Agenda packet — Silicon Valley Clean Energy Board of Directors, March 9, 2022 (part 2 of 3)

Staff Report – Item 1m
Item 1m: Legislative and Regulatory Response to Industry Transition 2022 Ad Hoc Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Rob Rennie, Committee Chair
Date: 3/9/2022
The Legislative and Regulatory Ad Hoc Committee held its first meeting Thursday, March 3, 2022. I was selected as Chair, and Director Martinez Beltran was selected as Vice Chair of the Committee.

Staff reviewed SVCE’s mission and the policy focus areas which were identified when approving the formation of the committee in January 2022. The group discussed several pieces of legislation, including the CalCCA sponsored bill, AB 1814 (Grayson), and bills related to the Brown Act. As part of the discussion of the Brown Act bills, the Committee recommended the SVCE Board support AB 1944 and SB 1100, and support bills that will allow additional flexibility for elected bodies to meet remotely. This item is on consent for the SVCE Board of Director’s consideration.

The next meeting of the Legislative and Regulatory Ad Hoc Committee is to be determined based on member availability and legislative needs.

Item 1m
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~CLEAN ENERGY

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Staff Report – Item 1n
Item 1n: California Community Power Report
To: Silicon Valley Clean Energy Board of Directors
From: Girish Balachandran, CEO
Date: 3/9/2022
Per direction from the SVCE Board on December 9, 2020 for the CEO to provide a report of the ongoing activities of California Community Power (CC Power) after each of its meetings, this is to report CC Power held a special meeting on Friday, February 25, 2022.

This special meeting of the CC Power Board was held to approve the Goal Line Long Duration Storage (LDS) Project and associated agreements; the Board voted unanimously to approve the project. Materials from the special board meeting can be found here on the CC Power website: CC Power Meeting, 2/25/22 The next meeting of the board will be March 16, 2022 at 1:00 p.m.; meeting materials can be found on the CC Power website: https://cacommunitypower.org/meetings/
Item 1n
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Staff Report – Item 2
Item 2: Receive Audit Results and Accept the Findings from Independent Auditor From: Girish Balachandran, CEO
Prepared by: Amrit Singh, CFO and Director of Administrative Services Kevin Armstrong, Administrative Services Manager
Date: 3/9/2022

RECOMMENDATION
Receive the Year-End Financial Statements and the Independent Auditor’s Report for the Fiscal Year 2020-21.

AUDIT COMMITTEE RECOMMENDATION
At the March 3, 2022 meeting of the Audit Committee, committee members received a presentation by the Independent Auditor discussing the status of the audit and the preliminary auditor’s opinion. The Audit Committee also receive a draft of the financial report.

BACKGROUND
In accordance with Financial Policy #1 (FP1), Accounting Policy, the annual audit of the financial statements has been completed and the report prepared by Pisenti & Brinker, LLP has been issued to the Agency. The auditors have rendered a clean opinion and found “the financial statements referred to above present fairly, in all material respects, the financial position of SVCE as of September 30, 2021 and 2020 and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.”
Basic Financial Statements
The Statement of Net Position presents information about assets and liabilities with the difference between the two reported as net position. The change in net position over time is an indicator of whether the financial position of the Agency is improving or deteriorating.

The Statement of Revenues, Expenses and Changes in Net Position reports how net position changed during the year and present a comparison between operating and non-operating revenues and operating and non-operating expenses. Operating revenues and expenses are related to the Agency’s principal business of providing carbon-free electricity.

The Statement of Cash Flows reports the cash provided and used by operating activities, as well as other sources and uses, such as financing and investing activities.

Notes to the Financial Statements
Various notes provide additional information that is essential to a full understanding of the information provided in the basic financial statements. These are found immediately following the financial statements to which they refer.

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Agenda Item: 2 Agenda Date: 3/9/2022

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ANALYSIS & DISCUSSION
The following represents highlights as of September 30, 2021:
• As of September 30, 2021, total assets were $207.2 million, with $206.8 million of current assets.

Current assets are mostly comprised of $158.8 million of cash and cash equivalents, $26.0 million in accounts receivable, $14.4 million in accrued revenue, $726 thousand in deposits, and $4.0 million in restricted cash. The total of current assets decreased during the fiscal year as a result of SVCE’s operating deficit.
• As of September 30, 2021, total liabilities were $41.1 million. Current liabilities consist mostly of the cost of electricity delivered to customers that is not yet due to be paid by SVCE. Other components include taxes and surcharges due to other governments and various other accrued liabilities.

Noncurrent liabilities of $7.0 million consist of supplier security deposits provided as cash, rather than letters of credit.
• As of September 30, 2021, total revenues were $242.6 million primarily from the sale of carbon-free electricity. Operating revenues exceeded the cost of electricity by $4.0 million resulting in an operating margin of 1.7%.
• As of September 30, 2021, total expenses were $257.8 million. The decrease in operating expenses from fiscal year 2020 to 2021 is largely the result of a decline in energy costs. Expenses for staff compensation, consulting, and other general and administrative expenses increased in 2021 as the organization grew to support its operations and meet the challenges of a changing business landscape.

Given the COVID pandemic, SVCE chose to maintain its rate discount, and as a result required withdrawals from reserves to fund operations.

STRATEGIC PLAN
This report supports the fiscal management goals of the strategic plan.

ALTERNATIVE
There is no alternative to this recommendation as the financial audit is a requirement of Board Policy FP1.

FISCAL IMPACT
During Fiscal Year 2020-21, SVCE’s total expenses exceeded total revenues, resulting in a decrease to Net Position of $15.1 million.

SVCE’s Auditors, Pisenti & Brinker, LLP, issued an unqualified (“clean”) opinion on the Agency’s financials for the fiscal year ended September 30, 2021.

ATTACHMENTS

1. Audited Financials for the fiscal year ended September 30, 2021

2. SVCE Representation Letter

3. Letter of Significant Deficiencies or Material Weaknesses Item 2
Financial Statements
Years Ended:

September 30, 2021
September 30, 2020
With Report of Independent Auditors
Silicon Valley Clean Energy Authority
Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
YEARS ENDED SEPTEMBER 30, 2021 AND 2020

TABLE OF CONTENTS
Independent Auditor’s Report ………………………………………………………... 1 Management’s Discussion and Analysis ……………………………………………... 3 Basic Financial Statements:

Statements of Net Position …………………………………………………… 11
Statements of Revenues, Expenses and Changes in Net Position …................. 12 Statements of Cash Flows …………………………………………………….. 13
Notes to the Basic Financial Statements ……………………………………… 15 Item 2
Attachment 1
A.

SANTA ROSA  PETALUMA

RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. 3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
(707) 542‐3343  Office
(707) 527‐5608  Fax
pbllp.com
Independent Auditor’s Report
To the Board of Directors
Silicon Valley Clean Energy Authority
Sunnyvale, California
Report on the Financial Statements
We have audited the accompanying financial statements of Silicon Valley Clean Energy Authority (SVCE), as of and for the years ended September 30, 2021 and 2020, and the related notes to the financial statements, which collectively comprise SVCE’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SVCE as of September 30, 2021 and 2020 and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Item 2
Attachment 1
• • p Is E NT I & BR I N I( ER LLP
Certified Public Accountants & Adviso rs
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Independent Auditor’s Report (continued)
Other Matters
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.

We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Santa Rosa, California
March 4, 2022
Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
3 The Management’s Discussion and Analysis provides an overview of Silicon Valley Clean Energy Authority’s (SVCE) financial activities as of and for the years ended September 30, 2021 and 2020. The information presented here should be considered in conjunction with the audited financial statements.

BACKGROUND
The formation of SVCE was made possible by the passage, in 2002, of California Assembly Bill 117, enabling communities to purchase power on behalf of their residents and businesses and creating competition in power generation.

SVCE was created as a California Joint Powers Authority (JPA) on March 31, 2016. SVCE was established to provide electric power at competitive costs as well as to provide other benefits within Santa Clara County, including reducing energy related greenhouse gas emissions, securing energy supply and price stability, and providing energy efficiencies and local economic benefits.

Governed by a board of directors (Board) consisting of elected representatives from each jurisdiction, SVCE has the rights and powers to set rates for the electricity it furnishes, incur indebtedness, and issue bonds or other obligations. SVCE is responsible for the acquisition of electric power for its service area. SVCE serves the unincorporated areas of Santa Clara County and the cities and towns of Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, and Sunnyvale.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
4 Financial Reporting
SVCE presents its financial statements as an enterprise fund under the economic resources measurement focus and accrual basis of accounting, in accordance with generally accepted accounting principles (GAAP) for proprietary funds, as prescribed by the Governmental Accounting Standards Board (GASB).

Contents of this report
This report is divided into the following sections:
 Management’s discussion and analysis.
 The basic financial statements:
o The Statements of Net Position include all of SVCE’s assets, liabilities, and net position and provide information about the nature and amount of resources and obligations at a specific point in time.
o The Statements of Revenues, Expenses, and Changes in Net Position report all of SVCE’s revenue and expenses for the years shown.
o The Statements of Cash Flows report the cash provided and used by operating activities, as well as other sources and uses, such as financing and investing activities. o Notes to the Basic Financial Statements provide additional details and information related to the basic financial statements.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
5 FINANCIAL HIGHLIGHTS
The following table is a summary of SVCE’s assets, liabilities, and net position, and a discussion of significant changes for the years ended September 30:
2021 2020 2019
Current assets $ 206,813,185 $ 220,538,554 $ 177,676,248 Noncurrent assets
Capital assets, net 316,766 119,175 148,038
Other noncurrent assets 45,330 145,130 129,060
Total noncurrent assets 362,096 264,305 277,098
Total assets 207,175,281 220,802,859 177,953,346
Current liabilities 34,061,545 39,659,471 34,958,389
Noncurrent liabilities 7,031,250 - -
Total liabilities 41,092,795 39,659,471 34,958,389
Net position
Investment in capital assets 316,766 119,175 148,038
Restricted for security collateral 4,000,216 4,500,000 5,000,000 Unrestricted 161,765,504 176,524,213 137,846,919
Total net position $ 166,082,486 $ 181,143,388 $ 142,994,957 Current Assets
Current assets were approximately $206,813,000 at the end of 2021 and are mostly comprised of cash and cash equivalents, accounts receivable, and accrued revenue. Accrued revenue differs from accounts receivable in that it is the result of electricity use by SVCE customers before invoicing to those customers has occurred. Total current assets decreased in 2021 primarily because of a drop in the rates SVCE charges its customers.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
6 Capital Assets
Capital assets were approximately $317,000 at the end of 2021, net of accumulated depreciation, primarily consisting of furniture and electronic equipment for use in SVCE’s administrative office.

SVCE does not own assets used for electric generation or distribution. The increase from 2020 relates to the acquisition of furniture and leasehold improvements.

Other Noncurrent Assets
Other noncurrent assets consist of various deposits for energy supply, regulatory and other operating purposes. The deposits have remained relatively stable over the last three years.

Current Liabilities
This category consists mostly of the cost of electricity delivered to customers that is not yet due to be paid by SVCE. Other components include taxes and surcharges due to other governments and various other accrued liabilities. Current liabilities had minor fluctuations from 2019 to 2021 as purchasing requirements were relatively stable.

Noncurrent Liabilities
Noncurrent liabilities increased in 2021 as a result of collateral deposits from energy suppliers held by SVCE that are not due to be returned within a year.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
7 The following table is a summary of SVCE’s results of operations and a discussion of significant changes for the years ended September 30:
2021 2020 2019
Operating revenues $ 242,600,167 $ 297,043,720 $ 292,473,135 Nonoperating revenues 273,985 1,729,841 1,230,787
Total income 242,874,152 298,773,561 293,703,922
Operating expenses 257,748,103 260,274,619 228,999,528
Nonoperating expenses 186,951 350,511 144,157
Total expenses 257,935,054 260,625,130 229,143,685
Change in net position (15,060,902) $ $ 38,148,431 $ 64,560,237 Operating Revenues
SVCE’s operating revenues are derived from the sale of electricity to commercial and residential customers throughout its territory. SVCE’s customer base was fairly stable each year, with approximately 280,000 customers enrolled. SVCE decreased the rates it charges to customers during 2021, resulting in a planned drop in operating revenues. SVCE has sufficient cash reserves to absorb the impact of the resulting decrease in net position. SVCE reports its revenue net of an allowance for uncollectible accounts.

From 2019 to 2020, the increase in revenue is directly related to changes in billing rates and customer usage patterns. In 2020, SVCE received $6,600,000 in revenue from damages as the result of the termination of one of its long-term energy supply contracts that failed to meet certain development milestones.

Nonoperating revenues, which primarily consists of investment income, decreased in 2021 because of lower interest rates and increased in 2020 due to higher interest rates.

Operating Expenses
SVCE’s largest operating expense is the purchase of electricity for retail customer use. SVCE procures energy from a variety of sources and focuses on purchasing at competitive costs and maintaining a balanced renewable power portfolio. Expenses for staff compensation, consulting, data management and other general and administrative expenses increased each year as the organization continued to grow to support its business demands.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
8 ECONOMIC OUTLOOK
Silicon Valley Clean Energy serves approximately 96% of all eligible customers in the service area, and that rate of participation is expected to remain stable in 2021.

SVCE’s mission is to reduce dependence on fossil fuels by providing carbon free, affordable, and reliable electricity and innovative programs for the SVCE community. Since its launch, SVCE has:
 Committed about $1.6 billion in renewable energy contracts  Secured over 720 MW in renewable energy projects, including 173 MW of energy storage  Provided $77 million in on-bill savings
 Reduced 35% regional energy-related emissions (since 2017)  Avoided 575 million pounds of greenhouse gas emissions  Provided $21 million in customer offers and services
 Processed more than 200 customer rebates for heat pump water heaters  Helped lead the formation of California Community Power and California Community Choice Financing Authority
 Achieved annual savings of $1.9M from securing California’s first ever Clean Energy Project Revenue Bonds
 Achieved ‘A’ credit rating from S&P Global with a stable outlook and a Moody’s Baa2, stable rating.

SVCE procures energy consistent with its Board-approved Energy Risk Management Policy that aligns customer demand for clean energy with short and long-term purchases of clean energy resources. SVCE complies with state laws and its own targets for renewable and greenhouse gas (GHG) free energy. California’s Renewable Portfolio Standard (“RPS”) requires load-serving entities such as SVCE to supply their retail sales with minimum quantities of eligible renewable energy both on an annual basis and through long-term commitments of greater than ten years. The state has also directed load serving entities (LSEs) for new clean energy and capacity resources by 2026 to meet grid reliability goals. Senate Bill 100 directs all LSEs to procure 60% of their portfolios from RPS-eligible resources by 2030, and 100% of their retail sales from GHG-free resources (or eligible renewable resources) by 2045. SVCE’s current policy is to procure 100% of retail sales from GHG-free resources. To date SVCE has executed 13 RPS contracts of ten years or more in duration and has met its RPS requirements for long-term procurement. SVCE intends to solicit additional long-term renewable resources to meet Board-directed goals and as ordered by the CPUC under the Mid-term Reliability Procurement decision (R.20-05-003).

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
9 ECONOMIC OUTLOOK (continued)
SVCE uses a portfolio risk-management approach in its power purchasing program, seeking low-cost supply as well as diversity among technologies, production profiles, project sizes and locations, counterparties, length of contract, and timing of market purchases. SVCE’s procurement strategy through 2030 includes regularly procuring new and existing California renewables by 2030, via contracts with terms of 10 years or more. The strategy also includes investing in storage paired with solar, stand-alone storage, long-duration storage, and large hydroelectric resources.

SVCE continually manages its forward load obligations and supply commitments with the objective of balancing cost stability and cost minimization. SVCE closely monitors its open positions for Portfolio Content Category 1 (“PCC 1”) renewable energy and carbon-free, non-RPS eligible, based on calendar-year targets. SVCE maintains its clean portfolio coverage targets of up to 100% in the near-term and leaves a greater portion open in the medium- to long-term, consistent with generally accepted industry practice.

SVCE also procures electric capacity or Resource Adequacy (“RA”), a California program jointly administered by the CPUC, the CEC, and CAISO. The RA resources ensure there will be enough supply in the right locations and with sufficient ramping capability to meet load in the CAISO market.

In fiscal year ending September 30, 2021, SVCE’s retail load dropped by about 3% from the prior fiscal year to 3.75 Terrawatt-hours (TWhrs). SVCE expects retail load to return to pre-Covid levels at 3.95 TWhrs for Fiscal Year ending September 30, 2022. Over the next ten years, SVCE expects load to grow at about 0.5% per year. SVCE’s long-term load forecast is driven primarily by the number and types of customers that SVCE expects to serve. The forecast also incorporates load-modifying effects of increasing electric vehicle adoption and charging, behind the meter solar and/or storage (via net energy metering), and energy efficiency.

Senate Bill 237 was passed in 2018 and increased the cap for direct access participation for large commercial and industrial customer load. In June 2021, the CPUC submitted a recommendation to the Legislature which opposed further expansion of direct access. The CPUC stated that, when compared to maintaining the current cap, expanding direct access risks increases in greenhouse gas emissions and could significantly complicate the State’s efforts to maintain grid reliability. A reduction in statewide commercial and industrial electric load due to COVID in 2020 and 2021 has created additional capacity under the statewide direct access (DA) cap. The impact is expected to be minimal to SVCE, with less than 2% of current load at risk. SVCE is being proactive in anticipation of potential future direct access expansion. In 2019, the Board of Directors approved a Commercial Pricing Policy that allows SVCE to be innovative in customized contract offerings to customers that supports long-term customer retention.

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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
10 ECONOMIC OUTLOOK (continued)
SVCE expects to continue to provide competitive electric rates. The unpredictable PG&E customer exit fee has been a barrier to providing stable rates, yet the exit fee will be significantly lower in 2022 than in recent years. SVCE has prioritized regulatory and legislative work with respect to the exit fee process and has implemented a proactive approach on other regulatory and legislative issues, such as integrated resource planning and grid reliability. Additionally, SVCE’s commitment to building up healthy cash reserves has placed SVCE in a stable position to manage future regulatory and legislative risk including changes to the customer exit fees.

SVCE has a strong focus on continuing to build credit capacity through increased cash reserves, complying with the energy risk management policy and credit guidelines, and entering in favorable energy purchase commitments. SVCE received an investment grade credit rating in Summer 2020 from Moody’s and an ‘A’ credit rating from S&P Global in January 2021.

REQUEST FOR INFORMATION
This financial report is designed to provide SVCE’s customers and creditors with a general overview of SVCE’s finances and to demonstrate SVCE’s accountability for the funds under its stewardship.

Please address any questions about this report or requests for additional financial information to 333 W. El Camino Real, Suite 330, Sunnyvale, CA 94087.

Respectfully submitted,
Girish Balachandran, Chief Executive Officer

Item 2
Attachment 1

BASIC FINANCIAL STATEMENTS
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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

STATEMENTS OF NET POSITION
SEPTEMBER 30, 2021 AND 2020
The accompanying notes are an integral part of these financial statements. 11 2021 2020
Current assets
Cash and cash equivalents $ 158,808,348 $ 159,924,735
Accounts receivable, net of allowance 25,990,183 31,458,312 Accrued revenue 14,410,621 17,517,224
Market settlements receivable 269,012 107,318
Other receivables 230,485 208,000
Prepaid expenses 2,378,236 2,590,546
Deposits 726,084 4,232,419
Restricted cash 4,000,216 4,500,000
Total current assets 206,813,185 220,538,554
Noncurrent assets
Capital assets, net of depreciation 316,766 119,175
Deposits 45,330 145,130
Total noncurrent assets 362,096 264,305
Total assets 207,175,281 220,802,859
Current liabilities
Accrued cost of electricity 30,827,091 36,744,837
Accounts payable 1,537,376 1,333,121
Other accrued liabilities 642,043 425,732
User taxes and energy surcharges due to other governments 1,055,035 1,155,781 Total current liabilities 34,061,545 39,659,471
Noncurrent liabilities
Supplier security deposits 7,031,250 -
Total liabilities 41,092,795 39,659,471
Investment in capital assets 316,766 119,175
Restricted for security collateral 4,000,216 4,500,000
Unrestricted 161,765,504 176,524,213
Total net position $ 166,082,486 $ 181,143,388

LIABILITIES

NET POSITION
ASSETS
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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

STATEMENTS OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
The accompanying notes are an integral part of these financial statements. 12 2021 2020

OPERATING REVENUES
Electricity sales, net $ 241,484,417 $ 295,515,259
GreenPrime electricity premium 1,014,531 1,315,254
Other income 101,219 213,207
Total operating revenues 242,600,167 297,043,720

OPERATING EXPENSES
Cost of electricity 238,586,555 244,925,916
Contract services 9,490,474 8,970,429
Staff compensation and benefits 5,474,124 4,603,241
General and administration 4,109,299 1,722,054
Depreciation 87,651 52,979
Total operating expenses 257,748,103 260,274,619
Operating income (loss) (15,147,936) 36,769,101

NONOPERATING REVENUES (EXPENSES)
Interest income 273,985 1,729,841
Financing costs (186,951) (350,511)
Nonoperating revenues, net 87,034 1,379,330
CHANGE IN NET POSITION (15,060,902) 38,148,431
Net position at beginning of year 181,143,388 142,994,957 Net position at end of year $ 166,082,486 $ 181,143,388 Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
The accompanying notes are an integral part of these financial statements. 13 2021 2020

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 255,739,767 $ 303,275,935
Other operating receipts 13,609,316 3,433,790
Payments to suppliers for electricity (247,219,228) (247,069,273) Payments for other goods and services (13,523,208) (10,511,456) Payments for staff compensation and benefits (5,247,813) (4,542,701) Payments of taxes and surcharges to other governments (4,766,832) (5,640,255) Net cash provided (used) by operating activities (1,407,998) 38,946,040

CASH FLOWS FROM NON-CAPITAL

FINANCING ACTIVITIES
Finance costs paid (186,951) (285,301)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments to acquire capital assets (295,207) (14,151)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 273,985 1,729,841
Net change in cash and cash equivalents (1,616,171) 40,376,429 Cash and cash equivalents at beginning of year 164,424,735 124,048,306 Cash and cash equivalents at end of year $ 162,808,564 $ 164,424,735 Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) $ 158,808,348 $ 159,924,735 Restricted cash 4,000,216 4,500,000
Cash and cash equivalents $ 162,808,564 $ 164,424,735
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Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
The accompanying notes are an integral part of these financial statements. 14 2021 2020
Operating income (loss) $ (15,147,936) $ 36,769,101
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation expense 87,651 52,979
Revenue adjusted for uncollectible accounts 1,100,000 - (Increase) decrease in:

Accounts receivable 4,368,129 (1,181,498)
Accrued revenue 3,106,604 2,054,876
Market settlements receivable (161,694) 59,339
Other receivables (22,485) (190,100)
Prepaid expenses 212,310 (1,321,841)
Current deposits 3,606,134 (1,987,933)
Increase (decrease) in:

Accrued cost of electricity (5,917,746) 4,612,528
Accounts payable 214,220 377,109
Other accrued liabilities 216,311 (186,990)
User taxes and energy surcharges due to other governments (100,746) (83,210) Supplier security deposits 7,031,250 (28,320)
Net cash provided (used) by operating activities $ (1,407,998) $ 38,946,040

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
15 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY
Silicon Valley Clean Energy Authority (SVCE) is a Joint Powers Authority created on March 31, 2016. As of September 30, 2021, parties to its Joint Powers Agreement consist of the following local governments:

Unincorporated areas of Santa Clara County Milpitas
Campbell Monte Sereno
Cupertino Morgan Hill
Gilroy Mountain View
Los Altos Saratoga
Los Altos Hills Sunnyvale
Los Gatos
SVCE is separate from and derives no financial support from its members. SVCE is governed by a Board of Directors whose membership is composed of elected officials representing the member governments.

SVCE was formed to study, promote, conduct, operate, and manage energy and energy-related climate change programs, and to exercise all other powers necessary and incidental to accomplishing these objectives. A core function of SVCE is to provide electric service that includes the use of renewable sources under the Community Choice Aggregation Program under California Public Utilities Code Section 366.2.

SVCE began its energy delivery operations in April 2017. Electricity is acquired from commercial and municipal suppliers and delivered through existing physical infrastructure and equipment managed by Pacific Gas and Electric Company (PG&E).

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
16 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

BASIS OF ACCOUNTING
SVCE’s financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements.

SVCE’s operations are accounted for as a governmental enterprise fund and are reported using the economic resources measurement focus and the accrual basis of accounting – similar to business enterprises. Accordingly, revenues are recognized when they are earned, and expenses are recognized at the time liabilities are incurred. Enterprise fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Reported net position is segregated into three categories – investment in capital assets, restricted and unrestricted.

When both restricted and unrestricted resources are available for use, it is SVCE’s policy to use restricted resources first, then unrestricted resources as they are needed.

CASH AND CASH EQUIVALENTS
For purpose of the Statements of Cash Flows, SVCE defines cash and cash equivalents to include cash on hand and demand deposits. SVCE has cash that is restricted under various security agreements. This is reported as restricted cash on the Statements of Net Position and the Statements of Cash Flows.

DEPOSITS
Various energy contracts entered into by SVCE require SVCE to provide a supplier with a security deposit. These deposits are generally held for the term of the contract. Deposits are classified as current or noncurrent assets depending on the length of time the deposits will be held. While these energy contract related deposits make up the majority of this item, other components of deposits include those for regulatory and other operating purposes.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
17 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

CAPITAL ASSETS AND DEPRECIATION
SVCE’s policy is to capitalize furniture and equipment valued over $1,000 that is expected to be in service for over one year. Depreciation is computed according to the straight-line method over estimated useful lives of three years for electronic equipment, five years for automobiles and seven years for furniture and leasehold improvements. SVCE does not own any electric generation assets.

NET POSITION
Net position is presented in the following components:

Investment in capital assets: This component of net position consists of capital assets, net of accumulated depreciation and reduced by outstanding borrowings that are attributable to the acquisition, construction, or improvement of those assets. SVCE did not have any outstanding borrowings as of September 30, 2021 or 2020.

Restricted: This component of net position consists of constraints placed on net asset use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation.

Unrestricted: This component of net position consists of net position that does not meet the definition of “investment in capital assets” or “restricted”.

OPERATING AND NON-OPERATING REVENUE
Revenue from the sale of electricity to customers is considered operating revenue. Interest income is considered non-operating revenue.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
18 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

REVENUE RECOGNITION
SVCE recognizes revenue on the accrual basis. This includes invoices issued to customers during the period and electricity estimated to have been delivered, but not yet billed. Management estimates that a portion of the billed amounts will be uncollectible. Accordingly, an allowance for uncollectible accounts has been recorded. Revenue is presented net of estimated uncollectible charges.

OPERATING AND NONOPERATING EXPENSES
Operating expenses include the costs of electricity and services, administrative expenses, and depreciation on capital assets. Expenses not meeting this definition are reported as nonoperating expenses.

ELECTRICAL POWER PURCHASED
During the normal course of business SVCE purchases electrical power from numerous suppliers.

Electricity costs include the cost of energy and capacity arising from bilateral contracts with energy suppliers as well as generation credits, and load and other charges arising from SVCE’s participation in the California Independent System Operator’s (CAISO) centralized market. The cost of electricity and capacity is recognized as “Cost of Electricity” in the Statements of Revenues, Expenses and Changes in Net Position.

To comply with the State of California’s Renewable Portfolio Standards (RPS) and self-imposed benchmarks, SVCE acquires RPS eligible renewable energy evidenced by Renewable Energy Certificates (Certificates) recognized by the Western Renewable Energy Generation Information System (WREGIS). SVCE obtains Certificates with the intent to retire them and does not sell or build surpluses of Certificates with a profit motive. An expense is recognized at the point that the cost of the Certificate is due and payable to the supplier.

SVCE purchases capacity commitments from qualifying generators to comply with the California Energy Commission’s Resource Adequacy Program. The goals of the Resource Adequacy Program are to provide sufficient resources to CAISO to ensure the safe and reliable operation of the grid in real-time and to provide appropriate incentives for the siting and construction of new resources needed for reliability in the future.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
19 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

STAFFING COSTS
SVCE pays employees bi-weekly and fully pays its obligation for health benefits and contributions to its defined contribution retirement plan as they come due. SVCE is not obligated to provide post-employment healthcare or other fringe benefits and, accordingly, no related liability is recorded in these financial statements. SVCE provides compensated time off, and the related liability is recorded in these financial statements.

INCOME TAXES
SVCE is a Joint Powers Authority under the provision of the California Government Code. As such it is not subject to federal or state income or franchise taxes.

ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

RECLASSIFICATIONS
Certain amounts in the prior-year financial statements have been reclassified for comparative purposes to conform to the presentation of the current-year financial statements. These reclassifications did not result in any change in previously reported net position or change in net position.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
20 2. CASH AND CASH EQUIVALENTS
SVCE maintains its cash in interest and non-interest-bearing accounts. SVCE’s deposits are subject to California Government Code Section 16521 which requires banks to collateralize public funds in excess of the Federal Deposit Insurance Corporation limit of $250,000 by 110%.

SVCE monitors its risk exposure on an ongoing basis. SVCE’s investment policy permits the investment of funds in depository accounts, certificates of deposit, and the California Local Agency Investment Funds (LAIF). As of September 30, 2021, all of SVCE’s cash and cash equivalents were held in depository accounts.

At the end of each year, SVCE had restricted cash that was held as collateral for its bank line of credit, as well as collateral held in accordance with certain security agreements with suppliers.

3. ACCOUNTS RECEIVABLE AND ACCRUED REVENUE
Accounts receivable were as follows as of September 30:
2021 2020
Accounts receivable from customers 28,590,183 $ $ 32,958,312 Allowance for uncollectible accounts (2,600,000) (1,500,000) Net accounts receivable 25,990,183 $ $ 31,458,312
The majority of account collections will occur within the first few months following customer invoicing. SVCE estimates that a portion of the billed accounts will not be collected. SVCE continues collection efforts on accounts in excess of de minimis balances regardless of the age of the account. Although collection success generally decreases with the age of the receivable, SVCE continues to be successful in collecting older accounts. The allowance for uncollectible accounts at the end of a period includes amounts billed during the current and prior fiscal years and is adjusted for write-offs.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
21 4. MARKET SETTLEMENTS RECEIVABLE
SVCE receives generation scheduling and other services from a scheduling coordinator registered with CAISO. Energy settlements due from the scheduling coordinator were approximately $269,000 and $107,000 as of September 30, 2021 and 2020, respectively.

5. CAPITAL ASSETS
Capital asset activity for the years ended September 30, 2021 and 2020 was as follows:

Furniture &
Equipment
Leasehold
Improvements
Accumulated
Depreciation Total
245,351 $ 5,263 $ (102,576) $ 148,038
24,116 (52,979) - (28,863)
269,467 5,263 (155,555) 119,175
212,629 72,613 (87,651) 197,591
482,096 $ 77,876 $ (243,206) $ 316,766
Balances at September 30, 2019 $
Additions
Balances at September 30, 2020
Additions
Balances at September 30, 2021 $
As of September 30, 2021 and 2020, SVCE had a bank line of credit in the amount of $35,000,000 to provide additional liquidity for operations as needed. The line of credit matures in October 2022.

As of September 30, 2021, SVCE had not drawn any cash proceeds on the line of credit. However, the line of credit was used to issue Letters of Credit to energy suppliers which totaled approximately $2,682,000. These Letters of Credit reduce the available balance on the revolving line of credit.

6. DEBT
Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
22 7. DEFINED CONTRIBUTION RETIREMENT PLAN
SVCE provides retirement benefits through the Silicon Valley Clean Energy Authority Public Agency Retirement System Defined Contribution Plan (Plan). The Plan is a defined contribution 401(a) Retirement Plan established to provide benefits at retirement to employees of certain qualified employers admitted by the Plan. The Plan is administered by the Public Agency Retirement System (PARS). At September 30, 2021 and 2020, SVCE had 27 and 25 plan participants, respectively. SVCE is required to contribute up to 10% of covered payroll as a match to required employee contributions. SVCE contributed approximately $414,000 and $413,000 during the years ended September 30, 2021 and 2020, respectively. Plan provisions and contribution requirements as they apply to SVCE are established and may be amended by the Board of Directors.

8. RISK MANAGEMENT
SVCE is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; and errors and omissions. During the year, SVCE purchased insurance policies from investment-grade commercial carriers to mitigate risks that include those associated with earthquakes, theft, general liability, errors and omissions, and property damage. SVCE has general liability coverage of $2,000,000 with a deductible of $500.

SVCE maintains risk management policies, procedures and systems that help mitigate credit, liquidity, market, operating, regulatory and other risks that arise from participation in the California energy market.

Credit guidelines include a preference for transacting with investment-grade counterparties, evaluating counterparties’ financial condition and assigning credit limits as applicable. These credit limits are established based on risk and return considerations under terms customarily available in the industry. In addition, SVCE enters into netting arrangements whenever possible and, where appropriate, obtains collateral and other performance assurances from counterparties.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
23 9. PURCHASE COMMITMENTS

POWER AND ELECTRIC CAPACITY
In the ordinary course of business, SVCE enters into various power purchase agreements to acquire renewable and other energy and electric capacity. The price and volume of purchased power may be fixed or variable. Variable pricing is generally based on the market price of either natural gas or electricity at the date of delivery. Variable volume is generally associated with contracts to purchase energy from as-available resources such as solar, wind and hydro-electric facilities.

SVCE enters into power purchase agreements in order to comply with state law and voluntary targets for renewable and greenhouse gas (GHG) free products and to ensure stable and competitive electric rates for its customers.

The following table represents the expected, undiscounted, contractual obligations outstanding as of September 30, 2021:

Years ending September 30,
2022 235,000,000 $
2023 165,000,000
2024 134,000,000
2025 109,000,000
2026 103,000,000
2027-2043 1,077,000,000
Total 1,823,000,000 $
As of September 30, 2021, SVCE had non-cancelable contractual commitments to professional service providers through December 2024 for services yet to be performed. Fees associated with these contracts are based on volumetric activity and are expected to be $10.3 million.

Item 2
Attachment 1

SILICON VALLEY CLEAN ENERGY AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
24 10. OPERATING LEASE
In December 2019 SVCE amended its non-cancelable lease for its office premises, extending the lease through June 30, 2025.

Rental expense for SVCE’s office space was $453,000 and $395,000 for the years ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, future minimum lease payments under the lease are as follows:

Years ending September 30,
2022 492,693 $
2023 507,480
2024 522,705
2025 400,770
Total 1,923,648 $

11. FUTURE GASB PRONOUNCEMENTS
The requirements of the following GASB Statements are effective for future fiscal years ending after September 30, 2021:

GASB has approved GASB Statement No. 87, Leases, GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, GASB Statement No. 96, Subscription-Based Information Technology Arrangements; and GASB Statement No. 97, Certain Component Unit Criteria and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. Management is analyzing its activity to determine the effect of the new guidance on its operating results and financial condition.

Item 2
Attachment 1
333 W El Camino Real, Suite 330 | Sunnyvale, CA 94087 | 1-844-474-SVCE (7823) | SVCleanEnergy.org Campbell | Cupertino | Gilroy | Los Altos | Los Altos Hills | Los Gatos | Milpitas | Monte Sereno | Morgan Hill | Mountain View | Saratoga | Sunnyvale | Unincorporated Santa Clara County March 4, 2022
Pisenti & Brinker LLP
3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
This representation letter is provided in connection with your audits of the basic financial statements of Silicon Valley Clean Energy Authority (SVCE) as of and for the years ended September 30, 2021 and 2020 for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.

We confirm, to the best of our knowledge and belief, that as of March 4, 2022:

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated May 14, 2020, for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP.

2. We acknowledge our responsibility for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

3. We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud.

4. We have complied with all aspects of laws, regulations and provisions of contracts and agreements that would have a material effect on the financial statements in the event of noncompliance. In connection therewith, we specifically represent that we are responsible for determining that we are not subject to the Item 2
Attachment 2
, , , SILICON VALLEY
~ CLEAN ENERGY
333 W El Camino Real, Suite 330 | Sunnyvale, CA 94087 | 1-844-474-SVCE (7823) | SVCleanEnergy.org Campbell | Cupertino | Gilroy | Los Altos | Los Altos Hills | Los Gatos | Milpitas | Monte Sereno | Morgan Hill | Mountain View | Saratoga | Sunnyvale | Unincorporated Santa Clara County requires of the Single Audit Act because we have not received, expended or otherwise been the beneficiary of the required amount of federal awards during the period of this audit.

5. We have reviewed, approved, and taken responsibility for the financial statements and related notes.

6. We have a process to track the status of audit findings and recommendations.

7. Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take.

8. Related-party transactions have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP.

9. All events subsequent to the date of the financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed.

10. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.

11. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, that is not disclosed in the financial statements.

12. Deposit and investment risks have been properly and fully disclosed.

13. Capital assets are properly capitalized and depreciated.

14. We have complied with all aspects of laws, regulations and provisions of contracts and agreements that would have a material effect on the financial statements in the event of noncompliance. In connection therewith, we specifically represent that we are responsible for determining that we are not subject to the requires of the Single Audit Act because we have not received, expended or otherwise been the beneficiary of the required amount of federal awards during the period of this audit.We have no knowledge of any uncorrected misstatements in the financial statements.

15. We have no knowledge of any uncorrected misstatements in the financial statements.

Information Provided

16. We have provided you with:
a. Access to all information of which we are aware that is relevant to the preparation and fair presentation of the basic financial statements such as records, documentation and other matters. b. Additional information that you have requested from us for the purpose of the audits. c. Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.
d. Minutes of the meetings of the governing boards and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared.

17. All transactions have been recorded in the accounting records and are reflected in the basic financial statements.

18. We have disclosed to you the results of our assessment of risk that the basic financial statements may be materially misstated as a result of fraud.

19. It is our responsibility to establish and maintain internal control over financial reporting. One of the components of internal control is risk assessment. We hereby represent that our risk assessment process includes identification and assessment of risks of material misstatement due to fraud. We have shared with you our fraud risk assessment, including a description of the risks, our assessment of the magnitude and likelihood of misstatements arising from those risks, and the controls that we have designed and implemented in response to those risks.

20. We have no knowledge of allegations of fraud or suspected fraud affecting the entity’s basic financial statements involving:
a. Management.
b. Employees who have significant roles in internal control. c. Others where the fraud could have a material effect on the basic financial statements.

21. We have no knowledge of any allegations of fraud or suspected fraud affecting SVCE’s basic financial statements received in communications from employees, former employees, analysts, regulators, short sellers or others.

22. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations.

23. We are not aware of any pending or threatened litigation and claims whose effects should be considered when preparing the financial statements.

24. We have disclosed to you the identity of the entity’s related parties and all the related-party relationships and transactions of which we are aware.

25. We are aware of no significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect SVCE’s ability to record, process, summarize and report financial data.

26. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.

27. We have disclosed to you all guarantees, whether written or oral, under which SVCE is contingently liable.

We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB-62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year. Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year.

28. We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds.

29. During the course of your audits, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us.

30. There are no:
a. Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations. b. Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62.
c. Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by GASB-62.

31. SVCE has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed to you.

Supplementary Information

32. With respect to the required supplementary information accompanying the financial statements:
a. We acknowledge our responsibility for the presentation of such information.

GAAP.
c. The methods of measurement and presentation have not changed from those used in the prior period.

33. With respect to the Management’s Discussion and Analysis presented as required by the Government Accounting Standards Board to supplement the financial statements:
a. We acknowledge our responsibility for the presentation of such required supplementary information. b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in the prior period.

Amrit Singh, CFO and Director of Administrative Services Mike Maher, Maher Accountancy, Accountant
Item 2
Attachment 2
r~'\ SILICON VALLEY ~ CLEAN ENERGY
A.

SANTA ROSA  PETALUMA

RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. 3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
(707) 542‐3343  Office
(707) 527‐5608  Fax
pbllp.com
March 4, 2022
To Management and the Board of Directors
Silicon Valley Clean Energy Authority
333 W. El Camino Real, #330
Sunnyvale, California
In planning and performing our audits of the financial statements of Silicon Valley Clean Energy Authority (SVCE) as of and for the years ended September 30, 2021 and 2020, in accordance with auditing standards generally accepted in the United States of America, we considered SVCE’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of SVCE’s internal control.

Accordingly, we do not express an opinion on the effectiveness of SVCE’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A deficiency in design exists when (a) a control necessary to meet the control objective is missing, or (b) an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or competence to perform the control effectively.

A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, we did not identify any deficiencies in internal control during our audits that we consider to be material weaknesses or significant deficiencies. However, material weaknesses or significant deficiencies may exist that were not identified.

This communication is intended solely for the information and use of management and the Board of Directors and is not intended to be, and should not be, used by anyone other than these specified parties.

PISENTI & BRINKER LLP
Brett Bradford
Partner
Item 2
Attachment 3
• • p Is E NT I & BR I N I( ER LLP
Certified Public Accountants & Adviso rs
RSMlrs'Am~";;;; RS~A

Page 1 of 3 ends

Staff Report – Item 3
Item 3: CEO Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Girish Balachandran, CEO
Date: 3/9/2022
REPORT
SVCE Staff Update
Tony Eulo joined the SVCE team on February 14, 2022 as Senior Manager of Public Sector Services. Tony will be working directly with SVCE member jurisdictions and others on advancing decarbonization programs, projects, and policies. Prior to joining SVCE, Tony worked for decades at the City of Morgan Hill on a wide variety of environmental programs, administrative issues, and utility services. Tony graduated from UC Davis with a B.S. degree in Environmental Policy Analysis and Planning.

Personnel Officer Update
Under the Personnel Authority granted to the CEO, SVCE has conducted interviews for two positions: a Manager position within the DGI group, and a coordinator position within the policy group.

CEO Agreements Executed
The following agreements have been executed by the CEO, consistent with the authority delegated by the Board:
1) CC Power, Amendment: Website design and marketing services, additional $7,500 added, new not to exceed $27,300, extends time to 12/31/22
2) Make Media Studios, Amendment: Photography and Videography Services, additional $18,000 added, new not to exceed $98,000
3) Keyes & Fox, Amendment: Legislative Support & Legal Representation, money redistributed amongst tasks
4) ADM, Amendment: Evaluation, Measurement and Verification Services, no changes to agreement cost or duration (new agreement signed)
5) Shute Mihaly & Weinberger, Agreement: Outside Counsel for Supplier Diversity, $30,000 split with four CCAs (SVCE portion $7,500).
6) Management Partners, Inc., Amendment: Management consulting services, time extended to 6/30/22 7) SMUD, Task Order: L1/L2 Multifamily Incentive Program Support, not to exceed $57,750. 8) Utility API, Amendment: Energy Data Exchange Platform Pilot, not to exceed $397,500, extends date to April 15, 2022.
9) ZappyRide, Agreement: Build and Launch EV Platform, not to exceed $30,000, 2/28/22 – 2/27/23.

Item 3
IA'\ SILICON VALLEY ~ CLEAN ENERGY

Page 2 of 3 ends

CEO Power Supply Agreements Executed
Counterparty Name Execution/Effective Date Transaction Type Product Start Date End Date Notional Value Central Coast Community Energy 2/15/2022 Sale Resource Adequacy 4/1/2022 4/30/2022 $142,687.50 Central Coast Community Energy 12/12/2021 Purchase Carbon Free Energy 1/1/2022 12/31/2022 $1,164,000 PG&E 2/14/2022 Purchase PCC-1 Renewable Energy 1/1/2022 12/31/2022 $2,800,590 These agreements are included in the Board packet as Appendix A.

Item 3
/ /j' SILICON VALLEY ~ CLEAN ENERGY

Page 3 of 3 ends

Presentations & Relevant Meetings Attended by CEO
- Participated in CalCCA Monthly board, executive, and legislative meetings; - Long-Duration Storage Super-JPA and RFO: Updates to various CCAs, CPUC, CAISO and legislative staff - CC Power Board Special Meeting, February 25th, report included on the Consent Calendar

ATTACHMENTS

1. Decarb & Grid Innovation Programs Update, March 2022

2. Account Services & Community Relations Update, March 2022

3. Legislative and Regulatory Update, March 2022

4. Agenda Look Ahead, March – July 2022

5. Board Action Requested, March 2022 Update
Item 3
IA'\ SILICON VALLEY ~ CLEAN ENERGY
7/21 8/21 9/21 10/21 11/21 12/21 1/22
1,000
750
500
250
0 Cumulative HPWH Installations
= 25 Single-Family Projects
= 1 Multi-Family Property Project
(Number of households varies)
Goal: 220 HPWH by 2022
Funding: $1.15M
MARCH 2022
Heat Pump Water Heater
Provide incentives for electric heat pump water heaters and service panel upgrades to residents using gas or
electric resistance heaters
= 10 Completed Installations
Single-Family Multi-Family
Lights On Silicon Valley
Provide incentives for enrolling solar and battery
systems in the SVCE grid services program
750 Single-Family + 5
Multi-Family Projects
Completed by 2023
Goal:

Funding: ≤ $7.4M
Households Supported
Cumulative Service Panel Upgrades = 1 CARE/FERA Installation 7/19
9/19
11/19
1/20
3/20
5/20
7/20
9/20
11/20
1/213/217/219/21
11/21
1/22
300
200
100
0 DECARBONIZATION & GRID INNOVATION

PROGRAMS UPDATE
2/22
Item 3
Attachment 1
••••••
• • • • • •
• • • • • •
• • • • • • +++++++
. ' • +
• •
11- 11' 11- 11- 11- 11- 11- 11- 11- 11-
11- 11- 11- 11- 11- 11- 11- 11- 11- 11-
11- 11- 11- 11- 11- 11- 11- 11- 11- 11-
11111111
• I
CALeVIP
Level 2 DCFC
$6M
$4M
$2M
$0M
Reserved
9/21 10/21 11/21 12/21 1/21 2/21
150
100
50 0
ONGOING METRICS MARCH 2022
Provide incentives for electric vehicle (EV) chargers
as part of a regional program
= 25 Level 2 Installations
Goal: 150 Participants (Phase 1)
Funding: $1.5M
Participants Installations
FutureFit Fundamentals
Provide financial relief to contractors by
expanding their knowledge of electrification
technologies
1K Level 2 + 85 DC Fast
Chargers by 2023
Goal:

Funding: $11.58M
= 5 Participants Complete Course
= 5 DCFC Installations
Waitlisted
Installed
To be released in
future years
$4.08M*
$6M
$1.5M
*$1.5M of the reserrved funding is undering a final review and validation.

Item 3
Attachment 1
■
■
•
■
•
Jwjwjwjwjwjwjwjwjwjw
Jwjwjwjwjwjwjwjwjwjw
Jwjwjwjwjwjwjwjwjwjw
Jwjwjwjwjwjwjwjwjwjw

IV IV IV IV IV IV IV IV IV

IV IV IV IV IV IV IV IV
···i·i·i &: &t &t &: &t
&: &t &t &: &t
&: &t &t &: &t
&: &t &t &: &t
&: &t &t &t &t
Streamlining Community-Wide Electrification
Building Decarb Joint Action Plan
Resilience at Community Facilities
CRCR Bill Relief
FutureFit Homes & Buildings
Regional Coordination
Click for More Information Active In Development Complete C&I Clean Power Offerings
Reach Codes
All-Electric Showcase Grants
FutureFit Heat Pump Water Heater
FutureFit Fundamentals
Accessible Financing
Local Policy to Decarbonize Existing Buildings
Feasibility Assessment - Natural Gas Phase Out By 2045
EV Infrastructure Strategy & Plan
CA Electric Vehicle Infrastructure Project (CALeVIP)
Priority Zone DCFC
MUD Technical Assistance
Fleet Electrification Grants
SV Transportation Electrification Clearinghouse (SVTEC) Regional Recognition
Virtual Power Plant
Customer Resource Center (eHub)
Community Engagement Grants
Innovation Partners
Innovation Onramp
UtilityAPI
EVmatch
Ecology Action
ev.energy
Span.IO
Outthink
Electron
Stanford
PROGRAMS AT A GLANCE MARCH 2022
POWER
SUPPLY
GRID

INTEGRATION

EDUCATION

OUTREACH
Extensible Energy / Community Energy Labs
BUILT

ENVIRONMENT

MOBILITY

INNOVATION
NeoCharge
XeroHome
Item 3
Attachment 1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
• • • • • • • • • • •
Spring 2022 is turning out to be the much-anticipated return of outdoor festivals. SVCE is excited to get back to connecting with customers in person to share our electrification resources.

March 8 1 – 2 PM Cupertino High School Environmental
Club –
Cupertino High School
March 13 4 PM Congregation Beth Am – Los Altos Hills
March 28 6 – 7:30 PM Climate Reality Silicon Valley Chapter –Virtual April 9 10 – 4 PM Saratoga Blossom Festival –Saratoga Civic Center April 23 11 AM – 3 PM
Cupertino Earth & Arbor Day & SVCE 5-
Year Anniversary Cupertino Library
Item 3
Attachment 2
Account Services & Comm. Relations Update, March 2022
Date Time Description Location
presentation
presentation
presentation
sponsorship and tabling EV Showcase Event in Los Altos
- sponsoring, tabling
& presenting
1 April 23 11 AM – 3 PM Mountain View Earth Day – Mountain View Senior Center
April 23 11 AM – 3 PM
Milpitas Resilience Project Ribbon Cutting – Milpitas Senior and Community Center
April 24 10 AM – 3 PM Los Gatos Earth Day – Los Gatos
April 24 10 AM – 3 PM AAUW Morgan Hill Community Earth Day Festival -
Morgan Hill Community
Outdoor Lawn and
Amphitheater
Item 3
Attachment 2
Account Services & Comm. Relations Update, March 2022

1. Outreach Events & Sponsorships Continued
Date Time Description Location
sponsoring and
tabling
presenting and tabling
tabling
tabling
2 Residential 96.37%

96.38%
Commercial 96.44%
Item 3
Attachment 2
Account Services & Comm. Relations Update, March 2022
rA, s1L1coN VALLEY ~ CLEAN ENERGY 3
The following agenda items were presented and discussed:
• SVCE New Staff Introductions
•‘Doubling Down’ on Decarb Programs
• Reach Codes 2.0
• Rate Update – Board action and bill relief for CARE/FERA customers Item 3
Attachment 2
Account Services & Comm. Relations Update, March 2022

3. Member Agency Working Group January Update
The recent MAWG meeting was held virtually on February 24, 2022, and was attended by 10 different agencies and organizations with a total of 22 participants.
rA, s1L1coN VALLEY ~ CLEAN ENERGY 4
• $20,000 in Scholarships Available Through the EmPower Silicon Valley Youth Short-Film Competition,
• Controlled EV-Charging Pilot Sees Successes, Emissions Challenges • Students Invited To Apply For Local $20K Scholarship
• Santa Clara EV Charging Deal Sets Trend for Multi-Unit Residential Deployment • EmPowering Event, Los Gatos Community Briefs
• ev.energy extends its Series A to $12.8m with ArcTern Ventures Item 3
Attachment 2
Account Services & Comm. Relations Update, March 2022
Press Release, 02-10-22
Santa Clara County O @SCCgov • Feb 18
Attention high school students!
@SVCleanEnergy invites you to share your stories about our clean energy future for S20k in scholarship awards. Learn more about the EmPower Silicon Valley Youth Shon-FIim Competition at bit.ly/empower-sv Share your stories
about our clean
energy future
0 3 t_"l 3 • 5
-----------------------~ Energy News Data, 02-04-22
--------------------~' _C_a_m_,_p_b_e~/1, Cupertino, Gilroy, Los Gatos, Patch.com, 02-17-22
_____________________________ Energy News Data, 02-18-22 The Mercury News, 02-20-22
-------------------------------~ AP News, 02-24-22
5 • Subtitle
New SV Clean Energy
PowerPoint Template
Item 3
Attachment 3
Leg/Reg Update, March 2022
Item 3
Attachment 3
Leg/Reg Update, March 2022
Regulatory Update:

1. Electricity Planning and Procurement

1. Integrated Resource Planning (IRP)

2. Resource Adequacy (RA)
Legislative Update:

1. Early Bill Positions

1. AB 1814 (Grayson) - Support

2. SB 833 (Dodd) - Support

3. SB 1112 (Becker) - Pending Support

2. Reviewing Legislation

1. SB 881 (Min)

2. SB 1158 (Becker)

3. Legislative Timeline
2 Item 3
Attachment 3
Leg/Reg Update, March 2022
•
•
•
•
•
Item 3
Attachment 3
Leg/Reg Update, March 2022
Integrated Resource Planning (/RP) is a process to ensure that the electricity sector is on track to meet its portion of the State's GHG reduction while maintaining a reliable system.

CPUC adopted new "Preferred System Plan"
35 million metric ton CO2/yr target by 2032 (previously 48 MMT by 2030) Builds N40GW of new capacity by 2032 - a N35% increase in total CAISO capacity in just a decade Adoption of plan does not require any additional procurement by LSEs at this time Plan will be used as basis for inputs and assumptions for next IRP cycle CPUC expected to kick off discussions on how to improve procurement process, including more equitable allocation of procurement orders which may be for specific resources or GHG-free purposes in the future Next steps: CPUC will release full set of IRP materials by June 15th, LSEs will file individual IRPs by November 1st, 2022.
4 •
•
•
Item 3
Attachment 3
Leg/Reg Update, March 2022
© RA Program: Reform of the RA Program is underway
Resource Adequacy (RA) is a program developed to ensure that there will be sufficient resources available to serve electric demand under most conditions.

Resource Adequacy reform
Final workshop report from RA Reform discussions was released February 28th .

Report provides more detailed descriptions of two primary "Slice-of-Day" proposals; one for 24-hourly slices and one with two slices at peak and net peak hours SVCE has expressed support for the two-slice proposal due to its ease of implementation and concern the 24-hour proposal will result in significant over-procurement relative to reliability needs PG&E and SCE, among others, support the 24-hourly slice proposal Next steps: A proposed decision is expected in Q2 2022. CPUC originally aimed for implementation by 2024, however CalCCA and others have suggested a delay to at least 2025.
5 •
•
•
Item 3
Attachment 3
Leg/Reg Update, March 2022
CPUC proceeding to pro-actively develop rules and regulations for a POLR should a CCA or ESP fail
POLR
Second workshop on POLR occurred Monday, 3/7.

Proceeding intended to insure cost recovery and continuity of service and reliability while ensuring LSEs stay on track for meeting CA's clean energy goals should an LSE fail IOUs - the current default POLR - would like significant changes to Financial Security Requirements ("FSR") which would increase CCA costs
Simultaneously, legislation (SB 1287) is under consideration which may increase FSR Next steps: Initial comments will be filed March 28th
6 Item 3
Attachment 3
Leg/Reg Update, March 2022
Item 3
Attachment 3
Leg/Reg Update, March 2022
SVCE is taking early action on the following bills:

Bill Summary
AB 1814 (Grayson) Adds CCAs as eligible program
administrators for CPUC's
Transportation Electrification Program
SB 833 (Dodd) Creates grant program for local
government community resiliency
plans and to expedite permitting for
distributed energy resources.

SB 1112 (Becker) Creates statewide tariff on bill financing structure for decarbonization
investments.

SVCE Position
(Legislative Program
Policy)
Support
(Climate
Mitigation/Clean
Energy Funding)
Support
(Climate
Mitigation/Clean
Energy Funding)
Pending Support
(Fuel Switching and
Electrification)
Status
Assembly
Utilities and
Energy
Committee
Senate Energy,
Utilities, and
Communications
Committee
Senate Energy,
Utilities, and
Communications
Committee 8
Item 3
Attachment 3
Leg/Reg Update, March 2022
SVCE is actively reviewing the following bills:

Bill
SB 881 (Min)
SB 1158 (Becker)
Summary SVCE Position
(Legislative Program
Policy)
Allows the CPUC to require LSE Reviewing
procurement to "achieve a diverse,
balanced, and reliable statewide
portfolio." Allows the CPUC to assess
penalties and additional procurement.

Changes the Power Source Disclosure Reviewing
to require LSEs to report hourly
electricity purchases. Requires the
CPUC to assess whether each LSE's
annual GHG reporting demonstrates
"adequate progress" towards GHG
targets.

Status
Senate Energy,
Utilities, and
Communications
Committee
Senate, pending
committee
referral
9 •
•
•
•
•
•
•
•
•
•
•
•
Item 3
Attachment 3
Leg/Reg Update, March 2022
1/3: Legislature reconvenes
1/10: Governor submits budget
1/31: Deadline to move 2 year bills out of first house
2/18: Bill introduction deadline
4/29: Deadline for policy committees to move fiscal bills to fiscal committees 5/6: Deadline for nonfiscal bills to move to the floor
5/20: Deadline for fiscal committees to move bills to floor 5/27: Last day for bills to pass out of first house
6/15: Budget deadline
8/12: Fiscal Committees to move bills to floor
8/31: Last day for each house to pass bills
9/30: Governor deadline to sign bills
10 Item 3
Attachment 3
Leg/Reg Update, March 2022
,, .... ~.
-
SVCE Agenda Look-Ahead
MARCH 2022 APRIL 2022 MAY 2022 JUNE 2022 JULY 2022
Board of Directors, March 9: Board of Directors, April 13:

Consent:

Minutes
January 2022 Treasurer Report
Regular Calendar:

SVCE 5 year anniversary
Board of Directors, May 11:

Consent:

Minutes
February 2022 Treasurer Report
Regular Calendar:
eHub Year 1 Recap & Survey Results
Board of Directors, June 8:

Consent:

Minutes
March 2022 Treasurer Report
Regular Calendar:

TBD
No meeting
Executive Committee, March 25:

Discussion re: return to in-person meetings
Executive Committee, April 22:
eHub Year 1 Recap & Survey Results
Policy updates
Executive Committee, May 27:

TBD
Executive Committee, June 24:

TBD
No meeting
Finance & Administration Committee (Mar/Apr TBD)
Item 3
Attachment 4
SVCE Board Action Requested - March Update
Date Meeting Where Requested Request/Comment Comments Department 2/9/2022 Board Meeting Reinforce communication to customers regarding rate changes Staff added an on-bill message that goes on the generation page of PG&E bills, customers will see this when they get their March statement. Banners have been posted to our
rates webpages to alert customers to changes in rates as of March 1. There will also be a mention in our March
newsletter.

Account Services & Comm.

Relations
2/9/2022 Board Meeting
As clean power supply projects come online, will oil and gas prices fluctuate less (Dir. Willey)
Staff will consider this question from a strategic
standpoint and get back to Dir. Willey All
8/11/2021 Board Meeting
Power Supply Contract with the California Community Choice Financing Authority. Note: Under discussion, Director Wiley asked if it would be advantageous to have periodic check-ins to assure that the Board was satisfied with results. CEO Balachandran stated he would take that as an action item to the Finance Committee and bring it back to the Board for discussion. Staff is keeping this in mind as we plan for future agenda items for the Finance and Administration Committee Finance & Admin 5/12/2021 Board Meeting
Training request on how to manage a potential new working environment and check-in 6 months to 1 yr after implementation of a possible hybrid work structure Staff will keep this in mind as a policy is developed Executive 3/3/2021 Audit Committee SVCE liability insurance - is it a sufficient amount? (Alt. Dir. Wei) Staff will consider this when looking at overall risk
mitigation Finance & Admin
8/28/2020 Executive Committee
Policy check regarding duration of contracts before they go back out to bid (Dir. Gibbons)
Purchasing Policy does not currently have a formal
duration limit; will update Purchasing policy pending
discussion with CFO Finance & Admin
2/2/22
Item 3
Attachment 5

Page 1 of 4 ends

Staff Report – Item 4
Item 4: Approve the Mid-Year 2021-22 Adjusted Operating Budget From: Girish Balachandran, CEO
Prepared by: Amrit Singh, CFO and Director of Administrative Services Kevin Armstrong, Administrative Services Manager
Date: 3/9/2022

RECOMMENDATION
Staff recommends that the Board approve resolution 2022-09, approving the mid-year (FY) 2021-22 1 Adjusted Operating Budget that contributes $61.61 million to the reserves.

BACKGROUND
The SVCE FY21-22 (FY22) budget was adopted in September 2021. Since the adoption of the budget, and as discussed at the February 2022 Board meeting, PG&E generation rates were forecast to increase significantly along with a significant drop in PCIA. Based on the new PG&E generation and PCIA rates taking effect March 1, 2022, the overall SVCE revenue is forecast to increase from $339.1 million to $385.5 million. Relative to the FY22 budget assumptions, PG&E generation rates increased by about 21% and PCIA decreased by about 23%.

The Board-adopted Strategic Plan, Goal 13 (“Commit to maintaining a strong financial position”) has two measures:

Measure 1: Balanced budget that achieves cash reserve targets and maintains customer value Measure 2: Set balanced rates that maintain customer value and support SVCE’s financial stability At the February 2022 meeting, the Board engaged in robust discussions on balancing the strategic plan objectives. With the improved financial outlook, the Board evaluated allocating funds among the goals of providing customer discounts, increasing funding for the decarbonization programs, and building adequate reserves to withstand risks from extreme but plausible events that can create significant financial hardship for the organization. In balancing these objectives, the Board decided to:

1. Build reserves to withstand future adverse events

2. Set aside $17 million for decarbonization ‘double down’ programs

3. Provide $3 million in bill credit to lower-income customers

4. Maintain customer discount at 1% to PG&E generation rates The mid-year adjusted operating budget adopts the above direction from the Board.

ANALYSIS & DISCUSSION
The Table below provides a high-level summary of the recommended FY22 Adjusted Budget and compares it with the budget the Board adopted in September 2021. At the time the budget was adopted, we were expecting revenues to cover all expenses and to contribute $36.5 million to the reserves and now with the 1 The fiscal year 2021-22 started on October 1, 2021 and ends on September 30, 2022.

Item 4
/ A"\ SILICON VALLEY
~CLEAN ENERGY
Agenda Item: 4 Agenda Date: 3/9/2022

Page 2 of 4 ends

improved margins due to a lower PCIA and higher PG&E generation rates, the contribution to reserves is expected to increase to $61.6 million.

As shown in the chart below, the projected reserves of $238.7 million at the end of the current FY will provide for 294 days of cash on hand to fund operating expenses, above the target level of 230 days of cash on hand.

The projected reserve balance in the above chart includes the remaining balances in the Programs and the Customer Relief and Community Resiliency (CRCR) funds. The table below shows the remaining balances in these funds:

FY 2021-22 FY 2021-22

DESCRIPTION

APPROVED
BUDGET

ADJUSTED
BUDGET $ %
Energy Revenues 339,073 385,502 46,430 13.7%
Energy Expenses 273,561 274,979 1,418 0.5%
Operating Margin 65,511 110,523 45,012 68.7%
Operating Expenses 22,407 21,693 (714) -3.2%
Non-Operating Revenue (Expense) 310 310 0 0.0%
Balance Available for Reserves (before
Transfers) 43,415 89,141 45,726 105.3%
Annual Transfers and Other Expenses 6,931 7,531 600 8.7% Double Down Program Allocation 0 17,000 17,000 -
Customer Bill Relief 0 3,000 3,000 -
Final Reserve Contribution Balance $36,483 $61,609 $25,126 69% ($ in thousands)

VARIANCE
Item 4
$300,000
$250,000
$200,000
-0 "'
C:
..
"' 5 $150,000
f.
.E
.,, $100,000
$50,000
$0
Reserves - Before Double Down
•
.
.
.

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 MY2021-22
- Total Projected Ending Reserves - Target Reserves Maximum Reserves - Minimum Reserves Agenda Item: 4 Agenda Date: 3/9/2022

Page 3 of 4 ends

The reserve calculation includes the remaining balance in the Programs and CRCR funds because the expense is only recorded when incurred. If the remaining balance were to be spent, then the projected reserve balance would drop from $238.7 million to $209.7 million, providing 258 days of cash on hand.

The following is a discussion of the key drivers that contribute to the $25.1 million increase in the projected balance available for the reserves from the adopted budget to the mid-year update.

Energy Revenues
The Adjusted budget shows an increase in revenues of $46.4 million compared to the adopted budget. The biggest contributor to this growth in revenues – while maintaining the 1% customer rate discount to PG&E – is the March 2022 increase in PG&E’s (and subsequently SVCE’s) generation rates and the reduction in the PCIA.

The adopted budget anticipated a decrease in PCIA to occur (from 4.59 to 2.43 cents/kWh) based on PG&E’s ERRA forecast, and a 1.08 cents/kwh increase in PG&E’s generation rates for the fiscal year. This would have allowed SVCE to maintain rates competitive with PG&E, at a 1% discount, while contributing a much higher margin.

Since last September, the timing and magnitude of those changes to PG&E’s PCIA and generation rate have shifted significantly. The PCIA is now expected to decrease to 1.88 cents/kWh in March. With the 2.16 cents/kwh decrease already assumed in the budget, these two changes to the PCIA represent a 59% annualized decrease in PCIA for the year, versus the 47% decrease assumed in the budget.

In addition to the favorable decrease in PCIA, PG&E’s generation rates continued to show increases. The Adopted Budget projected a 12.03 cents/kwh generation rate, while the rates in effect March 1, 2022, increased to 14.53 cents/kwh rate.

This decrease in the PCIA and increase in PG&E generation rates relieves pressure on SVCE’s competitive position from both directions, allowing for both significant revenue growth, while maintaining a competitive 1% discount relative to PG&E.

The Adjusted budget continues to incorporate a reduction in revenues for potential customer write-offs, at a rate of 0.75% that amounts to about $2.9 million dollars, which is high by historical levels of about $0.4 million. SVCE could face large potential write-offs because of the large increases in the accounts receivable balances resulting from our customers facing COVID-19 related economic hardships. Blunting this impact are the $1.3 million in state funds being received through the California Arrearage Payment Program. This funding is expected to be received in mid- to late March.

Power Supply Expenses
Power supply expenses are expected to increase slightly by $1.42 million from the adopted budget due to higher market prices. The expected reduction in load by about 1% along with savings from PG&E allocation of carbon free attributes and savings from the Prepay transaction largely offsets the higher market prices. The Power Supply portfolio’s hedged position has increased from about 82% at the time the FY22 budget was FY 2021-22
($ in thousands)
Programs CRCR
Fund balance at beginning of period $5,838 $7,990
Transfer from Operating Fund $6,781
Nuclear Allocation $600
Double Down Program Allocation $17,000
Double down Customer Bill Relief $3,000
Available Funds $33,219 $7,990
Forecast Expenditures $8,582 $2,850
Fund balance at end of period $24,637 $5,140
Item 4
Agenda Item: 4 Agenda Date: 3/9/2022

Page 4 of 4 ends

created to about 95% of load. The COVID-related reduction in energy consumption created additional capacity within the Direct Access cap, making additional load eligible for Direct Access. We anticipate about 1% of load loss to Direct Access.

Operating Expenses
Operating expenses are slightly lower than the adopted budget by about $714,000 due largely to ongoing personnel vacancies. Eleven full-time positions are currently vacant, more than offsetting increases from the addition of a new Senior Manager of Public Sector Services position and an increase in the monthly contribution to employee health premiums from $1000 / month to $1200 / month. SVCE’s monthly contribution to employee health premiums has remained constant at $1000 / month since 2017 while health insurance costs have risen by 6% / year (34% cumulative increase) and recent benchmarking against other Bay Area CCAs has shown that our contribution lags our peers. A more thorough analysis and update to employee benefit amounts is planned for mid-2022, with any additional changes to be proposed and incorporated during the FY22-23 budget process.

Beyond personnel, there are only small changes in the professional services, marketing, and general & administrative budgets. Professional services costs are declining in the Decarbonization group, but increasing in Power Resources, for a net increase of $21,000. Marketing costs are declining by $11,000 due to a reduction in the eHub online promotions budget. And the General and Administrative budget is increasing by $12,000 to account for increased data subscription costs for the now-larger Power Resources team.

Non-Operating Revenues
Non-operating revenues are projected to remain flat, as interest rates continue to remain low.

Table of Organization
This Adjusted Operating Budget funds thirty-nine (39) full-time equivalent positions and seven (7) part-time positions, along with two external consultants and two Climate Corps fellows. As noted above, the only additional FTE position included in the budget is the Senior Manager of Public Sector Services, previously created under the authority granted to the Personnel Officer, and formally incorporated into the budget at this time. A current Table of Organization is included in the presentation accompanying this item, and as an Exhibit.

STRATEGIC PLAN
The recommendation supports all goals of the Board adopted Strategic Plan. Specifically, the recommendations strongly support Goal 13 - “Commit to maintaining a strong financial position” and the accompanying Measure “Balanced budget that achieves cash reserve targets and maintains customer value”.

ALTERNATIVE
Staff is open to suggestions from the Board.

FISCAL IMPACT
The FY 2021-22 Adjusted Operating Budget includes total revenues of $385.5 million and total expenses of $296.67 million resulting in an operating surplus of $89.14 million. Taking into account transfers and capital expenses, the Budget anticipates $61.6 million to contribute to reserves.

ATTACHMENTS

1. FY 2021-22 Adjusted Operating Budget

2. Current SVCE Table of Organization

3. Resolution 2022-09, Adopting the Mid-Year 2021-22 Adjusted Operating Budget Item 4

SILICON VALLEY CLEAN ENERGY
MY 2021-22 BUDGET WORKSHEET
($ in thousands)
FY 2021-22 FY 2021-22

DESCRIPTION

APPROVED
BUDGET

ADJUSTED
BUDGET $ %

ENERGY REVENUES
Energy Sales 338,603 384,498 45,894 13.6%
Green Prime 470 1,005 535 114.0%
TOTAL ENERGY REVENUES 339,073 385,502 46,430 13.7%

ENERGY EXPENSES
Power Supply 273,561 274,979 1,418 0.5%
OPERATING MARGIN 65,511 110,523 45,012 68.7%

OPERATING EXPENSES
Data Management 3,249 3,249 0 0.0%
PG&E Fees 1,450 1,450 0 0.0%
Salaries and Retirement 9,271 8,535 (736) -7.9%
Professional Services 5,648 5,669 21 0.4%
Marketing & Promotions 919 908 (11) -1.1%
Notifications 131 131 0 0.0%
Lease 525 525 0 0.0%
General & Administrative 1,213 1,225 12 1.0%
TOTAL OPERATING EXPENSES 22,407 21,693 (714) -3.2%
OPERATING INCOME (LOSS) 43,105 88,831 45,726 106.1%

NON-OPERATING REVENUES
Other Income 50 50 0 0.0%
Interest Income 300 300 0 0.0%
Grant Income 0 0 0 -
TOTAL NON-OPERATING REVENUES 350 350 0 0.0%

NON-OPERATING EXPENSES
Financing 40 40 0 0.0%
Interest 0 0 0 -
TOTAL NON-OPERATING EXPENSES 40 40 0 0.0%

TOTAL NON-OPERATING INCOME
(EXPENSES) 310 310 0 0.0%
CHANGE IN NET POSITION 43,415 89,141 45,726 105.3%

CAPITAL EXPENDITURES, INTERFUND

TRANSFERS & OTHER
Capital Outlay 150 150 0 0.0%
Transfer to CRCR Fund 0 0 0 -
Transfer to Programs Fund 6,781 6,781 0 0.0%
Nuclear Allocation 0 600 600 -
Double Down Programs Allocation 0 17,000 17,000 -
Customer Bill Relief 0 3,000 3,000 -
Other 0 0 0 -

TOTAL CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER $6,931 $27,531 $20,600 297.2%
BALANCE AVAILABLE FOR RESERVES $36,483 $61,609 $25,126 68.9%

VARIANCE
Item 4
Attachment 1
2022 SVCE Org Chart
3/3/22
Girish
Balachandran
Chief Executive
Officer
Amrit Singh
Chief Financial Officer &
Director of Administrative
Services
Kevin
Armstrong
Administrative
Services Manager
Nik Zanotto
Management
Analyst
Lisa Lai
Administrative
Assistant
Mel Vega
Interim
Administrative
Assistant
Vacant
Human Resources
Generalist
Aidas
Baublys
Sr. Financial
Analyst
Karthik
Rajan
Sr. Risk Manager
Vacant
Technology
Services Manager
Don Bray
Director of Account
Services & Community
Relations
Pam
Leonard
Communications
Manager
Colleen
McCamy
Marketing
Specialist
Michaela
Pippin
Communications
Specialist
Matt Lundy
Community
Outreach Fellow
Zoe
Elizabeth
Energy Services
Manager
Peyton
Parks
Energy Services
Lead
Peter
Mustacich
Energy Services
Lead
Hannah
Gustafson
Senior Energy
Services
Specialist
Jess
Cornejo
Energy Services
Specialist
Naomi
Moraes
Funding &
Finance Fellow
Tony Eulo
Senior Manager
of Public Sector
Services
Monica Padilla
Director of Power
Resources
Charles
Grinstead
Power Resources
Manager
Oren
Weiner
Power Resources
Manager
Vacant
Principal Power
Analyst
Maren
Wenzel
Power Resources
Planner
Zak Liske
Power Contracts
& Settlements
Manager
Owen
Milligan
Power Resources
Intern
Mike
Wardell
Power Supply
Project
Manager
Bob Tang
Power Supply
Project
Manager
TJ Messier
Power
Settlements &
Compliance
Analyst
Justin Zagunis
Director of
Decarbonization & Grid
Innovation Programs
Vacant
Data Scientist
(2)
Rebecca
Fang
Data Analyst
Vacant
Senior Program
Manager
Jessamyn
Allen
Program
Manager
Vacant
Director of Regulatory and
Legislative Policy
Bena
Chang
Senior
Government
Affairs Manager
Vacant
Compliance
Manager
Vacant
Principal Policy
Analyst
Vacant
Senior
Regulatory
Analyst
Vacant
To be determined
Sanjay
Natu
Internal
Operations
Program Manager
Andrea
Pizano
Board
Clerk/Executive
Assistant
= Full-time employee
= Part-time/Contracted employee
Item 4
Attachment 3
-
D
1 RESOLUTION 2022-09

SILICON VALLEY CLEAN ENERGY AUTHORITY RESOLUTION
NO. 2022-09

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SILICON VALLEY CLEAN ENERGY AUTHORITY TO APPROVE THE MID-YEAR 2021-2022

ADJUSTED BUDGET FOR SILICON VALLEY CLEAN ENERGY
WHEREAS, the Silicon Valley Clean Energy Authority (“Authority”) was formed on March 31, 2016, pursuant to a Joint Powers Agreement to study, promote, develop, conduct, operate, and manage energy programs in Santa Clara County; and WHEREAS, the Authority operates on a fiscal year budget cycle from October 1st through September 30th;
WHEREAS, a mid-year adjusted version of the Authority’s budget for each fiscal year is generally presented to the Board of Directors at the midpoint of the fiscal year in March;
WHEREAS, staff has incorporated direction from recent Board discussions around rates, programs, and customer relief and has prepared an adjusted budget, set forth in Exhibit A (the “Adjusted Budget”);
NOW THEREFORE, the Board of Directors of the Silicon Valley Clean Energy Authority does hereby resolve that:

1. The foregoing recitals are true and correct.

2. The Board of Directors hereby approves and adopts the Adjusted Budget, as set forth in Exhibit A, as the Authority’s fiscal year 2021-2022 budget.

PASSED AND ADOPTED this 9
th day of March, 2022, by the following vote:

JURISDICTION NAME AYE NO ABSTAIN ABSENT
City of Campbell Director Gibbons
City of Cupertino Director Sinks
City of Gilroy Director Hilton
City of Los Altos Director Fligor
Town of Los Altos Hills Director Tyson
Town of Los Gatos Director Rennie
City of Milpitas Director Chua
City of Monte Sereno Director Ellahie
City of Morgan Hill Director Martinez Beltran
Item 4
Attachment 3
2 RESOLUTION 2022-09
City of Mountain View Director Abe-Koga
County of Santa Clara Director Lee
City of Saratoga Director Walia
City of Sunnyvale Director Klein
Chair
ATTEST:

Andrea Pizano, Board Secretary
Item 4
Attachment 3

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Staff Report – Item 5
Item 5: Authorize the Chief Executive Officer to Execute Necessary Agreements for Goal Line Long Duration Energy Storage with California Community Power, Participating Community Choice Aggregators and Goal Line BESS 1, LLC From: Girish Balachandran, CEO
Prepared by: Monica Padilla, Director of Power Resources Date: 3/9/2022

RECOMMENDATION
Staff recommends that the Board delegate authority to the Chief Executive Officer (CEO) to execute on behalf of Silicon Valley Clean Energy Authority (SVCE), as a member of California Community Power (“CC Power”), the following agreements and any necessary ancillary documents for the Goal Line Long Duration Storage (LDS) project with a delivery term of 15 years starting on or about June 1, 2025, for a quantity not to exceed

22.81 MW and amount not to exceed $100 million:

1. Project Participation Share Agreement (PPSA) between Silicon Valley Clean Energy Authority, California Community Power and participating community choice aggregators (CCAs) – Attachment 1

2. Energy Storage Service Agreement (ESSA) - Buyer Liability Pass Through Agreement (BLPTA) between Silicon Valley Clean Energy Authority, California Community Power and Goal Line BESS 1, LLC – Attachment 2

3. Operations Agreement (COA) between Silicon Valley Clean Energy Authority, California Community Power and participating CCAs for Goal Line – To be developed, not attached.

BACKGROUND
Through the 2020 Integrated Resource Planning (IRP) proceeding, the California Public Utilities Commission (CPUC) had identified the need for additional storage including long-duration storage (i.e., a minimum of eight-hour discharge duration) to enable grid integration of a large fleet of intermittent resources to meet California’s greenhouse gas emission reduction goals and to replace several methane gas once-through-cooling (OTC) power plants and the Diablo Canyon Nuclear Power Plant (DCNPP) slated to retire between 2023 and 2025.

In October 2020, SVCE along with nine other CCAs issued a request for offers (“Joint LDS RFO”) with the intent to procure cost effective LDS resource(s) to meet each CCA’s respective portfolio needs and in anticipation of potential procurement mandates by the CPUC. Subsequently, in June 2021, as part of the 2020 IRP the CPUC issued through a decision order (D.21-06-035) the Mid-term Reliability Procurement Order (“MTR Order”) requiring jurisdictional load serving entities (LSEs), such as SVCE, to procure and/or develop a collective 11,500 MW of new capacity by 2026. Included within the MTR Order is an identified need of 1,000 MW of LDS. SVCE’s obligation is approximately 22 to 26 MW depending on the CPUC’s final determination of effective load carrying capacity (ELCC) factors for LDS resources.

In February 2021, CC Power was formed by ten CCAs, including SVCE, to share resources and risk related to the procurement of difficult to acquire resources. Once formed, CC Power took over the Joint LDS RFO including shortlisting of projects and coordination of negotiations and development of necessary agreements.

Item 5
Agenda Item: 5 Agenda Date: 3/9/2022

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In February 2022, SVCE Board authorized participation in Tumbleweed, the first CC Power approved LDS project resulting from the Joint LDS RFO: Item 5, SVCE Feb. 9, 2022 Bord of Directors Meeting. The other six CCAs participating in Tumbleweed have either gained or are in process gaining the necessary approvals to fully effect the Tumbleweed LDS project.

In addition to Tumbleweed, the Joint LDS RFO, shortlisted two other projects for consideration, Goal Line is the second LDS project. SVCE along with five other CCAs have agreed to participate in the Goal Line LDS Project including:

1. Clean Power San Francisco (CPSF)

2. Redwood Coast Energy Authority (RCEA)

3. San Jose Clean Energy (SJCE)

4. Sonoma Clean Power Authority (SCPA)

5. Valley Clean Energy (VCE)
The contract structure used for Tumbleweed is proposed for Goal Line which involves CC Power signing an ESSA with the project seller and each of the participating CCAs signing a PPSA with CC Power.

ANALYSIS & DISCUSSION
The Goal Line LDS project is a 50 MW/400 MWh lithium-ion battery storage facility located in Escondido, CA.

The anticipated commercial operations date of the project is June 2025.

Overview of Project
Project Name Goal Line BESS 1, LLC
Technology Li-Ion Storage – 8 hour discharge duration
Storage Capacity 50 MW / 400 MWh
Commercial Operation Date & Term 6/1/2025, 15 years
Developer Onward
Location Escondido, CA
Under the contract, CC Power will pay ESSA rate and in return will be entitled to all product attributes from the facility, including energy arbitrage, ancillary services, and resource adequacy. Through the PPSA, SVCE will pay for its entitlement share of the project and in turn receive its share of the attributes and benefits of the LDS project. The Goal Line ESSA has a rate expressed in dollar per kilowatt-month, with no escalation, for the term of the contract and a variable cost component expressed in dollar per megawatt-hour which is triggered if the battery is cycled more than a threshold amount.

Goal Line is in process of achieving an executed interconnection agreement with the California Independent System Operator (CAISO) for Full Capacity Deliverability Status (FCDS) for the energy storage component, meaning it will provide resource adequacy attributes in addition to energy and ancillary service benefits. The project will interconnect to one of San Diego Gas & Electric’s substations.

Developer
The project is being developed by Onward Energy an independent power generator that owns and operates 43 projects in 16 states across North America including solar, wind, and methane gas electric generation plants. In California, Onward has developed over 2,300 MW of renewable and methane gas projects that are in operation today. Onward currently has 200 MW of battery storage in development in California.

Consistent with the CC Power Board direction for enhanced contracting conditions, the developer will construct the project under a project labor agreement, thus assuring payment of prevailing wages and use of apprenticeship programs. The project will also adhere to CC Power environmental and environmental justice conditions.

Item 5
Agenda Item: 5 Agenda Date: 3/9/2022

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Project Participation and Recommended Maximum Authority The six participating CCAs will receive an entitlement share of the obligations and benefits associated with its capacity share. Table 1 is the expected entitlement share percentage per CCA.

Table 1: Expected Entitlement Share per CCA
CCA
Entitlement
Share %
Expected
Entitlement
Share MW
CPSF 21.50% 10.75
RCEA 4.00% 2.00
SJCE 24.22% 12.11
SVCE 28.42% 14.21
SCPA 17.36% 8.68
VCE 4.50% 2.25
Total 100% 50
Each participating CCA is seeking a minimum approval authority to cover their entitlement share plus two contingencies. The first contingency is to cover the unlikely event that one large CCA does not gain the necessary approvals to move forward. In such case, rather than allowing the ESSA to terminate, the remaining CCAs will increase their entitlement share. The second contingency is intended to cover a step-up provision included in the PPSA, where if a CCA defaults after the PPSA is executed, the remaining CCAs will need to step up to take additional allocation. The step-up provision is capped at 125% of the PPSA entitlement share. SVCE’s expected share of the agreement is 28.42% or 14.21 MW/114 MWh and authority is sought to take up to 22.81 MW to cover the two contingencies.

MTR Order and Compliance
Goal Line meets the conditions established in the MTR Order for LDS resources including the minimum eight-hour discharge duration, minimum ten-year contract term, start date by mid-2026 and ability to meet resource adequacy requirements. In aggregate, the long duration storage mandate for the CCAs participating in joint LDS procurement through CC Power is 96.5 MW of nameplate capacity. Once adjusted for effective load carrying capacity (ELCC) the requirement increases to 123.39 MW of Net Qualifying Capacity (NQC).

SVCE’s obligation is 26.2 MW which will be fully met with the execution of Tumbleweed and Goal Line as shown in Table 2.

Table 2: MTR Order Net Qualifying Capacity (NQC) and Compliance MTR
Requirement
NQC MW
MTR
Obligation
NQC MW
Tumbleweed
Entitlement
Nameplate MW
Remaining
Need NQC
MW
Goal Line
Entitlement
Nameplate MW
Net Open Position
+Surplus/(-) Deficit
NQC MW

20.5 26.2 14.66 11.54 14.21 2.67

STRATEGIC PLAN
Execution of the Goal Line project agreements supports the goals of the Board adopted Strategic Plan including:

Item 5
Agenda Item: 5 Agenda Date: 3/9/2022

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• Goal 5 - Acquire clean and reliable electricity in a cost effective, equitable and sustainable manner • Goal 6 - Manage and optimize power supply resources to meet affordability, GHG reduction and reliability objectives

ALTERNATIVE
SVCE can decide to procure LDS resources on its own and not through CC Power. This alternative is not recommended as SVCE’s requirements are relatively small and would be difficult to procure the exact amount required of SVCE via the MTR Order. Procuring on its own may require SVCE to over-procure while participating through the LDS Project will allow SVCE to minimize the amount of capacity procured.

SVCE can choose not to abide by the MTR Order. Doing so would may expose SVCE’s ratepayers to significant cost in the form of “back-stop” procurement undertaken by a central procurement entity in addition to CPUC penalties imposed on SVCE.

FISCAL IMPACT
Ultimate execution of the Goal Line agreements will result in cost to SVCE starting in Fiscal Year 2024-25, which will be included in the budget at that time. Additional costs to administer the monitoring and implementation of the LDS Project agreements through CC Power are expected for FY 2021-22 and have been included in Operating Budget.

ATTACHMENTS

1. Project Participation Share Agreement

2. Redacted Energy Storage Service Agreement with Buyer Liability Pass Through Agreement

3. California Community Power Resolution No. R22-01-01
Item 5

GOAL LINE STORAGE

PROJECT PARTICIPATION SHARE AGREEMENT
among

CITY AND COUNTY OF SAN FRANCISCO, ACTING BY AND THROUGH ITS

PUBLIC UTILITIES COMMISSION CLEANPOWERSF
and

REDWOOD COAST ENERGY AUTHORITY
and
CITY OF SAN JOSÉ, ADMINISTRATOR OF SAN JOSÉ CLEAN ENERGY and

SILICON VALLEY CLEAN ENERGY
and

SONOMA CLEAN POWER
and

VALLEY CLEAN ENERGY
and

CALIFORNIA COMMUNITY POWER
Item 5
Attachment 1

TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS....................................................................................................... 1

1.1. Definitions.............................................................................................................. 1

1.2. Rules of Interpretation ......................................................................................... 15 ARTICLE 2 EFFECTIVE DATE AND TERM...................................................................... 16

2.1. Term..................................................................................................................... 16 ARTICLE 3 AGREEMENT..................................................................................................... 16

3.1. Transaction........................................................................................................... 16 ARTICLE 4 ENTITLEMENT SHARE................................................................................... 17

4.1. Initial Entitlement Share ...................................................................................... 17

4.2. Change of Entitlement Share. .............................................................................. 17

4.3. Reduction of Entitlement Share to Zero .............................................................. 17 ARTICLE 5 OBLIGATIONS OF CCP; ROLE OF CCP BOARD AND CCP MANAGER .................................................................................................. 17

5.1. Obligations of CCP.............................................................................................. 17

5.2. Role of CCP Board. ............................................................................................. 21

5.3. Role of CCP Manager.......................................................................................... 23 ARTICLE 6 PROJECT COMMITTEE.................................................................................. 23

6.1. Establishment and Authorization of the Project Committee................................ 23

6.2. Project Committee Membership .......................................................................... 23

6.3. Project Committee Operations, Meetings, and Voting. ....................................... 24

6.4. Project Committee Responsibilities..................................................................... 24

6.5. Subcommittees..................................................................................................... 27

6.6. Representative’s Expenses................................................................................... 27

6.7. Inaction by Committee......................................................................................... 27

6.8. Delegation ............................................................................................................ 27 ARTICLE 7 OPERATING COMMITTEE ............................................................................ 27

7.1. Operating Committee........................................................................................... 27 ARTICLE 8 OPERATING ACCOUNT.................................................................................. 28

8.1. Calculation of Estimated Monthly Project Cost. ................................................. 28

8.2. Operating Account............................................................................................... 28 ARTICLE 9 BILLING.............................................................................................................. 29

9.1. Monthly Costs...................................................................................................... 29

9.2. Billing Statements................................................................................................ 29

9.3. Disputed Monthly Billing Statement ................................................................... 29

9.4. Payment Adjustments; Billing Errors.................................................................. 29 Item 5
Attachment 1
ii

9.5. Payment of Invoice Amount ................................................................................ 29

9.6. Withdrawal of Invoice Amount from Operating Account................................... 30

9.7. Late Payments...................................................................................................... 30 ARTICLE 10 UNCONDITIONAL PAYMENT OBLIGATIONS;
AUTHORIZATIONS; CONFLICTS; LITIGATION.............................. 30

10.1. Unconditional Payment Obligation...................................................................... 30

10.2. Authorizations...................................................................................................... 31

10.3. Conflicts............................................................................................................... 31

10.4. Litigation.............................................................................................................. 31

10.5. San José Clean Energy......................................................................................... 31

10.6. Clean Power San Francisco.. ............................................................................... 31 ARTICLE 11 PROJECT SPECIFIC MATTERS AND PROJECT
PARTICIPANTS’ RIGHTS AND OBLIGATIONS UNDER THE
ESSA.............................................................................................................. 32

11.1. CCP Rights and Obligations under the ESSA ..................................................... 32 ARTICLE 12 NONPERFORMANCE AND PAYMENT DEFAULT.................................. 32

12.1. Nonperformance by Project Participants ............................................................. 32

12.2. Payment Default................................................................................................... 33

12.3. Payment Default Notice....................................................................................... 33

12.4. Cured Payment Default........................................................................................ 33

12.5. Suspension of Project Participant’s Project Revenue Rights............................... 33

12.6. Termination and Disposal of Project Participant’s Project Rights ...................... 34

12.7. Step-Up Invoices.................................................................................................. 34

12.8. Step-Up Allocation of Project Participant’s Project Rights................................. 35

12.9. Elimination or Reduction of Payment Obligations.............................................. 37 ARTICLE 13 LIABILITY ........................................................................................................ 37

13.1. Project Participants’ Obligations Several ............................................................ 37

13.3. Extent of Exculpation; Enforcement of Rights.................................................... 38

13.4. No General Liability of CCP ............................................................................... 38

13.5. Indemnification .................................................................................................... 38 ARTICLE 14 NOTICES ........................................................................................................... 39

14.1. Addresses for the Delivery of Notices................................................................. 39

14.2. Acceptable Means of Delivering Notice.............................................................. 39 ARTICLE 15 ASSIGNMENT .................................................................................................. 39

15.1. General Prohibition on Assignments ................................................................... 39 ARTICLE 16 GOVERNING LAW AND DISPUTE RESOLUTION.................................. 39

16.1. Governing Law .................................................................................................... 39 Item 5
Attachment 1
iii

16.2. Dispute Resolution............................................................................................... 39 ARTICLE 17 MISCELLANEOUS .......................................................................................... 40

17.1. Entire Agreement; Integration; Exhibits.............................................................. 40

17.2. Amendments ........................................................................................................ 40

17.3. No Waiver............................................................................................................ 40

17.4. Severability .......................................................................................................... 40

17.5. Counterparts......................................................................................................... 40

17.6. Electronic Delivery .............................................................................................. 40

17.7. Binding Effect...................................................................................................... 40

17.8. Forward Contract ................................................................................................. 40

17.9. City of San Francisco Standard Provisions.......................................................... 41

17.10. City of San José Standard Provisions. ................................................................. 42

17.11. Further Assurances............................................................................................... 43 EXHIBIT A NOTICES............................................................................................................. A-1

EXHIBIT B SCHEDULE OF PROJECT PARTICIPANT ENTITLEMENT SHARES AND STEP-UP ALLOCATION CAPS ...................................................... B-1

EXHIBIT C PROCEDURE FOR VOLUNTARY REDUCTION OF PROJECT
PARTICIPANT’S ENTITLEMENT SHARE............................................. C-1 EXHIBIT D PROJECT COMMITTEE OPERATIONS, MEETINGS, AND VOTING......... D-1 Item 5
Attachment 1
1 GOAL LINE STORAGE

PROJECT PARTICIPATION SHARE AGREEMENT

PREAMBLE
This Project Participation Share Agreement (“Agreement”) is entered into as of _________ (the “Effective Date”), by and among the City and County of San Francisco acting by and through its Public Utilities Commission, CleanPowerSF, Redwood Coast Energy Authority, a California joint powers authority, City of San José, a California municipality, Silicon Valley Clean Energy, a California joint powers authority, Sonoma Clean Power, a California joint powers authority, and Valley Clean Energy, a California joint powers authority (each individually a “Project Participant” and collectively referred to as the “Project Participants”) and California Community Power (“CCP”), a California joint powers authority. CCP and the Project Participants 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 CCP is a Joint Powers Authority, was formed for the purpose of developing, acquiring, constructing, owning, managing, contracting for, engaging in, or financing electric energy generation and storage projects, and for other purposes; and WHEREAS, the Project Participants have participated with CCP in the negotiation of an agreement for purchase of the certain energy storage products of Goal Line Storage Project (the “Project” as defined in Exhibit A of the ESSA), and CCP is to enter into an Energy Storage Service Agreement (“ESSA”), which is incorporated herein by this reference, with Goal Line BESS 1, LLC, a Delaware limited liability company (“Project Developer”), providing for purchase of the energy storage products, and associated rights, benefits, and credits from the Project on behalf of the Project Participants.

WHEREAS, pursuant to this Agreement, CCP shall cause to deliver to each Project Participant the Project Participant’s associated share of the energy storage products and associated rights, benefits, and credits of the Project.

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. Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:

Item 5
Attachment 1
2 “AC” means alternating current.
“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” (including, with correlative meanings, the terms “controlled by” and “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. “Agreement” has the meaning set forth in the Preamble and any Exhibits, schedules, and any written supplements hereto.
“Amended Annual Budget” means the budget approved by the Project Committee and adopted by the CCP Board pursuant to Section 5.1(c) of this Agreement. “Ancillary Services” means frequency regulation, spinning reserve, non-spinning reserve, regulation up, regulation down, black start, voltage support, and any other ancillary services that the Facility is capable of providing consistent with the Operating Restrictions set forth in Exhibit Q of the ESSA, as each is defined in the CAISO Tariff.
“Annual Budget” means the budget approved by the Project Committee and adopted by the CCP Board pursuant to Section 5.1(c) of this Agreement. “Annual Excess Cycle Payment” means the payment, if any, to be made by CCP to Project Developer annually during the Delivery Term if Buyer dispatches the Facility for more than 200 cycles during a Contract Year, as calculated in accordance with Exhibit C of the ESSA. “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.
“Billing Statement” has the meaning set forth in Section 9.2 of this Agreement. “Buyer Liability Pass Through Agreement” or “BLPTA” means, for each Project Participant, the form set forth in Exhibit L of the ESSA, as executed by such Project Participant, countersigned by CCP, and delivered to the Project Developer. “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. local time for the Party sending a Notice, or payment, or performing a specified action.

Item 5
Attachment 1
3 “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Balancing Authority Area” has the meaning set forth in the CAISO Tariff. “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 Ancillary Services, PMAX, and PMIN associated with such storage units, that are applicable to the Facility.
“CAISO Grid” has the same meaning as “CAISO Controlled Grid” 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.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capital Improvements” means any unit of property, property right, land or land right which is a replacement, repair, addition, improvement or betterment to the Project or any transmission facilities relating to, or for the benefit of, the Project, the betterment of land or land rights or the enlargement or betterment of any such unit of property constituting a part of the Project or related transmission facilities which is (i) consistent with Prudent Utility Practices and determined necessary and/or desirable by the CCP Board or (ii) required by any governmental agency having jurisdiction over the Project.
“CCP Board” means the Board of Directors of California Community Power. “CCP Manager” means the General Manager of California Community Power. “CEC” means the California Energy Commission, or any successor agency performing similar statutory functions.
“Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Facility can 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. “CEQA” means the California Environmental Quality Act, as amended or supplemented from time to time.
“Chairperson” has the meaning set forth in Exhibit D.

Item 5
Attachment 1
4 “Change of Control” has the meaning set forth in Section 1.1 of the ESSA. “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. “Charging Notice” means the operating instruction, and any subsequent updates, given by CCP’s SC or the CAISO to Project Developer, directing the Facility to charge at a specific MW rate for a specified period of time or amount of MWh; provided, any such operating instruction shall be in accordance with the Operating Restrictions. “Commercial Operation” has the meaning set forth in Section 1.1 of the ESSA. “Commercial Operation Date” or “COD” has the meaning set forth in Section 1.1 of the ESSA.
“Commercial Operation Delay Damages” has the meaning set forth in Section 1.1 of the ESSA.
“Communications Protocols” has the meaning set forth in Section 1.1 of the ESSA. “Community Choice Aggregator” has the meaning set forth in California Public Utilities Code § 331.1.
“Confidential Information” has the meaning set forth in Section 18.1 of the ESSA. “Construction Start” has the meaning set forth in Exhibit B of the ESSA. “Construction Start Date” has the meaning set forth in Exhibit B of the ESSA. “Contract Price” has the meaning set forth on the Cover Sheet of the ESSA. “Contract Term” has the meaning set forth in Section 2.1 of the ESSA. “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. “Coordinated Operations Agreement” means the agreement by and among CCP and all Project Participants for purposes of operating the Project. “Costs” means, with respect to a Project Participant assuming all or a portion of a Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section

12.8(b) or 12.8(c), brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Project Participant in terminating any arrangement pursuant to which it has hedged its obligations; and all reasonable attorneys’ fees and expenses incurred by the Project Participant in connection with the Step-Up Allocation. “CPUC” means the California Public Utilities Commission, or successor entity.

Item 5
Attachment 1
5 “Cured Payment Default” means a Payment Default that has been cured in accordance with Section 12.4 of this Agreement.
“Daily Delay Damages” has the meaning set forth in Section 1.1 of the ESSA. “Damage Payment” means the amount to be paid by the ESSA Defaulting Party to the ESSA 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) of the ESSA. “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Defaulting Project Participant” has the meaning set forth in Section 12.1. “Delivery Point” means the Facility PNode on the CAISO grid. “Delivery Term” means the period of Contract Years set forth on the Cover Sheet of the ESSA beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of the ESSA.
“Designated Fund” has the meaning set forth in Section 10.5. “Development Security” means (a) cash or (b) a Letter of Credit in the amount set forth on the Cover Sheet of the ESSA.
“Discharging Energy” means the 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 any applicable Electrical Losses.
“Discharging Notice” means the operating instruction, and any subsequent updates, given by CCP’s SC or the CAISO to the Facility, directing the Facility to discharge Facility Energy at a specific MW rate for a specified period of time or to an amount of MWh. “Effective Date” has the meaning set forth in the Preamble. “Electrical Losses” means all transmission or transformation losses (a) between 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 Facility 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.

Item 5
Attachment 1
6 “Energy” means electrical energy, measured in kilowatt-hours or Megawatt-hours or multiple units thereof.
“Energy Management System” or “EMS” means the Facility’s energy management system.
“Energy Storage Service Agreement” or “ESSA” means the agreement between CCP and Project Developer for the purchase of energy storage products of Goal Line Storage Project, executed on _________________.
“ESSA Defaulting Party” has the meaning set forth in Section 11.1(a) of the ESSA. “ESSA Non-Defaulting Party” has the meaning set forth in Section 11.2 of the ESSA. “Entitlement Share” means the percentage entitlement of each Project Participant as set forth in Exhibit B of this Agreement (entitled “Schedule of Project Participant Entitlement Shares and Step-Up Allocation Caps”) attributable to each such Project Participant, as may be amended pursuant to Section 4.2 or 12.8.
“Entitlement Share Reduction Amount” has the meaning set forth in Exhibit C. “Entitlement Share Reduction Compensation Amount” has the meaning set forth in Exhibit C.
“Entitlement Share Reduction Notice” has the meaning set forth in Exhibit C. “Environmental Attributes” shall mean any and all attributes under the RPS regulations or under any and all other international, federal, regional, state or other law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable now, or in the future to the Facility and its displacement of conventional energy generation.
“Estimated Monthly Project Cost” has the meaning set forth in Section 8.1. “Event of Default” has the meaning set forth in Section 11.1 of the ESSA. “Expected Commercial Operation Date” means the date set forth on the Cover Sheet of the ESSA.
“Facility” means the energy storage facility described on the Cover Sheet of the ESSA and in Exhibit A of the ESSA, located at the Site and including 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 the ESSA.

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7 “Facility Energy” means the Energy delivered from the Facility to the Delivery Point 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 any applicable Electrical Losses or Station Use.
“Facility Meter” has the meaning set forth in Section 1.1 of the ESSA. “Facility Metering Point” means the location(s) of the Facility Meter shown in Exhibit R of the ESSA.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Flexible Capacity” means, with respect to any particular Showing Month, the number of MWs of Product which are eligible to satisfy Flexible RAR. “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 of the ESSA. “Full Capacity Deliverability Status” or “FCDS” has the meaning set forth in the CAISO Tariff.
“Full Capacity Deliverability Status Finding” means a written confirmation from the CAISO that the Facility is eligible for Full Capacity Deliverability Status. “Gains” means, with respect to a Project Participant assuming all or a portion of a Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section

12.8(b) or 12.8(c), an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from such Step-Up Allocation for the remaining Contract Term of the ESSA, determined in a commercially reasonable manner. Factors used in determining the economic benefit to such Project Participant may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of such Project Participant, 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., NP-15), all of which should be calculated for the remaining Contract Term, and include the value of Environmental Attributes and Capacity Attributes.
“GHG Regulations” means Title 17, Division 3 (Air Resources), Chapter 1 (Air Resources Board), Subchapter 10 (Climate Change), Article 5 (Emissions Cap), Sections 95800 to 96023 of the California Code of Regulations, as amended or supplemented from time to time. “Governmental Authority” means any federal, state, provincial, local, or municipal government, any political subdivision thereof or any other governmental, congressional, or Item 5
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8 parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, “Governmental Authority” shall not in any event include any Party, except to the extent that the Party is acting solely in its governmental capacity.
“Greenhouse Gas” or “GHG” has the meaning set forth in the GHG Regulations or in any other applicable Laws.
“Guaranteed Commercial Operation Date” means the date set forth on the Cover Sheet of the ESSA, as such date may be extended pursuant to Exhibit B of the ESSA. “Guaranteed Construction Start Date” means the date set forth on the Cover Sheet of the ESSA, as such date may be extended pursuant to Exhibit B of the ESSA. “Installed Capacity” means the lesser of (a) PMAX, and (b) maximum dependable operating capacity of the Facility to discharge Energy for eight (8) hours of continuous discharge, as measured in MW AC at the Facility Meter Point 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 of the ESSA, as such capacity may be adjusted pursuant to Section 5 of Exhibit B of the ESSA.
“Interconnection Agreement” means the interconnection agreement entered into by Project Developer pursuant to which the Facility will be interconnected with the Transmission System, and pursuant to which Project Developer’s Interconnection Facilities and any other Interconnection Facilities will be constructed, operated, and maintained during the ESSA Contract Term.
“Interconnection Facilities” means the interconnection facilities, control and protective devices, and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.2 of the ESSA. “Invoice Amount” has the meaning set forth in Section 9.2. “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 (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated January 29, 2021, as amended from time to time, under which CCP 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.

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9 “Late Payment Notice” means a notice issued by CCP to a Project Participant pursuant to Section 9.7.
“Late Payment Charge” has the meaning set forth in Section 9.7. “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.
“Letter(s) of Credit” has the meaning set forth in Section 1.1 the ESSA. “Local Capacity Area Resource” has the meaning set forth in the CAISO Tariff. “Local RAR” means the local Resource Adequacy Requirements established for load-serving entities by the 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 requirements in other regulatory proceedings or legislative actions. “Losses” means, with respect to a Project Participant assuming all or a portion of a Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section

12.8(b) or 12.8(c), an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from such Step-Up Allocation for the remaining Contract Term of the ESSA, determined in a commercially reasonable manner. Factors used in determining economic loss to such Project Participant may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Project Participant, 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., NP-15), all of which should be calculated for the remaining Contract Term of the ESSA and must include the value of Environmental Attributes and Capacity Attributes.
“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)).
“Month” means a calendar month.
“Monthly Costs” has the meaning set forth in Section 9.1. “Monthly Capacity Payment” means the payment required to be made by CCP to Project Developer each month of the Delivery Term as compensation for the Product, as calculated in accordance with Exhibit C of the ESSA.

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10 “MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“NERC” means the North American Electric Reliability Corporation. “Net Qualifying Capacity” or “NQC” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Project Participant” has the meaning set forth in Section 12.1. “Normal Vote” has the meaning set forth in Exhibit D.
“Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (e-mail).
“Operating Account” means an account established by CCP for each Project Participant pursuant to Section 8.2.
“Operating Cost” means the share of the Annual Budget or Amended Annual Budget attributable to the applicable Month for a Billing Statement. “Operating Restrictions” means those restrictions, rules, requirements, and procedures set forth in Exhibit Q of the ESSA.
“Party” has the meaning set forth in the Preamble.
“Payment Default” has the meaning set forth in Section 12.2. “Payment Default Termination Deadline” has the meaning set forth in Section 12.6. “Performance Guarantees” has the meaning set forth in Section 4.3(b) of the ESSA. “Performance Security” means (i) cash or (ii) a Letter of Credit in the amount set forth on the Cover Sheet of the ESSA.
“Permitted Transferee” has the meaning set forth in Section 1.1 of the ESSA. “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.
“PMAX” means the applicable CAISO-certified maximum operating level of the Facility. “PMIN” means the applicable CAISO-certified minimum operating level of the Facility.

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11 “PNode” has the meaning set forth in the CAISO Tariff. “Product” has the meaning set forth in Section 3.1
“Progress Report” means a progress report including the items set forth in Exhibit E of the ESSA.
“Project” shall be broadly construed to entail the aggregate of rights, liabilities, interests, and obligations of CCP pursuant to the ESSA, including but not limited to all rights, liabilities, interests, and obligations associated with the Product, all rights, liabilities, interests and obligations associated with the Facility, and including all aspects of the operation and administration of the Facility and the ESSA and the rights, liabilities, interests and obligations associated therewith. “Project Committee” means the committee established in accordance with Section6.1. “Project Developer” means Goal Line BESS 1, LLC, a Delaware limited liability company, or assignee as permitted under the ESSA.
“Project Participants” means those entities executing this Agreement, as identified in the Preamble, together in each case with each entity’s successors or assigns. “Project Revenue Rights” means all rights of a Project Participant under this Agreement to any revenue associated with the Facility Energy or Ancillary Services associated with the Facility.
“Project Rights” means all rights and privileges of a Project Participant under this Agreement, including but not limited to its Entitlement Share, its right to receive the Product from the Facility, and its right to vote on Project Committee matters. “Project Rights and Obligations” means the Project Participants’ Project Rights and obligations under the terms of this Agreement.
“Proposed Entitlement Share Reduction Compensation Amount” has the meaning set forth in Exhibit C.
“Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric industry during the relevant time period with 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 Item 5
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12 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” has the meaning set forth in Section 1.1 of the ESSA. “RA Guarantee Date” means the date by which the Facility is expected to achieve Full Capacity Deliverability Status, which is the Commercial Operation Date. “RA Shortfall Month” has the meaning set forth in Section 1.1 of the ESSA. “Real-Time Market” has the meaning set forth in the CAISO Tariff. “Receiving Party” has the meaning set forth in Section 18.2 of the ESSA. “Reliability Network Upgrades” has the meaning set forth in the CAISO Tariff. “Remedial Action Plan” has the meaning set forth in Section 2.4 of the ESSA. “Replacement RA” has the meaning set forth in Section 1.1 of the ESSA. “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 and shall include Flexible Capacity, and any local, zonal or otherwise locational attributes associated with the Facility.
“Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Resource Adequacy Resource” has the meaning used in Resource Adequacy Rulings. “Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, 15-06-063, 16-06-045, 17-06-027, 18-06-030, 18- 06-031, 19-02-022, 19-06-026, 19-10-021, 20-01-004, 20-03-016, 20-06-002, 20-06-031, 20-06- 028, 20-12-006, 21-06-035 and any other existing or subsequent ruling or decision, or any other resource adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable Item 5
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13 Governmental Authority, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Contract Term. “Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduled Energy” means the Facility Energy that clears under the applicable CAISO market based on the final Day-Ahead Schedule(s), FMM Schedule(s) (as defined in the CAISO Tariff), and/or any other financially binding Schedule(s), 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.
“Scheduling Coordinator Services Agreement” means the agreement between CCP and a Scheduling Coordinator that was approved by the CCP Board pursuant to Section 5.2(a)(xiii). “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 Facility Energy to the Delivery Point, including the Interconnection Facilities and the Interconnection Agreement itself, if applicable, that are used in common with third parties or by the Project Developer for electric generation or storage facilities owned by Project Developer other than the Facility.
“Showing Month” means the calendar month of the Delivery Term, commencing with the Showing Month that contains the RA Guarantee Date, that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.
“Site” has the meaning set forth in Section 1.1 of the ESSA, as further described in Exhibit A of the ESSA.
“Station Use” means the Energy that is used within the Facility to power the lights, motors, temperature control systems, control systems and other electrical loads that are necessary for operation of the Facility.
“Step-Up Allocation Cap” has the meaning set forth in Section 12.8(a). “Step-Up Invoice” means an invoice sent to a Non-Defaulting Project Participant as a result of a Defaulting Project Participant’s Payment Default, which invoice shall separately Item 5
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14 identify any amount owed with respect to the monthly Billing Statement of the Defaulting Project Participant, as the case may be, pursuant to Section 12.7. “Step-Up Invoice Amount” has the meaning set forth in Section 12.7. “Step-Up Invoice Amount Cap” has the meaning set forth in Section 12.7. “Step-Up Reserve Account” has the meaning set forth in Section 12.7(a)(i). “Storage Level” means, at a particular time, the amount of electric Energy in the Facility available to be discharged as Facility Energy, expressed in MWh. “System Emergency” means any condition that requires, as determined, and declared by CAISO or the Transmission 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. “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 state, local and/or federal production tax credit, depreciation benefit, tax deduction and/or investment tax credit, including the ITC, specific to investments in renewable energy facilities and/or energy storage facilities. “Terminated Transaction” has the meaning set forth in Section 11.2(a) the ESSA. “Termination Payment” has the meaning set forth in Section 11.3 of the ESSA. “Transmission Provider” means any entity that owns, operates, and maintains transmission or distribution lines and associated facilities and/or has entitlements to use certain transmission or distribution lines and associated facilities for the purpose of transmitting or transporting the Facility Energy from the Delivery Point. “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.
“Unanimous Vote” has the meaning set forth in Exhibit D. “Uncontrollable Forces” means any Force Majeure event and any cause beyond the control of any Party, which by the exercise of due diligence such Party is unable to prevent or overcome, including but not limited to, failure or refusal of any other Person to comply with then existing contracts, an act of God, fire, flood, explosion, earthquake, strike, sabotage, epidemic or pandemic (excluding impacts of the disease designated COVID-19 or the related virus designated Item 5
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15 SARS-CoV-2 impacts actually known by the Party claiming the Force Majeure Event as of the Effective Date), an act of the public enemy (including terrorism), civil or military authority including court orders, injunctions and orders of governmental agencies with proper jurisdiction or the failure of such agencies to act, insurrection or riot, an act of the elements, failure of equipment, a failure of any governmental entity to issue a requested order, licenseor permit, inability of any Party or any Person engaged in work on the Project to obtain or ship materials or equipment because of the effect of similar causes on suppliers or carriers. Notwithstanding the foregoing, Uncontrollable Forces as defined herein shall also include events of Force Majeure pursuant to the ESSA, as defined therein.

1.2. Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that 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” mean “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;
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16 (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;
(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; and
(n) in the event of any conflict or inconsistency between the terms of this Agreement and the terms of the ESSA or the Coordinated Operations Agreement, the terms and provisions of this Agreement shall control.

ARTICLE 2

EFFECTIVE DATE AND TERM

2.1. Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the occurrence of all of the following: (i) the termination of the ESSA and (ii) the termination of the Buyer Liability Pass Through Agreement for all the Project Participants, and (iii) all Parties have met their obligations under this Agreement (“Term”). (b) Applicable provisions of this Agreement shall continue in effect after termination to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. All indemnity and audit rights shall remain in full force and effect for three (3) years following the termination of this Agreement.

ARTICLE 3

AGREEMENT

3.1. Transaction. Subject to the terms and conditions of this Agreement, the Project Participants authorize CCP to purchase all Facility Energy, Capacity Attributes, Ancillary Services, and Environmental Attributes associated with the Facility and any Replacement RA provided pursuant to the ESSA (collectively the “Product”), on behalf of the Project Participants.

Pursuant to the procedures set forth in the Coordinated Operations Agreement, CCP shall cause Project Developer to deliver each Project Participant’s Entitlement Share of the Product to such Project Participant, including but not limited to (i) any revenue associated with the Facility Energy, Capacity Attributes, Ancillary Services, or Environmental Attributes associated with the Facility, and (ii) the Capacity Attributes and Environmental Attributes associated with the Facility or Item 5
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17 otherwise provided to CCP pursuant to the ESSA. CCP shall administer the ESSA and oversee the operation of the Project. CCP shall not sell, assign, or otherwise transfer any Product, or any portion thereof, to any third party other than to the Project Participants, unless authorized by the Project Participants pursuant to this Agreement.

ARTICLE 4

ENTITLEMENT SHARE

4.1. Initial Entitlement Share. Each Project Participant’s initial Entitlement Share as of the Effective Date shall be set forth in Column B of the Table provided in Exhibit B of this Agreement (entitled “Schedule of Project Participant Entitlement Shares and Step-Up Allocation Caps”). Any revisions to the Entitlement Share specified in Exhibit B pursuant to Section 4.2. or Section 12.8 shall be considered an element of the administration of this Agreement and shall not require the consent of the Parties hereto.

4.2. Change of Entitlement Share. Any Project Participant may reduce its Entitlement Share of the Project pursuant to the process set forth in Exhibit C.

4.3. Reduction of Entitlement Share to Zero. If any Project Participant’s Entitlement Share is reduced to zero through any process specified in Exhibit C, such Project Participant shall remain a Party to this Agreement and shall be subject to all rights, obligations, and liabilities of this Agreement, including but not limited to any liabilities for Monthly Capacity Payments, Annual Excess Cycle Payments, Damage Payment or Termination Payment, as applicable, and any other damage payments or reimbursement amounts under the ESSA.

ARTICLE 5
OBLIGATIONS OF CCP; ROLE OF CCP BOARD AND CCP MANAGER

5.1. Obligations of CCP.
(a) CCP shall take such commercially reasonable actions or implement such commercially reasonable measures as may be necessary or desirable for the utilization, maintenance, or preservation of the rights and interests of the Project Participants in the Project including, if appropriate, such enforcement actions or other measures as the Project Committee or CCP Board deems to be in the Project Participants’ best interests. To the extent not inconsistent with the ESSA or other applicable agreements, CCP may also be authorized by the Project Participants to assume responsibilities for planning, designing, financing, developing, acquiring, insuring, contracting for, administering, operating, and maintaining the Project to effectuate the conveyance of the Product to Project Participants in accordance with Project Participants’ Entitlement Shares.
(b) To the extent such services are available and can be carried forth in accordance with the ESSA, CCP shall also provide such other services, as approved by the Project Committee or CCP Board, as may be deemed necessary to secure the benefits and/or satisfy the obligations associated with the ESSA.
(c) Adoption of Annual Budget. The Annual Budget and any amendments to the Annual Budget shall be prepared and approved in accordance with this Section 5.1(c).

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18 (i) The CCP Manager will prepare and submit to the Project Committee a proposed Annual Budget at least ninety (90) days prior to the beginning of each Contract Year during the term of this Agreement. The proposed Annual Budget shall be based on the prior Contract Year’s actual costs and shall include reasonable estimates of the costs CCP expects to incur during the applicable Contract Year in association with the administration of the ESSA, including the cost of insurance coverages that are determined to be attributable to the Project by action of the CCP Board. Upon approval of the proposed Annual Budget by a Normal Vote of the Project Committee, the CCP Manager shall present the proposed Annual Budget to the CCP Board.

The CCP Board shall adopt the Annual Budget no later than thirty (30) days prior to the beginning of such Contract Year and shall cause copies of such adopted Annual Budget to be delivered to each Project Participant.
(ii) At any time after the adoption of the Annual Budget for a Contract Year, the CCP Manager may prepare and submit to the Project Committee a proposed Amended Annual Budget for and applicable to the remainder of such Contract Year. The proposal shall (A) explain why an amendment to the Annual Budget is needed, (B) compare estimated costs against actual costs, and (C) describe the events that triggered the need for additional funding. Upon approval of the proposed Amended Annual Budget by a Normal Vote of the Project Committee, the CCP Manager shall present the proposed Amended Annual Budget to the CCP Board. Upon adoption of the Amended Annual Budget by the CCP Board, such Amended Annual Budget shall apply to the remainder of the Contract Year and the CCP Board shall cause copies of such adopted Amended Annual Budget to be delivered to each Project Participant. (iii) Reports. CCP will prepare and issue to Project Participants the following reports each quarter of a year during the Term:
(A) Financial and operating statement relating to the Project. (B) Variance report comparing the costs in the Annual Budget versus actual costs, and the status of other cost-related issues with respect to the Project. (d) Records and Accounts. CCP will keep, or cause to be kept, accurate records and accounts of the Project as well as of the operations relating to the Project, all in a manner similar to accepted accounting methodologies associated with similar projects. All transactions of CCP relating to the Project with respect to each Contract Year shall be subject to an annual audit.

Each Project Participant shall have the right at its own expense to examine and copy the records and accounts referred to above on reasonable notice during regular business hours. (e) Information Sharing. Upon CCP’s request, each Project Participant agrees to coordinate with CCP to provide such information, documentation, and certifications that are reasonably necessary for the design, financing, refinancing, development, operation, administration, maintenance, and ongoing activities of the Project, including information required to respond to requests for such information from any federal, state, or local regulatory body or other authority.
(f) Consultants and Advisors Available. CCP shall make available to the Project Committee all consultants and advisors, including financial advisors and legal counsel that Item 5
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19 are retained by CCP, and such consultants, counsel and advisors shall be authorized to consult with and advise the Project Committee on Project matters. CCP agrees to waive any conflicts of interest or any other applicable professional standards or rules as required by consultants, counsel, and advisors to advise the Project Committee on Project matters. (g) Deposit of Insurance Proceeds. CCP shall promptly deposit any insurance proceeds received by CCP from any insurance obtained pursuant to this Agreement or otherwise associated with the Project into the Operating Accounts of the Project Participants based on each Project Participants’ Entitlement Shares.
(h) Liquidated and Other Damages. Any amounts paid to CCP, or applied against payments otherwise due by CCP pursuant to the ESSA or each Project Participant’s respective BLPTA, by the Project Developer shall be deposited on a pro rata share, based on each Project Participant’s Entitlement Share into each Project Participant’s Operating Account.

Liquidated Damages include, but are not limited to Daily Delay Damages, RA Deficiency Amount, Damage Payment, and Termination Payment.
(i) Charging and Discharging Energy. Subject to the direction of the Project Committee, CCP shall reasonably coordinate, schedule, and do all other things necessary or appropriate, except as otherwise prohibited under this Agreement, to provide for the delivery of Charging Energy from the grid to the Point of Delivery to enable CCP to exercise its rights and obligations in connection with Charging Energy in accordance with the requirements of the ESSA.

Subject to the direction of the Project Committee, CCP shall reasonably coordinate, schedule, and do all other things necessary or appropriate, except as otherwise prohibited under this Agreement, to provide for the delivery of Discharging Energy from the Point of Delivery to the grid to enable CCP to maximize the value of the ESSA to the Project Participants in accordance with the requirements of the ESSA.
(j) Resale of Product. Any Project Participant may direct CCP to remarket such Project Participant’s Entitlement Share of the Product, or such Project Participant’s Entitlement Share of any part of the Product. If CCP incurs any expenses associated with the remarketing activities pursuant to this Section 5.1(j), then CCP shall include the total amount of such expenses as a Monthly Cost on the Project Participant’s next Billing Statement. Prior to offering the Project Participant’s Entitlement Share of the Product, or the Project Participant’s Entitlement Share of any part of the Product to any third party, CCP shall first offer the Product or portion of the Product to the other Project Participants. The amount of compensation paid to the selling Project Participant shall be negotiated and agreed to between the selling Project Participant and the purchasing Project Participant or third party. Any payments for any resold Product pursuant to this Section 5.1(j) shall be transmitted directly from the purchasing Project Participant or purchasing third party to the reselling Project Participant. Any such resale to a third party shall not convey any rights or authority over the operation of the Project, and the Project Participant shall not make a representation to the third party that the resale conveys any rights or authority over the operation of the Project.
(k) Uncontrollable Forces. CCP shall not be required to provide, and CCP shall not be liable for failure to provide, the Product, Replacement RA, or other service under this Agreement when such failure, or the cessation or curtailment of, or interference with, the Item 5
Attachment 1
20 service is caused by Uncontrollable Forces or by the failure of the Project Developer, or its successors or assigns, to obtain any required governmental permits, licenses, or approvals to acquire, administer, or operate the Project; provided, however, that the Project Participants shall not thereby be relieved of their obligations to make payments under this Agreement except to the extent CCP is so relieved pursuant to the ESSA, and provided further that CCP shall pursue all applicable remedies against the Project Developer under the ESSA and distribute any remedies obtained pursuant to Section 5.1(h).
(l) Insurance. Within one hundred and eighty days (180) of the Effective Date of this Agreement, CCP shall secure and maintain, during the Term, insurance coverage as follows:
(i) Commercial General Liability. CCP shall maintain, or cause to be maintained, commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of One Million Dollars ($1,000,000) per occurrence, and an annual aggregate of not less than Two Million Dollars ($2,000,000), endorsed to provide contractual liability in said amount, specifically covering CCP’s obligations under this Agreement and including each Project Participant as an additional insured. (ii) Employer’s Liability Insurance. CCP, if it has employees, shall maintain Employers’ Liability insurance with limits of not less than One Million Dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee. (iii) Workers’ Compensation Insurance. CCP, if it has employees, shall also maintain at all times during the Term workers’ compensation and employers’ liability insurance coverage in accordance with statutory amounts, with employer’s liability limits of not less than One Million Dollars ($1,000,000.00) for each accident, injury, or illness; and include a blanket waiver of subrogation.
(iv) Business Auto Insurance. CCP shall maintain at all times during the Term business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of CCP’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 each Project Participant as an additional insured and contain standard cross-liability and severability of interest provisions. (v) Public Entity Liability Insurance. CCP shall maintain public entity liability insurance, including public officials’ liability insurance, public entity reimbursement insurance, and employment practices liability insurance in an amount not less than One Million Dollars ($1,000,000) per claim, and an annual aggregate of not less than One Million Dollars ($1,000,000) and CCP shall maintain such coverage for at least two (2) years from the termination of this Agreement.
(m) Evidence of Insurance. Within ten (10) days after the deadline for securing insurance coverage specified in Section 5.1(l), and upon annual renewal thereafter, CCP shall deliver to each Project Participant certificates of insurance evidencing such coverage with insurers with ratings comparable to A-VII or higher, and that are authorized to do business in the State of Item 5
Attachment 1
21 California, in a form evidencing all coverages set forth above. Such certificates shall specify that each Project Participant shall be given at least thirty (30) days prior Notice by CCP in the event of cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of each Project Participant. Any other insurance maintained by CCP not associated with this Agreement is for the exclusive benefit of CCP and shall not in any manner inure to the benefit of Project Participants. The general liability, auto liability and worker’s compensation policies shall be endorsed with a waiver of subrogation in favor of each Project Participant for all work performed by CCP, its employees, agents and sub-contractors.

5.2. Role of CCP Board.
(a) The rights and obligations of CCP under the ESSA shall be subject to the ultimate control at all times of the CCP Board. The CCP Board, shall have, in addition to the duties and responsibilities set forth elsewhere in this Agreement, the following duties and responsibilities, among others:
(i) Dispute Resolution. The CCP Board shall review, discuss and attempt to resolve any disputes among CCP, any of the Project Participants, and the Project Developer relating to the Project, the operation and management of the Facility, and CCP’s rights and interests in the Facility.
(ii) ESSA. The CCP Board shall have the authority to review, modify, and approve, as appropriate, all amendments, modifications, and supplements to the ESSA. (iii) Capital Improvements. The CCP Board shall review, modify, and approve, if appropriate, all Capital Improvements undertaken with respect to the Project and all financing arrangements for such Capital Improvements. The CCP Board shall approve those budgets or other provisions for the payments associated with the Project and the financing for any development associated with the Project.
(iv) Committees. The CCP Board shall exercise such review, direction, or oversight as may be appropriate with respect to the Project Committee and any other committees established pursuant to this Agreement.
(v) Budgeting. Upon the submission of a proposed Annual Budget or proposed Amended Annual Budget, approved by a Normal Vote of the Project Committee, the CCP Board shall review, modify, and approve each Annual Budget and Amended Annual Budget in accordance with Section 5.1(c) of this Agreement.
(vi) Early Termination of ESSA. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section 6.4(b)(ii) of this Agreement, as to an early termination of the ESSA pursuant to Section 11.2 of the ESSA. (vii) Assignment by Project Developer. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section

6.4(b)(iii) of this Agreement, as to any assignment by Project Developer pursuant to Section 14.1 of the ESSA other than any assignment pursuant to Sections 14.2 or 14.3 of the ESSA.

Item 5
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22 (viii) Buyer Financing Assignment. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section 6.4(b)(iv) of this Agreement, as to an assignment by CCP to a financing entity. (ix) Change of Control. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section 6.4(b)(v) of this Agreement, as to any Change of Control requiring CCP’s consent, as specified in Section 14.1 of the ESSA.
(x) Supervening Authority of the Board. The CCP Board has complete and plenary supervening power and authority to act upon any matter which is capable of being acted upon by the Project Committee or which is specified as being within the authority of the Project Committee pursuant to the provisions of this Agreement. (xi) Other Matters. The CCP Board is authorized to perform such other functions and duties, including oversight of those matters and responsibilities addressed by the Project Committee or CCP Manager as may be provided for under this Agreement and under the ESSA, or as may otherwise be appropriate.
(xii) Periodic Audits. The CCP Board or the Project Committee may arrange for the annual audit by certified accountants, selected by the CCP Board and experienced in electric generation or electric utility accounting, of the books and accounting records of CCP, the Project Developer to the extent authorized under the ESSA, and any other counterparty under any agreement to the extent allowable, and such audit shall be completed and submitted to the CCP Board as soon as reasonably practicable after the close of the Contract Year. CCP shall promptly furnish to the Project Participant copies of all audits. No more frequently than once every calendar year, each Project Participant may, at its sole cost and expense, audit, or cause to be audited the books and cost records of CCP, and/or the Project Developer to the extent authorized under the ESSA.
(xiii) Scheduling Coordinator Services Agreement. Upon a recommendation by Normal Vote of the Project Committee pursuant to Section 6.4(b)(vi), the CCP Board shall review, modify, and approve, or delegate the authority to approve, a Scheduling Coordinator Services Agreement or amendment thereto.
(b) Pursuant to Section 5.06 of the Joint Powers Agreement, this Agreement modifies the voting rules of the CCP Board for purposes of approving or acting on any matter identified in this Agreement, as follows:
(i) Quorum. A quorum shall consist of a majority of the CCP Board members that represent Project Participants.
(ii) Voting. Each CCP Board member that represents a Project Participant shall have one vote for any matter identified in this Agreement. Any CCP Board member representing a CCP member that is not a Project Participant shall abstain from voting on any matter identified in this Agreement. A vote of the majority of the CCP Board members representing Project Participants that are in attendance shall be sufficient to constitute action, provided a quorum is established and maintained.

Item 5
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23 5.3. Role of CCP Manager.
(a) In addition to the duties and responsibilities set forth elsewhere in this Agreement, the CCP Manager is delegated the following authorities and responsibilities:
(i) Request for Tax Documentation. Respond to any requests for tax-related documentation by the Project Developer. (ii) Request for Financial Statements. Provide the Project Developer with Financial Statements as may be required by the ESSA. (iii) Request for Information by Project Participant. Respond to any request by a Project Participant for information or documents that are reasonably available to allow the Project Participant to respond to requests for such information from any federal, state, or local regulatory body or other authority.
(iv) Coordinate Response to a Request for Confidential Information.

Upon a request or demand by any third person that is not a Party to the ESSA or a Project Participant, for Confidential Information as described in Section 18.2 of the ESSA, the CCP Manager shall notify the Project Developer and coordinate the response of CCP and Project Participants.
(v) Invoices. The CCP Manager shall review each invoice submitted by Project Developer and shall request such other data necessary to support the review of such invoices.

ARTICLE 6

PROJECT COMMITTEE

6.1. Establishment and Authorization of the Project Committee. The Project Committee is hereby established and duly authorized to act on behalf of the Project Participants as provided for in this Section 6 for the purpose of (a) providing coordination among, and information to, the Project Participants and CCP, (b) making any recommendations to the CCP Board regarding the administration of the Project, and (c) execution of the Project Committee responsibilities set forth in Section 6.4.

6.2. Project Committee Membership. The Project Committee shall consist of one representative from each Project Participant. The CCP Manager shall be a non-voting member of the Project Committee. Within thirty (30) days after the Effective Date, each Project Participant shall provide notice to each other of such Project Participant’s representative on the Project Committee. Alternate representatives may be appointed by similar written notice to act on the Project Committee, or on any subcommittee established by the Project Committee, in the absence of the regular representative. An alternate representative may attend all meetings of the Project Committee but may vote only if the representative for whom they serve as alternate for is absent.

No Project Participant’s representative shall exercise any greater authority than permitted by the Project Participant which they represent.

Item 5
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24 6.3. Project Committee Operations, Meetings, and Voting. Project Committee operations, meetings, and voting shall be in accordance with the procedures and requirements specified in Exhibit D.

6.4. Project Committee Responsibilities. The Project Committee shall have the following responsibilities:
(a) General Responsibilities of the Project Committee.
(i) Provide a liaison between CCP and the Project Participants with respect to the ongoing administration of the Project.
(ii) Exercise general supervision over any subcommittee established pursuant to Section 6.5.
(iii) Oversee, as appropriate, the completion of any Project design, feasibility, or planning studies or activities.
(iv) Review, discuss, and attempt to resolve any disputes among the Project Participants relating to this Agreement or the ESSA. (v) Perform such other functions and duties as may be provided for under this Agreement, the ESSA, or as may otherwise be appropriate or beneficial to the Project or the Project Participants.
(b) Recommendations to the CCP Board by a Normal Vote.
(i) Budgeting. Review, modify, and approve by a Normal Vote each proposed Annual Budget and proposed Amended Annual Budget for submission to the CCP Board for final approval.
(ii) Early Termination of ESSA. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding an early termination of the ESSA pursuant to Section 11.2 of the ESSA.
(iii) Assignment by Project Developer. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding any assignment by Project Developer pursuant to Section 14.1 of the ESSA other than any assignment pursuant to Sections

14.2 or 14.3 of the ESSA.
(iv) Buyer Financing Assignment. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding an assignment by CCP to a financing entity.
(v) Change of Control. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding any Change of Control requiring CCP’s consent, as specified in Section 14.1 of the ESSA.

Item 5
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25 (vi) Scheduling Coordinator. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding the selection of a Scheduling Coordinator and the form of the Scheduling Coordinator Services Agreement, including any amendments thereto. Such Scheduling Coordinator Services Agreement shall: (i) require that the scheduling and dispatch of the Project is in accordance with the criteria set forth in Exhibit C of the Coordinated Operations Agreement; (ii) include the Scheduling Coordinator responsibilities specified in Exhibit D of the Coordinated Operations Agreement; and (iii) address requirements relating to CAISO settlements, the Operating Restrictions, and communications and reporting from the Scheduling Coordinator to the Project Participants. (c) Actions Delegated to the Project Committee by this Agreement Subject to a Unanimous Vote.
(i) Project Design. Review, modify, and approve by a Unanimous Vote any recommendations to the Project Developer on the design of the Project. (ii) Extension of Guaranteed Construction Start Date and Guaranteed Commercial Operation Date. Review and confirm that requirements of Exhibit B of the ESSA have been satisfied, such that the Guaranteed Construction Start Date and/or Guaranteed Commercial Operation Date has been extended.
(iii) Event of Default. Direct CCP to exercise its rights under the ESSA if an Event of Default has occurred under Section 11.1 of the ESSA or under the Scheduling Coordinator Services Agreement.
(d) Actions Delegated to the Project Committee by this Agreement Subject to a Normal Vote.
(i) Make recommendations to the CCP Manager, the CCP Board, the Project Participants or to the Project Developer, as appropriate, with respect to the development, operation, and ongoing administration of the Project.
(ii) Review, develop, and, if appropriate, modify and approve rules, procedures, and protocols for the administration of the Project, including rules, procedures, and protocols for the management of the costs of the Facility and the scheduling, handling, tagging, dispatching, and crediting of the Product, the handling and crediting of Environmental Attributes associated with the Facility and the control and use of the Facility. (iii) Review, develop, and, if appropriate, modify rules, procedures, and protocols for the monitoring, inspection, and the exercise of due diligence activities relating to the operation of the Facility.
(iv) Review, and, if appropriate, modify or otherwise act upon, the form or content of any written statistical, administrative, or operational reports, Facility-related data and storage information, technical information, facility reliability data, transmission information, forecasting, scheduling, dispatching, tagging, parking, firming, exchanging, balancing, movement, or other delivery information, and similar information and records, or matters pertaining to the Item 5
Attachment 1
26 Project which are furnished to the Project Committee by the CCP Manager, the Project Developer, experts, consultants or others.
(v) Review, formulate, and, if appropriate, modify, or otherwise act upon, practices and procedures to be followed by Project Participants for, among other things, the production, scheduling, tagging, transmission, delivery, firming, balancing, exchanging, crediting, tracking, monitoring, remarketing, sale, or disposition of the Product, including the control and use of the Facility, and the supply, scheduling, and use of Charging Energy. (vi) Review and act upon any matters involving any arrangements and instruments entered into by the Project Developer or any affiliate thereof to, among other things, secure certain performance requirements, including, but not limited to, the ESSA, the Development Security or the Performance Security and any other letter of credit delivered to, or for the benefit of, CCP by the Project Developer and take such actions or make such recommendations as may be appropriate or desirable in connection therewith. (vii) Review, and, if appropriate, recommend, modify, or approve policies or programs formulated by CCP or Project Developer for determining or estimating storage resources or the values, quantities, volumes, or costs of the Product from the Facility. (viii) Review, and where appropriate, recommend the implementation of metering technologies and methodologies appropriate for the delivery, accounting for, transferring and crediting of the Product to the Point of Delivery (directly or through the Facility). (ix) Review, to the extent permitted by this Agreement, the ESSA, or any other relevant agreement relating to the Project, modify and approve or disapprove the specifications, vendors’ proposals, bid evaluations, or any other matters with respect to the Facility.
(x) Review and approve any Remedial Action Plan submitted by Project Developer to CCP pursuant to Section 2.4 of the ESSA.
(xi) Review and approve the submission of the written
acknowledgement of the Commercial Operation Date in accordance with Section 2.2 of the ESSA. (xii) Review and approve the return of the Development Security to Project Developer in accordance with Section 8.7 of the ESSA. (xiii) Review and approve the return of any unused Performance Security to Project Developer in accordance with Section 8.8 of the ESSA. (xiv) Review Progress Reports provided by Project Developer to CCP pursuant to Section 2.3 of the ESSA and participate in any associated regularly scheduled meetings with Project Developer to discuss construction progress. (xv) Direct CCP to collect any liquidated damages owed by Project Developer to CCP under the ESSA, and to the extent authorized by ESSA, draw upon the Development Security or Performance Security.

Item 5
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27 (xvi) Review invoices received by CCP from the Project Developer and, if appropriate, direct CCP to dispute an invoice pursuant to Section 8.5 of the ESSA. (xvii) Review invoices received by CCP from the Scheduling Coordinator and, if appropriate, direct CCP to collect any damages owed by the Scheduling Coordinator to CCP under the Scheduling Coordinator Services Agreement or to take any action permitted by law to enforce its rights under the Scheduling Coordinator Services Agreement, including but not limited to bringing any suit, action or proceeding at law or in equity as may be necessary or appropriate to recover damages and/or enforce any covenant, agreement, or obligation against the Scheduling Coordinator.

6.5. Subcommittees. The CCP Manager may establish as needed subcommittees including, but not limited to, auditing, legal, financial, engineering, mechanical, weather, geologic, diurnal, barometric, meteorological, operating, insurance, governmental relations, environmental, and public information subcommittees. The authority, membership, and duties of any subcommittee shall be established by the CCP Manager; provided, however, such authority, membership or duties shall not conflict with the provisions of the ESSA or this Agreement.

6.6. Representative’s Expenses. Any expenses incurred by any representative of any Project Participant or group of Project Participants serving on the Project Committee or any other committee in connection with their duties on such committee shall be the responsibility of the Project Participant which they represent and shall not be an expense payable under this Agreement.

6.7. Inaction by Committee. It is recognized by CCP and Project Participants that if the Project Committee is unable or fails to agree with respect to any matter or dispute which it is authorized to determine, resolve, approve, disapprove or otherwise act upon after a reasonable opportunity to do so, or within the time specified herein or in the ESSA, then CCP may take such commercially reasonable action as CCP determines is necessary for its timely performance under any requirement pursuant to the ESSA or this Agreement, pending the resolution of any such inability or failure to agree, but nothing herein shall be construed to allow CCP to act in violation of the express terms of the ESSA or this Agreement.

6.8. Delegation. To secure the effective cooperation and interchange of information in a timely manner in connection with various administrative, technical, and other matters which may arise from time to time in connection with administration of the ESSA, in appropriate cases, duties and responsibilities of the CCP Board or the Project Committee, as the case may be under this Section 6, may be delegated to the CCP Manager by the CCP Board upon notice to the Project Participants.

ARTICLE 7

OPERATING COMMITTEE

7.1. Operating Committee. The Operating Committee is established through the Coordinated Operations Agreement, as may be subsequently amended.

7.2. Operating Committee Responsibilities. In addition to any specific roles and responsibilities identified in the Coordinated Operations Agreement, the Project Committee may, through a Normal Vote, assign additional tasks to the Operating Committee as long as such Item 5
Attachment 1
28 additional tasks are within the scope of the Operating Committee’s authority set forth in the Coordinated Operations Agreement.

ARTICLE 8

OPERATING ACCOUNT

8.1. Calculation of Estimated Monthly Project Cost.
(a) No later than one hundred and eighty (180) days after the Effective Date, the CCP Manager shall present to the Project Committee a proposed Estimated Monthly Project Cost, which shall be equal to a forecast of expected Monthly Capacity Payments over an entire Contract Year, divided by twelve (12). The Project Committee shall review, and, if appropriate, recommend, modify, or approve through a Normal Vote, the proposed Estimated Monthly Project Cost.

8.2. Operating Account. CCP shall establish an Operating Account for each Project Participant that is accessible to and can be drawn upon by both CCP and the applicable Project Participant. Such Operating Accounts are for the purpose of providing a reliable source of funds for the payment obligations of the Project and, taking into account the variability of costs associated with the Project for the purpose of providing a reliable payment mechanism to address the ongoing costs associated with the Project.
(a) Operating Account Amount. The Operating Account Amount for each Project Participant shall be an amount equal to the Estimated Monthly Project Cost multiplied by three, the product of which is multiplied by such Project Participant’s Entitlement Share (“Operating Account Amount”).
(b) Initial Funding of Operating Account. By no later than three hundred and sixty-five (365) days after the Effective Date, each Project Participant shall deposit into such Project Participant’s Operating Account an amount equal to that Project Participant’s Operating Account Amount.
(c) Use of Operating Account. CCP shall draw upon each Project Participant’s Operating Account each month in an amount equal to the Monthly Costs multiplied by such Project Participant’s Entitlement Share. As required by Section 9.5, each Project Participant must deposit sufficient funds into such Project Participant’s Operating Account by the deadline specified in Section 9.5.
(d) Final Distribution of Operating Account. Following the expiration or earlier termination of the ESSA, and upon payment and satisfaction of any and all liabilities and obligations to make payments of the Project Participants under this Agreement and upon satisfaction of all remaining costs and obligations of CCP under the ESSA, any amounts then remaining in any Project Participant’s Operating Account shall be paid to the associated Project Participant.

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29 ARTICLE 9

BILLING

9.1. Monthly Costs. The amount of Monthly Costs for a particular Month shall be the sum of the Project Participant’s Entitlement Share multiplied by the Monthly Capacity Payments for the Product, as specified in Section 8.2 of the ESSA for such Month and to the extent such payment is made by CCP to the Project Developer, plus the Project Participant’s Entitlement Share multiplied by the Annual Excess Cycle Payment that is included in the invoice for such Month, if any, plus the Project Participant’s Entitlement Share multiplied by the Operating Cost for such Month and subtracting the Project Participant’s Entitlement Share multiplied by the positive revenue associated with the sale of any Facility Energy or Ancillary Services net of any CAISO costs or Scheduling Coordinator costs for such Month, as shown in the following formula:

Monthly Cost = ((Project Participant’s Entitlement Share) × (Monthly Capacity Payments)) + ((Project Participant’s Entitlement Share) × (Annual Excess Cycle Payment)) + ((Project Participant’s Entitlement Share) × (Operating Costs)) – ((Project Participant’s Entitlement Share) × (revenue from sale of Facility Energy or Ancillary Services, net of any CAISO costs or Scheduling Coordinator costs))

9.2. Billing Statements. By no later than ten (10) calendar days after CCP receives an invoice from Project Developer for the prior Month of each Contract Year pursuant to Section 8.1 of the ESSA, CCP shall issue to each Project Participant a copy of the invoice and a “Billing Statement,” which specifies such Project Participant’s Monthly Costs, itemized by each part of such Monthly Cost. The amount of Monthly Costs attributable to a Project Participant, and specified in such Billing Statement, shall be the “Invoice Amount.”

9.3. Disputed Monthly Billing Statement. A Project Participant may dispute, by written Notice to CCP, any portion of any Billing Statement submitted to that Project Participant by CCP pursuant to Section 9.2, provided that the Project Participant shall pay the full amount of the Billing Statement when due. If CCP determines that any portion of the Billing Statement is incorrect, CCP will deposit the difference between such correct amount and such full amount, if any, including interest at the rate received by CCP on any overpayment into the Project Participant’s Operating Account. If CCP and a Project Participant disagree regarding the accuracy of a Billing Statement, CCP will give consideration to such dispute and will advise all Project Participants with regard to CCP’s position relative thereto within thirty (30) days following receipt of written Notice by Project Participant of such dispute.

9.4. Payment Adjustments; Billing Errors. If CCP or Project Developer determines that a prior invoice or Billing Statement was inaccurate, CCP shall credit against or increase as appropriate each Project Participant’s subsequent Monthly Costs according to such adjustment.

The accompanying Billing Statement shall describe the cause of such adjustment and the amount of such adjustment.

9.5. Payment of Invoice Amount. Each Project Participant shall deposit the Invoice Amount for the applicable Month into such Project Participant’s Operating Account by no later than the twentieth (20th) calendar day of the following Month after the Billing Statement is issued, unless CCP has failed to issue the Billing Statement by the deadline specified in Section 9.2, in which case, each Project Participant shall deposit the Invoice Amount for the applicable Month by no later than thirty (30) days after the date on which CCP issues the Billing Statement to the Project Participant.

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30 9.6. Withdrawal of Invoice Amount from Operating Account. No sooner than five (5) calendar days after CCP issues a Billing Statement to a Project Participant or a Step-Up Invoice to a Project Participant, CCP shall withdraw the Invoice Amount or the Step-Up Invoice Amount from each Project Participant’s Operating Account. If the Monthly Cost attributable to such Project Participant is a negative number, CCP shall deposit such funds into the Operating Account of that Project Participant.

9.7. Late Payments.
(a) If any Project Participant fails to deposit the Invoice Amount into the Project Participant’s Operating Account by the deadline specified in Section 9.5, then CCP will issue such Project Participant a Late Payment Notice within five (5) days of the deadline specified in Section 9.5 directing the Project Participant to immediately deposit the Invoice Amount into the Project Participant’s Operating Account and informing the Project Participant that such Project Participant must pay a charge (“Late Payment Charge”). Upon issuing a Late Payment Notice to any Project Participant, CCP shall promptly provide Notice of such occurrence to all other Project Participants.
(b) The Late Payment Charge shall be equal to the Invoice Amount minus any partial payment that was deposited into such Project Participant’s Operating Account multiplied by the Interest Rate specified in Section 8.2 of the ESSA for the period from the deadline specified in Section 9.5 until the date on which the Project Participant deposits the Invoice Amount plus the Late Payment Charge into such Project Participant’s Operating Account. Upon payment, CCP shall withdraw the full amount of such Late Payment Charge from the Project Participant’s Operating Account and deposit any such Late Payment Charge into the Operating Accounts of all other Project Participants on a pro rata share, based on such other Project Participants’ Entitlement Shares.

ARTICLE 10
UNCONDITIONAL PAYMENT OBLIGATIONS; AUTHORIZATIONS; CONFLICTS; LITIGATION.

10.1. Unconditional Payment Obligation. Beginning with the earliest of (i) the date CCP is obligated to pay any portion of the costs of the Project, (ii) the date of the COD, or (iii) the date of the first delivery of the Product to Project Participants and continuing through the term of this Agreement, Project Participants shall pay CCP the amounts of Monthly Costs set forth in the Billing Statements submitted by CCP to Project Participants in accordance with the provisions of Section 9, whether or not the Project or any part thereof has been completed, is functioning, producing, operating or operable or its output or the provision of Facility products are suspended, interrupted, interfered with, reduced or curtailed or terminated in whole or in part, and such payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever, provided that the obligation of Project Participants to pay amounts associated with the Monthly Capacity Payment or Annual Excess Cycle Payment shall be limited to the amount of Monthly Capacity Payment or Annual Excess Cycle Payment charged by the Project Developer to CCP and paid by CCP to the Project Developer.

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31 10.2. Authorizations. Each Project Participant hereby represents and warrants that no order, approval, consent, or authorization of any governmental or public agency, authority, or person, is required on the part of such Project Participant for the execution and delivery by the Project Participant, or the performance by the Project Participant of its obligations under this Agreement except for such as have been obtained.

10.3. Conflicts. Each Project Participant represents and warrants to CCP as of the Effective Date that, to the Project Participant’s knowledge, the execution and delivery of this Agreement by the Project Participants and the Project Participants’ performance hereunder will not constitute a default under any agreement or instrument to which it is a party, or any order, judgment, decree or ruling of any court that is binding on the Project Participant, or a violation of any applicable law of any governmental authority, which default or violation would have a material adverse effect on the financial condition of the Project Participant.

10.4. Litigation. Each Project Participant represents and warrants to CCP that, as of the Effective Date, to the Project Participant’s knowledge, except as disclosed, there are no actions, suits or proceedings pending against the Project Participant (service of process on the Project Participant having been made) in any court that questions the validity of the authorization, execution or delivery by the Project Participant of this Agreement, or the enforceability on the Project Participant of this Agreement.

10.5. San José Clean Energy.
(a) The City of San José is a municipal corporation and is precluded under the California State Constitution and applicable law from entering into obligations that financially bind future governing bodies without an appropriation for such obligation, and, therefore, nothing in the Agreement shall constitute an obligation of future legislative bodies of the City of San José to appropriate funds for purposes of the Agreement; provided, however, that the City of San José has created and set aside a designated fund (being the San Jose Energy Operating Fund established pursuant to City of San Jose Municipal Code, Title 4, Part 63, Section 4.80.4050 et. seq.) (“Designated Fund”) for payment of its obligations under this Agreement. (b) Limited Obligations. The City of San José’s payment obligations under this Agreement are special limited obligations of San José Clean Energy payable solely from the Designated Fund and are not a charge upon the revenues or general fund of the City of San José or upon any non- San José Clean Energy moneys or other property of the Community Energy Department or the City of San José.

10.6. Clean Power San Francisco. With regard to Clean Power San Francisco only, (1) obligations under this Agreement are special limited obligations of Clean Power San Francisco payable solely from the revenues of Clean Power San Francisco, and shall not be a charge upon the revenues or general fund of the San Francisco Public Utilities Commission or the City and County of San Francisco or upon any non-Clean Power San Francisco moneys or other property of the San Francisco Public Utilities Commission or the City and County of San Francisco, (2) cannot exceed the amount certified by the San Francisco City Controller for the purpose and period stated in such certification, and (3) absent an authorized emergency per the San Francisco City Charter or Code, no San Francisco City representative is authorized to offer or promise, nor is San Item 5
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32 Francisco required to honor, any offered or promised payments under this Agreement for work beyond the agreed upon scope or in excess of the certified maximum amount without the San Francisco City Controller having first certified the additional promised amount.

ARTICLE 11
PROJECT SPECIFIC MATTERS AND PROJECT PARTICIPANTS’ RIGHTS AND OBLIGATIONS UNDER THE ESSA.

11.1. CCP Rights and Obligations under the ESSA. Notwithstanding anything to the contrary contained in this Agreement: (i) the obligation of CCP to cause the delivery of the Project Participants’ Entitlement Shares of the Product during the Delivery Term of this Agreement is limited to the Product which CCP receives from the Facility (or the Project Developer, as applicable); (ii) the obligation of CCP to pay any amount to Project Participants hereunder or to give credits against amounts due from Project Participants hereunder is limited to amounts CCP receives in connection with the transaction to which the payment or credit relates (or is otherwise available to CCP in connection with this Agreement for which such payment or credit relates); (iii) any purchase costs, operating costs, energy costs (including costs related to Charging Energy), capacity costs, Facility costs, environmental attribute costs, transmission costs, tax costs, insurance costs, indemnifications, other costs or other charges for which CCP is responsible under the ESSA shall be considered purchase costs, operating costs, energy costs, capacity costs, Facility costs, environmental attribute costs, transmission costs, tax costs, insurance costs, indemnifications, other costs or other charges incurred by CCP and payable by Project Participants as provided in this Agreement; (iv) CCP shall carry out its obligations and exercise its rights under the ESSA in a commercially reasonable manner; (v) all remedies provided to CCP pursuant to the ESSA or the Scheduling Coordinator Services Agreement shall be provided to Project Participants in accordance with Section 5.1(h); and (vi) any Force Majeure under the ESSA or other event of force majeure affecting the delivery of Product pursuant to applicable provisions of the ESSA shall be considered an event caused by Uncontrollable Forces affecting CCP with respect to the delivery of the Product hereunder and CCP forwarding to Project Participants notices and information from the Project Developer concerning an event of Force Majeure upon receipt thereofshall be sufficient to constitute a Notice that Uncontrollable Forces have occurred pursuant to Section 5.1 of this Agreement. Any net proceeds received by CCP from the sale of the Product by the Project Developer to any third-party as a result of a Force Majeure event or failure by CCP to accept delivery of Product pursuant to the ESSA and any reimbursement received by CCP for purchase of Replacement RA shall be remitted by CCP to the Project Participants in accordance with their respective Entitlement Shares.

ARTICLE 12
NONPERFORMANCE AND PAYMENT DEFAULT.

12.1. Nonperformance by Project Participants. If a Project Participant fails to perform any covenant, agreement, or obligation under this Agreement or shall cause CCP to be in default with respect to any undertaking entered into for the Project or to be in default under the ESSA (“Defaulting Project Participant”), CCP may, in the event the performance of any such obligation remains unsatisfied after thirty (30) days’ prior written notice thereof to such Project Participant and a demand to so perform, take any action permitted by law to enforce its rights under this Agreement, including but not limited to termination of such Project Participant’s rights under Item 5
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33 this Agreement including any rights to its Entitlement Share of the Product, and/or bring any suit, action or proceeding at law or in equity as may be necessary or appropriate to recover damages and/or enforce any covenant, agreement or obligation against such Project Participant with regard to its failure to so perform. Any Project Participant that is not the Defaulting Project Participant (“Non-Defaulting Project Participant”) may submit Notice directly to the CCP Board, if such Non-Defaulting Project Participant determines that CCP is or may not be fully taking appropriate actions to enforce CCP’s rights under this Agreement against a Defaulting Project Participant.

The CCP Board shall consider such Notice and direct CCP to take appropriate action, if any.

12.2. Payment Default. If any Project Participant fails to deposit the Invoice Amount into the Project Participant’s Operating Account by the deadline specified in Section 9.5, and if such Participant has not deposited the Invoice Amount plus the Late Payment Charge into such Project Participant’s Operating Account within ten (10) calendar days of the issuance of the Late Payment Notice to such Project Participant by CCP, then such occurrence shall constitute a “Payment Default.”

12.3. Payment Default Notice. Upon the occurrence of a Payment Default, CCP shall issue a Notice of Payment Default to the Project Participant notifying such Project Participant that as a result of a Payment Default, it is in default under this Agreement and has assumed the status of a Defaulting Project Participant and that such Defaulting Project Participant’s Project Revenue Rights have been suspended and that such Defaulting Project Participant’s Project Rights are subject to termination and disposal in accordance with Sections 12.6 and 12.8 of this Agreement.

CCP shall provide a copy of such Notice of Default to all other Project Participants within five (5) calendar days after the issuance of the written Notice of Payment Default by CCP to the Defaulting Project Participant.

12.4. Cured Payment Default. If after a Payment Default, the Defaulting Project Participant cures such Payment Default within forty-five (45) calendar days after the issuance of the Late Payment Notice by CCP, the Defaulting Project Participant’s Project Revenue Rights shall be reinstated and its Project Rights shall not be subject to termination and disposal as provided for in Sections 12.6 and 12.8. In order to cure a Payment Default, the Defaulting Project Participant must deposit the full amount of any unpaid Invoice Amounts and any associated Late Payment Penalties into its Operating Account.

12.5. Suspension of Project Participant’s Project Revenue Rights and Treatment of Capacity Attributes.
(i) Upon the occurrence of a Payment Default, the Defaulting Project Participant’s Project Revenue Rights shall be suspended until such time as such Defaulting Project Participant cures the Payment Default pursuant to the requirements of Section 12.4. Any revenue associated with the Facility Energy or Ancillary Services associated with the Facility shall be deposited by CCP into the Step-Up Reserve Account, as specified in Section 12.7. (ii) For any Month where the funds remaining in a Defaulting Project Participant’s Operating Account are sufficient to pay the entire Invoice Amount, CCP shall withdraw the Invoice Amount from such Defaulting Project Participant’s Operating Account and shall cause the delivery of the Defaulting Project Participant’s Entitlement Share of the Capacity Item 5
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34 Attributes and Environmental Attributes associated with the Facility or otherwise provided for pursuant to the ESSA. For any Month where the funds remaining in a Defaulting Project Participant’s Operating Account are less than the amount necessary to pay the entire Invoice Amount, CCP shall withdraw all remaining funds from the Defaulting Project Participant’s Operating Account, and to the extent reasonably possible, in CCP’s sole discretion, CCP shall cause the delivery of a quantity of Capacity Attributes and Environmental Attributes proportionate to the portion of the Invoice Amount that the remaining funds were sufficient to pay for. For any Month where the Defaulting Project Participant’s Operating Account has no funds remaining, the Defaulting Project Participant shall have no right to any such Capacity Attributes or Environmental Attributes associated with the Facility or otherwise provided for under the ESSA.

12.6. Termination and Disposal of Project Participant’s Project Rights. If a Defaulting Project Participant has not cured a Payment Default within forty-five (45) calendar days after the payment deadline specified in Section 9.5 by CCP (“Payment Default Termination Deadline"), then all Project Rights and Obligations pursuant to this Agreement shall be terminated and disposed in accordance with Sections 12.6 and 12.8 of this Agreement; provided, however, that the Defaulting Project Participant shall be liable for all outstanding payment obligations accrued prior to the Payment Default Termination Deadline and shall remain subject to all rights, obligations, and liabilities of this Agreement, including but not limited to any liabilities for Damage Payment or Termination Payment, as applicable, and any other damage payments or reimbursement amounts under the ESSA. CCP shall provide to the Defaulting Project Participant a separate monthly invoice of any such payment obligations of such Defaulting Project Participant.

CCP shall immediately notify the other Project Participants of such termination of the Defaulting Project Participant’s Project Rights and Obligations.

12.7. Step-Up Invoices.
(a) Upon the occurrence of a Payment Default, CCP shall, concurrently with the Late Payment Notice issued pursuant to Section 9.7(a), issue a Step-Up Invoice to each Non-Defaulting Project Participant that specifies such Non-Defaulting Project Participant’s pro rata payment obligation, calculated based on the Entitlement Share of such Non-Defaulting Project Participant, of the amount of the Payment Default for the Defaulting Project Participant (the “Step-Up Invoice Amount”); provided, however, that a Non-Defaulting Project Participant’s Step-Up Invoice Amount shall not exceed twenty-five percent (25%) of such Non-Defaulting Project Participant’s Invoice Amount for the same month for which the Payment Default occurred (the “Step-Up Invoice Amount Cap”).
(i) Each Non-Defaulting Project Participant shall deposit the Step-Up Invoice Amount into such Non-Defaulting Project Participant’s Operating Account by the later of the twentieth (20th) calendar day of the following Month or thirty (30) days after the date on which CCP issues the Step-Up Invoice to the other Project Participants. No sooner than five (5) calendar days after CCP issues the Step-Up Invoice, CCP may withdraw the amount of the Step-Up Invoice from each Project Participant’s Operating Account and deposit such funds in a separate account (“Step-Up Reserve Account”), which shall be accessible only by CCP, and which CCP may in its sole discretion draw upon in order to ensure that CCP can meet the payment obligations of the ESSA. CCP first shall withdraw all funds from a Defaulting Project Participant’s Operating Account before withdrawing funds from the Step-Up Reserve Account.

Item 5
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35 (ii) Application of Moneys Received from a Defaulting Project Participant. If a Defaulting Project Participant cures a Payment Default on or before the Payment Default Termination Deadline, any funds remaining in the Step-Up Reserve Account shall be deposited into the Operating Accounts of the other Project Participants on a pro rata share, based on the Entitlement Share of such other Project Participant. If a Defaulting Project Participant fails to cure a Payment Default and the Defaulting Project Participant’s Project Rights and Obligations are terminated and disposed of in accordance with Section 12.8, any funds remaining in the Step-Up Reserve Account shall be deposited into the Operating Accounts of the Non-Defaulting Project Participants on a pro rata share, based on the Entitlement Share, subject to the Step-Up Invoice Amount Cap, of such other Project Participant. If any Non-Defaulting Project Participant has not deposited the full amount of its share of the Step-Up Invoice Amount into its Operating Account by the deadline specified in Section 12.7(a)(i), then such occurrence shall be a Late Payment as specified in Section 9.7(a) and is subject to a Late Payment Charge pursuant to Section 9.7(b), and any such Non-Defaulting Project Participant shall not be entitled to its share of any moneys received from the Defaulting Project Participant or any funds remaining in the Step-Up Reserve Account in accordance with this Section 12.7(a)(ii) until such Non-Defaulting Project Participant has deposited the full amount of its Step-Up Invoice Amount and the Late Payment Charge into its Operating Account.

12.8. Step-Up Allocation of Project Participant’s Project Rights. In the event that a Defaulting Project Participant’s Project Rights are terminated pursuant to Section 12.6, then such Defaulting Project Participant’s Entitlement Share shall be allocated to the other Project Participants (“Step-Up Allocation”) pursuant to the process set forth in this Section 12.8. (a) Step-Up Allocation Cap. If a Defaulting Project Participant’s Entitlement Share is allocated to the Non-Defaulting Project Participants pursuant to this Section 12.8, no individual Non-Defaulting Project Participant shall be obligated to assume an allocation that exceeds that Project Participant’s Step-Up Allocation Cap set forth in Column E of the Table in Exhibit B of this Agreement. Each Non-Defaulting Project Participant’s initial Step-Up Allocation Cap shall be equal to the Non-Defaulting Project Participant Entitlement Share as of the Effective Date and set forth in Column B of the Table in Exhibit B of this Agreement, multiplied by one hundred and twenty-five percent (125%). If a Project Participant modifies its Entitlement Share pursuant to Section 4.2 of this Agreement, then that Project Participant’s Step-Up Allocation Cap shall be equal to the Project Participant’s Entitlement Share as modified pursuant to Section 4.2 multiplied by one hundred and twenty-five percent (125%). Upon a modification of a Project Participant’s Entitlement Share pursuant to Section 4.2, the CCP Manager shall cause the Step-Up Allocation Cap specified in Column E of the Table in Exhibit B of this Agreement to be modified in accordance with this Section 12.8(a). For avoidance of doubt, if a Project Participant’s Entitlement Share is increased pursuant to Section 12.8(b) or (c), then such Project Participant’s Step-Up Allocation Cap shall not be modified.
(b) Step-Up Allocation Share. If a Defaulting Project Participant’s Project Rights are terminated pursuant to Section 12.6, then such Defaulting Project Participant’s Entitlement Share shall be allocated to each Non-Defaulting Project Participant based on such Non-Defaulting Project Participant’s pro rata share, calculated based on its Entitlement Share of the entire project minus the Entitlement Share of the Defaulting Project Participant, unless such allocation would cause any individual Non-Defaulting Project Participant to exceed its Step-Up Item 5
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36 Allocation Cap, in which case Section 12.8(c) shall apply. Upon allocation of a defaulting Project Participant’s Entitlement Share pursuant to this Section 12.8(b), the CCP Manager shall cause each affected Project Participant’s Entitlement Share specified in Column D of the Table in Exhibit B to be modified in accordance with this Section 12.8.
(c) Voluntary Allocation of Project Rights in Excess of the Step-Up Allocation Caps. If the allocation of a Defaulting Project Participant’s Entitlement Share pursuant to Section

12.8(b) would cause any Non-Defaulting Project Participant’s Entitlement Share to exceed its Step-Up Allocation Cap, then no allocation shall occur pursuant to Section 12.8(b). In such case, the CCP Manager shall oversee the offering of the total amount of the Defaulting Project Participant’s Entitlement Share to the Non-Defaulting Project Participants on a voluntary basis.

The initial offering shall be to each Non-Defaulting Project Participant on a pro rata share, based on such Non-Defaulting Project Participant’s Entitlement Share. Each Project Participant may accept or reject the portion of the Defaulting Project Participant’s Entitlement Share. If any portion of the Defaulting Project Participant’s Entitlement Share remains unclaimed after the initial offering, then the remaining portion shall be offered to any Non-Defaulting Project Participant that accepted its full share of the Defaulting Project Participant’s Entitlement Share in the initial offering on a pro rata share, based on such Non-Defaulting Project Participant’s Entitlement Share as a percentage of the total Entitlement Shares of all Project Participants that are participating in the subsequent round of offerings. The CCP Manager shall conduct subsequent offering rounds until either the total amount of the Defaulting Project Participant’s Entitlement Share is accepted by one or more of the Non-Defaulting Project Participants or some portion of the Defaulting Project Participant’s Entitlement Share remains, but all Non-Defaulting Project Participants have rejected such remaining amount.
(d) Step-Up Allocation Damage Payment. A Defaulting Project Participant shall owe to each Non-Defaulting Project Participant that assumes any portion of the Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section 12.8(b) or

12.8(c) a “Step-Up Allocation Damage Payment” equal to the Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Project Participant’s Costs and Losses exceed its Gains, then the Step-Up Allocation Damage Payment shall be an amount owing to such Non-Defaulting Project Participant. If the Non-Defaulting Project Participant’s Gains exceed its Costs and Losses, then the Step-Up Allocation Damage Payment shall be zero dollars ($0). A Defaulting Project Participant shall not be entitled to any Step-Up Allocation Damage Payment or any other damages otherwise authorized under this Agreement from any other Project Participant.

The Step-Up Allocation Damage Payment does not include consequential, incidental, punitive, exemplary, or indirect or business interruption damages. Each Non-Defaulting Project Participant that assumes any portion of the Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section 12.8(b) or 12.8(c) shall calculate, in a commercially reasonable manner, the Step-Up Allocation Damage Payment for the Defaulting Project Participant’s Entitlement Share assumed by the Non-Defaulting Project Participant as of the effective date of such Step-Up Allocation. 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. If the Defaulting Project Participant disputes the Non-Defaulting Project Participant’s calculation of the Step-Up Allocation Damage Payment, in whole or in part, the Defaulting Project Participant shall, within five (5) Business Days of receipt of the Non-Defaulting Project Participant’s calculation of the Step-Up Allocation Item 5
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37 Damage Payment, provide to the Non-Defaulting Project Participant a detailed written explanation of the basis for such dispute. Disputes regarding the Step-Up Allocation Damage Payment shall be determined in accordance with Article 16. Each Party agrees and acknowledges that (i) the actual damages that the other Project Participant would incur in connection with a Step-Up Allocation would be difficult or impossible to predict with certainty, (ii) the Step-Up Allocation Damage Payment described in this Section 12.8(d) is a reasonable and appropriate approximation of such damages, and (iii) the Step-Up Allocation Damage Payment described in this Section

12.8(d) is the exclusive remedy of a Project Participant in connection with a Step-Up Allocation pursuant to the process set forth in Sections 12.8(b) or 12.8(c) against a Defaulting Project Participant but shall not otherwise act to limit any of the Non-Defaulting Project Participant’s rights or remedies under this Agreement.
(e) Remarketing of Unclaimed Defaulting Project Participant’s Entitlement Share. If after the process set forth in Section 12.8(c), some portion of the Defaulting Project Participant’s Entitlement Share remains unclaimed, the CCP Manager, in their discretion or as directed by the Non-Defaulting Project Participants, may take any action to generate revenue from such unclaimed Entitlement Share in order to meet CCP’s payment obligation under the ESSA.

For avoidance of doubt, the CCP Manager shall not be limited by the requirements of Section 4.2 or 5.1(j) of this Agreement in remarketing or generating revenue base on the unclaimed share.

12.9. Elimination or Reduction of Payment Obligations. Notwithstanding anything to the contrary in this Agreement, upon termination of a Defaulting Project Participant’s Project Rights pursuant to Section 12.6 and the disposal of such Defaulting Project Participant’s Project Rights and Obligations pursuant to Section 12.8, such Defaulting Project Participant’s obligation to make payments under this Agreement (notwithstanding anything to the contrary herein) shall not be eliminated or reduced; provided, however, such payment obligations for the Defaulting Project Participant may be eliminated or reduced to the extent permitted by law, through an amendment to this Agreement, which shall be subject to the consent and approval of all Parties to this Agreement.

ARTICLE 13

LIABILITY

13.1. Project Participants’ Obligations Several. No Project Participant shall be liable under this Agreement for the obligations of any other Project Participant or for the obligations of CCP incurred on behalf of other Project Participants. Each Project Participant shall be solely responsible and liable for performance of its obligations under this Agreement, except as otherwise provided for herein. The obligation of Project Participants to make payments under this Agreement is a several obligation and not a joint obligation with those of the other Project Participants.

13.2. No Liability of CCP or Project Participants, Their Directors, Officers, Etc.; CCP, The Project Participants’ and CCP Manager’s Directors, Officers, Employees Not Individually Liable. Except as provided for under Section 13.5 herein, the Parties agree that neither CCP, Project Participants, nor any of their past, present or future directors, officers, employees, board members, agents, attorneys or advisors (collectively, the “Released Parties”) shall be liable to any other of the Released Parties for any and all claims, demands, liabilities, obligations, losses, Item 5
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38 damages (whether direct, indirect or consequential), penalties, actions, loss of profits, judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses) or disbursements of any kind or nature whatsoever in law, equity or otherwise (including, without limitation, death, bodily injury or personal injury to any person or damage or destruction to any property of Project Participants, CCP, or third persons) suffered by any Released Party as a result of the action or inaction or performance or non-performance by the Project Developer under the ESSA. Except as provided for under Section 13.5 herein, each Party shall release each of the other Released Parties from any claim or liability that such Party may have cause to assert as a result of any actions or inactions or performance or non-performance by any of the other Released Parties under this Agreement (excluding gross negligence and willful misconduct, which, unless otherwise agreed to by the Parties, are both to be determined and established by a court of competent jurisdiction in a final, non-appealable order). Notwithstanding the foregoing, no such action or inaction or performance or non-performance by any of the Released Parties shall relieve CCP or any Project Participants from their respective obligations under this Agreement, including, without limitation, the Project Participants’ obligation to make payments required under Section 9.5 of this Agreement and CCP’s obligation to make payments under Section 8.2 of the ESSA. The provisions of this Section 13.2 shall not be construed so as to relieve the CCP or the Project Developer from any obligation or liability under this Agreement or the ESSA.

13.3. Extent of Exculpation; Enforcement of Rights. The exculpation provision set forth in Section 13.2 hereof shall apply to all types of claims or actions including, but not limited to, claims or actions based on contract or tort. Notwithstanding the foregoing, any Party may protect and enforce its rights under this Agreement by a suit or suits in equity for specific performance of any obligations or duty of any other Party, and each Party shall at all times retain the right to recover, by appropriate legal proceedings, any amount determined to have been an overpayment, underpayment or other monetary damages owed by the other Party in accordance with the terms of this Agreement.

13.4. No General Liability of CCP. The undertakings under this Agreement by CCP shall not constitute a debt or indebtedness of CCP within the meaning of any provision or limitation of the Constitution or statutes of the State of California, and shall not constitute or give rise to a charge against its general credit.

13.5. Indemnification. Each Party shall indemnify, defend, protect, hold harmless, and release the other Parties, their directors, board members, officers, employees, agents, attorneys and advisors, past, present or future, from and against any and all claims, demands, liabilities, obligations, losses, damages (whether direct, indirect or consequential), penalties, actions, loss of profits, judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses) or disbursements of any kind or nature whatsoever in law, equity or otherwise, which include, without limitation, death, bodily injury, or personal injury to any person or damage or destruction to any property of Project Participants, CCP, or third persons, that may be imposed on, incurred by or asserted against any Party arising by manner of any breach of this Agreement, or the negligent acts, errors, omissions or willful misconduct incident to the performance of this Agreement on the part of any Party or any Party’s directors, board members, officers, employees, agents and advisors, past, present or future.

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39 ARTICLE 14

NOTICES

14.1. 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 A or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.

14.2. 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, five (5) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including electronic mail or other electronic means) at the time indicated by the time stamp upon delivery and, if after 5:00 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 15

ASSIGNMENT

15.1. General Prohibition on Assignments. No Party may assign this Agreement, or its rights or obligations under this Agreement, without the prior written consent of all other Parties, in each Party’s sole discretion.

ARTICLE 16

GOVERNING LAW AND DISPUTE RESOLUTION

16.1. Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced, and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. The Parties agree that any suit, action, or other legal proceeding by or against any Party with respect to or arising out of this Agreement shall be brought in the federal or state courts located in the State of California in a location to be mutually chosen by all Parties, or in the absence of mutual agreement, the County of San Francisco.

16.2. 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 available to them at Law or in equity.

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40 ARTICLE 17

MISCELLANEOUS

17.1. Entire Agreement; Integration; Exhibits. This Agreement, together with the Exhibits attached hereto constitutes the entire agreement and understanding by and among the Parties 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. 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.

17.2. Amendments. This Agreement may only be amended, modified, or supplemented by an instrument in writing executed by duly authorized representatives of all Parties; provided, this Agreement may not be amended by electronic mail communications. Any revisions to the Entitlement Share specified in Exhibit B pursuant to Section 4.2. or Section 12.8 shall be considered an element of the administration of this Agreement and shall not require the consent of the Parties hereto.

17.3. No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.

17.4. 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.

17.5. 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.

17.6. 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.

17.7. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

17.8. Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and that the Parties are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Item 5
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41 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.

17.9. City of San Francisco Standard Provisions.
(a) False Claims. Pursuant to San Francisco Administrative Code § 21.35, any Party to this Agreement who submits a false claim shall be liable to the City and County of San Francisco for the statutory penalties set forth in that section. A Party will be deemed to have submitted a false claim to the City and County of San Francisco if the Party: (a) knowingly presents or causes to be presented to an officer or employee of the City and County of San Francisco a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City and County of San Francisco; (c) conspires to defraud the City and County of San Francisco by getting a false claim allowed or paid by the City and County of San Francisco; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City and County of San Francisco; or (e) is a beneficiary of an inadvertent submission of a false claim to the City and County of San Francisco, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City and County of San Francisco within a reasonable time after discovery of the false claim. (b) Political Activity. In performing its responsibilities under this Agreement, CCP shall comply with San Francisco Administrative Code Chapter 12G, which prohibits funds appropriated by the City and County of San Francisco for this Agreement from being expended to participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure.
(c) Non-discrimination Requirements.
(i) Non-discrimination in Contracts. CCP shall comply with the provisions of Chapters 12B and 12C of the San Francisco Administrative Code. CCP shall incorporate by reference in all subcontracts the provisions of Sections12B.2(a), 12B.2(c)-(k), and 12C.3 of the San Francisco Administrative Code and shall require all subcontractors to comply with such provisions. CCP is subject to the enforcement and penalty provisions in Chapters 12B and 12C.
(ii) Non-discrimination in the Provision of Employee Benefits. San Francisco Administrative Code 12B.2. CCP does not as of the date of this Agreement, and will not during the term of this Agreement, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of employee benefits between employees with domestic partners and employees with spouses and/or between the domestic partners and spouses of such employees, subject to the conditions set forth in San Francisco Administrative Code Section 12B.2.

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Attachment 1
42 (d) Consideration of Criminal History in Hiring and Employment Decisions.

CCP agrees to comply fully with and be bound by all of the provisions of Chapter 12T, “City Contractor/Subcontractor Consideration of Criminal History in Hiring and Employment Decisions,” of the San Francisco Administrative Code, including the remedies provided, and implementing regulations, as may be amended from time to time. The requirements of Chapter 12T shall only apply to CCP’s operations to the extent those operations are in furtherance of the performance of this Agreement, shall apply only to applicants and employees who would be or are performing work in furtherance of this Agreement, and shall apply when the physical location of the employment or prospective employment of an individual is wholly or substantially within the City. Chapter 12T shall not apply when the application in a particular context would conflict with federal or state law or with a requirement of a government agency implementing federal or state law. MacBride Principles – Northern Ireland. Pursuant to San Francisco Administrative Code § 12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride principles. (e) MacBride Principles – Northern Ireland. Pursuant to San Francisco Administrative Code § 12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride Principles. (f) Tropical Hardwood and Virgin Redwood Ban. The City and County of San Francisco urges contractors not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood product, virgin redwood or virgin redwood product. If this order is for wood products or a service involving wood products: (a) Chapter 8 of the Environment Code is incorporated herein and by reference made a part hereof as though fully set forth. (b) Except as expressly permitted by the application of Sections 802(B), 803(B), and 804(B) of the Environment Code, CCP shall not provide any items to the City in performance of this Agreement which are tropical hardwoods, tropical hardwood products, virgin redwood or virgin redwood products. (c) Failure of CCP to comply with any of the requirements of Chapter 8 of the Environment Code shall be deemed a material breach of contract.

17.10. City of San José Standard Provisions.
(a) Nondiscrimination/Non-Preference. The Parties shall not, and shall not cause or allow its subcontractors to, discriminate against or grant preferential treatment to any person on the basis of race, sex, color, age, religion, sexual orientation, actual or perceived gender identity, disability, ethnicity or national origin. This prohibition applies to recruiting, hiring, demotion, layoff, termination, compensation, fringe benefits, advancement, training, apprenticeship and other terms, conditions, or privileges of employment, subcontracting and purchasing. The Parties will inform all subcontractors of these obligations. This prohibition is subject to the following conditions: (i) the prohibition is not intended to preclude Parties from providing a reasonable accommodation to a person with a disability; (ii) the City of San José’s Compliance Officer may require the Parties to file, and cause any Party’s subcontractor to file, reports demonstrating compliance with this section. Any such reports shall be filed in the form Item 5
Attachment 1
43 and at such times as the City’s Compliance Officer designates. They shall contain such information, data and/or records as the City’s Compliance Officer determines is needed to show compliance with this provision.
(b) Conflict of Interest. The Parties represent that they are familiar with the local and state conflict of interest laws, and agrees to comply with those laws in performing this Agreement. The Parties certify that, as of the Effective Date, are unaware of any facts constituting a conflict of interest or creating an appearance of a conflict of interest. The Parties shall avoid all conflicts of interest or appearances of conflicts of interest in performing this Agreement. The Parties have the obligation of determining if the manner in which it performs any part of this Agreement results in a conflict of interest or an appearance of a conflict of interest, and a Party shall immediately notify the City of San José in writing if it becomes aware of any facts giving rise to a conflict of interest or the appearance of a conflict of interest. A Party’s violation of this Section 17.10(b) is a material breach.
(c) Environmentally Preferable Procurement Policy. Parties shall perform its obligations under this Agreement in conformance with San José City Council Policy 1-19, entitled “Prohibition of City Funding for Purchase of Single serving Bottled Water,” and San José City Council Policy 4-6, entitled “Environmentally Preferable Procurement Policy,” as those policies may be amended from time to time. The Parties acknowledge and agree that in no event shall a breach of this Section 17.10(c) be a material breach of this Agreement or otherwise give rise to an Event of Default or entitle the City of San José to terminate this Agreement. (d) Gifts Prohibited. The Parties represent that they are familiar with Chapter

12.08 of the San José Municipal Code, which generally prohibits a City of San José officer or designated employee from accepting any gift. The Parties shall not offer any City of San José officer or designated employee any gift prohibited by Chapter 12.08. A Party’s violation of this Section 17.10(d) is a material breach.
(e) Disqualification of Former Employees. The Parties represent that they are familiar with Chapter 12.10 of the San José Municipal Code, which generally prohibits a former City of San José officer and former designated employee from providing services to the City of San José connected with his/her former duties or official responsibilities. Parties shall not use either directly or indirectly any officer, employee or agent to perform any services if doing so would violate Chapter 12.10.

17.11. 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 assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
[Signatures on following page]
Item 5
Attachment 1
44 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

California Community Power
By:

Name:

Title:

Approved as to form by Counsel
By:

Name:

Title:

Clean Power San Francisco
By:

Name:

Title:

Approved as to form by Counsel
By:

Name:

Title:

Redwood Coast Energy Authority
By:

Name:

Title:

Approved as to form by Counsel
By:

Name:

Title:

San José Clean Energy
By:

Name:

Title:

Approved as to form by Counsel
By:

Name:

Title:

Item 5
Attachment 1
45 Silicon Valley Clean Energy
By:

Name:

Title:

Approved as to form by Counsel
By:

Name:

Title:

Sonoma Clean Power
By:

Name:

Title:

Approved as to form by Counsel
By:

Name:

Title:

Valley Clean Energy
By:

Name:

Title:

Approved as to form by Counsel
By:

Name:

Title:

Item 5
Attachment 1
Exhibit A - 1

EXHIBIT A

NOTICES
Party All Notices Invoices
California
Community Power
California Community Power
Tim Haines
____________________
____________________
timhaines@powergridsymmetry
.com
Clean Power San
Francisco
Clean Power San Francisco
Barbara Hale, Assistant General
Manager, Power
San Francisco Public Utilities
Commission
525 Golden Gate Ave, 13th
Floor
San Francisco, CA 94102
[email protected]
Redwood Coast
Energy Authority
Redwood Coast Energy
Authority
Matthew Marshall, CEO
Redwood Coast Energy
Authority
633 3rd Street
Eureka, CA 95501
[email protected]
San José Clean
Energy
San José Clean Energy
Lori Mitchell, Director
cc: Luisa Elkins, Senior Deputy
City Attorney
San José Clean Energy
200 E. Santa Clara Street, 14th
Floor
San José, CA 95113
[email protected]
[email protected]
Item 5
Attachment 1
Exhibit A - 2
Party All Notices Invoices
Silicon Valley Clean
Energy
Silicon Valley Clean Energy
Girish Balachandran, CEO
Silicon Valley Clean Energy
Authority
333 W. El Camino Real, Suite
330
Sunnyvale, CA 94087
[email protected]
Sonoma Clean
Power
Sonoma Clean Power
Geof Syphers, CEO
Sonoma Clean Power
50 Santa Rosa Avenue, 5th Floor
Santa Rosa, CA 95404
[email protected]
rg
Valley Clean
Energy
Valley Clean Energy
Gordon Samuel
Assistant General Manager &
Director of Power Resource
604 2nd Street
Davis, CA 95616
gordon.samuel@valleycleanene
rgy.org
Item 5
Attachment 1
Exhibit B - 1

EXHIBIT B

SCHEDULE OF PROJECT PARTICIPANT ENTITLEMENT SHARES

AND STEP-UP ALLOCATION CAPS
Dated:________________________

A B C D E
Project Participant
Entitlement Share
As of Effective Date
Entitlement Share
As Modified Pursuant to
Section 4.2
Entitlement Share
As Modified Pursuant to
Section 12.8(b) or 12.8(c)
Step-Up Allocation Cap
125% multiplied by Column B
or C as applicable
Clean Power San Francisco 21.50%
Redwood Coast Energy Authority 4.00%
San José Clean Energy 24.22%
Silicon Valley Clean Energy 28.42%
Sonoma Clean Power 17.36%
Valley Clean Energy 4.50%
Total 100%
Instructions: If the CCP Manager modifies one or more Project Participant’s Entitlement Share pursuant to Section 4.2, the CCP Manager shall prepare an updated Exhibit B that shows the prior Entitlement Share (Column B or D) in strikeout and specifies the new Entitlement Share values and the effective date of such modification in Column C. If the CCP Manager modifies one or more Project Participant’s Entitlement Share pursuant to Section 12.8, the CCP Manager shall prepare an updated Exhibit B that shows the prior Entitlement Share (Column B or Column C) in strikeout and specifies the new Entitlement Share values and the effective date of such modification in Column D.

Item 5
Attachment 1
Exhibit C - 1

EXHIBIT C

PROCEDURE FOR VOLUNTARY REDUCTION OF
PROJECT PARTICIPANT’S ENTITLEMENT SHARE
(a) Offer to Other Project Participants. A Project Participant proposing to reduce its Entitlement Share of the Project shall provide Notice to all other Project Participants and CCP specifying the quantity of the proposed reduction of Entitlement Share (“Entitlement Share Reduction Amount”) and the first Month for which the Project Participant Proposes that the change of Entitlement Share would become effective (such Notice referred to as the “Entitlement Share Reduction Notice”).
(i) Upon receiving an Entitlement Share Reduction Notice from any Project Participant, the CCP Manager shall promptly do all of the following:
(A) Establish Entitlement Share Reduction Compensation
Amount. The CCP Manager shall secure at least one (1), but no more than three (3), valuations of the net present value of the Entitlement Share Reduction Amount over the remaining term of the ESSA from one or more qualified firm(s) with the requisite experience to determine such valuation. The valuation, or if more than one valuation is obtained, the average of all valuations received, shall be the “Proposed Entitlement Share Reduction Compensation Amount.” The CCP Manager shall call a meeting of the Project Committee and present the Proposed Entitlement Share Reduction Compensation Amount to the Project Committee. The Project Committee shall by a Normal Vote either approve the Proposed Entitlement Share Reduction Compensation Amount or direct the CCP Manager to secure additional valuations. The Proposed Entitlement Share Reduction Compensation Amount approved by the Project Committee shall be the “Entitlement Share Reduction Compensation Amount.” The Project Participant proposing to reduce its Entitlement Share may modify the quantity of the Entitlement Share Reduction Amount associated with its proposal or withdraw its proposal at any time prior to the initiation of the process set forth in paragraph (a)(i)(B).
(B) Oversee the Offering of the Entitlement Share Reduction Amount to Other Project Participants. The CCP Manager shall facilitate the offering of the Entitlement Share Reduction Amount to the other Project Participants through multiple rounds of offerings.
a) The initial offering shall be to each Project
Participant on a pro rata share, based on such Project Participant’s Entitlement Share. Each Project Participant may accept or reject the portion of the Entitlement Share Reduction Amount offered to the Project Participant through this process. If any portion of the Entitlement Share Reduction Amount remains after the initial offering, then the remaining portion shall be offered to any Project Participant that accepted the share of the Entitlement Share Reduction Amount offered in the initial offering on a pro rata share, based on such Project Participant’s Entitlement Share as a percentage of the total Entitlement Shares of all Project Participants that accepted the portion of the Entitlement Share Reduction Amount offered to them in the initial offering.

Item 5
Attachment 1
Exhibit C - 2
b) The CCP Manager shall conduct subsequent offering
rounds until either the total Entitlement Share Reduction Amount is accepted by one or more of the other Project Participants or some portion of the Entitlement Share Reduction Amount remains, but all Project Participants have rejected such amount. c) Any Project Participant accepting a share of the
offered Entitlement Share Reduction Amount shall either pay the offering Project Participant or be compensated by the offering Project Participant at the Entitlement Share Reduction Compensation Amount multiplied by the quantity of the portion being accepted. d) Before a transfer of all or a portion of any Project Participant’s Entitlement share to another Project Participant can become effective, the proposed transfer must be submitted to and approved by the Project Committee through a Normal Vote. e) After acceptance and payment for such portion of the Entitlement Share Reduction Amount, and upon approval of such transfer by the Project Committee, the CCP Manager shall cause the Entitlement Share specified in Exhibit B to be modified accordingly, and such modification shall be considered an element of the administration of this Agreement and shall not require the consent of the Parties hereto. (C) Oversee the Offering of the Entitlement Share Reduction Amount to CCP Members that are not Project Participants. If there is any portion of the Entitlement Share Reduction Amount that remains unaccepted after the process specified in paragraph (a)(i)(B) is complete, then the Project Participant proposing to reduce its Entitlement Share may request that the CCP Manager offer the remaining portion of the Entitlement Share Reduction Amount to CCP Members that are not Project Participants. If any CCP Member wishes to accept any or all of the remaining portion of the Entitlement Share Reduction Amount, such action shall require the CCP Member to become a Project Participant through an amendment to this Agreement, which shall be subject to the consent and approval of all Parties to this Agreement and the CCP Member becoming a Project Participant. The compensation amount associated with the CCP Member accepting the remaining portion of the Entitlement Share Reduction Amount shall be negotiated between the CCP Member and the offering Project Participant. (D) Oversee the Offering of the Entitlement Share Reduction Amount to a Community Choice Aggregator that is not a CCP Member. If there is any portion of the Entitlement Share Reduction Amount that remains unaccepted after the process specified in both paragraphs (a)(i)(B) and (a)(k)(C) is complete, then the Project Participant proposing to reduce its Entitlement Share, may request that the CCP Manager offer the remaining portion of the Entitlement Share Reduction Amount to a community choice aggregator that is not a CCP Member. If any community choice aggregator wishes to accept any or all of the remaining portion of the Entitlement Share Reduction Amount, such action shall require the community choice aggregator to become a CCP Member, and subsequent to becoming a CCP Member, to become a Project Participant through an amendment to this Agreement that is subject to the consent and approval of all Parties to this Agreement and the community choice aggregator becoming a Project Participant. The compensation amount associated with the community choice aggregator accepting the remaining portion of the Entitlement Share Reduction Amount shall be negotiated between the community choice aggregator and the offering Project Participant.

Item 5
Attachment 1
Exhibit D - 1

EXHIBIT D

PROJECT COMMITTEE OPERATIONS, MEETINGS, AND VOTING
(a) Chairperson of Project Committee. The chairperson of the Project Committee (“Chairperson”) shall be the CCP Manager. The Chairperson shall be responsible for calling and presiding over meetings of the Project Committee in a manner and to the extent permitted by law.
(b) Conducting Meetings. Conducting of Project Committee meetings and actions taken by the Project Committee may be taken by vote given in an assembled meeting, by telephone, by video conferencing, or by any combination thereof, to the extent permitted by law. (c) Calling of Meetings.
(i) The Chairperson may call a meeting of the Project Committee at their discretion.
(ii) The Chairperson shall promptly call a meeting of the Project Committee at the request of any representative of a Project Participant. (d) Unanimous Votes. Certain actions, as designated in Section 6.4(c), require a unanimous affirmative vote by all Project Participants (“Unanimous Vote”). No such vote may be taken unless a representative from every Project Participant is present at the meeting of the Project Committee. If any Project Participant’s Entitlement Share is reduced to zero through the process specified in Exhibit C, such Project Participant shall not be required to be present or be entitled to vote in order for such vote to be a Unanimous Vote. (e) Normal Votes. All actions not designated as requiring unanimous vote, shall proceed pursuant to the “Normal Vote” process set forth in this paragraph (e). (i) Quorum. No Normal Vote of the Project Committee shall be taken unless a representative is present for at least fifty percent (50%) of the total number of Project Participants, without regard to each Project Participant’s Entitlement Share. (ii) Initial Normal Vote. Unless a representative requests an Alternate Normal Vote, pursuant to paragraph (e)(iii), all actions requiring a Normal Vote, as specified in Section 6.4(b) or 6.4(d), shall require an affirmative vote of at least fifty-one percent (51%) of the total number of Project Participants, without regard to each Project Participant’s Entitlement Share.
(iii) Alternate Normal Vote. Any representative may request that any Normal Vote be taken on an Entitlement Share basis (referred to as an “Alternate Normal Vote”).

If a representative requests an Alternate Normal Vote, then the following vote requirements shall apply:

Item 5
Attachment 1
Exhibit D - 2
(A) If any individual Project Participant has an Entitlement Share exceeding fifty percent (50%), then all actions for which an Alternate Normal Vote is taken shall require that the Project Participant with an Entitlement Share exceeding fifty percent (50%) plus any other Project Participant vote in the affirmative. (B) If no individual Project Participant has an Entitlement Share exceeding fifty percent (50%), then all actions for which an Alternate Normal Vote is taken shall require an affirmative vote of Project Participants having Entitlement Shares aggregating at least fifty-one percent (51%) of the total Entitlement Shares.

Item 5
Attachment 1
APPROVAL DRAFT Item 5
Attachment 2

EXECUTION VERSION

ENERGY STORAGE SERVICE AGREEMENT

COVERSHEET
Seller: Goal Line BESS 1, LLC, a Delaware limited liability company Buyer: California Community Power, a California joint powers authority Description of Facility: A grid-connected 50 MW/400 MWh batte1y energy storage facility, located in Escondido, CA, as further described in Exhibit A.

Milestones:

Milestone Expected Date for
Completion
Evidence of Site Control --
Conditional Use Permit obtained --
Phase I and Phase II Interconnection study results obtained Interconnection Agreement executed
--
Major equipment procurement agreements executed ,I
Federal and state discretionary permits issued .... I
Expected Construction Start Date ....

Guaranteed Construction Start Date ... ,
Initial Synchronization --
Full Capacity Deliverability Status or Interim .... ,
Deliverability Status obtained
Expected Commercial Operation Date --
Guaranteed Commercial Operation Date 6/1/2025
Delivery Term: 15 Contract Years
Guaranteed Capacity: 50 MW of Installed Capacity at eight (8) homs of continuous discharge APPROVAL DRAFT Item 5
Attachment 2
Dedicated Interconnection Capacity: 50 MW
Guaranteed Efficiency Rate:_
Contract Price & Excess Cycle Price:

Contract Year
1-15
Product:
~ Discharging Energy
Contract Price & Excess Cycle Price
Contract Price: (flat) with
no escalation and subject to adjustments in
Exhibit C
Excess C cle Price:
~ Installed Capacity and Effective Capacity
~ Ancilla1y Services
~ Capacity Attributes
Scheduling Coordinator:

Prior to Commercial Operation Date: Seller
From Commercial Operation Date through the Delive1y Tenn: Buyer Security Amount:

Development Secmity: - of Guaranteed Capacity
Perfo1mance Secmity: of Guaranteed Capacity

TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS.......................................................................................................... 1

1.1 Contract Definitions............................................................................................... 1

1.2 Rules of Interpretation ......................................................................................... 22 ARTICLE 2 TERM; CONDITIONS PRECEDENT................................................................... 23

2.1 Contract Term ...................................................................................................... 23

2.2 Commercial Operation; Conditions Precedent .................................................... 23

2.3 Development; Construction; Progress Reports.................................................... 24

2.4 Remedial Action Plan .......................................................................................... 25

2.5 Pre-Commercial Operation Actions..................................................................... 25 ARTICLE 3 PURCHASE AND SALE....................................................................................... 25

3.1 Product ................................................................................................................. 25

3.2 Discharging Energy ............................................................................................. 26

3.3 Capacity Attributes. ............................................................................................. 26

3.4 Ancillary Services; Environmental Attributes..................................................... 26

3.5 Resource Adequacy Failure ................................................................................. 27

3.6 Buyer’s Re-Sale of Product ................................................................................. 28

3.7 Pre-COD Operations............................................................................................ 28

3.8 Compliance Expenditure Cap .............................................................................. 28 ARTICLE 4 OBLIGATIONS AND DELIVERIES.................................................................... 30

4.1 Delivery................................................................................................................ 30

4.2 Interconnection. ................................................................................................... 30

4.3 Performance Guarantees...................................................................................... 30

4.4 Facility Testing .................................................................................................... 30

4.5 Testing Costs and Revenues ................................................................................ 31

4.6 Facility Operations............................................................................................... 32

4.7 Dispatch Notices.................................................................................................. 32

4.8 Facility Unavailability to Receive Dispatch Notices........................................... 32

4.9 Energy Management ............................................................................................ 33

4.10 Capacity Availability Notice................................................................................ 35

4.11 Daily Operating Report........................................................................................ 35

4.12 Outages ................................................................................................................ 35 ARTICLE 5 TAXES, GOVERNMENTAL AND ENVIRONMENTAL COSTS...................... 37

5.1 Allocation of Taxes and Charges......................................................................... 37

5.2 Cooperation.......................................................................................................... 37

5.3 Environmental Costs............................................................................................ 37 ARTICLE 6 MAINTENANCE AND REPAIR OF THE FACILITY ........................................ 37

6.1 Maintenance of the Facility ................................................................................. 37

6.2 Maintenance of Health and Safety....................................................................... 38

6.3 Shared Facilities................................................................................................... 38 APPROVAL DRAFT Item 5
Attachment 2
APPROVAL DRAFT Item 5
Attachment 2
ARTICLE 7 METERIN"G ................................ ............................................................................ 38

7.1 Metering ................................. .............................................................................. 38

7.2 Meter Verification ................................................................................................ 39 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................. 39

8.1 Invoicing ................................. ............................................................................. 39

8.2 Payment. ................................ ............................................................................... 39

8.3 Books and Records . ............................................................................................. 40

8.4 Payment Adjustments; Billing Enors . ................................................................. 40

8.5 Billing Disputes . .................................................................................................. 40

8.6 Netting of Payments ............................................................................................. 40

8.7 Seller's Development Security ............................................................................ 41

8.8 Seller's Perfo1mance Security .............................................................................. 41

8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................ 41

8.10 Buyer Credit Anangements . ................................................................................ 42 ARTICLE 9 NOTICES ................................ ................................................................................ 43

9.1 Addresses for the Delive1y of Notices ................................................................. 43 9 .2 Acceptable Means of Delivering Notice .............................................................. 43 ARTICLE 10 FORCE MAJEURE .............................................................................................. 43

10.1 Definition ................................ ............................................................................. 43

10.2 No Liability If a Force Majeure Event Occurs .................................................... 44

10.3 Notice ................................ ................................................................................... 45

10.4 Te1mination Following Force Majeure Event.. .................................................... 45 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ...................................................... 45

11.1 Events of Default ................................................................................................. 45

11.2 Remedies; Declaration of Early Te1mination Date .............................................. 48

11.3 Damage Payment; Te1mination Payment ............................................................ 48

11.4 Notice of Payment ofTe1mination Payment or Damage Payment.. .................... 49

11.5 Disputes With Respect to Te1mination Payment or Damage Payment ............... 49

11.6 ............................................................ 50

11. 7 Rights And Remedies Are Cumulative ................................................................ 50

11.8 Mitigation ................................ ............................................................................. 50

11.9 Pass Through of Buyer Liability .......................................................................... 50

11.10 Seller Pre-COD Liability Limitations .................................................................. 50 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES .......... 51

12.1 No Consequential Damages . ................................................................................ 51

12.2 Waiver and Exclusion of Other Damages ............................................................ 51 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; COVENANTS .......................... 52

13.1 Seller's Representations and Wairnnties ............................................................. 52

13.2 Buyer's Representations and Wananties ............................................................. 53 11 13.3 General Covenants............................................................................................... 54

13.4 Seller’s Covenants ............................................................................................... 54 ARTICLE 14 ASSIGNMENT..................................................................................................... 55

14.1 General Prohibition on Assignments ................................................................... 55

14.2 Collateral Assignment.......................................................................................... 55

14.3 Permitted Assignment.......................................................................................... 55

14.4 Portfolio Financing .............................................................................................. 56 ARTICLE 15 DISPUTE RESOLUTION .................................................................................... 56

15.1 Governing Law. ................................................................................................... 56

15.2 Dispute Resolution............................................................................................... 57

15.3 Attorneys’ Fees. ................................................................................................... 57 ARTICLE 16 INDEMNIFICATION........................................................................................... 57

16.1 Indemnification .................................................................................................... 57

16.2 Claims. ................................................................................................................. 58 ARTICLE 17 INSURANCE........................................................................................................ 58

17.1 Insurance .............................................................................................................. 58 ARTICLE 18 CONFIDENTIAL INFORMATION .................................................................... 60

18.1 Definition of Confidential Information................................................................ 60

18.2 Duty to Maintain Confidentiality......................................................................... 60

18.3 Irreparable Injury; Remedies ............................................................................... 61

18.4 Further Permitted Disclosure ............................................................................... 61

18.5 Press Releases...................................................................................................... 61 ARTICLE 19 MISCELLANEOUS ............................................................................................. 62

19.1 Entire Agreement; Integration; Exhibits.............................................................. 62

19.2 Amendments ........................................................................................................ 62

19.3 No Waiver............................................................................................................ 62

19.4 No Agency, Partnership, Joint Venture or Lease................................................. 62

19.5 Severability .......................................................................................................... 62

19.6 Mobile-Sierra ....................................................................................................... 62

19.7 Counterparts......................................................................................................... 63

19.8 Electronic Delivery .............................................................................................. 63

19.9 Binding Effect...................................................................................................... 63

19.10 No Recourse to Members of Buyer ..................................................................... 63

19.11 Forward Contract ................................................................................................. 63

19.12 Change in Electric Market Design....................................................................... 63

19.13 Further Assurances............................................................................................... 64 Exhibits:

Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation APPROVAL DRAFT Item 5
Attachment 2
Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F Form of Monthly Expected Available Capacity Report Exhibit G Form of Daily Availability Notice
Exhibit H Form of Commercial Operation Date Certificate Exhibit I Form of Capacity and Efficiency Rate Test Certificate Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Buyer Liability Pass Through Agreement Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Capacity and Efficiency Rate Tests
Exhibit P Facility Availability Calculation
Exhibit Q Operating Restrictions
Exhibit R Metering Diagram
Exhibit S Form of Daily Operating Report
Exhibit T Form of Collateral Assignment Agreement
Exhibit U Material Permits
Exhibit V Project Participants and Liability Shares
APPROVAL DRAFT Item 5
Attachment 2
APPROVAL DRAFT Item 5
Attachment 2

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 refeITed 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 Alticle 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 pmchase, on the tenns and conditions set forth in this Agreement, the Product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Paities 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:
"~ " means alternating cuITent.
"Accepted Compliance Costs" has the meaning set fo1th in Section 3.8(c). "Affiliate" means, with respect to any Person, each Person that directly or indirectly conti·ols, is controlled by, or is under common conu-ol with such designated Person. For pmposes of this definition and the definition of "Permitted Transferee", "conti·ol" (including, with coITelative meanings, the terms "conti·olled by" and "under common conti·ol with"), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting ( or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.

Notwithstanding the foregoing, the Paities 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 othe1wise be deemed an "Affiliate" for pmposes of this Agreement.
"Agreement" has the meaning set fo1th in the Preamble and includes the Cover Sheet and any Exhibits, schedules and any written supplements hereto. "Alternative Dispatches" has the meaning set fo1th in Section 4.6(b). 1 APPROVAL DRAFT Item 5
Attachment 2
"Ancillary Services" means frequency regulation, spinning reserve, non-spinning reserve, regulation up, regulation down, black start, voltage suppo1t, and any other ancillaiy services, in each case as defined in the CAISO Tariff from time to time, that the Facility is at the relevant time actually physically capable of providing consistent with the Operating Restrictions set fo1t h in Exhibit 0, which may be updated to add new Ancilla1y Services pursuant to Section 3.4. "Annual Excess Cycle Payment" has the meaning set fo1t h in Exhibit C. "Approval Period" has the meaning in Section 2. 1 (b ). "Approved Maintenance Hours" means up to hours per Contract Year for Facility maintenance scheduled in accordance with Section 4.12, calculated on a pro rata basis based upon the time period of such Facility maintenance and the Available Capacity. - Tariff.
"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. "Automated Generation Control'' or "~ " has the meaning set fo1th in the CAISO "Availability Adjustment" has the meaning set fo1t h in Exhibit C. "Availability Notice" has the meaning set fo1t h in Section 4.10. "Availability Standards" has the meaning set foith in the CAISO Tariff or such other similai· te1m as modified and approved by FERC hereafter to be inco1porated in the CAISO Tariff.
"Available Capacity" means the capacity of the Facility, expressed in whole MWs, that is mechanically available to charge and discharge Energy and provide Ancilla1y Services. "Bankrupt" or "Bankruptcy" means with respect to any entity, such entity that (a) files a petition or othe1w ise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankmptcy, insolvency, reorganization or siinilai· 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 aiTangement for the benefit of creditors, (d) othe1w ise becomes bankmpt or insolvent (however evidenced), (e) has a liquidator, adininistrator, receiver, tru stee, 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.
"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. local time for the Pa1ty sending a Notice, or payment, or performing a specified action. 2 “Buyer” has the meaning set forth on the Cover Sheet. “Buyer Default” means any breach or an Event of Default of Buyer. “Buyer Dispatched Test” has the meaning in Section 4.4(c). “Buyer’s Indemnified Parties” has the meaning set forth in Section 16.1(a). “Buyer Liability Pass Through Agreement” means the form set forth in Exhibit L. “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Balancing Authority Area” has the meaning set forth in the CAISO Tariff. “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 Ancillary Services that the Facility can provide, PMAX, and PMIN associated with such storage units, that are applicable to the Facility.
“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 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.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Facility can 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 Damages” has the meaning set forth in Section 5 of Exhibit B. “Capacity Test” or “CT” means any test or retest of the Facility to establish the Installed Capacity, Effective Capacity, Efficiency Rate or any other test conducted pursuant to Exhibit O.

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“CEQA” means the California Environmental Quality Act, as amended or supplemented from time to time.
“Change in Law” means the enactment, adoption, promulgation, modification, suspension, repeal, or judicial determination, after the Effective Date, by any Governmental Authority of any Law, including a change in interpretation or enforcement of any existing Law. “Change of Control” means, except in connection with public market transactions of equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller; provided, in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any 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. “Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer’s SC or the CAISO to Seller, directing the Facility to charge at a specific MW rate for a specified period of time or amount of MWh; provided, any such operating instruction shall be in accordance with the Operating Restrictions and the CAISO Tariff. Any instruction to charge the Facility pursuant to a Buyer Dispatched Test shall be considered a Charging Notice. “Collateral Assignment Agreement” has the meaning set forth in Section 14.2 and substantially in the form attached as Exhibit T.
“Commercial Operation” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice of the same to Buyer; provided Commercial Operation shall occur no sooner than one hundred eighty (180) days prior to the Expected Commercial Operation Date.
“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” means the date on which Commercial Operation is achieved.

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"Commercial Operation Delay Damages" means an amount equal to (a) the Development Security amount required hereunder, divided by (b) ...... "Communications Protocols" means ce1t ain operating and dispatch protocols developed by the Patt ies pursuant to Exhibit O that involve procedures and protocols regarding communication with respect to the operation of the Facility pursuant to this Agreement. "Compliance Actions" has the meaning set fo1t h in Section 3.8(a). "Compliance Expenditure Cap" has the meaning set fo1th in Section 3.8. "Compliant Project Participant" means a Project Patt icipant that is not a Defaulted Project Patticipant.
"Confidential Information" has the meaning set forth in Section 18.1. "Construction Start" has the meaning set fo1th in Exhibit B. "Construction Start Date" has the meaning set fo1t h in Exhibit B. "Contract Price" has the meaning set forth on the Cover Sheet. "Contract Term" has the meaning set forth in Section 2. l(a). "Contract Year" means a period of twelve (12) consecutive months. The first Contract Y eat· shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversaty of the Commercial Operation Date. "Costs" means, with respect to the Non-Defaulting Pa1ty, brokerage fees, commissions and other similat· third-party transaction costs and expenses reasonably incmTed by such Patty either in tenninating any aITangement pursuant to which it has hedged its obligations or entering into new aITangements which replace the Agreement; and all reasonable attorneys' fees and expenses incmTed by the Non-Defaulting Patty in connection with tenninating the Agreement. "Cover Sheet" means the cover sheet to this Agreement, which is incorporated into this Agreement.
"CPM Soft Offer Cap" has the meaning set fo1t h in the CAISO Tat·iff. "CPUC" means the California Public Utilities Commission, or any successor entity perfonning siinilar functions.
"Credit Rating" means, with respect to any entity, the rating then assigned to such entity's unsecured, senior long-term debt obligations (not suppo1ted by third patty credit enhancements) or if such entity does not have a rating for its senior unsecured long-te1m 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 at·e not equivalent, the lower rating shall apply.
"Cure Plan" has the meaning set foith in Section 11 .1 (b )(iii). 5 APPROVAL DRAFT Item 5
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"Curtailment Order" means any of the following:
(a) CAISO orders, directs, ale1ts, or provides notice to a Paity, including a CAISO operating order, to cmtail deliveries of Dischai·ging Energy for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or waining of an imminent condition or situation, which jeopai·dizes CAISO 's electric system integrity or the integrity of other systems to which CAISO is connected; (b) a cmtailment ordered by the Transmission Provider for reasons including, but not limited to, (i) any situation that affects n01mal function of the electric system including, but not Ii.mi ted to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abno1mal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopai·dize the Transmission Provider's electric system integrity or the integrity of other systems to which the Transmission Provider is connected; (c) a cmtailment ordered by CAISO or the Transmission Provider due to a Transmission System Outage; or
(d) a cmtailment in accordance with Seller's obligations under the Interconnection Agreement with the Transmission Provider or distribution operator. "Cycles" means the number of equivalent charge/dischai·ge cycles of the Facility dming a specified time period, which shall be deemed to be equal to (a) the total cumulative amount of Dischai·ging Energy discharged from the Facility ( expressed in MWh) divided by (b) eight (8) homs times the average Effective Capacity for such tin1e period. "Daily Delay Damages" means an amount equal to (~ the Development Secmity amount required hereunder, divided by (b)
"Daily Operating Report" has the meaning in Section 4.11. "Damage Payment" means the amount to be paid by the Defaulting Paity to the Non-Defaulting Paity after a Terminated Transaction occmTing prior to the Commercial Operation Date, in a dollai· amount set fo1t h in Section 11.3( a). "Day-Ahead Market" has the meaning set fo1t h in the CAISO Tai·iff. "Day-Ahead Schedule" has the meaning set fo1th in the CAISO Tai·iff. "Dedicated Interconnection Capacity" means the maximum instantaneous amount of Charging Energy and/or Dischai·ging Energy, as applicable, that is pe1mitted to be delivered from and/or to the Delive1y Point under the Interconnection Agreement, in the amount of MWs as set fo1t h on the Cover Sheet.
"Defaulted Liability Share" means the Liability Shai·e of a Defaulted Project Paiticipant. "Defaulted Project Participant" means a Project Pait icipant that has incmTed but not cm ed a Project Paiticipant Payment Default, including any Project Pait icipant whose rights under 6 the Project Participation Share Agreement have been suspended or terminated. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Delivery Point” means the Interconnection Point.
“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 the 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 any applicable Electrical Losses.
“Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer’s SC or the CAISO to the Facility, directing the Facility to discharge Discharging Energy at a specific MW rate for a specified period of time or to an amount of MWh; provided, any such operating instruction shall be in accordance with the Operating Restrictions and the CAISO Tariff.

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, to Seller, directing the Facility to charge or discharge Energy at a specific MWh rate to a specified Storage Level; provided, any such operating instruction or updates shall be in accordance with the Operating Restrictions and the CAISO Tariff.
“Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Capacity” means the lesser of (a) PMAX, and (b) the Effective Capacity 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) up to but not in excess of (i) the Guaranteed Capacity (with respect to a Commercial Operation Capacity Test) or (ii) the Installed Capacity (with respect to any other Capacity Test).
“Effective Date” has the meaning set forth on the Preamble. “Effective Flexible Capacity” or “EFC” has the meaning set forth in the CAISO Tariff.

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“Efficiency Rate” means the rate calculated pursuant to Sections II.I(2) and III(A) of Exhibit O by dividing Discharging Energy by Charging Energy and which for a given calendar month shall be prorated as necessary if more than one Efficiency Rate applies during such calendar month.
“Efficiency Rate Adjustment” has the meaning set forth in Exhibit C. “Electrical Losses” means, subject to meeting any applicable CAISO requirements and in accordance with Section 7.1, all transmission or transformation losses (a) between 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. If any amounts included within the definitions of “Electrical Losses” and “Station Use” hereunder are duplicative, then for all relevant calculations hereunder it is intended that such amounts not be double counted or otherwise duplicated.
“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 electrical energy, measured in kilowatt-hours, megawatt-hours, or multiple units thereof.
“Energy Level” means the actual amount of Energy (expressed in MWh) physically stored in the Facility at any moment in time. The Facility’s EMS shall provide a continuous monitoring and read out of the Energy Level.
“Energy Management System” or “EMS” means the Facility’s energy management system.
“Energy Ratio” means the ratio of the Energy Level to the actual full storage capacity of the Facility, expressed as a percentage as shown on the EMS. “Environmental Attributes” shall mean any and all attributes under the RPS regulations or under any and all other international, federal, regional, state or other law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable, now, or in the future to the Facility and its displacement of conventional energy generation, but excluding Tax Credits. “Environmental Cost” 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, APPROVAL DRAFT Item 5
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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. “Excess Cycle Discharging Energy” has the meaning set forth in Exhibit C. “Excess Cycle Price” has the meaning set forth on the Cover Sheet. “Excused Event” has the meaning set forth in Exhibit P. “Expected Commercial Operation Date” means the date set forth on the Cover Sheet. “Facility” means the energy storage facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment required to deliver 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 hereof. “Facility Meter” means a CAISO-approved bi-directional revenue quality meter or meters (with a 0.3 accuracy class), CAISO-approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Facility Metering Point and the amount of Discharging Energy delivered 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. “Federal Investment Tax Credit Legislation” means validly enacted federal legislation that either (a) applies the ITC in its current form to the Facility without regard to the source of energy used to charge the Facility, or (b) extends federal Tax Credits associated with capital investment in the construction of energy storage facilities or equipment used to store energy for which Seller, as the owner of the Facility, is eligible. “FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Flexible Capacity” has the meaning set forth in the CAISO Tariff. “Flexible Capacity Ratio” has the meaning set forth in Section 3.5(b)(i)(B).

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“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. “Forced Labor” has the meaning set forth in Section 13.4(c). “Full Capacity Deliverability Status” or “FCDS” has the meaning set forth in the CAISO Tariff.
“Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term, and include the value of Environmental Attributes and 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, “Governmental Authority” shall not in any event include any Party.
“Guaranteed Availability” has the meaning set forth in Section 4.3(a). “Guaranteed Amount” has the meaning set forth in each Project Participant’s Buyer Liability Pass Through Agreement, which amount may be different for each Project Participant given each Project Participant’s Liability Share.
“Guaranteed Capacity” means the Guaranteed Capacity 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 Construction Start Date” means the date set forth on the Cover Sheet, as such date may be extended pursuant to Exhibit B.
“Guaranteed Efficiency Rate” means the minimum guaranteed Efficiency Rate of the Facility in each Contract Year of the Delivery Term, as set forth on the Cover Sheet. “Guaranteed Flexible Capacity” means, at any point in time, the maximum quantity of Effective Flexible Capacity (in MWs) for which a storage facility having a storage capacity of 50 APPROVAL DRAFT Item 5
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MW with at least eight (8) hours of continuous discharging at the maximum rate of discharge, and a minimum ramp rate of 100 MW/minute, having achieved FCDS, and performing with operational characteristics equal to or better than those required by the Guaranteed Availability and Guaranteed Efficiency Rate may be counted in any given Showing Month pursuant to the then current Law, including counting conventions set forth in the Resource Adequacy Rulings and the CAISO Tariff applicable to Resource Adequacy Resources. “Guaranteed Net Qualifying Capacity” means, at any point in time, the maximum quantity of Net Qualifying Capacity (in MWs) for which a storage facility having a storage capacity of 50 MW with at least eight (8) hours of continuous discharging at the maximum rate of discharge, and a minimum ramp rate of 100 MW/minute, having achieved FCDS, and performing with operational characteristics equal to or better than those required by the Guaranteed Availability and Guaranteed Efficiency Rate may be counted in any given Showing Month pursuant to the then current Law, including counting conventions set forth in the Resource Adequacy Rulings and the CAISO Tariff applicable to Resource Adequacy Resources. “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 deviates from the applicable amount of Energy in a CAISO Dispatch. “Indemnified Party” shall mean (i) Buyer, with respect to all third-party claims, demands, losses, liabilities, penalties, and expenses arising out of, resulting from, or caused by the circumstances described in Section 16.1(a), and (ii) Seller, with respect to all third-party claims, demands, losses, liabilities, penalties, and expenses arising out of, resulting from, or caused by the circumstances described in Section 16.1(b).
“Indemnifying Party” shall mean (i) Seller, with respect to all third-party claims, demands, losses, liabilities, penalties, and expenses arising out of, resulting from, or caused by the circumstances described in Section 16.1(a), and (ii) Buyer, with respect to all third-party claims, demands, losses, liabilities, penalties, and expenses arising out of, resulting from, or caused by the circumstances described in Section 16.1(b).
“Initial Liability Share” means the Liability Share of each Project Participant shown on Exhibit V as of the Effective Date.
“Initial Synchronization” means the commencement of Trial Operations (as defined in the CAISO Tariff).
“Installed Capacity” means the lesser of (a) PMAX, and (b) Installed Capacity that achieves Commercial Operation, as determined pursuant to the most recent Commercial Operation APPROVAL DRAFT Item 5
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Capacity Test, and as evidenced by a certificate substantially in the fo1m attached as Exhibit I hereto, but in either case (a) or (b) up to but not in excess of the Guaranteed Capacity. It is acknowledged that Seller shall have the right and option in its sole discretion to install Facility capacity in excess of the Guaranteed Capacity; provided, for all pmposes of this Agreement the amount of Installed Capacity shall never be deemed to exceed the Guaranteed Capacity, and (for the avoidance of doubt) Buyer shall have no rights to instmct Seller to (i) charge or discharge the Facility at an instantaneous rate (in MW) in excess of the Effective Capacity or (ii) charge the Facility to a level in excess of 100% Storage Level.
"Inter-SC Trade" has the meaning set fo1th in the CAISO Tariff. "Interconnection Agreement" means the interconnection agreement entered into by Seller or a Seller Affiliate pmsuant to which the Facility will be interconnected with the Transmission System, and pursuant to which the Interconnection Facilities will be constructed, operated and maintained dming the Conti·act Tenn.
"Interconnection Facilities" means the interconnection facilities, conti·ol and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
"Interconnection Point" has the meaning set fo1th in Exhibit A. "Interest Rate" has the meaning set fo1th in Section 8.2. "Interim Deliverability Status" has the meaning set fo1th in the CAISO Tariff. "ITC" means the investinent tax credit established pmsuant 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 (Government Code Section 6500 et seq.).
"Joint Powers Agreement" means that ce1tain Joint Powers Agreement dated Januaiy 29, 2021, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
"~ " means a kilowatt-horn- measmed in alternating cmTent, unless expressly stated in te1ms of direct cmTent.
"w " means any applicable law, statute, mle, regulation, decision, writ, order, decree or judgment, pe1mit or any inte1pretation thereof, promulgated or issued by a Governmental Authority.
12 “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 (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 or a foreign bank with a U.S. branch with such bank (a) 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 or (b) being reasonably acceptable to Buyer, in a form substantially similar to the letter of credit set forth in Exhibit K. “Liability Share” means the percentage amount set forth for each Project Participant in Exhibit V.
“Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Local Capacity Area Resource” has the meaning set forth in the CAISO Tariff. “Local RAR” means the local Resource Adequacy Requirements established for load-serving entities by the 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. “Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. 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 liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term and must include the value of Environmental Attributes and Capacity Attributes.
“Marketable Emission Trading Credits” means emissions trading credits or units pursuant to the requirements of California Division 26 Air Resources; Health & Safety Code APPROVAL DRAFT Item 5
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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 Data File” has the meaning set forth in the CAISO Tariff. “Material Permits” means all permits required for Seller to commence construction, as set forth on Exhibit U.
“Maximum Charging Capacity” means the highest charging rate at which the Facility may be charged, expressed in MW and as set forth in Exhibit Q, at a specific SOC. “Maximum Discharging Capacity” means the highest discharging rate at which the Facility may be discharged, expressed in MW and as set forth in Exhibit Q, at a specific SOC. “Milestones” means the development activities for significant permitting, interconnection, and construction milestones set forth on the Cover Sheet. “Monthly Capacity Availability” has the meaning set forth in Exhibit P. “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.
“Monthly Forecast” has the meaning in Section 4.10(a).
“Monthly RA Replacement Adjustment” has the meaning set forth in Exhibit C. “Moody’s” means Moody’s Investors Service, Inc., or its successor. “MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“NERC” means the North American Electric Reliability Corporation, or any successor entity performing similar functions.
“Net Qualifying Capacity” or “NQC” has the meaning set forth in the CAISO Tariff. “Network Upgrades” has the meaning set forth in the CAISO Tariff. “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).

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"Notification Deadline" in respect of a Showing Month shall be fifteen (15) Business Days before the relevant deadlines for the conesponding RA Compliance Showings for such Showing Month.
"NP-15" means the Existing Zone Generation Trading Hub for Existing Zone region NP15 as set forth in the CAISO Tariff.
"Operating Restrictions" means those restrictions, mles, requirements, and procedures set forth in Exhibit 0.
"Outage Schedule" has the meaning set fo1th in Section 4.12(a)(i). "Partial Capacity Deliverability Status" has the meaning set forth in the CAISO Tariff. "Participating Transmission Owner" or "ll.Q" means an entity that owns, operates and maintains transmission or distribution lines and associated facilities and/or has entitlements to use ce1tain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Pa1ticipating Transmission Owner is San Diego Gas & Electric.
"Party" has the meaning set fo1th in the Preamble.
"Payment Demand" has the meaning set forth in Exhibit L. "Performance Guarantees" has the meaning set fo1th in Section 4.3(b). "Performance Security" means (i) cash or (ii) a Letter of Credit in the amount set fo1th on the Cover Sheet.
"Permitted Transferee" means (i) any Affiliate of Seller or (ii) any entity that satisfies, or is controlled by another Person ( on a consolidated basis with its Affiliates) that satisfies the following requirements:

A tangible net worth of not less than
or a Credit Rating of at least BBB- from S&P or Baa3 from Moody's; and (b) At least one (1) year of experience in the ownership and operations of energy storage facilities similar to the Facility, or (failing such operations experience) has retained a third-paity with such experience to operate the Facility. "Person" means any individual, sole proprietorship, cmporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, tiust, incorporated organization, institution, public benefit cmporation, uninco1porated organization, government entity or other entity.
"Planned Outage" means a period during which the Facility is either in whole or in pali not capable of providing service due to planned maintenance that has been scheduled in advance in accordance with Section 4.12(a).
15 “PMAX” means the applicable CAISO-certified maximum operating level of the Facility at the Interconnection Point.
“PMIN” means the applicable CAISO-certified minimum operating level of the Facility at the Interconnection Point.
“PNode” has the meaning set forth in the CAISO Tariff.
“Point of Change of Ownership” has the meaning set forth in Exhibit A. “Portfolio” means the single 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(b). “Pro Rata” means, for purposes of calculating a Project Participant’s Revised Liability Share, the ratio of (i) such Project Participant’s Initial Liability Share to (ii) the sum of the Initial Liability Shares of all of the Compliant Project Participants. “Product” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth in Exhibit E. “Project Labor Agreement” has the meaning set forth in Section 13.4(b). “Project Participant” means each Person identified in Exhibit V that shall execute a Buyer Liability Pass Through Agreement in the form set forth in Exhibit L. “Project Participant Approval” means each Project Participant has obtained all necessary approvals from its board or governing authority necessary to execute a Buyer Liability Pass Through Agreement and the Project Participation Share Agreement, and that Buyer has delivered to Seller Buyer Liability Pass Through Agreements and the Project Participation Share Agreement executed by each Project Participant and countersigned by Buyer. “Project Participant Payment Default” means any failure by a Project Participant to pay any material amount under the Project Participation Share Agreement as and when due (without giving effect to any extensions of time, waivers or late notices), including monthly amounts collected to fund, or to reserve funds for, payment of Buyer’s obligations under this Agreement. “Project Participation Share Agreement” means that certain Goal Line Storage Project APPROVAL DRAFT Item 5
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Participation Share Agreement executed by and among Buyer and all of the Project Participants relating to their allocation among themselves of Buyer’s responsibilities and liabilities under this Agreement, and any successor agreement.
“Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of independent power producers within 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. “RA Change in Law” means any Change in Law which results in a reduction of the maximum quantity of Effective Flexible Capacity or Net Qualifying Capacity that a storage capacity of 50 MW with at least eight (8) hours of continuous discharging at the maximum rate of discharge, and a minimum ramp rate of 100 MW/minute, having achieved FCDS, and performing with operational characteristics equal to or better than those required by the Guaranteed Availability and Guaranteed Efficiency Rate may be counted in any given Showing Month pursuant to the then current Law, including counting conventions set forth in the Resource Adequacy Rulings and the CAISO Tariff applicable to Resource Adequacy Resources. “RA Compliance Showing” means the (a) System RAR compliance or advisory showings (or similar or successor showings) and (b) 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 Guarantee Date” means the Commercial Operation Date, which is the date by which the Facility is expected to have achieved Full Capacity Deliverability Status or Interim Deliverability Status.
“RA Penalties” means the RA penalties assessed against load serving entities by the CPUC for RA deficiencies that are not replaced or cured, as established by the CPUC in the Resource Adequacy Rulings and subsequently incorporated into the annual Filing Guide for System, Local and Flexible Resource Adequacy Compliance Filings that is issued by the CPUC Energy Division, or any replacement or successor documentation established by the CPUC Energy Division to APPROVAL DRAFT Item 5
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reflect RA penalties that are established by the CPUC and assessed against load serving entities for RA deficiencies.
“RA Shortfall Month” means any Showing Month, commencing with the Showing Month that contains the RA Guarantee Date, during which either:
(a) the Facility has not achieved FCDS (unless the Facility has achieved Interim Deliverability Status); or
(b) the Net Qualifying Capacity of the Facility for such Showing Month was either (i) not published by or otherwise established with the CAISO by the Notification Deadline for such Showing Month (other than due to Buyer’s action or inaction), or (ii) was less than the then applicable Guaranteed Net Qualifying Capacity of the Facility for such Showing Month; or (c) the Effective Flexible Capacity of the Facility for such Showing Month was either (i) not published by or otherwise established with the CAISO by the Notification Deadline for such Showing Month (other than due to Buyer’s action or inaction), or (ii) was less than the then applicable Guaranteed Flexible Capacity of the Facility for such Showing Month. “Real-Time Market” has the meaning set forth in the CAISO Tariff. “Receiving Party” has the meaning set forth in Section 18.2. “Reliability Network Upgrades” has the meaning set forth in the CAISO Tariff. “Remedial Action Plan” has the meaning in Section 2.4.
“Replacement RA” means Resource Adequacy Benefits, if any, (a) equivalent to those that would have been provided by the Facility with respect to the applicable month in which a RA Deficiency Amount is due to Buyer, and (b) located within the CAISO Balancing Authority Area. “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 issued by a Governmental Authority, including the Resource Adequacy Rulings and shall include Flexible Capacity and any local, zonal or otherwise locational attributes associated with the Facility.
“Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Resource Adequacy Resource” shall have the meaning used in Resource Adequacy Rulings.

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"Resource Adequacy Rulings" means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, 15-06-063, 16-06-045, 17-06-027, 18-06-030, 18- 06-03 1, 19-02-022, 19-06-026, 19-10-021, 20-01-004, 20-03-016, 20-06-002, 20-06-031, 20-06- 028, 20-12-006 and any other existing or subsequent ruling or decision, or any other resomce adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable Governmental Authority, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Contract Te1m. "Revised Liability Share" means the sum of a Project Patticipant's Initial Liability Share plus its Pro Rat.a po1tion of all Defaulted Liability Shat·es, not to exceed "~ " means the Standard & Poor's Financial Se1v ices, LLC (a subsidiaty of S&P Global Inc.) or its successor.
"SCADA Systems" means the standat·d supe1v iso1y control and data acquisition systems to be installed by Seller as patt of the Facility, including those system components that enable Seller to receive ADS and AGC instrnctions from the CAISO or similat· instructions from Buyer's SC.
"Schedule" has the meaning set fo1th m the CAISO Tariff, and "Scheduled" and "Scheduling" have a corollaty meaning.
"Scheduling Coordinator" or "§£" means an entity ce1t ified by the CAISO as qualifying as a Scheduling Coordinator pmsuant to the CAISO Tariff for the pmposes of unde1taking 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. "~ " has the meaning set fo1th on the Cover Sheet.
"Seller's Indemnified Parties" has the meaning set fo1th in Section 16.l(b). "Seller Initiated Test" has the meaning set fo1th in Section 4.4(c). "Settlement Amount" means the Non-Defaulting Patty's Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Pa1ty'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 Patty's Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplaty or indirect or business intenuption damages.
"Settlement Interval" has the meaning set fo1th in the CAISO Tat·iff. "Settlement Period" has the meaning set fo1th in the CAISO Tat·iff. 19 “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 Discharging Energy to the Delivery Point, including the Interconnection Facilities and the Interconnection Agreement itself, if applicable, that are used in common with third parties or by Seller for electric generation or storage facilities owned by Seller other than the Facility.
“Showing Month” shall be a calendar month of the Delivery Term, commencing with the Showing Month that contains the RA Guarantee Date, that is the subject of a 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 Affiliates: (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.
“State of Charge” or “SOC” means, at a particular time, the Storage Level in the Facility divided by the Effective Capacity multiplied by eight (8), expressed as a percentage. “Station Use” means the Energy that is used within the Facility as defined by the retail energy provider and CAISO Tariff in accordance with applicable CPUC rules and decisions regarding such station use, except during periods in which the Facility is charging or discharging pursuant to a Charging Notice, Discharging Notice, Buyer Dispatched Test or Seller Initiated Test. “Step-Up Event” means the forty-fifth (45th) day following the occurrence of a Project Participant Payment Default if such Project Participant Payment Default has not been cured by that date, regardless of whether or not notice was given to the Defaulted Project Participant under the Project Participation Share Agreement or otherwise or by Buyer hereunder. “Storage Level” means, at a particular time, the amount of electric Energy in the Facility available to be discharged as Discharging Energy, expressed in MWh. The Parties acknowledge that, taking into account Electrical Losses to the Delivery Point (as referenced in the definition of Discharging Energy), the Energy Level (expressed in MWh) physically stored in the Facility at any moment in time will be greater than the Storage Level. “Subsequent Purchaser” means the purchaser or recipient of Product from Buyer in any conveyance, re-sale or remarketing of Product by Buyer. “Supplementary Capacity Test Protocol” has the meaning set forth in Exhibit O.

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“Supply Plan” has the meaning set forth in the CAISO Tariff. “System Emergency” means any condition that requires, as determined and declared by CAISO or the Transmission 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. “System RAR” means the 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. “System RAR” may also be known as system area reliability, system resource adequacy, system resource adequacy procurement requirements, or system capacity requirement in other regulatory proceedings or legislative actions. “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 (i) federal production tax credit, depreciation benefit, tax deduction and/or investment tax credit, including the ITC, specific to investments in renewable energy facilities and/or energy storage facilities and (ii) any refundable credit, grant, or other cash payment in lieu of an incentive described in clause (i). “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Transmission Provider” means any entity that owns, operates and maintains transmission or distribution lines and associated facilities and/or has entitlements to use certain transmission or distribution lines and associated facilities for the purpose of transmitting or transporting the Discharging Energy from the Delivery Point. “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.
“Transmission System Outage” means an outage on the Transmission System, other than a System Emergency, that is not caused by Seller’s actions or inactions and that prevents Buyer or the CAISO (as applicable) from receiving the Facility’s Energy onto the Transmission System. “Ultimate Parent” means Onward
.
“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.

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1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that 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” mean “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 APPROVAL DRAFT Item 5
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Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(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, including Section 2.1(b) (“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) Notwithstanding anything to the contrary in this Agreement, if Project Participant Approval of this Agreement is not obtained within ninety (90) days following the Effective Date (the “Approval Period”), then either Party may terminate this Agreement upon written Notice to the other Party. Upon such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(c). During the Approval Period, Seller or Seller’s Affiliates may at their sole discretion actively market and negotiate to sell, transfer or assign the Facility and any Product associated with or attributable thereto, provided that neither Seller nor Seller’s Affiliates may enter into any agreement to sell, transfer or assign the Facility and any Product associated with or attributable thereto to a party other than Buyer prior to the expiration of the Approval Period. (c) Applicable provisions of this Agreement shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 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 Commercial Operation Date 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 have five (5) Business Days to approve or reject Seller’s request for Commercial Operation. Upon Buyer’s approval of Seller’s achievement of Commercial Operation, Buyer shall provide Seller with written acknowledgement of the Commercial Operation Date.
(a) Seller shall have 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 APPROVAL DRAFT Item 5
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Licensed Professional Engineer substantially in the form of Exhibit I setting forth the Installed Capacity and Efficiency Rate on the Commercial Operation Date; (b) Seller or its Affiliates, as applicable, shall have executed the Interconnection Agreement with the Transmission Provider, which shall be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer; (c) Seller has provided Buyer with a copy of written notice from CAISO that the Facility has achieved Full Capacity Deliverability Status or Interim Deliverability Status, as applicable. If the Seller provides written notice that is has achieved Interim Deliverability Status, Seller shall also provide a timeline under which Full Capacity Deliverability Status is expected to be obtained and an explanation of any required transmission upgrades; (d) A Participating Generator Agreement and a Meter Service Agreement shall have been executed by Seller or its Affiliates, as applicable, with CAISO, which shall be in full force and effect and a copy of each such agreement delivered to Buyer; (e) Seller has obtained CAISO Certification for the Facility; (f) The Facility has successfully completed all testing required by any requirement of Law to operate the Facility;
(g) All applicable regulatory authorizations, approvals and permits for the commencement of operation of the Facility have been obtained and all conditions thereof required for the commencement of operations that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect; (h) Seller or its Affiliates, as applicable, shall have obtained Site Control; (i) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8;
(j) Insurance requirements for the Facility have been met, with evidence provided in writing to Buyer, in accordance with Section 17.1; and (k) Seller has paid Buyer for all amounts owing under this Agreement, if any, including Daily Delay Damages and Commercial Operation Delay Damages.

2.3 Development; Construction; Progress Reports. Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Construction Start Date, and (ii) each calendar month from the first calendar month following the Construction Start Date until the Commercial Operation Date, Seller shall provide 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 by Seller. Seller is solely responsible for the design and construction of the Facility, including the location of the Site, the APPROVAL DRAFT Item 5
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Facility layout, and the selection and procurement of the equipment comprising the Facility.

2.4 Remedial Action Plan. If a Milestone is missed 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 Milestone completion date, a remedial action plan (“Remedial Action Plan”), which will describe in detail any delays (actual or anticipated) beyond the scheduled Milestone dates, including the cause of the delay (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor), Seller’s detailed description of its proposed course of action to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date, as such date may be extended pursuant to Exhibit B; 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 (to the extent not addressed in an earlier Remedial Action Plan) 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, or causes any of its Affiliates to comply, with the 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(s); provided, in the event any Milestone is missed by more than sixty (60) days and Seller cannot reasonably demonstrate a plan for achieving Commercial Operation by the Guaranteed Commercial Operation Date, as such date may, or is reasonably expected to, be extended pursuant to Exhibit B, Buyer shall have the right to terminate this Agreement pursuant to Section 11.1(a)(iii) (following notice and expiration of any applicable cure periods).

2.5 Pre-Commercial Operation Actions. The Parties agree that, in order for Seller to achieve the Commercial Operation Date, Seller will need to conduct operational testing of the Facility (including charging and discharging the Facility), and 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 delivery of Charging Energy and Dispatch Notices consistent with Seller’s reasonable requests to enable Facility operational testing and nominating and scheduling the Facility, in advance of the Commercial Operation Date. The Parties shall cooperate with each other to facilitate the foregoing and to avoid delaying the Commercial Operation Date, including Buyer’s use of commercially reasonable efforts to provide Scheduling Coordinator services prior to the Commercial Operation Date for the limited purpose of aiding Seller in achieving Commercial Operation of the Facility under this Agreement.

ARTICLE 3

PURCHASE AND SALE

3.1 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 make available, 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 APPROVAL DRAFT Item 5
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purchase any energy storage capacity, Energy, Ancillary Services or Capacity Attributes (except for Replacement RA) from any other energy storage 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.

3.2 Discharging Energy. 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 shall request Full Capacity Deliverability Status or Partial Capacity Deliverability Status for the Guaranteed Capacity in the CAISO generator interconnection process. As between Buyer and Seller, Seller shall be responsible for the cost and installation of any Network Upgrades associated with obtaining such Full Capacity Deliverability Status or Partial 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 or Interim 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, including Flexible Capacity, 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.

3.4 Ancillary Services; Environmental Attributes.
(a) Ancillary Services. Buyer shall have the exclusive rights to all Ancillary Services with characteristics and quantities determined in accordance with the CAISO Tariff.

Seller shall operate and maintain the Facility throughout the Contract Term so as to be able to provide the Ancillary Services in accordance with the specifications set forth in the Facility’s initial CAISO Certification associated with the Installed 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 consistent with the definition of Ancillary Services herein, provided that Buyer has agreed to reimburse Seller for any material costs Seller incurs in connection with conducting such additional CAISO Certification.
(b) Environmental Attributes. Buyer shall have the exclusive rights during the Delivery Term to any Environmental Attributes existing on the Effective Date or that may come into existence during the Contract Term. Buyer shall bear all costs and risks associated with the transfer, qualification, verification, registration and ongoing compliance for such Environmental APPROVAL DRAFT Item 5
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Attributes. Upon Seller's receipt of Notice from Buyer of Buyer's intent to claim such Environmental Atti ibutes, the Parties shall detennine the necessaiy actions and additional costs associated with such Environmental Attributes. Seller shall have no obligation to beat· any costs, losses or liability, or alter the Facility, unless the Pa1ties have agreed on all necessa1y te1ms and conditions relating to such alteration and Buyer has agreed to reimburse Seller for all costs, losses, and liabilities associated with such alteration.

3.5 Resource Adequacy Failure.
(a) RA Deficiency Dete1mination. For each RA Sho1tfall Month, Seller shall pay to Buyer as liquidated damages the RA Deficiency Amount, as set fo1th in Section 3 .5(b ), and/or provide Replacement RA, as set fo1th in Section 3.5(c), as the exclusive remedy for the Capacity Attributes that Seller failed to convey to Buyer. (b) RA Deficiency Amount Calculation. For each RA Shortfall Month, Seller shall pay to Buyer an amount (the "RA Deficiency Amount") equal to the product of:
(i) The greater of:
(A) the difference, expressed in kW, of the quantity of the then applicable Guaranteed Net Qualifying Capacity of the Facility, minus the then applicable Net Qualifying Capacity of the Facility that may be included in Supply Plans by Buyer, which shall be deemed to be zero (0) MW if the Net Qualifying Capacity has not been published by or othe1wise established with the CAISO by the Notification Deadline for such RA Shoitfall Month (other than due to Buyer's action or inaction), plus any Replacement RA that was able to be included in Supply Plans for the Showing Month by Buyer; and
(B) the difference, expressed in kW, of the quantity of the then applicable Guai·anteed Flexible Capacity of the Facility, minus the then applicable Effective Flexible Capacity of the Facility that may be included in Supply Plans by Buyer, which shall be deemed to be zero (0) MW if the Effective Flexible Capacity has not been published by or othe1wise established with the CAISO by the Notification Deadline for such RA Sho1tfall Month ( other than due to Buyer's action or inaction), plus any Effective Flexible Capacity that was provided as Replacement RA that was able to be included in Supply Plans in the Showing Month by Buyer, divided by the ratio of Guaranteed Flexible Capacity to Guaranteed Net Qualifying Capacity (the "Flexible Capacity Ratio"); 27 APPROVAL DRAFT Item 5
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(c) If Seller anticipates that it will have an RA Shortfall Month, Seller may provide Replacement RA in the amount of (i) the Guaranteed Net Qualifying Capacity of the Facility with respect to such Showing Month, minus (ii) the expected Net Qualifying Capacity of the Facility with respect to such Showing Month; provided that any Replacement RA provided pursuant to this Section 3.5 is communicated by Seller to Buyer in a Notice substantially in the fo1m of Exhibit Mat least seventy-five (75) days before the RA Sho1tfall Month.

3.6 Buyer's Re-Sale of Product. Buyer shall have the exclusive right in its sole discretion and at is sole cost and expense 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 at is sole cost and expense to offer, bid, or othe1wise 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 administrative actions (at Buyer's cost and expense) and execute all documents or instrnments reasonably necessaiy to allow Subsequent Purchasers to use such resold Product. 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 Pre-COD Operations. Prior to the Commercial Operation Date, and notwithstanding anything in Exhibit D or elsewhere under this Agreement, Seller shall have the right to operate the Facility and sell Products therefrom for its own account, so long as such operation does not interfere with Seller's ability to perfo1m its obligations under this Agreement.

Subject to Section 2.5, prior to the Commercial Operation Date, Buyer shall have no rights to issue or cause to be issued Charging Notices or Discharging Notices, and Seller shall have exclusive rights to chai·ge and dischai·ge the Facility, and Seller shall be entitled to all revenues and other amounts paid by CAISO for periods prior to the Commercial Operation Date and as othe1wise expressly set fo1th herein.

3.8 Compliance Expenditure Cap. If a Change in Law (excluding any RA Change in Law) occUITing after the Effective Date (1) results in or gives rise to any increase in Seller's costs, liabilities or obligations to comply with its obligations under this Agreement exceeding the cost, liabilities or obligations that Seller iI1cU1Ted or expected to iI1cur as of the Effective Date to comply with Seller's obligations under this Agreement, or (2) precludes or prohibits Seller from perfo1ming any of its obligations under this Agreement, in each case of clause (1) and (2) above with respect to obtaining, maintaining, conveying or effectuating Buyer's use of any Product or any obligation under Sections 3.1 through 3.4, then the Patties agree that the maxiinum aggregate amount of costs and expenses Seller shall be requiI·ed to bear during the Delive1y Te1m to comply with all of such obligations shall be capped at (i) per MW of Guai·anteed Capacity in the aggregate over the Delive1y Te1m ("Compliance Expenditure 28 Cap”). For the avoidance of doubt, the requirements of this Section 3.8 do not apply to any RA Change in Law that impacts RA Deficiency Amounts that Seller may owe under Section 3.5(b). (a) Any actions required for Seller to comply with any Change(s) in Law the cost of which is included in the Compliance Expenditure Cap as set forth in the first paragraph above, shall be referred to collectively as the “Compliance Actions”; provided that notwithstanding anything to the contrary hereunder, Compliance Actions shall not require Seller to install any additional MW or MWh of energy storage capacity, or otherwise alter the physical design or configuration of the Facility in any material manner as a result of any Change in Law occurring after the Effective Date.
(b) If Seller reasonably anticipates the need to incur costs and expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated costs and expenses. (c) Buyer will have sixty (60) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (1) agree to reimburse Seller for all or some portion of the costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. If Buyer does not respond to a Notice given by Seller under this Section 3.8 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 notwithstanding anything to the contrary hereunder, if Buyer waives or is so deemed to have waived Seller’s obligation to take such Compliance Actions, Seller shall have no further obligation to take, and no liability for any failure to take, such Compliance Actions for the remainder of the Delivery Term (and there shall be no reduction in Seller’s compensation hereunder or imposition of any damages, penalties or fees hereunder as a result of Seller’s failure to take any Compliance Actions).
(d) 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 in a commercially reasonable timeframe 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; provided that notwithstanding anything to the contrary hereunder, any such Compliance Actions implemented by Seller shall not reduce Seller’s compensation hereunder or cause Seller to incur any damages, penalty or fee hereunder, including for the avoidance of doubt, that if any Compliance Action causes the Facility to have reduced Monthly Capacity Availability, Efficiency Rate or Effective Capacity for any period of time, then such reduced availability or capacity shall be excluded for purposes of calculating Seller’s compensation hereunder

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ARTICLE4

OBLIGATIONS AND DELIVERIES

4.1 Delivery. Subject to the provisions of this Agreement, commencing on the Commercial Operation Date through the end of the Contract Tenn, Seller shall supply and deliver the Product to Buyer at the Delive1y Point, and Buyer shall take delive1y of the Product at the Delive1y Point in accordance with the temlS of this Agreement. Seller shall be responsible for paying or satisfying when due any costs or charges imposed in connection with the delive1y of Discharging Energy to the Delive1y Point, including any operation and maintenance charges imposed by the Transmission 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 delive1y of Discharging Energy at and after the Delive1y Point, including without limitation transmission costs and transmission line losses and imbalance charges. Commencing as of the Commercial Operation Date, 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 of interconnecting the Facility to the Interconnection Point. Dming the Delive1y Te1m, Seller shall maintain the Dedicated Interconnection Capacity for the Facility's sole use.

4.3 Performance Guarantees.
(a) Dming the Delive1y Term, the Facility shall maintain a Monthly Capacity Availability dming each month of no less than (the "Guaranteed Availability"), which Monthly Capacity Availability shall be calculated in accordance with Exhibit P.
(b) Dming the Delive1y Te1m, the Facility shall maintain an Efficiency Rate of no less than Guaranteed Efficiency Rate, which Efficiency Rate shall be calculated in accordance with Exhibit O. The Guaranteed Availability and Guaranteed Efficiency Rate are collectively the "Performance Guarantees".
( c) Buyer's remedies for Seller's failure to achieve the Perfo1mance Guarantees are: (i) for the Guaranteed Availability, (1) the Availability Adjustment to the Monthly Capacity Payment, as set fo1th in Exhibit C, and (2) the Seller Event of Default as set forth in Section

11. l(b )(iii) and the applicable remedies set fo1th in Aiticle 11; and (ii) for the Guaranteed Efficiency Rate, the Efficiency Rate Adjustment to the Monthly Capacity Payment, as set fo1t h in Exhibit C.

4.4 Facility Testing.
(a) Capacity Tests. Prior to the Commercial Operation Date, Seller shall schedule and complete a Commercial Operation Capacity Test in accordance with Exhibit 0.

Thereafter, Seller and Buyer shall have the right to nm additional Capacity Tests in accordance with Exhibit O.
(i) Buyer shall have the right to send one or more representative(s) to witness all Capacity Tests, subject to applicable NERC requirements and other applicable Laws. 30 APPROVAL DRAFT Item 5
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(ii) Following each Capacity Test, Seller shall submit a testing report in accordance with Exhibit 0. If the actual capacity or efficiency rate determined pursuant to a Capacity Test varies from the then-cmTent Effective Capacity and/or Efficiency Rate, as applicable, then the actual capacity and/or efficiency rate determined pursuant to such Capacity Test shall become the new Effective Capacity and/or Efficiency Rate, at the beginning of the day following the completion of the test for all pmposes under this Agreement. (b) Additional Testing. Seller shall, at times and for durations reasonably agreed to by Buyer, conduct necessa1y testing to ensure the Facility is functioning properly and the Facility is able to respond to Dispatch Notices pursuant to Section 4.6(b ). (c) Any testing of the Facility requested by Buyer after the Commercial Operation Capacity Tests, and all required annual tests pursuant to Section B of Exhibit 0 , 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 Collllllercial Operation Capacity Test, any C~ acity Test conducted if the Effective Capacity immediately prior to such Capacity Test , any test required by CAISO (including any test required to obtain or maintain CAISO Ce1tification), and other Seller-requested discretionaiy tests or dispatches, at times and for durations reasonably agreed to by Buyer, that Seller deems necessaiy for pmposes of reliably operating or maintaining the Facility or for re-perfonning a required test within a reasonable number of days of the initial required test ( considering the circmnstances that led to the need for a retest) shall be deemed a "Seller Initiated Test".
(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 Pmdent 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 necessaiy 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 pmposes of calculating the Monthly Capacity Availability.

4.5 Testing Costs and Revenues.
(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 othe1wise in accordance with Exhibit C, all applicable CAISO revenues received by Buyer and associated with the dischai·ge Energy associated with such Seller Initiated Test.
(b) Buyer shall be responsible for all costs, expenses and foes payable or reimbursable to its representative(s) witnessing any Facility test. 31 (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 Operations.
(a) Seller shall operate the Facility in accordance with Prudent Operating Practices.
(b) 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. During any period during which the Facility is not capable of receiving or implementing Automated Dispatches, Seller shall implement back-up procedures consistent with the CAISO Tariff and CAISO protocols to enable Seller to receive and implement non-automated Dispatch Notices (“Alternative Dispatches”). (c) Seller shall maintain in accordance with Prudent Operating Practices 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.
(d) Seller shall maintain in accordance with Prudent Operating Practices accurate records with respect to all Capacity Tests.
(e) Seller shall maintain in accordance with Prudent Operating Practices and make available to Buyer upon request records, including logbooks, demonstrating that the Facility is operated in accordance with Prudent Operating Practices. Seller shall comply with all reporting requirements and upon request permit on-site audits, investigations, tests and inspections permitted or required under any Prudent Operating Practices.

4.7 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. If Automated Dispatches are not possible for reasons beyond Buyer’s control, Alternative Dispatches may be provided pursuant to Section 4.6(b).

4.8 Facility Unavailability to Receive Dispatch Notices. To the extent the Facility is unable to receive or respond to Dispatch Notices either through Automated Dispatches or Alternative Dispatches 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 APPROVAL DRAFT Item 5
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deemed unavailable for purposes of calculating the Monthly Capacity Availability.

4.9 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 in order to deliver the Product in accordance with the terms of this Agreement, including maintenance, repair or replacement of equipment in Seller’s possession or control used to deliver 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 CAISO costs and charges associated with Charging Energy during the Delivery Term. Buyer shall ensure that all Charging Notices and Discharging Notices are issued in a manner consistent with all requirements of this Agreement, including all Operating Restrictions and the CAISO Tariff.
(b) Charging Notices. Buyer shall have the right to charge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays) during the Delivery Term, by causing Charging Notices to be issued; provided Buyer’s right to cause Charging Notices to be issued is subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions, the CAISO Tariff, and the provisions of Section 4.9(a). Each Charging Notice issued in accordance with this Agreement shall be effective unless and until Buyer’s SC or CAISO modifies such Charging Notice by providing Seller with an updated Charging Notice. (c) No Unauthorized Charging. Seller shall not charge the Facility during the Delivery Term other than pursuant to a valid Charging Notice (it being understood that Seller may adjust a Charging Notice to the extent necessary to maintain compliance with the Operating Restrictions or the CAISO Tariff), or in connection with a Buyer Dispatched Test or Seller Initiated Test (including Facility maintenance or a Capacity Test), or pursuant to a notice from CAISO, the Transmission Provider or any Governmental Authority. If, during the Delivery Term, Seller charges the Facility (i) to a Storage Level greater than the Storage Level provided for in a Charging Notice, or (ii) in violation of the first sentence of this Section 4.9(c), then (i) Seller shall pay to Buyer all Energy costs associated with such charging of the Facility, and (ii) Buyer shall be entitled to discharge such Energy and shall be entitled to all of the benefits (including Product) associated with such discharge.
(d) Discharging Notices. Buyer shall have the right to discharge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays) during the Delivery Term, by causing Discharging Notices to be issued, subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions, the CAISO Tariff, and the existing level of charge of the Facility. Each Discharging Notice issued in accordance with this Agreement shall be effective unless and until Buyer’s SC or the CAISO modifies such Discharging Notice by providing the Facility 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 (it being understood that Seller may adjust a Discharging Notice to the extent necessary to maintain compliance with the Operating Restrictions or the CAISO Tariff), or in connection with a Seller Initiated Test APPROVAL DRAFT Item 5
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(including Facility maintenance or a storage Capacity Test), or pursuant to a notice from CAISO, the Transmission Provider or any Governmental Authority. (f) Unauthorized Charges and Discharges. If Seller or anyone under Seller’s control charges, discharges or otherwise uses the Facility other than as permitted hereunder, or as is expressly addressed in this Section 4.9, Seller shall reimburse Buyer for all FERC, CPUC or CAISO charges or penalties 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 (following notice and applicable cure periods) shall be an Event of Default under Article 11.
(g) CAISO Dispatches. During the Delivery Term, CAISO Dispatches shall have priority over any Charging Notice or Discharging Notice issued by Buyer’s SC, and Seller shall have no liability for violation of this Section 4.9 or any Charging Notice or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any CAISO Dispatch. Except to the extent otherwise expressly stated herein, Buyer shall be liable for all CAISO charges, penalties and costs, including any imbalance charges and penalties, provided that during any time interval during the Delivery Term in which the Facility is capable of responding to a CAISO Dispatch, but the Facility deviates from a CAISO Dispatch solely due to (i) Seller’s violation of the CAISO Tariff, (ii) Seller’s breach of this Agreement or (iii) operating or performance deficiencies or defects of Seller or the Facility (except to the extent arising from a Force Majeure Event), Seller shall be responsible for all CAISO charges and penalties resulting from such deviation (in addition to any Buyer remedy related to overcharging of the Facility as set forth in Section 4.9(c)).
(h) Pre-Commercial Operation Date Period, etc. Prior to the Commercial Operation Date, Buyer shall have no rights to issue or cause to be issued Charging Notices or Discharging Notices, and Seller shall have exclusive rights to charge and discharge the Facility. (i) 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 Section 4.9 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 Transmission Provider. Buyer (or Buyer’s SC) shall have the right, but not the obligation, to provide Seller with updated Dispatch Notices during any Curtailment Order consistent with CAISO rules and the Operating Restrictions. (j) 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 or Seller Initiated Test shall not be considered Station Use, and (iii) Seller shall indemnify and hold harmless Buyer from any and all costs, penalties, charges or other adverse consequences that result from Energy supplied for Station Use by any means other than retail service from the applicable utility, and APPROVAL DRAFT Item 5
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shall take any additional measures to ensure Station Use (other than that supplied from Charging Energy or Discharging Energy as provided in clause (ii)) is supplied by the applicable utility’s retail service if necessary to avoid any such costs, penalties, charges or other adverse consequences.

4.10 Capacity Availability Notice.
(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 F (“Monthly Forecast”).
(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 as 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.
(c) Seller shall notify Buyer and the SC (if applicable) immediately 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.

4.11 Daily Operating Report. Upon Buyer’s request, Seller shall, on each day immediately after each operating day, provide Buyer an operating report for the Facility substantially in the form attached in Exhibit S (the “Daily Operating Report”).

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 schedule of proposed Planned Outages (“Outage Schedule”) for the following twelve (12)-month period in a form reasonably agreed to by Buyer. 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 reasonable 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. Seller shall be permitted to reduce deliveries of applicable Product during any period of such Planned Outages.

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(ii) If reasonably required in accordance with Prndent Operating Practices, Seller may perfo1m maintenance at a different time than maintenance scheduled pursuant to Section 4.12(a)(i); provided that Seller shall provide Notice to Buyer within the time period dete1mined 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 (or such sho1ter period as may be reasonably acceptable to Buyer), and Seller shall (A) reimburse Buyer for any costs, penalties or charges imposed by CAISO in connection therewith, (B) provide Buyer with Replacement RA con esponding to such time period to the extent required by the CAISO and (C) subject to Prndent Operating Practices, use commercially reasonable effo1ts to limit maintenance repairs perfo1med pursuant to this Section 4.12(a)(ii) to periods reasonably acceptable to Buyer.
(b) No Planned Outages During Summer Months. Except as scheduled by the Paities under Section 4.12(a), during the months of June through September, Seller shall not schedule any non-emer~ cy maintenance that reduces the energy storage capability of the Facility by more than , unless (i) such outage is required to
avoid damage to the Facility, (ii) such maintenance is necessa1y to maintain equipment waiTanties and cannot be scheduled outside of the months of June through September, (iii) such outage is required in accordance with Prndent Operating Practices, or (iv) the Pa1ties agree othe1w ise in writing. In the event that Seller has a previously Planned Outage that becomes coincident with a System Emergency, Seller shall make all reasonable effolis to reschedule such Planned Outage. (c) Planned Outage Timing. To the fullest extent practical and without limiting Seller's rights pursuant to Section 4.12(a)(ii), 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) othe1w ise 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 Seller becoming aware of the occmTence of an Unplanned Outage, or if Seller has knowledge that an Unplanned Outage will occur, within twenty (20) minutes of dete1mining that such Unplanned Outage will occur.

Seller shall relay outage info1mation to Buyer as required by the CAISO Tariff within twenty (20) minutes of the Unplanned Outage. Seller shall communicate to Buyer the estimated time ofretum 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 mies and instructions during any inspection and shall not interfere with work on or operation of the Facility. (f) Reports of Outages. Seller shall promptly prepai·e and provide to Buyer, all reports of Unplanned Outages or Planned Outages that Buyer may reasonably require for the pmpose of enabling Buyer to comply with CAISO requirements or any applicable Laws. Seller shall also report all Unplanned Outages or Planned Outages in the Daily Operating Repo1t. 36 ARTICLE 5

TAXES, GOVERNMENTAL AND ENVIRONMENTAL COSTS

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). If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation to evidence such exemption or exclusion within thirty (30) days after the date Buyer makes such claim. Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes for which Buyer is responsible hereunder and from which Buyer claims it is exempt.

5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, 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.

5.3 Environmental Costs. Seller shall be solely responsible for all Environmental Costs, excluding, however, environmental related costs of any type arising out of or related to Charging Energy or Discharging Energy where such costs are assessed or arise at, or on the grid side of, the Delivery Point, all of which costs shall (as between Seller and Buyer) be the sole responsibility of Buyer.

ARTICLE 6

MAINTENANCE AND REPAIR OF THE FACILITY

6.1 Maintenance of the Facility.
(a) Seller shall construct, operate, and maintain the Facility so that Buyer may dispatch the Facility within the operating parameters of the Operating Restrictions. (b) Seller shall, as between Seller and Buyer, be solely responsible for the operation, inspection, maintenance and repair of the Facility, and any portion thereof, 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. (c) Subject to Article 10 and the other provisions hereof, Seller shall promptly make all necessary repairs to the Facility, and any portion thereof, and take all actions necessary APPROVAL DRAFT Item 5
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in order to provide the Product to Buyer in accordance with the terms of this Agreement (and, at a minimum, the Performance Guarantees).

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 Buyer’s emergency contact identified in Exhibit N Notice 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 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities, and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities and/or co-tenancy agreements to be entered into among Seller, the Transmission Provider, Seller’s Affiliates, and/or third parties pursuant to which certain Shared Facilities and Interconnection Facilities may be subject to joint ownership and shared maintenance and operation arrangements. Seller agrees that any such agreements regarding Shared Facilities (i) shall permit Seller to perform or satisfy, and shall not purport to limit, Seller’s obligations hereunder, (ii) shall provide for separate metering of the Facility; (iii) shall not limit Buyer’s ability to charge or discharge the Facility up to the Dedicated Interconnection Capacity; (iv) 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 (v) shall provide that any curtailment or restriction of Shared Facility capacity shall be allocated to all generating or energy storage facilities using the Shared Facilities based on their pro rata allocation of the Shared Facility capacity prior to such curtailment or reduction. Seller shall not, and shall not permit any Affiliate to, allocate to other Persons a share of the total interconnection capacity under the Interconnection Agreement in excess of an amount equal to the total interconnection capacity under the Interconnection Agreement minus the Dedicated Interconnection Capacity.

ARTICLE 7

METERING

7.1 Metering. Seller shall measure the amount of Charging Energy and Discharging Energy using the Facility Meter, which will be subject to adjustment in accordance with applicable CAISO meter requirements and Prudent Operating Practices, including to account for Electrical Losses. Seller shall separately meter all Station Use. The Facility Meter will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained at Seller’s cost. Each meter shall be kept under seal, such seals to be broken only when the Facility Meters are 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. Seller and Buyer shall cooperate to allow both Parties to retrieve the meter reads from the CAISO market results interface - settlements (MRI-S) web and/or directly from the CAISO meter(s) at the Facility.

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7.2 Meter Verification. Annually, if Seller has reason to believe there may be a Facility Meter malfunction, or upon Buyer’s reasonable request, Seller shall request permission from CAISO to test the Facility Meter. 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 no later than the tenth (10th) day of each month for the previous calendar month.

Each invoice shall reflect (a) 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 and the amount of Discharging Energy, in each case as read by the Facility Meter, and the amount of Replacement RA delivered to Buyer (if any) and (ii) data showing a calculation of the Annual Excess Cycle Payment (if any), 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.

Beginning on the Commercial Operation Date, 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.

8.2 Payment. Buyer shall make payment to Seller of Monthly Capacity Payments for Product (and any other amounts due, including, if applicable, the Annual Excess Cycle Payment) by wire transfer or ACH payment to the bank account provided on each monthly invoice. Buyer shall pay undisputed invoice amounts within (30) days of Buyer’s receipt of Seller’s invoices; provided, if such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on 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.

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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 $10,000.

8.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5 or an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or there is determined to have been a Facility Meter inaccuracy sufficient to require a payment adjustment. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment.

If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due.

8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.

8.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B and P, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.

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8.7 Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days after Project Participant Approval of this Agreement is obtained. Seller shall maintain the Development Security in full force and effect. Subject to Section 11.10, within five (5) Business Days following any draw by Buyer on the Development Security, Seller shall replenish the amount drawn such that the Development Security is restored to the applicable amount. Upon the earlier of (a) Seller’s delivery of the Performance Security, or (b) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If requested by Seller, Buyer shall from time to time reasonably cooperate with Seller to enable Seller to exchange one permitted form of Development Security for another permitted form.

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 five (5) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement other than to satisfy a Termination Payment, until the following have occurred: (a) the Delivery Term has expired or terminated early; and (b) all payment obligations of Seller 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 requested by Seller, Buyer shall from time to time reasonably cooperate with Seller to enable Seller to exchange one permitted form of Performance Security for another permitted form.

8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.

Upon or any time after the occurrence 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;
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(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Perfonnance Security; and ( c) Liquidate all Development Security or Perfo1mance 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 smplus proceeds remaining after such obligations are satisfied in full.

8.10 Buyer Credit Arrangements. To secure its obligations under this Agreement, Buyer shall deliver to Seller, within ninety (90) days after the Effective Date, Buyer Liability Pass Through Agreements from the Project Pa1ticipants with Liability Shares as set fo1th on Exhibit V.

Seller shall countersign each Buyer Liability Pass Through Agreement within ten (10) days of receipt of Buyer's delive1y of each such Buyer Liability Pass Through Agreement executed by Buyer and the applicable Project Prut icipant. Buyer shall maintain such Buyer Liability Pass Through Agreements in full force and effect until both of the following have occmTed: (a) the Delive1y Term has expired or te1minated early; and (b) all payment obligations of Buyer due and payable under this Agreement ru·e paid in full (whether directly or indirectly such as through set-off or netting). Buyer may propose amendments to Exhibit V, including with respect to the identity of Project Pruticipants and the amount of each Project Pa1ticipant's Liability Shru·e. Seller shall have ten (10) Business Days to evaluate any such proposed runendments to Exhibit V in its sole but good faith discretion. If Seller approves such proposed runendments to Exhibit V, Buyer shall have thiity (30) days to provide Seller with replacement Buyer Liability Pass Through Agreements executed by Buyer and the Seller-approved Proj ect Paiticipants and inco1porating the revised Liability Shares set foith in the amended Exhibit V. Seller shall countersign each Buyer Liability Pass Through Agreement executed by Buyer and such Seller-approved Project Participants within ten (10) Business Days after Buyer's delive1y of such Buyer Liability Pass Through Agreements to Seller; provided that no delay in countersigning any such Buyer Liability Pass Through Agreement shall affect Seller's, Buyer's or the Project Pait icipant's rights or obligations thereunder.
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the occunence of a Step-Up Event, Seller and Buyer will amend Exhibit V to set forth the Revised Liability Shares of the remaining Project Participants.

ARTICLE9

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 fo1th 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, pennitted, 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 delive1y canier with delive1y fees either prepaid or an atTangement with such canier made for the payment of such fees, the next Business Day after the same is delivered by the sending Paity to such cruTier; (c) if sent by electronic communication (including electronic mail or other electronic meai1s) at the time indicated by the time stamp upon delive1y and, if after 5 pm, on the next Business Day; or ( d) if delivered in person, upon receipt by the receiving Pa1ty. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch infonnation or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transinission.

10.1 Definition.

ARTICLE 10

FORCE MAJEURE
(a) "Force Majeure Event" means any act or event that delays or prevents a Pa1ty from timely perfo1ming all or a po1t ion 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 effo1ts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Pruty 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 ru1d without the fault or negligence of the Party 43 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, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic or pandemic (including the COVID 19 pandemic); landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; any Change in Law that renders this Agreement or any provisions hereof incapable of (or delayed in) being performed or administered; 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, the term “Force Majeure Event” does not include (i) economic conditions or any Change in Law that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component or compliance costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy Product at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above that disables physical or electronic facilities necessary to transfer funds to the payee Party; (iv) a Curtailment 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) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Facility; (vii) any equipment failure except if such equipment failure is caused by a Force Majeure Event; (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 an extension under this Agreement; or (ix) any action or inaction by any third party, including Transmission Provider, that delays or prevents the approval, construction or placement in service of any Interconnection Facilities or Network Upgrades, except to the extent caused by a Force Majeure Event.

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 or delayed from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable (or delayed) to fulfill any obligation by reason of a Force Majeure Event shall take commercially reasonable actions necessary to remove such inability or delay with commercially reasonable speed and diligence. Nothing herein shall be construed as permitting that Party to continue to fail to perform or delay after said cause has been removed. The obligation to use commercially reasonable 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.

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not (a) suspend or excuse the obligation of a Party to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Construction Start Date or the Guaranteed Commercial Operation Date beyond the extensions provided in Section 4 of Exhibit B, or (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(ii) and receive a Damage Payment upon exercise of Buyer’s remedies pursuant to Section 11.2.

10.3 Notice. In the event of any delay or nonperformance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall (a) promptly notify the other Party in writing of the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance, and (b) 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; provided, a Party’s failure to give timely Notice shall not affect such Party’s ability to assert that a Force Majeure Event has occurred unless the delay in giving Notice materially prejudices the other Party.

10.4 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder in any material respect, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(c), and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.

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 any provision hereof that provides for a liquidated or other exclusive remedy, the exclusive remedy for which shall be that set forth in such provision), and such failure is not remedied within thirty (30) days after Notice thereof (or such longer APPROVAL DRAFT Item 5
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additional period, not to exceed an additional ninety (90) days, if the Defaulting Party is unable to remedy such default within such initial thniy (30)-day period despite exercising collllllercially reasonable effo1ts);
(iv) such Pa1iy becomes Bankrnpt;
(v) such Paiiy assigns this Agreement or any of its rights hereunder other than in compliance with Aliicle 14, if applicable; or (vi) such Paiiy consolidates or amalgainates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the tune of such consolidation, amalgamation, merger or transfer, the resulting, smviving or transferee entity fails to assume all the obligations of such Paiiy under this Agreement to which it or its predecessor was a paiiy by operation of Law or pmsuant to an agreement reasonably satisfacto1y to the other Paiiy. (b) with respect to Seller as the Defaulting Paiiy, the occunence of any of the following:
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11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occun-ed 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 tennination date of this Agreement ("Early Termination Date") that terminates this Agreement (the "Terminated Transaction") and ends the Delive1y Te1m effective as of the Early T ennination Date;
(b) to accelerate all amounts owing between the Paities, and to collect as liquidated damages (i) the Damage Payment, or (ii) the Tennination Payment, as applicable, in each case calculated in accordance with Section 11.3 below; ( c) to withhold any payments due to the Defaulting Paity under this Agreement; ( d) to suspend perfo1mance; and
(e) to exercise any other right or remedy available at law or in equity, including specific perfo1mance or injunctive relief, except to the extent such remedies ai·e expressly limited under this Agreement; provided, payment by the Defaulting Pai·ty of the Damage Payment or Te1mination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Pa1ty's sole and exclusive remedy for any Te1minated Transaction and the Event of Default related thereto.

11.3 Damage Payment; Termination Payment. If an Early Tennination Date has been declared, the Non-Defaulting Pa1ty shall calculate, in a commercially reasonable manner, the Damage Payment or Te1mination Payment, as applicable, in accordance with this Section 11.3. (a) Damage Payment by Seller Prior to Commercial Operation Date. If the Early T e1mination Date occurs before the Commercial Operation Date with Seller as the Defaulting Paity, then the Damage Payment shall be calculated in accordance with this Section l 1.3(a).
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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 default would be difficult or impossible to detennine and that the damages set forth in this Section l 1.3(a)(i) are a reasonable approximation of Buyer's ha1m or loss. (b) Other Termination Payment. The payment owed by (i) Buyer as the Defaulting Party to Seller as the Non-Defaulting Party for a Te1minated Transaction occmTing prior to the Commercial Operation Date or (ii) the Defaulting Party to the Non-Defaulting Party for a T e1minated Transaction occmTing on or 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 Te1mination Date) netted into a single amount.

The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amom1t for the Terminated Transaction as of the Early Termination Date. Third paiiies supplying info1mation for pmposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant mai·kets, end-users of the relevant product, info1mation vendors and other somces of mai·ket info1mation. The Settlement Amount shall not include consequential, incidental, punitive, exemplaiy , indiJ:ect or business inte1n1ption damages. Without prejudice to the Non-Defaulting Party's duty to mitigate, the Non-Defaulting Pa1iy shall not have to enter into replacement transactions to establish a Settlement Amount. Each Pruiy agrees and acknowledges that (i) the actual damages that the Non-Defaulting Paiiy would incm in connection with a Te1minated Transaction would be difficult or impossible to predict with ce1iainty, (ii) the Te1mination Payment described in this Section l l .3(b) is a reasonable and appropriate approximation of such damages, and (iii) the Te1mination Payment described in this Section 11.3 (b) is the exclusive remedy of the Non-Defaulting Pa1iy in connection with a Terminated Transaction but shall not othe1wise act to limit any of the Non-Defaulting Pruiy's rights or remedies if the Non-Defaulting Party does not elect a Tenninated Transaction as its remedy for an Event of Default by the Defaulting Pruiy.

11.4 Notice of Payment of Termination Payment or Damage Payment. As soon as practicable after a Te1minated Transaction, but in no event later than sixty (60) days after the Eru·ly Te1mination Date (or such longer additional period, not to exceed an additional sixty (60) days, if the Non-Defaulting Paiiy is unable, despite using commercially reasonable efforts, to calculate the Te1mination Payment or Damage Payment, as applicable, within such initial sixty (60)-day period despite exercising commercially reasonable effo1is), Notice shall be given by the Non-Defaulting Pa1iy to the Defaulting Paiiy of the amount of the Damage Payment or T e1mination Payment, as applicable, and whether the Termination Payment or Damage Payment, as applicable, is due to or from the Non-Defaulting Paiiy. The Notice shall include a written statement explaining in reasonable detail the calculation of such an1ount and the somces for such calculation. The Te1mination 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 Pai·ty disputes the Non-Defaulting Pa1iy's calculation of the Te1mination Payment or Damage Payment, as applicable, in whole or in pai·t, the Defaulting Pruiy shall, within five (5) Business Days ofreceipt of the Non-Defaulting Paiiy's calculation of the Termination Payment or 49 APPROVAL DRAFT Item 5
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Damage Payment, as applicable, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the T e1mination Payment or Damage Payment, as applicable, shall be dete1mined in accordance with Alticle 15.

11. 7 Rights And Remedies Are Cumulative. Except where liquidated damages or other express remedy or measure of damages are provided herein as the exclusive remedy, the rights and remedies of a Party pursuant to this Alticle 11 shall be cumulative and in addition to the rights of the Paities othe1wise provided in this Agreement.

11.8 Mitigation. Any Non-Defaulting Pai·ty shall be obligated to use commercially reasonable effo1ts to mitigate its Costs, Losses and damages resulting from any Event of Default of the other Party under this Agreement.

11.9 Pass Through of Buyer Liability. Notwithstanding any other provision of this Agreement, if Buyer fails 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, Seller may, without waiving any of its rights with respect to Buyer except as expressly provided herein, pursue remedies lmder any or all of the Buyer Liability Pass Through Agreements as provided therein.

Seller hereby waives the right to recover directly from Buyer any Damage Payment or Te1mination Payment owed by Buyer that is not paid by Buyer pursuant to Sections 11.3 and 11.4, but the foregoing waiver does not apply to any other right or remedy of Seller under this Agreement, including the right to recover accmed Monthly Capacity Payments, other amOlmts payable or reimbursable under this Agreement or any other amounts incmTed or accmed prior to te1mination of this Agreement, and the right to tenninate the ESSA as the result of an Event of Default by Buyer.

11.10 Seller Pre-COD Liability Limitations. Notwithstanding any other provision of 50 APPROVAL DRAFT Item 5
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this Agreement, Seller's aggregate liability under or arising out of this Agreement p_£ior to the Commercial Operation Date shall be limited to an amount equal to ...

ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.

12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF (A) AN EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, (B) AN ARTICLE 16

INDEMNITY CLAIM, (C) INCLUDED IN A LIQUIDATED DAMAGES CALCULATION, OR (D) RESULTING FROM A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,

NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS

FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL

DAMAGES, OR LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS,

WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT, BY STATUTE, IN TORT OR CONTRACT.

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. TO THE

EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED OR

ANY OTHER EXCLUSIVE REMEDY IS SET FORTH HEREIN, 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 51 CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,

WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.

THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE

EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE

BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY

WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.

ARTICLE 13
REPRESENTATIONS AND WARRANTIES; COVENANTS

13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a Delaware 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) Any and all permits and approvals necessary for the construction and operation of the Facility shall be obtained and maintained as and when needed by Seller or its Affiliates, as applicable, including without limitation, environmental clearance under CEQA or APPROVAL DRAFT Item 5
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other environmental law, as applicable, from the local jurisdiction where the Facility is or will be constructed.
(f) Site Control shall be maintained by Seller or its Affiliates, as applicable, throughout the Delivery Term.
(g) Neither Seller nor its Affiliates have received notice from, or been advised by, any existing or potential 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, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law. (b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, 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.

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(e) 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;
(b) It or its Affiliates, as applicable, 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. 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) Workforce Development. Seller shall comply with all applicable federal, state and local laws, statutes, ordinances, rules, regulations and orders and decrees of any courts or administrative bodies or tribunals, including, without limitation, employment discrimination and prevailing wage laws. Although the Facility is not a public work as defined by California Labor Code section 1720, any construction work contracted by Seller in furtherance of this Agreement shall (i) comply with California prevailing wage provisions applicable to public works projects, including but not limited to those set forth in California Labor Code sections 1770, 1771, 1771.1, 1772, 1773, 1773.1, 1774, 1775, 1776, 1777.5, and 1777.6, as they may be amended from time to time (“Prevailing Wage Requirement”); and (ii) be conducted using a project labor agreement, community workforce agreement, work site agreement, collective bargaining agreement, or similar agreement providing for terms and conditions of employment with applicable labor organizations (“Project Labor Agreement”). Seller shall use best efforts to include the following language in any Project Labor Agreement: “Union members agree not to APPROVAL DRAFT Item 5
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make any written or verbal statements about CC Power or its members that are disparaging, untrue or inaccurate.”
(c) Prohibition Against Forced Labor. Seller represents and warrants that it has not and will not knowingly utilize equipment or resources for the construction, operation or maintenance of the Facility that rely on work or services exacted from any Person under the threat of a penalty and for which the Person has not offered himself or herself voluntarily (“Forced Labor”). Consistent with the business advisory jointly issued by the U.S. Departments of State, Treasury, Commerce and Homeland Security on July 1, 2020, equipment or resources sourced from the Xinjiang region of China are presumed to involve Forced Labor.

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 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 by Seller, 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 and shall include any revisions and comments reasonably required by the Lender and reasonably acceptable to Buyer. 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 of the Facility. Buyer shall have no obligation to agree to any revisions by the Lender to the Collateral Assignment Agreement that materially and adversely affect any of Buyer’s rights, benefits, risks or obligations under this Agreement.

14.3 Permitted Assignment.
(a) Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to:
(i) an Affiliate of Seller; or
(ii) any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of law) if, and only if (A) such Person is a Permitted APPROVAL DRAFT Item 5
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Transferee; (B) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed assignment; and (C) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests pursuant to this Section 14.3(a)(ii) 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.

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 accepted by Buyer.
(b) Buyer may, without the prior written consent of Seller, transfer or assign this Agreement to any Project Participant that (A) has, and has continued to maintain for at least one hundred eighty (180) consecutive days, a Credit Rating of at least BBB-(stable) from S&P or Baa3 from Moody’s, (B) is a load serving entity, (C) has no pending or threatened actions, suits, proceedings or claims against Seller or Seller’s Affiliates and (D) is not a competitor to Seller and poses no material business, legal or ethical conflict to Seller; provided, Buyer shall give Seller Notice at least fifteen (15) Business Days before the date of such proposed assignment and provide to Seller a written agreement, in a form acceptable to Seller, signed by the Person to which Buyer wishes to assign its interests that provides that such Person will assume all of Buyer’s obligations and liabilities under this Agreement upon such transfer or assignment. Notwithstanding the foregoing, any assignment by Buyer, its successors or assigns under this Section 14.3(b) shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Seller.

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 (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.

ARTICLE 15

DISPUTE RESOLUTION

15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. The Parties agree that any suit, action or other legal proceeding by or against any Party with respect to or arising out of this Agreement shall be brought in the federal or state courts located in the State of California in a location to be mutually chosen by Buyer and Seller, or in the absence of mutual agreement, the County of San Francisco.

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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 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) 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, (ii) negligent or tortious acts, errors, or omissions by Seller or its Affiliates, or (iii) intentional acts 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) a violation of applicable Laws by Buyer or its Affiliates, (ii) negligent or tortious acts, errors, or omissions by Buyer or its Affiliates, or (iii) intentional acts or willful misconduct by Buyer or its Affiliates, 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 solely from its own negligence, intentional acts or willful misconduct. These APPROVAL DRAFT Item 5
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indemnity provisions shall not be constmed 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 Alticle 16 may apply, the Indemnified Party shall notify the Indemnifying Paity in writing of such fact. The Indemnifying Paity shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfacto1y to the Indemnified Patty, provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Patty and the Indemnified Pat·ty 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 Patty shall have the right to select and be represented by separate counsel, at the Indemnifying Pa1ty's expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Patty fails to assume the defense of a claim meriting indemnification, the Indemnified Patty 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 Patty or, absent such consent, written opinion of the Indemnified Pat·ty's counsel that such claim is meritorious or waiTants settlement. Except as othe1wise provided in this Alticle 16, in the event that a Patty is obligated to indemnify and hold the other Pa1ty and its successors and assigns hannless under this Alticle 16, the amount owing to the Indemnified Pat·ty will be the amount of the Indemnified Party's damages net of any insurance proceeds received by the Indemnified Pa1ty following a reasonable effo1t by the Indemnified Patty to obtain such insurance proceeds.

17.1 Insurance.

ARTICLE 17

INSURANCE
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, commercial general liability insurance, including products and completed operations and personal injmy insurance, in a minimum amount of per
occmTence, and an annual aggregate of not less than , endorsed to provide contractual liability in said amount, specifically covering Seller's obligations under this Agreement and including Buyer as an additional insured. Such insurance shall include Buyer as an additional insured and 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 injmy or death occmTing as a result of each accident. With regard to bodily injmy 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 T e1m workers' compensation and employers' liability insurance coverage in accordance with statuto1y amounts, with employer's liability limits of not less than for each accident, injmy , or illness; and include a blanket waiver of subrogation.
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( d) Business Auto Insurance. Seller shall maintain at all times during the Contract T e1m business auto insurance for bodily injmy and prope1iy damage with limits of-per occmTence. 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 perfo1mance of the Agreement and shall include 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 constrnction of the Facility prior to the Commercial Operation Date, Pollution Insurance in the amount of per occmTence and in the aggregate, including Seller (and Lender, if any) as additional insureds.
(f) Umbrella Liability Insurance. Seller shall maintain or cause to be maintained an umbrella liability policy with a limit of liability of per occmTence 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 primaiy , excess or umbrella liability policies to meet the insurance limits required under Sections 17.l (a), 17. l(b) and 17.l(d) above. (g) Constrnction All-Risk Insurance. Seller shall maintain or cause to be maintained during the constrnction of the Facility prior to the Commercial Operation Date, constrnction all-risk f01m prope1iy insurance covering the Facility during such constrnction periods.
(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" prope1iy insurance coverage in ainounts that are not less than the actual replacement value of the Facility;provided, however, with respect to prope1iy insurance for natural catastrophes, Seller shall maintain limits with deductibles and sublimits in accordance with industiy standards. Such insurance shall include business inte1n1ption coverage in an amount equal to of expected revenue from this Agreement.
(i) Subconti·actor Insurance. Seller shall require all of its subconti-actors to cany: (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 injmy and property damage with limits of per occmTence. All subconti·actors shall name Seller as an additional insured to insurance caiTied pursuant to clauses (i)(i) and (i)(iii). All subconti·actors shall provide a primaiy endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.l(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 with insurers with ratings compai·able to A-, VII or higher, that are authorized to do business in the State of California, and that are reasonably satisfacto1y to Buyer, in f01m evidencing all coverages set fo1ih above. Such ce1iificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material 59 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 provide a waiver of subrogation in favor of Buyer for all work performed by Seller, its employees, agents and sub-contractors.
(k) Failure to Comply with Insurance Requirements. If Seller fails to comply with any of the provisions of this Article 17, Seller, among other things and without restricting Buyer’s remedies under the Law or otherwise, shall, at its own cost and expense, act as an insurer and provide insurance in accordance with the terms and conditions above. With respect to the required general liability, umbrella liability and commercial automobile liability insurance, Seller shall provide a current, full and complete defense to Buyer, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents, employees, assigns, and successors in interest, in response to a third-party claim in the same manner that an insurer would have, had the insurance been maintained in accordance with the terms and conditions set forth above. In addition, alleged violations of the provisions of this Article 17 means that Seller has the initial burden of proof regarding any legal justification for refusing or withholding coverage and Seller shall face the same liability and damages as an insurer for wrongfully refusing or withholding coverage in accordance with the laws of California.

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 prospective 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.

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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 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 or its Affiliates’ 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.

18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement.

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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, 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, 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 APPROVAL DRAFT Item 5
Attachment 2
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 (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Except as set forth in Section 11.9 and any Buyer Liability Pass Through Agreements issued by one or more Project Participants pursuant to Section

8.10, 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 officers, directors, advisors, contractors, consultants or employees 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 Change in Electric Market Design. If a change in the CAISO Tariff (excluding any Change in Law governed by Section 3.8) 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 APPROVAL DRAFT Item 5
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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 agreesto 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 assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
[Signatures on following page]
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Attachment 2
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

GOAL LINE BESS 1, LLC
By:

Name:

Title:

CALIFORNIA COMMUNITY POWER,
a California joint powers authority
By:

Name:

Title:

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EXHIBIT A

FACILITY DESCRIPTION
Site Name: Goal Line BESS
Site includes all or some of the following APNs:

City: Escondido
County: CA
Zip Code: 92025
Latitude and Longitude: GPS:

Facility Description: Grid connected 50 MW/400 MWh batte1y energy storage facility as depicted in preliminaiy Site diagrams on the following pages.

Interconnection Point: See Note 1 below.

Point of Change of Ownership: See Note I below.

Facility Meter: See Note 1 below.

Facility Metering Points: See Note 1 below.

PNode: See Note I below.

Transmission Provider: San Diego Gas & Electric
Additional Information: none
Note 1: The Interconnection Point, Point of Change of Ownership, Facility Meter, Facility Metering Points, and PNode will be defined by Seller by written notice to Buyer following the execution of the Interconnection Agreement.

Exhibit A - 1
APPROVAL DRAFT Item 5
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Appendix A - 2
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Appendix A - 3
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EXIDBITB

FACILITY CONSTRUCTION AND COMMERCIAL OPERATION

1. Construction of the Facility.
a. "Construction Start" will occur upon (i) acquisition by Seller or its Affiliate, as applicable, of all applicable regulato1y authorizations, approvals and permits necessa1y for commencement of the constrnction of the Facility and (ii) the execution by Seller or its Affiliate, as applicable, of any engineering, procurement, or constrnction contract ( or similar contract) with respect to the Facility and issuance of a notice to proceed ( or reasonable equivalent) to the contractor or integrator party thereto that authorizes the contractor to mobilize to Site and begin physical constrnction at the Site, all in a manner (under preceding clauses (i) and (ii)) that can reasonably be considered necessa1y so that engineering, procurement and construction of the Facility may begin and proceed to completion without foreseeable intenuption of a material duration. The date of Construction Staii will be evidenced by and subject to Seller's delive1y to Buyer of a ce1i ificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the "Construction Start Date." Constr11ction Staii shall occur no later than the Guaranteed Constrnction Staii Date.
b. Seller may extend the Guaranteed Construction Start Date by paying Daily Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Construction Stai·t Date, not to exceed a total of of
extensions by such payment of Daily Delay Damages. On or before the date that is ten (10) days prior to the then-cmTent Guaranteed Constrnction Staii Date, Seller may provide notice and payment to Buyer of the Daily Delay Damages for the number of days of extension to the Guai·anteed Constrnction Staii Date. If Seller achieves Construction Staii prior to the Guai·anteed Construction Staii Date, as extended by the payment of Daily Delay Damages, Buyer shall refund to Seller the Daily Delay Damages for each day Seller achieves Constrnction Strut prior to the Guaranteed Construction Staii Date times the Daily Delay Damages, not to exceed the total amount of Daily Delay Damages paid by Seller pursuant to this Section l(b). If Seller achieves Commercial Operation on or before the Guai·anteed Commercial Operation Date (not including any extensions to such date resulting from Seller's payment of Commercial Operation Delay Damages, but as may be extended pursuant to a Development Cure Period), then Buyer shall refund to Seller all Daily Delay Damages paid by Seller and not previously refunded by Buyer.

2. Commercial Operation of the Facility.
a. Seller shall cause Commercial Operation for the Facility to occur by the Guai·anteed Commercial Operation Date.
b. Seller may extend the Guaranteed Commercial Operation Date by paying Commercial Operation Delay Damages to Buyer for each day Seller desires to Exhibit B - 1
APPROVAL DRAFT Item 5
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extend the Guaranteed Commercial Operation Date, not to exceed a total of-11111111111111 of extensions by such payment of Commercial Operation Delay Damages. On or before the date that is ten (10) days prior to the then-cmTent Guaranteed Commercial Operation Date, Seller may provide Notice and payment to Buyer of the Commercial Operation Delay Damages for the number of days of extension to the Guaranteed Commercial Operation Date. If Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date, as extended by the payment of Commercial Operation Delay Damages, Buyer shall refund to Seller the Commercial Operation Delay Damages for each day Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date times the Commercial Operation Delay Damages, not to exceed the total amount of Commercial Operation Delay Damages paid by Seller pursuant to this Section 2(b ).

3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation on or before the Guaranteed Commercial Operation Date (as may be extended herelmder), Buyer may elect to terminate this Agreement in accordance with Sections 11. l (b )(ii) and 11.2.

4. Extension of the Guaranteed Dates. Independent of Seller's extension rights lmder Sections 1 and 2 of this Exhibit B above, the Guaranteed Construction Staii Date and the Guaranteed Commercial Operation Date shall, subject to notice and documentation requirements set forth below, both be automatically 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 act.ions to meet its requirements and deadlines:
a. neither Seller nor its Affiliate, as applicable, has acquired the Material Permits by the Guai·anteed Constru ction Start Date despite the exercise of diligent and commercially reasonable efforts by Seller or its Affiliates, as applicable; or b. a Force Majeure Event occurs; or
c. the Interconnection Facilities or Reliability Network Upgrades are not complete and ready for the Facility to receive approval for Initial Synchronization and to connect and sell Product at the Delive1y Point by the original expected Initial Synchronization date as set fo1ih in the Cover Sheet, despite the exercise of diligent and commercially reasonable effo1is by Seller; or
d. Buyer has not made all necessaiy airnngements to receive the Dischai·ging Energy at the Delive1y Point by the Guaranteed Commercial Operation Date (it being acknowledged that an extension under this pai·agraph ( d) shall not limit other rights and remedies Seller may have for any Buyer Default).

Notwithstanding anyihing in this Agreement to the contr·a1y, the cumulative extensions granted under the Development Cure Period ( other than the extensions granted pursuant to Exhibit B - 2
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clause 4(d) above) shall not exceed , for any reason, including a Force Majeure Event, and the cumulative extensions granted to the Guaranteed Commercial Operation Date by the payment of Commercial Operation Delay Damages and any Development Cure Period( s) ( other than the extensions granted pursuant to clause 4( d) above) shall not exceed . Upon request from Buyer, Seller shall provide documentation demonstrating to Buyer's reasonable satisfaction that the delays described above did not result from Seller's actions or failure to take commercially reasonable actions.

5. Failur
, Seller shall have
after the Commercial Operation Date to install additional capacity and/or Network Upgrades such that the Installed Capacity is equal to (but not greater than (without limiting Seller's right to overbuild the Facility in accordance with the definition of "Installed Capacity")) the Guaranteed Capacity, and Seller shall provide to Buyer a new ce1tificate substantially in the fonn attached as Exhibit I hereto specifying the new Installed Capacity.

If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay "CapaciJ Damages" to Buyer, in an amount equal to
for each MW that the Guaranteed Capacity exceeds the Installed Capacity, and the Guaranteed Capacity and other applicable portions of the Agreement shall be adjusted accordingly. Capacity Damages shall not be offset or reduced by the payment of Development Security, Perfo1mance Security, Daily Delay Damages, Commercial Operation Delay Damages, or any other form of liquidated damages under this Agreement.

6. Buyer's Right to Draw on Development Security. If Seller fails to timely pay any Daily Delay Damages or Commercial Operation Delay Damages, Buyer may draw upon the Development Security to satisfy Seller's payment obligation thereof.

Exhibit B - 3
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EXHIBITC

COMPENSATION
(a) Monthly Compensation. Each month of the Delive1y Te1m (and pro-rated for the first and last month of the Delive1y Te1m if the Delive1y Term does not start on the first day of a calendar month), Buyer shall pay Seller a Monthly Capacity Payment equal to the sum of (x) Contract Price x Effective Capacity x Availability Adjustment x Efficiency Rate Adjustment and (y) Monthly RA Replacement Adjustment. If Buyer dispatches the Facility for more than - Cycles dming a Contract Year, Buyer shall pay Seller the Annual Excess Cycle Payment calculated for such Contract Year in accordance with clause (e) below, which shall be included in Seller's invoice to Buyer following the end of such Contract Year in accordance with Section 8.1. All of such foregoing Monthly Capacity Payments and Annual Excess Cycle Payments constitute the entirety of the amount due to Seller from Buyer for the Product. If the Effective Capacity and/or Efficiency Rate are adjusted pmsuant to a Capacity Test effective as of a day other than the first day of a calendar month, payment shall be calculated separately for each p01tion of the month in which the different Effective Capacity and/or Efficiency Rate are applicable. (b) Availabilitv Adjustment. The "Availability Adjustment" (or "AA") is calculated as follows:
■
•
--
-
(c) Efficiency Rate
-
Adjustment. The "Efficiency Rate Adjustment" is calculated as follows:
■
---
•
-
Exhibit C - 1
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(d) Monthly RA . · " ment Adjustment" is
calculated as follows:
■
-
•
(e) --==--=-=-----------......._ .................. --== The "Annual Excess Cycle Payment" is calculated as follows:
■
(f) Tax Credits. Seller shall take commercially reasonable efforts to evaluate and determine whether to pmsue Tax Credits available to Seller under any Federal Investment Tax Credit Legislation that is enacted after the Effective Date and prior to Commercial Operation Date• Exhibit C - 2

EXHIBIT D

SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Subject to Section 2.5 with respect to pre-Commercial Operations, beginning on the Commercial Operation Date, 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. At least thirty (30) days prior to the Commercial Operation Date, (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 Commercial Operation Date, and (ii) Buyer shall, and shall cause its designee to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Commercial Operation Date. Buyer (or Buyer’s SC) shall submit an NQC request to CAISO in relation to the Facility as early as is reasonably possible. Seller shall submit an NQC request to CAISO in relation to the Facility for purposes of inclusion on the annual RA plan as early as is reasonably possible.

On and after the Commercial Operation Date, 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’s SC (which may be Buyer) 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 market basis that may develop after the Effective Date, as determined by Buyer consistent with the CAISO Tariff.
(b) Notices. Beginning on the Commercial Operation Date, Buyer’s SC (which may be Buyer) 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 by (in order of preference) telephone or electronic mail to the personnel designated to receive such information. Buyer (as the Facility’s SC) shall provide Seller with read-only access to applicable real-time CAISO data to the extent Buyer has the authorization to do so.
(c) CAISO Costs and Revenues. Beginning on the Commercial Operation Date, except as otherwise set forth in this part (c) or as otherwise expressly provided in the Agreement, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including Charging Energy, penalties, Imbalance Energy and Charging Energy costs or revenues, and other charges) and shall be entitled to all CAISO revenues (including Discharging Energy, credits, Imbalance Energy and Charging 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; provided, however, Seller shall assume all liability and reimburse Buyer for any and all costs or charges (i) APPROVAL DRAFT Item 5
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incurred by Buyer because of Seller’s default, breach or other failure to perform as required by this Agreement, (ii) 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 any Non-Availability Charges arise from Scheduling Coordinator’s violation of the CAISO Tariff. 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. Beginning on the Commercial Operation Date, 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. Beginning on the Commercial Operation Date, 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 or Buyer’s designated SC as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration date.

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(g) 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. (h) NERC Reliability Standards. Beginning on the Commercial Operation Date, 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 any applicable NERC reliability standards. This cooperation shall include the provision of information in Buyer’s 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.

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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. Progress and schedule of all material agreements, contracts, permits (including Material Permits), approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.

12. 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.

13. Workforce Development or Supplier Diversity Reporting (if applicable). Format to be provided by Buyer.

14. If Network Upgrades are required by CAISO, a list of any such Network Upgrades and a status report of progress toward completion of such Network Upgrades as and when known by Seller; or if Network Upgrades are not required by CAISO, a notice of such outcome.

15. Any other documentation reasonably requested by Buyer.

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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.

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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:

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EXHIBITH

FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This ce1tification ("Certification") of Commercial Operation is delivered by ___ [licensed professional engineer] ("Engineer") to California Community Power, a California joint powers authority ("Buyer") in accordance with the te1ms of that ce1tain Energy Storage Service Agreement dated ___ ("Agreement") by and between [Seller] and Buyer. All capitalized te1ms used in this Certification but not othe1wise defined herein shall have the respective meanings assigned to such te1ms in the Agreement.

As of ___ [DATE] __ , Engineer hereby ce1t ifies and represents to Buyer the following:

1. The Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.

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 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 suppo1t ing full unrestricted release for Commercial Operation by [Name of Transmission Provider as appropriate] on ___ [DATE] __ .

7. The CAI SO has provided notification supporting Commercial Operation, m accordance with the CAISO Tariff on ___ [DA TE] __ .

8. Seller has segregated and separately metered Station Use to the extent reasonably possible in accordance with Pm dent Operating Practice, and any such meter(s) have the same or greater level of accm acy as is required for CAISO ce1tified meters used for settlement pmposes.

EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ___ dayof ____ ~20 .
[LICENSED PROFESSIONAL ENGINEER]
By: ___________ _
Exhibit H - 1
Its:

Date:

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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 California 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 and Efficiency Rate Test conducted on [Date] demonstrated (i) an [Installed or Effective] Capacity of __ MW AC to the Delivery Point at eight (8) hours of continuous discharge, and (ii) 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:

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EXHIBIT J

FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [SELLER ENTITY] (“Seller”) to California 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:

APPROVAL DRAFT Item 5
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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]
Beneficiary:

California Community Power,
a California joint powers authority
[Address]
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 California Community Power, a California joint powers authority (“Beneficiary”), [Address], for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100) (the “Available Amount”), pursuant to that certain Energy Storage [Service] Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Creditshall become effective immediately and shall be of no further force or effect at 5:00 p.m., California time, on [Date] 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 purposes hereof, “Business Day” shall mean any day on which commercial banks are not authorized or required to close in San Francisco, California.

Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before 5:00 p.m. California time, on or before the Expiration Date of a copy of this Letter of Credit No. [XXXXXXX] and all amendments accompanied by Beneficiary’s dated statement purportedly signed by Beneficiary’s duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein.

Any full or partial drawing hereunder may be requested by transmitting copies of the requisite documents as described above to the Issuer by facsimile at [facsimile number for draws] or such other number as specified from time-to-time by the Issuer.

The facsimile transmittal shall be deemed delivered when received. Drawings made by facsimile transmittal are deemed to be the operative instrument without the need of originally signed APPROVAL DRAFT Item 5
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documents.

Issuer hereby agrees that all drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Issuer before the Expiration Date. All correspondence and any drawings (other than those made by facsimile) hereunder are to be directed to [Issuer address/contact]. Issuer undertakes to make payment to Beneficiary under this Standby Letter of Credit within three (3) business days of receipt by Issuer of a properly presented Drawing Certificate. The Beneficiary shall receive payment from Issuer by wire transfer to the bank account of the Beneficiary designated in the 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; provided, the Available Amount shall be reduced by the amount of each such drawing.

It is a condition of this Letter of Credit that it shall be deemed automatically extended without an amendment for a one year period (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter) beginning on the present Expiration Date hereof and upon each anniversary for such date (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter), unless at least one hundred twenty (120) days prior to any such Expiration Date Issuer has sent Beneficiary written notice by overnight courier service at the address provided below that Issuer elects not to extend this Letter of Credit, in which case it will expire on its then current Expiration Date. 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.

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 California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.

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: California Community Power, a California joint powers authority, [Title], [Address]. 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.

APPROVAL DRAFT Item 5
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[Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
APPROVAL DRAFT Item 5
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EXHIBIT A
(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 California Community Power, [ADDRESS], 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 Energy Storage Service 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
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 [ ] 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 [ ] by wire transfer in immediately available funds to the following account:
[Specify account information]
[ ]
_______________________________
Name and Title of Authorized Representative
Date___________________________
APPROVAL DRAFT Item 5
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EXHIBIT L

FORM OF BUYER LIABILITY PASS THROUGH AGREMENT
This Buyer Liability Pass Through Agreement (this “BLPTA”) is entered into as of [______], 20__ (the “BLPTA Effective Date”) by and between [______], a [______] (together with its successors and permitted assigns “Project Participant”), California Community Power, a California joint powers authority (“CC Power”), and [_____], a [______] (together with its successors and permitted assigns “Seller”). Seller, CC Power, and Project Participant are sometimes referred to herein individually as a “Party” and jointly as the “Parties.”

RECITALS
WHEREAS, CC Power and Seller have entered into that certain Energy Storage Service Agreement (as amended, restated or otherwise modified from time to time, the “ESSA”) dated as of [_____], 20__;
WHEREAS, Project Participant is entering into this BLPTA to secure, in part, California Community Power’s obligations under the ESSA;
WHEREAS, Project Participant is named as a Project Participant under the ESSA and will derive substantial direct and indirect benefits from the execution and delivery of the ESSA; WHEREAS, Seller and CC Power will derive substantial and direct benefits from the execution and delivery of this BLPTA; and
WHEREAS, initially capitalized terms used but not defined herein have the meaning set forth in the ESSA.

AGREEMENT

1. Project Participant Covenants. For value received, Project Participant does hereby unconditionally, absolutely, and irrevocably guarantee, as obligor and not as a surety, to Seller the complete and prompt payment of [X%] (the “Liability Share”), as the same may be adjusted pursuant to Section 4, [Note: Insert percentage from Exhibit V] of all obligations and liabilities for payment now or hereafter owing from CC Power to Seller under the ESSA, including liabilities for Monthly Capacity Payments, the Damage Payment or Termination Payment, as applicable, and any other damage payments or reimbursement amounts (each such obligation or liability of CC Power under the ESSA, a “Guaranteed Amount”). Any payment made directly from CC Power to Seller under the ESSA shall reduce Project Participant’s liability hereunder by reducing the total amount that is used to calculate the Guaranteed Amount pursuant to the preceding sentence. This BLPTA is an irrevocable, absolute, unconditional, and continuing guarantee of the punctual payment and performance, and not of collection, of Project Participant’s APPROVAL DRAFT Item 5
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APPROVAL DRAFT Item 5
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Liability Share of the Guaranteed Amount. ill the event CC Power shall fail to duly, completely, or punctually pay any amount owed by Buyer pursuant to the tenns and conditions of the ESSA, and such failure is not remedied within ten (10) Business Days after Notice thereof pursuant to Sections 11 .1 or 11 .4, as applicable, Project Participant shall promptly pay Project Participant's Liability Share of the Guaranteed Amount, as required herein.

2. Seller Waiver. ill consideration of the foregoing, Seller unconditionally waives all right to recover directly from CC Power any Damage Payment or T ennination Payment that is not paid by CC Power pursuant to Sections 11 .3 and 11 .4 of the ESSA, but the foregoing waiver does not apply to any other right or remedy of Seller under the ESSA, including the right to recover accmed Monthly Capacity Payments, other amounts payable or reimbursable under the ESSA or any other amounts incmTed or accmed prior to tennination of the ESSA and the right to terminate the ESSA as the result of an Event of Default by Buyer.

3. Demand Notice. For avoidance of doubt, Seller may demand payment from Project Participant for purposes of this BLPTA only when and if a payment is not duly, completely, or punctually paid by CC Power pursuant to the tenns and conditions of the ESSA and such failure is not remedied by CC Power within ten (10) Business Days after Notice thereof is issued pursuant to Sections 11 .1 or 11.4, as applicable. If CC Power fails to pay any amount when due pursuant to the ESSA, and such failure is not remedied by CC Power within ten (I 0) Business Days after Notice thereof, then Seller may exercise its rights under this BLPTA and make a payment demand upon Project Paiticipant to pay Project Participant's Liability Share of the unpaid Guaranteed Amount (a "Payment Demand"). A Payment Demand shall be in writing and shall reasonably specify (a) in what manner and what amount CC Power has failed to pay, (b) an explanation of why such payment is due and owing, (c) a calculation of the Guaranteed Amount due from Project Pa1ticipant, and ( d) a specific statement that Seller is requesting that Project Participant pay its Guaranteed Liability Share of the unpaid Guaranteed Amount under this BLPTA. Project Pa1ticipant shall, within fifteen (15) Business Days following its receipt of the Payment Demand, pay to Seller Project Paiticipant's Liability Share of the unpaid Guaranteed Amount.

4. Step-Up Events. Within thirty (30) days after the occmTence of a Step-Up Event, Project Paiticipant and CC Power will tender to Seller a duly executed and binding replacement Buyer Liability Pass Through Agreement in the saine fo1m as this Agreement, but for a Liability Shai·e equal to the Project Participant's Revised Liability Share. Upon receipt of such executed replacement Buyer Liability Pass Through Agreement, Seller will cancel this Buyer Liability Pass Through Agreement, effective upon the effectiveness of the replacement Buyer Liability Pass Through Agreement. For the avoidance of doubt, the cancellation of an existing Buyer Liability Pass Through Agreement shall not be effective unless and until the replacement Buyer Liability Pass Through Agreement has become effective and binding. Following delive1y of such replacement Buyer Liability Pass Through Agreement and cancellation of this Buyer Liability Pass Through Agreement, Exhibit V to the ESSA will be deemed amended to reflect the Project Pait icipant's Revised Liability Share;

5. Scope and Duration of BLPTA. The obligations under this BLPTA are independent of the obligations of CC Power under the ESSA, and an action may be brought to Exhibit L- 2
enforce this BLPTA whether or not action is brought against CC Power under the ESSA. This BLPTA shall continue in full force and effect from the BLPTA Effective Date until both of the following have occurred: (a) the Delivery Term of the ESSA has expired or terminated early, and (b) either (i) all payment obligations of CC Power due and payable under the ESSA are paid in full (whether directly or indirectly such as through set-off or netting) or (ii) Project Participant has paid the maximum Guaranteed Amount (i.e. based on its maximum Revised Liability Share as provided in Section 4) in full. This BLPTA shall also continue to be effective or be reinstated, as the case may be, if at any time any payment of any Guaranteed Amount by CC Power is rescinded or must otherwise be returned by Seller upon the insolvency, bankruptcy or reorganization of CC Power or similar proceeding, all as though such payment had not been made, and Project Participant’s Liability Share of such Guaranteed Amount shall be subject to payment following a Payment Demand issued pursuant to this BLPTA. Without limiting the generality of the foregoing, and to the extent that the Project Participant has not paid its maximum Guaranteed Amount in full, the obligations of the Project Participant hereunder shall not be released, discharged, or otherwise affected, and this BLPTA shall not be invalidated or impaired or otherwise affected for the following reasons:

A. The extension of time for the payment of any Guaranteed Amount; or B. Any amendment, modification or other alteration of the ESSA; or C. Any insurance that may be available to cover any loss, except to the extent insurance proceeds are used to satisfy the Guaranteed Amount; or D. Any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting CC Power, including but not limited to any rejection or other discharge of CC Power’s obligations under the ESSA imposed by any court, trustee or custodian or any similar official or imposed by any law, statue or regulation, in each such event in any such proceeding; or
E. Any reorganization of CC Power or Project Participant, or any merger or consolidation of CC Power or Project Participant into or with any other Person; or F. The receipt, release, modification or waiver of, or failure to pursue or seek relief under or with respect to, any other BLPTA, guaranty, collateral, pledge or security device whatsoever; or
G. CC Power’s inability to pay any Guaranteed Amount or perform its obligations under the ESSA; or
H. Any other event or circumstance that may now or hereafter constitute a defense to payment of the Guaranteed Amount, including, without limitation, statute of frauds and accord and satisfaction; provided that Project Participant reserves the right to assert for itself any defenses, setoffs or counterclaims that CC Power is or may be entitled to assert against Seller, including with respect to disputes regarding the calculation of a Guaranteed Amount.

6. Waivers by Project Participant. Project Participant hereby unconditionally APPROVAL DRAFT Item 5
Attachment 2
waives as a condition precedent to the performance of its obligations hereunder, with the exception of the requirements in Paragraphs 2 and 3, (a) notice of acceptance, presentment or protest, notice of any of the events described in Paragraph 5, or any other notice or demand of any kind with respect to the Guaranteed Amounts and this BLPTA, (b) any requirement that Seller pursue or exhaust any right, power or remedy or proceed against California Community Power under the ESSA or against any other Person, including any obligation to pursue any other BLPTAs, or to marshal assets, (c) any defense based on any of the matters described in Paragraph 4, (d) all rights of subrogation or other rights to pursue CC Power for payments made under this BLPTA until all amounts owing under the ESSA have been paid in full, and (e) any duty of Seller to disclose any information or other matters relating to the business, operations or finances or other condition of CC Power or any other Person who has provided a BLPTA or other security or guaranty with respect to the ESSA now or hereafter known to Seller. Project Participant further acknowledges and agrees that it is and will be bound by actions taken and elections made by CC Power under the ESSA and waives any defense based on CC Power’s authority or lack thereof or the validity, regularity or advisability of the actions taken or elections made.

7. Project Participant Representations and Warranties. Project Participant hereby represents and warrants that (a) it has all necessary and appropriate powers and authority and the legal right to execute and deliver, and perform its obligations under, this BLPTA, (b) this BLPTA constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this BLPTA does not and will not contravene Project Participant’s organizational documents, any applicable Law or any contractual provisions binding on or affecting Project Participant, (d) there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the Project Participant, threatened, against or affecting Project Participant or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of Project Participant to enter into or perform its obligations under this BLPTA, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority, and no consent of any other Person (including, any member of the Project Participant), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this BLPTA by Project Participant.

8. Seller Representations and Warranties. Seller hereby represents and warrants that (a) it has all necessary and appropriate powers and authority and the legal right to execute and deliver, and perform its obligations under, this BLPTA, (b) this BLPTA constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this BLPTA does not and will not contravene Seller’s organizational documents, any applicable Law or any contractual provisions binding on or affecting Seller, (d) there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the Seller, threatened, against or affecting Seller or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of Seller to enter into or perform its obligations under this BLPTA, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority, and no APPROVAL DRAFT Item 5
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consent of any other Person (including, any stockholder or creditor of the Seller), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this BLPTA by Seller.

9. California Community Power Representations and Warranties. California Community Power hereby represents and warrants that (a) it has all necessary and appropriate powers and authority and the legal right to execute and deliver, and perform its obligations under, this BLPTA, (b) this BLPTA constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this BLPTA does not and will not contravene California Community Power’s organizational documents, any applicable Law or any contractual provisions binding on or affecting California Community Power, (d) there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the California Community Power, threatened, against or affecting California Community Power or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of California Community Power to enter into or perform its obligations under this BLPTA, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority, and no consent of any other Person (including, any member of California Community Power), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this BLPTA by California Community Power.

10. Notices. Notices under this BLPTA shall be deemed received if sent to the address specified below: (i) on the day received if served by overnight express delivery, and (ii) four (4) Business Days after mailing if sent by certified, first-class mail, return receipt requested. Any Party may change its address or facsimile to which notice is given hereunder by providing notice of the same in accordance with this Paragraph 8.

If delivered to Seller, to it at:
[____]
Attn: [____]
Fax: [____]
If delivered to Project Participant, to it at:
[____]
Attn: [____]
Fax: [____]
If delivered to CC Power, to it at:
[____]
Attn: [____]
Fax: [____]

11. Governing Law and Forum Selection. This BLPTA shall be governed by, and interpreted and construed in accordance with, the laws of the United States and the State of APPROVAL DRAFT Item 5
Attachment 2
California, excluding choice of law rules. The Parties agree that any suit, action or other legal proceeding by or against any Party (or its affiliates or designees) with respect to or arising out of this BLPTA shall be brought in the federal courts of the United States or the courts of the State of California sitting in the county of [________].

12. Miscellaneous. This BLPTA shall be binding upon the Parties and their respective successors and assigns and shall inure to the benefit of the Parties and their successors and permitted assigns. No provision of this BLPTA may be amended or waived except by a written instrument executed by Seller, CC Power, and Project Participant. No provision of this BLPTA confers, nor is any provision intended to confer, upon any third party (other than the Parties’ successors and permitted assigns) any benefit or right enforceable at the option of that third party.

This BLPTA embodies the entire agreement and understanding of the Parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements and understandings of the Parties hereto, verbal or written, relating to the subject matter hereof. If any provision of this BLPTA is determined to be illegal or unenforceable (i) such provision shall be deemed restated in accordance with applicable Laws to reflect, as nearly as possible, the original intention of the Parties hereto, and (ii) such determination shall not affect any other provision of this BLPTA and all other provisions shall remain in full force and effect. This BLPTA may be executed in any number of separate counterparts, each of which when so executed shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This BLPTA may be executed and delivered by electronic means with the same force and effect as if the same was a fully executed and delivered original manual counterpart.

13. Assignment. Except as provided below in this Paragraph 12, no Party may assign this BLPTA or its rights or obligations under this BLPTA, without the prior written consent of the other Parties, which consent shall not be unreasonably withheld, conditioned or delayed. Seller may, without the prior written consent of Project Participant and CC Power, transfer or assign this BLPTA to any Person to whom Seller may assign its rights or obligations under the ESSA, including assignments for financing purposes, including a Portfolio Financing; provided, Seller shall give Project Participant and CC Power Notice at least fifteen (15) Business Days before the date of such proposed assignment and, except in the case of a collateral assignment or other assignment for financing purposes, provide Project Participant and CC Power a written agreement signed by the Person to which Seller wishes to assign its interests that provides that such Person will fully assume all of Seller’s obligations and liabilities under this BLPTA, including obligations and liabilities that arose prior to the date of transfer or assignment, upon such transfer or assignment. Project Participant may, without the prior written consent of Seller and CC Power, transfer or assign this BLPTA to any member of CC Power that (A) has a Credit Rating of at least BBB- from S&P or Baa3 from Moody’s, and (B) is a load serving entity; provided, Project Participant shall give Seller and CC Power Notice at least fifteen (15) Business Days before the date of such proposed assignment and provide to Seller and CC Power a written agreement signed by the Person to which Project Participant wishes to assign its interests that provides that such Person will fully assume all of Project Participant’s obligations and liabilities, including obligations and liabilities that arose prior to the date of transfer or assignment, under this BLPTA upon such transfer or assignment.

14. No Recourse to Members of Project Participant. Project Participant is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of APPROVAL DRAFT Item 5
Attachment 2
California (Government Code Section 6500, et seq.) pursuant to its joint powers agreement and is a public entity separate from its constituent members. Project Participant shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this BLPTA. Seller and CC Power shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Project Participant’s constituent members, or the officers, directors, advisors, contractors, consultants or employees of Project Participant or its constituent members, in connection with this BLPTA.

15. Financing Cooperation. Project Participant agrees to provide reasonable cooperation to any Lender, including entering into a customary acknowledgment and consent to assignment and related documents and agreements as are reasonably necessary for obtaining and maintaining financing for the Project typical in non-recourse financing of power projects similar to the Project; provided, Project Participant shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Project Participant and all reasonable attorney’s fees incurred by Project Participant in connection therewith shall be borne by Seller. Project Participant also agrees (i) to respond promptly to reasonable requests for information from any Lender, including financial statements for Project Participant (subject to a reasonably appropriate confidentiality agreement) and (ii) to deliver usual and customary legal opinions of counsel to Project Participant (regarding due authorization, enforceability and such other matters relating to such consent and this BLPTA as reasonably requested) and related certifications (including certificates of good standing and applicable authorizations for execution and delivery of the applicable agreements).

16. No Recourse to Members of CC Power. CC Power 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. Except as expressly set forth in the ESSA and this BLPTA, CC Power shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this BLPTA, and as such, Seller and Project Participant shall have no rights and shall not make any claims, take any actions or assert any remedies against any of CC Power’s constituent members, or the officers, directors, advisors, contractors, consultants or employees of Project Participant or its constituent members, in connection with this BLPTA.

17. CleanPowerSF as Project Participant. Paragraph 14 shall not apply if CleanPowerSF is the Project Participant, but the following shall apply:
a. Designated Fund. CleanPowerSF payment obligations under this BLPTA are special limited obligations of CleanPowerSF payable solely from the revenues of CleanPowerSF. CleanPowerSF’s payment obligations under this BLPTA are not a charge upon the revenues or general fund of the San Francisco Public Utility Commission (“SFPUC”) or the City and County of San Francisco or upon any non- CleanPowerSF moneys or other property of the SFPUC or the City and County of San Francisco.
b. Controller Certification. CleanPowerSF’s obligations hereunder shall not at any time exceed the amount certified by the Controller for the purpose and period stated in such certification. Except as may be provided by laws governing emergency procedures, officers and employees of CleanPowerSF are not authorized to request, and CleanPowerSF is not required to APPROVAL DRAFT Item 5
Attachment 2
reimburse Seller for, commodities or services beyond the agreed upon contract scope unless the changed scope is authorized by amendment and approved as required by law. Officers and employees of CleanPowerSF are not authorized to offer or promise, nor is CleanPowerSF required to honor, any offered or promised additional funding in excess of the maximum amount of funding for which the contract is certified without certification of the additional amount by the Controller.

The Controller is not authorized to make payments on any contract for which funds have not been certified as available in the budget or by supplemental appropriation. c. Biennial Budget Process. For each City and County of San Francisco biennial budget cycle during the term of this BLPTA, CleanPowerSF agrees to take all necessary action to include the maximum amount of its annual payment obligations under this BLPTA in its budget submitted to the City and County of San Francisco’s Board of Supervisors for each year of that budget cycle.
d. Compliance with Laws. Each Party shall keep itself fully informed of all applicable federal, state, and local laws in any manner affecting the performance of its obligations under this BLPTA, and must at all times materially comply with such applicable laws as they may be amended from time to time.
e. Prohibition on Political Activity with City Funds. In performing any services required under this BLPTA, Seller shall comply with San Francisco Administrative Code Chapter 12G, which prohibits funds appropriated by the City for this BLPTA from being expended to participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure in San Francisco.
f. Non-discrimination in Contracts. Seller shall comply with the provisions of Chapters 12B and 12C of the San Francisco Administrative Code. Seller shall incorporate by reference in all subcontracts the provisions of Sections12B.2(a), 12B.2(c)-(k), and 12C.3 of the San Francisco Administrative Code and shall require all subcontractors to comply with such provisions. Seller is subject to the enforcement and penalty provisions in Chapters 12B and 12C. g. Non-discrimination in the Provision of Employee Benefits. San Francisco Administrative Code 12B.2. Seller does not as of the date of this BLPTA, and will not during the term of this BLPTA, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of employee benefits between employees with domestic partners and employees with spouses and/or between the domestic partners and spouses of such employees, subject to the conditions set forth in San Francisco Administrative Code Section 12B.2. h. Submitting False Claims. Pursuant to San Francisco Administrative Code §21.35, any contractor or subcontractor who submits a false claim shall be liable to the City for the statutory penalties set forth in that section. A contractor or subcontractor will be deemed to have submitted a false claim to the City if the contractor or subcontractor: (1) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (2) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (3) conspires to defraud the City by getting a false claim allowed or paid by the City; (4) knowingly makes, uses, or causes to be made or used APPROVAL DRAFT Item 5
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a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (5) is a beneficiary of an inadvertent submission of a false claim to the City, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim. i. Consideration of Salary History. Seller shall comply with San Francisco Administrative Code Chapter 12K, the Consideration of Salary History Ordinance or “Pay Parity Act.” Seller is prohibited from considering current or past salary of an applicant in determining whether to hire the applicant or what salary to offer the applicant to the extent that such applicant is applying for employment to be performed on this BLPTA or in furtherance of this BLPTA, and whose application, in whole or part, will be solicited, received, processed or considered, whether or not through an interview, in the City or on City property. j. Consideration of Criminal History in Hiring and Employment Decisions.

Seller agrees to comply fully with and be bound by all of the provisions of Chapter 12T, “City Contractor/Subcontractor Consideration of Criminal History in Hiring and Employment Decisions,” of the San Francisco Administrative Code, including the remedies provided, and implementing regulations, as may be amended from time to time. The requirements of Chapter 12T shall only apply to Seller’s operations to the extent those operations are in furtherance of the performance of this BLPTA, shall apply only to applicants and employees who would be or are performing work in furtherance of this BLPTA, and shall apply when the physical location of the employment or prospective employment of an individual is wholly or substantially within the City.

Chapter 12T shall not apply when the application in a particular context would conflict with federal or state law or with a requirement of a government agency implementing federal or state law. k. Conflict of Interest. By executing this BLPTA, Seller certifies that it does not know of any fact which constitutes a violation of Section 15.103 of the City’s Charter; Article III, Chapter 2 of City’s Campaign and Governmental Conduct Code; Title 9, Chapter 7 of the California Government Code (Section 87100 et seq.), or Title 1, Division 4, Chapter 1, Article 4 of the California Government Code (Section 1090 et seq.), and further agrees promptly to notify the City if it becomes aware of any such fact during the term of this BLPTA. l. Campaign Contributions. By executing this BLPTA, Seller acknowledges its obligations under Section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with, or is seeking a contract with, any department of the City for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sale or lease of any land or building, for a grant, loan or loan guarantee, or for a development agreement, from making any campaign contribution to (i) a City elected official if the contract must be approved by that official, a board on which that official serves, or the board of a state agency on which an appointee of that official serves, (ii) a candidate for that City elective office, or (iii) a committee controlled by such elected official or a candidate for that office, at any time from the submission of a proposal for the contract until the later of either the termination of negotiations for such contract or twelve months after the date the City approves the contract. The prohibition on contributions applies to each prospective party to the contract; each member of Seller’s board of directors; Seller’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person with an ownership interest of more than ten percent (10%) in Seller; any subcontractor listed in the bid or contract; and any committee that is sponsored or APPROVAL DRAFT Item 5
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controlled by Seller. Seller shall inform the relevant persons of the limitation on contributions imposed by Section 1.126.
m. MacBride Principles – Northern Ireland. Pursuant to San Francisco Administrative Code § 12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride principles. n. Tropical Hardwood and Virgin Redwood Ban. The City and County of San Francisco urges contractors not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood product, virgin redwood or virgin redwood product. If this order is for wood products or a service involving wood products: (a) Chapter 8 of the Environment Code is incorporated herein and by reference made a part hereof as though fully set forth. (b) Except as expressly permitted by the application of Sections 802(B), 803(B), and 804(B) of the Environment Code, Seller shall not provide any items to the City in performance of this BLPTA which are tropical hardwoods, tropical hardwood products, virgin redwood or virgin redwood products. (c) Failure of Seller to comply with any of the requirements of Chapter 8 of the Environment Code shall be deemed a material breach of contract.
o. Effect on Payment Obligations. The Parties agree that, although breach of an obligation set forth in Sections 17(d) through 17(n) may result in Seller incurring liability for such breach, any such liability will be independent of Project Participant’s liability hereunder, and no breach of or default by Seller under Sections 17(d) through 17(n) will relieve Project Participant of its liability for its Liability Share of all Guaranteed Amounts, nor may any such breach or default, or claim of breach or default, be permitted or asserted as a defense to or offset against payment of any amounts owed by Project Participant to Seller hereunder.

18. City of San José (San José Clean Energy) as Project Participant. Paragraph 14 shall not apply if the City of San José, as administrator of San José Clean Energy (“SJCE”) is the Project Participant, but the following shall apply:
a) Designated Fund. The City of San José is a municipal corporation and is precluded under the California State Constitution and applicable law from entering into obligations that financially bind future governing bodies without an appropriation for such obligation, and, therefore, nothing in the Agreement shall constitute an obligation of future legislative bodies of the City to appropriate funds for purposes of the Agreement; provided, however, that the City of San José has created and set aside a designated fund (being the San Jose Energy Operating Fund established pursuant to City of San Jose Municipal Code, Title 4, Part 63, Section 4.80.4050 et. seq.) (“Designated Fund”) for payment of its obligations under this BLPTA. Subject to the requirements and limitations of applicable law and taking into account other available money specifically authorized by the San José City Council and allocated and appropriated to the SJCE’s obligations, SJCE agrees to establish rates and charges that are sufficient to maintain revenues in the Designated Fund necessary to pay its obligations under this BLPTA. b) Limited Obligations. SJCE’s payment obligations under this BLPTA are special limited obligations of the SJCE payable solely from the Designated Fund and are not a APPROVAL DRAFT Item 5
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charge upon the revenues or general fund of the City of San José or upon any non- San José Clean Energy moneys or other property of the Community Energy Department or the City of San José. c) Nondiscrimination/Non-Preference. In performing its obligations under this BLPTA, Seller shall not, and shall not cause or allow its subcontractors to, discriminate against or grant preferential treatment to any person on the basis of race, sex, color, age, religion, sexual orientation, actual or perceived gender identity, disability, ethnicity or national origin. This prohibition applies to recruiting, hiring, demotion, layoff, termination, compensation, fringe benefits, advancement, training, apprenticeship and other terms, conditions, or privileges of employment, subcontracting and purchasing. Seller will inform all subcontractors of these obligations. This prohibition is subject to the following conditions: (i) the prohibition is not intended to preclude Seller from providing a reasonable accommodation to a person with a disability; (ii) the City’s Compliance Officer may require Seller to file, and cause any Seller’s subcontractor to file, reports demonstrating compliance with this section. Any such reports shall be filed in the form and at such times as the City’s Compliance Officer designates. They shall contain such information, data and/or records as the City’s Compliance Officer determines is needed to show compliance with this provision.
d) Conflict of Interest. Seller represents that it is familiar with the local and state conflict of interest laws and agrees to comply with those laws in performing this BLPTA.

Seller certifies that, as of the Effective Date, it was unaware of any facts constituting a conflict of interest or creating an appearance of a conflict of interest. Seller shall avoid all conflicts of interest or appearances of conflicts of interest in performing this BLPTA. Seller has the obligation of determining if the manner in which it performs any part of this BLPTA results in a conflict of interest or an appearance of a conflict of interest and shall immediately notify SJCE in writing if it becomes aware of any facts giving rise to a conflict of interest or the appearance of a conflict of interest. Seller’s violation of this subsection (ii) is a material breach. e) Environmentally Preferable Procurement Policy. Seller shall perform its obligations under this BLPTA in conformance with San José City Council Policy 1-19, entitled “Prohibition of City Funding for Purchase of Single serving Bottled Water,” and San José City Council Policy 4-6, entitled “Environmentally Preferable Procurement Policy,” as those policies may be amended from time to time. The Parties acknowledge and agree that in no event shall a breach of this Section 13.1(g) be a material breach of this BLPTA or otherwise give rise to an Event of Default or entitle SJCE to terminate this BLPTA. f) Gifts Prohibited. Seller represents that it is familiar with Chapter 12.08 of the San José Municipal Code, which generally prohibits a City of San José officer or designated employee from accepting any gift. Seller shall not offer any City of San José officer or designated employee any gift prohibited by Chapter 12.08. Seller’s violation of this subsection (iv) is a material breach.
g) Disqualification of Former Employees. Seller represents that it is familiar with Chapter 12.10 of the San José Municipal Code, which generally prohibits a former City of San José officer and former designated employee from providing services to the City of San José connected with his/her former duties or official responsibilities. Seller shall not use either directly or indirectly any officer, employee or agent to perform any services if doing so would violate APPROVAL DRAFT Item 5
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Chapter 12.10.
h) Effect on Payment Obligations. The Parties agree that, although breach of an obligation set forth in Sections 17(d) through 17(g) may result in Seller incurring liability for such breach, any such liability will be independent of Project Participant’s liability hereunder, and no breach of or default by Seller under Sections 17(c) through 17(h) will relieve Project Participant of its liability for its Liability Share of all Guaranteed Amounts, nor may any such breach or default, or claim of breach or default, be permitted or asserted as a defense to or offset against payment of any amounts owed by Project Participant to Seller hereunder.

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IN WITNESS WHEREOF, the Paii ies have caused this BLPTA to be duly executed and delivered by their duly authorized representatives on the date first above written.

By: __________ _
Printed Name:
--------
Title: -------------
CALIFORNIA COMMUNITY POWER, a
California joint powers authority:

By: ____________ _
Printed Name:
--------
Title: -------------
By: __________ _
Printed Name:
--------
Title: -------------
Exhibit L - 13

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:

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Unit lnformation1
Name
l ocation
CAISO Resource ID
Unit SCIO
Prorated Percentage of Unit Factor
Resource Type
Point of Interconnection with t he CAISO
Controlled Grid (" substation or transmission
line")
Path 26 (North or South)
LCR Area (if any)
Oeliverability rest rictions, if any, as described
in most recent CAISO deliverability
assessment
Run Hour Restrictions
Delivery Period
Month Unit CAISO NQC (MW ) Unit Contract Quantity (MW)
January
Feb ruary
Mar ch
April
May
Ju ne
Ju ly
August
Septem ber
October
Novem ber
December
1 To be repeated for each unit if more t han one.
[SELLER ENTITY]
By:

Its:

Date:

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Goal Line BESS 1, LLC
("Seller")
All Notices:

Scheduling: [To be provided]
Attn:

Phone:

Email:

Confirmations: [To be provided]
Attn:

Phone:

Email:

Invoices: [To be provided]
Attn:

Phone:

E-mail:

Payments: [To be provided]
Attn:

Phone:

E-mail:

Wire Transfer: [To be provided]
-
-
Reference Numbers: [To be provided]
Duns:

Federal Tax ID Number:

EXHIBITN

NOTICES
California Community Power, a California
joint powers authority ("Buyer")
All Notices:

Street: 70 Garden Court, Suite 300
City: Monterey, CA 93940
Attn: Tim Haines
Phone: 916-207-4078
Email: [email protected]
Scheduling:

Attn: TBD
Phone: TBD
Email: TBD
Confirmations:

Attn: TBD
Phone: TBD
Email: TBD
Invoices:

Attn: TBD
Phone: TBD
E-mail: TBD
Payments:

Attn: TBD
Phone: TBD
E-mail: TBD
Wire Transfer:

BNK:TBD
ABA:TBD
ACCT: TBD
Reference Numbers:

Duns:

Federal Tax ID Number:

Credit and Collections: [To be provided]
Attn:

Credit and Collections:

Attn:

Street: Street:

City: City:

Phone: Phone:

Email: Email:

ExhibitN - 1
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Goal Line BESS 1, LLC
("Seller")
With additional Notices of an Event of
Default to:

California Community Power, a California
joint powers authority ("Buyer")
With additional Notices of an Event of
Default to:

Attn: Brittany Iles, Attorney
Street: 555 Capitol Mall, Ste 570
City: Sacramento, CA 95814
Phone: 916 326-5812
Facsimile: 916 330-4337
Email: [email protected]
Exhibit N - 2

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 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. 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 if Buyer provides data with such Notice reasonably indicating that the then-current Effective Capacity or Efficiency Rate have varied materially from the results of the most recent prior Capacity Test. 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) Business Days following any Capacity Test, Seller shall submit to Buyer raw data and preliminary Capacity Test results. No later than ten (10) Business Days following any Capacity Test, Seller shall submit to Buyer a testing report detailing results and findings of the Capacity 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.

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(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. Communications protocols and communications connection requirements shall be modified, if necessary, to comply with NERC CIP standards.
(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. Communications protocols and communications connection requirements shall be modified, if necessary, to comply with NERC CIP standards.
(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.
(4) Additional Testing. The Seller shall have the right to conduct one or more preliminary runs as a part of any Capacity Test prior to the commencement of a Capacity Test to determine or adjust, as necessary, the then current Energy Ratio at 0% SOC and 100% SOC.

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 Energy Level measurements associated with a Capacity Test shall be based on the Storage Level without taking into account any energy that exceeds 100% SOC.

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) Total electrical energy discharged from the Facility, as recorded at the Facility Meter when Maximum Discharging Capacity is sustained for eight (8) continuous hours; and
(2) Total electrical energy used to charge the Facility, as recorded at the Facility Meter when Maximum Charging Capacity is sustained until the SOC APPROVAL DRAFT Item 5
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reaches at least 90%, continued by electrical input at a rate up to the Maximum Charging Capacity and sustained until the SOC reaches 100%, not to exceed ten (10) 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) Total electrical energy discharged from the Facility, as recorded at the Facility Meters (kWh) (i.e., to each measurement device making up the Facility Meter);
(3) Total electrical energy used to charge the Facility, as recorded at the Facility Meters (kWh) (i.e., from each measurement device making up the Facility Meter);
(4) Storage Level (MWh);
(5) Energy Level (MWh); and
(6) Energy Ratio.

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 nominal sustained discharging level for eight (8) consecutive hours pursuant to A(1) above;
(3) The nominal sustained charging level for ten (10) consecutive hours pursuant to A(2) above;
(4) Amount of time between the Facility’s electrical output going from 0 to the Maximum Discharging Capacity during the CT (for purposes of calculating the ramp rate);
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(5) Amount of time between the Facility’s electrical input going from 0 to the Maximum Charging Capacity during the CT(for purposes of calculating the ramp rate);
(6) Energy Level (MWh) at 0% SOC and 100% SOC, to be used for the testing and operation of the Facility until the subsequent CT supersedes the values. (7) Total electrical energy used to charge the Facility, registered at the Facility Meter, to go from 0% SOC to 100% SOC;
(8) Total electrical energy discharged from the Facility, registered at the Facility Meter, to go from 100% SOC to 0% SOC.
(9) Amount of charging reactive energy in VARh, registered at the Facility Meter during the charging period
(10) Amount of discharging reactive energy in VARh, registered at the Facility Meter during the discharging period.
(11) Maximum, minimum, average, and standard deviation of the battery temperatures (°C)
(12) Battery enclosure temperatures (°C).

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. Capacity Test shall be conducted within 10 C of the industry standard test conditions of 25 °C. If battery starting temperatures are not greater than 30 °C, preconditioning will be performed prior to the start of the CT. Capacity Tests conducted to determine Effective Capacity and Efficiency Rate shall be conducted at a power factor between

0.99 lagging and 0.99 leading.
(2) Abnormal Conditions. If at any time any operating protocols including but not limted to current, voltage and termperature are exceeded, the test shall be immediately haulted and the system placed into a safe mode. 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. The measurement uncertainty calculated in APPROVAL DRAFT Item 5
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the post-test measurement uncertainty analysis will be applied to the test results of the Capacity Test.

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 CAISO or the Transmission Provider, Seller shall be permitted to reconduct such CT on dates and at times reasonably acceptable to the Parties and all costs, expenses and fees payable as a result of such retest shall be borne or reimbursed by the Party that requested the initial incomplete CT; provided, however, that if Seller is unable to complete a CT due to any action or inaction of Buyer, all costs, expenses and fees payable as a result of such retest shall be borne or reimbursed by Buyer regardless of which Party requested the initial incomplete CT.

G. Test Report. Within ten (10) 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 and provides data or reasons with such rejection reasonably indicating that the results were not in accordance with this agreement, or the Supplementary Capacity Test Protocol, such CT shall be repeated in accordance with Section 4.4 of the Agreement.

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-current Supplementary Capacity Test Protocol. The initial Supplementary Capacity APPROVAL DRAFT Item 5
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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 electrical energy delivered to the Delivery Point (expressed in MWh AC) during the first eight (8) 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 5 of Exhibit B) or (b) the Installed Capacity (in the case of any other Capacity Test), multiplied by (ii) eight (8) hours) shall be divided by eight (8) 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) Total electrical energy discharged from the Facility (as reported under Section II.D(8) above) divided by the total electrical energy used to charge the Facility (as reported under Section II.D(7) 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 Adjustment 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 Energy Ratio, Energy Level, the Storage Level, and the initial time.
(3) Command a real power charge of Facility’s Maximum Charging Capacity and begin the test period once the system has fully ramped. Continue charging until the earlier of (a) the Facility has reached 100% SOC or (b) ten (10) hours have elapsed since the Facility commenced charging. (4) Record and store the Energy Ratio, Energy Level, Storage Level, and time after the earlier of (a) the Facility has reached 100% SOC or (b) ten (10) hours of continuous charging.
(5) Record and store the total electrical energy used to charge the Facility, registered at the Facility Meter, to go from 0% SOC to 100% SOC, Energy Level, and the Storage Level.

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(6) Following an agreed-upon rest period, command a real power discharge of the Facility’s Maximum Discharging Capacity and begin the test period once the system has fully ramped. Maintain the discharging rate until the earlier of (a) the Facility has discharged for eight (8) consecutive hours, or (b) the Facility has reached 0% SOC.
(7) Record and store the Energy Ratio, Energy Level, Storage Level, and time after eight (8) hours of continuous discharging.
(8) Record and store the total electrical energy discharged from the Facility 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 0% SOC or 0% Energy Ratio, whichever occurs first.
(10) Record and store the Storage Level, Energy Level, and the total electrical energy discharged from the Facility as measured at the Facility Meter from the commencement of discharging pursuant to Part III.A.6 until the Facility has reached 0% SOC or 0% Energy Ratio, whichever occurs first, 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 electrical energy discharged from the Facility, as registered at the Facility Meter, divided by eight (8) hours.
(2) Total electrical energy discharged from the Facility (as reported under Section III.A(10) above) divided by the total electrical energy used to charge the Facility (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 Adjustment in Exhibit C until updated pursuant to a subsequent Capacity Test.

B. AGC Discharge Test
• Purpose: This test will demonstrate the AGC discharge capability to achieve the Facility’s nominal discharging level within 8 seconds.
• 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.

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(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.

C. AGC Charge Test
• Purpose: This test will demonstrate the AGC charge capability to achieve the facility’s nominal charging level within 8 seconds.
• 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 25 MW for ten (10) minutes. (3) Record and store the Facility reactive power response.

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• 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
• 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 25 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.

APPROVAL DRAFT Item 5
Attachment 2
APPROVAL DRAFT Item 5
Attachment 2

EXHIBITP

FACILITY AVAILABILITY CALCULATION
Monthly Capacity Availability Calculation. Seller shall calculate the "Monthly Capacity Availability" for a given month of the Delive1y Term using the fonnula set forth below:
[AV AILHRSm + EXCUSEDHRSm]
Monthly Capacity Availability(%) = ------------------
[MONTHRSm]
Where:
m = relevant month "111" in which Monthly Capacity Availability is calculated; MONTHRSm is the total number of hours for the month;
AV AILHRSm is the total number of hours, or partial hours, in the month during which the Facility was available to charge and discharge Energy and to provide Ancillaiy Services at the Point of Change of Ownership ( excluding, for avoidance of doubt, all circumstances on or beyond the PTO's side of the Point of Change of Ownership). If the Facility is available pursuant to the preceding sentence during any applicable hour, or paitial hour, but for less than the full amount of the Effective Capacity, the AV AILHRSm for such time period shall be calculated by multiplying such AV AILHRSm by a percentage detennined by the quotient of ( a) divided by (b); where ( a) is the lower of (i) such capacity amount repo1ted 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. 1 O(b )), and (b) is the Effective Capacity.

EXCUSEDHRSm is the total number of hours, or pa1iial hours, in the month during which the Facility is unavailable to chai·ge and discharge Energy and to provide Ancilla1y Services at the Point of Change of Ownership due to Approved Maintenance Hours, Force Majeure Events , Buyer Dispatched Tests,
Operating Restrictions in Exhibit Q. Buyer Default, or any circu111Stances ai·ising on or beyond the PTO' s side of the Point of Change of Ownership that may limit Seller's delive1y of Product (each, an "Excused Event"). If an Excused Event results in less than the full amount of the Effective Capacity for the Facility being available during any applicable hour, or partial hour, the EXCUSEDHRSm for such time period shall be calculated by multiplying such EXCUSEDHRSm by a percentage detennined by the quotient of (a) divided by (b); where (a) is the lower of such Effective Capacity amount that is notrepo1ted as available by (i) Seller's real-time EMS data feed to Buyer for the Facility for such hours, or prutial hours, and (ii) Seller's most recent Availability Notice (as updated pursuant to Section 4.lO(b)), and (b) is the Effective Capacity. For avoidance of doubt, the total of A VAILHRSm plus EXCUSEDHRSm for any hour, or partial hour, shall never exceed 1.

If the Facility or any component thereof was previously deemed unavailable for an Exhibit P - 1
hour or part of an hour, and Seller provides a revised Notice indicating the Facility is available for that hour or part of an hour by 5:00 a.m. of the morning Buyer schedules or bids the Facility in the Day-Ahead Market, the Facility will be deemed to be available to the extent set forth in the revised Notice.

If the 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 Facility is available for that hour or part of an hour at least sixty (60) minutes prior to the time Buyer is required to schedule or bid the Facility in the Real-Time Market, the Facility will be deemed to be available to the extent set forth in the revised Notice.

APPROVAL DRAFT Item 5
Attachment 2
APPROVAL DRAFT Item 5
Attachment 2

EXHIBITQ

OPERA TING RESTRICTIONS
The Patties 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 rnles, requirements and procedmes 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 sinlilar instructions from Buyer relating to the use of the Facility, and (iv) may include Facility Scheduling, operating restrictions, and communications protocols.

File Update Date: IXX/XX/20:XXl
TechnoloiIT: Lithium-ion
Facility Name: [Name]
A. Contract Capacity
Guaranteed Capacity (MW): 50
Effective Capacity (MW): 50
B. Total Unit Dispatchable Range Information
Operating Restrictions (Aoolicable to Buver)
Interconnect Voltage (kV) 69
Maximum SOC during Charging 100%
Minimum SOC during Discharging 0%
Maximum Stora2e Level (MWh): 400
Minim um Stora2e Level (MWh): 0
Maximum Char2in2 Capac.ity (MW): 50
Maximum Dischar2in2 Capac.ity (MW): 50
Maximum annual Cycles:

EneriIT Ramp Rate (MW/minute)
-
100
C. Ancillary Services
Frequency 1·e2ulation is included: Yes
Spinnin 2 reserve is included: Yes
Non-spinnin2 r eserve is included: Yes
Re2ulation up is included: Yes
Re2ulation down is included: Yes
Black start is included: No
Volta2e sunnort is included: Yes
Exhibit Q- 1
APPROVAL DRAFT Item 5
Attachment 2

EXHIBITR

EXHIBIT S

FORM OF DAILY OPERATING REPORT

DAILY OPERATING REPORT
for MM/DD/YY
Availability – Capacity - Generation
Plant Status at 0600 Hours:

Unit 1
Operating
Available
Not Available
See significant events
Previous 24 Hours:

Unit 1
Operating Hours: 0:00 Hrs:Min
(0001 – 2400 Total On Line Hours)
Net Generation: 0.0 MWhr
(0001 – 2400 Total Net Generation)
Facility

APPROVAL DRAFT
((On Line Hr + Off Line Available Hr)/24)
Item 5
Attachment 2
□
□
□
Period Availability:

Unit 1
M(onth)TD Availability 100.00 %
P(eak)TD Availability 100.00 %
State of Charge Ratio:

Unit 1
Initial SOC:

Ending SOC:

Battery String SOC:

Significant Events
No significant events, generation losses, major equipment out of service, accidents, injuries or operating anomalies.

Losses of Generation: (Include Date/Time Off Line; Date/Time On Line; Brief Narrative Description of Event.)
List Major Equipment Out of Service; Briefly Describe any Accidents or Injuries; Describe any Operating Anomalies

APPROVAL DRAFT Item 5
Attachment 2
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EXHIBIT T

FORM OF CONSENT TO COLLATERAL ASSIGNMENT
This Consent to Collateral Assignment (this “Consent”) is entered into among (i) California Community Power, a California joint powers authority (“CCP”), (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”). CCP, 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 CCP 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 CCP, and CCP 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 CCP 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 CCP and the other Parties hereto shall have executed and delivered this Consent.

Silicon Valley Clean Energy Board of DirectorsMarch 9, 2022

Silicon Valley Clean Energy Board of Directors
March 9, 2022