7.2 Meter Verification. Seller shall test the 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 296
297
CONFIDENTIAL
EXECUTION VERSION
37 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 (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 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-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 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 G, 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 within thirty (30) days of the Effective Date.
Seller shall maintain the Development Security in full force and effect and Seller shall within ten (10) Business Days after any draw thereon replenish the Development Security in the event Buyer collects or draws down any portion of the Development Security for any reason permitted under 298
299
CONFIDENTIAL
EXECUTION VERSION
39 in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security; and (c) Liquidate all Development Security or Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.
ARTICLE 9
NOTICES
9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth in Exhibit N or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows:
(a) if sent by United States mail with proper first-class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail;
(b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including electronic mail or other electronic means) and if concurrently with the transmittal of such electronic communication the sending Party provides a copy of such electronic Notice by hand delivery or express courier, at the time indicated by the time stamp upon delivery; or
(d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, invoices sent pursuant to Section 8.1 and Notices of outages or other scheduling or dispatch information or requests may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission. 300
CONFIDENTIAL
EXECUTION VERSION
40 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 commercially 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 of the type described in the foregoing clause may include an act of God or the elements, such as flooding, lightning, hail, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic (including the COVID-19 epidemic); pandemics; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, “Force Majeure Event” of the type described in the foregoing paragraph 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; (iv) a Curtailment Order, except to the extent such inability 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) any equipment failure except if such equipment failure is caused by a Force Majeure Event; (vii) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Facility; (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; or (ix) any action or inaction by any third party, including Distribution Provider, that delays or prevents the approval, construction or placement in service of any Interconnection Facilities or Reliability Network Upgrades, except to the extent expressly permitted as a Development Cure Period under this Agreement.
10.2 No Liability If a Force Majeure Event Occurs. Except as provided in Section 4 301
302
CONFIDENTIAL
EXECUTION VERSION
42 (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default, the occurrence of any of the following (subject to any applicable cure periods):
(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 (A) failures related to the Adjusted Energy Production that do not trigger the provisions of Section 11.1(b)(vi), (vii), and (viii), the exclusive remedies for which are set forth in Section 4.9 and Exhibit G 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. (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, other than Replacement Product;
(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) Business Days after Notice thereof, the failure by Seller to deliver a Remedial Action Plan within the timeframe set forth in Section
2.4 that demonstrates a reasonable plan for completing the Facility by the Guaranteed Commercial Operation Date;
303
304
CONFIDENTIAL
EXECUTION VERSION
44 (D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit 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, or (ii) the Termination Payment, as applicable, calculated in accordance with Section 11.3 below;
(c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; and
(e) to exercise any other right or remedy available at law or in equity, including specific performance, 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 monetary remedy for any Terminated Transaction and the Event of Default related thereto.
11.3 Damage Payment; Termination Payment. If an Early Termination Date has been declared, the Non-Defaulting Party shall calculate, in a commercially reasonable manner, the Damage Payment or Termination Payment, as applicable, in accordance with this Section 11.3. (a) Damage Payment Prior to Commercial Operation Date. If the Early Termination Date occurs before the Commercial Operation Date, then the Damage Payment shall be calculated in accordance with this Section 11.3(a).
305
306
CONFIDENTIAL
EXECUTION VERSION
46 connection with a Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment or Damage Payment. As soon as practicable after a Terminated Transaction, but in no event later than sixty (60) days after the Early Termination Date (or such longer additional period, not to exceed an additional sixty (60) days, if the Non-Defaulting Party is unable, despite using commercially reasonable efforts, to calculate the Termination Payment or Damage Payment, as applicable, within such initial sixty (60)-day period despite exercising commercially reasonable efforts), Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment, as applicable, and whether the Termination Payment or Damage Payment, as applicable, is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment or Damage Payment, as applicable, shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
11.5 Disputes With Respect to Termination Payment or Damage Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment or Damage Payment, as applicable, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment or Damage Payment, as applicable, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment or Damage Payment, as applicable shall be determined in accordance with Article 15.
11.6 Limitation on Seller’s Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date. If this Agreement is terminated by either Party prior to the Commercial Operation Date for any reason except due to Buyer’s Event of Default, neither Seller nor Seller's Affiliates may sell, market or deliver any Product associated with or attributable to the Facility to a party other than Buyer for a period of two (2) years following the Early Termination Date, unless prior to selling, marketing or delivering such Product, or entering into the agreement to sell, market or deliver such Product to a party other than Buyer, Seller or Seller’s Affiliates provide Buyer with a written offer to sell the Product on terms and conditions materially similar to the terms and conditions contained in this Agreement (including price) and Buyer fails to accept such offer within forty-five (45) days of Buyer’s receipt thereof. Neither Seller nor Seller’s Affiliates may sell or transfer the Facility, or any part thereof, or land rights or interests in the Site (including the interconnection queue position of the Facility) so long as the limitations contained in this Section 11.6 apply, unless the transferee agrees to be bound by the terms set forth in this Section 11.6 pursuant to a written agreement approved by Buyer. Seller shall indemnify and hold Buyer harmless from all benefits lost and other damages sustained by Buyer as a result of any breach by Seller of its covenants contained within this Section 11.6.
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 307
308
CONFIDENTIAL
EXECUTION VERSION
48 FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. TO THE
EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 4.7, 11.2, 11.3, 11.9 AND AS PROVIDED IN EXHIBIT B
AND EXHIBIT G, 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 has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law 309
CONFIDENTIAL
EXECUTION VERSION
49 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 qualifies as a DAC-GT project pursuant to CPUC Decisions 18-06-27, (i) will be located in and connected electrically to a circuit, load, or substation within San Diego Gas and Electric Company’s service territory, and (ii) is located within an eligible DAC in which subscribing customers of Buyer reside. .
(f) Seller shall maintain Site Control throughout the Delivery Term. (g) 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, if applicable.
13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons 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 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 310
CONFIDENTIAL
EXECUTION VERSION
50 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 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 (California Government Code Section 810 et seq.).
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.
13.5 Prevailing Wage. Seller shall use commercially 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 Laws, if any (“Prevailing Wage Requirement”). Nothing herein shall require Seller, its contractors and subcontractors to comply with, or assume liability created by other inapplicable provisions of any applicable labor Laws. In addition, Seller shall use commercially reasonable efforts to:
(a) Use fifty percent (50%) Union labor across all Local RFO Projects; (b) Hire from San Diego-based apprenticeship programs, with an emphasis on hyper-local programs;
(c) Ensure all sanitation, equipment rental, and waste services are provided by local companies; and
(d) Work with community-based organizations to ensure that all RFPs related to the Facility are posted to local boards and released in appropriate community newsletters.
13.6 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 311
CONFIDENTIAL
EXECUTION VERSION
51 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 Exhibit S.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided below in this Article 14, neither Party may assign this Agreement or its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any Change of Control of Seller (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed; provided, a Change of Control of Seller shall not require Buyer’s consent and will not be subject to Section
14.2 or Section 14.3 if the assignee or transferee is a Permitted Transferee. Any assignment made without the required written consent, or in violation of the conditions to assignment set out below, shall be null and void. Buyer will have no obligation to provide any consent, or enter into any agreement, that materially and adversely affects any of Buyer’s rights, benefits, risks or obligations under this Agreement, or to modify the Agreement, except as set forth below. The assigning Party shall pay the other Party’s reasonable expenses associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by the assigning Party, including without limitation reasonable attorneys’ fees.
14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility. In connection with any financing or refinancing of the Facility by Seller, upon request of Seller, Buyer shall in good faith work with Seller and Lender to agree upon a consent to collateral assignment of this Agreement.
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 (California Government Code Section 81000 et seq.) or the regulations thereto, California Section 1090, or any other conflict of interest Law, Seller may, without the prior written consent of Buyer, transfer or assign this Agreement directly or indirectly to an Affiliate of Seller if, and only if:
(a) Seller may, without the prior written consent of Buyer, transfer or assign this Agreement directly or indirectly to an Affiliate of Seller if, and only if:
(i) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed assignment; and
(ii) Seller has provided Buyer a written agreement signed by the Affiliate to which Seller wishes to assign its interests that provides that such Affiliate will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment. (b) Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to any Person succeeding to all, or substantially all, of the assets of Seller (whether voluntary or by operation of law), if, and only if:
312
CONFIDENTIAL
EXECUTION VERSION
52 (i) 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.
(c) Notwithstanding the foregoing, any assignment by Seller, its successors or assigns under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and confirmed by Buyer.
14.4 Portfolio Financing. Buyer agrees and acknowledges that Seller may elect to finance all or any portion of the Facility or the Interconnection Facilities or the Shared Facilities (a) utilizing tax equity investment, and/or (b) through a Portfolio Financing, which may include cross-collateralization or similar arrangements. In connection with any financing or refinancing of the Facility, the Interconnection Facilities or the Shared Facilities by Seller or any Portfolio Financing, Buyer, Seller, Portfolio Financing Entity (if any), and Lender shall execute and deliver such further consents, approvals and acknowledgments as may be reasonable and necessary to facilitate such transactions; provided, Buyer shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Buyer and all reasonable attorney’s fees incurred by Buyer in connection therewith shall be borne by Seller.
14.5 Permitted Assignment by Buyer. Buyer may make a limited assignment to an entity with 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 substantially in the form set forth in Exhibit T, 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.
14.6 Right of First Refusal as to Future Phases, Additional Projects, Addition of Storage Capacity. Seller hereby grants Buyer with the exclusive right (such right, the “Right of First Refusal” or “ROFR”) to the purchase of (i) all of the output of any additional phases of the Facility and (ii) any separate renewable energy or energy storage projects that are currently under development by, or will be developed by, Seller or Affiliates of Seller, and that will use or share infrastructure, land, equipment (including the ability to jointly procure equipment), or other facilities with Seller or the Facility (each such future phase or separate renewable energy or energy 313
CONFIDENTIAL
EXECUTION VERSION
53 storage project, an “Expansion Project”). The requirements of this Section 14.6 shall apply to each Expansion Project.
(b) Prior to offering the output of the Expansion Project for sale to any third party, Seller shall present a binding commercial offer for the output of the Expansion Project (the “ROFR Offer”), for Buyer to accept, subject only to finalization and execution of a power purchase agreement for the Expansion Project (the “Project PPA”) incorporating the Material Terms of such Offer, and any additional terms the Parties agree to include, including credit requirements, and to the extent not inconsistent with the foregoing, the terms and conditions of this Agreement, as applicable. The ROFR Offer provided by Seller shall specifically identify the material financial and other terms and conditions of such ROFR Offer (the “Material Terms”). (c) At any time prior to the expiration of the forty-five (45) day period following Buyer’s receipt of the ROFR Offer (the “Exercise Period”), Buyer may accept the ROFR Offer by delivery to Seller of a letter of intent executed by Buyer. If, by the expiration of the Exercise Period, Buyer has not accepted the ROFR Offer, and provided that Seller has complied with all of the provisions of this Section 14.6, at any time following the expiration of the Exercise Period, Seller may enter into a Project PPA for the Expansion Project with a third party (the “Third-Party Transaction”); provided, that if such Third-Party Transaction is not consummated within twelve (12) months of the date of the Offer Notice, or if Seller offers the Expansion Project on terms more favorable than the Material Terms, the terms and conditions of this Section 14.6 will again apply, Seller shall not enter into any Third-Party Transaction for the Expansion Project without affording Buyer the right of first refusal on the terms and conditions of this Section 14.6.
(d) Notwithstanding any of the above, if the sum of (i) the Delivered Energy and (ii) the generating energy and/or storage energy from the Expansion Project for any Settlement Interval would exceed the Dedicated Interconnection Capacity for such Settlement Interval, then the generating energy and/or storage energy from the Expansion Project shall be curtailed first prior to curtailing the Delivered Energy.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law; Venue.
(a) 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. [STC 17].
(b) For avoidance of doubt, although “agreement” is not capitalized in Section
15.1(a), the parties intend for “agreement” to mean this Agreement, and for “party” and “parties” to refer to the Party and Parties as set forth in the preamble to this Agreement. (c) The Parties agree that any suit, action or other legal proceeding by or against any Party with respect to or arising out of this Agreement shall be brought in the federal or state courts of the State of California sitting in the County of San Diego. 314
CONFIDENTIAL
EXECUTION VERSION
54 15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, the Parties shall submit the dispute to mediation prior to seeking any and all remedies available to them at Law in or equity. The Parties will cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator’s fee, equally, but such shared costs shall not include each Party’s own attorneys’ fees and costs, which shall be borne solely by such Party. If the mediation is unsuccessful, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
15.3 Attorneys’ Fees. In any proceeding brought to enforce this Agreement or because of the breach by any Party of any covenant or condition herein contained, the prevailing Party shall be entitled to reasonable attorneys’ fees (including reasonably allocated fees of in-house counsel) in addition to court costs and any and all other costs recoverable in said action.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnification.
(a) Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees and agents (collectively, the “Indemnified Party”) from and against all claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) (i) for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the negligent or willful misconduct of the Indemnifying Party, its Affiliates, its directors, officers, employees, or agents, or (ii) for third-party claims resulting from the Indemnifying Party’s breach (including inaccuracy of any representation of warranty made hereunder), performance or non-performance of its obligations under this Agreement (“Indemnifiable Losses”).
(b) Seller shall indemnify, defend, and hold harmless Buyer’s Indemnified Parties, from any claim, liability, loss, injury or damage arising out of, or in connection with Environmental Costs and any environmental matters associated with the Facility, including the storage, disposal and transportation of Hazardous Substances, or the contamination of land, including but not limited to the Site, with any Hazardous Substances by or on behalf of the Seller or at the Seller’s direction or agreement.
(c) 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. 315
316
317
CONFIDENTIAL
EXECUTION VERSION
57 “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.
18.2 Duty to Maintain Confidentiality. The Party receiving Confidential Information (the “Receiving Party”) from the disclosing Party (the “Disclosing Party”) shall not disclose Confidential Information to a third party (other than the Receiving Party’s members, employees, lenders or investors, counsel, accountants, directors or advisors, or any such representatives of a Party’s Affiliates, who have a need to know such information and have agreed to keep such terms confidential) except in order to (a) comply with any applicable Law, regulation, any exchange, control area or independent system operator rule, an order of a court; or regulatory requirement applicable to the Receiving Party, or (b) in order to enforce this Agreement; provided, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. The Parties agree and acknowledge that nothing in this Section 18.2 prohibits a Party from disclosing any one or more of the commercial terms of a transaction (other than the name of the other Party unless otherwise agreed to in writing by the Parties) to any industry price source for the purpose of aggregating and reporting such information in the form of a published energy price index.
(b) The Parties acknowledge and agree that the Agreement and any transactions entered into in connection herewith are subject to the requirements of the California Public Records Act (California Government Code Section 7920 et seq.). In order to designate information as confidential, the Disclosing Party must clearly stamp and identify the specific portion of the material designated with the word “Confidential.” The Parties agree not to over-designate material as Confidential Information. Over-designation includes stamping whole agreements, entire pages or series of pages as “Confidential” that clearly contain information that is not Confidential Information.
18.3 Requested Confidential information. Upon request or demand of any third person or entity not a Party hereto to Buyer pursuant to the California Public Records Act for production, inspection and/or copying of Confidential Information (“Requested Confidential Information”), Buyer shall as soon as practical notify Seller in writing via email that such request has been made. Seller shall be solely responsible for taking at its sole expense whatever legal steps are necessary to prevent release of the Requested Confidential Information to the third party by Buyer. If Seller takes no such action after receiving the foregoing notice from Buyer, Buyer shall, at its discretion, be permitted to comply with the third party’s request or demand and is not required to defend against it. If Seller does take or attempt to take such action, Buyer shall provide timely and reasonable cooperation to Seller, if requested by Seller, and Seller agrees to indemnify and hold harmless Buyer and Buyer’s Indemnified Parties from any claims, liability, award of attorneys’ fees, or damages, and to defend any action, claim or lawsuit brought against any of Buyer or Buyer’s Indemnified Parties for Buyer’s refusal to disclose any Requested Confidential Information.
318
CONFIDENTIAL
EXECUTION VERSION
58 18.4 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.
18.5 Further Permitted Disclosure. 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)), so long as such Person to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions that are no less stringent than those in this Article 18 to the same extent as if it were a Party. Seller shall provide written 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.
18.6 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 press release. A Party’s consent shall not be unreasonably withheld, conditioned or delayed.
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.
319
CONFIDENTIAL
EXECUTION VERSION
59 19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) or, to the extent set forth herein, any Lender 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 “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 an executed counterpart in .pdf electronic version shall be binding as if delivered in the original. The words “execution,” “signed,” “signature,” and words of like import in this Agreement shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature or the use of a paper-based record keeping system, as the case may be, to the extent and as provided for in any applicable law.
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 (California Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s 320
CONFIDENTIAL
EXECUTION VERSION
60 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 Further Assurances. Each of the Parties hereto agrees to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumption 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.
19.13 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article 15. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, 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]
321
Signature Page
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
LUMINIA CA DEVCO 4, LLC, a
California limited liability company
By:
Name:
Title:
SAN DIEGO COMMUNITY POWER, a
California joint powers authority
By:
Name:
Title:
322
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Project Name: Chula Vista Retail Center
Site includes all or some of the following APNs: 5720104700 & 5720104600 County: San Diego
CEQA Lead Agency: Not Applicable
Zip Code: 91910
Latitude and Longitude: 32.629583, -117.086121
Facility Description: Rooftop and Canopy Solar PV
Delivery Point: Interconnection Point On Site CAISO Meter Facility Meter and Metering Points: See Exhibit O.
PNode:
1 MONTGMRY_6_N002
Interconnection Point: Facility Meter
Distribution Provider: San Diego Gas and Electric
Local Capacity Area and Sub-Local Capacity Area: San Diego-Imperial Valley Additional Information: Site plan provided below.
1 If not available at the Effective Date, the PNode shall be updated by mutual agreement of Buyer and Seller prior to the initial delivery of Test Energy hereunder to reflect the PNode corresponding to the Facility’s Interconnection Point with the CAISO Grid.
323
Exhibit A - 1
324
Exhibit B - 1
EXHIBIT B
MAJOR PROJECT DEVELOPMENT MILESTONES AND COMMERCIAL
OPERATION
1. Construction Start.
a. “Construction Start” will occur upon Seller’s acquisition of all applicable regulatory authorizations, approvals and permits for the construction of the Facility, and once Seller has engaged all contractors and ordered all essential equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of the Facility may begin and proceed to completion without foreseeable interruption of material duration, and has executed an engineering, procurement, and construction contract and issued thereunder a notice to proceed that authorizes the contractor to mobilize to Site and begin physical construction (including, at a minimum, excavation for foundations or the installation or erection of improvements) at the Site.
2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when (i) Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “COD Certificate”) (ii) Seller has notified Buyer in writing that it has provided the required documentation to Buyer and met the conditions for achieving Commercial Operation, and (iii) Buyer has acknowledged to Seller in writing that Buyer agrees that Commercial Operation has been achieved. The “Commercial Operation Date” shall be the later of (x) the Expected Commercial Operation Date, or (y) the date on which Commercial Operation is achieved.
b. Seller shall cause Commercial Operation to occur no later than the Guaranteed Commercial Operation Date, as such date may be extended (i) pursuant to Section 2(a) of Exhibit B, (ii) by Seller’s payment of Commercial Operation Delay Damages pursuant to Section 2(c) of Exhibit B, and/or (iii) 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. c. In addition to extensions pursuant to a Development Cure Period, Seller may extend the Guaranteed Commercial Operation Date by paying Commercial Operation 325
326
327
328
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 (as applicable) of Test Energy, and the Product at the Delivery Point. Prior to the Initial Synchronization of the Facility, Seller or Seller’s designee shall be the Scheduling Coordinator for the Facility. At least thirty (30) days prior to the Initial Synchronization, (i) Seller shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid, (ii) Seller shall make available to Buyer's Scheduling Coordinator all real-time telemetry data reasonably necessary for Buyer’s Scheduling Coordinator to perform its duties as Buyer’s Scheduling Coordinator, including the relevant operational data specified in this Exhibit D, Section (i), and (iii) Buyer shall, and shall cause its designee to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid. On and after Initial Synchronization of the Facility to the CAISO Grid.
Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit Schedules to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen-minute market or real time or other CAISO market basis that may develop after the Effective Date, as determined by Buyer. (b) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer and the CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller shall 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 fax 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 (except as otherwise set forth in this Agreement), 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. In addition, Seller shall assume all liability and reimburse Buyer for any and all CAISO penalties and Imbalance Energy costs (i) incurred by Buyer resulting from any failure by Seller to abide by the CAISO Tariff requirements imposed on it as Facility owner (but not in connection with obligations of Buyer hereunder) or the outage notification requirements set forth in this Agreement (except to the extent such non-compliance is caused by Buyer’s failure to 329
CONFIDENTIAL
EXECUTION VERSION
Exhibit D - 2
perform its duties as Scheduling Coordinator for the Facility), or (ii) to the extent arising as a result of Seller’s failure to comply with a timely Curtailment Order if such failure results in incremental costs to Buyer. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility.
(d) CAISO Settlements. Buyer (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“CAISO Charges Invoice”) for which Seller is responsible under this Agreement. CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges.
Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer will review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for such 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 in respect of performance prior to the expiration or termination of this Agreement 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 Data File and Resource Data Template; Master Resource Database.
The Parties will collaborate to comply with the applicable deadlines for filing and updating the information for the Facility in the CPUC Master Resource Database and Master Data File. Seller shall provide the data to Buyer that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement at least five (5) Business Days before the deadline for submission to CAISO and Buyer (as SC) shall promptly provide such data to CAISO. Seller shall provide the data that is required for the CPUC Master Resource Database for the Facility consistent with this Agreement to Buyer for review and approval at least five (5) Business Days before the deadline for submission of such to the CPUC. Neither Party shall change such CAISO or CPUC data without the other Party’s prior 330
CONFIDENTIAL
EXECUTION VERSION
Exhibit D - 3
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 (or successor data systems) and CPUC Master Resource Database for this Facility remains consistent with the actual operating characteristics of the Facility and provide such information to Buyer for review at least five (5) Business Days prior to submission to the CAISO or CPUC as applicable. (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. 331
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.]
12. Progress and schedule of all major agreements, contracts, permits, approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.
13. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the Distribution System and all other interconnection utility services.
14. Workforce Development or Supplier Diversity Reporting (if applicable).
15. Any other documentation reasonably requested by Buyer. 332
Exhibit F - 1
EXHIBIT F-1
FORM OF AVERAGE EXPECTED ENERGY REPORT
[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.
333
Exhibit F - 2
EXHIBIT F-2
FORM OF AVAILABLE CAPACITY FORECAST
Available 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.
334
335
CONFIDENTIAL
EXECUTION VERSION
Exhibit G - 2
“Replacement Energy” means energy produced by a facility other than the Facility, that is provided by Seller to Buyer as Replacement Product, in an amount equal to the amount of Replacement Green Attributes provided by Seller as Replacement Product for the same Performance Measurement Period or, with Buyer’s prior written consent, in the following calendar year.
“Replacement Product” means (a) Replacement Energy, and (b) Replacement Green Attributes for the previous Contract Year. Seller shall provide Replacement Product for the same Performance Measurement Period or, with Buyer’s prior written consent, in the following calendar year.
336
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 Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Distribution System in accordance with the Interconnection Agreement.
2. Seller has installed equipment for the Facility with a nameplate capacity of no less than ninety-five percent (95%) of the Guaranteed Capacity.
3. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
4. Seller has demonstrated functionality of the Facility’s communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with this Agreement and/or the CAISO.
5. The 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 Facility at the Delivery Point, as adjusted for ambient conditions on the date of the Facility testing.
6. Authorization to parallel the Facility was obtained from the Distribution Provider on___[DATE]____.
7. The Distribution Provider has provided documentation supporting full unrestricted release for Commercial Operation _______[DATE]_____.
8. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
9. Seller shall have caused the Facility to be included in the Full Network Model and has the ability to offer Bids into the CAISO Day-Ahead and Real-Time Markets in respect of the Facility.
10. Seller has segregated and separately metered Station Use to the extent required in accordance with the retail service provider’s tariff, and any such meter(s) have the same or greater level of accuracy as is required under the retail service provider’s tariff. 337
CONFIDENTIAL
EXECUTION VERSION
Exhibit H - 2
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
338
Exhibit I - 1
EXHIBIT I
FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity 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.
I hereby certify the following:
(a) The performance test for the Facility demonstrated peak electrical output of __ kW AC at the Delivery Point, as adjusted for ambient conditions on the date of the performance test (“Installed Capacity”);
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
339
Exhibit J - 1
EXHIBIT J
RESERVED
340
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
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 renew annually until terminated in accordance with the terms hereof (the “Expiration Date”).
Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit 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]] 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.
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 341
CONFIDENTIAL
EXECUTION VERSION
Exhibit K - 2
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.
This Letter of Credit may only be terminated 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.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision) International Chamber of Commerce Publication No. 600 (the “UCP”), except to the extent that the terms hereof are inconsistent with the provisions of the UCP, including but not limited to Articles 14(b) and 36 of the UCP, in which case the terms of this Letter of Credit shall govern. In the event of an act of God, riot, civil commotion, insurrection, war or any other cause beyond Issuer’s control (as defined in Article 36 of the UCP) that interrupts Issuer’s business and causes the place for presentation of the Letter of Credit to be closed for business on the last day for presentation, the 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. [Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
342
Exhibit K - 3
(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 (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of __________ (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Renewable Power Purchase Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Seller Event of Default (as such term is defined in the Agreement) has occurred or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the letter of credit has occurred.
OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the expiration date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such expiration date.
3. The undersigned is a duly authorized representative of 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___________________________
343
Exhibit L - 1
EXHIBIT L
FACILITY OPERATIONS DATA
Data Point
Unit Gross kW
Unit Net kW
High Sustainable Limits
ADS 5 Minute Dispatch Operating Targets
Setpoint
Aggregate Gross MW
Interconnection Point/Delivery Point MW
Meteorological Data2
Heartbeat
Frequency
2 Meteorological Data includes irradiance, back panel temperature, wind speed, wind direction, and temperature and such other data as mutually agreed to by the Parties.
344
Exhibit M - 2
EXHIBIT M
RESERVED
345
346
CONFIDENTIAL
EXECUTION VERSION
Exhibit N - 2
LUMINIA CA DEVCO 4, LLC
(“Seller”)
SAN DIEGO COMMUNITY POWER
(“Buyer”)
With additional Notices of an Event of
Default to:
Attn: Alan Whiting, CFO
Phone: (858) 866-8777
Email: [email protected]
With additional Notices of an Event of
Default to:
Attn: Veera Tyagi, General Counsel
PO Box 12716San Diego, CA 92112
Email: [email protected]
Emergency Contact:
Attn: Alan Whiting, CFO
Phone: (858) 866-8777
Email: [email protected]
Emergency Contact:
Attn: Byron Vosburg, Director of Power
Services
Phone: (619) 880-6545
Email: [email protected]
347
Exhibit O - 1
EXHIBIT O
METERING DIAGRAM
348
Exhibit P - 1
EXHIBIT P
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
7. If your business is a minority-owned business enterprise, what GO156 certification or 349
CONFIDENTIAL
EXECUTION VERSION
Exhibit P - 2
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 Yes, history of multi-trade PLA but not in this contract with SDCP 350
CONFIDENTIAL
EXECUTION VERSION
Exhibit P - 3
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.
351
Exhibit Q - 1
EXHIBIT Q
FORM OF LIMITED ASSIGNMENT AGREEMENT
LIMITED ASSIGNMENT AGREEMENT
This Limited Assignment Agreement (this “Agreement”) is entered into as of [____] (the “Assignment Agreement Effective Date”) by and among [PPA SELLER], a [____] limited liability company (“PPA Seller”), San Diego Community Power, a California joint powers authority (“PPA Buyer”), and [__________], a Delaware corporation (“Financing Entity”).
RECITALS
WHEREAS, PPA Buyer and PPA Seller are parties to that certain PPA identified on Appendix 1 hereto;
WHEREAS, in connection with a prepaid electricity transaction between California Community Choice Financing Authority (“Issuer”) and Energy Prepay IV, LLC (“Prepay LLC”), and with effect from and including the Assignment Period Start Date (as defined below), PPA Buyer wishes to transfer by limited assignment to Limited Assignee, and Limited Assignee wishes to accept the transfer by limited assignment of, the Assigned Rights and Obligations (as defined below) for the duration of the Assignment Period (as defined below); WHEREAS, pursuant to this Agreement, during the Assignment Period, Limited Assignee will receive the Assigned Product and Limited Assignee will deliver such Assigned Product to Prepay LLC, which will redeliver such Assigned Product to Issuer for ultimate redelivery to PPA Buyer; and
WHEREAS, pursuant to this Agreement, during the Assignment Period, Limited Assignee will assume responsibility for the Delivered Product Payment Obligation.
THEREFORE, in consideration of the premises above and the mutual covenants and agreements herein set forth, PPA Seller, PPA Buyer and Limited Assignee (the “Parties” hereto; each is a “Party”) agree as follows:
AGREEMENT
1. Definitions.
Unless the context otherwise specifies or requires, or defined below, capitalized terms used but not defined in this Agreement have the meanings set forth in the PPA. The following terms, when used in this Agreement and identified by the capitalization of the first letter thereof, have the 352
Exhibit Q - 2
respective meanings set forth below, unless the context otherwise requires:
“Agreement” has the meaning specified in the first paragraph above. “Assigned Product” means (i) [PV Energy] and (ii) [Green Attributes (PCC1)], as each is defined in the PPA.
“Assigned Rights and Obligations” means (i) the rights of PPA Buyer under the PPA to receive the Assigned Product in each Month during the Assignment Period, as such rights may be limited or further described in the “Further Information” section on Appendix 1, and (ii) the Delivered Product Payment Obligation, which right and obligation are transferred and conveyed to Limited Assignee hereunder, but which shall not relieve PPA Buyer of its obligations under the PPA in any respects.
“Assignment Early Termination Date” has the meaning specified in Section 5(b). “Assignment Period” has the meaning specified in Section 5(a). “Assignment Period End Date” means 11:59:59 p.m. pacific prevailing time on [____]. “Assignment Period Start Date” means [_____].
“Claims” means all claims or actions, threatened or filed, and the resulting losses, damages, expenses, attorneys’ fees, experts’ fees, and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed prior to or after the termination of this Agreement, in each case arising under, in respect of or related in any way to the PPA or any transaction thereunder, except for the Delivered Product Payment Obligation. “Custodian” means U.S. Bank Trust Company, National Association. “Delivered Product Payment Obligation” has the meaning specified in Section 3(a). “Issuer” means California Community Choice Financing Authority, a joint powers authority and a public entity of the State of California established pursuant to the provisions of the Joint Exercise of Powers Act (Article 1, Chapter 5, Division 7, Title 1, Section 6500 et seq. of the California Government Code, as amended).
“Limited Assignee” has the meaning specified in the first paragraph of this Agreement. “Month” means a calendar month.
“Monthly Gross Amount” has the meaning specified in Section 3(c). “PPA Buyer” has the meaning specified in the first paragraph of this Agreement. “PPA Seller” has the meaning specified in the first paragraph of this Agreement. “Prepaid Agreement” means that certain Prepaid Energy Sales Agreement dated as of November 5, 2024 by and between Prepay LLC and Issuer as amended from time to time. 353
Exhibit Q - 3
“Prepay LLC” has the meaning specified in the first paragraph of this Agreement. “Prepay Power Supply Contract” means that certain Power Supply Contract dated November 5, 2024 by and between PPA Buyer and Issuer as amended from time to time. “Receivables” has the meaning given to such term in Section 3(f). “Retained Rights and Obligations” has the meaning specified in Section 3.
2. Transfer and Undertakings.
(a) PPA Buyer hereby assigns, transfers and conveys to Limited Assignee all right, title and interest in and to the rights of PPA Buyer under the PPA to receive delivery of the Assigned Product during the Assignment Period. In connection with this assignment, PPA Buyer hereby delegates to Limited Assignee the Assigned Rights and Obligations during the Assignment Period. (b) PPA Seller hereby consents and agrees to PPA Buyer’s assignment, transfer and conveyance of all right, title and interest in and to the Assigned Product and, subject to Section 3, the delegation of the Assigned Rights and Obligations to Limited Assignee and the exercise and performance by Limited Assignee of the Assigned Rights and Obligations during the Assignment Period.
(c) Limited Assignee hereby accepts such assignment, transfer and conveyance of PPA Buyer’s right, title and interest in and to the Assigned Products during the Assignment Period, and PPA Buyer’s delegation of the Assigned Rights and Obligations during the Assignment Period and agrees to perform any such Assigned Rights and Obligations due from it during the Assignment Period to the extent expressly set forth in this Agreement.
3. Limited Assignment.
The Parties acknowledge and agree that (i) the Assigned Rights and Obligations include only a portion of PPA Buyer’s rights and obligations under the PPA, and that all rights and obligations (including without limitation obligations with respect to payment for any Product not included in the Assigned Product and any other amounts owed under the PPA) arising under the PPA that are not expressly included in the Assigned Rights and Obligations shall be “Retained Rights and Obligations” that are retained solely by PPA Buyer, and (ii) the Retained Rights and Obligations include all rights and obligations of PPA Buyer arising during the Assignment Period except the rights and obligations expressly included in the Assigned Rights and Obligations. In this regard:
(a) Limited to Delivered Product Payment Obligation. Limited Assignee’s sole payment obligation hereunder will be to pay the Floating Price Payments into the Custodial Account as such terms are defined in and described on Appendix 1 (the “Delivered Product Payment Obligation”). Limited Assignee and PPA Buyer each agree to instruct the Custodian in accordance with Section 3(c) hereof to pay PPA Seller for the Assigned Product delivered during each Month of the Assignment Period on each applicable payment date under Section [_] of the PPA. PPA Buyer shall remain responsible for any payment obligations under the PPA during the Assignment Period, including in the event that either (i) Limited Assignee does not make the payments into the Custodial Account as described above or (ii) the Custodian does not make the payments to the PPA Seller from the Custodial Account as described above. 354
Exhibit Q - 4
(b) Retained Rights and Obligations. Any Claims (other than the Delivered Product Payment Obligation or a failure to perform the same) arising or existing in connection with or related to the PPA, whether related to performance by PPA Seller, PPA Buyer or Limited Assignee, and whether arising before, during or after the Assignment Period, in each case excluding the Delivered Product Payment Obligation, will be included in the Retained Rights and Obligations, and any such Claims will be resolved exclusively between PPA Seller and PPA Buyer in accordance with the PPA.
(c) Invoicing. During the Assignment Period, PPA Seller shall continue to provide PPA Buyer a monthly invoice of amounts owing under the PPA, which invoice shall show the total amount due to PPA Seller under the PPA for such Month (the “Monthly Gross Amount”).
Promptly following PPA Buyer’s receipt of each monthly invoice from PPA Seller during the Assignment Period and, in any event, no later than seven (7) days thereafter, PPA Buyer shall deliver (i) a copy of such monthly invoice and the related supporting data to Limited Assignee and (ii) a statement to each of Limited Assignee and the Custodian indicating (A) the Monthly Gross Amount; (B) the Delivered Product Payment Obligation; and (C) the “Retained Payment Obligation”, which shall be an amount equal to the Monthly Gross Amount minus the Delivered Product Payment Obligation. PPA Buyer and Limited Assignee covenant and agree to instruct the Custodian to pay the Monthly Gross Amount to PPA Seller on or before the applicable payment date in the PPA, provided, that the liability of Limited Assignee hereunder to PPA Seller is limited as described on Appendix 1. PPA Buyer and Limited Assignee may agree in a separate writing as to the allocation of the Monthly Gross Amount between PPA Buyer and Limited Assignee of amounts paid by the Custodian to PPA Seller hereunder. At all times, PPA Buyer remains liable to PPA Seller for all amounts due and owing under the PPA. For the avoidance of doubt, the Parties acknowledge and agree that any invoice adjustments or reconciliations occurring after the initial settlement of amounts due under a monthly invoice shall be resolved exclusively between PPA Seller and PPA Buyer pursuant to the terms of the PPA. (d) Scheduling. All scheduling of Energy associated with the Assigned Product and other communications related to the PPA shall take place between PPA Buyer and PPA Seller pursuant to the terms of the PPA; provided that during the Assignment Period (i) title to Assigned Product will pass to Limited Assignee upon delivery by PPA Seller at the Delivery Point in accordance with the PPA; (ii) immediately thereafter, title to such Assigned Product will pass to Prepay LLC, Issuer and then to PPA Buyer upon delivery by Limited Assignee at the same point where title is passed to Limited Assignee pursuant to clause (i) above; (iii) PPA Buyer will be deemed to be acting as Limited Assignee’s agent with regard to scheduling Assigned Product; and (iv) PPA Buyer will provide copies to Limited Assignee of (A) any notice of a Force Majeure Event delivered under the PPA, (B) any notice of a default or of a breach or other event that, if not cured within an applicable grace period, could result in an Event of Default, (C) annual forecasts and monthly forecasts with respect to the Assigned Product delivered by PPA Seller under [Section __] of the PPA, (D) invoices delivered by PPA Seller under [Section __ of the PPA] (with a copy to the Custodian if and to the extent retained by PPA Buyer and Limited Assignee), and (E) any other information reasonably requested by Limited Assignee relating to Assigned Product. (e) Amendments. PPA Buyer will provide written notice (including copies thereof) of any amendment, waiver, supplement, modification, or other changes to the PPA to relating to the Assigned Rights and Obligations, and the Parties hereby acknowledge and agree that an 355
Exhibit Q - 5
amendment, waiver, supplement, modification or other change will not have any effect on Limited Assignee’s rights or obligations under this Agreement unless and until Limited Assignee receives written notice thereof. No amendment, modification, or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile or electronic transmission) and executed by each of the Parties.
(f) Setoff of Receivables. Pursuant to the Prepaid Agreement, Prepay LLC has agreed to purchase the rights to payment of the net amounts owed by PPA Buyer under the Prepay Power Supply Contract (“Receivables”) in the case of non-payment by PPA Buyer. To the extent any such Receivables relate to Assigned Product purchased by Limited Assignee pursuant to the Assigned Rights and Obligations, Prepay LLC may sell such Receivables to Limited Assignee and, provided that Limited Assignee has notified PPA Seller in writing (with a copy to PPA Buyer) (a “Receivables Setoff Notice”) that the amount of any such Receivables is true and accurate, Limited Assignee may transfer such Receivables (excluding any penalties, late payment fees, late payment interest or other fees, costs or interest included in such Receivables) to PPA Seller and apply the face amount of such Receivables (excluding any penalties, late payment fees, late payment interest or other fees, costs or interest included in such Receivables) as a reduction to any Delivered Product Payment Obligations; provided, however, that (1) at no time shall PPA Seller be required to pay Limited Assignee for any amounts by which such Receivables exceed any Delivered Product Payment Obligations, and (2) at all times, PPA Buyer remains liable to PPA Seller for all amounts due and owing under the PPA including the Monthly Gross Amount under each invoice. The amount of any Receivables set forth in a Receivables Setoff Notice shall be final and binding unless PPA Buyer shall have provided PPA Seller and Limited Assignee a written notice within two (2) Business Days of its receipt of a Receivables Setoff Notice containing conclusive evidence that such amount is incorrect and asserting what PPA Buyer has determined is the correct amount of Receivables. If any dispute arises therefrom, Limited Assignee shall still be entitled to set-off the amount of Receivables set forth in its Receivables Setoff Notice as provided above, and any such dispute as to the correct amount of Receivables shall be settled exclusively between PPA Buyer and PPA Seller with no liability to Limited Assignee, provided that at all times, PPA Buyer remains liable to PPA Seller for all amounts due and owing under the PPA including the Monthly Gross Amount under each invoice.
4. Forward Contract.
The Parties acknowledge and agree that this Agreement is intended to constitute a “forward contract” and that the Parties is intended to constitute “forward contract merchants” within the meaning of the United States Bankruptcy Code.
5. Assignment Period; Assignment Early Termination.
(a) Assignment Period. The “Assignment Period” shall begin on the Assignment Period Start Date and extend until the Assignment Period End Date; provided that in no event shall the Assignment Period extend past an Assignment Early Termination Date; and further provided that the Assignment Period will automatically terminate upon the expiration or early termination of either the Delivery Term or the PPA.
(b) Early Termination. An “Assignment Early Termination Date” will occur under the following circumstances and as of the dates specified below:
356
Exhibit Q - 6
i. delivery of a written notice of termination by either Limited Assignee or PPA Buyer to each of the other Parties hereto;
ii. delivery of a written notice of termination by PPA Seller to each of Limited Assignee and PPA Buyer following Limited Assignee’s failure to pay when due any amounts owed to PPA Seller in respect of any Delivered Product Payment Obligation and such failure continues for five (5) Business Days following receipt by Limited Assignee of written notice thereof;
iii. delivery of a written notice by PPA Seller if any of the events described in [Section 1.1, definition of “Bankrupt” of the PPA], occurs with respect to Limited Assignee; or
iv. delivery of a written notice by Limited Assignee if any of the events described in [Section 1.1, definition of “Bankrupt” of the PPA], occurs with respect to PPA Seller.
(c) Reversion of Assigned Rights and Obligations. The Assignment Period will end at the end of the last delivery hour on the date specified in any termination notice provided pursuant to Section 5(b). The Parties acknowledge and agree that upon the occurrence of an Assignment Early Termination Date, early termination pursuant to Sections 5(d) and at the expiration of the Assignment Period the Assigned Rights and Obligations will revert from Limited Assigneeto PPA Buyer. Any Assigned Rights and Obligations that would become due for payment or performance on or after such Assignment Early Termination Date or early termination pursuant to Section 5(d) shall immediately and automatically revert from Limited Assignee to PPA Buyer, provided that (i) Limited Assignee shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to Limited Assignee prior to the Assignment Early Termination Date or prior to the expiration of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the occurrence of the Assignment Early Termination Date or the expiration of the Assignment Period.
(d) Early Termination for PPA Termination. The Assignment Period will automatically terminate upon the expiration or early termination of the PPA.
6. Representations and Warranties.
(a) Copy of PPA. As of the Assignment Agreement Effective Date, each of PPA Seller and PPA Buyer represents and warrants to Limited Assignee that a true, complete, and correct copy of the PPA as of such date is attached hereto as Appendix 3. (b) No Default. As of the Assignment Agreement Effective Date, each of PPA Seller and PPA Buyer represents and warrants to Limited Assignee that no event or circumstance exists (or would exist with the passage of time or the giving of notice) that, to its knowledge, would give either of them the right to terminate the PPA or suspend performance thereunder. 357
Exhibit Q - 7
(c) Other. Each of PPA Buyer and PPA Seller represents and warrants to each other and to Limited Assignee that:
i. It has made no prior transfer (whether by way of security or otherwise) of any interest in the Assigned Rights and Obligations; and ii. To its knowledge, all obligations of PPA Buyer and PPA Seller under the PPA required to be performed on or before the Assignment Period Start Date have been fulfilled.
(d) Representations. Each Party represents to each of the other Parties as of the Assignment Agreement Effective Date:
i. Status. It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing.
ii. Powers. It has the power to execute, this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and has taken all necessary action to authorize such execution, delivery and performance. iii. No Violation or Conflict. Such execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the incurrence by such Party of its obligations under this Agreement, will not result in any violation of, or conflict with: (i) any term of any material contract or agreement applicable to it; (ii) any of its charter, bylaws, or other constitutional documents; (iii) any determination or award of any arbitrator applicable to it; or (iv) any license, permit, franchise, judgment, writ, injunction or regulation, decree, order, charter, law, ordinance, rule or regulation of any Government Agency presently in effect, applicable to it or any of its assets or properties or to any obligations incurred by it or by which it or any of its assets or properties or obligations are bound or affected, and shall not cause a breach of, or default under, any such term or result in the creation of any lien upon any of its properties or assets. iv. Consents. All consents, approvals, orders or authorizations of, registrations, declarations, filings or giving of notice to, obtaining of any licenses or permits from, or taking of any other action with respect to, any Person or Government Agency that are required to have been obtained by such Party with respect to this Agreement and the transactions contemplated hereby, including the due authorization of such Party and its governing body and any approval or consent of any security holder of such Party or any holder (or any trustee for any holder) of any indebtedness or other obligation of such Party, have been obtained and are in full force and effect and all conditions of any such consents have been complied with. v. Obligations Binding. Its obligations under this Agreement constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles 358
Exhibit Q - 8
of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).
vi. Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other Parties as investment advice or as a recommendation to enter into this Agreement; it being understood that information and explanations related to the terms and conditions of this Agreement shall not be considered investment advice or a recommendation to enter into this Agreement. It is entering into this Agreement as a bona-fide, arm’s-length transaction involving the mutual exchange of consideration and, once executed by all Parties, considers this Agreement a legally enforceable contract. No communication (written or oral) received from any of the other Parties shall be deemed to be an assurance or guarantee as to the expected results of this Agreement. vii. Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Agreement. It is also capable of assuming, and assumes, the risks of this Agreement. viii. Status of Parties. None of the other Parties is acting as a fiduciary for or an adviser to it in respect of this Agreement.
7. Miscellaneous.
Article [__] (Confidential Information), [__] (No Consequential Damages), [__] (Amendments), [__] (No Agency, Partnership, Joint Venture or Lease), Sections [__] (Severability), [__] (Electronic Delivery), [__] (Counterparts), Section [__] (Binding Effect) and [__] (Forward Contract) of the PPA are incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.
8. Costs and Expenses.
The Parties shall each pay their own costs and expenses (including legal fees) incurred in connection with this Agreement and as a result of the negotiation, preparation, and execution of this Agreement.
9. Notices.
Any notice, demand, or request required or authorized by this Agreement to be given by one Party to another Party shall be delivered in accordance with [Section ___] of the PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Buyer agrees to notify Limited Assignee of any updates to such notice information, including any updates provided by PPA Seller to PPA Buyer. Notices to Limited Assignee shall be provided to the address set forth in Appendix 2. Each Party may update its address from time to time by notice to the other Parties.
10. Governing Law; Dispute Resolution.
359
Exhibit Q - 9
(a) Governing Law. This Agreement and the rights and duties of the Parties under this Agreement will be governed by and construed, enforced and performed in accordance with the laws of the state of New York, without reference to any conflicts of laws provisions that would direct the application of another jurisdiction’s laws; provided, however, that the authority of PPA Buyer to enter into and perform its obligations under this agreement shall be determined in accordance with the laws of the state of California.
(b) Arbitration. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope of this Agreement to arbitrate, shall be determined by final, non-appealable binding arbitration in San Francisco, California before three (3) arbitrators. The arbitration shall be administered by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days after the commencement of arbitration, each of Limited Assignee and PPA Buyer shall select one person to act as arbitrator, and the two so-selected arbitrators shall select a third arbitrator (the “chairperson”) within thirty (30) days of the commencement of the arbitration. If either Limited Assignee or PPA Buyer is unable or fails to select one person to act as arbitrator, such arbitrator shall be appointed by JAMS. If the Limited Assignee and PPA Buyer-selected arbitrators are unable or fail to agree upon a chairperson, the chairperson shall be appointed by JAMS. The chairperson shall be a person who has experience in renewable energy-related transactions, and none of the arbitrators shall have been previously employed by any Party or have any direct pecuniary interest in any Party or the subject matter of the arbitration, unless such conflict is expressly acknowledged and waived in writing by all of the Parties. The Parties shall maintain the confidential nature of the arbitration proceeding and any award, including any hearing(s), except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as necessary in connection with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision. Any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration provision shall be governed by the Federal Arbitration Act. The arbitrator(s) shall have no authority to award consequential, treble, exemplary, or punitive damages of any type or kind regardless of whether such damages may be available under any law or right, with the Parties hereby affirmatively waiving their rights, if any, to recover or claim such damages.
The responsibility for compensation and expenses of the three arbitrators and all other expenses charged by JAMS shall be equally split in one-third (1/3) shares by each of Limited Assignee, PPA Buyer, and PPA Seller. In any arbitration arising out of or related to this Agreement, the arbitrators shall award to the prevailing Party or Parties, if any, the costs and attorney’s fees reasonably incurred in seeking to enforce the application of this Section 10(b) and by the prevailing party in connection with the arbitration. Notwithstanding the foregoing provisions of this Section 10(b), any costs incurred by a Party in seeking judicial enforcement of any written decision of the arbitrators shall be chargeable to and borne exclusively by the Party against whom such court order is obtained. The award shall be final and binding on the Parties and judgment upon any award may be entered in any court of competent jurisdiction.
(c) Judicial Reference. Without limiting the provisions in Section 10(b), if Section 10(b) is deemed ineffective or unenforceable in any respect, any dispute between the Parties arising out of or in connection with this Agreement or its performance, breach, or termination (including the existence, validity and interpretation of this Agreement and the applicability of any statute of 360
Exhibit Q - 10
limitation period) (each, a “Dispute”) shall be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections (a “Reference Proceeding”), which shall constitute the exclusive remedy for the resolution of any Dispute. As a condition precedent to initiating a Reference Proceeding with respect to any Dispute, the Parties shall comply with the provisions of Section 10(c)(i).
i. Notice of Dispute. Prior to initiating the Reference Proceeding, a Party (the “Disputing Party”) shall provide the other Parties (the “Responding Parties”) with a written notice of each issue in dispute, a proposed means for resolving each such issue, and support for such position (the “Notice of Dispute”). Within 10 days after receiving the Notice of Dispute, the Responding Parties shall provide the Disputing Party with a written Notice of each additional issue (if any) with respect to the dispute raised by the Notice of Dispute, a proposed means for resolving every issue in dispute, and support for such position (the “Dispute Response”). Thereafter, the Parties shall meet to discuss the matter and attempt in good faith to reach a negotiated resolution of the dispute. If the Parties do not resolve the dispute by unanimous agreement within fifteen (15) days after receipt of the Dispute Response, (the “Negotiation Period”), then any Party may provide to the other Parties written notice of intent for judicial reference (the “Impasse Notice”) in accordance with the further provisions of this Section 10(c).
ii. Applicability; Selection of Referees. Within 10 days of the delivery of an Impasse Notice, each of Limited Assignee and PPA Buyer shall nominate one (1) referee.
The two (2) referees (the “Party-Appointed Referees”) shall appoint a third referee (the “Third Referee”, together with the Party-Appointed Referees, the “Referees”). The Party-Appointed Referees shall be competent and experienced in matters involving the electric energy business in the United States, with at least ten (10) years of electric energy industry experience as a practicing attorney. The Third Referee shall be an active or retired California state or federal judge. Each of the Party-Appointed Referees and the Third Referee shall be impartial and independent of each of the Parties and of the other referees and not employed by any of the Parties in any prior matter. iii. Inability to Agree upon Third Referee. If the Party-Appointed Referees are unable to agree on the Third Referee within 45 days from delivery of the Impasse Notice, then the Third Referee shall be appointed pursuant to CCP Section 640(b) in an action filed in the Superior Court of California, County of San Francisco (the “Court”), and with due regard given to the selection criteria above. A request for appointment of a referee may be heard on an ex parte or expedited basis, and the Parties agree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP Section 170.6, each of PPA Buyer and Limited Assignee shall have one (1) peremptory challenge to the referee selected by the Court.
iv. Discovery; Proceedings.
(A) The Parties agree that time is of the essence in conducting the Reference Proceeding. Accordingly, the Referees shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within 20 days after the date of selection of the Third Referee, (ii) if practicable, try all issues of law or fact within 361
Exhibit Q - 11
180 days after the date of the conference, and (iii) report a statement of decision within 20 days after the matter has been submitted for decision. (B) Discovery and other pre-hearing procedures shall be conducted as agreed to by the Parties, or if they cannot agree, as determined by the Third Referee after discussion with the Parties regarding the need for discovery and other pre-hearing procedures. (C) Except as expressly set forth herein, the Third Referee shall determine the manner in which the Reference Proceeding is conducted, including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the Reference Proceeding. The Reference Proceeding, including the trial, shall be conducted at a neutral location selected by the Parties, or if not agreed by the Parties, by the Third Referee, in San Francisco, California.
(D) All proceedings and hearings conducted before the Referees, except for trial, shall be conducted without a court reporter, except that when any Party so requests, a court reporter will be used at any hearing conducted before the Referees, and the Referees will be provided a courtesy copy of the transcript. The Party making such a request shall have the obligation to arrange for and pay the court reporter.
v. Decision. The Referees shall render a written statement of decision setting forth findings of fact and conclusions of law. The Referees shall have no authority to award consequential, treble, exemplary, or punitive damages of any type or kind regardless of whether such damages may be available under any law or right, with the Parties hereby affirmatively waiving their rights, if any, to recover or claim such damages. The decision shall be entered as a judgment in the court in accordance with the provisions of CCP Sections 644 and 645. The decision shall be appealable to the same extent and in the same manner that such decision would be appealable if rendered by a judge of the Court. The Parties intend this general reference agreement to be specifically enforceable in accordance with the CCP.
vi. Expenses. Each of Limited Assignee, PPA Seller and PPA Buyer shall bear the compensation and expenses of its respective own counsel, witnesses, consultants and employees. The responsibility for compensation and expenses of the Referees and all other expenses of judicial reference shall be equally split in one-third (1/3) shares by each of Limited Assignee, PPA Buyer, and PPA Seller
10. U.S. Resolution Stay Protocol. The Parties hereby confirm that they are adherents to the ISDA 2018 U.S. Resolution Stay Protocol (“ISDA U.S. Stay Protocol”), the terms of the ISDA U.S. Stay Protocol are incorporated into and form a part of this Agreement, and this Agreement shall be deemed a Protocol Covered Agreement for purposes thereof. For purposes of incorporating the ISDA U.S. Stay Protocol, Limited Assignee shall be deemed to be a Regulated Entity, and PPA Buyer and PPA Seller each shall be deemed to be an Adhering Party.
In the event of any inconsistences between this Agreement and the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.
362
Exhibit Q - 12
363
Signature Page to Limited Assignment Agreement
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Assignment Agreement Effective Date.
[PPA SELLER]
By: ____________________________
Name:_______________________
Title:________________________
SAN DIEGO COMMUNITY POWER
By: ____________________________
Name:_______________________
Title:________________________
[FINANCING ENTITY].
364
By: ____________________________
Name:_______________________
Title:________________________
365
Appendix 1
Appendix 1
Assigned Rights and Obligations
PPA: Renewable Power Purchase Agreement dated as of [____], by and between PPA Buyer and PPA Seller, as may be amended from time to time.
Delivery Point: [____]
Further Information: PPA Seller shall transfer or, to the extent applicable, continue to transfer, to PPA Buyer the WREGIS Certificates associated with all [Renewable Energy Credits] corresponding to all [PV Energy] under the PPA pursuant to [Section ___ of the PPA], provided that the transferee of such WREGIS Certificates may be changed from time to time in accordance with the written instructions of both Limited Assignee and PPA Buyer upon fifteen (15) Business Days’ notice, which change shall be effective as of the first day of the next calendar month after such notice period has expired, unless otherwise agreed. All Assigned Product delivered by PPA Seller to Limited Assignee shall be a sale made at wholesale, with Limited Assignee reselling all such Assigned Product. Terms with initial capitalization used in this paragraph but not otherwise defined in this Agreement have the meaning set forth in the PPA.
Limitation of Limited Assignee Liability. Limited Assignee has separately agreed with the PPA Buyer and the Custodian (pursuant to the Custodial Agreement dated November 20, 2024, among PPA Buyer, Limited Assignee and the Custodian (the “Custody Agreement”)) to pay into the custodial account specified in the Custody Agreement (the “Custodial Account”) for Assigned Product delivered in each Month of the Assignment Period at the “Day-Ahead Average Price” as defined below (“Floating Price Payments”). Limited Assignee agrees for the benefit of the PPA Seller to pay the Floating Price Payments into the Custodial Account, and Limited Assignee’s payment obligations under this Agreement are limited to making such payments into the Custodial Account, for application as provided in the Custody Agreement. PPA Buyer and PPA Seller each acknowledge and agree that the making of Floating Price Payments into the Custodial Account by Limited Assignee shall not entitle (i) PPA Seller for payments in excess of the [Contract Price] for Assigned Product delivered hereunder or (ii) PPA Buyer to pay less than the [Contract Price] for Assigned Product delivered hereunder. PPA Buyer and Limited Assignee each acknowledge and agree that the making of Floating Price Payments into the Custodial Account by Limited Assignee shall not entitle (i) Limited Assignee to any payments from PPA Seller or (ii) affect the Custodian’s obligation to pay the Monthly Gross Amount to PPA Seller on or before the applicable payment date in the PPA. At all times the PPA Buyer shall remain obligated for the payment of all amounts owing under the terms of the PPA including the Monthly Gross Amount under each invoice. 366
Appendix 1
“Day-Ahead Average Price” means (x) the sum of the Day-Ahead Market Prices for each Pricing Interval in a Month divided by (y) the number of Pricing Intervals in such Month. As used in this definition, “Pricing Interval” means the unit of time for which [______] establishes a separate price. As used in this definition “Day-Ahead Market Price” means the Day Ahead Market or Locational Marginal Price for [_________________] for each applicable hour as published by [_______], or as such price may be corrected or revised from time to time by [_____] in accordance with its rules. For the avoidance of doubt, the Day-Ahead Average Price can be a negative number. 367
Appendix 2
Appendix 2
FINANCING ENTITY Notice Information
[To be completed before signing.]
368
Signature Page to Limited Assignment Agreement
Appendix 3
Copy of PPA
[To be attached.]
369
Appendix 2 - 1
370
SAN DIEGO COMMUNITY POWER
Staff Report – Item 15
____________________________________________________________________________________ TO: Board of Directors
FROM: Eric W. Washington, Chief Financial Officer/Treasurer VIA: Karin Burns, Chief Executive Officer
SUBJECT: Approve a Contract with Maher Accountancy for General Accounting Professional Services in an Up-to-Amount, Not-to-Exceed $1,185,000 from February 1, 2025, Through January 31, 2028, and for Two Optional One-Year Extensions for a Total Up-to-Amount, Not-to-Exceed $2,069,700, and Authorize the Chief Executive Officer to Execute the Contract
DATE: January 23, 2025
____________________________________________________________________________________ RECOMMENDATION:
Approve a Contract with Maher Accountancy for General Accounting Professional Services in an Up-to-Amount Not-to-Exceed $1,185,000 from February 1, 2025, through January 31, 2028, and for Two Optional One-Year Extensions for a total up-to-amount, not-to-exceed $2,069,700, and Authorize the Chief Executive Officer to Execute the Contract.
BACKGROUND:
On June 25, 2020, the San Diego Community Power (Community Power) Board of Directors (Board) received an update from staff on a request for proposals and other solicitations stating that an accounting firm with Community Choice Aggregation (CCA) experience, Maher Accountancy (Consultant), would be retained and would start work for Community Power on August 1, 2020.
Subsequently, on August 1, 2020, the professional services agreement (Agreement) between Community Power and the Consultant was executed for a term of August 1, 2020, to July 31, 2021, with a not-to-exceed amount of $112,500. Later, on May 27, 2021, the Board approved the first amendment to the Agreement to establish the not-to-exceed amount of $241,000 for the period covering May 1, 2021, to June 30, 2022. Then on June 23, 2022, the Board approved the second amendment to the Agreement to establish the not-to-exceed amount of $223,000 for the period July 1, 2022, to June 30, 2023.
Subsequently, the Board approved a third amendment to the Agreement to establish the not-to-exceed amount of $297,000 for the period July 1, 2023, to June 30, 2024. Next, on June 28, 2024, a fourth amendment was executed by the Chief Executive Officer through 371
the Community Power’s Contract Delegation Policy to establish a not-to-exceed amount of $87,500 from July 1, 2024, to September 30, 2024.
On October 1, 2024, Community Power entered into a new Agreement with the Consultant through section 5.b of the Community Power Procurement Policy to establish the not-to-exceed amount of $112,000 for a term of October 1, 2024, to January 31, 2025.
The new agreement was necessary to adequately finish Community Power’s FY 2023-24 financial audit consistent with sections 4.6.14, 5.4, and 7.2.2 of the Community Power Joint Powers Agreement.
Finally, on November 7, 2024, Community Power issued a request for proposals (RFP) for general accounting professional services to solicit additional proposals. The deadline to submit proposals was December 12, 2024, and Community Power received four proposals. Evaluation of the proposals occurred between December 18, 2024, and December 20, 2024, with scoring based primarily on general qualifications, demonstration of past success, proposed approach, and commercial pricing terms.
Following the reviews of the proposals, Maher Accountancy was identified as the proposer able to bring the greatest value to Community Power and was the only proposer with direct, relevant experience. Maher Accountancy demonstrated strong expertise, capabilities, and experience to adequately meet Community Power’s needs.
ANALYSIS AND DISCUSSION:
Maher Accountancy is a full-service audit, accounting, tax, and business consulting firm that provides services to businesses and local governments across California. The Consultant provides full-service accounting to several other CCA clients in the state and provides ancillary services for other CCAs using software and analytical tools developed specifically for its CCA accounts.
This experience has allowed Maher Accountancy to develop a deep understanding of the unique business and industry needs facing Community Power. Maher Accountancy has a solid reputation in the CCA industry, both with the clients it serves and with the numerous consultants that assist CCAs. Since its inception, Maher Accountancy has focused on providing accounting and audit services to government entities.
The proposed not-to-exceed amount of $1,185,000 for the period from February 1, 2025, to January 31, 2028, includes fees as follows:
Year 1
• Monthly Financial Operational Assistance Fee: $28,000 • Annual Financial Statement Audit Management Fee: $16,000 • Annual Anticipated Total Cost: $352,000
372
Year 2
• Year 1 cost escalated at a 5% escalation factor
• Annual Anticipated Total Cost: $369,600
Year 3
• Year 2 cost escalated at a 5% escalation factor ($369,600 x 1.05) • Annual Anticipated Total Cost: $388,400
Contingency
• Total Contingency: $75,000
The proposed cost is an increase from the third amendment which included a not-to-exceed amount of $277,000 for the period from July 1, 2023, to June 30, 2024. This increase is in alignment with the combination of cost-of-living increases resulting from inflation and an increased level of accounting services needed due to Community Power growth and development including, for example, the inclusion of accounting for the capital costs related to the $124 million Regional Energy Network program and the inclusion of significantly more staff and professional services to accommodate agency growth.
The proposal also includes two optional one-year extensions that total $407,300 and $427,400 in each respective one-year extension.
Scope of Services ($352,000 in year 1 – escalated by 5% escalation factor each subsequent year)
Maher Accountancy’s scope of services for the period outlines the tasks below.
I. Monthly Financial Operational Assistance ($28,000/month):
a) Maintain accounting system, accounts payable system and processes. b) Maintain the general ledger with proper support and documentation, including:
1. Posting accrued revenue, cash receipts, accounts payable, cash disbursements, payroll, accrued expenses, aggregate customer billings, etc.
2. Prepare or maintain the following monthly analysis regarding general ledger account balances:
• Reconciliation to statements from CCA’s financial institution for cash activity and balances;
• Reconciliation of customer data manager reports of customer activity and accounts receivable aging to general ledger; 373
• Computation of estimated user fees earned but not billed as of the end of the reporting period;
• Schedule of depreciation of capital assets;
• Aged schedule of accounts payable;
• Schedules of details regarding all remaining balance sheet accounts.
c) Manage accounts payable: Provides documentation of management review, proper segregation of duties, and access to source data. Ensures that required authorization is documented and that account coding is correct. Also provides for internal control to authorize the release of payment, providing an additional safeguard. Additionally, provides weekly and monthly support for ongoing payments to SD Community Power’s net-energy-metering customers. d) Assist with compliance of fiscal provisions of non-energy vendor contracts for services. Before remitting vendor invoices for management approval, verifies that each vendor invoice is compliant with contract provisions regarding time periods, rates, and financial limits.
e) Provide monthly year-to-date financial statements in compliance preferably with GAAP (without disclosures). The financial statements will be considered a compilation engagement in accordance with the Statements on Standards for Accounting and Review Services promulgated by the AICPA.
f) Provide monthly financial statements with comparison to budget.
1. Provide timely budget amendments and insight suggestions. g) Filing annual information returns, such as form 1099/1096’s. h) Prepare and file various compliance reports for state and local agencies such as user taxes, energy surcharges and state controller reports including financial transaction and government compensation in California and other states as needed.
i) Assist in treasury function and assist staff with development of the operating budget.
II. Financial Statement Audit Support ($16,000/yearly audit) a) Draft financial statements, notes, and MD&A letter
b) Prepare audit workpapers
374
c) Coordinate with SD Community Power and the auditor.
III. Contingency for out-of-scope items ($75,000/initial three-year term) a. Grant Management Support (for additional grant programs) i. Provides ongoing support in grant billing and reconciliation in compliance with grant-specific local, state and federal grant guidelines
ii. Assists in the preparation of SD Community Power’s single audit, if necessary
iii. Maintains financial statements for the San Diego Regional Energy Network
iv. Other grant support as needed
b. Territory Expansion
c. Change in Data Manager
d. Non-Financial Statement Audit Assistance
e. Customer Software Development and Enhancements
i. i.e. PowerBudget development
f. Change in Software
i. Payroll Software
ii. Accounting Software
g. Significant increase or change to Customer Programs
h. Acquisition of Capital Infrastructure
i. Power Generating Facilities
ii. Buildings
FISCAL IMPACT:
The proposed not-to-exceed amount of $1,185,000 for the period from February 1, 2025, to January 31, 2028, includes an annual cost of $352,000 in the first year and annual escalation of 5%. The proposed cost is an increase from the third amendment which included an annual not-to-exceed amount of $277,000 for the period from July 1, 2023, to June 30, 2024. The proposed not-to-exceed amount was the most competitive proposal received from the RFPs that were submitted, in which, for example, a proposal was received that included an annual fee greater than $1 million.
This increase is also in alignment with the combination of cost-of-living increases resulting from inflation and an increased level of accounting services needed due to Community Power growth and development including, for example, the inclusion of accounting for the capital costs related to the $124 million Regional Energy Network program and the inclusion of significantly more staff and professional services to accommodate agency growth.
COMMITTEE REVIEW:
The Finance and Risk Management Committee (FRMC) on January 16, 2025, recommended Board approval of the contract with Maher Accountancy for general accounting professional services in an amount not-to-exceed $1,131,000 from February 375
1, 2025, through January 31, 2028, and for two optional one-year extensions in an amount not-to-exceed $377,000 each respective year, for a total not-to-exceed amount of $1,885,000, and authorize the Chief Executive Officer to execute the contract.
During the FRMC meeting, the term of the contract was clarified to be three years ending on January 31, 2028. Additionally, since the FRMC meeting, in negotiation with Maher Accountancy, the proposed not-to-exceed amount is proposed to increase from $1,131,000 from February 1, 2025, through January 31, 2028, to an up-to-amount not-to-exceed $1,185,000. The total not-to-exceed amount is proposed to increase from $1,885,000, to an up-to-amount not-to-exceed $2,069,700. The proposed increase is due to a 5% annual escalation starting in the second year of the contract to account for cost-of-living increases and additional scope as Community Power continues to expand.
ATTACHMENTS:
Attachment A: Professional Services Agreement Between San Diego Community Power and Maher Accountancy.
376
ITEM 15
ATTACHMENT A
377
SAN DIEGO COMMUNITY POWER
PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (“Agreement”) is made and entered into on January XX, 2025, by and between SAN DIEGO COMMUNITY POWER, a California joint powers authority (“Community Power”) and MAHER ACCOUNTANCY, a California corporation (“Consultant”). Community Power and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.”
RECITALS
A. Consultant desires to perform and assume responsibility for the provision of certain professional services required by Community Power on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing the services reflected in Exhibit A and is familiar with the plans of Community Power.
B. Community Power desires to engage Consultant to render such professional services for general accounting services, financial statemen audit support, financial operational assistance, and grants management support (“Project”) as detailed in Exhibit A.
AGREEMENT
1. Scope of Project and Term.
1.1 General Scope of Project. Consultant promises and agrees to furnish to Community Power all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the Project. The Project is more particularly described in Exhibit A attached hereto. The Project shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto, and all applicable local, state and federal laws, rules and regulations.
1.2 Term. The term of this Agreement shall be from February 1, 2025 to January 31, 2028 unless earlier terminated as provided herein. Consultant shall complete the Project within the term of this Agreement and shall meet any other established schedules and deadlines.
1.2.1 Option to Extend. SDCP shall have the option to extend the term of this Agreement for two (2) additional terms of one (1) year each commencing on the first day after the expiration date of the previous term. SDCP may exercise the options by giving Consultant written notice not later than sixty (60) days prior to the expiration of the then current term. If SDCP exercises the options to extend, Consultant’s allowable compensation under Section 3.1 shall reset for each additional term.
2. Responsibilities of Consultant.
2.1 Control and Payment of Subordinates; Independent Contractor. The Project shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Project subject to the requirements of this Agreement.
Community Power retains Consultant on an independent contractor basis and not as an employee.
Consultant retains the right to perform similar or different services for others during the term of 378
this Agreement. Any additional personnel performing the Project under this Agreement on behalf of Consultant shall also not be employees of Community Power and shall at all times be under Consultant’s exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of the Project under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation insurance.
2.2 Schedule of Project. Consultant shall perform the Project expeditiously, within the term of this Agreement. Consultant represents that it has the professional and technical personnel required to perform the Project in conformance with such conditions. In order to facilitate Consultant’s conformance with the Schedule, Community Power shall respond to Consultant’s submittals in a timely manner. Upon request of Community Power, Consultant shall provide a more detailed schedule of anticipated performance to meet the schedule of the Project.
2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of Community Power.
2.4 Substitution of Key Personnel. Consultant has represented to Community Power that certain key personnel will perform and coordinate the Project under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of Community Power. In the event that Community Power and Consultant cannot agree as to the substitution of key personnel, Community Power shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Project in a manner acceptable to Community Power, or who are determined by the Community Power to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of the Community Power. The key personnel for performance of this Agreement are as follows:
Michael Maher, Vice President
2.5 Community Power’s Representative. In its capacity as investment manager, Consultant shall receive all instructions, directions and other communications on Community Power's behalf respecting Community Power's account from Eric Washington, Community Power Chief Financial Officer & Treasurer (“Community Power Representative”). Consultant is hereby authorized to rely and act upon all such instructions, directions and communications from such Representative or any agent of such Representative.
2.6 Consultant’s Representative. Consultant hereby designates Michael Maher, or his designee, to act as its Representative for the performance of this Agreement (“Consultant’s Representative”). Consultant’s Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant’s Representative shall supervise and direct the Project, using his or her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Project under this Agreement.
2.7 Coordination of Project. Consultant agrees to work closely with Community Power 379
staff in the performance of Project and shall be available to Community Power’s staff, consultants and other staff at all reasonable times.
2.8 Standard of Care; Performance of Employees. Consultant shall perform the Project under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California.
Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Project. Consultant warrants that all employees and sub-contractors shall have sufficient skill and experience to perform the Project assigned to them. Finally, Consultant represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Project, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from Community Power, any services necessary to correct errors or omissions which are caused by the Consultant’s failure to comply with the standard of care provided for herein. Any employee of the Consultant or its subcontractors who is determined by Community Power to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Project in a manner acceptable to Community Power, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform the Project.
2.9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with the Project. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to Community Power, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold Community Power, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.
2.10 Insurance.
2.10.1 Time for Compliance. Consultant shall not commence the Project under this Agreement until it has provided evidence satisfactory to Community Power that it has secured all insurance required under this section, in a form and with insurance companies acceptable to Community Power. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to Community Power that the subcontractor has secured all insurance required under this section.
2.10.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents, representatives, employees or subcontractors. Consultant shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage:
(A) Minimum Scope of Insurance. Coverage shall be at least as broad as 380
the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001 or exact equivalent); (2) Automobile Liability: Insurance Services Office Business Auto Coverage (form CA 0001, code 1 (any auto) or exact equivalent); and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance asrequired by the State of California and Employer’s Liability Insurance. (B) Minimum Limits of Insurance. Consultant shall maintain limits no less than: (1) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limitshall be twice the required occurrence limit;(2) Automobile Liability:
$1,000,000 per accident for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation limits as required by the Labor Code of the State of California. Employer’s Liability limits of $1,000,000 per accident for bodily injury or disease.
2.10.3 Professional Liability. Consultant shall procure and maintain, and require its subcontractors to procure and maintain, for a period of five (5) years following completion of the Project, errors and omissions liability insurance appropriate to their profession. Such insurance shall be in an amount not less than $2,000,000 per claim. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Consultant. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend.
2.10.4 Insurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by Community Power to add the following provisions to the insurance policies:
(A) General Liability.
(i) Commercial General Liability Insurance must include coverage for (1) Bodily Injury and Property Damage; (2) Personal Injury/Advertising Injury; (3) Premises/Operations Liability; (4) Products/Completed Operations Liability; (5) Aggregate Limits that Apply per Project; (6) Explosion, Collapse and Underground (UCX) exclusion deleted; (7) Contractual Liability with respect to this Agreement; (8) Broad Form Property Damage; and (9) Independent Consultants Coverage.
(ii) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; or (3) contain any other exclusion contrary to the Agreement. (iii) The policy shall give Community Power, its directors, officials, officers, employees, and agents insured status using ISO endorsement forms 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage. (iv) The additional insured coverage under the policy shall be 381
“primary and non-contributory” and will not seek contribution from Community Power’s insurance or self- insurance and shall be at least as broad as CG 20 01 04 13, or endorsements providing the exact same coverage.
(B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) Community Power, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects Community Power, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any insurance or self-insurance maintained by Community Power, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way. (C) Workers’ Compensation and Employers Liability Coverage. (i) Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and Consultant will comply with such provisions before commencing work under this Agreement.
(ii) The insurer shall agree to waive all rights of subrogation against Community Power, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Consultant.
(D) All Coverages. Defense costs shall be payable in addition to the limits set forth hereunder. Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits set forth herein shall be available to Community Power, its directors, officials, officers, employees and agents as additional insureds under said policies.
Furthermore, the requirements for coverage and limits shall be (1) the minimum coverage and limits specified in this Agreement; or (2) the broader coverage and maximum limits of coverage of any Insurance policy or proceeds available to the named insured; whichever is greater. (i) The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of Community Power (if agreed to in a written contract or agreement) before Community Power’s own insurance or self-insurance shall be called upon to protect it as a named insured. The umbrella/excess policy shall be provided on a “following form” basis with coverage at least as broad as provided on the underlying policy(ies). (ii) Consultant shall provide Community Power at least thirty 382
(30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to Community Power at least ten (10) days prior to the effective date of cancellation or expiration. (iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement.
Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement.
(iv) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by Community Power, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(v) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, Community Power has the right but not the duty to obtain the insurance it deems necessary and any premium paid by Community Power will be promptly reimbursed by Consultant or Community Power will withhold amounts sufficient to pay premium from Consultant payments.
In the alternative, Community Power may cancel this Agreement. Community Power may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project.
(vi) Neither Community Power nor any of its directors, officials, officers, employees or agents shall be personally responsible for any liability arising under or by virtue of this Agreement.
2.10.5 Separation of Insureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to Community Power, its directors, officials, officers, employees, agents and volunteers.
2.10.6 Deductibles and Self-Insurance Retentions. Any deductibles or self-insured retentions must be declared to and approved by Community Power. Consultant shall guarantee that, at the option of Community Power, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects Community Power, its directors, officials, officers, employees, agents and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.
2.10.7 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, licensed to do business in California, and satisfactory to Community Power.
383
2.10.8 Verification of Coverage. Consultant shall furnish Community Power with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to Community Power. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf and shall be on forms provided by Community Power if requested. All certificates and endorsements must be received and approved by Community Power before work commences. Community Power reserves the right to require complete, certified copies of all required insurance policies, at any time.
2.10.9 Subcontractor Insurance Requirements. Consultant shall not allow any subcontractors to commence work on any subcontract until they have provided evidence satisfactory to Community Power that they have secured all insurance required under this section.
Policies of commercial general liability insurance provided by such subcontractors shall be endorsed to name Community Power as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, Community Power may approve different scopes or minimum limits of insurance for particular subcontractors.
2.10.10 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out the Project, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life-saving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures.
3. Fees and Payments.
3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for the Project rendered under this Agreement at the rates set forth in Exhibit B, attached hereto. The total compensation shall not exceed one million, one hundred eight-five thousand dollars $1,185,000.00 for the initial term and an additional four hundred seven thousand three hundred dollars $407,300.00 and four hundred twenty seven thousand four hundred $427,400 for each respective, optional one-year extended term (for a total a total not-to-exceed amount of $2,069,700.00) without written approval of Community Power’s CEO. Extra Work may be authorized, as described below, and, if authorized, said Extra Work will be compensated at the rates and manner set forth in this Agreement.
3.2 Payment of Compensation. Consultant shall submit to Community Power a monthly itemized statement which indicates work completed and hours of the Project rendered by Consultant. The statement shall describe the amount of services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. Community Power shall, within 45 days of receiving such statement, review the statement and pay all approved charges thereon.
3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses 384
unless authorized in writing by Community Power.
3.4 Extra Work. At any time during the term of this Agreement, Community Power may request that Consultant perform Extra Work. As used herein, “Extra Work” means any work which is determined by Community Power to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from Community Power’s Representative.
4. Accounting Records. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of Community Power during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.
5. General Provisions.
5.1 Termination of Agreement.
5.1.1 Grounds for Termination. Community Power may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven
(7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to Community Power, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause.
5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, Community Power may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of the Project under this Agreement. Consultant shall be required to provide such documents and other information within fifteen (15) days of the request.
5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, Community Power may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.
5.2 Delivery of Notices. All reports and other communications required hereunder to be in writing shall be delivered in person, or sent by first-class mail postage prepaid, by overnight courier, by confirmed facsimile with original to follow or by confirmed electronic mail with proof of receipt to the addresses set forth below. Either party to this Agreement may, by written notice given at any time, designate a different address for the receipt of reports and other communications due hereunder:
Consultant: Maher Accountancy
Attn: Michael Maher,
385
Vice President
1101 Fifth Avenue
Suite 200
San Rafael, CA 94901
Community Power: San Diego Community Power
Attn: Eric W. Washington, Chief
Financial Officer & Treasurer
815 E Street, Suite 12716
San Diego, CA 92112
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.
5.2.1 Electronic Delivery. From time to time, Consultant may be required to deliver certain documents to Community Power such as account information, notices and required disclosures. Community Power hereby consents to Consultant’s use of electronic means, such as email, to make such delivery. This delivery may include notification of the availability of such document(s) on a website, and Community Power agrees that such document(s) on a website, and Community Power agrees that such notification will constitute “delivery”. Community Power further agrees to provide Consultant with Community Power’s email address(s) and to keep this information current at all times by promptly notifying Consultant of any change in email address(s).
SDCP email addresses:
[email protected];
[email protected]
5.3 Ownership of Materials and Confidentiality.
5.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for Community Power to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement (“Documents & Data”). Consultant shall require all subcontractors to agree in writing that Community Power is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement.
Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by Community Power. Community Power shall not be limited in any way in its use of the Documents & Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at Community Power’s sole risk. 386
5.3.2 Intellectual Property. In addition, Community Power shall have and retain all right, title and interest (including copyright, patent, trade secret and other proprietary rights) in all plans, specifications, studies, drawings, estimates, materials, data, computer programs or software and source code, enhancements, documents, and any and all works of authorship fixed in any tangible medium or expression, including but not limited to, physical drawings or other data magnetically or otherwise recorded on computer media (“Intellectual Property”) prepared or developed by or on behalf of Consultant under this Agreement as well as any other such Intellectual Property prepared or developed by or on behalf of Consultant under this Agreement.
Community Power shall have and retain all right, title and interest in Intellectual Property developed or modified under this Agreement whether or not paid for wholly or in part by Community Power, whether or not developed in conjunction with Consultant, and whether or not developed by Consultant. Consultant will execute separate written assignments of any and all rights to the above referenced Intellectual Property upon request of Community Power.
Consultant shall also be responsible to obtain in writing separate written assignments from any subcontractors or agents of Consultant of any and all right to the above referenced Intellectual Property. Should Consultant, either during or following termination of this Agreement, desire to use any of the above-referenced Intellectual Property, it shall first obtain the written approval of the Community Power.
All materials and documents which were developed or prepared by the Consultant for general use prior to the execution of this Agreement and which are not the copyright of any other party or publicly available and any other computer applications, shall continue to be the property of the Consultant. However, unless otherwise identified and stated prior to execution of this Agreement, Consultant represents and warrants that it has the right to grant the exclusive and perpetual license for all such Intellectual Property as provided herein.
Community Power further is granted by Consultant a non-exclusive and perpetual license to copy, use, modify or sub-license any and all Intellectual Property otherwise owned by Consultant which is the basis or foundation for any derivative, collective, insurrectional, or supplemental work created under this Agreement.
5.3.3 Confidential Relationship. The terms and conditions of this Agreement, and all information and advice furnished by either party to the other shall be treated as confidential and shall not be disclosed to third parties except (i) as required by law, rule, or regulation, (ii) as requested by a regulatory authority, (iii) for disclosures by either party of information that has become public by means other than wrongful conduct by such party or its officers, employees, or other personnel, (iv) for disclosures by either party to its legal counsel, accountants, or other professional advisers, (v) as necessary for Consultant to carry out its responsibilities hereunder, or (vi) as otherwise expressly agreed by the parties.
5.3.4 Infringement Indemnification. Consultant shall defend, indemnify and hold Community Power, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by Community Power of the Documents & Data, including any method, process, product, or concept specified or depicted. 387
5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.
5.5 Attorney’s Fees. If either Party commences an action against the other Party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney’s fees and all other costs of such action.
5.6 Indemnification.
5.6.1 To the fullest extent permitted by law, Consultant shall defend (with counsel of Community Power’s choosing), indemnify and hold the Community Power, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, arising solely out of the negligence, recklessness, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant shall defend, at Consultant’s own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against Community Power, its directors, officials, officers, employees, agents or volunteers arising solely out of the negligence, recklessness, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against Community Power or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding arising solely out of the negligence, recklessness, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant shall reimburse Community Power and its directors, officials, officers, consultants, employees, agents and/or volunteers, for any and all legal expenses and costs, including reasonable attorneys’ fees, incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Except for actions or claims arising out of willful misconduct, Consultant's obligation to indemnify shall be restricted to insurance proceeds, if any, received by Consultant. This section shall survive any expiration or termination of this Agreement.
5.6.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance of “design professional” services (as that term is defined under Civil Code § 2782.8), then, and only to the extent required by Civil Code § 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.
388
5.7 Entire Agreement. This Agreement contains the entire Agreement of the Parties 389
with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties.
5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Diego County.
5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement.
5.10 Community Power’s Right to Employ Other Consultants. Community Power reserves right to employ other consultants in connection with this Project.
5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties.
5.12 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of Community Power. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.
5.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days.
All references to Consultant include all personnel, employees, agents, and subcontractors of Consultant, except as otherwise specified in this Agreement. All references to Community Power include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.
5.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.
5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.
5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.
5.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
390
5.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, Community Power shall have the right to rescind this Agreement without liability.
For the term of this Agreement, no member, officer or employee of Community Power, during the term of his or her service with Community Power, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
5.19 Equal Opportunity Employment and Subcontracting. Consultant represents that it is an equal opportunity employer and it shall not discriminate on the basis of race, gender, gender expression, gender identity, religion, national origin, ethnicity, sexual orientation, age, or disability in the solicitation,selection, hiring, or treatment of applicants, employees, subcontractors, vendors, or suppliers. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Further, Consultant shall provide equal opportunity for subcontractors to participate in subcontracting opportunities.
Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for Workers’ Compensation, or to undertake self- insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Project.
5.20 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.
5.21 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.
5.22 Subcontracting. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of Community Power. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
391
SIGNATURE PAGE TO
SAN DIEGO COMMUNITY POWER PROFESSIONAL
SERVICES AGREEMENT
IN WITNESS WHEREOF, the Parties have made and executed this Agreement as of the date first written above.
SAN DIEGO COMMUNITY POWER
By:
Karin Burns, Chief Executive Officer
MAHER ACCOUNTANCY
By:
Michael Maher, Vice President
APPROVED AS TO FORM:
By:
Veera Tyagi,
Community Power General Counsel
ATTEST:
By:_________________________________
Maricela Hernandez
Community Power Clerk of the Board
392
EXHIBIT A
SCOPE OF SERVICES
A. Monthly Financial Operational Assistance:
a. Maintain accounting system, accounts payable system and processes. b. Maintain the general ledger with proper support and documentation, including:
i. Posting accrued revenue, cash receipts, accounts payable, cash disbursements, payroll, accrued expenses, aggregate customer billings, etc.
ii. Prepare or maintain the following monthly analysis regarding general ledger account balances:
1. Reconciliation to statements from CCA’s financial
institution for cash activity and balances;
2. Reconciliation of customer data manager reports of
customer activity and accounts receivable aging to
general ledger;
3. Computation of estimated user fees earned but not
billed as of the end of the reporting period;
4. Schedule of depreciation of capital assets;
5. Aged schedule of accounts payable;
6. Schedules of details regarding all remaining balance sheet accounts.
c. Manage accounts payable: Provides documentation of management review, proper segregation of duties, and access to source data.
Ensures that required authorization is documented and that account coding is correct. Also provides for internal control to authorize the release of payment, providing an additional safeguard. Additionally provides weekly and monthly support for ongoing payments to SD Community Power’s net-energy-metering customers.
d. Assist with compliance of fiscal provisions of non-energy vendor contracts for services. Before remitting vendor invoices for management approval, verifies that each vendor invoice is compliant with contract provisions regarding time periods, rates, and financial limits.
e. Provide periodic and year-to-date financial statements in compliance preferably with GAAP (without disclosures). The financial statements will be considered a compilation engagement in accordance with the Statements on Standards for Accounting and Review Services promulgated by the AICPA.
393
f. Provide monthly financial statements with comparison to budget. i. Provide timely budget amendments and insight suggestions. g. Filing annual information returns, such as form 1099/1096’s. h. Prepare and file various compliance reports for state and local agencies such as user taxes, energy surcharges and state controller reports including financial transaction and government compensation in California.
i. Assist in treasury function and assist staff with development of the operating budget.
B. Financial Statement Audit Support
a. Draft financial statements, notes, and MD&A letter
b. Prepare audit workpapers
c. Coordinate with SD Community Power and the auditor.
C. Potential Out of Scope Items (To be Paid from Contingency Funds) a. Grant Management Support
i. Provides ongoing support in grant billing and reconciliation in compliance with grant-specific local, state and federal grant guidelines
ii. Assists in the preparation of SD Community Power’s single audit, if necessary
iii. Maintains financial statements for the San Diego Regional Energy Network
iv. Other grant support as needed
b. Territory Expansion
c. Change in Data Manager
d. Non-Financial Statement Audit Assistance
e. Customer Software Development and Enhancements
i. i.e. PowerBudget development
f. Change in Software
i. Payroll Software
ii. Accounting Software
g. Significant increase or change to Customer Programs
h. Acquisition of Capital Infrastructure
i. Power Generating Facilities
ii. Buildings
394
EXHIBIT B
COMPENSATION BILLING RATES
Reimbursable Expenses in addition to Compensation above:
Subscription and transaction fees for cloud-based accounts payable system (Bill.com) will be borne by Community Power. This will be a pass-through charge with no mark-up. Maher Accountancy will not pass through costs related to license fees for its own staff use.
Dollars, $ Year 1 Year 2 Year 3 Year 4 (Optional) Year 5 (Optional) Monthly Fee $ 28,000.00 $ 29,400.00 $ 30,900.00 $ 32,400.00 $ 34,000.00 Annual Audit Fee $ 16,000.00 $ 16,800.00 $ 17,600.00 $ 18,500.00 $ 19,400.00 Annual Total $ 352,000.00 $ 369,600.00 $ 388,400.00 $ 407,300.00 $ 427,400.00 Initial Three-Year Term Contingency $ 75,000.00
Three Year Up-to-Amount Not-to-Exceed $ 1,185,000.00
Year 4 /Year 5 Additional Contingency $ 50,000.00
Total Up-to-Amount Not-to-Exceed $ 2,069,700.00
395
SAN DIEGO COMMUNITY POWER
Staff Report – Item 16
____________________________________________________________________________________ TO: Board of Directors
FROM: Eric Washington, Chief Financial Officer
VIA: Karin Burns, Chief Executive Officer
SUBJECT: Authorize the Chief Executive Officer to Enter into a Sublease Agreement with CORELATION, INC. for Office Space
DATE: January 23, 2025
____________________________________________________________________________________ RECOMMENDATION:
Authorize the Chief Executive Officer to enter into a sublease agreement with CORELATION, INC., for office space located at 2305 Historic Decatur Road, San Diego, CA, in the amount of $638,208, plus utilities, for 24 months, with a potential option to extend for an additional year, and related documents.
BACKGROUND:
On June 1, 2022, San Diego Community Power (Community Power) entered into a Sublease Agreement to rent 4,811 square feet of office space with Nuvve Holding Corporation at 2488 Historic Decatur Road, Suite 250, San Diego, California 92106. The term of the Sublease Agreement was for six months, effective June 1, 2022, with two potential six-month extensions at a rate of $14,500 per month.
Subsequently, On November 1, 2022, Community Power entered into new Sublease Agreements with Nuvve Holding Corporation with a term through October 31, 2025. The new Sublease Agreements includes the original space, Suite 250, and an additional 2,408 square feet of space located at 2488 Historic Decatur Road, Suite 230, San Diego, California 92106. The monthly cost for this sublease agreements was $31,041.70.
Then, on September 28, 2023, Community Power entered into a sublease agreement with CORELATION, INC. at 2305 Historic Decatur Road Suite 200, San Diego, California, 92106. The monthly cost for the Sublease Agreement is $51,390. This current office space is able to accommodate Community Power’s current staff and is Community Power’s first dedicated area only for Community Power with 13,704 square feet. It includes private offices, conference rooms and a shared community space. The term of the agreement for the current office is for two years from November 1, 2023, to October 31, 2025, with an option to extend to October 31, 2026. 396
ANALYSIS AND DISCUSSION:
To ensure the continued and uninterrupted operation of Community Power, staff recommends the Board of Directors (Board) authorize the Chief Executive Officer to enter into a sublease agreement with CORELATION, INC., under the terms identified in Attachment A- the Letter of Intent (LOI), to expand Community Power’s office space located at 2305 Historic Decatur Road, San Diego, CA. This sublease agreement will have a 24-month term from the negotiated commencement date with an option to extend for one additional year. Draft terms also include three months of free rent for the initial term.
The monthly cost for this new space is $26,592, or $3 per square foot, before additional electricity costs which will also be passed to Community Power. The proposed office space is planned to include 8,864 square feet and will be located on the first floor of Community Power’s existing office space.
The current office space, encompassing 13,704 square feet, provides capacity to accommodate Community Power's current staff of 72. Community Power’s number of employees are expected to increase to 80 per the staff authorized by the Board in the Fiscal Year 2024-25 budget and is planned to grow in subsequent fiscal years. To accommodate planned expansion and to accommodate associated needs for conference rooms and offices, Community Power will require a larger office footprint. We are therefore proposing to enter into a second sublease agreement with CORELATION, INC. to expand Community Power’s office space.
After careful consideration of several factors including cost and the importance of uninterrupted operations, Community Power determined that expanding in the same building and current office space represents the most cost-effective and efficient solution for our current and future needs.
Staff therefore recommends that the Board authorize the Chief Executive Officer to enter into a sublease agreement with CORELATION, INC., under the terms of the LOI, in the amount of $638,208, plus utilities, for 24 months, and authorize the Chief Executive Officer to execute the sublease agreement, a potential option to extend for an additional year, and related documents.
FISCAL IMPACT:
Community Power’s current Sublease agreement to lease office space is at a rate of $51,390 per month for a dedicated office space that accommodates Community Power’s current employees of 72. Community Power is expected to reach 80 employees by June 2025 with a proposal to expand further and is therefore currently near capacity at its current office space. The proposed Sublease Agreements is at an increased rate of $26,592 per month for a second dedicated office space that can accommodate Community Power’s long-term staffing needs. Should Community Power move into the second office space by March 1, 2025, this action will add $26,592 in costs to the Fiscal 397
Year 2024-25 budget given that the draft terms include three months of free rent for the initial term. Staff believes the new Sublease Agreement is necessary due to Community Power’s growth.
COMMITTEE REVIEW:
N/A
ATTACHMENTS:
A: Letter of Intent – Proposal to Sublease – San Diego Community Power - 2305 Historic Decatur Road, Suite 103, San Diego, California 92106 398
ITEM 16
ATTACHMENT A
399
January 6, 2025
Mr. Nick Norris
RE: Proposal to Sublease – San Diego Community Power
2305 Historic Decatur Road, Suite 103
San Diego, California 92106
Dear Nick:
Corelation, Inc., (“Sublandlord”) has authorized Range SD, as Sublandlord’s Broker of Record, to provide this letter of intent outlining the business terms under which Sublandlord would be willing to negotiate a Sublease agreement within the Building and Premises with San Diego Community Power (“Subtenant”):
(1) PREMISES:
a) Location: 2305 Historic Decatur Road, Suite 103
b) Square Footage: Tenant shall sublease an 8,864 RSF portion of the 1st Floor located in Suite 103. (2) TERM:
a) Term: The Sublease shall have an initial term (“Term”) of twenty-four (24) months commencing on the Sublease Commencement Date as determined pursuant to Section 5 below. b) Option to Extend: Subtenant shall have one (1) consecutive option to extend the Term of the Sublease (the “Extension Option”), with said option being for an additional twelve (12) months.
The Base Rent for each Extension Option shall be at $3.00 + Electricity per rentable square foot of the Premises.
(3) SUBLEASE COMMENCEMENT DATE:
The “Sublease Commencement Date” shall be estimated February 1, 2025. Subtenant shall be provided occupancy, at no charge, to the Premises so long as a sublease agreement is fully executed.
(4) RENT:
a) Base Rent: $3.00 + Electricity per rentable square foot as of the Sublease Commencement Date, on a Net of Electricity basis, inclusive of janitorial services to the Premises. The monthly Base Rent shall remain flat during the Term with no annual escalations. 400
b) Abated Base Rent: Four (4) months from months two (2) through five (5). c) Holdover: Subtenant shall have the right at the expiration of the Sublease and upon sixty (60) days prior written notice to Sublandlord to extend the Term of the Sublease for no more than four (4) months at the same rental rate in effect upon the scheduled Sublease Expiration Date. d) Operating Expenses: Subtenant shall not be required to pay its pro rata share of Operating Expenses for the Sublease Term.
(5) SECURITY DEPOSIT:
No security deposit shall be required of Tenant.
(6) FIRST MONTH’S RENT:
The Base Rent for the first (1st) month of the Term shall be payable upon the Sublease Commencement Date.
(7) USE:
Subtenant shall have the right to use and occupy the Premises for office operations and for general business purposes, including without limitation, any other lawful purpose consistent with the character of the building.
(8) ASSIGNMENT AND SUBLETTING: PER MASTER LEASE
(9) BUILDING AND SERVICES: PER MASTER LEASE
(10) PARKING PRIVILEGES: PER MASTER LEASE
(11) SIGNAGE:
Subject to approval from the Master Lessor, Sublessor shall provide Sublessee all standard lobby directory and suite identification signage per the Master Lease. (12) EXISTING FURNITURE, FIXTRUES, AND EQUIPMENT OF PREMISES:
Subtenant shall have the right, at no additional cost to SubTenant, to utilize the existing Furniture, Fixtures , including telecommunications cabling, (“FF&E”) located in the Premises. Subtenant shall have no responsibility to remove existing Furniture, Fixtures, and telecommunications cabling at the end of the Sublease Term.
(13) RESTORATION:
Subtenant shall not be required to restore any improvements within the Premises upon the expiration of the Sublease or any extensions thereof unless approved alterations are made to the Premises and restoration is required as part of approval. Subtenant shall have the right to remove any and all trade fixtures installed during occupancy and any improvements or alternations considered to be the intellectual property or trade secrets of Subtenant. 401
(14) BROKERAGE FEE:
Chuck Reiter of CBRE exclusively represents Tenant with respect to the transaction proposed herein. In the event a Sublease is consummated between Sublandlord and Subtenant, Sublandlord shall pay CBRE a market brokerage fee equal to four percent (4%) of the aggregate rent for the Term of the Sublease. Said commission shall be due 50% upon sublease execution and 50% upon sublease commencement.
Sublandlord and Subtenant acknowledge that this Letter of Intent is not a Lease and is non-binding, and that it is intended as the basis for negotiation of a Sublease. The Sublease shall be subject to Master Landlord, Sublandlord and Subtenant’s approval in each party’s sole discretion and only a fully executed Sublease shall bind the parties.
Range and Corelation, Inc. appreciate your consideration of this Letter of Intent. If you have any questions with respect to the foregoing, or if you require any additional information, please contact me at (619) 850-9413. We look forward to receiving your response no later seven (7) days from the date of this letter.
Submitted electronically by:
Range SD
Nick Norris, DRE License No 01911071
402
SAN DIEGO COMMUNITY POWER
Staff Report – Item 17
____________________________________________________________________________________ TO: Board of Directors
FROM: Xiomalys Crespo, Sr. Community Engagement Manager VIA: Karin Burns, Chief Executive Officer
SUBJECT: Approval of Community Advisory Committee Member for County of San Diego (Unincorporated)
DATE: January 23, 2025
____________________________________________________________________________________ RECOMMENDATION:
Approve the Appointment of Ross Pike to the Community Advisory Committee (CAC) for the County of San Diego (Unincorporated).
BACKGROUND:
Per Section 5.10.3 of the San Diego Community Power (Community Power) Joint Powers Authority (JPA) Agreement:
The Board shall establish a Community Advisory Committee comprised of non-Board members. The primary purpose of the Community Advisory Committee shall be to advise the Board of Directors and provide for a venue for ongoing citizen support and engagement in the strategic direction, goals, and programs of the Authority. The Community Advisory Committee is advisory only, and shall not have decision-making authority, nor receive any delegation of authority from the Board of Directors. Each Party may nominate a committee member(s) and the Board shall determine the final selection of committee members, who should represent a diverse cross-section of interests, skills sets, and geographic regions.
ANALYSIS AND DISCUSSION:
At both the July 2023 CAC and Board of Directors meetings, staff announced a CAC vacancy for the County of San Diego (Unincorporated). Since, staff has promoted this and other vacancies through Community Power’s social media channels and the CAC, as well as directly engaging with staff, advocacy organizations, and the general public during networking and tabling events in all of our member agencies.
If approved by the Board with a simple majority vote, staff will work with the representative to conduct their oath of office and onboarding prior to the next CAC meeting on February 403
13, 2025. Staff will also update Attachment A: CAC Roster and Seat Assignments, which is publicly available through Community Power’s website, to include the new representative.
As of the drafting of this report, seats for the City of Chula Vista and the City of La Mesa remain vacant. Applications for vacant seats remain open until filled.
FISCAL IMPACT:
N/A
COMMITTEE REVIEW:
N/A
ATTACHMENTS:
A: CAC Roster and Seat Assignments
404
ITEM 17
ATTACHMENT A
405
Community Advisory Committee Roster
Member Agency Name Appointed
Current
Term
Term
Ends
San Diego
Luis Montero-Adams August 2024 First 2025
Matthew Vasilakis (Chair) April 2020 Second 2026
Chula Vista
Anthony Sclafani July 2022 First 2025
Vacant - - -
La Mesa
Vacant - - -
David Harris April 2020 Second 2026
Encinitas
Gary L. Jahns April 2020 Second 2025
Tara Hammond April 2020 Second 2026
Imperial Beach
Kenneth Hoyt May 2024 First 2025
Ilian Sandoval November 2023 First 2026
County of San
Diego
(unincorporated)
Peter Andersen February 2022 First 2025
Vacant - - -
National City
Aida Castañeda (Secretary) February 2022 First 2025
Lawrence Emerson
(Vice-Chair) February 2022 Second 2026
Terms end at the end of every June. Members are subject to two, three-year consecutive terms.
They are also subject to CAC Policies and Procedures. Odd seats are displayed in blue. 406
SAN DIEGO COMMUNITY POWER
Staff Report – Item 18
____________________________________________________________________________________ TO: Board of Directors
FROM: Lucas Utouh, Senior Director of Data Analytics and Customer Operations
Aaron Lu, Rates and Strategy Manager
VIA: Karin Burns, Chief Executive Officer
SUBJECT: Update on 2025 Projected Rate Changes
DATE: January 23, 2025
____________________________________________________________________________________ RECOMMENDATION:
Receive and file an update on San Diego Community Power’s (Community Power) 2025 projected rate changes.
BACKGROUND:
As Community Power prepares to develop and propose rates for 2025, it is critical to understand current San Diego Gas and Electric (SDG&E) generation and the Power Charge Indifference Adjustment (PCIA) rates – as both SDG&E bundled and PCIA rates play a role in Community Power’s rate setting process, particularly as it relates to Community Power’s competitiveness. Community Power‘s Board of Directors last adjusted Community Power commodity/generation rates on January 18, 2024, and those rates came into effect as of February 1, 2024. Community Power’s Board of Directors also adopted Power100 Green-e Certified and PowerBase services, which came into effect as of July 1, 2024.
ANALYSIS AND DISCUSSION:
Rate Setting Process
Community Power will establish rates sufficient to recover all costs related to the operations of our service and the Board of Directors has the ultimate responsibility for setting the electric generation rates for Community Power’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 Community Power to be fiscally sustainable, the final approved rates should, at a minimum, meet the annual revenue requirements developed by Community Power, including any reserves or coverage requirements set forth in policy 407
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, Community Power considers the following objectives in its rate setting framework:
• Cost Recovery,
• Reserves,
• Rate Competitiveness and Customer Value,
• Rate Stability,
• Equity Among Customers,
• Rate Structure Simplicity and Comparability,
• Transparency,
• Avoidance of Cost Shifting, and
• Cost of Service.
Additionally, per previous Board direction, Community Power staff will, if possible, recommend rates that remain competitive with SDG&E service.
It is important to note rates consist of several components, only one of which Community Power has control over, i.e., Community Power’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 rate, as it is the above market cost of power associated with SDG&E’s portfolio that both SDG&E’s bundled customers and Community Power’s customers, who have departed SDG&E commodity service, pay and can affect Community Power’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.
408
2025 Rates Timeline
Community Power, like most Community Choice Aggregators (CCAs), 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 2025 rates and when Community Power needs updated rates available for 2025. The expected schedule for Community Power’s rate setting is as follows:
• May 15, 2024: SDG&E filed its 2025 Energy Resource Recovery Account (ERRA) forecast application.
• May 30, 2024: Community Power’s Board of Directors adopted Power100 Green-e Certified and PowerBase services, which came into effect as of July 1, 2024. • October 21, 2024: SDG&E filed its Updated 2025 ERRA forecast application. • November 15, 2024: SDG&E filed Advice Letter 4548-E: Annual Electric Regulatory Account Update and Preliminary January 1, 2025, Rates Outlook. • December 5 and 12, 2024: Community Power staff briefed its Community Advisory Committee and Board of Directors of SDG&E’s 2025 projected and PCIA rates changes.
• January 16 and 23, 2025: Community Power staff presents Community Power’s 2025 projected rate changes to the Community Advisory and Finance Risk Management Committees and Board of Directors.
• January 31, 2025: SDG&E files its Consolidated Filing to Implement February 1, 2025, Electric Rates advice letter.
• February 1, 2025: SDG&E’s expected effective date of implementation of its delivery and generation rates as well as the PCIA.
• February 7, 2025: Community Power Board adopts 2025 rates, to be retroactively effective on February 1, 2025.
2025 Bundled & PCIA Rates Projections
Based on SDG&E’s October 2025 Updated forecast application, their projected bundled system average generation rates were expected to increase by 0.07% as of January 1, 2025. On November 15, 2024, SDG&E filed a regulatory account update advice letter which adjusted their projected bundled system average generation rates to increase by
6.20%. SDG&E attributes bundled system average generation rates increase in 2025 primarily to actualization of balancing account projections and impacts from the General Rate Case.
409
Recent bundled generation rate changes and these projections are articulated in the table below.
Based on our high-level forecasts and the filings by SDG&E, Community Power is expecting in 2025 to see a decrease in PCIA rates for all vintages relevant to Community Power customers, including Vintage Year 2020 (Phase 1 & 2 customers), Vintage Year 2021 (Phase 3 customers), and Vintage Year 2022 (Phase 4 customers).
On December 9, 2024, SDG&E requested a one-month extension from the CPUC to implement its 2025 Consolidated Rate advice letter and to delay the rate adjustments reflected in that advice letter from being effective as of January 1, 2025 to February 1, 2025. The CPUC approved the request because the extension is necessary to avoid potential customer confusion due to fluctuating rates and provides the needed time to plan and implement the consolidated electric rate changes from the recent approved General Rate Case decision.
2025 Rate Setting Mechanics
In accordance with SDG&E’s definition of load transfer from bundled service to Community Power’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 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 Community Power Board for adoption on February 7, 2025 that both meet the revenue and prudent reserve needs of Community Power 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 2025. 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 illustrated below.
Customer Class 1/1/2023 1/1/2024 3/1/2024 10/1/2024* 1/1/2025** 1/1/2025*** 1/1/2023 - 1/1/2024 1/1/2024 - 3/1/2024 3/1/2024 - 10/1/2024 10/1/2024 - 1/1/2025 Residential 0.1967 0.1514 0.1517 0.1517 0.1519 0.1622 -23.03% 0.19% 0.00% 6.96% Small Commercial 0.1742 0.1283 0.1285 0.1285 0.1288 0.1385 -26.34% 0.19% 0.00% 7.78% M/L C&I 0.2039 0.1578 0.1581 0.1581 0.1578 0.1660 -22.61% 0.18% 0.00% 5.04% Agricultural 0.1455 0.1120 0.1122 0.1122 0.1116 0.1174 -23.00% 0.18% 0.00% 4.61% Lighting 0.1286 0.0991 0.0993 0.0993 0.0995 0.1063 -22.92% 0.19% 0.00% 7.07% System Total 0.1947 0.1499 0.1502 0.1502 0.1503 0.1595 -23.03% 0.19% 0.00% 6.20% * SDG&E 10/1/2024 rate change did not revise commodity rates and PCIA. ** SDG&E proposed 1/1/2025 rates from Oct. 2025 ERRA Update, filed 10/21/2024. ** *SDG&E proposed 1/1/2025 rates from Nov. Consolidated Rates Filing, filed 11/15/2024.
SDG&E Avg. Commodity Rate ($/kWh) SDG&E Avg. Commodity Rate Change (%) 410
FISCAL IMPACT:
N/A
COMMITTEE REVIEW:
The Community Advisory and Finance and Risk Management Committees reviewed this item at the January 16, 2025, meetings.
ATTACHMENTS:
N/A
411
SAN DIEGO COMMUNITY POWER
Staff Report – Item 19
____________________________________________________________________________________ TO: Board of Directors
FROM: Laura Fernandez, Director of Regulatory and Legislative Affairs Aisha Cervantes-Cissna, Senior Policy Manager
Patrick Welch, Senior Legislative Manager
Stephen Gunther, Regulatory Manager
Dean Kinports, Senior strategic Policy Manager
VIA: Karin Burns, Chief Executive Officer
SUBJECT: Update on Regulatory and Legislative Affairs
DATE: January 23, 2025
____________________________________________________________________________________ RECOMMENDATION:
Receive and file the update on regulatory and legislative affairs.
BACKGROUND:
Staff will provide monthly updates via written staff report to the Board of Directors regarding SDCP regulatory and legislative engagement. Staff also intends to provide quarterly presentations to the Board of Directors. The quarterly update for Quarter 1 2025 will be presented at the January 23, 2025 Board of Directors meeting. The quarterly presentation is intended to provide a verbal overview of important highlights from the preceding quarter. Monthly staff reports provide more in-depth and timely regulatory and legislative updates.
ANALYSIS AND DISCUSSION:
A) Regulatory Updates
Renewables Portfolio Standard
On December 24, 2024, the California Public Utilities Commission (CPUC) issued a Final Decision on the 2024 Renewables Portfolio Standard (RPS) Procurement Plans filed by load serving entities. Community Power’s Draft 2024 RPS Procurement Plan, which was filed in July 2024, was accepted and deemed final in the Final Decision. However, the CPUC also identified Community Power’s filing as having some inappropriately redacted information, and as such, Community Power must revise its 2024 RPS Plan by January 23, 2025.
412
Integrated Energy Policy Report
On December 12, 2024, the California Energy Commission hosted a workshop to provide an overview of draft annual and hourly electricity demand forecast results used in the 2024 Integrated Energy Policy Report, which informs several planning processes and resource adequacy obligations. CalCCA filed comments on the workshop on January 2, 2025, recommending that the Commission:
• Supplant or supplement its bottom-up forecast development for long-term needs with historical top-down load information in the near-term to ensure load forecast stability for resource adequacy obligations; and
• Document the work of the Demand Analysis Working Group (DAWG) to ensure all LSEs benefit from decisions or discussions regarding certain programs and how they impact the demand forecast.
The Commission is expected to post final forecast results for proposed adoption on January 21, 2025.
Disconnections
Disconnections Phase 2 Scoping Ruling
On October 30, 2024, the CPUC issued a Ruling seeking comments regarding the implementation of (1) Senate Bill (SB) 1142 and (2) potential additional disconnection protections during extreme weather events. Opening comments on the Ruling were due November 22, 2024. Reply comments are due January 17, 2025. A workshop on this Ruling was held on December 12, 2024. Opening comments on the workshop are due January 10, 2025. Reply comments on the workshop are due January 17, 2025.
SB 1142, enacted in September 2024, requires Investor-Owned Utilities (IOUs) to reconnect customers who agree to a payment plan. SB 1142 directs the Commission to determine additional implementation details associated with reconnection. A motion filed by The Utility Reform Network (TURN) in August 2024 seeks to enhance protections against disconnection during extreme heat. The motion proposes modifying rules to prevent disconnections when temperatures exceed 100 degrees Fahrenheit or when the "Major" risk-level is forecasted on the National Weather Service's "HeatRisk" index. It also suggests that electric IOUs proactively contact disconnected customers under these conditions to offer reconnection without requiring any upfront payment, provided the customer consents to a payment plan.
CalCCA filed opening comments on November 22, 2024, taking the following positions:
• When restoring service to a customer who was disconnected due to nonpayment, IOUs should offer customers all payment plans for which they qualify. • The CPUC should hire a third party to perform a holistic examination of disconnection protections and payment programs.
413
• The CPUC should adopt TURN’s proposed rule modifications; the HeatRisk index should be adopted, and a similar indexing system for low temperature risks (NWS Cold Threats).
The IOUs (SDG&E, SCE, and PG&E) do not support changes to existing disconnection policies. The Public Advocates Office recommends offering all payment plans for reconnection without upfront fees and calls for an evaluation of existing plans. They suggest more data is needed before adopting TURN's changes. The Utility Consumers’ Action Network advocates for limiting IOU profits to tackle the root causes of disconnections due to arrearages. The Utility Reform Network and allies push for a full spectrum of payment options upon reconnection and thorough financial assessments before disconnections.
The workshop presentations largely reflected the comments summarized above.
Commissioner Houck presided over the workshop and expressed great interest in accounting for a customer’s ability to pay before terminating service due to nonpayment.
B) State Legislative Activities Update
Monitoring the New Legislative Session, Which Will Likely Focus on Affordability The 2025 legislative year officially began on December 2, marking the start of the first year of a two-year legislative session. Legislators have until February 21 to introduce new bills. SDCP staff will monitor legislative activities related to electricity and energy that could impact SDCP and its customers. SDCP staff will analyze introduced legislation and take positions in accordance with the Board approved Legislative and Regulatory Platform. The Legislature is expected to consider fewer bills this year due to legislative rule changes. During the 2025-26 legislative session, Assemblymembers will only be allowed to introduce 35 bills, down from 50 in the prior legislative session. Senators will also be limited to 35 bills, down from 40 the session prior. The goal of the rule change is to make better use of the Legislature’s limited bandwidth.
SDCP’s legislative engagement generally focuses on the work of the Senate Committee on Energy, Utilities and Communications (SEUC) and the Assembly Committee on Utilities and Energy (U&E). Both committees analyze and vote on legislation that impacts SDCP operations and customers. They are very active committees. Last year, SEUC held 10 hearings to review and vote on at least 65 pieces of legislation, and U&E held 13 hearings to review and vote on 74 pieces of legislation.
There is a new chair of SEUC, Senator Josh Becker (D-Menlo-Park). He pledged bold action on clean energy and affordability and called for smart regulations. U&E will continue to be led by Assemblymember Petrie-Norris (D-Irvine), who said she’d continue to focus on lowering costs and building critical infrastructure. There aren’t any Senators 414
representing SDCP’s service area on SEUC. The full membership of U&E has not been announced.
Consistent with the focus on affordability from the chairs of SEUC and U&E, the Speaker of the Assembly also urged lawmakers to do more to lower energy costs. In a speech, he told his legislative colleagues that California must lead on climate, but not on the backs of poor and working people.
SDCP Spearheads Letter to Support Distributed Electricity Backup Assets Funding in 2025 State Budget
SDCP led a group of seven other CCAs on a letter to the state’s Director of Finance (DOF) that advocated for funding for the California Energy Commission’s (CEC) Distributed Electricity Backup Assets (DEBA). The DOF leads putting together the Governor’s annual budget proposals. DEBA was created in 2022 as part of the state’s electric Strategic Reliability Reserve (SRR) to fund clean distributed energy assets that can help with load reduction and in emergency grid scenarios. If funded, DEBA could be a state-level funding avenue that could be pursued for programs like Solar Battery Savings. There would be an application and scoring process if the program is funded. The 2024 State Budget included a commitment to fund DEBA with $200 million, but the upcoming 2025 State Budget must follow through and provide the actual appropriation to the CEC.
There isn’t a guarantee that the 2024 State Budget commitment to DEBA will be included in the 2025 State Budget. While the Legislative Analyst’s Office (LAO) predicts that the 2025 State Budget is on track to be roughly balanced, there is no capacity for new spending commitments due to projected deficits in future years. However, DEBA would likely be funded by revenue from the Greenhouse Gas Reduction Fund, which is a special fund separate from the state’s General Fund that was analyzed by the LAO.
C) Federal Activities Update
Monitoring Congressional Activity on the Future of the Inflation Reduction Act The 119th Congress was sworn in on January 3. Both houses of Congress are now controlled by the Republican party. Democrats controlled the Senate and Republicans controlled the House in the prior Congress. Among other items, the new Congress is expected to attempt to address energy issues and may seek to make changes to the Inflation Reduction Act (IRA), which among other things, established tax credits for renewable energy generation and energy storage. SDCP staff and federal representatives will monitor IRA related developments and engage on issues when they are in accordance with SDCP’s Legislative and Regulatory Platform.
FISCAL IMPACT:
N/A
415
COMMITTEE REVIEW:
N/A
ATTACHMENTS:
A: Distributed Electricity Backup Assets (DEBA) Letter
416
ITEM 19
ATTACHMENT A
417
December 4, 2024
Joe Stephenshaw
Director, Department of Finance
1021 O Street, Suite 3110
Sacramento, CA 95814
Subject: Funding the California Energy Commission’s (CEC) Distributed Electricity Backup Assets (DEBA) Program Will Help Ratepayer Affordability Dear Director Stephenshaw,
The 2024 Budget Act included a $200 million set aside from the Greenhouse Gas Reduction Fund (GGRF) for DEBA in 2025-26. We urge you to work with the Governor to follow through on this commitment and include the appropriation in the January budget proposal.
Funding for DEBA has become even more critical considering increasing electric rates and the Governor’s recent executive order to curb electricity costs (Executive Order N-5-24).
According to the CPUC’s Public Advocate’s Office, bundled electricity rates have increased by between 82% to 110% in the past decade. Funding DEBA aligns with the Executive Order’s goal to "take decisive action to rein in” ratepayer costs and ensure the prioritization of the “most efficient and effective opportunities to meet energy demand with clean resources.”
DEBA was created in 2022 as part of the Strategic Reliability Reserve (SRR) to fund local community power projects through “the construction of cleaner and more efficient distributed energy assets” that can serve as on-call emergency supply or load reduction while minimizing cost exposure to ratepayers (PRC Section 25791). The SRR was created to ensure electricity reliability during extreme weather events from climate change to help support California's leadership “in driving the affordable and equitable transition to a clean reliable energy system and economy” (PRC Section 25790). DEBA, through a prior appropriation, has funded projects to increase the capacity of existing thermal generators, but has yet to have sufficient funds for distributed asset projects. 418
Funding DEBA will help reduce cost pressure on ratepayers by supporting the acquisition of additional clean customer resources that can be enrolled in virtual power plants (VPPs).
California’s CCAs are at the forefront of building VPPs, which rely on aggregated customer resources – like batteries and thermostats – that are critical to achieving state clean energy goals, reducing costs for ratepayers, supporting grid reliability & resilience, and advancing environmental justice through accessible clean energy. By enabling customers to participate in automated dispatch, VPPs can collectively provide capacity through demand reduction at peak hours when energy is most expensive, thereby benefiting all customers.
In closing, not only does funding DEBA balance ratepayer affordability with continuing progress towards meeting clean energy goals, but it also aligns with the Governor’s Clean Energy Transition plan, which calls for technologies to “help customers access lower rates through demand flexibility by using power during times of the day when costs are the lowest.”
Thank you for considering our request. If you have any questions, please contact Amy Costa, at [email protected].
Sincerely,
Patrick Welch
Senior Legislative Manager
San Diego Community Power
Marc Hershman
Director of Government Affairs
Peninsula Clean Energy
Vincent Wiraatmadja
Senior Legislative Manager
MCE
Greg Wade
Chief Executive Officer
Clean Energy Alliance
Mitch Sears
Chief Executive Officer
Valley Clean Energy
Bena Chang
Director of Government & Legislative
Affairs
Silicon Valley Clean Energy
419
Adam Jorge
Senior Decarbonization Policy Manager
Sonoma Clean Power
Scott Green
Scott Green
Senior Gov Affairs Manager
San Jose Clean Energy
Cc: The Honorable Mike McGuire, President Pro Tempore, State Senate The Honorable Scott Wiener, Chair, Senate Committee on Budget & Fiscal Review The Honorable Robert Rivas, Speaker, State Assembly
The Honorable Jessie Gabriel, Chair, Assembly Committee on Budget Siva Gunda, Vice Chair, California Energy Commission
Grant Mack, Deputy Legislative Secretary, Office of Governor Newsom 420
SAN DIEGO COMMUNITY POWER
Staff Report – Item 20
____________________________________________________________________________________ TO: Board of Directors
FROM: Emily Fisher, Senior Program Manager
Colin Santulli, Director of Programs
VIA: Karin Burns, Chief Executive Officer
SUBJECT: Update on Solar Battery Savings Program
DATE: January 23, 2025
____________________________________________________________________________________ RECOMMENDATION:
Receive and file the update on Community Power’s Solar Battery Savings Program.
BACKGROUND:
The Net Billing Tariff (“NBT”) NBT, also known as the Solar Billing Plan, is the successor to Net Energy Metering (“NEM”) 2.0. It was established by the California Public Utilities Commission (CPUC) in December 2022 and went into effect for all new customers installing solar systems or any other renewable self-generation system on or after April 15, 2023.
The San Diego Community Power Board of Directors adopted the NBT policy at the October 2023 Board of Directors meeting, replacing NEM 2.0 as the default billing mechanism for accounts with newly installed generating systems (e.g., solar, wind, biomass, geothermal or other renewable resources). In December 2023, NBT was operationalized within Community Power’s billing system for customers with new generating systems and/or for customers who had reached the conclusion of their 20- year legacy period with NEM. This new approach for compensating renewable energy generation is intended to promote grid reliability, thus increasing the value of solar systems paired with battery storage.
To make these clean energy investments more affordable for customers, and support the continued growth of the regional solar market, Community Power committed to create a program to incentivize solar and storage with the following goals:
1. Install solar and storage systems in single-family homes throughout the service territory (goal of 50% of incentives going to Communities of Concern)
2. Support clean energy and reliability
3. Leverage non-Community Power incentives for customers 421
4. Build strong relationships with customers and the industry A summary of the key program parameters is shown below.
Table 1. Program Parameters
Market Rate
Non-Market Rate
(CARE/FERA1 & Communities
of Concern)
Solar Upfront Incentive N/A Up to $450/kW-AC2
Storage Upfront Incentive $350/kWh
(nameplate useable capacity)
Up to $500/kWh3
(nameplate useable capacity)
Storage Performance
Incentive
$0.10/kWh
(based on actual performance over the dispatch period during on-peak periods) # of Events Daily (weekday only or weekday+weekend)
Battery Enrollment
Participants can select the percentage of their battery’s usable capacity to enroll in the program, with a minimum requirement of 50% (with restrictions based on product manufacturer selected)
Op-Out Battery can underperform by up to 10% of the total enrolled capacity per month
Unenrollment There will be a prorated claw back associated with the upfront incentive if the participant chooses to unenroll within the first five years. 1California Alternate Rates for Energy (“CARE”) and Family Electric Rate Assistance Program (“FERA”) 2Up to based on if customer is eligible for other solar incentives, e.g., Disadvantaged Communities–Single-Family Affordable Solar Homes (“DAC-SASH”) and City of San Diego Equity Program 3Up to based on if customer is eligible for other upfront storage incentives, e.g., Self-Generation Incentive Program (“SGIP”)
ANALYSIS AND DISCUSSION:
Program Development
The local residential solar industry is a key stakeholder in the success of the Solar Battery Savings program. As the primary contact to the customer for the program, approved contractors are required to be well versed in program guidelines and have regular access to Community Power staff as questions arise. As such, staff mandated the completion of a program training for all participating contractors. The training outlines who Community Power is, customer eligibility, program design and structure, mechanics of how to submit applications, technical specifications of allowable projects and expected system performance, and overarching contractor expectations (e.g., allowable communication and marketing practices). In addition to completing the mandatory training, interested contractors are required to apply to participate and agree to uphold all program requirements.
Community Power staff began offering in-person program trainings to contractors in mid-June of 2024, leveraging industry partnerships to maximize participation. In June and July, staff held four in-person contractor trainings at a local distributor’s training room and International Brotherhood of Electrical Workers (IBEW) 569’s training facility, training 44 contractors in total during this time. A recording of the training is available to interested contractors to participate at their convenience.
422
Battery manufacturers had similar required trainings to participate in the program. Staff held a specific program training for battery manufacturers interested in participating in the program at the end of June. A recording of the battery manufacturer training is available for interested stakeholders. Additionally, as battery manufacturers are approved, staff meets with them individually to address questions and understand how they plan to operationalize and ensure a successful path forward for data sharing.
Program Launch and Implementation
Solar Battery Savings began accepting project applications on July 28, 2024. The launch of the program garnered significant interest with over 500 applications submitted within the first 24 hours. The total number of approvals are as follows, with an 87% approval rate:
Table 2. Program Approvals
# of Projects
Total Approved Projects 1,636
Total Approved Batteries 2,249
The 2,249 batteries are expected to provide 7.2MW of peak load reduction daily during on-peak periods for up to 10 years. Customers will continue to receive performance incentives annually for up to 10 years as long as they remain enrolled.
As of January 6, 2025, 480 projects have received the upfront incentive payment (29% of all approved projects) based on post-installation documentation submittals. The average upfront incentive was $6,870 per home, with the average being slightly lower for market rate customers ($6,150) and higher for non-market rate customers ($8,469). The distribution based on project count and budget across market rate, CARE/FERA customers and Communities of Concern was as follows:
Figure 1. Distribution Across Market Rate, CARE/FERA and Communities of Concern Of the approved projects, 59% are for existing Net Energy Metering (NEM) customers, while 41% are for Net Billing Tariff (NBT) customers. 14% of NEM customers added solar of less than 10% of their current system size or 1 kW to expand their existing solar system in addition to adding a battery, allowing them to remain on their current NEM tariff.
Projects were approved in all seven Community Power member agencies. Table 3 shows approved application distribution by member agency.
423
Table 3. Distribution Across Member Agencies
Member Agency # of Applications % of Applications % of SF Homes1 Chula Vista 105 6.4% 10%
Encinitas 96 5.9% 3.6%
Imperial Beach 6 0.004% 0.7%
National City 3 0.002% 1.3%
La Mesa 63 3.8% 2.7%
San Diego 826 50.5% 50%
Unincorporated San
Diego County
537 32.8% 31.8%
Total 1,636 1
The “% of SF Homes” column identifies single-family homes in each member agency as a percentage of all single family homes in Community Power territory based on an internal analysis using 2023 census data Battery Manufacturer Engagement
Community Power approved 14 battery manufacturers for the program who offered a total of 46 different approved batteries. The approved batteries vary in size from three kilowatt-hours to 23.5 kilowatt-hours. Many of the manufacturers are headquartered in California, with one in San Diego County. Only eight of the 14 battery manufacturers had batteries installed (or planned for install) with the initial round of funding. Please see below for the number of batteries approved for installation based on manufacturer.
Table 4. Participation by Battery Manufacturers
OEM # of Batteries Approved
Tesla 1,857 (83%)
Enphase 254 (11%)
sonnen 101 (4.5%)
FranklinWH 12 (<1%)
Canadian Solar 3 (<1%)
StackRack 7 (<1%)
PointGuard 4 (<1%)
NeoVolta 7 (<1%)
Total 2,249
Contractor Engagement
A diverse group of 50 contractors were approved to participate in the program. 37% were Diverse Business Enterprises and 4% were union. Participating contractors vary greatly in company size:
• 42% have 10 employees or less
• 42% have 10-50 employees
• 16% have more than 50 employees
424
Of approved contractors, 38 submitted at least one project. Table 5 lists participation of contractors who had at least 15 projects submitted; 18 contractors had less than 15 projects submitted.
Table 5. Participation Across Contractors
Contractor Name Total Projects % of Projects
Baker Home Energy 410 25%
TMAG Industries Inc, DBA Stellar Solar 176 11%
Sunline Energy 144 9%
Aloha Solar Power & Electrical Services Inc. 131 8%
KBI Electric, Inc. DBA Build Brothers 85 5%
Semper Solaris 76 5%
SolHome 64 4%
Homegrown Energy Solutions LLC 60 4%
Tesla, Inc. 59 4%
Solar Tech Energy 50 3%
Cosmic Solar Inc. 47 3%
Solare Energy, Inc. 40 2%
Johnson Solar 33 2%
SunVantage 31 2%
Sattler Solar Inc 25 2%
G C Electric Solar 24 1%
Alltech Solar, Inc. 21 1%
Palomar Solar LTD 18 1%
Incentive Solar 18 1%
San Diego Solar Inc 15 1%
NEXT STEPS:
Staff is preparing for an initial program evaluation in the first quarter of 2025 to inform a program relaunch this calendar year. Additionally, staff is exploring non-residential pilot project concepts.
FISCAL IMPACT:
N/A
COMMITTEE REVIEW:
An update was also presented at the January 16, 2025, Community Advisory Committee meeting.
ATTACHMENTS:
N/A
425