Agenda packet — Silicon Valley Clean Energy Board of Directors, September 14, 2022 (part 2 of 4)

Staff Report – Item 1l
Item 1l: Authorize the Chief Executive Officer to Execute an Agreement for FY22-23 with Richards, Watson & Gershon for Legal Services
From: Girish Balachandran, CEO
Prepared by: Amrit Singh, CFO / Director of Administrative Services Kevin Armstrong, Deputy Director of Administrative Services Date: 9/14/2022

RECOMMENDATION
Staff recommends that the Board authorize the CEO to execute a new FY22-23 agreement with Richards, Watson & Gershon (RWG) for legal services from October 1, 2022 through September 30, 2023, for an amount not to exceed $215,000.

BACKGROUND
Silicon Valley Clean Energy (SVCE) has been utilizing the services of RWG since the Agency’s formation with the current agreement expiring on September 30, 2022. Staff continues to have a successful working relationship with Richards, Watson, and Gershon as General Counsel to SVCE, and recommends continuing the partnership.

Compensation for the upcoming agreement for fiscal year 2022 – 2023 is to not exceed $215,000 for the term of the agreement. This compensation cap matches the amended agreement amount from FY20-21 and is slightly under the amount from FY 21-22 ($235,000), as current utilization is running under projections. While staff recognizes that consultation with RWG has increased over the past several years due to increasing program and contractual needs, staff and RWG believe that this slightly lower amount will still provide enough headroom to lessen the possibility of an amendment later in the fiscal year.

ANALYSIS & DISCUSSION
The scope of work for fiscal year 2022 – 2023 is included in Exhibit A to the Agreement with RWG (see Attachment 1) and includes:
• Attendance at the monthly SVCE Board of Directors meetings and any special meetings and workshops as required by the CEO or Chair of the Board.
• Brown Act, Conflict of Interest and Public Records Act advice and representation. • Preparation or review of consultant and vendor contracts. • Advice to the CEO and designated staff on administrative and operational matters. • Research and advice on legal questions asked by the Board, CEO and designated staff. • Advice and assistance on other legal matters as may be assigned by the CEO.

STRATEGIC PLAN
The recommendation supports staff in all areas of the Strategic Plan.

ALTERNATIVE
Staff is open to alternatives from the Board.

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/ A"\ SILICON VALLEY
~CLEAN ENERGY
Agenda Item: 1l Agenda Date: 9/14/2022

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FISCAL IMPACT
The recommendation results in a fiscal impact of $215,000 for Fiscal Year 2022-23. The recommended contract is $20,000 less than the current agreement expiring on September 30, 2022.

ATTACHMENTS

1. Agreement with Richards, Watson & Gershon for FY22-23 legal services.

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AGREEMENT BETWEEN THE SILICON VALLEY CLEAN ENERGY AUTHORITY AND

RICHARDS, WATSON & GERSHON
FOR

LEGAL SERVICES
THIS AGREEMENT (“Agreement”), is entered into this 8th day of September, 2022, by and between the SILICON VALLEY CLEAN ENERGY AUTHORITY, an independent public agency, ("Authority"), and RICHARDS, WATSON & GERSHON, a professional corporation whose address is 44 Montgomery St., Suite 3800, San Francisco, CA 94104 (hereinafter referred to as "Consultant") (collectively referred to as the “Parties” and individually as a “Party”).

RECITALS:

A. Authority is an independent public agency duly organized under the provisions of the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.) (“Act”) with the power to conduct its business and enter into agreements.

B. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement pursuant to the terms and conditions described herein.

C. Authority and Consultant desire to enter into an agreement for Legal Services upon the terms and conditions herein.

NOW, THEREFORE, the Parties mutually agree as follows:

1. TERM
The term of this Agreement shall commence on October 1, 2022, and shall terminate on September 30, 2023, unless terminated earlier as set forth herein.

2. SERVICES TO BE PERFORMED
Consultant shall perform each and every service set forth in Exhibit "A" pursuant to the schedule of performance set forth in Exhibit "B," both of which are attached hereto and incorporated herein by this reference.

3. COMPENSATION TO CONSULTANT
Consultant shall be compensated for services performed pursuant to this Agreement in a total amount not to exceed two hundred and fifteen thousand and 00/100 dollars ($215,000.00) based on the rates and terms set forth in Exhibit "C," which is attached hereto and incorporated herein by this reference.

4. TIME IS OF THE ESSENCE
Consultant and Authority agree that time is of the essence regarding the performance of this Agreement.

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5. STANDARD OF CARE
Consultant agrees to perform all services required by this Agreement in a manner commensurate with the prevailing standards of specially trained professionals in the San Francisco Bay Area under similar circumstances and in a manner reasonably satisfactory to Authority and agrees that all services shall be performed by qualified and experienced personnel. Consultant shall be responsible to Authority for any errors or omissions in the performance of work pursuant to this Agreement. Should any errors caused by Consultant be found in such services or products, Consultant shall correct the errors at no additional charge to Authority by redoing the professional work and/or revising the work product(s) called for in the Scope of Services to eliminate the errors.

Should Consultant fail to make such correction in a reasonably timely manner, such correction may be made by Authority, and the cost thereof shall be charged to Consultant. In addition to all other available remedies, Authority may deduct the cost of such correction from any retention amount held by Authority or may withhold payment otherwise owed Consultant under this Agreement up to the amount of the cost of correction.

6. INDEPENDENT PARTIES
Authority and Consultant intend that the relationship between them created by this Agreement is that of an independent contractor. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the express terms of this Agreement. No civil service status or other right of employment will be acquired by virtue of Consultant's services. None of the benefits provided by Authority to its employees, including but not limited to, unemployment insurance, workers’ compensation plans, vacation and sick leave are available from Authority to Consultant, its employees or agents. Deductions shall not be made for any state or federal taxes, FICA payments, PERS payments, or other purposes normally associated with an employer-employee relationship from any fees due Consultant. Payments of the above items, if required, are the responsibility of Consultant. Consultant shall indemnify and hold harmless Authority and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of Authority officials, from any and all liability, damages, claims, costs and expenses of any nature to the extent arising from Consultant’s personnel practices. Authority shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to Authority from Consultant as a result of Consultant’s failure to promptly pay to Authority any reimbursement or indemnification arising under this section.

7. NO RECOURSE AGAINST CONSTITUENT MEMBERS OF AUTHORITY Authority is organized as a Joint Powers Authority in accordance with the Joint Powers Act of the State of California (Government Code Section 6500 et seq.) pursuant to a Joint Powers Agreement dated March 31, 2016, and is a public entity separate from its constituent members.

Authority shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Consultant shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Authority’s constituent members in connection with this Agreement.

8. NON-DISCRIMINATION
In the performance of this Agreement, Consultant, and any subconsultant under the Consultant, shall not discriminate against any employee, subcontractor or applicant for Item 1l
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employment because of race, color, religious creed, sex, gender, gender identity, gender expression, marital status, national origin, ancestry, age, physical disability, mental disability, medical condition, genetic information, sexual orientation, military or veteran status, or other basis prohibited by law, except as provided in Government Code section 12940. Consultant shall have responsibility for compliance with this Section.

9. HOLD HARMLESS AND INDEMNIFICATION
A. General Indemnification. To the fullest extent permitted by law, Consultant shall, at its sole cost and expense, defend, hold harmless and indemnify Authority and its elected officials, officers, attorneys, agents, employees, designated volunteers, successors, assigns and those Authority agents serving as independent contractors in the role of Authority officials (collectively “Indemnitees”), from and against any and all damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including fees of accountants, attorneys, or other professionals and all costs associated therewith and the payment of all consequential damages (collectively “Liabilities”), in law or equity, whether actual, alleged or threatened, which arise out of, are claimed to arise out of, pertain to, or relate to the acts or omissions of Consultant, its officers, agents, servants, employees, subcontractors, materialmen, consultants or their officers, agents, servants or employees (or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees’ active or passive negligence, except for Liabilities arising from the sole negligence or willful misconduct of the Indemnitees as determined by court decision or by the agreement of the Parties. Consultant shall defend the Indemnitees in any action or actions filed in connection with any Liabilities with counsel of the Indemnitees’ choice, and shall pay all costs and expenses, including all attorneys’ fees and experts’ costs actually incurred in connection with such defense. Consultant shall reimburse the Indemnitees for any and all legal expenses and costs incurred by Indemnitees in connection therewith.

B. Intellectual Property Indemnification. Consultant hereby certifies that it owns, controls, or licenses and retains all right, title, and interest in and to any intellectual property it uses in relation to this Agreement, including the design, look, feel, features, source code, content, and other technology relating to any part of the services and including all related patents, inventions, trademarks, and copyrights, all applications therefor, and all trade names, service marks, know how, and trade secrets (collectively referred to as “IP Rights”), except as otherwise expressly provided by this Agreement. Consultant warrants that the services to be provided pursuant to this Agreement do not infringe, violate, trespass, or constitute the unauthorized use or misappropriation of any IP Rights of any third party. Consultant shall indemnify, defend, and hold Indemnitees, harmless from and against any Liabilities by a third party that the services to be provided pursuant to this Agreement infringe or violate any third-party’s IP Rights, provided any such right is enforceable in the United States. Such costs and expenses shall include reasonable attorneys’ fees of counsel of Authority’s choice, expert fees and all other costs and fees of litigation.

C. The acceptance of the services by Authority shall not operate as a waiver of these rights of indemnification. The hold harmless and indemnification provisions of this Section shall apply regardless of whether or not any insurance policies are determined to be applicable to the ability.

D. Consultant’s indemnifications and obligations under this section shall survive the expiration or termination of this Agreement.

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10. INSURANCE
A. General Requirements. On or before the commencement of the term of this Agreement, Consultant shall furnish Authority with certificates showing the type, amount, class of operations covered, effective dates and dates of expiration of insurance coverage in compliance with the requirements listed in Exhibit "D," which is attached hereto and incorporated herein by this reference. Such insurance and certificates, which do not limit Consultant’s indemnification obligations under this Agreement, shall also contain substantially the following statement:
"Should any of the above insurance covered by this certificate be canceled or coverage reduced before the expiration date thereof, the insurer affording coverage shall provide thirty (30) days’ advance written notice to the Authority by certified mail, Attention: Chief Executive Officer." Consultant shall maintain in force at all times during the performance of this Agreement all appropriate coverage of insurance required by this Agreement with an insurance company that is acceptable to Authority and licensed to do insurance business in the State of California.

Endorsements naming the Authority as additional insured shall be submitted with the insurance certificates.

B. Subrogation Waiver. Consultant agrees that in the event of loss due to any of the perils for which he/she has agreed to provide comprehensive general and automotive liability insurance, Consultant shall look solely to his/her/its insurance for recovery. Consultant hereby grants to Authority, on behalf of any insurer providing comprehensive general and automotive liability insurance to either Consultant or Authority with respect to the services of Consultant herein, a waiver of any right to subrogation which any such insurer of Consultant may acquire against Authority by virtue of the payment of any loss under such insurance.

C. Failure to Secure or Maintain Insurance. If Consultant at any time during the term hereof should fail to secure or maintain the foregoing insurance, Authority shall be permitted to obtain such insurance in the Consultant's name or as an agent of the Consultant and shall be compensated by the Consultant for the costs of the insurance premiums at the maximum rate permitted by law and computed from the date written notice is received that the premiums have not been paid.

D. Additional Insured. Authority, its members, officers, employees and volunteers shall be named as additional insureds under all insurance coverages, except any professional liability insurance, required by this Agreement. The naming of an additional insured shall not affect any recovery to which such additional insured would be entitled under this policy if not named as such additional insured. An additional insured named herein shall not be held liable for any premium, deductible portion of any loss, or expense of any nature on this policy or any extension thereof. Any other insurance held by an additional insured shall not be required to contribute anything toward any loss or expense covered by the insurance provided by this policy.

E. Sufficiency of Insurance. The insurance limits required by Authority are not represented as being sufficient to protect Consultant. Consultant is advised to confer with Consultant's insurance broker to determine adequate coverage for Consultant.

F. Maximum Coverage and Limits. It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum Insurance coverage requirements and/or limits shall be available to the additional insureds. Furthermore, the requirements for coverage and limits shall be the minimum coverage and limits specified in this Agreement, or the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured, whichever is greater.

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11. CONFLICT OF INTEREST
Consultant warrants that it, its officers, employees, associates and subcontractors, presently have no interest, and will not acquire any interest, direct or indirect, financial or otherwise, that would conflict in any way with the performance of this Agreement, and that it, its officers, employees, associates and subcontractors, will not employ any person having such an interest.

Consultant and its officers, employees, associates and subcontractors, if any, shall comply with all conflict of interest statutes of the State of California applicable to Consultant’s services under this Agreement, including the Political Reform Act (Gov. Code § 81000, et seq.) and Government Code Section 1090. During the term of this Agreement, Consultant may perform similar services for other clients, but Consultant and its officers, employees, associates and subcontractors shall not, without the Authority Representative’s prior written approval, perform work for another person or entity for whom Consultant is not currently performing work that would require Consultant or one of its officers, employees, associates or subcontractors to abstain from a decision under this Agreement pursuant to a conflict of interest statute. Consultant shall incorporate a clause substantially similar to this section into any subcontract that Consultant executes in connection with the performance of this Agreement. Consultant understands that it may be required to fill out a conflict of interest form if the services provided under this Agreement require Consultant to make certain governmental decisions or serve in a staff Authority, as defined in Title 2, Division 6, Section 18700 of the California Code of Regulations.

12. PROHIBITION AGAINST TRANSFERS
Consultant shall not assign, sublease, hypothecate, or transfer this Agreement, or any interest therein, directly or indirectly, by operation of law or otherwise, without prior written consent of Authority. Any attempt to do so without such consent shall be null and void, and any assignee, sublessee, pledgee, or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. However, claims for money by Consultant from Authority under this Agreement may be assigned to a bank, trust company or other financial institution without prior written consent. Written notice of such assignment shall be promptly furnished to Authority by Consultant.

The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or cotenant, if Consultant is a partnership or joint venture or syndicate or cotenancy, which shall result in changing the control of Consultant, shall be construed as an assignment of this Agreement. Control means fifty percent (50%) or more of the voting power of the corporation.

13. SUBCONTRACTOR APPROVAL
Unless prior written consent from Authority is obtained, only those persons and subcontractors whose names are attached to this Agreement shall be used in the performance of this Agreement.

In the event that Consultant employs subcontractors, such subcontractors shall be required to furnish proof of workers’ compensation insurance and shall also be required to carry general, automobile and professional liability insurance in substantial conformity to the insurance carried by Consultant. In addition, any work or services subcontracted hereunder shall be subject to each provision of this Agreement.

Consultant agrees to include within their subcontract(s) with any and all subcontractors the same requirements and provisions of this Agreement, including the indemnity and insurance Item 1l
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requirements, to the extent they apply to the scope of the subcontractor’s work. Subcontractors hired by Consultant shall agree to be bound to Consultant and Authority in the same manner and to the same extent as Consultant is bound to Authority under this Agreement. Subcontractors shall agree to include these same provisions within any sub-subcontract. Consultant shall provide a copy of the Indemnity and Insurance provisions of this Agreement to any subcontractor. Consultant shall require all subcontractors to provide valid certificates of insurance and the required endorsements prior to commencement of any work and will provide proof of compliance to Authority.

14. REPORTS
A. Each and every report, draft, work product, map, record and other document, hereinafter collectively referred to as "Report", reproduced, prepared or caused to be prepared by Consultant pursuant to or in connection with this Agreement, shall be the exclusive property of Authority. Consultant shall not copyright any Report required by this Agreement and shall execute appropriate documents to assign to Authority the copyright to Reports created pursuant to this Agreement. Any Report, information and data acquired or required by this Agreement shall become the property of Authority, and all publication rights are reserved to Authority. Consultant may retain a copy of any Report furnished to the Authority pursuant to this Agreement.

B. All Reports prepared by Consultant may be used by Authority in execution or implementation of: (1) The original project for which Consultant was hired; (2) Completion of the original project by others; (3) Subsequent additions to the original project; and/or (4) Other Authority projects as Authority deems appropriate in its sole discretion.

C. Consultant shall, at such time and in such form as Authority may require, furnish reports concerning the status of services required under this Agreement.

D. All Reports shall also be provided in electronic format, both in the original file format (e.g., Microsoft Word) and in PDF format.

E. No Report, information or other data given to or prepared or assembled by Consultant pursuant to this Agreement that has not been publicly released shall be made available to any individual or organization by Consultant without prior approval by Authority.

F. Authority shall be the owner of and shall be entitled upon request to immediate possession of accurate reproducible copies of Reports or other pertinent data and information gathered or computed by Consultant prior to termination of this Agreement or upon completion of the work pursuant to this Agreement.

15. RECORDS
Consultant shall maintain complete and accurate records with respect to costs, expenses, receipts and other such information required by Authority that relate to the performance of services under this Agreement, in sufficient detail to permit an evaluation of the services and costs. All such records shall be clearly identified and readily accessible. Consultant shall provide free access to such books and records to the representatives of Authority or its designees at all proper times, and gives Authority the right to examine and audit same, and to make transcripts therefrom as necessary, and to allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a minimum period of five (5) years after Consultant receives final payment from Authority for all services required under this agreement
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16. PARTY REPRESENTATIVES
The Chief Executive Officer (“Authority Representative”) shall represent the Authority in all matters pertaining to the services to be performed under this Agreement. Richards, Watson &Gershon (Consultant Representative”) shall represent Consultant in all matters pertaining to the services to be performed under this Agreement.

17. CONFIDENTIAL INFORMATION AND DOCUMENTS
A. Consultant covenants that all data, reports, documents, discussion, or other information (collectively “Data”) developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed or released by Consultant without prior written authorization by Authority. Authority shall grant such authorization if applicable law requires disclosure. Consultant, its officers, employees, agents, or subcontractors shall not without written authorization from the Authority Representative or unless requested in writing by the Authority Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement or relating to any project or property located within the Authority.

Response to a subpoena or court order shall not be considered “voluntary,” provided Consultant gives Authority notice of such court order or subpoena.

B. Consultant shall promptly notify Authority should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed thereunder or with respect to any project or property located within the Authority. Authority may, but has no obligation to, represent Consultant or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with Authority and to provide Authority with the opportunity to review any response to discovery requests provided by Consultant. However, Authority’s right to review any such response does not imply or mean the right by Authority to control, direct or rewrite the response.

C. In the event Authority gives Consultant written notice of a “litigation hold”, then as to all data identified in such notice, Consultant shall, at no additional cost to Authority, isolate and preserve all such data pending receipt of further direction from the Authority.

D. Consultant agrees to comply with the confidentiality and data protection provisions set forth in Exhibit “E,” attached hereto and incorporated herein by this reference.

E. Consultant’s covenants under this section shall survive the expiration or termination of this Agreement.

18. NOTICES
Any notice, consent, request, demand, bill, invoice, report or other communication required or permitted under this Agreement shall be in writing and conclusively deemed effective:
(a) on personal delivery, (b) on confirmed delivery by courier service during Consultant’s and Authority’s regular business hours, or (c) three Business Days after deposit in the United States mail, by first class mail, postage prepaid, and addressed to the Party to be notified as set forth below:

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TO AUTHORITY:
333 W. El Camino Real
Suite 330
Sunnyvale CA 94087
Attention: Chief Executive Officer
TO CONSULTANT:

Richard, Watson & Gershon
Attn: Trisha Ortiz
44 Montgomery St., Suite 3800
San Francisco, CA 94104

19. TERMINATION
In the event Consultant fails or refuses to perform any of the provisions hereof at the time and in the manner required hereunder, Consultant shall be deemed in default in the performance of this Agreement. If Consultant fails to cure the default within the time specified (which shall be determined by the Authority but shall be not less than 10 days) and according to the requirements set forth in Authority’s written notice of default, and in addition to any other remedy available to the Authority by law, the Authority Representative may terminate the Agreement by giving Consultant written notice thereof, which shall be effective immediately. The Authority Representative shall also have the option, at its sole discretion and without cause, of terminating this Agreement by giving seven (7) calendar days' prior written notice to Consultant as provided herein. Upon receipt of any notice of termination, Consultant shall immediately discontinue performance.

In the event of Authority’s termination of this Agreement due to no fault or failure of performance by Consultant, Authority shall pay Consultant for services satisfactorily performed up to the effective date of termination. Upon termination, Consultant shall immediately deliver to the Authority any and all copies of studies, sketches, drawings, computations, and other material or products, whether or not completed, prepared by Consultant or given to Consultant, in connection with this Agreement. Such materials shall become the property of Authority.

Consultant shall have no other claim against Authority by reason of such termination, including any claim for compensation.

20. COMPLIANCE WITH LAWS
Consultant shall keep itself informed of all applicable federal, state and local laws, ordinances, codes, regulations and requirements which may, in any manner, affect those employed by it or in any way affect the performance of its services pursuant to this Agreement. Consultant shall, at all times, observe and comply with all such laws and regulations, including, but not limited to the Americans with Disabilities Act, the Stored Communications Act, 18 U.S.C. Section 2701, et seq., California Civil Code Sections 1798.80 through 1798.84, and the California Consumer Privacy Act, Civil Code Section 1798.100 et seq. Authority, and its officers and employees, shall not be liable at law or in equity by reason of the failure of the Consultant to comply with this paragraph.

Consultant represents and agrees that all personnel engaged by Consultant in performing services are and shall be fully qualified and are authorized or permitted under state and local law to perform such services. Consultant represents and warrants to Authority that it has all licenses, Item 1l
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permits, certificates, qualifications, and approvals required by law to provide the services and work required to perform services under this Agreement, including a business license. Consultant further represents and warrants that it shall keep in effect all such licenses, permits, and other approvals during the term of this Agreement.

21. CONFLICT OF LAW
This Agreement shall be interpreted under, and enforced by the laws of the State of California. The Agreement and obligations of the Parties are subject to all valid laws, orders, rules, and regulations of the authorities having jurisdiction over this Agreement (or the successors of those authorities). Any suits brought pursuant to this Agreement shall be filed with the Superior Court of the County of Santa Clara, State of California.

22. ADVERTISEMENT
Consultant shall not post, exhibit, display or allow to be posted, exhibited, displayed any signs, advertising, show bills, lithographs, posters or cards of any kind pertaining to the services performed under this Agreement unless prior written approval has been secured from Authority to do otherwise.

23. WAIVER
A waiver by Authority of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character.

24. INTEGRATED CONTRACT
This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions hereof. Any modification of this Agreement will be effective only by a written document signed by both Authority and Consultant.

25. AUTHORITY
The individual(s) executing this Agreement represent and warrant that they have the legal Authority and authority to do so on behalf of their respective legal entities.

26. INSERTED PROVISIONS
Each provision and clause required by law to be inserted into the Agreement shall be deemed to be enacted herein, and the Agreement shall be read and enforced as though each were included herein. If through mistake or otherwise, any such provision is not inserted or is not correctly inserted, the Agreement shall be amended to make such insertion on application by either Party.

27. CAPTIONS AND TERMS
The captions in this Agreement are for convenience only, are not a part of the Agreement and in no way affect, limit or amplify the terms or provisions of this Agreement.

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28. AUTHORITY’S RIGHTS TO EMPLOY OTHER CONSULTANTS
Authority reserves the right to employ other consultants in connection with the subject matter of the Scope of Services.

29. EXHIBITS
The Exhibits referenced in this Agreement are attached hereto and incorporated herein by this reference as though set forth in full in the Agreement. If any inconsistency exists or arises between a provision of this Agreement and a provision of any exhibit, or between a provision of this Agreement and a provision of Consultant’s proposal, the provisions of this Agreement shall control.

30. FORCE MAJEURE
Consultant shall not be liable for any failure to perform its obligations under this Agreement if Consultant presents acceptable evidence, in Authority’s sole judgment, that such failure was due to acts of God, embargoes, inability to obtain labor or materials or reasonable substitutes for labor or materials, governmental restrictions, governmental regulations, governmental controls, judicial orders, enemy or hostile governmental action, civil commotion, fire or other casualty, or other causes beyond Consultant’s reasonable control and not due to any act by Consultant.

31. FINAL PAYMENT ACCEPTANCE CONSTITUTES RELEASE
The acceptance by Consultant of the final payment made under this Agreement shall operate as and be a release of Authority from all claims and liabilities for compensation to Consultant for anything done, furnished or relating to Consultant’s work or services. Acceptance of payment shall be any negotiation of Authority’s check or the failure to make a written extra compensation claim within ten calendar days of the receipt of that check. However, approval or payment by Authority shall not constitute, nor be deemed, a release of the responsibility and liability of Consultant, its employees, subcontractors and agents for the accuracy and competency of the information provided and/or work performed; nor shall such approval or payment be deemed to be an assumption of such responsibility or liability by Authority for any defect or error in the work prepared by Consultant, its employees, subcontractors and agents.

32. ATTORNEY FEES
In any litigation or other proceeding by which a Party seeks to enforce its rights under this Agreement (whether in contract, tort or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing Party shall be entitled to recover all attorneys’ fees, experts’ fees, and other costs actually incurred in connection with such litigation or other proceeding, in addition to all other relief to which that Party may be entitled.

33. SEVERABILITY
If any provision in this Agreement is held by a court of competent jurisdiction to be illegal, invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way.

34. SUCCESSORS AND ASSIGNS
The terms and conditions of this Agreement shall be binding on the successors and assigns Item 1l
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of the Parties to this Agreement.

35. NO THIRD PARTY BENEFICIARIES INTENDED
This Agreement is made solely for the benefit of the Parties to this Agreement and their respective successors and assigns, and no other person or entity may have or acquire a right by virtue of this Agreement.

36. COUNTERPARTS; FACSIMILE/PDF/ELECTRONIC SIGNATURE
This Agreement may be executed in multiple counterparts, all of which shall be deemed an original, and all of which will constitute one and the same instrument. The Parties agree that a facsimile, PDF or electronic signature may substitute for and have the same legal effect as the original signature.

37. DRAFTING PARTY
This Agreement shall be construed without regard to the Party that drafted it. Any ambiguity shall not be interpreted against either Party and shall, instead, be resolved in accordance with other applicable rules concerning the interpretation of contracts.

IN WITNESS WHEREOF, the Parties have caused the Agreement to be executed as of the date set forth above.

RECOMMENDED FOR APPROVAL
__________________________________________________________ Amrit Singh, Chief Financial Officer/Director of Administrative Services Item 1l
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CONSULTANT NAME

RICHARD, WATSON & GERSHON
By: ________________________
Name: ________________________
Title: _________________________
Date: __________________________

SILICON VALLEY CLEAN ENERGY

AUTHORITY
A Joint Powers Authority
By: ___________________________
Name: Girish Balachandran
Title: Chief Executive Officer
Date: __________________________
APPROVED AS TO FORM:
_______________________
Counsel for Authority
ATTEST:
_____________________
Authority Clerk
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Exhibit A
Scope of Services
As General Counsel for SVCEA, Richards, Watson & Gershon shall provide the general legal services typically required by a joint powers authority in addition to those general legal services related more specifically to the operation of a community choice aggregation program as described below. These legal services shall include the following:
• Attendance at the monthly SVCEA Board of Directors (“Board”) meetings and any special meetings and workshops as requested by the CEO Or Chair of the Board. • Brown Act, Conflict of Interest and Public Records Act advice and representation. • Preparation or review of consultant and vendor contracts. • Advice and preparation of documents related to personnel matters. • Advice to the Chief Executive Officer and designated staff on administrative and operational matters.
• Research and advice on legal questions asked by the Board, CEO and designated staff. • Advice and assistance on other legal matters as may be assigned by the CEO.

Legal services will not include matters in which Richards, Watson & Gershon has a conflict of interest that precludes the law firm from representing SVCEA. General Counsel services also will not include energy contracts or regulatory matters before the California Public Utilities Commission (CPUC) that require specialized legal services in these areas of law.

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Exhibit B
Schedule of Performance
This schedule may be modified with the written approval of the Authority.

Task Begin Complete

1. Legal Services October 2022 September 2023
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Exhibit C
Compensation
Authority shall compensate Consultant for professional services in accordance with the terms and conditions of this Agreement based on the rates and compensation schedule set forth below.

Compensation shall be calculated based on the hourly rates set forth below up to the not to exceed budget amount set forth below.

The compensation to be paid to Consultant under this Agreement for all services described in Exhibit “A” and reimbursable expenses shall not exceed a total of two hundred and fifteen thousand dollars and no/100 ($215,000.00), as set forth below. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to Authority unless previously approved in writing by Authority.

Rates
Personnel Hourly
Shareholders $335/Hour
Associates $285/Hour
Paralegals $180/Hour
Invoices
Monthly Invoicing: In order to request payment, Consultant shall submit monthly invoices to the Authority describing the services performed and the applicable charges (including a summary of the work performed during that period, personnel who performed the services, hours worked, task(s) for which work was performed). Authority shall pay all undisputed invoice amounts within thirty (30) calendar days after receipt up to the maximum compensation set forth herein. Authority does not pay interest on past due amounts.

Reimbursable Expenses
Administrative, overhead, secretarial time or overtime, word processing, photocopying, in house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. Travel expenses must be authorized in advance in writing by Authority
Additional Services
Consultant shall provide additional services outside of the services identified in Exhibit A only by advance written authorization from Authority Representative prior to commencement of any additional services. Consultant shall submit, at the Authority Representative’s request, a detailed written proposal including a description of the scope of additional services, schedule, and proposed maximum compensation. Any changes mutually agreed upon by the Parties, and any increase or decrease in compensation, shall be incorporated by written amendments to this Agreement.

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Exhibit D
Insurance Requirements and Proof of Insurance
Consultant shall maintain the following minimum insurance coverage:

A. COVERAGE:
(1) Workers' Compensation:

Statutory coverage as required by the State of California. (2) Liability:

Commercial general liability coverage with minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate for bodily injury and property damage.

ISO occurrence Form CG 0001 or equivalent is required.
(3) Automotive:

Comprehensive automotive liability coverage with minimum limits of $1,000,000 per accident for bodily injury and property damage. ISO Form CA 0001 or equivalent is required.
(4) Professional Liability
Professional liability insurance which includes coverage for the professional acts, errors and omissions of Consultant in the amount of at least $1,000,000. (5) Privacy and Cybersecurity Liability
Privacy and cybersecurity liability (including costs arising from data destruction, hacking or intentional breaches, crisis management activity related to data breaches, and legal claims for security breach, privacy violations, and notification costs of at least $5,000,000 US per occurrence.

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Exhibit E
Confidentiality and Data Security Requirements
Subject to the terms and conditions of the Agreement, current proprietary and confidential information of Authority regarding customers of Authority (“Authority Customers”) and/or other confidential information (collectively “Confidential Information”) may be disclosed to Consultant from time to time in connection herewith solely for the purposes set forth in the Agreement. Such disclosure is subject to the following legal continuing representations and warranties by Consultant:

1. The Confidential Information disclosed to Consultant in connection herewith may include, without limitation, the following information about Authority Customers: (a) names; (b) addresses; (c) telephone numbers and email addresses; (d) service agreement numbers and account numbers; (e) meter and other identification numbers; (f) Authority-designated account numbers; (g) electricity and gas usage (including monthly usage, monthly maximum demand, electrical or gas consumption, HP load, and other data detailing electricity or gas needs and patterns of usage); (h) billing information (including rate schedule, baseline zone, CARE participation, end use code (heat source) service voltage, medical baseline, meter cycle, bill cycle, balanced payment plan and other plans); (i) payment / deposit status; (j) number of units; and (k) other similar information specific to Authority Customers individually or in the aggregate. Confidential Information shall also include specifically any copies, drafts, revisions, analyses, summaries, extracts, memoranda, reports and other materials prepared by Consultant or its representatives that are derived from or based on Confidential Information disclosed by Authority, regardless of the form of media in which it is prepared, recorded or retained.

2. Except for electric and gas usage information provided to Consultant pursuant to this Agreement, Confidential Information does not include information that Consultant proves (a) was properly in the possession of Consultant at the time of disclosure; (b) is or becomes publicly known through no fault of Consultant, its employees or representatives; or (c) was independently developed by Consultant, its employees or representatives without access to any Confidential Information.

3. From the Effective Date, no portion of the Confidential Information may be disclosed, disseminated or appropriated by Consultant, or used for any purpose other than the purposes set forth in the Agreement.

4. Consultant shall, at all times and in perpetuity, keep the Confidential Information in the strictest confidence and shall take all reasonable measures to prevent unauthorized or improper disclosure or use of Confidential Information. Consultant shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the personal information from unauthorized access, destruction, use, modification, or disclosure and prohibits the use of the data for purposes not set forth in the Agreement. Specifically, Consultant shall restrict access to Confidential Information, and to materials prepared in connection therewith, to those employees or representatives of Consultant who have a “need to know” such Confidential Information in the course of their duties with respect to the Consultant program and who agree to be bound by the Item 1l
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nondisclosure and confidentiality obligations of this Agreement. Prior to disclosing any Confidential Information to its employees or representatives, Consultant shall require such employees or representatives to whom Confidential Information is to be disclosed to review this Agreement and to agree to be bound by the terms of this Agreement. Consultant shall not disclose Confidential Information or otherwise make it available, in any form or manner, to any other person or entity that is not Consultant’s employee or representative (a “Third Party”), except where that Third Party has separately entered into a nondisclosure agreement with Authority. Without limiting Consultant’s obligation of confidentiality as further described herein, Consultant shall be responsible for establishing, maintaining, and providing a written description to Authority of, a data privacy and information security program, including physical, technical, administrative, and organizational safeguards, that comply with or are substantial similar to the security controls identified in the current version of NIST SP800-53, and that is designed to: (a) ensure the security and confidentiality of the Authority’s Data; (b) protect against any anticipated threats or hazards to the security or integrity of the Data; (c) protect against unauthorized disclosure, access to, or use of the Data; (d) ensure the proper disposal of Data; and, (e) ensure that all employees, agents, and subcontractors of Consultant, if any, comply with all of the foregoing. In no case shall the safeguards of Consultant’s data privacy and information security program used to protect Data be less stringent than the safeguards used by Consultant for its own data. If the services include handling credit card information, then the Consultant shall comply at all times with all applicable Payment Card Industry Data Security Standards (PCI-DSS). Consultant agrees and warrants that it is responsible for the security of “cardholder data” that Consultant possesses, stores, processes or transmits on behalf of the Authority, and for any impact on the security of Authority’s cardholder data environment adversely affected by any failure of Company to maintain compliance with provisions of the PCI-DSS applicable to the services. No less than annually, Consultant shall conduct a comprehensive independent third-party audit of its data privacy and information security program and provide such audit findings to Authority. The required audit shall be a SAS-70 (or successor standard) compliant audit, and Consultant shall provide the audit findings in the form of an SAS-70 Type II report.

5. Notwithstanding the above, Consultant may disclose Confidential Information to the extent required by an order, subpoena, or lawful process requiring the disclosure of such Confidential Information issued by a court or other governmental authority of competent jurisdiction, provided that Consultant notifies Authority immediately upon receipt thereof to allow Authority to seek protective treatment for such Confidential Information.

6. In the event of any act, error or omission, negligence, misconduct, or breach that permits any unauthorized access to, or that compromises or is suspected to compromise the security, confidentiality, or integrity of the Authority’s Data or the physical, technical, administrative, or organizational safeguards put in place by Consultant that relate to the protection of the security, confidentiality, or integrity of the Data, Consultant shall, as applicable: (a) notify Authority as soon as practicable but no later than twenty-four (24) hours of becoming aware of such occurrence; (b) cooperate with Authority in investigating the occurrence, including making available all relevant records, logs, files, data reporting, and other materials required to comply with applicable law or as otherwise required by Authority; (c) in the case of Confidential Information, at Authority’s sole Item 1l
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election, (i) notify the affected individuals who comprise the Confidential Information as soon as practicable but no later than is required to comply with applicable law including, but not limited to, the provisions of California Civil Code Section 1798.82, or, in the absence of any legally required notification period, within five (5) calendar days of the occurrence; or, (ii) reimburse Authority for any costs in notifying the affected individuals; (d) in the case of Confidential Information, provide third-party credit and identity monitoring services to each of the affected individuals who comprise the Confidential Information for the period required to comply with applicable law, or, in the absence of any legally required monitoring services, for no less than twelve (12) months following the date of notification to such individuals; (e) perform or take any other actions required to comply with applicable law as a result of the occurrence; (f) without limiting Consultant’s obligations of indemnification as further described in this Agreement, indemnify, defend, and hold harmless Authority for any and all Claims (as defined herein), including reasonable attorneys’ fees, costs, and expenses incidental thereto, which may be suffered by, accrued against, charged to, or recoverable from Authority in connection with the occurrence; (g) be responsible for recreating lost Data in the manner and on the schedule set by Authority without charge to Authority; (h) provide to Authority a detailed plan within ten (10) calendar days of the occurrence describing the measures Consultant will undertake to prevent a future occurrence and (i) upon conclusion of the occurrence, or at Authority’s request, provide to Authority a comprehensive summary of the occurrence, including reason for occurrence, details of occurrence, how occurrence was addressed and any other information required by Authority, which shall be executed by Consultant and may be relied upon by Authority as a true and accurate account of the occurrence. Notification to affected individuals, as described above, shall comply with applicable law, be written in plain language, and contain, at a minimum: name and contact information of Consultant’s representative; a description of the nature of the loss; a list of the types of data involved; the known or approximate date of the loss; how such loss may affect the affected individual; what steps Consultant has taken to protect the affected individual; what steps the affected individual can take to protect himself or herself; contact information for major credit card reporting agencies; and, information regarding the credit and identity monitoring services to be provided by Consultant. This Section shall survive the termination of this Agreement.

7. It shall be considered a material breach of this Agreement if Consultant engages in a pattern or practice of accessing, storing, using, or disclosing the Confidential Information in violation of the contractual obligations described herein. Consultant understands that if Authority finds that Consultant is engaged in a pattern or practice of accessing, storing, using, or disclosing Confidential Information in violation of this Agreement Authority shall promptly cease all disclosures of Confidential Information to Consultant. Consultant further understands that if Authority receives a customer complaint about Consultant’s misuse of data or other violation of the Disclosure Provisions, Authority shall promptly cease disclosing that customer’s information to Consultant and shall notify the California Public Utilities Commission of the complaint.

8. Consultant shall be liable for the actions of, or any disclosure or use by, its employees or representatives contrary to this Agreement; however, such liability shall not limit or Item 1l
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prevent any actions by Authority directly against such employees or representatives for improper disclosure and/or use. In no event shall Consultant or its employees or representatives take any actions related to Confidential Information that are inconsistent with holding Confidential Information in strict confidence. Consultant shall immediately notify Authority in writing if it becomes aware of the possibility of any misuse or misappropriation of the Confidential Information by Consultant or any of its employees or representatives. However, nothing in this Agreement shall obligate the Authority to monitor or enforce the Consultant’s compliance with the terms of this Agreement.

9. Consultant shall comply with the consumer protections concerning subsequent disclosure and use set forth in Attachment B to California Public Utilities Commission (CPUC) Decision No. 12-08-045.

10. In addition to any other requirements set forth in the Agreement, within ten (10) business days of receipt of Authority’s written request, and at Authority’s option, Consultant will either return to Authority all tangible Confidential Information, including but not limited to all electronic files, documentation, notes, plans, drawings, and copies thereof, or will provide Authority with written certification that all such tangible Confidential Information of Authority has been destroyed.

11. Consultant acknowledges that disclosure or misappropriation of any Confidential Information could cause irreparable harm to Authority and/or Authority Customers, the amount of which may be difficult to assess. Accordingly, Consultant hereby confirms that the Authority shall be entitled to apply to a court of competent jurisdiction or the California Public Utilities Commission for an injunction, specific performance or such other relief (without posting bond) as may be appropriate in the event of improper disclosure or misuse of its Confidential Information by Consultant or its employees or representatives. Such right shall, however, be construed to be in addition to any other remedies available to the Authority, in law or equity.

12. In addition to all other remedies, Consultant shall indemnify and hold harmless Authority, its officers, employees, or agents from and against and claims, actions, suits, liabilities, damages, losses, expenses and costs (including reasonable attorneys’ fees, costs and disbursements) attributable to actions or non-actions of Consultant and/or its employees and/or its representatives in connection with the use or disclosure of Confidential Information.

13. When Consultant fully performs the purposes set forth in the Agreement, or if at any time Consultant ceases performance or Authority requires Consultant cease performance of the purposes set forth in the Agreement, Consultant shall promptly return or destroy (with written notice to Authority itemizing the materials destroyed) all Confidential Information then in its possession at the direction of Authority. Notwithstanding the foregoing, the nondisclosure obligations of this Agreement shall survive any termination of this Agreement.

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Staff Report – Item 1m
Item 1m: Executive Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: George Tyson, Executive Committee Chair
Date: 9/14/2022
The Executive Committee met August 26, 2022 and received information on the Inflation Reduction Act, an update on SVCE’s FY22-23 Strategic Focus Areas, a status update on SVCE’s Integrated Resource Plan, and information on the GridShift EV Charging program.

Bena Chang, Sr. Government Affairs Manager, presented information on the Inflation Reduction Act and highlighted some of the programs included in the act, including those related to EV investments, building decarbonization investments, community funds, and other additional investments and policies.

CEO Girish Balachandran presented an update on the five Strategic Focus Areas, noting two previous employee related focus areas had been combined and an area was added to address the Inflation Reduction Act. The Executive Committee was supportive of these focus areas, which will be presented to the Board of Directors for consideration of approval.

Maren Wenzel, Senior Manager of Energy Policy and Regulatory Analysis, presented a status update on the Integrated Resource Plan (IRP) which included background, filing requirements, draft results and next steps.

Senior Manager of Energy Policy and Regulatory Analysis Wenzel will be presenting a similar presentation to the Board of Directors.

Rebecca Fang, Senior Data Analyst, provided a presentation on SVCE’s GridShift: EV Charging program, which allows users to set a “ready-by-time” to automate EV charging and save money and reduce emissions.

Materials from this meeting can be found on SVCE’s website: SVCE Executive Committee Meeting, August 26, 2022
The next meeting of the Executive Committee will be September 23, 2022 at 10:00 a.m.; materials will be posted no later than 72 hours in advance of the meeting.

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Staff Report – Item 1n
Item 1n: Finance and Administration Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Andrea Piano, Board Clerk/Executive Assistant Date: 9/14/2022
No report as the Finance and Administration Committee has not met since August 1, 2022.

The next meeting of the Finance and Administration Committee is to be determined and is expected to occur in October; materials will be posted no later than 72 hours prior to the meeting date.

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Staff Report – Item 1o
Item 1o: Audit Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Bryan Mekechuk, Audit Committee Chair
Date: 9/14/2022
The Audit Committee met on August 31, 2022 to review staff’s process for selecting and recommending an external Financial Auditor, make a recommendation to the Board of Directors to select an audit firm, and receive an update on the IT Audit and security assessments.

Kevin Armstrong, Deputy Director of Administrative Services, presented the Audit Committee with background information on the Request for Proposals process to select an Audit firm. Deputy Director of Administrative Services Armstrong outlined the evaluation standards for the respondents and identified the two shortlisted firms. Staff proposed that the Audit Committee recommend that the Board of Directors select Pisenti & Brinker LLP as the financial auditor for SVCE’s financial statements for the fiscal year 2022-23 with the option to extend for additional years not exceeding a total of five years. The Audit Committee discussed staff’s recommendation and voted unanimously to support it. The agreement for Pisenti & Brinker LLP will be included on the consent calendar of the September 14, 2022 Board of Directors meeting for the Board’s consideration.

Deputy Director of Administrative Services Armstrong provided an update on SVCE’s IT Audit, and an overview of contracting for services of a Virtual Chief Information Security Officer (VCISO) and an IT Security assessment. Staff noted they would return in early 2023 with prioritized recommendations of any additional IT security measures to implement based on VCISO’s assessment.

Materials from the August 31, 2022 Audit Committee meeting can be found here: SVCE Audit Committee Meeting, August 31, 2022
The next meeting of the Audit Committee is to be determined and is expected to occur in late September; materials will be posted no later than 72 hours prior to the meeting date.

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Staff Report – Item 1p
Item 1p: Legislative and Regulatory Response to Industry Transition 2022 Ad Hoc Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Andrea Pizano, Board Clerk/Executive Assistant Date: 9/14/2022
No report as the Legislative and Regulatory Response to Industry Transition 2022 Ad Hoc Committee has not met since June 14, 2022.

The next meeting of the Committee will be held in early October 2022 and will be scheduled based on member availability.

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Staff Report – Item 1q
Item 1q: California Community Power Report
To: Silicon Valley Clean Energy Board of Directors
From: Girish Balachandran, CEO
Date: 9/14/2022
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 regular board meeting on Wednesday, August 17, 2022.

Attached is a summary report from Interim General Manager Timothy Haines; materials from the August board meeting can be found here on the CC Power website: CC Power Meeting, 8/17/22 The next meeting of the board will be September 21, 2022 at 1:00 p.m.; meeting materials can be found on the CC Power website: https://cacommunitypower.org/meetings/ ATTACHMENTS:

CA Community Power Board Meeting Summary from Interim General Manager Timothy Haines, August 17, 2022 Item 1q
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California Community Power
70 Garden Court, Suite 300, Monterey, CA 93940 | cacommunitypower.org A Joint Powers Agency whose members are:

Central Coast Community Energy | CleanPowerSF | East Bay Community Energy | MCE | Peninsula Clean Energy | Redwood Coast Energy Authority | San José Clean Energy | Silicon Valley Clean Energy | Sonoma Clean Power | Valley Clean Energy
TO: CC Power Board of Directors and Alternates DATE: 8/17/2022 FROM: Tim Haines – Interim General Manager
SUBJECT: Report on CC Power Special Board of Directors Meeting – August 17, 2022 The CC Power Board of Directors held its regularly scheduled meeting on Wednesday, August 16, 2022, via Zoom. Details on the Board packet, presentation materials, and public comment letters can be found under the Meetings tab at the CC Power website: https://cacommunitypower.org Highlights of the meeting included the following:
• Consent Calendar - The Board unanimously approved the following items:
o Minutes of the Regular Board Meeting held on June 15, 2022. o Resolution 22-08-01 Determination that Meeting in Person Would Present Imminent Risks to the Health or Safety of Attendees as a Result of the Proclaimed State of Emergency
• Resolution 22-08-02 Acceptance of Marin Clean Energy Withdrawal from California Community Power. MCE provided CC Power with a notice of intent to withdraw from CC Power. The stated reasons are MCE has not participated in CC Power projects and has been successful contracting directly. MCE does note that it anticipates the pause is temporary and expects to rejoin CC Power in the future subject to market and technology needs. The remaining debts that MCE will pay are $5,000.
• Update from Strategic Business Plan ad hoc Committee. Interim General Manager informed the Board that the ad hoc Committee is close to selecting a consultant with extensive experience with California public utilities at the Board and executive management level. Mr. Haines explained how the plan will reflect the Board’s ideas for future projects, organization, and leadership.
• Open Discussion on Inflation Reduction Act and Potential Impacts. The Board discussed the potential significant opportunities that the IRA creates for CC Power and its members. The Chair asked the Interim GM to work with the Budget ad hoc committee and return to the Board with a budget plan to staff up CC Power at a future Board meeting. This will compliment the Strategic Business Plan.
• General Manager’s Report
o Follow-up on CC Power Discussion with California Independent System Operator.

The Interim GM informed the Board that the CC Power had initiated outreach with the CAISO. The report discussed the next steps in the education and engagement process.

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2 o Resolution 22-08-03 Approval of 2022 Budget Amendment and Cash Calls. The Interim General Manager proposed, and the Board adopted the 2022 budget amendment and the associated cash calls to members.

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Staff Report – Item 2
Item 2: CEO Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Girish Balachandran, CEO
Date: 9/14/2022
REPORT
SVCE Staff Update
Juliette Pascual joined SVCE September 8, 2022 as a Community Outreach Fellow through Climate Corps. Juliette graduated from UC Berkeley with a B. S. in Conservation & Resource Studies and a minor in Creative Writing in 2019. After graduating, she joined Peace Corps Philippines as an English education volunteer in secondary schools. Before joining this fellowship, Juliette worked with an urban forestry nonprofit in San Jose in outreach and community development.

Alhad Dighe joined SVCE September 8, 2022 as a Fleet Electrification Fellow through Climate Corps. Alhad graduated from UC Santa Cruz with a B.S. in Environmental Studies and Biology, and a minor in Sustainability Studies. After working in Climate Tech after college, Alhad served as a CivicSpark Fellow at the Bay Area Regional Collaborative, working on Climate Adaptation Policy, Sea Level Rise resilience, and decarbonization efforts.

Personnel Officer Update
After an intensive search, SVCE has selected a candidate for the role of Energy Services and Community Relations Director, who will be publicly announced shortly. SVCE has also just recently onboarded two new Climate Corps fellows, Juliette Pascual and Alhad Dighe. Juliette will be a Community Outreach fellow with the Marketing and Communications team, and Alhad will be a Fleet Electrification Fellow with the Decarbonization team.

In addition, SVCE continues to recruit for several open positions, including a Senior Regulatory Analyst, Human Resources Generalist, and Decarbonization Data Engineer. Staff has begun internal discussions around implementing the proposed employee benefit enhancements, pending board approval of the FY22-23 budget.

Finally, staff is working to update the recruitment policy to ensure that SVCE remains competitive within the hiring market and will share that updated policy with the Board once complete.

Second Prepay Project
SVCE, along with EBCE, spent over two years executing its first Prepay with Morgan Stanley. This first transaction was for 50 MW (~10% of SVCE’s load), and saves SVCE about 10% of the energy cost of the initial transaction assigned into the Prepay. Power delivery under the Prepay began 1/1/2022, and we are successfully settling each month and realizing the savings.

SVCE would like to leverage the two years of work put into this structure by replicating it for another Prepay. The details of this second Prepay are still being worked out, but it could be another 10% of the load. After this, there will be room for additional Prepays, but we will likely engage in another RFP to reassess our current structure and test the market. We will also first need to assess IRA’s economics of owning generation assets, likely through CC Power. Details on the development of this second Prepay will be discussed with the Finance and Administration Committee at their next meeting.

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Agenda Item: 2 Agenda Date: 9/14/2022

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CEO Agreements Executed
The following agreements have been executed by the CEO, consistent with the authority delegated by the Board:
1) Make Media Studios, Agreement: Photography and Videography Services, not to exceed $105,000, 10/1/22 – 9/30/24
2) Joseph F. Wiedman, Agreement: Legal Services, not to exceed $12,000 3) SMUD, Amendment: FutureFit Fundamentals Contractor Rebate Program Support, not to exceed $195,600 4) Keyes & Fox, Amendment: Legal representation, not to exceed $75,000 5) Creative F5, Agreement: Graphic and web design services, not to exceed $105,000, 10/1/22 – 9/30/24 6) Ion Translations, LLC, Agreement: Translation Services, not to exceed $90,000, 10/1/22 – 9/30/24 7) Community Resilience Program – City of Sunnyvale, Agreement: Capital Project Grant, not to exceed $327,680
8) ZappyRide, Amendment: Master Subscription Agreement, not to exceed $44,000 9) Buro Happold, Scope of Work: Energy Resilience Planning, Analysis, and Support, not to exceed $52,339 10)Community Resilience Program – City of Morgan Hill: Capital Project Grant, not to exceed $209,003 11)Flynn Resource Consultants Inc., Agreement: General Consulting Services, not to exceed $60,000, 9/1/22 – 9/30/25
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CEO Power Supply Agreements Executed
Counterparty Name Execution/Effective Date Transaction Type Product Start Date End Date Notional Value City of Riverside 7/19/2022 Sale Import Allocation Rights 1/1/2023 12/31/2023 $266,580.00 Peninsula Clean Energy 7/26/2022 Sale Resource Adequacy 11/1/2022 11/30/2022 $3,000.00 East Bay Community Energy 7/19/2022 Purchase Resource Adequacy 10/1/2022 12/31/2022 $44,500.00 San Diego Community Power 8/16/2022 Sale Import Allocation Rights 10/1/2022 10/31/2022 $18,000.00 City of Vernon 8/5/2022 Sale Resource Adequacy 11/1/2022 11/30/2022 $11,000.00 City of Riverside 8/22/2022 Sale Resource Adequacy 11/1/2022 11/30/2022 $30,000.00 High Desert Power, LLC 8/18/2022 Purchase Resource Adequacy 1/1/2024 12/31/2025 $16,920,000.00 Exelon 8/9/2022 Purchase Hedge Energy 4/1/2023 12/31/2024 $23,373,726.00 PG&E 7/25/2022 Purchase Renewable Energy PCC-1 1/1/2023 12/31/2032 $119,470,561.56 (Estimated)
These agreements are included in the Board packet as Appendix A.

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Presentations & Relevant Meetings Attended by CEO
- Participated in CalCCA Monthly board, executive, and legislative meetings; - CC Power Board Meeting, August 17
th, report included on the Consent Calendar
- Participated in California Community Choice Financing Authority Board of Directors Special Meeting, August 26, 2022
- Welcome remarks, Silicon Valley Business Journal’s Business of Climate Change Series – Electrifying Silicon Valley

ATTACHMENTS

1. Clean Power Update, September 2022

2. Decarb Programs & Policy Update, September 2022

3. Energy Services & Community Relations Update, September 2022

4. Legislative and Regulatory Update, September 2022

5. Agenda Look Ahead, September 2022 – January 2023

6. Board Action Requested, September 2022 Update
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• Subtitle
New SV Clean Energy
PowerPoint Template
Item 2
Attachment 1
Clean Power Update, September 2022
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Item 2
Attachment 1
Clean Power Update, September 2022

SACRAMENTO
•
NEVADA
' ' ' ' '

GEOTHERMAL
■ SOLAR POWER ♦ STORAGE
■ SOLAR POWER
■ WIND GENERATION
■ LONG DURATlON STORAGE
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$1.98+ in commitments
16 PPAs signed
13 new build projects
676 MW of Renewable Power
151 MW lithium-ion storage paired with
445 MW of Solar PV
29 MW of Long-duration storage
4 Projects now delivering to SVCE
meeting N20% energy needs:

COSO geothermal - January 2022
Slate Solar+ Storage - January 2022
Casa Diablo geothermal - September 2022
Mountain View wind - July 2022
2 Seller Project Name Technology
Generation
MW
Storage
MW
Approximate
% of Annual
load in 2025
Term
(years)
Lifetime
Not to
Exceed
Authority
(MM$)
SVCE
Board
Approv
al Status
1Goldman Sachs Slate Solar + Storage 93.0 46.5 6.7% 17 $198 Oct-18 on-line 2Ormat Casa Diablo Geothermal 7.0 1.4% 10 $43 Feb-20 on-line 3Atlantica Coso Geothermal 43.8 9.6% 15 $331 Mar-20 on-line 4Leeward Rabbitbrush Solar + Storage 40.0 8 3.0% 15 $64 Apr-20 construction 5NextEra Yellow Pine Solar + Storage 50.0 26 4.1% 20 $128 May-20 construction 68 Minute Energy Aratina Solar + Storage 80.0 20 6.6% 20 $174 Jun-20 Pre-construction 7174 Power Global Atlas Solar 50.0 0 3.8% 10 $27 Jan-21 Pre-construction 8SB Energy Angela Solar + Storage 20.0 10 1.4% 15 $35 Mar-21 Pre-construction 9AES Mountain View Wind 62.5 15.625 3% 20 $128 Apr-21 on-line 10Origis San Luis West Solar + Storage 33.5 4% 15 $74 Apr-21 Pre-construction 11Clearway Victory Pass Solar + Storage 100.0 25 8% 15 $149 May-21 Pre-construction 12Terra-Gen Cameron Crest Wind 77.7 5% 15 $150 May-21 existing 13LS Power Tumbleweed
Long Duration
Storage 14.6 n/a 15 $100 Feb-22 Pre-construction
14Onward Goal Line
Long Duration
Storage 14.2 n/a 15 $100 Mar-22 Pre-construction
15Ormat
Geothermal
Portfolio Geothermal 16.75 3.3% 20 $256 Jun-22 Pre-construction 16OME Fish Lake Geothermal 1.82 0.4% 20 $30 Jun-22 in development Item 2
Attachment 1
Clean Power Update, September 2022
© SVCE Long-term Clean Energy Contracts
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Item 2
Attachment 1
Clean Power Update, September 2022
© Clean Energy Resources On-line Progress
2022 - Q3
2022 - Q4
2023 - Q1
2023 - Q2, Q3
2023 - Q3, Q4
2024+
Casa Diablo Geothermal - achieved COD in mid-July 2022
Mountain View Wind - achieved COD in late-July 2022
Rabbitbrush Solar+ Storage - delivering test energy
• Atlas Solar - Pre-Construction - delayed
Cameron Crest Wind - Existing project
• Yellow Pine Solar+ Storage - Construction mode - delayed Angela Solar + Storage - Pre-construction - delayed
Aratina Solar+ Storage - Pre-construction - delayed
Victory Pass Solar+ Storage - Pre-construction - delayed San Luis West Solar+ Storage - Pre-construction - delayed FCR: Ormat and Fish Lake - Pre-construction
LDS: Goal Line and Tumbleweed - Pre-construction
4 Item 2
Attachment 1
Clean Power Update, September 2022
Rabbitbrush Solar + Storage 40 MW
COD October 2022
Yellow Pine Solar+ Storage 50 MW
COD June 2023 -
--
5 Item 2
Attachment 1
Clean Power Update, September 2022
,, .... ~ .
......
.
.

SVCE has opened the application window for incentives of up to $50,000 per DC fast charger installed in high priority zones near dense areas of multifamily housing. The goal of this program is to accelerate electric vehicle adoption by residents of multifamily developments in SVCE territory who may otherwise lack access to on-site EV charging at home. Applications will be evaluated, and best-fit projects will be selected for funding. The application window is open now open through November 15, 2022.

Applications Open for Priority Zone DC Fast
Charging (DCFC) 2.0 Program

DECARBONIZATION PROGRAMS UPDATE

AUGUST HIGHLIGHTS
GridShift: EV Charging App Refresh
The GridShift EV Charging app, powered by ev.energy, allows SVCE's residential customers to automate their electric vehicle (EV) charging, while saving money and reducing emissions. SVCE and ev.energy released a refresh of the GridShift: EV Charging app on August 1, which includes new features such as solar-powered charging, smarter scheduling, and an improved user interface.

SVCE ran a promotional campaign providing $50 sign-up bonus per user, which helped to increase the number of users from 400 in July to 580 in August.

Applications for the Community Decarbonization Demonstration Grants program and Community Decarbonization Engagement Grants programs, approved by the Board in June, will be open in September. Both programs promote the practicality and feasibility of decarbonization practices. The Demonstration Grants, totaling $1.2 million, are designed to assist local agencies and organizations in making capital investments in decarbonization technologies that the public can see and experience. The Engagement Grants, totaling $350,000, will provide local agencies with resources to engage their communities on a variety of decarbonization topics.

Applications for both programs will be due in October with award announcements scheduled for December.

Community Decarbonization Programs Launch
Item 2
Attachment 2
DPP Update, September 2022
fa, SILICON VALLEY \.:!:.,/ CLEAN ENERGY
08/219/21
10/21
11/21
12/21
1/22
2/223/224/22
7/228/22
1,000
750
500
250
0 10/19
12/19
2/20
4/20
6/20
8/20
10/20
12/20
2/214/216/218/21
10/21
12/21 2/224/22
7/22
400
300
200
100
0 = 25 Single-Family Projects
= 1 Multi-Family Property Project
(Number of households varies)
Goal: 220 HPWH by 2022
Funding: $1.15M
ONGOING METRICS AUGUST 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
= 1 CARE/FERA Installation
Cumulative HPWH Installations
Cumulative Service Panel Upgrades
= 10 Completed Installations Above
the Initial Goal
335
104
444
Item 2
Attachment 2
DPP Update, September 2022
• •
• •
it it it it it it it it it it
it it it it it it it it a
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• II
CALeVIP
Level 2 DCFC
500,000
000,000
500,000
0 9/21
10/21
11/21
12/21
1/22
2/223/224/225/226/22
7/228/22
150
100
50 0

ONGOING METRICS
Provide incentives for electric vehicle (EV) chargers
as part of a regional program
= 25 Level 2 Installations
150 Participants Complete
the Course (Phase 1)
Goal:

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
Reserved Waitlisted
Funds Issued
(To be released
in future years)
$1.39M $5.14M
$1.5M
$235K
AUGUST 2022
$700K
58 $6M
$4M
$2M
Being Processed
$2.45M
$1.6M
Item 2
Attachment 2
DPP Update, September 2022 •
•
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Permit Simplification Effort
Building Decarb Joint Action Plan
Resilience at Community Facilities
FutureFit Homes & Buildings
Regional Coordination
Click for More Information Active In Development Complete C&I Clean Power Offerings
All-Electric Showcase Awards
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 & Incentives
Fleet Electrification Grants
SV Transportation Electrification Clearinghouse (SVTEC) Regional Recognition
Other Virtual Power Plant
Customer Resource Center (eHub)
Community Engagement Grants
Innovation Partners
Innovation Onramp Pilots

PROGRAMS AT A GLANCE
POWER
SUPPLY
GRID

INTEGRATION

EDUCATION &

OUTREACH
BUILT

ENVIRONMENT

MOBILITY

INNOVATION
Reach Codes
CRCR Bill Relief
Lights On Silicon Valley
GridShift EV Charging
Data Hive
AUGUST 2022
Medical Baseline Battery Program
Item 2
Attachment 2
-
DPP Update, September 2022
.......... .
-
1 1. Outreach Events & Sponsorships
Date Time Description Location
September 17 10:00 AM – 3:00
PM
Veggie Fest (Regional Event) - sponsorship & Tabling Discovery Meadow Park, San Jose
September 17 10– 6 PM Kiwanis Club of Los Gatos Art & Wine Festival:

Fiesta de Artes – sponsorship & tabling Los Gatos Civic Center Lawn September 24 10 AM – 4 PM Silicon Valley Green Home Tour – branding sponsorship
8 homes in SVCE territory
September 24 1:00 - 4:00 PM Assemblymember Berman’s Children and Families Health and Wellness Fair – tabling 500 Toft St, Mountain View September 24 10 AM – 6 PM Silicon Valley Fall Festival- sponsorship and tabling Memorial Park, Cupertino September 30 6:00 - 9:00 PM Sierra Club Regional Guardians of Nature – sponsorship
Mitchell Park Community
Center, Palo Alto
Silicon Valley Clean Energy will be connecting with customers at upcoming community and industry events and will be supporting communities through event sponsorship.

Item 2
Attachment 3
ESCR Update, September 2022
rA, s1L1coN VALLEY ~ CLEAN ENERGY
2 Participation Rate Overall Participation Rate
Residential 96.43%

96.44%
Commercial 96.60%

2. Customer Participation
Item 2
Attachment 3
ESCR Update, September 2022
rA, s1L1coN VALLEY ~ CLEAN ENERGY
3 3. Customer Credit Updates
CARE and FERA Rate Relief Bill
• SVCE began crediting customer bills in April, and as of August 29, 2022, has applied over 142,000 bill credits of $12.50, totaling $1.782M. These credits will continue monthly for income-qualified CARE and FERA customers through November 2022.

Item 2
Attachment 3
ESCR Update, September 2022
rA, s1L1coN VALLEY ~ CLEAN ENERGY
4 4. Member Agency Working Group June Update
The recent MAWG meeting was held virtually on August 26, 2022 and was attended by 12 different agencies and organizations with a total of 24 participants.

The following agenda items were presented and discussed:
• Inflation Reduction Act (IRA) Update
• BlocPower & Existing Building Decarb
• External Grant Opportunities & Resources/New SVCE Grants • GridShift: Electric Vehicle App Revamp
• Reach Code Update
• Clean Air Day
Item 2
Attachment 3
ESCR Update, September 2022
rA, s1L1coN VALLEY ~ CLEAN ENERGY
5 5. Media
• San Mateo moving to all-electric future,
San Mateo Daily Journal, 08-29-22
• CAISO’s First Geothermal Plant in 30
Years Comes Online, POWER
Magazine, 08-25-22
• Taking Part in the Fight Against Climate
Change, American Infrastructure, 08-11-
22 Item 2
Attachment 3
ESCR Update, September 2022
=----AMERICAN--=
INFRASTRUCTURE lnfom11111 M11 n1upl Marligemenl Prtftss1ooab By PENINSULA PUBLISHING BUSIN ESS MEDI A FOR U.S. IUILOING PROFESSIONALS San Mateo moving to all-electric
future
Officials to discuss ways to eliminate natural gas in all of homes by 2030
Curtis Driscoll Dairy Journal starr 7 hrs ago II!, o
,jit HOME MUNICIPAL NEWS .., Al WEEKLY FEATURES EVENTS MUNICIPAL MART MAGAZINE v S Taking Part in the Fight Against Climate Change The Smarr City fnfrasrructure Program for Milpitas By Rich Tran
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 2
Attachment 4
Leg/Reg Update, September 2022
Item 2
Attachment 4
Leg/Reg Update, September 2022
Regulatory Update: Legislative Update:

1. Resource Adequacy Reform (RA Reform) 1. Federal Inflation Reduction Act

2. Integrated Resource Planning (IRP) 2. State Budget Update

3. Voluntary Allocation Market Offer (VAMO) 3. Bill Position Matrix

4. Net Energy Metering (NEM 3.0) 4. Legislative Timeline 2 Item 2
Attachment 4
Leg/Reg Update, September 2022
Item 2
Attachment 4
Leg/Reg Update, September 2022
'
I
Proceeding
Resource
Adequacy
Reform
Integrated
Resource Plan
(IRP)
Provider of Last
Resort (POLR)
Purpose
Update resource adequacy rules and accounting
methodology to ensure system reliability. Key
proposals include 24-slice and 2-slice methods.

Ensure long-term system planning is on track to meet
state's climate and reliability goals.

To pro-actively develop rules and regulations for a
POLR should a CCA fail.

Status
CPUC adopted decision supporting 24-slice
proposal on 6/23. Additional workshops to
develop compliance materials and finalize resource
counting will occur over the summer .

The CPUC has released the required materials to
develop internal portfolios. SVCE has begun
developing and modeling scenarios.

Initial workshops and comments have been filed in
the proceeding. Expected next step will be a staff
proposal for Phase 1.

I
4 Item 2
Attachment 4
Leg/Reg Update, September 2022
Proceeding
Net Energy
Metering ("NEM

3.0")
Purpose
Update compensation structure
for rooftop solar owners.

Status
On May 9, the CPUC reopened the NEM Successor Tariff proceeding ("NEM 3.0"), specifically requesting comments on aspects of the original, December 2021 Proposed Decision (PD). The ruling seeks feedback from parties on the PD's proposed grid access charge, calculation of non-bypassable charges to NEM customers, export compensation and specific rules for low-income customers. The ruling makes no changes to the PD and SVCE's position on the NEM

3.0 PD remains unchanged.

In mid-August the CPUC extended the statutory deadline for the proceeding to August 27, 2023. While the CPUC is unlikely to use the full extension, the new PD is unexpected in the imminent future. We will continue to develop ideas for customer program offerings for current and prospective solar customers to promote solar-plus-battery installations in alignment with whole-home electrification.
5 Item 2
Attachment 4
Leg/Reg Update, September 2022
•
•
•
•
Item 2
Attachment 4
Leg/Reg Update, September 2022
Largest single federal investment in clean energy. Carrot approach to decarbonizing the economy.

Clean Energy:

Extends Production Tax Credit and Investment Tax Credit for renewable energy projects. Expands Tax Credits to new
technologies like stand-alone storage and microgrid controllers.

Tax-exempt entities, like CCAs, can access tax credits.

Decarbonization Programs:

Supercharges building and transportation electrification efforts through consumer rebates and tax credits.
7 Item 2
Attachment 4
Leg/Reg Update, September 2022
© Clean Energy and Domestic Production
Stability in tax credits reduces market uncertainty.

Program Amount Notes
Clean Energy Tax Credits $139 billion Extends Production Tax Credits for electricity from renewable resources including solar, wind, and geothermal. Extends and expands Investment Tax Credits for solar, wind to cover storage, biogas, microgrids. Additional tax credits for projects that use prevailing wage, domestic parts/materials, and for those located in brownfield/coal/gas communities. Technology neutral after 2024.

Clean Energy Manufacturing $60 billion Includes $30 billion for manufacturing solar panels, wind turbines, batteries, and critical materials. $10 billion for clean tech manufacturing facilities.

EV Manufacturing Loans $3 billion Loans for advanced technology vehicle manufacturing.

EV Manufacturing Grants $2 billion Grants to covert existing vehicle manufacturing facilities to EV facilities. 8
Item 2
Attachment 4
Leg/Reg Update, September 2022
EV Charging Station Investments in Infrastructure Investment and Jobs Act Program Amount
Clean Vehicles - includes EVs and $12 billion
hydrogen fuel vehicles
Notes
Tax credits/point-of-sale rebates of up to $7,500 for
new vehicles and $4,500 for used vehicles
(depending on domestic battery and critical minerals).
$150k income limit, limit of $80k sale price for vans,
trucks, SUVs, $55k all other vehicles. Commercial
clean vehicle tax credits of $7,500 for light-duty and
$40,000 for heavy-duty.
9 Item 2
Attachment 4
Leg/Reg Update, September 2022
© Building Decarbonization Investments
Package includes significant support for existing building electrification as well as building code development and training support.

Program
Building Decarbonization - High-efficiency Electric Home Rebate Program
HOMES Rebate Program
Amount
$4.275 billion
$4.3 billion
Home Energy Efficiency Contractor $200 million
Training Grants
Zero Building Energy Code
Adoption
$1 billion
Notes
Grants to states: $8,000 heat pump cooling/heating,
$1,750 heat pump water heaters, $840 heat-pump
clothes dryer/electric stoves, $4,000 electric panel
upgrades, $2,500 electrical wiring. Max $14k credit
per homeowner, 150% AMI income limit.

Grants to states: $2,000-$4,000 depending on
energy savings (limit of 30% of project costs). $4,000- $8,000 for low-income (limit of 80% of project costs).

Applies to multifamily.

Grants to states: contractor training for residential
energy efficiency and electrification installation.

Grants to states for local governments to adopt
building codes that meet or exceed 2021
International Conservation Code. 10
Item 2
Attachment 4
Leg/Reg Update, September 2022
Funds to non-profits, local governments, and schools in low-income and disadvantaged communities.

Program Amount
Environmental and Climate Justice $3 billion
Block Grants
Climate Pollution Reduction Grants $5 billion
Air Pollution in Schools $50 million
Notes
Grants to nonprofits that partner with local govt's or
higher ed institutions for zero emission technologies
and infrastructure to address climate resilience and
reduce indoor air pollution. Funds can be used on
outreach/engagement and workforce development.

Funds to low-income and disadvantaged
communities to plan and implement programs,
policies, and projects to reduce GHG pollution.

Grants to monitor and reduce air pollution and GHG
emissions at schools in low-income and
disadvantaged communities. Includes school
environmental quality plans with standards for school
building, design, and mitigation funding for ongoing
air pollution hazards. 11
Item 2
Attachment 4
Leg/Reg Update, September 2022
Funding for fed procurement, environmental justice, and domestic manufacturing.

Program
Federal Clean Technology
Procurement
Green Bank
Defense Production Act
Amount
$9 billion
$27 billion
$500 million
Notes
Includes $3 billion for Postal Service to purchase
ZEVs.

Clean Energy Technology Accelerator to support
deployment of emissions-reduction technology in
disadvantaged communities.

Supports President's Defense Production Act
Executive Order for production of domestic heat
pumps and solar.
12 Item 2
Attachment 4
Leg/Reg Update, September 2022
Methane Emissions Reduction and "all of the above" strategy.

Program
Methane Emissions Reduction
Program
Public Land/Water Renewable
Energy tied to Gas and Oil
Production
Amount
$850 million
N/A
Notes
Fee on excess methane emissions paired with grants
to industry to monitor and reduce methane. Charge
for methane begins at $900 per ton in 2024 and
increased to $1,500 per ton in 2026.

Requires oil and gas lease sales each year before
any utility-scale renewable energy projects (including
offshore wind) on public lands or waters.
13 Item 2
Attachment 4
Leg/Reg Update, September 2022
Distributed $22 billion in climate funding, which includes additional energy/decarb funding Program
Diablo Canyon Nuclear Power
Plant
Equitable Building Decarb
Program
Offshore Wind
Amount
$1.4 billion
$162 million
$45 million
Notes
Loan to PG&E for extending operations at Diablo
Canyon to 2035.

New CEC direct-install program for wiring/panel
upgrades, heat pumps, energy efficiency projects for
mod/low-income. Additional $800 million in future
years. $50 million to TECH program.

For offshore wind infrastructure
14 Item 2
Attachment 4
Leg/Reg Update, September 2022
© Additional State Budget Investments
Funding for EVs and Community Resiliency Centers
Program
Electric Vehicles
Community Resiliency Centers
Amount
$430 million
$110 million
Notes
Includes $20 million for equitable at-home charging
program for renters, increases equity transportation
grants to $381 for Clean Cars 4 All, battery
replacement
Funding for community resiliency centers. Additional
$85 million in future years.
15 Item 2
Attachment 4
Leg/Reg Update, September 2022
© SVCE Legislative Positions Matrix
Bill Summary
AB 1814 Adds CCAs as eligible program
(Grayson) 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 Ensures notification to tenants and
(Becker) property owners for tariff on bill
decarbonization charges.

SB 1100 Establishes a process for removing
(Cortese) individuals who are willfully interrupting
meetings
AB 1944 (Lee) Allows legislative body members to
participate in meetings from private
locations and without publishing private
addresses on meeting notices.

SVCE Position
(Legislative Program
Policy)
Support
(Climate Mitigation/Clean
Energy Funding)
Support
(Climate Mitigation/Clean
Energy Funding)
Support
(Fuel Switching and
Electrification)
Support
(per Board direction)
Support
(per Board direction)
Status
Died
Died
Governor's
Desk
Signed by
Governor
Died, legislative
vehicle now AB
2449 (Rubio)
Impact to
SVCE
16 Item 2
Attachment 4
Leg/Reg Update, September 2022
Bill Summary
AB 2061 (Ting) Requires all entities that receive state or ratepayer funding to submit data on EV
station uptime, or the amount of time an EV
station is operational.

SB 1158 (Becker) Requires load serving entities to report hourly electricity purchases. Requires the
CPUC to assess whether reporting
demonstrates "adequate progress" towards
GHG targets.

SVCE Position (Legislative
Program Policy)
Status
Support (Fuel Switching and Governor's Desk
Electrification)
Support (Climate Mitigation Governor's Desk
and Clean Energy
Technologies)
17 •
•
•
•
•
•
•
•
•
•
•
•
Item 2
Attachment 4
Leg/Reg Update, September 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's deadline to sign bills
18 SVCE Agenda Look Ahead
Sept. 2022 - Jan. 2023
SEPTEMBER 2022 OCTOBER 2022 NOVEMBER 2022 DECEMBER 2022 JANUARY 2023 Board of Directors, September 14: Board of Directors, October 12:

Consent:

Minutes
August 2022 Treasurer Report
Committee Reports
Regular Calendar:

Investment Policy
SVCE Workplan
IRP Approval
Reach Code Update
FutureFit Fundamentals Program Presentation
Board of Directors, November 9:

Consent:

Minutes
September 2022 Treasurer Report
Committee Reports
Regular Calendar:

Reach Code Update
Community Energy Resilience Program
presentation
Board of Directors, December 14:

Consent:

Minutes
October 2022 Treasurer Report
Committee Reports
Regular Calendar:

Rate Change
Reach Code Update
Board of Directors, January 11:

Consent:

Minutes
November 2022 Treasurer Report
Committee Reports
Regular Calendar:

Appointment of Chair and Vice Chair
Appointment of Executive Committee
Reach Code Update
Executive Committee, September 23:

Program Snapshots - FutureFIt
Fundamentals
Executive Committee, October 28, 11am :

Program Snapshots
Request for Recommendation to the SVCE Board
of Directors for approval of tariffed on bill pilot
program
Executive Committee, Date TBD:

Program Snapshots: FutureFit Homes and
Buildings
Executive Committee, Date TBD:

Program Snapshots
Executive Committee, Date TBD:

Program Snapshots
Audit Committee - TBD
Audit Kick-off
Finance & Admin Committee - TBD
Item 2
Attachment 5
Board Action Requested
September 2022 Update
Date Meeting Where Requested Request/Comment Comments Department 6/10/2022 Special Meeting
Info on frequency and voltage changes required for reliability – future deeper dive (Vice Chair Tyson)
Staff will consider this topic for future board
member information sessions General
6/10/2022 Special Meeting
Information request on small modular reactors (SMRs) (Dir.

Chua) Staff is preparing information for Dir. Chua on SMRs General 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 the hybrid
work structure is developed Executive
3/3/2021 Audit Committee
SVCE liability insurance - is it a sufficient amount? (Alt. Dir.

Wei)
Staff is planning an overall assessment and
review of SVCE's insurance portfolio in fall
2022 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, though Staff adheres to
a five-year solicitation timeline in practice Finance & Admin Item 2
Attachment 6

Page 1 of 2 ends

Staff Report – Item 3
Item 3: Update on Strategic Plan and Adopt FY23 SVCE Strategic Focus Areas From: Girish Balachandran, CEO
Prepared by: Andrea Pizano, Board Clerk/Executive Assistant Date: 9/14/2022

RECOMMENDATION
Staff requests that the Board of Directors receive an update on the FY23 Strategic Plan and adopt the five proposed FY23 SVCE Strategic Focus Areas:
24x7 Clean Energy
Customer Base & Electrification
Inflation Reduction Act
Finance
Employee

EXECUTIVE COMMITTEE RECOMMENDATION
The Executive Committee met August 26, 2022 and received a presentation on the proposed FY23 SVCE Strategic Focus Areas. The committee was in consensus to support the focus areas presented for the Board’s consideration.

BACKGROUND
The FY23 Strategic Focus Areas were previously introduced at the May Executive Committee and June Board of Directors meetings, and included in the June Executive Committee and August Board of Directors meetings as part of the FY23 preliminary operating budget. They were most recently presented at the August 26, 2022 Executive Committee meeting.

ANALYSIS & DISCUSSION
Adopting Strategic Focus Areas is useful for the Board of Directors and CEO to establish priorities. Staff is requesting the Board of Directors adopt the following five focus areas (in no particular order):
24x7 Clean Energy: Explore 24x7 clean energy delivery at scale, to improve on the current 100% clean energy goal
Customer Base & Electrification: Grow Customer Base & Offerings, Emphasize Electrification Inflation Reduction Act: Accelerate deployment of currently adopted decarbonization strategies and goals; evaluate and capitalize on the Inflation Reduction Act & California state budget climate funds to further improve programs
Finance: Leverage Balance Sheet for Structured Financing and use financing solutions to increase impact of decarbonization program offerings, especially to lower-income customers Employee: Be the Employer of Choice, and Increase Staffing Adopting these focus areas will prioritize and drive workplan development.

Item 3
/ A"\ SILICON VALLEY
~CLEAN ENERGY
Agenda Item: 3 Agenda Date: 9/14/2022

Page 2 of 2 ends

STRATEGIC PLAN
The focus areas support the overall SVCE Strategic Plan.

FISCAL IMPACT
N/A

ALTERNATIVE
Staff is open to suggestions from the Board of Directors on amendments to the proposed focus areas.

ATTACHMENTS

1. This presentation is posted to the SVCE website.

Item 3

Page 1 of 6 ends

Staff Report – Item 4
Item 4: Adopt the FY 2022-23 Recommended Operating Budget and Updated Reserves Policy
From: Girish Balachandran, CEO
Prepared by: Amrit Singh, CFO and Director of Administrative Services Kevin Armstrong, Deputy Director of Administrative Services Date: 9/14/2022

RECOMMENDATION
Staff recommends that the Board of Directors approve the fiscal year (FY) 2022-23 1 Recommended Operating
Budget that projects depositing $115.4 million into the reserves and the updated Reserves Policy that revises the reserve target thresholds.

COMMITTEE & BOARD REVIEWS
On June 24, 2022, staff presented the methodology and framework for developing the proposed budget to the Executive Committee (EC). The EC agreed with the methodology and made a few suggestions, including ensuring sufficient staffing contingency and further clarifying some of the proposals in the presentation.

After incorporating EC’s comments and developing the budget per the proposed methodology, on August 1, 2022, staff presented the Proposed Operating Budget and updated Financial Reserves Policy to the Finance and Administration Committee. The Committee requested additional clarifications relating to staffing levels over time, peer CCA staffing levels, and budget changes year over year, which are included in the accompanying presentation, and unanimously recommended that the Board adopt the proposed budget and update the reserves policy.

At the August 10th, 2022, Board meeting, staff presented the Proposed FY 2022-23 budget and the updated Reserves policy. The Board discussed the proposed budget, supported the budget as shown, and did not propose any changes.

ANALYSIS & DISCUSSION
The FY 2022-23 Proposed Operating Budget is balanced and presents Silicon Valley Clean Energy (SVCE) in stable financial condition. The projected balance available for reserves of $115.4 million is an increase of $53.8 million above the $61.6 million presented in the FY 2021-22 Mid-Year Budget.

Energy Revenues
The Proposed budget shows an increase in revenues of $98.4 million compared to the FY 2021-22 adjusted mid-year budget. The most significant contributor to this revenue increase is the favorable SVCE margins based on a reduced PCIA rate. SVCE margins relative to the current rates that went into effect in March of 2022, with a slight adjustment in June 2022, are about 10 percent higher. However, compared to the average margin over the FY 2021-22 period, the current margin is about 26 percent higher. 1 The fiscal year 2022-23 starts on October 1, 2022 and ends on September 30, 2023.

Item 4
/ A"\ SILICON VALLEY
~CLEAN ENERGY
Agenda Item: 4 Agenda Date: 9/14/2022

Page 2 of 6 ends

The proposed budget anticipates no PCIA charge (currently at ~1.88 cents/kWh) and a ~12 percent decrease in PG&E’s generation rates (from ~14.3 cents/kWh to ~12.79 cents/kWh) starting in January 2023. Both estimates are based on CalCCA’s NewGen Model using SVCE’s updated market prices and an adjustment for modeling error.

PG&E’s forecast of 2023 rates in the ERRA filing made in May 2022 shows a lower PG&E Generation Rate (~12.62 cents/kWh) and a charge of about 1.43 cents/kWh for PCIA, implying a reduction in SVCE margin of about 10 percent. PG&E’s filing, however, is based on results using market prices in late March 2022, and since then, market prices have increased ~20 percent2. Based on the ERRA filing schedule, PG&E will update its rate forecast in early fall, and the CPUC is expected to approve new rates in late December. Based on current market data and using the NewGen Model, PG&E’s update in the fall should show a higher PG&E generation rate and a negative PCIA charge.

To test the NewGen model’s accuracy, staff, working with the NewGen consultant, calibrated the model to PG&E’s forecast using the same period market data PG&E used in developing its 2023 rate forecast. The calibration shows that the model results in a ~10 percent higher SVCE margin. Using the methodology discussed with the EC3, to account for potential modeling error, staff reduced the resulting margins from the current model using the latest market prices by 10 percent. The results show PCIA to be slightly negative.

Because PG&E tariffs do not allow for negative rates, PCIA is set at zero. If PCIA does turn negative, PG&E will account for the negative portion in the following year’s PCIA rates.

Using the NewGen model with the latest prices and an adjustment for modeling error likely better aligns revenues closer to the rates PG&E will update in October. It also better aligns revenues with power supply costs because both estimates are made using the same market data. Nevertheless, the results are based on a forecast, and the actual rates won’t be known until the CPUC approval, expected in late December. Between now and when the rates are finalized, market prices will change, creating less or more favorable results. Staff recommends that SVCE change its rates when the CPUC makes the new PCIA and PG&E generation rates effective. At that time, the Board can revisit the customer discount rate and decide based on the actual rates.

To set the Budget, the effective discount is set at 3% starting January 2023. The current 1 percent discount remains until the end of December 2022. The 3 percent effective discount rate is composed of 2 percent relative to comparable PG&E generation rates for all customers and an additional 1 percent converted to dollar bill credits to the CARE & FERA customers, which amounts to $3.6 million or about $10.50 per month bill credit for 12 months. The budget shows the bill credit as a separate cost item.

The proposed budget continues to reduce revenues to account for potential write-offs that SVCE could incur because of the large accounts receivable balances resulting from our customers facing economic hardships.

SVCE is budgeting revenues to include a 0.9% write-off rate, roughly $4.4 million. This is a conservative estimate, as statewide efforts are underway to potentially cover a large portion of those losses.

Power Supply Expenses
Due to increasingly volatile market prices, power supply expenses are expected to increase to $325.3 million.

In addition, the costs for non-RPS, carbon-free attributes are expected to remain high due to the ongoing drought in the western US and the resultant low hydropower production. SVCE expects to receive PG&E allocations in 2022 to offset some of those cost increases, but the volumes are unknown at this time.

Changing resource adequacy (RA) requirements and high RA prices also contribute to higher costs relative to the last fiscal year. While long-term PPAs continuing to come online puts downward pressure on SVCE’s power 2 As of the budget analysis preparation date of Jul 15th, 2022. 3 Using the same methodology resulted in a ~20% reduction in SVCE margins when staff presented the results to the EC. Since the EC presentation, NewGen released a new model (version 3.1 versus 2.5 used for the EC presentation).

Item 4
Agenda Item: 4 Agenda Date: 9/14/2022

Page 3 of 6 ends

supply costs, potential delays in their operational starts and negotiations subject SVCE to additional energy, RPS, and RA volumes at currently high market prices.

While the commercial load is yet to recover to pre-Covid levels and the Covid-related increases in residential load are starting to taper off, load relative to the Mid-year budget forecast, including the growth from new load moving into the SVCE portfolio, is higher and contributes to the increase in Power Supply cost.

Updated Reserves Policy
At the June 8th, 2022, Board of Directors meeting, staff presented the results of the stress test analyses and emphasized the need to hold sufficient reserves to ensure SVCE can withstand risks such as those modeled in the analyses. The most consequential stress test was scenario 2, which modeled a collapse in energy prices that substantially reduced revenues along with a substantial increase in the financial posting requirements to the Provider of Last Resort (PG&E). Staff has since updated the stress test scenario 2 analyses with market and portfolio data consistent with those used to develop the recommended budget and computed the results on a fiscal year instead of the calendar year view presented in the initial analyses.

Staff proposes that the reserves targets in the Reserves Policy, as redlined in the attachment, be updated such that SVCE can maintain a minimum of 120 Days of Cash on Hand (DCOH) for the next two fiscal years under Stress Test Scenario 2 conditions. Staff also proposes resetting the upper reserves target so that if stress test 2 occurs, reserves over the next five fiscal years will not fall below 90 DCOH.

As presented in the June Stress Test report and presentation, the upcoming fiscal year margins are not guaranteed given the true-up in 2024 for PCIA and PG&E generation rates. If the adverse-modeled risk conditions materialize, the updated reserves policy targets maintaining at least 120 DCOH, which will be needed to reshape strategy and secure additional liquidity. Staff’s proposal to increase the upper reserves target is intended to take advantage of good margin years to manage risks over the five years.

The table below summarizes the change in the reserve targets:

Item 4
Historica l Baseline & 2023 Load
4,100,000
3,900,000
3,700,000
~ 3,500,000
.c
$ 3,300,000
2 3,100,000
2,900,000
2,700,000
2,500,000
2019A 2020A 2021 A 2022 (Budget) 2023 Forecast
- Load - Actuals Average
Reserve Targets (DCOH) G'iiN,11 New Targets
Minimum
Goal (Target)
Maximum (Upper Target)
120
230
320
120
285
490
Agenda Item: 4 Agenda Date: 9/14/2022

Page 4 of 6 ends

If stress test 2 were to occur, the draw on reserves in the Fiscal Year 2023-24 would be about $186 million.

To end the Fiscal Year 2023-24 with 120 DCOH, SVCE needs to end FY 2022-23 with about $288 million in reserves, equivalent to holding 285 DCOH based on a daily burn rate slightly higher than a million dollars.

Similarly, the new upper reserves target was computed to ensure that each of the latter three years of the 5- year forecast stays above 90 DCOH.

Operating Expenses
Operating expenses are expected to grow in the recommended budget, increasing by $6.6 million from the FY 2021-22 adjusted midyear budget. The increase in projected operating expenses is primarily comprised of costs associated with increased staffing and professional services. In addition, the operating budget includes an overall 5% contingency, which amounts to $1.41 million.

Overall personnel expenses are expected to increase by $3.5 million, of which $1.8 million is associated with the request for ten new positions spread across the organization. These new positions will focus on program deployment, power market data analysis, commercial and industrial services, and risk control. In addition to these new positions, SVCE continues to work with specialized consultants who provide critical skills to bridge gaps between full-time staff. Of the increase in personnel costs, $370 thousand arise from proposed benefit improvements intended to bring SVCE up to a competitive position with its peer CCAs and retain staff.

Proposed improvements include increases to the monthly medical premium and cash-in-lieu amounts, an increase to the monthly technology allowance, the creation of a paid parental leave benefit for new parents, and an amount for staff to participate in programs alongside our customers, but without competing for existing program funds.

The salary portion of the staffing budget includes a 5.3% cost-of-living adjustment to salaries, based on a trailing six-month average for the Bay Area CPI, which adds $350 thousand in additional cost. SVCE is budgeting for a similar 5% in merit increases, to be determined by management during the upcoming annual review process, contributing another $330 thousand. SVCE continues to work to fill positions and anticipates fully staffing by the end of the calendar year but continues utilizing a 5% long-term vacancy rate in the personnel budget. Salaries for all existing job descriptions are included in a table in attachment 4.

The ten new positions requested through this proposed budget reflect the increasing needs of a mature organization. The latest positions include three new program staff, focusing on community programs, policy development, and overall program portfolio effectiveness. On the Power Resources team, an additional regulatory analyst is proposed to deal with the growing volume of work generated by the CAISO and CEC, along with two market data analysts to work on PPA data and load forecasting. The Energy Services and Community Relations team proposes three new positions: two Energy Services Specialists to support commercial and industrial offerings and an outreach specialist to coordinate with member agencies and community groups. Finally, the Finance and Administration team proposes a Risk Control Analyst to support middle office functions and Business Process Optimization (BPO) technology solutions implementation.

Professional services costs are proposed to increase by $2.35 million, largely accounted for by a $1.5 million request for potential litigation costs, along with a $375 thousand increase in the Phase 1 implementation costs for the BPO project, a $150,000 bid for funds to develop and launch a structured financing program, and a $125 thousand increase in recruiting costs to account for the continued potential for a competitive hiring market.

The final notable increase in operating expenses is the $600,000 increase in general and administrative costs, primarily due to increased hardware, travel, training, and conference fees anticipated for a larger staff, and a return to pre-COVID levels of outside engagement. SVCE is also budgeting additional funds for insurance costs, given significant increases in cybersecurity insurance and directors’ and officers’ coverage over the past year. Administrative staff is planning to conduct a comprehensive insurance review this fiscal year to determine the appropriate levels of coverage and whether any savings can be found through bundling our Item 4
Agenda Item: 4 Agenda Date: 9/14/2022

Page 5 of 6 ends

various coverages. SVCE continues to prioritize cybersecurity efforts and maintains a budget of $250 thousand for system improvements and hardening. Staff intends to work with a virtual Chief Information Security Officer (vCISO) this fall on an updated cybersecurity assessment, which may identify additional funding needed at mid-year.

Since the August 10th presentation to the Board, staff has made one adjustment to the operating expense budget. Staff has increased the budgeted contribution amount for CA Community Power (CC Power) by $90,000 up to $150,000 due to increases in member contributions approved at the August CC Power Board meeting, expected increase in operation cost due to managing the four long-term contracts entered into by CC Power over the last 12 months, along with a projected expansion of the General Manager role from a contract employee hired to work 15 hours/week, to a full-time General Manager with one high-level support staff, to pursue potential Inflation Reduction Act opportunities. We expect the CC Power budget to come in lower than $150,000 but have targeted this amount to provide for maximum flexibility.

Programs Budget
SVCE will continue to incorporate projected programs spending over the 5-year forecast period into the reserve balance projections. This includes remaining CRCR funds (expected to be drawn by the end of FY23- 24) and the double-down program allocation from FY21-22 (expected to be drawn down by FY24-25). For this coming fiscal year, programs spending is projected to be $15 million, with an additional $3.2 million in CRCR spending. In addition to these previously allocated funds, staff is including $1.9 million from the PG&E nuclear allocation, representing the portfolio’s savings from accepting the allocation. Options for these funds were presented to the Board of Directors in June 2022.

Non-Operating Revenues
Non-operating revenues are projected to increase by about $290,000. This increase reflects the increase in interest earned on the growing reserve balance.

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 feedback and suggestions from the Board. At a strategic level, the Board can change the discount to PG&E, reduce the carbon-free percent of power supply, reduce the renewable percent of the power supply, and cut the programs expenditure.

Staff does not recommend any specific reductions given a sufficient projected reserve balance that maintains SVCE’s stable financial condition. The Board can revisit the customer discount rate when actual PCIA and PG&E generation rates are known with more certainty.

Item 4
Organization
CA Community Power (CC Power)
Previous Amount
($000s)
60 Adjusted Amount
($000s)
150
Agenda Item: 4 Agenda Date: 9/14/2022

Page 6 of 6 ends

FISCAL IMPACT
The FY 2022-23 Proposed Operating Budget includes total revenues of $483.9 million and total expenses, non-operating revenues, and transfers of $368.5 million, resulting in a surplus/contribution to reserves of $115.4 million.

ATTACHMENTS

1. FY 2022-23 Recommended Operating Budget

2. Resolution 2022-21, Adopting the FY 2022-23 Operating Budget

3. Updated Financial Reserves Policy

4. FY 2022-23 Salary Chart
Item 4

SILICON VALLEY CLEAN ENERGY
FY 2022-23 OPERATING BUDGET
($ in thousands)
FY 2021-22 FY 2022-23
DESCRIPTION BUDGET BUDGET $ %

ENERGY REVENUES
Energy Sales 384,498 482,930 98,432 25.6%
Green Prime 1,005 931 (74) -7.4%
TOTAL ENERGY REVENUES 385,502 483,860 98,358 25.5%

ENERGY EXPENSES
Power Supply 274,979 325,296 50,317 18.3%
OPERATING MARGIN 110,523 158,564 48,041 43.5%

OPERATING EXPENSES
Data Management 3,249 3,413 163 5.0%
PG&E Fees 1,450 1,470 20 1.4%
Salaries and Retirement 8,535 12,024 3,490 40.9%
Professional Services 5,669 8,016 2,347 41.4%
Marketing & Promotions 908 862 (46) -5.1%
Notifications 131 131 0 0.0%
Lease 525 525 0 0.0%
General & Administrative 1,225 1,857 633 51.7%
TOTAL OPERATING EXPENSES 21,693 28,299 6,606 30.5%
OPERATING INCOME (LOSS) 88,831 130,265 41,435 46.6%

NON-OPERATING REVENUES
Other Income 50 50 0 0.0%
Interest Income 300 592 292 97.2%
Grant Income 0 0 0 -
TOTAL NON-OPERATING REVENUES 350 642 292 83.3%

NON-OPERATING EXPENSES
Financing 40 3 (37) -92.5%
Interest 0 0 0 -
TOTAL NON-OPERATING EXPENSES 40 3 (37) -92.5%

TOTAL NON-OPERATING INCOME
(EXPENSES) 310 639 329 106.0%
CHANGE IN NET POSITION 89,141 130,904 41,763 46.9%

CAPITAL EXPENDITURES, INTERFUND

TRANSFERS & OTHER
Capital Outlay 150 200 50 33.3%
Transfer to CRCR Fund 0 0 0 -
Transfer to Program Fund 6,781 9,765 2,984 44.0%
Nuclear Allocation 600 1,900 1,300 216.7%
Add'l Programs Allocation 17,000 0 (17,000) -100.0%
Add'l Customer Bill Relief 3,000 3,600 600 20.0%
Other 0 0 0 -

TOTAL CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER $27,531 $15,465 ($12,066) -43.8%
BALANCE AVAILABLE FOR RESERVES $61,609 $115,439 $53,830 87.4% Year over Year
Change
Item 4
Attachment 1
1 RESOLUTION 2022-21

SILICON VALLEY CLEAN ENERGY AUTHORITY RESOLUTION
NO. 2022-21

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SILICON VALLEY CLEAN ENERGY AUTHORITY TO APPROVE THE FISCAL YEAR 2022-2023

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 1 st
through September 30th;
WHEREAS, draft versions of the Authority’s budget for fiscal year 2022-2023 were presented to the Finance & Administration Committee on August 1, 2022, and the Board of Directors on August 10, 2022 (collectively, the “Prior Presentations”); WHEREAS, staff has incorporated feedback from the Prior Presentations and has prepared a recommended budget, set forth in Exhibit A (the “Recommended 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 Recommended Budget, as set forth in Exhibit A, as the Authority’s fiscal year 2022-2023 budget.

PASSED AND ADOPTED this 14th day of September, 2022, by the following vote:

JURISDICTION NAME AYE NO ABSTAIN ABSENT
City of Campbell Director Gibbons
City of Cupertino Director Willey
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
Item 4
Attachment 2
2 RESOLUTION 2022-21
City of Morgan Hill Director Martinez Beltran
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 2
FP9
Category: FINANCE
Page | 1 Adopted: 3/08/2017
Proposed Amendment:
99/814/20212022

FINANCIAL RESERVES
POLICY
I. PURPOSE
This Reserve Policy outlines the appropriate types and levels (minimum, goal, and maximum) of financial reserves as prescribed in the following policy. The primary reason for a reserve policy is to be prepared for contingencies, but other reasons also exist. Seven important purposes of a reserve policy are as follow:

1. Plan for contingencies. To maintain sufficient reserves to minimize rate increase due to market volatility(power supply shocks or maintain rate competitiveness), weather impacts on demands, economic downturns, emergencies
(such as natural disasters), and regulatory changes.

2. Maintain good standing with rating agencies. By
maintaining sufficient reserves, SVCE can preserve good credit ratings, allowing it to secure power at lower costs, that is, without posting credit enhancements, in the energy markets.

3. Avoid interest expense. To avoid interest expense to cover short-term cash shortfalls by having sufficient
reserves to use for this purpose, rather than debt.

4. Ensure cash availability when revenue is unavailable.

To bridge times of the year that normally see temporary low levels of cash.

5. Plan for anticipated future rate increases by gradually raising those rates, using reserves to cushion the full impact on customers over an extended time period. For
example, if it is expected that rates are highly likely to increase in 3 to 5 years, higher reserves on hand can cushion those rate increases over a more gradual timeframe by
drawing down on the accumulated funds that may be in
excess of the reserves’ goal.

6. Manage the risks identified in the Energy Risk
Management Policy, which are:

Item 4
Attachment 3
r~'\ SILICON VALLEY
\:!,/CLEAN ENERGY
FP9
Category: FINANCE
Page | 2 Adopted: 3/08/2017
Proposed Amendment:
99/814/20212022
• Market price risk,
• Net revenue risk,
• Counterparty credit and performance risk,
• Load and generation volumetric risk,
• Operational risk,
• Liquidity risk, and
• Regulatory/legislative risk.

7. Establish clear expectations between the Board of
Directors and staff. A formal reserve policy creates a
shared understanding of the proper level and use of reserves.

II. POLICY
Reserve Levels Established
Financial reserves shall be set aside as follows:

The Reserve targets cover the operations of SVCE over a number of days in the event of emergencies or other significant unforeseen events. Three levels are defined, with the first being baseline. Given the purposes stated above, the Reserve shall be maintained at no less than the minimum described in (a) below. The reserve level described in (b) is recommended as the goal. The Maximum reserve level described in (c) would provide solid reserves for significant fluctuations in revenue or unforeseen circumstances. The Board shall review its reserve levels annually in context of SVCE’s overall financial condition of the agency, as well as due to changes to the industry and/or risk factors as described in periodic review of targets below.
(a) Minimum Operating Reserve (baseline) shall be the minimum maintained to cover 120 days of operations of the annual operating budget;
(b) An Operating Reserve goal of covering 230285 days of operations of the annual operating budget;
(c) Maximum Operating Reserve to cover 320490 days of
operations of the annual operating budget.

Item 4
Attachment 3
r~'\ SILICON VALLEY
\:!,/CLEAN ENERGY
FP9
Category: FINANCE
Page | 3 Adopted: 3/08/2017
Proposed Amendment:
99/814/20212022
Conditions for Use of Reserves
For purposes of this policy, use of reserves is defined as a projected or estimated1reduction in reserves by fiscal year-end. A temporary reduction in cash consistent with the expected peaks or dips in revenues and expenditures are normal cyclical occurrences to be expected during the fiscal year, and do not constitute a use of reserves.

The reserves may be drawn down upon by the CEO during the year, up to the lesser of 10% of the year’s budgeted cost of power supply, or $30 million, to:

1. Cover increases in power supply expenses due to spikes in costs and/or due to higher customer demand;

2. Provide necessary funds to make up for unanticipated revenue shortfalls;

3. Meet any margin or collateral posting requirements under energy supply contracts; and,

4. Provide resources to meet emergency expenditures.

If further use of reserves are needed to manage the operations of the organization, or if the use of reserves would bring the balance below the Minimum Operating Reserve baseline, the CEO must present recommendations to the Board and the Board must authorize any such use.

Replenishment of Reserves
Should SVCE drawdown reserves below the Minimum Operating Reserve level, SVCE will implement plans to return reserves to their minimum targets within two (2) fiscal years. Such plans will be provided in subsequent budget and rate discussions with the Board. 1 It is not practical to wait the formal fiscal year end closing of the accounting records to determine if the reserves have been “used”. Therefore, it is appropriate for staff to estimate reserve levels, with the important amount being what is estimated for fiscal year end.

Item 4
Attachment 3
r~'\ SILICON VALLEY
\:!,/CLEAN ENERGY
FP9
Category: FINANCE
Page | 4 Adopted: 3/08/2017
Proposed Amendment:
99/814/20212022
Excess Reserves
If reserve funds are projected to exceed the maximum level, the CEO shall present options for consideration by the Board of Directors for proper disposition of those reserves during the next budget cycle.

Reserves between Minimum and Maximum
To the extent that reserves are above target and below the maximum, no other action by SVCE would be required.

Periodic Review of Reserve Goals
Reserve goals shall be periodically reviewed for consistency with industry standards. If significant risk factors are eliminated or significant new risks emerge as a result of changes in the industry, legislation, or economic conditions, the basis of the reserve policy shall be reviewed, and the funding level shall be adjusted accordingly.

Unless the Reserves are approaching minimum levels, formal Reserve funding discussions with the Board may await the next budget process.

Reporting
Reserve levels will be monitored during the fiscal year and reported in the quarterly financial reports. Reserve target levels (minimum and maximum) will be analyzed annually, and over/under reserve determination shall be made in conjunction with year-end financial results. These results will be reported to the Board of Directors as part of the year-end financial report presentation.

Item 4
Attachment 3
r~'\ SILICON VALLEY
\:!,/CLEAN ENERGY
-1-
FY22-23 Salary Chart
Title
Minimum
Salary
Maximum
Salary
(Annual $) (Annual $)
Administrative Analyst 92,320 158,130
Administrative Assistant 61,546 97,682
Administrative Services Manager 133,350 209,549
Associate Data Analyst 91,159 135,121
Associate Legislative Analyst 79,497 124,924
Associate Manager of Decarbonization and
Grid Innovation Programs 122,330 174,687
Associate Power Analyst 86,818 128,687
Associate Power Resources Planner 121,933 187,917
Associate Program Manager 76,932 120,894
Board Clerk/Executive Assistant 112,835 182,630
CFO & Director of Finance and
Administration 164,123 286,277
Communications Manager 123,092 193,430
Communications Specialist 66,675 108,966
COO & Director of Power Resources 194,896 306,265
Data Analyst 106,547 159,299
Data Engineer 116,127 166,368
Data Scientist 121,933 174,687
Deputy Director of Administrative Services 140,018 220,027 Deputy Director of Decarbonization Policy
and Programs 123,092 209,549
Director of Decarbonization Policy and
Programs 146,088 257,907
Director of Energy Services and
Community Relations 164,123 257,907
Director of Regulatory and Legislative
Policy 164,123 257,907
Energy Services Lead 123,092 182,630
Energy Services Manager 123,092 209,549
Energy Services Specialist 76,932 120,894
Financial Analyst 92,320 145,072
Human Resources Generalist 92,320 158,130
Management Analyst 112,835 177,311
Item 4
Attachment 4
Manager of Decarbonization Policy and
Programs 133,350 209,549
Marketing Specialist 66,675 108,966
Outreach Specialist 66,675 108,966
Policy Analyst 92,320 145,072
Power Analyst (Data-Markets / Load
Forecasting) 101,473 151,713
Power Contracts & Settlements Manager 164,124 225,214
Power Resources Manager 153,866 241,788
Power Resources Planner 133,350 209,549
Power Settlements and Compliance
Analyst 112,835 177,311
Principal Data Engineer 133,350 209,549
Principal Data Scientist 133,350 209,549
Principal Policy Analyst 133,350 209,549
Principal Power Analyst 164,136 225,214
Principal Program Manager 133,350 209,549
Program Manager 92,320 145,072
Programs Implementation Manager 92,320 145,072
Programs Specialist 76,932 120,894
Rates Manager 133,350 209,549
Regulatory & Compliance Manager 133,350 209,549
Regulatory Analyst 107,706 169,252
Risk Control Analyst 121,933 174,687
Senior Communications Specialist 80,434 122,196
Senior Data Analyst 116,127 166,368
Senior Data Engineer 135,163 187,917
Senior Data Scientist 135,163 187,917
Senior Energy Services Specialist 92,320 145,072
Senior Financial Analyst 121,933 174,687
Senior Government Affairs Manager 164,124 225,214
Senior Management Analyst 112,835 177,311
Senior Manager of Decarbonization Policy
and Programs 164,124 225,214
Senior Manager of Energy Policy and
Regulatory Analysis 164,123 257,907
Senior Manager of Power Operations 164,124 225,214
Senior Manager of Power Resources 153,866 241,788
Senior Marketing Specialist 80,434 122,196
Senior Policy Analyst 107,705 169,251
Senior Power Analyst 121,933 174,687
Item 4
Attachment 4
Senior Power Resources Planner 164,124 225,214
Senior Program Manager 121,933 174,687
Senior Programs Specialist 92,320 145,072
Senior Public Sector Services Manager 164,124 225,214
Senior Quantitative Analyst 121,933 174,687
Senior Rates Analyst 121,465 183,011
Senior Regulatory Analyst 107,706 169,252
Senior Risk Manager 164,124 225,214
Technology Services Manager 133,350 209,549
Wholesale Energy Markets Manager 164,136 225,214
Item 4
Attachment 4

Page 1 of 3 ends

Staff Report – Item 5
Item 5: Authorize the Chief Executive Officer to Execute Necessary Agreements for a Resource Adequacy Resource from AES Clean Energy Development, LLC From: Girish Balachandran, CEO
Prepared by: Monica Padilla, COO and Director of Power Resources Charles Grinstead, Sr. Manager of Power Resources
Date: 09/14/2022

RECOMMENDATION
Staff recommends that the Silicon Valley Clean Energy Authority (SVCE) Board authorize the Chief Executive Officer (CEO) to execute the attached Long Form Resource Adequacy Agreement with AES Clean Energy Development, LLC (“Baldy Mesa Solar RA Agreement”) in substantial form and any necessary ancillary agreements and documents as follows:
• 10-Year term RA Agreement with expected delivery from June 1, 2023 through May 31, 2033; • 75 MWs megawatts (MW) of lithium-ion battery incremental capacity; • The total contract amount not-to-exceed $81,477,000.

Execution of the Baldy Mesa Solar RA Agreement is necessary to meet a portion of SVCE’s procurement mandates under California’s Mid-Term Reliability Procurement Order (“MTR Order”).

BACKGROUND
Through the 2020 Integrated Resource Planning (IRP) proceeding, the California Public Utilities Commission (CPUC) had identified the need for additional clean energy resources and capacity including firm and/or baseload clean resources, and storage resources, 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 that are scheduled to be shut down, and the Diablo Canyon Nuclear Power Plant (DCNPP) slated to retire between in 2024 and 2025.

Subsequently, in June 2021, as part of the 2020 IRP the CPUC issued through a decision order (D.21-06-035) the 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. SVCE’s share of the MTR Order is 237 MW which is determined based on SVCE’s load ratio to the CPUC’s jurisdictional load. The MTR Order includes a requirement to procure a portion of incremental capacity through “generic” clean resources which may include capacity from standalone or paired storage capacity, such as Baldy Mesa. The MTR Order also requires a minimum ten-year term for compliance.

On January 5th, 2022, Silicon Valley Clean Energy, Sonoma Clean Power Authority, and Central Coast Community Energy, or “The Joint CCAs”, issued the MTR Procurement Joint CCA RFO for Incremental Net Qualifying Capacity to meet respective requirements under the order, in addition to meeting Renewable Portfolio Standard “RPS” and greenhouse gas emission reductions goals.

The Joint CCAs received bids from 18 bidders and 39 projects located inside and outside California. Many of the projects were a combination of solar plus storage and standalone storage resources. Although many Item 5
/ A"\ SILICON VALLEY
~CLEAN ENERGY
Agenda Item: 5 Agenda Date: 9/14/2022

Page 2 of 3 ends

projects were bid into the RFO, only a few were selected to move forward for further negotiations, of which Baldy Mesa Solar was selected. Additionally, through the RFO process many of the offers selected were either withdrawn or repriced by the seller. Most sellers cited increases in the cost of solar photovoltaic panels and/or lithium-ion batteries and/or competing interest for their resources.

On September 1, 2022, California Governor Newsom signed into law Senate Bill 846 providing for an extension of DCNPP through 2030. The justification for the extension was due to supply chain and development in issues for new clean resources. The MTR Order was maintained at 11.5 GW with the same on-line dates, however.

ANALYSIS & DISCUSSION
The Baldy Mesa Solar project proposed for board approval will continue to bridge the gap towards SVCE meeting CPUC MTR. The recommended project is located inside the California Independent System Operator (CAISO) balancing authority, was approved for full capacity deliverability status, and therefore count towards SVCE’s MTR obligations.

Following is a summary of the Baldy Mesa Solar project recommended for approval.

1. Baldy Mesa Solar
Located in San Bernardino County, the project participants will receive incremental capacity attributes from a 4-hour 75 MW/300 MWh collocated lithium-ion battery. The battery will be charged from the on-site solar project for a duration of up to five years, per the investment tax credit program for paired solar and storage resources. AES Clean Energy Development, LLC will own and operate the facility in partnership with their parent company, AES Corporation, a Fortune 500 global energy company, focused on clean energy development in North America.

Project Overview
Project Name Baldy Mesa Solar
Technology Co-located Solar and Storage
Portfolio Capacity & Expected Annual
Energy
75 MWs of Lithium-Ion Storage
SVCE’s expected share: 75 MW
Expected Commercial Operation Date &
Term
June 1, 2023, 10 years
Developer AES Clean Energy Development, LLC.

Location San Bernardino County, California
Price Fixed-price $/kW-Month for capacity delivered with no escalator
SVCE Participation
The Baldy Mesa RA Agreement is ten-years with an expected delivery from June 1, 2023 through May 31, 2033. Currently, SVCE’s expected share is 75 megawatts (MW) of lithium-ion battery incremental capacity.

The contract acquires the incremental resource adequacy benefits only meant to count towards the MTR requirements and towards SVCE’s monthly RA requirements. The contract does not provide energy benefits, tolling capacity off the battery or energy to meet SVCE’s RPS or clean energy goals.

MTR Order and Compliance
The Baldy Mesa Solar RA project meets the conditions established in the MTR Order for resources that must be able to deliver incremental capacity, has a minimum ten-year contract term, start date before mid-2026 and can meet resource adequacy requirements. The Baldy Mesa Solar project provides 75 MWs of nameplate, however once adjusted for effective load carrying capacity (ELCC) the capacity contribution decreases to Item 5
Agenda Item: 5 Agenda Date: 9/14/2022

Page 3 of 3 ends

69.25 MWs of Net Qualifying Capacity (NQC). This capacity will meet the 2024 requirement which requires projects be on-line no later than June 30, 2024 and allow for bridge capacity if necessary.

SVCE’s overall MTR Order obligation is 237 MW of net qualifying capacity (NQC) which is nameplate capacity adjusted by the technologies effective load carrying capacity. For example, SVCE’s share of Baldy Mesa Solar RA Agreement is 75 MW of nameplate capacity but only 69.75 MW of NQC. MTR Order obligations vary year to year and have specific technology requirements in some years. Execution of the Baldy Mesa Solar RA Agreement will partially meet SVCE’s MTR Order obligations. Table 1 is a summary of SVCE’s MTR Order procurement efforts including Baldy Mesa Solar RA.

Table 1: SVCE MTR Order and Compliance
Total MTR Requirement
MTR Tranche
2024
Obligation
SVCE’s
Procurement Compliant

1. Generic by June 2024 124
Proposed Baldy
Mesa Solar RA

69.75 MW NQC
No

54.25 MW Deficit

2. Net Zero Resources – DCPP
Replacement by June 2025 52
Existing
purchases 34.27
MW
No

17.7 MW Deficit

3. Long Duration Storage by
June 2026 20.5
Existing
purchases 22.6
MW
Yes
2 MW Surplus

4. Firm Clean Resources
(geothermal) by June 2026 20.5
Existing
Purchases 25.1
MW
Yes

4.6 MW Surplus

STRATEGIC PLAN
Execution of the MTR project agreement supports the goals of the Board adopted Strategic Plan including:
• 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 choose not to abide by the MTR Order. Doing so 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 Baldy Mesa Solar RA Agreement will result in cost to SVCE starting in Fiscal Year 2023-24, which will be included in the budget at that time. Staff’s spending authority over the life of the agreement shall not exceed $81,477,000.

ATTACHMENTS

1. SVCE/AES Clean Energy Development, LLC RA Agreement (Redacted version) Item 5
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
A. Parties

RESOURCE ADEQUACY AGREEMENT

COVERSHEET
Seller: Baldy Mesa Solar, LLC, a Delaware limited liability company Buyer: Silicon Valley Clean Energy, a California joint powers authoiity B. Description of Unit
A grid-connected 75 MW/300 MWh batte1y energy storage unit, located in San Bernadino County, in the State of California, as flllt her desc1ibed in Exhibit D.

C. Product
Buyer's Capacity Share of all Capacity Attributes available from the Unit.

D. Delivery Term
The Delive1y Te1m is ten (10) Contract Years.

E. Guaranteed Capacity
The Guaranteed Capacity of the Unit shall be: 75 MW.

Buyer's Capacity Share shall be one hundred percent (100%) of the Guaranteed Capacity.

F. Contract Price
The Contract Plice shall be-per kW-month.

G. Seller's Security Amounts
Development Security:

Perfo1mance Security:
x Guaranteed Capacity x Buyer's Capacity Share.
x Guaranteed Capacity x Buyer's Capacity Share.

H. Milestones
Milestone
Site Control obtained
Documentation of Conditional Use Pe1mit if required:
[ ] CEQA, [ ] Cat Ex, [ ]Neg Dec, [X] Mitigated Neg Dec, [] EIR
Seller's receipt of Phase I and Phase II Interconnection study results for Seller's Interconnection Facilities
Date for Completion
-
-

EXECUTION VERSION
ii
Milestone Date for Completion
Interconnection Agreement executed
Major equipment procured
Federal and State discretionary permits obtained
Guaranteed Construction Start Date
Network Upgrades completed
Full Capacity Deliverability Status obtained
Initial Synchronization
Expected CAISO Commercial Operation
Guaranteed Commercial Operation Date
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
-
-
-
-
-
-
-
-
-

EXECUTION VERSION
iii

TABLE OF CONTENTS
COVER SHEET ..........................................................................................................................................................I ARTICLE 1: DEFINITIONS .....................................................................................................................................1 ARTICLE 2: TERM; DELIVERY TERM; CONDITIONS PRECEDENT ........................................................11

2.1 Term...........................................................................................................................................................11

2.2 Conditions Precedent. ................................................................................................................................12 ARTICLE 3: TRANSACTION, DELIVERY AND PAYMENT...........................................................................12

3.1 Resource Adequacy Capacity Product.......................................................................................................12

3.2 Interconnection Capacity. ..........................................................................................................................13

3.3 [Reserved]..................................................................................................................................................13

3.4 Delivery Point............................................................................................................................................13

3.5 Planned Outages. .......................................................................................................................................13

3.6 Replacement RA........................................................................................................................................13

3.7 Delivery of RA. .........................................................................................................................................14

3.8 Failure to Deliver Product..........................................................................................................................14

3.9 [Reserved]..................................................................................................................................................15

3.10 Monthly RA Capacity Payment.................................................................................................................15

3.11 Allocation of Other Payments and Costs. ..................................................................................................15 ARTICLE 4: CAISO OFFER REQUIREMENTS.................................................................................................16 ARTICLE 5: EVENTS OF DEFAULT; REMEDIES............................................................................................16

5.1 Events of Default. ......................................................................................................................................16

5.2 Declaration of an Early Termination Date and Calculation of Settlement Amounts. ................................18

5.3 Net Out of Settlement Amounts.................................................................................................................18

5.4 Notice of Payment of Termination Payment..............................................................................................18

5.5 Disputes with Respect to Termination Payment. .......................................................................................19

5.6 [Reserved]..................................................................................................................................................19

5.7 Seller Pre-COD Liability Limitations........................................................................................................19 ARTICLE 6: PAYMENT AND NETTING.............................................................................................................19

6.1 Billing Period.............................................................................................................................................19

6.2 Timeliness of Payment...............................................................................................................................19

6.3 Disputes and Adjustments of Invoices.......................................................................................................19

6.4 Netting of Payments. .................................................................................................................................20

6.5 Payment Obligation Absent Netting. .........................................................................................................20

6.6 Security......................................................................................................................................................20 ARTICLE 7: LIMITATIONS ..................................................................................................................................20

7.1 Limitation of Remedies, Liability and Damages. ......................................................................................20 ARTICLE 8: GOVERNMENTAL CHARGES ......................................................................................................21

8.1 Cooperation. ..............................................................................................................................................21

8.2 Governmental Charges. .............................................................................................................................21 DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
iv
ARTICLE 9: [RESERVED.] ....................................................................................................................................21

9.1 [Reserved.].................................................................................................................................................21 ARTICLE 10: REPRESENTATIONS; WARRANTIES; COVENANTS............................................................21

10.1 Mutual Representations and Warranties. ...................................................................................................21

10.2 Buyer and Seller Covenants.......................................................................................................................22

10.3 Seller Representations, Warranties and Covenants....................................................................................23

10.4 Buyer Representations, Warranties and Covenants. ..................................................................................24 ARTICLE 11: CONFIDENTIALITY......................................................................................................................24 ARTICLE 12: BUYER’S RE-SALE OF PRODUCT.............................................................................................25 ARTICLE 13: CHANGE IN LAW ..........................................................................................................................26 ARTICLE 14: COLLATERAL REQUIREMENTS ..............................................................................................26

14.1 Development Security................................................................................................................................26

14.2 Performance Security.................................................................................................................................26

14.3 First Priority Security Interest in Cash or Cash Equivalent Collateral.......................................................26

14.4 Buyer Financial Statements. ......................................................................................................................27 ARTICLE 15: INSURANCE....................................................................................................................................27

15.1 Insurance....................................................................................................................................................27

15.2 Evidence of Insurance................................................................................................................................28 ARTICLE 16: UNIT CONSTRUCTION AND COMMERCIAL OPERATION................................................28

16.1 Construction of the Unit. ...........................................................................................................................28

16.2 Commercial Operation...............................................................................................................................29

16.3 .....................................................................................................................................31

16.4 ........................................................................................................................................31 ARTICLE 17: FORCE MAJEURE .........................................................................................................................32

17.1 Definition...................................................................................................................................................32

17.2 No Liability If a Force Majeure Event Occurs. .........................................................................................33

17.3 Notice.........................................................................................................................................................33

17.4 Termination Following Force Majeure Event............................................................................................33 ARTICLE 18: MISCELLANEOUS.........................................................................................................................33

18.1 Title and Risk of Loss................................................................................................................................33

18.2 Indemnity...................................................................................................................................................34

18.3 Assignment. ...............................................................................................................................................34

18.4 Governing Law and Venue........................................................................................................................35

18.5 Notices.......................................................................................................................................................35

18.6 Mobile-Sierra.............................................................................................................................................36

18.7 General.......................................................................................................................................................36

18.8 Audit. .........................................................................................................................................................37

18.9 Forward Contract.......................................................................................................................................37

18.10 Dispute Resolution.....................................................................................................................................37 DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
v

18.11 Execution...................................................................................................................................................37

18.12 Joint Powers Authority. .............................................................................................................................37

18.13 Dodd-Frank Act.........................................................................................................................................38

18.14 Market-Based Rate Authority....................................................................................................................38

18.15 Rules of Interpretation. ..............................................................................................................................38 EXHIBIT A: FORM OF LETTER OF CREDIT ................................................................................................ A-1 EXHIBIT B: FORM OF CONSTRUCTION START DATE CERTIFICATE .................................................B-1 EXHIBIT C: FORM OF COMMERCIAL OPERATION DATE CERTIFICATE......................................... C-1 EXHIBIT D: DESCRIPTION OF UNIT.............................................................................................................. D-1 EXHIBIT E: OPERATIONAL CHARACTERISTICS.......................................................................................E-1 EXHIBIT F: PROGRESS REPORTING FORM.................................................................................................F-1 EXHIBIT G: FORM OF BUYER ASSIGNMENT AGREEMENT ................................................................. G-1 EXHIBIT H: NOTICES......................................................................................................................................... H-1 DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
1 RESOURCE ADEQUACY AGREEMENT
This Resource Adequacy Agreement (“Agreement”) is entered into between Baldy Mesa Solar, LLC (“Seller”) and Silicon Valley Clean Energy, a California joint powers authority (“Buyer”), each individually a “Party” and together the “Parties”, as of September ___, 2022 (the “Effective Date”). All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.

RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate the Unit; and WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms 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 Parties agree to the following:

ARTICLE 1: DEFINITIONS

1.1 “Affiliate” means, with respect to any person, any other person (other than an individual) that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such person. For this purpose, “control” means the direct or indirect ownership of fifty percent (50%) or more of the outstanding capital stock or other equity interests having ordinary voting power.

1.2 “Agreement” has the meaning set forth in the Preamble.

1.3 “Applicable Laws” means any law, rule, regulation, order, decision, judgment, or other legal or regulatory determination by any Governmental Body having jurisdiction over one or both Parties or this Agreement, including without limitation, the Tariff.

1.4 “Availability Incentive Payments” means Availability Incentive Payments as defined in theTariff.

1.5 “Availability Standards” means Availability Standards as defined in the Tariff.

1.6 “Bankrupt” means with respect to any entity, such entity (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, or has any such petition filed or commenced against it and such petition filed or commenced against it is not stayed or dismissed within ninety (90) days thereafter, (b) makes an assignment or any general arrangement for the benefit of creditors, (c) otherwise becomes bankrupt or insolvent (however evidenced), (d) 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 (e) is generally unable to pay its debts as they fall due.

1.7 1.8
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
2 1.9 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California.

1.10 “Buyer” has the meaning set forth in the Preamble.

1.11 “Buyer’s Capacity Share” means the percentage of the Guaranteed Capacity, as set forth in Section E of the Cover Sheet, for which Buyer shall have exclusive rights to all Capacity Attributes available from the Unit, including the Designated RA Capacity.

1.12 “CAISO” means the California Independent System Operator or its successor.

1.13 “CAISO Balancing Authority Area” has the meaning set forth in the CAISO Tariff.

1.14 “CAISO Commercial Operation” has the meaning of “Commercial Operation” set forth in the CAISO Tariff.

1.15 “CAISO Control Area” means the Control Area (as defined in the Tariff) that is operated by the CAISO.

1.16 “CAISO Controlled Grid” has the meaning set forth in the Tariff.

1.17 “CAISO Offer Requirements” has the meaning set forth in Article 4.

1.18 “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the Unit’s Guaranteed Capacity that can be purchased and sold under CAISO or CPUC market rules, including all RA Capacity.

1.19 “Change of Control” means 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 or otherwise ceases to retain the ability to control the decision making of Seller; provided that in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and
(b) ownership interests in Seller owned directly or indirectly by any Lender (including any cash equity and tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent or similar representative acting on their behalf and subsequent assignee or transferee thereof) shall be excluded from the total outstanding equity interests in Seller.

1.20 “CIRA Tool” means the CAISO Customer Interface for Resource Adequacy.

1.21 “Claiming Party” has the meaning set forth in Section 3.12.

1.22 “Claims” means all third-party claims or actions, threatened or filed and, whether groundless, false, fraudulent or otherwise, that directly or indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys’ fees and court costs, whether incurred by DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
settlement or othe1wise, and whether such claims or actions are threatened or filed prior to or after the tennination of this Agreement.

1.23 "Commercial Operation" has the meaning set fo1th in Section 16.2(a).

1.24 "Commercial Operation Date" means the date on which Commercial Operation is achieved.

1.25 "Commercial Operation Delay Damages" means an amount equal to (a) the Development Security amount required hereunder, divided by (b)

1.26 "Compliance Obligation" means the RAR, Local RAR, FCR, and any other resource adequacy or capacity procurement requirements imposed on LSEs by the CPUC pursuant to the Resource Adequacy Rulings, by the CAISO, by the WECC, or by any other Governmental Body having jmisdiction.

1.27 "Confidential fufo1mation" has the meaning set f 01t h in Alticle 11 .

1.28 "Constrnction Sta1t" has the meaning set fo1t h in Section 16.1 (a).

1.29 "Constrnction Sta1t Date" has the meaning set fo1t h in Section 16. l (a).

1.30 "Contract Plice" has the meaning set fo1t h in Section F of the Cover Sheet.

1.31 "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 anniversruy of the Commercial Operation Date.

1.32 "Costs" means, with respect to the Non-Defaulting Pruty, brokerage fees, commissions and other similar third-pruty transaction costs and expenses reasonably incmTed by such Pruty either in te1minating any ruTangement pursuant to which it has hedged its obligations or entering into new anangements which replace a Te1minated Transaction; and all reasonable attorneys' fees and expenses incmTed by the Non-Defaulting Pruty in connection with the te1mination of a Transaction.

1.33 "CPM Soft Offer Cap" has the meaning set fo1th in the CAISO Tariff.

1.34 "CPUC" means the California Public Utilities Commission or its successor.

1.35 "CPUC Filing Guide" means the annual document issued by the CPUC which sets fo1th the guidelines, requirements and instrnctions for LSE's to demonstrate compliance with the CPUC's resource adequacy program.

1.36 "Credit Rating" means, with respect to any entity, the rating then assigned to such entity's unsecured, senior long-te1m debt obligations (not suppo1ted by third paity 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.

1.37 "Damage Payment" means the dollru· amount that equals

1.38 "Defaulting Party" has the meaning set forth in Section 5 .1.

1.39 "Delive1y Point" has the meaning set fo1t h in Section 3.4. 3 EXECUTION VERSION
4 1.40 “Delivery Term” means the period of Contract Years set forth in Section D of the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.

1.41 “Designated RA Capacity” shall be equal to, with respect to each Showing Month of the Delivery Term, Buyer’s Capacity Share multiplied by the RA Capacity available from the Unit.

1.42 “Development Cure Period” has the meaning set forth in Section 16.2(c).

1.43 “Development Security” means collateral in the form of cash or a Letter of Credit in an amount set forth in Section G of the Cover Sheet.

1.44 “Dispute” has the meaning set forth in Section 18.10(a).

1.45 “Dispute Notice” has the meaning set forth in Section 18.10(a).

1.46 “Early Termination Date” has the meaning set forth in Section 5.2.

1.47 “Effective Date” is the date set forth in the Preamble.

1.48 “Effective Flexible Capacity” means the net capacity of a resource that can be counted towards an LSE’s Flexible Capacity Requirements, as identified from time to time by the Tariff, the Resource Adequacy Rulings, LRA, or other Governmental Body having jurisdiction.

1.49 “EPC Contract” means the Seller’s engineering, procurement and construction contract with the EPC Contractor.

1.50 “EPC Contractor” means Seller’s engineering, procurement and construction contractor or such Person performing those functions.

1.51 “Equitable Defenses” means any bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and with regard to equitable remedies, the discretion of the court before which proceedings to obtain same may be pending.

1.52 “Event of Default” has the meaning set forth in Section 5.1.

1.53 “Facility” has the meaning set forth in Exhibit E.

1.54 “FCR Attributes” means, with respect to a Resource Adequacy Resource, any and all flexible resource adequacy attributes that can be counted toward an LSE’s FCR, as they are identified from time to time by the Resource Adequacy Rulings, the Tariff, an LRA, or other Governmental Body having jurisdiction, exclusive of any LAR Attributes and any RAR Attributes.

1.55 “FCR Showings” means the FCR compliance showings (or similar or successor showings) an LSE is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings and the Tariff, or to an LRA having jurisdiction over the LSE.

1.56 “FERC” means the Federal Energy Regulatory Commission or any successor government agency.

1.57 “Flexible Capacity Category” has the meaning set forth in the Resource Adequacy Rulings.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
5 1.58 “Flexible Capacity Requirements” or “FCR” means the flexible capacity requirements established for LSEs by the CPUC pursuant to the Resource Adequacy Rulings, or by an LRA or other Governmental Body having jurisdiction.

1.59 “Force Majeure Event” has the meaning set forth in Section 17.1(a).

1.60 “Full Capacity Deliverability Status” or “FCDS” has the meaning set forth in the Tariff.

1.61 “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 a Terminated Transaction, determined in a commercially reasonable manner.

1.62 “Governmental Approvals” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, permits, orders, licenses, exemptions, notices to and declarations of or with any Governmental Body and shall include those siting and operating permits and licenses, and any of the foregoing under any applicable environmental law, that are required for the use and operation of the Unit.

1.63 “Governmental Body” means (a) any federal, state, local, municipal or other government; (b) any governmental, regulatory or administrative agency, commission or other authority lawfully exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; and (c) any court or governmental tribunal, but in all cases, excludes both Parties.

1.64 “Governmental Charges” has the meaning set forth in Section 8.2.

1.65 “Guaranteed Capacity” means the maximum dependable operating capacity of the Unit to discharge electric energy, as measured in MW AC at the Delivery Point for four (4) hours of continuous discharge, as set forth on the Cover Sheet.

1.66 “Guaranteed Commercial Operation Date” is the date set forth in Section H of the Cover Sheet, as such date may be extended as provided herein.

1.67 “Guaranteed Construction Start Date” is the date set forth in Section H of the Cover Sheet, as such date may be extended as provided herein.

1.68 “Guaranteed Flexible Capacity” means, at any point in time, Buyer’s Capacity Share multiplied by the maximum quantity of Effective Flexible Capacity (in MWs) for which a storage unit having achieved FCDS, and having a storage capacity equal to the Guaranteed Capacity with at least four (4) hours of continuous discharging, and having achieved or exceeded the Operational Characteristics in Exhibit E 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.

1.69 “Guaranteed Net Qualifying Capacity” means, at any point in time, Buyer’s Capacity Share multiplied by the maximum quantity of Net Qualifying Capacity (in MWs) for which a storage unit having achieved FCDS, and having a storage capacity equal to the Guaranteed Capacity, with at least four (4) hours of continuous discharging, and having achieved or exceeded the Operational Characteristics in Exhibit E 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.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
6 1.70 “Initial Synchronization” has the meaning set forth in the Tariff.

1.71 “Interconnection Agreement” means the interconnection agreement entered into by Seller pursuant to which the Facility and Seller’s Interconnection Facilities will be interconnected with the Transmission System during the Delivery Term.

1.72 “Interconnection Capacity Limit” means the maximum instantaneous amount of Energy that is permitted to be delivered by the Facility to the Interconnection Point under Seller’s Interconnection Agreement, in an amount no less than 75 MW.

1.73 “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.

1.74 “Interest Rate” means, for any date, the lesser of (a) the per annum rate of interest equal to the prime lending rate as may from time to time be published in The Wall Street Journal under “Money Rates” on such day (or if not published on such day on the most recent preceding day on which published), plus two percent (2%) and (b) the maximum rate permitted by applicable law.

1.75 “Investment Grade” means a Credit Rating of at least “BBB-” from S&P and/or “Baa3” from Moody’s (or, if such entities cease to provide Credit Ratings, from another comparable rating agency that is reasonably acceptable to the Parties).

1.76 “Joint Powers Agreement” means that certain agreement dated January 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 of the State of California (Government Code Section 6500 et seq.).

1.77 “LAR” means local area reliability, which is any program of localized resource adequacy requirements established for jurisdictional LSEs by the CPUC pursuant to the Resource Adequacy Rulings, or by another LRA having jurisdiction over the LSE, as implemented in the Tariff. LAR may also be known as local resource adequacy, local RAR, or local capacity requirement in other regulatory proceedings or legislative actions.

1.78 “LAR Attributes” means, with respect to a Unit, any and all resource adequacy attributes (or other locational attributes related to system reliability), as they are identified from time to time by the Resource Adequacy Rulings, CAISO, LRA, or other Governmental Body having jurisdiction, associated with the physical location or point of electrical interconnection of the Unit within the CAISO Control Area, that can be counted toward LAR, but exclusive of any RAR Attributes which are not associated with where in the CAISO Control Area the Unit is physically located or electrically interconnected. For clarity, it should be understood that if the CAISO, LRA, or other Governmental Body, defines new or re-defines existing local areas, then such change will not result in a change in payments made pursuant to this Agreement.

1.79 “LAR Showings” means the LAR compliance showings (or similar or successor showings) an LSE is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings and the Tariff, or to an LRA having jurisdiction over the LSE.

1.80 “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a Credit Rating of DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
■

EXECUTION VERSION
7 in a form as set forth in Exhibit A or as otherwise acceptable to Buyer.

1.81 “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 a Terminated Transaction, determined in a commercially reasonable manner.

1.82 “LRA” has the meaning set forth in the Tariff.

1.83 “LSE” means load-serving entity. LSEs may be an investor-owned utility, an electric service provider, a community aggregator or community choice aggregator, or a municipality serving load in the CAISO Control Area (excluding exports).

1.84 “Milestones” has the meaning set forth in Section H of the Cover Sheet.

1.85 “Monthly RA Capacity Payment” has the meaning specified in Section 3.10(a) hereof.

1.86 “Moody’s” means Moody’s Investor Services, Inc. or its successor.

1.87 “MTR Resource” means a resource that meets the requirements of CPUC Decision 21-06-035, including that such resource (a) a first point of interconnection with CAISO Balancing Authority Area, (b) is incremental to the CPUC’s baseline list established pursuant to CPUC Decision 21-06- 035, and (c) is a Resource Adequacy Resource that is eligible to provide RA Capacity as set forth in the Resource Adequacy Rulings.

1.88 “MW” means megawatts measured in alternating current, unless expressly stated in terms of direct current.

1.89 “NERC” means the North American Electric Reliability Corporation, or its successor.

1.90 “Network Upgrades” has the meaning set forth in the Tariff.

1.91 “Net Qualifying Capacity” or “NQC” means the net capacity of a resource that can be counted towards an LSE’s RAR obligation, as identified from time to time by the Tariff, the Resource Adequacy Rulings, LRA, or other Governmental Body having jurisdiction.

1.92 “Non-Availability Charges” has the meaning set forth in the Tariff.

1.93 “Non-Defaulting Party” has the meaning set forth in Section 5.2.

1.94 “Notification Deadline” has the meaning set forth in Section 3.6.

1.95 “Notifying Party” has the meaning set forth in Section 18.10(a).

1.96 “One-Time Extension” has the meaning set forth in Section 16.4(a).

1.97 “Operational Characteristics” means the minimum performance requirements for the Unit, as set forth in Exhibit E.

1.98 “Outage” means any CAISO approved disconnection, separation, or reduction in the capacity of any Unit that relieves all or part of the offer obligations of the Unit consistent with the Tariff. For the avoidance of doubt, Outage shall be deemed to include Planned Outages.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
8 1.99 “Participating Transmission Owner” means an entity that (a) owns, operates and maintains transmission lines and associated facilities and/or has entitlements to use certain transmission lines and associated facilities and (b) has transferred to the CAISO operational control of such facilities and/or entitlements to be made part of the CAISO Grid. The Participating Transmission Owner for purposes of this Agreement is Southern California Edison.

1.100 “Performance Security” means collateral in the form of cash or a Letter of Credit in an amount set forth in Section G of the Cover Sheet.

1.101 “Permitted Transferee” means (a) any Affiliate of Seller or (b) any entity that has, or is controlled by another person or business entity that satisfies the following requirements: (i) a tangible net worth of not less than one hundred fifty million dollars ($150,000,000) or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from Moody’s; and (ii) at least two (2) years of experience in the ownership and operations of storage facilities similar to the Facility, or has retained a third-party with such experience to operate the Facility.

1.102 “Planned Outage” means, subject to and as further described in the Tariff, a CAISO-approved planned or scheduled disconnection, separation or reduction in capacity of the Unit that is conducted for the purposes of carrying out routine repair or maintenance of such Unit, or for the purposes of new construction work for such Unit.

1.103 “Product” means Buyer’s Capacity Share of all Capacity Attributes available from the Unit, including the Designated RA Capacity.

1.104 “Progress Report” means a report substantially in the form set forth in Exhibit F, the requirements for which are further set forth in Section 16.1(c).

1.105 “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 energy storage system industry during the relevant time period with respect to battery systems in the Western United States, or (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 generating facilities in the Western United States.

Prudent Operating Practice shall include compliance with applicable Laws, applicable 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.

1.106 “RA Capacity” means the qualifying and deliverable capacity of the Unit for RAR, LAR, and FCR purposes, as applicable, for the Delivery Term, as determined by the CPUC, CAISO, or other Governmental Body authorized to make such determination under Applicable Laws, including the Resource Adequacy Rulings. RA Capacity encompasses the applicable RAR Attributes, LAR Attributes, and FCR Attributes of the capacity provided by a Unit.

1.107 “RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month, as calculated in accordance with Section 3.8(b).

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
9 1.108 “RAR” means the resource adequacy requirements, exclusive of LAR and FCR, established for LSEs by the CPUC pursuant to the Resource Adequacy Rulings, or by an LRA or other Governmental Body having jurisdiction.

1.109 “RAR Attributes” means, with respect to a Resource Adequacy Resource, any and all resource adequacy attributes, as they are identified from time to time by the Tariff, Resource Adequacy Rulings, LRA, or any Governmental Body having jurisdiction that can be counted toward RAR, exclusive of any LAR Attributes and FCR Attributes.

1.110 “RAR Showings” means the RAR compliance showings (or similar or successor showings) an LSE is required to make to the CPUC (and/or, to the extent authorized by the CPUC, to the CAISO), pursuant to the Tariff or Resource Adequacy Rulings, or to an LRA having jurisdiction.

1.111 “RA Penalties” means the Tier 1 System RA Penalties assessed against LSEs 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, which is expected to be updated annually, or any replacement or successor documentation established by the CPUC Energy Division to reflect RA penalties that are established by the CPUC and assessed against LSEs for RA deficiencies. For example, the Tier 1 System RA Penalties applicable under the “2022 Filing Guide for System, Local and Flexible Resource Adequacy Compliance Filings” are 8.88/kW-month for the months of May through October and $4.44/kW-month for the months of November to April.

1.112 “RA Shortfall Month” means any Showing Month, commencing with the Showing Month that contains the Commercial Operation Date, during which either: (a) the Unit has not achieved Full Capacity Deliverability Status; or (b) the Net Qualifying Capacity of the Unit that was able to be included in Buyer’s Supply Plan for such Showing Month was either (i) not published by or otherwise established with the CAISO by the Notification Deadline for such Showing Month, or (ii) was less than the then applicable Guaranteed Net Qualifying Capacity for such Showing Month; or (c) the Effective Flexible Capacity of the Unit that was able to be included in Buyer’s Supply Plan for such Showing Month was either (i) not published by or otherwise established with the CAISO by the Notification Deadline for such Showing Month, or (ii) was less than the then applicable Guaranteed Flexible Capacity for such Showing Month.

1.113 “Recipient Party” has the meaning set forth in Section 18.10(a).

1.114 “Regulatory Event” has the meaning set forth in Section 18.7.

1.115 “Reliability Compensation Services Tariff” has the meaning set forth in the Tariff.

1.116 “Remedial Action Plan” has the meaning specified in Section 16.1(d) hereof.

1.117 “Replacement RA” means resource adequacy attributes, as they are identified from time to time by the Tariff, the Resource Adequacy Rulings, LRA, or any Governmental Body having jurisdiction, that are (a) equivalent to those that would have been provided by the Unit, (b) located within the CAISO Balancing Authority Area, and (c) to the extent that the Unit would have qualified as a Local Capacity Area Resource for such month, located within the same Local Capacity Area as the Unit. For avoidance of doubt, Replacement RA does not need to be provided from an MTR Resource.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
10 1.118 “Replacement Unit” means an alternative battery electric storage project to the Unit with at least four (4) hours of continuous discharging, which unit must (a) have an expected nameplate capacity of seventy-five (75) MW or a portion of such unit equal to seventy-five (75) MW if the unit has an expected nameplate capacity of more than seventy-five (75) MW, or such larger capacity as may be acceptable to Buyer in its sole discretion, and (b) qualifies as an MTR Resource.

1.119 “Replacement Unit Deadline” has the meaning set forth in Section 16.3(a).

1.120 “Replacement Unit Notice” has the meaning set forth in Section 16.3(a).

1.121 “Residual Unit Commitment” has the meaning set forth in the Tariff.

1.122 “Resold Product” has the meaning set forth in Article 12.

1.123 “Resource Adequacy Plan” has the meaning specified in the Tariff.

1.124 “Resource Adequacy Resource” has the meaning set forth in the Tariff.

1.125 “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, 20-06-028, 20-12-006 and any other existing or subsequent ruling or decision, or any other resource adequacy Law, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Delivery Term.

1.126 “Resource Category” shall be as described in the CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time.

1.127 “RMR Contracts” has the meaning set forth in the Tariff.

1.128 “S&P” means the Standard & Poor’s Rating Group (a division of McGraw-Hill, Inc.) or its successor.

1.129 “Schedule” or “Scheduling” means the actions of Seller, Buyer and/or their designated representatives, including each Party’s Transmission Providers, if applicable, of notifying, requesting and confirming to each other the quantity and type of Product to be delivered on any given day or days during the Delivery Term at a specified Delivery Point.

1.130 “Scheduling Coordinator” has the same meaning as in the Tariff.

1.131 “Security Interest” has the meaning set forth in Section 14.3(a).

1.132 “Seller” has the meaning set forth in the Preamble.

1.133 “Settlement Amount” means, with respect to the Non-Defaulting Party, the aggregate Losses or Gains, and Costs, expressed in U.S. Dollars, which such party incurs as a result of the liquidation of a Terminated Transaction pursuant to Section 5.2.

1.134 “Showing Month” shall be the calendar month during the Delivery Term that is the subject of the RAR Showing, LAR Showing, and/or FCR Showing, as applicable, as set forth in the Resource Adequacy Rulings or Tariff. For illustrative purposes only, pursuant to the Resource Adequacy DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
11 Rulings in effect as of the Effective Date, the monthly RAR Showing made in June is for the Showing Month of August.

1.135 “Site” means the real property on which the Unit is located as identified in Appendix D.

1.136 “Site Control” means that, for the Term, Seller (or, prior to the Delivery Term, its Affiliate): (a) owns or has the option to purchase the Site; (b) is the lessee or has the option to lease the Site; or (c) is the holder of an easement or an option for an easement, right-of-way grant, or similar instrument with respect to the Site.

1.137 “Substitution Rules” has the meaning specified in the Tariff.

1.138 “Supply Plan” means the supply plans, or similar or successor filings, that each Scheduling Coordinator representing RA Capacity submits to the CAISO, LRA, or other Governmental Body, pursuant to Applicable Laws, in order for that RA Capacity to count, as applicable, for RAR Attributes, LAR Attributes, and/or FCR Attributes.

1.139 “Tariff” means the tariff and protocol provisions of the CAISO, including associated rules, procedures and business practice manuals, as amended or supplemented from time to time.

1.140 “Term” has the meaning set forth in Section 2.1(a).

1.141 “Terminated Transaction” has the meaning set forth in Section 5.2.

1.142 “Termination Payment” has the meaning set forth in Section 5.3.

1.143 “Transmission Provider” means the CAISO.

1.144 “Transmission System” means the transmission facilities operated by the CAISO, which provide energy transmission service within the CAISO grid from the Delivery Point.

1.145 “Ultimate Parent” means the AES Corporation.

1.146 “Unit” shall mean the energy storage unit described in Section B of the Cover Sheet and Exhibit D hereof.

1.147 “Work” means (a) work or operations performed by a Party or on a Party’s behalf; and (b) materials, parts or equipment furnished in connection with such work or operations; including (i) warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of “a Party’s work”; and (ii) the providing of or failure to provide warnings or instructions.

ARTICLE 2: TERM; DELIVERY TERM; CONDITIONS PRECEDENT

2.1 Term.

The term of this Agreement shall commence upon the Effective Date and shall continue until the expiration of the Delivery Term, provided that this Agreement shall thereafter remain in effect until the Parties have fulfilled all obligations arising under this Agreement, including any compensation for the Product, Termination Payment, then-owing indemnification payments or other damages, are paid in full (whether directly or indirectly, such as through set-off or netting) and the Development Security or Performance Security, as applicable, is released and/or returned (the “Term”). Upon Seller’s request, Buyer will promptly confirm in writing the Effective Date. All provisions relating to invoicing, payment, delivery, DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
12 settlement of other liabilities incurred pursuant to this Agreement and dispute resolution survive for the period necessary to effectuate the rights of the Party benefited by such provision except as otherwise specified herein. Notwithstanding anything to the contrary in this Agreement, (i) all rights under Sections 17.2 (Indemnities) and any other indemnity rights survive the end of the Delivery Term for an additional twelve (12) months; (ii) all rights and obligations under Article 11 (Confidentiality) survive the end of the Delivery Term for an additional two (2) years; all rights under Section 16.2(g) survive early termination by Seller pursuant to Section 16.1(c) and Section 16.2(e) for an additional two (2) years; and (iv) all provisions relating to limitations of liability survive without limit.

2.2 Conditions Precedent.

Seller shall provide notice of expected Commercial Operation to Buyer no less than sixty (60) days in advance of such date. The Delivery Term shall not commence until Seller completes to Buyer’s reasonable satisfaction each of the following conditions:
(a) Seller shall have secured all CAISO and Governmental Approvals as are necessary for the safe and lawful operation and maintenance of the Unit and to enable Seller to deliver the Product to Buyer except for those CAISO and Governmental Approvals that Seller is required to obtain during the Delivery Term which are not required to commence commercial operations and which Seller reasonably expects to obtain in the ordinary course.
(b) Seller shall have secured Site Control.
(c) Seller shall have provided to Buyer a certification of Seller and a licensed professional engineer, substantially in the form attached hereto as Exhibit C, demonstrating that the Commercial Operation Date has occurred.
(d) Seller shall have provided Performance Security to Buyer as required by Section 14.2. (e) As of the Commercial Operation Date, no Event of Default on the part of Seller shall have occurred and be continuing.
(f) Seller has obtained Full Capacity Deliverability Status. (g) In accordance with Section 3.7(a), Seller shall have (i) submitted, or caused the Unit’s SC to submit, a notice to Buyer including Seller’s proposed Supply Plan for the first Showing Month of the Delivery Term and (ii) submitted, or caused the Unit’s SC to submit, a Supply Plan to CAISO for the first Showing Month of the Delivery Term.
(h) Seller shall have delivered to Buyer all insurance documents required under Article 15. (i) As of the Commercial Operation Date, Seller shall have paid Buyer for all amounts owing under this Agreement, if any, including Commercial Operation Delay Damages.

ARTICLE 3: TRANSACTION, DELIVERY AND PAYMENT

3.1 Resource Adequacy Capacity Product.
(a) During the Delivery Term, Buyer shall purchase all the Product produced by or associated with the Unit at the Contract Price and in accordance with Section 3.10, and Seller shall supply and deliver to Buyer at the Delivery Point all the Product produced by or associated with the Unit in accordance with DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
13 the terms of this Agreement. Seller shall be responsible for any costs or charges imposed on or associated with the Product or its delivery of the Product up to the Delivery Point. Buyer shall be responsible for any costs or charges imposed on or associated with the Product or its receipt at and from the Delivery Point.

Notwithstanding anything to the contrary herein, no energy or ancillary services associated with the Unit are required to be made available to Buyer as part of this Agreement, and Buyer shall not be responsible for compensating Seller for Seller’s commitments to the CAISO required by this Agreement. (b) Seller shall obtain Full 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. Throughout the Delivery Term, Seller shall maintain eligibility for Full Capacity Deliverability Status for the Guaranteed Capacity from the CAISO and shall perform all actions necessary to ensure that the Unit qualifies to provide the Designated RA Capacity to Buyer.

3.2 Interconnection Capacity.

Seller shall be responsible for all costs of interconnecting the Unit to the Interconnection Point. Seller shall have and maintain interconnection capacity available or allocable to the Unit that is no less than the Interconnection Capacity Limit throughout the Delivery Term.

3.3 [Reserved].

3.4 Delivery Point.

The “Delivery Point” for the Unit shall be the CAISO Control Area, and if applicable, the LAR region in which the Unit is electrically interconnected.

3.5 Planned Outages.

Seller shall schedule all Planned Outages within the time-period determined by the CAISO for the Unit, as a Resource Adequacy Resource that is subject to the Availability Standards, to qualify for an “Approved Maintenance Outage” under the CAISO Tariff. Seller shall reimburse Buyer for any cost Buyer incurs to provide Replacement RA, as required by the CAISO, during any Planned Outages (including the cost of procuring Replacement RA for a full calendar month during any month in which a Planned Outage is planned or scheduled). Notwithstanding anything in this Agreement to the contrary, no Planned Outages of the Unit shall be scheduled or planned from each June 1 through October 31 during the Delivery Term, unless (i) required to maintain any manufacturer’s warranties on Unit equipment; (ii) required in accordance with Prudent Operating Practice to prevent a future unscheduled outage or damage to the Unit, or (iii) otherwise approved by Buyer in writing in its sole discretion.

3.6 Replacement RA.
(a) The “Notification Deadline” for a given Showing Month shall be twenty (20) Business Days before the earlier of the relevant deadlines for (a) the corresponding CPUC RAR Showings, LAR Showings and/or FCR Showings, as applicable for that Showing Month, or (b) submission of the CAISO Supply Plan filings applicable to that Showing Month.
(b) 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 and/or Guaranteed Flexible Capacity, as applicable, with respect to such Showing Month, minus (ii) the expected Net Qualifying Capacity and/or Effective Flexible Capacity, as applicable, that is able to be included in Buyer’s Supply DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
14 Plan for such Showing Month; provided, that any Replacement RA is communicated by Seller to Buyer no later than the Notification Deadline.

3.7 Delivery of RA.

Seller shall provide Buyer with the Designated RA Capacity and any Replacement RA for each Showing Month consistent with the following:
(a) No later than the Notification Deadline corresponding to each Showing Month of the Delivery Term, Seller shall submit, or cause the Unit’s Scheduling Coordinator to submit, Supply Plans to identify and confirm the Designated RA Capacity and any Replacement RA provided to Buyer for each Showing Month. Buyer shall notify Seller five (5) Business Days prior to the Notification Deadline if Seller is to submit less than the full Contract Quantity during the applicable Showing Month. (b) The Designated RA Capacity and any Replacement RA is delivered and received when the CIRA Tool shows that the Supply Plan submitted in compliance with Buyer’s instructions, including Buyer’s instructions to withhold all or part of the Designated RA Capacity from Seller’s Supply Plan for any Showing Month during the Delivery Term, has been accepted by the CAISO. If CAISO rejects either the Supply Plan or Buyer’s Resource Adequacy Plan with respect to any part of the Contract Quantity in any Showing Month, the Parties will confer, make such corrections as are necessary for acceptance, and resubmit the corrected Supply Plan or Resource Adequacy Plan for validation before the applicable Notification Deadline for the relevant Showing Month.
(c) At least ninety (90) days before Buyer’s annual FCR Showings filing deadline, Seller shall provide Buyer with written notice of the quantity of Guaranteed Flexible Capacity the Unit is expected to provide for the following calendar year. No later than the Notification Deadline, Seller will notify Buyer of the quantity of Effective Flexible Capacity that the Buyer is permitted to include in the Buyer’s FCR Showings. Seller is prohibited from selling any Effective Flexible Capacity that Buyer is not able to include in Buyer’s CPUC FCR Showings. For the avoidance of doubt, the Monthly RA Capacity Payment shall not be adjusted based upon the quantity of Effective Flexible Capacity Buyer is permitted to include in its CPUC FCR Showings.

3.8 Failure to Deliver Product.
(a) For each RA Shortfall Month, Seller shall pay to Buyer as liquidated damages the RA Deficiency Amount, as set forth in Section 3.8(b), and/or provide Replacement RA, as set forth in Section 3.6(b), as the exclusive remedy for the Product that Seller fails to convey to Buyer. (b) 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 then applicable Guaranteed Net Qualifying Capacity, minus the then applicable Net Qualifying Capacity that may be included in the Supply Plan for Buyer, which shall be deemed to be zero (0) MW if the Net Qualifying Capacity has not been published by or otherwise established with the CAISO by the Notification Deadline for such RA Shortfall Month, plus any Replacement RA that was able to be included in the Supply Plan for such Showing Month for Buyer; and (B) the difference, expressed in kW, of the then applicable Guaranteed Flexible Capacity, minus the then applicable Effective Flexible Capacity that may be DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
included in the Supply Plan for 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 Shortfall Month, plus any Effective Flexible Capacity that was provided as Replacement RA that was able to be included in the Supply Plan for such Showing Month for Buyer;
(ii) multiplied by applicable
to such RA Shortfall Month.

3.9 [Reserved].

3.10 Monthly RA Capacity Payment.

Each month of the Delive1y Te1m (and pro-rated for the first and last month of the Delive1y Te1m if the Delive1y Te1m does not start on the first day of a calendar month), Buyer shall pay Seller a Monthly RA Capacity Payment equal to the product of (i) the Contract Price, (ii) the Guaranteed Capacity, (iii) Buyer's Capacity Share, and (iv) 1,000; provided, Buyer's obligation to make Monthly RA Capacity Payments shall be pro-rated or suspended dwing any month in which a Force Majeure Event reduces the delivered Product or prevents Seller delivering Product. The final product of this Monthly RA Capacity Payment calculation shall be rounded to the nearest penny (i.e., two decimal places). Such payment constitutes the entirety of the amount due to Seller from Buyer for the Product.

3.11 Allocation of Other Payments and Costs.
(a) Seller may retain any revenues it may receive from, and shall pay all costs charged by, the CAISO or any other third paity with respect to any Unit for (i) start-up, shut-down, and minimum load costs, (ii) capacity revenue for ancilla1y se1vices, (iii) energy and environmental attiibute sales, (iv) any revenues for black strut or reactive power se1vices, or (v) the sale of the unit-contingent call rights on the storage capacity of the Unit to provide energy to a third paity, so long as such rights do not confer on such third party the light to claim any portion of the RA Capacity sold hereunder in order to make an RAR Showing, LAR Showing, FCR Showing, or any similar capacity or resource adequacy showing with the CAISO or CPUC.
(b) Buyer shall be entitled to receive and retain all revenues associated with the Designated RA Capacity of the Unit during the Delive1y Te1m (including any capacity or availability revenues from RMR Conti·acts for any Unit, Reliability Compensation Se1vices Tariff, and Residual Unit Commitment capacity payments, but excluding payments described in Section 3.1 l(a) above). ( c) In accordance with Section 3 .10 of this Agreement:
(i) all such Buyer revenues desc1ibed in Section 3.1 l(b) received by Seller, or a Unit's Scheduling Coordinator, owner, or operator shall be reinitted to Buyer, and Seller shall pay such revenues to Buyer if the Unit's Scheduling Coordinator, owner, or operator fails to remit those revenues to Buyer (and upon any such payment by Seller, Seller shall be subrogated to all lights of Buyer against such Unit's Scheduling Coordinator, owner, or operator for the amount of such revenues paid). If Seller fails to pay such revenues to Buyer, Buyer may offset any amounts owing to it for such revenues against any future amounts it may owe to Seller under this Agreement. (ii) all such Seller, or a Unit's Scheduling Coordinator, owner, or operator revenues described in Section 3.ll(a)(i)-(v), but received by Buyer shall be reinitted to Seller, and Buyer shall pay such revenues to Seller if the Unit's Scheduling Coordinator, owner, or operator fails to 15 EXECUTION VERSION
16 remit those revenues to Seller (and upon any such payment by Buyer, Buyer shall be subrogated to all rights of Seller against such Unit’s Scheduling Coordinator, owner, or operator for the amount of such revenues paid). If Buyer fails to pay such revenues to Seller, Seller may offset any amounts owing to it for such revenues against any future amounts it may owe to Buyer under this Agreement. (d) Buyer acknowledges and agrees that all Availability Incentive Payments are for the benefit of Seller and for Seller’s account, and that Seller shall receive, retain, or be entitled to receive all credits, payments, and revenues, if any, resulting from Seller achieving or exceeding Availability Standards. The Parties acknowledge and agree that any Non-Availability Charges are the responsibility of Seller, and for Seller’s account and Seller shall be responsible for all fees, charges, or penalties, if any, resulting from Seller failing to achieve Availability Standards.

ARTICLE 4: CAISO OFFER REQUIREMENTS
During the Delivery Term, except to the extent the Unit is in an Outage, Seller shall either schedule or cause the Unit’s Scheduling Coordinator to schedule with, or make available to, the CAISO the Unit’s Guaranteed Capacity in compliance with the Tariff, including compliance with Minimum Sate of Charge, Day-Ahead Availability, Real-Time Availability, Must Offer Obligation, and Default Energy Bid requirements established in Article 40 of the Tariff, and Seller shall perform all, or cause the Unit’s Scheduling Coordinator, owner, or operator, as applicable, to perform all obligations under the Tariff that are associated with the sale of Product hereunder. (the “CAISO Offer Requirements”). Buyer shall have no liability for the failure of Seller or the failure of any Unit’s Scheduling Coordinator, owner, or operator to comply with such Tariff provisions, including any penalties or fines imposed on Seller or the Unit’s Scheduling Coordinator, owner, or operator for such noncompliance.

ARTICLE 5: EVENTS OF DEFAULT; REMEDIES

5.1 Events of Default.

An “Event of Default” shall mean, with respect to a Party (a “Defaulting Party”), the occurrence of any of the following:
(a) the failure to make, when due, any payment required pursuant to this Agreement if such failure is not remedied within ten (10) Business Days after written notice; (b) 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 Party does not fully mitigate the adverse consequences as reasonably determined by the other Party of such incorrect representation or warranty to the other Party within thirty (30) days after written 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) days period despite exercising best efforts); (c) the failure to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default, and except for such Party’s obligations to deliver or receive the Product, the exclusive remedy for which is provided in Section 3.8) if such failure is not remedied within thirty (30) Business Days after written notice (or such longer additional period, not to exceed an additional ninety (90) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) days period despite exercising best efforts); (d) the failure by Seller to achieve Commercial Operation on or before the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of Commercial Operation DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
17 Delay Damages, a Development Cure Period, and/or a One-Time Extension, the exclusive remedy for which is set forth in Section 16.2(e);
(e) if at any time, Seller delivers or attempts to deliver Product to the Delivery Point for sale under this Agreement that was not generated by the Unit, except for Replacement RA; (f) Seller sells, assigns, or otherwise transfers, or commits to sell, assign, or otherwise transfer, the Product, or any portion thereof, during the Term to any party other than Buyer except as expressly permitted under this Agreement;
(g) such Party becomes Bankrupt;
(h) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Section 18.3, if applicable;
(i) the failure of such Party to satisfy the creditworthiness/collateral requirements agreed to pursuant to Article 14 hereof if such failure is not remedied within ten (10) Business Days after written notice;
(j) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party; or
(k) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(i) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody’s;
(ii) the issuer of such Letter of Credit becomes Bankrupt; (iii) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit; (iv) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit;
(v) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit; (vi) such Letter of Credit fails or ceases to be in full force and effect at any time; or (vii) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement.

DRAFT Item 5
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18 5.2 Declaration of an Early Termination Date and Calculation of Settlement Amounts.

If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (the “Non-Defaulting Party”) shall have the right to (i) designate a day, no earlier than the day such notice is effective and no later than twenty (20) days after such notice is effective, as an early termination date (“Early Termination Date”) to accelerate all amounts owing between the Parties and to liquidate and terminate this Agreement (referred to herein as a “Terminated Transaction”) between the Parties; (ii) withhold any payments due to the Defaulting Party under this Agreement; and (iii) suspend performance.

If the Early Termination Date occurs before the Commercial Operation Date and Seller is the Defaulting Party, then the Damage Payment shall be owed to Buyer. If the Early Termination Date occurs after the Commercial Operation Date, or if Buyer is the Defaulting Party either before or after the Commercial Operation Date, then as soon as reasonably practicable, the Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for such Terminated Transaction as of the Early Termination Date.

The Non-Defaulting Party (or its agent) may determine its Gains and Losses by reference to information either available to it internally or supplied by one or more third parties 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. Third parties supplying such information 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 Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0).

5.3 Net Out of Settlement Amounts.

The Non-Defaulting Party shall aggregate all Settlement Amounts into a single amount by: netting out (a) all Settlement Amounts that are due to the Defaulting Party, plus, at the option of the Non-Defaulting Party, any cash or other form of security then available to the Non-Defaulting Party pursuant to Article 14, plus any or all other amounts due to the Defaulting Party under this Agreement against (b) all Settlement Amounts that are due to the Non-Defaulting Party plus, at the option of the Non-Defaulting Party, any cash or other form of liquid security then in the possession of the Defaulting Party or its agent pursuant to Article 14, plus any or all other amounts due to the Non-Defaulting Party under this Agreement, so that all such amounts shall be netted out to a single liquidated amount (the “Termination Payment”) payable by one Party to the other. The Termination Payment shall be due to or due from the Non-Defaulting Party as appropriate.

5.4 Notice of Payment of Termination Payment.

As soon as practicable after a liquidation but in no event later than thirty (30) days, notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment and whether the Termination Payment is due to or due from the Non-Defaulting Party. The notice shall include a written statement explaining in reasonable detail the calculation of such amount. The Termination Payment shall be made by the Party that owes it within ten (10) days after such notice is effective.

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5.5 Disputes with Respect to Termination Payment.

If the Defaulting Patty disputes the Non-Defaulting Patty's calculation of the Tennination Payment, in whole or in patt, the Defaulting Party shall, within ten (10) days of receipt of Non-Defaulting Patty's calculation of the Tennination Payment, provide to the Non-Defaulting Patty a detailed wti tten explanation of the basis for such dispute; provided, however, that if the Tennination Payment is due from the Defaulting Party, the Defaulting Patty shall first transfer Petfotmance Security to the Non-Defaulting Party in an amount equal to the Tetmination Payment.

5.6 [Reserved].

5.7 Seller Pre-COD Liability Limitations.

Notwithstanding any other provision ofthis Agreement, Seller's aggregate liability under or at·ising out of a tetmination of this A~ ement E_tior to the Commercial Operation Date shall be liinited to ARTICLE 6: PAYMENT AND NETTING

6.1 Billing Period.

The calendai· month shall be the standard period for all payments under this Agreement ( other than Tetmination Payments). As soon as practicable after the end of each month, each Pat·ty will render to the other Patty an invoice for the payment obligations, if any, inc1med hereunder during the preceding month.

6.2 Timeliness of Payment.

Unless othetwise agreed by the Patties, all invoices under this Agreement shall be due and payable in accordance with each Patty's invoice instmctions on or before the later of the twentieth (20th) day of each month, or tenth (10th) day after receipt of the invoice or, if such day is not a Business Day, then on the next Business Day. Each Patty will make payments by electronic funds transfer, or by other mutually agreeable method(s), to the account designated by the other Pat·ty. Any amounts not paid by the due date will be deemed delinquent and will accme interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full.

6.3 Disputes and Adjustments of Invoices.

A Pat·ty may, in good faith, dispute the con ectness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any atithmetic or computational en or within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or pott ion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed pott ion of the invoice shall be required to be made when due, with notice of the objection given to the other Patty.

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 accmed at the Interest Rate from and including the due date to but excluding the date paid. Inadvett ent ovetpayments shall be returned upon request or deducted by the Patty receiving such ovetpayment from subsequent payments, with interest accmed at the Interest Rate from and including the date of such ovetpayment to but excluding the date repaid or deducted by the Patty receiving such 19 EXECUTION VERSION
20 overpayment. Any dispute with respect to an invoice is waived unless the other Party is notified in accordance with this Section 6.3 within twelve (12) months after the invoice is rendered or any specific adjustment to the invoice is made. 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.

6.4 Netting of Payments.

The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other under this Agreement on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement, including any related damages calculated pursuant to Sections 3.8 or 16.2(b), 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.

6.5 Payment Obligation Absent Netting.

If no mutual debts or payment obligations exist and only one Party owes a debt or obligation to the other during the monthly billing period, including, but not limited to, any related damage amounts calculated pursuant to Sections 3.8 or 16.2(b), interest, and payments or credits, that Party shall pay such sum in full when due.

6.6 Security.

Unless the Party benefiting from Development Security and Performance Security notifies the other Party in writing, and except in connection with a liquidation and termination in accordance with Article 5, all amounts netted pursuant to this Article 6 shall not take into account or include any Development Security or Performance Security which may be in effect to secure a Party’s performance under this Agreement.

ARTICLE 7: LIMITATIONS

7.1 Limitation of Remedies, Liability and Damages.

EXCEPT AS EXPRESSLY SET FORTH IN SECTION 10.3, THERE IS NO IMPLIED 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. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS

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 ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL

BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY

SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR

INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY

STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION SET FORTH IN THIS AGREEMENT OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE

LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE

WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE DRAFT Item 5
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EXECUTION VERSION
21 NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE

PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES

ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN

ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

ARTICLE 8: GOVERNMENTAL CHARGES

8.1 CooperationError! Bookmark not defined..

Each Party shall use reasonable efforts to implement the provisions of and to administer this Agreement in accordance with the intent of the parties to minimize all taxes, so long as neither Party is materially adversely affected by such efforts.

8.2 Governmental Charges.

Seller shall pay or cause to be paid all taxes imposed by any government authority (“Governmental Charges”) on or with respect to the Product or a transaction arising prior to the Delivery Point. Buyer shall pay or cause to be paid all Governmental Charges on or with respect to the Product or a transaction at and from the Delivery Point (other than ad valorem, franchise or income taxes which are related to the sale of the Product and are, therefore, the responsibility of the Seller). In the event Seller is required by law or regulation to remit or pay Governmental Charges which are Buyer’s responsibility hereunder, Buyer shall promptly reimburse Seller for such Governmental Charges. If Buyer is required by law or regulation to remit or pay Governmental Charges which are Seller’s responsibility hereunder, Buyer may deduct the amount of any such Governmental Charges from the sums due to Seller under Article 6 of this Agreement.

Nothing shall obligate or cause a Party to pay or be liable to pay any Governmental Charges for which it is exempt under the law.

ARTICLE 9: [RESERVED.]

9.1 [Reserved.]
ARTICLE 10: REPRESENTATIONS; WARRANTIES; COVENANTS

10.1 Mutual Representations and Warranties.

On the Effective Date, each Party represents and warrants to the other Party that:
(a) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;
(b) it has all regulatory authorizations necessary for it to legally perform its obligations under this Agreement, except all permits necessary to construct, operate and maintain the Unit and sell the Product therefrom in the case of Seller;
(c) the execution, delivery and performance of this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it;
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22 (d) this Agreement and each other document executed and delivered in accordance with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; subject to any Equitable Defenses.
(e) it is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt; (f) there is not pending or, to its knowledge, threatened against it or any of its Affiliates any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement;
(g) no Event of Default would occur as a result of its entering into or performing its obligations under this Agreement;
(h) it is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Agreement;
(i) it is a “forward contract merchant” within the meaning of the United States Bankruptcy Code; and
(j) it has entered into this Agreement in connection with the conduct of its business and it has the capacity or ability to make or take delivery of Product.

10.2 Buyer and Seller Covenants.

Buyer and Seller shall, throughout the Delivery Term, take all commercially reasonable actions and execute any and all documents or instruments reasonably necessary to ensure Buyer’s right to the use of the Product, including the Designated RA Capacity, for the sole benefit of Buyer (or any subsequent purchaser under Article 12). Such commercially reasonable actions shall include, without limitation:
(a) Cooperating with and providing, and in the case of Seller causing the Unit’s Scheduling Coordinator, owner, or operator to cooperate with and provide requested supporting documentation to the CAISO, the CPUC, or any other Governmental Body responsible for administering RAR, LAR, and/or FCR under Applicable Laws, to certify or qualify the Product as RA Capacity. Such actions shall include, without limitation, providing information requested by the CAISO, CPUC, or by an LRA having jurisdiction, to demonstrate for each month of the Delivery Term the ability to deliver the Designated RA Capacity from the Unit to the CAISO Controlled Grid for the minimum hours required to qualify as RA Capacity, and providing information requested by the CPUC, CAISO or other Governmental Body having jurisdiction to administer RAR, LAR, or FCR to demonstrate that the Designated RA Capacity can be delivered to the CAISO Controlled Grid, pursuant to “deliverability” standards established by the CAISO, or other Governmental Body having jurisdiction to administer RAR, LAR and/or FCR; and (b) Negotiating in good faith to make necessary amendments, if any, to this Agreement to conform it to subsequent clarifications, revisions, or decisions rendered by the CAISO, CPUC, FERC, or other Governmental Body having jurisdiction to administer RAR, LAR, or FCR so as to maintain the benefits of the bargain struck by the Parties on the Effective Date; provided, however, that such commercially reasonable actions shall not include any obligation that the owner or operator of the Facility DRAFT Item 5
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23 undertake capital improvements, Facility enhancements, or the construction of new facilities nor in any way limit the Parties with respect to advocacy for any regulatory policies or market changes before any entity.

10.3 Seller Representations, Warranties and Covenants.

Seller represents, warrants and covenants to Buyer that:
(a) Throughout the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all the Product from the Unit, including the Designated RA Capacity; (b) Throughout the Delivery Term, Seller owns or has the exclusive right to the Capacity Attributes sold under this Agreement, and shall furnish Buyer, CAISO, CPUC or other jurisdictional LRA, or other Governmental Body with such evidence as may reasonably be requested to demonstrate such ownership or exclusive right;
(c) Throughout the Delivery Term, no portion of the Designated RA Capacity has been committed by Seller to any third party in order to satisfy RAR, LAR, FCR or analogous obligations in CAISO markets, other than pursuant to an RMR Contract between the CAISO and either Seller or the Unit’s owner or operator;
(d) Throughout the Delivery Term, no portion of the Designated RA Capacity has been committed by Seller in order to satisfy RAR, LAR, FCR, or analogous obligations in any non-CAISO market;
(e) The Unit is within the CAISO Control Area and Seller shall maintain Site Control throughout the Delivery Term;
(f) Throughout the Delivery Term, the owner or operator of the Unit is obligated to comply with Applicable Laws, including the Tariff, relating to RA Capacity, RAR, LAR, and FCR; (g) Throughout the Delivery Term, the respective cumulative amounts of LAR Attributes, RAR Attributes, and FCR Attributes that Seller has sold, assigned or transferred from the Unit does not exceed that Unit’s RA Capacity;
(h) Throughout the Delivery Term, with respect to the Designated RA Capacity provided under this Agreement, Seller shall, and the Unit’s Scheduling Coordinator is obligated to, comply with Applicable Laws, including the Tariff, relating to RAR, LAR, and FCR; (i) Seller has notified the Scheduling Coordinator of the Unit that, throughout the Delivery Term, Seller has transferred the Designated RA Capacity to Buyer, and the Scheduling Coordinator is obligated to deliver the Supply Plans in accordance with this Agreement and the Tariff; (j) Seller has notified the Scheduling Coordinator of the Unit that Seller is obligated, throughout the Delivery Term, to cause the Unit’s Scheduling Coordinator to provide to the Buyer, at least twenty (20) Business Days before the Notification Deadline, the Designated RA Capacity of the Unit that is to be submitted in the Supply Plan associated with this Agreement for the applicable period; and (k) Seller has notified the Unit’s Scheduling Coordinator that, throughout the Delivery Term, Buyer is entitled to the revenues set forth in Section 3.11 of this Agreement and that such Scheduling Coordinator is obligated to promptly deliver those revenues to Buyer, along with appropriate documentation supporting the amount of those revenues.

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24 (l) As of the Effective Date, that the Unit is eligible to qualify as a MTR Resource.

10.4 Buyer Representations, Warranties and Covenants.
(a) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim and affirmatively waives immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court, (3) relief by way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment.
(b) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
(c) Buyer cannot assert sovereign immunity as a defense to the enforcement of its obligations under this Agreement.

10.5 Prevailing Wage.

Seller shall comply with all federal, state and local laws, statutes, ordinances, rules and regulations, and orders and decrees of any courts or administrative bodies or tribunals, including without limitation employment discrimination laws and prevailing wage laws. Seller shall use reasonable efforts to ensure that all employees hired by Seller, and its contractors and subcontractors, that will perform construction work or provide services at the Site related to construction of the Facility are paid wages at rates not less than those prevailing for workers performing similar work in the locality as provided by applicable California law, if any (“Prevailing Wage Requirement”). Buyer agrees that Seller’s obligations under this Section

10.5 with respect to the Prevailing Wage Requirement will be satisfied upon the execution by Seller’s contractor of a community workforce agreement, work site or project labor agreement, collective bargaining agreement, or other similar agreement related to construction of the Facility.

ARTICLE 11: CONFIDENTIALITY
(a) Neither Party shall disclose this Agreement, any of the terms or conditions of this Agreement or information exchanged between the Parties pursuant to this Agreement (“Confidential Information”) to a third party, except for such information (i) as may become generally available to the public, (ii) as may be required or appropriate in response to any summons, subpoena, request from a regulatory body, or otherwise in connection with any litigation or to comply with any applicable law, order, regulation, ruling, regulatory request, accounting disclosure rule or standard or any exchange, control area or independent system operator rule, (iii) as may be obtained from a non-confidential source that disclosed such information in a manner that did not violate its obligations to the Disclosing Party, if any, in making such disclosure, or (iv) as may be furnished to a Party’s Affiliates, and to each of such person’s employees, lenders or potential lenders, investors or potential investors, counsel, accountants or advisors who have a need to know such information and have agreed to keep such terms confidential. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation.
(b) Notwithstanding the foregoing, the Parties agree that Buyer may disclose information pertaining to this Agreement to any Governmental Body, the CPUC, the CAISO or any LRA having jurisdiction in order to support its LAR Showings, RAR Showings and/or FCR Showings, as applicable, and Seller may disclose the transfer of the Designated RA Capacity under this Agreement to the Scheduling Coordinator of the Unit in order for such Scheduling Coordinator to timely submit accurate Supply Plans; DRAFT Item 5
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25 provided, that each disclosing Party shall use reasonable efforts to limit, to the extent possible, the ability of any such applicable Governmental Body, CAISO, or Scheduling Coordinator to further disclose such information. In addition, in the event Buyer resells all or any portion of the Designated RA Capacity to another party, Buyer shall be permitted to disclose to the other party to such resale transaction all such information to the extent such disclosure is necessary to affect such resale transaction, provided that such other party agrees to keep such information confidential. (c) Seller acknowledges that Buyer is subject to the California Constitution Article 1, Section 3, and the California Public Records Act, Cal. Gov. Code § 6250 et seq. (“Public Records Act”) in regard to the documents comprising this Agreement, which items may constitute public records subject to inspection and copying by the public under the authority of the California Constitution and the Public Records Act. Buyer shall, consistent with those laws, use reasonable efforts to provide Seller with notice of any third-party request to inspect and copy any of the documents that comprise this Agreement, which Seller might deem confidential and exempt from disclosure, in order that Seller may timely seek to protect those documents from disclosure to the third party. Seller acknowledges and agrees that Buyer shall not be liable to Seller if Buyer makes disclosure in accordance with the California Constitution and/or the Public Records Act before Seller has timely obtained an order to prevent Buyer from making the requested disclosure to the third party.

ARTICLE 12: BUYER’S RE-SALE OF PRODUCT
(a) Buyer may re-sell all or a portion of the Product and any associated rights, in each case, acquired under this Agreement. If Buyer re-sells all or a portion of the Product and any associated rights acquired under this Agreement (“Resold Product”), Seller agrees, and agrees to cause the Unit’s Scheduling Coordinator, to follow Buyer’s reasonable instructions with respect to providing such Resold Product to subsequent purchasers of such Resold Product to the extent such instructions are consistent with Seller’s obligations under this Agreement.
(b) Seller further agrees, and agrees to cause the Unit’s Scheduling Coordinator, to take all commercially reasonable actions and execute any and all documents or instruments reasonably necessary to allow such subsequent purchasers to use such Resold Product in a manner consistent with Buyer’s rights under this Agreement. If Buyer incurs any liability to any purchaser of such Resold Product due to the failure of Seller or the Unit’s Scheduling Coordinator to comply with the terms of this Agreement, then Seller shall be liable to Buyer for any liabilities Seller would have incurred under this Agreement if Buyer had not resold the Product, including without limitation, pursuant to Sections 3.8. (c) In the event there is any Resold Product, Buyer agrees to notify Seller that such a sale has occurred and agrees to provide Seller with the information specified below promptly following such sale (and any other information reasonably requested by Seller so that Seller may perform its obligations in this Article 12) and promptly notify Seller of any subsequent changes to such information with respect to any particular sale: (i) benefitting LSE’s SC identification number (SCID), (ii) volume (in MW) of Resold Product, and (iii) subsequent sale delivery period for Resold Product. (d) If a centralized capacity market develops within the CAISO or WECC region, Buyer will have exclusive rights to offer, bid, or otherwise submit Product sold to Buyer pursuant to this Agreement for re-sale in such market, and retain and receive any and all related revenues. Buyer shall be responsible for any material, incremental costs of offering, bidding,submitting, or re-selling Product in such centralized capacity market.

DRAFT Item 5
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26 ARTICLE 13: CHANGE IN LAW
If any action by the CPUC, CAISO or any Governmental Body having jurisdiction results in any change in applicable law occurring after the Effective Date that changes the Resource Adequacy Requirements such that the Product can no longer be counted towards Buyer’s Compliance Obligation (a “Change in Law”), then upon the request of the affected Party, the Parties will discuss in good faith potential amendments to this Agreement as the Parties may mutually agree are appropriate to give effect to the original intentions of the Parties regarding the appropriate allocation of benefits and burdens and responsibilities of the Parties hereunder; provided however that no Party is obligated to agree to an amendment and further provided that Seller’s obligations hereunder are subject to the limitations on Seller’s obligations as set forth in Section 10.3(b).

ARTICLE 14: COLLATERAL REQUIREMENTS

14.1 Development Security.

Seller shall deliver Development Security to Buyer within ten (10) Business Days of the Effective Date.

Seller shall maintain the Development Security in full force and effect and Seller shall within ten (10) Business Days replenish the Development Security in the event Buyer collects or draws down any portion of the Development Security for any reason permitted under this Agreement provided that the aggregate amount of any such collected or drawn upon Development Security shall in no event exceed an amount equal to the Seller Pre-COD Liability Cap, and Seller has no obligation to replenish the Development Security in excess thereof. Upon the earlier of (a) Seller’s delivery of the Performance Security, or (b) sixty (60) days aftertermination of this Agreement,Buyershall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement.

14.2 Performance Security.

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 shall within ten (10) Business Days 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. Buyer shall return the Performance Security, less the amounts drawn in accordance with this Agreement, once all payment obligations of Seller then due and payable under this Agreement, including compensation for penalties, termination damages, indemnification payments, or other damages are paid in full (whether directly or indirectly such as through set-off or netting).

14.3 First Priority Security Interest in Cash or Cash Equivalent Collateral. (a) 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 and Performance Security, any other cash collateral and cash equivalent collateral posted under this Agreement, 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. (b) 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 DRAFT Item 5
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27 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:
(i) Exercise any of its rights and remedies with respect to the Development Security or Performance Security, as applicable, including any such rights and remedies under Applicable Law then in effect;
(ii) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security and Performance Security, as applicable; and (iii) Liquidate Development Security or Performance Security, as applicable, then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller. (c) Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.

14.4 Buyer Financial Statements.

If, at any time during the Term, Buyer does not have or ceases to have and maintain an Investment Grade Credit Rating, Buyer provide to Seller both upon request and as indicated below: (a) within sixty (60) days following the end of its first, second and third fiscal quarters, or as soon as reasonably possible thereafter, unaudited quarterly financial statements of Buyer prepared in accordance with generally accepted accounting principles in the United States, consistently applied; (b) within two hundred ten (210) days following the end of each fiscal year, or as soon as reasonably possible thereafter, annual audited financial statements of Buyer prepared in accordance with generally accepted accounting principles in the United States, consistently applied; and (c) as available, Buyer’s annual report, which will include an overview of customer rate classes and retention rate (and may include opt-out rates), procurement activities, customer programs, and a list of Buyer’s member agencies and board members.

ARTICLE 15: INSURANCE

15.1 Insurance.

Throughout the Term, Seller shall procure and maintain the following insurance coverage. In addition, Seller will require that its contractors comply with such insurance requirements and industry standards as related to the scope of Work. For the avoidance of doubt, the obligations of the Seller in this Section 15.1 constitute a material obligation of this Agreement.
(a) Workers’ Compensation and Employers’ Liability.
(i) If it has employees, workers’ compensation insurance indicating compliance with any applicable labor codes, acts, Applicable Laws or statutes, California state or federal, where Seller performs Work.
(ii) Employers’ liability insurance will not be less than one million dollars ($1,000,000) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the one million dollar ($1,000,000) policy limit will apply to each employee.

DRAFT Item 5
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28 (b) Commercial General Liability.
(i) Commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of two million dollars ($2,000,000) per occurrence, and an annual aggregate of not less than five million dollars ($5,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller’s insurable indemnity obligations under this Agreement and including Buyer as an additional insured but only to the extent of Seller’s insurable indemnity obligations under this Agreement. (ii) An umbrella insurance policy in a minimum limit of liability of ten million dollars ($10,000,000). The amounts of liability insurance described in Section 15.1(b)(i) and this Section 15.1(b)(ii) may be satisfied by primary insurance or by any combination of primary and umbrella insurance.
(iii) Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions.
(c) Business Auto.
(i) Business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence.
(ii) Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(d) Construction All-Risk Insurance.
(i) During the construction of the Unit prior to the Commercial Operation Date, construction all-risk form property insurance covering the Unit during such construction periods, and naming Seller (and Lender if any) as the loss payee.

15.2 Evidence of Insurance.

Within ten (10) days after the Effective Date and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing the coverage required under this Agreement. In the event of any material modification, reduction, cancellation or termination of coverage, Seller will provide thirty (30) days prior notice to Buyer or as soon as reasonably possible if thirty (30) days is not available. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer.

ARTICLE 16: UNIT CONSTRUCTION AND COMMERCIAL OPERATION

16.1 Construction of the Unit.
(a) Construction Start. “Construction Start” will occur upon satisfaction of the following:
(i) Seller has acquired the applicable regulatory authorizations, approvals and permits required for the commencement of construction of the Unit, (ii) Seller has engaged all contractors and ordered all essential equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of the Unit may begin and proceed to completion without foreseeable interruption of material duration, and (iii) Seller has executed an engineering, procurement, and construction contract (or equivalent DRAFT Item 5
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EXECUTION VERSION
29 agreements) and issued thereunder a “notice to proceed” or its equivalent that authorizes the contractor to mobilize to Site and begin physical construction of the Unit at the Site. The date of Construction Start will be evidenced by and subject to Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit B hereto, and the date certified therein shall be the “Construction Start Date.” Seller shall cause the Construction Start Date to be achieved by the Guaranteed Construction Start Date; provided that if Seller does not cause the Construction Start Date by the Guaranteed Construction Start Date, Seller’s sole liability and Buyer’s sole remedy will be Seller’s obligation to provide a Remedial Action Plan as provided in Section 16.1(c).
(b) Progress Reports. The Parties acknowledge that Seller’s obligations hereunder are contingent upon the construction and operation of the proposed energy storage system being developed by the Guaranteed Commercial Operation Date. 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 agree to regularly scheduled meetings between representatives of Buyer and Seller to review such monthly reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit F. Seller shall also provide Buyer with any reasonable 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 shall also provide Buyer with any information in Seller’s possession that is reasonably requested by Buyer for Buyer to demonstrate to the CPUC, CAISO, or other Governmental Bodies that Buyer has met its applicable resource adequacy requirements and integrated resource planning requirements, including providing status reports to the CPUC with respect to the Unit. (c) Remedial Action Plan; Termination Right. If Seller misses any Milestone by more than thirty (30) days, 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) to 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. Delivery of any Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent missed Milestones and to achieve the Guaranteed Commercial Operation Date in accordance with the terms of this Agreement.

In the event Seller misses any Milestone by more than ninety (90) days and Seller and Buyer mutually agree that Seller will not achieve Commercial Operation on or before the Guaranteed Commercial Operation Date, as may be extended by a Development Cure Period, a One-Time Extension or Seller’s payment of Commercial Operation Delay Damages, either Party shall have the right, but not the obligation, to terminate this Agreement and Seller will owe Buyer, as liquidated damages, an amount equal to the full Development Security that is required to be posted by Seller pursuant to this Agreement; provided, payment of such amount shall constitute liquidated damages and Buyer’s sole and exclusive remedy for such termination.

16.2 Commercial Operation.
(a) Commercial Operation. “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 to Buyer substantially in the form of Exhibit C. Seller shall use commercially reasonable efforts to cause Commercial Operation for the Unit to occur by the Guaranteed Commercial Operation Date. (b) Commercial Operation Delay Damages. Seller may extend the Guaranteed Commercial Operation Date by paying Commercial Operation Delay Damages in advance to Buyer for each day Seller DRAFT Item 5
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EXECUTION VERSION
desires to extend the Guaranteed Commercial Operation Date, not to exceed a total of ■■■■■ of extensions by such payment of Commercial Operation Delay Damages. In no event will Seller be required to pay Commercial Operation Delay Damages for more than a total of ■■■■■· On or before the date that is ten (I 0) days prior to the then-cunent Guaranteed Commercial Operation Date, if Seller has elected to extend the Guaranteed Commercial Operation Date, Seller shall provide notice and payment to Buyer of the Commercial Operation Delay Damages for the number of days of extension to the Guaranteed Commercial Operation Date. If Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date as extended by the payment of Commercial Operation Delay Damages, Buyer shall refund to Seller the Commercial Operation Delay Damages for each day Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date times the Commercial Operation Delay Damages, not to exceed the total amount of Commercial Operation Delay Damages paid by Seller pursuant to this Section 16.2(b).
(c) Extension of Guaranteed Milestones. The Guaranteed Constmction Start Date and the Guaranteed Commercial Operation Date shall, subject to notice and documentation requirements set fo1th below, be automatically extended on a day-for-day basis (the "Development Cure Period") for the duration of any and all delays aiising out of the following circumstances to the extent the following circumstances are not the result of Seller's failure to take all commercially reasonable actions to meet its requirements and deadlines:
(i) The Interconnection Facilities or Network Upgrades, if applicable, are not complete and ready for the Unit to connect and sell Product at the Delive1y Point by the Guaranteed Commercial Operation Date despite the exercise of commercially reasonable effo1ts by Seller; or (ii) A Force Majeure Event occurs.
(d) Maximum Milestone Extensions. Notwithstanding anything in this Agreement to the contra1y, the cumulative extensions granted under the Development Cure Period 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 Pe1iod(s) shall not exceed ■■■■■■111■■11 · No extension shall be given if the delay was the result of Seller's failure to take all commercially reasonable actions to meet its requirements and deadlines. 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 failure to take such commercially reasonable actions. (e) Tennination for Failure to Achieve Guaranteed Commercial Operation Date. If Seller has not achieved Commercial Operation on or before the Guaranteed Commercial Operation Date, as such date may be extended by Seller's payment of Commercial Operation Delay Damages, a One-Time Extension and/or a Development Cure Pe1iod, then either Patty has the rig!it, but not the obligation, to temlinate this Agreement
(f) Failure to Reach Guaranteed Capacity. If, at Commercial Operation, the installed capacity is less than one hundred percent (I 00%) of the Guai·anteed Capacity, Seller shall have ninety (90) days after the Commercial Operation Date to install additional capacity such that the installed capacity is equal to (but not greater than) the Guai·anteed Capacity, and Seller shall provide to Buyer a new ce1tificate substantially in the fo1m attached as Exhibit C hereto specifying the new Installed Capacity. If Seller fails to constmct the Guai·anteed Capacity by such date, Seller shall pay "Capacity Damages" to Buyer, in an amount equal 30 DRAFT Item 5
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EXECUTION VERSION
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 reduced to an amount equal to the product of (a) the amount in effect prior to such adjustment, multiplied by (b) the ratio of the installed capacity as of such date to the original Guaranteed Capacity. (g) Limitation on Seller's Ability to Make or Agree to Third-Party Sales from the Unit after Early Termination Date. If this Agreement is terminated by Seller prior to the Commercial Operation Date pursuant to Section 16. l(c) or 16.2(e), neither Seller nor Seller's Affiliates may sell, market or deliver any Product associated with or attributable to the Unit to a party other than Buyer for a period of following such termination, unless prior to selling, marketing or delivering such Product, or entering into the agreement to sell, market or deliver such Product to a party other than Buyer, Seller or Seller's Affiliates provide Buyer with a written offer to sell the Product on terms and conditions materially similar to the terms and conditions contained in this Agreement
and Buyer fails to accept such offer within
forty-five ( 45) days of Buyer's receipt thereof. Neither Seller nor Seller's Affiliates may sell or transfer the Unit, or any part thereof, or land rights or interests in the Site (including the interconnection queue position of the Unit) so long as the limitations contained in this Section 16.2(g) apply, unless the transferee agrees to be bound by the terms set forth in this Section l 6.2(g) pursuant to a written agreement approved by Buyer in its reasonable discretion. Seller shall indemnify and hold Buyer harmless from all benefits lost and other damages sustained by Buyer as a result of any breach by Seller of its covenants contained within this Section

16.2(g).
31 EXECUTION VERSION
32 ARTICLE 17: FORCE MAJEURE

17.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of commercially reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance.
(b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic and pandemic landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; or strikes caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions or changes in Law that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component or compliance costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy Product at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above; (iv) a Curtailment Order; (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) 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; or (ix) delays in the construction of the Facility or the delivery of DRAFT Item 5
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Draft Agreement: Baldy Mesa Solar, LLC
DRAFT Item 5
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EXECUTION VERSION
materials necessruy to complete the Facility known or that reasonably should have been known to Seller, its existing suppliers or service providers for the Facility as of the Effective Date. 17 .2 No Liability If a Force Majeure Event Occurs.

Except as provided in Section 16.2(b) and (c), neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Pruty rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take commercially reasonable actions necessruy to remove such inability with due speed and diligence.

Nothing herein shall be constmed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due speed and diligence shall not be interpreted to require resolution oflabor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party having such difficulty. Neither Pruty shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party's perform ance of one or more of its obligations hereunder is caused by a Force Majeure Event. The occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of a Pruty to make any payments due hereunder.

17.3 Notice.

In the event of any delay or nonperformance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall (a) as soon as practicable, notify the other Pru·ty in writing of the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or intenuption in performance, and (b) 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 Pruty; provided, a Party's failure to give timely Notice shall not affect such Party's ability to assert that a Force Majeure Event has occuned unless the delay in giving Notice materially prejudices the other Party.

17.4 Termination Following Force Majeure Event.
(b) If a Force Majeure Event has occuned after the Commercial Operation Date that has caused either Party to be wholly or part ially unable to perform its obligations hereunder in any material respect, and the impacted Pruty 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 Pru·ty, save and except for those obligations specified in Section 2.1, and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.

ARTICLE 18: MISCELLANEOUS

18.1 Title and Risk of Loss.
33 EXECUTION VERSION
34 Title to and risk of loss related to the Product shall transfer from Seller to Buyer at the Delivery Point.

Seller warrants that it will deliver to Buyer the Product free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto by any person arising prior to the Delivery Point.

18.2 Indemnity.
(a) Indemnity by Seller. Seller shall release, indemnify and hold harmless Buyer or Buyers’ respective directors, officers, agents, and representatives against and from any and all loss, Claims, actions or suits, including costs and attorney’s fees resulting from, or arising out of or in any way connected with Seller’s operation and/or maintenance of the Unit, including without limitation any loss, Claim, action or suit, for or on account of injury to, bodily or otherwise, or death of persons, or for damage to or destruction of property belonging to Buyer, Seller, or others, excepting only such loss, Claim, action or suit as may be caused solely by the willful misconduct or gross negligence of Buyer, its Affiliates, or Buyers’ and Affiliates’ respective agents, employees, directors, or officers. (b) Indemnity by Buyer. Buyer shall release, indemnify and hold harmless Seller, its directors, officers, agents, and representatives against and from any and all loss, Claims, actions or suits, including costs and attorney’s fees resulting from, or arising out of or in any way connected with Buyer’s access to the Unit site, including any loss, Claim, action or suit, for or on account of injury to, bodily or otherwise, or death of persons, or for damage to or destruction of property belonging to Buyer, Seller, or others, excepting only such loss, Claim, action or suit as may be caused solely by the willful misconduct or gross negligence of Seller, its Affiliates, or Seller’s and Affiliates’ respective agents, employees, directors or officers
(c) No Dedication. Without limitation of each Party’s obligations under Sections 17.2(a) and

17.2(b) herein, nothing in this Agreement shall be construed to create any duty to, any standard of care with reference to, or any liability to any person or entity not a Party to this Agreement. No undertaking by one Party to the other under any provision of this Agreement shall constitute the dedication of that Party’s system or any portion thereof to the other Party or the public, nor affect the status of Buyer as an independent public utility corporation or Seller as an independent individual or entity.

18.3 Assignment.
(a) Assignment Generally. Neither Party shall assign this Agreement or its rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed, and any Change of Control of Seller will be deemed an assignment and will require the prior written consent of Buyer hereunder, which consent will not be unreasonably withheld, conditioned or delayed; provided, however, Seller may, without the consent of Buyer (and without relieving itself from liability hereunder), (i) transfer, sell, pledge, encumber or assign this Agreement or the accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements, (ii) transfer or assign this Agreement, including through a Change of Control, to an Affiliate of such Party which Affiliate’s creditworthiness is equal to or higher than that of such Party, or (iii) transfer or assign this Agreement, including through a Change of Control, to any person or entity succeeding to all or substantially all of the assets whose creditworthiness is equal to or higher than that of such Party; provided, however, that in the case of any such assignment pursuant to clause (ii) or clause (iii), any such assignee shall agree in writing to be bound by the terms and conditions hereof and so long as the transferring Party delivers such tax and enforceability assurance as the non-transferring Party may reasonably request. In connection with any financing or refinancing of the Unit by Seller, Buyer shall in good faith negotiate and agree upon a consent to collateral assignment of this Agreement in a form that is commercially reasonable and customary in the industry
DRAFT Item 5
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EXECUTION VERSION
35 (b) Notwithstanding the foregoing, after the Commercial Operation Date has occurred, Seller may, without the prior written consent of Buyer, transfer or assign this Agreement, including through a Change of Control, to any Person acquiring all or substantially all of the renewable energy assets directly or indirectly owned by Seller’s Ultimate Parent (whether voluntary or by operation of law and whether by assignment or Change of Control), if, (a) such transferee is a Permitted Transferee; (b) Seller gives Buyer notice at least fifteen (15) Business Days prior to such proposed assignment or Change of Control; (c) except in the case of a Change of Control, Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests that provides that such Person will assume all of Seller’s obligations and liabilities under this agreement upon such transfer or assignment; and (d) Seller has provided Buyer with a certificate signed by the Person to which Seller wishes to assign its interests certifying that such Person meets the definition of a Permitted Transferee (and only if the requirements in subsections (a), (b), (c) and (d) above are satisfied). Neither the transfer or assignment of this Agreement through foreclosure by any Lender on the assets of Seller or on the direct or indirect ownership interests in Seller nor the transfer or assignment of this Agreement or such ownership interests in Seller to any Lender in lieu of such foreclosure (including any transfer or assignment of this Agreement or such ownership interests in Seller subsequent to such foreclosure or transfer or assignment in lieu of foreclosure to a Permitted Transferee) shall require Buyer’s consent.
(c) Buyer’s Limited Assignment Right. Buyer may assign the right to receive all or a portion of the Product that would otherwise be delivered to Buyer hereunder. In connection with any such assignment, Buyer and Seller agree to execute an assignment agreement substantially in the form attached hereto as Exhibit G. For the avoidance of doubt, Buyer will remain responsible for all its obligations under this Agreement related to such assigned Product, including (i) the obligation to pay for such Product to the extent the assignee thereof does not do so, and (ii) any damages associated with such assignee’s failure to receive any such Product.

18.4 Governing Law and Venue.

This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. Each of the Parties irrevocably and unconditionally agrees that any suit, action or other proceeding arising out of or relating to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement or validity or invalidity of this Agreement or any provision hereof shall be filed in either the United States District Court for the Northern District of California or the Superior Court of California, County of Santa Clara, as appropriate (and agrees not to commence any suit, action or proceeding relating thereto except in such courts). Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement or validity or invalidity of this Agreement or any provision hereof in the United States District Court for the Northern District of California or the Superior Court of California, County of Santa Clara, as appropriate, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final judgment (i.e., judgment after any appeals that may be duly made) in any suit, action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner provided in law or in equity.

18.5 Notices.

DRAFT Item 5
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EXECUTION VERSION
36 All notices, requests, statements or payments shall be made as specified in Exhibit H. Notices (other than scheduling requests) shall, unless otherwise specified herein, be in writing and may be delivered by hand delivery, United States mail, overnight courier service or facsimile. Notice by facsimile or hand delivery shall be effective at the close of business on the day actually received, if received during business hours on a Business Day, and otherwise shall be effective at the close of business on the next Business Day. Notice by overnight United States mail or courier shall be effective on the next Business Day after it was sent. A Party may change its addresses by providing notice of same in accordance herewith.

18.6 Mobile-Sierra.

Absent the agreement of all Parties to the proposed change, the standard of review for changes to any rate, charge, classification, term or condition of this Agreement, whether proposed by a Party (to the extent that any waiver below is unenforceable or ineffective as to such Party), a non-party or FERC acting sua sponte, shall be the ‘public interest’ standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956), and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008); NRG Power Marketing LLC v. Maine Public Utility Commission, 558 U.S. 527 (2010).

Notwithstanding any provision of this Agreement, and absent the prior written agreement of the Parties, each Party, to the fullest extent permitted by Applicable Laws, for itself and its respective successors and assigns, hereby also expressly and irrevocably waives any rights it can or may have, now or in the future, whether under Sections 205, 206, or 306 of the Federal Power Act or otherwise, to seek to obtain from FERC by any means, directly or indirectly (through complaint, investigation, supporting a third party seeking to obtain or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC changing any section of this Agreement specifying any rate or other material economic terms and conditions agreed to by the Parties.

18.7 General.

This Agreement (including the exhibits, schedules and any written supplements hereto, if any) constitute the entire agreement between the Parties relating to the subject matter.

Notwithstanding the foregoing, any collateral, credit support or margin agreement or similar arrangement between the Parties shall, upon designation by the Parties, be deemed part of this Agreement and shall be incorporated herein by reference. 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. Except to the extent herein provided for, no amendment or modification to this Agreement shall be enforceable unless reduced to writing and executed by both Parties. Each Party agrees if it seeks to amend any applicable wholesale power sales tariff during the term of this Agreement, such amendment will not in any way affect outstanding transactions under this Agreement without the prior written consent of the other Party. Each Party further agrees that it will not assert, or defend itself, on the basis that any applicable tariff is inconsistent with this Agreement. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement). Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default. Any provision declared or rendered unlawful by any applicable court of law or regulatory agency or deemed unlawful because of a statutory change (individually or collectively, such events referred to as “Regulatory Event”) will not otherwise affect the remaining lawful obligations that arise under this Agreement; and provided, further, that if a Regulatory Event occurs, the Parties shall use commercially reasonable efforts to reform this Agreement in order to give effect to the original intention of the Parties. The term “including” when used in this Agreement shall be by way of example only and shall not be considered in any way to be in limitation.

The headings used herein are for convenience and reference purposes only. All indemnity and audit rights DRAFT Item 5
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EXECUTION VERSION
37 shall survive the termination of this Agreement for twelve (12) months. This Agreement shall be binding on each Party’s successors and permitted assigns.

18.8 Audit.

Each Party has the right, at its sole expense and during normal working hours, to examine the records of the other Party to the extent reasonably necessary to verify the accuracy of any statement, charge or computation made pursuant to this Agreement. If requested, a Party shall provide to the other Party statements evidencing the Product delivered hereunder. If any such examination reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof will be made promptly and shall bear interest calculated at the Interest Rate from the date the overpayment or underpayment was made until paid; provided, however, that no adjustment for any statement or payment will be made unless objection to the accuracy thereof was made prior to the lapse of twelve (12) months from the rendition thereof, and thereafter any objection shall be deemed waived.

18.9 Forward Contract.

The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the United States Bankruptcy Code.

18.10 Dispute Resolution.
(a) In the event of any claim, controversy or dispute between the Parties arising out of or relating to or in connection with this Agreement (including any dispute concerning the validity of this Agreement or the scope and interpretation of this Section 18.10) (a “Dispute”), any Party (the “Notifying Party”) may deliver to the other Parties (the “Recipient Party”) notice of the Dispute with a detailed description of the underlying circumstances of such Dispute (a “Dispute Notice”). The Dispute Notice shall include a schedule of the availability of the Notifying Party’s senior officers (having a title of senior vice president (or its equivalent) or higher) duly authorized to settle the Dispute during the thirty (30) day period following the delivery of the Dispute Notice.
(b) The Recipient Party shall, within five (5) Business Days following receipt of the Dispute Notice, provide to the Notifying Party a brief summary of the Recipient Party’s position on the Dispute and a parallel schedule of availability of the Recipient Party’s senior officers (having a title of senior vice president (or its equivalent) or higher) duly authorized to settle the Dispute. Following delivery of the respective senior officers’ schedules of availability, the senior officers of the Parties shall meet and confer as often as they deem reasonably necessary during the remainder of the thirty (30) day period in good faith negotiations to resolve the Dispute to the satisfaction of each Party. (c) In the event a Dispute is not resolved pursuant to the procedures set forth in Sections 17.10(a) and (b) by the expiration of the thirty (30) day period set forth in Section 18.10(b), then a Party may pursue any legal remedy available to it in accordance with this Agreement.

18.11 Execution.

A signature received via facsimile or email shall have the same legal effect as an original.

18.12 Joint Powers Authority.

Seller acknowledges and agrees that Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act of the State of California (Government Code Section 6500 et seq.) pursuant to a Joint Powers Agreement and is a public entity separate from its members. Buyer shall solely be responsible for DRAFT Item 5
Attachment 1
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EXECUTION VERSION
38 all debts, obligations and liabilities accruing and arising out of this Agreement and Seller agrees that it shall have no rights and shall not make any claim, take any actions or assert any remedies against any of Buyer’s members in connection with this Agreement.

18.13 Dodd-Frank Act
The Parties intend this Agreement to be a “customary commercial arrangement” as described in Section II.A.1 of Commodity Futures Trading Commission, Proposed Guidance, Certain Natural Gas and Electric Power Contracts, 81 Fed. Reg. 20583 at 20586 (Apr. 8, 2016) and a “Forward Capacity Transaction” within the meaning of Commodity Futures Trading Commission, Final Order in Responseto a Petition From Certain Independent System Operators and Regional Transmission Organizations To Exempt Specified Transactions Authorized by a Tariff or Protocol Approved by the Federal Energy Regulatory Commission, 78 Fed. Reg. 19,880 (Apr. 2, 2013).

18.14 Market-Based Rate Authority.

Seller agrees, in accordance with Federal Energy Regulatory Commission (FERC) Order No. 697, to, upon request of Buyer, submit a letter of concurrence in support of any affirmative statement by Buyer that this Agreement does not transfer “ownership or control of generation capacity” from Seller to Buyer as the term “ownership or control of generation capacity” is used in 18 CFR Section 35.42. Seller also agrees that it will not, in filings, if any, made subject to Order Nos. 652 and 697, claim that this Agreement conveys ownership or control of generation capacity from Seller to Buyer.

18.15 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; DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
39 (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term; (j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) the expression “and/or” when used as a conjunction shall connote “any or all of”; (l) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and (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.
[Remainder of Page Intentionally Left Blank]
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Signature Page
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

BALDY MESA SOLAR, LLC SILICON VALLEY CLEAN
ENERGY, a California joint powers
authority
By: __________________________ By: __________________________ Name: __________________________ Name: __________________________ Title: __________________________ Title: __________________________ DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Exhibit A - 1
EXHIBIT A: FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:

Bank Ref.:

Amount: US$[XXXXXXXX]
Expiry Date:

APPLICANT DETAILS TO BE PROVIDED
Beneficiary:
[Buyer], 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 [Buyer], 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), pursuant to that certain Resource Adequacy Agreement dated as of ___________ and as amended (the “Agreement”) between [Applicant] and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on [XXXXXX] which is one year after the issue date of this Letter of Credit, or any expiration date extended in accordance with the terms hereof (the “Expiration Date”).

Funds under this Letter of Credit are available to Beneficiary by presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).

The Drawing Certificate may be presented by (a) physical delivery, or (b) facsimile to [bank fax number [XXX-XXX-XXXX]] confirmed by [e-mail to [bank email address]] (if presented by fax it must be followed up by a phone call to us at [XXXXXX] or [XXXXXX] to confirm receipt) with the originals to follow via courier. The drawing will be effective upon our receipt of the original documents at the above noted address.

The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentment of a Drawing Certificate by Beneficiary hereunder in order to receive payment.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
Exhibit A - 2
We hereby agree with the Beneficiary that documents presented under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation to the Issuer on or before the Expiration Date.

All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.

Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.

It is a condition of this Letter of Credit that the Expiration Date shall be deemed automatically extended without an amendment for a one year period beginning on the present Expiration Date hereof and upon each anniversary for such date, unless at least ninety (90) days prior to any such Expiration Date we have sent to you written notice by registered mail or overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on the date specified in such notice. No presentation made under this Letter of Credit after such Expiration Date will be honored.

Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.

This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision) International Chamber of Commerce Publication No. 600 (the “UCP”), except to the extent that the terms hereof are inconsistent with the provisions of the UCP, including but not limited to Articles 14(b) and 36 of the UCP, in which case the terms of this Letter of Credit shall govern. In the event of an act of God, riot, civil commotion, insurrection, war or any other cause beyond Issuer’s control (as defined in Article 36 of the UCP) that interrupts Issuer’s business and causes the place for presentation of the Letter of Credit to be closed for business on the last day for presentation, the Expiration Date of the Letter of Credit will be automatically extended without amendment to a date thirty (30) calendar days after the place for presentation reopens for business.

Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.

All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: [Buyer], Chief Operating Officer, [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. [Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
Exhibit A - 3
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 [Buyer], a California joint powers authority, [Buyer 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 Resource Adequacy Agreement dated as of ___________, (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) or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the letter of credit has occurred.

OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because we have received notice from the Bank that you have elected not to extend the Expiration Date of the Letter of Credit beyond its current Expiration Date and 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 [Buyer], a California joint powers authority 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 [Buyer], a California joint powers authority by wire transfer in immediately available funds to the following account:
[Specify account information]
[Buyer]
_______________________________
Name and Title of Authorized Representative
Date___________________________
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
Exhibit B - 1
EXHIBIT B: FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [Seller] (“Seller”) to [Buyer], a California joint powers authority (“Buyer”) in accordance with the terms of that certain Resource Adequacy Agreement dated [date] (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

Seller hereby certifies and represents to Buyer that the Construction Start (as defined in 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.

IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
[Seller]
By:

Its:

Date:

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
1111 -
-

EXECUTION VERSION
Exhibit C - 1
EXHIBIT C: FORM OF COMMERCIAL OPERATION DATE CERTIFICATE This certification (“Certification”) of Commercial Operation is delivered by [Seller] (“Seller”) to [Buyer], a California joint powers authority (“Buyer”) in accordance with the terms of that certain Resource Adequacy Agreement dated [date] (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

As of _______[DATE]_____, Seller hereby certifies and represents to Buyer the following:
a) The Unit is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
b) Seller has installed equipment for the Unit with a nameplate capacity of no less than ninety-seven percent (97%) of the Guaranteed Capacity.
c) The Unit is fully capable of charging, storing and discharging energy up to no less than ninety-seven percent (97%) of the Guaranteed Capacity and receiving instructions to charge, store and discharge energy.
d) Authorization to parallel the Unit was obtained by the Participating Transmission Owner, Southern California Edison on___[DATE]____.

SELLER:

Signature:

Name:

Title:__________________________________________
Date:__________________________________________

ENGINEER
Signature:______________________________________
Name:_________________________________________
Title:__________________________________________
Date:__________________________________________
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
1111 -
-

EXECUTION VERSION
Exhibit D - 1
EXHIBIT D: DESCRIPTION OF UNIT
The following describes the Unit to be constructed, operated and maintained by Seller through the Term in accordance with the Agreement.

Unit name: Baldy Mesa Solar
Resource type: Lithium-Ion Battery Energy Storage System Nameplate capacity: 75MW
Flex Capacity estimate: Years 1-5: 75MW; Years 6+: 150MW Location: San Bernardino County, CA
Unit physical address: 19252 Muskrat Ave, Adelanto, California 92301 Unit elevation: 2888 ft
Unit latitude: 34.5759
Unit longitude: -117.4134
Interconnection voltage: 115kV
CAISO transmission access charge area: SCE
Point of interconnection: 115kV bus at SCE Roadway Substation Point of interconnection address: 34.5759,-117.413376
Existing zone: SP-15
PNode: ROADWAY_1_N013
CAISO Resource ID: TBD
Substation: SCE Roadway Substation
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

EXECUTION VERSION
Exhibit E - 1
EXHIBIT E: OPERATIONAL CHARACTERISTICS
Throughout the Delivery Term, the Unit shall maintain or exceed the following minimum performance.

The amounts set forth below reflect the full Unit.

Discharging and Charging
Minimum monthly Round-Trip Efficiency: %
Minimum Annual Availability: %
Minimum daily Cycles
Minimum annual Cycles:

Definitions
“Round-Trip Efficiency” means the rate calculated by dividing energy discharged from the Unit by energy charged to the Unit.
“Annual Availability” means the total number of hours, or partial hours, in the Contract Year during which the Unit was available to charge and discharge energy between the Unit and the Delivery Point. “Cycles” means the number of equivalent charge/discharge cycles of the Unit during a specified time period, which shall be deemed to be equal to (a) the total cumulative amount of discharging energy discharged from the Unit (expressed in MWh) divided by (b) four (4) hours.

Description of the Facility
Baldy Mesa Solar is a project comprised of the 75 MW, 300 MWh BESS Unit, paired with a solar facility with an expected nameplate capacity of 150 MW (“Facility”).

Baldy Mesa Solar is behind a POI with an interconnection capacity of 200 MW, along with several other projects under development by AES.

In furtherance of Buyer’s compliance and reporting obligations related to the Product, and without limiting Seller’s obligations under any other provision of this Agreement, Seller agrees to provide documentation reasonably requested by Buyer in connection with such compliance obligations (subject to redaction of commercially sensitive information)
DRAFT .

Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
■
- ■

EXECUTION VERSION
Exhibit F - 1
EXHIBIT F: PROGRESS REPORTING FORM
Each Progress Report must include the following items:

1. Executive summary.

2. Unit description.

3. Site plan of the Unit.

4. Description of any material planned changes to the Unit or the Site.

5. Schedule showing progress on Unit construction generally and achieving each of the Milestones.

6. Summary of activities during the previous month, including any OSHA labor hour reports.

7. Forecast of activities scheduled for the current calendar quarter.

8. Written description about the progress relative to the Milestones, including whether Seller is on schedule with respect to the same.

9. List of issues that are likely to potentially affect achievement of the Milestones.

10. Progress and schedule of the EPC Contract, all major equipment supply agreements, Governmental Approvals, technical studies, and financing arrangements.

11. Pictures, in sufficient quantity and of appropriate detail to document construction and interconnection progress.

12. Compliance with workforce and prevailing wage requirements.

13. Any other documentation reasonably requested by Buyer.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Exhibit G - 1
EXHIBIT G: FORM OF BUYER ASSIGNMENT AGREEMENT
This Buyer Assignment Agreement (this “Assignment Agreement” or “Agreement”) is entered into as of [____], 2022 by and among [____], a [____] (“Seller”), [CCA], a [____] (“Buyer”), and J.

Aron & Company LLC, a New York limited liability company (“J. Aron”), and relates to that certain Resource Adequacy Agreement (the “RAA”) between Buyer and Seller as described on Appendix 1.

Unless the context otherwise specifies or requires, capitalized terms used but not defined in this Agreement have the meanings set forth in the PPA.

In consideration of the premises above and the mutual covenants and agreements herein set forth, Seller, Buyer and J. Aron (the “Parties” hereto; each is a “Party”) agree as follows:

1. Limited Assignment and Delegation.
(a) Buyer hereby assigns, transfers and conveys to J. Aron all right, title and interest in and to the rights of Buyer under the RAA to receive delivery of the products described on Appendix 1 (the “Assigned Products”) during the Assignment Period (as defined in Appendix 1), as such rights may be limited or further described in the “Further Information” section on Appendix 1 (the “Assigned Product Rights”). All Assigned Products shall be delivered pursuant to the terms and conditions of this Agreement during the Assignment Period as provided in Appendix

1. All other rights of Buyer under the RAA are expressly reserved for Buyer. (b) Buyer hereby delegates to J. Aron the obligation to pay for all Assigned Products that are actually delivered to J. Aron pursuant to the Assigned Product Rights during the Assignment Period (the “Delivered Product Payment Obligation” and together with the Assigned Product Rights, collectively the “Assigned Rights and Obligations”). All other obligations of Buyer under the RAA are expressly retained by Buyer. To the extent J. Aron fails to pay for any Assigned Products by the due date for payment set forth in the RAA, Buyer agrees that it will remain responsible for such payment within five (5) Business Days (as defined in the RAA) of receiving notice of such non-payment from Seller.
(c) J. Aron hereby accepts and Seller hereby consents and agrees to the assignment, transfer, conveyance and delegation described in clauses (a) and (b) above. (d) All scheduling of Assigned Products and other communications related to the RAA shall take place between Buyer and Seller pursuant to the terms of the RAA; provided that (i) title to Assigned Product will pass from Seller to J. Aron upon delivery by Seller of Assigned Product in accordance with the RAA; (ii) Buyer is hereby authorized by J. Aron to and shall act as J.

Aron’s agent with regard to scheduling Assigned Product; (iii) Buyer will provide copies to J.

Aron of any Notice (as defined in the RAA) of an Event of Default or default, breach or other occurrence that, if not cured within the applicable grace period, could result in an Event of Default contemporaneously upon delivery thereof to Seller and promptly after receipt thereof from Seller; (iv) Seller will provide copies to J. Aron of annual forecasts and monthly forecasts of Available Capacity provided pursuant to Section [__] of the RAA; (v) Seller will provide copies to J. Aron of all invoices and supporting data provided to Buyer pursuant to Section [__], provided that any payment adjustments or subsequent reconciliations occurring after the date that is ten (10) days prior to the payment due date for a monthly invoice, including pursuant to Section [__], will be resolved solely between Buyer and Seller and therefore Seller will not be obligated to deliver copies of any communications relating thereto to J. Aron; and (vi) Buyer and Seller, as applicable, will provide copies to J. Aron of any other information reasonably requested by J. Aron relating to Assigned Products.
(e) Seller acknowledges that (i) J. Aron intends to immediately transfer title to any Assigned Products received from Seller through one or more intermediaries such that all Assigned Products will be re-delivered to Buyer, and (ii) J. Aron has the right to purchase receivables due from Buyer for any such Assigned Products. To the extent J. Aron purchases any such receivables due from Buyer, J. Aron may transfer such receivables to Seller and apply the face amount thereof as a reduction to any Delivered Product Payment Obligation.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Exhibit G - 2
(f) Notwithstanding any other provision of this Agreement, Buyer shall be entitled to retain for its own account all CAISO revenues associated with delivery of the Assigned Product to CAISO, including where Buyer is acting as Scheduling Coordinator for the Unit (as defined in the RAA) and through scheduling of ISTs. As used in this clause (f), the following terms have the meanings specified below.
“CAISO” means California Independent System Operator or its successor. “CAISO Tariff” means CAISO’s Federal Energy Regulatory Commission approved tariff, as modified, amended or supplemented from time to time.
“Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “Scheduling Coordinator” 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.

2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the following:
(1) delivery of a written notice of termination by either J. Aron or Buyer to each of the other Parties hereto;
(2) delivery of a written notice of termination by Seller to each of J. Aron and Buyer following J. Aron’s failure to pay when due any amounts owed to Seller in respect of any Delivered Product Payment Obligation and such failure continues for one business day following receipt by J. Aron of written notice thereof;
(3) delivery of a written notice by Seller if any of the events described in Section [__] [Bankruptcy] of the RAA occurs with respect to J. Aron; or (4) delivery of a written notice by J. Aron if any of the events described in Section [__] [Bankruptcy] of the RAA occurs with respect to Seller.
(b) The Assignment Period will end at the end of last delivery hour on the date specified in the termination notice provided pursuant to Section 2(a), which date shall not be earlier than the end of the last day of the calendar month in which such notice is delivered if termination is pursuant to clause (a)(1) or (a)(2) above. All Assigned Rights and Obligations shall revert from J. Aron to Buyer upon the early termination of the Assignment Period, provided that (i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to J. Aron prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period (c) The Assignment Period will automatically terminate upon the expiration or early termination of the RAA. All Assigned Rights and Obligations shall revert from J. Aron to Buyer upon the expiration of or early termination of the RAA, provided that (i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to J. Aron prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period.

3. Representations and Warranties. The Seller and the Buyer represent and warrant to J. Aron that (a) the RAA is in full force and effect; (b) no event or circumstance exists (or would exist with the passage of time or the giving of notice) that would give either of them the right to terminate the RAA or suspend performance thereunder; and (c) all of its obligations under the RAA required to be performed on or before the Assignment Period Start Date have been fulfilled.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Exhibit G - 3

4. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement to be given by one Party to another Party shall be delivered in accordance with Section [__] and the Cover Sheet of the RAA and to the addresses of each of Seller and Buyer specified in the RAA. Buyer agrees to notify J. Aron of any updates to such notice information, including any updates provided by Seller to Buyer. Notices to J. Aron shall be provided to the following address, as such address may be updated by J. Aron from time to time by notice to the other Parties:

J. Aron & Company LLC
200 West Street
New York, New York 10282-2198
Email: [email protected]

5. Miscellaneous. Sections [__] (Buyer’s Representations and Warranties), [__] (Confidential Information), Sections [__] (Severability), [__] (Counterparts), [__] (Amendments), [__] (No Agency), [__] (Mobile-Sierra), [__] (Counterparts), [__] (Facsimile or Electronic Delivery), Section [__] (Binding Effect) and [__] (No Recourse to Members of Buyer) of the RAA are incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.

6. U.S. Resolution Stay Provisions. The Parties hereby confirm that they are adherents to the ISDA 2018 U.S. Resolution Stay Protocol (“ISDA U.S. Stay Protocol”), the terms of the ISDA U.S. Stay Protocol are incorporated into and form a part of this Agreement, and for the purposes of such incorporation, (i) J. Aron shall be deemed to be a Regulated Entity, (ii) each of Buyer and Seller shall be deemed to be an Adhering Party, and (iii) this Agreement shall be deemed a Protocol Covered Agreement. In the event of any inconsistencies between this Agreement and the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.

7. Governing Law, Jurisdiction.
(a) Governing Law.

THIS ASSIGNMENT AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES

UNDER THIS ASSIGNMENT AGREEMENT WILL BE GOVERNED BY AND

CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS

OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ANY CONFLICTS OF

LAWS PROVISIONS THAT WOULD DIRECT THE APPLICATION OF ANOTHER JURISDICTION’S LAWS; PROVIDED, HOWEVER, THAT THE AUTHORITY OF THE

BUYER TO ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER THIS

ASSIGNMENT AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
(b) [Reserved].1
(c) Waiver of Right to Trial by Jury.

EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE

LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS NOVATION AGREEMENT. EACH

PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF

EITHER OF THE OTHER PARTIES HAS REPRESENTED, EXPRESSLY OR

OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A

SUIT ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER

AND (II) ACKNOWLEDGES THAT IT AND EACH OF THE OTHER PARTIES HAVE

BEEN INDUCED TO ENTER INTO THIS ASSIGNMENT AGREEMENT BY, AMONG

OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(C).
1 NOTE: Parties to negotiate and agree upon jurisdiction provision, if any, at the time of execution.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Exhibit G - 4
[Remainder of Page Intentionally Blank]
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Exhibit G - 5
IN WITNESS WHEREOF, the Parties have executed this Assignment Agreement effective as of the date first set forth above.
[SELLER]
a [____]
By:

Name:

Title:

[BUYER]
a [____]
By:

Name:

Title:

J. ARON & COMPANY LLC
By:

Name:

Title:

Execution and delivery of the foregoing Assignment Agreement is hereby approved. [ISSUER]
By:

Name:

Title:

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Exhibit G - 6
Appendix 1
Assigned Rights and Obligations
RAA: “RAA” means that certain Resource Adequacy Agreement dated [____], by and between [Buyer], a [____], and [____], a [____], as amended from time to time. “Assignment Period” means the period beginning on [___________] and extending until [___________], provided that in no event shall the Assignment Period extend past the earlier of (i) the termination of the Assignment Period pursuant to Section 2 of the Assignment Agreement and (ii) the end of the Delivery Term under the RAA; provided that applicable provisions of this Agreement shall continue in effect after termination of the Assignment Period to the extent necessary to enforce or complete, duties, obligations or responsibilities of the Parties arising prior to the termination.

Assigned Product: “Assigned Products” include [____].

Further Information: All Assigned Product delivered by Seller to J. Aron shall be a sale made at wholesale, with J. Aron reselling all such Assigned Product.

DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
Exhibit G - 7
Appendix 2
Assigned Prepay Quantity
[NOTE: To be set forth in a monthly volume schedule.]
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC
DRAFT Item 5
Attachment 1
Draft Agreement: Baldy Mesa Solar, LLC

BALDY MESA SOLAR, LLC
("Seller")
All Notices:

Street:

City:

Attn: General Counsel
Phone: 801-679-3500
Email:

Reference Numbers:

Duns:

Federal Tax ID Number:

Invoices:

Attn: Revenue Manager
Phone: 801-679-3500
E-mail:

Payments:

Attn: Revenue Manager
Phone: 801-679-3500
E-mail:

Wire Transfer:
-
-
EXHIBIT H: NOTICES
Silicon Valley Clean Energy Authority, a
California joint powers autho1ity ("Buyer")
All Notices:

Street: 333 W. El Camino Real, Suite 330
City: Sunnyvale, California, 94087
Attn: Girish Balachandran, CEO
Phone: (408) 721-5301
Email:

Reference Numbers:

Invoices:

Attn: Power Supply Group
Phone: (408) 721-5301
E-mail:
------------ -
Payments:

Attn: Finance Group
Phone: (408) 721-5301
E-mail:

Exhibit H - 1

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Silicon Valley Clean Energy Board of DirectorsSeptember 14, 2022

Silicon Valley Clean Energy Board of Directors
September 14, 2022