Presentations & Relevant Meetings Attended by CEO
- Participated in CalCCA Monthly board, executive, and legislative meetings - CC Power Board Meeting, August 16, 2023 (General Manager report is on Consent Calendar)
ATTACHMENTS
1. 2022 GHG Emissions
2. Clean Power Update, September 2023
3. Decarb Programs & Policy Update, September 2023
4. Energy Services & Community Relations Update, September 2023
5. Regulatory and Legislative Update, September 2023
6. Agenda Look Ahead, September 2023 – January 2024
Item 2
SILICON VALLEY \3/ CLEAN ENERGY
Item 2
Attachment 1
Emissions
[MT
CO2
e]
Q) 2022 GHG Inventory Update
2022 emissions were 23.4% below 2015
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Energy & Transportation Emissions by Sector
2022 emissions:
3.08 million MT CO2e
SVCE GHG Reduction Targets
2021:30% below 2015
2025: 40% below 2015
2030: 50% below 2015
Non-Commercial On Road
Commercial On-Road
Off-Road
Non-Res. Natural Gas
Res. Natural Gas
Non-Res. Electricity DA
Non-Res. Electricity
Res. Electricity
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Item 2
Attachment 1
With operations rebounding from COVID, emissions
return to 2019 levels
SVCE’s 2022 electricity
emissions factor and an
increase in vehicle miles
traveled due to a rebound
from COVID contributes to
SVCE’s emissions returning
to pre-COVID levels
SVCE is working on more
robust GHG modeling
capabilities to track and
forecast trends more
closely
Compared to 2021, 2022...
On-road vehicle miles traveled (VMT) increased 10%*
Residential electricity consumption decreased 1%
Residential gas consumption decreased 1%
Non-residential electricity consumption increased 3%
Non-residential gas consumption increased 0.5%
Compared to 2019 (pre-COVID), 2022...
On-road VMT increased 1%
Residential electricity consumption decreased 1%
Residential gas consumption decreased 4%
Non-residential electricity consumption decreased 9%
Non-residential gas consumption decreased 16%
*due to a COVID rebound
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Item 2
Attachment 1
With operations rebounding from COVID, emissions
return to 2019 levels
SVCE’s 2022 electricity
emissions factor and an
increase in vehicle miles
traveled due to a rebound
from COVID contributes to
SVCE’s emissions returning
to pre-COVID levels
Compared to the 2015 baseline, 2022...
On-road vehicle miles traveled (VMT) increased 4%
Residential electricity consumption decreased 3%
Residential gas consumption increased 8%
Non-residential electricity consumption decreased 14%
Non-residential gas consumption decreased 5%
SVCE is working on more
robust GHG modeling
capabilities to track and
forecast trends more
closely
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 2
Attachment 2
Clean Power Update, September 2023
SVCE Board Meeting
September 13, 2023
SILICON VALLEY
CLEAN ENERGY
CEO Report
Clean Power Update
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Item 2
Attachment 2
Clean Power Update, September 2023
Clean Long-term Power Agreements
$3.2B+ in commitments
20 PPAs signed
17 new build projects
796 MW of Renewable Power
1,845 MWh of Battery Storage
7 Projects now delivering to SVCE
meeting ~33% of energy needs:
COSO geothermal - January 2022
Slate Solar + Storage -January 2022
Casa Diablo geothermal-September 2022
Mountain View wind -July 2022
Rabbitbrush Solar + Storage -October 2022
Terra-Gen Wind - January 2023
Yellow Pine Solar + Storage - July 2023
Seller Project Name Technology Generation MW Storage MWh Approximate % of Annual
load in 2028
Term
(years)
Lifetime Not to
Exceed Authority
(MM$)
SVCE Board
Approval Status
1 MN8 Slate Solar + Storage 93 186 6.60% 17 $198 Oct-18 Online 2 Ormat Casa Diablo Geothermal 7 1.40% 10 $43 Feb-20 Online 3 Atlantica Coso Geothermal 43.8 6.50% 15 $331 Mar-20 Online 4 Leeward Rabbitbrush Solar + Storage 40 20 3.00% 15 $64 Apr-20 Online 5 NextEra Yellow Pine Solar + Storage 50 104 4.00% 20 $128 May-20 Online 6 Avantus Aratina Solar + Storage 80 60 6.60% 20 $174 Jun-20 Pre-construction 7 174 Power
Global Atlas Solar 50 3.80% 10 $32 Jan-21 Pre-construction 8 SB Energy Angela Solar + Storage 20 40 1.40% 15 $35 Mar-21 Pre-construction 9 AES Mountain View Wind 33.3 3% 20 $128 Apr-21 Online
10 Origis San Luis West Solar + Storage 62.5 62.5 4% 15 $74 Apr-21 Pre-construction 11 Clearway Victory Pass Solar + Storage 100 100 8% 15 $173 May-21 Construction 12 Terra-Gen Cameron Crest Wind 77.7 5% 15 $150 May-21 Online 13 Rev
Renewables Tumbleweed
Long Duration
Storage 127.5 15 $100 Feb-22 Pre-construction
14 Onward Goal Line
Long Duration
Storage 113.6 15 $100 Mar-22 Pre-construction
15 Ormat Geothermal Portfolio Geothermal 16.75 4.40% 20 $256 Jun-22 Pre-construction 16 OME Fish Lake Geothermal 1.82 0.40% 20 $30 Jun-22 Pre-construction 17 AES Baldy Mesa (RA-only) Storage 0 300 10 $81 Sep-22 Construction 18 MRP Hanford Thermal + BESS 99.4 131.4 12 $280 Apr-23 Pre-construction 19 NextEra Grace Solar 120 9.00% 15 $286 Aug-23 Pre-construction 20 NextEra Yellow Pine III Storage 0 460 15 $420 Aug-23 Pre-construction Item 2
Attachment 2
Clean Power Update, September 2023
CD SVCE Long-Term Clean Energy Contracts
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Item 2
Attachment 2
Clean Power Update, September 2023
0) Clean Energy Resources Online Progress
as of 8/31/2023
r
2023 -Q4 San Luis West Solar + Storage: Pre-construction - delayed 2024 -Q1 •Victory Pass Solar + Storage: Construction mode - delayed Angela Solar + Storage: Pre-construction - delayed
2024 -Q2 •Fish Lake Geothermal: Pre-construction
•Baldy Mesa (RA-Only Storage): Construction mode
2024 -Q4 •Hanford BESS on Peaker: Pre-construction
2025 -Q2
-
•Goal Line Long Duration Storage: Pre-construction
•Aratina Solar + Storage: Pre-construction - delayed
1 2025 -Q3+
Ormat Geothermal Portfolio: Pre-construction
Tumbleweed Long Duration Storage: Pre-construction
Atlas Solar: Pre-construction - delayed
Yellow Pine III Storage: Pre-construction
Grace Solar: Pre-construction
Item 2
Attachment 2
Clean Power Update, September 2023
Permit Modernization
Resilience at Community Facilities
FutureFit Homes & Buildings
Regional Coordination
Click for More Information Active In Development Complete C&I Clean Power Offerings
Electric Showcase Awards
FutureFit Heat Pump Water Heater
FutureFit Fundamentals
Accessible Financing
Existing Building Policy Experimentation
Feasibility Assessment - Natural Gas Phase Out By 2045
CA Electric Vehicle Infrastructure Project (CALeVIP)
Priority Zone DCFC
Future Fit Assist
Fleet Electrification Program
SV Transportation Electrification Clearinghouse (SVTEC) Other Virtual Power Plant
Customer Resource Center (eHub)
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
Medical Baseline Battery Program
Q2 2023
Building Decarbonization Demonstration Grants
Decarbonization Engagement Grants
SV Building Electrification
Multifamily EV Charging Installation Incentive Program
Multifamily Building Electrification Direct Install
Multifamily EV Charging Direct Install
Item 2
Attachment 3
DPP Update, September 2023
The SVCE Electric Showcase Awards are designed to highlight and recognize community members who are reducing local emissions by upgrading to clean, electric technologies in their homes or businesses. We received 150 applications representing properties located throughout Santa Clara County and selected 13 residential and 3 non-residential properties to award with cash prizes of $5,000-$10,000. Learn more about our winners here! Each winner is in a different phase of their journey transitioning away from gas use in their home or business. We will be promoting winners’ stories throughout the fall and some winners will be featured in the Electric Home Tour on October 14th.
This is the second time SVCE held the Electric Showcase Awards, the first round was held in 2019. You can view those winners here.
Electric Showcase Awards Winners Announced
DECARBONIZATION PROGRAMS UPDATE
AUGUST HIGHLIGHTS
Customers with a heat pump (water heater or HVAC) and/or an electric vehicle (EV) can now enroll in the SVCE Electric Home (E-ELEC) rate. The rate offers a lower rate on electricity consumed between 12 a.m. and 3 p.m. all year-round. But that's not all – SVCE is taking the E-ELEC rate to the next level by offering a super discount: customers who shift electricity consumption to off-peak hours can enjoy up to a 20% discount on their electric generation charges. The SVCE Electric Home Rate is a pilot rate and is available to the first 1,000 customers to enroll; the discount is guaranteed through January 1, 2027. Visit our website to see if the E-ELEC rate is right for you.
Maximize Bill Savings with the E-ELEC Rate
Item 2
Attachment 3
DPP Update, September 2023
VALLEY
ENERGY
10/2
1 /2
12/2
1/23
2/23
3/23
4/23
5/23
6/23
1,500
1,000
500
0 Rebates claimed: $446K
Rebates reserved: $1.37M
Total $Funds Reserved
0 10 20 30 40
Commercial business
Government
Multifamily
School/Nonprofit
Incentive program for L1 and L2 EV charging
infrastructure at multifamily properties
Jan-Mar Apr-Jun
0 100 200 300
HPWH
HP HVAC
Panel Upgrades
Pre-wiring
Meter Removals
Funds Reserved: $823K
Approved Reservations: 19
Goal: 35 Sites, 150 ports
ONGOING METRICS Q2 2023
FutureFit Homes
Provide incentives to residents for electric heat
pump water heaters (HPWH), heat pump HVAC
systems, service panel upgrades, and pre-wiring
upgrades to replace gas appliances.
Future Fit Assist
Assistance in site assessment, preliminary
design, and applying to rebates for charging at
multifamily housing and small and medium
workplace properties.
Cumulative Applications
Charging Installation
Incentive Program
Number of Reservations
$ 1.5M
$ 1.0M
$ 500K
Item 2
Attachment 3
DPP Update, September 2023
SILICON VALLEY \3/ CLEAN ENERGY
CALeVIP
Level 2 DCFC
8 6
4 2
0 1 /21
12/21
1/2
2/23/24/25/26/2
7/28/29/2
10/23/23
6/23
250
200
150
100
50 0
Reserved
ONGOING METRICS Q2 2023
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
Completions
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
Funds Issued = 5 DCFC Installations
$1.5M
102
Remaining Funds
Registrations
201
$5.8M
$909K $700K
$1.75M
$2.4M
$6M
$4M
$2M
Item 2
Attachment 3
DPP Update, September 2023
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e es
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1/2
2/23/24/25/26/28/29/2
10/2
1 /2
12/2
1/23
2/23
3/23
4/23
5/23
6/30
1,250
1,000
750
500
250
0 9/2
10/2
1 /2
12/2
1/23
2/23
3/23
4/23
5/23
6/23
250,000
200,000
150,000
100,000
50,000
0 ONGOING METRICS Q2 2023
GridShift EV Charging
Managed EV charging app that optimizes charging
to reduce associated costs and emissions.
Charger Rebates Reserved: 52 Number of Enrolled EVs
1,042
Charger Rebate Funds
Reserved: $120K
Charger Rebate goal: 120
eHUB Report
Online customer resource center to enable
engagement, education and action related to clean
electricity, EVs and home electrification.
= 1 email campaign completed
247,412
eHub visitor Goals:
Reach 275K Unique Visitors by EOY
23,013
Unique Visits Return Visits
FY 22-23
Goal:
Conduct 10 full-scale email
campaigns
Item 2
Attachment 3
DPP Update, September 2023
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1 1. Outreach Events & Sponsorships
Date Event Location
9/9/2023 Silicon Valley Fall Fest
10:00 a.m. - 7:00 p.m.
Sponsorship
Cupertino Memorial Park
21121 Stevens Creek Blvd
Cupertino, CA 95014
9/9/23 –
9/10/23
Mountain View Arts & Wine Festival
9/9 - 10:00 a.m. - 7:00 p.m.
9/10 - 9:00 a.m. - 6:00 p.m.
Sponsorship and tabling
Downtown Mountain View
Castro St.
Mountain View, CA 94041
9/14/2023 SPUR Digital Discourse
12:30 p.m. – 1:30 p.m.
Sponsorship
Webinar: Affordable Home Electrification: How the Bay Area Can Embrace Clean Appliances Without Hurting Our Pocketbooks
9/23/2023 Sunnyvale State of the City
9:00 a.m. - 1:00 p.m.
Tabling
Sunnyvale City Hall
465 W. Olive Ave
Sunnyvale, CA 94086
9/26/2023 Santa Clara County Induction Cooking
Demonstration
6:30 p.m. – 7:30 p.m.
Tabling
Okayama Room, Leininger Center inside Kelley Park
1300 Senter Road
San Jose, CA 95112
Item 2
Attachment 4
ESCR Update, September 2023
—
2 1. Outreach Events & Sponsorships
Date Sponsorship Location
9/27/2023 CPUC Small and Diverse Business Expo
9:00 a.m. – 2:00 p.m.
Tabling
California Center of Arts
340 N. Escondido Blvd
Escondido, CA 92025
9/30/2023 Senator Cortese Day by the Lake
10:00 a.m. – 3:00 p.m.
Sponsorship and tabling
Hellyer County Park
985 Hellyer Ave
San Jose, CA 95111
9/30/2023 Assemblymember Berman Health &
Wellness Fair
1:00 p.m. - 4:00 p.m.
Tabling
Castlemont Elementary School
3040 Payne Ave
San Jose, CA 95008
9/30/2023 Los Altos Greentown Garden Party &
Fundraiser
2:00 p.m. – 4:30 p.m.
Sponsorship and staff attendance
Location TBA
Los Altos, CA
10/7/2023 Morgan Hill Clean Air Day
Time TBA
Tabling
Magical Bridge Playground
171 W Edmundson Ave
Morgan Hill, CA 95037
Item 2
Attachment 4
ESCR Update, September 2023
3 1. Outreach Events & Sponsorships
Date Sponsorship Location
10/14/2023 Electric Home Tours
Time TBA
Sponsorship and staff attendance
Home Tour Locations TBA
10/14/2023 Day on the Bay
10:00 a.m. - 3:00 p.m.
Sponsorship and tabling
Alviso Marina
1195 Hope St
Alviso, CA 95002
10/22/2023 Congregation Beth Am Sustainability
Faire
Time TBA
Tabling
Congregation Beth Am
26790 Arastradero Road
Los Altos Hills, CA 94022
10/28/2023 Gilroy La Ofrenda Festival
1:00 p.m. - 5:00 p.m.
Sponsorship and tabling
Location TBA
Downtown Gilroy
Item 2
Attachment 4
ESCR Update, September 2023
4 Participation Rate
Overall Participation
Rate
Residential 96.31%
96.35%
Commercial 96.64%
2. Customer Participation
Item 2
Attachment 4
ESCR Update, September 2023
SILICON VALLEY
CLEAN ENERGY
5 The most recent MAWG meeting was held on August 24, 2023, and was attended by 8 different agencies and organizations with a total of 12 participants.
The following agenda items were presented and discussed:
• SVCE Briefs (Budget, PPAs, Program Updates)
• Community Resilience Grant: New Deadlines, Projects Approved, Website • All-Electric Showcase Awards
• Member Agency Services EM&V
3. Member Agency Working Group – August Update
Item 2
Attachment 4
ESCR Update, September 2023
6 Purpose of Promotion: Encourage
customers to learn about electrification and
upgrade their appliances to electric.
Promotion Details: Customers can get
$50 off a portable power station, smart
thermostat, air purifier, and evaporative
cooler.
4. Summer Appliances Assistant Promotion
Launched June 21, closes September 30
From June 21 – July
31, there have been
131 rebates claimed!
Item 2
Attachment 4
ESCR Update, September 2023
0 10 20 30 40
7 Press
• City of Los Altos Receives $125K Grant to Pilot Cool Pavement Program, press release, 08-09-23 • Sunnyvale School District and Silicon Valley Clean Energy Team Up to Upgrade Local School With Clean, Green Heat Pumps, press release, 08-21-23
• Silicon Valley Clean Energy CEO, Girish Balachandran, Announces Retirement Planned for March 2024, press release, 08-29-23
Media
• CalCCA Requests Rehearing of CPUC Decision Restricting CCA Expansions, California Energy Markets, 07-28-23
• Clean Energy Rebates, The Mercury News, San Francisco Daily Journal, 07-30-23 • Clean Energy Rebates, Marin Independent Journal, The Mercury News, San Francisco Daily Journal, 08-06-23
• How do offices run on 24/7 clean energy?, Google - The Keyword, 08-22-23 Item 2
Attachment 4
ESCR Update, September 2023
5. Press Releases & Media
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
SVCE Legislative and
Regulatory Update
September 13, 2023
Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
CD Policy Updates
Regulatory Update:
1. Load Management Standards
2. Distributed Energy Resources Data Access
Proceeding
Legislative Update:
1. Budget Trailer Bill/AB 1373 (Garcia)
2. SVCE Legislative Positions
2 Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
Regulatory
Update
Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
Key Regulatory Proceedings
Proceeding Purpose Status
Integrated Resource
Planning
(R.20-05-003)
"Umbrella proceeding" to
ensure the collective
procurement of Load
Serving Entities (LSEs) is on
target to achieve the state's
clean energy and reliability
goals.
On August 21st, a scoping memo was issued to discuss timing for several key topics in the IRP framework. Of particular note, the CPUC intends to update their framework for procurement orders in the IRP proceeding. This may result in better alignment of Resource Adequacy and IRP counting rules, a reduction or removal of CPUC procurement orders and/or an improved means of procurement order allocation, amongst other issues. It is also expected that implementation of a central procurement entity as envisioned in AB 1373 (see legislative section) will be discussed, should the bill pass. It is expected a CPUC staff proposal will be released shortly which will be the starting point for stakeholder discussion. A final decision on the future procurement framework is not expected until at least Q3 2024. 4 Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
Legislative
Update
5 •
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Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
Governor’s Energy Reliability Budget Trailer
Bill/AB 1373 (Garcia) Update
SVCE is working closely with CaICCA on the Governor’s
Budget Trailer Bill on Energy Reliability.
The concepts are now in AB 1373 (Garcia), which will be heard at the Senate Energy Committee on 9/6.
Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
CD SVCE Positions
Status of the bills that SVCE has taken positions on
Bill Summary Legislative
Platform Policy
AB 625
(Aguiar-Curry)
Extends sunset date of the
BioMAT program
Competitive Equity
SB 488
(Alvarado-Gil)
Allows CCAs to participate in the
BioRAM program.
Competitive Equity
SB 410
(Becker)
Reporting, timelines, and
stakeholder group for
distribution-level interconnection.
Clean, Reliable
Grid
SB 527 (Min) Requires CPUC to establish a
Neighborhood Decarb Program.
Climate
Mitigation/Fuel
Switching
AB 593
(Haney)
Directs CEC to create a
statewide building decarb
strategy
Climate
Mitigation/Fuel
Switching
SVCE Position Bill Status
Support Died -two-year bill
Support Died -two-year bill
Support Assembly Energy
Committee
Support Died -two-year bill
Support Died -two-year bill
7 Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
CD SVCE Positions
Status of the bills that SVCE has taken positions on
Bill Summary Legislative
Platform Policy
SVCE Position Bill Status
AB 1393
(Garcia)
Legislative vehicle for Governor’s
Budget Trailer Bill on energy
reliability
Competitive Equity Oppose Unless
Amended
Senate Energy
Committee
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Item 2
Attachment 5
SVCE Leg/Reg Update, September 2023
1 Key State Legislative Milestones
January 4—Legislature Reconvenes
February 17—Last day for bills to bo introduced
April 28—Last day for policy committees to vote on fiscal bills May 5—Last day for policy committees to vote on non fiscal bills May 19—Last day for fiscal committees to hoar bills introduced in that house Juno 2—Last day for each house to pass bills introduced in that house Juno 15—Budget bill must pass by midnight
July 14—Last day for policy committees to vote on bills September 1—Last day for fiscal committees to vote on bills September 14 - Last day for each house to pass bills
October 14 - Last day for Governor to sign bills
9 SVCE Agenda Look Ahead
September 2023 - January 2024
September 2023 October 2023 November 2023 December 2023 January 2024 Board of Directors, September 13: Board Workshop, Decarbonization Programs and Policy, October 11
Board of Directors, October 11:
Consent:
Minutes
August 2023 Treasurer Report
Committee Reports
Adopt FY23-24 Workplan
Receive Q3 2023 Programs Update
Scheduling Coordinator Agreement
Program Portfolio Management software contract
Regular Calendar:
Prepay #3
Permit Modernization and Policy Experimentation Update
Board of Directors, November 8:
Consent:
Minutes
September 2023 Treasurer Report
Committee Reports
Program Administration Consultant Agreement
Program Application/Portfolio Tool Development
Agreement
Multifamily Direct Install Program Agreement
Data Analytics Support Agreements
Regular Calendar:
2024 Legislative Policy Platform
Annual Customer Survey Results
Special Meeting: SVCE End-of-the-Year Event,
December 13
Board of Directors, December 13:
Consent:
Minutes
October 2023 Treasurer Report
Committee Reports
Regular Calendar:
Rate Change
2024 Legislative Policy Platform
Board Elections Update
Board of Directors, January 10:
Consent:
Minutes
November 2023 Treasurer Report
Committee Reports
Regular Calendar:
Chair and Vice Chair Appointment
Executive Committee Membership Selection
Executive Committee, September 22:
Cancelled
Executive Committee, October 27:
Introduction to SVCE's Load Management Standards
Compliance Plan
Program Snapshot
Executive Committee, TBD (will be a
combined meeting with Nov./December):
Rate Change Discussion
Program Snapshot
Executive Committee, TBD (will be a
combined meeting with Nov./December):
Rate Change Discussion
Program Snapshot
Executive Committee, TBD (tentatively
scheduled for Jan. 26):
Appointment of Committee Chair and Vice
Chair
Audit Committee, September 19, Noon:
Audit kick-off
Finance & Admin Committee Meeting, Oct. 3, 3pm:
Prepay #3 Review/Recommendation
9/7/23
Item 2
Attachment 6
Staff Report – Item 3
Item 3: Update on Strategic Plan and Adopt FY24 SVCE Focus Areas From: Girish Balachandran, CEO
Prepared by: Andrea Pizano, Board Clerk/Executive Assistant Date: 9/13/2023
RECOMMENDATION
Staff requests the SVCE Board of Directors receive an update on the FY24 Strategic Plan and adopt the five proposed FY24 SVCE Strategic Focus Areas:
• Expand Clean and Reliable Grid Actions
• Expand Customer Base & Interaction
• Accelerate Building & Transportation Electrification
• Implement Innovative Financing Solutions
• Attract & Retain Employees
EXECUTIVE COMMITTEE RECOMMENDATION
The Executive Committee met August 25, 2023 and received a presentation from staff on the proposed FY24 Strategic Focus Areas; the committee was in consensus to support the focus areas presented for the Board’s consideration.
BACKGROUND
The SVCE Board of Directors has been adopting annual Strategic Focus Areas since 2021. Adopting Strategic Focus Areas is useful for the Board of Directors and CEO to establish priorities for the year.
The FY23-24 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 Finance & Administration Committee and Board of Directors meetings as part of the FY24 preliminary operating budget.
As mentioned previously, the Executive Committee received the most recent Focus Areas presentation and the committee supported the focus areas presented. Although these focus areas are being considered for FY23-24, many of these areas will remain a focus topic beyond 2024 as the work that will be performed will extend well beyond one year.
ANALYSIS & DISCUSSION
FY23-24 Focus Areas
Staff is requesting the Board of Directors approve and adopt the following five focus areas (in no particular order):
• Expand Clean and Reliable Grid Actions: Explore 24x7 clean energy delivery at scale; evaluate SVCE role in enhancing distribution and transmission reliability • Expand Customer Base & Interaction: Grow non-residential customer base; Expand Offerings & emphasize electrification to all customers
Item 3
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 3 Agenda Date: 9/13/2023
• Accelerate Building & Transportation Electrification: Accelerate deployment of currently adopted decarbonization strategies and goals; evaluate and capitalize on federal and state funding opportunities
• Implement Innovative Financing Solutions: Implement innovative financing solutions to increase impact of decarbonization program offerings, especially to lower-income customers • Attract & Retain Employees: Be the Employer of Choice, and increase staffing; Hire CEO Supporting work for these focus areas includes the risk and opportunities being updated, the strategies and measures in SVCE’s workplan being updated, the utilization of Monday.com to track progress and actions during the year, and updating details under each Strategic Focus Area.
The only change since the last time this was presented to the Board is to include the hiring of a new CEO under the “Attract & Retain Employees” focus area.
FY23-24 Strategic Work Plan Update
The FY23-24 Strategic Work Plan has been in development since May, taking input from all departments to identify the goals and measures for the coming fiscal year. Based off of the initial feedback from the Executive Committee and Board of Directors on the strategic focus areas, staff has been working toward updating goals within their own working groups in addition to discussing cross-collaboration with other departments. Based on the current draft of the plan, there are 25 goals and 84 measures.
The final draft of the Strategic Work Plan will be brought to the October 11, 2023 meeting for the Board’s consideration.
STRATEGIC PLAN
The focus areas support the overall SVCE Strategic Plan.
FISCAL IMPACT
N/A
ALTERNATIVE
Staff is open to suggestions and feedback from the Board on the proposed Focus Areas.
ATTACHMENT
1. FY23-24 Proposed Strategic Focus Areas
Item 3
SVCE FY23-24 Proposed Strategic Focus Areas
Expand Clean & Reliable Grid Actions
Explore 24x7 clean energy delivery at scale, evaluate SVCE role in enhancing and distribution and transmission reliability
• Explore pathways to measure & achieve carbon free 24x7 for the entire portfolio and aligned with SVCE’s mission
• Implement Google’s Carbon Free Energy (CFE) framework and explore opportunities to offer expanded clean offerings to other customers
• Explore VPP opportunities and how we can demonstrate the “grid of the future” • Explore targeted SVCE role to enhance distribution and transmission reliability Expand Customer Base & Interaction
Grow non-residential customer base; expand Offerings & emphasize electrification to all customers • Be the Supplier of Choice; attract and retain DA customers • Maintain competitive rates; increase customer offerings and demand side programs • Expand value proposition emphasizing electrification
Accelerate Building and Transportation Decarbonization
Accelerate deployment of currently adopted decarbonization strategies and goals; evaluate and capitalize on federal and state funding opportunities to further improve programs • Grow our capacity and deploy programs at a much larger scale • Operationalize equity into programs
• Assist member agencies evaluating federal and state decarbonization policies and program impacts
• Explore opportunities to influence and partner with other organizations on supporting a clean energy workforce.
Implement Innovative Finance Solutions
Leverage Balance Sheet for Structured Financing and use financing solutions to increase impact of decarbonization program offerings, especially to lower-income customers • Continue building strong financial reserves
• Attract and retain DA customers
• Implement innovative financing solutions to customers, particularly to reach those with barriers to conventional programs (e.g., low income, renters)
Employees
Be The Employer of Choice, & Increase Staffing
• Hire CEO
• Attract and Hire New Employees, passionate about our mission and with excellent job knowledge
• Build and maintain a high-performance agency; preserve start-up culture of employee innovation, engagement, and collaboration
• Continue enhancing remote, hybrid and in-person work
Item 3
Attachment 1
Staff Report – Item 4
Item 4: Adopt the FY 2023-24 Recommended Operating Budget and Updated Reserves Policy
From: Girish Balachandran, CEO
Prepared by: Amrit Singh, CFO and Director of Administrative Services Date: 9/13/2023
RECOMMENDATION
Staff recommends that the Board of Directors adopt Resolution 2023-16 approving the fiscal year (FY) 2023- 24 1 Recommended Operating Budget that projects depositing $7.7 million into the reserves and approve the updated Reserves Policy that increases the reserve target from 285 days of cash on hand (DCOH) to 300.
FINANCE AND ADMINISTRATION, EXECUTIVE COMMITTEE & BOARD REVIEWS At the May 12th Finance and Administration Committee meeting, the May 26th Executive Committee meeting, and the June 14th Board of Directors meeting, staff presented the methodology, framework, and key assumptions for developing the proposed budget and responded to the Committees and Board members’ questions on the approach to developing the budget.
Staff presented a preliminary budget outlook at the June 23rd Executive Committee meeting. Staff informed the Committee that the final budget numbers will be developed using July’s latest energy price market data.
The Committee provided feedback on the preliminary budget, including comparing SVCE’s full-time staff numbers with those of the other CCAs. Staff discussed the high volatility in the energy markets and the high prices for Resource Adequacy (RA) and Renewable Portfolio Standard (RPS) products, which added additional uncertainty to budget projections. Staff discussed removing the request to transfer funds towards an SVCE building purchase if margin projections deteriorate further.
Staff presented the Proposed Operating Budget and the recommendation to increase the target DCOH level in the reserves policy to the Finance and Administration Committee on August 1, 2023. Staff explained the difficulty in modeling RA and RPS prices, their impact on SVCE’s revenue forecast, and the modeling assumptions of these prices, holding other variables constant, could create conservative budget projections.
The Committee unanimously supported the potential conservative approach to modeling SVCE’s revenues.
Although not in the proposed budget, the Committee encouraged staff to continue assessing opportunities for purchasing an SVCE office building and to return to the Committee and the Board with any attractive opportunities. The Committee unanimously recommended that the Board adopt the Proposed Operating Budget and change the reserve policy to increase the DCOH target from 285 to 300.
At the August 9th, 2023, Board meeting, staff presented the Proposed FY 2023-24 budget and the updated Reserves policy. The Board discussed the proposed budget, supported the budget as shown, and did not propose any changes.
1 The fiscal year 2023-24 starts on October 1, 2023, and ends on September 30, 2024.
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SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 4 Agenda Date: 9/13/2023
ANALYSIS & DISCUSSION
The FY 2023-24 Proposed Operating Budget is balanced and presents Silicon Valley Clean Energy (SVCE) in stable financial condition. The projected balance available for reserves of $7.7 million is a decrease of $65.7 million from the $73.4 million presented in the FY 2022-23 Mid-Year Budget.
Energy Revenues
The Proposed budget shows a decrease in revenues of $83.6 million compared to the FY 2022-23 adjusted mid-year budget. The revenue decrease is primarily due to a forecasted increase in 2024 PCIA2 of about 318 percent (from 0.28 cents/kWh to 1.17 cents/kWh) and a drop in the 2024 PG&E generation rate of about 28 percent on average (from 14.08 cents/kWh to 11.55 cents/kWh) because of recent declines in forward energy prices. From late March to early July, the energy prices for the calendar year 20233 are down about 18%, and the forward prices for the calendar year 2024 are down on average about 14%. Declining market prices typically result in a simultaneous increase in PCIA and a decrease in PG&E generation rates. The significant rise in PCIA combined with a drop in PG&E generation rates reduces SVCE margins on average by 27 percent for 2024.
Staff used the CalCCA’s4 NewGen Strategies & Solutions Model to forecast PCIA and PG&E generation rates with updated market prices and an adjustment for modeling error by calibrating the model with PG&E’s May ERRA5forecast of 2024 rates. Staff did not update the model’s forecast of RA and RPS prices. Unlike prior years, RPS prices and Resource Adequacy costs are highly volatile and at very high levels compared to those in the past, creating an additional layer of uncertainty in forecasting PCIA and PG&E generation rates.
Unlike energy prices, where there are readily available market-traded forward prices, the Resource Adequacy (RA) and Renewable Portfolio Standard (RPS) prices used in the PCIA and PG&E generation rate calculations are based on CPUC’s derived market price benchmarks (MPB), which are published later in the fall of the year.
It’s difficult to forecast CPUC’s MPB prices because CPUC calculates them using a volume-weighted average of Load Serving Entities (LSE) market transactions, which can span forward transactions entered by the LSEs during the prior two years. The NewGen Strategies & Solutions MPB prices are very low compared to the current market prices. For example, the current market price for RPS product is about $45 MWh for the calendar year 2024, but those used in the model are about $12.50 per MWh, and for RA, it’s modeled at about $8.50 $kW-month versus the market price of around $12.75 $kW-month. In computing SVCE’s Power Supply costs, staff computed the open RA and RPS positions cost at current market prices. Holding for other variables, this disparity in RA and RPS prices used for projecting costs versus PCIA and PG&E generation rates tends to make the budget forecast conservative. For illustrative purposes, if we used the higher RA and RPS prices in the NewGen model to estimate PCIA and PG&E generation rates, the fiscal year 2023-24 revenues would be about $100 million higher.
PG&E’s forecast of 2024 rates in the ERRA filing made in May shows a very high PG&E Generation Rate of ~14.546 cents/kWh and a very low PCIA of negative 0.62 cents/kWh, implying an improvement in SVCE margin of about 6 percent relative to current rates. PG&E’s filing, however, is based on results using market prices in late March 2023, and since then, market prices have decreased significantly, as stated earlier in the 2 Public Utility Code Sections 366.1 and 366.2 require the CPUC to make sure that customers leaving PG&E do not burden remaining PG&E customers with costs which were incurred to serve them. To ensure customer indifference, CCAs and Direct Access, or departing load customers are required to pay a power charge indifference adjustment (PCIA).
3 Calendar year 2023 calculation includes actuals for past months and forwards for future months. 4 CalCCA, California Community Choice Association, is the trade association of 24 CCAs in California. SVCE has been a member of CalCCA since its inception in 2017.
5 ERRA, the Energy Resource Recovery Account, is a balancing account utilized by PG&E to record and recover power costs associated with PG&E’s authorized procurement plan. ERRA proceedings are used to determine fuel and purchased power costs which can be recovered in rates. 6 The rates shown in this report are SVCE load-weighted average rates.
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Agenda Item: 4 Agenda Date: 9/13/2023
report. 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.
To test the accuracy of the NewGen model, staff calibrated the model to PG&E’s forecast using the same period market data PG&E used in developing its 2024 rate forecast. The calibration shows that the model results in about a 5 percent higher SVCE margin. Using the methodology discussed in the budget framework discussions to account for potential modeling errors, staff reduced the resulting margins from the current model by 10 percent.
Using the NewGen model with the latest prices and an adjustment for modeling error likely better aligns revenues closer to the rates that PG&E will update in October, and it also better aligns revenues with power supply costs because both estimates are made using the same set of energy 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, which can create 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. The effective SVCE rate discount is modeled at 2% starting January 2024 to set the budget. The current 4 percent discount remains until the end of December 2023. The 2 percent effective discount rate is composed of a 1 percent discount 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 (~30,000), which amounts to $3.14 million or about $8.70 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 could occur. SVCE is currently budgeting revenues to include a 0.75% write-off rate, which amounts to roughly $3.3 million.
Power Supply Expenses
Power supply expenses are expected to remain close to the current fiscal year level at $391.6 million. The drop in forward prices reduces costs but only to an extent because the portfolio for the calendar year 2024 is currently hedged at 78 percent. Additional Power Purchase Agreements (PPAs) coming online also further reduce costs. However, the favorable drivers reducing costs are offset by an increase in load of about 1.5%, as the forecast assumes full recovery from COVID-19 impacts and much higher RPS and RA prices.
Reserves Policy Target Levels
At the June 14th, 2023, 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 stress test modeled a collapse in energy prices that substantially reduced revenues and increased financial posting requirements to the Provider of Last Resort (PG&E). Staff has since updated the stress test scenario analysis with market and portfolio data consistent with those used to develop the proposed budget.
As shown in the table below, the new implied targets, derived using the methodology discussed in the stress test analysis, are close to the current targets. The methodology for deriving the targets is to set the target level such that if the modeled stress scenario were to occur, reserves remain above 120 days of cash on hand (DCOH) for the next two fiscal years and set the upper reserve target such that it remains above 90 DCOH over the next five fiscal years. Given the conservative assumptions used in modeling RA and RPS prices to derive the PCIA and PG&E generation rate forecasts and the 5-year financial projection shown in attachment 3 showing ending reserves will be below target levels in the near future, staff considered keeping the existing targets.
On July 26th, Moody’s Investor Service, a credit rating agency, upgraded SVCE’s issuer rating from Baa2 to Baa1 with a stable outlook. Strong liquidity and adopting a more stringent reserves policy with a higher reserve target of 285 days were cited as credit-positive elements. Moody’s also indicated that “Maintenance of strong liquidity position through sound financial management with days cash on hand in excess of 300 days” Item 4
Agenda Item: 4 Agenda Date: 9/13/2023
would be one of several factors that could lead to a rating upgrade. Given that 300 DCOH is close to the current level and supported by the current stress test analysis, staff recommends increasing the target reserve DCOH level to 300 from 285. This change would not only continue to align the target level to the stress test analysis but would also align it with one of Moody’s key criteria in assessing our credit rating.
The attached redlined Reserves Policy shows the proposed change to the reserve target level.
As presented in the June Stress Test report and presentation, the upcoming fiscal year margins are not guaranteed, given the true-up in 2025 for PCIA and PG&E generation rates. If the adverse-modeled risk conditions materialize, the reserves policy targets maintaining at least 120 DCOH, which will be needed to reshape strategy and secure additional liquidity, and the upper reserves target helps manage risks over 5 years.
Operating Expenses
Operating expenses are expected to grow in the proposed budget, increasing by $4.8 million from the FY2022- 23 adjusted midyear budget. The increase in projected operating expenses is primarily comprised of costs associated with increased staffing. In addition, the operating budget includes an overall 5% contingency, which amounts to $1.5 million embedded in all operating expense category increases.
Overall personnel expenses are expected to increase by $4.1 million, of which $1.8 million, approximately 40% of the increase, is associated with the nine new positions across the organization. The remaining part of the increase is driven by filling vacancies and budgeting for salary increases.
The nine new positions reflect the increasing needs of a mature organization. These new positions focus on program design, marketing, and deployment; data analyses; data engineering to integrate various energy wholesale and portfolio operational data; supporting regulatory work; analytical and administrative work; and budgeting and financial analyses. Of the nine new positions since last fiscal year, one Associate Data Scientist position is filled, and one Senior Regulatory Analyst position is currently being recruited under the CEO’s personnel authority, which allows the CEO to add positions within 10 percent of the authorized number and the approved budget. 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, $1.5 million arose from lower vacancy savings than the Mid-Year budget, which was partially based on actual vacancy rates as opposed to the 5 percent annual vacancy rate assumed in the proposed budget. SVCE continues to work to fill positions and anticipates full staffing by the end of the calendar year but utilizes a 5% long-term vacancy rate in the personnel budget.
The salary portion of the staffing budget includes a 4.5% cost-of-living adjustment to salaries, based on a trailing six-month average for the Bay Area CPI, which adds $500 thousand in additional cost. SVCE is budgeting for a 3% average merit increase, to be determined by management during the upcoming annual review process, and which contributes another $300 thousand in cost increases.
Item 4
Reserve Targets(DCOH) Current New
Minimum 120 120
Goal (Target) 285 300
Maximum (Upper Target) 490 490
Agenda Item: 4 Agenda Date: 9/13/2023
Other marketing, general and administration expenses, and professional services increase by about $680 thousand. These primarily result from increased hardware, travel, training, and conference fees anticipated for a larger staff.
Staff is also currently evaluating employee benefits package updates, focusing on incentives to promote staff retention. The current budget does not include these changes, but staff will likely present some benefits updates later during the fiscal year.
Programs Budget
SVCE will continue incorporating projected programs spending over the 5-year forecast period into the reserve balance projections and now in forecasting the ending net position as shown in the 5-year financial forecast in attachment 3. For this coming fiscal year, programs spending is projected to be $27.1 million, with an additional $3.5 million in CRCR7 spending and $600 thousand in E-Elec (all electric) rate discounts.
The proposed budget transfers an additional $8.9 million, two percent of projected revenues and $2.2 million from the PG&E nuclear allocation savings, representing the portfolio’s savings from accepting the allocation.
Non-Operating Revenues
Non-operating revenues are projected to increase by about $1.6 million. This increase reflects the interest earned on the growing reserve balance.
Set Aside for a Building Fund
During the budget framework discussions, staff proposed considering buying a building instead of leasing the current office space. SVCE’s current lease runs through September 2025. Before the lease expires, staff will need time to explore the alternatives of buying versus leasing. Staff also wants SVCE to be able to pursue attractive property opportunities as they arise. Staff proposes to continue assessing the market opportunities and return to the Board later to earmark a portion of reserves for potential building purchase. An initial back-of-the-envelope analysis indicates a roughly 10-year breakeven period compared to leasing for 20,000 sf space at a cost of around $20 million.
STRATEGIC PLAN
The recommendation supports all goals of the Board adopted Strategic Plan. Specifically, the recommendations strongly support Goal 15 - “Commit to maintaining a strong financial position” and the accompanying Measures “Present Balanced budget that achieves cash reserve targets, weighs tradeoffs between customer value proposition and contribution to reserves and maintains competitive rates”; “Board presentation on 5-year financial forecast once a year” and “Maintain investment grade credit rating from one of the three credit rating agencies.”
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.
Considering any of the above options requires an extensive policy-level discussion, and the Board can consider them while finalizing SVCE’s strategic priorities and revisit the customer discount rate when actual PCIA and PG&E generation rates are known. Given a sufficient projected reserve balance that maintains SVCE’s stable financial condition, staff does not recommend any specific reductions. 7 CRCR, the ~$10 million Customer Relief and Community Resilience Program, was established in 2020 to provide COVID credit payments to income-qualified customers as bill assistance, support local workforce training, and fund resiliency planning and capital expenditures at SVCE member cities.
Item 4
Agenda Item: 4 Agenda Date: 9/13/2023
FISCAL IMPACT
The FY 2023-24 Proposed Operating Budget includes total revenues of $440.4 million and total expenses, non-operating revenues, and transfers of $432.7 million, resulting in a surplus/contribution to reserves of $7.7 million.
ATTACHMENTS
1. FY 2023-24 Recommended Operating Budget
2. Resolution 2023-16, Adopting the FY 2023-24 Operating Budget
3. 5-year Financial Forecast
4. Updated Financial Reserves Policy
5. FY 2023-24 Salary Chart
Item 4
Attachment 1
SILICON VALLEY CLEAN ENERGY
FY 2023-24 OPERATING BUDGET
($ in thousands)
MY 2022-23 FY 2023-24
ADJUSTED PROPOSED
DESCRIPTION BUDGET BUDGET $ %
ENERGY REVENUES
Energy Sales 522,853 438,342 (84,511) -16.2%
Green Prime 1,055 2,012 957 90.7%
Other Income 50 50 0 0.0%
TOTAL ENERGY REVENUES 523,958 440,404 (83,554) -15.9%
ENERGY EXPENSES
Power Supply 392,436 391,624 (812) -0.2%
OPERATING MARGIN 131,522 48,780 (82,742) -62.9%
OPERATING EXPENSES
Data Management 3,413 3,413 0 0.0%
PG&E Fees 1,470 1,470 0 0.0%
Salaries and Retirement 11,285 15,406 4,121 36.5%
Professional Services 8,016 8,084 68 0.9%
Marketing & Promotions 862 1,349 487 56.5%
Notifications 131 21 (110) -84.0%
Lease 525 551 26 5.0%
General & Administrative 1,857 2,067 209 11.3%
TOTAL OPERATING EXPENSES 27,559 32,361 4,802 17.4%
OPERATING INCOME (LOSS) 103,963 16,419 (87,544) -84.2%
NON-OPERATING REVENUES
Interest Income 3,870 5,501 1,631 42.1%
Grant Income 0 0 0 -
TOTAL NON-OPERATING REVENUES 3,870 5,501 1,631 42.1%
NON-OPERATING EXPENSES
Financing 3 3 0 0.0%
Interest 0 0 0 -
TOTAL NON-OPERATING EXPENSES 3 3 0 0.0%
TOTAL NON-OPERATING INCOME
(EXPENSES) 3,867 5,498 1,631 42.2%
CHANGE IN NET POSITION 107,830 21,917 (85,913) -79.7%
CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER
Capital Outlay 200 50 (150) -75.0%
Transfer to CRCR Fund 0 0 0 -
Program Fund 9,765 8,874 (891) -9.1%
Nuclear Allocation 1,900 2,188 288 15.2%
Multi Family Direct Install Program 9,500 0 (9,500) -100.0% Electrification Discount Program 9,500 0 (9,500) 0.0%
Customer Bill Relief 3,600 3,136 (464) -12.9%
TOTAL CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER $34,465 $14,248 ($20,217) -58.7%
BALANCE AVAILABLE FOR RESERVES $73,365 $7,669 ($65,696) -89.5% Year over Year
Change
Item 4
Attachment 1
1 RESOLUTION 2023-16
SILICON VALLEY CLEAN ENERGY AUTHORITY
RESOLUTION NO. 2023-16
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SILICON VALLEY CLEAN ENERGY AUTHORITY TO APPROVE THE FISCAL YEAR 2023-2024
BUDGET FOR SILICON VALLEY CLEAN ENERGY
WHEREAS, the Silicon Valley Clean Energy Authority (“Authority”) was formed on March 31, 2016, pursuant to a Joint Powers Agreement to study, promote, develop, conduct, operate, and manage energy programs in Santa Clara County; and WHEREAS, the Authority operates on a fiscal year budget cycle from October 1st through September 30th;
WHEREAS, draft versions of the Authority’s budget for the fiscal year 2023-2024 were presented to the Finance & Administration Committee on August 1, 2023, and the Board of Directors on August 09, 2023 (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 2023-2024 budget.
PASSED AND ADOPTED this 13
th day of September 2023, by the following vote:
JURISDICTION NAME AYE NO ABSTAIN ABSENT
City of Campbell Director Scozzola
City of Cupertino Director Mohan
City of Gilroy Director Hilton
City of Los Altos Director Meadows
Town of Los Altos Hills Director Tyson
Town of Los Gatos Director Rennie
City of Milpitas Director Chua
City of Monte Sereno Director Mekechuk
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Attachment 2
2 RESOLUTION 2023-16
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
Attachment 3
($ in Thousands)
FY22-23 FY23-24 FY24-25 FY25-26 FY26-27 FY27-28
Operating Revenue (Adjusted Budget) (Budget) (Forecast) (Forecast) (Forecast) (Forecast) Electricity Sales, Net1
$ 531,561 $ 435,206 $ 471,956 $ 503,130 $ 515,879 $ 517,916 GreenPrime Electricity Premium 1,055 2,012 2,322 2,334 2,351 2,371 Total Operating Revenues 532,616 437,218 474,278 505,464 518,230 520,287 Operating Expense
Power Supply $ 391,261 $ 391,624 $ 400,877 $ 416,343 $ 450,677 $ 439,648 Operating Margin 141,355 45,594 73,401 89,122 67,553 80,639 Data Management 3,413 3,413 3,583 3,762 3,950 4,148
PG&E Service Fees 1,470 1,470 1,544 1,621 1,702 1,787
Staff Compensation 11,285 15,406 16,176 16,985 17,834 18,726 Consultants and other Professional Fees 8,016 8,084 8,570 9,084 9,629 10,206 Communications and Noticing 993 1,370 1,439 1,511 1,586 1,666 General and Administration 2,382 2,618 2,749 2,886 3,031 3,182 Transfers to Programs Fund 34,265 11,062 9,486 10,109 10,365 10,406 Total Operating Expenses 453,085 435,047 444,422 462,300 498,773 489,769 Operating Income 79,531 2,171 29,856 43,164 19,457 30,518 Nonoperating Revenue (Expense)
Other Income 182 50 51 51 52 52
Investment Income - 5,501 5,251 5,683 6,389 6,635
Capital Outlay & Financing Costs (200) (53) (53) (53) (53) (53) Grant Income - - - - - -
Total Non-Operating Revenue (Expense) (18) 5,498 5,249 5,681 6,387 6,634 Change in Net Position/Available for Reserves 79,513 7,669 35,104 48,845 25,844 37,152 Begin, Net Position 212,684 320,082 307,579 329,143 364,448 376,752 Adjustment for Program Expenditure2
27,886 (20,173) (13,540) (13,540) (13,540) 0
End, Net Position $ 320,082 $ 307,579 $ 329,143 $ 364,448 $ 376,752 $ 413,904
Days Cash On Hand (DCOH) at Year End $ 297,561 $ 285,058 $ 306,622 $ 341,927 $ 354,230 $ 391,383 Days of cash on hand 255 229 244 262 252 292
Each year the Board transfers funds from the Operating Budget to the Decarboniztion Programs Fund as shown in the above forecast u nder line item Transfers to Programs Fund. The line item Adjustment for Program Expenditure accounts for the difference between forecasted spend for programs versus the amount transfered to the fund. This adjustment is needed because program spending to date has been less than the amount transferred to the programs fund.
Assumptions: 4% overall discount relative to comparable PG&E rates for Oct-Dec 2023 and 1% for Jan-Sept 2024. FY 23-24 includes additional bill credit to low income customers totaling $3.14 million (1% of Jan-Sept 2024 Revenue). 1% discount for FY24-25, FY25-26, FY26-27 and FY27-28.
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Attachment 3
1 2
FP9
Category: FINANCE
Page | 1 Amended: 9/14/2022
Proposed Amendment: 9/13/2023
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:
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Attachment 4
SILICON VALLEY \3/ CLEAN ENERGY
FP9
Category: FINANCE
Page | 2 Amended: 9/14/2022
Proposed Amendment: 9/13/2023
• 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 285300 days of operations of the annual operating budget;
(c) Maximum Operating Reserve to cover 490 days of operations of the annual operating budget.
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Attachment 4
SILICON VALLEY \3/ CLEAN ENERGY
FP9
Category: FINANCE
Page | 3 Amended: 9/14/2022
Proposed Amendment: 9/13/2023
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.
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Attachment 4
SILICON VALLEY \3/ CLEAN ENERGY
FP9
Category: FINANCE
Page | 4 Amended: 9/14/2022
Proposed Amendment: 9/13/2023
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 4
SILICON VALLEY \3/ CLEAN ENERGY
1 | P a g e
FY23-24 Salary Chart
FTE Title
Minimum Salary
(Annual $)
Maximum Salary
(Annual $)
Administrative Analyst 99,244 169,990
Administrative Assistant 66,162 105,008
Administrative Services Manager 150,519 225,265
Associate Data Analyst 99,244 169,990
Associate Data Scientist 118,248 174,567
Associate Legislative Analyst 82,702 134,294
Associate Manager of Decarbonization Policy and
Programs
132,324 190,610
Associate Power Analyst 93,330 138,338
Associate Power Resources Planner 132,324 202,010
Associate Program Manager 82,702 134,294
Board Clerk/Executive Assistant 121,297 202,010
CFO & Director of Finance and Administration 209,513 349,375 Communication Specialist 86,467 131,360
Communications Manager 132,324 209,625
Community Outreach Specialist 71,675 117,138
COO & Director of Power Resources 209,513 376,250
Data Analyst 118,248 174,567
Data Engineer 124,836 181,946
Data Scientist 132,324 190,610
Deputy Director of Administrative Services 176,446 259,922 Deputy Director of Decarbonization Policy and
Programs
132,324 225,265
Deputy Director of Marketing and Communications 143,351 225,265 Director of Decarbonization Policy and Programs 176,446 277,250 Director of Energy Services & Community Relations 176,446 277,250 Director of Government Affairs and Legislative Affairs 176,446 277,250 Director of Human Resources 176,446 277,250
Director of Regulatory and Legislative Policy 176,446 277,250 Director of Strategic Development 176,446 277,250
Energy Services Lead 132,324 202,010
Item 4
Attachment 5
FTE Title
Minimum Salary
(Annual $)
Maximum Salary
(Annual $)
Energy Services Manager 132,324 209,625
Energy Services Principal 132,324 225,265
Energy Services Specialist 86,467 131,361
Financial Analyst 99,244 169,990
Human Resources Analyst 99,244 169,990
Human Resources Generalist 121,297 190,610
Human Resources Manager 165,406 225,265
IT Analyst 121,297 190,610
Management Analyst 121,297 190,610
Manager of Decarbonization Policy and Programs 143,351 225,265 Manager of Finance and Risk Controls 150,519 225,265
Manager of Technology and Admin Services 150,519 225,265 Marketing Specialist 71,675 117,138
Policy Analyst 99,244 169,990
Power Contracts & Settlements Manager 176,446 225,265
Power Data Analyst 109,084 163,092
Power Resources Manager 165,406 259,922
Power Resources Planner 143,351 225,265
Power Settlements and Compliance Analyst 121,297 190,610 Principal Communications Specialist 100,346 181,946
Principal Data Engineer 143,351 225,265
Principal Data Scientist 143,351 225,265
Principal Policy Analyst 143,351 225,265
Principal Power Analyst 176,446 242,105
Program Marketing Manager 132,324 209,625
Programs Lead 132,324 202,010
Programs Specialist 82,702 134,294
Rates Manager 150,519 225,265
Regulatory & Compliance Manager 143,351 225,265
Regulatory Analyst 115,784 169,990
Senior Communications Specialist 86,467 131,361
Senior Data Analyst 132,324 190,610
Item 4
Attachment 5
FTE Title
Minimum Salary
(Annual $)
Maximum Salary
(Annual $)
Senior Data Engineer 143,351 202,011
Senior Data Scientist 143,351 202,011
Senior Energy Services Specialist 99,244 169,990
Senior Financial Analyst 132,324 190,610
Senior Financial Analyst / Accountant 132,324 190,610
Senior Government Affairs Manager 176,446 242,105
Senior Management Analyst 132,324 190,610
Senior Manager of Communications 143,351 225,265
Senior Manager of Decarbonization Policy and
Programs
176,446 242,105
Senior Manager of Energy Policy and Regulatory
Analysis
176,446 277,250
Senior Manager of Power Operations 176,446 242,105
Senior Manager of Power Resources 176,446 277,250
Senior Manager of Technology and Administrative
Services
176,446 242,105
Senior Marketing Specialist 86,467 131,360
Senior Policy Analyst 115,784 169,990
Senior Power Analyst 132,324 190,610
Senior Power Resources Planner 176,446 242,105
Senior Programs Specialist 99,244 169,990
Senior Public Sector Services Manager 176,446 242,105
Senior Quantitative Analyst 132,324 190,610
Senior Rates Analyst 132,324 190,610
Senior Regulatory Advisor 121,297 190,610
Senior Regulatory Analyst 121,297 190,610
Senior Risk Manager 176,446 259,922
Wholesale Energy Markets Manager 176,446 242,105
Item 4
Attachment 5
Appendix A
Silicon Valley Clean Energy
Board of Directors Meeting
September 13, 2023
Appendix A
Power Resource Contracts Executed by CEO
SILICON VALLEY
CLEAN ENERGY
DocuSign Envelope ID: 0A773252-7A43-485A-997E-2112DC197145 Nucleus:
(01) SENA (100814)
1 MASTER POWER PURCHASE AND SALE AGREEMENT
CONFIRMATION LETTER – RESOURCE ADEQUACY
BETWEEN
SHELL ENERGY NORTH AMERICA (US), L.P.
AND
SILICON VALLEY CLEAN ENERGY AUTHORITY
This Confirmation Letter ("Confirmation") confirms the Transaction between Shell Energy North America (US), L.P., a Delaware limited partnership (“Buyer”) and Silicon Valley Clean Energy Authority, a California joint powers authority (“Seller”), and each individually a “Party” and together the “Parties”, dated as of January 11, 2023 (the “Confirmation Effective Date”) in which Seller agrees to provide to Buyer the right to the Product, as such term is defined in Article 3 of this Confirmation.
This Transaction is governed by the Edison Electric Institute Master Power Purchase and Sale Agreement between the Parties, effective as of November 28, 2016, along with any annexes (including Paragraph 10 of the Collateral Annex, as applicable) and amendments thereto (collectively, the “Master Agreement”).
The Master Agreement and this Confirmation shall be collectively referred to herein as the “Agreement”.
Capitalized terms used but not otherwise defined in this Confirmation have the meanings ascribed to them in the Master Agreement or the Tariff (defined herein below).
ARTICLE 1. DEFINITIONS
1.1 “Alternate Capacity” means any replacement Product which Seller has elected to provide to Buyer in accordance with the terms of Section 4.5.
1.2 “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 Transaction, including without limitation, the Tariff.
1.3 “Availability Incentive Payments” shall mean Availability Incentive Payments as defined in FERC filing ER09-1064 or such other similar term as modified and approved by FERC thereafter to be incorporated in the Tariff or otherwise applicable to CAISO.
1.4 “Availability Standards” shall mean the availability standards set forth in Section 40.9 of the Tariff.
1.5 “Buyer” has the meaning specified in the introductory paragraph hereof.
1.6 “CAISO” means the California Independent System Operator Corporation or its successor.
1.7 “Capacity Replacement Price” means (a) the price actually paid for any Replacement Capacity purchased by Buyer pursuant to Section 4.7 hereof, plus costs reasonably incurred by Buyer in purchasing such Replacement Capacity, or (b) absent a purchase of any Replacement Capacity, the market price for such Designated RA Capacity not provided at the Delivery Point. Buyer shall determine such market prices in a commercially reasonable manner. For purposes of Section 1.51 of the Master Agreement, “Capacity Replacement Price” shall be deemed to be the “Replacement Price” as used in the Master Agreement.
1.8 “Confirmation” has the meaning specified in the introductory paragraph hereof.
1.9 “Confirmation Effective Date” has the meaning specified in the introductory paragraph hereof.
1.10 “Contingent Firm RA Product” has the meaning specified in Section 3.2 hereof.
1.11 “Contract Price” means, for any Monthly Delivery Period, the price for such Monthly Delivery Period as specified in the “RA Capacity Price Table” set forth in Section 4.9.
1.12 “Contract Quantity” means, with respect to any particular Showing Month of the Delivery Period, the amount of Product (in MWs) set forth in the “Contract Quantity Table” in Section 4.3 which Seller has agreed to provide to Buyer from the Unit for such Showing Month.
Appendix A Shell Energy
DocuSign Envelope ID: 0A773252-7A43-485A-997E-2112DC197145 Nucleus:
(01) SENA (100814)
2 1.13 “CPUC Decisions” means, CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 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 and subsequent decisions related to resource adequacy, as may be amended from time to time by the CPUC.
1.14 “CPUC Filing Guide” means the annual document issued by the CPUC which sets forth the guidelines, requirements and instructions for LSE’s to demonstrate compliance with the CPUC’s resource adequacy program.
1.15 “Delivery Period” has the meaning specified in Section 4.1 hereof.
1.16 “Delivery Point” has the meaning specified in Section 4.2 hereof.
1.17 “Designated RA Capacity” shall be equal to, for each day during any particular Showing Month of the Delivery Period, the Contract Quantity of Product for such Showing Month, including the amount of Contract Quantity that Seller has elected to provide Alternate Capacity with respect to, minus any reductions to Contract Quantity specified in Section 4.4 with respect to which Seller has not elected to provide Alternate Capacity.
1.18 “Effective Flexible Capacity” has the meaning specified for such term in the Tariff.
1.19 “Flexible Capacity Requirements” or “FCR” means the flexible capacity requirements established for LSEs by the CPUC pursuant to the CPUC Decisions, or by an LRA or other Governmental Body having jurisdiction.
1.20 “Flexible RA Product” means Designated RA Capacity consisting of FCR Attributes, and, if applicable, LAR Attributes and/or RAR Attributes.
1.21 “FCR Attributes” means, with respect to a Unit, 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 CPUC Decisions, the Tariff, an LRA or other Governmental Body having jurisdiction, exclusive of any LAR Attributes and RAR Attributes.
1.22 “FCR Showing” 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 CPUC Decisions and the Tariff, or to an LRA having jurisdiction over the LSE.
1.23 “Generic RA Product” means Designated RA Capacity consisting of RAR Attributes and, if applicable, LAR Attributes, but not FCR Attributes.
1.24 “Governmental Body” means (i) any federal, state, local, municipal or other government; (ii) 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 (iii) any court or governmental tribunal.
1.25 “LAR” means local area reliability, which is any program of localized resource adequacy requirements established for jurisdictional LSEs by the CPUC pursuant to the CPUC Decisions, 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.
1.26 “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 CPUC Decisions, CAISO, LRA, or other Governmental Body having jurisdiction, associated with the physical location or point of electrical interconnection of such Unit within the CAISO Control Area, that can be counted toward LAR, exclusive of any RA 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 Transaction.
Appendix A Shell Energy
DocuSign Envelope ID: 0A773252-7A43-485A-997E-2112DC197145 Nucleus:
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3 1.27 “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 CPUC Decisions, or to an LRA having jurisdiction over the LSE.
1.28 “LRA” has the meaning set for in the Tariff for the term “Local Regulatory Authority”.
1.29 “LSE” has the meaning specified in the Tariff for the term “Load Serving Entity”.
1.30 “Master Agreement” has the meaning specified in the introductory paragraph hereof.
1.31 “Monthly Delivery Period” means each calendar month during the Delivery Period and shall correspond to each Showing Month.
1.32 “Net Qualifying Capacity” has the meaning set forth in the Tariff.
1.33 “Non-Excusable Event” means any event, other than a Planned Outage and those events described under the definition of "Unit Firm" in the Master Agreement that excuse Seller's performance, that causes Seller to fail to perform its obligations under this Confirmation, including, without limitation, any such event resulting from (a) the negligence of the owner, operator or Scheduling Coordinator of a Unit, or (b) Seller’s failure to comply, or failure to cause the owner, operator or Scheduling Coordinator of the Units to comply, with the terms of the Tariff with respect to the Units providing RA Attributes, Flexible RA Attributes or LAR Attributes, as applicable.
1.34 “Non-Availability Charges” are as defined in the Tariff.
1.35 “Notification Deadline” means, for each Showing Month, the date that is fifteen (15) Business Days before the earlier of the relevant deadlines for (a) the corresponding RAR Showings, FCR Showings and/or LAR Showings for such Showing Month, and (b) the Supply Plan filings applicable to that Showing Month.
1.36 “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 Outage (defined below).
1.37 “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.
1.38 “Product” has the meaning specified in Article 3 hereof.
1.39 “RA Capacity” means the qualifying and deliverable capacity of the Unit for RAR and, if applicable, LAR, and FCR purposes for the Delivery Period, as determined by the CAISO or other Governmental Body authorized to make such determination under Applicable Laws. RA Capacity encompasses the applicable RA Attributes, and if applicable, LAR Attributes and FCR Attributes of the capacity provided by a Unit.
1.40 “RA Capacity Payment” has the meaning specified in Section 4.9 hereof.
1.41 “RAR” means the resource adequacy requirements, exclusive of LAR established for LSEs by the CPUC pursuant to the CPUC Decisions, or by an LRA or other Governmental Body having jurisdiction.
1.42 “RAR Attributes” means, with respect to a Unit, any and all resource adequacy attributes, as identified and existing as of the Confirmation Date by the Tariff, CPUC Decisions, LRA, or any Governmental Body having jurisdiction that can be counted toward RAR, exclusive of any LAR Attributes and FCR Attributes.
1.43 “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 CPUC Decisions, or to an LRA having jurisdiction.
1.44 “Replacement Capacity” has the meaning specified in Section 4.7 hereof.
Appendix A Shell Energy
DocuSign Envelope ID: 0A773252-7A43-485A-997E-2112DC197145 Nucleus:
(01) SENA (100814)
4 1.45 “Replacement Unit” means any generating unit having comparable RAR Attributes, LAR Attributes and, if applicable, FCR Attributes to the Unit(s), meeting the requirements for a Unit specified herein and meeting the requirements specified in Section 4.5.
1.46 “Resource Category” shall be as described in the CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time.
1.47 “Scheduling Coordinator” has the same meaning as in the Tariff.
1.48 “Seller” has the meaning specified in the introductory paragraph hereof.
1.49 “Showing Month” shall be the calendar month during the Delivery Period that is the subject of the RAR Showing, LAR Showing, and/or FCR Showing, as applicable, as set forth in the CPUC Decisions or Tariff. For illustrative purposes only, the monthly RAR Showing made in June is for the Showing Month of August.
1.50 “Supply Plan” has the meaning specified in the Tariff.
1.51 “Tariff” means the tariff and protocol provisions of the CAISO, as amended or supplemented from time to time. For purposes of Article 5, the Tariff refers to the tariff and protocol provisions of the CAISO as they exist on the Confirmation Effective Date.
1.52 “Transaction” has the meaning specified in the introductory paragraph hereof.
1.53 “Unit” or “Units” shall mean the generation assets described in Article 2 hereof (including any Replacement Units), from which RA Capacity is provided by Seller to Buyer.
1.54 “Unit EFC” means the Effective Flexible Capacity set by the CAISO for the applicable Unit. If the CAISO adjusts the Unit EFC after the Confirmation Effective Date, then for the period in which the adjustment is effective, the Unit EFC shall be deemed the lessor of (i) the Unit EFC as of the Confirmation Effective Date, or (ii) the CAISO-adjusted Effective Flexible Capacity.
1.55 “Unit NQC” means the Net Qualifying Capacity set by the CAISO for the applicable Unit. If the CAISO adjusts the Net Qualifying Capacity of a Unit after the Confirmation Effective Date, then for the period in which the adjustment is effective, the Unit NQC shall be deemed the lesser of (i) the Unit NQC as of the Confirmation Effective Date, or (ii) the CAISO-adjusted Net Qualifying Capacity.
Appendix A Shell Energy
DocuSign Envelope ID: 0A773252-7A43-485A-997E-2112DC197145 Nucleus:
(01) SENA (100814)
5 ARTICLE 2. UNIT INFORMATION
Name Kern River Cogen Facility
Location Bakersfield, CA
CAISO Resource ID OMAR_2_UNIT 3
Unit SCID TS 12
Unit NQC April 75, May 73.67
Unit EFC NA
Resource Type Gas Cogen
Resource Category (1, 2, 3 or 4) 4
Flexible RAR Category (1, 2 or 3) NA
Path 26 (North or South) South
Local Capacity Area (if any, as of
Confirmation Effective Date) BCV
Deliverability restrictions, if any, as
described in most recent CAISO
deliverability assessment
None
Run Hour Restrictions None
ARTICLE 3. RESOURCE ADEQUACY CAPACITY PRODUCT
3.1 During the Delivery Period, Seller shall provide to Buyer, pursuant to the terms of this Confirmation, the Designated RA Capacity in accordance with the product types selected in Section 3.2 (the “Product”) and the Contract Quantity set forth in Section 4.3. The Product does not confer to Buyer any right to the electrical output from the Units, other than the right to include the Designated RA Capacity associated with the Contract Quantity in RAR Showings, LAR Showings, and/or FCR Showings, as applicable, and any other capacity or resource adequacy markets or proceedings as specified in this Confirmation. Specifically, no energy or ancillary services associated with any Unit is required to be made available to Buyer as part of this Transaction and Buyer shall not be responsible for compensating Seller for Seller’s commitments to the CAISO required by this Confirmation. Seller retains the right to sell any pursuant to the Tariff any RA Capacity from a Unit in excess of that Unit’s Contract Quantity and any RA Attributes, LAR Attributes or FCR Attributes not otherwise transferred, conveyed, or sold to Buyer under this Confirmation.
3.2 Product Type
Flexible RA Product
The Designated RA Capacity is a Flexible RA Product. For avoidance of doubt, the Flexible RA Product to be delivered by Seller to Buyer hereunder shall include the following Product attributes:
[ ] FCR Attributes with LAR Attributes
[ ] FCR Attributes with RAR Attributes
Generic RA Product
The Designated RA Capacity is a Generic RA Product. For avoidance of doubt, the Generic RA Product to be delivered by Seller to Buyer hereunder shall include the following Product attributes:
[X] RAR Attributes
[ ] LAR Attributes
Appendix A Shell Energy
DocuSign Envelope ID: 0A773252-7A43-485A-997E-2112DC197145 Nucleus:
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6 3.3 Delivery Obligation
Contingent Firm RA Product
Seller shall provide Buyer with Designated RA Capacity from the Units. If those Units are not able to provide the full amount of the Contract Quantity as a result of a Non-Excusable Event, then, subject to Section 4.4, Seller shall have the option to notify Buyer in writing by the Notification Deadline that either (a) Seller will not provide the full Contract Quantity during the period of such non-availability; or (b) Seller will supply Alternate Capacity to fulfill the remainder of the Contract Quantity during such period. If Seller fails to provide Buyer with the Contract Quantity as a result of a Non-Excusable Event and has failed to notify Buyer in writing by the Notification Deadline that it will not provide the full Contract Quantity during the period of such non availability as provided in Section 4.4, then Seller shall be liable for damages and/or required to indemnify Buyer for any resulting penalties or fines pursuant to the terms of Sections 4.7 and
4.8 hereof. Notwithstanding anything herein to the contrary, if Seller provides less than the full amount of the Contract Quantity for any reason other than a Non-Excusable Event or in accordance with Section 4.4, and Seller provides notice of such by the Notification Deadline, Seller is not obligated to provide Buyer with Alternate Capacity or to indemnify Buyer for any resulting penalties or fines. The Product is a Contingent Firm RA Product, and with respect to this Contingent Firm RA Product, “Contingent Firm” shall have the same meaning as “Unit Firm” in the Master Agreement.
Firm RA Product
Seller shall provide Buyer with Designated RA Capacity from the Unit(s) in the amount of the Contract Quantity. If the Units are not available to provide the full amount of the Contract Quantity for any reason other than Force Majeure, including without limitation any Outage or any adjustment of the RA Capacity of any Unit, pursuant to Section 4.4, then, Seller shall provide Buyer with Designated RA Capacity from one or more Replacement Units pursuant to Section 4.5 hereof. If Seller fails to provide Buyer with replacement Designated RA Capacity from Replacement Units pursuant to Section 4.5, then Seller shall be liable for damages and/or required to indemnify Buyer for penalties or fines pursuant to the terms of Sections 4.7 and 4.8 hereof.
ARTICLE 4. DELIVERY AND PAYMENT
4.1 Delivery Period
4.2 Delivery Point
The Delivery Point for each Unit shall be the CAISO Control Area, and if applicable, the LAR region in which the Unit is electrically interconnected.
4.3 Contract Quantity
The Contract Quantity for each Monthly Delivery Period shall be:
Contract Quantity Table
Contract Month / Year
Contract Quantity
(MWs)
4.4 Adjustments to Contract Quantity
(a) Planned Outages: If Seller is unable to provide the applicable Contract Quantity for all or a portion of a Showing Month due to a Planned Outage of a Unit, then Seller shall have the option, but not the obligation, upon written notice to Buyer by the Notification Deadline, to either (a) reduce the Contract Quantity in accordance with the Planned Outage for such portion of the Showing Month; or (b) provide Alternate Capacity up to the Contract Quantity for the applicable portion of such Showing Month.
Appendix A Shell Energy
DocuSign Envelope ID: 0A773252-7A43-485A-997E-2112DC197145 Nucleus:
(01) SENA (100814)
7 (b) Reductions in Unit NQC: If the Product is both (i) Generic RA Product, and (ii) Contingent Firm RA Product, then Seller’s obligation to deliver the applicable Contract Quantity for any Showing Month may also be reduced by Seller if the Unit experiences a reduction in Unit NQC as determined by the CAISO. If the Unit experiences such a reduction in Unit NQC then Seller has the option, but not the obligation, upon written notice to Buyer by the Notification Deadline, to provide the applicable Contract Quantity for such Showing Month from (i) the same Unit, provided the Unit has sufficient remaining and available Product, and/or (ii) from Replacement Units, provided, that in each case Seller provides and identifies such Replacement Units in accordance with Section 4.5. (c) If Product is both (i) Flexible RA Product specified under Section 3.2, and (ii) Contingent Firm RA Product specified under Section 3.3, then Seller’s obligation to deliver the applicable Contract Quantity for any Showing Month may also be reduced if the Unit experiences a reduction in Unit EFC or Unit NQC as determined by the CAISO. If the Unit experiences such a reduction in Unit EFC or Unit NQC, then Seller has the option, but not the obligation, to provide the applicable Contract Quantity for such Showing Month from (i) the same Unit, provided the Unit has sufficient remaining and available Product and/or (ii) Alternate Capacity up to the Contract Quantity.
4.5 Alternative Capacity and Replacement Units
(a) If Seller elects or is unable to provide the full Contract Quantity for any Showing Month for any reason, including, without limitation, due to one of the reasons specified in Section 4.4, or Seller desires to provide the Contract Quantity for any Showing Month from a different generating unit other than the Unit, then Seller, at no additional cost to Buyer, may provide Buyer with Alternate Capacity from one or more Replacement Units, with the total amount of Product provided to Buyer from the Unit and Replacement Units up to an amount equal to the Contract Quantity for the applicable Showing Month; provided that in each case, Seller shall notify Buyer in writing of such Replacement Units no later than the Notification Deadline. If Seller notifies Buyer in writing as to the particular Replacement Units and such Units meet the requirements of this Section 4.5, then such Replacement Units shall be automatically deemed a Unit for purposes of this Confirmation for the remaining portion of that Showing Month. that Showing Month and Seller shall not be liable to Buyer or any other party for damages, including any cover costs, and/or required to indemnify Buyer for costs, penalties or fines pursuant to the terms of Sections 4.7 and 4.8 hereof if and only if Seller has provided Buyer with timely notice pursuant to this Section 4.5(a) of Seller’s intent not to provide Alternate Capacity in an amount equal to the Contract Quantity of that Showing Month.
(b) If Seller is unable to provide the full Contract Quantity for any Showing Month for any reason, including, without limitation, due to one of the reasons specified in Section 4.4 and Seller does not provide Alternate Capacity in an amount equal to that which allows Seller to provide the full Contract Quantity for that Showing Month, then Buyer may, but shall not be required to, purchase Replacement Capacity.
4.6 Delivery of Product
Seller shall provide Buyer with the Designated RA Capacity of Product for each Showing Month consistent with the following:
Seller shall, on a timely basis, submit, or cause the Unit’s Scheduling Coordinator to submit, Supply Plans to identity and confirm the Designated RA Capacity provided to Buyer for each Showing Month so that the total amount of Designated RA Capacity identified and confirmed for such Showing Month equals the Designated RA Capacity, unless specifically requested not to do so by Buyer.
4.7 Damages for Failure to Provide Designated RA Capacity If Seller fails to provide Buyer with the Designated RA Capacity of Product for any Showing Month, and such failure is not excused under the terms of the Confirmation, then the following shall apply:
Appendix A Shell Energy
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8 (a) Buyer may, but shall not be required to, replace any portion of the Designated RA Capacity not provided by Seller with capacity having equivalent RA Attributes, LAR Attributes and/or FCR Attributes as the Designated RA Capacity not provided by Seller; provided, however, that if any portion of the Designated RA Capacity that Buyer is seeking to replace is Designated RA Capacity having solely RAR Attributes and no LAR Attributes or FCR Attributes, and no such RA Capacity is available, then Buyer may replace such portion of the Designated RA Capacity with capacity having any applicable FCR Attributes and/or LAR Attributes (“Replacement Capacity”). Buyer may enter into purchase transactions with one or more parties to replace any portion of Designated RA Capacity not provided by Seller so long as such transactions are done at prevailing market prices. Additionally, Buyer may enter into one or more arrangements to repurchase its obligation to sell and deliver capacity to another party, and, to the extent such transactions are done at prevailing market prices, such arrangements shall be considered equivalent to the procurement of Replacement Capacity. Buyer shall use commercially reasonable efforts to minimize damages when procuring any Replacement Capacity.
(b) Seller shall pay to Buyer an amount equal to the positive difference, if any, between (i) the sum of (A) the Replacement Capacity times the Capacity Replacement Price, and (B) the Designated RA Capacity not provided by Seller (less any Replacement Capacity) times the Capacity Replacement Price; and (ii) the Designated RA Capacity not provided by Seller times the Contract Price for that month. If Seller fails to pay these damages, then Buyer may in addition to any other remedies that may be available to Buyer, offset those damages owed it against any future amounts it may owe to Seller under this Confirmation pursuant to Article 6 of the Master Agreement. Seller will not be in breach of this Confirmation for any failure to provide any Designated RA Capacity so long as Seller complies with the provisions of this Section 4.7.
4.8 Indemnities for Failure to Deliver Contract Quantity Subject to any adjustments made pursuant to Section 4.4, Seller agrees to indemnify, defend and hold harmless Buyer from any penalties, fines or costs assessed against Buyer by the CPUC or the CAISO, resulting from any of the following:
(a) Seller’s failure to provide any portion of the Designated RA Capacity if such failure is not excused under the terms of the Product or by Buyer’s failure to perform; (b) Seller’s failure to provide notice of the non-availability of any portion of Designated RA Capacity as required under Sections 4.5; or
(c) A Unit Scheduling Coordinator’s failure to timely submit accurate Supply Plans that identify Buyer’s right to the Designated RA Capacity purchased hereunder.
With respect to the foregoing, the Parties shall use commercially reasonable efforts to minimize such penalties, fines and costs; provided, that in no event shall Buyer be required to use or change its utilization of its owned or controlled assets or market positions to minimize these penalties and fines. If Seller fails to pay the foregoing penalties, fines or costs, or fails to reimburse Buyer for those penalties, fines or costs, then Buyer may, in addition to any other remedies that may be available to Buyer, offset those penalties, fines or costs against any future amounts it may owe to Seller under this Confirmation.
4.9 RA Capacity Payment
In accordance with the terms of Article 6 of the Master Agreement, Buyer shall make an RA Capacity Payment to Seller for each Unit, in arrears, after the applicable Showing Month. The RA Capacity Payment shall be equal to the sum for each day during the Showing Month of the product of (a) the applicable Contract Price for such Showing Month, multiplied by (b) the Designated RA Capacity for the Monthly Delivery Period, multiplied by (c) 1,000. The final product of this RA Capacity Payment calculation shall be rounded to the nearest penny (i.e., two decimal places); provided, however, that the Monthly RA Capacity Payment shall be prorated to reflect any portion of Designated RA Capacity that was not delivered pursuant to Section 4.4 at the time of the CAISO filing for the respective Showing Month.
Appendix A Shell Energy
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9 RA Capacity Price Table
Contract
Month / Year Contract Price
4.10 Allocation of Other Payments and Costs
Seller shall be entitled to receive and retain all revenues that Buyer is not expressly entitled to receive pursuant to this Agreement, including all revenues that Seller may receive from the CAISO or any other third party with respect to any Unit for (a) start-up, shut-down, and minimum load costs, (b) revenue for ancillary services, (c) energy sales, (d) any revenues for black start or reactive power services, or (e) the sale of the unit-contingent call rights on the generation capacity of the Unit to provide energy to a third party, so long as such rights do not confer on such third party the right 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. 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. If a centralized capacity market develops within the CAISO region, Buyer will have exclusive rights to offer, bid, or otherwise submit Designated RA Capacity provided to Buyer pursuant to this Confirmation for re-sale in such market, and retain and receive any and all related revenues.
ARTICLE 5. CAISO OFFER REQUIREMENTS
During the Delivery Period, except to the extent any Unit is in an Outage, or is affected by an event of Force Majeure that results in a partial or full outage of that Unit, Seller is responsible for either scheduling or causing the Unit’s Scheduling Coordinator to schedule with, or make available to, the CAISO each Unit’s Designated RA Capacity in compliance with the Tariff, and performing, or causing the Unit’s Scheduling Coordinator, owner, or operator, as applicable, to perform all obligations under the Tariff that are associated with the sale of Designated RA Capacity hereunder. 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 6. CHANGE IN LAW
If any statutes, rules, regulations, permits or authorizations are enacted, amended, granted or revoked which have the effect of changing the transfer and sale procedure for Product set forth in this Confirmation so that the implementation of this Confirmation becomes impossible or impracticable, or if a new product that is a derivative of the Product(s) contracted for herein is created, the Parties hereto agree to negotiate in good faith to amend this Confirmation, to conform with such new statutes, regulations, or rules in order to maintain the original intent of the Parties under this Confirmation or to provide Buyer with Product pursuant to another program if possible; provided, however, that neither Party shall be obligated to enter into any such amendment except in its sole discretion.
ARTICLE 7. OTHER BUYER AND SELLER COVENANTS
7.1 Further Assurances
Buyer and Seller shall, throughout the Delivery Period, take all commercially reasonable actions and execute any and all documents or instruments reasonably necessary to ensure Buyer’s right to the use of Appendix A Shell Energy
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10 the Contract Quantity for the sole benefit of Buyer’s applicable RAR, LAR and/or FCR, as applicable, including, without limitation:
(a) Cooperating with and providing, and in the case of Seller causing each 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 Contract Quantity as RA Capacity and Designated 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 Period the ability to deliver the Contract Quantity from each Unit to the CAISO Controlled Grid for the minimum hours required to qualify as RA Capacity, and providing information requested by the CPUC, the CAISO or other Governmental Body having jurisdiction to administer the applicable RAR, LAR and FCR to demonstrate that the Contract Quantity can be delivered to the CAISO Controlled Grid pursuant to the “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 Confirmation, which remain subject to agreement of such Parties, in each Party’s sole discretion, to conform this Transaction to subsequent clarifications, revisions, or decisions rendered by the CPUC, FERC, or other Governmental Body having jurisdiction to administer the applicable RAR or FCR so as to maintain the purpose and intent of the Transaction agreed to by the Parties on the Confirmation Effective Date.
7.2 Seller Representations and Warranties
Seller represents, warrants and covenants to Buyer that, throughout the Delivery Period:
(a) Seller owns or has the exclusive right to the RA Capacity sold under this Confirmation from each Unit, and shall furnish Buyer, the CAISO, CPUC, or other jurisdictional LRA of or other Governmental Body with such evidence as may reasonably be requested to demonstrate such ownership or exclusive right;
(b) No portion of the Contract Quantity 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 Agreement between the CAISO and either Seller or the Unit’s owner or operator;
(c) No portion of the Contract Quantity has been committed by Seller in order to satisfy RAR, LAR, FCR, or analogous obligations in any non-CAISO market; (d) Each Unit is connected to the CAISO Controlled Grid, is within the CAISO Control Area, or is under the control of CAISO;
(e) The owner or operator of each Unit is obligated to comply with Applicable Laws, including the Tariff, relating to RA Capacity, RAR, LAR and FCR;
(f) If Seller is the owner of any Unit, the cumulative amounts of LAR Attributes, RAR Attributes and FCR Attributes that Seller has sold, assigned or transferred for any Unit does not exceed that Unit’s RA Capacity;
(g) With respect to the RA Capacity provided under this Confirmation, Seller shall, and each Unit’s Scheduling Coordinator is obligated to, comply with Applicable Laws, including the Tariff, relating to RA Capacity, RAR, LAR and FCR;
(h) Seller has notified the Scheduling Coordinator of each Unit that Seller has transferred the Designated RA Capacity to Buyer, and the Scheduling Coordinator is obligated to deliver the Supply Plans in accordance with the Tariff;
(i) Seller has notified the Scheduling Coordinator of each Unit that Seller is obligated to cause each Unit’s Scheduling Coordinator to provide to Buyer, no later than the Notification Appendix A Shell Energy
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11 Deadline, of the Designated RA Capacity of each Unit that is to be submitted in the Supply Plan associated with this Agreement for the applicable period; and (j) Seller has notified each Unit’s Scheduling Coordinator that Buyer is entitled to the revenues set forth in Section 4.10 of this Confirmation, and such Scheduling Coordinator is obligated to promptly deliver those revenues to Buyer, along with appropriate documentation supporting the amount of those revenues.
ARTICLE 8. CONFIDENTIALITY
Notwithstanding any agreement or obligation of confidentiality or non-disclosure between Buyer and Seller, the Parties agree that Buyer may disclose the Designated RA Capacity under this Transaction 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 Transaction to the SC of each Unit in order for such SC to timely submit accurate Supply Plans. In addition, If Buyer becomes legally compelled (by interrogatories, requests for information or documents, subpoenas, summons, civil investigative demands, or similar processes or otherwise in connection with any litigation or to comply with any applicable law, order, regulation, ruling, regulatory request, accounting disclosure rule or standard or any exchange, control area or independent system operator rule, or a request to Buyer under the California Public Records Act (California Government Code Section 6250 et seq.)) to disclose any confidential information of Seller, Buyer may do so after providing Seller with prompt notice so that Seller, at its sole expense, may seek an appropriate protective order or other appropriate remedy against disclosure. Notwithstanding anything to the contrary in Section
10.11 of the Master Agreement, Buyer may make portions of this Confirmation available to the public as part of Buyer’s process of seeking approval from its Board of Directors for this Transaction.
ARTICLE 9. BUYER’S RE-SALE OF PRODUCT
Buyer may re-sell all or a portion of the Product hereunder. In the event of any such re-sale, Seller shall cause its Scheduling Coordinator to cooperate reasonably with Buyer and Buyer’s transferee (and their respective Scheduling Coordinators) to allow such transferee to utilize the re-sold Product.
ARTICLE 10. MARKET BASED RATE AUTHORITY
Upon Buyer’s written request, Seller shall, in accordance with Federal Energy Regulatory Commission (FERC) Order No. 697, submit a letter of concurrence in support of any affirmative statement by Buyer that this contractual arrangement 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 shall not, in filings, if any, made subject to Order Nos. 652 and 697, claim that this contractual arrangement conveys ownership or control of generation capacity from Seller to Buyer.
ARTICLE 11. COLLATERAL REQUIREMENTS
The Parties further agree that for the purposes of calculating the Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, the Current Mark-to-Market Value for this Transaction is deemed to be zero.
Appendix A Shell Energy
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12 ACKNOWLEDGED AND AGREED TO AS OF THE CONFIRMATION EFFECTIVE DATE.
SHELL ENERGY NORTH AMERICA (US), L.P. SILICON VALLEY CLEAN ENERGY AUTHORITY By: By:
Name: John W. Pillion
Girish Balachandran
Name:
Title: Confirmations – Team Lead Title: CEO
Date: 1.11.23 Date:
1/12/2023
Appendix A Shell Energy
DocuSigned by:
'
5CA64B9AC4C24C3...
1 CONFIRMATION LETTER
BETWEEN
MORGAN STANLEY CAPITAL GROUP INC.
AND
SILICON VALLEY CLEAN ENERGY AUTHORITY
Confirmation
Inc. ( Morgan Stanley Seller
authority ( SVCE Buyer Party Parties August
11, 2023 Confirmation Effective Date to provide to Buyer the right to the Product. This Transaction is governed by the EEI Master Power Purchase and Sale Agreement dated November 23, 2016, together with any and all exhibits, schedules or supplements thereto or incorporated therein by reference, each in force and effect from time to time between the Parties (collectively, the Master Agreement erms and
conditions. The definitions and provisions contained in this Confirmation, the Master Agreement, the RA Requirements (as defined herein), and in the tariffs and/or protocols of the California Independent System CAISO CAISO Tariff Tariff
Confirmation and are incorporated by reference; provided that, to the extent that this Confirmation is inconsistent with any provision of the Master Agreement, this Confirmation shall govern the rights and obligations of the Parties hereunder. Consistent with Section 2.2 of the Master Agreement, this Confirmation, together with all other transactions, confirmations and the Master Agreement, form a single integrated agreement between the Parties and are not separate contracts. This Confirmation supersedes and replaces any prior oral or written confirmation or agreement, including broker confirmations, regarding this Transaction.
ARTICLE 1
PRODUCT 1
1.1. Product 1 Contract Price, Contract Quantity, Delivery Term and Delivery Point (a) Product 1: WSPP Agreement Schedule C Firm Energy supplied from the Carbon Free Source (as defined in Exhibit Carbon Free Firm Energy
curtailed by Seller or Buyer for economic reasons.
(b) Delivery Term:
(c) Hourly Contract Quantity:
(d) Delivery Point: Nevada NOB , which is an Intertie. The Parties may subsequently agree to an alternate delivery point in writing, provided a transmission path is specified to such other delivery point and such other delivery point is an Intertie.
(e) Delivery Profile: Monday through Saturday minimum 4 consecutive hours between 4 pm through 9 pm (hours ending 1700 PPT through hour ending 2100 PPT), and at least 100 hours per month, in accordance with MCC Bucket obligations during each calendar month Minimum Monthly Delivery Quantity .
(f) MCC Bucket: MCC Bucket Category 1.
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
This confirmation letter (“ ”) confirmsthe Transaction between Morgan Stanley Capital Group “ ” or “ ”) and Silicon Valley Clean Energy Authority, a California joint powers “ ” or “ ”), each individually a “ ” and together the “ ,” dated as of (the “ ”) in which Seller agrees
“ ”), as amended and supplemented by this Confirmation, under the following t Operator (“ ”) as amended from time to time (the “ ” or the “ ”), shall apply to this A) (“. ”). The Product cannot be
Oregon Border (“ ”), north to south
(the “
2 (g) Contract Price (Product 1): The Contract Price is an aggregation of three components, as further described in Section 1.2(c).
(h) Passage of Title: Seller represents and warrants that Seller holds the rights to the Product free and clear of all liens and encumbrances, and Seller agrees to convey and hereby conveys all such Product to Buyer free and clear of all liens and encumbrances as included in the delivery of the Product subject to the terms and conditions contained herein. As set forth in Section 10.3 of the Master Agreement, title and reporting rights to the Carbon Free Firm Energy shall pass from Seller to Buyer at the Delivery Point. (i) Transmission and Agreed Transmission Path: Under this Confirmation and pursuant to Section 10 of the WSPP Agreement, the agreed transmission path for deliveries to the Delivery Point will be from the Carbon Free Source (as listed in Exhibit A) to Big Eddy and Big Eddy to N Agreed Transmission Path .
Transmission (as defined herein).
For the purposes of the Cap and Trade Regulations, the foregoing agreed upon transmission Regulations).
(j) Seller shall Bid or Self-Schedule Carbon Free Firm Energy in the amount of the Hourly Contract Quantity from the Carbon Free Source into the CAISO at the Delivery Point to Buyer without substituting electricity from another source, as evidenced by e-Tags, or such other format acceptable to Buyer. Deliveries shall be measured for each hour that the Carbon Free Firm Energy is delivered to the CAISO but shall not exceed the lesser of corresponding amounts shown on the e-Tags or meter data from the Carbon Free Source.
(k) Reporting Requirements. Seller shall provide Buyer with all necessary documentation required to support and verify that delivery requirements have been met according to the Applicable Program, including but not limited to documentation demonstrating that the Carbon Free Source meets the CARB requirements of a Specified Source Facility and that the Carbon Free Firm Energy is traceable to a specific generating facility.
1.2. Special Conditions Product 1
(a) Generally Accepted Utility Practice: All scheduling and tagging shall be in accordance with Generally Accepted Utility Practice.
(b) External Resource: Energy delivered pursuant to this Confirmation will not be sourced from resources internal to the CAISO Balancing Authority Area. (c) Product 1 Contract Price Components: The Contract Price is a per megawatt hour aggregation of the following components:
(i) LMP Index minus for the energy,
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
OB (each, an “ ”)
For the purposes of Section 10 of the WSPP Agreement, “firm transmission” means Firm path shall constitute a “continuous physical transmission path” which shall provide for “direct delivery of electricity” (as such terms are defined in the Cap and Trade Seller Delivery Obligation.
3 (ii) payable for the first 100 hours of Minimum Monthly Delivery Quantity only, representing the price for the Hourly Contract Quantity of forward capacity commitment supporting energy delivery from the Carbon Free Source, converted to $/MWh throughout the Delivery Term Capacity Fee
(iii) for the carbon free attributes Attributes Fee ) payable for the first only of Carbon Free Firm Energy delivered hereunder.
The Capacity Fee shall be due and payable on the entire Hourly Contract Quantity of Carbon Free Firm Energy each hour (unless energy is not delivered due to an unexcused failure to deliver by Seller), not to exceed the Minimum Monthly Delivery Quantity during any calendar month. For greater certainty, the Parties hereby acknowledge and agree that Seller may deliver more than the Minimum Monthly Delivery Quantity hereunder Additional Monthly Quantity during any calendar month; provided however (A) no Capacity Fee shall be due and payable for any such Additional Monthly Quantity and (B) no Attributes Fee shall be payable for Additional Monthly Quantities in excess of All other components of the Product 1 Contract Price shall be due and payable only on the quantity of energy delivered to the Delivery Point in each hour.
Notwithstanding and without limiting Section 4.2 of the Master Agreement, in determining the Sales Price there will be no obligation or requirement to attribute or include a value attributable to the capacity or the carbon free attributes. (d) Additional Seller Representations: Seller represents and warrants to Buyer as follows:
(i) The facilities comprising the Carbon Free Source are each external to the CAISO Balancing Authority Area;
(ii) as of the Confirmation Effective Date, the capacity supporting energy to be delivered pursuant to this Confirmation is surplus to the expected capacity committed to another balancing authority area (i.e., no double-counting); (iii) throughout the Delivery Term, Seller will not commit the capacity necessary to support delivery of Carbon Free Firm Energy from the Carbon Free Source to a third party or other balancing authority area;
(iv) the Hourly Contract Quantity of Carbon Free Firm Energy sold to Buyer hereunder has been sold once and only once by Seller;
(v) throughout the Delivery Term, Carbon Free Firm Energy will be delivered to the Delivery Point using Firm Transmission on the last segment immediately preceding the CAISO balancing authority; and
(vi)
and will be supported (backed) each hour by operating reserves (including required contingency reserves and sufficient balancing reserves) in the Carbon Free energy available for Seller to meet its obligation throughout the applicable operating hour.
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
(“ ”), and
requirements of the Carbon Free Source’s host balancing authority area and is not throughout the Delivery Term, Seller’s firm energy obligation under Product 1 is Source’s host balancing authority area necessary to ensure there is sufficient 4 hereunder is and remains subject to
the terms of the Product and the Master Agreement.
ARTICLE 2
PRODUCT 2
2.1. Product 2 Scheduling Coordinator Services
(a) Seller: Morgan Stanley Capital Group Inc.
(b) Buyer: SVCE
(c) Product 2: Scheduling Coordinator Services as described below for Carbon Free Firm Energy procured by Buyer as Product 1.
2.2. Overview
The purpose of Product 2 is for Morgan Stanley to perform the required scheduling coordinator -06-028, the Carbon Free
Firm Energy). Although D.20-06-028 required the Buyer to take responsibility for ensuring that energy associated with an import RA contract is bid into, and delivered to, the CAISO markets, the Buyer to designate another party to act on its behalf as a scheduling coordinator to bid and deliver the energy into the CAISO markets.
Morgan Stanley is a Scheduling Coordinator recognized by CAISO pursuant to the CAISO Tariff and has the requisite experience, skill and capability to perform the scheduling obligations assumed by it in providing the Scheduling Coordinator Services (as defined below). In providing the Scheduling Coordinator Services, Morgan Stanley will perform, and assume all costs, risks and liabilities associated with performing, the scheduling responsibilities defined below for the limited purpose of submitting Bid(s) and physically scheduling and delivering Buyer Energy procured as Product 1 from the Delivery Point to the Sink as required and contemplated by CPUC D.20-06-028 and the resource adequacy requirements established by CAISO pursuant to the CAISO Tariff.
2.3. Scheduling Coordinator Services
Morgan Stanley agrees to assume the scheduling functions required to schedule and deliver the Carbon Free Firm Energy purchased by Buyer as Product 1 at and from the Delivery Point to the Sink, being an Aggregated Pricing Node in the CAISO Balancing Authority Area, as set forth below Scheduling Coordinator Services
(a) For each hour in which Carbon Free Firm Energy is to be delivered to the Delivery Point, consistent with the Minimum Monthly Delivery Quantity, Morgan Stanley will Bid or Self-Schedule (as such terms are defined in the CAISO Tariff) the Carbon Free Firm Energy into the CAISO Day Ahead Market and Real-Time Market, provided if Morgan Stanley submits Bid(s) (other than Self-Schedule) such Bid(s) for each hour that is an Availability Assessment Hour, Morgan Stanley between negative
and Bidding Requirement until the Minimum Monthly Delivery Quantity has been met.
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
For greater certainty, Seller’s performance (and failure to perform) functions for the “resource” (as such term is used by the CPUC in D.20 CPUC’s decision also permitted the
’s Carbon Free Firm
’sBid(s)shall be at a price
5 (b) Working with CAISO and Buyer to set up a Resource ID associated with Morgan Stanley SCID for purposes of undertaking the services in paragraph (a) RA Resource ID which shall be set up as a CAISO system resource;
(c) Submitting a monthly and annual Supply Plan using the RA Resource ID for each month of the Delivery Term on or prior to the deadline in the CAISO Tariff; (d) Undertaking all scheduling and tagging requirements in accordance with Generally Accepted Utility Practice from the Delivery Point to the Sink, including inserting the following in each NERC E-Tag:
(i) Morgan Stanley
the Delivery Point to the Sink,
(ii) Buyer
(iii) Buyer
(iv) RA Resource ID (MSCG_NOB_I_F_IMS010) in the Misc(Token/Value) field in (v) a CAISO Aggregated Pricing Node as the Sink; and
(e) performing such other ancillary requirements under the CAISO Tariff to give effect to the foregoing.
A sample NERC E-Tag is attached hereto as Exhibit B for informational purposes. Actual NERC E-Tags generated for deliveries hereunder may vary from the sample attached as Exhibit B due to changes in the Carbon Free Source, CAISO or WECC tagging practices or otherwise as required to be consistent with Generally Accepted Utility Practice.
2.4. Scheduling Contacts
Phone Fax
Pre-scheduler:
Real-Time:
2.5. Buyer LSVCE
Buyer LSVCE
2.6. Special Conditions Product 2
(a) Resource Adequacy Plan: Buyer shall submit (or cause to be submitted) a monthly and RA Plan
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
’s
above (“ ”),
’s Scheduling Coordinator PSE in the “physical path” at and from ’s PSE in the “market path” at the Delivery Point,
’s PSE as the last PSE in the “physical path”,
“physical path” at and from the Delivery Point to the Sink, and Seller’s
Buyer’s Identifiers
’s SCID:
’s PSE:
annual Resource Adequacy Plan (“ ”), as required by the CAISO Tariff, that 6 explicitly identifies the Delivery Profile hours as the temporal constraint/limitation and such RA Plan shall otherwise match the Supply Plan submitted by Morgan Stanley. (b) CAISO Acceptance/Rejection: Morgan Stanley shall be entitled to retain any and all revenues received from (and if prices are negative, liable for all payments to) CAISO as a result of CAISO accepting the Bid(s) (including Self-Schedule(s)) submitted by Morgan Stanley. If, in any hour of the Delivery Term, CAISO rejects the Bid(s) (including Self-Schedule) submitted by Morgan Stanley in the CAISO Day Ahead Market and Real-Time Market, then
(i) if Morgan Stanley Self-Schedules or Bids in accordance with the Bidding Requirement, the Parties agree to treat such rejection by CAISO as Uncontrollable Force such that each Party shall be excused from their respective obligation to sell and deliver or purchase and receive the Carbon Free Firm Energy for that hour, and
(ii) if Morgan Stanley does not Bid in accordance with the Bidding Requirement, the Parties agree to treat such rejection by CAISO as a failure to deliver by Seller, no Capacity Fee shall be due for such hour, and, unless Seller is otherwise excused from its delivery obligations, Buyer shall be entitled to such remedies as are provided hereunder and in the Master Agreement.
(c) Energy Adjustment: For each month of the Delivery Term, and in consideration of Morgan Stanley retaining any and all revenues received as a result of any CAISO awards from the Bid(s) (including or Self-Schedule(s)) submitted by Morgan Stanley (among other things), Morgan Stanley will credit Buyer Energy Adjustment
the LMP Index minus for each MWh of the Carbon Free Firm Energy delivered to Buyer in such month pursuant to this Confirmation.
ARTICLE 3
GENERAL PROVISIONS
3.1 Uncontrollable Force/Force Majeure
The Parties agree that Product 1 shall be subject to Uncontrollable Force (as defined in the WSPP Agreement) and Product 2 shall be subject to Force Majeure (as defined in the Master Agreement).
The Parties agree, for the purposes of Section 10 of the WSPP Agreement, Section 3.3 of the Master Agreement and the definition of Force Majeure, that:
(a) any limitation, interruption or curtailment on the applicable Agreed Transmission Path, at the Delivery Point or from the Delivery Point to Sink by the transmission provider pursuant to the applicable OATT or transmission service contract (including CAISO pursuant to CAISO Tariff), by or at the direction of WECC or any applicable NERC-recognized regional reliability coordinator, including for unscheduled flow mitigation, planned outage(s) and full or partial de-rate(s), whether or not known or anticipated as of the Confirmation Effective Date, will be considered Uncontrollable Force and Force Majeure, (b) a limitation, interruption or curtailment described in paragraph (a) may result in Bid(s), schedule(s) or E-Tag(s) not being submitted or created, as applicable, for one or more hours depending on the timing and circumstances of the qualifying limitation, interruption or DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
the Energy Adjustment. “ ” means
7 curtailment, Generally Accepted Utility Practice and requirements and practices pursuant to CAISO Tariff,
(c) if and to the extent any of the events or circumstances described in paragraphs (a) and (b) above prevents (i) delivery of the Hourly Contract Quantity of Carbon Free Energy from the Carbon Free Source to Sink for any hour(s) of the Delivery Term or (ii) Bid(s), schedule(s) or E-Tag(s) being submitted or created, as applicable, by Morgan Stanley for any hour(s) of the Delivery Term, subject to Section 1.2(c), Morgan Stanley and Buyer shall be relieved of their obligation to sell and deliver or purchase and receive, respectively, the Carbon Free Firm Energy at the Delivery Point for such hour(s) and Morgan Stanley shall be relieved of its SC Services obligations for such hour(s), (d) Morgan Stanley will use commercially reasonable efforts to communicate (verbally or electronically in writing, including via eTags) any limitations, interruptions or curtailments on the Agreed Transmission Path known prior to the day-ahead pre-scheduling deadline and advise as to what quantities, if any, of Carbon Free Firm Energy Morgan Stanley is able to deliver to Buyer during the affected hours, and (e) for the purposes of calculating Liquid Damages Payment (i) the Damages Payment shall only be calculated and payable on the difference between the applicable Minimum Monthly Delivery Quantity and the volume of MWh delivered hereunder; and (ii) the monthly price each year for deliveries during the Delivery Term shall be deemed as follows:
3.2 Monthly Reporting
The Parties acknowledge that in each month of the Delivery Term non-delivery of energy can reasonably be expected from time to time as a result of, among other things, Uncontrollable Force (e.g., transmission limitations, interruptions and/or curtailments) and CAISO rejecting Bid(s) meeting the Bid Requirement, including during conditions of oversupply and congestion. For transparency, in addition to Buyer having delivery visibility through inclusion on all NERC E-Tags, Morgan Stanley will provide a monthly report that includes a lesser of analysis showing eTags, and meter readings from the Carbon Free Source.
3.3 Electricity Importer
As a result of the provision of Scheduling Services, Morgan Stanley will be the electricity importer into California for purposes of the Cap and Trade Regulations for the Carbon Free Firm Energy delivered pursuant to this Confirmation. The Parties acknowledge that Morgan Stanley will be responsible for satisfying any Compliance Obligation (as defined in the Cap and Trade Regulations) associated with the energy that is scheduled and imported into California pursuant to this Confirmation.
3.4 Confidentiality
Notwithstanding anything to the contrary in Section 10.11 of the Master Agreement, the Parties agree that either Party may disclose a copy of this Confirmation to a Governmental Authority if DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
ated Damages settlements(the
8 required or if requested by such Governmental Authority or for the purposes set forth in Section
3.5(b), provided such Party shall redact commercial terms (e.g., Contract Price) prior to disclosure or disclose the Confirmation confidentially to the Governmental Authority unless redactions or confidential treatment is not permitted by the Governmental Authority. Each Party recognizes that this Confirmation is subject to the requirements of the California Public Records Act (Government Code Section 6250 et seq.).
3.5 RA Requirements / Change in Law
(a) The Parties acknowledge that Buyer has entered into this transaction to, among other things, use Product 1 toward meeting its RA Requirements. Buyer acknowledges that Seller makes no representation or warranty that Product 1 as procured by Buyer will be eligible for or can be used or counted toward Buyer
pursuant to the RA Requirements.
(b) The Parties agree that either or both Parties may provide a copy of this Confirmation to the CPUC confidentially prior to the time required for Buyer A
Requirements, provided if Seller provides a copy it shall redact or exclude Buyer (c) It is Buyer Intertie import
capability at the Delivery Point such that it may use Product 1 toward its RA Requirements and (ii) determine the appropriate maximum cumulative capacity bucket(s). (d) If there is a Change in Law that (i) materially adversely changes or a obligations hereunder or (ii) results in Buyer being unable to use Product 1 to meet its RA Requirements, the Parties shall work in good faith to try and revise this Confirmation, which may include changes to commercial terms, to appropriately address the material adverse change or effect or permit Buyer to be able to use Product 1 toward its RA Requirements. In the event the Parties cannot reach agreement on any such amendments to this Confirmation within 30 days written notice from one Party following the Change Negotiation Period
thirty (30) days after the Negotiation Period upon written notice to the other Party, which, subject to paragraph 3.8 below, shall be effective the next Business Day after such notice is received. Any termination in accordance with this paragraph shall be without liability of either Party to the other on the termination date as a result of such termination, provided for greater certainty each Party shall remain liable for any payments arising from performance (and non-performance) up to and including the termination date. Termination of this Confirmation pursuant to this paragraph shall not result in termination (or give rise to a right of termination) of any other transactions between the Parties provided that if multiple transactions between the Parties are similarly affected by the Change in Law the terminating Party must concurrently terminate all such transactions unless the other Party otherwise agrees.
3.6 Seller Indemnification / Termination
To the extent Seller fails to fulfill its obligations under this Confirmation and such failure is not excused under the terms of either Product, this Confirmation or the Master Agreement or caused DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
’s resource adequacy obligations
’s compliance filings to obtain the
CPUC's guidance or advice as to the eligibility of Product 1 for meeting the R ’s name.
’s sole responsibility to (i) ensure it has obtained sufficient ffects a Party’s
in Law (“ ”), then either Party may terminate this Confirmation within 9 by a failure to perform by Buyer or other third party contracting directly or indirectly with Buyer, then
(a) Seller agrees to indemnify Buyer for any
nonperformance hereunder as assessed against Buyer by the CPUC pursuant to the RA Requirements, but only to the extent such penalties being assessed could not be avoided by Buyer following notice from Seller of its nonperformance; and (b)
RA Termination Event, Buyer may terminate this Confirmation upon written notice to Seller, provided such notice is provided no later than two (2) Business Days after such RA Termination Event having occurred. If timely termination notice is provided to Seller, subject to paragraph 3.8, termination shall be effective the next Business Day after such notice is received. Any termination in accordance with this paragraph shall be without liability of either Party to the other on the termination date as a result of such termination, provided for greater certainty each Party shall remain liable for any payments arising from performance (and non-performance) up to and including the termination date. Termination of this Confirmation pursuant to this paragraph shall not result in termination (or give rise to a right of termination) of any other transactions between the Parties.
With respect to the foregoing, the Parties shall use commercially reasonable efforts to minimize any such monetary penalties or the impact of any Seller non-performance; provided, that in no event shall Buyer be required to use or change its utilization of its owned or controlled assets or market positions to minimize such penalties.
3.7 Survival
To the extent this Confirmation is terminated by either Party as provided in paragraphs 3.5 or 3.6 and Morgan Stanley, in performing its obligations hereunder, has submitted a monthly Supply Plan or has other binding obligations or commitments to CAISO that cannot be rescinded without Morgan Stanley incurring penalties or other charges, all applicable terms, conditions and provisions of this Confirmation shall survive termination until all binding obligations or commitments to CAISO as at the effective date of such termination have been fully performed, including, without limiting the generality of the foregoing, the purchase and sale of Carbon Free Firm Energy. For greater certainty, neither Party will make any further binding commitments to CAISO (e.g., no filing of monthly RA Plans or Supply Plans) after the effective date of termination.
3.8 Relationship of the Parties
The Parties are independent contractors, and will not be deemed to be partners, joint venturers or agents of each other for any purpose. Nothing contained in this Confirmation will be construed to create a partnership, joint venture, agency or other relationship that may invoke fiduciary obligations between the Parties.
[Signatures appear on the following page.]
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
monetary penalties directly resulting from Seller’s
in addition to Buyer’s other remedies hereunder, if such failure meets all the criteria for a 10 DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
Acknowledged and agreed to as of the Confirmation Effective Date.
MORGAN STANLEY CAPITAL GROUP
INC.
Sign:
Print:
Title:
SILICON VALLEY CLEAN ENERGY
AUTHORITY, a California joint powers
authority
Sign:
Print:
Title:
Brent Masucci
Vice President
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
DocuSigned by:
5CA64D9AC4C24C3"
Girish Balachandran
CEO
Exhibit A - 1
EXHIBIT A
CARBON FREE SOURCE
In any delivery hour, the Carbon Free Firm Energy will be generated by any one or more of the following Carbon Free Source
Facility Name Technology Location CARB ID
Wanapum Dam Large hydroelectric Washington State 500054 Priest Rapids Dam Large hydroelectric Washington State 500054 Rock Island Dam Large hydroelectric Washington State 500003 Rocky Reach Dam Large hydroelectric Washington State 500055 Boundary Dam Large hydroelectric Washington State 500043 Lucky Peak Dam Large hydroelectric Idaho State 500046
Lake Chelan Large hydroelectric Washington State 500040 Wells Large hydroelectric Washington State 500237
Large hydroelectric Montana State 500014
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
large hydro generating facilities listed below (in aggregate, the “ ”).
Kerr (Seii's Ksanka Qlispe) Dam
Exhibit B - 1
EXHIBIT B
SAMPLE NERC E-TAG
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
Market Path
Physical Path
PSE Product Contract Mise Info
MSCG01 G-F Yes
LSVCE L No
BA TSP MO PSE POR POD Sched Entities Contract Mise Info Loss GCPD MSCG01 Source: MSCG_GCPD No
BPAT MSCG01 BPAT.GCPD BigEddy BPAT No
BPAT MSCG01 BigEddy NOB BPAT No
CISO CISO MSCG01 NOB SYLMAR LDWP No
CISO CISO MSCG01 SYLMAR SP15 CISO Yes
CISO CISO LSVCE Sink: SP15 No
Transmission Allocation
TSP Owner Product OASIS NITS Resource Mise Info
BPAT(1) MSCG01 7-F 10031 No
BPAT (2) MSCG01 7-F 10031 No
CISO (1) MSCG01 7-F MSCG_NOBJ_FJMS010 No
CISO (2) MSCG01 7-F MSCG_NO8_l_F_IMS010 No
Exhibit C - 1
EXHIBIT C
DEFINITIONS
Capitalized terms not otherwise defined herein that are defined in the CAISO Tariff shall have the meanings ascribed thereto in the CAISO Tariff.
AAH Availability Assessment Hours -defined by CAISO
pursuant to the CAISO Tariff as the Availability Assessment Hours for resources providing system resource adequacy for the applicable month of the Delivery Term. The Parties acknowledge that, as of the Confirmation Effective Date, CAISO has determined the Availability Assessment Hours for resources providing HE
1700 through HE 2100 (5 hours per day), Monday through Saturday (6 days per week).
Applicable Program ions.
Buyer
Cap and Trade Regulations
Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms regulations (California Code of Regulations Title 17, Subchapter 10, Articles 2 and 5 respectively).
CARB
CAISO Tariff -approved electric tariff of the California Independent System Operator CAISO -published Operating Procedures and Business
Practice Manuals, in each case as amended or supplemented from time to time.
Change in Law ons, additions or clarifications to or of (i) the RA Requirements by the CPUC, or (ii) the CAISO Tariff by CAISO, including CAISO changing the five consecutive hour period for the Availability Assessment Hours for any month of the Delivery Term such that it is no longer HE 1700 through HE 2100 (5 hours per day), Monday through Friday (5 days per week), excluding Federal Holidays, in either case occurring after the Confirmation Effective Date.
CPUC Filing Guide which sets forth the guidelines,
requirements and instructions for load serving entities to demonstrate compliance with the RA Requirements.
Federal Holidays
Firm Transmission smission Service Reservation Priority 7-F (firm point-to-point transmission), and includes conditional firm point-to-point transmission.
Flat -Peak and On-Peak hours (24x7).
Generally Accepted Utility Practice means a practice established by the Western Electricity Coordinating WECC
to time, or if no practice is so established, means a practice otherwise generally accepted in the WECC region.
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
“ ” or “ ” means the five consecutive hour period pre
system resource adequacy for the applicable months of the Delivery Term are hour ending (“ ”) “ ” means the Cap and Trade Regulations or the PSD Regulat “ ”, as used in the Master Agreement, means Buyer.
“ ” means the Mandatory Greenhouse Gas Emissions Reporting and California “ ” means the California Air Resources Bureau of the California Environmental Protection Agency. “ ” means the FERC
Corporation (“ ”) and any current applicable CAISO
“ ” means any changes, revisi
“ ” means the annual document issued by the CPUC
“ ” means legal public holidays as set forth in 5 USC § 6103(a). “ ” means NERC Tran
“ ” means all Off
66 „
Council (“ ”) or any successor regional reliability council, as such practice may be revised from time Exhibit C - 2
Governmental Authority
subdivision thereof, or any other governmental, regulatory, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, department, bureau, or entity with authority over a Party or the subject matter of this Agreement, and includes, without limitation, the Federal Energy Regulatory FERC and CPUC
LMP Index - LMP
TH_NP15_GEN- NP 15 Trading Hub
for the applicable hours of delivery as published by the CAISO. In the event the CAISO fails to publish the LMP for the NP 15 Trading Hub, such failure shall be addressed by the Parties in a manner consistent with the Master Agreement provisions applicable to Market Disruption Events. In the event the CAISO subsequently corrects the LMP for the NP15 Trading Hub, such correction shall be addressed by the Parties in a manner consistent with the Master Agreement provisions applicable to price corrections.
Notwithstanding any other provision of this Confirmation or the Master Agreement, the LMP Index shall not be revised as a result of a correction to the LMP for the NP 15 Trading Hub made any time after 6 months from the end of the Delivery Term.
MCC Bucket(s) ries adopted and defined by the
CPUC in CPUC Decision 22-06-050 pursuant to which CPUC-jurisdictional LSEs are required to categorize their resource adequacy resources based on availability (as defined in the D. 22-06-050). There are five MCC Bucket categories: DR, 1, 2, 3 and 4.
MCC Bucket Category 1 22-06-050, the resource has availability (as defined in the D. 22-06-050) and updated in 2023 CPUC Filing Guide, every Monday through Saturday, for 4 consecutive hours between 4 pm through 9 pm, and at least 100 hours per month from May through December.
NERC Holiday
Off-Peak 0100 through HE 0600 and HE 2300 through HE 2400 PPT and all hours on (i) Sundays or (ii) any NERC Holiday.
On-Peak
per week), excluding NERC Holidays.
PSD Regulations
Regulations Title 20, Division 2, Chapter 3, Article 5, Sections 1390 through 1394).
RA Requirements
isions, resolutions,
or rulings related to resource adequacy as applicable to system resource adequacy and the availability, eligibility and use of imports for system resource adequacy, including CPUC Decision 20-06-028 and (ii) CPUC Decision 22-06-050 solely for the purposes of the eligibility of Product 1 for an MCC Bucket category if specified in this Confirmation.
RA Termination Event
to (x) satisfy the Bidding Requirement or (y) deliver the Carbon Free Firm Energy to the Delivery Point, and in either case such failure is not excused pursuant to the terms hereof, and (ii) such unexcused failure by Seller is likely to cause Buyer to not (or no longer) be able to count Product 1 toward its RA Requirements.
Scheduling Coordinator
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
’ ” means any national, state, provincial or local government, any political Commission (“ ”) California Public Utilities Commission (“ ”). ;
” means, for any day of delivery, the day ahead hourly Locational Marginal Price (“ ”) at APND (or any successor Aggregated Pricing Node for NP 15) (“ ”) ’
” means the maximum cumulative capacity bucket catego
’ ”means, as provided in D.
“ ” means any day designated as a holiday by NERC.
“ ” means HE
“ ” means HE 0700 through HE 2200 (16 hours per day) PPT, Monday through Saturday (6 days “ ” means the Power Source Disclosure Program regulations (California Code of “ ” means(i)the resource adequacy requirements established for CPUC jurisdictional load serving entities by the CPUC pursuant to the CPUC’s currently effective or future dec ’ ” means, for any Availability Assessment Hour in the Delivery Term, (i) Seller fails ’ ” has the meaning given in the CAISO Tariff.
Exhibit C - 3
Self-Schedule
Sink SO Balancing
Authority Area.
Specified Source Facility
is intended to be claimed in an Emissions Data Report pursuant to section 95111(g)(1) of the Regulation for the Mandatory Reporting of Greenhouse Gas Emissions in the state of California.
DocuSign Envelope ID: C67D7CC5-08F5-48E7-8668-7D7E08A720AC Appendix A Morgan Stanley Capitol Group
;
” has the meaning given in the CAISO Tariff.
means the final point of delivery for the energy, which shall be a point within the CAI '
” means a power source registered by an electric power entity with CARB that DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Joint CCA (Buys) WSPP Standard RA Confirmation
8/22/2023
1 WSPP RESOURCE ADEQUACY CONFIRMATION
This Confirmation confirms the transaction between Silicon Valley Clean Energy Authority, a California joint powers authority (“Seller”) and San Diego Community Power, a California joint powers authority (“Purchaser”), and each individually a “Party” and together the “Parties”, dated as of August 22, 2023 (the “Effective Date”), by which Seller agrees to sell and deliver, and Purchaser agrees to purchase and receive, the Product (the “Transaction”). This Transaction is governed by the WSPP Agreement dated August 26, 2022 (the “WSPP Agreement”). The WSPP Agreement and this Confirmation, including any applicable appendices, exhibits or amendments thereto, shall be collectively referred to herein as the “Agreement” and will constitute a single agreement between the Parties with respect to the Transaction. Capitalized terms not otherwise defined in this Confirmation or the WSPP Agreement are defined in the Tariff.
ARTICLE 1
TRANSACTION TERMS
Product, Delivery Period, Contract Quantity, Contract Price and other specifics of the Product are in Appendix B. Appendices A, B, C, and D are incorporated into this Confirmation. ☐ Firm RA Product:
Seller shall provide Purchaser with the Product from the Unit in the amount of the Contract Quantity. If the Unit is not available to provide the full amount of the Contract Quantity for any reason, then Seller shall have the option to supply Alternate Capacity pursuant to Section 2.3 to fulfill the remainder of the Contract Quantity during such period. If Seller fails to provide Purchaser with the Contract Quantity and has failed to supply Alternate Capacity to fulfill the remainder of the Contract Quantity during such period, then Seller shall be liable for damages and/or required to indemnify Purchaser for penalties or fines pursuant to the terms of Section 2.5. ☒ Contingent Firm RA Product:
Seller shall provide Purchaser with Product from the Unit in the amount of the Contract Quantity.
If the Unit is not available to provide the full amount of the Contract Quantity as a result of any reduction of the Contract Quantity of the Unit in accordance with Section 2.2, Seller shall have the option to notify Purchaser that either (a) Seller will not provide the portion of the Contract Quantity attributable to such reduction during the period of such non-availability; or (b) Seller will supply Alternate Capacity to fulfill the remainder of the Contract Quantity during such period pursuant to Section 2.3. If the Unit is not available to provide the full amount of the Contract Quantity as a result of any reason other than as provided in Section 2.2, then Seller shall have the option to supply Alternate Capacity pursuant to Section 2.3 to fulfill the remainder of the Contract Quantity during such period. If Seller fails to provide Purchaser with the Expected Contract Quantity from the Unit and has failed to supply Alternate Capacity to fulfill the remainder of the Expected Contract Quantity during such period, then Seller shall be liable for damages and/or required to indemnify Purchaser for penalties or fines pursuant to the terms of Section 2.5.
Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Joint CCA (Buys) WSPP Standard RA Confirmation
8/22/2023
2 ARTICLE 2
DELIVERY OBLIGATIONS AND ADJUSTMENTS
2.1 Sale and Delivery of Product
(a) For each Showing Month of the Delivery Period, Seller shall sell and deliver to Purchaser, and Purchaser shall purchase and receive from Seller, the Expected Contract Quantity of the Product from the Shown Unit(s). Seller’s obligation to deliver the Expected Contract Quantity of Product for the Delivery Period is firm and will not be excused for any reason.
(b) Seller shall deliver the Expected Contract Quantity by submitting to CAISO in its Supply Plan the Shown Unit(s) and the characteristics of the Shown Unit(s) and Product for Purchaser, as further specified in Appendix B, all in compliance with this Confirmation.
(c) Seller shall cause all Supply Plans to meet and be filed in conformance with the requirements of the CPUC and the Tariff. Seller shall submit, or cause the Shown Unit’s SC to submit, (i) monthly Supply Plans and (ii) annual Supply Plans if the Effective Date is prior to the year-ahead Compliance Showing Deadline applicable for the Showing Months specified in Appendix B, in accordance with the Tariff and CPUC requirements and no later than the initial Compliance Showing Deadline for such Showing Month, identifying and confirming the transfer of the Expected Contract Quantity of Product to Purchaser for each Showing Month. The total amount of Product identified and confirmed for such Showing Month shall equal the Expected Contract Quantity.
(d) Seller shall sell and deliver Product from a Shown Unit that meets the requirements set forth in Appendix B, including the Resource Category and, if applicable, the Flexible Capacity Category. In no event shall a Shown Unit utilize coal or coal materials as a source of fuel. A Shown Unit must be a specific resource that is connected directly to the CAISO controlled grid or be under the operational control of CAISO. A Shown Unit may not be an unspecified import. Seller shall identify the Shown Unit(s) and Expected Contract Quantity by providing Purchaser with the specific information contemplated in Appendix B no later than the Notification Deadline for the relevant Showing Month.
(e) If CAISO rejects either the Supply Plan or the Resource Adequacy Plan with respect to any part of the Expected Contract Quantity for the Shown Unit(s) in any Showing Month, the Parties shall confer, make such corrections as are necessary for acceptance, and resubmit the corrected Supply Plan or Resource Adequacy Plan for validation before the applicable deadline for the Showing Month. (f) The Product is delivered and received when the CIRA Tool shows that the Supply Plan submitted in compliance with Purchaser’s instructions, including Purchaser’s instructions to withhold all or part of the Expected Contract Quantity from Seller’s Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Joint CCA (Buys) WSPP Standard RA Confirmation
8/22/2023
3 Supply Plan for any Showing Month during the Delivery Period, has been accepted for the Product from the Shown Unit(s) by CAISO. Seller has failed to deliver the Product if (i) Purchaser has elected to submit the Product from the Shown Unit in its Resource Adequacy Plan and such submission is accepted by the CPUC and the CAISO but the Supply Plan and Resource Adequacy Plan are not matched in the CIRA Tool and are rejected by CAISO notwithstanding performance of Section
2.1(e) or (ii) Seller fails to submit the volume of Expected Contract Quantity for any Showing Month in such amount as instructed by Purchaser for the applicable Showing Month. Seller will not have failed to deliver the Expected Contract Quantity if Purchaser fails or chooses not to submit the Shown Unit(s) and the Product in its Resource Adequacy Plan with the CPUC or CAISO. (g) The Shown Unit(s) must not have characteristics that would trigger the need for Purchaser or Seller to file an advice letter or other request for authorization with the CPUC or for Purchaser to make a compliance filing pursuant to California Public Utilities Code Section 380.1
2.2 Reductions in ContractQuantity
(a) If Seller is providing Contingent Firm RA Product, Seller’s obligation to deliver the Contract Quantity for each Showing Month may be reduced at Seller’s option by the amount of any Planned Outages which exist with respect to any portion of the Unit during the applicable Showing Month; provided, (i) Seller notifies Purchaser by the Notification Deadline applicable to that Showing Month of the amount of Product from the Unit that Purchaser may include in Purchaser’s Compliance Showings applicable to that month as a result of such Planned Outage, and (ii) such reduction is able to be reflected on the Supply Plansin accordance with the Tariff. (b) In the event Seller is unable to provide the Contract Quantity for any portion of a Showing Month because of a Planned Outage of a Unit, Seller has the option, but not the obligation, to provide Product for such portions of such Showing Month from Replacement Units, provided Seller provides and identifiessuch Replacement Units in accordance with Section 2.3.
(c) If Seller is providing Contingent Firm RA Product, Seller’s obligation to deliver the Contract Quantity for each Showing Month may be reduced at Seller’s option by the amount of any reductions in Unit NQC or Unit EFC of any Unit(s).
2.3 Seller’s Option To Provide Alternate Capacity
If Seller is unable to provide the full Contract Quantity for a Showing Month for any reason, including, without limitation, as provided in Section 2.2, or Seller desires to provide some or all of the Contract Quantity for any Showing Month from a different generating unit other than the 1 For example, contracts with Once-Through Cooling resources that terminate one year or less before the State Water Resources Control Board compliance deadline require an advice letter filing under CPUC Decision 12-04-046 Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Joint CCA (Buys) WSPP Standard RA Confirmation
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4 Unit, then Seller may, at no cost to Purchaser, provide Purchaser with replacement Product from one or more Replacement Units in an amount such that the total amount of Product provided to Purchaser from the Unit and any Replacement Unit(s) for each Showing Month is not more than the Contract Quantity, provided that in each case:
(a) Seller shall notify Purchaser in writing of its intent to provide Alternate Capacity and shall identify the proposed Replacement Units from which such Alternate Capacity shall be provided for Purchaser’s Compliance Showings related to such Showing Month;
(b) The proposed Replacement Units must (i) be accepted by the CAISO, and (ii) otherwise satisfy the requirements of this Agreement;
(c) Seller shall, or shall cause the SC to submit a Supply Plan that includes the Replacement Units for each Showing Month and, if applicable, annual filing, no later than the Notification Deadline for Purchaser’s Compliance Showings; and (d) If Seller does not comply with the requirements of Sections 2.3(a), (b) and (c) for the applicable Showing Month and, if applicable, annual filing, then any such Replacement Units shall not be deemed a Replacement Unit for purposes of this Confirmation for that Showing Month and Seller shall not receive payment for such Product.
Subject to the satisfaction of the conditions contained in subsections (a) – (c) of this Section 2.3, once Seller has identified in writing any Replacement Units that meetthe requirements of this Section 2.3, then any such Replacement Units shall be deemed a Unit for purposes of this Confirmation for that Showing Month.
2.4 Planned Outages
As of the Confirmation Effective Date, Seller and Purchaser have agreed to all Planned Outages as specified in Appendix D (“Planned Outage Schedule”) for all relevant Showing Months for the following calendar year, or until the end of the Delivery Period, whichever is shorter. Seller may provide Purchaser with proposed changes to the Planned Outage Schedule from time to time.
Within ten (10) Business Days after Purchaser’s receipt of any Seller proposed changes, Purchaser shall notify Seller in writing of any reasonable requests for modifications to such Seller proposed changes, and Seller shall, to the extent consistent with Prudent Operating Practice, accommodate Purchaser’s requests regarding the timing of any Seller proposed changes to the Planned Outage Schedule.
2.5 Purchaser’s Remedies for Seller’s Failure to Deliver Expected Contract Quantity (a) If Seller fails to deliver any part of the Expected Contract Quantity as required herein for any Showing Month, Seller shall be liable for damages pursuant to Section 21.3 of the WSPP Agreement, without reference to the word “hourly” therein.
Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Joint CCA (Buys) WSPP Standard RA Confirmation
8/22/2023
5 (b) Seller shall indemnify, defend and hold harmless Purchaser from any penalties, fines or costs, assessed against Purchaser by the CPUC, CAISO or other Governmental Body resulting from Seller’s failure to deliver the Product or a Shown Unit’s SC’s failure to timely or accurately submit Supply Plans in accordance with the Tariff and this Confirmation. The Parties shall use commercially reasonable efforts to minimize such penalties, fines or costs; provided, that in no event will Purchaser be required to use or change its utilization of its owned or controlled assets or market positions to minimize these penalties, fines or costs.
(c) If Seller fails to pay the foregoing damages, penalties, fines or costs, or fails to reimburse Purchaser for those damages, penalties, fines or costs, then, without prejudice to its other rights and remedies, Purchaser may setoff and recoup those damages, penalties, fines or costs against any future amounts it may owe to Seller under this Confirmation or the WSPP Agreement.
2.6 Purchaser’s Re-Sale of Product
(a) Purchaser may re-sell all or part of the Product; provided that any such re-sale must not increase Seller’s obligations hereunder other than as set forth in this Section
2.6(a). For any such a resale, the Resource Adequacy Plan of Purchaser as used herein will refer to the Resource Adequacy Plan of Subsequent Purchaser. Seller shall, or shall cause the Shown Unit’s SC, to follow Purchaser’s instructions with respect to providing such resold Product to Subsequent Purchasers, to the extent such instructions are consistent with Seller’s obligations under this Confirmation.
Seller shall, and shall cause the Shown Unit’s SC, to take all commercially reasonable actions and execute all documents or instruments reasonably necessary to allow such Subsequent Purchasers to use such resold Product in a manner consistent with Purchaser’s rights under this Confirmation. If Purchaser incurs any liability to a Subsequent Purchaser due to the failure of Seller or the Shown Unit’s SC to comply with this Confirmation, Seller will be liable to Purchaser for the amounts Seller would have owed Purchaser under this Confirmation if Purchaser had not resold the Product.
(b) Purchaser shall notify Seller in writing of any resale of Product and the Subsequent Purchaser no later than two (2) Business Days before the Notification Deadline for each Showing Month for which Purchaser has resold the Product. (c) If CAISO or CPUC develops a centralized capacity market, Purchaser will have exclusive rights to direct the Seller or the Unit’s SC to offer, bid, or otherwise submit the Expected Contract Quantity of Product for re-sale in such market, Seller and the Unit’s SC shall comply with Purchaser’s direction and Purchaser shall retain and receive all revenues from such re-sale.
Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Joint CCA (Buys) WSPP Standard RA Confirmation
8/22/2023
6 (d) Purchaser shall have the exclusive right to direct the Seller or the Unit’s SC to offer, bid, or otherwise submit the Expected Contract Quantity into the CAISO Competitive Solicitation Process (CSP) for CPM Capacity. Seller and the Unit’s SC shall comply with the Purchaser’s direction and, to the extent that the CAISO designates the Expected Contract Quantity as CPM Capacity, Purchaser shall be entitled to retain and receive the CPM Capacity Payment. Unless otherwise instructed by Purchaser, (i) Seller shall not, and shall cause the Unit’s SC to not, offer any portion of the Expected Contract Quantity to CAISO as CPM Capacity and (ii) if CAISO designates any portion of the Contract Capacity as CPM Capacity, then Seller shall, and shall cause the Unit’s SC to, promptly (and in any event within one (1) Business Day of the time Seller receives notification from CAISO) notify Purchaser of such designation, and if CAISO makes such a designation, Seller shall not, and shall cause the Unit’s SC to not, accept any such designation by CAISO unless and until Purchaser has agreed to accept such designation.
ARTICLE 3
PAYMENTS
3.1 Payment
Purchaser shall make a monthly payment to Seller for the Product by the later of (i) ten (10) calendar days after Purchaser’s receipt of Seller’s invoice (which may be given upon first day of the Showing Month) and (ii) the twentieth (20th) day of the month following the Showing Month, and if such day is not a Business Day, the next following Business Day (“Monthly RA Capacity Payment”). The Monthly RA Capacity Payment shall equal the product of (a) the applicable Contract Price for that Showing Month, (b) the Expected Contract Quantity for the Showing Month and (c) 1,000, rounded to the nearest penny (i.e., two decimal places); provided, however, that the Monthly RA Capacity Payment shall be adjusted to reflect any portion of Expected Contract Quantity for the Showing Month that was not delivered in accordance with Section 2.1 for such Showing Month.
3.2 Allocation of Other Payments and Costs
(a) Seller will receive any revenues from, and must pay all costs charged by, CAISO or any other third party with respect to the Shown Unit(s) for (i) start-up, shutdown, and minimum load costs, (ii) capacity for ancillary services, (iii) energy sales, (iv) flexible ramping product, or (v) black start or reactive power services. Purchaser must promptly report receipt of any such revenues to Seller. Purchaser must pay to Seller any such amounts described in this Section 3.2(a) received by Purchaser or a Subsequent Purchaser. Without prejudice to its other rights and remedies, Seller may setoff and recoup any such amounts that are not paid to it pursuant to this Section 3.2(a) against any amounts owed to Purchaser under the WSPP Agreement.
Purchaser is to receive and retain all revenues associated with the Expected Contract Quantity of Product during the Delivery Period, including any capacity Appendix A San Diego Community Power
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7 and availability revenues from the Capacity Procurement Mechanism, or its successor, RUC Availability Payments, or its successor, but excluding payments described in Section 3.2(a)(i)-(v) or 3.2(d). Seller shall promptly report receipt of any such revenues to Purchaser. Seller shall pay to Purchaser within thirty (30) days of receipt any such amounts received by Seller, or a Shown Unit’s SC, owner, or operator. Without prejudice to its other rights, Purchaser may set off and recoup any such amounts that are not paid to it against amounts owed to Seller under the WSPP Agreement.
(b) Any Availability Incentive Payments or Non-Availability Charges are for Seller to receive and pay.
ARTICLE 4
OTHER PURCHASER AND SELLER COVENANTS
4.1 CAISO Requirements
Seller shall schedule or cause the Shown Unit’s SC to schedule or make available to CAISO the Expected Contract Quantity of the Product during the Delivery Period, in compliance with the Tariff, and perform all, or cause the Shown Unit’s SC, owner, or operator to perform all, obligations under applicable law and the Tariff relating to the Product. Purchaser is not liable for, and Seller shall indemnify and hold Purchaser harmless from, the failure of Seller or the Shown Unit’s SC, owner, or operator to comply with the Tariff, and for any penalties, fines or costs imposed on Seller or the Shown Unit’s SC, owner, or operator for noncompliance.
4.2 Seller’s and Purchaser’s Duties to Take Actions to Allow Product Utilization Throughout the Delivery Period, Purchaser and Seller shall take all commercially reasonable actions and execute all documents or instruments reasonably necessary to ensure (a) Purchaser’s rights to the Expected Contract Quantity for the sole benefit of Purchaser or any Subsequent Purchaser and (b) that Purchaser may use the Expected Contract Quantity to meet its Compliance Obligations. Such commercially reasonable actions shall include, without limitation cooperating with and providing, and causing each Shown Unit’s SC, owner, or operator to cooperate with and provide, requested supporting documentation to the CAISO, the CPUC, or any other Governmental Body responsible for administering the applicable Compliance Obligations, including to demonstrate that the Expected Contract Quantity can be delivered to the CAISO controlled grid for the minimum hours required to satisfy the Compliance Obligations, as applicable, pursuant to the “deliverability” standards established by the CAISO or other Governmental Body of competent jurisdiction.
If necessary, the Parties further agree to negotiate in good faith to amend this Confirmation to conform this Transaction to subsequent clarifications, revisions, or decisions rendered by CAISO or an applicable Governmental Body to maintain the benefits of the Transaction.
4.3 Seller’s Representations and Warranties
Appendix A San Diego Community Power
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8 Seller represents and warrants to Purchaser throughout the Delivery Period that:
(a) No part of the Contract Quantity during the Delivery Period has been committed by Seller to any third party to satisfy Compliance Obligations or analogous obligations in any CAISO or non-CAISO markets;
(b) The Shown Unit(s) qualify to provide the Product under the Tariff, and the Shown Unit(s) and Seller are capable of delivering the Product; (c) the aggregation of all amounts of Capacity Attributes that Seller has sold, assigned, or transferred for the Shown Unit(s) during the Delivery Period does not exceed the Shown Unit’s Net Qualifying Capacity and, if applicable, the Effective Flexible Capacity for that Shown Unit;
(d) if applicable, Seller has notified either the Shown Unit’s SC or the entity from which Seller purchased the Product that Seller has transferred the Contract Quantity of Product for the Delivery Period to Purchaser; and
(e) Seller has notified or will notify the Shown Unit’s SC that Purchaser is entitled to the revenues set forth in Section 3.2(b), and such Shown Unit’s SC is obligated to promptly deliver those revenues to Purchaser, along with appropriate documentation supporting the amount of those revenues.
4.4 Market Based Rate Authority
Upon Purchaser’s written request, Seller shall, in accordance with FERC Order No. 697, submit a letter of concurrence in support of any affirmative statement by Purchaser that this contractual arrangement does not transfer “ownership or control of generation capacity” from Seller to Purchaser as the term “ownership or control of generation capacity” is used in 18 CFR Section
35.42. Seller shall not, in filings, if any, made subject to Order Nos. 652 and 697, claim that this contractual arrangement conveys ownership or control of generation capacity from Seller to Purchaser.
ARTICLE 5
RESERVED
ARTICLE 6
ADDITIONAL WSPP AGREEMENT AMENDMENTS; GENERAL PROVISIONS
6.1 Termination Payment
For this Transaction, the following is inserted as a penultimate paragraph in Section 22.2(b) of the WSPP Agreement:
“If Purchaser is the Non-Defaulting Party and Purchaser reasonably expects to incur or be liable for any penalties, fines or costs from CAISO, or any Governmental Body, because Purchaser or a Subsequent Purchaser is not able to include the applicable Expected Appendix A San Diego Community Power
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9 Contract Quantity in a Compliance Showing due to Seller’s Event of Default, then Purchaser may, in good faith, estimate the amount of those penalties, fines or costs and include the estimate in its determination of the Termination Payment, subject to accounting to Seller when those penalties, fines or costs are finally ascertained. If this accounting establishes that Purchaser’s estimate exceeds the actual amount of penalties, fines or costs, Purchaser must promptly remit to Seller the excess amount with interest in accordance with Section 9.3 of the WSPP Agreement. The rights and obligations with respect to determining and paying any Termination Payment, and any dispute resolution provisions with respect thereto, survive the termination of this Transaction and continue until after those penalties, fines or costs are finally ascertained.”
6.2 Confidentiality
Notwithstanding Section 30.1 of the WSPP Agreement:
(a) (i) Purchaser may disclose information as necessary in order to support its Compliance Showings or otherwise show it has met its Compliance Obligations; (ii) Seller may disclose as necessary to a Shown Unit’s SC or as necessary for Supply Plans; (iii) each Party may disclose information as necessary to the independent evaluator or other administrator of any competitive solicitation process of Purchaser, which in turn may disclose such information as necessary to CAISO or any Governmental Body; and (iv) Purchaser may disclose information to any Subsequent Purchaser.
(b) Seller acknowledges that Purchaser is a public agency subject to the requirements of the California Public Records Act (Cal. Gov. Code section 6250 et seq.) and that Purchaser may be required to make public this Confirmation (which may be partially redacted by Purchaser) in connection with the process of seeking approval from its board of directors for the execution of this Confirmation. Seller may submit information to Purchaser that Seller considers confidential, proprietary, or trade secret information pursuant the Uniform Trade Secrets Act (Cal. Civ. Code section 3426 et seq.), or otherwise protected from disclosure pursuant to an exemption to the California Public Records Act (Government Code sections 6254 and 6255). Seller acknowledges that Purchaser may submit to Seller information that Purchaser considers confidential or proprietary or protected from disclosure pursuant to exemptions to the California Public Records Act (Government Code sections 6254 and 6255). Upon request or demand of any third person or entity not a party to this Confirmation (“Requestor”) pursuant to the California Public Records Act for production, inspection and/or copying of this Confirmation or any information designated by a disclosing Party as confidential, the receiving Party as soon as practical shall notify the disclosing Party that such request has been made, by telephone call, letter sent via electronic mail, and/or by overnight carrier to the address, or email address listed at the end of this Confirmation. The disclosing Party shall be solely responsible for taking whatever legal steps are necessary to Appendix A San Diego Community Power
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10 protect information deemed by it to be confidential information and to prevent release of information to the Requestor by the receiving Party. If the disclosing Party takes no such action within ten (10) days, after receiving the foregoing notice from the receiving Party, the receiving Party shall be permitted to comply with the Requestor’s demand and is not required to defend against it. Notwithstanding the foregoing, Purchaser may release confidential information without notice to or over the objection of Seller if Purchaser’s legal counsel advises Purchaser that Purchaser is required by law to release such confidential information.
6.3 Dodd-Frank Act
The Parties intend this Transaction 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 Response to 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).
6.4 Change in Law
If any action by the CPUC, CAISO or any Governmental Body having jurisdiction, or any change in applicable law, occurring after the Confirmation Effective Date results in (i) material changes to Purchaser’s or Seller’s obligations with regard to the Products sold hereunder, (ii) has the effect of changing the transfer and sale procedure set forth in this Confirmation so that the performance of this Confirmation becomes impracticable, or (iii) changes the Resource Adequacy Requirements such that the Product can no longer be counted towards Purchaser’s Resource Adequacy Requirements (a “Change in Law”), the Parties shall work in good faith to revise this Confirmation so that the Parties can perform their obligations regarding the purchase and sale of the Product sold hereunder in order to maintain the original intent.
6.5 Governing Law
Notwithstanding Section 24 of the WSPP Agreement, this Transaction 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.
6.6 Collateral
Notwithstanding any provision in the WSPP Agreement to the contrary, including Section 27, neither Party shall be required to post collateral or other security for this Transaction.
6.7 No Recourse to Members
The Parties are organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) and is a public entity separate from its constituent members. Each Party will solely be responsible for all debts, Appendix A San Diego Community Power
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11 obligations and liabilities accruing and arising out of this Confirmation. Each Party agrees that it will have no rights and shall not make any claims, take any actions or assert any remedies against any of the other Party’s constituent members, or the officers, directors, advisors, contractors, consultants or employees of Purchaser or Purchaser’s constituent members, in connection with this Confirmation.
6.8 Other WSPP Agreement Changes
For this Transaction, the WSPP Agreement shall be amended as follows:
(a) Section 9.4 is deleted in its entirety and replaced with the following:
“In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due, with notice of the objection given to the other Party.
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 two (2) Business Days of such resolution along with interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party receiving such overpayment.
Any dispute with respect to an invoice is waived unless the other Party is notified in writing 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 of a Transaction occurred, the right to payment for such performance is waived.” (b) Section 22.1 is modified by inserting the following new text at the end thereof:
“(f) the failure of the Defaulting Party to pay its debts generally as they become due or the Defaulting Party’s admission in a writing that is unable to generally pay its debts as they become due;
(g) the institution, by the Defaulting Party, of a general assignment for the benefit of its creditors; or
(h) the application for, consent to, or acquiescence to, by the Defaulting Party, the appointment of a receiver, custodian, trustee, liquidator, or similar official for all or a substantial portion of its assets.”
(c) Section 22.2(b) is amended by inserting “and is continuing” after “Event of Default occurs” in the first line thereof and deleting the second sentence therein.
Appendix A San Diego Community Power
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12 (d) Section 22.3(c) is amended by deleting the third sentence thereof and replacing it with the following: “If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement or a Confirmation, the Termination Payment for all such Terminated Transactions shall be zero, notwithstanding any provision in this Section or Agreement to the contrary.”
(e) Section 22.3(e) is deleted in its entirety and replaced with the following:
“[Intentionally omitted]”
(f) Section 22.3(f) is deleted in its entirety and replaced with the following:
“If the Defaulting Party disagrees with the calculation of the Termination Payment and the Parties cannot otherwise resolve their differences, and provided that the Defaulting Party has paid the undisputed part of the Termination Payment to the Non-Defaulting Party as provided under Section 22.3(c), and that any amounts disputed by the Defaulting Party are disputed in good faith, then the Defaulting Party may submit the calculation issue to Dispute Resolution pursuant to Section
34.”
(g) Section 28.1 is applicable and the Parties shall net monthly payments in accordance with Exhibit A of the WSPP. Both Parties intend for the netting provisions of Exhibit A to the WSPP Agreement to be effective on the Confirmation Effective Date.
(h) Section 30.1 is amended by inserting “or requested” after the word “required” in Section 30.1(4) and by adding the following at the end of the first sentence: “; or (8) to the Party’s and such Party’s affiliates’ lenders, counsel, accountants, advisors and agents who have a need to know such information and have agreed to keep such terms confidential”.
(i) Subsections 34.1 and 34.2 are deleted and replaced with the following:
“34.1 INFORMAL DISPUTE RESOLUTION
IN THE EVENT OF ANY DISPUTE ARISING UNDER THIS TRANSACTION, WITHIN TEN (10) DAYS FOLLOWING THE RECEIPT OF A WRITTEN
NOTICE FROM EITHER PARTY IDENTIFYING SUCH DISPUTE, THE
PARTIES SHALL MEET, NEGOTIATE AND ATTEMPT, IN GOOD FAITH,
TO RESOLVE THE DISPUTE QUICKLY, INFORMALLY AND
INEXPENSIVELY. IF THE PARTIES ARE UNABLE TO RESOLVE A
DISPUTE ARISING HEREUNDER WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF SUCH NOTICE, THEN EITHER PARTY MAY SEEK ANY AND
ALL REMEDIES AVAILABLE TO IT AT LAW OR IN EQUITY, SUBJECT TO THE LIMITATIONS SET FORTH IN THIS TRANSACTION.”
“34.2 EXCLUSIVE JURISDICTION
Appendix A San Diego Community Power
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13 EACH PARTY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
STATE OR FEDERAL COURTS LOCATED IN SAN FRANCISCO,
CALIFORNIA, FOR ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY TRANSACTION, AND EXPRESSLY WAIVES ANY
OBJECTION IT MAY HAVE TO SUCH JURISDICTION OR THE
CONVENIENCE OF SUCH FORUM.”
(j) In Section 34.4, the phrase “arbitration or” is deleted from the first line. (k) The following shall be inserted as a new Section 34.5:
“34.5 LIMITATION OF DAMAGES
EXCEPT AS OTHERWISE SPECIFIED IN ANY CONFIRMATION, FOR
BREACH OF ANY PROVISION OF THIS CONFIRMATION AGREEMENT
FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS
PROVIDED, THE EXPRESS REMEDY OR MEASURE OF DAMAGES
PROVIDED IS THE SOLE AND EXCLUSIVE REMEDY UNDER THIS
AGREEMENT AND THE AGREEMENT FOR THE BREACH, LIABILITY
FOR THE BREACH IS LIMITED AS SET FORTH IN THE PROVISION AND
ALL OTHER REMEDIES FOR DAMAGES AT LAW OR IN EQUITY ARE
WAIVED. EXCEPT AS OTHERWISE SPECIFIED IN ANY CONFIRMATION,
IF NO EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN
THIS AGREEMENT FOR A PARTICULAR BREACH, LIABILITY FOR THE
BREACH IS LIMITED TO DIRECT DAMAGES ONLY, THE DIRECT
DAMAGES ARE THE SOLE AND EXCLUSIVE REMEDY UNDER THIS
AGREEMENT FOR THE BREACH, AND ALL OTHER REMEDIES FOR
DAMAGES AT LAW OR IN EQUITY ARE WAIVED. EXCEPT AS
OTHERWISE SPECIFIED IN ANY CONFIRMATION, NEITHER PARTY IS
LIABLE FOR ANY OTHER TYPE OF DAMAGE, INCLUDING INCIDENTAL,
PUNITIVE, EXEMPLARY, CONSEQUENTIAL, SPECIAL OR INDIRECT
DAMAGES OF ANY NATURE (INCLUDING DAMAGES ASSOCIATED
WITH LOST PROFITS, BUSINESS INTERRUPTION AND LOSS OF
GOODWILL) ARISING AT ANY TIME, WHETHER IN TORT (INCLUDING
THE SOLE OR CONTRIBUTORY NEGLIGENCE OF EITHER PARTY OR
ANY RELATED PERSON), WARRANTY, STRICT LIABILITY, CONTRACT OR STATUTE, UNDER ANY INDEMNITY PROVISION, OR OTHERWISE.” (l) Section 37 is amended by inserting the following in the beginning thereof: “On the date of entering into this Confirmation,”.
(m) Section 41 “Witness” shall become Section 42 and the following “Standard of Review” Section shall be substituted in its place:
“The Parties agree as follows:
Appendix A San Diego Community Power
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14 From the date of entering into a Transaction under this Agreement and throughout the term of such Transaction, the Parties each warrant and covenant as follows:
(i) Absent the agreement of all Parties to the proposed change, the standard of review for changes to any section of this Agreement (including all Transactions and/or Confirmations) specifying the rate(s) or other material economic terms and conditions agreed to by the Parties herein, whether proposed by a 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)( the “Mobile-Sierra” doctrine) and clarified in Morgan Stanley Capital Group, Inc. v.
Public Util. Dist. No. 1 of Snohomish 554 U.S. 527 (2008) and NRG Power Marketing LLC v. Maine Pub. Util. Comm’n, 558 U.S. 165 (2010). (ii) The Parties, for themselves and their successors and assigns, (i) agree that this “public interest” standard shall apply to any proposed changes in any other documents, instruments or other agreements executed or entered into by the Parties in connection with this Agreement and (ii) hereby expressly and irrevocably waive any rights they can or may have to the application of any other standard of review, including the “just and reasonable” standard.”
6.9 Counterparts
This Confirmation may be signed in any number of counterparts with the same effect as if the signatures to the counterparts were upon a single instrument. The Parties may rely on electronic, or scanned signatures as originals under this Confirmation. Delivery of an executed signature page of this Confirmation as a PDF attachment to an email shall be the same as delivery of a manually executed signature page.
6.10 Entire Agreement; No Oral Agreements or Modifications This Confirmation sets forth the terms of the Transaction into which the Parties have entered and shall constitute the entire agreement between the Parties relating to the contemplated purchase and sale of the Product. Notwithstanding any other provision of the Agreement, this Transaction may be confirmed only through a Documentary Writing executed by both Parties, and no amendment or modification to this Transaction shall be enforceable except through a Documentary Writing executed by both Parties.
[Signatures appear on the following page.]
Appendix A San Diego Community Power
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Silicon Valley Clean Energy, a
California joint powers authority
San Diego Community Power, a
California joint powers authority
By: By: Karin Burns (Aug 25, 2023 16:35 PDT)
Name: Girish Balachandran
Title: Chief Executive Officer
Name:
Title:
Karin Burns
Chief Executive Officer
Appendix A San Diego Community Power
x DocuSigned by:
5CA64B9AC4C24C3
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APPENDIX A
DEFINED TERMS
“Alternate Capacity” means replacement Product which Seller has elected to provide to Purchaser in accordance with the terms of Section 2.3.
“CAISO” means the California ISO or the successor organization to the functions thereof. “Capacity Attributes” means attributes of the Shown Unit that may be counted toward Compliance Obligations, including: flexibility, dispatchability, physical location or point of electrical interconnection of the Shown Unit; Unit ability to generate at a given capacity level, provide ancillary services, or ramp up or down at a given rate; any current or future defined characteristics, certificates, tags, credits, or accounting constructs of the Shown Unit, howsoever entitled, identified from time to time by the CAISO or a Governmental Body having jurisdiction over Compliance Obligations.
“CIRA Tool” means the CAISO Customer Interface for Resource Adequacy. “Compliance Obligations” means, as applicable, RAR, Local RAR and FCR. “Compliance Showing Deadline” means, for each Showing Month, the Compliance Showing plan submission due date for such Showing Month. For illustrative purposes only, as of the Effective Date, the applicable Compliance Showing plan submission due dates are as follows: (A) forty-five (45) days prior to the Showing Month covered by the Supply Plan for the monthly Supply Plan; and (B) the last Business Day of October that is prior to commencement of the year for the annual Supply Plan, such dates may be modified by the CAISO from time to time throughout the Delivery Period.
“Compliance Showings” means the applicable LSE’s compliance with the resource adequacy requirements of the CPUC for an applicable Showing Month. “Contingent Firm RA Product” has the meaning set forth in Article 1 herein. “CPUC Decisions” means any currently effective or future decisions, resolutions, or rulings related to resource adequacy.
“CPUC Filing Guide” is the document issued annually by the CPUC which sets forth the guidelines, requirements and instructions for load serving entities to demonstrate compliance with the CPUC’s resource adequacy program.
“Effective Flexible Capacity” has the meaning given in CAISO’s FERC-approved Tariff. “Expected Contract Quantity” means,with respect to any Showing Month of the Delivery Period, (a) for Firm RA Product, the Contract Quantity of Product, including the amount of Contract Quantity of Product that Seller has elected to provide Alternate Capacity, and (b) for Contingent Firm RA Product, the Contract Quantity of Product for such Showing Month, including the Appendix A San Diego Community Power
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amount of Contract Quantity of Product that Seller has elected to provide Alternate Capacity, less any reductions to Contract Quantity consistent with Section 2.2 with respect to which Seller has not elected to provide Alternate Capacity.
“FCR” means the flexible capacity requirements established for LSEs by the CPUC pursuant to the CPUC Decisions, the CAISO pursuant to the Tariff, or other Governmental Body having jurisdiction over Compliance Obligations and includes any non-binding advisory showing which an LSE is required to make with respect to flexible capacity. “FCR Attributes” means, with respect to a Shown Unit, any and all resource adequacy attributes of the Shown Unit, as may be identified from time to time by the CPUC, CAISO, or other Governmental Body having jurisdiction over Compliance Obligations, that can be counted toward an LSE’s FCR.
“Firm RA Product” has the meaning set forth in Article 1 herein. “Flexible Capacity Category” shall be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time. “Governmental Body” means any federal, state, local, municipal or other government; 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 any court or governmental tribunal. “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. “Local RAR” means the local resource adequacy requirements established for LSEs by the CPUC pursuant to the CPUC Decisions, by CAISO pursuant to the Tariff, or by any other Governmental Body having jurisdiction over Compliance Obligations.
“Local RAR Attributes” means, with respect to a Shown Unit, any and all resource adequacy attributes of the Shown Unit, as may be identified from time to time by the CPUC, CAISO, or other Governmental Body having jurisdiction over Compliance Obligations, that can be counted toward an LSE’s Local RAR.
“LSE” means “Load Serving Entity” as such term is used in Section 40.9 of the Tariff. “MW” means megawatt.
“Net Qualifying Capacity” has the meaning given in CAISO’s FERC-approved Tariff. “Notification Deadline” is thirteen (13) Calendar Days before the Compliance Showing Deadline.
Appendix A San Diego Community Power
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“Planned Outage” means, subject to and as further described in the CPUC Decisions, 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. “Product” means RAR Attributes, Local RAR Attributes and FCR Attributes, each for the Delivery Period, Unit, Contract Quantity, Contract Price and other specifications contained in Appendix B. “Prorated Percentage of Unit Factor” means the percentage, as specified in Appendix B, of the Unit NQC as of the Effective Date that is dedicated to Purchaser under this Transaction. “Prorated Percentage of Unit Flexible Factor” means the percentage, as specified in Appendix B, of the Unit EFC as of the Effective Date that is dedicated to Purchaser under this Transaction. “Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric power industry during the relevant time period 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 electric power industry in the Western United States. “RAR Attributes” means, with respect to a Shown Unit, any and all resource adequacy attributes of the Shown Unit, as may be identified from time to time by the CPUC, CAISO, or other Governmental Body having jurisdiction over Compliance Obligations, that can be counted toward an LSE’s RAR.
“Replacement Unit” means a generating unit having the same capacity attributes as the Unit(s) originally identified in Appendix B hereof, including the same Resource Category, RAR Attributes, and, as applicable, LAR Attributes, FCR Attributes, and Flexible Capacity Category, and otherwise meeting the requirements specified Section 2.3 hereof. A Replacement Unit shall not utilize coal or coal materials as a source of fuel, must be a specific resource that is connected directly to the CAISO controlled grid, or be under the operational control of CAISO, and may not be an unspecified import.
“Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements established for LSEs by the CPUC pursuant to the CPUC Decisions, by CAISO pursuant to the Tariff, or by any other Governmental Body having jurisdiction over Compliance Obligations, not including Local RAR or FCR.
“Resource Category” shall be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time. “SC” means Scheduling Coordinator as defined in the Tariff.
Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Appendix A - 4
“Showing Month” means the calendar month of the Delivery Period that is the subject of the related Compliance Showing.
“Shown Unit” means the Unit, or any Replacement Unit meeting the requirements of Section 2.3 of this Confirmation and specified by Seller in a Supply Plan. “Subsequent Purchaser” means the purchaser of Product from Purchaser in a re-sale of Product by Purchaser.
“Substitute Capacity” has the meaning set forth in the Tariff for “RA Substitute Capacity”. “Tariff” means the CAISO Tariff, including any current CAISO-published “Operating Procedures” and “Business Practice Manuals,” in each case as amended or supplemented from time to time.
“Unit” means the generation unit(s) described in Appendix B. “Unit EFC” means the lesser of the Unit’s Effective Flexible Capacity as set by CAISO as of the Effective Date and that of the Unit on a subsequent date of determination. “Unit NQC” means the lesser of the Unit’s Net Qualifying Capacity as set by CAISO as of the Effective Date and that of the Unit on a subsequent date of determination.
Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Appendix B - 1
APPENDIX B
PRODUCT AND UNIT INFORMATION
Product:
RAR Local RAR Flexible Capacity
and all Capacity Attributes related to such Product.
Additional Product Information (fill in all that apply):
CAISO Zone: System
Resource Category (MCC Bucket): 4
CPUC Local Area (if applicable): N/A
Flexible Capacity Category (if applicable): N/A
Delivery Period:
Contract Quantity and Contract Price:
Showing
Month and
Year
RAR Contract
Quantity (MW)
Flex Contract
Quantity (MW)
Contract Price
($/kW-mo)
Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Appendix B - 2
Unit 1
Unit Specific Information
Resource Name High Desert Power Project
Aggregate
Physical Location Victorville, CA
CAISO Resource ID HIDSRT_2_UNITS
SCID of Resource TS30
Unit NQC by month (e.g., Jan=50,Feb=65): 830
Unit EFC by month (e.g., Jan=30, Feb=50) 630
Resource Type (e.g., gas, hydro, solar, etc.) Natural Gas Minimum Qualified Flexible Capacity
Category (Flex 1, 2 or 3)
1 Capacity Area (CAISO System, Fresno,
Sierra, Kern, LA Basin, Bay Area, Stockton,
Big Creek-Ventura, NCNB, San
Diego-IV or Humboldt)
N/A
Resource Category as defined by the CPUC
(DR, 1, 2, 3, 4)
4 [Information for specific Shown Units may be provided after the Effective Date pursuant to the Confirmation.]
Appendix A San Diego Community Power
DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Appendix C - 1
APPENDIX C
NOTICE INFORMATION
Seller: Silicon Valley Clean Energy Purchaser: San Diego Community Power Appendix A San Diego Community Power
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DocuSign DocuSign Envelope Envelope ID: 995F349A 340013FF-0D47 AB3F--4762 4868--9D21 9543-8A37DBA2EB25 714F23E2A792 Appendix D - 1
APPENDIX D
PLANNED OUTAGE SCHEDULE
Unit Name CAISO
Resource ID *
Outage (MW)
SLIC
Outage
Start Date
SLIC
Outage
End Date
N/A N/A N/A N/A N/A
Appendix A San Diego Community Power
DocuSign Envelope ID:
Created: 2023-08-24
By:
Status:
Transaction ID:
DocuSign Envelope ID:
Signature Date: 2023-08-25 - 11:35:04 PM GMT - Time Source: server Agreement completed.
2023-08-25 - 11:35:04 PM GMT
Appendix A San Diego Community Power
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