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, in each case 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 or injunctive relief, except to the extent such remedies are expressly limited under this Agreement; provided, payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for any Terminated Transaction and the Event of Default related thereto.
Notwithstanding the foregoing, in the event that a Seller Event of Default occurs under Section
11.1(b)(ii), and Buyer as the Non-Defaulting Party does not establish any Early Termination Date within thirty (30) days following the occurrence of such Seller Event of Default, then Seller may in its sole discretion terminate this Agreement upon written Notice to Buyer that designates an Early Termination Date, and Buyer shall be entitled to the remedies set forth in this Section 11.2 subject to the limitations set forth in Article 12.
300
48 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).
(i) If Seller is the Defaulting Party, then the Damage Payment shall be owed to Buyer and shall be a dollar amount that equals the entire amount of the Development Security plus, if the Development Security is posted as cash, any interest accrued thereon. Buyer shall be entitled to retain all Daily Delay Damages and Commercial Operation Delay Damages paid prior to the Termination Date and immediately retain for its own benefit those funds held as Development Security and any interest accrued thereon if the Development Security is posted as cash, and any amount of Development Security that Seller has not yet posted with Buyer shall be immediately due and payable by Seller to Buyer. There will be no amounts owed to Seller. The Parties agree that Buyer’s damages in the event of an Early Termination Date prior to the Commercial Operation Date caused by Seller’s Event of Default would be difficult or impossible to determine and that the damages set forth in this Section 11.3(a)(i) are a reasonable approximation of Buyer’s harm or loss.
(ii) If Buyer is the Defaulting Party, then a Damage Payment shall be owed to Seller and shall equal the aggregate of all Settlement Amounts plus any and all other amounts due to or from Seller (as of the Early Termination Date) netted into a single amount.
There will be no amount owed to Buyer. Seller shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date.
Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to Seller’s duty to mitigate, Seller shall not have to enter into replacement transactions to establish a Settlement Amount. The Parties agree that Seller’s damages in the event of an Early Termination Date prior to the Commercial Operation Date caused by Buyer’s default would be difficult or impossible to determine and that the damages set forth in this Section 11.3(a)(ii) are a reasonable approximation of Seller’s harm or loss.
(b) Termination Payment On or After the Commercial Operation Date. The payment owed by the Defaulting Party to the Non-Defaulting Party for a Terminated Transaction occurring after the Commercial Operation Date (“Termination Payment”) shall be the aggregate of all Settlement Amounts plus any and all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information.
The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to 301
302
303
304
52 ARTICLE 13
REPRESENTATIONS AND WARRANTIES; COVENANTS
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 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, except where such failure does not have a material adverse effect on Seller’s performance under this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller. (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Neither Seller nor its Affiliates have received written notice from or been advised in writing by any existing supplier or service provider that the disease designated COVID-19 or the related virus designated SARS-CoV-2 have caused, or are reasonably likely to cause, a delay in the construction of the Facility or the delivery of materials necessary to complete the Facility, in each case that would cause the Commercial Operation Date to be later than the Guaranteed Commercial Operation Date.
13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in its jurisdiction. All Persons making up the governing body of 305
53 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, including but not limited to community choice aggregation, the Joint Powers Act, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim 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, (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.
(f) Buyer cannot assert sovereign immunity as a defense to the enforcement of its obligations under this Agreement.
(g) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
13.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and to be qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
306
54 (b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.
13.4 Seller’s Covenants. Seller covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) Compliance with Laws. To the extent applicable to Seller or the Facility, Seller shall comply with all federal, state and local laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals, including, without limitation those related to employment discrimination and prevailing wage, non-discrimination and non-preference; conflict of interest; environmentally preferable procurement; single serving bottled water; gifts; and disqualification of former employees. Seller shall not discriminate against any employee or applicant for employment on the basis of the fact or perception of that person's race, color, religion, ancestry, national origin, age, sex (including pregnancy, childbirth or related medical conditions), legally protected medical condition, family care status, veteran status, sexual orientation, gender identity, transgender status, domestic partner status, marital status, physical or mental disability, or AIDS/HIV status.
(b) Seller shall obtain and maintain any and all permits and approvals necessary for the construction and operation of the Facility, including without limitation, environmental clearance under CEQA or other environmental law, as applicable, from the local jurisdiction where the Facility is or will be constructed.
13.5 Site Control. Seller shall maintain Site Control throughout the Delivery Term.
13.6 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 California law, 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 California labor laws. Buyer agrees that Seller’s obligations under this Section 13.6 will be satisfied, as one of many means or methods, upon the execution of a project labor agreement related to construction of the Facility.
13.7 Workforce Development. Seller acknowledges that Buyer will, from time to time, request voluntary disclosure of Seller’s certification status with the CPUC Clearinghouse, and voluntary disclosure regarding Seller’s efforts to work with diverse business enterprises, including women, minority, disabled veteran, and lesbian, gay, bisexual, transgender and/or persons with disabilities business enterprises in a form similar to Exhibit S. 307
55 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. Seller may, without Buyer’s consent, assign this Agreement to any Person as part of a tax equity transaction or otherwise, provided that such Person must be subject to management control by the same Person(s) that had the power to control the management and policies of Seller. 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. 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 without the consent of Buyer. In connection with any financing or refinancing of the Facility, Buyer shall in good faith work with Seller and Lender to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”), which shall be substantially in the form of Exhibit T. Seller shall pay Buyer’s reasonable expenses, including attorneys’ fees, incurred to provide consents, estoppels, or other required documentation in connection with Seller’s financing or refinancing of the Facility. Other than the Collateral Assignment Agreement, Buyer shall 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 this Agreement.
14.3 Permitted Assignment.
(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:
(i) The assignee is a Permitted Transferee;
308
56 (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 or refinance all or any portion of the Facility or the Interconnection Facilities or the Shared Facilities (1) utilizing tax equity investment, and/or (2) 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 Buyer Financing Assignment. Buyer may assign this Agreement to a financing entity that will pre-pay all of Buyer’s payment obligations under this Agreement with Seller’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned; provided that Seller has reasonably determined that the terms and conditions of such pre-payment arrangements are satisfactory to Seller and its Lenders and do not adversely affect Seller or its arrangements with Lenders in any material respect.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. Subject to Section 15.2, the Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in the County of San Diego, California.
15.2 Dispute Resolution. In the event of any 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 and informally without significant legal costs. If the Parties are unable to resolve a dispute arising hereunder within thirty (30) days after Notice of the dispute, the Parties may pursue all remedies 309
57 available to them at Law in or equity.
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) Seller agrees to indemnify, defend and hold harmless Buyer and its Affiliates, directors, officers, attorneys, employees, representatives and agents (collectively, the “Buyer’s Indemnified Parties”) from and against all third-party claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees and expert witness fees), howsoever described, to the extent arising out of, resulting from, or caused by (i) Seller’s breach of this Agreement (including inaccuracy of any Seller representation of warranty made hereunder), (ii) a violation of applicable Laws by Seller or its Affiliates, including but not limited to violations of any laws in constructing or operating the Facility, or (iii) negligent or willful misconduct by Seller or its Affiliates, directors, officers, employees, or agents. (b) Buyer agrees to indemnify, defend and hold harmless Seller and its Affiliates, directors, officers, attorneys, employees, representatives and agents (collectively, the “Seller’s Indemnified Parties”) from and against all third-party claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees and expert witness fees), howsoever described, to the extent arising out of, resulting from, or caused by (i) Buyer’s breach of this Agreement (including inaccuracy of any representation of warranty made hereunder), (ii) a violation of applicable Laws by Buyer or its Affiliates, or (iii) negligent or willful misconduct of Buyer or its Affiliates, its directors, officers, employees, or agents. (c) 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.
(d) 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 own sole negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
16.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which an indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense 310
311
59 (e) Pollution Liability. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, Pollution Legal Liability Insurance in the amount of per occurrence and in the aggregate, naming Seller (and Lender if any) as additional named insured. (f) Umbrella Liability Insurance. Seller shall maintain or cause to be maintained an umbrella liability policy with a limit of liability of per occurrence and in the aggregate. Such insurance shall be in excess of the General Liability, Employer’s Liability, and Business Auto Insurance coverages. Seller may choose any combination of primary, excess or umbrella liability policies to meet the insurance limits required under Sections 17.1(a), 17.1(b) and 17.1(d) above. (g) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, construction all-risk form property insurance covering the Facility during such construction periods, and naming Seller (and Lender if any) as the loss payee. (h) Property Insurance. On and after the Commercial Operation Date, Seller shall maintain or cause to be maintained insurance against loss or damage from all causes under standard “all risk” property insurance coverage in amounts that are not less than the actual replacement value of the Facility; provided, however, with respect to property insurance for natural catastrophes, Seller shall maintain limits equivalent to a probable maximum loss amount determined by a firm with experience providing such determinations. Such insurance shall include business interruption coverage in an amount equal to twelve (12) months of expected revenue from this Agreement.
(i) Subcontractor Insurance. Seller shall make commercially reasonable efforts to require all of its subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage not less than ; (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of per occurrence. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (i)(i) and (i)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(i).
(j) Evidence of Insurance. Within ten (10) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. To the extent commercially and reasonably available, such certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material modification, cancellation or termination of coverage; provided that to the extent any such notices of modification are not commercially and reasonably available, Seller shall provide Buyer at least thirty (30) days prior Notice in the event of any material modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer. The general liability, auto liability and worker’s compensation policies shall be endorsed with a waiver of 312
60 subrogation in favor of Buyer for all work performed by Seller, its employees, agents and sub-contractors.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.
18.2 Duty to Maintain Confidentiality. The Party receiving Confidential Information (the “Receiving Party”) from the other Party (the “Disclosing Party”) shall not disclose Confidential Information to a third party (other than the Party’s members, employees, actual or potential lenders or investors, counsel, accountants, contractors, vendors, 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 comply with any applicable Law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to such Party or any of its Affiliates; 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.
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 (Government Code Section 6250 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.
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 313
61 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.
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 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)) or investors or purchasers (including tax credit buyers), so long as such Person to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions that are at least as restrictive as this Article 18 to the same extent as if it were a Party.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such 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 314
62 a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
19.2 Amendments. Except as otherwise explicitly permitted herein, this Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) and/or, to the extent set forth herein or in any Collateral Assignment Agreement, 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 applicable Law.
19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by 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 315
63 “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 (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Each Party shall solely be responsible for all its debts, obligations and liabilities accruing and arising out of this Agreement, and neither Party shall have any rights and shall not make any claims, take any actions or assert any remedies against the other Party’s constituent members, or the officers, directors, advisors, contractors, consultants or employees of the other Party, 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 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.
19.13 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.
316
64 [Signatures on following page]
317
Signature Page
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
NORTH JOHNSON ENERGY CENTER,
LLC
By:
Name:
Title:
SAN DIEGO COMMUNITY POWER
By:
Name:
Title:
318
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: North Johnson Energy Center
Site includes all or some of the following APNs:
County: San Diego County
CEQA Lead Agency: City of El Cajon
Zip Code: 92020
Latitude and Longitude:
Facility Description: Battery Energy Storage Projected rated at 50 MW & 200 MWh Interconnection Point: El Cajon 69/12kV Substation
Facility Meter: See Exhibit R
Facility Metering Points: See Exhibit R
P-node: ELCAJN_6_LM6K (Proxy until assigned by CAISO)
Transmission Provider: PTO = SDG&E
Additional Information: Site Plan provided below.
319
320
321
322
323
Exhibit C - 1
EXHIBIT C
COMPENSATION
324
325
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer shall have the option to select Seller or Seller’s agent or Buyer or Buyer’s agent to act as Scheduling Coordinator for the Facility for both the delivery and the receipt (as applicable) of Charging Energy, Discharging Energy and the Product at the Delivery Point. If Buyer selects Seller or Seller’s agent as Scheduling Coordinator, Buyer shall not owe Seller any additional fees for the services provided by Seller for Scheduling Coordinator Services. Buyer shall provide notice to Seller of its selection of the Scheduling Coordinator election within three hundred sixty five (365) days prior to the Guaranteed Commercial Operation Date. If Buyer selects Seller or Seller’s agent to act as Scheduling Coordinator for the Facility, the Parties shall enter into good faith negotiations to agree on necessary amendments to this Agreement to effectuate the selection of Seller or Seller’s agent as Scheduling Coordinator. Such negotiations shall be limited to necessary amendments related to the Scheduling Coordinator services for the Facility and shall, to the greatest extent possible, maintain the relative benefits, burdens, and obligations under this Agreement.
(b) Buyer as Scheduling Coordinator for the Facility. If Buyer elects to be the Scheduling Coordinator or designates a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility at least thirty (30) days prior to the Initial Synchronization, (i) Seller shall take all commercially reasonable actions and execute and deliver to Buyer and the CAISO all documents in Seller’s control and responsibility which are necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Commercial Operation Date of the Facility to the CAISO Grid, and (ii) Buyer shall, and shall cause its designee to, expeditiously 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 Commercial Operation Date of the Facility to the CAISO Grid through the termination or expiration of the Delivery Term. On or after the Commercial Operation Date of the Facility to the CAISO Grid, Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer.
Buyer (as the Facility’s SC) shall submit Schedules to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen-minute market, real time or other CAISO market basis that may develop after the Effective Date, as determined by Buyer. 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 transmission to the personnel designated to receive such information. (b) CAISO Costs and Revenues. Buyer shall be responsible for CAISO costs, charges and penalties (including Charging Energy, penalties, Imbalance Energy costs or revenues, and 326
Exhibit D - 2
other charges) and shall be entitled to all CAISO revenues (including Discharging Energy, credits, Imbalance Energy revenues or costs, 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 Delivery Point and Charging Energy delivered to the Delivery Point; provided, however, Seller shall assume all liability and reimburse Buyer for any and all CAISO penalties (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 perform its duties as Scheduling Coordinator for the Facility), or (iii) 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. The Parties agree that any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of Seller and for Seller’s account (except to the extent such Non-Availability Charges arise out of Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility). 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.
(c) 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 shall 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. (d) Dispute Costs. The Party that is SC (“SC Party”) may be required by the other Party to dispute CAISO settlements in respect of the Facility. The Non-SC Party agrees to pay the SC Party’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 the Non-SC Party with respect to the Facility that the Non-SC Party has directed the SC Party to dispute, except to the extent such dispute arises from the SC Party’s failure to perform its duties as Scheduling Coordinator for the Facility.
327
Exhibit D - 3
(e) Terminating Buyer’s Designation as Scheduling Coordinator. If Buyer is the SC, 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.
(f) Master Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. (g) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate reasonably with Seller, or cause its designated SC to 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 or its designated SC’s possession, as applicable, that Buyer (as Scheduling Coordinator) or its designated SC, as applicable, has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) or its designated SC, as applicable, related to Seller’s compliance with applicable NERC reliability standards. 328
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 incidents.
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 reasonably likely to 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 material agreements, contracts, permits, approvals, financing agreements and major equipment purchase orders showing the projected and completion dates.
13. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the Transmission System and all other interconnection utility services.
14. Workforce Development or Supplier Diversity Reporting (if applicable). Format to be provided by Buyer.
15. Any other documentation reasonably requested by Buyer. 329
Exhibit F - 1
EXHIBIT F
FORM OF MONTHLY EXPECTED AVAILABLE CAPACITY REPORT
[Available Capacity, MW 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.
330
Exhibit G - 1
EXHIBIT G
FORM OF DAILY AVAILABILITY NOTICE
Trading Day:
Station: Issued By:
Unit: Issued At:
Unit 100% Available No Restrictions:
Hour Ending Available Capacity Comments
(MW)
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
0:00
Comments:
331
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, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated _______ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of _______[DATE]_____, Engineer hereby certifies and represents to Buyer the following:
1. The F cility is fully operational, interconnected, and synchronized with the Transmission System in accordance with the Interconnection Agreement.
2. The Facility has met all Interconnection Agreement requirements and is capable of receiving Charging Energy from, and delivering Discharging Energy to, the CAISO Balancing Authority.
3. The commissioning of the equipment has been completed in accordance with the applicable material requirements of the manufacturers’ specifications.
4. The Facility’s Installed Capacity is no less than ninety-five percent (95%) of the Guaranteed Capacity and the Facility is capable of charging, storing and discharging Energy, all within the operational constraints and subject to the applicable Operating Restrictions.
5. Authorization to parallel the Facility was obtained by the Transmission Provider, [Name of Transmission Provider as appropriate] on___[DATE]____.
6. The Transmission Provider has provided documentation supporting full unrestricted release for Commercial Operation by [Name of Transmission Provider as appropriate] on _______[DATE]_____.
7. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
8. 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.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
332
Exhibit I - 1
EXHIBIT I
FORM OF CAPACITY AND EFFICIENCY RATE TEST CERTIFICATE
This certification (“Certification”) of Capacity and Efficiency Rate Test results is delivered by [licensed professional engineer] (“Engineer”) to San Diego Community Power, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated __________ (“Agreement”) by and between [SELLER ENTITY] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify that a Capacity Test conducted on [Date] demonstrated (i) an [Installed or Effective] Capacity of __ MW AC to the Delivery Point at four (4) hours of continuous discharge, (ii) a Battery Charging Factor of __%, (iii) a Battery Discharging Factor of __%, and (iv) an Efficiency Rate of __%, all in accordance with the testing procedures, requirements and protocols set forth in Section 4.4 and Exhibit O.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
333
Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [SELLER ENTITY] (“Seller”) to San Diego Community Power, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
(1) Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto.
(2) the Construction Start Date occurred on _____________ (the “Construction Start Date”); and
(3) the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site:
_____________________________________________________________________ (such description shall amend the description of the Site in Exhibit A of the Agreement.) IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
[SELLER ENTITY]
By:
Its:
Date:
334
Exhibit K - 1
EXHIBIT K
Form of Letter of Credit
IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT
LETTER OF CREDIT NUMBER: []
ISSUANCE DATE: []
EXPIRATION DATE: []
PLACE OF EXPIRY: []
ISSUING BANK:
[•]
BENEFICIARY:
[•]
APPLICANT:
[•]
AVAILABLE AMOUNT: USD [•] (UNITED STATES DOLLARS [•])
LADIES AND GENTLEMEN:
WE, [•], [•], (THE "BANK") HEREBY ESTABLISHES THIS IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT NO. [] ("LETTER OF CREDIT") IN FAVOR OF [•] (THE "BENEFICIARY"), FOR THE ACCOUNT OF [•], A [] LIMITED LIABILITY CORPORATION (THE "APPLICANT"), FOR THE AMOUNT STATED ABOVE (THE "AVAILABLE AMOUNT"), EFFECTIVE IMMEDIATELY.
THIS LETTER OF CREDIT SHALL BE OF NO FURTHER FORCE OR EFFECT AT 5:00 P.M.,
NEW YORK TIME ON THE EXPIRATION DATE STATED ABOVE OR, IF SUCH DAY IS
NOT A BUSINESS DAY (AS HEREINAFTER DEFINED), ON THE NEXT BUSINESS DAY (AS MAY BE EXTENDED PURSUANT TO THE TERMS OF THIS LETTER OF CREDIT) (THE "EXPIRATION DATE").
FOR THE PURPOSE HEREOF, "BUSINESS DAY" SHALL MEAN ANY DAY OTHER THAN:
1. A SATURDAY OR A SUNDAY,
2. A DAY ON WHICH BANKING INSTITUTIONS IN THE STATE OF NEW YORK ARE
REQUIRED OR AUTHORIZED BY LAW TO REMAIN CLOSED, OR
335
Exhibit K - 2
3. A DAY ON WHICH THE PAYMENT SYSTEM OF THE FEDERAL RESERVE SYSTEM IS NOT OPERATIONAL.
IT IS A CONDITION OF THIS LETTER OF CREDIT THAT THE EXPIRATION DATE SHALL BE AUTOMATICALLY EXTENDED, WITHOUT AMENDMENT, FOR ONE (1)
YEAR FROM THE EXPIRATION DATE HEREOF OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO SUCH EXPIRATION DATE, THE BANK
HAS SENT BENEFICIARY WRITTEN NOTICE BY CERTIFIED MAIL OR OVERNIGHT
COURIER, AT THE ADDRESS STATED BELOW, THAT THE BANK ELECTS NOT TO EXTEND THIS LETTER OF CREDIT FOR ANY SUCH ADDITIONAL PERIOD. NO
PRESENTATION MADE UNDER THIS LETTER OF CREDIT AFTER SUCH EXPIRATION DATE WILL BE HONORED.
SUBJECT TO THE TERMS AND CONDITIONS HEREIN, FUNDS UNDER THIS LETTER
OF CREDIT ARE AVAILABLE TO BENEFICIARY BY COMPLYING PRESENTATION ON OR BEFORE 5:00 P.M. NEW YORK TIME, ON OR BEFORE THE THEN CURRENT EXPIRATION DATE OF THE FOLLOWING:
1. THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENTS, OR A COPY
OF SUCH DOCUMENTS IN THE CASE OF PARTIAL DRAWINGS,
2. A DRAWING CERTIFICATE ISSUED IN THE FORM OF ATTACHMENT "A"
ATTACHED HERETO AND WHICH FORMS AN INTEGRAL PART HEREOF, DULY
COMPLETED AND BEARING THE SIGNATURE OF AN AUTHORIZED
REPRESENTATIVE OF THE BENEFICIARY SIGNING AS SUCH, AND
3. A SIGHT DRAFT IN THE FORM OF ATTACHMENT "B" ATTACHED HERETO AND
WHICH FORMS AN INTEGRAL PART HEREOF, DULY COMPLETED AND BEARING THE SIGNATURE OF AN AUTHORIZED REPRESENTATIVE OF THE BENEFICIARY.
DRAWINGS MAY ALSO BE PRESENTED AS A PDF ATTACHMENT TO AN EMAIL TO [BANK EMAIL ADDRESS] OR BY FACSIMILE TRANSMISSION ("FAX") TO FAX NUMBER [] OR SUCH OTHER NUMBER AS SPECIFIED FROM TIME-TO-TIME BY THE
BANK WITH TELEPHONE CONFIRMATION BY THE BENEFICIARY TO THE BANK AT [] OR [], OR SUCH OTHER NUMBERS AS SPECIFIED FROM TIME-TO-TIME BY THE BANK. BENEFICIARY'S FAILURE TO SEEK SUCH A TELEPHONE CONFIRMATION DOES NOT AFFECT THE BANK'S OBLIGATION TO HONOR SUCH A PRESENTATION.
THE EMAIL OR FACSIMILE TRANSMITTAL SHALL BE DEEMED DELIVERED WHEN RECEIVED. IT IS UNDERSTOOD THAT ANY SUCH FAX PRESENTATION SHALL BE CONSIDERED THE SOLE OPERATIVE INSTRUMENT OF DRAWING. IN THE EVENT OF
PRESENTATION BY EMAIL OR FAX, THE ORIGINAL DOCUMENTS SHOULD NOT ALSO BE PRESENTED.
PARTIAL DRAWING OF FUNDS SHALL BE PERMITTED UNDER THIS LETTER OF
CREDIT, AND THIS LETTER OF CREDIT SHALL REMAIN IN FULL FORCE AND EFFECT 336
Exhibit K - 2
WITH RESPECT TO ANY CONTINUING BALANCE, PROVIDED, THE AVAILABLE
AMOUNT SHALL BE REDUCED BY THE AMOUNT OF EACH SUCH DRAWING PAID HEREUNDER.
THIS LETTER OF CREDIT IS NOT TRANSFERABLE OR ASSIGNABLE. ANY
PURPORTED TRANSFER OR ASSIGNMENT SHALL BE VOID AND OF NO FORCE OR EFFECT.
ALL CORRESPONDENCE AND ANY DRAWINGS (OTHER THAN THOSE MADE BY FACSIMILE) HEREUNDER ARE TO BE DIRECTED TO [•]. ATTN: [•].
ALL NOTICES TO BENEFICIARY WILL BE IN WRITING AND ARE REQUIRED TO BE SENT BY CERTIFIED MAIL OR OVERNIGHT COURIER TO: [•], MANAGER OF RISK OPERATIONS AND COLLATERAL MANAGEMENT, [•]. [•]. 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.
BANKING CHARGES SHALL BE THE SOLE RESPONSIBILITY OF THE APPLICANT.
THIS LETTER OF CREDIT SETS FORTH IN FULL OUR OBLIGATIONS AND SUCH
OBLIGATIONS SHALL NOT IN ANY WAY BE MODIFIED, AMENDED, AMPLIFIED OR
LIMITED BY REFERENCE TO ANY DOCUMENTS, INSTRUMENTS OR AGREEMENTS
REFERRED TO HEREIN, EXCEPT ONLY THE ATTACHMENT REFERRED TO HEREIN,
AND ANY SUCH REFERENCE SHALL NOT BE DEEMED TO INCORPORATE BY
REFERENCE ANY DOCUMENT, INSTRUMENT OR AGREEMENT EXCEPT FOR SUCH ATTACHMENT. EXCEPT IN THE CASE OF AN INCREASE IN THE AVAILABLE
AMOUNT OR EXTENSION OF THE EXPIRATION DATE, THIS LETTER OF CREDIT MAY
NOT BE AMENDED OR MODIFIED WITHOUT THE BENEFICIARY'S PRIOR WRITTEN CONSENT.
THE BANK ENGAGES WITH THE BENEFICIARY THAT BENEFICIARY'S DRAFTS
DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF
CREDIT WILL BE DULY HONORED IF PRESENTED TO THE BANK ON OR BEFORE THE EXPIRATION DATE.
EXCEPT SO FAR AS OTHERWISE STATED, THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES ISP98 (ALSO KNOWN AS ICC PUBLICATION NO. 590), OR REVISION CURRENTLY IN EFFECT (THE "ISP"). AS TO
MATTERS NOT COVERED BY THE ISP, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREUNDER, SHALL GOVERN ALL MATTERS WITH RESPECT TO THIS LETTER OF CREDIT. [•]
AUTHORIZED SIGNATURE FOR BANK
337
Exhibit K - 2
BY:
NAME:
TITLE:
338
Exhibit K - 2
ATTACHMENT A
DRAWING CERTIFICATE
TO: [•]
[•]
[•]
ATTN: [•]
IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT REFERENCE NUMBER: []
DATE: (INSERT DATE OF ISSUE)
[•] (THE "BENEFICIARY"), DEMANDS [•], (THE "BANK") PAYMENT TO THE ORDER OF
THE BENEFICIARY THE AMOUNT OF USD (INSERT AMOUNT) (INSERT AMOUNT IN WORDS U.S. DOLLARS), DRAWN UNDER THE LETTER OF CREDIT REFERENCED ABOVE (THE "LETTER OF CREDIT"), FOR THE FOLLOWING REASON(S) (CHECK APPLICABLE PROVISION):
( )A. AN EVENT OF DEFAULT, AS DEFINED IN THAT CERTAIN [] AGREEMENT BETWEEN [•] OR ITS SUCCESSOR (THE “APPLICANT”) AND BENEFICIARY, DATED AS OF [] (AS MAY BE AMENDED FROM TIME TO TIME) (THE "AGREEMENT") WITH RESPECT TO THE APPLICANT HAS OCCURRED AND IS CONTINUING. ( )B. THE LETTER OF CREDIT WILL EXPIRE IN FEWER THAN [] BUSINESS DAYS (AS
DEFINED IN THE AGREEMENT) FROM THE DATE HEREOF, AND THE APPLICANT OR
ITS SUCCESSOR HAS NOT PROVIDED BENEFICIARY ALTERNATIVE FINANCIAL SECURITY ACCEPTABLE TO BENEFICIARY.
( )C. BENEFICIARY IS ENTITLED TO RETAIN ALL OR PART OF THE PROJECT SECURITY (AS DEFINED IN THE AGREEMENT).
UNLESS OTHERWISE PROVIDED HEREIN, CAPITALIZED TERMS WHICH ARE USED
AND NOT DEFINED HEREIN SHALL HAVE THE MEANING GIVEN EACH SUCH TERM IN THE LETTER OF CREDIT.
AUTHORIZED SIGNATURE FOR BENEFICIARY:
[•]
BY:
NAME: (PRINT NAME)
TITLE: (PRINT TITLE)
339
Exhibit K - 2
ATTACHMENT B
SIGHT DRAFT
TO: [•]
[•]
[•]
[•]
DATE: (INSERT ISSUE DATE)
PAY AT SIGHT TO THE ORDER OF [•] (THE "BENEFICIARY")
THE AMOUNT OF (USD INSERT AMOUNT) (AMOUNT IN WORDS)
DRAWN UNDER [•], IRREVOCABLE NON-TRANSFERABLE STANDY LETTER OF CREDIT NUMBER [] ISSUED ON []
FUNDS PAID PURSUANT TO THE PROVISIONS OF THE LETTER OF CREDIT SHALL BE
WIRE TRANSFERRED TO THE BENEFICIARY IN ACCORDANCE WITH THE FOLLOWING INSTRUCTIONS:
(INSERT WIRING INSTRUCTION)
AUTHORIZED SIGNATURE
[•]
BY:
NAME: (PRINT NAME)
TITLE: (PRINT TITLE)
340
Exhibit L -1
EXHIBIT L
[RESERVED]
341
Exhibit M - 1
EXHIBIT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) is delivered by [SELLER ENTITY] (“Seller”) to [______], a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Pursuant to Section 3.5 of the Agreement, Seller hereby provides the below Replacement RA product information:
342
Exhibit M - 2
[SELLER ENTITY]
By:
Its:
Date:
343
344
Exhibit N - 2
NORTH JOHNSON ENERGY CENTER,
LLC
(“Seller”)
SAN DIEGO COMMUNITY POWER
(“Buyer”)
With additional Notices of an Event of
Default to:
Attn: Gregory Contreras
Phone: 916-281-8440
Email:[email protected]
With additional Notices of an Event of
Default to:
PO Box 12716
San Diego, CA 92112
Attn: Veera Tyagi, General Counsel
Email: [email protected]
Emergency Contact: [To be Updated]
Attn:
Phone:
Email:
Emergency Contact:
Attn: Byron Vosburg, Chief Commercial
Officer
Phone: (619) 880-6545
Email: [email protected]
345
Exhibit O - 1
EXHIBIT O
CAPACITY AND EFFICIENCY RATE TESTS
Capacity Test Notice and Frequency
A. Commercial Operation Capacity Test(s). Upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Commercial Operation Capacity Test prior to the Commercial Operation Date. Such initial Commercial Operation Capacity Test (and any subsequent Commercial Operation Capacity Test permitted in accordance with Section 6 of Exhibit B) shall be performed in accordance with this Exhibit O and shall establish the Installed Capacity and initial Efficiency Rate hereunder based on the actual capacity and capabilities of the Facility determined by such Commercial Operation Capacity Test(s).
B. Subsequent Capacity Tests. Following the Commercial Operation Date, at least fifteen (15) days in advance of the start of each Contract Year, upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Capacity Test. In addition to the annual capacity test, if Buyer has reason to believe that the Effective Capacity or the Efficiency Rate is materially less than shown by the most recent test results, Buyer shall have the right to require a Capacity Test at any time upon no less than five (5) Business Days prior Notice to Seller.
Seller shall have the right to run a retest of any Capacity Test at any time upon five (5) Business Days’ prior Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice).
C. Test Results and Re-Setting of Effective Capacity and Efficiency Rate. No later than five (5) days following any Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Facility Meter readings and plant log sheets verifying the operating conditions and output of the Facility. In accordance with Section 4.4(a)(ii) of the Agreement and Part II(I) below, after the Commercial Operation Capacity Test(s), the Effective Capacity (up to, but not in excess of, the Installed Capacity) and Efficiency Rate determined pursuant to such Capacity Test shall become the new Effective Capacity and Efficiency Rate at the beginning of the day following the completion of the test for calculating the Monthly Capacity Payment and all other purposes under this Agreement.
Capacity Test Procedures
PART I. GENERAL.
A. Each Capacity Test shall be conducted in accordance with Prudent Operating Practices, the Operating Restrictions, and the provisions of this Exhibit O. For ease of reference, a Capacity Test is sometimes referred to in this Exhibit O as a “CT”.
Buyer or its representative may be present for the CT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost).
B. Conditions Prior to Testing.
346
Exhibit O - 2
(1) EMS Functionality. The EMS shall be successfully configured to receive data from the Battery Management System (BMS), exchange DNP3 data with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points. (2) Communications. The Remote Terminal Unit (RTU) testing should be successfully completed prior to any testing. The interface between Buyer’s RTU and the Facility SCADA System should be fully tested and functional prior to starting any testing, including verification of the data transmission pathway between Buyer’s RTU and Seller’s EMS interface and the ability to record SCADA System data.
(3) Commissioning Checklist. Commissioning shall be successfully completed per manufacturer guidance on all applicable installed Facility equipment, including verification that all controls, set points, and instruments of the EMS are configured.
PART II. REQUIREMENTS APPLICABLE TO ALL CAPACITY TESTS.
Note: Seller shall have the right and option in its sole discretion to install storage capacity in excess of the Guaranteed Capacity; provided, for all purposes of this Agreement, the amount of Installed Capacity shall never be deemed to exceed the Guaranteed Capacity, and all SOC measurements associated with a Capacity Test shall be based on the Installed Capacity without taking into account any capacity that exceeds the Guaranteed Capacity.
A. Test Elements. Each CT shall include at least the following individual test elements, which must be conducted in the order prescribed in Part III of this Exhibit O, unless the Parties mutually agree to deviations therefrom. The Parties acknowledge and agree that should Seller fall short of demonstrating one or more of the Test Elements as specified below, the Test will still be deemed “complete,” and any adjustments necessary to the Effective Capacity or to the Efficiency Rate resulting from such Test, if applicable, will be made in accordance with this Exhibit O. (1) Electrical output at maximum discharging level (MW) for four (4) continuous hours; and
(2) Electrical input at maximum charging level at the Facility Meter (MW), as sustained until the SOC reaches at least 90%, continued by the electrical input at a rate up to the maximum charging level at the Facility Meter (MW), as sustained until the SOC reaches 100%, not to exceed six (6) hours of total charging time.
B. Parameters. During each CT, the following parameters shall be measured and recorded simultaneously for the Facility, at the specified intervals:
(1) Time in 1-minute intervals;
347
Exhibit O - 3
(2) The amount of Discharging Energy to the Facility Meters (kWh) (i.e., to each measurement device making up the Facility Meter) in 5-minute intervals;
(3) Net electrical energy input from the Facility Meters (kWh) (i.e., from each measurement device making up the Facility Meter) in 5-minute intervals; and
(4) Stored Energy Level (MWh) in 1-minute intervals.
C. Site Conditions. During each CT, the following conditions at the Site shall be measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the Facility; and
(3) Ambient air temperature (°F).
D. Test Showing. Each CT shall record and report the following datapoints:
(1) That the CT successfully started;
(2) The maximum sustained discharging level for four (4) consecutive hours pursuant to A(1) above;
(3) The maximum sustained charging level for six (6) consecutive hours (or such lesser time as is required to reach 100% SOC) pursuant to A(2) above; (4) Intentionally Omitted;
(5) Intentionally Omitted;
(6) Amount of Charging Energy, registered at the Facility Meter, to go from 0% SOC to 100% SOC;
(7) Amount of Discharging Energy, registered at the Facility Meter, to go from 100% SOC to 0% SOC.
E. Test Conditions.
(1) General. At all times during a CT, the Facility shall be operated in compliance with Prudent Operating Practices, the Operating Restrictions, and all operating protocols recommended, required or established by the manufacturer for the Facility.
348
Exhibit O - 4
(2) Abnormal Conditions. If abnormal operating conditions that prevent the testing or recordation of any required parameter occur during a CT, Seller may postpone or reschedule all or part of such CT in accordance with Part II.F below.
(3) Instrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the CT. The instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Operating Practice and, as applicable, the CAISO Tariff.
F. Incomplete Test. If any CT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the CT stopped without any modification to the Effective Capacity or Efficiency Rate pursuant to Section I below; (ii) require that the portion of the CT not completed, be completed within a reasonable specified time period; or (iii) require that the CT be entirely repeated within a reasonable specified time period. Notwithstanding the above, if Seller is unable to complete a CT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO or the Transmission Provider, Seller shall be permitted to reconduct such CT on dates and at times reasonably acceptable to the Parties.
G. Test Report. Within five (5) Business Days after the completion of any CT, Seller shall prepare and submit to Buyer a written report of the results of the CT, which report shall include:
(1) A record of the personnel present during the CT that served in an operating, testing, monitoring or other such participatory role;
(2) The measured and calculated data for each parameter set forth in Part II.A through D, including copies of the raw data taken during the test; and (3) Seller’s statement of either Seller’s acceptance of the CT or Seller’s rejection of the CT results and reason(s) therefor.
Within ten (10) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the CT results or Buyer’s rejection of the CT and reason(s) therefor. If either Party rejects the results of any CT, such CT shall be repeated in accordance with Part II.F.
H. Supplementary Capacity Test Protocol. No later than sixty (60) days prior to commencing Facility construction, Seller shall deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) a supplement to this Exhibit O with additional and supplementary details, procedures and requirements applicable to Capacity Tests based on the then current design of the Facility (“Supplementary Capacity Test Protocol”). Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then-349 Exhibit O - 5
current Supplementary Capacity Test Protocol. The initial Supplementary Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Exhibit O.
I. Adjustment to Effective Capacity and Efficiency Rate. The Effective Capacity and Efficiency Rate shall be updated as follows:
(1) The total amount of Discharging Energy delivered to the Delivery Point (expressed in MWh AC) during the first four (4) hours of discharge (up to, but not in excess of, the product of (i) (a) the Guaranteed Capacity (in the case of a Commercial Operation Capacity Test, including under Section 6 of Exhibit B) or (b) the Installed Capacity (in the case of any other Capacity Test), multiplied by (ii) four (4) hours) shall be divided by four (4) hours to determine the Effective Capacity, which shall be expressed in MW AC, and shall be the new Effective Capacity in accordance with Section 4.4(a)(ii) of the Agreement.
(2) The total amount of Discharging Energy (as reported under Section II.D(7) above) divided by the total amount of Charging Energy (as reported under Section II.D(6) above), and expressed as a percentage, shall be recorded as the new Efficiency Rate, and shall be used for the calculation of the Efficiency Rate liquidated damages in Exhibit C until updated pursuant to a subsequent Capacity Test.
PART III. INITIAL SUPPLEMENTARY CAPACITY TEST PROTOCOL.
A. Effective Capacity and Efficiency Rate Test
• Procedure:
(1) System Starting State: The Facility will be in the on-line state at 0% SOC. (2) Record the initial value of the SOC.
(3) Command a real power charge that results in an AC power of Facility’s maximum charging level and continue charging until the earlier of (a) the Facility has reached 100% SOC or (b) six (6) hours have elapsed since the Facility commenced charging.
(4) Record and store the SOC after the earlier of (a) the Facility has reached 100% SOC or (b) six (6) hours of continuous charging. Such data point shall be used for purposes of calculation of the Battery Charging Factor. (5) Record and store the amount of Charging Energy, registered at the Facility Meter, to go from 0% SOC to 100% SOC.
350
Exhibit O - 6
(6) Following one (1) hour rest period, command a real power discharge that results in an AC power output of the Facility’s maximum discharging level and maintain the discharging state until the earlier of (a) the Facility has discharged at the maximum discharging level for four (4) consecutive hours, or (b) the Facility has reached 0% SOC.
(7) Record and store the SOC after four (4) hours of continuous discharging.
Such data point shall be used for purposes of calculation of the Battery Discharging Factor. If the Facility SOC remains above zero percent (0%) after discharging at a rate at or above the Guaranteed Capacity (or at or above the Installed Capacity after a Commercial Operation Capacity Test) for four (4) consecutive hours pursuant to Part III.A.6(a), the SOC will be deemed 0 for the purposes of calculating the Battery Discharging Factor. (8) Record and store the Discharging Energy as measured at the Facility Meter.
Such data point shall be used for purposes of calculation of the Effective Capacity.
(9) If the Facility has not reached 0% SOC pursuant to Section III.A.6, continue discharging the Facility until it reaches a 0% SOC.
(10) Record and store the Discharging Energy as measured at the Facility Meter from the commencement of discharging pursuant to Part III.A.6 until the Facility has reached a 0% SOC pursuant to either Part III.A.7 or Part III.A.9, as applicable.
• Test Results:
(1) The resulting Effective Capacity measurement is the sum of the total Discharging Energy after 4 hours of continuous discharging at the Facility Meter divided by four (4) hours.
The starting interval of the Capacity Test is the first 5-minute interval for which the output is above 99% of the commanded discharge output.
The ending interval of the Capacity Test is the 5-minute interval that ends 4 hours after the commencement of the starting interval. (2) The total amount of Discharging Energy (as reported under Section III.A(10) above) divided by the total amount of Charging Energy (as reported under Section III.A(5) above), and expressed as a percentage, shall be recorded as the new Efficiency Rate, and shall be used for the calculation of the Efficiency Rate liquidated damages in Exhibit C until updated pursuant to a subsequent Capacity Test.
The starting interval of the Efficiency Rate test is the interval before the first 5-minute interval for which the output is above 99% of the commanded 351
Exhibit O - 7
discharge output.
The ending interval of the Efficiency Rate test is the interval after the last 5-minute interval for which the output is above 99% of the commanded discharge output.
B. Intentionally Omitted.
C. Intentionally Omitted.
D. Intentionally Omitted.
E. Intentionally Omitted.
352
Exhibit P - 1
EXHIBIT P
FACILITY AVAILABILITY CALCULATION
Monthly Capacity Availability Calculation. Seller shall calculate the “Monthly Capacity Availability” from the Commercial Operation Date through the RA Guarantee Date and thereafter for each given month of the Delivery Term using the formula set forth below:
[AVAILHRSm + EXCUSEDHRSm]
Monthly Capacity Availability (%) =
[MONTHRSm]
Where:
m = relevant month “m” in which Monthly Capacity Availability is calculated; MONTHRSm is the total number of hours for the month;
AVAILHRSm is the total number of hours, or partial hours, in the month during which the Facility was available to charge and discharge Energy between the Facility and the Delivery Point and to provide Ancillary Services at the Delivery Point (excluding, for avoidance of doubt, all circumstances at the high-voltage side of the Delivery Point or beyond that may limit Seller’s delivery of Product). If the Facility is available pursuant to the preceding sentence during any applicable hour, or partial hour, but for less than the full amount of the Effective Capacity, the AVAILHRSm for such time period shall be calculated by multiplying such AVAILHRSm by a percentage determined by dividing (a) by (b); where (a) is the lower of (i) such capacity amount reported as available by Seller’s real-time EMS data feed to Buyer for the Facility for such hours, or partial hours, and (ii) Seller’s most recent Availability Notice (as updated pursuant to Section 4.10(b)), and (b) is the Effective Capacity.
EXCUSEDHRSm is the total number of hours, or partial hours, in the month that are not included as AVAILHRSm due to Buyer Default, the failure of Buyer’s SC to comply with the CAISO Tariff, Force Majeure Events (excluding Insurable Force Majeure Events), periods during which the receipt of Charging Energy or delivery of Discharging Energy is prevented due to a Curtailment Order, Buyer Dispatched Tests, Approved Maintenance Outages, CAISO approved Short Term Opportunity Outages (as that term is defined in the CAISO Tariff), or the Operating Restrictions in Exhibit Q (each, an “Excused Event”). If an Excused Event results in less than the full amount of the Effective Capacity for the Facility being unavailable during any applicable hour, or partial hour, the EXCUSEDHRSm for such time period shall be calculated by multiplying such EXCUSEDHRSm by a percentage determined by dividing (a) by (b); where (a) is the lower of such Effective Capacity amount that is not reported as available by (i) Seller’s real-time EMS data feed to Buyer for the Facility for such hours, or partial hours, and (ii) Seller’s most recent Availability Notice (as updated pursuant to Section 4.10(b)), and (b) is the Effective Capacity. For avoidance of doubt, the total of AVAILHRSm plus EXCUSEDHRSm for 353
Exhibit P - 2
any hour, or partial hour, shall never exceed 1.
If the Storage Facility or any component thereof was previously deemed unavailable for an hour or part of an hour, and Seller provides a revised Notice indicating the Storage Facility is available for that hour or part of an hour by 5:00 a.m. of the morning Buyer schedules or bids the Storage Facility in the Day-Ahead Market, the Storage Facility will be deemed to be available to the extent set forth in the revised Notice. 354
355
356
Exhibit R - 1
EXHIBIT R
METERING DIAGRAM
357
Exhibit S - 1
EXHIBIT S
WORKFORCE DEVELOPMENT
Sample Supplier Diversity Survey
Please note that not all questions may apply to your business. For the questions that do not apply, please skip them or answer "Not Applicable" or “Decline to State.” Pursuant to Proposition 209, SDCP does not give preferential treatment based on race, sex, color, ethnicity, or national origin. Providing information in these categories is optional and will not impact your participation in any future SDCP solicitation selection process. Responses are collected for informational and reporting purposes only pursuant to Senate Bill (SB) 255. *Required
1. Business Name*
2. Email Address*
3. Where is your business located/headquartered?
4. Is your business certified under General Order 156 (GO 156)? GO 156 is a California Public Utilities Commission ruling that requires utility entities to report annually on their contracts with majority women-owned, minority owned, disabled veteran-owned and LGBT-owned business enterprises (WMDVLGBTEs) in all categories. Qualified businesses become GO 156 Certified through the CPUC and are then added to the GO 156 Clearinghouse database at www.thesupplierclearinghouse.com*
Yes
No
Qualified as a WMDVLGBTBE but not GO 156 certified
5. If you answered “yes” to Question 4, when does your certification expire?
6. If you answered “yes” or “qualified, but not certified” to Question 4, in which categories are you certified or qualified? Please choose all that apply.
Minority Owned
Women Owned
LGBT Owned
Disabled Veteran Owned
Small Business Enterprise, as defined by 8(d) of the Small Business Act 358
Exhibit S - 2
7. If your business is a minority-owned business enterprise, what GO156 certification or qualification does your business fall under?
Black American
Hispanic American
Asian Pacific American
Native American
8. Please list the Standardized Industrial Code (SIC) of the products and services your business offers. Search for your SIC in the “Commodity Codes” search bar, here:
https://sch.thesupplierclearinghouse.com/FrontEnd/SearchCertifiedDirectory. asp.
9. If certified under GO 156, please list your annual business revenue as reported to the CPUC Supplier Clearinghouse. You may check your CPUC Supplier Clearinghouse status here:
https://sch.thesupplierclearinghouse.com/ FrontEnd/SearchCertifiedDirectory.asp.
10. If your business is qualified, but not GO 156 certified, please identify the reasons for not completing the certification process?
11. If your business has used GO 156 certified subcontractors for your SDCP contract, please include a list of your subcontractor business names, if the subcontract is for products or services, and the anticipated subcontract amount. Example: Electrical Design Technology, Inc.; products (batteries); $100,000.
12. If applicable, please describe any hiring policies your business has for using small, local, and/or economically disadvantaged subcontractors or for using subcontractors that qualify for the GO 156 Supplier Clearinghouse.
13. Does your business have a history of using apprenticeship programs, local-hires, union labor, or multi-trade project labor agreements? Local hires can be defined as labor-sourced from within SDCP’s service area.
Yes, apprenticeship programs in this recent contract with SDCP Yes, local labor in this recent contract with SDCP
Yes, union labor in this recent contract with SDCP
Yes, multi-trade PLA in this recent contract with SDCP
Yes, apprenticeship programs but not in this contract with SDCP Yes, history of local hire but not in this contract with SDCP Yes, history of union labor but not in this contract with SDCP 359
Exhibit S - 3
Yes, history of multi-trade PLA but not in this contract with SDCP Uses California-based labor, but not local to SDCP’s service areas None of the above
Not applicable
14. Are you a small business? Please refer to the Small Business Association’ Size Standards tool for more information: https://www.sba.gov/sizestandards.
Yes
No
15. If you answered “yes” to Question 14, please describe your history with labor agreements, union labor, multi-trade labor, apprenticeship labor, or how many local workers/businesses you employ for your contract with SDCP.
16. Is there any additional feedback that you would like to provide to SDCP at this time?
17. Does the bidder have formal initiatives to promote diversity, equity, and inclusion among its workforce?
18. If the answer to question 33 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 36 is “Yes”, please explain and provide supporting documentation.
360
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-1
EXHIBIT T
CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT
This Consent to Collateral Assignment Agreement (this “Consent”) is entered into as of _________, 2025 (the “Effective Date”) by and among (i) San Diego Community Power, a California joint powers authority (“SDCP”), (ii) Chula Vista Energy Center 2, LLC, a Delaware limited liability company (“Project Company”), and (iii) [•], as Collateral Agent for the secured parties under the Financing Documents referred to below (such secured parties together with their successors permitted under this Consent in such capacity, the “Secured Parties”, and, such agent, together with its successors in such capacity, “Collateral Agent”). SDCP, Project Company and Collateral Agent are hereinafter sometimes referred to individually as a “Party” and jointly as the “Parties”. Capitalized terms used but not otherwise defined in this Consent shall have the meanings ascribed to them in the Agreement (as defined below).
RECITALS
The Parties enter into this Consent with reference to the following facts:
A. Project Company and SDCP have entered into that certain Energy Storage Service Agreement, dated as of [•] (as may be amended, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”), pursuant to which Project Company has been developing, constructing, commissioning, testing and operating the Project and will sell the Product to SDCP, and SDCP will purchase the Product from Project Company; B. As collateral for Project Company’s obligations under the Agreement, Project Company has agreed to provide to SDCP certain collateral, which may include Performance Assurance and Security Interests and other collateral described in the Agreement (collectively, the “Agreement Collateral”);
C. Project Company has entered into that certain Financing Agreement, dated as of January [__], 2024, among Project Company, the financial institutions from time to time party thereto as lenders and as issuers of letters of credit (together with their respective successors and assigns, collectively, the “Lenders”), [•], in its capacity as Administrative Agent, and [•], in its capacity as Collateral Agent (as the same may be amended, modified, restated or supplemented and as in effect from time to time, the “Financing Agreement”), pursuant to which, among other things, the Lenders have extended commitments to make loans to Project Company; D. As collateral security for Project Company’s obligations under the Financing Agreement and related agreements (collectively, the “Financing Documents”), Project Company has, among other things, assigned all of its right, title and interest in, to and under the Agreement and Project Company’s owners have pledged their ownership interest in Project Company (collectively, the “Assigned Interest”) to Collateral Agent pursuant to the Financing Documents; and
E. It is a requirement under the Financing Agreement and the Agreement that SDCP and the other Parties hereto shall have executed and delivered this Consent. 361
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-2
AGREEMENT
In consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereto hereby agree as follows:
ARTICLE 1
CONSENT TO ASSIGNMENT, ETC.
1.1 Consent and Agreement.
SDCP hereby acknowledges:
notice of and consents to the assignment as collateral security to Collateral Agent, for the benefit of the Secured Parties, of the Assigned Interest; and
the right (but not the obligation) of Collateral Agent in the exercise of its rights and remedies under the Financing Documents, to make all demands, give all notices, take all actions and exercise all rights of Project Company permitted under the Agreement (subject to SDCP’s rights and defenses under the Agreement and the terms of this Consent) and accepts any such exercise; provided, however, that, insofar as Collateral Agent exercises any such rights under the Agreement or makes any claims with respect to payments or other obligations under the Agreement, the terms and conditions of the Agreement applicable to such exercise of rights or claims shall apply to Collateral Agent to the same extent as to Project Company.
1.2 Project Company’s Acknowledgement.
Each of Project Company and Collateral Agent hereby acknowledges and agrees that SDCP is authorized to act in accordance with Collateral Agent’s instructions, and that SDCP shall bear no liability to Project Company or Collateral Agent in connection therewith, including any liability for failing to act in accordance with Project Company’s instructions.
1.3 Right to Cure.
If Project Company defaults in the performance of any of its obligations under the Agreement, or upon the occurrence or non-occurrence of any event or condition under the Agreement which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable SDCP to terminate or suspend its performance under the Agreement (an “Agreement Default”), SDCP will not terminate or suspend its performance under the Agreement until it first gives written notice of such Agreement Default to Collateral Agent and affords Collateral Agent the right to cure such Agreement Default within the applicable cure period under the Agreement, which cure period shall run concurrently with that afforded Project Company under the Agreement. In addition, if Collateral Agent gives SDCP written notice prior to the expiration of the applicable cure period under the Agreement of Collateral Agent’s intention to cure such Agreement Default (which notice shall include a reasonable description of the time during which it anticipates to cure such Agreement Default) and is diligently proceeding to cure such Agreement Default, notwithstanding the applicable cure period under the Agreement, Collateral Agent shall 362
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-3
have a period of sixty (60) days (or, if such Agreement Default is for failure by the Project Company to pay an amount to SDCP which is due and payable under the Agreement other than to provide Agreement Collateral, thirty (30) days, or, if such Agreement Default is for failure by Project Company to provide Agreement Collateral, five (5) Business Days) from the Collateral Agent’s receipt of the notice of such Agreement Default from SDCP to cure such Agreement Default; provided, however, that (a) if possession of the Project is necessary to cure any such non-monetary Agreement Default and Collateral Agent has commenced foreclosure proceedings within sixty (60) days after notice of the Agreement Default and is diligently pursuing such foreclosure proceedings, Collateral Agent will be allowed a reasonable time, not to exceed one hundred eighty (180) days after the notice of the Agreement Default, to complete such proceedings and cure such Agreement Default, and (b) if Collateral Agent is prohibited from curing any such Agreement Default by any process, stay or injunction issued by any Governmental Authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving Project Company, then the time periods specified herein for curing an Agreement Default shall be extended for the period of such prohibition, so long as Collateral Agent has diligently pursued removal of such process, stay or injunction. Collateral Agent shall provide SDCP with reports concerning the status of efforts to cure an Agreement Default upon SDCP’s reasonable request.
1.4 Substitute Owner.
Subject to Section 1.7, the Parties agree that if Collateral Agent notifies (such notice, a “Financing Document Default Notice”) SDCP that an event of default has occurred and is continuing under the Financing Documents (a “Financing Document Event of Default”) then, upon a judicial foreclosure sale, non-judicial foreclosure sale, deed in lieu of foreclosure or other transfer following a Financing Document Event of Default, Collateral Agent (or its designee) shall be substituted for Project Company (the “Substitute Owner”) under the Agreement, and, subject to Sections 1.7(b) and 1.7(c) below, SDCP and Substitute Owner will recognize each other as counterparties under the Agreement and will continue to perform their respective obligations (including those obligations accruing to SDCP and the Project Company prior to the existence of the Substitute Owner) under the Agreement in favor of each other in accordance with the terms thereof; provided, however, that before SDCP is required to recognize the Substitute Owner, the Substitute Owner must have demonstrated to SDCP’s reasonable satisfaction that the Substitute Owner has (i) a minimum tangible net worth of at least $[•] and (ii) at least three (3) years of experience operating a generating plant of similar technology and similar size (or has retained a third party with such operating experience) (such person or entity, a “Permitted Transferee”). For purposes of the foregoing, SDCP shall be entitled to assume that any such purported exercise of rights by Collateral Agent that results in substitution of a Substitute Owner under the Agreement is in accordance with the Financing Documents without independent investigation thereof but shall have the right to require that Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same.
1.5 Replacement Agreements.
Subject to Section 1.7, if the Agreement is terminated, rejected or otherwise invalidated as a result of any bankruptcy, insolvency, reorganization or similar proceeding affecting Project 363
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-4
Company, its owner(s) or guarantor(s), and if Collateral Agent or its designee directly or indirectly takes possession of, or title to, the Project (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) (“Replacement Owner”), SDCP shall, and Collateral Agent shall cause Replacement Owner to, enter into a new agreement with one another for the balance of the obligations under the Agreement remaining to be performed having terms substantially the same as the terms of the Agreement with respect to the remaining Term (“Replacement Agreement”); provided, that before SDCP is required to enter into a Replacement Agreement, the Replacement Owner must have demonstrated to SDCP’s reasonable satisfaction that the Replacement Owner satisfies the requirements to be a Permitted Transferee. For purposes of the foregoing, SDCP is entitled to assume that any such purported exercise of rights by Collateral Agent that results in a Replacement Owner is in accordance with the Financing Documents without independent investigation thereof but shall have the right to require that the Replacement Owner provide reasonable evidence demonstrating the same. Notwithstanding the execution and delivery of a Replacement Agreement, to the extent SDCP is, or was otherwise prior to its termination as described in this Section 1.5, entitled under the Agreement, SDCP may suspend performance of its obligations under such Replacement Agreement, unless and until all Agreement Defaults of Project Company under the Agreement or Replacement Agreement have been cured.
1.6 Transfer.
Subject to Section 1.7, a Substitute Owner or a Replacement Owner may assign all of its interest in the Project and the Agreement and a Replacement Agreement to a natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority or other entity (a “Person”) to which the Project is transferred; provided, however, that the proposed transferee shall have demonstrated to SDCP’s reasonable satisfaction that such proposed transferee satisfies the requirements to be a Permitted Transferee.
1.7 Assumption of Obligations.
Transferee.
Any transferee under Section 1.6 shall expressly assume in a writing reasonably satisfactory to SDCP all of the obligations of Project Company, Substitute Owner or Replacement Owner under the Agreement or Replacement Agreement, as applicable, including posting and collateral assignment of the Agreement Collateral. Upon such assignment and the cure of any outstanding Agreement Default, and payment of all other amounts due and payable to SDCP in respect of the Agreement or such Replacement Agreement, the transferor shall be released from any further liability under the Agreement or Replacement Agreement, as applicable.
Substitute Owner.
Subject to Section 1.7(c), any Substitute Owner pursuant to Section 1.4 shall be required to perform Project Company’s obligations under the Agreement, including posting and collateral assignment of the Agreement Collateral; provided, however, that the obligations of such Substitute Owner shall be no more than those of Project Company under the Agreement. 364
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-5
No Liability.
SDCP acknowledges and agrees that neither Collateral Agent nor any Secured Party shall have any liability or obligation under the Agreement as a result of this Consent (except to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner) nor shall Collateral Agent or any other Secured Party be obligated or required to (i) perform any of Project Company’s obligations under the Agreement, except as provided in Sections 1.7(a) and 1.7(b) and to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner, or (ii) take any action to collect or enforce any claim for payment assigned under the Financing Documents. If Collateral Agent becomes a Substitute Owner pursuant to Section 1.4 or enters into a Replacement Agreement, Collateral Agent shall not have any personal liability to SDCP under the Agreement or Replacement Agreement and the sole recourse of SDCP in seeking enforcement of such obligations against Collateral Agent shall be to the aggregate interest of the Secured Parties in the Project; provided, however, that such limited recourse shall not limit SDCP’s right to seek equitable or injunctive relief against Collateral Agent, or SDCP’s rights with respect to any offset rights expressly allowed under the Agreement, a Replacement Agreement or the Agreement Collateral.
1.8 Delivery of Notices.
SDCP shall deliver to Collateral Agent, concurrently with the delivery thereof to Project Company, a copy of each notice, request or demand given by SDCP to Project Company pursuant to the Agreement relating to (a) an Agreement Default, (b) any claim regarding Force Majeure by SDCP under the Agreement, (c) any notice of dispute under the Agreement, (d) any notice of intent to terminate or any termination notice, and (e) any matter that would require the consent of Collateral Agent pursuant to Section 1.11 or any other provision of this Consent. Collateral Agent acknowledges that delivery of such notice, request and demand shall satisfy SDCP’s obligation to give Collateral Agent a notice of Agreement Default under Section 1.3. Collateral Agent shall deliver to SDCP, concurrently with delivery thereof to Project Company, a copy of each notice, request or demand given by Collateral Agent to Project Company pursuant to the Financing Documents relating to a default by Project Company under the Financing Documents.
1.9 Confirmations.
SDCP will, as and when reasonably requested by Collateral Agent from time to time, confirm in writing matters relating to the Agreement (including the performance of the same by Project Company); provided, however, that such confirmation may be limited to matters of which SDCP is aware as of the time the confirmation is given and such confirmations shall be without prejudice to any rights of SDCP under the Agreement as between SDCP and Project Company.
1.10 Exclusivity of Dealings.
Except as provided in Sections 1.3, 1.4, 1.8, 1.9, and 2.1, unless and until SDCP receives a Financing Document Default Notice, SDCP shall deal exclusively with Project Company in connection with the performance of SDCP’s obligations under the Agreement. From and after such time as SDCP receives a Financing Document Default Notice and until a Substitute Owner is substituted for Project Company pursuant to Section 1.4, a Replacement Agreement is entered into 365
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-6
or the Agreement is transferred to a Person to whom the Project is transferred pursuant to Section
1.6, SDCP shall, until Collateral Agent confirms to SDCP in writing that all obligations under the Financing Documents are no longer outstanding, deal exclusively with Collateral Agent in connection with the performance of SDCP’s obligations under the Agreement, and SDCP may irrevocably rely on instructions provided by Collateral Agent in accordance therewith to the exclusion of those provided by any other Person.
1.11 No Amendments.
To the extent permitted by applicable Laws, SDCP agrees that it will not, without the prior written consent of Collateral Agent (not to be unreasonably withheld, delayed or conditioned) (a) enter into any material supplement, restatement, novation, extension, amendment or modification of the Agreement, (b) terminate or suspend its performance under the Agreement (except in accordance with Section 1.3) or (c) consent to or accept any termination or cancellation of the Agreement by Project Company.
ARTICLE 2
PAYMENTS UNDER THE AGREEMENT
2.1 Payments.
Unless and until SDCP receives written notice to the contrary from Collateral Agent, SDCP will make all payments to be made by it to Project Company under or by reason of the Agreement directly to Project Company. SDCP, Project Company, and Collateral Agent acknowledge that SDCP will be deemed to be in compliance with the payment terms of the Agreement to the extent that SDCP makes payments in accordance with Collateral Agent’s instructions.
2.2 No Offset, Etc.
All payments required to be made by [•] under the Agreement shall be made without any offset, recoupment, abatement, withholding, reduction or defense whatsoever, other than that expressly allowed by the terms of the Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SDCP
SDCP makes the following representations and warranties as of the date hereof in favor of Collateral Agent:
3.1 Organization.
SDCP is a joint powers authority and community choice aggregator duly organized and validly existing 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 its jurisdiction.
SDCP has all requisite power and authority, corporate and otherwise, to enter into and to perform 366
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-7
its obligations hereunder and under the ESSA, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.
3.2 Authorization.
The execution, delivery and performance by SDCP of this Consent and the Agreement have been duly authorized by all necessary corporate or other action on the part of SDCP and do not require any approval or consent of any holder (or any trustee for any holder) of any indebtedness or other obligation of SDCP which, if not obtained, will prevent SDCP from performing its obligations hereunder or under the Agreement except approvals or consents which have previously been obtained and which are in full force and effect.
3.3 Execution and Delivery; Binding Agreements.
Each of this Consent and the Agreement is in full force and effect, have been duly executed and delivered on behalf of SDCP by the appropriate officers of SDCP, and constitute the legal, valid and binding obligation of SDCP, enforceable against SDCP in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
3.4 No Default or Amendment.
Except as set forth in Schedule A attached hereto: (a) Neither SDCP nor, to SDCP’s actual knowledge, Project Company, is in default of any of its obligations under the Agreement; (b) SDCP and, to SDCP’s actual knowledge, Project Company, has complied with all conditions precedent to the effectiveness of its obligations under the Agreement; (c) to SDCP’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either SDCP or Project Company to terminate or suspend its obligations under the Agreement; and (d) the Agreement has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.
3.5 No Previous Assignments.
SDCP has no notice of, and has not consented to, any previous assignment by Project Company of all or any part of its rights under the Agreement, except as previously disclosed in writing and consented to by SDCP.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PROJECT COMPANY
Project Company makes the following representations and warranties as of the date hereof in favor of Collateral Agent and SDCP:
4.1 Organization.
367
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-8
Project Company is a limited liability company duly organized and validly existing under the laws of the state of its organization, and is duly qualified, authorized to do business and in good standing in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where the failure to so qualify would not have a material adverse effect on its financial condition, its ability to own its properties or its ability to transact its business. Project Company has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.
4.2 Authorization.
The execution, delivery and performance of this Consent by Project Company, and Project Company’s collateral assignment of its right, title and interest in, to and under the Agreement to Collateral Agent pursuant to the Financing Documents, have been duly authorized by all necessary corporate or other action on the part of Project Company.
4.3 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Project Company by the appropriate officers of Project Company, and constitutes the legal, valid and binding obligation of Project Company, enforceable against Project Company in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
4.4 No Default or Amendment.
Except as set forth in Schedule B attached hereto: (a) neither Project Company nor, to Project Company’s actual knowledge, SDCP, is in default of any of its obligations under the Agreement; (b) Project Company and, to Project Company’s actual knowledge, SDCP, has complied with all conditions precedent to the effectiveness of its obligations under the Agreement; (c) to Project Company’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either SDCP or Project Company to terminate or suspend its obligations under the Agreement; and (d) the Agreement has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.
4.5 No Previous Assignments.
Project Company has not previously assigned all or any part of its rights under the Agreement.
368
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-9
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF COLLATERAL AGENT
Collateral Agent makes the following representations and warranties as of the date hereof in favor of SDCP and Project Company:
5.1 Authorization.
The execution, delivery and performance of this Consent by Collateral Agent have been duly authorized by all necessary corporate or other action on the part of Collateral Agent and Secured Parties.
5.2 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Collateral Agent by the appropriate officers of Collateral Agent, and constitutes the legal, valid and binding obligation of Collateral Agent as Collateral Agent for the Secured Parties, enforceable against Collateral Agent (and the Secured Parties to the extent applicable) in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
ARTICLE 6
MISCELLANEOUS
6.1 Notices.
All notices and other communications hereunder shall be in writing, shall be deemed given upon receipt thereof by the Party or Parties to whom such notice is addressed, shall refer on their face to the Agreement (although failure to so refer shall not render any such notice or communication ineffective), shall be sent by first class mail, by personal delivery or by a nationally recognized courier service, and shall be directed (a) if to SDCP or Project Company, in accordance with Section 9.1 of the Agreement, (b) if to Collateral Agent to the contact information provided below, or (c) to such other address or addressee as any such Party may designate by notice given pursuant hereto.
[•], as Collateral Agent
[•]
[•]
Attention: [•]
Telephone: [•]
Email: [•]
6.2 Governing Law; Submission to Jurisdiction.
369
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-10
THIS CONSENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THIS
CONSENT AND ALL MATTERS ARISING OUT OF THIS CONSENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF CALIFORNIA WITHOUT REGARD TO ANY CONFLICTS OF LAWS
PROVISIONS THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
All disputes, claims or controversies arising out of, relating to, concerning or pertaining to the terms of this Consent shall be governed by the dispute resolution provisions of the Agreement.
Subject to the foregoing, any legal action or proceeding with respect to this Consent and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of California or of the United States of America for the Central District of California, and, by execution and delivery of this Consent, each Party hereby accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof. Each Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its notice address provided pursuant to Section 6.1 hereof. Each Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Consent brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law.
6.3 Headings Descriptive.
The headings of the several sections and subsections of this Consent are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Consent.
6.4 Severability.
In case any provision in or obligation under this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
6.5 Amendment, Waiver.
Neither this Consent nor any of the terms hereof may (a) be terminated, amended, supplemented or modified, except by an instrument in writing signed by SDCP, Project Company and Collateral Agent or (b) waived, except by an instrument in writing signed by the waiving Party.
6.6 Termination.
Each Party’s obligations hereunder are absolute and unconditional, and no Party has any right, and shall have no right, to terminate this Consent or to be released, relieved or discharged from any obligation or liability hereunder until SDCP has been notified by Collateral Agent that 370
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-11
all of the obligations under the Financing Documents shall have been satisfied in full (other than contingent indemnification obligations) or, with respect to the Agreement or any Replacement Agreement, its obligations under such Agreement or Replacement Agreement have been fully performed.
6.7 Successors and Assigns.
This Consent shall be binding upon each Party and its successors and assigns permitted under and in accordance with this Consent, and shall inure to the benefit of the other Parties and their respective successors and assigns permitted under and in accordance with this Consent. Each reference to a Person herein shall include such Person’s successors and assigns permitted under and in accordance with this Consent.
6.8 Further Assurances.
SDCP hereby agrees to execute and deliver all such instruments and take all such action as may be necessary to effectuate fully the purposes of this Consent.
6.9 Waiver of Trial by Jury.
TO THE EXTENT PERMITTED BY APPLICABLE LAWS, THE PARTIES HEREBY
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT OR ANY MATTER ARISING HEREUNDER. EACH PARTY FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.10 Entire Agreement.
This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Consent and any such agreement, document or instrument, the terms, conditions and provisions of this Consent shall prevail.
6.11 Effective Date.
This Consent shall be deemed effective as of the Effective Date.
6.12 Counterparts; Electronic Signatures.
This Consent may be executed in one or more counterparts, each of which will be deemed to be an original of this Consent and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Consent and of signature pages by facsimile transmission, Portable Document Format (i.e., PDF), or by other electronic means shall constitute effective execution and delivery of this Consent as to the Parties and may be used in lieu of the original Consent for all purposes.
371
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-12
[Remainder of Page Left Intentionally Blank.]
372
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-13
IN WITNESS WHEREOF, the Parties hereto have caused this Consent to be duly executed and delivered by their duly authorized officers as of the Effective Date.
SAN DIEGO COMMUNITY POWER, a California
joint powers authority
By:
Name:
Title:
373
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-14
CHULA VISTA ENERGY CENTER 2, LLC,
a Delaware limited liability company
By:
Name:
Title:
374
[SIGNATURE PAGE TO CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT – ESSA] Exhibit T-15
[•],
as Collateral Agent
By:
Name:
Title:
375
Exhibit T-16
SCHEDULE A
None.
376
Exhibit T - 0
SCHEDULE B
None.
377
SAN DIEGO COMMUNITY POWER
Staff Report – Item 17
--------------------------------------------------------------------------------------------------------------------- To: Board of Directors
From: Byron Vosburg, Chief Commercial Officer
Morgan Adam, Senior Local Development Manager
Via: Karin Burns, Chief Executive Officer
Subject: Approve Energy Storage Services Agreement Portfolio with Luminia CA DevCo 5, LLC
Date: February 27, 2025
--------------------------------------------------------------------------------------------------------------------- RECOMMENDATION:
Approve Energy Storage Services Agreements (ESSAs) and a Framework Agreement, in substantially final forms, for a Local RFO portfolio with Luminia CA DevCo 5, LLC, for up to 20.6 MW of 4-hr duration battery energy storage systems (BESS) for twenty years and authorize the Chief Executive Officer to execute the agreements.
BACKGROUND:
As San Diego Community Power (Community Power) strives to meet its environmental, financial, and regulatory compliance goals and requirements, long-term contracts of at least 10 years in duration are integral components of its portfolio. Long-term contracts provide renewable generation and clean energy storage facility developers with the certain revenue stream against which they can finance up-front capital requirements, so each long-term contract that Community Power signs with a developing facility will underpin a new, incremental project. In addition, long-term contracts lock in energy and capacity supply around which Community Power can build its power supply portfolio while also providing power supply cost certainty around which Community Power can develop its pro forma financial model.
Supplemental to Community Power’s efforts to secure more long-term contracts, Community Power additionally strives to procure an increasing amount of its power and capacity needs from resources that are local to San Diego County and that are smaller, non-utility scale projects, typically interconnected to distribution circuits closer to where Community Power loads are located. One of the ways that Community Power works to meet these local distributed energy resource (DER) procurement goals is through open solicitations, one of which was Community Power’s Local Distributed RFO solicitation, 378
which closed in December of 2023, and which invited offers for renewable projects greater than 100 kW per site and battery energy storage system (BESS) projects greater than 250 kW per site.
In January of 2024, the Energy Contract Working Group (ECWG) approved the shortlisting of a portfolio of battery energy storage systems (BESS) submitted by local San Diego based developer, Luminia LLC. The proposed Energy Storage Services Agreements (ESSAs) with Luminia CA DevCo 5, LLC (subsidiary of Luminia LLC) along with an associated Framework Agreement is for energy and capacity attributes provided by a portfolio of five BESS totaling 20.6 MW sited at commercial and industrial (C&I) facilities that will be able to store 82.4 MWh of energy and will provide Community Power BESS attributes over a 20-year term. Community Power has reached ESSA terms mutually agreeable to both parties.
ANALYSIS AND DISCUSSION
Staff and outside procurement counsel at Keyes & Fox negotiated the attached ESSAs for the purchase of BESS attributes from the portfolio of project sites, which consist of multi-use commercial sites located in the cities of San Diego and Chula VIsta. One representative ESSA is included for reference. The remaining three (3) are identical except for the project details as described in the Framework Agreement.
ESSA Contract Overview
• Project:
o Total of 20.6 MW, 4-Hr BESS, full-toll attributes, including energy shifting of peak loads and Resource Adequacy (RA)
• Project location: Five (5) commercial sites in cities of Chula Vista and San Diego • Contract term: 20 years
• Capacity price: Fixed capacity price applicable to the full term of the agreement • Guaranteed Commercial Operation Date: March 31, 2027
• No credit or collateral obligations for Community Power • Community Power would receive financial compensation in the event of seller’s failure to successfully achieve certain development milestones A separate Framework Agreement will manage development of the individual site ESSAs at a portfolio level. The Framework Agreement governs a process by which the five (5) ESSAs presented for approval here may be replaced by ESSAs at different site locations, subject to approval by Community Power pursuant to Community Power’s Energy Management Risk Policy, and not to exceed the aggregate 20.6 MW PV portfolio. 379
Community Benefits:
• Over $2 MM in local labor wages and salaries during the construction phases of the projects
• Developer commitment to using local labor, prevailing wage and hiring from San Diego-based apprenticeship programs
The project’s value to Community Power’s customers and further diversification of Community Power’s power portfolio warrants consideration of the ESSAs. Community Power staff recommends approving these ESSAs and Framework Agreement due to the projects’ anticipated benefits to the community as well as the projects’ role in helping to meet California’s need for significant development of reliable battery energy storage capacity. The fact that these distributed generation (DG) projects are sited on previously disturbed property of C&I sites also spares development on property that could otherwise be utilized for other purposes – one of the reasons why Community Power is committed to including these types of infill projects to our portfolio.
These projects would constitute the first ESSAs secured from the Local Distributed RFO and would be among a growing pool of projects that demonstrate Community Power’s commitment to local, distributed resources as a vital part of Community Power’s power portfolio. As such, staff recommends approving the ESSAs and Framework Agreement to allow the projects to move forward with development.
COMMITTEE REVIEW:
The Energy Contract Working Group (ECWG) recommended staff to move forward in negotiations of the ESSAs on January 26, 2024.
FISCAL IMPACT:
The competitive energy pricing of the ESSAs are confidential, but the long-term purchase of BESS attributes will provide Community Power with long-term energy hedge value and potential local capacity value over the term of the ESSAs.
ATTACHMENTS:
Attachment A: Energy Storage Services Agreement with Luminia CA DevCo 5, LLC Attachment B: ESSA Development Framework Agreement with Luminia CA DevCo 5, LLC
380
CONFIDENTIAL
EXECUTION VERSION
ENERGY STORAGE SERVICE AGREEMENT
COVER SHEET
Seller: Luminia CA DevCo 5, LLC (“Seller”)
Buyer: San Diego Community Power, a California joint powers authority (“Buyer”) Description of Facility: A [XX MW/XXX MWh] battery energy storage facility, located in ___________ County, in the State of ___________, as further described in Exhibit A.
Milestones:
Milestone Date for
Completion
Evidence of Site Control
Applications for all federal, state and local discretionary permits submitted and accepted as complete by the issuing agency (the “Permitting Submission Milestone”)
Conditional Use Permit and other discretionary permits
obtained
Seller’s receipt of Phase I and Phase II Interconnection study results for Seller’s Interconnection Facilities
Executed Interconnection Agreement
Financial Close
Major Equipment procured
Expected Construction Start Date
Initial Synchronization
Network Upgrades completed, if applicable
Guaranteed Commercial Operation Date
Delivery Term: 20 Contract Years, as may be extended pursuant to Section 2.1(b) Guaranteed Capacity: [XX] MW-AC at a Resource Duration of four (4) hours of continuous discharge
Dedicated Interconnection Capacity: [XX] MW
381
CONFIDENTIAL
EXECUTION VERSION
Guaranteed Availability:
Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency
Rate
1 – 20
Minimum Efficiency Rate:
Contract Price:
Contract Year Contract Price
1 – 20
Product:
☒ Discharging Energy
☒ Effective Capacity
☒ Ancillary Services
☒ Imbalance Reserves
☒ Capacity Attributes
☒ Any other existing products and products that may be developed or evolve from time to time during the Contract Term that the Facility is able to provide as the Facility is configured on the Commercial Operation Date and at no additional cost to Seller.
Metering Arrangement: CAISO Metered Entity
Scheduling Coordinator: Buyer/Buyer’s agent
Security Amount:
Development Security:
Performance Security:
382
CONFIDENTIAL
EXECUTION VERSION
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ........................................................................................................ 1
1.1 Contract Definitions ............................................................................................... 1
1.2 Rules of Interpretation ......................................................................................... 22 ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................. 24
2.1 Contract Term. ..................................................................................................... 24
2.2 Commercial Operation; Conditions Precedent .................................................... 25
2.3 Development; Construction; Progress Reports .................................................... 26
2.4 Remedial Action Plan .......................................................................................... 26
2.5 Pre-Commercial Operation Actions ..................................................................... 27 ARTICLE 3 PURCHASE AND SALE ...................................................................................... 27
3.1 Purchase and Sale of Product ............................................................................... 27
3.2 Discharging Energy ............................................................................................. 27
3.3 Capacity Attributes. ............................................................................................. 27
3.4 Ancillary Services ................................................................................................ 28
3.5 Resource Adequacy Failure ................................................................................. 29
3.6 Buyer’s Re-Sale of Product ................................................................................. 29
3.7 Compliance Expenditure Cap. ............................................................................. 29 ARTICLE 4 OBLIGATIONS AND DELIVERIES ................................................................... 30
4.1 Delivery................................................................................................................ 30
4.2 Interconnection. ................................................................................................... 31
4.3 Storage Availability and Efficiency Rate. ........................................................... 31
4.4 Capacity Tests. ..................................................................................................... 31
4.5 Testing Costs and Revenues. ............................................................................... 32
4.6 Facility Operation. ............................................................................................... 33
4.7 Seller Equipment Required for Operating Instruction Communications ............. 33
4.8 Dispatch Notices .................................................................................................. 34
4.9 Facility Unavailability to Receive Dispatch Notices ........................................... 34
4.10 Energy Management. ........................................................................................... 34
4.11 Availability Notices. ............................................................................................ 36
4.12 Outages. ............................................................................................................... 37 ARTICLE 5 TAXES .................................................................................................................. 38
5.1 Allocation of Taxes and Charges. ........................................................................ 38
5.2 Cooperation. ......................................................................................................... 39 ARTICLE 6 MAINTENANCE AND REPAIR OF THE FACILITY ....................................... 39
6.1 Maintenance of the Facility. ................................................................................ 39
6.2 Maintenance of Health and Safety. ...................................................................... 39
6.3 Effective Capacity Notice .................................................................................... 39 383
CONFIDENTIAL
EXECUTION VERSION
ii
6.4 Shared Facilities. .................................................................................................. 40 ARTICLE 7 METERING ........................................................................................................... 40
7.1 Metering. .............................................................................................................. 40
7.2 Meter Verification. ............................................................................................... 41 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 41
8.1 Invoicing. ............................................................................................................. 41
8.2 Payment................................................................................................................ 41
8.3 Books and Records. ............................................................................................. 42
8.4 Invoice Adjustments. ........................................................................................... 42
8.5 Billing Disputes. .................................................................................................. 42
8.6 Netting of Payments. ............................................................................................ 42
8.7 Seller’s Development Security. ........................................................................... 43
8.8 Seller’s Performance Security. ............................................................................. 43
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................ 43 ARTICLE 9 NOTICES .............................................................................................................. 44
9.1 Addresses for the Delivery of Notices ................................................................. 44
9.2 Acceptable Means of Delivering Notice .............................................................. 44 ARTICLE 10 FORCE MAJEURE ............................................................................................. 45
10.1 Definition ............................................................................................................. 45
10.2 No Liability If a Force Majeure Event Occurs .................................................... 46
10.3 Notice of Force Majeure Event. ........................................................................... 46
10.4 Termination Following Force Majeure Event ...................................................... 46 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ..................................................... 47
11.1 Events of Default ................................................................................................. 47
11.2 Remedies; Declaration of Early Termination Date. ............................................. 49
11.3 Damage Payment; Termination Payment ............................................................ 50
11.4 Notice of Payment of Termination Payment or Damage Payment ...................... 51
11.5 Disputes With Respect to Termination Payment or Damage Payment ............... 51
11.6 Limitation on Seller’s Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date ............................................................ 51
11.7 Rights And Remedies Are Cumulative ................................................................ 52
11.8 Mitigation ............................................................................................................. 52 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 52
12.1 No Consequential Damages. ................................................................................ 52
12.2 Waiver and Exclusion of Other Damages. ........................................................... 53 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; COVENANTS ......................... 54
13.1 Seller’s Representations and Warranties. ............................................................ 54
13.2 Buyer’s Representations and Warranties ............................................................. 54
13.3 General Covenants ............................................................................................... 55 384
CONFIDENTIAL
EXECUTION VERSION
iii
13.4 Prevailing Wage ................................................................................................... 56
13.5 Workforce Development and Supplier Diversity ................................................ 56 ARTICLE 14 ASSIGNMENT.................................................................................................... 56
14.1 General Prohibition on Assignments ................................................................... 56
14.2 Collateral Assignment .......................................................................................... 57
14.3 Permitted Assignment by Seller ........................................................................... 57
14.4 Portfolio Financing .............................................................................................. 57
14.5 Permitted Assignment by Buyer. ......................................................................... 58
14.6 Right of First Refusal as to Future Phases, Additional Projects, Addition of Storage Capacity. ............................................................................................. 58 ARTICLE 15 DISPUTE RESOLUTION ................................................................................... 59
15.1 Governing Law; Venue. ....................................................................................... 59
15.2 Dispute Resolution. .............................................................................................. 59
15.3 Attorneys’ Fees. ................................................................................................... 69 ARTICLE 16 INDEMNIFICATION ......................................................................................... 59
16.1 Indemnification. ................................................................................................... 59
16.2 Claims. ................................................................................................................. 60 ARTICLE 17 INSURANCE ...................................................................................................... 61
17.1 Insurance .............................................................................................................. 61 ARTICLE 18 CONFIDENTIAL INFORMATION ................................................................... 62
18.1 Definition of Confidential Information ................................................................ 62
18.2 Duty to Maintain Confidentiality. ........................................................................ 63
18.3 Irreparable Injury; Remedies. .............................................................................. 63
18.4 Further Permitted Disclosure ............................................................................... 63
18.5 Press Releases ...................................................................................................... 63 ARTICLE 19 MISCELLANEOUS ............................................................................................ 64
19.1 Entire Agreement; Integration; Exhibits .............................................................. 64
19.2 Amendments ........................................................................................................ 64
19.3 No Waiver ............................................................................................................ 64
19.4 No Agency, Partnership, Joint Venture or Lease ................................................. 64
19.5 Severability .......................................................................................................... 64
19.6 Mobile-Sierra ....................................................................................................... 64
19.7 Counterparts ......................................................................................................... 65
19.8 Electronic Delivery .............................................................................................. 65
19.9 Binding Effect ...................................................................................................... 65
19.10 No Recourse to Members of Buyer ..................................................................... 65
19.11 Forward Contract ................................................................................................. 65
19.12 Further Assurances............................................................................................... 65
19.13 Change in Electric Market Design ....................................................................... 66
EXHIBITS
385
CONFIDENTIAL
EXECUTION VERSION
iv
A. FACILITY DESCRIPTION ..................................................................................................... 1 B. FACILITY CONSTRUCTION AND COMMERCIAL OPERATION ................................... 1 C. COMPENSATION.................................................................................................................... 1 D. SCHEDULING COORDINATOR RESPONSIBILITIES ....................................................... 1 E. PROGRESS REPORTING FORM ........................................................................................... 1 F. FACILITY OPERATIONS DATA ........................................................................................... 1 G. FORM OF AVAILABILITY NOTICE ............................................................................... 1 H. FORM OF COMMERCIAL OPERATION DATE CERTIFICATE ....................................... 1 I. FORM OF EFFECTIVE CAPACITY AND EFFICIENCY RATE TEST
CERTIFICATE .............................................................................................................................. 1 J. FORM OF CONSTRUCTION START DATE CERTIFICATE ............................................... 1 K. FORM OF LETTER OF CREDIT ............................................................................................ 1 L. FORM OF MONTHLY AVAILABLE CAPACITY REPORT ............................................... 1 M. FORM OF REPLACEMENT RA NOTICE ............................................................................ 1 N. NOTICES .......................................................................................................................... 1 O. CAPACITY AND EFFICIENCY RATE TESTS ..................................................................... 1 P. MONTHLY CAPACITY AVAILABILITY CALCULATION ............................................... 1 Q. OPERATING RESTRICTIONS ............................................................................................... 1 R. METERING DIAGRAM .......................................................................................................... 1 S. WORKFORCE DEVELOPMENT ............................................................................................ 1 T. FORM OF CONSENT TO COLLATERAL ASSIGNMENT…………………………...……1 386
CONFIDENTIAL
SDCP PRO FORMA
STORAGE ESSA
December 2024
1 ENERGY STORAGE SERVICE AGREEMENT
This Energy Storage Service Agreement (“Agreement”) is entered into as of [__________] (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product; and WHEREAS, the Parties’ commitment to develop a portfolio of related facilities is set forth in that certain Energy Storage Development Framework Agreement (the “Framework Agreement”), dated as of February ___, 2025, between the Parties; NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:“AC” means alternating current. “Accepted Compliance Costs” has the meaning set forth in Section 3.7(e). “Actual Off-Peak Grid Charging Availability” or “AOPA” has the meaning set forth in Exhibit C, Section (d).
“Administrative NQC Reduction” means a reduction in the maximum achievable Net Qualifying Capacity of the Facility that has been generally applied to resources materially similar to the Facility in terms of technology type, market and operational characteristics (including those characteristics specified in the CPUC Master Resource Database), including any methodology that incorporates fleet averages or other average outage rates. Notwithstanding the foregoing, “Administrative NQC Reduction” does not include reductions that are related to the actual operation or interconnection of the Facility.
“Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control”, “controlled by” and 387
CONFIDENTIAL
EXECUTION VERSION
2 “under common control with”, as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person. Notwithstanding the foregoing, the Parties hereby agree and acknowledge that with respect to Buyer the public entities designated as members or participants under the Joint Powers Agreement creating Buyer shall not constitute or otherwise be deemed an “Affiliate” for purposes of this Agreement.
“Agreement” has the meaning set forth in the Preamble and includes the Cover Sheet and any Exhibits, schedules and any written supplements hereto. “Ancillary Services” means all ancillary services, products and other attributes, if any, associated with the Capacity of the Facility, including spinning reserve, non-spinning reserve, regulation up, regulation down, as each is defined in the CAISO Tariff and any other ancillary services added to the Agreement in accordance with Section 3.4. For the purposes of this Agreement, “Ancillary Services” does not include black start service. “Automated Dispatches” has the meaning set forth in Section 4.6(b). “Automated Dispatch System” or “ADS” has the meaning set forth in the CAISO Tariff. “Automatic Generation Control” or “AGC” has the meaning set forth in the CAISO Tariff.
“Availability Adjustment” or “AA” has the meaning set forth in Exhibit C. “Availability Notice” has the meaning set forth in Section 4.11(b). “Availability Standards” has the meaning set forth in the CAISO Tariff or such other similar term as modified and approved by FERC hereafter to be incorporated in the CAISO Tariff. “Available Capacity” means the Effective Capacity of the Facility, expressed in MWs, that is mechanically available to charge and discharge Energy and provide Ancillary Services. “Bankrupt” or “Bankruptcy” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due.
“Battery Charging Factor” means a fraction, the numerator of which is the amount of Charging Energy absorbed by the Facility after the first five (5) hours of the charging phase of the applicable Capacity Test, and the denominator of which is the Effective Capacity. 388
CONFIDENTIAL
EXECUTION VERSION
3 “Battery Discharging Factor” means one (1) minus a fraction, the numerator of which is the amount of Discharging Energy discharged during the first four (4) hours of the discharging phase of the applicable Capacity Test, and the denominator of which is the Effective Capacity. “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. Pacific Prevailing Time.
“Buyer” means San Diego Community Power, a California joint powers authority. “Buyer Default” means a failure by Buyer to perform Buyer’s obligations hereunder and includes an Event of Default of Buyer.
“Buyer Dispatched Test” has the meaning in Section 4.4(c). “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Approved Meter” means a CAISO approved revenue quality meter or meters, CAISO approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, all Charging Energy and Discharging Energy delivered to or from the Delivery Point. “CAISO Certification” means the certification and testing requirements for a storage unit set forth in the CAISO Tariff that are applicable to the Facility, including certification and testing for all applicable Ancillary Services, PMAX, and PMIN.
“CAISO Charges Invoice” has the meaning set forth in Exhibit D. “CAISO Dispatch” means any Charging Notice or Discharging Notice given by the CAISO to the Facility, whether through ADS, AGC or any successor communication protocol, communicating an Ancillary Service Award (as defined in the CAISO Tariff) or directing the Facility to charge or discharge at a specific MW rate for a specified period of time or amount of MWh.
“CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Metered Entity” has the meaning set forth in the CAISO Tariff. “CAISO Operating Order” means the Operating Instruction or Dispatch Instruction as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
389
CONFIDENTIAL
EXECUTION VERSION
4 “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the ability of the Facility to charge, discharge and deliver to the Delivery Point at a particular moment and that can be purchased, sold or conveyed under CAISO or CPUC market rules, including Resource Adequacy Benefits. “Capacity Test” or “CT” means any test or retest of the Facility to establish the Installed Capacity, Effective Capacity, or Efficiency Rate or any other test conducted pursuant to Exhibit O. “CEQA” means the California Environmental Quality Act, as amended or supplemented from time to time.
“Change of Control” means, except in connection with public market transactions of equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, at least fifty percent (50%) of the outstanding equity interests in Seller; provided, in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any tax equity provider) shall be excluded from the total outstanding equity interests in Seller. “Charging Energy” means the Energy delivered to the Facility pursuant to a Charging Notice, as measured at the Facility Metering Point by the Facility Meter, as such meter readings are adjusted by the CAISO for any applicable Electrical Losses and Station Use. All Charging Energy shall be used solely to charge the Facility.
“Charging Hours” has the meaning set forth in Exhibit C, Section (d). “Charging Limit” has the meaning set forth in Exhibit C, Section (d). “Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer, Buyer’s SC or the CAISO, directing the Facility to charge at a specific MW rate for a specified period of time or to a specified Stored Energy Level; provided, any such operating instruction shall be in accordance with the Operating Restrictions. Any instruction to charge the Facility pursuant to a Buyer Dispatched Test shall be considered a Charging Notice. “COD Certificate” has the meaning set forth in Exhibit B. 390
CONFIDENTIAL
EXECUTION VERSION
5 “Code” means the U.S. Internal Revenue Code, as amended. “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Capacity Test” means the Capacity Test conducted in connection with Commercial Operation of the Facility, including any additional Capacity Test for additional capacity installed after the Commercial Operation Date pursuant to Section 5 of Exhibit B.
“Commercial Operation Date” or “COD” has the meaning set forth in Exhibit B. “Commercial Operation Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) . “Communications Protocols” means the protocols developed by the Parties pursuant to Section 4.7 that involve procedures, software, equipment and protocols regarding communication with respect to the operation of the Facility pursuant to this Agreement. “Compliance Actions” has the meaning set forth in Section 3.7(c). “Compliance Expenditure Cap” has the meaning set forth in Section 3.7(b). “Confidential Information” has the meaning set forth in Section 18.1. “Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Price” has the meaning set forth on the Cover Sheet. “Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace this Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating this Agreement. “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“COVID-19” means the epidemic disease designated COVID-19 and the related virus designated SARS-CoV-2 and any mutations thereof, and the efforts of a Governmental Authority to combat such disease.
391
CONFIDENTIAL
EXECUTION VERSION
6 “CPM Soft Offer Cap” has the meaning set forth in Section 43A.4.1.1 of the CAISO Tariff.
“CPUC” means the California Public Utilities Commission, or any successor entity performing similar functions.
“CPUC Master Resource Database” means the CPUC database of generation, energy storage and other resources qualified to provide RA capacity to load serving entities. “CPUC System RA Penalty” means the System RA Penalties assessed against load-serving entities by the CPUC for Resource Adequacy Requirement deficiencies that are not replaced or cured, as established in the Resource Adequacy Rulings and subsequently incorporated into the annual “Filing Guide for System, Local and Flexible Resource Adequacy Compliance Filings” that is issued by the CPUC Energy Division, which is expected to be updated annually, or any replacement or successor documentation established by the CPUC Energy Division to reflect Resource Adequacy Requirement penalties that are established by the CPUC and assessed against load-serving entities for Resource Adequacy Requirement deficiencies. “Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Cure Plan” has the meaning set forth in Section 11.1(b)(iii). “Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, including a CAISO Operating Order, to curtail deliveries of Discharging Energy for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected; (b) a curtailment ordered by the Distribution Provider for reasons including, but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Distribution Provider’s electric system integrity or the integrity of other systems to which the Distribution Provider is connected; (c) a curtailment ordered by CAISO or the Distribution Provider due scheduling or unscheduled maintenance of the Distribution Provider’s distribution facilities that prevents (i) Buyer from receiving, or (ii) Seller from delivering Discharging Energy to the Delivery Point; or (d) a curtailment in accordance with Seller’s obligations under its Interconnection Agreement with the Distribution Provider.
392
CONFIDENTIAL
EXECUTION VERSION
7 “Damage Payment” means the amount to be paid by the Defaulting Party to the Non-Defaulting Party after a Terminated Transaction occurring prior to the Commercial Operation Date, in a dollar amount set forth in Section 11.3(a).
“Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Dedicated Interconnection Capacity” means an instantaneous amount of Charging Energy and/or Discharging Energy, as applicable, that is permitted to be delivered from and/or to the Delivery Point under Seller’s Interconnection Agreement, in the amount of MWs as set forth on the Cover Sheet.
“Deemed Delivered RA” means, for the applicable Showing Month, the amount of Net Qualifying Capacity, expressed in MW, that the Facility would have been able to deliver as Resource Adequacy Benefits, but for (a) a Force Majeure Event as provided in Section 10.1, and/or (b) Planned Outages permitted by the terms of this Agreement to the extent such Planned Outages reduce the maximum achievable Net Qualifying Capacity of the Facility. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Delivered RA” means an amount, expressed in MW, calculated for the applicable Showing Month as the sum of (a) the amount of the Net Qualifying Capacity of the Facility for each hour of the Resource Duration in such Showing Month able to be shown on Buyer’s monthly or annual Resource Adequacy Plan to the CAISO and CPUC and able to be counted as Resource Adequacy Benefits by both the CAISO and CPUC, (b) Deemed Delivered RA and (c) Replacement RA.
“Delivery Network Upgrades” has the meaning set forth in the CAISO Tariff. “Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (a) cash or (b) a Letter of Credit in the amount set forth on the Cover Sheet.
“Discharging Energy” means all Energy delivered from the Facility to the Delivery Point pursuant to a Discharging Notice during any Settlement Interval or Settlement Period, as measured at the Facility Metering Point by the Facility Meter, as such meter readings are adjusted by the CAISO for Station Use and Electrical Losses to the Delivery Point. “Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer, Buyer’s SC or the CAISO, directing the Facility to discharge Discharging Energy at a 393
CONFIDENTIAL
EXECUTION VERSION
8 specific MW rate for a specified period of time or to a specified Stored Energy Level; provided, any such operating instruction or updates shall be in accordance with the Operating Restrictions.
Any instruction to discharge the Facility pursuant to a Buyer Dispatched Test shall be considered a Discharging Notice.
“Disclosing Party” has the meaning set forth in Section 18.2. “Dispatch Notice” means any Charging Notice, Discharging Notice and any subsequent updates thereto, given by the CAISO, Buyer or Buyer’s SC, directing the Facility to charge or discharge Energy at a specific MWh rate, for a specified period of time, and/or to a specified Stored Energy Level; provided, any such operating instruction or updates shall be in accordance with the Operating Restrictions.
“Dispute Notice” has the meaning set forth in Section 15.2. “Distribution Provider” means any entity or entities transmitting or transporting the Charging Energy and Discharging Energy, as applicable, on behalf of Seller or Buyer to or from the Delivery Point, but excluding Seller or any Seller’s Affiliate responsible for operating any gen-tie line to any point of interconnection to a Distribution Provider’s transmission system or distribution system. For purposes of this Agreement, the Distribution Provider is set forth in Exhibit A.
“Distribution System” means the distribution facilities now or hereafter in existence which provide energy distribution service downstream from the Delivery Point. “Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Capacity” means the lesser of (a) PMAX, and (b) maximum dependable operating capacity of the Facility to discharge Energy for the number of hours of continuous discharge corresponding to the Resource Duration, as measured in MW AC at the Delivery Point (i.e., measured at the Facility Meter and adjusted for Electrical Losses to the Delivery Point to the extent such Electrical Losses are not already reflected in the Facility Meter measurements, as determined pursuant to the most recent Capacity Test including the Commercial Operation Capacity Test), and as evidenced by a certificate substantially in the form attached as Exhibit I hereto, in either case (a) or (b) not to exceed (i) (with respect to a Commercial Operation Capacity Test) or, (ii) the Installed Capacity (with respect to any other Capacity Test).
“Effective Capacity Notice” has the meaning set forth in Section 6.3. “Effective Date” has the meaning set forth on the Preamble. “Efficiency Rate” means the measured round-trip efficiency rate of the Facility, expressed as a percentage, calculated pursuant to) a Capacity Test, and which for a given calendar month, shall be prorated as necessary if more than one Efficiency Rate applies during such calendar month. “Electrical Losses” means, subject to meeting any applicable CAISO requirements and in accordance with Section 7.1, all transmission, distribution, or transformation losses (a) between 394
CONFIDENTIAL
EXECUTION VERSION
9 the Delivery Point and the Facility Metering Point associated with delivery of Charging Energy, and (b) between the Facility Metering Point and the Delivery Point associated with delivery of Discharging Energy.
“Emission Reduction Credits” or “ERCs” means emission reductions that have been authorized by a local air pollution control district pursuant to California Division 26 Air Resources; Health and Safety Code Sections 40709 and 40709.5, whereby a district has established a system by which all reductions in the emission of air contaminants that are to be used to offset certain future increases in the emission of air contaminants shall be banked prior to use to offset future increases in emissions.
“Energy” means alternating currenty electrical energy, measured in MWh. “Energy Management System” or “EMS” means the Facility’s energy management system.
“Environmental Costs” means costs incurred in connection with acquiring and maintaining all environmental permits and licenses for the Facility, and the Facility’s compliance with all applicable environmental laws, rules and regulations, including capital costs for pollution mitigation or installation of emissions control equipment required to permit or license the Facility, all operating and maintenance costs for operation of pollution mitigation or control equipment, costs of permit maintenance fees and emission fees as applicable, the costs of all Emission Reduction Credits or Marketable Emission Trading Credits required by any applicable environmental laws, rules, regulations, and permits to operate the Facility, and the costs associated with the disposal and clean-up of Hazardous Substances introduced to the Site, and the decontamination or remediation, on or off the Site, necessitated by the introduction of such Hazardous Substances on the Site.
“Event of Default” has the meaning set forth in Section 11.1. “Excused Event” has the meaning set forth in Exhibit P. “Expected Commercial Operation Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Commercial Operation. “Expected Construction Start Date” means the date set forth on the Cover Sheet, as such date may be extended pursuant to Exhibit B.
“Expected Effective Capacity” means the capacity set forth in Exhibit A, as such capacity may be updated pursuant to Section 6.3.
“Export and Import Costs” means all export (including any withholding tax in the country of origin) and import customs and other similar taxes, tariffs and duties and other charges or fees levied or assessed by any jurisdiction (including, without limitation, current and future anti-dumping duty, countervailing duty, Section 301 of the Trade Act of 1974 or other duties or tariffs imposed by any jurisdiction, including the country of manufacture, the country in which the Facility is located and any other country through which the Facility equipment or material is transported or stored), or other costs that may be assessed or incurred in connection with the import 395
CONFIDENTIAL
EXECUTION VERSION
10 and export of the Facility equipment or material, including any such costs associated with any change in Law, and all penalties payable to a Governmental Authority due to a finding or allegation of liability for noncompliance with one or more customs requirements (including a duty, tariff or other payment owed due to a Governmental Authority finding or allegation regarding the country of origin of any item).
“Extension Period” has the meaning set forth in Section 2.1(e). “Facility” means the energy storage facility described on the Cover Sheet and in Exhibit A, located at the Site and including the Energy Management System and mechanical equipment and associated facilities and equipment required to deliver Product (but excluding any Shared Facilities), as such storage facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement.
“Facility Meter” means a CAISO Approved Meter, along with a CAISO-approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Facility Metering Point and the amount of Discharging Energy discharged from the Facility at the Facility Metering Point to the Delivery Point for the purpose of invoicing in accordance with Section 8.1. The Facility may contain multiple measurement devices that will make up the Facility Meter, and, unless otherwise indicated, references to the Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“Facility Metering Point” means the location(s) of the Facility Meter shown in Exhibit R. “Facility Rebalancing” has the meaning set forth in Section 6.3. “FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Financial Close” means Seller or one of its Affiliates has obtained debt or equity financing commitments from one or more Lenders sufficient to construct the Facility, including such financing commitments from Seller's owner(s).
“Flexible RAR” means the flexible capacity requirements established for load-serving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Force Majeure Event” has the meaning set forth in Section 10.1. “Framework Agreement” has the meaning set forth in the Recitals. “Full Capacity Deliverability Status” has the meaning set forth in the CAISO Tariff. “Gains” means, with respect to any Non-Defaulting Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable 396
CONFIDENTIAL
EXECUTION VERSION
11 manner, which economic benefit (if any) shall be deemed the gain (if any) to such Non-Defaulting Party represented by, (a) if Buyer is the Non-Defaulting Party, the positive difference between the present value of the payments required to be made by Buyer during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made by Buyer under any transaction(s) replacing this Agreement, and (b) if Seller is the Non-Defaulting Party, the positive difference between the present value of the payments that would be required to be made to, or that would otherwise be received by, Seller under any transaction(s) replacing this Agreement and the present value of the payments required to be made to Seller during the remaining Contract Term of this Agreement. Factors used in determining the economic benefit to a Non-Defaulting Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and include the value of Capacity Attributes. “Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, “Governmental Authority” shall not in any event include any Party. “Grid Charging Restrictions” has the meaning set forth in Section 4.7(d). “Grid Charging Restrictions Liquidated Damages” or “GCRLDs” are the liquidated damages payable by Seller to Buyer as calculated pursuant Exhibit C, Section (d). “Grid Charging Restrictions Monthly Damages Factor” has the meaning set forth in Exhibit C, Section (d).
“Guaranteed Availability” means the minimum guaranteed Monthly Capacity Availability of the Facility in each month of the Delivery Term, as set forth on the Cover Sheet. “Guaranteed Capacity” means the maximum dependable operating capability of the Facility to discharge electric energy, as measured in MW AC at the Delivery Point for four (4) hours of continuous discharge (i.e., measured at the Facility Meter and adjusted for Electrical Losses and Station Use to the Delivery Point), for the number of hours of continuous discharge corresponding to the Resource Duration as set forth on the Cover Sheet. “Guaranteed Commercial Operation Date” means the date set forth on the Cover Sheet, as such date may be extended pursuant to Exhibit B.
“Guaranteed Efficiency Rate” means the minimum guaranteed Efficiency Rate of the Facility in each Contract Year of the Delivery Term, as set forth on the Cover Sheet. “Guaranteed RA Amount” means, for any Showing Month, the Qualifying Capacity of the Facility as determined by the CPUC as based on the Effective Capacity of the Facility, minus 397
CONFIDENTIAL
EXECUTION VERSION
12 Administrative NQC Reduction for each hour of the Relevant Day in the applicable Showing Month.
“Grid Charging Restrictions” has the meaning set forth in Exhibit C. “Grid Charging Restrictions Liquidated Damages” has the meaning set forth in Exhibit C.
“Hazardous Substance” means, collectively, (a) any chemical, material or substance that is listed or regulated under applicable Laws as a “hazardous” or “toxic” substance or waste, or as a “contaminant” or “pollutant” or words of similar import, (b) any petroleum or petroleum products, flammable materials, explosives, radioactive materials, asbestos, urea formaldehyde foam insulation, and transformers or other equipment that contain polychlorinated biphenyls, and (c) any other chemical or other material or substance, exposure to which is prohibited, limited or regulated by any Laws.
“Imbalance Energy” means the amount of Energy in MWh, in any given Settlement Period or Settlement Interval, by which the amount of Charging Energy or Discharging Energy, as applicable, deviates from the amount of Scheduled Energy. “Imbalance Reserves” has the meaning set forth in the CAISO Tariff. “Import Restriction Action” means any import or customs-related action by a Governmental Authority that, directly or indirectly, delays the delivery of major equipment procured by Seller to be used in the Facility, including, without limitation, a U.S. Customs and Border Protection withhold release order, issuance of a CF28 or CF29 instrument or seizure or enforcement action.
“Indemnifiable Loss(es)” has the meaning set forth in Section 16.1(a). “Indemnified Party” has the meaning set forth in Section 16.1(a). “Indemnifying Party” has the meaning set forth in Section 16.1(a). “Initial Showing Month” shall be the first month that the Buyer (or Buyer’s SC, if applicable) is capable of including the Facility’s Resource Adequacy Benefits on a Supply Plan. “Initial Synchronization” means the commencement of Trial Operations (as defined in the CAISO Tariff).
“Installed Capacity” means the lesser of (a) PMAX, and (b) the maximum dependable operating capacity of the Facility to discharge Energy for the number of continuous discharge corresponding to the Resource Duration, as measured in MW AC at the Delivery Point (i.e., measured by the Facility Meter and adjusted for Electrical Losses to the Delivery Point), that achieves Commercial Operation, as evidenced by a certificate substantially in the form attached as Exhibit I hereto, as such capacity may be adjusted pursuant to Section 5 of Exhibit B, but in either case (a) or (b) up to but not in excess of .
398
CONFIDENTIAL
EXECUTION VERSION
13 “Insurable Force Majeure Event” has the meaning set forth in Exhibit P. “Inter-SC Trade” has the meaning set forth in the CAISO Tariff. “Interconnection Agreement” means the interconnection agreement(s) entered into by Seller or a Seller Affiliate pursuant to which the Facility will be interconnected with the Distribution System, providing for interconnection capacity available or allocable to the Facility at the Interconnection Point that is no less than the Dedicated Interconnection Capacity, and pursuant to which Seller’s Interconnection Facilities and any other Interconnection Facilities will be constructed, operated and maintained during the Contract Term “Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Distribution System in accordance with the Interconnection Agreement.
“Interconnection Point” means the point at which Seller’s Interconnection Facilities interconnect with the Distribution System pursuant to the Interconnection Agreement, which point is identified in Exhibit A.
“Interest Rate” has the meaning set forth in Section 8.2. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff. “Investment Grade Credit Rating” means a Credit Rating of BBB- or higher by S&P or Baa3 or higher by Moody’s.
“ITC” means the investment tax credit established pursuant to Section 48 of the United States Internal Revenue Code of 1986.
“Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (California Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated October 1, 2019, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“kWh” means a kilowatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Lender” means, collectively, any Person (a) providing senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form 399
CONFIDENTIAL
EXECUTION VERSION
14 (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller and/or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (b) providing interest rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations and/or (c) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K. “Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Limited Assignee” has the meaning set forth in Section 14.5. “Local RAR” means the local Resource Adequacy Requirements established for load-serving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority. “Local RAR” may also be known as local area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulatory proceedings or legislative actions. “Local RFO Projects” means the energy storage projects, including the Facility, that are subject to power purchase agreements between the Parties resulting from Seller’s response to Buyer’s request for offers titled “San Diego Community Power 2023 Request for Offers for Local Distributed Projects.”
“Losses” means, with respect to any Non-Defaulting Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner, which economic loss (if any) shall be deemed to be the loss (if any) to such Party represented by (a) if Buyer is the Non-Defaulting Party, the positive difference between the present value of the payments that would be required to be made by Buyer under any transaction(s) replacing this Agreement, and the present value of the payments required to be made by Buyer during the remaining Contract Term of this Agreement and (b) if Seller is the Non-Defaulting Party, the positive difference between the present value of the payments required to be made to Seller during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made to, or that would otherwise be received by, Seller under any transaction(s) replacing this Agreement. Factors used in determining economic loss to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at 400
CONFIDENTIAL
EXECUTION VERSION
15 liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term and must include the value of Capacity Attributes and Tax Credits. “Major Equipment” means the batteries, main power transformer, medium voltage transformer, inverters, and the monitoring and control systems to be installed at the Facility. “Material Permits” means all permits required for Seller to commence construction, including any county discretionary and building permits. “Marketable Emission Trading Credits” means emissions trading credits or units pursuant to the requirements of California Division 26 Air Resources; Health & Safety Code Section 39616 and Section 40440.2 for market-based incentive programs such as the South Coast Air Quality Management District’s Regional Clean Air Incentives Market, also known as RECLAIM, and allowances of sulfur dioxide trading credits as required under Title IV of the Federal Clean Air Act (42 U.S.C. § 7651b (a) to (f)).
“Master File” has the meaning set forth in the CAISO Tariff. “Maximum Charging Capacity” means the highest level at which the Facility may be charged, expressed in MW and as set forth in Exhibit Q. “Maximum Discharging Capacity” means the highest level at which the Facility may be discharged, expressed in MW and as set forth in Exhibit Q. “Maximum State of Charge” means the maximum State of Charge to which the Facility may be charged, as set forth in Exhibit Q.
“Maximum Stored Energy Level” means the maximum Stored Energy Level the e Facility is capable of achieving, expressed in MWh, as set forth in Exhibit Q. “Meter Service Agreement” means “Meter Service Agreement for CAISO Metered Entities” or “Meter Service Agreement for Scheduling Coordinators”, as applicable, as each are defined in the CAISO Tariff.
“Milestones” means the development activities for significant permitting, interconnection, and construction milestones set forth on the Cover Sheet. “Minimum Efficiency Rate” means the percentage specified on the Cover Sheet. “Minimum State of Charge” means the minimum State of Charge to which the Facility may be discharged, as set forth in Exhibit Q.
“Minimum Stored Energy Level” means the minimum Stored Energy Level the Facility is capable of achieving, expressed in MWh, as set forth in Exhibit Q. “Monthly Available Capacity Report” has the meaning set forth in Section 4.11(a). “Monthly Capacity Availability” has the meaning set forth in Exhibit P. 401
CONFIDENTIAL
EXECUTION VERSION
16 “Monthly Capacity Payment” means the payment required to be made by Buyer to Seller each month of the Delivery Term as compensation for the Product, as calculated in accordance with Exhibit C.
“Moody’s” means Moody’s Investors Service, Inc.
“MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hours measured in alternating current, unless expressly stated in terms of direct current.
“NERC” means the North American Electric Reliability Corporation, or any successor entity performing similar functions.
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Network Upgrades” means collectively Delivery Network Upgrades and Reliability Network Upgrades.
“Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (e-mail).
“NP-15” means the Existing Zone Generation Trading Hub for Existing Zone region NP15 as set forth in the CAISO Tariff.
“Off-Peak Hour” means the hours designed as Off-Peak Hours in the Grid Charging Restrictions Table in Exhibit Q initially, and as may be amended by Buyer pursuant to Exhibit C. “Operating Restrictions” means those restrictions, rules, requirements, and procedures set forth in Exhibit Q.
“Outage Schedule” has the meaning set forth in Section 4.12(a)(i). “Participating Generator Agreement” has the meaning set forth in the CAISO Tariff. “Party” or “Parties” has the meaning set forth in the Preamble. “Performance Security” means (i) cash or (ii) a Letter of Credit in the amount set forth on the Cover Sheet.
“Permitted Transferee” means (i) any Affiliate of Seller, (ii) any other Person that is reasonably acceptable to Buyer, or (iii) any entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
402
CONFIDENTIAL
EXECUTION VERSION
17 (a) A Tangible Net Worth or assets under management of not less than or a Credit Rating of at least BBB- from S&P, or Baa3 from Moody’s; and
(b) At least three (3) years of experience in the ownership and operations of facilities similar to the Facility or has retained a third-party with such experience to operate the Facility. “Permitting Delays” means any delay in Seller’s receipt of any discretionary approvals and permits required for the construction of the Facility; provided however, that Permitting Delays shall be included in the Development Cure Period only if Seller achieved the Permit Submission Milestone and has exercised diligent and commercially reasonable efforts to obtain such permits. “Permitting Submission Milestone” has the meaning set forth on the Cover Sheet. “Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Planned Outage” means a period during which the Facility is either in whole or in part not capable of providing service due to planned maintenance that has been scheduled in advance in accordance with Section 4.12(a).
“PMAX” means the applicable CAISO-certified maximum operating level of the Facility. “PMIN” means the applicable CAISO-certified minimum operating level of the Facility. “PNode” has the meaning set forth in the CAISO Tariff.
“Portfolio” means the portfolio of electrical energy generating, electrical energy storage, or other assets and entities, including the Facility (or the interests of Seller or Seller’s Affiliates or the interests of their respective direct or indirect parent companies), that is pledged as collateral security in connection with a Portfolio Financing.
“Portfolio Financing” means any debt incurred by an Affiliate of Seller that is secured only by a Portfolio.
“Portfolio Financing Entity” means any Affiliate of Seller that incurs debt in connection with any Portfolio Financing.
“Prevailing Wage Requirement” has the meaning set forth in Section 13.4. “Product” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth in Exhibit E. “Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in 403
CONFIDENTIAL
EXECUTION VERSION
18 or approved by a significant portion of the electric industry during the relevant time period with respect to grid-interconnected, utility-scale energy storage facilities in the Western United States, and (b) any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Operating Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale energy storage facilities in the Western United States. Prudent Operating Practice shall include compliance with applicable Laws, applicable safety and reliability criteria, and the applicable criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations.
“Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Compliance Showing” means the (a) Local RAR compliance or advisory showings (or similar or successor showings), (b) RAR compliance or advisory showings (or similar or successor showings), and (c) Flexible RAR compliance or advisory showings (or similar successor showings), in each case, an entity is required to make to the CAISO pursuant to the CAISO Tariff, to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings, or to any Governmental Authority.
“RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month, as calculated in accordance with Section 3.5(b). “RA Shortfall Amount” for a given Showing Month, the average difference, expressed in MW, of (a) the Guaranteed RA Amount minus (b) Delivered RA for the Relevant Day;provided, if the CPUC adopts another methodology for calculating a load serving entity’s procurement deficiencies in Resource Adequacy Benefits for purposes of the Resource Adequacy Requirements, the Parties shall cooperate in good faith to amend this definition to conform to such new methodology in order to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this definition as of the Effective Date. If the result of the calculation is a negative number, the RA Shortfall shall be deemed to be zero MW for such Showing Month. “RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 3.5(b), any Showing Month during the Delivery Term, commencing with the Initial Showing Month, during which there is a RA Shortfall.
“RA Substitute Capacity” has the meaning set forth in the CAISO Tariff. “Ramp Rate” means the ability of the Facility to change between power output levels, expressed in MWAC/min.
“Real-Time Market” has the meaning set forth in the CAISO Tariff. “Receiving Party” has the meaning set forth in Section 18.2. 404
CONFIDENTIAL
EXECUTION VERSION
19 “Reliability Network Upgrades” has the meaning set forth in the CAISO Tariff. “Relevant Day” means the peak day(s) of the month, or such other time period, as established by the CPUC for purposes of determining compliance with Resource Adequacy Requirements.
“Remedial Action Plan” has the meaning set forth in Section 2.4. “Replacement RA” means Resource Adequacy Benefits from a Resource Adequacy Resource that are equivalent in all respects to those that would have been provided by the Facility with respect to the applicable Showing Month in which a RA Deficiency Amount is due to Buyer, including the same Slice-of-Day, generation profile and related characteristics, any successor criteria applicable to the Facility, and as applicable, Flexible RAR and Local RAR unless Buyer consents to accept Replacement RA from another facility that provides non-equivalent Resource Adequacy Benefits.
“Requested Confidential Information” has the meaning set forth in Section 18.2. “Resource Adequacy Benefits” means the rights and privileges attached to the Facility that satisfy any entity’s Resource Adequacy Requirements, as those obligations are set forth in any ruling issue by a Governmental Authority, including the Resource Adequacy Rulings, or the CAISO Tariff, and shall include RAR, Flexible RAR, Local RAR, and any successor criteria applicable to the Facility, include any Resource Duration attributes. “Resource Adequacy Plan” has the meaning set forth in the CAISO Tariff. “Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Resource Adequacy Resource” has the meaning set forth in the CAISO Tariff. “Resource Adequacy Rulings” means any applicable CPUC ruling or decision related to resource adequacy, or any other resource adequacy laws, rules or regulations enacted, adopted or promulgated by the CPUC or the CAISO, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Contract Term. “Resource Duration” means the number of continuous hours of discharge set forth on the Cover Sheet.
“Right of First Refusal” or “ROFR” has the meaning set forth in Section 14.5(a). “ROFR Offer” has the meaning set forth in Section 14.5(b). “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of S&P Global Inc.) or its successor.
405
CONFIDENTIAL
EXECUTION VERSION
20 “SC Metered Entity” has the meaning of a “Scheduling Coordinator Metered Entity” as defined in the CAISO Tariff.
“SCADA Systems” means the standard supervisory control and data acquisition systems to be installed by Seller as part of the Facility, including those system components that enable Seller to receive ADS and AGC instructions from the CAISO or similar instructions from Buyer’s SC.
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” and “Scheduling” have a corollary meaning.
“Scheduled Energy” means the Charging Energy or Discharging Energy, as applicable, that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), and/or any other financially binding Schedule, market instruction or dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff.
“Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Security Interest” has the meaning set forth in Section 8.9. “Seller” has the meaning set forth on the Cover Sheet.
“Seller Initiated Test” has the meaning set forth in Section 4.4(c). “Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount shall not include consequential, incidental, punitive, exemplary or indirect or business interruption damages unless such damages are part of a Party’s Gains, Losses or Costs, as those terms are defined herein. “Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary to enable delivery of Charging Energy and Discharging Energy to and from the Delivery Point to the Facility (which is excluded from Shared Facilities), including the Interconnection Agreement itself that are used in common with third parties or by Seller for electric generation or storage facilities owned by Seller other than the Facility.
406
CONFIDENTIAL
EXECUTION VERSION
21 “Showing Month” shall be a calendar month of the Delivery Term, commencing with the Showing Month that contains the RA Guarantee Date, that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.
“Site” means the real property on which the Facility is or will be located, as further described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer; provided, that any such update to the Site that includes real property that was not originally contained within the Site boundaries described in Exhibit A shall be subject to Buyer’s approval of such updates in its sole discretion. “Site Control” means that, for the Contract Term, Seller (or, prior to the Delivery Term, its Affiliate): (a) owns or has the option to purchase the Site; (b) is the lessee or has the option to lease the Site; or (c) is the holder of an easement or an option for an easement, right-of-way grant, or similar instrument with respect to the Site.
“SP-15” means the Existing Zone Generation Trading Hub for Existing Zone region SP15 as set forth in the CAISO Tariff.
“SQMD Plan” has the meaning set forth in the CAISO Tariff. “State of Charge” or “SOC” means the ratio of (a) the Stored Energy Level of the Facility to (b) the Effective Capacity multiplied by the Resource Duration, expressed as a percentage. “Station Use” means the Energy that is used within the Facility to power certain lights, motors, temperature control systems, control systems and other ancillary electrical loads that are necessary for operation of the Facility (or as otherwise defined by the retail energy provider and CAISO Tariff) except during periods in which the Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice.
“Stored Energy Level” means, at a particular time, the amount of electric Energy in the Facility available to be discharged as Discharging Energy, expressed in MWh. “Subsequent Purchaser” means the purchaser or recipient of Product from Buyer in any conveyance, re-sale or remarketing of Product by Buyer. “Subsequent Storage Capacity Test” has the meaning set forth in section 4.4(c). “Supplementary Capacity Test Protocol” has the meaning set forth in Exhibit O. “Supply Plan” has the meaning set forth in the CAISO Tariff. 407
CONFIDENTIAL
EXECUTION VERSION
22 “System Emergency” means any condition that requires, as determined and declared by CAISO or the Distribution Provider, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability. “Tangible Net Worth” means the tangible assets (for example, not including intangibles such as goodwill and rights to patents or royalties) that remain after deducting liabilities as determined in accordance with generally accepted accounting principles. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Tax Credits” means any (a) federal production tax credit, depreciation benefit, tax deduction and/or investment tax credit, including the ITC, specific to investments in energy storage facilities and (b) any refundable credit, grant, or other cash payment in lieu of an incentive described in clause (a).
“Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3(b). “Threshold Off-Peak Grid Charging Availability” or “TOPA” has the meaning set forth in Exhibit C, Section (d).
“Throughput” means, at any point in time during any day or Contract Year, as applicable, the total cumulative amount of Discharging Energy from the Facility at such point in time during such day or Contract Year, as applicable (expressed in MWh). “Transmission Plan Deliverability” has the meaning set forth in the pending Interconnection Process Enhancements CAISO Tariff amendments. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Point.
“Ultimate Parent” means [_________] a [_________] registered in [_________]. “Unplanned Outage” means a period during which the Facility is not capable of providing service due to the need to maintain or repair a component thereof, which period is not a Planned Outage.
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
408
CONFIDENTIAL
EXECUTION VERSION
23 (a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Article, Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement shall mean such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the terms “include” and “including” means “include or including (as applicable) without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the word or provision in respect of which such examples are provided;
(h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) the expression “and/or” when used as a conjunction shall connote “any or all of”;
(l) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
409
CONFIDENTIAL
EXECUTION VERSION
24 (m) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
ARTICLE 2
TERM; CONDITIONS PRECEDENT
2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions set forth herein (“Contract Term”); provided, Buyer’s obligations to pay for or accept any Product are subject to Seller’s completion of the conditions precedent pursuant to Section 2.2.
(b) The obligations of each Party under this Agreement shall not commence until Seller’s receipt of (i) the approval of the interconnection application for the Facility by SDG&E, and (ii) Seller’s receipt of Site Control; if the conditions set forth in this Section 2.1(b) are not satisfied by December 31, 2025, either Party shall have the right to terminate this Agreement without further liability for either Party, except as set forth in Section 2.1(f), by providing thirty (30) days advance Notice to the other Party. Upon termination under this Section
2.1(b), Buyer shall promptly return the Development Security to Seller. (c) At any time prior to December 31, 2025, Seller may terminate this Agreement as further set forth in the Framework Agreement. (d) If at any time after the Effective Date and before the Expected Construction Start Date, any change in Law occurs regarding the development, construction or operation of energy storage projects that prohibits Seller from developing, constructing or operating the Project, Seller in its sole discretion may elect to terminate this Agreement, unless Seller has waived this termination right in writing. If Seller elects to terminate, such termination shall be effective upon delivery of Notice to Buyer. Upon termination of this Agreement, Buyer shall promptly return the Development Security to Seller. Following the return of the Development Security to Seller, neither Party shall have any obligation or liability to the other by reason of such termination. (e) If Seller secures Full Capacity Deliverability Status during the Delivery Term, Buyer shall have the right to extend the Delivery Term at its sole discretion for (i) Resource Adequacy Benefits only (with no operational guarantees provided by Seller and no Monthly Capacity Payment owed by Buyer to Seller) by up to the total number of months from the Commercial Operation Date of this Agreement until the date the Facility first receives Full Capacity Deliverability Status (“Extension Period”), and/or (ii) for the full Product by up to the term of the Extension Period at a twenty percent (20%) reduction to the Contract Price. Any extension of the Delivery Term pursuant to this Section shall be subject to Seller’s confirmation that the Facility is technically capable of accommodating such Extension Period. (f) Applicable provisions of this Agreement shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, 410
CONFIDENTIAL
EXECUTION VERSION
25 obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 shall remain in full force and effect for two (2) years following the termination of this Agreement, and all indemnity and audit rights shall remain in full force and effect for three (3) years following the termination of this Agreement.
2.2 Commercial Operation; Conditions Precedent. Seller shall provide Notice to Buyer of the expected Commercial Operation Date and expected Installed Capacity at least sixty (60) days in advance of such date. Seller shall provide Notice to Buyer when Seller believes it has provided the required documentation to Buyer and met all the conditions precedent set forth below for achieving Commercial Operation. Following Buyer’s receipt of such Notice, Buyer shall approve or reject Seller’s request for confirmation of Commercial Operation, which, approval shall not be unreasonably withheld, conditioned or delayed. If confirmed, Commercial Operation shall be deemed to have occurred as of the date of such Notice. Upon Buyer’s approval of Seller’s achievement of Commercial Operation, Buyer shall provide Seller with written acknowledgment of the Commercial Operation Date.
(a) Seller has delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I setting forth the Installed Capacity and Efficiency Rate on the Commercial Operation Date;
(b) The Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Distribution System; (c) The Facility has met all Interconnection Agreement requirements that are preconditions to receiving and delivering Energy in the amount of the Guaranteed Capacity and is capable of receiving Charging Energy from, and delivering Discharging Energy to, the CAISO Balancing Authority, if applicable;
(d) The commissioning of the equipment has been completed in accordance with the applicable material requirements of the manufacturers’ specifications; (e) The Facility’s Installed Capacity is no less than one hundred percent (100%) of the Guaranteed Capacity and the Facility is capable of charging, storing and discharging Energy, all within the operational constraints and subject to the applicable Operating Restrictions; (f) [Intentionally Omitted];
(g) A Participating Generator Agreement and a Meter Service Agreement between Seller and CAISO have been executed and delivered and are in full force and effect, and a copy of each such agreement has been delivered to Buyer (h) Seller has obtained CAISO Certification for the Facility, and a copy of the CAISO Certification has been delivered to Buyer
(i) The Facility has successfully completed all testing required by Prudent Operating Practice or any requirement of Law to operate the Facility; 411
CONFIDENTIAL
EXECUTION VERSION
26 (j) All applicable regulatory authorizations, approvals and permits for the commencement of operation of the Facility have been obtained and are in full force and effect and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect, and Seller has delivered to Buyer an attestation certificate from an officer of Seller certifying to the satisfaction of this condition; (k) Seller has Site Control;
(l) Insurance requirements for the Facility have been met as set forth in Article 17, with evidence provided in writing to Buyer, in accordance with Section 17.1; and (m) Seller has made 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 for the Facility, including the operational data specified in Exhibit F;
(n) The Parties have agreed to a Communications Protocol as set forth in Section 4.7;
(o) Seller has taken all actions and executed all documents and instruments required to authorize Buyer (or its designated agent) to act as Scheduling Coordinator under this Agreement, and Buyer (or its designated agent) is authorized to act as Scheduling Coordinator and has full capability to Schedule and dispatch the Facility; and Seller has established a process to provide Availability Notices pursuant to Section 4.12(b) to Buyer’s Scheduling Coordinator subject to Buyer’s approval, not to be unreasonably withheld; (p) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8;
(q) Seller has paid Buyer for all amounts owing under this Agreement as of the Commercial Operation Date, if any, including Commercial Operation Delay Damages.
2.3 Development; Construction; Progress Reports. Within fifteen (15) days after the close of (a) each calendar quarter from the first calendar quarter following the Effective Date until the Construction Start Date, and (b) each calendar month from the first calendar month following the Construction Start Date until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report and agrees to regularly scheduled meetings between representatives of Buyer and Seller to review such reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit E. Seller shall also provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of receipt of such request from Buyer. For the avoidance of doubt, Seller is solely responsible for the design and construction of the Facility, including the location of the Site, the Facility layout, and the selection and procurement of the equipment comprising the Facility.
2.4 Remedial Action Plan. If Seller misses a Milestone by more than thirty (30) days, except as the result of Force Majeure Event or Buyer Default, Seller shall submit to Buyer, within ten (10) Business Days of the end of such thirty (30)-day period following the missed Milestone 412
CONFIDENTIAL
EXECUTION VERSION
27 completion date, a remedial action plan (“Remedial Action Plan”), which will describe in detail any delays (actual or anticipated) beyond the scheduled Milestone dates, including the cause of the delay (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor), Seller’s detailed description of its proposed course of action to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date; provided, delivery of any Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent Milestones and to achieve the Guaranteed Commercial Operation Date in accordance with the terms of this Agreement. Subject to the provisions of Exhibit B, so long as Seller complies with its obligations under this Section 2.4, Seller shall not be considered in default of its obligations under this Agreement solely as a result of missing any Milestone.
2.5 Pre-Commercial Operation Actions. The Parties agree that, in order for Buyer to dispatch the Facility for its Commercial Operation Date, the Parties will have to perform certain of their Delivery Term obligations in advance of the Commercial Operation Date, including, without limitation, Seller’s delivery of an Availability Notice for the Commercial Operation Date, and Buyer’s delivery of a Dispatch Notice and nominating and scheduling the Facility for the Commercial Operation Date, in advance of the Commercial Operation Date. The Parties shall cooperate with each other in order for Buyer to be able to dispatch the Facility for the Commercial Operation Date.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer shall have the exclusive right to the Installed Capacity and Effective Capacity, as applicable, and all Product associated therewith. Seller shall operate the Facility and ensure that the Facility can charge and discharge, deliver, and sell the Product therefrom to Buyer when and as the Facility is available, subject to the terms and conditions of this Agreement, including the Operating Restrictions. Seller represents and warrants that it will deliver the Product to Buyer free and clear of all liens, security interests, claims and encumbrances. Seller shall not substitute or purchase any energy storage capacity, Energy, Ancillary Services or Capacity Attributes from any other resource or the market for delivery hereunder except as otherwise provided herein, nor shall Seller sell, assign or otherwise transfer any Product, or any portion thereof, to any third party other than to Buyer or the CAISO pursuant to this Agreement or as otherwise required by Law.
3.2 Discharging Energy. Subject to the terms and conditions of this Agreement, Seller commits to make available the Discharging Energy to Buyer during the Delivery Term, and Buyer shall have the exclusive rights to all such Discharging Energy, subject to the Operating Restrictions. Title to and risk of loss related to the Discharging Energy shall pass and transfer from Seller to Buyer at the Delivery Point.
3.3 Capacity Attributes. Seller’s obligations to provide Resource Adequacy Benefits under this Agreement are conditioned upon the receipt of CAISO Transmission Plan Deliverability for the Facility. Seller shall request Full Capacity Deliverability Status for the Facility’s Installed Capacity and shall use commercially reasonable efforts to obtain deliverability through the CAISO 413
CONFIDENTIAL
EXECUTION VERSION
28 Transmission Plan Deliverability process. If and to the extent the CAISO has confirmed to Seller’s reasonable satisfaction that the Facility has been allocated Interim Deliverability Status or Full Capacity Deliverability Status, Seller’s obligations under this Agreement with respect to Resource Adequacy Benefits shall take effect. If the Facility is not awarded deliverability, (i) Seller shall not be obligated to provide Resource Adequacy Benefits under any provision of this Agreement, including this Section 3.3, (ii) there shall be no Event of Default under this Agreement, and (iii) there shall be no impact on the Contract Price or other material provisions of this Agreement that are not related to the sale of Resource Adequacy Benefits to Buyer. As between Buyer and Seller, Seller shall be responsible for the cost and installation of any Reliability Network Upgrades and/or Delivery Network Upgrades associated with obtaining such Full Capacity Deliverability Status. (a) Throughout the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all the Capacity Attributes from the Facility. (b) Throughout the Delivery Term, Seller shall maintain Full Capacity Deliverability Status for the Facility from the CAISO and shall perform all actions necessary to ensure that the Facility qualifies to provide Resource Adequacy Benefits to Buyer. Throughout the Delivery Term, Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits from the Facility to Buyer.
(c) For the duration of the Delivery Term, Seller shall take all commercially reasonable actions, including complying with all applicable registration and reporting requirements, and execute all documents or instruments necessary to enable Buyer to use all of the Capacity Attributes committed by Seller to Buyer pursuant to this Agreement. (d) If Seller anticipates it will have an RA Deficiency Amount in any month of the Delivery Term, Seller may provide Replacement RA up to the anticipated RA Shortfall Amount as an alternative to paying RA Deficiency Amounts; provided, any Replacement RA capacity shall be communicated by Seller to Buyer with Replacement RA product information in a written notice substantially in the form of Exhibit M at least fifty (50) days before the applicable Showing Month.
3.4 Ancillary Services. Buyer shall have the exclusive rights to all Ancillary Services that the Facility is capable of providing during the Delivery Term consistent with the Operating Restrictions, with characteristics and quantities determined in accordance with the CAISO Tariff.
Seller shall operate and maintain the Facility throughout the Delivery Term so as to be able to provide Ancillary Services in accordance with the specifications set forth in Exhibit Q and the Facility’s CAISO Certification associated with the Installed Capacity, adjusted to reflect the Effective Capacity. Upon Buyer’s reasonable request, Seller shall submit the Facility for additional CAISO Certification so that the Facility may provide additional Ancillary Services that the Facility is, at the relevant time, actually physically capable of providing without modification of the Facility; provided, Buyer shall reimburse Seller for any material costs Seller incurs in connection with conducting such additional CAISO Certification.
414
CONFIDENTIAL
EXECUTION VERSION
29 3.5 Resource Adequacy Failure.
(a)
(b)
3.6 Buyer’s Re-Sale of Product. Buyer shall have the exclusive right in its sole discretion to convey, use, market, or sell the Product, or any part of the Product, to any Subsequent Purchaser; and Buyer shall have the right to all revenues generated from the conveyance, use, re-sale or remarketing of the Product, or any part of the Product. If the CAISO or CPUC develops a centralized capacity market, Buyer shall have the exclusive right to offer, bid, or otherwise submit the Capacity Attributes for re-sale into such market, and Buyer shall retain and receive all revenues from such re-sale. Seller shall take all commercially reasonable actions and execute all documents or instruments reasonably necessary to allow Subsequent Purchasers to use such resold Product, but without increasing Seller’s obligations or liabilities under this Agreement. If Buyer incurs any liability to a Subsequent Purchaser due to the failure of Seller to comply with this Section 3.6, Seller shall be liable to Buyer for the amounts Seller would have owed Buyer under this Agreement if Buyer had not resold the Product.
3.7 Compliance Expenditure Cap.
(a) The Parties acknowledge that Governmental Authorities, including the CPUC and CAISO, may undertake actions to implement changes in Law. Seller agrees, subject to the provisions of this Section 3.7 to use commercially reasonable efforts to cooperate with respect to any future changes to this Agreement needed to satisfy requirements of Governmental Authorities associated with changes in Law to maximize benefits to Buyer, including: (i) the modification of the description of Capacity Attributes as may be required, including updating the Agreement to reflect any mandatory contractual language required by Governmental Authorities; or (ii) submission of any reports, data, or other information required by Governmental Authorities; provided, Seller shall have no obligation to modify this Agreement, or take other actions not required under this Agreement, if such modifications or actions would materially adversely affect, or could reasonably be expected to have or result in a material adverse effect on, any of Seller's rights, benefits, risks and/or obligations under this Agreement. 415
CONFIDENTIAL
EXECUTION VERSION
30 (b) If a change in Laws occurring after the Effective Date has increased Seller’s cost to comply with Seller’s obligations under this Agreement to obtain, maintain, convey or effectuate Buyer’s use of any Resource Adequacy Benefits, then the Parties agree that the maximum aggregate amount of the increase in out-of-pocket costs and expenses Seller shall be required to bear during the Contract Term to comply with all of such obligations shall be capped at per MW of Contract Capacity (“Compliance
Expenditure Cap”).
(c) Any actions required for Seller to comply with its obligations set forth in Section 3.7(b), the cost of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions.”
(d) If Seller reasonably anticipates the need to incur out-of-pocket expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action Seller shall provide Notice to Buyer of such anticipated out-of-pocket expenses. (e) Buyer will have sixty (60) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (i) agree to reimburse Seller for of the costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (ii) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. If Buyer does not respond to a Notice given by Seller under this Section 3.7 within sixty (60) days after Buyer’s receipt of same, Buyer shall be deemed to have waived its rights to require Seller to take the Compliance Actions that are the subject of the Notice, and Seller shall have no further obligation to take, and no liability for any failure to take, these Compliance Actions for the remainder of the Contract Term. (f) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Parties and Buyer shall reimburse Seller for Seller’s actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within sixty (60) days from the time that Buyer receives an invoice and documentation of such costs from Seller.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery. Subject to the provisions of this Agreement, including Section 4.9(a), commencing on the Commercial Operation Date through the end of the Contract Term, Seller shall supply and deliver the Product to Buyer at the Delivery Point, and Buyer shall take delivery of the Product at the Delivery Point in accordance with the terms of this Agreement. Seller shall be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Discharging Energy to the Delivery Point, including any operation and maintenance charges imposed by the Distribution Provider directly relating to the Facility’s operations. Buyer shall be responsible for all costs, charges and penalties, if any, imposed in connection with the delivery of Charging Energy to the Delivery Point (including the cost of Charging Energy itself) and delivery of Discharging Energy at and after the Delivery Point, including without limitation transmission and distribution costs and transmission and distribution line losses and imbalance 416
CONFIDENTIAL
EXECUTION VERSION
31 charges. The Charging Energy and Discharging Energy will be scheduled to the CAISO by Buyer in accordance with Exhibit D.
4.2 Interconnection. Seller shall be responsible for all costs and charges associated with Interconnection Facilities and Network Upgrades necessitated by the interconnection of the Facility. Seller shall ensure that throughout the Delivery Term (a) the Facility will have an Interconnection Agreement providing for interconnection capacity available or allocable to the Facility that is no less than the Dedicated Interconnection Capacity and (b) Seller shall have sufficient interconnection capacity and rights under such Interconnection Agreement to interconnect the Facility with the CAISO-controlled grid, to fulfill Seller’s obligations under the Agreement, including with respect to Resource Adequacy, and to allow Buyer’s dispatch rights for the Facility to be fully reflected in the CAISO’s market optimization and not result in CAISO market awards that are not physically feasible. Seller shall hold Buyer harmless from any penalties, imbalance energy charges, or other costs from CAISO or under the Agreement resulting from Seller’s inability to provide the foregoing interconnection capacity.
4.3 Storage Availability and Efficiency Rate.
(a) During the Delivery Term, the Facility shall maintain a Monthly Capacity Availability during each month of no less than the Guaranteed Availability, which Monthly Capacity Availability shall be calculated in accordance with Exhibit P. If the Monthly Capacity Availability during any month is less than the Guaranteed Availability, then Buyer’s Monthly Capacity Payment shall be calculated by reference to the Availability Adjustment (as determined in accordance with Exhibit C).
(b) During the Delivery Term, the Facility shall maintain an Efficiency Rate, calculated pursuant to a Capacity Test, of no less than Guaranteed Efficiency Rate. If the Efficiency Rate during any month is less than the Guaranteed Efficiency Rate, Seller shall owe liquidated damages pursuant to Exhibit C.
4.4 Capacity Tests.
(a) Prior to the Commercial Operation Date, Seller shall schedule and complete a Commercial Operation Capacity Test in accordance with Exhibit O. Thereafter, Seller and Buyer shall have the right to run additional Capacity Tests in accordance with Section 6.3 and Exhibit O.
Consistent with Prudent Operating Practices and the Operating Restrictions, Seller shall schedule all Capacity Tests during Off-Peak Hours.
(i) Buyer shall have the right to send one or more representative(s) to witness all Capacity Tests. Alternatively, to the extent that any Capacity Tests are done remotely, and no representatives are needed on site, Seller shall arrange for both Parties to have access to all data and other information arising out of such tests.
(ii) Following each Capacity Test, Seller shall submit a testing report in accordance with Exhibit O. If the actual capacity or efficiency rate determined pursuant to a Capacity Test varies from the then-current Effective Capacity and/or Efficiency Rate, as applicable, then the actual capacity and/or efficiency rate, as applicable determined pursuant to such Capacity Test (not to exceed the Installed Capacity) shall become the new Effective Capacity 417
CONFIDENTIAL
EXECUTION VERSION
32 and/or Efficiency Rate, as applicable, at the beginning of the day following the completion of the test for all purposes under this Agreement, including compensation under Exhibit C, until a revised Effective Capacity and/or Efficiency Rate, as applicable, is determined pursuant to a subsequent Capacity Test.
(b) Seller shall conduct such additional testing as necessary to ensure the Facility is functioning properly and the Facility is able to respond to Dispatch Notices in accordance with Section 4.6(b). For any Seller Initiated Test other than a Capacity Test required by Exhibit O or Section 6.3 for which there is a stated notice requirement, Seller shall notify Buyer no later than twenty-four (24) hours prior thereto (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practices).
(c) Any testing of the Facility requested by Buyer after the Commercial Operation Capacity Tests, and all required annual tests pursuant to Section B (“Subsequent Capacity Tests”)” in Exhibit O, shall be deemed Buyer-instructed dispatches of the Facility (“Buyer Dispatched Test”). Any test of the Facility that is not a Buyer Dispatched Test, including all tests conducted prior to Commercial Operation, any Commercial Operation Capacity Test, any Capacity Test conducted if the Effective Capacity immediately prior to such Capacity Test is below seventy percent (70%) of the Expected Effective Capacity for the applicable Contract Year as set forth in Exhibit A, any Capacity Test conducted if the Efficiency Rate immediately prior to such Storage Capacity Test is below the Minimum Efficiency Rate, any test required by CAISO (including any test required to maintain CAISO Certification), and other Seller-requested discretionary tests or dispatches, at times and for durations reasonably agreed to by Buyer, that Seller deems necessary for purposes of reliably operating or maintaining the Facility or for re-performing a required test within a reasonable number of days of the initial required test (considering the circumstances that led to the need for a retest) shall be deemed a “Seller Initiated Test”. For all Seller Initiated Tests, Seller shall (i) be liable for all CAISO costs and charges for associated Charging Energy, and (ii) be entitled to any CAISO revenues associated with Discharging Energy. The Facility shall be deemed unavailable during any Seller Initiated Test. For any Buyer Dispatched Test, Buyer shall (x) pay for all CAISO costs and charges for associated Charging Energy, and (y) be entitled to any CAISO revenues associated with associated Discharging Energy. Any Buyer Dispatched Test shall be deemed an Excused Event for the purposes of calculating the Monthly Capacity Availability. (i) For any Seller Initiated Test other than a Capacity Test required by Exhibit O for which there is a stated notice requirement, Seller shall notify Buyer no later than twenty-four (24) hours prior thereto (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practices).
(ii) No Dispatch Notices shall be issued during any Seller Initiated Test.
Dispatch Notices may be issued during a Buyer Dispatched Test as reasonably necessary to implement the applicable test. The Facility shall be deemed unavailable during any Seller Initiated Test. Any Buyer Dispatched Test shall be deemed an Excused Event for the purposes of calculating the Monthly Capacity Availability.
4.5 Testing Costs and Revenues.
418
CONFIDENTIAL
EXECUTION VERSION
33 (a) Buyer shall be responsible for paying for all Charging Energy and shall be entitled to all CAISO revenues associated with a Buyer Dispatched Test. Seller shall be responsible for paying for all Energy to charge the Facility and shall be entitled to all CAISO revenues associated with a Seller Initiated Test. Buyer shall pay to Seller, in the month following Buyer’s receipt of such CAISO revenues and otherwise in accordance with Exhibit C, all applicable CAISO revenues received by Buyer and associated with the discharge Energy associated with such Seller Initiated Test.
(b) Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representative(s) witnessing any Facility test. (c) Except as set forth in Sections 4.5(a) and (b), all other costs of any testing of the Facility shall be borne by Seller.
4.6 Facility Operation.
(a) Seller shall operate and maintain the Facility in accordance with Prudent Operating Practices and the Operating Restrictions set forth in Exhibit Q. (b) Each Party shall perform their respective obligations under this Agreement pursuant to the Operating Restrictions.
(c) During the Delivery Term, Seller shall maintain SCADA Systems, communications links, and other equipment necessary to receive automated Dispatch Notices consistent with CAISO protocols and practice (“Automated Dispatches”). In the event of the failure or inability of the Facility to receive Automated Dispatches, Seller shall use all commercially reasonable efforts to repair or replace the applicable components as soon as reasonably possible, and if there is any material delay in such repair or replacement, Seller shall provide Buyer with a written plan of all actions Seller plans to take to repair or replace such components for Buyer’s review and comment.
(d) Seller shall maintain a daily operations log for the Facility which shall include but not be limited to information on Energy charging and discharging, electricity consumption and efficiency (if applicable), availability, outages, changes in operating status, inspections and any other significant events related to the operation of the Facility. Information maintained pursuant to this Section 4.6(c) shall be provided to Buyer within fifteen (15) days of Buyer’s request.
(e) Seller shall maintain accurate records with respect to all Capacity Tests. (f) Seller shall maintain and make available to Buyer records, including logbooks, demonstrating that the Facility is operated in accordance with Prudent Operating Practices. Seller shall comply with all reporting requirements and permit on-site audits, investigations, tests and inspections permitted or required under any Prudent Operating Practices.
4.7 Seller Equipment Required for Operating Instruction Communications. Seller shall acquire, install, and maintain such facilities, communications links and other equipment, and implement such protocols and practices, as necessary to respond and follow instructions, including 419
CONFIDENTIAL
EXECUTION VERSION
34 an electronic signal conveying real time and intra-day instructions, to operate the Facility as directed by the Buyer in accordance with this Agreement or a Governmental Authority, including to implement a Curtailment Order in accordance with the then-current methodology used to transmit such instructions as it may change from time to time. If at any time during the Delivery Term Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies, Seller shall take the steps necessary to become compliant as soon as reasonably possible. Seller shall be liable to Buyer for any costs, charges or penalties resulting from Seller’s failure to comply with a Curtailment Order, during the time that Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies. For the avoidance of doubt, a Curtailment Order communication via such systems and facilities shall have the same force and effect on Seller as any other form of communication. The Parties shall cooperate in good faith to agree upon Communications Protocols for the Facility at least thirty (30) days prior to the earlier of the Guaranteed Commercial Operation Date or the Expected Commercial Operation Date. Upon request of a Party during the Delivery Term, the Parties shall cooperate in good faith to agree on reasonable changes to the Communications Protocols.
4.8 Dispatch Notices. Buyer shall have the right to dispatch the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Dispatch Notices, subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Subject to the Operating Restrictions, each Dispatch Notice shall be effective unless and until such Dispatch Notice is modified by the CAISO, Buyer or Buyer’s SC.
4.9 Facility Unavailability to Receive Dispatch Notices. To the extent the Facility is unable to receive or respond to Dispatch Notices through Automated Dispatches or during any Settlement Interval or Settlement Period, then as an exclusive remedy, the time period corresponding to such Settlement Interval or Settlement Period shall be deemed unavailable for purposes of calculating the Monthly Capacity Availability except to the extent that the Facility is unable to receive or respond to Dispatch Notices due to any circumstances at the high-voltage side of the Delivery Point or beyond that point.
4.10 Energy Management.
(a) Charging Generally. Upon receipt of a valid Charging Notice, Seller shall take all action necessary to deliver the Charging Energy to the Facility from the Delivery Point.
Seller shall maintain, repair or replace equipment in Seller’s possession or control used to deliver the Charging Energy from the Delivery Point to the Facility. Except as otherwise expressly set forth in this Agreement, Buyer shall be responsible for paying all costs and charges of delivering the Charging Energy to the Delivery Point, including all CAISO costs and charges associated with Charging Energy.
(b) Charging Notices. During the Delivery Term, Buyer shall have the right to charge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Charging Notices to Seller electronically; provided, Buyer’s right to issue Charging Notices is subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Each Charging Notice issued in accordance with this Agreement will be effective unless and until such Charging Notice is modified with an updated 420
CONFIDENTIAL
EXECUTION VERSION
35 Charging Notice. Seller shall comply with all Charging Notices, subject to the requirements and limitations set forth in this Agreement.
(c) No Unauthorized Charging. Seller shall not charge the Facility during the Delivery Term other than pursuant to a valid Charging Notice, or in connection with a Seller Initiated Test (including Facility maintenance or a Capacity Test), or pursuant to a notice from the CAISO, Distribution Provider, or any other Governmental Authority. If, during the Delivery Term, Seller (i) charges the Facility to a Stored Energy Level greater than the Stored Energy Level provided for in a Charging Notice, or (ii) charges the Facility in violation of the first sentence of this Section 4.10(c), then (A) Seller shall be responsible for all Energy costs associated with such charging of the Facility, (B) Buyer shall not be required to pay for the charging of such Energy (i.e., Charging Energy), and (C) Buyer shall be entitled to discharge such Energy and entitled to all of the benefits (including Product) associated with such discharge. (d) Discharging Notices. During the Delivery Term, Buyer shall have the right to discharge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Discharging Notices to Seller electronically, subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Seller shall comply with all Discharging Notices, subject to the requirements and limitations set forth in this Agreement. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer modifies such Discharging Notice by providing Seller with an updated Discharging Notice.
(e) No Unauthorized Discharging. Seller shall not discharge the Facility during the Delivery Term other than pursuant to a valid Discharging Notice, or in connection with a Seller Initiated Test (including Facility maintenance or a Capacity Test), or pursuant to a notice from CAISO, Distribution Provider, or any other Governmental Authority. If, during the Delivery Term, Seller (i) discharges the Facility other than as provided for in the Discharging Notice, or (ii) discharges the Facility in violation of the first sentence of this Section 4.10(e), then (A) Seller shall be responsible for all Charging Energy costs associated with such discharging of the Facility, and (B) Buyer shall be entitled to all of the benefits (including Storage Product) associated with such discharge.
(f) Unauthorized Charges and Discharges. If Seller or any third party charges, discharges or otherwise uses the Facility other than as permitted hereunder, or as is expressly addressed in this Section 4.10, it shall be a breach by Seller and Seller shall hold Buyer harmless from, and indemnify Buyer against, all actual costs or losses associated therewith, and be responsible to Buyer for any damages arising therefrom, and, if Seller fails to implement procedures reasonably acceptable to Buyer to prevent any further occurrences of the same, then the failure to implement such procedures shall be an Event of Default under Article 11. (g) Curtailments. Notwithstanding anything in this Agreement to the contrary, during any Settlement Interval, Curtailment Orders applicable to such Settlement Interval shall have priority over any Dispatch Notices applicable to such Settlement Interval, and Seller shall have no liability for violation of this Agreement or any Dispatch Notice if and to the extent such violation is caused by Seller’s compliance with any Curtailment Order or other instruction or direction from a Governmental Authority or the Distribution Provider. Buyer shall have the right, 421
CONFIDENTIAL
EXECUTION VERSION
36 but not the obligation, to provide Seller with updated Dispatch Notices during any Curtailment Order, subject to availability of the Facility and the requirements and limitations set forth in this Agreement, including the Operating Restrictions.
(h) Pre-Commercial Operation Date Period, etc. Prior to the Commercial Operation Date, (i) Buyer shall have no rights to issue or cause to be issued Charging Notices or Discharging Notices, (ii) Seller shall have exclusive rights to test, charge and discharge the Facility, and (iii) all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility shall be for Seller’s account. Seller is responsible to procure, at its own cost, any energy required for commissioning purposes and to arrange to discharge such energy into the grid. Upon the Commercial Operation Date, Buyer shall have exclusive rights to issue or cause to be issued Charging Notices or Discharging Notices and all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility operations shall be for Buyer’s account.
(i) Station Use. Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge (i) Seller is responsible for providing all Energy to serve Station Use (including paying the cost of any Energy used to serve Station Use during periods in which the Facility is not charging or discharging pursuant to a Charging Notice or Discharging Notice), (ii) Energy supplied from Charging Energy or Discharging Energy during periods in which the Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice shall not be considered Station Use, (iii) Station Use may be supplied over the same circuit as Charging Energy and Discharging Energy, and (iv) Seller shall indemnify and hold harmless Buyer from any and all costs, penalties or charges for Energy supplied for Station Use by any means other than retail service from the applicable utility, and shall take any additional measures to ensure Station Use (other than that supplied from Charging Energy or Discharging Energy as provided in clause (ii) or over the same circuit as Charging Energy and Discharging Energy as provided in clause (iii)) is supplied by the applicable utility’s retail service if necessary to avoid any such costs, penalties or charges.
4.11 Availability Notices.
(a) No less than thirty (30) days before the beginning of Commercial Operation, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of the hourly expected Available Capacity for each day of the following month in a form substantially similar to Exhibit L (“Monthly Available Capacity Report”).
(b) During the Delivery Term, no later than two (2) Business Days before each schedule day for the Day-Ahead Market in accordance with CAISO scheduling practices, Seller shall provide Buyer and the SC (if applicable) with an hourly schedule of the Available Capacity that the Facility is expected to have for each hour of such schedule day (the “Availability Notice”).
Seller shall provide Availability Notices (including updated Availability Notices) using the form attached in Exhibit G, or other form reasonably requested by Buyer, by (in order of preference) electronic mail or telephonically to Buyer personnel or its Scheduling Coordinator designated to receive such communications.
422
CONFIDENTIAL
EXECUTION VERSION
37 (c) Seller shall notify Buyer and the SC (if applicable) as soon as practicable with an updated Monthly Forecast and Availability Notice, as applicable, if the Available Capacity of the Facility changes or is expected to change after Buyer’s receipt of a Monthly Forecast or Availability Notice. Seller shall accommodate Buyer’s reasonable requests for changes in the time of delivery of Availability Notices.
(d) If (i) Seller provides a revised Availability Notice by 5:00 a.m. of the morning Buyer schedules or bids the Facility in the Day-Ahead Market indicating the Facility is available for an hour or part of an hour previously deemed unavailable, and the Facility is dispatched in the Day-Ahead Market, or (ii) Seller provides a revised Availability Notice at least sixty (60) minutes prior to the time the Buyer is required to schedule or bid the Facility indicating the Facility is available for that hour or part of an hour in the Real-Time Market, and the Facility is dispatched in the Real-Time Market, the Facility will be deemed to be available for such hour or part of an hour for the purpose of Exhibit P.
4.12 Outages.
(a) Planned Outages.
(i) No later than January 15, April 15, July 15 and October 15 of each Contract Year, and at least sixty (60) days prior to the Commercial Operation Date, Seller shall submit to Buyer Seller’s non-binding schedule of proposed Planned Outages (“Outage Schedule”) for the following twelve (12)-month period in a form reasonably agreed to by Buyer. Seller shall, consistent with Prudent Operating Practices, limit Planned Outages to periods of the day when Seller does not reasonably believe the Facility will be dispatched. Within twenty (20) Business Days after its receipt of an Outage Schedule, Buyer shall give Notice to Seller of any reasonable request for changes to the Outage Schedule, and Seller shall, consistent with Prudent Operating Practices, accommodate Buyer’s requests regarding the timing of any Planned Outage. Seller shall deliver to Buyer the final Outage Schedule no later than ten (10) days after receiving Buyer’s comments.
(ii) If reasonably required in accordance with Prudent Operating Practices, Seller shall have the right, on no less than thirty (30) days advance Notice to Buyer, to propose changes to the Outage Schedule developed pursuant to Section 4.12(a)(i); provided, Seller shall schedule all Planned Outages within the time period determined by the CAISO for the Facility, as a Resource Adequacy Resource that is subject to the Availability Standards, to qualify for an “Approved Maintenance Outage” under the CAISO Tariff and Seller shall reimburse Buyer for any cost Buyer incurs in connection therewith (including procurement of RA Substitute Capacity as required by the CAISO). Buyer may provide comments no later than ten (10) days after receiving Seller’s Notice of proposed changes to the Outage Schedule and shall permit any changes if doing so would not have a material adverse impact on Buyer and Seller agrees to reimburse Buyer for any costs or charges associated with such changes. (b) No Planned Outages During Summer Months. Notwithstanding anything in this Agreement to the contrary, no Planned Outages of the Facility shall be scheduled or planned from each June 1 through October 31 during the Delivery Term, unless approved by Buyer in writing in its sole discretion. In the event Seller has a previously Planned Outage that becomes 423
CONFIDENTIAL
EXECUTION VERSION
38 coincident with a System Emergency, Seller shall make all reasonable efforts to reschedule such Planned Outage.
(c) Planned Outage Timing. To the extent commercially reasonable, Seller shall schedule maintenance outages (i) within a single month, rather than across multiple months, (ii) during periods in which CAISO does not require resource substitution or replacement, and (iii) otherwise in a manner to avoid reductions in the Resource Adequacy Benefits available from the Facility to Buyer.
(d) Notice of Unplanned Outages. Seller shall notify Buyer by telephoning Buyer’s Scheduling Coordinator no later than ten (10) minutes following the occurrence of an Unplanned Outage, or if Seller has knowledge that an Unplanned Outage will occur, within twenty (20) minutes of determining that such Unplanned Outage will occur. Seller shall relay outage information to Buyer as required by the CAISO Tariff within twenty (20) minutes of the Unplanned Outage. Seller shall communicate to Buyer the estimated time of return of the Facility as soon as practical after Seller has knowledge thereof. (e) Inspection. In the event of an Unplanned Outage, Buyer shall have the option to inspect the Facility and all records relating thereto on any Business Day and at a reasonable time and Seller shall reasonably cooperate with Buyer during any such inspection.
Buyer shall comply with Seller’s safety and security rules and instructions during any inspection and shall not interfere with work on or operation of the Facility. (f) Reports of Outages. Seller shall promptly prepare and provide to Buyer, all reports of Unplanned Outages or Planned Outages that Buyer may reasonably require for the purpose of enabling Buyer to comply with CAISO requirements or any applicable Laws. Seller shall also report all Unplanned Outages or Planned Outages in the Availability Report. (g) RA Substitute Capacity. Seller shall provide RA Substitute Capacity as required by CAISO in connection with Facility outages. Seller acknowledges and agrees that any failure by Seller to provide such RA Substitute Capacity may result in CAISO rejecting or cancelling Seller’s request for CAISO to approve such Facility outage. If Seller fails to provide RA Substitute Capacity, then Buyer may elect to not include the Facility (or, if applicable, the portion of the Facility) in its Supply Plan and such failure shall be deemed an “RA Shortfall” for the purpose of Section 3.5.
ARTICLE 5
TAXES
5.1 Allocation of Taxes and Charges. Seller shall pay or cause to be paid all Taxes on or with respect to the Facility or on or with respect to the sale and making available of Product to Buyer, that are imposed on Product prior to its delivery to Buyer at the time and place contemplated under this Agreement. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees) or on 424
CONFIDENTIAL
EXECUTION VERSION
39 Charging Energy prior to its delivery to Seller. If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.
ARTICLE 6
MAINTENANCE AND REPAIR OF THE FACILITY
6.1 Maintenance of the Facility.
(a) Seller shall be solely responsible for the operation, inspection, maintenance and repair of the Facility, and any portion thereof, the generation and sale of Product, Environmental Costs and the disposal and recycling of any equipment associated with the Facility, including batteries, in accordance with applicable Law and Prudent Operating Practices. Seller shall maintain and deliver maintenance and repair records of the Facility to Buyer’s scheduling representative upon request. Nothing herein shall limit Seller’s right to replace or augment existing batteries and other equipment to maintain the capacity of the Facility. (b) Seller shall promptly make all necessary repairs to the Facility, and any portion thereof, and take all actions necessary in order to provide the Product to Buyer in accordance with the terms of this Agreement (and, at a minimum, the Guaranteed Availability and the Guaranteed Efficiency Rate).
6.2 Maintenance of Health and Safety. Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of the Facility. If Seller becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt, reasonable action to prevent such damage or injury and shall give Notice to Buyer’s emergency contact identified on Exhibit N of such condition. Such action may include disconnecting and removing all or a portion of the Facility or suspending the supply of Discharging Energy to the Delivery Point.
6.3 Effective Capacity Notice. The Effective Capacity shall be equal to the Installed Capacity at the Commercial Operation Date and is anticipated to be augmented as set forth in in the Effective Capacity Schedule. The Effective Capacity shall be no less than the Guaranteed Capacity during the Delivery Term. No later than sixty (60) days prior to each calendar year during the Delivery Term, Seller shall provide Notice to Buyer of the Expected Effective Capacity and the schedule for capacity augmentation (“Effective Capacity Notice”), if any, for the following calendar year. Seller shall provide at least five (5) Business Days prior Notice to Buyer of any Capacity Test related to capacity augmentations and all such Capacity Tests shall be deemed a Seller Dispatched Test.
425
CONFIDENTIAL
EXECUTION VERSION
40 6.4 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities, and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities and/or co-tenancy agreements to be entered into among Seller, the Distribution Provider, Seller’s Affiliates, and/or third parties. Seller agrees that any agreements regarding Shared Facilities (a) shall permit Seller to perform or satisfy, and shall not purport to limit, Seller’s obligations hereunder, including providing interconnection capacity for the Facility’s sole use in an amount not less than the Dedicated Interconnection Capacity, (b) shall provide for separate metering and a separate CAISO Resource ID for the Facility; (c) shall provide that any other generating or energy storage facilities not included in the Facility but using Shared Facilities shall not be included within the Facility’s CAISO Resource ID; and (d) shall provide that any curtailment of the full capacity of Shared Facilities that is ordered by Distribution Provider and which Seller and its Affiliates have discretion to allocate across generating or energy storage facilities using the Shared Facilities, shall not be allocated to the Facility more than its pro rata portion of the total capacity of all generating or energy storage facilities using the Shared Facilities. Seller shall not, and shall not permit any Affiliate to, allocate to other Persons a share of the total interconnection capacity under the Interconnection Agreements in excess of an amount equal to the total interconnection capacity under the Interconnection Agreements minus the Dedicated Interconnection Capacity.
ARTICLE 7
METERING
7.1 Metering. Seller shall measure the amount of Charging Energy and Discharging Energy using the Facility Meter. The Facility Meter will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained at Seller’s cost. If Seller elects to for the Facility to be a SC Metered Entity, then all Facility Meters will be programmed, operated and maintained pursuant to the applicable CAISO-approved SQMD Plan for the Facility, at Seller’s cost (including, for avoidance of doubt, reimbursement to Buyer of reasonable and customary costs owed by Buyer to its Scheduling Coordinator for submitting SQMD Plan meter data to the CAISO), throughout the period to which the SQMD Plan applies. Seller shall provide to Buyer a copy of any CAISO-approved SQMD Plan and any modifications thereto and notice of any termination or withdrawal thereof. Subject to meeting any applicable CAISO requirements, the Facility Meter shall be programmed to adjust for Electrical Losses and Station Use, as applicable, from such meters to the Delivery Point in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Seller shall separately meter all Station Use. Metering shall be consistent with the Metering Diagram set forth as Exhibit R, a final version of which shall be provided to Buyer at least thirty (30) days before the Commercial Operation Date. The Facility Meter shall be kept under seal, such seals to be broken only when the Facility Meter is to be tested, adjusted, modified or relocated. In the event Seller breaks a seal, Seller shall notify Buyer as soon as practicable. In addition, Seller hereby agrees to provide all Facility Meter data to Buyer in a form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports, to the extent such meter data and related meters are not the subject of a CAISO-approved SQMD Plan for the Facility. Seller and Buyer shall cooperate to allow both Parties to retrieve the meter reads from the CAISO Market Results Interface - Settlements (MRI-S) website and/or directly from the CAISO meter(s) at the Facility, to the extent such meter data and related meters are not the subject of a CAISO-approved SQMD Plan for the Facility. 426
CONFIDENTIAL
EXECUTION VERSION
41 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 shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. If a Facility Meter is inaccurate, it shall be promptly repaired or replaced. If a meter is inaccurate by more than one percent (1%) and it is not known when the Facility Meter inaccuracy commenced (if such evidence exists, then such date will be used to adjust prior invoices), then the invoices covering the period of time since the last Facility Meter test shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during one-half of such period if such adjustments are accepted by CAISO; provided, such period may not exceed twelve (12) months.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Seller shall use commercially reasonable efforts to deliver an invoice to Buyer for Product within ten (10) days after the end of the prior monthly delivery period. Each invoice shall (a) include records of metered data, including (i) CAISO metering and transaction data sufficient to document and verify the amount of Product delivered by the Facility for any Settlement Period during the preceding month, including the amount of Charging Energy, Discharging Energy, and the amount of Replacement RA delivered to Buyer (if any) and (ii) Seller’s records of metered data, including data showing a calculation of the Monthly Capacity Payment and other relevant data for the prior month; and (b) be in a format reasonably specified by Buyer, covering the Product provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices. The invoice shall be delivered by electronic mail in accordance with Exhibit N.
8.2 Payment. Buyer shall make Monthly Capacity Payments to Seller for Product by wire transfer or ACH payment to the bank account provided on each monthly invoice. The Party that owes a payment to the other Party shall pay undisputed invoice amounts by the later of thirty (30) days from (a) Buyer’s receipt of Seller’s invoices, or (b) the end of the prior monthly delivery period; provided, if such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on an annual Interest Rate equal to the prime rate published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication), plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day. 427
CONFIDENTIAL
EXECUTION VERSION
42 8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) years or as otherwise required by Law. Upon fifteen (15) days’ Notice to the other Party, either Party shall be granted reasonable access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with California Government Code Section 8546.7, Seller may be subject to audit by the California State Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds Ten Thousand Dollars ($10,000).
8.4 Invoice Adjustments. Invoice adjustments shall be made if (a) there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5, or (b) ,an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, (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. 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 C, 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.
428
CONFIDENTIAL
EXECUTION VERSION
43 8.7 Seller’s Development Security.
8.8 Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date.
Seller shall maintain the Performance Security in full force and effect, and Seller shall within ten (10) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement other than to satisfy a Termination Payment, until the following have occurred: (a) the Delivery Term has expired or terminated early; and (b) all payment obligations of Seller due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security; provided, however, if Seller has failed to provide Beneficiary with a substitute Letter of Credit or other acceptable instrument within thirty (30) days prior to such expiration date, Buyer shall have the right to draw on the full amount of the Letter of Credit.
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller 429
CONFIDENTIAL
EXECUTION VERSION
44 agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security; and (c) Liquidate all Development Security or Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after such 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; 430
CONFIDENTIAL
EXECUTION VERSION
45 (c) if sent by electronic communication (including electronic mail or other electronic means) at the time indicated by the time stamp upon delivery and, if after 5 pm, on the next Business Day; or
(d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission.
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 may include an act of God or the elements, such as flooding, lightning, hail, hurricanes, tornadoes, or ice storms; explosion; fire (except to the extent that such fire is caused by the Facility); 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” 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 Curtailment Order 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 431
CONFIDENTIAL
EXECUTION VERSION
46 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 of Exhibit B, neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove such inability with due speed and diligence. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due speed and diligence shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party having such difficulty. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event.
Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of Seller to achieve the Guaranteed Commercial Operation Date beyond the extensions provided in Section 4 of Exhibit B, or (b) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(ii) after all applicable extensions of the the Guaranteed Commercial Operation Date and receive a Damage Payment upon exercise of Buyer’s remedies pursuant to Section 11.2.
10.3 Notice of Force Majeure Event. Within three (3) Business Days of the non-performing Party’s awareness of the impact of a Force Majeure Event, the claiming Party shall provide the other Party with oral notice of the event of Force Majeure, and within two (2) weeks of the commencement of a Force Majeure Event the claiming Party shall provide the other Party with Notice describing in detail the occurrence giving rise to the Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure to provide timely notice constitutes a waiver of the Force Majeure Event. Upon written request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from Seller’s actions or failure to exercise due diligence or take reasonable actions. The claiming party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of Force Majeure must be of no greater scope and of no longer duration than is required by the Force Majeure Event.
10.4 432
CONFIDENTIAL
EXECUTION VERSION
47 ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30)-day period despite exercising commercially reasonable efforts); (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1; and except for (A) failure to provide Capacity Attributes, the exclusive remedies for which are set forth in Section 3.5, (B) failures related to the Monthly Capacity Availability that do not trigger the provisions of Section 11.1(b)(iii), the exclusive remedies for which are set forth in Section 4.3(a) and Exhibit P, and (C) failure to maintain the Guaranteed Efficiency Rate that does not trigger the provisions of Section 11.1(b)(iv), the exclusive remedies for which are set forth in Section 4.3(b) and Exhibit C), 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 commercially reasonable 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:
433
CONFIDENTIAL
EXECUTION VERSION
48 (i) if at any time, Seller delivers or attempts to deliver Energy to the Delivery Point for sale under this Agreement that was not discharged by the Facility; (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(b) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B; (iii) if, in any Contract Year, the simple average of the Monthly Capacity Availability for such Contract Year is not and Seller fails to (A) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of the failure to meet and the actions that Seller has taken, is taking, or proposes to take in an effort to cure such condition along with the written confirmation of a Licensed Professional Engineer that such plan or report is in accordance with Prudent Operating Practices and capable of cure within a reasonable period of time, not to exceed one hundred eighty (180) days (“Cure Plan”) and (B) complete such Cure Plan in all material respects as set forth therein, including within the timeframe set forth therein; (iv) if, Seller fails to maintain an average Efficiency Rate, determined pursuant to a Capacity Test, equal to or greater than the Minimum Efficiency Rate over a rolling twelve (12) month period;
(v) if not remedied within ten (10) days after Notice thereof, the failure by Seller to deliver a Remedial Action Plan within the time frame set forth in Section 2.4 that demonstrates a reasonable plan for completing the Facility by the Guaranteed Commercial Operation Date;
(vi) Seller sells, assigns, or otherwise transfers, or commits to sell, assign, or otherwise transfer, the Product, or any portion thereof, during the Delivery Term to any party other than Buyer except as expressly permitted under this Agreement; (vii) if, Seller fails to maintain an Effective Capacity equal to of the current Expected Effective Capacity for more than three hundred sixty-five (365) days;
(viii) failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 within five (5) Business Days after Notice from Buyer, including the failure to replenish the Development Security or Performance Security amount in accordance with this Agreement in the event Buyer draws against either for any reason other than to satisfy a Damage Payment or Termination Payment;
(ix) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
434
CONFIDENTIAL
EXECUTION VERSION
49 (A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit;
(D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(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, in each case 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 or injunctive relief, except to the extent such remedies are expressly limited under this Agreement; provided, payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting 435
CONFIDENTIAL
EXECUTION VERSION
50 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).
(i) If Seller is the Defaulting Party, then the Damage Payment shall be owed to Buyer and shall be a dollar amount that equals the entire amount of the Development Security plus, if the Development Security is posted as cash, any interest accrued thereon. Buyer shall be entitled to immediately retain for its own benefit those funds held as Development Security and any interest accrued thereon if the Development Security is posted as cash, and any amount of Development Security that Seller has not yet posted with Buyer shall be immediately due and payable by Seller to Buyer. There will be no amounts owed to Seller. The Parties agree that Buyer’s damages in the event of an Early Termination Date prior to the Commercial Operation Date caused by Seller’s Event of Default would be difficult or impossible to determine and that the damages set forth in this Section 11.3(a)(i) are a reasonable approximation of Buyer’s harm or loss. (ii) If Buyer is the Defaulting Party, then a Damage Payment shall be owed to Seller and shall equal the aggregate of all Settlement Amounts plus any and all other amounts due to or from Seller (as of the Early Termination Date) netted into a single amount.
There will be no amount owed to Buyer. Seller shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date.
The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to Seller’s duty to mitigate, Seller shall not have to enter into replacement transactions to establish a Settlement Amount. The Parties agree that Seller’s damages in the event of an Early Termination Date prior to the Commercial Operation Date caused by Buyer’s default would be difficult or impossible to determine and that the damages set forth in this Section 11.3(a)(ii) are a reasonable approximation of Seller’s harm or loss. (iii) Notwithstanding anything in this Agreement to the contrary, unless and until the Facility has achieved Commercial Operation, Seller’s aggregate liability under this Agreement for any and all reasons, including liabilities for payment of Commercial Operation Delay Damages, and the Damage Payment, shall not exceed one hundred and fifty hundred percent (150%) of the Development Security.
(b) Termination Payment On or After the Commercial Operation Date. The payment owed by the Defaulting Party to the Non-Defaulting Party for a Terminated Transaction occurring after the Commercial Operation Date (“Termination Payment”) shall be the aggregate of all Settlement Amounts plus any and all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. The Settlement Amount shall not include 436
CONFIDENTIAL
EXECUTION VERSION
51 consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (i) the actual damages that the Non-Defaulting Party would incur in connection with a Terminated Transaction would be difficult or impossible to predict with certainty, (ii) the Termination Payment described in this Section 11.3(b) is a reasonable and appropriate approximation of such damages, and (iii) the Termination Payment described in this Section
11.3(b) is the exclusive remedy of the Non-Defaulting Party in connection with a Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment 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.
11.6 437
CONFIDENTIAL
EXECUTION VERSION
52 11.7 Rights And Remedies Are Cumulative. Except where an express and exclusive remedy or measure of damages is provided, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
11.8 Mitigation. Any Non-Defaulting Party shall be obligated to use commercially reasonable efforts to mitigate its Costs, Losses and damages resulting from any Event of Default of the other Party under this Agreement.
11.9 ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES
12.1 No Consequential Damages. EXCEPT TO THE EXTENT (A) PART OF AN
EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, (B) PART OF A THIRD PARTY INDEMNITY CLAIM UNDER ARTICLE 16, (C) INCLUDED IN A LIQUIDATED DAMAGES CALCULATION, OR (D) RESULTING FROM A PARTY’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY SPECIAL, PUNITIVE,
EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR LOSSES OR
DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER FORESEEABLE OR
NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT, BY STATUTE, IN TORT OR CONTRACT.
438
CONFIDENTIAL
EXECUTION VERSION
53 12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. THE VALUE OF ANY TAX CREDITS, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO
MITIGATE AFTER USE OF REASONABLE EFFORTS) AND AMOUNTS DUE IN
CONNECTION WITH THE RECAPTURE OF ANYTAX CREDITS, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.5, 4.3, 11.2 AND 11.3, AND AS PROVIDED IN EXHIBIT B, EXHIBIT C, and EXHIBIT P, THE PARTIES
ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO
DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE REMEDY IS
INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE
INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES
AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR
CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,
WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND
THE EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR
THE BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH
PARTY WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT. 439
CONFIDENTIAL
EXECUTION VERSION
54 ARTICLE 13
REPRESENTATIONS AND WARRANTIES; COVENANTS
13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability corporation, 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] [corporate] action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Facility will be located in the State of California. (f) Seller shall maintain Site Control throughout the Contract 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:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their 440
CONFIDENTIAL
EXECUTION VERSION
55 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 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 (i) suit, (ii) jurisdiction of court (provided that such court is located within a venue permitted in Law and under the Agreement), (iii) relief by way of injunction, order for specific performance or recovery of property, (iv) attachment of assets, or (v) 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 in 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. 441
CONFIDENTIAL
EXECUTION VERSION
56 13.4 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 or skilled and trained workforce across all Local RFO Projects;
(b) Hire from San Diego-based apprenticeship programs, with an emphasis on hyper-local programs near the Local RFO Projects;
(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.
13.5 Workforce Development and Supplier Diversity. Seller acknowledges that Buyer will, from time to time, request voluntary disclosure of Seller’s certification status with the CPUC Supplier Clearinghouse, and voluntary disclosure regarding Seller’s efforts to work with diverse business enterprises, including women, minority, disabled veteran, and lesbian, gay, bisexual, transgender and/or persons with disabilities business enterprises in a form similar to 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. 442
CONFIDENTIAL
EXECUTION VERSION
57 14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller or its Affiliates have 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 or its Affiliates, 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 substantially in the form set forth in Exhibit T.
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 Government Code section 1090, or any other conflict of interest Law:
(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:
(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 443
CONFIDENTIAL
EXECUTION VERSION
58 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 including the requirement 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 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 energy 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 an energy storage services agreement for the Expansion Project (the “Project ESSA”) 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 ESSA 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 444
CONFIDENTIAL
EXECUTION VERSION
59 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 Scheduled Energy and (ii) the energy from the Expansion Project for any Settlement Interval would exceed the Dedicated Interconnection Capacity for such Settlement Interval, then the energy from the Expansion Project shall be curtailed first prior to curtailing the Facility.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law; Venue. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in the County of San Diego, California.
15.2 Dispute Resolution. In the event of any claim, controversy or dispute arising out of or relating to or in connection with this Agreement, any Party may deliver to the other Parties notice of the Dispute with a detailed description of the underlying circumstances of such Dispute (a “Dispute Notice”). The senior officers of the Parties shall meet and confer as often as they deem reasonably necessary during the thirty (30) day period following receipt of the Dispute Notice in good faith negotiations to resolve the Dispute to the satisfaction of each Party. In the event a Dispute is not resolved by the expiration of the thirty (30) day period, then a Party may pursue any legal remedy available to it in accordance with this Agreement.
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 445
CONFIDENTIAL
EXECUTION VERSION
60 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 own sole negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
16.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which an indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified Party, provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim; provided, settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Except as otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.
ARTICLE 17
INSURANCE
17.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of per occurrence, and an annual aggregate of not less than , endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this 446
CONFIDENTIAL
EXECUTION VERSION
61 Agreement and including Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of . Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions. (b) Employer’s Liability Insurance. Seller, if it has employees, shall maintain Employers’ Liability insurance with limits of not less than for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the policy limit will apply to each employee.
(c) Workers’ Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of California Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement and shall name Buyer as an additional insured and contain standard cross-liability and severability of interest provisions. (e) Pollution Liability. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, Pollution Legal Liability Insurance in the amount of Two per occurrence and in the aggregate, naming Seller (and Lender if any) as additional named insured. (f) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, construction all-risk form property insurance covering the Facility during such construction periods, and naming Seller (and Lender if any) as the loss payee. (g) Subcontractor Insurance. Seller shall require all of its subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage not less than ; (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of per occurrence. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (g)(i) and (g)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(g). (h) Property Insurance. On and after the Commercial Operation Date, Seller shall maintain or cause to be maintained insurance against loss or damage from all causes under standard “all risk” property insurance coverage in amounts that are not less than the actual replacement value of the Facility; provided, however, with respect to property insurance for natural catastrophes, Seller shall maintain limits equivalent to a probable maximum loss amount determined by a firm with experience providing such determinations. Such insurance shall include 447
CONFIDENTIAL
EXECUTION VERSION
62 business interruption coverage in an amount equal to twelve (12) months of expected revenue from this Agreement.
(i) Evidence of Insurance. Within ten (10) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing coverage required under Section 17.1; provided that Seller shall not be required to provide evidence of site-specific insurance policies until such time as they are required to be in place as specified in Sections 17.1(f)-(h). Such certificates shall specify that Buyer shall be given at least thirty (30) days’ prior Notice by Seller in the event of any material modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer. The general liability, auto liability and workers’ compensation policies shall be endorsed with a waiver of subrogation in favor of Buyer for all work performed by Seller, its employees, agents and sub-contractors.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; (iv) information that the recipient independently developed without a violation of this Agreement; and (v) information that is determined by Buyer to be subject to the California Public Records Act.
18.2 Duty to Maintain Confidentiality.
(a) The Party receiving Confidential Information (the “Receiving Party”) from the other Party (the “Disclosing Party”) shall not disclose Confidential Information to a third party (other than the 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 comply with any applicable Law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to such Party or any of its Affiliates; 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 448
CONFIDENTIAL
EXECUTION VERSION
63 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 7920.000 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.
(c) 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.
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 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 at least as restrictive as 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.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed 449
CONFIDENTIAL
EXECUTION VERSION
64 upon the contents of any such press release.
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, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) and/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, 450
CONFIDENTIAL
EXECUTION VERSION
65 absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.
19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by 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, and Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, officers, directors, advisors, consultants or advisors of 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.
451
CONFIDENTIAL
EXECUTION VERSION
66 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, (a) 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 (b) 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]
452
CONFIDENTIAL
EXECUTION VERSION
Signature Page
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
LUMINIA CA DEVCO 5, LLC
By:
Name:
Title:
SAN DIEGO COMMUNITY POWER, a
California joint powers authority
By:
Name:
Title:
453
CONFIDENTIAL
EXECUTION VERSION
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Project Name:
Site includes all or some of the following APNs:
County:
CEQA Lead Agency:
Zip Code:
Latitude and Longitude:
Facility Description:
Delivery Point: Facility Meter
Facility Meter: See Exhibit R
Facility Metering Points: See Exhibit R
P-node: [If not available at the Effective Date, the PNode shall be updated by mutual agreement of Buyer and Seller prior to the Commercial Operation Date to reflect the PNode corresponding to the Facility’s Interconnection Point with the CAISO Grid.] Interconnection Point: Delivery Point
Distribution Provider:
Local Capacity Area and Sub-Local Capacity Area:
Additional Information: Site Plan provided below.
Effective Capacity Schedule:
Contract Year Expected Effective
Capacity
1 2
3 4
5 6
7 8
9 10
454
CONFIDENTIAL
EXECUTION VERSION
Exhibit A - 2
11 12
13 14
15 16
17 18
19 20
Seller shall provide an updated Effective Capacity schedule to Buyer with the Notice of the Commercial Operation Date set forth in Section 2.2 (“Effective Capacity Schedule”).
Substitution of Facilities. Seller will be permitted to replace this Facility with a substitute facility according to the procedure set forth in the Framework Agreement. 455
CONFIDENTIAL
EXECUTION VERSION
Exhibit B - 1
EXHIBIT B
FACILITY CONSTRUCTION AND COMMERCIAL OPERATION
1. Construction of the Facility.
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. The date of Construction Start will be evidenced by and subject to Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the “Construction Start Date.”
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. a.
b. Seller shall cause Commercial Operation to occur no later than the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of Commercial Operation Delay Damages pursuant to Section 2(b) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B. Seller shall notify Buyer at least sixty (60) days before the anticipated Commercial Operation Date. 456
CONFIDENTIAL
EXECUTION VERSION
Exhibit B - 2
c.
3. Termination for Failure to Timely Achieve Commercial Operation. If the Facility has not achieved Commercial Operation on or before the Guaranteed Commercial Operation Date (as may be extended hereunder), Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and 11.2; provided however, prior to Buyer’s exercise of its termination rights under Sections 11.1(b)(ii) and 11.2, the Parties shall engage in dispute resolution pursuant to Section 15.2 and work together in good faith to explore al possible remedies following such Event of Default. In no event shall Seller’s aggregate liability under this Agreement arising prior to COD exceed one hundred fifty (150%) of the Development Security.
4. Extension of the Guaranteed Dates. In addition to Seller’s one-time opportunity to update the Guaranteed Commercial Operation Date pursuant to Exhibit B, Section 2(a), the Guaranteed Commercial Operation Date shall, subject to notice and documentation requirements set forth below, be extended on a day-for-day basis (the “Development Cure Period”) for the duration of any and all delays arising out of the following circumstances to the extent the following circumstances are not the result of Seller’s failure to take all commercially reasonable actions to meet its requirements and deadlines:
a. a Force Majeure Event occurs; or
b. the Interconnection Facilities or Network Upgrades are not complete and ready for the Facility to connect and sell Product at the Delivery Point by the Guaranteed Commercial Operation Date despite the exercise of diligent and commercially reasonable efforts by Seller; or
d. Buyer has not made all necessary arrangements to receive the Product at the Delivery Point by the Guaranteed Commercial Operation Date. 457
CONFIDENTIAL
EXECUTION VERSION
Exhibit B - 3
458
CONFIDENTIAL
EXECUTION VERSION
Exhibit C - 1
EXHIBIT C
COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C (the “Monthly Product Payment”).
459
CONFIDENTIAL
EXECUTION VERSION
Exhibit C - 2
460
CONFIDENTIAL
EXECUTION VERSION
Exhibit C - 3
461
CONFIDENTIAL
EXECUTION VERSION
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 Charging Energy, Discharging 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, 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, 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 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 Charging Energy, penalties, Imbalance Energy costs (except as otherwise set forth in this Agreement), and other charges) and shall be entitled to all CAISO revenues (including Discharging Energy, credits, Imbalance Energy revenues, and other payments), including revenues associated with CAISO Dispatches, bid cost recovery, Inter-SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility. Seller shall assume all liability and reimburse Buyer for any and all costs, charges or sanctions associated with delivery of Resource Adequacy Benefits from the Facility (including Non-Availability Charges (as defined in the CAISO Tariff)); provided, 462
CONFIDENTIAL
EXECUTION VERSION
Exhibit D - 2
any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of Seller and for Seller’s account. In 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 perform its duties as Scheduling Coordinator for the Facility), or (iii) 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 shall 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 463
CONFIDENTIAL
EXECUTION VERSION
Exhibit D - 3
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 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. 464
CONFIDENTIAL
EXECUTION VERSION
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 reasonably likely to 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. 465
CONFIDENTIAL
EXECUTION VERSION
Exhibit F - 1
EXHIBIT F
FACILITY OPERATIONS DATA
Data Point
Unit Gross MW
Unit Net MW
Unit Operating High Limit
Unit Operating Low Limit
High Sustainable Limits
AGC Setpoint
ADS 5 Minute Dispatch Operating
Targets Setpoint
State of Charge MWh
Aggregate Gross MW
Interconnection Point/Delivery
Point MW
Maximum State of Charge
AGC Status
Meterological Data1
Heartbeat
Frequency
1 Meterological Data includes irradiance, back panel temperature, wind speed, wind direction, and temperature and such other data as mutually agreed to by the Parties. 466
CONFIDENTIAL
EXECUTION VERSION
Exhibit G - 1
EXHIBIT G
FORM OF AVAILABILITY NOTICE
Trading Day:
Station: Issued By:
Unit: Issued At:
Unit 100% Available No Restrictions:
Hour Ending Available Capacity Comments
(MW)
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
0:00
Comments:
467
CONFIDENTIAL
EXECUTION VERSION
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, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated _______ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of _______[DATE]_____, Engineer hereby certifies and represents to Buyer the following:
1. The Facility is fully operational, interconnected, and synchronized with the Distribution System in accordance with the Interconnection Agreement.
2. Seller has installed equipment for the Facility with an Installed Capacity that is no less than one hundred percent (100%) of the Guaranteed Capacity.
3. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
4. Seller has demonstrated functionality of the Facility’s communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the Agreement and/or the CAISO.
5. Authorization to parallel the Facility was obtained by the Distribution Provider on___[DATE]____.
6. The Distribution Provider has provided documentation supporting full unrestricted release for Commercial Operation.
7. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
8. 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. 468
CONFIDENTIAL
EXECUTION VERSION
Exhibit H - 2
EXECUTED by [LICENSED PROFESSIONAL ENGINEER] this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name: ______
469
CONFIDENTIAL
EXECUTION VERSION
Exhibit I - 1
EXHIBIT I
FORM OF INSTALLED CAPACITY AND EFFICIENCY RATE TEST CERTIFICATE This certification (“Certification”) of Installed Capacity and Efficiency Rate is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to San Diego Community Power, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated __________ (“Agreement”) by and between [SELLER ENTITY] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the following:
(a) that a Capacity Test conducted on [Date] demonstrated an Installed Capacity of __ MW AC, in accordance with the testing procedures, requirements and protocols set forth in Exhibit O; and,
(b) the Capacity Test conducted on [______] demonstrated an Efficiency Rate of __%, all in accordance with the testing procedures, requirements and protocols set forth in Exhibit O.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER] this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
470
CONFIDENTIAL
EXECUTION VERSION
Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [SELLER ENTITY] (“Seller”) to San Diego Community Power, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
(1) Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto.
(2) the Construction Start Date occurred on _____________ (the “Construction Start Date”); and
(3) the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site.
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of this ___ day of ________.
[SELLER ENTITY]
By:
Its:
Date:
471
CONFIDENTIAL
EXECUTION VERSION
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.
472
CONFIDENTIAL
EXECUTION VERSION
Exhibit K - 2
We hereby agree with Beneficiary that all documents presented under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation to Issuer on or before the Expiration Date. All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.
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, P.O. 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]
473
CONFIDENTIAL
EXECUTION VERSION
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, P.O. 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___________________________
474
CONFIDENTIAL
EXECUTION VERSION
Exhibit L - 1
EXHIBIT L
FORM OF MONTHLY AVAILABLE CAPACITY REPORT
[Available Capacity, MW 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.
475
CONFIDENTIAL
EXECUTION VERSION
Exhibit M - 1
EXHIBIT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) is delivered by [SELLER ENTITY] (“Seller”) to [______], a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Pursuant to Section 3.5 of the Agreement, Seller hereby provides the below Replacement RA product information:
476
CONFIDENTIAL
EXECUTION VERSION
Exhibit M - 3 2
[SELLER ENTITY]
By:
Its:
Date:
477
CONFIDENTIAL
EXECUTION VERSION
Exhibit N - 1
EXHIBIT N
NOTICES
[_________Luminia CA DevCo 5, LLC
____________]
(“Seller”)
SAN DIEGO COMMUNITY POWER
(“Buyer”)
All Notices:
Street: 4445 Eastgate Mall, Suite 200
City: San Diego, CA 92121
Attn: Alan Whiting, CFO
Phone: (858) 866-8777
Email: [email protected]
All Notices:
PO Box 12716
San Diego, CA 92112
Attn: Byron Vosburg, Director of Power
Services
Phone: (619) 880-6545
Email: [email protected]
Reference Numbers: Reference Numbers:
Invoices:
Attn: Alan Whiting, CFO
Phone: (858) 866-8777
Email: [email protected]
Invoices:
Attn: SDCP Settlements
Phone: (619) 880-6545
Email: [email protected]
Scheduling:
Attn: Alan Whiting, CFO
Phone: (858) 866-8777
Email: [email protected]
Scheduling:
Tenaska Power Services Co.
Attn: Kara Whillock
Phone: (972) 333-6122
Email: [email protected]
Day Ahead: (817) 303-1115
Real Time: (817) 303-1852
Facsimile: (817) 303-1104
Confirmations:
Attn: Alan Whiting, CFO
Phone: (858) 866-8777
Email: [email protected]
Confirmations:
Attn: SDCP Settlements
Phone: (619) 880-6545
Email: [email protected]
Payments:
Attn: Alan Whiting, CFO
Phone: (858) 866-8777
Email: [email protected]
Payments:
Attn: Michael Maher
Phone: (415) 526-3020
Email: [email protected]
Wire Transfer: Wire Transfer:
478
CONFIDENTIAL
EXECUTION VERSION
Exhibit N - 2
[_________Luminia CA DevCo 5, 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: SDCP General Counsel
PO Box 12716
San 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]
479
CONFIDENTIAL
EXECUTION VERSION
Exhibit O - 1
EXHIBIT O
CAPACITY AND EFFICIENCY RATE TESTS
Capacity Test Notice and Frequency
A. Commercial Operation Capacity Test(s). Upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Commercial Operation Capacity Test prior to the Commercial Operation Date. Such initial Commercial Operation Capacity Test (and any subsequent Commercial Operation Capacity Test permitted in accordance with Section 5 of Exhibit B) shall be performed in accordance with this Exhibit O and shall establish the Effective Capacity and initial Efficiency Rate hereunder based on the actual capacity and capabilities of the Facility determined by such Commercial Operation Capacity Test(s).
B. Subsequent Capacity Tests. Following the Commercial Operation Date, at least fifteen (15) days in advance of the start of each Contract Year, upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Capacity Test. In addition to the annual capacity test, if Buyer has reason to believe that the Effective Capacity or the Efficiency Rate is materially less than shown by the most recent test results, Buyer shall have the right to require a Capacity Test at any time upon no less than five (5) Business Days prior Notice to Seller.
Seller shall have the right to run a retest of any Capacity Test at any time upon five (5) Business Days’ prior Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice).
C. Test Results and Re-Setting of Effective Capacity and Efficiency Rate. No later than five (5) days following any Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Facility Meter readings and plant log sheets verifying the operating conditions and output of the Facility. In accordance with Section 4.4(a)(ii) of the Agreement and Part II(I) below, after the Commercial Operation Capacity Test(s), the Effective Capacity (not to exceed ) and Efficiency Rate determined pursuant to such Capacity Test shall become the new Effective Capacity and Efficiency Rate at the beginning of the day following the completion of the test for calculating the Monthly Capacity Payment and all other purposes under this Agreement.
Capacity Test Procedures
PART I. GENERAL.
A. Each Capacity Test shall be conducted in accordance with Prudent Operating Practices, the Operating Restrictions, and the provisions of this Exhibit O. For ease of reference, a Capacity Test is sometimes referred to in this Exhibit O as a “CT”.
Buyer or its representative may be present for the CT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost).
B. Conditions Prior to Testing.
(1) EMS Functionality. The EMS shall be successfully configured to receive data from the Battery Management System (BMS), exchange DNP3 data 480
CONFIDENTIAL
EXECUTION VERSION
Exhibit O - 2
with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points. (2) Communications. The Remote Terminal Unit (RTU) testing should be successfully completed prior to any testing. The interface between Buyer’s RTU and the Facility SCADA System should be fully tested and functional prior to starting any testing, including verification of the data transmission pathway between Buyer’s RTU and Seller’s EMS interface and the ability to record SCADA System data.
(3) Commissioning Checklist. Commissioning shall be successfully completed per manufacturer guidance on all applicable installed Facility equipment, including verification that all controls, set points, and instruments of the EMS are configured.
PART II. REQUIREMENTS APPLICABLE TO ALL CAPACITY TESTS.
Note: Seller shall have the right and option in its sole discretion to install storage capacity in excess of the Guaranteed Capacity; provided, for all purposes of this Agreement, the amount of Installed Capacity and Effective Capacity shall never be deemed to exceed , and all SOC measurements associated with a Capacity Test shall be based on the Effective Capacity.
A. Test Elements. Each CT shall include at least the following individual test elements, which must be conducted in the order prescribed in Part III of this Exhibit O, unless the Parties mutually agree to deviations therefrom. The Parties acknowledge and agree that should Seller fall short of demonstrating one or more of the Test Elements as specified below, the Test will still be deemed “complete,” and any adjustments necessary to the Effective Capacity or to the Efficiency Rate resulting from such Test, if applicable, will be made in accordance with this Exhibit O. (1) Electrical output at maximum discharging level (MW) for four (4) continuous hours; and
(2) Electrical input at maximum charging level at the Facility Meter (MW), as sustained until the SOC reaches at least 90%, continued by the electrical input at a rate up to the maximum charging level at the Facility Meter (MW), as sustained until the SOC reaches 100%, not to exceed five (5) hours of total charging time.
B. Parameters. During each CT, the following parameters shall be measured and recorded simultaneously for the Facility, at two (2) second intervals:
(1) Time;
(2) The amount of Discharging Energy to the Facility Meters (kWh) (i.e., to each measurement device making up the Facility Meter);
481
CONFIDENTIAL
EXECUTION VERSION
Exhibit O - 3
(3) Net electrical energy input from the Facility Meters (kWh) (i.e., from each measurement device making up the Facility Meter); and
(4) Stored Energy Level (MWh).
C. Site Conditions. During each CT, the following conditions at the Site shall be measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the Facility; and
(3) Ambient air temperature (°F).
D. Test Showing. Each CT shall record and report the following datapoints:
(1) That the CT successfully started;
(2) The maximum sustained discharging level for four (4) consecutive hours pursuant to A(1) above;
(3) The maximum sustained charging level for five (5) consecutive hours (or such lesser time as is required to reach 100% SOC) pursuant to A(2) above; (4) Amount of time between the Facility’s electrical output going from 0 to the maximum sustained discharging level registered during the CT for purposes of calculating the ramp rate (with the parties acknowledging this this value may be effeviely instantaenous and unmeasurable with precision); (5) Amount of time between the Facility’s electrical input going from 0 to the maximum sustained charging level registered during the CT(for purposes of calculating the ramp rate);
(6) Amount of Charging Energy, registered at the Facility Meter, to go from 0% SOC to 100% SOC;
(7) Amount of Discharging Energy, registered at the Facility Meter, to go from 100% SOC to 0% SOC.
E. Test Conditions.
(1) General. At all times during a CT, the Facility shall be operated in compliance with Prudent Operating Practices, the Operating Restrictions, and all operating protocols recommended, required or established by the manufacturer for the Facility.
482
CONFIDENTIAL
EXECUTION VERSION
Exhibit O - 4
(2) Abnormal Conditions. If abnormal operating conditions that prevent the testing or recordation of any required parameter occur during a CT, Seller may postpone or reschedule all or part of such CT in accordance with Part II.F below.
(3) Instrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the CT. The instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Operating Practice and, as applicable, the CAISO Tariff.
F. Incomplete Test. If any CT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the CT stopped without any modification to the Effective Capacity or Efficiency Rate pursuant to Section I below; (ii) require that the portion of the CT not completed, be completed within a reasonable specified time period; or (iii) require that the CT be entirely repeated within a reasonable specified time period. Notwithstanding the above, if Seller is unable to complete a CT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO or the Distribution Provider, Seller shall be permitted to reconduct such CT on dates and at times reasonably acceptable to the Parties.
G. Test Report. Within five (5) Business Days after the completion of any CT, Seller shall prepare and submit to Buyer a written report of the results of the CT, which report shall include:
(1) A record of the personnel present during the CT that served in an operating, testing, monitoring or other such participatory role;
(2) The measured and calculated data for each parameter set forth in Part II.A through D, including copies of the raw data taken during the test; and (3) Seller’s statement of either Seller’s acceptance of the CT or Seller’s rejection of the CT results and reason(s) therefor.
Within ten (10) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the CT results or Buyer’s rejection of the CT and reason(s) therefor. If either Party rejects the results of any CT, such CT shall be repeated in accordance with Part II.F.
H. Supplementary Capacity Test Protocol. No later than sixty (60) days prior to commencing Facility construction, Seller shall deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) a supplement to this Exhibit O with additional and supplementary details, procedures and requirements applicable to Capacity Tests based on the then current design of the Facility (“Supplementary Capacity Test Protocol”). Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then-483
CONFIDENTIAL
EXECUTION VERSION
Exhibit O - 5
current Supplementary Capacity Test Protocol. The initial Supplementary Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Exhibit O.
I. Adjustment to Effective Capacity and Efficiency Rate. The Effective Capacity and Efficiency Rate shall be updated as follows:
(1) The total amount of Discharging Energy delivered to the Delivery Point (expressed in MWh AC) during the first four (4) hours of discharge (up to, but not in excess of, the product of (i) ,
multiplied by (ii) four (4) hours) shall be divided by four (4) hours to determine the Effective Capacity, which shall be expressed in MW AC, and shall be the new Effective Capacity in accordance with Section 4.4(a)(ii) of the Agreement.
(2) The total amount of Discharging Energy (as reported under Section II.D(7) above) divided by the total amount of Charging Energy (as reported under Section II.D(6) above), and expressed as a percentage, shall be recorded as the new Efficiency Rate.
PART III. INITIAL SUPPLEMENTARY CAPACITY TEST PROTOCOL.
A. Effective Capacity and Efficiency Rate Test
• Procedure:
(1) System Starting State: The Facility will be in the on-line state at 0% SOC. (2) Record the initial value of the SOC.
(3) Command a real power charge that results in an AC power of Facility’s maximum charging level and continue charging until the earlier of (a) the Facility has reached 100% SOC or (b) five (5) hours have elapsed since the Facility commenced charging.
(4) Record and store the SOC after the earlier of (a) the Facility has reached 100% SOC or (b) five (5) hours of continuous charging. Such data point shall be used for purposes of calculation of the Battery Charging Factor. (5) Record and store the amount of Charging Energy, registered at the Facility Meter, to go from 0% SOC to 100% SOC.
(6) Following one (1) hour rest period, command a real power discharge that results in an AC power output of the Facility’s maximum discharging level and maintain the discharging state until the earlier of (a) the Facility has discharged at the maximum discharging level for four (4) consecutive hours, or (b) the Facility has reached 0% SOC.
484
CONFIDENTIAL
EXECUTION VERSION
Exhibit O - 6
(7) Record and store the SOC after four (4) hours of continuous discharging.
Such data point shall be used for purposes of calculation of the Battery Discharging Factor. If the Facility SOC remains above zero percent (0%) after discharging at a rate at or above the Guaranteed Capacity (or at or above the Effective Capacity after a Commercial Operation Capacity Test) for four (4) consecutive hours pursuant to Part III.A.6(a), the SOC will be deemed 0 for the purposes of calculating the Battery Discharging Factor. (8) Record and store the Discharging Energy as measured at the Facility Meter.
Such data point shall be used for purposes of calculation of the Effective Capacity.
(9) If the Facility has not reached 0% SOC pursuant to Section III.A.6, continue discharging the Facility until it reaches a 0% SOC.
(10) Record and store the Discharging Energy as measured at the Facility Meter from the commencement of discharging pursuant to Part III.A.6 until the Facility has reached a 0% SOC pursuant to either Part III.A.7 or Part III.A.9, as applicable.
• Test Results:
(1) The resulting Effective Capacity measurement is the sum of the total Discharging Energy at the Facility Meter divided by four (4) hours. (2) The total amount of Discharging Energy (as reported under Section III.A(10) above) divided by the total amount of Charging Energy (as reported under Section III.A(5) above), and expressed as a percentage, shall be recorded as the new Efficiency Rate.
B. AGC Discharge Test
• Purpose: This test will demonstrate the AGC discharge capability to achieve the Facility’s maximum discharging level within 1 second.
• System starting state: The Facility will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The EMS will be configured to follow a predefined agreed-upon active power profile. • Procedure:
(1) Record the Facility active power level at the Facility Meter. (2) Command the Facility to follow a simulated CAISO RIG signal of PMAX at .95 power factor for ten (10) minutes.
(3) Record and store the Facility active power response (in seconds). 485
CONFIDENTIAL
EXECUTION VERSION
Exhibit O - 7
• System end state: The Facility will be in the on-line state and at a commanded active power level of 0 MW.
C. AGC Charge Test
• Purpose: This test will demonstrate the AGC charge capability to achieve the facility’s full charging level within 1 second.
• System starting state: The Facility will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The Facility control system will be configured to follow a predefined agreed-upon active power profile.
• Procedure:
(1) Record the Facility active power level at the Facility Meter. (2) Command the Facility to follow a simulated CAISO RIG signal of PMAX at .95 power factor for ten (10) minutes.
(3) Record and store the Facility active power response (in seconds). • System end state: The Facility will be in the on-line state and at a commanded active power level of 0 MW.
D. Reactive Power Production Test
• Purpose: This test will demonstrate the reactive power production capability of the Facility.
• System starting state: The Facility will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The EMS will be configured to follow an agreed-upon predefined reactive power profile. • Procedure:
(1) Record the Facility reactive power level at the Facility Meter. (2) Command the Facility to follow 15 MW for ten (10) minutes. (3) Record and store the Facility reactive power response. • System end state: The Facility will be in the on-line state and at a commanded reactive power level of 0 MVAR.
E. Reactive Power Consumption Test
486
CONFIDENTIAL
EXECUTION VERSION
Exhibit O - 8
• Purpose: This test will demonstrate the reactive power consumption capability of the facility.
• System starting state: The Facility will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The Facility control system will be configured to follow an agreed-upon predefined reactive power profile.
• Procedure:
(1) Record the Facility reactive power level at the Facility Meter. (2) Command the Facility to follow 15 MW for ten (10) minutes. (3) Record and store the Facility reactive power response. • System end state: The Facility will be in the on-line state and at a commanded reactive power level of 0 MVAR.
487
CONFIDENTIAL
EXECUTION VERSION
Exhibit P - 1
EXHIBIT P
MONTHLY CAPACITY AVAILABILITY CALCULATION
Monthly Capacity Availability Calculation. Seller shall calculate the “Monthly Capacity Availability” for a given month of the Delivery Term using the formula set forth below:
[AVAILHRSm + EXCUSEDHRSm]
Monthly Capacity Availability (%) =
[MONTHRSm]
Where:
m = relevant month “m” in which Monthly Capacity Availability is calculated;
MONTHRSm is the total number of hours for the month;
AVAILHRSm is the total number of hours, or partial hours, in the month during which the Facility was designated as available to charge and discharge Energy between the Facility and the Delivery Point and to provide Ancillary Services at the Delivery Point in both Seller’s most recent Availability Notice and Seller’s real-time EMS data feed to Buyer for the Facility (excluding, for avoidance of doubt, all circumstances at the high-voltage side of the Delivery Point or beyond, including Force Majeure Events, that may limit Seller’s delivery of Product). If the Facility is available pursuant to the preceding sentence during any applicable hour, or partial hour, but for less than the full amount of the Effective Capacity, the AVAILHRSm for such time period shall be calculated by multiplying such AVAILHRSm by a percentage determined by dividing (a) by (b); where (a) is the lower of such capacity amount reported as available by (i) Seller’s real-time EMS data feed to Buyer for the Facility for such hours, or partial hours, and (ii) Seller’s most recent Availability Notice (as updated pursuant to Section 4.11(c)), and (b) is the Effective Capacity.
EXCUSEDHRSm is the total number of hours, or partial hours, in the month that are not included as AVAILHRSm due to Buyer Dispatched Tests Buyer Default (provided that such Buyer Default causes the Facility to be unavailable), Force Majeure Events (excluding Force Majeure Events that result in direct, physical loss to the Facility (“Insurable Force Majeure Events”), periods during which delivery of Product is prevented due to a Curtailment Order, grid charging restrictions, Buyer Dispatched Tests, , or the Operating Restrictions in Exhibit Q (each, an “Excused Event”). If an Excused Event results in less than the full amount of the Effective Capacity for the Facility being unavailable during any applicable hour, or partial hour, the EXCUSEDHRSm for such time period shall be calculated by multiplying such EXCUSEDHRSm by a percentage determined by dividing (a) by (b); where (a) is the lower of such Effective 488
CONFIDENTIAL
EXECUTION VERSION
Exhibit P - 2
Capacity amount that is not reported as available due to the Excused Event by (i) Seller’s real-time EMS data feed to Buyer for the Facility for such hours, or partial hours, and (ii) Seller’s most recent Availability Notice (as updated pursuant to Section 4.11(c)), and (b) is the Effective Capacity. For avoidance of doubt, the total of AVAILHRSm plus EXCUSEDHRSm for any hour, or partial hour, shall never exceed 1. 489
CONFIDENTIAL
EXECUTION VERSION
Exhibit Q - 1
EXHIBIT Q
OPERATING RESTRICTIONS
The Parties will develop and finalize the Operating Restrictions prior to the Commercial Operation Date; provided, the Operating Restrictions (i) may not be materially more restrictive of the operation of the Facility than as set forth below, unless agreed to by Buyer in writing, (ii) will, at a minimum, include the rules, requirements and procedures set forth in this Exhibit Q, (iii) will include protocols and parameters for Seller’s operation of the Facility in the absence of Discharging Notices or other similar instructions from Buyer relating to the use of the Facility, and (iv) may include facility scheduling, operating restrictions and Communications Protocols.
File Update Date:
Technology:
Storage Unit Name:
A. Contract Capacity
Guaranteed Capacity (MW):
Effective Capacity (MW):
B. Total Unit Dispatchable Range Information
Interconnect Voltage (kV)
Maximum State of Charge (SOC) during
Charging
Minimum State of Charge (SOC) during
Discharging
Maximum Stored Energy Level (MWh):
Minimum Stored Energy Level (MWh):
Maximum Charging Capacity (MW):
Maximum Discharging Capacity (MW):
C. Maximum Throughput
Maximum Annual Throughput:
D. Charge and Discharge Rates
Ramp Rate (MW/minute) Description
Energy
E. Ancillary Services
Spinning reserve is included: Yes
Non-spinning reserve is included: Yes
Regulation up is included: Yes
Regulation down is included: Yes
Black start is included: No
F. Other Services
Voltage support is included: Yes
Grid Charging Restriction Table:
490
Exhibit Q - 2
Grid Charging Availability
Hour Ending Off-Peak Hour Actual Hourly Grid Charging Availability Percentages Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1 X
2 X
3 X
4 X
5 X
6 x
7 8
9 X
10 X
11 X
12 X
13 X
14 X
15 X
16 X
17 18
19 20
21 22
23 X
24 X
491
CONFIDENTIAL
EXECUTION VERSION
Exhibit R - 1
EXHIBIT R
METERING DIAGRAM
492
CONFIDENTIAL
EXECUTION VERSION
Exhibit S- 1
EXHIBIT S
WORKFORCE DEVELOPMENT
Sample Supplier Diversity Survey
Please note that not all questions may apply to your business. For the questions that do not apply, please skip them or answer “Not Applicable” or “Decline to State.” Pursuant to Proposition 209, SDCP does not give preferential treatment based on race, sex, color, ethnicity, or national origin. Providing information in these categories is optional and will not impact your participation in any future SDCP solicitation selection process.
Responses are collected for informational and reporting purposes only pursuant to Senate Bill (SB) 255.
*Required
1. Business Name*
2. Email Address*
3. Where is your business located/headquartered?
4. Is your business certified under General Order 156 (GO 156)? GO 156 is a California Public Utilities Commission ruling that requires utility entities to report annually on their contracts with majority women-owned, minority-owned, disabled veteran-owned and LGBT-owned business enterprises (WMDVLGBTEs) in all categories. Qualified businesses become GO 156 Certified through the CPUC and are then added to the GO 156 Clearinghouse database at www.thesupplierclearinghouse.com.
Yes
No
Qualified as a WMDVLGBTBE but not GO 156 certified
5. If you answered “yes” to Question 4, when does your certification expire?
6. If you answered “yes” or “qualified, but not certified” to Question 4, in which categories are you certified or qualified? Please choose all that apply.
Minority Owned
Women Owned
LGBT Owned
Disabled Veteran Owned
493
CONFIDENTIAL
EXECUTION VERSION
Exhibit S- 2
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 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 494
CONFIDENTIAL
EXECUTION VERSION
Exhibit S- 3
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 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.
495
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 1
EXHIBIT T
FORM OF CONSENT TO COLLATERAL ASSIGNMENT
This Consent to Collateral Assignment (this “Consent”) is entered into among (i) San Diego Community Power, a California joint powers authority (“SDCP”), (ii) [Name of Seller], a [Legal Status of Seller] (the “Project Company”), and (iii) [Name of Collateral Agent], a [Legal Status of Collateral Agent], as Collateral Agent for the secured parties under the Financing Documents referred to below (such secured parties together with their successors permitted under this Consent in such capacity, the “Secured Parties”, and, such agent, together with its successors in such capacity, the “Collateral Agent”). SDCP, Project Company and Collateral Agent are hereinafter sometimes referred to individually as a “Party” and jointly as the “Parties”.
Capitalized terms used but not otherwise defined in this Consent shall have the meanings ascribed to them in the ESSA (as defined below).
RECITALS
The Parties enter into this Consent with reference to the following facts:
A. Project Company and SDCP have entered into that certain Energy Storage Service Agreement, dated as of [Date] [List all amendments as contemplated by Section 3.4] (“ESSA”), pursuant to which Project Company will develop, construct, commission, test and operate the Facility (the “Project”) and sell the Product to SDCP, and SDCP will purchase the Product from Project Company;
B. As collateral for Project Company’s obligations under the ESSA, Project Company has agreed to provide to SDCP certain collateral, which may include Performance Security and Development Security and other collateral described in the ESSA (collectively, the “ESSA Collateral”);
C. Project Company has entered into that certain [Insert description of financing arrangements with Lender], dated as of [Date], among Project Company, the Lenders party thereto and the Collateral Agent (the “Financing Agreement”), pursuant to which, among other things, the Lenders have extended commitments to make loans to Project Company; D. As collateral security for Project Company’s obligations under the Financing Agreement and related agreements (collectively, the “Financing Documents”), Project Company has, among other things, assigned all of its right, title and interest in, to and under the ESSA and Project’s Company’s owners have pledged their ownership interest in Project Company (collectively, the “Assigned Interest”) to the Collateral Agent pursuant to the Financing Documents; and
E. It is a requirement under the Financing Agreement and the ESSA that SDCP and the other Parties hereto shall have executed and delivered this Consent.
AGREEMENT
496
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 2
In consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereto hereby agree as follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 Consent and Agreement.
SDCP hereby acknowledges:
(a) Notice of and consents to the assignment as collateral security to Collateral Agent, for the benefit of the Secured Parties, of the Assigned Interest; and (b) The right (but not the obligation) of Collateral Agent in the exercise of its rights and remedies under the Financing Documents, to make all demands, give all notices, take all actions and exercise all rights of Project Company permitted under the ESSA (subject to SDCP’s rights and defenses under the ESSA and the terms of this Consent) and accepts any such exercise; provided, insofar as the Collateral Agent exercises any such rights under the ESSA or makes any claims with respect to payments or other obligations under the ESSA, the terms and conditions of the ESSA applicable to such exercise of rights or claims shall apply to Collateral Agent to the same extent as to Project Company.
1.2 Project Company’s Acknowledgement.
Each of Project Company and Collateral Agent hereby acknowledges and agrees that SDCP is authorized to act in accordance with Collateral Agent’s instructions, and that SDCP shall bear no liability to Project Company or Collateral Agent in connection therewith, including any liability for failing to act in accordance with Project Company’s instructions.
1.3 Right to Cure.
If Project Company defaults in the performance of any of its obligations under the ESSA, or upon the occurrence or non-occurrence of any event or condition under the ESSA which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable SDCP to terminate or suspend its performance under the ESSA (a “ESSA Default”), SDCP will not terminate or suspend its performance under the ESSA until it first gives written notice of such ESSA Default to Collateral Agent and affords Collateral Agent the right to cure such ESSA Default within the applicable cure period under the ESSA, which cure period shall run concurrently with that afforded Project Company under the ESSA. In addition, if Collateral Agent gives SDCP written notice prior to the expiration of the applicable cure period under the ESSA of Collateral Agent’s intention to cure such ESSA Default (which notice shall include a reasonable description of the time during which it anticipates to cure such ESSA Default) and is diligently proceeding to cure such ESSA Default, notwithstanding the applicable cure period under the ESSA, Collateral Agent shall have a period of sixty (60) days (or, if such ESSA Default is for failure by the Project Company to pay an amount to SDCP which is due and payable under the ESSA other than to provide ESSA Collateral, thirty (30) days, or, if such ESSA Default is for failure by Project Company to provide ESSA Collateral, ten (10) Business Days) from the Collateral Agent’s receipt 497
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 3
of the notice of such ESSA Default from SDCP to cure such ESSA Default; provided, (a) if possession of the Project is necessary to cure any such non-monetary ESSA Default and Collateral Agent has commenced foreclosure proceedings within sixty (60) days after notice of the ESSA Default and is diligently pursuing such foreclosure proceedings, Collateral Agent will be allowed a reasonable time, not to exceed one hundred eighty (180) days after the notice of the ESSA Default, to complete such proceedings and cure such ESSA Default, and (b) if Collateral Agent is prohibited from curing any such ESSA Default by any process, stay or injunction issued by any Governmental Authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving Project Company, then the time periods specified herein for curing a ESSA Default shall be extended for the period of such prohibition, so long as Collateral Agent has diligently pursued removal of such process, stay or injunction. Collateral Agent shall provide SDCP with reports concerning the status of efforts to cure a ESSA Default upon SDCP’s reasonable request.
1.4 Substitute Owner.
Subject to Section 1.7, the Parties agree that if Collateral Agent notifies (such notice, a “Financing Document Default Notice”) SDCP that an event of default has occurred and is continuing under the Financing Documents (a “Financing Document Event of Default”) then, upon a judicial foreclosure sale, non-judicial foreclosure sale, deed in lieu of foreclosure or other transfer following a Financing Document Event of Default, Collateral Agent (or its designee) shall be substituted for Project Company (the “Substitute Owner”) under the ESSA, and, subject to Sections 1.7(b) and 1.7(c) below, SDCP and Substitute Owner will recognize each other as counterparties under the ESSA and will continue to perform their respective obligations (including those obligations accruing to SDCP and the Project Company prior to the existence of the Substitute Owner) under the ESSA in favor of each other in accordance with the terms thereof; provided, before SDCP is required to recognize the Substitute Owner, the Substitute Owner must (i) be a permitted assignee under the ESSA or (ii) have demonstrated to SDCP’s reasonable satisfaction that the Substitute Owner has financial qualifications and operating experience [TBD] (a “Permitted Transferee”). For purposes of the foregoing, SDCP shall be entitled to assume that any such purported exercise of rights by Collateral Agent that results in substitution of a Substitute Owner under the ESSA is in accordance with the Financing Documents without independent investigation thereof but shall have the right to require that the Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same.
1.5 Replacement Agreements.
Subject to Section 1.7, if the ESSA is terminated, rejected or otherwise invalidated as a result of any bankruptcy, insolvency, reorganization or similar proceeding affecting Project Company, its owner(s) or guarantor(s), and if Collateral Agent or its designee directly or indirectly takes possession of, or title to, the Project (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) (“Replacement Owner”), SDCP shall, and Collateral Agent shall cause Replacement Owner to, enter into a new agreement with one another for the balance of the obligations under the ESSA remaining to be performed having terms substantially the same as the terms of the ESSA with respect to the remaining Term (“Replacement ESSA”); provided, before SDCP is required to enter into a Replacement ESSA, the Replacement Owner must have demonstrated to SDCP’s reasonable satisfaction that the Replacement Owner satisfies the 498
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 4
requirements of a Permitted Transferee. For purposes of the foregoing, SDCP is entitled to assume that any such purported exercise of rights by Collateral Agent that results in a Replacement Owner is in accordance with the Financing Documents without independent investigation thereof but shall have the right to require that the Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same. Notwithstanding the execution and delivery of a Replacement ESSA, to the extent SDCP is, or was otherwise prior to its termination as described in this Section 1.5, entitled under the ESSA, SDCP may suspend performance of its obligations under such Replacement ESSA, unless and until all ESSA Defaults of Project Company under the ESSA or Replacement ESSA have been cured.
1.6 Transfer.
Subject to Section 1.7, a Substitute Owner or a Replacement Owner may assign all of its interest in the Project and the ESSA and a Replacement ESSA to a natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority or other entity (a “Person”) to which the Project is transferred; provided, the proposed transferee shall have demonstrated to SDCP’s reasonable satisfaction that such proposed transferee satisfies the requirements of a Permitted Transferee.
1.7 Assumption of Obligations.
(a) Transferee.
Any transferee under Section 1.6 shall expressly assume in a writing reasonably satisfactory to SDCP all of the obligations of Project Company, Substitute Owner or Replacement Owner under the ESSA or Replacement ESSA, as applicable, including posting and collateral assignment of the ESSA Collateral. Upon such assignment and the cure of any outstanding ESSA Default, and payment of all other amounts due and payable to SDCP in respect of the ESSA or such Replacement ESSA, the transferor shall be released from any further liability under the ESSA or Replacement ESSA, as applicable.
(b) Substitute Owner.
Subject to Section 1.7(c), any Substitute Owner pursuant to Section 1.4 shall be required to perform Project Company’s obligations under the ESSA, including posting and collateral assignment of the ESSA Collateral; provided, the obligations of such Substitute Owner shall be no more than those of Project Company under the ESSA.
(c) No Liability.
SDCP acknowledges and agrees that neither Collateral Agent nor any Secured Party shall have any liability or obligation under the ESSA as a result of this Consent (except to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner) nor shall Collateral Agent or any other Secured Party be obligated or required to (i) perform any of Project Company’s obligations under the ESSA, except as provided in Sections 1.7(a) and 1.7(b) and to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner, or (ii) take any action to collect or enforce any claim for payment assigned under the Financing 499
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 5
Documents. If Collateral Agent becomes a Substitute Owner pursuant to Section 1.4 or enters into a Replacement ESSA, Collateral Agent shall not have any personal liability to SDCP under the ESSA or Replacement ESSA and the sole recourse of SDCP in seeking enforcement of such obligations against Collateral Agent shall be to the aggregate interest of the Secured Parties in the Project; provided, such limited recourse shall not limit SDCP’s right to seek equitable or injunctive relief against Collateral Agent, or SDCP’s rights with respect to any offset rights expressly allowed under the ESSA, a Replacement ESSA or the ESSA Collateral.
1.8 Delivery of Notices.
SDCP shall deliver to Collateral Agent, concurrently with the delivery thereof to Project Company, a copy of each notice, request or demand given by SDCP to Project Company pursuant to the ESSA relating to (a) a ESSA Default by Project Company under the ESSA, (b) any claim regarding Force Majeure by SDCP under the ESSA, (c) any notice of dispute under the ESSA, (d) any notice of intent to terminate or any termination notice, and (e) any matter that would require the consent of Collateral Agent pursuant to Section 1.11 or any other provision of this Consent.
Collateral Agent acknowledges that delivery of such notice, request and demand shall satisfy SDCP’s obligation to give Collateral Agent a notice of ESSA Default under Section 1.3. Collateral Agent shall deliver to SDCP, concurrently with delivery thereof to Project Company, a copy of each notice, request or demand given by Collateral Agent to Project Company pursuant to the Financing Documents relating to a default by Project Company under the Financing Documents.
1.9 Confirmations.
SDCP will, as and when reasonably requested by Collateral Agent from time to time, confirm in writing matters relating to the ESSA (including the performance of same by Project Company); provided, such confirmation may be limited to matters of which SDCP is aware as of the time the confirmation is given and such confirmations shall be without prejudice to any rights of SDCP under the ESSA as between SDCP and Project Company.
1.10 Exclusivity of Dealings.
Except as provided in Sections 1.3, 1.4, 1.8, 1.9 and 2.1, unless and until SDCP receives a Financing Document Default Notice, SDCP shall deal exclusively with Project Company in connection with the performance of SDCP’s obligations under the ESSA. From and after such time as SDCP receives a Financing Document Default Notice and until a Substitute Owner is substituted for Project Company pursuant to Section 1.4, a Replacement ESSA is entered into or the ESSA is transferred to a Person to whom the Project is transferred pursuant to Section 1.6, SDCP shall, until Collateral Agent confirms to SDCP in writing that all obligations under the Financing Documents are no longer outstanding, deal exclusively with Collateral Agent in connection with the performance of SDCP’s obligations under the ESSA, and SDCP may irrevocably rely on instructions provided by Collateral Agent in accordance therewith to the exclusion of those provided by any other Person.
1.11 No Amendments.
500
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 6
To the extent permitted by Laws, SDCP agrees that it will not, without the Project Company obtaining prior written consent of Collateral Agent (not to be unreasonably withheld, delayed or conditioned) (a) enter into any material supplement, restatement, novation, extension, amendment or modification of the ESSA (b) terminate or suspend its performance under the ESSA (except in accordance with Section 1.3) or (c) consent to or accept any termination or cancellation of the ESSA by Project Company.
SECTION 2. PAYMENTS UNDER THE ESSA
2.1 Payments.
Unless and until SDCP receives written notice to the contrary from Collateral Agent, SDCP will make all payments to be made by it to Project Company under or by reason of the ESSA directly to Project Company. SDCP, Project Company, and Collateral Agent acknowledge that SDCP will be deemed to be in compliance with the payment terms of the ESSA to the extent that SDCP makes payments in accordance with Collateral Agent’s instructions.
2.2 No Offset, Etc.
All payments required to be made by SDCP under the ESSA shall be made without any offset, recoupment, abatement, withholding, reduction or defense whatsoever, other than that expressly allowed by the terms of the ESSA.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SDCP
SDCP makes the following representations and warranties as of the date hereof in favor of Collateral Agent:
3.1 Organization.
SDCP is a joint powers authority and community choice aggregator duly organized and validly existing 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 its jurisdiction.
SDCP has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the ESSA, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.
3.2 Authorization.
The execution, delivery and performance by SDCP of this Consent and the ESSA have been duly authorized by all necessary corporate or other action on the part of SDCP and do not require any approval or consent of any holder (or any trustee for any holder) of any indebtedness or other obligation of SDCP which, if not obtained, will prevent SDCP from performing its obligations hereunder or under the ESSA except approvals or consents which have previously been obtained and which are in full force and effect.
3.3 Execution and Delivery; Binding Agreements.
501
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 7
Each of this Consent and the ESSA is in full force and effect, have been duly executed and delivered on behalf of SDCP by the appropriate officers of SDCP, and constitute the legal, valid and binding obligation of SDCP, enforceable against SDCP in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
3.4 No Default or Amendment.
Except as set forth in Schedule A attached hereto: (a) Neither SDCP nor, to SDCP’s actual knowledge, Project Company, is in default of any of its obligations under the ESSA; (b) SDCP and, to SDCP’s actual knowledge, Project Company, has complied with all conditions precedent to the effectiveness of its obligations under the ESSA; (c) to SDCP’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either SDCP or Project Company to terminate or suspend its obligations under the ESSA; and (d) the ESSA has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.
3.5 No Previous Assignments.
SDCP has no notice of, and has not consented to, any previous assignment by Project Company of all or any part of its rights under the ESSA, except as previously disclosed in writing and consented to by SDCP.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PROJECT COMPANY Project Company makes the following representations and warranties as of the date hereof in favor of the Collateral Agent and SDCP:
4.1 Organization.
Project Company is a [Legal Status of Seller] duly organized and validly existing under the laws of the state of its organization, and is duly qualified, authorized to do business and in good standing in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where the failure to so qualify would not have a material adverse effect on its financial condition, its ability to own its properties or its ability to transact its business. Project Company has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the ESSA, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.
4.2 Authorization.
The execution, delivery and performance of this Consent by Project Company, and Project Company’s assignment of its right, title and interest in, to and under the ESSA to the Collateral Agent pursuant to the Financing Documents, have been duly authorized by all necessary corporate or other action on the part of Project Company.
502
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 8
4.3 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Project Company by the appropriate officers of Project Company, and constitutes the legal, valid and binding obligation of Project Company, enforceable against Project Company in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
4.4 No Default or Amendment.
Except as set forth in Schedule B attached hereto: (a) neither Project Company nor, to Project Company’s actual knowledge, SDCP, is in default of any of its obligations thereunder; (b) Project Company and, to Project Company’s actual knowledge, SDCP, has complied with all conditions precedent to the effectiveness of its obligations under the ESSA; (c) to Project Company’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either SDCP or Project Company to terminate or suspend its obligations under the ESSA; and (d) the ESSA has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.
4.5 No Previous Assignments.
Project Company has not previously assigned all or any part of its rights under the ESSA.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF COLLATERAL AGENT Collateral Agent makes the following representations and warranties as of the date hereof in favor of SDCP and Project Company:
5.1 Authorization.
The execution, delivery and performance of this Consent by Collateral Agent have been duly authorized by all necessary corporate or other action on the part of Collateral Agent and Secured Parties.
5.2 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Collateral Agent by the appropriate officers of Collateral Agent, and constitutes the legal, valid and binding obligation of Collateral Agent as Collateral Agent for the Secured Parties, enforceable against Collateral Agent (and the Secured Parties to the extent applicable) in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
503
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 9
SECTION 6. MISCELLANEOUS
6.1 Notices.
All notices and other communications hereunder shall be in writing, shall be deemed given upon receipt thereof by the Party or Parties to whom such notice is addressed, shall refer on their face to the ESSA (although failure to so refer shall not render any such notice or communication ineffective), shall be sent by first class mail, by personal delivery or by a nationally recognized courier service, and shall be directed (a) if to SDCP or Project Company, in accordance with [Notice Section of the ESSA] of the ESSA, (b) if to Collateral Agent, to [Collateral Agent Name], [Collateral Agent Address], Attn: [Collateral Agent Contact Information], Telephone: [___], Fax:
[___], and (c) to such other address or addressee as any such Party may designate by notice given pursuant hereto.
6.2 Governing Law; Submission to Jurisdiction.
(a) THIS CONSENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
THIS CONSENT AND ALL MATTERS ARISING OUT OF THIS CONSENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF CALIFORNIA WITHOUT REGARD TO ANY CONFLICTS OF LAWS
PROVISIONS THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
(b) All disputes, claims or controversies arising out of, relating to, concerning or pertaining to the terms of this Consent shall be governed by the dispute resolution provisions of the ESSA. Subject to the foregoing, any legal action or proceeding with respect to this Consent and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of California or of the United States of America for the Central District of California, and, by execution and delivery of this Consent, each Party hereby accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof. Each Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its notice address provided pursuant to Section 6.1 hereof. Each Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Consent brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law.
6.3 Headings Descriptive.
The headings of the several sections and subsections of this Consent are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Consent.
504
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 10
6.4 Severability.
In case any provision in or obligation under this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
6.5 Amendment, Waiver.
Neither this Consent nor any of the terms hereof may (a) be terminated, amended, supplemented or modified, except by an instrument in writing signed by SDCP, Project Company and Collateral Agent or (b) waived, except by an instrument in writing signed by the waiving Party.
6.6 Termination.
Each Party’s obligations hereunder are absolute and unconditional, and no Party has any right, and shall have no right, to terminate this Consent or to be released, relieved or discharged from any obligation or liability hereunder until SDCP has been notified by Collateral Agent that all of the obligations under the Financing Documents shall have been satisfied in full (other than contingent indemnification obligations) or, with respect to the ESSA or any Replacement ESSA, its obligations under such ESSA or Replacement ESSA have been fully performed.
6.7 Successors and Assigns.
This Consent shall be binding upon each Party and its successors and assigns permitted under and in accordance with this Consent, and shall inure to the benefit of the other Parties and their respective successors and assignee permitted under and in accordance with this Consent.
Each reference to a Person herein shall include such Person’s successors and assigns permitted under and in accordance with this Consent.
6.8 Further Assurances.
SDCP hereby agrees to execute and deliver all such instruments and take all such action as may be necessary to effectuate fully the purposes of this Consent.
6.9 Waiver of Trial by Jury.
TO THE EXTENT PERMITTED BY APPLICABLE LAWS, THE PARTIES HEREBY
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT OR ANY MATTER ARISING HEREUNDER. EACH PARTY FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.10 Entire Agreement.
505
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 11
This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Consent and any such agreement, document or instrument, the terms, conditions and provisions of this Consent shall prevail.
6.11 Effective Date.
This Consent shall be deemed effective as of the date upon which the last Party executes this Consent.
6.12 Counterparts; Electronic Signatures.
This Consent may be executed in one or more counterparts, each of which will be deemed to be an original of this Consent and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Consent and of signature pages by facsimile transmission, Portable Document Format (i.e., PDF), or by other electronic means shall constitute effective execution and delivery of this Consent as to the Parties and may be used in lieu of the original Consent for all purposes.
[Remainder of Page Left Intentionally Blank.]
506
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 12
IN WITNESS WHEREOF, the Parties hereto have caused this Consent to be duly executed and delivered by their duly authorized officers on the dates indicated below their respective signatures.
[NAME OF PROJECT COMPANY],
[Legal Status of Project Company].
SAN DIEGO COMMUNITY POWER,
a California joint powers authority.
By:
________________________________
___
[Name]
[Title]
Date: ___________________________
By:
________________________________
___
[Name]
[Title]
Date: ___________________________
[NAME OF COLLATERAL AGENT],
[Legal Status of Collateral Agent].
By:
________________________________
[Name]
[Title]
Date: ___________________________
507
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 13
SCHEDULE A
[Describe any disclosures relevant to representations and warranties made in Section 3.4] 508
CONFIDENTIAL
EXECUTION VERSION
Exhibit T- 14
SCHEDULE B
[Describe any disclosures relevant to representations and warranties made in Section 4.4] 509
CONFIDENTIAL
EXECUTION VERSION
1 ENERGY STORAGE DEVELOPMENT FRAMEWORK AGREEMENT
This ENERGY STORAGE DEVELOPMENT FRAMEWORK AGREEMENT (the “Agreement”) is entered into this [ ] day of [ ________], 2025 (“Effective Date”) by and between SAN DIEGO COMMUNITY POWER, a California joint powers authority (“Buyer” or “SDCP”), and LUMINIA CA DEVCO 5, LLC, a limited liability company organized under the laws of California (“Seller”). Buyer and Seller may be referred to herein individually as a “Party” or collectively as the “Parties”.
Unless otherwise defined in this Agreement, capitalized terms have the meanings set out in the Form ESSA (as defined below).
RECITALS
WHEREAS, Seller is developing a portfolio of energy storage Facilities, as identified in Exhibit A in San Diego County, California, with a total capacity not to exceed 20.57 MW AC (“Portfolio Expected Capacity”);
WHEREAS, Seller desires to sell, and Buyer desires to purchase, the Product produced by each of these Facilities;
WHEREAS, to effect the purchase of Product from these Facilities, the Parties will execute an energy storage service agreement substantially in the form of Energy Storage Service Agreement set forth as Exhibit B (“Form ESSA”) for each Facility in the portfolio; and WHEREAS, this Agreement governs the Parties’ commitment to develop the Facilities prior to December 31, 2025.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
I. ESSA Execution.
Concurrently with the execution of this Agreement, the Parties will execute an ESSA (as defined below) for each of the Facilities.
II. Facility Substitutions.
Prior to December 31, 2025, Seller may, with the prior written consent of Buyer, replace any or all of the Facilities with one or more substitute facilities. Seller shall provide Notice to Buyer of its request to replace the Facility no later than twenty-eight days prior to a regularly scheduled meeting of the Board of Directors of SDCP (“SDCP BOD”) meeting and provide a 510
511
512
513
CONFIDENTIAL
EXECUTION VERSION
5 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date set opposite their signatures.
SAN DIEGO COMMUNITY POWER, a
California joint powers authority
Date: _______________ By: _________________________________ LUMINIA CA DEVCO 5, LLC, a California
limited liability company
Date: _______________ By: ______________________________ 514
515
EXHIBIT B
FORM OF ENERGY STORAGE SERVICE AGREEMENT
[See attached.]
516
SAN DIEGO COMMUNITY POWER
Staff Report – Item 18
____________________________________________________________________________________ TO: Board of Directors
FROM: Karin Burns, Chief Executive Officer
SUBJECT: Update on Strategic Planning Goals for FY 26-28 DATE: February 27, 2025
____________________________________________________________________________________ RECOMMENDATION:
Receive and file an update on the development of Strategic Plan Goals for FY 26-28 of San Diego Community Power (Community Power).
BACKGROUND:
Community Power developed its first Strategic Plan in Q3 of 2022. For the past 2.5 years the team has been diligently executing on that strategic plan. Given the substantial progress made on achieving the goals of that first strategic plan, the growth of customer accounts, and the overall growth of the organization, best practice suggests we develop a strategic plan roughly every 3 years with annual reviews. This year we aim to have the plan approved by the Board of Directors in March of 2025 so that it can tie to the annual fiscal year planning, staffing, and goal setting processes of the organization.
The strategic planning process for fiscal year 2025 began in September of 2024 with the drafting of a timeline and process – communicated to staff, the CAC and the Board by the end of the calendar year 2024. In September, staff conducted an organization- wide assessment of risks, challenges, and opportunities that are impacting the organization.
Subsequently, in October each department then developed its business outlook and preliminary set of goals over the next three-year period (FY 26-28). These, in combination with the risks, challenges and opportunities framework, were then used by the executive team in November during a strategic planning session to further refine and prioritize department and organization level goals. The Directors and Executive team then met in December for a full day strategic offsite to collaborate in the development of shared goals to refine and prioritize them further. In January of 2025 the entire organization held a strategic offsite to discuss and review our departmental and inter-departmental goals, and in February of 2025 we met with members of the CAC in small group discussions to present and seek feedback on the draft strategic goals. Finally, individual Board members were briefed on the draft goals and were given opportunities to provide staff with their feedback and suggestions on the FY 2026-2028 goals of Community Power. 381 517
ANALYSIS AND DISCUSSION:
During the regular Board meeting on February 27, 2025, these draft goals are to be presented to the Board and to the public for feedback, further guidance, and discussion.
The CEO will present the proposed draft strategic goals for the three-year planning period defined by FY 26-28 for the following functional departments:
1. Finance
2. Power
3. Customer Programs
4. Legislative & Regulatory
5. Public Affairs
6. Customer Operations
7. Human Resources
Community Power staff then expect to finalize the Strategic Plan for FY 2026-28 and bring the plan to the CAC for their final review and recommendation to the Board to approve the plan during the CAC’s regular committee meeting in March. Community Power will then bring the Strategic Plan to the Board during the regular March Board meeting for final review and approval.
FISCAL IMPACT:
N/A
COMMITTEE REVIEW:
N/A
ATTACHMENTS:
N/A
382 518