Agenda packet — Silicon Valley Clean Energy Board of Directors, November 8, 2023 (part 1 of 2)

333 W El Camino Real, Ste. 330 | Sunnyvale, CA 94087 | SVCleanEnergy.org | 1-844-474-SVCE 4/11/23
George Tyson, Chair
Town of Los Altos Hills
Tina Walia, Vice Chair
City of Saratoga
Elliot Scozzola
City of Campbell
Sheila Mohan
City of Cupertino
Zach Hilton
City of Gilroy
Sally Meadows
City of Los Altos
Rob Rennie
Town of Los Gatos
Evelyn Chua
City of Milpitas
Bryan Mekechuk
City of Monte Sereno
Yvonne Martinez
Beltran
City of Morgan Hill
Margaret Abe-Koga
City of Mountain View
Larry Klein
City of Sunnyvale
Otto Lee
County of Santa Clara

AGENDA PACKET MATERIALS AMENDMENTS SUMMARY
11/6/23

1. Item 5: Attachment, Draft Redacted PPA, added

SILICON VALLEY

CLEAN ENERGY

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Pursuant to the Americans with Disabilities Act, if you need special assistance in this meeting, please contact the Clerk for the Authority at (408) 721-5301 x1005. Notification 48 hours prior to the meeting will enable the Authority to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 35.105 ADA Title II).

Gilroy, CA 95020
Teleconference Meeting
Webinar:
https://cityofcupertino.zoom.us/j/95872555681
Telephone (Audio Only):

US: +1 669-900-6833
Webinar ID: 958 7255 5681
Members of the public may also attend this meeting in person, or observe this meeting electronically by accessing the meeting via instructions above. Public Comments can be sent in advance of the meeting via email up to three hours before the meeting begins to Board Clerk Andrea Pizano at [email protected] and will be distributed to the Board of Directors. The public will also have an opportunity to provide comments during the meeting. Members of the public participating remotely and using Zoom may comment during public comment or the applicable agenda item by using the Raise Hand feature and you will be recognized by the Chair. Those using the telephone (audio only) feature should press star 9 on your phones to initiate the “Raise Hand” function in Zoom. You will then be announced, unmuted, and your time to speak will begin.

The public may provide comments on any matter listed on the Agenda. Speakers are customarily limited to 3 minutes each, however, the Board Chair may increase or decrease the time allotted to each speaker based on the number of speakers, the length of the agenda and the complexity of the subject matter. Speaking time will not be decreased to less than one minute.

If you are an individual with a disability and need a reasonable modification or accommodation pursuant to the Americans with Disabilities Act (“ADA”) please contact Board Clerk Andrea Pizano at [email protected] prior to the meeting for assistance.

AGENDA
SILICON VALLEY <3/ CLEAN ENERGY

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Public Comment on Closed Session
The public may provide comments regarding the Closed Session item(s) just prior to the Board beginning the Closed Session. Closed Sessions are not open to the public.

Convene to Closed Session
Public Employee Appointment
Title: Chief Executive Officer

CONFERENCE WITH LABOR NEGOTIATORS
Agency Designated Representatives: George Tyson, Tina Walia and Rob Rennie Unrepresented Employee: Chief Executive Officer
Report from Closed Session
Consent Calendar (Action)
1a) Approve Minutes of the October 11, 2023, Board of Directors Meeting 1b) Receive September 2023 Treasurer Report
1c) Approve Employment Agreement with Chief Executive Officer 1d) Adopt Resolution Approving Amended Conflict of Interest Code 1e) Approve Plan to Implement Net Billing Tariff (Solar Billing Plan, NEM3) for New Solar Customers without Modification Beginning December 15, 2023
1f) Approve Scholarship Funds for 2024 EmPower Silicon Valley Student Short-Film Competition
SILICON VALLEY <3/ CLEAN ENERGY

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George Tyson, Chair
Town of Los Altos Hills
Tina Walia, Vice Chair
City of Saratoga
Elliot Scozzola
City of Campbell
Sheila Mohan
City of Cupertino
Zach Hilton
City of Gilroy
Sally Meadows
City of Los Altos
Rob Rennie
Town of Los Gatos
Evelyn Chua
City of Milpitas
Bryan Mekechuk
City of Monte Sereno
Yvonne Martinez Beltran
City of Morgan Hill
Margaret Abe-Koga
City of Mountain View
Larry Klein
City of Sunnyvale
Otto Lee
County of Santa Clara
svcleanenergy.org
333 W El Camino Real
Suite 330
Sunnyvale, CA 94087
1g) Closing Report of the Ad Hoc Committee of the Board to Address Legislative Responses to Industry Transition
1h) Legislative Response to Industry Transition 2023 Ad Hoc Committee Report
1i) Executive Committee Report
1j) California Community Power Report
1k) Additional Committee Reports
Regular Calendar
2) CEO Report (Discussion)
3) Approve 2024 Legislative Policy Platform and Identify Focus Areas for the 2024 Legislative Ad Hoc Committee (Action)
4) Authorize the Chief Executive Officer to Make Changes to the GreenStart and GreenPrime Retail Rate Offerings (Action)
5) Authorize the Chief Executive Officer to Execute a 15-Year Power Purchase Agreement with SunZia Wind PowerCo LLC and Potential Replacement PPAs in Substantial Form and Any Necessary Ancillary Agreements and Documents (Action)
6) Update on Permit Modernization and Policy Experimentation Program Rollout (Discussion)
Board Member Announcements and Direction on Future Agenda Items Adjourn
SILICON VALLEY <3/ CLEAN ENERGY

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Silicon Valley Clean Energy Authority
Board of Directors Meeting
Wednesday, October 11, 2023
7:00 pm
Cupertino Community Hall
10350 Torre Avenue
Cupertino, CA
2302 Zanker Road
San Jose, CA

DRAFT MEETING MINUTES
Call to Order:

Chair Tyson called the meeting to order at 7:03 p.m.

Roll Call

Present:

George Tyson (Chair), Los Altos Hills
Tina Walia (Vice Chair), Saratoga
Elliot Scozzola, Campbell
Sheila Mohan, Cupertino
Rebeca Armendariz, Gilroy (Arrived at 7:11 p.m., participated via teleconference) Sally Meadows, Los Altos
Rob Rennie, Los Gatos
Burton Craig, Monte Sereno
Yvonne Martinez Beltran, Morgan Hill (Arrived at 7:06 p.m.) Pat Showalter, Mountain View
Larry Klein, Sunnyvale
Otto Lee, Santa Clara County

Absent:

Evelyn Chua, Milpitas
Public Comment on Matters Not Listed on the Agenda
Bruce Karney commented members of the decarbonization advocacy community have become increasingly aware of challenges related to city building code related to noise and setback requirements for heat pump equipment located in side, back and front yards and challenging requirements from building departments with respect to permitting and the processing of permits and inspections. Mr. Karney encouraged board members to make sure their cities are being encouraging rather than discouraging of building electrification efforts.

Item 1a Draft Minutes: October 11, 2023 Board of Directors meeting SILICON VALLEY \3/ CLEAN ENERGY

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Consent Calendar
Chair Tyson opened public comment.

No speakers.

Chair Tyson closed public comment.

Director Meadows noted a correction on Item 1a, page 4 of the draft meeting minutes that should read, “Director Meadows thanked Director of Decarbonization Programs and Policy Zagunis for attending the Los Altos City Council Meeting on September 12, 2023 to present the Electric Showcase Award.” 1a) Approve Minutes of the September 13, 2023, Board of Directors Meeting 1b) Receive August 2023 Treasurer Report
1c) Adopt FY24 Strategic Work Plan
1d) Receive FY23 Q4 Decarbonization Strategy and Programs Quarterly Report 1e) Authorize the Chief Executive Officer to Execute a 3-Year Agreement with Itron, Inc. for Long-term Load Forecast and Software 1f) Audit Committee Report
1g) Finance and Administration Committee Report
1h) California Community Power Report
1i) Additional Committee Reports
MOTION: Director Lee moved and Director Mohan seconded the motion to approve the Consent Calendar, Items 1a through 1i.

The motion carried by verbal roll call vote with Director Chua, Director Martinez Beltran, and Alternate Director Armendariz absent.

Regular Calendar
2) CEO Report (Discussion)
Acting CEO Monica Padilla provided the CEO Report, which included the following:
1) Introduction of SVCE’s newest employee, Director of Human Resources Gia Ilole, who provided brief welcome comments.
2) Announcement of promotions of the following staff:
a. Lisa Lai, formerly Administrative Assistant, has been promoted to Administrative Analyst; b. Jessamyn Allen, formerly Senior Programs Specialist, has been promoted to Programs Lead;
c. Peyton Parks, formerly Energy Services Lead, has been promoted to Energy Services Principal; and
d. Andrea Pizano, formerly Board Clerk/Executive Assistant, has been promoted to Senior Executive Assistant and Board Clerk
3) A presentation from Principal Communications Specialist, Michaela Pippin, regarding information on the 2023 Electric Showcase Awards and an invitation to the Electric Home Tours on October 14, 2023. Board members thanked staff for their work on the program and staff responded to questions regarding plans for future awards.
4) Announcement and video presentation from Zoe Elizabeth, Deputy Director of Decarbonization Programs and Policy, regarding a SVCE Decarbonization Demonstration Grant recipient project, Sunnyvale School District. Director Klein thanked SVCE for investing in youth and in schools.

Item 1a Draft Minutes: October 11, 2023 Board of Directors meeting

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5) An invitation to a ribbon cutting event for the Yellow Pine solar and storage project on November 1, 2023 at the project site in Clarks County, Nevada.

Chair Tyson opened Public Comment.

Bruce Karney commented he loves the tour of electric homes and hopes SVCE will consider sponsoring another tour before 12 months have passed. Mr. Karney noted he is very pleased SVCE is doing so much across so many different approaches to recognize and promote those who are on the leading edge of decarbonization, and gave a shoutout to Electric Showcase award winner Sunshine Gardens.

Chair Tyson closed Public Comment.
3) Authorize the Chief Executive Officer to Execute Agreements with Firms Providing Services to Enable SVCE to Execute its Third Prepay and to Execute the Power Supply Contract with the California Community Choice Financing Authority and Related Supporting Agreements (Action)
Amrit Singh, CFO and Director of Finance and Administration, introduced Michael Berwanger of PFM Financial Advisors LLC and provided a presentation with a request of the Board of Directors to authorize the CEO to execute agreements with firms providing services to enable SVCE to execute its third prepay, and approve the parameters of the transaction, by adopting the following two resolutions:

Resolution 2023-17 authorizing the CEO to approve or execute the following contracts for services these firms will provide to enable SVCE to execute its third Prepay transaction. The combined fees for services provided by the firms identified below shall not exceed 1% of the bond proceeds amount, including other ancillary services such as green bond verification, bond trustee and counsel fees, an investment advisor fee, and other miscellaneous costs such as printing.

1. PFM Financial Advisors LLC & PFM Swap Advisors - $155,000

2. Chapman & Cutler (Disclosure/Issuer’s Counsel) - $175,000

3. Ballard Spahr (Bond and Tax Counsel) - $250,000

4. Moody’s Investor Service Inc (Credit Rating) - $272,500 Approve engagement with Morgan Stanley as the Prepay Supplier with the following fee structure:
• Bond underwriting fee of $5/bond
• Underwriter expenses not to exceed $0.50/bond.

Resolution 2023-18 authorizing the CEO to execute Power Supply Contract with California Community Choice Financing Authority (CCCFA) and execute or approve the related supporting agreements to enable SVCE to enter an approximately 30-year energy prepayment transaction subject to the following parameters:

1. The Bonds, issued by CCCFA, will not be guaranteed obligations of SVCE but will be limited obligations of CCCFA payable solely from the revenues and other amounts pledged under the Indenture as the Trust Estate, including amounts owed by SVCE under the Power Supply Contract.

2. The aggregate principal amount of the Bonds shall not exceed $1,500,000,000.

3. The energy savings to SVCE under the Power Supply Contract for the initial Reset Period, including the Annual Refund (as defined in the Power Supply Contract), shall be at least 8 percent.

4. The energy service revenue fee in the transaction shall not exceed $1.10 per MWh.

5. The commodity swap counterparty fee in the transaction shall not exceed $0.50 MWh.

6. If floating rate debt is issued, Morgan Stanley shall charge no more than six basis points on the interest rate swap spread to mid-market.

CFO Singh’s presentation included a review of the prepay goal and structure, information on leveraging the first and second prepay structures, review of fees for consultants and counsel, Board-authorized parameters for execution of the deal, review of the fiscal impact, and next steps.

Item 1a Draft Minutes: October 11, 2023 Board of Directors meeting

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Staff responded to board member questions which included future additional prepay transactions, SVCE’s responsibility for the bonds, the discounts on the offer, and timing on when we would be able to go to the market.

Chair Tyson opened Public Comment.

No speakers.

Chair Tyson closed Public Comment.

MOTION: Director Martinez Beltran moved and Vice Chair Walia seconded the motion to adopt Resolution 2023-17, authorizing the CEO to approve or execute contracts for services to enable SVCE to execute its third Prepay transaction, and 2023-18, authorizing the CEO to execute Power Supply Contract with CCCFA and execute or approve the related supporting agreements to enable SVCE to enter an approximately 30-year energy prepayment transaction.

The motion carried by verbal roll call vote with Director Chua absent. 4) Study Session: Decarbonization Programs and Policy Overview of Residential Buildings (Discussion)
Justin Zagunis, Director of Decarbonization Programs and Policy, provided a presentation and information on SVCE’s residential natural gas use and programs focused on residential buildings. The presentation addressed SVCE emission statistics, a deep dive into residential building graphs, program highlights, and policy and scale.

Board members asked questions and provided comments on the information.

Some ideas shared included:

Use Google maps to identify which homes already have solar, and may be right for an HVAC or water heater upgrade;
Offering a program outlining savings of electrifying for families; Exploring appliances that can move with tenants;
A lot of panel upgrades needed, so explore a legislative idea requiring PG&E to have a certification program that allows non-PG&E employees to do some of the panel upgrade work; For affordable housing, multi-family residents: reach out to affordable housing non-profits running multiple projects in member agency cities and provide electrification education; Development of educational materials for young children and teenagers, similar to Valley Water District, and additional outreach to youth;
Explore purchasing electric appliances or electric upgrades for families who cannot afford them and identify a payment schedule; and
Offer materials in multiple languages.

Chair Tyson opened Public Comment.

Bruce Karney commented on the pace of installations of heat pump water heaters and other electrification over the past few years and what needs to happen in the future. Mr. Karney suggested SVCE be the centralized permitting resource for building electrification that would apply to all cities within its jurisdiction, applauded SVCE for the potential in replacing baseboard electric resistance heaters in apartment buildings with heat pumps, and suggested Mr. Zagunis make sure the board understands NEC code 220.87.

Chair Tyson closed Public Comment.

Board Member Announcements and Future Agenda Items
Chair Tyson announced CEO Girish Balachandran was currently on vacation, but had announced his retirement for March 2024. Chair Tyson noted the CEO Search Committee was proceeding according to schedule, and would have further actions soon.

Item 1a Draft Minutes: October 11, 2023 Board of Directors meeting

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Director Scozzola announced that at the last City of Campbell council meeting, Deputy Director of Marketing and Communications Pamela Leonard presented Campbell’s Electric Showcase award winner, Judy Wang.

Director Meadows announced Los Altos’ Community Center, through the Silicon Valley Business Journal’s 2023 Structures Award, received the All-Electric Excellence Award.

Director Lee announced an event, Day on the Bay, would take place on October 14, 2023 at Alviso Marina Park, and thanked SVCE for their sponsorship.

Director Mohan thanked Don Bray, Director of Strategic Development, for attending the City of Cupertino’s City Council meeting to acknowledge Cupertino’s Electric Showcase award winner.

Chair Tyson shared Los Altos Hill’s Electric Showcase Award winner’s quote.

Adjourn
Chair Tyson adjourned the meeting at 9:18 p.m.

ATTEST:
_____________________________
Andrea Pizano, Board Secretary
Item 1a Draft Minutes: October 11, 2023 Board of Directors meeting

TREASURER REPORT
Fiscal Year to Date
As of September 30, 2023
(Preliminary & Unaudited)
Issue Date: November 8, 2023
Table of Contents
Page
Disclaimer 2
Summary 3-4
Investments Report 5
Accounts Receivable Aging Report 6
Certificate of Compliance 7
SVCE Managed Account & Security Transactions 8-11
Item 1b
SILICON VALLEY <3/ CLEAN ENERGY
Estimated High-Level Financial Highlights as of September 30, 2023 Because of the closing of the fiscal year 2022-2023, the Accounting team needs additional time to prepare the financial statements. The complete financial reports for this month are not available. This report provides a very high-level estimated financials for the close of the fiscal year ending September 30, 2023.

Complete financial reports will be available in the next month's Board package.

Item 1b

Page 1 ends

Balance Sheet Highlights:
> SVCE operations resulted in a change in net position of approximately $8.5M for the month of September and ~$115 million for the entire fiscal year 2022/2023.* > Total Net Position increased further to approximately $328 M > SVCE is investing ~97% of available funds generating FYTD interest/dividend income of around $8.5 million. *Does not yet recognize unspent program dollars
**For reconciliation purposes, budget numbers include actual program expenses and depreciation, excludes GASP 87 expenses.

SVCE Yield-bearing Accounts:

Combined Ending Balance 249.3 M
Total Interest/Div. Earned FYTD 8.4 M
Average Return On Investments** 5.3%
* Includes River Bank accounts - Money Market, Collateral and ICS; CAMP; PFM Portfolio ** Average annualized Yield for the current month

SILICON VALLEY CLEAN ENERGY AUTHORITY
Estimated Financial Statement Highlights ($ in millions) September 30, 2023
223.3 M
328.0 …
-250 M
-150 M
-50 M
50 M
150 M
250 M
350 M
-16 M
-12 M
-8 M
-4 M
0 M
4 M
8 M
12 M
16 M
20 M
Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Net Position Change in Net Position Change in Net Position*
Net Position (Right Y-Axes) MidYear Budget (Left Y-Axis)** Actual (Left Y-Axes) 169 178 180 176 186 197 206 216 225 230 233 241
0 50
100
150
200
250
300
350
400
450
500
Oct Nov Dec Jan Feb Mar Apr May June July Aug
Days Cash on Hand (DCOH)
DCOH* Maximum Reserves Target Reserves Minimum Reserves

8.5 M
$ 91.5 K $ 111.4 K$ 172.9 K
$ 549.1 K $ 547.0 K
$ 744.9 K
$ 826.5 K
$ 960.8 K
$ 989.4 K
$ 1,131.4 K
$ 1,287.5 K
$ 1,113.6 K
0 M
1 M
2 M
3 M
4 M
5 M
5 M
6 M
7 M
8 M
9 M
$ 0 K
$ 160 K
$ 320 K
$ 480 K
$ 640 K
$ 800 K
$ 960 K
$ 1,120 K
$ 1,280 K
$ 1,440 K
$ 1,600 K
Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept
Investment Income*
Actual Cumulative Budget Actual
River City Bank
Accounts
7%
California Asset
Management Program
(CAMP)
59%
PFM Asset Management
Investment Portfolio*
34%
SVCE Accounts
*Includes investment income from SVCE Yield-bearing accounts plus interest on cash collateral *Adjusted to reflect Mid-year budget adjustments and additional program funding Item 1b
Illlllllllll

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Summary of Actual Results vs. Budget (includes allocated but unspent program dollars):
> Fiscal Year 2022/2023 operating revenues totaled around $505M, below budgeted annual revenue of $524M > FYTD Power Supply costs are -4.3% below mid-year budget. > Retail GWh sales for the month and FYTD landed around -8.8% and -2% below budget respectively.

Variance Explanation:
$ in thousands Actual Budget % Dif Actual Budget % Dif Main Drivers:

Revenue 51.9 M 55.1 M -5.9% 505.0 M 524.0 M -3.6%
Total Operating Expenses 42.4 M 45.8 M -7.4% 398.0 M 420.0 M -5.2% Net Operating Income 8.5 M 9.4 M -8.9% 106.0 M 104.0 M 2.0% Net Non-Op. Income 0.9 M 0.5 M 97.4% 9.0 M 3.9 M 132.7% Change in Net Position 9.4 M 9.8 M -4.0% 115.0 M 107.8 M 6.6% Customer Load Statistics:

Total Accounts 278,094
Opt-Out Accounts (Month) 68
Opt-Out Accounts (FYTD) 925
Opt-Up Accounts (Month) (7)
Opt-Up Accounts (FYTD) (42)
* The financial results in this report are preliminary and subject to change pending closing of the books for the fiscal year. Any potential changes are not expected to be significant. -13%, -7%, -5% and -9% lower than budgeted customer load for June, July, August and September

SILICON VALLEY CLEAN ENERGY AUTHORITY
Estimated Financial Statement Highlights* ($ in millions) September 30, 2023
September Fiscal YTD
February, April & May- mainly reflects the below budget net power supply cost and savings in all categories of other operating expenses.

March - mainly reflects stronger revenues due to higher than anticipated customer load
June, July, August, September - lower than estimated
customer load due to below historic-average temperatures; significantly higher RA prices and energy hedging costs. Staffing vacancies, underrunning professional services, and lower marketing expenses January - the variance mainly reflects a big drop in prices from December'22 to January'23 resulting in $21.5M net power cost savings comparing to MY Budget estimations
Reflects higher Interest Income
716 K 876 K 572 K
21,610 K
5,650 K
3,920 K
1,859 K
4,320 K
-4,583 K
-13,524 K
-10,930 K
-789 K
-18,000 K
-13,000 K
-8,000 K
-3,000 K
2,000 K
7,000 K
12,000 K
17,000 K
22,000 K
Oct Nov Dec Jan Feb Mar Apr May June July Aug
Net Increase in Available Fund Balance
Comparing Actuals to Mid-Year Budget
250,207 250,606
27,507 27,488
92%
93%
94%
95%
96%
97%
98%
-
50,000
100,000
150,000
200,000
250,000
300,000
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Customer Accounts and Participation Rate
Res Accounts Com Accounts Customer Participation (Right Y-Axes) -12%
-9%
-6%
-3%
0%
3%
6%
9%
12%
-
50 100
150
200
250
300
350
400
Retail Sales - Actual vs Budget (GWh)
Retail Sales Actual (GWh)
Retail Sales Budget (GWh)
Load deviation from the Budget (Right Y-Axes)
Power Supply

94.0%
Personnel

2.5% Contract
Services

2.5%
G & A

0.9%
Depreciation

0.2%
August YTD Operating Expenses
Item 1b
1 1 1 1
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Illi ill'l
xZ
Ending Balance of SVCE Accounts: Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep River City Bank Accounts $ 208,116,692 $ 221,541,600 $ 227,161,983 $ 70,193,524 $ 66,497,950 $ 45,850,620 $ 23,833,640 $ 43,723,703 $ 26,483,735 $ 42,080,801 $ 29,477,603 $ 21,029,717 California Asset Management Program (CAMP) $ - $ - $ - $ 140,486,848 $ 140,996,992 $ 177,721,225 $ 216,512,539 $ 209,946,658 $ 244,922,370 $246,027,861 $ 166,966,244 $191,727,753 PFM Asset Management Investment Portfolio* $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 110,067,184 $110,047,741 Total Ending Balance $ 208,116,692 $ 221,541,600 $ 227,161,983 $ 210,680,372 $ 207,494,943 $ 223,571,844 $ 240,346,179 $ 253,670,362 $ 271,406,105 $288,108,662 $ 306,511,031 $322,805,211 *Closing Marker Value
Return On Investments:

Annual % Yield Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep River City Bank Accounts 0.50% 0.58% 0.85% 1.07% 1.44% 2.39% 2.77% 2.85% 2.97% 3.06% 3.15% 3.37% California Asset Management Program (CAMP) 0.00% 0.00% 0.00% 4.53% 4.73% 4.80% 4.97% 5.16% 5.24% 5.31% 5.52% 5.55% PFM Asset Management Investment Portfolio 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.34% 5.35% Average Return On Investments: 0.50% 0.58% 0.85% 3.38% 3.68% 4.31% 4.75% 4.76% 5.02% 4.98% 5.23% 5.34% Interest Earned Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep River City Bank Accounts $ 67,811 $ 86,193 $ 139,716 $ 54,891 $ 36,841 $ 13,057 $ 24,386 $ 15,153 $ 13,649 $ 18,219 $ 7,858 $ 9,129 California Asset Management Program (CAMP) $ - $ - $ - $ 486,848 $ 510,145 $ 724,233 $ 791,314 $ 934,120 $ 975,711 $ 1,105,492 $ 938,383 $ 761,509 PFM Asset Management Investment Portfolio $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 328,431 $ 342,931 Total Interest/Div. Earned $ 67,811 $ 86,193 $ 139,716 $ 541,738 $ 546,985 $ 737,290 $ 815,701 $ 949,273 $ 989,361 $ 1,123,710 $ 1,274,672 $ 1,113,568 CAMP Portfolio Statistics
As of September 30, 2023
Beginning of the Month Market Value $ 166,966,244
End of The Month Market Value $ 191,727,753
Yield at Market 5.55% Weighted Average Maturity (days) 41 PFM Portfolio Statistics
As of September 30, 2023
Portfolio Par Value $ 111,720,330
Portfolio Market Value (icl. Accrued Interest) $ 110,669,278 Yield at Cost 5.35%
Yield at Market 5.43%
Benchmark Yield* 5.14% Weighted Average Maturity (days) 543 *ICE BofA 0-3 Year U.S. Treasury Index
SVCE Investment Policy:
https://svcleanenergy.org/wp-content/uploads/2018/10/FP-08_Investments-Policy-F.pdf

SILICON VALLEY CLEAN ENERGY AUTHORITY

INVESTMENTS SUMMARY
October 1, 2022 through August 31, 2023

32.48%

15.89%

32.50%

15.43%

1.38% 2.32%

0.00%
0%
5%
10%
15%
20%
25%
30%
35%
0 - 6 Months 6 - 12
Months
1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Over 5 Years Maturity Distribution
U.S. Treasury
Bond / Note
46%
Commercial
Paper
17%
CAMP Pool
17%
Federal Agency
Commercial
1%
Corporate Note
9%
Certificate of
Deposit
7%
Asset-Backed
Security
3%
SVCE PFM Portfolio Investments
Repurchase
Agreements,

33.8%
Certificates of
Deposit, 26.4%
Commercial
Paper, 32.5% US Agencies ,

1.0%
US Treasuries,

4.7%
Money Market
Funds, 0.1%
Corporate
Notes, 1.6%
Camp Pool Composition (based on market value)
Item 1b
October November December January February March April May June July August September YTD Retail Sales Actual (GWh) 307 311 341 341 311 334 287 306 297 333 351 312 3,831 Retail Sales Budget (GWh) 315 308 331 336 295 309 290 313 340 358 369 342 3,907 Load deviation from the Budget (Right Y-Axes) -2.5% 1.1% 3.1% 1.3% 5.3% 8.2% -1.1% -2.3% -12.7% -7.1% -4.9% -8.8% -2.0% Customer Participation Rate Res 96.4% 96.4% 96.4% 96.4% 96.3% 96.3% 96.3% 96.3% 96.3% 96.3% 96.3% 96.3% Customer Participation Rate Com 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.7% 96.6% 96.8% Total Accounts 277,714 277,867 277,956 277,950 278,041 278,106 278,068 278,120 278,095 277,993 278,143 278,094 Opt-Out Accounts 74 62 99 126 137 69 77 54 42 43 74 68 925 Opt-Up Accounts -3 4 -6 -36 8 24 -7 -4 -3 -10 -2 -7 -42

0.10 37.04
SVCE Arrearager Total for customers 31+ days late and 120+ days late Age Summary (as of 9/1/2023) Date Amount
<30 days $46,329,022 High 11/29/2021 $7.99M
<60 days $2,114,744 Low 4/17/2020 $2.54M
<90 days $990,311 Current 7/31/2023 $6.8 M
<120 days $856,094
Older $2,886,312
September 2023 FYTD
Accounts Receivable Days
37 Days
$53,176,482

SILICON VALLEY CLEAN ENERGY AUTHORITY

RETAIL SALES, CUSTOMER ACCOUNTS AND AGING REPORT
Bad Debt % (Actual)

0.33%

TOTAL DUE
Bad Debt % (Budget)

0.90%
• Green arrow indicates
receipt of $1.3M in Federal
CAPP funds.
• An additional $717K in
CAPP funding provided in
Winter 2023.
• Growth at red arrow
indicates short-term PG&E
billing-hold issue in Fall
2022 that was quickly
resolved.
'17-'18 '18-'19 '19-'20 '20-'21 21-'22 22-'23
Total (L Axes) $308,552 $417,275 $415,187 $639,455 $885,995 $1,484,752 % Revenue 0.12% 0.14% 0.14% 0.25% 0.23% 0.33%
Av./Month (R Axes) $25,713 $34,773 $34,599 $53,288 $73,833 $123,729 $-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000 SVCE Write-offs By Fiscal Year
0 2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Jan-20 Feb-20 Mar-20 Mar-20 Apr-20 May-20 Jun-20 Jun-20 Jul-20 Aug-20 Aug-20 Sep-20 Oct-20 Oct-20 Nov-20 Dec-20 Dec-20 Jan-21 Feb-21 Mar-21 Mar-21 Apr-21 May-21 May-21 Jun-21 Jul-21 Jul-21 Aug-21 Sep-21 Sep-21 Oct-21 Nov-21 Nov-21 Dec-21 Jan-22 Jan-22 Feb-22 Mar-22 Apr-22 Apr-22 May-22 Jun-22 Jun-22 Jul-22 Aug-22 Aug-22 Sep-22 Oct-22 Oct-22 Nov-22 Dec-22 Jan-23 Jan-23 Feb-23 Mar-23 Mar-23 Apr-23 May-23 May-23 Jun-23 Jul-23 Jul-23 Aug-23 Sep-23 Oct-23 >120 Days 31+ Days
Item 1b
Item 1b
Silicon Valley Clean Energy September 30, 2023
Certificate of Compliance
During the reporting period for the period ended September 30, 2023, the account(s) managed by PFM Asset Management ("PFMAM") were in compliance with the applicable investment policy and guidelines as furnished to PFMAM.

Acknowledged : PFM Asset Management LLC
Note: Pre- and post-trade compliance for the account(s) managed by PFM Asset Management is provided via Bloomberg Asset and Investment Management ("AIM"). 6 Item 1b
Managed Account Security Transactions & Interest For the Month Ending September 30, 2023 Silicon Valley Clean Energy - SVCE Investment Portfolio - 4025-002 - (12517950) Transaction Type Principal Accrued Realized G/L Realized G/L Sale Trade Settle Security Description CUSIP Par Proceeds Interest Total Cost Amort Cost Method BUY
09/01/23 09/01/23 BNP PARIBAS NY BRANCH COMM PAPER
DTD 08/03/2023 0.000% 04/29/2024
09659BDV9 2,250,000.00 (2.166,403.13) 0.00 (2,166,403.13) 09/05/23 09/08/23 JOHN DEERE CAPITAL CORP

CORPORATE NOTES
DTD 09/08/2023 5.300% 09/08/2025
24422EXC8 425,000.00 (424.842.75) 0.00 (424,842.75)
09/05/23 09/12/23 COMMONWEALTH BK AUSTR NY

CORPORATE NOTES
DTD 09/12/2023 5.499% 09/12/2025
20271RAS9 800,000.00 (800.000.00) 0.00 (800.000.00)
09/06/23 09/07/23 US TREASURY N/B NOTES
DTD 02/15/2023 4.000% 02/15/2026
91282CGL9 5,000,000.00 (4,900,976.56) (12,500.00) (4,913,476.56) 09/06/23 09/07/23 US TREASURY NOTES
DTD 08/31/2019 1.250% 08/31/2024
912828YE4 4.000,000.00 (3,840,781.25) (961.54) (3,841,742.79) 09/06/23 09/08/23 STATE STREET CORP NOTES 857477CD3 400,000.00 (397,792.00) (2,050.22) (399,842.22) (CALLABLE)
DTD 08/03/2023 5.272% 08/03/2026
09/06/23 09/08/23 BANK OF AMERICA NA CORPORATE
NOTES
DTD 08/18/2023 5.650% 08/18/2025
06428CAC8 850,000.00 (851,028.50) (2,668.06) (853,696.56) 09/06/23 09/08/23 GOLDMAN SACHS GROUP INC CORP

NOTES (CALL
DTD 02/25/2016 3.750% 02/25/2026
38143U8H7 400.000.00 (381,680.00) (541.67) (382,221.67) 09/06/23 09/08/23 CITIGROUP INC CORP NOTE
(CALLABLE)
DTD 11/03/2021 1.281% 11/03/2025
172967ND9 500,000.00 (472,190.00) (2,223.96) (474,413.96) 09/06/23 09/08/23 JPMORGAN CHASE & CO (CALLABLE)

CORP NOTE
DTD 06/01/2021 0.824% 06/01/2025
46647PCH7 600,000.00 (575,664.00) (1,332.13) (576,996.13) 09/06/23 09/08/23 WELLS FARGO & CO CORP NOTES
DTD 04/22/2016 3.000% 04/22/2026
949746RW3 400,000.00 (372,684.00) (4,533.33) (377,217.33) 09/06/23 09/08/23 MORGAN STANLEY CORP NOTES
(CALLABLE)
DTD 02/18/2022 2.630% 02/18/2026
61747YEM3 400,000.00 (380,292.00) (584.44) (380,876.44) PFM Asset Management LLC Account 4025-002 Page 16
7 Item 1b
Managed Account Security Transactions & Interest For the Month Ending September 30, 2023 Silicon Valley Clean Energy - SVCE Investment Portfolio - 4025-002 - (12517950) Transaction Type
Trade Settle Security Description
Principal
CUSIP Par Proceeds
Accrued
Interest Total
Realized G/L Realized G/L Sale
Cost Amort Cost Method
BUY

CORPORATE NOTES
DTD 01/12/2022 1.375% 01/10/2025
09/06/23 09/11/23 TOYOTA MOTOR CREDIT CORP 89236TKZ7 550,000.00 (549,906.50) 0.00 (549,906.50) 09/07/23 09/15/23

CORPORATE NOTES
DTD 09/11/2023 5.600% 09/11/2025
CHAIT 2023-Al A 161571HT4 805,000.00 (804,776.85) 0.00 (804.776.85) 09/12/23 09/19/23
DTD 09/15/2023 5.160% 09/15/2028
AMXCA 2023-3 A 02582JKD1 825,000.00 (824,963.12) 0.00 (824,963.12) 09/18/23 09/20/23
DTD 09/19/2023 5.230% 09/15/2028
NATIXIS NY BRANCH CERT DEPOS 63873OP65 825,000.00 (825,000.00) 0.00 (825,000.00) 09/19/23 09/20/23
DTD 09/20/2023 5.610% 09/18/2026
US TREASURY N/B NOTES 91282CFX4 7,000,000.00 (6,925,078.13) (96,393.44) (7,021,471.57) 09/19/23 09/20/23
DTD 11/30/2022 4.500% 11/30/2024
US TREASURY N/B NOTES 91282CFG1 5.000.000.00 (4.899,218.75) (8,928.57) (4,908.147.32) 09/19/23 09/20/23
DTD 08/31/2022 3.250% 08/31/2024
US TREASURY N/B NOTES 91282CHV6 5,000,000.00 (4,991,015.63) (13,736.26) (5,004,751.89) 09/20/23 09/27/23
DTD 08/31/2023 5.000% 08/31/2025
HDMOT 2023-B A3 41285YAC9 935,000.00 (934,788.60) 0.00 (934.788.60) 09/21/23 09/22/23
DTD 09/27/2023 5.690% 08/15/2028
CITIGROUP GLOBAL MARKETS COMM 17327AC47 2,000,000.00 (1,949,068.89) 0.00 (1,949,068.89) 09/21/23 09/25/23
PAPER
DTD 06/07/2023 0.000% 03/04/2024
AMERICAN HONDA FINANCE 02665WEA5 400,000.00 (379,076.00) (1,200.00) (380,276.00) 09/21/23 09/25/23

CORPORATE NOTES
DTD 01/13/2022 1.500% 01/13/2025
COMCAST CORP CORP NOTES 20030NCS8 400,000.00 (387,656.00) (7,022.22) (394,678.22) 09/21/23 09/25/23
(CALLABLE)
DTD 10/05/2018 3.950% 10/15/2025
BANK OF NY MELLON (CALLABLE) CORP 06406RAN7 850,000.00 (796,637.00) (5,704.44) (802,341.44) 09/21/23 09/25/23
NOTES
DTD 04/24/2020 1.600% 04/24/2025
COOPERA7IEVE RABOBANK UA 21688AAS1 400,000.00 (378,000.00) (1,145.83) (379.145.83) PFM Asset Management LLC Account 4025-002 Page 17
8 Item 1b
Managed Account Security Transactions & Interest For the Month Ending September 30, 2023 Silicon Valley Clean Energy - SVCE Investment Portfolio - 4025-002 - (12517950) Transaction Type
Security Description CUSIP Par
Principal
Proceeds
Accrued
Interest Total
Realized G/L
Cost
Realized G/L
Amort Cost
Sale
Trade Settle Method
BUY
09/21/23 09/25/23 CATERPILLAR FINL SERVICE

CORPORATE NOTES
DTD 05/13/2022 3.400% 05/13/2025
14913R2V8 450.000.00 (434,988.00) (5,610.00) (440,598.00) 09/21/23 09/25/23 NATIONAL AUSTRALIA BK/NY

CORPORATE NOTES
DTD 06/09/2022 3.500% 06/09/2025
63254ABD9 500.000.00 (483,240.00) (5,152.78) (488,392.78) 09/25/23 09/26/23 TOYOTA MOTOR CREDIT CORP COMM
PAPER
DTD 09/25/2023 0.000% 03/25/2024
89233GCR5 1.500,000.00 (1,458,219.17) 0.00 (1.458,219.17) 09/25/23 09/26/23 CREDIT AGRICOLE CIB NY COMM
PAPER
DTD 09/25/2023 0.000% 03/26/2024
22533TCS3 2.500.000.00 (2,429,348.61) 0.00 (2,429,348.61) 09/25/23 09/28/23 FHMS K065 Al
DTD 07/24/2017 2.864% 10/01/2026
3137F1G36 851,285.21 (814,540.27) (1,828.56) (816,368.83) 09/26/23 09/29/23 CITIBANK NA CORP NOTES (CALLABLE)
DTD 09/29/2023 5.864% 09/29/2025
17325FBA5 380,000.00 (380,000.00) 0.00 (380,000.00)
09/28/23 09/29/23 BMW US CAPITAL LLC CORPORATE
NOTES
DTD 08/11/2023 5.300% 08/11/2025
05565ECC7 500,000.00 (497,395.00) (3,533.33) (500,928.33) Transaction Type Sub-Total 47,696,285.21 (46,707,250.71) (177,650.78) (46,884,901.49)

INTEREST
09/01/23 09/25/23 FHMS K058 Al
DTD 11/09/2016 2.340% 07/01/2026
3137BSP64 565,176.82 0.00 1.102.09 1,102.09
09/15/23 09/15/23 CARMX 2022-2 A3
DTD 04/28/2022 3.490% 02/16/2027
14317HAC5 725,000.00 0.00 2,108.54 2,108.54
Transaction Type Sub-Total 1,290,176.82 0.00 3,210.63 3,210.63

PAYDOWNS
09/01/23 09/25/23 FHMS K058 Al
DTD 11/09/2016 2.340% 07/01/2026
3137BSP64 12,863.35 12,863.35 0.00 12,863.35 659.25 0.00 Transaction Type Sub-Total 12,863.35 12,863.35 0.00 12,863.35 659.25 0.00 PFM Asset Management LLC Account 4025-002 Page 18
Item 1b
Managed Account Security Transactions & Interest For the Month Ending September 30, 2023 Silicon Valley Clean Energy - SVCE Investment Portfolio - 4025-002 - (12517950) Transaction Type
Trade Settle Security Description
Principal
CUSIP Par Proceeds
Accrued
Interest Total
Realized G/L
Cost
Realized G/L Sale
Amort Cost Method
Managed Account Sub-Total (46,694,387.36) (174,440.15) (46,868,827.51) 659.25 0.00 Total Security Transactions ($46,694,387.36) ($174,440.15) ($46,868,827.51) $659.25 $0.00 PFM Asset Management LLC Account 4025-002 Page 19

Page 1 of 1 ends

Staff Report – Item 1c
Item 1c: Approve Employment Agreement with Chief Executive Officer To: Silicon Valley Clean Energy Board of Directors
From: George Tyson, Chair of Ad Hoc CEO Selection Subcommittee Date: 11/8/2023

RECOMMENDATION
Approve Employment Agreement with a new Chief Executive Officer (CEO) based on the recommendation of the Board’s Ad Hoc CEO Selection Subcommittee.

BACKGROUND
CEO Girish Balachandran announced his plans to retire from his position, effective April 1, 2024. The Board of Directors formed a three member Ad Hoc CEO Selection Subcommittee (the “Subcommittee”), comprised of Chair Tyson, Vice Chair Walia, and Director Rennie, to administer the selection process for a new CEO. The Subcommittee utilized a recruiter, shortlisted candidates, and interviewed selected applicants. The Subcommittee completed its work by identifying a recommended candidate for CEO of SVCE.

ANALYSIS & DISCUSSION
The Subcommittee will make a recommendation to the Board of Directors for appointment of the new CEO in a closed session of the November 8, 2023 meeting. If the Board agrees with the recommendation and appoints a new CEO, then the Subcommittee recommends that the Board consider the attached employment agreement (See Attachment 1). Due to privacy concerns for the Subcommittee’s recommended candidate, their name is being withheld pending the Board’s consideration and appointment.

The terms outlined in the Employment Agreement were benchmarked across operational CCAs. As such, the Agreement will provide the new CEO an annual salary of $403,000, 40 hours of management leave in addition to the SVCE standard Paid Time Off, and a $400 per month transportation allowance for an electric car. The term of the Agreement expires on September 30, 2027, but will automatically renew on October 1, for additional one year renewal terms unless either party gives the other written notice of non-renewal at least 120 days prior to the end of the term. The Agreement also provides for a CEO performance evaluation within the first six months, and annually thereafter.

ATTACHMENTS

1. Employment Agreement
Item 1c
SILICON VALLEY \3/ CLEAN ENERGY
- 1 -
12955-0001\2880891v3.doc
DRAFT

CHIEF EXECUTIVE OFFICER EMPLOYMENT AGREEMENT BETWEEN
SILICON VALLEY CLEAN ENERGY AND _______________
This Employment Agreement (“Agreement”) is made as of and entered into as of _________, 2023 (the “Effective Date”) by and between the Silicon Valley Clean Energy Authority, an independent public agency (“SVCE”), and ______________, an individual (“CEO”).

RECITALS
A. SVCE desires to employ CEO as its Chief Executive Officer and CEO desires to accept appointment as Chief Executive Officer.

B. CEO represents that he/she has the requisite education, experience, specialized skills and training and is otherwise qualified to serve as the Chief Executive Officer.

NOW, THEREFORE, in consideration of these recitals and the performance by the parties of the promises, covenants, and conditions herein contained, SVCE and CEO agree as provided in this Agreement.

1. Appointment of Chief Executive Officer. As of the Commencement Date, defined in Section 2 below, SVCE does hereby appoint and employ CEO in the capacity of Chief Executive Officer and CEO does accept employment upon the terms and conditions set forth herein. This Agreement shall supersede and replace any and all prior agreements between SVCE and CEO.

2. Term.

A. Commencement Date. The term of this Agreement shall commence on April 1, 2024, (“Commencement Date”) and terminate on September 30, 2027 (“Term”).

This Agreement will automatically renew on October 1 of each year, for additional one year renewal terms on the terms and conditions that are in force at the time of the renewal, unless either party gives the other party written notice of non-renewal at least 120 days prior to the end of the term of this Agreement.

B. Transition Period. Notwithstanding anything to the contrary in paragraph A of this Section 2, in the event that there is an election to utilize the “Transition Period,” as such term is defined in that certain Employment Agreement, dated December 13, 2017, between SVCE and Girish Balachandran, as amended by that certain Amendment No. 6, effective September 14, 2023, the Commencement Date shall be the date on which the Transition Period commences.

3. Duties and Authority. CEO shall exercise the full powers and perform the duties of the position of Chief Executive Officer of SVCE, as set forth in Exhibit A attached Item 1c
Attachment 1
- 2 -
12955-0001\2880891v3.doc
hereto. CEO shall exercise such other powers and perform such other duties as SVCE Board of Directors may from time to time assign.

4. Obligations. CEO shall devote his/her full energies, interest, abilities and productive time to the performance of this Agreement, and utilize his/her best efforts to promote SVCE's interests. CEO shall not engage in any activity, consulting service or enterprise, for compensation or otherwise, which is actually or potentially in conflict with or inimical to, or which materially interferes with his/her duties and responsibilities to SVCE.

As set forth in Section 5 of this Agreement, CEO shall be exempt from the overtime pay provisions of California law (if any) and federal law and as such is expected to engage in those hours of work that are necessary to fulfill the obligations of the Chief Executive Officer position.

5. Salary and Benefits.

A. Base Salary. SVCE shall pay CEO an annual base salary of $403,000 The annual salary will be prorated and paid on SVCE’s normal paydays, subject to legally permissible or required withholding. CEO’s salary is compensation for all hours worked and for all services under this Agreement, including those involving any position, office or appointment associated with SVCE. CEO shall be exempt from the overtime pay provisions of California law (if any) and federal law.

B. Benefits.
(1) SVCE Employee Benefits. Unless stated otherwise in this Agreement, CEO shall be entitled to receive the benefits offered to all full-time SVCE employees (SVCE Benefit Programs). SVCE reserves the right to enhance, reduce, terminate, and amend, or to otherwise change its SVCE Benefit Programs at any time. Any such change to any benefit available shall apply to CEO, including any new or additional benefits, without the need to amend this Agreement.
(2) Paid Time Off and Management Leave. CEO shall be subject to any PTO policy applicable to SVCE employees generally; provided, however, that on March 31, 2024, CEO may cash out up to eighty percent (80%) of the PTO that CEO accrued as of March 31, 2024. In addition to PTO, CEO shall receive forty (40) hours of management leave annually at the beginning of each fiscal year, commencing with the Commencement Date. Management leave time must be used within the fiscal year in which it is received. Any unused management leave shall not be carried over. (3) Business Expenses; Professional Development. SVCE recognizes that CEO may incur certain reasonable job-related expenses of a non-personal nature.

SVCE agrees to reimburse or to pay such business expenses incurred by the CEO in the course of his/her duties. CEO shall submit such expenses according to SVCE’s normal expense reimbursement procedures. All expenses must be supported by documentation meeting SVCE’s normal requirements and must be submitted within time Item 1c
Attachment 1
- 3 -
12955-0001\2880891v3.doc
limits established by SVCE. SVCE shall pay reasonable sums for professional dues and subscriptions for CEO necessary for CEO’s continued participation in associations and organizations, which memberships are necessary and desirable for the continued professional development of CEO and for the good of SVCE. Notwithstanding the foregoing, SVCE Board of Directors shall have discretion to establish appropriate amounts, in the annual SVCE budget or otherwise, for job-related and professional development expenses and travel costs.
(4) Office Equipment. SVCE shall provide CEO with a SVCE-issued cellular device and laptop device, including business-related software, to maintain communication with SVCE Board of Directors and SVCE staff. Such equipment and software shall remain the sole property of SVCE and SVCE reserves the right to monitor the use of its equipment. CEO agrees that CEO has no privacy rights in the use of such equipment and the equipment shall be returned upon termination or separation from employment. Alternatively, CEO may use SVCE Benefit Programs for office equipment, including, but not limited to electing compensation for use of personal cellular device. (5) Personal Vehicle Use. Any rules, policies or practices to the contrary notwithstanding, CEO shall be provided a monthly auto allowance of Four Hundred Dollars ($400) in exchange for making a vehicle available for the CEO’s use for SVCE-related business and/or functions during, before and after normal work hours.

CEO shall comply with all SVCE policies related to the use of his/her own vehicle, which includes providing SVCE with proof of current automobile insurance with liability limits in the amount set by SVCE. The allowance paid pursuant to this paragraph will be paid only upon receipt of evidence that the CEO’s vehicle is an electric vehicle that is powered by an electric motor that draws electricity from a battery (i.e., all-electric vehicle).

6. Evaluations. CEO’s performance of the duties and responsibilities shall be evaluated by the SVCE Board of Directors within 6 months of the Commencement Date; and thereafter, SVCE Board of Directors may conduct an evaluation of CEO's performance on or before the one year anniversary of the first evaluation. CEO will request and schedule such reviews, as appropriate, pursuant to SVCE Board of Directors agenda procedures or as otherwise directed by SVCE Board of Directors. In addition, SVCE Board of Directors may, but is not required to, review CEO's salary and benefits as part of the evaluation process or at any other time. Said review and evaluation shall be in accordance with specific criteria developed jointly by SVCE and CEO. Said criteria may be added to or deleted from as SVCE Board of Directors may from time-to-time determine in consultation with the CEO. Nothing in this paragraph is intended to limit additional interim evaluations or reviews or to limit the normal communications process between SVCE Board of Directors and CEO.

7. Indemnification. Except as otherwise permitted, provided, limited or required by law, including without limitation California Government Code Sections 825, 995, and 995.2 through 995.8, SVCE will defend and indemnify CEO, using legal counsel of SVCE’s choosing, against legal liability for acts or omissions by CEO occurring in the course and scope of employment under this Agreement. In the event SVCE provides Item 1c
Attachment 1
- 4 -
12955-0001\2880891v3.doc
funds for legal criminal defense pursuant to this section and the terms of the Government Code, CEO shall reimburse SVCE for such legal criminal defense funds if CEO is convicted of a crime involving an abuse of office or position, as provided by Government Code Sections 53243 – 53243.4. Further, in the event CEO is convicted of a crime involving an abuse of office or position, CEO shall reimburse SVCE for any paid leave or cash settlement, as provided by Government Code Sections 53243 – 53243.4.

8. At-Will Employment Relationship-Termination.

A. Under the terms of this appointment and California Government Code Section 36507, CEO is appointed by and serves at the pleasure of SVCE Board of Directors and is an “at-will” employee.

Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of SVCE to terminate this Agreement and the employment of CEO at any time, with or without cause, as provided in this paragraph. Accordingly, CEO may be terminated: (i) with cause, at any time, upon written notice, and (ii) without cause, by giving thirty (30) calendar days advance written notice to the CEO, unless the parties mutually agree to waive or alter the time required for such notice. Upon termination, the employment relationship shall end.

B. In the event CEO is terminated by SVCE Board of Directors without “cause” before expiration of this Agreement, or any extension thereof, and during such time that CEO is willing and able to perform the duties of the Chief Executive Officer, SVCE agrees to pay CEO immediately upon termination a lump sum cash payment equal to his/her then monthly base salary for a period of Two (2) months.

C. Any other term of this Agreement notwithstanding, the maximum severance that CEO may receive under this Agreement shall not exceed the limitations provided in Government Code Sections 53260 – 53264, or other applicable law. Further, in the event CEO is convicted of a crime involving an abuse of office or position, CEO shall reimburse SVCE for any paid leave salary offered pending investigation or cash settlement (including severance), as provided by Government Code Sections 53243 – 53243.4.

D. In the event SVCE terminates CEO for cause, then SVCE may terminate this Agreement immediately, without providing CEO with any notice, opportunity to be heard, or right of appeal. CEO shall be entitled to only the compensation accrued up to the date of termination, payments for accrued unused vacation leave, and such other termination benefits and payments as may be required by law. CEO shall not be entitled to any severance benefits and payments. For purposes of this Agreement, for “cause” is defined to mean as follows:

Item 1c
Attachment 1
- 5 -
12955-0001\2880891v3.doc
(1) Conviction of a felony or any offense involving a violation of CEO’s official duties;
(2) If, during the term of this Agreement, CEO becomes mentally or physically incapable of performing the Chief Executive Officer’s functions and duties as set forth in this Agreement with reasonable accommodation, and it reasonably appears such incapacity will last for more than six (6) months; (3) Continued abuse or use of prescription or non-prescription drugs or alcohol that materially affects the performance of Chief Executive Officer’s duties; (4) Repeated and protracted unexcused absences from the Chief Executive Officer’s office and duties;
(5) Refusal to comply with a lawful order or instruction issued by a majority of SVCE Board of Directors at a lawfully convened meeting; (6) Deliberate falsification of SVCE records or official documents, or instructing a SVCE employee to commit an act which CEO knows or has reason to know is a crime;
(7) Failure and refusal to carry out the duties of the Chief Executive Officer as set forth in this Agreement;
E. CEO may terminate this Agreement by giving one hundred twenty (120) calendar days advance written notice to SVCE Board of Directors, unless the parties mutually agree to waive or alter the time required for such notice.

9. Integration of Agreement. This Agreement contains the entire agreement between the parties and supersedes all prior oral and written agreements, understandings, commitments, and practices between the parties concerning CEO’s employment with SVCE. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, oral or written, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party.

10. Confidential Information. CEO acknowledges and agrees that in the performance of his/her duties, SVCE discloses and entrusts his/her with certain confidential proprietary information. CEO agrees not to directly or indirectly disclose or use at any time any such information, whether it be in the form of records, lists, data, personnel information, reports or otherwise, of a business or technical nature, which was acquired or viewed by CEO during CEO’s relationship with SVCE unless such disclosure is authorized by SVCE in writing, required by law, or required in the performance of the duties of the Chief Executive Officer. This provision shall survive the termination or expiration of this Agreement.

Item 1c
Attachment 1
- 6 -
12955-0001\2880891v3.doc

11. Method of Amendment. No amendments to this Agreement may be made except by a writing signed and dated by SVCE and CEO.

12. Notices. Any notice to SVCE under this Agreement shall be given in writing to SVCE, by personal service, by overnight delivery service providing confirmation of delivery, or by registered or certified mail, postage prepaid, addressed to the Clerk at SVCE's then principal place of business. Any such notice to CEO shall be given in a like manner and, if deposited with an overnight delivery service or mailed, shall be addressed to CEO at his/her home address then shown in SVCE's files. For the purpose of determining compliance with any time limit in this Agreement, a notice shall be deemed to have been duly given (a) on the date of delivery, if served personally on the party to whom notice is to be given, (b) on the next delivery day following deposit with an overnight delivery service or (c) on the third calendar day after mailing, if mailed to the party to whom the notice is to be given in the manner provided in this Section.

13. General Provisions.

A. Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.

B. Entire Agreement. This Agreement sets forth the final, complete and exclusive agreement between SVCE and CEO relating to the employment of CEO as Chief Executive Officer by SVCE. Any prior discussions or representations by or between the parties are merged into and rendered null and void by this Agreement. The foregoing notwithstanding, CEO acknowledges that, except as expressly provided in this Agreement, his/her employment is subject to SVCE’s generally applicable rules and policies pertaining to employment matters, such as those addressing equal employment opportunity, sexual harassment and violence in the workplace.

C. Choice of Law and Venue. This Agreement shall be interpreted and construed pursuant to and in accordance with the local laws of the State of California and all applicable SVCE Codes, Ordinances and Resolutions. The parties agree that venue shall be in Santa Clara County, California.

D. Independent Review of Agreement. CEO acknowledges that he/she has had the opportunity and has conducted an independent review of the financial and legal effects of this Agreement. CEO acknowledges that he/she has made an independent judgment upon the financial and legal effects of this Agreement and has not relied upon any representation of SVCE, its officers, agents or employees other than those expressly set forth in this Agreement.

Item 1c
Attachment 1
- 7 -
12955-0001\2880891v3.doc
E. Drafting of Agreement. The Parties hereto acknowledge and agree that although this Agreement has been drafted by SVCE’s legal counsel, CEO has reviewed, or had an opportunity to review the terms of this Agreement with his/her legal counsel. Consequently, the doctrine that ambiguities in an agreement should be resolved against the drafting party shall not be employed in connection with this Agreement and this Agreement shall be interpreted in accordance with its fair meaning.

F. Voluntary Agreement. CEO represents and warrants that he/she has read carefully and fully understands all the provisions of this Agreement, that he/she is free to enter into this Agreement and to render the services described in it, that he/she entering into and performance of this Agreement will not breach or violate or conflict with any other agreement (written or oral) to which he/she is a party, and that he/she has had an opportunity to consult with his/her legal counsel prior to entering into this Agreement and has either done so or voluntarily chosen not to do so. CEO is voluntarily entering into this Agreement. SVCE represents and warrants that it has the right and power to enter into this Agreement.

Item 1c
Attachment 1
- 8 -
12955-0001\2880891v3.doc
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and executed personally as the date and year first written above. _________________, an individual:

SILICON VALLEY CLEAN ENERGY AUTHORITY:
_____________________________
George Tyson, Chair
ATTEST:
_____________________________
Andrea Pizano, SVCE Clerk
APPROVED AS TO FORM:
______________________________
Trisha Ortiz, Counsel for SVCE
Item 1c
Attachment 1
- 9 -
12955-0001\2880891v3.doc

EXHIBIT A

CHIEF EXECUTIVE OFFICER DUTIES
Silicon Valley Clean Energy (SVCE) is a not-for-profit, community-owned joint powers authority providing clean electricity from renewable and carbon-free sources to more than 288,000 residential and commercial customers in 13 Santa Clara County jurisdictions.

SVCE has investment grade credit ratings from S&P and Moody’s Investor Services.

The mission statement of SVCE is, “Reduce dependence on fossil fuels by providing carbon free, affordable, and reliable electricity and innovative programs for the SVCE community.”
SVCE provides electric service as a CCA under the CPUC Code Section 366.2. SVCE has the rights and powers to set rates for the electricity it furnishes, incur indebtedness, and issue bonds or other obligations. SVCE is governed by a board of directors consisting of elected representatives from each jurisdiction. SVCE has a local rate-setting process in which its board has authority to raise rates to grow annual revenues and reserves, if needed. As a public agency, net revenues are returned to the community to keep rates competitive and promote clean energy programs. Silicon Valley Clean Energy is advancing innovative solutions to fight climate change by decarbonizing the grid, transportation, and buildings.

The Chief Executive Officer (CEO) reports to the Board of Directors and is responsible for strategic leadership of the organization, including management of power supply planning and procurement, finance and rates, local energy and decarbonization programs, energy services and customer relations, strategic development, administrative services, and regulatory and legislative affairs. CEO will plan, organize, direct, and coordinate all operations of the Silicon Valley Clean Energy Authority; supervise and direct staff and consultant and administrative services to the Board of Directors; support any committees established by the Board of Directors; and perform such other duties and services as directed by the Board of Directors to achieve its key milestones as updated by the Board from time to time via the Board-approved Strategic Plan. CEO will direct all activities of the SVCE, including operations, resource procurement and planning, organizational development, finance, regulatory and legislative affairs, external communications, and strategic planning.

The CEO represents SVCE to a variety of boards, committees, and commissions, and in public hearings and meetings. Additionally, the CEO provides frequent communication and maintains positive relationships with SVCE’s member agencies, customers, private businesses, regulatory agencies including the California Public Utilities Commission (CPUC), California Energy Commission (CEC), California Independent System Operator (CAISO), California Air Resources Board (CARB), California Community Choice Association (CalCCA), Pacific Gas & Electric company and other IOUs, and other key stakeholders.

Item 1c
Attachment 1

Page 1 of 2 ends

Staff Report – Item 1d
Item 1d: Adopt Resolution Amending SVCE Conflict of Interest Code to Add Multiple Positions From: Girish Balachandran, CEO
Prepared by: Andrea Pizano, Sr. Executive Assistant and Board Clerk Date: 11/8/2023

RECOMMENDATION
Adopt Resolution 2023-19 amending the SVCE Conflict of Interest Code to add multiple positions in the list of designated positions for filing.

BACKGROUND
Shortly after the formation of SVCEA, the Board of Directors adopted a conflict-of-interest code as required by the Political Reform Act, commencing at Government Code Section 81000. The code lists the positions within the Authority that are required to file statements of economic interests (Form 700). As a joint powers authority with members located entirely within Santa Clara County, the County Board of Supervisors is the conflict code reviewing body that is required to approve all changes to the conflict-of-interest code. County Counsel has advised that when positions are added or removed from the conflict code, a new resolution must be adopted approving a new conflict of interest code with the added or removed position(s).

At the September 8, 2021 Board meeting, the Board of Directors adopted Resolution 2021-22 approving the creation of a personnel system to insure equitable and uniform policies and procedures for administering personnel matters in compliance with applicable laws; designating the Chief Executive Officer (CEO) as Personnel Officer; and delegating authority to the CEO to carry out all duties necessary to implement the personnel system.

The last Conflict of Interest Code amendment was approved at the March 2023 Board of Directors meeting.

ANALYSIS & DISCUSSION
Over the past six months, various positions have been created and filled under the Personnel Officer’s authority. SVCE staff and general counsel feel the following new positions should report financial interests in the proposed assigned disclosure categories based on the decisions he/she will be making:

Designated Position Assigned Disclosure Category
Deputy Director of Marketing and Communications 2
Director of Human Resources 2
Director of Government and Legislative Affairs 2
Regulatory Analyst 2
Senior Manager of IT and Administrative Services 2
In accordance with the requirements of the Political Reform Act and the County of Santa Clara, a new conflict of interest code must be adopted by resolution which includes the newly created or identified positions as well as any changes to the existing Conflict of Interest Code. The attached resolution amends Appendix A to SVCE’s code to reflect the new positions identified above. The remainder of the Conflict of Interest Code has not been changed.

Item 1d
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 1d Agenda Date: 11/8/2023

Page 2 of 2 ends

STRATEGIC PLAN
Not applicable.

ALTERNATIVES
None.

FISCAL IMPACT
There is no fiscal impact as a result of adding positions to SVCE’s Conflict of Interest Code.

ATTACHMENT

1. Resolution 2023-19 Amending the Authority’s Conflict of Interest Code to Add Multiple Positions Item 1d
Resolution 2023-19 -1-
RESOLUTION NO. 2023-19

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SILICON VALLEY CLEAN ENERGY AUTHORITY AMENDING THE AUTHORITY’S CONFLICT OF INTEREST

CODE TO ADD MULTIPLE POSITIONS
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 Political Reform Act, Government Code Section 81000, et seq., (the “Political Reform Act”) requires each public agency in California, including the Authority, to adopt and promulgate a conflict of interest code; and WHEREAS, Government Code Section 87306 requires each public agency in California to amend its conflict of interest code when change is necessitated by a change in circumstances, including the creation of new positions and relevant changes to the duties assigned to existing positions; and
WHEREAS, the Board of Directors of the Authority has adopted a conflict of interest code, and has amended this code as appropriate due to changed circumstances, with the most recent code adopted by Resolution 2023-03; and WHEREAS, the Board of Directors, after consultation with the County of Santa Clara as its code reviewing body, desires to amend the list of designated positions in Appendix A by adding multiple positions.

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Authority rescinds Resolution No. 2023-03 and adopts the following attached Conflict of Interest Code including its Appendices of Designated Positions and Disclosure Categories.

BE IT FURTHER RESOLVED that The Board of Directors of the Authority hereby directs the Secretary of the Board to coordinate the preparation of a revised Conflict of Interest Code in succeeding even-numbered years following notice and instructions from the County of Santa Clara as the code-reviewing body for the Authority, in accordance with the requirements of Government Code Sections 87306 and 87306.5. Future revisions to the Conflict of Interest Code should reflect changes in employee or official designations. If no revisions to the Code are required, the Authority shall submit a response as indicated in the instructions provided by the County of Santa Clara no later than October 1st of the same year, stating that amendments to the Authority’s Conflict of Interest Code are not required.

Item 1d
Attachment 1
Resolution 2023-19 -2-
ADOPTED AND APPROVED this 8
th day of November 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
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:

Clerk
Item 1d
Attachment 1
Resolution 2023-19 -3-

SILICON VALLEY CLEAN ENERGY AUTHORITY

CONFLICT OF INTEREST CODE
The Political Reform Act (Government Code § 81000, et seq., hereinafter referred to as the Act) requires state and local government agencies to adopt and promulgate conflict of interest codes. The Fair Political Practices Commission (“FPPC”) has adopted a regulation (2 California Code of Regulations § 18730) which contains the terms of a standard conflict of interest code, which can be incorporated by reference in an agency’s code. After public notice and hearing, the standard code may be amended by the FPPC to conform to amendments in the Act. Therefore, the terms of 2 California Code of Regulations § 18730 and any amendments to it duly adopted by the FPPC are hereby incorporated by reference.

This regulation and the text here designating positions and establishing disclosure categories shall constitute the conflict of interest code of the Silicon Valley Clean Energy Authority (“Authority”).

The most current version of 2 Cal. Code of Regs. Section 18730 is available on the website of the Fair Political Practices Commission
(https://www.fppc.ca.gov/content/dam/fppc/NS-Documents/LegalDiv/Regulations/Index/Chapter7/Article2/18730.-Provisions-of-Conflict-of%20Interest-Codes.pdf.pdf).

Individuals holding a designated position shall file their Statements of Economic Interests with the Authority’s Filing Official, which will make the Statements available for public inspection and reproduction subject to Government Code section 81008. If Statements are received in signed paper format, the Authority’s Filing Official shall make and retain a copy and forward the original Statements to the Filing Officer, the County of Santa Clara Clerk of the Board of Supervisors. If Statements are electronically filed using the County of Santa Clara’s Form 700 e-filing system, both the Authority’s Filing Official and the County of Santa Clara Clerk of the Board of Supervisors will receive access to the e-filed Statements simultaneously.

Item 1d
Attachment 1
Resolution 2023-19 -4-

SILICON VALLEY CLEAN ENERGY AUTHORITY

CONFLICT OF INTEREST CODE
APPENDIX "A"

DESIGNATED POSITIONS
Designated Position Assigned Disclosure Category
Member of Board of Directors 1
Alternate Member of Board of Directors 1
Audit Committee Member 2
Chief Executive Officer 1
Chief Financial Officer & Director of Administrative Services 1 Chief Operating Officer and Director of Power Resources 1 Finance and Administration Committee Member 2
General Counsel 1
Administrative Services Manager 2
Associate Legislative Analyst 2
Associate Manager of Decarbonization Programs & Policy 2 Associate Power Analyst 1
Associate Power Resources Planner 1
Communications Manager 2
Deputy Director of Administrative Services 2
Deputy Director of Marketing and Communications 2
Deputy Director of Decarbonization Programs & Policy 2
Director of Decarbonization Programs & Policy 2
Director of Energy Services & Community Relations 2
Director of Government and Legislative Affairs 2
Item 1d
Attachment 1
Resolution 2023-19 -5-
Director of Human Resources 2
Director of Regulatory & Legislative Policy 2
Director of Strategic Development 2
Energy Services Manager 2
Financial Analyst 2
Human Resources Generalist 2
Management Analyst 2
Manager of Decarbonization Programs & Policy 2
Manager of Technology & Administrative Services 2
Policy Analyst 2
Power Analyst 1
Power Data Analyst 1
Power Resources Manager 1
Power Resources Planner 1
Power Contracts & Settlements Manager 1
Power Settlements & Compliance Analyst 1
Principal Policy Analyst 2
Principal Power Analyst 1
Rates Manager 2
Regulatory Analyst 2
Regulatory and Compliance Manager 2
Risk Controls Project Manager 2
Senior Data Analyst 2
Senior Financial Analyst 2
Senior Government Affairs Manager 2
Senior Management Analyst 2
Item 1d
Attachment 1
Resolution 2023-19 -6-
Senior Manager of Communications 2
Senior Manager of Energy Policy and Regulatory Analysis 2 Senior Manager of IT and Administrative Services 2
Senior Manager of Decarbonization Programs & Policy 2
Senior Manager of Power Operations 1
Senior Manager of Power Resources 1
Senior Manager of Public Sector Services 2
Senior Policy Analyst 2
Senior Power Analyst 1
Senior Power Resources Planner 1
Senior Quantitative Analyst 2
Senior Rates Analyst 2
Senior Regulatory Analyst 2
Senior Risk Manager 2
Technology Services Manager 2
Wholesale Energy Markets Manager 1
Consultant 3
Newly Created Position *
* Newly Created Position
A newly created position that makes or participates in the making of governmental decisions that may foreseeably have a material effect on any financial interest of the position-holder, and which specific position title is not yet listed in the Authority’s conflict of interest code is included in the list of designated positions and shall disclose pursuant to the broadest disclosure category in the code, subject to the following limitation: The Chief Executive Officer of the Authority may determine in writing that a particular newly created position, although a “designated position,” is hired to perform a range of duties that are limited in scope and thus is not required to fully comply with the broadest disclosure requirements, but instead must comply with more tailored disclosure requirements specific to that newly created position. Such written determination shall include a description of the newly created position's duties and, based upon that Item 1d
Attachment 1
Resolution 2023-19 -7-
description, a statement of the extent of disclosure requirements. The Chief Executive Officer’s determination is a public record and shall be retained for public inspection in the same manner and location as this conflict-of-interest code. (Gov. Code Section 81008.) As soon as the Authority has a newly created position that must file Statements of Economic Interests, the Authority’s Filing Official shall contact the County of Santa Clara Clerk of the Board of Supervisors Form 700 division to notify it of the new position title to be added in the County’s electronic Form 700 record management system, known as eDisclosure. Upon this notification, the Clerk’s office shall enter the actual position title of the newly created position into eDisclosure and the Authority’s Filing Official shall ensure that the name of any individual(s) holding the newly created position is entered under that position title in eDisclosure.

Additionally, within 90 days of the creation of a newly created position that must file Statements of Economic Interests, the Authority shall update this conflict-of-interest code to add the actual position title in its list of designated positions and submit the amended conflict of interest code to the County of Santa Clara Office of the County Counsel for code-reviewing body approval by the County Board of Supervisors. (Gov. Code Section 87306.)
Item 1d
Attachment 1
Resolution 2023-19 -8-

SILICON VALLEY CLEAN ENERGY AUTHORITY

CONFLICT OF INTEREST CODE
APPENDIX "B"

DISCLOSURE CATEGORIES
Designated positions must report financial interests in accordance with the assigned disclosure categories.

Category 1: Persons in this category shall disclose:
(a) investments and business positions in business entities, and income (including gifts, loans, and travel payments) from sources that contract with the Authority, or that provide, plan to provide, or have provided during the previous two years, facilities, goods, technology, equipment, vehicles, machinery, or services, including training or consulting services, of the type utilized by the Authority; and (b) all interests in real property located: in whole or in part within the jurisdiction of the Silicon Valley Clean Energy Authority, or within two miles of the borders of any of the parties to the Joint Powers Agreement for the Authority, or within two miles of any land owned or used by the Authority.

Category 2: Persons in this category shall disclose investments and business positions in business entities, and income (including gifts, loans, and travel payments) from sources that contract with the Authority, or that provide, plan to provide, or have provided during the previous two years, facilities, goods, technology, equipment, vehicles, machinery, or services, including training or consulting services, of the type utilized by the Authority.

Category 3: Each Consultant, as defined for purposes of the Political Reform Act and applicable regulations1, shall disclose pursuant to the broadest disclosure category in the Authority’s conflict of interest code subject to the following limitation: The Chief Executive Officer of the Authority may determine in writing that a particular consultant, although a "designated position," is hired to perform a range of duties that are limited in scope and thus is not required to comply fully with the disclosure requirements of the broadest disclosure category, but instead must comply with more tailored disclosure requirements specific to that consultant. Such a written determination shall include a description of the consultant's duties and, based upon that description, a statement of the extent of 1 As defined in FPPC Regulation 18700.3, “consultant” means an individual who (1) makes governmental decisions, such as whether to approve a rate, rule, or regulation; to issue, deny, suspend, or revoke any permit, license, application, certificate or similar authorization; to adopt or approve a plan, design, report, study; or to adopt or approve policies, standards, or guidelines for the Authority; (2) serves in a staff capacity with the Authority, and in that capacity participates in making governmental decisions by providing information, an opinion, or a recommendation for the purpose of affecting the decision without significant intervening substantive review; or (3) performs the same or substantially all the same duties for the Authority that would otherwise be performed by an individual holding a designated position in this Code.

Item 1d
Attachment 1
Resolution 2023-19 -9-
disclosure requirements. The Chief Executive Officer’s written determination is a public record and shall be retained for public inspection in the same manner and location as this Conflict of Interest Code.

Item 1d
Attachment 1

Page 1 of 4 ends

Staff Report – Item 1e
Item 1e: Approve Plan to Implement Net Billing Tariff (Solar Billing Plan, NEM3) for New Solar Customers without Modification Beginning December 15, 2023 From: Girish Balachandran, CEO
Prepared by: Peyton Parks, Energy Services Principal
Date: 11/8/2023

RECOMMENDATION
Staff requests the Board of Directors (Board) approve implementation of the Net Billing Tariff (NBT) program, as ordered by the California Public Utilities Commission (CPUC) and designed by Pacific Gas and Electric (PG&E) and without modification, for new solar customers only in order to begin billing under the tariff terms beginning December 15, 2023, as follows:

1. Use of the CPUC’s Avoided Cost Calculator (ACC) to determine the value of solar exports for customers under NBT;

2. Billing settlement will happen on a monthly basis; and

3. Increase in the size limit of solar relative to load to allow for increased electrification.

The NBT changes will not impact the approximately 35,000 SVCE customers on existing Net Energy Metering (NEM) program tariffs. Additionally, staff will collect and analyze customer performance data during the course of 2024 to suggest potential tariff modifications to the Board in the first quarter of 2025.

EXECUTIVE COMMITTEE RECOMMENDATION
At the October 27, 2023 SVCE Board Executive Committee meeting, staff presented the proposed NBT tariff (Attachment 1) program as provided for in this staff report. The Executive Committee unanimously supported the staff proposal and directed staff to move forward in seeking Board approval for implementation consistent with the requirements under PG&E’s NBT tariff.

BACKGROUND
Since its inception, SVCE has offered a comprehensive Net Energy Metering (NEM) program to support customers that self-generate renewable electricity at their homes or businesses. NEM describes a relationship between a customer and a utility by which a customer’s self-generated electricity can create financial value for the customer by sending excess generation back to the grid. The predominate technology type for NEM agreements is solar, with over 32,000 residential installations and 2,500 commercial installations territory wide.

Solar itself gained tremendous momentum in California during the mid-2010’s as declining technology and installation costs paired with rising electricity rates to make it an affordable and prudent investment for customers. Currently, though, it is understood that the proliferation of solar without paired storage has raised three major concerns for the state:

1. The rate of exchange for NEM credits is mismatched to the actual value the excess electricity provides to the grid.

Item 1e
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 1e Agenda Date: 11/8/2023

Page 2 of 4 ends

2. It has helped to contribute to the glut of renewable electricity on the grid during the day, exacerbating the familiar ‘duck curve’ and subsequent ramp-up of thermal (natural gas) power plants in the early evening.

3. Solar customers, by way of NEM, are also absolved of paying much of the utilities’ fixed costs associated with maintaining and operating the grid which can result in a shifting of cost from solar to non-solar customers, creating equity concerns.

To address these issues, the CPUC, together with the three California investor-owned utilities (IOUs), proposed a major revision to NEM in the fall of 2021. This original proposal was met with strong headwinds from consumer advocacy groups and the solar industry, and a revised proposal was issued in fall of 2022 which passed the CPUC in December 2022. The decision addresses the issues by 1) changing the valuation mechanism of export electricity from retail rates to mirroring wholesale rates, 2) strongly encouraging paired battery installation through export price signals, and 3) by ensuring that solar customers are contributing to grid-related fixed costs.

Following the decision, customers had until April 15, 2023 (120 days) to file a net metering agreement application with the IOUs to be considered for NEM ‘2.0’ prior to the transition to NBT. All net metering applications received after April 15, 2023 have been accepted under the terms of the new NBT. PG&E plans to implement the billing rules of the new tariff beginning December 15, 2023 for solar customers approved to net meter after April 15th. SVCE staff is working with Calpine Energy Solutions on billing implementation ahead of the transition.

The most significant divergence between the NBT and prior versions of the NEM tariff is how exported energy is valued. NBT will value electricity exports using the CPUC’s Avoided Cost Calculator (ACC) which will produce a set of 8,760 hourly values annually. These values are intended to be better aligned to grid wholesale pricing than the retail exchange rates of the current NEM version and the price signal by which battery storage is strongly encouraged.

ANALYSIS & DISCUSSION
NBT implements a number of changes to NEM, illustrated in Table 1 below. These changes were designed to address equity and compensation issues created under NEM, as well as encourage the installation of paired battery storage with solar systems to help address the ‘duck curve’ problem.

Table 1: Comparison of Existing NEM 2.0 to Proposed NBT Tariff Item 1e
Feature NEM 2.0 Net Billing Tariff Comments
Rate
Requirement
Any TOU Rate E-ELEC TOU rate designed for electric appliance households (heat pump, EV)
Export
Compensation
Retail minus Non-bypassable chargeAvoided Cost
Calculator (ACC) +
Adders
Intended to match export value more
closely with wholesale energy value;
early adopters auto-enrolled with 'adder'
Billing
Settlement
Annual Monthly Export values offset charges, accrued
charges will not carry forward to True-up
System Size
Limits
<= 110% Annual
Usage
<= 150% Annual
Usage
Additional sizing intended for future
electrification efforts
Average System
ROI
6 Years 9 Years* *Assumes system paired with battery
storage
Greatest
Customer Value
Export, Self¬
Consumption
Self-Consumption kWh consumed, or stored for later
consumption, provides greatest value
Agenda Item: 1e Agenda Date: 11/8/2023

Page 3 of 4 ends

The fundamental change to NEM under the NBT is the use of the ACC to determine export pricing. Historically, solar exports had been valued at or very near to retail rates and had included the value of transmission and distribution (T&D). The ACC provides an annual forecast of hourly prices for solar exports and apply to generation only. One effect of this is that T&D charges can no longer be offset by solar exports. This aspect applies primarily to PG&E’s business, non-residential, customers.

For SVCE, the value of generation-related exports will vary hourly throughout the year, introducing a new layer of complexity to billing operations. Another effect of the ACC is that the average value of solar exports for customers under NBT will decline from $0.15-$0.20/kWh under previous NEM versions to $0.05- $0.07/kWh. The lower average price of export is meant to encourage storage of daytime solar energy for use in the evening. A customer that deploys stored energy from a battery during the most expensive evening peak hours contributes to the well-being of the grid by reducing peak demand. That customer will also see the greatest rate of return for their solar energy because self-consumption is a direct reduction of both T&D and generation at the retail value.

SVCE filed comments in support of the NBT in its current form due to its alignment with the organization’s values of equity, grid stewardship through energy storage, and enabling future electrification. Staff has recommended that NBT be adopted as-is, but also recognizes that there are malleable aspects of NBT that can be adjusted to potentially further our interests in the name of these values:
• Export Rate – It is possible for SVCE to create its own variable or fixed rate for export. Higher rates encourage customer export to the grid, lower rates further incentivize storage • Export Adders – Adders per kWh can be added to certain hours of the day to encourage discharge from batteries during peak above and beyond self-consumption • Low-income adjustments – SVCE can choose to implement differing or beneficial rules for protected customer classes to encourage solar adoption in these categories • VPP or Demand Response – With more batteries coming online under NBT it may be possible to implement Virtual Power Plant or Demand Response programs • SVCE could decide to offer rebates or incentives for purchases of batteries It is unknown at this time which, if any, of the above modifications will be most effective at delivering on SVCE’s goal of enabling future electrification in an equitable and economically responsible manner. Due to the complexity of applying thousands of billing determinates to customer bills, as well as the unknown nature of new solar customer performance on NBT, staff recommends that the Board adopt the NBT without modification to the ACC calculation for implementation on new solar customer bills beginning December 15, 2023. Existing customers on NEM 1.0 and NEM 2.0 will not be impacted. Staff will evaluate customer data for performance and recommend modifications.

ALTERNATIVE
Staff is open to alternative plans or program modifications from the Board of Directors to the proposed NBT program, including the potential modifications highlighted above. In its current proposal staff has attempted to underscore the importance of understanding the mechanics of the program through customer performance under the tariff for one year prior to making modifications to the program.

STRATEGIC PLAN
This recommendation to support updated solar NEM programming to align with PG&E’s NBT is consistent with the strategic plan, Goal 8, Measure 2: ‘Enact and maintain competitive service offerings for SVCE customers that deliver measurable economic and environmental benefits’ and ‘Establish new rate program(s) to promote electrification, and matching of clean energy supply and demand.’ Item 1e
Agenda Item: 1e Agenda Date: 11/8/2023

Page 4 of 4 ends

FISCAL IMPACT
Implementation of the Net Billing Tariff will likely have negligible financial impacts in its first year due to low anticipated customer enrollment and comparatively lower export rates for energy than previous versions of the NEM program. Staff intends to study the financial performance of customers under the tariff in order to inform future NEM-integrated program design in the future.

ATTACHMENT

1. Presentation to the SVCE Executive Committee for Implementation of Net Billing Tariff (NEM3, Solar Billing Plan)
Item 1e
1 New SV Clean Energy
PowerPoint Template
Subtitle
Net Billing Tariff (NEM 3.0)
Implementation Proposal to
Executive Committee
Peyton Parks
October 27, 2023
Item 1e
Attachment 1
2 Agenda
• Background on Net Billing Tariff
• Differences between NEM 2.0 and NBT
• Drivers behind the change
• SVCE Position and Future Potential
• Potential levers for program improvement
• NBT Program ‘Unknowns’ and options
• Staff Recommendation for 2024
• NEM 3.0 – Colloquial term
for Net Billing Tariff
• Net Billing Tariff – PG&E
and SVCE internal
terminology
• Solar Billing Plan –
Customer-facing term used
for bill presentment
• Avoided Cost Calculator
(ACC) – The hourly
determinate of solar export
pricing
Key Terms
Item 1e
Attachment 1
3 Background
• After earlier proposal revisions, in December 2022 CPUC approved major changes to Net Energy Metering in CA
• SVCE provided comments to the proceeding in favor of the changes, which incentivize solar with paired storage over stand-alone solar installations • Solar interconnection applications filed with PG&E on or after April 15, 2023 are subject to new rules. Existing NEM customers are unaffected until end of 20-year NEM agreement
• Beginning December 15, 2023 Net Billing Tariff calculations will go live on customer bills.
• Staff proposes following PG&E export pricing and billing structure for first year
Timeline and Highlights
2023
2024
2022
2022 December, NEM 3.0 passes
CPUC
2023 April 15, last day to file
NEM 2.0 application
2023 December 15, NEM 3.0
billing goes live
2023 October 27, Strategize
NEM 3 implementation with Exec
Committee
2023 November 08, BOD approves
recommended NEM 3.0 strategy
2024 Study customer performance,
make additional BOD rec’s
Item 1e
Attachment 1
4 Background - Key Differences NEM 2.0 vs NBT
Feature NEM 2.0 Net Billing Tariff Comments
Rate
Requirement
Any TOU Rate E-ELEC TOU rate designed for electric appliance households (heat pump, EV)
Export
Compensation
Retail minus Non-bypassable chargeAvoided Cost
Calculator (ACC) +
Adders
Intended to match export value more
closely with wholesale energy value;
early adopters auto-enrolled with ‘adder’
Billing
Settlement
Annual Monthly Export values offset charges, accrued
charges will not carry forward to True-up
System Size
Limits
<= 110% Annual
Usage
<= 150% Annual
Usage
Additional sizing intended for future
electrification efforts
Average System
ROI
6 Years 9 Years* *Assumes system paired with battery
storage
Greatest
Customer Value
Export, Self-ConsumptionSelf-Consumption kWh consumed, or stored for later consumption, provides greatest value
New solar installations since SVCE inception in 2017 have fallen under NEM 2.0 rules Item 1e
Attachment 1
5 Background – Three Drivers of Change
Equity
Grid
Stewardship
Export
Valuation
Alignment
• Solar exports that offset T&D charges absolve solar
customers of paying for fixed grid costs
• These costs get shifted to non-solar customers that
don’t have solar on their roofs.
• The Avoided Cost Calculator (ACC) values NBT solar
exports near the hourly wholesale grid price
• This is intended to be a better reflection of the
exports’ value to the grid compared to retail pricing.
• NBT strongly incentivizes customers to pair storage
with their solar to achieve the best ROI
• This functions as a price signal to increase the
number of dispatchable batteries on the grid
Item 1e
Attachment 1

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B 40.00

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Net Load - March 31
£
5 o
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28,000
26,000
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22,000
20,000
18,000
16,000
14,000
12,000
10,000
0 12 a.m. 3 a.m. 6 a.m. 9 a.m. 12 a.m. 3 p.m. 6 p.m. 9 p.m.

Hour
6 Important Reminder!
Net Billing Tariff is ONLY applicable to NEW Net Energy Metering applications received by PG&E AFTER April 15, 2023
Existing NEM 1.0 and NEM 2.0 New NBT Customers
• NOT affected by NBT decision
• Will continue to export kWh at the retail rate
• No value proposition or ROI change
• After end of 20-year Net Metering Agreement
term, customers transition to NEM 3 or then-applicable tariff • New solar installations in 2023 and onward
• Rate of uptake slowed due to industry-wide
push to install under NEM 2.0
*Exact number of customers to be confirmed via
PG&E update to customer attribute file in 2024
35,510 < 500*
Item 1e
Attachment 1
7 SVCE Position and Potential
SVCE’s Position on NBT is in Alignment with PG&E
• SVCE believes the move to NBT is ‘directionally correct’ in reducing the export rate paid to solar customers and promoting battery storage installation
• Solar is already heavily incentivized by tax credits and most likely does not need the rich incentive of retail exchange credits to continue its high adoption rates
• Self-generation is repeatedly shown to be a vital part of electrification, helping homeowners who electrify to avoid the rising cost of electricity prices
• Electrified homes with solar + storage tend to look more like efficiency measures, reducing total load from the grid with no/minimal exports.

NBT appears to be a step in
the right direction for a
number of measures:
• Right-sizing of solar systems,
limiting export
• Battery installation
• Enabling future electrification
• Carbon-free self-generation
However, it may be possible
to customize the Net Billing
Tariff to further advance
SVCE’s interests in a
number of distinct ways
Item 1e
Attachment 1
8 Levers for Program Customization
Export Rate Adders and ‘Bonus’
VPP or DR Enrollment
CARE/FERA Incentives
Battery Rebates/ Programs
Potential to create SVCE’s own
variable or fixed/flat export pricing
calculation for entire year
$/kWh additional compensation to
incentivize exports at strategic hours,
or less to optimize charging
Flat adders or bonuses to make solar
more attractive to low-income
customers, above and beyond PG&E’s
existing compensation
Provide custom DR incentives to
piggy-back on existing programs or
create our own
Design and implement rebates for
battery storage pairings to provide
best customer value under NBT
Item 1e
Attachment 1
9 Options for NBT Rollout December ‘23
Option 1: Option 2: Option 3: Option 4:

Course of Action
Follow PG&E ACC Follow PG&E ACC
with ‘Sweetener’
Set an SVCE
‘Custom’ Rate (flat
for all hours)
Set an SVCE ‘Custom’
Rate (swings
dramatically, deeply
incentivize storage)
Implementation
Effort Easy Hard Medium Hard
Implementation
Cost Free
Custom Rate,
charged by
Calpine
Free, staff time only
to develop 8760
rate sheet
Free, staff time only
to develop 8760 rate
sheet
Incremental cost
to bottom line? TBD TBD TBD TBD
Alignment with
‘Spirit‘ NBT:

Storage
High Medium/Low Medium High
Benefit to
customer? Medium, ACC
makes ROI difficult
to determine
High, Provides
additional value
for exported kWh
Medium, Provides
little/no extra value,
but makes export
rate predictable
VARIES! Provides
little/no extra value,
makes export rate
unpredictable.

Without battery no
benefit
Program ‘Unknowns’ Program Options
At this time there are critical
pieces of information that have
not been made available to SVCE
that might influence its decision-making
• Customer enrollment
volume
• Finalized 2024 ACC pricing
sheet
Item 1e
Attachment 1
10 Staff Recommendation - NBT Rollout December ‘23
Option 1: Follow PG&E ACC for 2024
• Staff recommends that SVCE follow PG&E’s NBT implementation model without modification for CY 2024.
• Staff proposes that the first 12 months of customer performance should be monitored and analyzed with the intention of making future recommendations to customize the program.
• Staff will return to the board in Q1 2025 with additional recommendations
• Reminder: This decision will not affect currently-enrolled NEM 1.0 and NEM 2.0 customers.

Item 1e
Attachment 1
Option 1:

Course of Action
Follow PG&E ACC
Impiementation
Effort Easy
Impiementation
Cost Free
Incremental cost
to bottom line? TBD
Alignment with
'Spirit* NBT:

Storage
High
Benefit to
customer? Medium, ACC
makes R.OI difficult
to determine
Questions/Comments?
11 Item 1e
Attachment 1

SILICON VALLEY

CLEAN ENERGY
12 Avoided Cost Calculator (ACC)
Item 1e
Attachment 1
2022 ACC
Methane Leakage
Losses
Ancillary Services
Distribution Capacity
Transmission Capacity
Generation Capacity
Energy
GHG Adder & Rebalancing
Cap and Trade

Page 1 of 2 ends

Staff Report – Item 1f
Item 1f: Approve Scholarship Funds for 2024 EmPower Silicon Valley Student Short-Film Competition
From: Girish Balachandran, CEO
Prepared by: Julianne Miller, Community Outreach Fellow Pamela Leonard, Deputy Director of Marketing & Communications Date: 11/8/2023

RECOMMENDATION
Approve the allocation of $20,000 from the marketing budget for scholarship prizes to be awarded in the proposed 2024 EmPower SV Short-Film Competition.

BACKGROUND
SVCE holds an annual scholarship competition to engage local youth in climate solutions to benefit their community. In previous years, SVCE hosted a competition that challenged high school students in the SVCE service area to engineer an electric bike, encouraging the exploration of electrification and innovation. However, due to the COVID-19 pandemic, this transitioned to a virtual short-film competition seeking to empower local middle and high school students to address climate change and solutions through video. Due to its continued success, SVCE proposes to host the fourth year of this competition to grow its diverse student involvement, accessibility, and wide range of skills and interests.

ANALYSIS & DISCUSSION
In the fourth year of this competition for 2024, middle and high school students in the SVCE service area, as individuals or small teams, will submit a short-film (no more than three minutes) depicting a community-driven solution to the impacts of climate change centered around decarbonization, electrification and innovation. With this competition, students will be introduced to or familiarized with concepts of electrification, and SVCE will have more visibility into our communities’ strengths and contributions toward addressing climate change from the lens of our youth.

The proposed Empower SV Short-Film Competition will be held from February to May 2024. The competition will begin with a virtual kick-off event, during which staff will introduce participants to the SVCE mission and the topics of electrification, decarbonization and innovation. At the competition’s close, a panel of judges will select main prize and honorable mention winners. Each submission will be showcased on the SVCE website and promoted during a potential in-person film festival event and award show The film festival will be held at a community site and will include a viewing party and award ceremony, alongside an SVCE informational booth to grow customer relations and further promote the SVCE mission.

Item 1f
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 1f Agenda Date: 11/8/2023

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• Staff recommends an allocation of $20,000 for scholarships under this program. The competition will designate four categories with one main prize of $3,000 each to distribute the award more equitably and recognize the diverse skillsets and interests of participants. Each category will have one honorable mention awarded a $2,000 prize, further distributing the award across a greater number of submissions. Staff anticipates that these scholarship prizes will be successful in incentivizing student participation and acknowledging the time and creative effort spent on developing the short-film.

The event and scholarship awards are a great opportunity to communicate the SVCE dedication to reinvesting in and benefiting the communities it serves. Furthermore, it will serve to empower local youth to grow their involvement in the climate crisis and explore climate solutions to support their community.

STRATEGIC PLAN
This event aligns with customer and community goals in SVCE’s board-adopted Strategic Plan, specifically with Goal 10 – Empower customers with the awareness, knowledge and resources needed to make effective clean energy choices.

ALTERNATIVE
SVCE seeks the approval of a general allocation of $20,000 for a 2024 scholarship program. If the Empower SV Short-Film Competition is not approved by the SVCE Board as a scholarship program for 2024, staff will explore other prize options, modify award categories, or explore alternative student scholarship competition ideas.

FISCAL IMPACT
There is no incremental fiscal impact. The $20,000 in scholarship funds will be allocated from the board-approved Energy Services & Community Relations marketing budget.

Item 1f

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Staff Report – Item 1g
Item 1g: Closing Report of the Ad Hoc Committee of the Board to Address Legislative Responses to Industry Transition
From: Girish Balachandran, CEO
Prepared by: Bena Chang, Director of Government and Legislative Affairs Date: 11/8/2023

RECOMMENDATION
Staff recommends that the Board receive the closing report of the Ad Hoc Committee of the Board to Address Legislative and Regulatory Responses to Industry Transition (“Ad Hoc Committee”).

BACKGROUND
The Ad Hoc Committee was convened at the December 2022 SVCE Board of Directors Meeting and expires at the end of 2023. The Closing Report contains documentation of the Ad Hoc Committee’s operations and activities during its tenure and is the required final product of the Ad Hoc Committee upon its expiration.

ANALYSIS & DISCUSSION
The Closing Report provides documentation of the Ad Hoc Committee’s activities as well as an update on each of the six policy areas defined as the scope of the Ad Hoc Committee upon its formation.

STRATEGIC PLAN
The activities of the Ad Hoc Committee including presentation of this Closing Report support Goal 16 of SVCE’s Strategic Plan, “Support legislation which advances SVCE’s mission to reduce dependence on fossil fuels by supporting the development of a low carbon, affordable, and reliable electric system while simultaneously advancing economy-wide decarbonization.”

ALTERNATIVE
If the Board wishes to see any changes to the Closing Report, SVCE can update the Closing Report and place it on the agenda for a future Board of Directors meeting.

FISCAL IMPACT
None.

ATTACHMENTS

1. Closing Report of the Ad Hoc Committee of the Board to Address Legislative and Regulatory Responses to Industry Transition

2. 2023 Legislative Bill Tracker with positions and results of bills that SVCE followed and took positions on.

Item 1g
SILICON VALLEY \3/ CLEAN ENERGY
Attachment 1
Closing Report of the
Ad Hoc Committee of the Board
to Address Legislative Responses to Industry Transition I. Committee Operations
Formation
Formation of the Ad Hoc Committee of the Board to Address Legislative Responses to Industry Transition (“Ad Hoc Committee”) was authorized by the SVCE Board of Directors at its December 2022 meeting with the following legislative platform policies:
• Affordability and Rates
• Climate Mitigation/Fuel Switching
• Clean, Reliable Grid
• Competitive Equity/Do No Harm
• Health Impact/Safety
• Equity
Members of the Ad Hoc Committee were selected at the February 8, 2023 Board of Directors Meeting.

Membership consisted of: Chair Yvonne Martínez Beltrán, Vice Chair Larry Klein, Director Zach Hilton, Director Bryan Mekechuk, Director Elliot Scozzola, and Director Margaret Abe-Koga.

Committee Activities
The Ad Hoc Committee held its inaugural meeting on March 29, 2023. At the meeting, the Committee elected Director Yvonne Martínez Beltrán as Chair and Director Larry Klein as Vice Chair. The committee discussed the state budget and legislation around central procurement, interconnection, and Brown Act flexibility.

The Ad Hoc Committee held its second meeting on June 21, 2023. The committee received an update from staff on the state budget and discussed legislation around central procurement and interconnection.

The Ad Hoc Committee held its final meeting on October 30, 2023, and received a recap on the 2023 legislative session and a forecast of the 2024 legislative session from Jennifer Tannehill from Aaron Read & Associates. The Committee provided input on the draft 2024 Legislative Policy Platform and discussed updates on interconnection legislation and regulatory activities.

II. Legislative Platform Policies
The Ad Hoc Committee provides the following updates to the Board on each of the Legislative Platform policies:

Affordability and Rates
• SVCE supported two bills, SB 488 (Alvarado-Gil) and AB 625 (Aguiar-Curry) that would have either allowed or made it more feasible for CCAs to participate in biomass programs that our ratepayers contribute to. Unfortunately, neither bill made it through the legislative process.

SVCE will continue to work with the bill sponsor on these issues.

Climate Mitigation/Fuel Switching
• SVCE supported two building electrification bills this year: SB 527 (Min), which would have directed the California Public Utilities Commission to create a neighborhood decarbonization pilot program, and AB 593 (Haney), which would have directed the California Energy Commission to create a plan to get to zero emissions in buildings. Unfortunately, both bills became two-year bills.

Clean, Reliable Grid
• SVCE supported SB 410 (Becker), which directs the California Public Utilities Commission to set minimum and maximum timelines for distribution system energization projects. The Governor signed SB 410 into law.

Item 1g
Attachment 1
SILICON VALLEY \3/ CLEAN ENERGY
• SVCE also worked with CalCCA, our trade association, to support several other bills that addressed the energization project backlog for the distribution system. Only one other bill, AB 50 (Wood), which directs the California Public Utilities Commission to set criteria for “timely” service interconnections was signed by the Governor.
• SVCE also worked with CalCCA to support SB 420 (Becker) to streamline permitting for transmission projects. The Governor vetoed the bill and said it should be addressed by the Administration’s Infrastructure Strike Team.

Competitive Equity/Do No Harm
• SVCE worked closely with CalCCA to negotiate changes to the Governor’s Budget Trailer Bill on reliability, which became AB 1373 (Garcia). The bill covered a variety of policy proposals, including central procurement and capacity payments for reliability shortfalls. CalCCA was able to amend several parts of the bill to narrow central procurement authority and reduce double payments between the capacity payment and the California Public Utilities Commission’s penalty.

Health Impact/Safety
• SVCE engaged in legislation that would remove barriers to building decarbonization and improve health as noted in the climate mitigation section above.

Equity
• SVCE provided comments in the Equitable Building Decarbonization Program proceeding at the California Energy Commission and led a joint CCA comment letter to the U.S. Department of Energy to advocate for broad and flexible definitions of low-income households that are not limited to certain census tracts.

Item 1g
Attachment 1
SILICON VALLEY \3/ CLEAN ENERGY
Bill Number Bill Author Bill Summary SVCE Position Bill Status Leg Program (if position)
AB 3 Zbur Requires CEC to issue report on best
procurement strategy for offshore wind, to
create a port plan, and study the feasibility of in-state manufacturing and assembly of offshore wind facilities.

Watch Signed by Governor
AB 538 Holden Directs CAISO to present a governing plan to the CEC for regionalization.

Watch Two-year bill
SB 488 Alvarado-Gil Allows CCAs to participate in the Bioenergy Renewable Auction Mechanism (BioRAM) if
POUs are not able to procure their share of the
program.

Support Two-year bill Competitive
Equity
AB 625 Aguiar-Curry Would extend the sunset date of the BioMAT program, along with other provisions.

Support Competitive
Equity
AB 1068 Valencia Would relax the ex parte rules by allowing parties to contact the personal staff of a
commissioner during the week of a commission
business hearing, as long as the staffer is acting
in their capacity as a legal or policy advisor.

Watch Signed by Governor
SB 663 Archuleta Would allow renewable hydrogen to count in the Renewable Portfolio Standard program.

Watch Two-year bill
AB 1373 Garcia Authorizes DWR to centrally procure certain resources, establishes a capacity payment for
deficiencies in resource adequacy, among other
provisions.

Neutral Signed by Governor Competitive
Equity
2023 SVCE Legislative Bill Tracker
Clean Energy/Power Supply
Generation Projects
Item 1g
Attachment 2
Bill Number Bill Author Bill Summary SVCE Position Bill Status Leg Program (if position)
SB 420 Becker Requires the Governor to identify a lead agency to monitor clean energy and electrical
transmission facility planning and development.

The agency would be the lead agency for CEQA
and would deem those projects as eligible for
CEQA streamlining.

Watch Vetoed by Governor
SB 619 Padilla Would expand the transmission facilities eligible for CEC certification.

Watch Two-year bill
SB 48 Becker Creates building performance standards for energy efficiency and GHG reductions in large
buildings.

Watch Two-year bill
AB 593 Haney Directs CEC to create a plan for how to get to zero emissions in buildings before January 1,
2024 and to implement the plan through the
Equitable Building Decarb Program by 2025.

Support Two-year bill Climate Change
Mitigation/Fuel
Switching
SB 527 Min Would direct CPUC to establish a Neighborhood Decarbonization Program to facilitate the cost-effective decarbonization of a targeted natural gas zone.

Support Two-year bill Climate Change
Mitigation/Fuel
Switching
AB 698 Essayli
Prohibits state agencies and local governments
from adopting an ordinance or policy that
directly or indirectly results in banning gas
stoves from buildings. Watch Two-year bill
Building Decarbonization
Item 1g
Attachment 2
Bill Number Bill Author Bill Summary SVCE Position Bill Status Leg Program (if position)
SB 795 Stern Requires the CEC to establish an HVAC
equipment sales tracking system and code
compliance data repository to enable the CEC,
the Contractors State License Board and local
permitting offices to identify noncompliant
installers and reduce the cost of code
enforcement.

Watch Two-year bill
SB 233 Skinner Requires all new ZEVs and EVSEs sold in CA have bidirectional capability by January 1, 2027.

Watch Two-year bill
SB 507 Gonzalez Requires the CEC to assess our progress towards ensuring 100% of new light-duty cars are ZEVs by
2035 (extends the current assessment horizon,
which ends by 2030). Assessment will evaluate
different usage types (rural, single-family,
carshare, low-income communities).

Watch Two-year bill
AB 591 Gabriel Requires companies to include universal
connectors on new publicly available charging
stations or to install them when making
upgrades or major repairs to existing stations.

Watch Two-year bill
AB 1482 Gabriel Requires the CEC to give preference to projects that have established expedited EV charging
permitting processes to projects under the
Clean Transportation Program.

Watch Two-year bill
Rate and Affordability Related Bills
Electric Vehicles Decarbonization
Item 1g
Attachment 2
Bill Number Bill Author Bill Summary SVCE Position Bill Status Leg Program (if position)
SB 572 Stern Directs the CEC and CPUC to work with each other, FERC, and the Public Advocates Office to
consider "additional requirements to protect
ratepayers from price spikes, stranded assets,
duplication of service, and risk of windfall
profiteering and market manipulation in
wholesale and retail markets."
Watch Two-year bill
AB 982 Villapudua Would direct the CPUC to transfer Public Purpose Programs from utility bills to the State's
General Fund. Would require a separate
appropriation of General Fund revenues to
support these programs. Would include
programs that are administered by third-parties
that are funded by ratepayers. Amended to
remove CARE and FERA.

Watch Two-year bill
SB 83 Wiener Would require an 8-week shot clock for building interconnections. CPUC to determine
compensatory damages to developers if miss
shot clocks.

Watch Two-year bill
AB 50 Wood Requires CEC to determine criteria for "timely service" for increased service or reenergization.

Watch Signed by Governor
AB 643 Berman Requires the CPUC to submit a report to the legislature before June 1st each year with
information on interconnection timelines of
customer-sited energy generation and storage
resources.

Watch Two-year bill
Interconnection Bills
Item 1g
Attachment 2
Bill Number Bill Author Bill Summary SVCE Position Bill Status Leg Program (if position)
SB 410 Becker Requires CPUC to set minimum/maximum
timelines for service connections.

Support Signed by Governor Clean, Reliable
Grid
AB 914 Friedman Exempts from CEQA the expansion or upgrade of an existing electrical substation, existing
electrical line facilities, or new electrical line
facilities under 200 KV.

Watch Two-year bill
AB 1293 Irwin Requires the CPUC to provide guidance to IOUs about prioritizing their distribution queues.

Watch Two-year bill
SB 537 Becker Would allow bodies that cover multiple cities and counties or special districts or JPAs to
continue to use pandemic-era flexibility for
Board members to teleconference into meetings
if the Board member lives more than 40 miles
from the in-person meeting location. Only
applies to appointed Boards. Revised AB 2449
rules to add immunosuppressed relative to the
"just cause" reasons for teleconferencing into a
meeting.

Watch Two-year bill
AB 557 Hart Extends AB 361 (Rivas) authorities indefinitely, but still requires a declared state of emergency.

Changes the legislative body findings vote to
every 45 days from every 30 days.

Watch Signed by Governor
SB 411 Portantino Would extend emergency teleconference provisions indefinitely and without regard to a
state of emergency only for neighborhood
councils in LA.

Watch Signed by Governor
Brown Act Bills
Item 1g
Attachment 2
Bill Number Bill Author Bill Summary SVCE Position Bill Status Leg Program (if position)
AB 817 Pacheco Allows non-decision-making subsidiary bodies like advisory boards and commissions to use
flexible pandemic-era teleconferencing rules. Watch
Two-year bill
AB 1379 Papan Would remove AB 2449 rules. Instead would require a legislative body to post agendas at a
singular physical location. Would provide the
ability to teleconference without publicly
disclosing the address or posting agendas at
remote locations. Would require at least 2
meetings a year that are in person within the
service territory. Watch
Two-year bill
AB 9 Muratsuchi Requires CARB to accelerate state GHG
reduction goal to 55% below 1990 levels by
December 31, 2030 instead of 40% below 1990
levels.

Watch Two-year bill
AB 735 Berman Would establish the High Road Utility Careers program administered by state workforce
development board to connect individuals with
careers in the utility sector. Focuses on
individuals with employment barriers.

Watch Two-year bill
SB 638 Eggman and Niello Climate Resiliency and Flood Protection Bond for $3.5 billion to repair/expand levees, $500 million
for the Delta, and $500 million for multi-benefit
flood management.

Watch Two-year bill
Miscellaneous
Item 1g
Attachment 2

Page 1 of 1 ends

Staff Report – Item 1h
Item 1h: Legislative Response to Industry Transition 2023 Ad Hoc Committee Report To: Silicon Valley Clean Energy Board of Directors
Prepared by: Yvonne Martinez Beltran, Committee Chair
Date: 11/8/2023
The Legislative Response to Industry Transition 2023 Ad Hoc Committee held its final meeting on October 30, 2023, and received a recap on the 2023 legislative session and a forecast of the 2024 legislative session from Jennifer Tannehill from Aaron Read & Associates. The Committee provided input on the draft 2024 Legislative Policy Platform and discussed updates on interconnection legislation and regulatory activities.

Item 1h

SILICON VALLEY

CLEAN ENERGY

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Staff Report – Item 1i
Item 1i: Executive Committee Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Tina Walia, Executive Committee Chair
Date: 11/8/2023
The Executive Committee met October 27, 2023 and heard discussion items from staff on proposed changes to SVCE’s GreenStart and GreenPrime offerings, an update on the Net Billing Tariff, and an update on a permit modernization and policy experimentation program rollout.

Monica Padilla, Acting CEO, introduced the first item regarding GreenStart and GreenPrime and shared the importance of ensuring SVCE staff received direction from the Executive Committee for the November board meeting to prepare for the rates discussion and decision at the December board meeting.

Maren Wenzel, Senior Manager of Energy Policy and Regulatory Analysis, and Don Bray, Director of Strategic Development, presented an overview of SVCE’s product offerings, challenges with carbon-free energy procurement in 2024, short-term options to achieve 100% clean or alternatives for both GreenStart and GreenPrime, and longer-term pathways to achieving SVCE’s mission. Staff presented potential options for both GreenStart and GreenPrime for 2024, and shared the recommended path for 2024:

GreenStart

1. Continue to seek carbon-free resources within budget parameters for calendar year 2024;

2. Approve the procurement of nuclear carbon-free resources, provided allocations from PG&E are not available;

3. If carbon-free resources are not available within budget, adjust 100% Clean goal for 2024 to current position of ~78% Clean, and
GreenPrime

1. Discontinue Green-e Certification for 2024;

2. Re-price GreenPrime premium for 2024 from $0.008/kWh to $0.012/kWh, reflecting underlying cost increases but maintaining 100% RE/CF GreenPrime as a viable alternative to GreenStart;

3. Communicate GreenPrime rate and process changes to customers in December 2023.

The Committee discussed staff’s recommendation in great depth, reviewing the options presented and providing initial feedback. The general consensus of the committee was to support staff’s recommendation for both GreenStart and GreenPrime and to present the item to the Board of Directors for consideration at the November board meeting.

Peyton Parks, Energy Services Principal, presented an implementation proposal for the net billing tariff (NBT), which was to follow PG&E’s NBT implementation model without modification for CY 2024. Staff proposed that the first 12 months of customer performance should be monitored and analyzed with the intention of making future recommendations to customize the program, and staff would return to the board in Q1 2025 with additional recommendations. The committee was supportive of staff’s plan.

Item 1i
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 1i Agenda Date: 11/8/2023

Page 2 of 2 ends

Zoe Elizabeth, Deputy Director of Decarbonization Programs and Policy, and Tony Eulo, Senior Manager of Public Sector Services, presented on the permit modernization and policy experimentation program launch, which would partner SVCE and member agencies to work toward sensible local policies and smoother local permitting through technical resources and grants. The committee was supportive of the program.

Materials from this meeting can be found on SVCE’s website: SVCE Executive Committee Meeting, October 27, 2023
The next meeting of the Executive Committee is scheduled for November 27, 2023 at 1:00 p.m.; materials will be posted no later than 72 hours in advance of the meeting.

Item 1i

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Staff Report – Item 1j
Item 1j: California Community Power Report
To: Silicon Valley Clean Energy Board of Directors
From: Girish Balachandran, CEO
Date: 11/8/2023
Per direction from the SVCE Board on December 9, 2020 for the CEO to provide a report of the ongoing activities of California Community Power (CC Power) after each of its meetings.

There is no report this month as the regularly scheduled meeting on October 18, 2023 was adjourned.

The next meeting of the board will be November 15, 2023 at 1:00 p.m.; meeting materials can be found on the CC Power website: https://cacommunitypower.org/meetings/ Item 1j
SILICON VALLEY \3/ CLEAN ENERGY

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Staff Report – Item 1k
Item 1k: Additional Committee Reports
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Andrea Pizano, Sr. Executive Assistant and Board Clerk Date: 11/8/2023
There are no reports for the 1) Finance and Administration Committee and 2) Audit Committee as they have not met since the last report.

The next meeting of the Finance and Administration Committee will be held in November, based on member availability, and the next meeting of the Audit Committee will likely be scheduled around the February timeframe to receive the financial audit results.

Item 1k

SILICON VALLEY

CLEAN ENERGY
Staff Report – Item 2
Item 2: CEO Report
To: Silicon Valley Clean Energy Board of Directors
Prepared by: Girish Balachandran, CEO
Date: 11/8/2023
Item 2
REPORT
Staff Updates
Britta Bradshaw joined SVCE October 16, 2023 as our new Power Resource Manager. Britta will be responsible for heading up the origination function for long-term clean energy and storage resources, assisting with short-to-mid-term portfolio management, supporting clean product offerings for all customers including C/I custom products, and supporting the development of SVCE’s IRP and long-term energy needs. She comes to us from PG&E where she was a Structured Energy Transactions Principal with 10 years of experience. At PG&E she led the team responsible for origination, negotiation, and execution of agreements for over 3 gigawatts of energy storage and renewable resources. Britta holds two degrees, including a Master of Environmental Management: Environmental Economics and Policy – Business and Environment Energy from Duke University Nicholas School of the Environment; and a Bachelor of Arts in Anthropology; Certificate: Environmental Studies from Princeton University.

Adam Pearse joined SVCE October 16, 2023 as our new Regulatory Analyst. Adam will be SVCE’s lead for many of the finance proceedings including Provider of Last Resort (POLR) and ERRA/PCIA, helping to ensure fair and reasonable protections for SVCE and our customers. Adam has been as an environmental litigator for the past 10 years, working at non-profits in Washington, DC, and in private firms in San Francisco. Before attending law school at Tulane University in New Orleans, Adam was an English teacher in France and then a math and science teacher in New York City, during which time he earned a Master's in Education from City College of New York.

Brett Sirianni joined SVCE as our new Information Technology Analyst on October 30, 2023. Brett will be joining the IT team at a critical time as SVCE pushes forward on strengthening our cyber security posture. Brett brings a vast skillset, wealth of knowledge and over 16 years of experience that will help us with our maturity as we continue to grow. Brett has worked in high tech, startups, small companies and in the CCA (MBCP) world. He even owned his own IT company.

Willy Wang joined SVCE November 6, 2023 as Power Resource Planner. In his role at SVCE, Willy will be responsible for monitoring CAISO regulatory proceedings and policy issues and will provide general support to the 4PRO team including assisting with monitoring and reporting on SVCE’s power resource portfolio. Willy started his energy career at Southern California Edison in 2006 working as Strategic Planning Manager overseeing complex regulatory cases. Most recently Willy worked for Bloom Energy where he managed a multinational team responsible for a portfolio of hydrogen fuel cell assets. Willy holds two degrees including an MBA from Cornell University and a Bachelor of Science in Electrical Engineering from UCLA. He is a Chartered Financial Analyst since 2010.

Personnel Officer Update
The month of October continued to be a busy one for recruitment. In addition to our four newest employees, offers have been made for the positions of Marketing Specialist and Sr. Financial Analyst. Interviews for Communications Specialist, Program Marketing Manager and Power Resources Manager are underway.

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SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 2 Agenda Date: 11/8/2023

Page 2 of 4 ends

Open positions can be found on SVCE’s website: Current Job Openings Yellow Pine Event Recap
Early this month SVCE staff joined Central Coast Community Energy and NextEra Energy Resources at a ribbon cutting event to celebrate the Yellow Pine I solar + battery storage project in Clark County, Nevada. Thank you to our Directors who attended the ribbon cutting and Chair Tyson for speaking on behalf of SVCE. This new project provides SVCE 50 megawatts of renewable electricity and 104 megawatt hours of battery, enough electricity to power 14,329 SVCE homes.

SVCE’s End-of-Year Event, Reflect & Recharge
Please join us on Wednesday, December 13th, at 4:00 p.m. at Cupertino Community Hall for SVCE’s end-of-year event, Reflect & Recharge! The event will host industry leaders to discuss the future as it relates to meeting our statewide decarbonization and clean energy goals, and will feature a discussion with our staff leadership to reflect on local impacts to date and the vision for our next stages as an agency. Please RSVP by December 1.

CEO Agreements Executed
The following agreements have been executed by the CEO, consistent with the authority delegated by the Board:
1) SMUD, Amendment: Electric Showcase Award Program Support, amended not to exceed amount $88,900 2) SMUD, Amendment: CHIIP Support, amended not to exceed amount $107,250 3) SMUD, Amendment: SMB Program Support, amended not to exceed amount $48,600 4) Aaron Read & Associates, Agreement: Lobbyist Services, not to exceed $96,000, 12/1/23 – 11/30/24 5) Peninsula Clean Energy, Amendment: Professional Services Cost Reimbursements, not to exceed $740,000
6) Kestrel, Agreement: Provide an external review of CCCFA project revenue bonds series 2023, not to exceed $22,000
7) Chapman and Cutler, LLP, Agreement: Legal services , not to exceed $175,000, 10/16/23 – 3/31/24 8) Shute Mihaly & Weinberger, Agreement: Special Counsel legal consulting services, not to exceed $99,999, 10/13/23 – 11/1/26
9) Nicole Arlette Hirsch, PhD, Agreement: Diversity, Equity & Inclusion Training, not to exceed $46,179, 11/1/23 – 11/31/24
10) Sunrun, Agreement: Technical Support Services, 10/26/23 – completion of work.

Item 2

Page 3 of 4 ends

CEO Power Supply Agreements Executed
Counterparty Name Execution/Effective Date Transaction Type Product Start Date End Date Notional Value East Bay Community Energy 10/6/2023 Purchase Resource Adequacy 6/1/2024 6/30/2024 $736,000 San Diego Gas & Electric 10/10/2023 Purchase Resource Adequacy 1/1/2024 4/30/2024 $771,750 San Diego Gas & Electric 10/10/2023 Purchase Resource Adequacy 8/1/2024 8/31/2024 $705,600 Silicon Valley Power 10/10/2023 Purchase Resource Adequacy 6/1/2024 6/30/2024 $832,000 Clean Power Alliance 10/20/2023 Purchase Resource Adequacy 3/1/2024 3/31/2024 $56,425 Clean Power Alliance 10/20/2023 Sale Resource Adequacy 3/1/2024 3/31/2024 $38,125 Calpine 10/17/2023 Purchase Resource Adequacy 7/1/2024 7/31/2024 $3,600,000 Google Energy, LLC 10/20/2023 Purchase Resource Adequacy 1/1/2024 12/31/2024 $2,821,400 These agreements are included in the Board packet as Appendix A.

Item 2
0 SILICON VALLEY

CLEAN ENERGY

Page 4 of 4 ends

Presentations & Relevant Meetings Attended by CEO
- Participated in CalCCA Monthly board, executive, and legislative meetings - 11/3: Attended CC Power ”Getting it Built Right” Workshop

ATTACHMENTS

1. Yellow Pine Event Recap

2. Clean Power Update, November 2023

3. FY23 Q4 Decarbonization Strategy and Programs Quarterly Report

4. Energy Services & Community Relations Update, November 2023

5. Regulatory and Legislative Update, November 2023

6. Agenda Look Ahead, November 2023 – March 2024
Item 2
SILICON VALLEY \3/ CLEAN ENERGY
Yellow Pine I
Wednesday, November 1, 2023
SVCE Portion
50 MW Solar Capacity
104 MWh Battery Storage
14,329 homes can be powered each
year with an average of 154,322 MWh
of electricity provided by the project
annually
32,688 metric tons of CO2 avoided
annually from the carbon-free electricity
produced*
New construction project located in Clark County, NV.

Developed by NextEra Energy. Jointly procured with Central Coast Community Energy. *Based on SVCE portion
Item 2
Attachment 1
o
Title of the
Page
Item 2
Attachment 1
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 2
Attachment 2
Clean Power Update, November 2023

SILICON VALLEY

CLEAN ENERGY
SVCE Board Meeting
November 8, 2023
CEO Report
Clean Power Update
•
•
•
•
•
•
•
•
•
•
•
•
Item 2
Attachment 2
Clean Power Update, November 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, November 2023
CD SVCE Long-Term Clean Energy Contracts
•
•
•
•
•
•
•
Item 2
Attachment 2
Clean Power Update, November 2023
0) Clean Energy Resources Online Progress
as of 10/27/2023
r i
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
p 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, November 2023
Victory Pass Solar + Storage
COD in QI 2024
Developer: Clearway
Riverside County, CA
PV: 100 MW
BESS: 25 MW
Will meet approx. 8% of
SVCE’s load
sep. 5, 2023, 12:34:47 p.m.

Desert Center CA 92239
Estados Unidos
Victory pass
5 Item 2
Attachment 2
Clean Power Update, November 2023
150 applicants for
All-Electric
Showcase
Awards.

DECARBONIZATION PROGRAMS
FY23 Q4 Milestones
Quarterly Report
267
L2 connector
installations and 10
DCFC installations
for CALeVIP.
236
completed
electrification
projects for
FutureFit Homes.

Item 2
Attachment 3

SILICON VALLEY

CLEAN ENERGY
Name Budget Potential Impact Cumulative Impact
To-Date Last Quarter (Update) Next Quarter (Target)
Electrification Rate
Discount $9.5M 5,000 customers enrolled 850 enrolled
Created tracking for enrolled
customer and setup
processes including welcome
emails and surveys
Review Phase 1 learnings
and decide on revisions.

Host focus group to learn
about customer behavior
CHIIP, including
Affordable Housing
EVI Incentives
$8.9M
25 MUDs with EVI
4,000 L1/L2 chargers at
affordable housing
22 reservations
1 completed See cumulative impact Expand enrollment
CALeVIP 1.0 $6M 85 DCFC installed
1,100 L2 installed
10 DCFC installed
267 L2 installed Closed application window DCFC and L2 projectpayments as they complete Community Energy
Resilience $5.15M 13 agencies completeprojects
13 agencies selected
a project See cumulative impact
Execute last 4 grant
agreements before 12/31/23
deadline
FutureFit Homes -
Residential
Incentives
$4.05M 750 homes fully/partially
electrified
236 homes
fully/partially
electrified
See cumulative impact. New
marketing videos also
released.

Expecting increase in
rebates paid as summer
projects finalize
Decarbonization
Demonstration
Grants
$3.2M 8 local public facing
electric projects 1 project complete See cumulative impact. Allgrant agreements executed.

Continue project work,
demonstrate value of
completed project and
share lessons
FutureFit
Fundamentals
Contractor Training
$1.7M 300 contractors trained
500 graduate incentives
104 contractors
completed training
See cumulative impact.

Program connected to
FutureFit Homes. Program
materials updated.

Working on new graduate
bonus
Electric Showcase
Awards 2.0 $1.5M
Highlight building
electrification success
stories
150 applications,
16 winners,
$95,000 awarded
See cumulative impact
Promote winners, present
to local councils and tour
two of the winning homes
FutureFit Homes
and Buildings: C&I
and SMB Incentives
$1.25M 20-30 SMBs electrified In progress
Building electrification
rebates launched for small
and medium business
customers in July
Continue program roll out
Customer Resource
Center (eHub) $1.1M 1.5M email opens250K unique web visits

1.4M email opens,
262K web visits, 206
rebate claims
See cumulative impact
100K email opens, 10K web
visits, 100 rebate claims,
launch induction cooktop
promo

PROGRAMS PORTFOLIO
Active Programs
See Glossary for program descriptions. Title links to program homepage (if available).

Quarterly Report
View our active rebates here. 1
FY23 Q4
Item 2
Attachment 3

SILICON VALLEY

CLEAN ENERGY
Name Budget Potential Impact Cumulative
Impact To-Date Last Quarter (Update) Next Quarter (Target) Priority Zone DC
Fast Charger
(PZDCFC) 2.0
$875K 10 DCFC installations
near MUD hotspots
4 DFCF sites with
10 100+ kW ports See cumulative impact Monitor site constructionprogress and milestones FutureFit Assist $725K
60 assessments
36 projects done
250 ports
52 applications See cumulative impact Expand enrollment GridShift EV
Charging $600K
Bill/emissions savings
and load shifting
capacity
1,184 EVs
enrolled
31 rebates
Launched August sign-up
incentive & marketing efforts
(direct mail, email, DMV ads)
Launch ongoing sign-up
incentive & referrals
Reach Codes

2.0 $600K
Require all new
buildings to be
emissions-free
12 agencies adopt
electrification
ordinances
Ninth Circuit’s Berkeley
decision stalled progress
Monitor and support agencies
as the legal case evolves
Decarbonization
Engagement
Grants
$442K
5 communities
engage residents on
climate action topics
In progress 5 communities executed
agreements
Work to complete projects,
share during MAWG meetings
Fleet
Electrification $300K
Complete for 5
member agency and
5 SMB fleets
In progress 5 agencies in process to
complete electrification plans
Solicit additional participants,
and work with 5 enrolled
agencies to complete plans
SV
Transportation
Electrification
Clearinghouse
$150K
Create cohort to
enable equitable
electrification.

In progress
Planned to host a stakeholder
meeting on MF EV charging
opportunities
Conduct relaunch to assess how
to increase impact
Lights On
Silicon Valley
Power
Supply
Budget
750 SFH and 5 MF
completed 581 enrolled SFH Sunrun continued to enroll andinstall customers Construction to complete,
delivery will begin

PROGRAMS PORTFOLIO
Active Programs
View our active rebates here. 2
FY23 Q4
Item 2
Attachment 3
©

SILICONVALLEY

CLEAN ENERGY
Name Budget Potential Impact Last Quarter (Update) Next Quarter (Target) Multifamily Direct
Install (TE and BE) $12.5M 300 to 1,000 MF AH unitselectrified RFP released Evaluate proposals, select winner Permit
Modernization $3.2M 13 member agencies improveelectrification permitting Program design completed Release to member agencies Tariffed On Bill
(TOB) Financing $3M 500 to 1,000 customers financeelectrification CPUC decision received which
outlines path for IOUs to develop
TOB proposals based on SVCE’s
Working group develops TOB
proposals and evaluates next steps
with TECH
Existing Building
Policy Experiment $1.9M
Spur action on building
electrification and reduce building
gas combustion
Program design completed Release to member agencies
FutureFit Homes
Concierge $892K
3,600 customers use hotline, 1,200
use tech assistance, 350 use
electrification plans
Worked with vendor on
implementation plan and tech
requirements
Develop webpage, train vendor on
SVCE programs, and prepare for
launch
Feasibility
Assessment,
Natural Gas Phase
Out
$300K Complete study that informs local,
regional, and statewide policies
Developed SPW for phase 1
analysis Hire contractor and kickoff work
SV Building
Electrification
Strategic Taskforce
$150K Educate stakeholders about
building electrification
Completed program design and
joined 2 workforce coordination
efforts
Map stakeholders, list feedback
received on workforce, housing, and
LMI building electrification issues

PROGRAMS PORTFOLIO
Planning
View our active rebates here.

Name Budget Summary
Innovation Onramp $2.4M 10 pilots complete. The final pilot from 2021 with NeoCharge was completed in May 2023. Future program pathway is being determined. $1.2M budget remaining.

FutureFit Homes Heat Pump Water
Heater $1.5M Program closed in December 2022. Active applications were transitioned to FutureFit HomesIncentives program.

Reach Codes 2019 $400K Reach Codes 2019 were adopted by 12 of 13 member agencies. Several agencies updated Reach Codes in the 2022 code cycle.

Medical Battery Program $200K All 50 batteries are claimed by customers who require electricity for medical devices and are at high risk of power outages.

Closed/Inactive
3 FY23 Q4
Item 2
Attachment 3

SILICON VALLEY

CLEAN ENERGY
10/2
1 /2
12/2
1/23
2/23
3/23
4/23
5/23
6/23
7/23
8/23
9/23
1,500
1,000
500
0 Rebates claimed:

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
0 100 200 300 400
HPWH

HP HVAC
Panel Upgrades
Pre-wiring
Meter Removals
Funds Reserved:

Approved Reservations:

Goal:

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 (CHIIP)
Number of Reservations
PROGRAMS HIGHLIGHTS FY23 Q4
4 $1.35M
$611K
22 $824K
35 Sites, 150 ports
Rebates reserved:

Item 2
Attachment 3
SILICON VALLEY <3/ CLEAN ENERGY
CALeVIP
Level 2 DCFC
8 6
4 2
0 1 /21
1/23/25/2
7/29/2
1 /2
1/23
3/23
5/23
7/23
9/23
200
150
100
50 0
Reserved
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
104
Remaining Funds
Registrations
197
$5.9M
$1.1M $700K
$1.8M
$2.7M
$6M
$4M
$2M
5 PROGRAMS HIGHLIGHTS FY23 Q4
Item 2
Attachment 3
***** ***** ***** ***** *****
e es
>J'J>¥¥¥>¥>¥>¥>*
1/23/25/2
7/29/2
1 /2
1/23
3/23
5/23
7/23
9/23
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
7/23
8/23
300,000
200,000
100,000
0 GridShift EV Charging
Managed EV charging app that optimizes charging
to reduce associated costs and emissions.

Charger Rebates Reserved: 31
Number of Enrolled EVs
1,184
Rebate Goal: $30K
Goal: 120 EV Chargers
eHub Report
Online customer resource center to enable
engagement, education and action related to clean
electricity, EVs and home electrification.
= 1 email campaign completed
262,219
24,083
Unique Visits Return Visits
FY 22-23
6 PROGRAMS HIGHLIGHTS FY23 Q4
Website Visit Goal:

Reach 250K Unique Visitors
Conduct 10 email campaigns
Email Goal:

Item 2
Attachment 3

A A A A A A A A
AiAAAA A A A

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Built Environment
Community Energy Resilience: Resources (grants) and tools for member agencies to increase individual and collective capacity to adapt to future power outages.

Electric Showcase Awards 2.0: Award program to recognize residential, commercial, and non-profits who are early adopters of existing building electrification.

Decarbonization Demonstration Grants: Grants to encourage member agencies and other key groups an opportunity to electrify their facilities. Focus on projects with public visibility for education/awareness purposes.

Decarbonization Engagement Grants: Grants for member agencies and other key groups to work on smaller electrification engagement initiatives to engage their communities.

Electrification Rate Discount: Custom rate to promote building electrification.

Existing Building Policy Experimentation: Assess and support potential policy levers that member agencies can explore to mitigate emissions from existing buildings.

Feasibility Assessment of Natural Gas Phase Out by 2045: Feasibility study to identify technical, legal, and economic barriers and opportunities for phasing out natural gas service by 2045 in SVCE's service territory.

FutureFit Fundamentals Contractor Training: Training and financial incentive program for contractors to expand their knowledge and installation of electrification technologies.

FutureFit Homes - Concierge: Comprehensive one-on-one phone or web assistance to SVCE customers to assist them in applying for electrification incentives, technical assistance, or developing a whole-home electrification plan.

FutureFit Homes - Residential Incentives: Incentives for various building electrification technologies for single- and small multi-family residential customers. Includes major appliances as well as eventual gas meter removal.

FutureFit Homes and Buildings - C&I Incentives: Incentives for demonstration projects at a handful of small and medium business properties.

Multifamily BE Direct Install: Comprehensive building electrification retrofits with a direct installer for multifamily affordable housing sites.

Permit Modernization: Benchmark and streamline member agency permitting and inspection processes to identify barriers and opportunities to electrification.

Reach Codes 2.0: Provide model building energy codes supportive of all-electric design and EV infrastructure to member agencies along with consultant support. 7 GLOSSARY FY23 Q4
Item 2
Attachment 3
©

SILICONVALLEY

CLEAN ENERGY
CALeVIP 1.0: Incentives for L2 and DCFC publicly-accessible EV chargers funded by California Energy Commission and SVCE as part of a regional collaboration.

CHIIP: Incentive program for L1 and L2 EV charging at hard-to-reach multifamily properties.

Fleet Electrification Program: Competitive application for SVCE’s fleet electrification planning support and funding for site upgrades targeting a broad set of fleet types.

FutureFit Assist: Technical assistance for preliminary site design and pertinent rebates for charging at multifamily housing and small and medium workplace properties.

Multifamily TE Direct Install: Comprehensive transportation electrification retrofits with a direct installer for multifamily affordable housing sites.

Priority Zone DC Fast Charger (PZDCFC) 2.0: Competitive grant application for DCFC installations in “priority zones” that support designated multifamily housing clusters.

SVTEC: Regular regional stakeholder meetings focused on information sharing, solving critical issues, and attracting external funding to the SVCE community in support of EV infrastructure deployment.

GLOSSARY
Lights On Silicon Valley: Provide incentives for enrolling solar and battery systems in the SVCE grid services program.

Medical Battery Program: Pilot program to deploy ~50 portable batteries to qualified customers who rely on power for medical equipment.

Customer Resource Center (eHub): Online customer resource center and marketplace to enable engagement, education, and action related to clean electricity, EVs, and home electrification.

Mobility
Power Supply
Education & Outreach
Built Environment
SVBEST: Regular regional stakeholder convenings to coordinate program alignment across building decarbonization workstreams.

Tariffed On Bill (TOB) Financing: Equitable financing pilot program for electrification for low-moderate income residents focusing cost recovery through on-bill charges that are lower than bill savings.

GridShift EV Charging: Managed EV charging phone app that optimizes charging to reduce associated costs and emissions. Includes incentives for reducing grid peak demand.

Grid Integration
8 FY23 Q4
Item 2
Attachment 3
©

SILICONVALLEY

CLEAN ENERGY
1 1. Outreach Events & Sponsorships
Date Sponsorship Location
11/4/2023 Wineries of Santa Clara
Valley Association Vine-to-Wine
1:00 p.m. – 7:00 p.m.

Sponsorship and tabling
Mountain Winery
14831 Pierce Road
Saratoga, CA 95070
11/13/2023 Heat Pump Summit
8:30 a.m. – 6:30 p.m.

Sponsorship and tabling
UC Berkeley - Pauley Ballroom Expo Hall
MLK Student Union, 2495 Bancroft Way,
Berkeley, CA 94720
11/26/2023 Festival of Lights Parade
6:00 p.m. – 8:00 p.m.

Sponsorship
Downtown Los Altos, 1st & State St.

Los Altos, CA 94022
12/2/2023 Los Gatos Parade (tentative)
11:00 a.m.

SVCE truck in parade
Downtown Los Gatos, Almendra Ave. at North Santa Cruz Ave.

Los Gatos, CA 95030
12/8/2023 Assemblymember Low Holiday Open
House (tentative)
Time TBD
Staff attendance and tabling
Location TBD
Item 2
Attachment 4
ESCR Update, November 2023
2 Outreach Events, cont’d.

SVCE sponsored the inaugural La Ofrenda
Festival in Gilroy and created an altar to honor
climate and clean energy pioneers that was on
display all of October.

We created a blog post with more information
about who we’re remembering on our ofrenda.
https://svcleanenergy.org/2023/09/28/gilroy-la-ofrenda-festival/ Item 2
Attachment 4
ESCR Update, November 2023
3 Participation Rate
Overall Participation
Rate
Residential 96.31%

96.35%
Commercial 96.76%

2. Customer Participation
Item 2
Attachment 4
ESCR Update, November 2023

SILICON VALLEY

CLEAN ENERGY
4 3. SVCE’s Electrification Discount Rate (E-ELEC)
Key Stats
• Enrollment recently surpassed 930 customers
• Average generation discount savings of 13% ($14/mo)
• Approximately 1/3 of participants live in low-to-moderate income areas • Nearly 5% of participants are CARE/FERA customers who are saving a combined 33% discount off monthly electric bills
What is it?
• SVCE pre-funded a multi-year discount on the E-ELEC rate to help reduce bill impacts of electrification
• Available to customers owning a heat pump space/water heater, EV, or battery
• Now open to NEM customers
Item 2
Attachment 4
ESCR Update, November 2023
5 Purpose of Promotion:

Encourage customers to learn
about electrification and upgrade
their appliances to electric.

Promotion Details: Customers
can get $50 off induction cooktops
through the Appliances Assistant.

4. Induction Cooktop Promotion
Launched October 25, closes February 29
Item 2
Attachment 4
ESCR Update, November 2023
Magnetic Cookware
Ceramic Top Plate
Magnetic Field
Power Coil

SILICON VALLEY

CLEAN ENERGY HOW IT
WORKS
$50 OFF INDUCTION

COOKTOPS
Visit appliances.svcleanenergy.org
G®

ELECTRIC
6 5. Education Fund Now Open
Now accepting Education Fund applications through January 19, 2024.

Changes to the 2023 Education Fund
• Now open to elementary and middle schoolers alongside the usual high school and community college students
• Outreach and application materials now available in four languages: English, Spanish, Traditional Chinese, Vietnamese • Applications open for four months instead of two
Sharing with your community
• Social media posts and newsletter
• In-person promotion at community events
• PeachJar school advertising reaching ~100
elementary and middle schools
Item 2
Attachment 4
ESCR Update, November 2023
7 The most recent MAWG meeting was held on October 26, 2023, and was attended by 10 different agencies and organizations with a total of 24 participants.

The following agenda items were presented and discussed:
• SVCE Decarbonization Grant Project Spotlight: Vargas Elementary School • EV Charger Maintenance Discussion
• Member Agency Grant Support Discussion
• BayREN Public Programs

6. Member Agency Working Group –
October Update
Item 2
Attachment 4
ESCR Update, November 2023
8 7. Press Releases & Media
Press Releases
• $80,000 in Grants Available Through the Silicon Valley Clean Energy Education Fund, Press Release, 10-19-23
Media
• Honors, happenings, opportunities, comings and goings — Sept. 2023, The Jewish News of Northern California, 09-28-23
• Inside 40+ Bay Area homes that have gone electric, The Almanac, 09-29-23 • Home briefs: Classic Eichlers, electric homes, historic orchard all open for tours in October, The Almanac, 10-03-23
• Cupertino home is a Silicon Valley Clean Energy showcase, East Bay Times, 10-08-23 • Milpitas salon is a Silicon Valley Clean Energy showcase, The Mercury News, 10-08-23 Item 2
Attachment 4
ESCR Update, November 2023
9 7. Press Releases & Media
• Sunnyvale households are Silicon Valley Clean Energy showcases, The Mercury News, 10-08-23
• Electric Home Tour -- What were your takeaways?, Mountain View Voice, 10-15-23
• Campbell households are Silicon Valley Clean Energy showcases, The Mercury News, 10-15-23
• Saratoga home is a Silicon Valley Clean Energy showcase, The Mercury News, 10-15-23
• Los Gatos home is a Silicon Valley Clean Energy showcase, The Mercury News, 10-22-23
Item 2
Attachment 4
ESCR Update, November 2023
Sbe/RerruryNotus
Campbell households are Silicon Valley Clean Energy showcases Santa Clara Board of Supervisors recognizes award winners • Subtitle
New SV Clean Energy
PowerPoint Template
Item 2
Attachment 5
Leg/Reg Update, November 2023
November 8, 2023

SILICON VALLEY

CLEAN ENERGY
SVCE Legislative and
Regulatory Update
Item 2
Attachment 5
Leg/Reg Update, November 2023
CD Policy Updates
Regulatory Update:

1. Review of CPUC's Net Billing Tariff (NEM 3.0)
Decision

2. High DER Proceeding
Legislative Update:

1. SVCE Legislative Positions
2 Item 2
Attachment 5
Leg/Reg Update, November 2023
Regulatory
Update
Item 2
Attachment 5
Leg/Reg Update, November 2023
Key Regulatory Activities
Activity Purpose Status
Integrated Resource
Planning
R.20-05-003
"Umbrella proceeding" to
ensure that collectively the
CPUC jurisdictional LSEs are
on track to meet the state's
reliability and clean energy
goals.

On October 5th, a ruling was issued seeking comment on the proposed Preferred System Plan and Transmission Planning Process (TPP) portfolios. The CPUC is proposing that the CAISO use the 25 MMT scenario based on the individual LSE IRP plans as the base case scenario. A second sensitivity studying the impact of gas retirements is also proposed.

Additionally, the ruling seeks feedback on recent Petitions for Modification (PFM) to the Mid-term Reliability (MTR) order. Most notably is the request by California Energy Storage Alliance (CESA) and others for an additional extension for the long-lead time resources, such as geothermal and long duration energy storage. The ruling suggests that if the PFM is granted, there will likely be an additional 2,000 MW of capacity ordered to be online by 2028.

SVCE is actively engaged with CaICCA in drafting comments on the ruling, which are due November 13, 2023.
4 Item 2
Attachment 5
Leg/Reg Update, November 2023
Key Regulatory Activities
Activity Purpose Status
Decision Conditionally
Approving Extended
Operations at Diablo
Canyon Nuclear Power
Plant, Pursuant to
Senate Bill 846
R.23-01-007
CPUC process to determine
monitoring of the Diablo
Canyon Power Plant
extension, including cost
and benefit allocations.

On October 26th, the CPUC issued a proposed decision (PD) related to the extension of Diablo Canyon Power Plant (DCPP). Key topics included allocation of the costs and benefits from DCPP. If adopted as written, PG&E would be obligated to allocate both the RA and GHG-free attributes from DCPP to all CPUC jurisdictional ratepayers -in Northern and Southern California -for the plant’s extended operations.

At the time of writing, SVCE staff is still reviewing the PD, however, expects to generally support the decision as written. Comments on the PD are due in mid¬ November.
5 Item 2
Attachment 5
Leg/Reg Update, November 2023
Legislative
Update
6 Item 2
Attachment 5
Leg/Reg Update, November 2023
CD SVCE Positions
Status of the bills that SVCE has taken positions on
Bill Summary Legislative Platform
Policy
SVCE
Position
Bill Status
AB 625
(Aguiar-Curry)
Extends sunset date of the
BioMAT program
Competitive Equity Support Died -two-year bill
SB 488
(Alvarado-Gil)
Allows CCAs to participate in the
BioRAM program.

Competitive Equity Support Died -two-year bill
SB 410
(Becker)
Reporting, timelines, and
stakeholder group for
distribution-level interconnection.

Clean, Reliable Grid Support Signed into law
SB 527 (Min) Requires CPUC to establish a
Neighborhood Decarb Program.

Climate Mitigation/Fuel
Switching
Support Died -two-year bill
AB 593
(Haney)
Directs CEC to create a
statewide building decarb
strategy
Climate Mitigation/Fuel
Switching
Support Died -two-year bill
7 Item 2
Attachment 5
Leg/Reg Update, November 2023
(D SVCE Positions
Status of the bills that SVCE has taken positions on
Bill Summary Legislative
Platform Policy
SVCE Position Bill Status
AB 1393
(Garcia)
Governor’s energy reliability
proposal.

Competitive Equity Neutral Signed into law
8 •
•
•
•
•
•
•
•
•
•
•
Item 2
Attachment 5
Leg/Reg Update, November 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—Budgetbill 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
November 2023 - March 2024
November 2023 December 2023 January 2024 February 2024 March 2024 Board of Directors, November 8: Special Meeting: SVCE End-of-the-Year Event, December 13, 4pm
Board of Directors, December 13:

Consent:

Minutes
October 2023 Treasurer Report
Program Admin Consultant Agreement
Multifamily Direct Install Program Agreement
Data Analytics Support Agreements
Program Application/Portfolio Tool Development
Agreement
Committee Reports
Regular Calendar:

Rate Change
CC Power PPA (tentative)
MRP/Gas Peaker Community Investment Policy
Annual Customer Survey Results
Board Elections Update
Board of Directors, January 10:

Consent:

Minutes
November 2023 Treasurer Report
Scheduling Coordinator Services Agreement
Battery Energy Storage System Optimization
Software Agreement
Committee Reports
Regular Calendar:

Chair and Vice Chair Appointment
Executive Committee Membership Selection
Board of Directors, February 14:

Consent:

Minutes
December 2023 Treasurer Report
Update to Exhibits C and D of the SVCE JPA
Committee Reports
Regular Calendar:

Committee Selections - 2024
SVCE’s Load Management Standards
Compliance Plan Preview
Board of Directors, March 13:

Consent:

Minutes
January 2024 Treasurer Report
Committee Reports
Regular Calendar:

Mid-Year Budget
Audited Financial Statements
Approve SVCE's Load Management
Standards Compliance Plan Preview
Executive Committee, Nov. 27 (will be a
combined meeting with Nov./December):

MRP/Gas Peaker Community Investment Policy
Introduction to SVCE's Load Management
Standards Compliance Plan Obligation
Board Elections Update
Program Snapshot
Executive Committee: CANCELLED Executive Committee, TBD (tentatively scheduled for Jan. 26):

Appointment of Committee Chair and Vice Chair
Establish regular meeting schedule
Executive Committee, TBD (tentatively
scheduled for Feb. 23):

TBD
Executive Committee, TBD (tentatively
scheduled for March 22):

TBD
Finance & Admin Committee, TBD:

Rate Change Discussion
11/2/23
Item 2
Attachment 6

Page 1 of 2 ends

Staff Report – Item 3
Item 3: Approve 2024 Legislative Policy Platform and Identify Focus Areas for the 2024 Legislative Ad Hoc Committee
From: Girish Balachandran, CEO
Prepared by: Bena Chang, Director of Government and Legislative Affairs Date: 11/8/2023

RECOMMENDATION
Staff recommends that the SVCE Board of Directors vote to approve:

1. A Policy Platform for 2024; and

2. Establish an Ad Hoc Committee of the Board to Address Legislative Responses to Industry Transition (“Ad Hoc Committee”) for 2024; and adopt specific focus areas for the Committee so that SVCE can continue to strengthen our advocacy and improve our legislative outcomes.

BACKGROUND
Policy Platform
In December 2022, the Board approved the SVCE’s Policy Platform. The Policy Platform contains principles on policies. Staff then implements the Platform by weighing in on legislation that aligns with the principles in the Policy Platform. This process allows SVCE to act in a timely manner to state and federal legislation.

Ad Hoc Committee of the Board to Address Legislative Responses to Industry Transition In 2018, SVCE established an Ad Hoc Committee to improve SVCE’s advocacy and outcomes by increasing engagement between SVCE staff and those Board members most interested in legislative matters. Subsequent Ad Hoc Committees were established every year to review the upcoming year’s legislative matters. In 2023, the Ad Hoc Committee met in March, June and October, and the Committee expires at the end of 2023.

Staff requests that an Ad Hoc Committee be established to review legislative matters for 2024.

ANALYSIS & DISCUSSION
Policy Platform
California’s energy landscape continues to evolve rapidly. As a result, it is critical that SVCE actively engage legislators to ensure policies support SVCE customers and allow us to meet our short and long-term goals.

The Policy Platform presents a framework for focusing SVCE resources on the policies and issues that most impact the agency and our member communities. The 2024 Policy Platform includes guiding principles and example policies. The key policies include: 1) Affordability and Rates, 2) Climate Mitigation/Fuel Switching, 3) Clean, Reliable Grid, and 4) Competitive Equity/Do No Harm, 5) Health Impact/Safety, and 6) Equity. Details on policy areas can be found in the attached Policy Platform.

Item 3
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 3 Agenda Date: 11/8/2023

Page 2 of 2 ends

Ad Hoc Committee of the Board to Address Legislative and Regulatory Responses to Industry Transition In 2024, anticipated activities of the Committee include:
➢ General advocacy strategy development for state and federal activities. ➢ Feedback on priorities for legislation and the state budget. ➢ Advocacy on key legislation.

Staff recommends the following policy areas for 2024:

1. Affordability & Rates,

2. Climate Change Mitigation/Fuel Switching,

3. Clean, Reliable Grid,

4. Competitive Equity/Do No Harm,

5. Health Impact/Safety, and

6. Equity.

SVCE staff encourage all Board members with an interest in legislative activities to consider joining the Committee, with the understanding that Committee membership involves additional time on top of regular Board duties. Appointment for this committee will occur at the February 14, 2024 board meeting.

STRATEGIC PLAN
Approving the Policy Platform, establishing a 2024 Ad Hoc Committee and approving the Committee Focus Areas for 2024 directly supports Goal 16 of the Strategic Plan to “Support legislation which advances SVCE's mission to reduce dependence on fossil fuels by supporting the development of a low carbon, affordable, and reliable electric system while simultaneously advancing economy-wide decarbonization.”

ALTERNATIVE
If the Board does not establish an Ad Hoc Committee for 2024, SVCE staff will need to a) find alternative ways of including the Board in SVCE’s policy advocacy, or b) conduct SVCE’s 2024 legislative activities with less involvement of the Board. The former is likely to be more logistically complicated than establishing an Ad Hoc Committee and may increase email/communications traffic for the entire Board. The latter, given the high regard for local elected voices in Sacramento, is likely to make SVCE’s advocacy significantly less effective.

FISCAL IMPACT
Approval of the 2024 Policy Platform and establishing an Ad Hoc Committee for 2024 is not expected to have any fiscal impact on SVCE.

ATTACHMENTS

1. 2024 Legislative Policy Platform
Item 3
2024 Silicon Valley Clean Energy Legislative Policy Platform Purpose
Active participation in the state and federal legislative processes is an important tool for ensuring that SVCE can continue to serve our customers and uphold our commitment to decarbonization. When Congress and the California legislature are in session, it is crucial that SVCE staff be able to quickly and efficiently determine SVCE’s positions on bills or amendments, communicate those positions to legislators, and advocate as appropriate. This platform is therefore designed to:
• Articulate SVCE’s legislative priorities for the 2024 legislative session and beyond;
• Allow SVCE staff to take positions on bills for SVCE without explicit Board approval as long as they are consistent with this platform; and • Guide optimal use of SVCE advocacy time and resources.

Process
SVCE will review the policy platform at the conclusion of the previous year’s legislative session. The purpose of the review will be to discuss the outcomes of that year’s legislative session, develop goals and priorities for the upcoming session for the following year, and identify any desired updates to this policy platform.

Updates to the platform will be drafted by SVCE staff and formally presented for a vote of the Board.

Policy Platform
Affordability & Rates
SVCE supports affordable rates that are competitively priced, enable high valued services to SVCE customers, and support cost-of-service that includes funds needed to cover operations, meet reserve targets, and fund decarbonization programs. - Policy Examples:
o Support policies that minimize the cost of service and don’t add unnecessary costs so SVCE can deliver more affordable electricity to customers to promote electrification.
o Advocate for Provider of Last Resort fees that appropriately factor in the risk of LSE failure.
o Support rate structures that encourage electrification. o Advocate for rate reform so programs like wildfire mitigation and public purpose programs are funded outside of rates.

Item 3
Attachment 1
Climate Change Mitigation/Fuel Switching
- SVCE supports funding, projects, and programs to decarbonize the economy, especially in the electric, building, and transportation sectors. SVCE seeks opportunities to amplify the learnings from our programs through regional, state, and federal levels both through policy and funding. We support efforts to remove barriers to fuel switching/decarbonization.
- Policy Examples:
o Understand and advocate for funding opportunities to support clean energy and climate change mitigation, including the Federal Inflation Reduction Act. Support local administration/control of program dollars as appropriate.
o Support efforts to transition buildings to electric, including removing the obligation to serve gas requirement, efforts to modernize permitting, and financing models.
o Support efforts to encourage overall energy efficiency and conservation.
o Support funding for EV charging infrastructure, and maintenance.

Ensure EV policies are technology neutral and advocate for affordable EV charging access.
o Advocate for the fair valuation of resources, including capturing the value of demand-side resources better in the CAISO.
o Advocate for increased funding for clean energy workforce training and investments to reduce fossil fuel damage in low-income communities. o Support efforts to decarbonize industrial uses and processes, including reducing the use of baseload fuel cells that use natural gas. o Support industry practices in evolving to develop robust supply chains for all-electric technologies to prepare for future widespread electrification.
o Support a climate bond that invests in decarbonizing the transportation, housing, and the electricity sectors.

Clean, Reliable Grid
- SVCE supports investments in, and removal of barriers to, building transmission to connect renewable projects that enable the transition to a cleaner grid. SVCE supports a reliable electric system, including the smart build out of the distribution grid to prepare for increased electrification without delays.
- Policy Examples:
o Support investments in transmission and distribution grid upgrades and efforts to reduce interconnection barriers and distribution grid failures, including addressing permitting challenges, better Item 3
Attachment 1
communications between IOUs and local governments, and increased transparency of the distribution planning process at the IOU level. o Support efforts to ease supply chain constraints and get renewable projects online faster.
o Advocate for investments that increase the reliability of the electric system including encouraging carbon-free sources like nuclear, wind, and geothermal while recognizing the role of fossil fuels with the transition to renewables.
o Ensure that penalties increase the production of renewables instead of simply raising the floor price of energy in the market. o Support efforts to explore regionalization to get a cleaner, more reliable grid.
o Support innovative approaches to enhance grid reliability during peak events, such as behind-the-meter stationary sources (batteries), Virtual Power Plants, and vehicle-to-grid initiatives.

Competitive Equity/Do No Harm
- SVCE supports the CCA model of local government governance, while acknowledging system-wide needs. Any system needs should give maximum flexibility to allow local authority and discretion to meet goals. - Policy Examples:
o Advocate for fair and equitable exit fees that prevent cost-shifting among customers.
o Engage in conversations about the role of a Central Procurement Entity that preserves CCA’s responsibility to procure energy while finding a system that maximizes cost efficiency and reliability.
o Advocate for flexible Brown Act requirements that allow remote access for board members.
o Advocate for goal-based procurement instead of prescriptive, technology-specific mandates.
o Ensure that local governments that are first movers on reach code adoption are not penalized through incentive programs that only fund projects that go beyond local and state codes.
o Advocate for IOU restructuring to more closely align business interests and incentives with customer interests, including potential IOU exit from generation services.
o Advocate for increased visibility into the distribution grid and an open access platform to provide clear information and signals about where Distribute Energy Resource buildout is optimal.

Health Impact/Safety
Item 3
Attachment 1
- SVCE supports policies that increase the safety of the electric infrastructure and the community.
- Policy Examples:
o SVCE recognizes the harmful health impacts of methane gas and gasoline and seeks to decarbonize buildings and transportation to address these impacts.
o Supports efforts to increase the safety of the distribution and transmission infrastructure.

Equity
- SVCE supports policies that consider equitable treatment of low-income and historically underserved communities through affordable electricity rates and priority access to decarbonization and climate mitigation programs. - Policy Examples:
o Support programs that invest in low-income and historically disadvantaged communities either through separate tracks that dedicate funding to or that give deeper levels of subsidies for these groups.
o Support tenant access to the benefits of decarbonization programs and tenant protections.
o Support efforts to repeal Proposition 209, which limits public agencies’ ability to engage on equity efforts.
o Support inclusive definitions of low-income and historically underserved communities that capture all communities and not just certain census tracts.

Item 3
Attachment 1

Page 1 of 6 ends

Staff Report – Item 4
Item 4: Authorize the Chief Executive Officer to Make Changes to the GreenStart and GreenPrime Retail Rate Offerings
From:

Prepared by:

Girish Balachandran, CEO
Monica Padilla, COO & Director of Power Resources
Don Bray, Director of Strategic Development
Maren Wenzel, Sr. Manager of Energy Policy & Regulatory Analysis Date: 11/8/2023

RECOMMENDATION
Authorize the Chief Executive Officer (“CEO”) to make changes to Silicon Valley Clean Energy’s (SVCE) two retail rate products, GreenStart and GreenPrime, starting in 2024 as follows:
1) Approve purchase of carbon free attributes from nuclear power sources to help increase SVCE’s reportable clean energy for 2024 for the GreenStart product and direct staff to only purchase nuclear attributes if sufficient attributes can be found to provide the portfolio with 100% carbon-free energy; 2) Authorize the CEO to reduce the clean energy target for GreenStart in the case that clean energy attributes are not available within the approved FY 2024 budget parameters; 3) Remove requirement that GreenPrime energy be sourced by Green-e certified Renewable Energy Credits (REC); and
4) Increase cost premium for GreenPrime from 0.8 cents per kilowatt hour (kWh) to 1.2 cents/kWh.

The above changes are proposed for calendar year 2024. Staff intends to return to the Board by mid-2024 with a broader discussion on SVCE’s pathway towards meeting long-term 100% clean requirements and any additional changes necessary to SVCE’s product offerings.

EXECUTIVE COMMITTEE RECOMMENDATION
At the October 27, 2023 Executive Committee meeting, staff led a discussion about the challenges of meeting GreenStart and GreenPrime and alignment needed to SVCE’s product offerings given such challenges and California’s ambitious goals to achieve 100% carbon neutral in the electricity sector by 2045. Staff presented recommended changes to both product offerings and laid out several alternatives. The Executive Committee was supportive of the modifications presented by staff as reflected in the recommendation via this staff report to the Board. Further, the Executive Committee recognizes the challenges in balancing SVCE’s mission in an affordable and sustainable way and supports a broader discussion on future product offerings.

BACKGROUND
SVCE offers two standard rate products for its customers, GreenStart and GreenPrime. SVCE currently procures its carbon-free energy needs for the GreenStart product via large-hydro and both short-term and long-term Renewable Portfolio Standard (RPS) eligible resources such as wind and solar. Today, through the Power Cost Indifference Adjustor (PCIA) mechanism and related Voluntary Allocation/ Market Offer (VAMO) process, a portion of SVCE’s clean portfolio is also met with allocated legacy PG&E resources, including both RPS, large hydro electricity and nuclear from the Diablo Canyon Nuclear Power Plant. GreenStart sales volume in 2023, represents approximately 90% of SVCE’s overall load.

SVCE’s GreenPrime is comprised of 100% renewable energy. The product is backed by ‘Green-e Certified’ RECs which are verified voluntary RECs from newer built projects. GreenPrime sales volume in 2023 is 190 GWh, approximately 5% of SVCE’s overall load1. Half of this annual volume is purchased by SVCE’s member agencies 1 The remainder of SVCE load is served by the GreenPrime Direct product, reserved for specific large C&I customers.

Item 4
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 4 Agenda Date: 11/8/2023

Page 2 of 6 ends

to serve municipal load, demonstrate community leadership, and maximize GHG reduction. Another ~45% of GreenPrime volume is purchased by large commercial customers, to demonstrate their commitment to renewables and satisfy requirements of voluntary programs such as the US Environmental Protection Agency’s prestigious ‘Green Power Partnership’ program, and the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) program for construction of green buildings. The remaining 5% of GreenPrime load serves approximately 2,000 residential customers who have ‘opted up’ to receive 100% renewable energy.

Since SVCE’s launch, GreenPrime customers have paid a premium of 0.8 cents per kWh for the product (8/10ths of a cent). Prior to this year, this amount generally covered the incremental cost to SVCE of GreenPrime supply.

Historically, roughly 50% of the GreenStart product is sourced from RPS resources from both long-term Power Purchase Agreements (PPAs) and short-term RPS products with the balance coming from carbon-free energy.

The market prices for carbon-free energy have increased dramatically due to the increased demand from corporate buyers, poor hydro conditions in the Pacific Northwest, and increasing climate targets in both California the Pacific Northwest. Carbon-free prices have increased by approximately 15x since SVCE’s inception in 2017 to today rising from $1.75 per MWh to $25 per MWh. Carbon-free procurement costs were $4.1 million in 2017 and if the same volumes were procured today the costs could be up to $58.5 million.

Both GreenStart and GreenPrime rely on RPS products. RPS prices have also seen dramatic increases over the past year, largely due to increased demand from corporate buyers, on-going delays for new projects, and the end of a RPS Compliance Period Four (CP4)2increasing demand. As recently as 2022, SVCE paid approximately $12 for Renewable Energy Credits (RECs) but in recent solicitations have seen prices from $70-80. For GreenPrime, this is further complicated by the need for ‘Green-e Certified’ RECs which are particularly scarce and typically purchased year to year.

Additionally, in June 2023, the California Public Utilities Commission (CPUC) issued D.23-06-006 which determined that PG&E is no longer obligated to offer allocations of nuclear and large hydro resources to load serving entities (LSEs) such as SVCE. The decision requires that if PG&E does not offer hydro allocations, LSE customers should be compensated for the hydro portfolio via the PCIA based on a calculated Market Price Benchmark (MPB). The decision also determined that there is insufficient data to determine an MPB for nuclear attributes, effectively setting their PCIA value at zero. In 2023 PG&E indicated that it will not offer nuclear allocations for 2024, but will provide hydro allocations for 2024. In subsequent years, once Diablo Canyon is in its extension period and paid for by all rate-payers, SVCE may once again receive GHG-free allocations for the resource, however a final determination of that issue is pending a vote by the CPUC.

Combined, the market and policy changes impacting carbon free resources have created a supply deficit. Based on recent Requests for Offers (RFO) results, staff is not certain sufficient supply is available on the market to meet the 100% Clean requirements for GreenStart at any price.

Table 1 below provides an overview of how SVCE has historically achieved its 100% Carbon-Free energy portfolio, including its current position for 2024.

Table1: Historical and Projected Clean Purchases
2020 2021 2022 2023 2024
SVCE Retail Sales (MWh) 3,877,807 3,746,139 3,605,920 3,645,419 3,950,160 SVCE Short-Term RPS
(MWh) 1,845,291 1,583,628 924,472 134,989 151,100
SVCE Long-Term RPS
(MWh) 0 187,555 893,754 1,584,391 1,962,976
PG&E Large-Hydro
Allocation (MWh) 170,858 203,266 289,616 520,150 337,678* PG&E DCPP Allocation
(MWh) 388,205 798,257 976,706 1,000,200 0
2 RPS Compliance Period Four sets a 40% overall RPS target for 2021 through 2024 and requires at least 65% of RPS resources come from contracts of ten years or greater in term. Failure to meet both requirements may result in penalties as assessed by the California Public Utilities Commission.

Item 4
Agenda Item: 4 Agenda Date: 11/8/2023

Page 3 of 6 ends

Carbon Free Purchases 1,937,035 1,240,206 950,823 1,052,203 1,050,869 Net Open Clean Position 0% 0% 0% 0% ~15%
Actuals Forecast
*Expected value. PG&E has confirmed the hydro allocation will be offered for 2024.

ANALYSIS & DISCUSSION
GreenStart
Once SVCE receives its hydro allocation for 2024, the organization expects to have an 85% carbon free portfolio for its GreenStart product. The cost of procuring the remaining 15% deficiency with hydro resources is estimated at $25 per carbon-free attribute, or thirty million dollars ($30 million) total. Given responses to recent solicitations, SVCE is uncertain that sufficient hydro supply can be procured, even at high prices.

Through market solicitations, SVCE believes there may be an opportunity to purchase carbon-free attributes from nuclear resources to help satisfy its clean position for GreenStart. It is expected the cost of these attributes would be lower than those for hydro resources. While SVCE does not have an explicit policy to prevent purchases of nuclear power from its carbon-free portfolio, staff sought approval in 2019 to allow the inclusion of nuclear allocations from PG&E on the basis that nuclear power is considered carbon-free, already exists as part of PG&E’s Power Content Label (PCL) and California’s system power and were paid for through the PCIA. Like taking an allocation, short-term purchases of nuclear energy will not extend the life of a nuclear plant nor generate additional nuclear energy. Further nuclear energy is a baseload resource with very little variability making it a more predictable resource compared to hydroelectricity which is highly dependent on precipitation conditions.

GreenStart options are outlined in the Table 2.

Table 2: GreenStart Alternatives
*emissions associated with Coso Geothermal renewable resources Option 1, to maintain existing policy and attempt to purchase sufficient hydro resources to cover the net open clean position, is expected to increase power supply costs by roughly $30M. However, as mentioned above this option may not be feasible as supply is limited. This option would however maintain the organization’s historic product offering.

Under Option 2, SVCE staff believes it may be able to maintain its carbon free portfolio at a lower cost if the board approves the purchase of nuclear attributes. Staff would only pursue this option if the organization can achieve 100% carbon free energy below the originally budgeted cost of procuring carbon-free resources.

Item 4
Option #1
Current Policy
Option #2
Buy Nuclear
Option #3
No Additional Purchases
Description Maintain 100% Carbon Free for
2024 -assumes SVCE can
purchase additional CF resources
Maintain 100% Carbon Free for
2024 with nuclear purchases
Stick with current Carbon Free
position (~78%-85% in 2024) which
assume PG&E Large Hydro
allocations.

Expected Reportable
Emissions on Power
Content Label
74 lbs of Co2* 74 lbs of Co2* ~170 lbs of Co2, includes grid emissions
Benefits Maintains SVCE’s historic product
offering
Same as Option #1, but at a lower
incremental cost
• Lower power supply cost, which
helps maintain SVCE reserves,
discount and/or program funding
Drawbacks • May not be feasible
• Expensive, ~$30M above budget
• Limited emissions reductions for
grid
• May not be feasible
• Expensive
• Limited emissions reductions for
grid
• Requires board approval
• May create concern from
customers, especially
GreenStart customers with
Climate Action Plans
Agenda Item: 4 Agenda Date: 11/8/2023

Page 4 of 6 ends

Finally, Option 3, would preserve SVCE’s reserves by not procuring additional carbon free resources, however would increase reportable emissions for the organization which may be of concern to GreenStart customers. In 2022, SVCE’s PCL attributed 74 lbs carbon dioxide (Co2) per MWh to the GreenStart product. Should SVCE meet its 100% Clean goal in 2024, it would expect a similar emissions reporting in 2024. If the organization does not procure any additional carbon-free energy and maintains a 85% clean position, it is estimated that the PCL reportable emissions would increase to approximately ~175 lbs Co2/MWh in 2024.

Staff recommends pursuit of Option 2, to procure a carbon free portfolio with the use of nuclear purchases. This will allow the organization to maintain a 100% carbon-free portfolio at budgeted costs and maintain a reportable emissions level for GreenStart similar to what was reported in 2023. However, if staff is not able to acquire sufficient nuclear resources below budgeted costs, then staff recommends not purchasing additional RPS or carbon-free resources and maintaining the existing clean position as described in Option 3.

GreenPrime
GreenPrime is facing critical challenges for 2024. RPS resources as noted above have become expensive and difficult to find, especially for 2024. Further, Green-e certified RECs are more difficult to find and carry an additional premium to general RPS RECs. And since Green-e RECs are traditionally purchased year-to-year, the

0.8 cents per kWh premium will no longer be sufficient to meet the incremental cost of GreenPrime in 2024.

Starting in 2024, staff recommends moving away from Green-e certification, and raising the premium charged for GreenPrime.

The Green-e Certification program is offered by the Center for Resource Solutions (CRS), a national non-profit focused on sustainability policy and standards. Green-e Certification ensures that RECs used to meet voluntary reporting programs minimize greenwashing risk, by sourcing from Green-e certified renewables projects, and satisfying clear and audited accounting standards. Green-e certification (or equivalent) of RECs is recommended by both the US EPA’s Green Power Partnership program, and the USGBC’s LEED program.

SVCE could consider allocating RECs from an SVCE PPA project that was Green-e Certified, as SVCE has supply well in excess of State RPS requirements. However, doing so would mean that these RECs could not be used to satisfy SVCE’s SB350 long-term procurement requirements for Compliance Period 4. Missing the CP4 requirement could result in substantial fines for SVCE.

CCAs generally offer a 100% RPS product, and most are facing similar issues with associated REC pricing and sourcing. Locally, both MCE and EBCE are ‘self-certifying’ their 100% RPS product RECs rather than certifying via Green-e. They are relying on required reporting via WREGIS (Western Renewable Energy Generation Information System) and California’s annual power source disclosure reporting and associated PCL to demonstrate product content and accounting for their 100% RPS products.

SVCE has contacted program personnel at the US EPA and USGBC and ensured that Green-e is not an exclusive certification requirement for the Green Power Partnership and LEED programs respectively. Beginning in 2024, staff recommends it report to its GreenPrime customers a product content via a combination of required WREGIS and PCL reporting, and continuation of an annual independent audit of GreenPrime RECs retirements. And as in prior years, the SVCE Board will continue to vote to ratify SVCE’s annual PCL submissions to the California Energy Commission.

Discontinuation of Green-e Certification will provide SVCE with more internal sourcing options for GreenPrime RECs in the future and reduce additional cost and availability issues.

Given the dramatic increase in RPS and carbon-free prices described above, the current 0.8 cents per kWh premium for GreenPrime is not sufficient to cover the incremental cost for 2024. For illustration, using a marginal 2024 REC costs of $75/MWh and marginal carbon-free costs of $25/MWh, the incremental cost of GreenPrime in 2024 would be ~2.5 cents per kWh, approximately 3 times the current premium.

It’s important to note that PG&E has a competing 100% RPS product, Solar Choice. The current premium for Solar Choice varies by customer segment – from 1.1 cents per kWh for medium commercial customers to 2.3 cents per kWh for residential customers. New subscriptions in PG&E’s program are currently being waitlisted, as the program has reached its cap of 272 MW and a petition for expanded capacity is currently being considered by the CPUC. GreenPrime rate change alternatives for 2024 are outlined in the Table 3.

Item 4
Agenda Item: 4 Agenda Date: 11/8/2023

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Table 3: GreenPrime Alternatives
Option 1, maintaining the status quo, limits customer disruption and maintains GreenPrime as an affordable 100% renewable and carbon-free alternative to GreenStart. This may be especially important if SVCE is not able to acquire additional carbon-free nuclear supply for 2024, resulting in increased GreenStart carbon emissions intensity. And GreenPrime customers would not see any relative price increase for GreenPrime in 2024. Under this option, the revenue collected from GreenPrime customers would be ~$3.2M less than the amount needed to cover the full incremental cost of GreenPrime in 2024.

Option 2 would increase the premium by 50% in 2024, to 1.2 cents per kWh. This would send a significant price signal to customers indicating the increased cost of GreenPrime, and likely result in some customer disruption.

Many participating member agencies and commercial customers would re-evaluate their interest in GreenPrime, and potentially opt-down to GreenStart. However, they would be unlikely to opt-out to buy PG&E’s Solar Choice product, as that option would still be more expensive. Even with a 50% increase in price to 1.2 cents/kWh, GreenPrime may still be a viable 100% RPS alternative to GreenStart, which may be especially important if SVCE is not able to acquire additional carbon-free resources for 2024. Under this option, the GreenPrime premium would under collect by ~$2.5M needed to cover the full incremental cost of GreenPrime in 2024.

Option 3 increases the premium by 100% in 2024 and would likely result in more significant customer disruption.

While it’s still not likely that customers would opt-out for PG&E’s solar choice program, more customers would likely opt-down from GreenPrime – and/or, feel constrained by limited options if SVCE’s GreenStart product has increased emissions intensity in 2024. Under this option, SVCE’s contribution to reserves would be reduced by ~$1.7M, the needed to cover the full incremental cost of GreenPrime in 2024.

Finally, Option 4 increases the premium by 200%, the full amount needed to cover incremental costs in 2024.

Under this scenario many opt-downs are likely and opt-outs to PG&E are possible, as PG&E’s 100% RPS product would be lower-cost.

Staff recommends that SVCE discontinue Green-e Certification for 2024. This will allow for more sourcing options for GreenPrime in future years – including potentially from SVCE PPA projects - and will likely reduce the future cost of GreenPrime RECs that are especially problematic in 2024.

For GreenPrime pricing in 2024, staff recommends Option 2. Option 2 balances the need for managing customer impact and optionality vis-a-vi GreenStart, while at the same time recognizing and signaling increased near-term product costs. With the elimination of Green-e Certification requirements, SVCE has more long-term options for reducing the incremental cost of GreenPrime RECs in the future. And Option 2 keeps SVCE’s 100% RPS product competitive versus PG&E for all customer classes. If SVCE were to raise the premium by 100% (as outlined in Option 3), the customer impact would be more substantial still, and potential increase in reserves contribution would be only $800k relative to Option 2.

Item 4
Option #1
Status Quo
Option #2
Directional
Price Increase
Option #3
Price at Standard
Discount to PG&E
Option #4
Price at SVCE 2024
Cost Recovery Rate
Price Change/
GP CostPremium
No change

0.8 cents per kWh
50%increasefor 2024

1.2 cents per kWh
100%increasefor2024
~1.6 cents per kWh
200%increasefor2024
~2.5 cents per kWh
Competitive
Positioning ~50%discount to PG&E ~25%discount to PG&E 1-4% discountto PG&E (std discount policy) 50%premium to PG&E
AnnualBill Impact
Res (6000 kWh)/
C&l(10GWh)
N/A - no change +$24/ +$40,000 +$48/ +$80,000 +$102/ +$170,000 Impactto 2024SVCE
Reserve Contribution < ~$3.2M > <~$2.5M> <~$1.7M> None (unless opt-outs) Pro’s - No customer disruption
- Affordable alternative if
GS no longer carbon-free
- Price signal to customers
- Possible alternative if GS
no longer carbon-free
- Unlikely to result in opt-outs
- Price still discounted to
PG&E
- No impactto reserve
contribution
- No 2024 cross-subsidy
Con’s - $3.2M impactto 2024
reserve contribution, and
‘cross-subsidy’
- Some customer disruption,
opt-downs likely
- $2.5M impactto 2024
reserve contribution, and
cross-subsidy
- Major customer disruption,
opt-downs very likely
- High-priced alternative to GS
- $1,7M impact to 2024
reserve contribution, and
cross-subsidy
- Major customer
disruption; many opt-downs likely
- Opt-outs possible
- Unlikely alternative to GS
Agenda Item: 4 Agenda Date: 11/8/2023

Page 6 of 6 ends

STRATEGIC PLAN
Board approval to purchase carbon-free attributes will enable staff to meet the current board directed clean targets while maintaining cost and rate objective goals as outlines in SVCE’s Strategic Plan, including:

G7: Acquire clean and reliable electricity in a cost effective, equitable and sustainable manner; and G8: Manage and optimize power supply resources to meet affordability, GHG reduction and reliability objectives.

Staff believes the proposed solutions best balance affordability in the current market conditions while maintaining overall clean targets.

ALTERNATIVES
Staff has provided various alternatives to changes for GreenStart and GreenPrime as described in Tables 2 and

3. The Board may decide not to support staff’s recommendation, and maintain the status quo for both product offerings, as follows:

GreenStart, SVCE staff pursues 100% clean target, which includes purchases above budgeted amount.

This alternative would expose SVCE to significantly higher costs associated with its net open position. As noted above, staff is uncertain sufficient supply exists in the market to allow the organization to close its 2024 open position.

GreenPrime, Do not discontinue use of Green-e Certification and retain current premium at 0.8 cents per kWh.

As noted above, this alternative would increase costs for the organization and sufficient Green-e certified RECs may not be on the market and SVCE would be under collecting ~$3.2M in retail revenue needed to cover the incremental cost of GreenPrime in 2024.

FISCAL IMPACT
Adoption of the proposed changes to GreenStart will not change the cost of procuring resources relative to the Board-approved fiscal year 2024 operating budget (FY 24 Budget). The proposed changes to GreenPrime are also consistent with budgeted supply cost in the FY 24 Budget however if the rate premium is approved will result in an increase in revenues for FY 24.

Item 4

Page 1 of 6 ends

Staff Report – Item 5
Item 5: Authorize the Chief Executive Officer to Execute a 15-Year Power Purchase Agreement with SunZia Wind PowerCo LLC and Potential Replacement PPAs in Substantial Form and Any Necessary Ancillary Agreements and Documents From: Girish Balachandran, CEO
Prepared by: Monica Padilla, COO and Director of Power Resources Kris Van Vactor, Wholesale Energy Markets Manager
Date: 11/08/2023

RECOMMENDATION
Staff recommends that the Board delegate authority to the Chief Executive Officer (CEO) to execute the SunZia Wind PowerCo LLC, Power Purchase Agreement (PPA), in substantial form, and any subsequent Replacement PPAs and/or necessary ancillary agreements and documents as follows:

1. SunZia Wind PowerCo LLC, Power Purchase Agreement (PPA) (“SunZia Wind”) a. 100 MW or approximately 315,672 MWh per year of Renewable Portfolio Standard (RPS) Portfolio Category Content One (“PCC1”) eligible resources b. 15-Year term PPA with expected commercial operation date (COD) and term from September 30, 2026, through September 29, 2041.
c. Total amount not-to-exceed $361,000,000.

The SunZia Wind PPA is needed to meet SVCE Board-directed clean energy targets; California’s RPS and clean procurement mandates; and possible Resource Adequacy (RA) requirements.

BACKGROUND
In fall of 2022, Silicon Valley Clean Energy (SVCE) issued a Request for Offers (RFO) for long-term clean resources. The goal of the RFO was to secure a diverse set of renewable energy and clean capacity to meet SVCE’s Renewable Portfolio Standard (RPS) and carbon-free objectives, while also complying with California’s RPS and clean mandates under Senate Bill 100 (“SB 100”) which set a goal of achieving a 60% RPS by 2030 and a 100% clean energy grid by 2045 with interim targets of 90% by 2035 and 95% by 2040 as provided for under Senate Bill 1020. Resources with at least ten years in term were sought to help meet Senate Bill 350 (“SB 350”) which sets a long-term procurement requirement of 65% of RPS per compliance period. The 2022 SVCE RFO long term clean resources did not yield the additional diversity that SVCE was hoping to achieve.

No wind or geothermal offers materialized. Through various conversations Pattern did approach SVCE in the late Spring timeframe with a bilateral offer for 100 MW of capacity.

Clean resources were also sought to meet obligations as ordered in the California Public Utilities Commission (CPUC) issuing Decision (D.) 21-06-035, the Mid-term Reliability Procurement Order (MTR Order), requiring CPUC-jurisdictional LSEs, such as SVCE, to procure and/or develop a collective 11,500 MW of new capacity by 2026. In February 2023, the CPUC issued D.23-02-040, the Supplemental Mid-term Reliability Procurement Order (Supplemental MTR Order), requiring an additional 4,000 MW of new clean capacity to come online by 2027 for a total of 15,500 MW (15.5 GW). SVCE’s total share of the MTR Order and Supplemental MTR Order is 317 MW, which was determined based on SVCE’s load ratio share of the CPUC’s jurisdictional load in the Item 5
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 5 Agenda Date: 11/8/2023

Page 2 of 6 ends

Pacific Gas and Electric transmission access area. While SVCE has made significant progress towards meeting the Supplemental MTR order, an open position still exists.

The latest procurement effort is also consistent with SVCE’s Board-directed clean energy goals of delivering 100% clean energy on an annual basis and to achieve a 75% RPS by 2030 as provided for in the Board-approved 2022 Integrated Resource Plan (2022 IRP) October 12, 2022 SVCE Board of Directors Meeting, Item

3. In support of SVCE’s goals and mandates, SVCE has 19 long-term contracts for clean energy, capacity and/or reliability products totaling over $3 billion over the life of the contracts. Currently, seven resources are online and estimated to meet approximately 32.7% of SVCE’s retail sales in 2023 with the following RPS mix:

Solar + Storage: 33%, Geothermal: 32%, Wind: 35%.

When all resources are on-line, SVCE will have achieved an 60.3% RPS from long-term resources and 42% of its peak capacity will be met from clean resources. Table 1 is a summary of PPAs executed to date to meet RPS, resource adequacy and/or MTR requirements.

Table 1: Board Authorized Clean Energy Contracts Executed Item 5
Seller Project Name Technology
Generation
MW
Storage
MW
Storage
MWh
Approximate % of
Annual load in 2025
Approximate % of
Annual load in 2028
Term
(years)
Lifetime Not to
Exceed
Authority
(MM$)
SVCE Board
Approval Status
1 MN8 Slate
Solar +
Storage 93 46.5 186 6.70% 6.60% 17 $198 Oct-18 Online
2 Ormat Casa Diablo Geothermal 7 1.40% 1.40% 10 $43 Feb-20 Online 3 Atlantica Coso Geothermal 43.8 9.60% 6.50% 15 $331 Mar-20 Online 4 Leeward Rabbitbrush
Solar +
Storage 40 8 20 3.00% 3.00% 15 $64 Apr-20 Online
5 NextEra Yellow Pine
Solar +
Storage 50 26 104 4.10% 4.00% 20 $128 May-20 Online
6 Solar
Storage 80 20 60 6.60% 6.60% 20 $174 Jun-20 Sre-corstruction 7 174 Power
Global Atlas Solar 50 3.80% 3.80% 10 $32 Jan-21 Pre-cor struction 8 SB Energy Angela
Solar +
Storage 20 20 40 1.40% 1.40% 15 $35 Mar-21 3re-cor struction 9 AES Mountain View Wind 33.3 3% 3% 20 $128 Apr-21 Online 10 Origis San Luis West
Solar +
Storage 62.5 15.625 62.5 4% 4% 15 $74 Apr-21 ®re-cor struction 11 Clearway Victory Pass
Solar +
Storage IM 25 100 8% 8% 15 $173 May-21 Construction
12 Terra-Gen Cameron Crest Wind 77.7 5% 5% 15 $150 May-21 Online 13 Rev
Renewables Tumbleweed
Long Duration
Storage 15.9375 127.5 n/a 15 $100 Feb-22 ®re-cor struction 14 Onward Goal Line
Long Duration
Storage 14.2 113.6 n/a 15 $100 Mar-22 sre-cor struction 15 Ormat
Geothermal
Portfolio Geothermal 16.75 3.30% 4.40% 20 $256 Jun-22 °re-cor struction 16 OME Fish Lake Geothermal 1.82 0.40% 0.40% 20 $30 Jun-22 In-development 17 MRP Hanford
Thermal +
BESS 99.4 131.4 131.4 12 $280 Apr-23 In-development
18 NextEra Grace Solar 120 0 9% 15 $286 Aug-23 3re-cor struction 19 NextEra Yellow Pine III Storage 0 115 460 15 $420 Aug-23 3re-corstruction Total: 895 428 1405 60.30% 67.10% $3,002
Agenda Item: 5 Agenda Date: 11/8/2023

Page 3 of 6 ends

ANALYSIS & DISCUSSION

1. SunZia Wind PowerCo “SunZia Wind”
SunZia Wind, is a 3,515 MW new build wind facility resource capable of producing over 11 million MWh of PCC1 RPS energy and renewable energy certificates (RECs). The SunZia Wind PPA for SVCE will be for 100 MW of the 3,515 MW facility and contribute around 316,000 MWh PCC1 RPS energy and renewable energy certificates (RECs), which will account for approximately 7-8% of SVCE’s retail sales and count towards annual and long-term RPS requirements. The resource is offered at a fixed-price in dollars per MWh under a fifteen-year term with an expected COD of September 30, 2026. The project is in New Mexico (it spans Torrance, Lincoln and San Miguel Counties) and will be interconnected to the California Independent System Operator (CAISO) at the Palo Verde Inter-tie. SunZia Wind will have deliverability status and provided SVCE is awarded the necessary Import Allocation Rights, the project will be able to provide resource adequacy attributes to help SVCE meet its annual compliance obligation.

Pattern Energy ("Pattern") is the parent company and developer of SunZia Wind. Pattern is contemplating splitting the project geographically and thus may need to restructure the off-takers via new or “Replacement PPAs”. The restructuring of the project and PPA is expected to happen prior to the commercial on-line status and may be necessary to achieve financing of the project. As such, SVCE’s PPA includes a provision which allows for a Replacement PPA under certain conditions. The Replacement PPA will preserve the energy generation and value expected under the original PPA. Because of the timing to execute the Replacement PPA, staff is seeking authority to execute a Replacement PPA as part of the CEO’s delegated authority.

Table 2 is a summary of the key features of the SunZia Wind PPA.

Table 2: Summary of Proposed Resources
Counterparty SunZia Wind PowerCo, LLC
Parent Company Pattern Energy, Inc.

Product New build wind PCC1 RPS
Energy
Need and/or
Compliance Obligation
SVCE’s 100% Clean
energy goal and RPS
target
SB100, SB350 and B1020
MTR Order and RA starting
in 2026
Expected Delivery
Term
15 years, September 30, 2026,
through September 29, 2041.

Contract Capacity 100 MW wind
Location New Mexico
Percentage of Retail
Load Served/RPS
~7-8%
RPS Compliance & Integrated Resource Plan
SB100 sets annual RPS targets starting in 2020 growing to 60% in 2030 and further sets a 100% clean energy goal by 2045. SVCE’s board-approved IRP further sets an RPS target of 75% by 2030. SunZia Wind provides an estimated 316,000 MWh of RPS eligible energy, bringing SVCE’s expected RPS in 2028 to 80%.

Item 5
Agenda Item: 5 Agenda Date: 11/8/2023

Page 4 of 6 ends

Figure 1 illustrates SVCE’s progress towards meeting the Board-approved and state mandated annual RPS targets as well as what the SunZia Wind PPA would do in terms of increasing RPS under contract for SVCE.

Figure 1: SVCE Annual Renewable Portfolio with SunZia Wind (2022-2033) SB350, passed in 2016, requires Load Serving Entities (LSE) such as SVCE to acquire a minimum of 65% of the state mandated RPS requirement through long-term PPAs (10 years or greater) starting with Compliance Period No. 4 “CP4” (2021-2024). The mandated overall RPS for CP4 is 40%, thus the long-term RPS procurement requirement is 26%. SVCE’s existing PPAs will achieve a combined 29.2% RPS in CP4 from long-term resources. SunZia Wind is expected to come on-line in 2026, helping meet long-term obligations in CP5.

With the inclusion of SunZia Wind, SVCE’s long-term RPS is 69.3% in CP5 and 79.5% in CP6, which is above California’s mandated long-term RPS requirement of 33% and 37% respectively. This number represents SVCE position assuming all contracts are operational based on the on-line dates specified in the PPAs and that the resources perform consistent with the generation profiles provided in the PPAs as well. Table 3 shows SVCE’s progress towards meeting the long-term RPS goals and mandates.

Mid-term Reliability Procurement Order & Resource Adequacy Capacity SVCE has made significant progress towards meeting its allocation in all tranches of procurement mandates per the MTR Order. SVCE is slightly deficient in meeting its generic 2025, 2026 and 2027 requirements which orders the procurement of new clean energy capacity including standalone storage. SVCE’s 100 MW share of SunZia Wind, will contribute approximately 34 MW of qualifying capacity helping to close SVCE’s obligation starting in 20271.

SVCE has an obligation to procure sufficient capacity to meet grid reliability as prescribed by the CPUC’s RA Program. Resources such as SunZia Wind effectively contribute clean capacity towards SVCE’s RA requirements. The actual amount of counting capacity will vary depending on CPUC’s rules as determined by the effectiveness of the resources ability to meet customer load on the worst days. 1 For MTR credit, in 2027 New Mexico Wind has an Effective Load Carrying Capacity rating of ~34 Item 5
4,500,000
4,000,000
3,500,000
3,000,000
g 2,500,000
> 2,000,000
1,500,000
1,000,000
500,000
0 Calendar Year
PG&E Nuclear Allocation Geothermal
Solar Wind
mmss SunZia Wind 100% Clean Goal
— —“
Agency RPS Target
Biomass
Large Hydro
SB100 Target
Agenda Item: 5 Agenda Date: 11/8/2023

Page 5 of 6 ends

Table 3: RPS Under SB100 and SB350 Long-term Contracting Requirement per Compliance Period Clean Energy and Capacity
Since its inception, SVCE has had a 100% clean energy goal measured annually. This has been achieved through a mix of RPS-eligible resources including wind, solar and geothermal combined with non-RPS eligible, but carbon-free resources such as large hydroelectricity and nuclear allocations from Pacific Gas and Electric.

While SVCE’s clean goal is ambitious, the Board has directed staff to evaluate a pathway to achieving a portfolio whereby load and resources are better matched in all hours of the day. To achieve this objective, staff must balance the need to also achieve reliability and affordability objectives.

Strategically, resources which can deliver clean energy in all hours of the day, such as geothermal, will best help SVCE balance its objectives however such resources are scarce. Solar plus storage, whether paired at the same site, or virtually collocated help achieve a more sustainable grid by pushing out solar generation in later hours of the day, when demand peaks. These types of resources are necessary to meet current retail product needs including GreenStart, GreenPrime and GreenPrime Direct in addition to help us build a pathway to 24/7 clean energy.

Out of state wind presents an opportunity for SVCE to further diversify its clean energy portfolio by technology and by geography. The wind profile for SunZia is such that the resource produces more in the winter/spring months than in the summer months. This pairs well with Solar that sees its production peak in the Summer.

SVCE does not have a clean capacity goal. Currently, short-term natural gas RA-only capacity contracts account for the vast majority of SVCE’s RA portfolio. In 2022, 80% of SVCE’s requirements were from RA-only contracts. By including SunZia Wind into the portfolio Energy Source from Wind increases by 7-8% and RA credit increases by close to ~3%. Table 4 is an illustration of SVCE’s energy and capacity portfolio in 2028.

Item 5
CP#4
2021-2024
CP#5
2025-2027
CP#6
2028-2030

1. State Mandated RPS per Compliance Period - % of
Retail Sales 40% 50% 57%

2. State Mandated % of Mandated RPS (Row #1) to be
Contracted Under RPS Long-term Contracts 65% 65% 65%

3. State Mandated % of Retail Sales with RPS Long¬
term Contracts (Row 2* Row 1) 26% 33% 37%

4. SVCE: Current Compliance with Row #3: Existing RPS
Achieved with Long-term Contracts 30.70% 66.00% 71.70%

5. SVCE: RPS Achieved with SunZia Wind 30.70% 69.30% 79.50% Open Position relative to State Mandate (Row #3)
+Above/ (-) Short 4.70% 36.30% 42.50%
Agenda Item: 5 Agenda Date: 11/8/2023

Page 6 of 6 ends

Table 4: Energy and RA Capacity Portfolio with SunZia Wind – Estimated for 2028

ALTERNATIVE
While SunZia Wind is necessary to meet overall RPS goals, the Board may decide not to approve this RPS resource and instead procure short-term resources or issue a new RFO. Staff does not recommend this alternative, as renewable resources are scarce, and the cost of short-term RECs far exceeds the implied REC cost associated with SunZia Wind.

STRATEGIC PLAN
Board approval to delegate authority to the CEO to finalize and execute the SunZia Wind PPA will enable staff to meet the current board directed clean targets and California mandates for RPS, clean energy and reliability consistent with goals and objective as outlines in SVCE’s Strategic Plan, including:

FISCAL IMPACT
Ultimate execution of the agreements will result in cost to SVCE starting in Fiscal Year (FY) 2026 for SunZia Wind PPA, which will be included in the budget at that time. Staff’s spending authority over the life of the projects will be limited to the amount recommended including $361,000,000 for SunZia Wind.

With the inclusion of the proposed contract SVCE’s total expected lifetime cost is $3.36 billion across all Clean Energy PPAs, $361 million higher than in Table 1 above.

ATTACHMENTS

1. SunZia Wind Power Purchase Agreement – redacted version Item 5
Estimated for 2028
Annual Energy
(GWh)
Energy Source as a
Percent of Total
Retail Sales
Capacity Source as a
Percent of Total RA
Requirement
Biomass 0 0% 0%
Geothermal 503 12% 12%
Solar 1,820 45% 12%
Wind with SunZia 788 19% 6%
Large Hydroelectric 871 21% 0%
Battery Storage 0 0% 7%
Natural Gas RA-only 0 0% 47%
Hanford -Natural Gas 70 2% 17%
Total 4,052 100% 100%

CONFIDENTIAL
Pattern-SVCE SunZia PPA
Pattern 10/30/2023
- 1 -

RENEWABLE POWER PURCHASE AND SALE AGREEMENT

COVER SHEET
Seller: SunZia Wind PowerCo LLC
Buyer: Silicon Valley Clean Energy Authority, a California joint powers authority Description of Facility: A wind-powered electricity generating facility with a nameplate capacity of up to 3,515 MW, as described in Exhibit A, as such facility may be modified under the terms of this Agreement.

Milestones:

Milestone Date for
Completion
Execute Interconnection Agreement 3/27/2023
Obtain Bureau of Land Management Record of Decision
for SunZia Transmission Line 5/18/2023
Expected Procurement of Major Equipment 11/30/2023
Expected Construction Start Date
Expected Commercial Operation Date 9/30/2026
Delivery Term: Fifteen (15) Contract Years.

Guaranteed Capacity: 100 MWAC.

Expected Energy:

Contract Year Expected Energy
(MWh per Contract Year)
1 – 15
Contract Price:

Product:
☒ Delivered Energy
☒ Green Attributes/Renewable Energy Credits (Portfolio Content Category 1) attributable to the Delivered Energy
☒ Capacity Attributes
DRAFT Item 5
Attachment 1
- 2 -
Scheduling Coordinator: Seller/Seller Third Party.

Development Security and Performance Security
Development Security:

Performance Security:

DRAFT Item 5
Attachment 1
i

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

1.1 CONTRACT DEFINITIONS.................................................................................................. 1

1.2 RULES OF INTERPRETATION. .......................................................................................... 19 ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................... 20

2.1 CONTRACT TERM........................................................................................................... 20

2.2 FACILITY OWNERSHIP.................................................................................................... 20

2.3 OBLIGATIONS PRIOR TO DELIVERY TERM...................................................................... 21

2.4 PROGRESS REPORTS....................................................................................................... 22

2.5 REMEDIAL ACTION PLAN............................................................................................... 22

2.6 RESERVED...................................................................................................................... 22

2.7 PROJECT BIFURCATION OR TRANSITION......................................................................... 22 ARTICLE 3 PURCHASE AND SALE........................................................................................ 25

3.1 SALE OF PRODUCT ......................................................................................................... 25

3.2 SALE OF GREEN ATTRIBUTES......................................................................................... 25

3.3 COMPENSATION. ............................................................................................................ 25

3.4 IMBALANCE ENERGY ..................................................................................................... 26

3.5 OWNERSHIP OF RENEWABLE ENERGY INCENTIVES........................................................ 26

3.6 FUTURE ENVIRONMENTAL ATTRIBUTES. ....................................................................... 27

3.7 TEST ENERGY ................................................................................................................ 27

3.8 CAPACITY ATTRIBUTES. ................................................................................................ 27

3.9 CEC CERTIFICATION AND VERIFICATION ...................................................................... 28

3.10 CPUC NON-MODIFIABLE STANDARD TERMS AND CONDITIONS. .................................. 29

3.11 CALIFORNIA RENEWABLES PORTFOLIO STANDARD ....................................................... 29

3.12 COMPLIANCE EXPENDITURE CAP................................................................................... 29 ARTICLE 4 OBLIGATIONS AND DELIVERIES..................................................................... 31

4.1 DELIVERY. ..................................................................................................................... 31

4.2 TITLE AND RISK OF LOSS. .............................................................................................. 31

4.3 SCHEDULING COORDINATOR RESPONSIBILITIES. ........................................................... 31

4.4 FORECASTING ................................................................................................................ 32

4.5 DISPATCH DOWN/CURTAILMENT................................................................................... 34

4.6 REDUCTION IN DELIVERY OBLIGATION ......................................................................... 34

4.7 GUARANTEED ENERGY PRODUCTION ............................................................................ 35

4.8 WREGIS ....................................................................................................................... 36 ARTICLE 5 TAXES..................................................................................................................... 38

5.1 ALLOCATION OF TAXES AND CHARGES ......................................................................... 38

5.2 COOPERATION................................................................................................................ 38 ARTICLE 6 MAINTENANCE OF THE FACILITY .................................................................. 38

6.1 MAINTENANCE OF THE FACILITY ................................................................................... 38

6.2 MAINTENANCE OF HEALTH AND SAFETY....................................................................... 39 DRAFT Item 5
Attachment 1
ii

6.3 SHARED FACILITIES ....................................................................................................... 39 ARTICLE 7 METERING............................................................................................................. 39

7.1 METERING ..................................................................................................................... 39

7.2 METER VERIFICATION ................................................................................................... 39 ARTICLE 8 INVOICING AND PAYMENT; CREDIT.............................................................. 40

8.1 INVOICING...................................................................................................................... 40

8.2 PAYMENT....................................................................................................................... 40

8.3 BOOKS AND RECORDS.................................................................................................... 41

8.4 PAYMENT ADJUSTMENTS; BILLING ERRORS .................................................................. 41

8.5 BILLING DISPUTES ......................................................................................................... 41

8.6 NETTING OF PAYMENTS ................................................................................................. 41

8.7 SELLER’S DEVELOPMENT SECURITY.............................................................................. 42

8.8 SELLER’S PERFORMANCE SECURITY.............................................................................. 42

8.9 FINANCIAL STATEMENTS. .............................................................................................. 42

8.10 BUYER’S FIRST PRIORITY SECURITY INTEREST IN CASH OR CASH EQUIVALENT COLLATERAL ............................................................................................................................. 43 ARTICLE 9 NOTICES................................................................................................................. 44

9.1 ADDRESSES FOR THE DELIVERY OF NOTICES ................................................................. 44

9.2 ACCEPTABLE MEANS OF DELIVERING NOTICE .............................................................. 44 ARTICLE 10 FORCE MAJEURE ............................................................................................... 44

10.1 DEFINITION.................................................................................................................... 44

10.2 NO LIABILITY IF A FORCE MAJEURE EVENT OCCURS .................................................... 45

10.3 NOTICE .......................................................................................................................... 45

10.4 TERMINATION FOLLOWING FORCE MAJEURE EVENT..................................................... 46 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ....................................................... 46

11.1 EVENTS OF DEFAULT ..................................................................................................... 46

11.2 REMEDIES; DECLARATION OF EARLY TERMINATION DATE ........................................... 49

11.3 TERMINATION PAYMENT ............................................................................................... 49

11.4 NOTICE OF PAYMENT OF TERMINATION PAYMENT ........................................................ 50

11.5 DISPUTES WITH RESPECT TO TERMINATION PAYMENT.................................................. 50

11.6 RIGHTS AND REMEDIES ARE CUMULATIVE ................................................................... 50

11.7 MITIGATION................................................................................................................... 50 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES........... 50

12.1 NO CONSEQUENTIAL DAMAGES..................................................................................... 50

12.2 WAIVER AND EXCLUSION OF OTHER DAMAGES ............................................................ 51 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY ............................ 52

13.1 SELLER’S REPRESENTATIONS AND WARRANTIES........................................................... 52

13.2 BUYER’S REPRESENTATIONS AND WARRANTIES. .......................................................... 52

13.3 GENERAL COVENANTS................................................................................................... 53

13.4 PREVAILING WAGE ........................................................................................................ 54 DRAFT Item 5
Attachment 1
iii
ARTICLE 14 ASSIGNMENT...................................................................................................... 54

14.1 GENERAL PROHIBITION ON ASSIGNMENTS..................................................................... 54

14.2 COLLATERAL ASSIGNMENT ........................................................................................... 55

14.3 PERMITTED ASSIGNMENT .............................................................................................. 55

14.4 LIMITED ASSIGNMENT BY BUYER.................................................................................. 56 ARTICLE 15 GOVERNING LAW; DISPUTE RESOLUTION ................................................. 56

15.1 GOVERNING LAW........................................................................................................... 56

15.2 VENUE ........................................................................................................................... 56

15.3 DISPUTE RESOLUTION.................................................................................................... 57

15.4 ATTORNEYS’ FEES ......................................................................................................... 57 ARTICLE 16 INDEMNIFICATION............................................................................................ 57

16.1 INDEMNIFICATION.......................................................................................................... 57

16.2 CLAIMS .......................................................................................................................... 57 ARTICLE 17 INSURANCE......................................................................................................... 58

17.1 INSURANCE. ................................................................................................................... 58 ARTICLE 18 CONFIDENTIAL INFORMATION ..................................................................... 59

18.1 DEFINITION OF CONFIDENTIAL INFORMATION ............................................................... 59

18.2 DUTY TO MAINTAIN CONFIDENTIALITY......................................................................... 59

18.3 IRREPARABLE INJURY; REMEDIES .................................................................................. 60

18.4 PERMITTED DISCLOSURES.............................................................................................. 60

18.5 PRESS RELEASES............................................................................................................ 60 ARTICLE 19 MISCELLANEOUS .............................................................................................. 60

19.1 ENTIRE AGREEMENT; INTEGRATION; EXHIBITS ............................................................. 60

19.2 AMENDMENTS................................................................................................................ 60

19.3 NO WAIVER ................................................................................................................... 61

19.4 NO AGENCY, PARTNERSHIP, JOINT VENTURE OR LEASE................................................ 61

19.5 SEVERABILITY ............................................................................................................... 61

19.6 MOBILE-SIERRA............................................................................................................. 61

19.7 COUNTERPARTS ............................................................................................................. 61

19.8 ELECTRONIC DELIVERY ................................................................................................. 61

19.9 BINDING EFFECT............................................................................................................ 61

19.10 NO RECOURSE TO MEMBERS OF BUYER......................................................................... 61

19.11 CHANGE IN
DRAFT
ELECTRIC MARKET DESIGN. ....................................................................... 62 Item 5
Attachment 1
iv
Exhibits
Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C Progress Reporting Form
Exhibit D Form of Average Forecast of Energy (MWh)
Exhibit E Energy Replacement Damages Calculation
Exhibit F Form of Commercial Operation Date Certificate Exhibit G Form of Installed Capacity Certificate
Exhibit H Form of Construction Start Date Certificate
Exhibit I Form of Letter of Credit
Exhibit J Form of Guaranty
Exhibit K Notices
Exhibit L Operating Restrictions
Exhibit M Form of Seller Commercial Operation Date Certificate DRAFT Item 5
Attachment 1

CONFIDENTIAL
Pattern-SVCE SunZia PPA
Pattern Draft 10/30/2023

RENEWABLE POWER PURCHASE AND SALE AGREEMENT
This Renewable Power Purchase and Sale Agreement (“Agreement”) is entered into as of [_______], 2023 (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.”

RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:

ARTICLE 1

DEFINITIONS

1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.12. “Adjusted Energy Production” has the meaning set forth in Exhibit E. “Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.
“Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, the Cover Sheet, and any designated collateral, credit support or similar arrangement between the Parties. “Alternative Delivery Point” means a Scheduling Point, as defined in the CAISO Tariff, other than the Delivery Point, that is agreed upon by Buyer and Seller.

DRAFT Item 5
Attachment 1
2 “Approved Meter” means a CAISO-approved revenue quality meter or meters, or if a CAISO approved meter is not consistent with PTO requirements, then a PTO-approved meter or meters, together with a CAISO-approved or PTO-approved, as the case may be, data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, all Energy produced by the Facility net of Electrical Losses and Station Use.
“Available Capacity” means the capacity from Buyer’s Share of the Facility, expressed in whole MWs, that is available to generate Energy.
“Balancing Authority” has the meaning set forth in the CAISO Tariff. “Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due.
“Business Day” means any day except a Saturday, Sunday, the Friday after the U.S.

Thanksgiving holiday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. local time for the Party sending a Notice, or payment, or performing a specified action.
“Buyer” has the meaning set forth on the Cover Sheet.
“Buyer’s Share” means the percentage that is equal to the quotient of the Guaranteed Capacity divided by the Installed Capacity (or, prior to the Commercial Operation Date, the total nameplate capacity of the Facility in operation at the time), not to exceed one hundred percent (100%), as such percentage may change from time to time with changes to the Installed Capacity, if applicable.
“Buyer’s WREGIS Account” has the meaning set forth in Section 4.8(a). “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Operating Instruction” has the same meaning as “Operating Instruction” as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including DRAFT Item 5
Attachment 1
3 the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and, to the extent subject to approval by FERC, as approved by FERC.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attribute” means Buyer’s Share of any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Facility can generate and deliver at a particular moment, including those that can be delivered to the CAISO Grid and that can be purchased and sold pursuant to the CAISO Tariff (e.g., Resource Adequacy Benefits).
“Capacity Damages” has the meaning set forth in Exhibit B. “Capacity Replacement Price” means
“CEC” means the California Energy Commission, or its successor agency. “CEC Certification and Verification” means that the CEC has certified (or, with respect to periods before the date that is one hundred eighty (180) days following the Commercial Operation Date, that the CEC has pre-certified) that the Facility is an Eligible Renewable Energy Resource for purposes of the California Renewables Portfolio Standard and that all Energy generated by the Facility qualifies as generation from an Eligible Renewable Energy Resource.
“Change of Control” means any circumstance in which (a) in respect of Buyer, the Person that has ultimate control over Buyer ceases to have such ultimate control, and (b) in the case of Seller, the Ultimate Parent ceases to have control over Seller; provided that, for the avoidance of doubt, it shall not be a Change of Control of Seller if the Ultimate Parent, itself or together with other Persons that would meet the requirements of the definition of Permitted Transferee, retains either (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of Seller or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in Seller, or (b) the right to direct the policies or operations of Seller. “COD Delay Damages Payment” has the meaning set forth in Exhibit B. “Collateral Assignment Agreement” has the meaning set forth in Section 14.2. “Commercial Operation” has the meaning set forth in Exhibit B.

DRAFT Item 5
Attachment 1
4 “Commercial Operation Date” has the meaning set forth in Exhibit B. “Compliance Actions” has the meaning set forth in Section 3.12. “Compliance Expenditure Cap” has the meaning set forth in Section 3.12. “Confidential Information” has the meaning set forth in Section 18.1. “Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Price” has the meaning set forth on the Cover Sheet. “Contract Revenues” has the meaning set forth in Section 4.5(b). “Contract Term” has the meaning set forth in Section 2.1. “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating the Agreement. “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“COVID-19” means the pandemic disease designated COVID-19 and the related virus designated SARS-CoV-2 and any mutations thereof, or the efforts of a Governmental Authority to combat or mitigate such disease.
“CPUC” means the California Public Utilities Commission, or successor entity. “CPUC Decisions” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04- 040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06- 025, 13-06-024, 14-06-050, 19-02-022, 20-06-002, 20-06-031, and any other existing or subsequent decisions, resolutions or rulings related to the Resource Adequacy Program or any successor program, as may be by the CPUC.
“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third-party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. Unless DRAFT Item 5
Attachment 1
5 otherwise indicated herein, if ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Curtailment Order” means any of the following:
(a) the CAISO orders, directs, alerts, or provides notice to a Party, including a CAISO Operating Instruction, to curtail deliveries of Energy from the Facility for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected; (b) a curtailment ordered by a Transmission Provider for reasons including, but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Transmission Provider’s electric system integrity or the integrity of other systems to which the Transmission Provider is connected;
(c) a curtailment ordered by CAISO or a Transmission Provider due to scheduled or unscheduled maintenance on the Transmission Provider’s transmission facilities that prevents (i) Buyer from receiving or (ii) Seller from delivering Energy at the Delivery Point; or
(d) a curtailment in accordance with Seller’s obligations under its Interconnection Agreement with the Participating Transmission Owner. “Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces generation or deliveries of Delivered Energy from the Facility pursuant to a Curtailment Order. Curtailment Period shall not include periods during which Seller reduces generation as a result of a Market Curtailment Period. “Damage Payment” means
“Day-Ahead Forecast” means a non-binding estimate of Buyer’s Share of the hourly Energy expected to be produced by the Facility and delivered to the Delivery Point, net of all Electrical Losses, not to exceed the Hourly Delivery Cap, for each hour of the immediately succeeding day, using an industry-standard
methodology that utilizes the potential generation of the Facility as a function of Available Capacity, wind speed and direction, wind turbine power curves and other pertinent data for the period of time, consistent with Prudent Operating Practice; provided that a Day-Ahead Forecast provided in a day prior to any non-Business Day(s) shall include non-binding forecasts for the immediately succeeding day, each succeeding non-Business Day and the next Business Day. “Day-Ahead Market” has the meaning set forth in the CAISO Tariff.

DRAFT Item 5
Attachment 1
6 “Deemed Delivered Energy” means (i) Buyer’s Share of the amount of Energy, expressed in MWh, not to exceed the Hourly Delivery Cap, that the Facility would have produced and delivered to the Delivery Point, but that is not produced by the Facility and delivered to the Delivery Point due solely to Seller’s reduction of generation during a Market Curtailment Period,
“Deemed Delivered RA” means, for any month, the amount of Resource Adequacy Benefits expressed in kW, that Seller would have delivered to Buyer, but for Buyer’s actions or inactions (including failure to obtain Import Capability sufficient to allow for the importation of such capacity into the CAISO).
“Defaulting Party” has the meaning set forth in Section 11.1(a). “Deficient Month” has the meaning set forth in Section 4.8(e). “Delay Damages” means an amount equal to
“Delivered Energy” means, in any Settlement Period, (i) Buyer’s Share of (a) the Energy produced by the Facility and delivered to the Delivery Point as measured in MWh by the Approved Meter, net of all Electrical Losses (other than Electrical Losses that are reflected in the meter readings) and Station Use, or (b) if a portion of the Facility output is curtailed, at Seller’s election, in any Settlement Period that is not during a Curtailment Period or Market Curtailment Period, and Buyer’s Share is not curtailed, then Delivered Energy for such Settlement Period will instead be equal to Buyer’s Share of the Energy that the Facility would have been able to produce and deliver to the Delivery Point if the Facility was not so curtailed, “Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means, at Seller’s option, (a) cash or (b) a Letter of Credit, in the amount set forth on the Cover Sheet.

DRAFT Item 5
Attachment 1
7 “Disclosing Party” has the meaning set forth in Section 18.2. “Dynamic Schedule” has the meaning set forth in the CAISO Tariff. “Dynamic Transfer” means either a Pseudo-Tie or a Dynamic Schedule. “E-Tag” has the meaning set forth in the CAISO Tariff.
“Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Preamble. “Electrical Losses” means all transmission or transformation losses between the Facility and the Delivery Point, other than losses that are financially settled by Seller. “Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means electrical energy, measured in MWh.
“Energy Replacement Damages” has the meaning set forth in Exhibit E. “EPC Contract” means Seller’s engineering, procurement and construction contract for the Facility.
“Event of Default” has the meaning set forth in Section 11.1. “Excess MWh” has the meaning set forth in Section 3.3(d). “Expected Commercial Operation Date” has the meaning set forth on the Cover Sheet. “Expected Construction Start Date” has the meaning set forth on the Cover Sheet. “Expected Energy” means the quantity of Energy (with associated Green Attributes) that Seller expects to be able to deliver to Buyer at the Delivery Point during each Contract Year in the quantity specified on the Cover Sheet, as such amount may be increased or decreased by Seller, based on a wind resource assessment from a Licensed Professional Engineer, by an amount equal to no more than five percent (5%) of the Expected Energy amount set forth on the Cover Sheet in a Notice to Buyer indicating the final amount by the earlier of the date that is DRAFT Item 5
Attachment 1
8 “Facility” means the energy generating facility described on the Cover Sheet and in Exhibit A.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Floor Price” means
“Force Majeure Event” has the meaning set forth in Section 10.1. “Forced Facility Outage” means an unexpected failure of one or more components of the Facility or any outage on the Transmission System that prevents Seller from making power available at the Delivery Point and that is not the result of a Force Majeure Event. “Future Environmental Attributes” means Buyer’s Share of any and all generation attributes (other than Green Attributes or Renewable Energy Incentives) under the RPS regulations and/or under any and all other international, federal, regional, state or other Law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable, now, or in the future, to the generation of electrical energy by a wind generation facility as opposed to from a conventional generation resource.
“Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner.

Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and includes the value of Green Attributes and Capacity Attributes.
“Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO and WREGIS; provided, however, that “Governmental Authority,” as such term is used in this Agreement in connection with Seller’s obligations to comply with Law or bear Taxes, shall not include Buyer to the extent DRAFT Item 5
Attachment 1
9 that Buyer’s acts or omissions would impose incremental burdens on Seller or Seller’s performance under this Agreement or limit or deprive Seller of any of Seller’s rights or benefits under this Agreement.
“Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the Delivered Energy. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) investment or production tax credits associated with the construction or operation of the Facility and other financial incentives associated therewith, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Facility for compliance with local, state, or federal operating and/or air quality permits. If the Facility is a biomass or landfill gas facility and Seller receives any tradable Green Attributes based on the greenhouse gas reduction benefits or other emission offsets attributed to its fuel usage, it shall provide Buyer with sufficient Green Attributes to ensure that there are zero net emissions associated with the production of electricity from the Facility. “Green Tag” means a certificate or other instrument recognized by a Governmental Authority, with one Green Tag representing the Green Attributes associated with one (1) MWh of Energy generated by the Facility.
“Green Tag Reporting Rights” means the right of a purchaser of renewable energy to report ownership of accumulated Green Tags in compliance with and to the extent permitted by applicable Law and include, without limitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS Operating Rules. “Guaranteed Capacity” has the meaning set forth on the Cover Sheet. “Guaranteed Commercial Operation Date” has the meaning set forth in Exhibit B. “Guaranteed Construction Start Date” has the meaning set forth in Exhibit B. “Guaranteed Energy Production” has the meaning set forth in Section 4.7. “Guaranteed RA Amount” means
DRAFT Item 5
Attachment 1
10 “Guarantor” means (A) (i) Pattern Energy Group LP or (ii) any Person that (a) does not already have any material credit exposure to Buyer under any other agreements, guarantees, or other arrangements at the time its Guaranty is issued, (b) is an Affiliate of Seller, or other third party reasonably acceptable to Buyer, (c) has (1) a Credit Rating of BBB- or better from S&P or a Credit Rating of Baa3 or better from Moody’s or (2) a tangible net worth of at least (d) is incorporated or organized in a jurisdiction of the United States and is in good standing in such jurisdiction, and (B) in either the case of (i) or (ii), that executes and delivers a Guaranty for the benefit of Buyer. “Guaranty” means a guaranty from a Guarantor provided for the benefit of Buyer substantially in the form attached as Exhibit J, or as reasonably acceptable to Buyer. “Hourly Delivery Cap” means
“Imbalance Energy” means the amount of Energy, in any given Settlement Period or Settlement Interval, by which the amount of Delivered Energy deviates from the amount of Scheduled Energy.
“Import Capability” means that portion of the Maximum Import Capability at the Delivery Point or Alternative Delivery Point, if applicable, allocated by the CAISO that is necessary to support the importation of Resource Adequacy Benefits from the Facility into the CAISO market in an amount equal to the Guaranteed RA Amount. “Indemnified Party” has the meaning set forth in Section 16.1(a). “Indemnifying Party” has the meaning set forth in Section 16.1(a). “Installed Capacity” means the nameplate capacity of the Facility at the Interconnection Point, as set forth in an Installed Capacity Certificate, as it may be updated by delivery of a subsequent Installed Capacity Certificate pursuant to Section 2(a) of Exhibit B. “Installed Capacity Certificate” means a certificate from a Licensed Professional Engineer substantially in the form attached as Exhibit G hereto, which certifies the Installed Capacity.
“Inter-SC Trade” has the meaning set forth in the CAISO Tariff. “Interconnection Agreement” means the interconnection agreement entered into by Seller pursuant to which the Facility will be interconnected with the PTO’s Transmission System, and pursuant to which any Interconnection Facilities will be constructed, operated and maintained during the Contract Term.

DRAFT Item 5
Attachment 1
11 “Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the PTO’s Transmission System in order to meet the terms and conditions of this Agreement. “Interconnection Point” means the SunZia East Converter Station. “Interest Rate” has the meaning set forth in Section 8.2. “Investment Grade Credit Rating” means a Credit Rating of not less than “Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated March 31, 2016 as amended from time to time, under which Buyer is organized as a joint powers authority in accordance with the Joint Powers Act.
“Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Lender” means, collectively, any Person (i) providing senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt, equity, public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller and/or its Affiliates, and any trustee or agent acting on their behalf, (ii) providing Interest Rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations, and/or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit (a) issued by a U.S. commercial bank, or U.S. branch of a foreign bank, with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, and (b) in a form substantially similar to the letter of credit set forth in Exhibit I or as otherwise reasonably acceptable to the Party that is the beneficiary of the Letter of Credit.
“Licensed Professional Engineer” means either (i) (ii) the independent engineer retained by the Lenders, or on their behalf under customary terms and conditions, in connection with a financing of the Facility, which engineer, or employee or principal thereof (a) is licensed to practice engineering in New Mexico, (b) has training and experience in the power industry specific to the technology of the Facility, (c) is not a representative of a consultant, engineer, contractor, designer or other individual involved in the development of the Facility or of a manufacturer or supplier of any equipment installed at the DRAFT Item 5
Attachment 1
12 Facility other than as the independent engineer for the Lenders, and (d) is licensed in an appropriate engineering discipline for the required certification being made, or (iii) a person acceptable to Buyer in its reasonable judgment.
“Limited Assignee” has the meaning set forth in Section 14.4. “LMP” means “Locational Marginal Price,” which has the meaning set forth in CAISO Tariff.
“Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining economic loss to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term and must include the value of Green Attributes, Capacity Attributes, and Renewable Energy Incentives. “Lost Output” has the meaning set forth in Exhibit E.
“Market Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces Delivered Energy during a Settlement Period or Settlement Interval
provided that the Market Curtailment Period shall
also include the time required for the Facility to ramp down to implement such curtailment and ramp up following such curtailment in accordance with the Operating Restrictions. “Master File” has the meaning set forth in the CAISO Tariff. “Maximum Import Capability” has the meaning set forth in the CAISO Tariff, and includes any replacement or successor metric used by the CAISO with respect to the ability of electricity off-takers to import Resource Adequacy Benefits produced by generating units that are external to the CAISO balancing authority into the CAISO balancing authority. “Milestones” means the development activities and dates associated therewith set forth on the Cover Sheet.
“Moody’s” means Moody’s Investors Service, Inc., or its successor.

DRAFT Item 5
Attachment 1
13 “MW” means megawatts measured in alternating current. “MWh” means megawatt-hour measured in alternating current. “Negative PTC Value” means the amount, on a dollar per MWh basis, equal to the PTC value that Seller is eligible to earn in respect of Delivered Energy from the Facility at the time of calculation, multiplied by negative one (-1).
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service or electronic communication (including email or other electronic means). “Operating Restrictions” means the operational characteristics of the Facility set forth in Exhibit L.
“Owner” has the meaning set forth in Section 2.2.
“Participating Transmission Owner” or “PTO” means an entity that owns, operates and maintains the Transmission System or distribution lines and associated facilities and/or has entitlements to use certain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Participating Transmission Owner is set forth in Exhibit A.
“Parties” has the meaning set forth in the Preamble.
“Party” has the meaning set forth in the Preamble.
“Performance Measurement Period” has the meaning set forth in Section 4.7. “Performance Security” means, at Seller’s option (i) cash (ii) a Letter of Credit, and/or (iii) a Guaranty, in the amount set forth on the Cover Sheet. “Permitted Transferee” means (i) any Affiliate of Seller, or (ii) an entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, DRAFT Item 5
Attachment 1
14 incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Portfolio Content Category 1” means the Renewable Energy Credit classification associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1), as may be amended from time to time or as further defined or supplemented by Law.
“Product” has the meaning set forth on the Cover Sheet. “Production Tax Credits” or “PTCs” means production tax credit under Section 45 of the Internal Revenue Code as in effect from time-to-time throughout the Delivery Term or any successor or other provision providing for a federal tax credit determined by reference to renewable electric energy produced from wind or other renewable energy resources for which Seller, as the owner of the Facility, is eligible.
“Progress Report” means a progress report including the items set forth in Exhibit C. “Project” has the same meaning as “Facility”.
“Prudent Operating Practice” means the practices, methods and standards of professional care, skill and diligence engaged in or approved by a significant portion of the utility-scale wind energy industry for facilities of similar size, type and design, that, in the exercise of reasonable judgment, in light of the facts known at the time, would have been expected to accomplish results consistent with Law, reliability, safety, environmental protection, applicable codes, and standards of economy and expedition. Prudent Operating Practice is not necessarily defined as the optimal standard practice method or act to the exclusion of others, but rather refer to a range of actions reasonable under the circumstances. “Pseudo-Tie” has the meaning set forth in the CAISO Tariff. “PTC Amount” means the amount, on a dollar per MWh basis, equal to the Production Tax Credits that Seller would have earned in respect of energy from the Facility at the time, grossed up on an after tax basis at the then-highest marginal combined federal and state corporate tax rate, but failed to earn as a result of Market Curtailment Period “QRE” has the meaning set forth for “Qualified Reporting Entity” in the WREGIS Operating Rules.
“Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Deficiency Amount” has the meaning set forth in Section 3.8(e).

DRAFT Item 5
Attachment 1
15 “RA Deficiency Amount Cap” means the maximum RA Deficiency Amount that Seller shall pay to Buyer
“RA Guarantee Date” means
“RA Market Price” means
“RA Shortfall Amount”, expressed in kW, means
“RA Shortfall Month” means any Showing Month in which the RA Shortfall Amount is greater than
“Real-Time Forecast” has the meaning set forth in Section 4.3(e). “Real-Time Market” has the meaning set forth in the CAISO Tariff. “REC Price” means the
“Receiving Party” has the meaning set forth in Section 18.2 “Recurring Certificate Transfers” has the meaning set forth in the WREGIS Operating Rules.
“Remedial Action Plan” has the meaning in Section 2.5(a).

DRAFT Item 5
Attachment 1
16 “Renewable Energy Credit” or “REC” has the meaning set forth in California Public Utilities Code Section 399.12(h), as may be amended from time to time or as further defined or supplemented by Law.
“Renewable Energy Incentives” means: (a) all federal, state, or local Tax credits or other Tax benefits associated with the construction, ownership, or production of electricity from the Facility (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as amended); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the Facility, including a cash grant available under Section 1603 of Division B of the American Recovery and Reinvestment Act of 2009, in lieu of federal Tax credits or any similar or substitute payment available under subsequently enacted federal legislation; and (c) any other form of incentive relating in any way to the Facility that is not a Green Attribute or a Future Environmental Attribute.
“Replacement Energy” means energy that is provided by Seller to Buyer as a component of Replacement Product, in an amount corresponding to the amount of Replacement Green Attributes provided by Seller as Replacement Product. “Replacement Green Attributes” means Renewable Energy Credits meeting the RPS requirements for Portfolio Content Category 1.
“Replacement PPA” means each power purchase agreement entered into by Buyer, as purchaser thereunder, and the applicable Owner, as seller thereunder, pursuant to the terms of Section 2.7.
“Replacement Product” means (a) Replacement Energy and (b) Replacement Green Attributes provided in accordance with Section 4.7.
“Resource Adequacy Benefits” means the rights and privileges attached to Buyer’s Share of the Capacity Attributes available from the Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in the CPUC Decisions and any subsequent CPUC ruling or decision and shall include any local, zonal or otherwise locational attributes associated with the Facility.
“Resource Adequacy Plan” has the meaning set forth in the CAISO Tariff. “Resource Data Template” has the meaning set forth in the CAISO Tariff. “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of The McGraw-Hill Companies, Inc.) or its successor.
“Schedule” means the actions of Seller, Buyer and/or their designated representatives, or Scheduling Coordinators, including each Party’s Transmission Providers, if applicable, of notifying, requesting and confirming to each other and the CAISO the quantity and type of Product to be delivered in any given hour on any given day or days at a specified Delivery Point. “Scheduled Energy” means the Energy from Buyer’s Share of the Facility that clears under the applicable CAISO market based on the final Schedule developed in accordance with DRAFT Item 5
Attachment 1
17 this Agreement, the operating procedures developed by the Parties pursuant to this Agreement, and the applicable CAISO Tariff, protocols and Scheduling practices. “Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Seller” has the meaning set forth on the Cover Sheet.
“Seller’s WREGIS Account” has the meaning set forth in Section 0(a). “Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff, which as of the Effective Date is the period beginning at the start of the hour and ending at the end of the hour. “Shared Facilities Agreement” has the meaning set forth in Section 6.3. “Showing Month” has the meaning set forth in the CAISO Tariff. “Site” means the real property on which the Facility is or will be located, as further described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Start Date Certificate, in the form of Exhibit H, to Buyer. “Site Control” means that, for the Contract Term, Seller (or, prior to the Delivery Term, its Affiliate): (a) owns or has the option to purchase the Site; (b) is the lessee or has the option to lease the Site; or (c) is the holder of an easement or an option for an easement, right-of-way grant, or similar instrument with respect to the Site.
“Station Use” means:
(a) The Energy produced by the Facility that is used within the Facility to power the lights, motors, control systems and other electrical loads that are necessary for operation of the Facility; and
(b) The Energy produced by the Facility that is consumed within the Facility’s electric energy distribution system as losses.
“SunZia Transmission Line” means that certain 3,000-MW high-voltage (+/-525-kV) transmission line originating at the Interconnection Point in New Mexico and terminating near DRAFT Item 5
Attachment 1
18 Phoenix, Arizona. The western terminus of the line will connect to the 500-kV Pinal Central Substation.
“Supply Plan” has the meaning set forth in the CAISO Tariff. “System Emergency” means any condition that: (a) requires, as determined and declared by CAISO, the PTO or a Transmission Provider, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability, and (b) directly affects the ability of any Party to perform under any term or condition in this Agreement, in whole or in part.
“Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Test Energy” means Buyer’s Share of (1) Energy delivered from the Facility (a) commencing on the later of (i) the first date that the CAISO informs Seller in writing that Seller may deliver Energy from the Facility to the CAISO and (ii) the first date that the PTO informs Seller in writing that Seller has conditional or temporary permission to parallel and (b) ending upon the occurrence of the Commercial Operation Date; and (2) associated Green Attributes including RECs that meet the RPS requirements for Portfolio Content Category 1. “Third-Party Forecast Vendor” means (a)
or (b) any other reputable
third-party vendor that is registered to do business in California, experienced in providing and verifying wind energy generation forecasts, not an Affiliate of Seller. “Transmission Provider” means any entity or entities transmitting or transporting the Product on behalf of Seller or Buyer to or from the Delivery Point, including the Participating Transmission Owner.
“Transmission System” means the transmission facilities operated by the Transmission Provider(s), now or hereafter in existence, which provide energy transmission service upstream to or downstream from the Delivery Point.
“Ultimate Parent” means Pattern Energy Group LP.
“WREGIS” means the Western Renewable Energy Generation Information System or any successor renewable energy tracking program.

DRAFT Item 5
Attachment 1
19 .
“WREGIS Certificate Deficit” has the meaning set forth in Section 4.8(e). “WREGIS Certificates” has the same meaning as “Certificate” as defined by WREGIS in the WREGIS Operating Rules and are designated as eligible for complying with the California Renewables Portfolio Standard.
“WREGIS Operating Rules” means those operating rules and requirements adopted by WREGIS as of October 2022, as subsequently amended, supplemented or replaced (in whole or in part) from time to time.

1.2 Rules of Interpretation.

In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement shall mean such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the term “including” means “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the word or provision in respect of which such examples are provided; (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; DRAFT Item 5
Attachment 1
20 (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) the expression “and/or” when used as a conjunction shall connote “any or all of”;
(l) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(m) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

ARTICLE 2
TERM; CONDITIONS PRECEDENT

2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions and any contract term extension provisions set forth herein (“Contract Term”).
(b) Applicable provisions of this Agreement shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 shall remain in full force and effect for following the termination of this Agreement, all indemnity and audit rights shall remain in full force and effect following, and Buyer’s obligation to return to Seller the Development Security and/or Performance Security less any amounts drawn in accordance with this Agreement shall remain in full force and effect following the termination of this Agreement.

2.2 Facility Ownership. Buyer acknowledges that, as of the Commercial Operation Date, the Facility will be owned by one or more of Seller’s Affiliates (each an “Owner”) that will be, in turn, owned by Seller, and the Facility will not be owned directly by Seller. As of the Commercial Operation Date, Seller will have, and throughout the Term Seller shall maintain, such agreements with Seller’s Affiliates and other instruments as are necessary for Seller to perform its obligations under this Agreement. References to Seller in this Agreement will include, as the context requires, Owners (including in respect of Seller performing the obligation DRAFT Item 5
Attachment 1
21 or causing Owners to perform the obligation). Seller will maintain its ownership of the Owners throughout the Delivery Term and will not sell or transfer Owners without Buyer’s consent, which consent shall not be withheld or delayed unreasonably.

2.3 Obligations Prior to Delivery Term. Prior to commencement of the Delivery Term, Seller shall complete each of the following conditions:
(a) Seller shall have delivered to Buyer certificates from a Licensed Professional Engineer substantially in the form of Exhibit F and Exhibit G; (b) A Pseudo-Tie Participating Generator Agreement (as defined in the CAISO Tariff) between Seller and CAISO, an agreement governing the terms of Dynamic Transfers between CAISO and the host Balancing Authority for the Facility, and a Meter Service Agreement for CAISO Metered Entities (as defined in the CAISO Tariff) between CAISO and Seller, if, with respect to each such agreement, it is required under the CAISO Tariff or for Seller to meet its obligations under this Agreement, shall have been executed and delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer; (c) An Interconnection Agreement between Seller and the PTO shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer;
(d) All applicable regulatory authorizations, approvals and permits for the operation of the Facility have been obtained (or if not obtained, applied for and reasonably expected to be received within ninety (90) days) and all conditions thereof have been satisfied and shall be in full force and effect;
(e) Seller has received the requisite pre-certification of the CEC Certification and Verification (and reasonably expects to receive final CEC Certification and Verification for the Facility in no more than one hundred eighty (180) days from the Commercial Operation Date);
(f) Seller (with the reasonable participation of Buyer) shall have completed all applicable WREGIS registration requirements pursuant to the WREGIS Operating Rules (that are reasonably capable of being completed prior to the Commercial Operation Date under the WREGIS Operating Rules), including the completion and submittal of all applicable registration forms and supporting documentation, which may include applicable interconnection agreements, informational surveys related to the Facility, QRE service agreements, and other appropriate documentation required to effect Facility registration with WREGIS and to enable Renewable Energy Credit transfers related to the Facility within the WREGIS system; (g) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8;
(h) Seller has paid Buyer for all Delay Damages due and owing under this Agreement, if any; and
DRAFT Item 5
Attachment 1
22 (i) Seller has delivered to Buyer a certificate from an authorized representative of Seller in the form of Exhibit M.

Upon request from Seller from time to time, Buyer shall confirm in writing the completion of those of the foregoing conditions that have been completed by Seller as of such request.

2.4 Progress Reports. The Parties agree time is of the essence in regard to the Agreement. Within fifteen (15) Business Days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the earlier of the Construction Start Date or the Guaranteed Construction Start Date, and (ii) each calendar month from the first calendar month following the earlier of the Construction Start Date or the Guaranteed Construction Start Date until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report that describes the progress towards meeting the Milestones and agree to regularly scheduled meetings between representatives of Buyer and Seller to review such monthly reports and discuss Seller’s construction progress. The content of the Progress Report is set forth in Exhibit C. Seller shall also provide Buyer with any reasonably requested documentation (subject to availability and confidentiality restrictions) directly related to the achievement of Milestones within Business Days of receipt of such request.

2.5 Remedial Action Plan.
(a) If Seller misses
, Seller shall submit to Buyer,
within ten (10) Business Days of such missed Milestone completion date, a remedial action plan (“Remedial Action Plan”), which will describe in detail any delays (actual or anticipated) beyond the scheduled Milestone dates, including the cause of the delay (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor),
(b) Delivery of any Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent Milestones and to achieve the Guaranteed Commercial Operation Date (as it may be extended) in accordance with the terms of this Agreement.
(c) So long as Seller is in compliance with its obligations under this Section

2.5, its failure to meet any Milestone shall not be a default under this Agreement.

2.6 Reserved.

2.7 Project Bifurcation or Transition. Notwithstanding the provisions of Section

2.2, Seller may, at any time during the Term, elect by Notice to Buyer to both terminate this Agreement and either (x) cause each Owner to simultaneously enter into a Replacement PPA with Buyer in respect of the portion of the Facility (i.e., SunZia Wind North or SunZia Wind South) owned by such Owner (a “Project Bifurcation”), or (y) cause the Owner of either (i) SunZia Wind South, or (ii) SunZia Wind North, to enter into a Replacement PPA with Buyer solely in respect of its portion of the Facility (a “Project Transition”). Each Replacement PPA DRAFT Item 5
Attachment 1
23 will be on the same terms and conditions as those set forth in this PPA, except for the following administrative changes that are necessary to effectuate the separation or transition of this Agreement into Replacement PPA(s) with the Owner or Owners (and such other administrative changes as may be necessary and would not require an additional approval from Buyer’s board), as applicable:
(a) the identity of Seller throughout shall be changed to reflect the identity of the applicable Owner;
(b) subject to the potential adjustment of the Installed Capacity pursuant to the terms of this Agreement or any Replacement PPA, the nameplate capacity of (i) each Owner’s portion of the Facility, in the case of a Project Bifurcation, or (ii) SunZia Wind South or SunZia Wind North, as applicable, in the case of a Project Transition (either the actual Installed Capacity, if the transition to the Replacement PPA(s) occurs after the final Installed Capacities have been determined under this Agreement, or the anticipated installed capacity at the time of the Project Bifurcation or Project Transition, as applicable, if otherwise) shall be inserted in “Description of Facility” in the Cover Sheet;
(c) Exhibit A (Facility Description) shall be revised to reflect (i) each Owner’s portion of the Facility in the case of a Project Bifurcation, or (ii) a description of SunZia Wind South or SunZia Wind North, as applicable, in the case of a Project Transition; (d) Exhibit K (Notices) shall be revised to reflect the appropriate information for each Owner signatory to the relevant Replacement PPA, as applicable; and (e) All instances of in this Agreement shall be changed in each Replacement PPA, on a pro rata basis, to reflect the installed capacity of each Owner’s portion of the Facility relative to, as applicable, either the actual Installed Capacity, if the Project Bifurcation or Project Transition, as applicable, occurs after the final Installed Capacity has been determined, or the anticipated installed capacity at the time of the Project Bifurcation or Project Transition, as applicable, if otherwise.
(f) In the case of a Project Bifurcation:
(i) subject to the potential adjustment of the Guaranteed Capacity pursuant to the terms of this Agreement or any Replacement PPA, the amount of the Guaranteed Capacity in the Cover Sheet of each Replacement PPA shall be changed, on a pro rata basis, to reflect the installed capacity of each Owner’s portion of the Facility, as applicable (either the actual Installed Capacity, if the transition to the Replacement PPAs occurs after the final Installed Capacities have been determined, or the anticipated installed capacity at the time of the transition, if otherwise); provided that, for the avoidance of doubt, the sum of the Guaranteed Capacities in the Cover Sheet in each Replacement PPA shall equal the Guaranteed Capacity in the Cover Sheet in this Agreement;
(ii) subject to the potential adjustment of the Expected Energy pursuant to the terms of this Agreement or any Replacement PPA, the amount of the Expected Energy in the Cover Sheet shall be reduced on a pro rata basis to reflect the nameplate capacity DRAFT Item 5
Attachment 1
24 and net capacity factor of each Owner’s portion of the Facility (either the actual Installed Capacity and net capacity factor when the final Installed Capacities have been determined or, if the final Installed Capacities have not yet been determined, the anticipated nameplate capacity and net capacity factor), as determined by Seller in its reasonable discretion; provided that, for the avoidance of doubt, the sum of the Expected Energy amounts in the Cover Sheet in each Replacement PPA shall equal the Expected Energy amount in the Cover Sheet in this Agreement;
(g) In the case of a Project Transition:
(i) subject to the potential adjustment of the Guaranteed Capacity pursuant to the terms of this Agreement or any Replacement PPA, the amount of the Guaranteed Capacity in the Cover Sheet of the Replacement PPA shall equal the amount of the Guaranteed Capacity in the Cover Sheet in this Agreement;
(ii) subject to the potential adjustment of the Expected Energy pursuant to the terms of this Agreement or any Replacement PPA, the amount of the Expected Energy in the Cover Sheet of the Replacement PPA shall equal the amount of the Expected Energy in the Cover Sheet in this Agreement.

In addition: (1) subject to the potential adjustment of the Installed Capacity pursuant to the terms of this Agreement or any Replacement PPA, if the Installed Capacity has been determined in accordance with this Agreement as of the effective date of the Replacement PPA(s), the Installed Capacity shall be revised to reflect the corresponding amount of installed nameplate capacity associated with (i) each Owner’s portion of the Facility in the case of a Project Bifurcation, or (ii) the installed nameplate capacity of SunZia Wind South or SunZia Wind North, as applicable, in the case of a Project Transition, (2) in the case of Project Bifurcation, contract values or requirements that are based on determinants that are changing as a result of such Project Bifurcation shall be adjusted on a pro rata basis under the Replacement PPAs to correspond to the changed determinants, including the amount of the Guaranteed Energy Production (which is set based on the Expected Energy) and the amount of required Development Security and Performance Security (which are each set based on the Guaranteed Capacity), and (3) Section 2.2 and Section 2.7 shall no longer apply and shall not be included in the Replacement PPA(s).

If Seller elects to consummate a Project Bifurcation or a Project Transition, Seller shall include in its Notice to Buyer drafts of each Replacement PPA, as applicable, and a draft agreement providing for the termination of this Agreement.

DRAFT Item 5
Attachment 1
25 Upon execution of the Replacement PPA(s) and termination of this Agreement: (A) each Owner shall deliver to Buyer substitute Development Security or Performance Security, as applicable, and as may be necessary or convenient; (B) upon receipt of the substitute Development Security or Performance Security referenced in item (A) of this sentence (if any), Buyer shall return to Seller the Development Security or Performance Security, as applicable, less any amounts drawn in accordance with this Agreement; (C) Buyer and the Owners shall, and the Owners shall cause Seller to, reasonably cooperate to implement any additional administrative actions that may be necessary to effectuate the Project Bifurcation or Project Transition (including, for example, in connection with WREGIS or CAISO); and (D) Seller shall have no further obligations to Buyer and Buyer shall have no further obligations to Seller, except for those obligations associated with the period of time prior to the termination of this Agreement.

ARTICLE 3

PURCHASE AND SALE

3.1 Sale of Product Subject to the terms and conditions of this Agreement, during the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase from Seller, all the Product produced by or associated with the Installed Capacity of the Facility, subject to the Hourly Delivery Cap. The sale by Seller and purchase by Buyer of Delivered Energy hereunder shall be for resale. During the Delivery Term, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product, or any component thereof, from the Facility after the Delivery Point for resale into the market or to any third party, and retain and receive any and all related revenues. Subject to Buyer’s obligations to pay for Deemed Delivered Energy, Buyer has no obligation to purchase from Seller any Product that is not or cannot be delivered to the Delivery Point or Alternative Delivery Point as a result of any circumstance, including, an outage of the Facility, a Force Majeure Event, or a Curtailment Order.

3.2 Sale of Green Attributes. During the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase from Seller, all of the Green Attributes attributable to the Delivered Energy.

3.3 Compensation.
(a) Delivered Energy. For each MWh of Delivered Energy and Replacement Energy in each Settlement Period or Settlement Interval, as applicable, Buyer shall pay DRAFT Item 5
Attachment 1
26 (b) Deemed Delivered Energy. For each Settlement Period or Settlement Interval, as applicable, during the Delivery Term, Buyer shall pay (c) Excess Deliveries. If, at any point in a Contract Year, the amount of Delivered Energy plus Deemed Delivered Energy
(d) Excess Settlement Interval Deliveries.

3.4 Imbalance Energy. Buyer and Seller recognize that from time to time the amount of Delivered Energy will deviate from the amount of Scheduled Energy. Seller shall be responsible for all CAISO costs, and shall be entitled to all CAISO revenues, associated with Imbalance Energy.

3.5 Ownership of Renewable Energy Incentives. Seller shall have all right, title and interest in and to all Renewable Energy Incentives. Buyer acknowledges that any Renewable Energy Incentives belong to Seller. If any Renewable Energy Incentives, or values representing the same, are initially credited or paid to Buyer, Buyer shall cause such Renewable Energy Incentives or values relating to same to be assigned or transferred to Seller without delay.

Buyer shall reasonably cooperate with Seller, at Seller’s sole expense, in Seller’s efforts to meet DRAFT Item 5
Attachment 1
27 the requirements for any certification, registration, or reporting program relating to Renewable Energy Incentives.

3.6 Future Environmental Attributes.
(a) The Parties acknowledge and agree that as of the Effective Date, environmental attributes sold under this Agreement are restricted to Green Attributes; however, Future Environmental Attributes may be created by a Governmental Authority through Laws enacted after the Effective Date. Subject to the final sentence of this Section 3.6(a), in such event, Buyer shall bear all costs associated with the transfer, qualification, verification, registration and ongoing compliance for Buyer’s Share of such Future Environmental Attributes, but there shall be no increase in the Contract Price. Upon Seller’s receipt of Notice from Buyer of Buyer’s intent to claim Buyer’s Share of such Future Environmental Attributes, the Parties shall determine the necessary actions and additional costs associated such Future Environmental Attributes. Seller shall have no obligation to alter the Facility or its operations unless the Parties have agreed on all necessary terms and conditions relating to such alteration and Buyer has agreed to reimburse Seller for all costs associated with such alteration. (b) If Buyer elects to receive Future Environmental Attributes pursuant to Section 3.6(a), the Parties agree to negotiate in good faith with respect to the development of further agreements and documentation necessary to effectuate the transfer of such Future Environmental Attributes, including agreement with respect to (i) appropriate transfer, delivery and risk of loss mechanisms, and (ii) appropriate allocation of any additional costs, as set forth above; provided, that the Parties acknowledge and agree that such terms are not intended to alter the other material terms of this Agreement.

3.7 Test Energy.

3.8 Capacity Attributes.
(a) Throughout the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all of the Capacity Attributes from the Facility. (b) Throughout the Delivery Term, Seller shall perform all commercially reasonable actions necessary to ensure that the Facility qualifies to provide Resource Adequacy Benefits at the Delivery Point. Throughout the Delivery Term, subject to Section 3.8(d), Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits to Buyer. (c) For the duration of the Delivery Term, Seller shall take all commercially reasonable actions, including complying with all applicable registration and reporting requirements, and execute any and all documents or instruments necessary to enable Buyer to use all of the Capacity Attributes committed by Seller to Buyer pursuant to this Agreement, including, if requested by Buyer, submitting Supply Plans in accordance with CAISO and CPUC requirements. For illustrative purposes only, as of the Effective Date, the applicable compliance deadlines are as follows: (A) forty-five (45) days prior to the Showing Month covered by the monthly Supply Plan; and (B) the last Business Day of October that is prior to commencement of DRAFT Item 5
Attachment 1
28 the year for the annual Supply Plan. The Parties acknowledge and agree that such dates may be modified by the CAISO from time to time throughout the Delivery Term. (d) Buyer acknowledges that it will be required to take certain actions and obtain certain rights at the Delivery Point in order to make use of the Capacity Attributes associated with the Product (including obtaining and maintaining Import Capability necessary to import the Guaranteed RA Amount from the Facility into the CAISO), in each case as may be required under applicable Law and as may change from time to time. Upon Buyer’s request, Seller shall use commercially reasonable efforts to support Buyer in obtaining such Import Capability. To the extent Buyer does not or cannot maintain Import Capability or any other rights or capacities necessary to support the importation of the Guaranteed RA Amount into the CAISO or otherwise receive or utilize the Capacity Attributes, for reasons other than a Seller failure under this Agreement or the inability of Seller to maintain the Facility as a Pseudo-Tie Resource, the Resource Adequacy Benefits that are not imported or that cannot be imported shall constitute Deemed Delivered RA.
(e) From and after the RA Guarantee Date, for any RA Shortfall Month, Seller shall be liable for liquidated damages (“RA Deficiency Amount”) in the amount of .

3.9 CEC Certification and Verification. Seller shall take all necessary steps including, but not limited to, making or supporting timely filings with the CEC to obtain and maintain CEC Certification and Verification for the Facility throughout the Delivery Term, including compliance with all applicable requirements for certified facilities set forth in the current version of the RPS Eligibility Guidebook (or its successor). Seller must promptly notify Buyer and the CEC of any changes to the information included in Seller’s application for CEC Certification and Verification for the Facility.

DRAFT Item 5
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29 3.10 CPUC Non-Modifiable Standard Terms and Conditions. (a) Eligibility. Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource (“ERR”) as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project’s output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6]
(b) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the Renewable Energy Credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1] (c) Tracking of RECs in WREGIS. Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System will be taken prior to the first delivery under the contract. [STC REC-2]

3.11 California Renewables Portfolio Standard. Upon request of Buyer, Seller shall provide records or other information reasonably required to demonstrate that the Product has been conveyed and delivered in accordance with the terms and conditions of this Agreement, including, subject to Section 3.12, scheduling or delivery information necessary to meet the requirements of the California Renewables Portfolio Standard for the Product. Subject to Section 3.12, Seller represents and warrants the Product meets the requirements set forth in PUC Code 399.16(b)(1) and the RPS compliance requirements for Portfolio Content Category 1 as set forth in CPUC Decision 11-12-052.

3.12 Compliance Expenditure Cap. Notwithstanding anything herein to the contrary, if Seller establishes to Buyer’s reasonable satisfaction that a change in Law occurring after the Effective Date has increased Seller’s cost above the cost that could reasonably have been contemplated as of the Effective Date to take all actions to comply with Seller’s obligations under the Agreement with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of (as applicable), the items listed below, then the Parties agree that the maximum amount of costs and expenses Seller shall be required to bear during the Delivery Term shall be capped at (“Compliance Expenditure Cap”):

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30 (a) CEC Certification and Verification;
(b) Green Attributes;
(c) WREGIS; and
(d) Capacity Attributes.

Any actions required for Seller to comply with its obligations set forth in the first paragraph above, the cost of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions.”
If Seller reasonably anticipates the need to incur out-of-pocket expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated out-of-pocket expenses.

Buyer will have sixty (60) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (1) agree to reimburse Seller for all or some portion of the costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or
If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by Buyer and Buyer shall reimburse Seller for Seller’s actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within sixty (60) days from the time that Buyer receives an invoice and documentation of such costs from Seller. If Buyer agrees to reimburse Seller for the Accepted Compliance Costs in an amount that is less than all of the costs DRAFT Item 5
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31 that exceed the Compliance Expenditure Cap, Seller shall only be obligated to take the Compliance Actions covered by the Accepted Compliance Costs.

The term “commercially reasonable efforts” as used in Section 3.10 means efforts consistent with and subject to this Section 3.12.

ARTICLE 4

OBLIGATIONS AND DELIVERIES

4.1 Delivery.
(a) Energy. Subject to the terms and conditions of this Agreement, Seller shall make available and Buyer shall accept all Delivered Energy on an as-generated, instantaneous basis. Seller shall effectuate the delivery of Delivered Energy through Dynamic Transfers, and shall be responsible for securing such arrangements with CAISO, the PTO and any other Transmission Provider as are necessary in connection therewith. (b) Green Attributes. Seller hereby provides and conveys all Green Attributes associated with the Delivered Energy as part of the Product being delivered. Seller represents and warrants that Seller holds the rights to all Green Attributes from the Facility, and Seller agrees to convey and hereby conveys all such Green Attributes to Buyer as included in the delivery of the Product from the Facility.

4.2 Title and Risk of Loss.
(a) Energy. Title to and risk of loss related to the Delivered Energy shall pass and transfer from Seller to Buyer at the Delivery Point. (b) Green Attributes. Title to and risk of loss related to the Green Attributes shall pass and transfer from Seller to Buyer upon the transfer of such Green Attributes in accordance with WREGIS.

4.3 Scheduling Coordinator Responsibilities.
(a) Seller as Scheduling Coordinator for the Facility. Seller shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for the delivery of the Product at the Delivery Point.

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32 (b) Floor Price.
(c) CAISO Costs and Revenues. Seller shall be responsible for all CAISO costs (including penalties, Imbalance Energy charges, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy payments, and other payments), including costs and revenues associated with CAISO dispatches, bid cost recovery, Inter-SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility. (d) Master File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master File and Resource Data Template (or successor data systems) for this Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. At least once per Contract Year, Seller shall review and confirm that the data provided for the CAISO’s Master File and Resource Data Template (or successor data systems) for this Facility remains consistent with the actual operating characteristics of the Facility and update such data as appropriate.

4.4 Forecasting. Seller shall provide the forecasts described below at its sole expense and in a format reasonably acceptable to Buyer (or Buyer’s designee). Seller shall use reasonable efforts to provide forecasts that are consistent with the information actually known by Seller at the time the forecasts are submitted and, to the extent not inconsistent with the requirements of this Agreement, shall prepare such forecasts, or cause such forecasts to be prepared, in accordance with Prudent Operating Practice. (a) Annual Forecast of Available Capacity. No less than forty-five (45) days before (i) the first day of the first Contract Year of the Delivery Term and (ii) the compliance deadline for the annual Supply Plan (which is currently the last Business Day of October that is prior to commencement of the year for the annual Supply Plan) for every subsequent Contract Year during the Delivery Term, Seller shall provide to Buyer a non-binding forecast of each DRAFT Item 5
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33 month’s Available Capacity, by hour, and Seller’s projection of scheduled maintenance for the following calendar year in a form reasonably requested by Buyer. (b) Annual Forecast of Energy. No less than forty-five (45) days before (i) the first day of the first Contract Year of the Delivery Term and (ii) the compliance deadline for the annual Supply Plan (which is currently the last Business Day of October that is prior to commencement of the year for the annual Supply Plan) for every subsequent Contract Year during the Delivery Term, Seller shall provide to Buyer a non-binding forecast of Buyer’s Share of each month’s average-day Energy expected to be produced by the Facility and delivered to the Delivery Point, net of all Electrical Losses, by hour, for the following calendar year in a form substantially similar to the table found in Exhibit D, or as reasonably requested by Buyer. (c) Monthly Forecast of Energy and Available Capacity. No less than thirty (30) days before the beginning of Commercial Operation, and thereafter ten (10) Business Days before the compliance deadline for the monthly Supply Plan for each Showing Month during the Delivery Term, Seller shall provide to Buyer a non-binding forecast of Buyer’s Share of the hourly Energy expected to be produced by the Facility and delivered to the Delivery Point, net of all Electrical Losses, and Available Capacity for each day of the following month in a form reasonably requested by Buyer (“Monthly Delivery Forecast”). (d) Daily Forecast of Available Capacity. By 5:30 AM Pacific Prevailing Time on the Business Day immediately preceding the date of delivery, Seller shall provide Buyer with (i) a non-binding forecast of its best estimate of Available Capacity and (ii) the Day-Ahead Forecast, in each case, for each hour of the immediately succeeding day. (e) Real-Time Forecasts. During the Delivery Term, Seller shall notify Buyer of any changes to the Day-Ahead Forecast resulting from changes of or more in available Installed Capacity, or when the hourly Energy expected to be produced by the Facility and delivered to the Delivery Point, net of all Electrical Losses, differs by more than , as applicable, of the amount set forth in the Day-Ahead Forecast, in each case, due to Forced Facility Outage or Force Majeure Event (such update, the “Real-Time Forecast”), as soon as reasonably possible, but no later than sixty (60) minutes prior to the deadline for submitting Schedules to the CAISO in accordance with the rules for participation in the Real-Time Market. If the available Installed Capacity or, if applicable, the hourly Energy expected to be produced by the Facility and delivered to the Delivery Point, net of all Electrical Losses, changes by at least , as applicable, due to Forced Facility Outage or Force Majeure Event as of a time that is less than one (1) hour prior to the Real-Time Market deadline, but before such deadline, then Seller must notify Buyer as soon as reasonably possible.

Such Real-Time Forecasts and shall
contain information regarding the beginning date and time of the event resulting in the change in Installed Capacity or hourly Energy expected to be produced by the Facility and delivered to the Delivery Point, net of all Electrical Losses, as applicable, the expected end date and time of such event, and any other information required by the CAISO or reasonably requested by Buyer.

With respect to any Forced Facility Outage, Seller shall use reasonable efforts to notify Buyer of such outage within ten (10) minutes of becoming aware of the Forced Facility Outage. Seller shall inform Buyer as soon as reasonably practicable of any developments that will affect either the duration of such outage or the availability of the Facility during or after the end of such DRAFT Item 5
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34 outage. These real-time forecasts shall be communicated by email to Buyer unless Buyer requests an alternative method of communications reasonably acceptable to Seller.

4.5 Dispatch Down/Curtailment.
(a) General. Subject to Section 4.5(b), Seller agrees to reduce deliveries of the Energy produced by the Facility by the amount and for the period set forth in any Curtailment Order; provided that Seller is not required to reduce such amount to the extent it is inconsistent with the limitations of the Facility set out in the Operating Restrictions. (b) Third-Party Sales.
(i) During a Curtailment Period, if, and for so long as, (ii) During Market Curtailment Periods,

4.6 Reduction in Delivery Obligation. For the avoidance of doubt, and in no way limiting Section 3.1 or Exhibit E:
(a) Facility Maintenance. Seller shall be permitted to reduce deliveries of Product during any period of scheduled maintenance on the Facility. (b) Forced Facility Outage. Seller shall be permitted to reduce deliveries of Product during any Forced Facility Outage. Seller shall provide Buyer with Notice and expected duration (if known) of any Forced Facility Outage and shall keep Buyer reasonably informed of any developments that will affect either the duration of the outage or the availability of the Facility during or after the end of such outage.

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35 (c) System Emergencies and other Events. Seller shall be permitted to reduce deliveries of Product
(d) Health and Safety. Seller shall be permitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2. (e) Real-Time Curtailment.

4.7 Guaranteed Energy Production.
(a) After the first Contract Year, Seller shall be required to deliver to Buyer no less than the Guaranteed Energy Production (as defined below) in each period of two (2) consecutive Contract Years during the Delivery Term (such that the first Performance Measurement Period comprises
(“Performance Measurement Period”).
“Guaranteed Energy Production” means
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36 (b)

4.8 WREGIS. Seller shall, at its sole expense, take all actions and execute all documents or instruments necessary to ensure that all WREGIS Certificates associated with all Renewable Energy Credits corresponding to all Delivered Energy are issued and tracked for purposes of satisfying the requirements of the California Renewables Portfolio Standard and transferred in a timely manner to Buyer for Buyer’s sole benefit. Seller shall transfer the Renewable Energy Credits to Buyer. Seller shall comply with all Laws, including the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates. Seller shall satisfy its obligations pursuant to Section 3.10(d) and Section 4.2(b) by fulfilling its obligations under Sections 4.8(a) through (f) below.
(a) Prior to the Commercial Operation Date, Seller shall register the Facility with WREGIS and establish an account with WREGIS (“Seller’s WREGIS Account”), which Seller shall maintain until the end of the Delivery Term. Seller shall transfer the WREGIS Certificates using Recurring Certificate Transfers from Seller’s WREGIS Account to the WREGIS account(s) of Buyer or the account(s) of a designee that Buyer identifies by Notice to Seller (“Buyer’s WREGIS Account”). Seller shall be responsible for all expenses associated with registering the Facility with WREGIS, establishing and maintaining Seller’s WREGIS Account, paying WREGIS Certificate issuance and transfer fees, and transferring WREGIS Certificates from Seller’s WREGIS Account to Buyer’s WREGIS Account. (b) Seller shall cause Recurring Certificate Transfers to occur on a monthly basis in accordance with the certification procedure established by the WREGIS Operating Rules. Since WREGIS Certificates will only be created for whole MWh amounts of Energy generated, any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate. WREGIS Certificates must DRAFT Item 5
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37 be matched with E-Tags associated with the Dynamic Transfers. WREGIS Certificates without matching E-Tags associated with Dynamic Transfers, will be rejected. (c) Seller shall, at its sole expense, ensure that the WREGIS Certificates for a given calendar month correspond with the Delivered Energy for such calendar month as evidenced by the Facility’s metered data.
(d) Due to the approximately fourteen (14) day delay in the creation of WREGIS Certificates relative to the timing of invoice payment under Section 8.2, Buyer shall make an invoice payment for a given month in accordance with Section 8.2 notwithstanding that the WREGIS Certificates may not have been formally transferred to Buyer in accordance with the WREGIS Operating Rules and this Section 4.8. Notwithstanding this delay, Buyer shall have all right and title to all such WREGIS Certificates upon payment to Seller in accordance with Section 8.2.
(e) A “WREGIS Certificate Deficit” means any deficit or shortfall in WREGIS Certificates delivered to Buyer for a calendar month as compared to the Delivered Energy for the same calendar month (“Deficient Month”). If any WREGIS Certificate Deficit is caused, or the result of any action or inaction, by Seller, then (f) If WREGIS changes the WREGIS Operating Rules after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Section 4.8 after the Effective Date, the Parties promptly shall modify this Section 4.8 as reasonably required to cause and enable Seller to transfer to Buyer’s WREGIS Account a quantity of WREGIS Certificates for each given calendar month that corresponds to the Delivered Energy in the same calendar month.

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38 ARTICLE 5
TAXES

5.1 Allocation of Taxes and Charges. Seller shall pay or cause to be paid all Taxes on or with respect to the Facility or on or with respect to the sale and delivery of Product to Buyer, that are imposed on Product prior to the Delivery Point. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of the Product that are imposed on Product at and from the Delivery Point (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees). If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, the exempted Party shall provide the other Party with all necessary documentation within thirty (30) days after the Effective Date to evidence such exemption or exclusion. If the exempted Party does not provide such documentation, then such Party shall indemnify, defend, and hold harmless the other Party from any liability with respect to Taxes from which the exempted Party claims it is exempt.

5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Energy delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Energy.

ARTICLE 6

MAINTENANCE OF THE FACILITY

6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent Operating Practice relating to the operation and maintenance of the Facility and the generation and sale of Product. On or before December 1st each year, Seller shall provide Buyer with the scheduled maintenance for the Facility for the next calendar year; provided, Seller shall provide Buyer with any updates to such schedule during each year consistent with Law and Prudent Operating Practice as soon as practicable; provided further, (a) during each period from during the Delivery Term, Seller shall not schedule any non-emergency maintenance of the Facility which reduces the energy generation capability of the Facility by more than , and (b) during each period from during the Delivery
Term, Seller shall not schedule any non
DRAFT
-emergency maintenance of the Facility
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39 6.2 Maintenance of Health and Safety. Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of the Facility. If Seller becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt, reasonable action to prevent such damage or injury and shall give Buyer’s emergency contact identified on Exhibit K Notice of such condition. Such action may include disconnecting and removing all or a portion of the Facility, or suspending the supply of Energy to Buyer.

6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Interconnection Facilities, Seller’s rights and obligations under the Interconnection Agreement and Seller’s rights and obligations under transmission service agreements with a Transmission Provider, may be subject to certain shared facilities and/or co-tenancy agreements (“Shared Facilities Agreements”) to be entered into among two or more of Seller, the Participating Transmission Owner, Seller’s Affiliates, and/or third parties pursuant to which certain Interconnection Facilities, interconnection service and/or transmission service may be subject to joint ownership and/or shared maintenance and operation arrangements.

ARTICLE 7

METERING

7.1 Metering. Seller shall measure the amount of Delivered Energy produced by the Facility using an Approved Meter. The Approved Meter shall be installed at the switching station adjacent to the SunZia East Converter Station and maintained at Seller’s cost. If the Approved Meter is inaccurate, Seller will cause such meter to be promptly corrected in accordance with Prudent Operating Practice and CAISO or PTO requirements, as applicable.

Seller will be responsible for any costs, fines or penalties, including imbalance charges as a result of the inaccurate meter. The meter shall be kept under seal, such seals to be broken only when the meters are to be tested, adjusted, modified or relocated. In the event that Seller breaks a seal, Seller shall notify Buyer as soon as practicable. In addition, Seller hereby agrees to provide all Approved Meter data to Buyer in a form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO or the PTO, as applicable, the meter data applicable to the Facility and all inspection, testing and calibration data and reports. Seller, or Seller’s Scheduling Coordinator, shall cooperate with Buyer to allow both Parties to retrieve the meter reads from the CAISO Market Results Interface – Settlements (MRIS-S) (or its successor) or directly from the Approved Meter at the Facility.

7.2 Meter Verification. Annually, if Seller has reason to believe there may be a meter malfunction, or upon Buyer’s reasonable request, Seller shall test the meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests.

If a meter is inaccurate it shall be promptly repaired or replaced. If a meter is inaccurate by more than one percent (1%) and it is not known when the meter inaccuracy commenced (if such evidence exists such date will be used to adjust prior invoices), then the invoices covering the DRAFT Item 5
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40 period of time since the last meter test shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during the second half of such period.

ARTICLE 8
INVOICING AND PAYMENT; CREDIT

8.1 Invoicing. Seller shall make good faith efforts to deliver an invoice to Buyer fifteen (15) Business Days after the end of the prior monthly delivery period. Each invoice shall provide Buyer (a) records of metered data, including metering and CAISO transaction data sufficient to document and verify the amount of Delivered Energy for each Settlement Period during the preceding month, the applicable Contract Price, the LMPs in the Day-Ahead Market and Real-Time Market at the Delivery Point for each Settlement Period and Settlement Interval, respectively, and information supporting the amount of Deemed Delivered Energy and Adjusted Energy Production,
(b) a reconciliation of hourly
meter data, E-Tag data and associated calculations, including the lesser of each by hour, ; (c) a statement of the quantity of
WREGIS Certificates transferred during the prior month that have been matched with E-Tags associated with the Dynamic Transfers; (d) access to any records, including invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; and (e) be in a reasonable format covering the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement.

8.2 Payment. Buyer shall make payment to Seller by wire transfer or ACH payment to the bank account designated by Seller in Exhibit K, which may be updated by Seller by Notice hereunder; provided, however, that changes to the invoices, payment, and wire transfer information set forth in Exhibit K must be made in writing and delivered via certified mail or a secured online method mutually agreed upon by both Parties, and shall include contact information for an authorized person who is available by telephone to verify the authenticity of such requested changes. Buyer shall pay undisputed invoice amounts within thirty (30) days after receipt of the invoice. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the prime rate published on the date of the invoice in The Wall Street Journal, or, if The Wall Street Journal is not published on that day, the next succeeding date of publication, plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.

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41 8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) years or as otherwise required by Law. Upon fifteen (15) days’ Notice to Seller, Buyer shall be granted reasonable access to the accounting books and records pertaining to all invoices generated pursuant to this Agreement.

8.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5, there is determined to have been a meter inaccuracy sufficient to require a payment adjustment, or if CAISO recalculates amounts due or owing in respect of prior periods. If the required adjustment is in favor of Buyer, Buyer’s monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice.

Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the non-erring Party received Notice thereof.

8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within ten (10) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned 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 but excluding the date repaid or deducted by the Party receiving such overpayment. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.

8.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all undisputed amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B and E, interest, and payments or credits, including pursuant to Section 4.3(c), shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.

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42 8.7 Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver Development Security to Buyer within after the Effective Date. Seller shall maintain the Development Security in full force and effect. Upon the earlier of (A) Seller’s delivery of the Performance Security, or (B) after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If and to the extent that any portion of the Development Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the required Credit Rating, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit, or (iv) becomes Bankrupt, Seller shall have ten (10) Business Days to post substitute collateral that meets the requirements set forth in the definition of Development Security. Seller shall have no obligation to replenish the Development Security following any draws thereon by Buyer. Seller’s maximum liability for an Event of Default or failure to perform its obligations hereunder prior to the Commercial Operation Date shall be capped at the amount of the Development Security, less any amounts collected by Buyer prior to such Event of Default or failure to perform.

8.8 Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date.

Seller shall maintain the Performance Security in full force and effect until the following have occurred: (A) the Delivery Term has expired or terminated early; and (B) all payment obligations of the Seller arising under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. Within ten (10) Business Days following any draw by Buyer on the Performance Security, Seller shall replenish the amount drawn such that Performance Security is restored to the amount on Cover Sheet. If and to the extent that any portion of the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the Credit Rating, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the end of the Delivery Term, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit, or (iii) becomes Bankrupt, Seller shall have ten (10) Business Days to post substitute collateral that meets the requirements set forth in the definition of Performance Security. If and to the extent that any portion of the Performance Security is a Guaranty, Seller shall (i) provide prompt Notice to Buyer if Guarantor becomes Bankrupt or otherwise fails to meet the criteria for an acceptable Guarantor as set forth in clauses (c) and (d) of the definition of Guarantor, but not later than ten (10) Business Days after Seller becomes aware of such development and (ii) post substitute collateral that meets the requirements set forth in the definition of Performance Security within ten (10) Business Days.

8.9 Financial Statements.
(a) If a Guaranty is provided as Performance Security in lieu of cash or a Letter of Credit, Seller shall provide to Buyer, or cause the Guarantor to provide to Buyer, unaudited quarterly and annual audited financial statements of the Guarantor (including a balance sheet and statements of income and cash flows), all prepared in accordance with generally accepted accounting principles in the United States, consistently applied.

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43 (b) Buyer shall provide to Seller (i) within one hundred twenty (120) days following the end of each fiscal year during the Contract Term, a copy of Buyer’s annual report containing audited consolidated financial statements for such fiscal year and (ii) within sixty (60) days after the end of each of its first three fiscal quarters of each fiscal year during the Contract Term, a copy of Buyer’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter. In all cases the statements shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles or International Financial Reporting Standards (“IFRS”); provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certifications, such unavailability shall not be an Event of Default so long as Buyer diligently pursues the preparation, certification, and delivery of the statements.

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

Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.10, the final sentence of Section 11.2 and the provisions of Article 12):
(a) Exercise any of its rights and remedies with respect to the Development Security or Performance Security, as applicable, including any such rights and remedies under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security, as applicable; and (c) Liquidate all Development Security or Performance Security, as applicable then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.

Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.

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44 ARTICLE 9

NOTICES

9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the physical or electronic addresses set forth on Exhibit K or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.

9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including email or other electronic means), at the time indicated by the time stamp upon delivery; or (d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission. In addition, for any Notice sent pursuant to (a), (b) or (d) above, the Party sending such Notice shall send a courtesy copy by email to the email address provided in Exhibit K.

ARTICLE 10

FORCE MAJEURE

10.1 Definition.
(a) “Force Majeure Event” means any act or event occurring after the Effective Date (or if occurring on or before the Effective Date, expanding, deteriorating or otherwise materially changing after the Effective Date) that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic, or pandemic, including COVID-19 (but only to the extent that new governmental rules or mandates related to COVID-19 are implemented that were not in place as of the Effective Date); landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; acts or failure to act by a Governmental Authority; war; blockade; civil insurrection; riot; civil DRAFT Item 5
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45 disturbance; serial defect; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below.
(c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including Buyer’s ability to buy Energy at a lower price, or Seller’s ability to sell Energy generated by the Facility at a higher price, than the Contract Price); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above that disables physical or electronic facilities necessary to transfer funds to the payee Party; (iv) a Curtailment Order, except to the extent that a Curtailment Order is caused by an event that otherwise qualifies as a Force Majeure Event; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility except to the extent such inability is caused by a Force Majeure Event; (vi) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Facility; (vii) any equipment failure except if such equipment failure is caused by a Force Majeure Event; or (viii) except as the Guaranteed Commercial Operation Date may be extended as a result of a Development Cure Period, Seller’s inability to achieve Commercial Operation following the Guaranteed Commercial Operation Date.

10.2 No Liability If a Force Majeure Event Occurs. Neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove such inability with due speed and diligence. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due speed and diligence shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party having such difficulty. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Construction Start Date, or Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(i) or Section 11.1(b)(ii) and receive a Damage Payment upon exercise of Buyer’s default rights pursuant to Section 11.2.

10.3 Notice. In the event of any delay or nonperformance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall (a) as soon as practicable, notify the other Party orally of the Force Majeure Event, followed by Notice in writing of the nature, cause, estimated date of commencement thereof, the anticipated extent of any delay or interruption in performance, and (b) notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected DRAFT Item 5
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46 Party; provided, however, that a Party’s failure to give timely Notice as provided in this Section

10.3 shall not affect such Party’s ability to assert that a Force Majeure Event has occurred unless the delay in giving Notice materially prejudices the other Party.

10.4 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be unable to perform its material obligations hereunder, and has continued for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon written Notice to the other Party experiencing the Force Majeure Event; provided that if Seller is the Party claiming such Force Majeure Event and such Force Majeure Event cannot reasonably be cured within such twelve (12) month period, then Seller may provide a plan to Buyer, which must be acceptable to Buyer in its reasonable discretion, to cure such Force Majeure Event within an additional six (6) month period and Buyer may not terminate this Agreement due to such Force Majeure Event unless Seller has not resumed performance of its material obligations hereunder upon the expiration of such additional six (6) month period. Upon any such termination, the non-claiming Party shall have no liability to the Party claiming Force Majeure Event, save and except for those obligations specified in Section 2.1(b).

ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION

11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within five (5) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default)
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47 (iv) failure by such Party to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 as applicable;
(v) such Party becomes Bankrupt;
(vi) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Sections 14.1, 14.2 or 14.3, as appropriate; or (v) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) The failure of Seller to achieve Construction Start within (ii) The failure of Seller to achieve Commercial Operation on or before the Guaranteed Commercial Operation Date (as extended by any Development Cure Period); (iii) except as otherwise provided herein, if at any time, Seller delivers or attempts to deliver Energy to the Delivery Point for sale under this Agreement that was not generated by the Facility;
(iv) with respect to any Guaranty provided for the benefit of Buyer, the failure by Seller to provide for the benefit of Buyer either (1) cash, (2) a replacement Guaranty from a different Guarantor meeting the criteria set forth in the definition of Guarantor, or (3) a replacement Letter of Credit from an issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) if any representation or warranty made by the Guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated, and such representation or warranty is not remedied within thirty (30) days after Notice thereof;
(B) the failure of the Guarantor to make any payment required or to perform any other material covenant or obligation in any Guaranty; (C) the Guarantor becomes Bankrupt;
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48 (D) the Guarantor shall fail to meet the criteria for an acceptable Guarantor as set forth in the definition of Guarantor; (E) the failure of the Guaranty to be in full force and effect (other than in accordance with its terms) prior to the indefeasible satisfaction of all obligations of Seller hereunder; or
(F) the Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any Guaranty; (vi) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a replacement Guaranty from a Guarantor meeting the criteria set forth in the definition of Guarantor, or (3) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least “A-” by S&P or “A3” by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit; (D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than sixty (60) days prior to the expiration of the outstanding Letter of Credit.
(vii) in any Performance Measurement Period, the Adjusted Energy Production Amount is not at least of the Expected Energy amount for such period;
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49 11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Contract Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment (in the case of an Event of Default by Seller occurring before the Commercial Operation Date) or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by Seller after the Commercial Operation Date or by Buyer throughout the Contract Term); (c) to withhold any payments due to the Defaulting Party under this Agreement;
(d) to suspend performance; and
(e) to exercise any other right or remedy available at Law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for the Terminated Transaction and the Event of Default related thereto.

11.3 Termination Payment. The termination payment (“Termination Payment”) for the Terminated Transaction shall be the aggregate of all Settlement Amounts plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the net Settlement Amount shall be zero. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties (which shall not include Affiliates of the Non-Defaulting Party) supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages; provided, however, that any lost Delivered Energy, Capacity Attributes and Green Attributes shall be deemed direct damages covered by this Agreement. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the DRAFT Item 5
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50 Non-Defaulting Party would incur in connection with the Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section Error! Reference source not found. or this Section Error! Reference source not found. (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section Error! Reference source not found. or this Section Error! Reference source not found. (as applicable) is the exclusive remedy of the Non-Defaulting Party in connection with the Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.

11.4 Notice of Payment of Termination Payment. As soon as practicable after a Terminated Transaction, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment and whether the Termination Payment is due to the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.

11.5 Disputes With Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 15.

11.6 Rights And Remedies Are Cumulative. Except where liquidated damages are provided as the exclusive remedy, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.

11.7 Mitigation. Any Non-Defaulting Party shall use commercially reasonable efforts to mitigate its Costs, Losses and damages resulting from any Event of Default of the other Party under this Agreement.

ARTICLE 12

LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES

12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF AN

EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, NEITHER PARTY SHALL

BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY SPECIAL,

PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR LOSSES

OR DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER FORESEEABLE

OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT, BY

STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE.

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51 12.2 Waiver and Exclusion of Other Damages. THE PARTIES CONFIRM THAT

THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF

LIABILITY CONTAINED IN THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO THE PARTIES’ LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE

REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.

NOTWITHSTANDING ANYTHING ELSE HEREIN TO THE CONTRARY, PRIOR TO THE COMMERCIAL OPERATION DATE, SELLER’S AGGREGATE LIABILITY

ARISING UNDER THIS AGREEMENT FOR ANY AND ALL REASONS

FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND

EXCLUSIVE REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS

REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH

PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.

IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. THE VALUE OF ANY TAX BENEFITS, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO

MITIGATE AFTER USE OF REASONABLE EFFORTS) AND AMOUNTS DUE IN

CONNECTION WITH THE RECAPTURE OF ANY RENEWABLE ENERGY INCENTIVES, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES.

TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.8, 4.7, 11.2 AND 11.3, AND AS

PROVIDED IN EXHIBIT B AND EXHIBIT E, THE PARTIES ACKNOWLEDGE THAT THE

DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE

OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THAT THE

LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE INTENT OF THE PARTIES THAT THE

LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES

BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO,

INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY

WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.

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52 THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND

THE EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY

FOR THE BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND

EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE

WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.

ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY

13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation, and is qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller.
(b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Seller’s performance under this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary corporate action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller. (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by Laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity.

13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of , and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All persons making up the governing body DRAFT Item 5
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53 of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law. (b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer. (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, including but not limited to community choice aggregation, the Joint Powers Act, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by Laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court, (3) relief by way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment.

13.3 General Covenants.
(a) Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(i) It shall continue to be duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and to be qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(ii) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and
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54 (iii) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and any contracts to which it is a party and in material compliance with any Law.
(b) Seller covenants that:
(i) Seller shall maintain Site Control throughout the Delivery Term; (ii) Seller shall obtain any and all permits and approvals, including without limitation, required environmental clearance under applicable environmental Law, from the local jurisdiction where the Facility is or will be constructed, as applicable. Seller agrees and acknowledges that Buyer is simply purchasing energy services under the PPA and does not intend to be the lead agency for the Facility.
(iii) Seller shall not knowingly utilize equipment or resources built with forced labor in connection with the construction, operation or maintenance of the Facility, including equipment or resources sourced from the Xinjiang region of China pursuant to the business advisory jointly issued by the U.S. Departments of State, Treasury, Commerce and Homeland Security on July 1, 2020 (as such guidance may be updated or modified by Governmental Authorities from time to time).
(iv) Commencing upon the production of Delivered Energy by the Facility and throughout the Delivery Term, Seller shall ensure that the Facility will have an interconnection agreement providing for interconnection capacity available or allocable to the Facility that is no less than the Guaranteed Capacity. Seller shall hold Buyer harmless from any penalties, imbalance energy charges, or other costs from CAISO or under the PPA resulting from Seller’s inability to provide, or any third party use of, such interconnection capacity.

13.4 Prevailing Wage. Seller shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals, including, without limitation employment discrimination laws and prevailing wage laws. Seller shall use commercially reasonable efforts to ensure that all employees hired by Seller, and its contractors and subcontractors, that will perform construction work or provide services at the Site related to the construction of the Facility are paid wages at rates not less than those prevailing for workers performing similar work in the locality as provided by applicable New Mexico law, if any (“Prevailing Wage Requirement”). Nothing herein shall require Seller, its contractors and subcontractors to comply with, or assume liability created by other inapplicable provisions of any New Mexico labor laws. Buyer agrees that Seller’s obligations for the Prevailing Wage Requirement may be satisfied upon the execution of a project labor agreement related to construction of the Facility.

ARTICLE 14

ASSIGNMENT

14.1 General Prohibition on Assignments. Except as provided below, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the written consent of the other Party, which consent shall not be unreasonably withheld. Any direct or indirect Change of Control of a Party (whether voluntary or by operation of Law) will DRAFT Item 5
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55 be deemed an assignment and will require the prior written consent of the other Party, except as provided in Section 14.3. Any assignment made without required written consent, or in violation of the conditions to assignment set out below, shall be null and void. The assigning Party shall be responsible for the other Party’s costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement, including without limitation reasonable attorneys’ fees.

14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility.

In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith work with Seller and Lender to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”) in a form mutually agreeable to Buyer, Seller and the applicable Lenders, and must include, among others, the following provisions; provided that Buyer shall not be required to consent to any additional terms or conditions that materially and adversely affect any of Buyer’s rights, benefits, risks or obligations under this Agreement:
(a)

14.3 Permitted Assignment. Notwithstanding Section 14.1, and in addition to its rights set forth in Section 14.2, Seller may at any time, without the prior written consent of Buyer, transfer or assign this Agreement (including by a Change of Control) (i) to an Affiliate of Seller, (ii) in connection with a tax equity financing (regardless of whether a Change of Control results from such tax equity financing), (iii) in connection with any other direct or indirect Change of Control to any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of Law), or (iv) as part of the sale or transfer of all or substantially all of the membership interests, equity, or assets of an Affiliate of Seller; provided, DRAFT Item 5
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56 with respect to clauses (iii) and (iv), such assignment or transfer shall not be effective unless (x) the assignee is a Permitted Transferee, and (y) Seller has given Buyer Notice at least prior to the date of such proposed assignment or transfer, and certifies that the assignee meets the definition of a Permitted Transferee.

14.4 Limited Assignment by Buyer. Buyer shall have the right to make a limited assignment in connection with a municipal prepayment transaction to an entity (“Limited Assignee”) that
ARTICLE 15
GOVERNING LAW; DISPUTE RESOLUTION

15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. [STC 17]

15.2 Venue. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Agreement DRAFT Item 5
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57 shall be brought in the federal courts of the United States or, if such federal courts refuse jurisdiction notwithstanding the Parties’ agreement, then in the courts of the State of California, in either case sitting in County of Santa Clara, California.

15.3 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, either Party may seek any and all remedies available to it at Law or in equity, subject to the limitations set forth in this Agreement.

15.4 Attorneys’ Fees. In any proceeding brought to enforce this Agreement or because of the breach by any Party of any covenant or condition herein contained, the prevailing Party shall be entitled to reasonable attorneys’ fees (including reasonably allocated fees of in-house counsel) in addition to court costs and any and all other costs recoverable in said action.

ARTICLE 16

INDEMNIFICATION

16.1 Indemnification.
(a) Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees, attorneys, representatives and agents (collectively, the “Indemnified Party”) from and against all third-party claims, demands, losses, liabilities, penalties, and expenses and expert witness fees (collectively “Indemnifiable Event”), to the extent such Indemnifiable Event arises out of, results from, or is caused by any of the following: (a) the negligent act or omission, recklessness or willful misconduct of the Indemnifying Party, its Affiliates, its or their directors, officers, employees, agents, subcontractors, and anyone directly or indirectly employed by the Indemnifying Party or any of its subcontractors or anyone that they control; or (b) any violation of applicable Law by the Indemnifying Party, in each case in connection with this Agreement.

Upon the Indemnified Party’s written request, the Indemnifying Party, at its own expense, must defend any suit or action that is subject to the Indemnifying Party’s indemnity obligations. The Parties’ indemnification obligations survive the expiration or termination of this Agreement until the relevant statute of limitations.
(b) Nothing in this Section 16.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting to the extent of its own negligence, intentional acts or willful misconduct.

These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.

16.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense DRAFT Item 5
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58 thereof with counsel designated by such Party and reasonably satisfactory to the Indemnified Party, provided, however, that if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim, provided that settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Notwithstanding the preceding sentence if the settlement consists solely of a monetary payment by the Indemnifying Party, such settlement shall not require the consent of the Indemnifying Party. Except as otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.

ARTICLE 17

INSURANCE

17.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance against claims for personal injury (including bodily injury and death) and property damage with a limit of liability of The
amounts of liability insurance described in this Article 17 may be satisfied by primary insurance or by any combination of primary and excess/umbrella insurance. Such insurance shall contain standard cross-liability and severability of interest provisions such that each person is protected in the same manner as though a separate policy has been issued to each but nothing therein shall operate to increase the insurance company’s liability beyond the amount the insurance company would have been liable if only one Person or interest had been named as insured. The liability insurance policies referenced in this Article 17 shall (x) provide an endorsement waiving rights of subrogation against Buyer, (y) name Buyer as additional insured on all required liability insurance (except workers compensation), and (z) be primary to any insurance of Buyer that may apply to such occurrence, accident or claim and no “other insurance” provision shall be applicable to Buyer or any additional insureds, by virtue of having been named an additional insured under any policy of insurance.
(b) Workers Compensation and Employer’s Liability Insurance. Employers’ Liability insurance shall not be less than One Million Dollars ($1,000,000) providing statutory benefits as required by Law (if any exposure exists) for injury, sickness, disability or death of the employees.

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59 (c) Business Auto Liability Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of combined single limit. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired motor vehicles in the performance of the Agreement.
(d) Property Insurance. Seller shall maintain or cause to be maintained property insurance covering the Facility against physical loss or damage, including coverage for natural perils including but not limited to flood, earthquake, windstorm, severe convective storm and wildfire, all with limits in accordance with industry standard recognizing that natural perils may be subject to a lower sublimit. Coverage will be on an “all-risk” basis including mechanical and electrical breakdown.

ARTICLE 18

CONFIDENTIAL INFORMATION

18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) pricing and other commercially-sensitive or proprietary information provided to or from Buyer in connection with the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.

18.2 Duty to Maintain Confidentiality. Except as permitted in this Article 18, neither Party shall disclose Confidential Information to a third party, except upon the written consent of the Disclosing Party. Confidential Information will retain its character as Confidential Information but may be disclosed by the recipient (the “Receiving Party”) if and to the extent such disclosure is required (a) to be made by any requirements of Law, (b) pursuant to an order of a court or (c) in order to enforce or implement this Agreement. If the Receiving Party 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) to disclose any Confidential Information of the disclosing Party (the “Disclosing Party”), Receiving Party shall provide Disclosing Party with prompt notice so that Disclosing Party, at its sole expense, may seek an appropriate protective order or other appropriate remedy. Each party hereto acknowledges and agrees that information and documentation provided may be subject to the California Records Act (Government Code Section 7920 et seq.).

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60 18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages may be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach may cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in Law, in equity or otherwise, Disclosing Party will be entitled to seek injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.

18.4 Permitted Disclosures. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by either Party to such Party’s counsel, accountants, auditors, advisors, other professional consultants, credit rating agencies, Affiliates or actual or prospective owners, investors, lenders, directors, underwriters, contractors, suppliers or others involved in the construction, operation and financing transactions and arrangements for a Party or its affiliates, or any of its or their agents, consultants or trustees, so long as the Person to whom Confidential Information is disclosed agrees in writing to be bound by the confidentiality provisions of this Article 18 to the same extent as if it were a Party, or is bound by substantially similar confidentiality requirements.

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

ARTICLE 19

MISCELLANEOUS

19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto, constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.

19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.

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61 19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.

19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy service provider and energy service recipient, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement).

19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.

19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support, any third party seeking to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v.

Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.

19.7 Counterparts. This Agreement may be executed in one or more counterparts, including electronic signatures, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.

19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party.

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

19.10 No Recourse to Members of Buyer. Buyer is organized as a joint powers authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights DRAFT Item 5
Attachment 1
62 and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors or Buyer or its constituent members, in connection with this Agreement.

19.11 Change in Electric Market Design.
(a) If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article 15.
(b) If any of the Transmission Systems utilized to deliver Product to the Delivery Point under this Agreement are integrated into a new or existing regional transmission organization or independent system operator and such integration has a material and adverse impact on either Party’s performance under this Agreement, including the costs of either Party to perform, then the affected Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to restore the balance of benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith; provided, that neither Party shall be obligated to amend this Agreement if such amendment(s) would materially adversely affect, or could reasonably be expected to have or result in a material adverse effect on, any of such Party’s rights, benefits, risks and/or obligations under this Agreement.

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[Signatures on following page]
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Attachment 1
[Signature Page – SunZia PPA SVCE]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

SunZia Wind PowerCo LLC
By:

Name:

Title:

Silicon Valley Clean Energy
By:

Name:

Title:

DRAFT Item 5
Attachment 1
Exhibit A - 1

EXHIBIT A

FACILITY DESCRIPTION
The Facility Description provided herein reflects Seller’s expectation for the Facility and the Site as of the Effective Date. Seller may, by Notice to Buyer prior to the Construction Start Date, modify the Site Name and Site Location within the counties set forth below. Except as otherwise provided in the Agreement, Seller shall not make any alteration or modification to the Facility which results in a change to the Guaranteed Capacity or the anticipated output of the Facility without Buyer’s prior written consent; provided that Seller shall be permitted to repower the Facility so long as Seller continues to be obligated to deliver Guaranteed Energy Production and Capacity Attributes associated with the Guaranteed Capacity during such repower.

Upon any such
repower that changes the Installed Capacity, Seller shall deliver an updated Installed Capacity Certificate in the form of Exhibit G.

Site Name: SunZia Wind North and SunZia Wind South
Site Map:

DRAFT Item 5
Attachment 1
wnziawiap uocumenis\zu2zu: _uuHHA_txniDit.mxa
Exhibit A - 2
as of the Effective Date and Site Location: Lincoln, Torrance and San Miguel Counties, New Mexico
Technology: Utility Scale Wind Technology
Guaranteed Capacity: 100 MWAC
Delivery Point: CAISO scheduling point-intertie combination at PALOVRDE_ASR-APND and PVWEST, or an Alternative Delivery Point as mutually agreed by the Parties Participating Transmission Owner: SunZia Transmission, LLC DRAFT Item 5
Attachment 1
Exhibit B - 1

EXHIBIT B

FACILITY CONSTRUCTION AND COMMERCIAL OPERATION

1. Construction of the Facility. “Construction Start” will occur upon Seller’s issuance of a full notice to proceed with the construction of the Facility following Seller’s execution of an EPC Contract related to the Facility. The date of Construction Start will be evidenced by Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit H hereto, and the date certified therein shall be the “Construction Start Date.” The Seller shall use commercially reasonable efforts to cause Construction Start to occur no later than the Guaranteed Construction Start Date. The “Guaranteed Construction Start Date” means the Expected Construction Start Date, subject to extensions on a day-for-day basis for the Development Cure Period.

2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when (i) Seller has fulfilled all of the conditions in Section 2.3 of the Agreement and (ii) Seller has confirmed to Buyer in writing that Commercial Operation has been achieved.

The “Commercial Operation Date” shall be the later of , and (y) the date on which Commercial Operation is achieved.
(a) Seller shall cause Commercial Operation for the Facility to occur by the Expected Commercial Operation Date (as such date may be extended by the Development Cure Period (defined below), the “Guaranteed Commercial Operation Date”). Seller shall notify Buyer at least sixty (60) days before the anticipated Commercial Operation Date. For the avoidance of doubt, Seller may continue to increase the Installed Capacity of the Facility after the Commercial Operation Date and will notify Buyer from time to time of such increases by delivering a certificate from a Licensed Professional Engineer substantially in the form attached as Exhibit G hereto; when the Installed Capacity is complete, Seller shall include a statement to that effect in a Notice accompanying the final such certificate.
(b) If Seller does not anticipate achieving Commercial Operation by the Guaranteed Commercial Operation Date, Seller may elect to extend the Guaranteed Commercial Operation Date by paying Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date, DRAFT Item 5
Attachment 1
Exhibit B - 2

3. Extension of the Guaranteed Dates. “Development Cure Period” means, DRAFT Item 5
Attachment 1
Exhibit B - 3

4. Failure to Reach Guaranteed Capacity. If, at Commercial Operation, of the Guaranteed Capacity has not been completed and is not ready to produce and deliver Product to Buyer, Seller shall have .

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Attachment 1
Exhibit C - 1

EXHIBIT C

PROGRESS REPORTING FORM
Each Progress Report must include the following items:

1. Executive summary.

2. Facility description.

3. Site plan of the Facility.

4. Description of any planned changes to the Facility or the site.

5. Schedule showing progress on achieving each of the Milestones.

6. Summary of activities during the previous calendar month/quarter.

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

8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones, and evidence of completion of Milestones, upon reasonable request from Buyer.

9. List of issues that could reasonably foreseeably affect Seller’s Milestones.

10. A status report of start-up activities including a forecast of activities ongoing and after start-up, a report on Facility performance including performance projections for the next twelve (12) months.

11. Progress and schedule of all major agreements, contracts, permits, approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.

12. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the PTO’s Transmission System and all other interconnection utility services.

13. Any other documentation, including copies of the Interconnection Agreement, transmission agreements and permits, as reasonably requested by Buyer, as such documentation may be redacted by Seller as necessary.

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Attachment 1
Exhibit D - 1

EXHIBIT D
FORM OF AVERAGE FORECAST OF ENERGY (MWh)
1:0
0 2:0
0 3:0
0 4:0
0 5:0
0 6:0
0 7:0
0 8:0
0 9:0
0 10:0
0 11:0
0 12:0
0 13:0
0 14:0
0 15:0
0 16:0
0 17:0
0 18:0
0 19:0
0 20:0
0 21:0
0 22:0
0 23:0
0 24:0
0 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
The foregoing table (i) is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement, and (ii) reflects expected P50 delivered volumes taking into account estimated X% physical losses from the Facility to the Delivery Point.

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Item 5
Attachment 1
Exhibit E - 1

EXHIBIT E

ENERGY REPLACEMENT DAMAGES CALCULATION
If Seller fails to achieve the Guaranteed Energy Production during any Performance Measurement Period, a liquidated damages (“Energy Replacement Damages”) payment shall be due from Seller to Buyer, calculated as follows:
[(A – B) * (C – D)] – E
where:

A = the Guaranteed Energy Production amount for the Performance Measurement Period, in MWh
B = the Adjusted Energy Production amount for the Performance Measurement Period, in MWh
C =
D = the Contract Price, in $/MWh
E = the amount of Energy Replacement Damages paid by Seller plus the value of any Replacement Product provided retrospectively by Seller, each with respect to the immediately preceding Performance Measurement Period “Adjusted Energy Production” shall mean the sum of the following: the Delivered Energy plus Lost Output plus Deemed Delivered Energy in the Performance Measurement Period.
“Energy Shortfall Amount” means the amount of MWh resulting from the calculation of A – B.
“Lost Output” means the sum of electric energy in MWh that would have been generated and delivered, but was not, on account of Force Majeure Event, Buyer’s failure to perform, System Emergency and Curtailment Order. The additional MWh comprising Lost Output shall be calculated in the same manner as Deemed Delivered Energy.

No payment shall be due if the calculation of (A - B) or (C - D) yields a negative number.

After each Contract Year, Buyer will send Seller Notice of the amount of damages owing, if any, which shall be payable to Buyer within thirty (30) days of such Notice; provided, DRAFT Item 5
Attachment 1
Exhibit E - 2
however, that (a) if, in accordance with Section 4.7(a), the Parties agreed that Seller would retrospectively deliver Replacement Product for a given Performance Measurement Period in lieu of Seller paying some or all of the Energy Replacement Damages, and (b) Seller does not deliver all such Replacement Product in the Contract Year immediately following such Performance Measurement Period, then Seller shall pay to Buyer the portion of the Energy Replacement Damages that correspond to the amount of MWh by which the Energy Shortfall Amount for such Performance Measurement Period exceeds the sum of (A) retrospectively delivered Replacement Product plus (B) that amount of MWh for which Seller paid Energy Replacement Damages pursuant to Section 4.7(a).

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Attachment 1
Exhibit F - 1

EXHIBIT F

FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by the undersigned, a licensed professional engineer and duly authorized representative of ____________________ in its capacity as independent engineer (“Engineer”) for purposes of this certification, to [____] (“Buyer”), pursuant to the [agreement between Seller and Engineer] and in connection with that certain Renewable Power Purchase and Sale Agreement dated _______ (“Agreement”) by and between [Pattern Entity] (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

Engineer hereby certifies and represents to Buyer the following:
(1) Wind turbines with a nameplate capacity of no less than of the Guaranteed Capacity have been installed at the Facility.
(2) Testing and commissioning of each wind turbine referred to in paragraph (1) above has been completed in accordance with its respective manufacturer’s specifications and each such wind turbine has delivered electricity to the Interconnection Point.
(3) Authorization to parallel the Facility was obtained by the Participating Transmission Owner on [DATE].

EXECUTED on this ________ day of _____________, 20__.

Sincerely,
By:
[NAME], P.E.
[TITLE]
DRAFT
New Mexico License No. [##]
Item 5
Attachment 1
Exhibit G - 1

EXHIBIT G

FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity is delivered by the undersigned, a licensed professional engineer and duly authorized representative of ________________ in its capacity as independent engineer (“Engineer”) for purposes of this certification, to [____] (“Buyer”), pursuant to the [agreement between Seller and Engineer] and in connection with that certain Renewable Power Purchase and Sale Agreement dated __________ (“Agreement”) by and between [Pattern Entity] (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

As of the date set forth below, [___] wind turbines with an aggregate nameplate capacity of [__], which is the Installed Capacity as of the date hereof, have been installed at the Facility, and testing and commissioning of each such wind turbines has been completed in accordance with the turbine supply agreement and each such wind turbine has delivered electricity to the Interconnection Point.

EXECUTED on this ________ day of _____________, 20__.

Sincerely,
By:
[NAME], P.E.
[TITLE]
New Mexico License No. [##]
Exp. [DATE]
DRAFT Item 5
Attachment 1
Exhibit H - 1

EXHIBIT H

FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [Pattern Entity] (“Seller”) to [____] (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase and Sale Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

Seller hereby certifies and represents to Buyer the following:
(1) the EPC Contract related to the Facility was executed on __________;
(2) the full notice to proceed with the construction of the Facility was issued on ______________ (attached) (the “Construction Start Date”); (3) the Construction Start Date has occurred;
(4) the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site:
___________________________ (such description shall amend the description of the Site in Exhibit A).

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

By:

Printed Name:

Title:

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Attachment 1

EXHIBIT I

FORM OF LETTER OF CREDIT
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [●]
DATE: [●]
BENEFICIARY:

APPLICANT:
[NAME, ADDRESS, CONTACT]
EXPIRATION DATE: [●]
AMOUNT/CURRENCY: [●]
AT THE REQUEST OF AND FOR THE ACCOUNT OF APPLICANT, WE, [INSERT BANK NAME AND ADDRESS] (“ISSUER”), HEREBY ESTABLISH IN YOUR FAVOR IN

RESPECT OF OBLIGATIONS OF APPLICANT OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER [●] (“LETTER OF CREDIT”) IN FAVOR OF [____] (“BENEFICIARY”), [BENEFICIARY ADDRESS], WHEREBY, SUBJECT TO THE TERMS

AND CONDITIONS CONTAINED HEREIN, BENEFICIARY IS HEREBY AUTHORIZED

TO DRAW ON US, BY SIGHT, BY ITS DRAWING STATEMENT AS PROVIDED HEREIN, FOR AN AGGREGATE AMOUNT UP TO BUT NOT EXCEEDING [●] (THE “FACE AMOUNT”).

WE ARE ADVISED THIS LETTER OF CREDIT IS IRREVOCABLE AND IS ESTABLISHED

AS SECURITY PURSUANT TO THAT CERTAIN RENEWABLE POWER PURCHASE AND SALE AGREEMENT DATED AS OF ___________, 2023 BETWEEN APPLICANT AND BENEFICIARY (THE “AGREEMENT”).

THIS LETTER OF CREDIT SHALL BE EFFECTIVE IMMEDIATELY AND SHALL EXPIRE ON [●], WHICH IS ONE YEAR AFTER THE ISSUE DATE OF THIS LETTER OF CREDIT,

OR ANY EXPIRATION DATE EXTENDED IN ACCORDANCE WITH THE TERMS HEREOF (THE “EXPIRATION DATE”).

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE

AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ADDITIONAL TWELVE (12) MONTH PERIODS FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE, BUT IN NO EVENT TO AN EXPIRATION DATE LATER THAN [●], UNLESS AT LEAST THIRTY (30) DAYS PRIOR TO THE EXPIRATION DATE WE SEND NOTICE IN

WRITING TO YOU VIA HAND DELIVERY OR OVERNIGHT COURIER AT THE ABOVE

ADDRESS, THAT WE ELECT NOT TO AUTOMATICALLY EXTEND THIS LETTER OF CREDIT FOR ANY ADDITIONAL PERIOD.

Exhibit I - 1
DRAFT Item 5
Attachment 1

ON OR BEFORE THE EXPIRATION DATE OF THIS LETTER OF CREDIT YOU MAY

DRAW ON US HEREUNDER FOR UP TO THE FULL UNUTILIZED AMOUNT AVAILABLE AS OF THE DATE OF DRAWING ON THIS LETTER OF CREDIT.

PARTIAL AND MULTIPLE DRAWINGS ARE PERMITTED UNDER THIS LETTER OF

CREDIT (PROVIDED THAT THE CUMULATIVE AGGREGATE AMOUNT THAT MAY

BE DEMANDED UNDER THIS LETTER OF CREDIT SHALL NOT EXCEED THE FACE

AMOUNT), AND THIS LETTER OF CREDIT SHALL REMAIN IN FULL FORCE AND EFFECT WITH RESPECT TO ANY CONTINUING BALANCE.

FUNDS UNDER THIS LETTER OF CREDIT SHALL BE AVAILABLE TO THE

BENEFICIARY UPON PRESENTATION TO US OF A DATED DRAWING CERTIFICATE

IN THE FORM OF EXHIBIT A HERETO (WHICH IS AN INTEGRAL PART OF THIS

LETTER OF CREDIT) PURPORTEDLY SIGNED BY THE BENEFICIARY'S DULY AUTHORIZED REPRESENTATIVE. [THE ORIGINAL OF THIS LETTER OF CREDIT (AND ALL AMENDMENTS, IF ANY) IS NOT REQUIRED TO BE PRESENTED IN

CONNECTION WITH ANY PRESENTMENT OF A DRAWING CERTIFICATE BY BENEFICIARY HEREUNDER IN ORDER TO RECEIVE PAYMENT.]

THE DRAWING CERTIFICATE MAY BE PRESENTED BY (A) PHYSICAL DELIVERY TO [ADDRESS], (B) [AS A PDF ATTACHMENT TO AN EMAIL TO [BANK EMAIL ADDRESS]], OR (C) BY FACSIMILE TO [FAX NUMBER]. [TRANSMITTAL BY FACSIMILE [OR EMAIL] SHALL BE DEEMED DELIVERED WHEN RECEIVED.]

ALL PAYMENTS MADE UNDER THIS LETTER OF CREDIT SHALL BE MADE WITH ISSUER’S OWN IMMEDIATELY AVAILABLE FUNDS BY MEANS OF WIRE TRANSFER IN IMMEDIATELY AVAILABLE UNITED STATES DOLLARS TO BENEFICIARY’S

ACCOUNT AS INDICATED BY BENEFICIARY IN ITS DRAWING CERTIFICATE OR IN A COMMUNICATION ACCOMPANYING ITS DRAWING CERTIFICATE.

WE HEREBY AGREE THAT THE DRAWING DOCUMENTS DRAWN UNDER AND IN

COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT WILL BE DULY

HONORED BY US UPON DELIVERY OF THE ABOVE SPECIFIED DRAWING

CERTIFICATE, IF PRESENTED ON OR BEFORE THE EXPIRATION DATE AS SPECIFIED HEREIN.

AS STIPULATED HEREIN, “BUSINESS DAY” SHALL MEAN ANY DAY OTHER THAN A

SATURDAY, SUNDAY OR A DAY ON WHICH BANKING INSTITUTIONS IN THE STATE OF ____________ ARE AUTHORIZED OR REQUIRED BY LAW TO CLOSE. IF

ANY DRAWING OR THE DOCUMENTATION PRESENTED IN CONNECTION

THEREWITH, DOES NOT CONFORM TO THE TERMS AND CONDITIONS HEREOF, WE

WILL ADVISE YOU OF THE SAME BY TELEPHONE OR FACSIMILE AND GIVE THE REASONS FOR SUCH NON-CONFORMANCE.

THIS LETTER OF CREDIT IS ISSUED SUBJECT TO THE RULES OF THE ‘INTERNATIONAL STANDBY PRACTICES 1998’, INTERNATIONAL CHAMBER OF Exhibit I - 2
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Attachment 1
Exhibit I - 3
COMMERCE PUBLICATION NO. 590 (‘ISP98’) AND AS TO MATTERS NOT ADDRESSED BY ISP98 SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF STATE OF ____________.

NOTWITHSTANDING ANY REFERENCE IN THIS LETTER OF CREDIT TO ANY OTHER

DOCUMENTS, INSTRUMENTS OR AGREEMENTS (OTHER THAN AS SET FORTH IN

THE IMMEDIATELY PRIOR PARAGRAPH), THIS LETTER OF CREDIT CONTAINS THE

ENTIRE AGREEMENT BETWEEN BENEFICIARY AND ISSUER RELATING TO THE OBLIGATIONS OF ISSUER HEREUNDER.

OTHER THAN AS PROVIDED HEREIN, COMMUNICATIONS WITH RESPECT TO THIS

LETTER OF CREDIT SHALL BE IN WRITING, SHALL SPECIFICALLY REFER TO BENEFICIARY AND TO OUR LETTER OF CREDIT NO. [●], AND SHALL BE ADDRESSED TO: [●]

ALL NOTICES TO BENEFICIARY SHALL BE IN WRITING AND ARE REQUIRED TO BE SENT BY CERTIFIED LETTER, OVERNIGHT COURIER OR DELIVERED IN PERSON TO:
[BENEFICIARY], ATTN: [BENEFICIARY ADDRESS]. ONLY NOTICES TO

BENEFICIARY MEETING THE REQUIREMENTS OF THIS PARAGRAPH SHALL BE CONSIDERED VALID. ANY NOTICE TO BENEFICIARY WHICH IS NOT IN

ACCORDANCE WITH THIS PARAGRAPH SHALL BE VOID AND OF NO FORCE OR EFFECT.

ALL COSTS RELATED TO THIS LETTER OF CREDIT SHALL BE PAID BY THE APPLICANT.

ALL PARTIES TO THIS LETTER OF CREDIT ARE ADVISED THAT THE U.S.

GOVERNMENT HAS IN PLACE CERTAIN SANCTIONS AGAINST CERTAIN COUNTRIES, TERRITORIES, INDIVIDUALS, ENTITIES, AND VESSELS. ISSUER

ENTITIES, INCLUDING BRANCHES AND, IN CERTAIN CIRCUMSTANCES,

SUBSIDIARIES, ARE/WILL BE PROHIBITED FROM ENGAGING IN TRANSACTIONS OR OTHER ACTIVITIES WITHIN THE SCOPE OF APPLICABLE SANCTIONS.

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Exhibit I - 4
EXHIBIT “A”

DRAWING CERTIFICATE
TO: [ISSUING BANK]
RE: IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER [●] ISSUED BY [ISSUING BANK] TO [BENEFICIARY] (“LETTER OF CREDIT”); CAPITALIZED TERMS USED BUT

NOT DEFINED IN THIS DRAWING CERTIFICATE HAVE THE MEANINGS ASCRIBED

TO THEM IN THE LETTER OF CREDIT)

THIS IS A DRAWING CERTIFICATE UNDER THE ABOVE-MENTIONED LETTER OF CREDIT.

I, , AN AUTHORIZED REPRESENTATIVE OF [BENEFICIARY], DO HEREBY CERTIFY THAT:

APPLICANT AND BENEFICIARY ARE PARTY TO THAT CERTAIN RENEWABLE POWER PURCHASE AND SALE AGREEMENT DATED AS OF ___________, 2023 (THE “AGREEMENT”).
[CHOOSE ONLY ONE OF THE FOLLOWING]
(1) BENEFICIARY IS MAKING A DRAWING UNDER THIS LETTER OF CREDIT IN THE AMOUNT OF U.S. $___________ BECAUSE [A SELLER

EVENT OF DEFAULT (AS SUCH TERM IS DEFINED IN THE

AGREEMENT) HAS OCCURRED OR OTHER OCCASION PROVIDED FOR

IN THE AGREEMENT WHERE BENEFICIARY IS AUTHORIZED TO DRAW ON THE LETTER OF CREDIT HAS OCCURRED][OR][A COD DELAY

DAMAGES PAYMENT (AS SUCH TERM IS DEFINED IN THE
AGREEMENT) IS DUE UNDER THE AGREEMENT].
(2) BENEFICIARY IS MAKING A DRAWING UNDER THIS LETTER OF CREDIT IN THE AMOUNT OF U.S. $___________, WHICH EQUALS THE

FULL AVAILABLE AMOUNT UNDER THE LETTER OF CREDIT,

BECAUSE APPLICANT IS REQUIRED TO MAINTAIN THE LETTER OF

CREDIT IN FORCE AND EFFECT BEYOND THE EXPIRATION DATE OF

THE LETTER OF CREDIT BUT HAS FAILED TO PROVIDE BENEFICIARY

WITH A REPLACEMENT LETTER OF CREDIT OR OTHER ACCEPTABLE INSTRUMENT WITHIN SIXTY (60) DAYS PRIOR TO SUCH EXPIRATION DATE.

IN ACCORDANCE WITH THE TERMS OF THE AGREEMENT , [BENEFICIARY] IS ENTITLED TO AND HEREBY DEMANDS PAYMENT OF USD _________, SUCH AMOUNT TO BE PAID TO [BENEFICIARY] BY WIRE TRANSFER IN IMMEDIATELY DRAFT Item 5
Attachment 1
Exhibit I - 5
AVAILABLE FUNDS TO: (INSERT WIRE INSTRUCTIONS),WHICH, [____] CERTIFIES IT IS ENTITLED TO UNDER THE AGREEMENT.

COMMUNICATIONS TO ME CONCERNING THIS DRAWING CERTIFICATE MAY BE MADE AT FOLLOWING TELEPHONE AND FACSIMILE NUMBERS: ____________; _________________.

IN WITNESS WHEREOF, [BENEFICIARY] THROUGH ITS AUTHORIZED

REPRESENTATIVE HAS EXECUTED AND DELIVERED THIS DRAWING CERTIFICATE THIS DAY OF , 20 _.
[____]
BY:

NAME:

TITLE:

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Attachment 1
Exhibit J - 1

EXHIBIT J

FORM OF GUARANTY
This Guaranty (this “Guaranty”) is entered into as of [_____] (the “Effective Date”) by and between [_____], a [______] (“Guarantor”), and [____] (together with its successors and permitted assigns, “Buyer”).

Recitals
A. Buyer and _____________________, a _____________________ (“Seller”), entered into that certain Renewable Power Purchase Agreement (as amended, restated or otherwise modified from time to time, the “PPA”) dated as of [____], 20___.

B. Guarantor is entering into this Guaranty as Performance Security to secure Seller’s obligations under the PPA, as required by Section 8.8 of the PPA.

C. It is in the best interest of Guarantor to execute this Guaranty inasmuch as Guarantor will derive substantial direct and indirect benefits from the execution and delivery of the PPA.

D. Initially capitalized terms used but not defined herein have the meaning set forth in the PPA.

Agreement

1. Guaranty. For value received, Guarantor does hereby unconditionally, absolutely and irrevocably guarantee, as primary obligor and not as a surety, to Buyer the full, complete and prompt payment by Seller of any and all amounts and payment obligations now or hereafter owing from Seller to Buyer under the PPA, including, without limitation, compensation for penalties, the Termination Payment, indemnification payments or other damages, as and when required pursuant to the terms of the PPA, provided, that Guarantor’s aggregate liability under or arising out of this Guaranty shall not exceed the sum of ________ Dollars ($___________), plus reasonable costs incurred by Buyer in enforcing this Guaranty, if successful, not to exceed [________ Dollars ($___________)] (the “Guaranteed Amount”). The Parties understand and agree that any payment by Guarantor shall thereafter reduce the Guaranteed Amount hereunder on a dollar-for-dollar basis. This Guaranty is an irrevocable, absolute, unconditional and continuing guarantee of the full and punctual payment and performance, and not of collection, of the Guaranteed Amount and, except as otherwise expressly addressed herein, is in no way conditioned upon any requirement that Buyer first attempt to collect the payment of the Guaranteed Amount from Seller, any other guarantor of the Guaranteed Amount or any other person or entity or resort to any other means of obtaining payment of the Guaranteed Amount. In the event Seller shall fail to duly, completely or punctually pay any Guaranteed Amount as required pursuant to the PPA, Guarantor shall promptly pay such amount as required herein.

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Attachment 1
Exhibit J - 2

2. Demand Notice. For avoidance of doubt, a payment shall be due for purposes of this Guaranty only when and if a payment is due and payable by Seller to Buyer under the terms and conditions of the Agreement. If Seller fails to pay any Guaranteed Amount as required pursuant to the PPA for five (5) Business Days following Seller’s receipt of Buyer’s written notice of such failure (the “Demand Notice”), then Buyer may elect to exercise its rights under this Guaranty and may make a demand upon Guarantor (a “Payment Demand”) for such unpaid Guaranteed Amount. A Payment Demand shall be in writing and shall reasonably specify in what manner and what amount Seller has failed to pay and an explanation of why such payment is due and owing, with a specific statement that Buyer is requesting that Guarantor pay under this Guaranty. Guarantor shall, within five (5) Business Days following its receipt of the Payment Demand, pay the Guaranteed Amount to Buyer.

3. Scope and Duration of Guaranty. This Guaranty applies only to the Guaranteed Amount. This Guaranty shall continue in full force and effect from the Effective Date until the earlier of the following: (x) all Guaranteed Amounts have been paid in full (whether directly or indirectly through set-off or netting of amounts owed by Buyer to Seller), or (y) replacement Performance Security is provided in an amount and form required by the terms of the PPA.

Further, this Guaranty (a) shall remain in full force and effect without regard to, and shall not be affected or impaired by any invalidity, irregularity or unenforceability in whole or in part of this Guaranty, and (b) subject to the preceding sentence, shall be discharged only by complete performance of the undertakings herein. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be released, discharged, or otherwise affected and this Guaranty shall not be invalidated or impaired or otherwise affected for the following reasons:
(i) the extension of time for the payment of any Guaranteed Amount, or (ii) any amendment, modification or other alteration of the PPA, or (iii) any indemnity agreement Seller may have from any party, or (iv) any insurance that may be available to cover any loss, except to the extent insurance proceeds are used to satisfy the Guaranteed Amount, or (v) any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, Seller or any of its assets, including but not limited to any rejection or other discharge of Seller’s obligations under the PPA imposed by any court, trustee or custodian or any similar official or imposed by any law, statue or regulation, in each such event in any such proceeding, or (vi) the release, modification, waiver or failure to pursue or seek relief with respect to any other guaranty, pledge or security device whatsoever, or (vii) any payment to Buyer by Seller that Buyer subsequently returns to Seller pursuant to court order in any bankruptcy or other debtor-relief proceeding, or DRAFT Item 5
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Exhibit J - 3
(viii) those defenses based upon (A) the legal incapacity or lack of power or authority of any person, including Seller and any representative of Seller to enter into the PPA or perform its obligations thereunder, (B) lack of due execution, delivery, validity or enforceability, including of the PPA, or (C) Seller’s inability to pay any Guaranteed Amount or perform its obligations under the PPA, or
(ix) any other event or circumstance that may now or hereafter constitute a defense to payment of the Guaranteed Amount, including, without limitation, statute of frauds and accord and satisfaction;
provided that Guarantor reserves the right to assert for itself any defenses, setoffs or counterclaims that Seller is or may be entitled to assert against Buyer (except for such defenses, setoffs or counterclaims that may be asserted by Seller with respect to the PPA, but that are expressly waived under any provision of this Guaranty).

4. Waivers by Guarantor. Guarantor hereby unconditionally waives as a condition precedent to the performance of its obligations hereunder, with the exception of the requirements in Paragraph 2, (a) notice of acceptance, presentment or protest with respect to the Guaranteed Amounts and this Guaranty, (b) notice of any action taken or omitted to be taken by Buyer in reliance hereon, (c) any requirement that Buyer exhaust any right, power or remedy or proceed against Seller under the PPA, and (d) any event, occurrence or other circumstance which might otherwise constitute a legal or equitable discharge of a surety. Without limiting the generality of the foregoing waiver of surety defenses, it is agreed that the occurrence of any one or more of the following shall not affect the liability of Guarantor hereunder:
(i) at any time or from time to time, without notice to Guarantor, the time for payment of any Guaranteed Amount shall be extended, or such performance or compliance shall be waived;
(ii) the obligation to pay any Guaranteed Amount shall be modified, supplemented or amended in any respect in accordance with the terms of the PPA; (iii) (a) sale, transfer or consolidation of Seller into or with any other entity, (b) sale of substantial assets by, or restructuring of the corporate existence of, Seller or (c) change in ownership of any membership interests of, or other ownership interests in, Seller; or (iv) the failure by Buyer or any other person to create, preserve, validate, perfect or protect any security interest granted to, or in favor of, Buyer or any person.

5. Subrogation. Notwithstanding any payments that may be made hereunder by the Guarantor, Guarantor hereby agrees that until the earlier of payment in full of all Guaranteed Amounts or expiration of the Guaranty in accordance with Section 3, it shall not be entitled to, nor shall it seek to, exercise any right or remedy arising by reason of its payment of any Guaranteed Amount under this Guaranty, whether by subrogation or otherwise, against Seller or seek contribution or reimbursement of such payments from Seller.

6. Representations and Warranties. Guarantor hereby represents and warrants that (a) it has all necessary and appropriate limited liability company powers and authority and the DRAFT Item 5
Attachment 1
Exhibit J - 4
legal right to execute and deliver, and perform its obligations under, this Guaranty, (b) this Guaranty constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this Guaranty does not and will not contravene Guarantor’s organizational documents, any applicable law or any contractual provisions binding on or affecting Guarantor, (d) there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the Guarantor, threatened, against or affecting Guarantor or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of Guarantor to enter into or perform its obligations under this Guaranty, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority, and no consent of any other Person (including, any stockholder or creditor of the Guarantor), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by Guarantor.

7. Notices. Notices under this Guaranty shall be deemed received if sent to the address specified below: (i) on the day received if served by overnight express delivery, and (ii) four business days after mailing if sent by certified, first class mail, return receipt requested. If transmitted by facsimile, such notice shall be deemed received when the confirmation of transmission thereof is received by the party giving the notice. Any party may change its address or facsimile to which notice is given hereunder by providing notice of the same in accordance with this Paragraph 7.

If delivered to Buyer, to it at [____]
Attn: [____]
Fax: [____]
If delivered to Guarantor, to it at [____]
Attn: [____]
Fax: [____]

8. Governing Law and Forum Selection. This Guaranty shall be governed by, and interpreted and construed in accordance with, the laws of the United States and the State of California, excluding choice of law rules. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Guaranty shall be brought in the federal courts of the United States sitting in the County of Santa Clara, California.

9. Miscellaneous. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of Buyer and its successors and permitted assigns pursuant to the PPA. No provision of this Guaranty may be amended or waived except by a written instrument executed by Guarantor and Buyer. This Guaranty is not assignable by Guarantor without the prior written consent of Buyer. No provision of this Guaranty confers, nor is any provision intended to confer, upon any third party (other than Buyer’s successors and permitted assigns) any benefit or right enforceable at the option of that third party. This Guaranty embodies the entire agreement and understanding of the parties hereto with respect to the subject matter DRAFT Item 5
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Exhibit J - 5
hereof and supersedes all prior or contemporaneous agreements and understandings of the parties hereto, verbal or written, relating to the subject matter hereof. If any provision of this Guaranty is determined to be illegal or unenforceable (i) such provision shall be deemed restated in accordance with applicable Laws to reflect, as nearly as possible, the original intention of the parties hereto and (ii) such determination shall not affect any other provision of this Guaranty and all other provisions shall remain in full force and effect. This Guaranty may be executed in any number of separate counterparts, each of which when so executed shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Guaranty may be executed and delivered by electronic means with the same force and effect as if the same was a fully executed and delivered original manual counterpart.

10. WAIVER OF JURY TRIAL; JUDICIAL REFERENCE.
(a) JURY WAIVER. EACH PARTY HERETO HEREBY WAIVES, TO

THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY

HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR

INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE

TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO

REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS

REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD

NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER

AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN

INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(b) JUDICIAL REFERENCE. IN THE EVENT ANY LEGAL
PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA (THE “COURT”)

BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY

CONTROVERSY, DISPUTE OR CLAIM DIRECTLY OR INDIRECTLY ARISING OUT OF

OR RELATING TO THIS GUARANTY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) (EACH, A “CLAIM”) AND THE WAIVER SET FORTH IN THE

PRECEDING PARAGRAPH IS NOT ENFORCEABLE IN SUCH ACTION OR PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:
(i) ANY CLAIM (INCLUDING BUT NOT LIMITED TO ALL DISCOVERY AND

LAW AND MOTION MATTERS, PRETRIAL MOTIONS, TRIAL MATTERS

AND POST-TRIAL MOTIONS) WILL BE DETERMINED BY A GENERAL

REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS
OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638
THROUGH 645.1. THE PARTIES INTEND THIS GENERAL REFERENCE

AGREEMENT TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE
WITH CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638.
(ii) UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL

SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN DRAFT Item 5
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Exhibit J - 6
TEN (10) DAYS OF SUCH WRITTEN REQUEST, THEN, ANY PARTY MAY

REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B).
(iii) THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED

IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL
BE DECIDED BY A REFEREE AND NOT BY A JURY.

IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed and delivered by its duly authorized representative on the date first above written.

GUARANTOR:
[_______]
By:

Printed Name:

Title:

BUYER:
[_______]
By:

Printed Name:

Title:

By:

Printed Name:

Title:

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Exhibit K - 1

EXHIBIT K

NOTICES

SUNZIA WIND POWERCO LLC SILICON VALLEY CLEAN ENERGY

AUTHORITY
All Notices:

Street: 1088 Sansome St.

City: San Francisco, CA
Attn: General Counsel
Phone:

Email:

All Notices:

Street:

City:

Attn:

Phone:

Email:

With a copy to:

Reference Numbers: Reference Numbers:

Invoices:

Attn: Pattern Energy Settlements
Phone:

Email:

Invoices:

Phone:

Email:

Scheduling:

Attn: Manager 24/7 Operations Control
Center
888 Westheimer Road, Suite 213
Houston, TX 77006
Email:

Phone:

Facsimile:

Scheduling:

Attn:

Phone:

Email:

Confirmations:

Attn: Pattern Energy Settlements
Phone:

Email:

Confirmations:

Attn:

Phone:

Email:

Payments:

Attn: Pattern Energy Settlements
Phone:

Email:

Payments:

Attn:

Phone:

Email:

Wire Transfer: Wire Transfer:

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III
Exhibit K - 2

SUNZIA WIND POWERCO LLC SILICON VALLEY CLEAN ENERGY

AUTHORITY
Emergency Contact:

Attn: 24/7 Operations Control Center
Phone:

Email:

With additional Notices of an Event of
Default to:

Attn:

Phone:

Email:

Emergency Contact:

Attn:

Phone:

Email:

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Attachment 1
Exhibit L - 1

EXHIBIT L

OPERATING RESTRICTIONS
Operating restrictions of the Facility for Market Curtailment Periods are as follows:
• Interconnection Capacity (Maximum Injection Amount):
• Minimum operating capacity:
• Maximum number of start-ups per calendar day (if any such operational limitations exist):
• Ramp Rate:
• Minimum Down Time:

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Attachment 1

EXHIBIT M

FORM OF SELLER COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) is delivered by the undersigned (“Authorized Representative”), a duly authorized representative of [SunZia Wind PowerCo LLC] in connection with that certain Renewable Power Purchase Agreement dated [DATE] (“Agreement”) by and between SunZia Wind PowerCo LLC (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

As of [DATE], Authorized Representative hereby certifies and represents to Buyer the following:
(1) The Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System. (2) The Facility’s testing included a performance test demonstrating peak electrical output of no less than of the Guaranteed Capacity for the Facility at the Interconnection Point, as adjusted for ambient conditions on the date of the Facility testing, and such peak electrical output, as adjusted, was [____ MW].
(3) The Participating Transmission Owner has provided
documentation supporting full unrestricted release for Commercial Operation on [DATE].
(4) The CAISO has provided notification that the Energy generation from a portion of the Facility that is no smaller than the Guaranteed Capacity may be scheduled into the CAISO markets on an unconditional basis in accordance with the CAISO Tariff and Business Practice Manual(s) as applicable, including the New Resource Implementation process.

EXECUTED by [AUTHORIZED REPRESENTATIVE]
this ________ day of _____________, 20__.

By:

Printed Name:

DRAFT
Title:

Item 5
Attachment 1
2 EXHIBIT N

FORM OF LIMITED ASSIGNMENT AGREEMENT
This Limited Assignment Agreement (this “Agreement”) is entered into as of [____] (the “Assignment Agreement Effective Date”) by and among [PPA SELLER], a Delaware limited liability company (“PPA Seller”), Silicon Valley Clean Energy Authority, a joint powers authority and a community choice aggregator organized under the laws of the State of California (“PPA Buyer”), and Morgan Stanley Capital Group Inc., a Delaware corporation (“MSCG”).

RECITALS
WHEREAS, PPA Buyer and PPA Seller are parties to that certain PPA identified on Appendix 1 hereto;
WHEREAS, in connection with a prepaid electricity transaction between [_______] (“Issuer”) and Morgan Stanley Energy Structuring, L.L.C. (“MSES”), and with effect from and including the Assignment Period Start Date (as defined below), PPA Buyer wishes to transfer by limited assignment to MSCG, and MSCG wishes to accept the transfer by limited assignment of, the Assigned Rights and Obligations (as defined below) for the duration of the Assignment Period (as defined below);
WHEREAS, pursuant to this Agreement, during the Assignment Period, MSCG will receive the Assigned Product in the Assigned Monthly Quantity and MSCG will deliver such Assigned Product to MSES, which will redeliver such Assigned Product to Issuer for ultimate redelivery to PPA Buyer; and
WHEREAS, pursuant to this Agreement, during the Assignment Period, MSCG will assume responsibility for the Delivered Product Payment Obligation.

THEREFORE, in consideration of the premises above and the mutual covenants and agreements herein set forth, PPA Seller, PPA Buyer and MSCG (the “Parties” hereto; each is a “Party”) agree as follows:

AGREEMENT

1. Definitions.

Unless the context otherwise specifies or requires, or defined below, capitalized terms used but not defined in this Agreement have the meanings set forth in the PPA. The following terms, when used in this Agreement and identified by the capitalization of the first letter thereof, have the respective meanings set forth below, unless the context otherwise requires:
“Agreement” has the meaning specified in the first paragraph above.

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Attachment 1
3 “Assigned Monthly Quantity” means the first [___] MWhs of Assigned Product delivered in accordance with the PPA by PPA Seller in each Month during the Assignment Period.
“Assigned Product” means (i) PV Energy and (ii) Green Attributes (PCC1). “Assigned Rights and Obligations” means (i) the rights of PPA Buyer under the PPA to receive the Assigned Monthly Quantity of Assigned Product in each Month during the Assignment Period, as such rights may be limited or further described in the “Further Information” section on Appendix 1, and (ii) the Delivered Product Payment Obligation, which right and obligation are transferred and conveyed to MSCG hereunder, but which shall not relieve PPA Buyer of its obligations under the PPA in any respects. “Assignment Early Termination Date” has the meaning specified in Section 4(b). “Assignment Period” has the meaning specified in Section 4(a). “Assignment Period End Date” means 11:59:59 p.m. pacific prevailing time on [____]. “Assignment Period Start Date” means [_____].
“Custodian” means The Bank of New York Mellon Trust Company, N.A., a national banking association.
“Delivered Product Payment Obligation” has the meaning specified in Section 3(a). “Issuer” means [____], a [____] [NOTE: This will be the JPA or other entity formed for purposes of issuing municipal bonds for the prepaid transaction.]. “Month” means a calendar month.
“Monthly Gross Amount” has the meaning specified in Section 3(c). “MSCG” has the meaning specified in the first paragraph of this Agreement. “MSES” means Morgan Stanley Energy Structuring, L.L.C., a Delaware limited liability company.
“PPA Buyer” has the meaning specified in the first paragraph of this Agreement. “PPA Seller” has the meaning specified in the first paragraph of this Agreement. “Prepaid Agreement” means that certain Prepaid Energy Sales Agreement dated as of [____] by and between MSES and Issuer.
“Prepay Power Supply Contract” means that certain Prepay Power Supply Contract dated [____] by and between PPA Buyer and Issuer.

DRAFT Item 5
Attachment 1
4 “Receivables” has the meaning given to such term in Section 3(g). “Retained Rights and Obligations” has the meaning specified in Section 3.

2. Transfer and Undertakings.
(a) PPA Buyer hereby assigns, transfers and conveys to MSCG all right, title and interest in and to the rights of PPA Buyer under the PPA to receive delivery of the Assigned Product in the Assigned Monthly Quantity during the Assignment Period. In connection with this assignment, PPA Buyer hereby delegates to MSCG the Assigned Rights and Obligations during the Assignment Period.
(b) PPA Seller hereby consents to PPA Buyer’s assignment, transfer and conveyance of all right, title and interest in and to the Assigned Product and Assigned Rights and Obligations to MSCG and the exercise and performance by MSCG of the Assigned Rights and Obligations during the Assignment Period.
(c) MSCG hereby accepts such assignment, transfer and conveyance of the Assigned Rights and Obligations during the Assignment Period and agrees to perform any such Assigned Rights and Obligations due from it during the Assignment Period.

3. Limited Assignment.

The Parties acknowledge and agree that (i) the Assigned Rights and Obligations include only a portion of PPA Buyer’s rights and obligations under the PPA, and that all rights and obligations (including without limitation obligations with respect to payment for any Product not included in the Assigned Product, any Assigned Product not included in the Assigned Monthly Quantity of Assigned Product, and any other amounts owed under the PPA) arising under the PPA that are not expressly included in the Assigned Rights and Obligations shall be “Retained Rights and Obligations” that are retained solely by PPA Buyer, and (ii) the Retained Rights and Obligations include all rights and obligations of PPA Buyer arising during the Assignment Period except the rights and obligations expressly included in the Assigned Rights and Obligations. In this regard:
(a) Limited to Delivered Product Payment Obligation. MSCG’s sole obligation hereunder will be to pay the Floating Price Payments into the Custodial Account as such terms are defined in and described on Appendix 1 (the “Delivered Product Payment Obligation”).

MSCG and PPA Buyer each agree to instruct the Custodian in accordance with Section 3(c) hereof to pay PPA Seller for the Assigned Product delivered during each Month of the Assignment Period on each applicable payment date under Section 8.2 of the PPA for a quantity up to, but not exceeding, the Assigned Monthly Quantity, at the Renewable Rate as set forth in the PPA. PPA Buyer shall remain responsible for any payment obligations under the PPA during the Assignment Period, and shall remain so responsible to make such payments by the times and on the terms set out in the PPA in the event that either (i) MSCG does not make the payments into the Custodial Account as described above or (ii) the Custodian does not make the payments to the PPA Seller from the Custodial Account as described above.

DRAFT Item 5
Attachment 1
5 (b) Retained Rights and Obligations. Any claims arising or existing in connection with or related to the PPA, whether related to performance by PPA Seller, PPA Buyer or MSCG, and whether arising before, during or after the Assignment Period, in each case excluding the Delivered Product Payment Obligation, will be included in the Retained Rights and Obligations, and any such claim will be resolved exclusively between PPA Seller and PPA Buyer in accordance with the PPA.
(c) Invoicing. During the Assignment Period, PPA Seller shall continue to provide PPA Buyer a monthly invoice of amounts owing under the PPA, which invoice shall show the total amount due to PPA Seller under the PPA for such Month (the “Monthly Gross Amount”).

Promptly following PPA Buyer’s receipt of each monthly invoice from PPA Seller during the Assignment Period and, in any event, no later than seven days thereafter, PPA Buyer shall deliver (i) a copy of such monthly invoice and the related supporting data to MSCG (ii) a statement to each of MSCG and the Custodian indicating (A) the Monthly Gross Amount; (B) the Delivered Product Payment Obligation; and (C) the Retained Payment Obligation. PPA Buyer and MSCG covenant and agree to instruct the Custodian to pay the Monthly Gross Amount to PPA Seller on or before the applicable payment date in the PPA, provided, that the liability of MSCG hereunder to PPA Seller is limited as described on Appendix 1. PPA Buyer and MSCG may agree in a separate writing as to the allocation of the Monthly Gross Amount between PPA Buyer and MSCG of amounts paid by the Custodian to PPA Seller hereunder. At all times, PPA Buyer remains liable to PPA Seller for all amounts due and owing under the PPA. (d) Scheduling. All scheduling of Assigned Product and other communications related to the PPA shall take place between PPA Buyer and PPA Seller pursuant to the terms of the PPA; provided that during the Assignment Period (i) title to Assigned Product will pass to MSCG upon delivery by PPA Seller at the Delivery Point in accordance with the PPA; (ii) immediately thereafter, title to such Assigned Product will pass to MSES, Issuer and then to PPA Buyer upon delivery by MSCG at the same point where title is passed to MSCG pursuant to clause (i) above; (iii) PPA Buyer will be deemed to be acting as MSCG’s agent with regard to scheduling Assigned Product; and (iv) PPA Buyer will provide copies to MSCG of (A) any notice of a Force Majeure Event delivered under the PPA, (B) any notice of a default or of a breach or other event that, if not cured within an applicable grace period, could result in an Event of Default, (C) annual forecasts and monthly forecasts with respect to the Assigned Product delivered by PPA Seller under Sections 4.3(a) and 4.3(b) of the PPA, (D) invoices delivered by PPA Seller under Section 8.1 of the PPA (with a copy to the Custodian if and to the extent retained by PPA Buyer and MSCG), and (E) any other information reasonably requested by MSCG relating to Assigned Product.
(e) Amendments. PPA Buyer will provide written notice (including copies thereof) of any amendment, waiver, supplement, modification, or other changes to the PPA to MSCG relating to the Assigned Rights and Obligations, and the Parties hereby acknowledge and agree that an amendment, waiver, supplement, modification or other change will not have any effect on MSCG’s rights or obligations under this Agreement until and unless MSCG receives written notice thereof.

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6 (f) Reserved.
(g) Setoff of Receivables. Pursuant to the Prepaid Agreement, MSES has agreed to purchase the rights to payment of the net amounts owed by PPA Buyer under the Prepay Power Supply Contract (“Receivables”) in the case of non-payment by PPA Buyer. To the extent any such Receivables relate to Assigned Product purchased by MSCG pursuant to the Assigned Rights and Obligations, MSES may sell such Receivables to MSCG and MSCG may transfer such Receivables (excluding any penalties, late payment fees, late payment interest or other fees, costs or interest included in such Receivables) to PPA Seller and apply the face amount of such Receivables (excluding any penalties, late payment fees, late payment interest or other fees, costs or interest included in such Receivables) as a reduction to any Delivered Product Payment Obligations; provided, however, that (1) at no time shall PPA Seller be required to pay MSCG for any amounts by which such Receivables exceed any Delivered Product Payment Obligations, and (2) at all times, PPA Buyer remains liable to PPA Seller for all amounts due and owing under the PPA including the Monthly Gross Amount under each invoice.

4. Assignment Period; Assignment Early Termination.
(a) Assignment Period. The “Assignment Period” shall begin on the Assignment Period Start Date and extend until the Assignment Period End Date; provided that in no event shall the Assignment Period extend past an Assignment Early Termination Date; and further provided that the Assignment Period will automatically terminate upon the expiration or early termination of either the Delivery Term or the PPA.
(b) Early Termination. An “Assignment Early Termination Date” will occur under the following circumstances and as of the dates specified below:
i. delivery of a written notice of termination by either MSCG or PPA Buyer to each of the other Parties hereto;
ii. delivery of a written notice of termination by PPA Seller to each of MSCG and PPA Buyer following MSCG’s failure to pay when due any amounts owed to PPA Seller in respect of any Delivered Product Payment Obligation and such failure continues for three (3) Business Days following receipt by MSCG of written notice thereof; iii. delivery of a written notice by PPA Seller if any of the events described in Section 1.1, definition of “Bankrupt” of the PPA, occurs with respect to MSCG; or
iv. delivery of a written notice by MSCG if any of the events described in Section 1.1, definition of “Bankrupt” of the PPA, occurs with respect to PPA Seller. (c) Reversion of Assigned Rights and Obligations. The Assignment Period will end at the end of the last delivery hour on the date specified in the termination notice provided pursuant to Section 4(b), which date shall not be earlier than the end of the last day of the Month in which such notice is delivered if termination is pursuant to clause (b)(i) or (b)(ii) above. The DRAFT Item 5
Attachment 1
7 Parties acknowledge and agree that upon the occurrence of an Assignment Early Termination Date and at the expiration of the Assignment Period the Assigned Rights and Obligations will revert from MSCG to PPA Buyer. Any Assigned Rights and Obligations that would become due for payment or performance on or after such Assignment Early Termination Date shall immediately and automatically revert from MSCG to PPA Buyer, provided that (i) MSCG shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to MSCG prior to the Assignment Early Termination Date or prior to the expiration of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the occurrence of the Assignment Early Termination Date or the expiration of the Assignment Period.

5. Representations and Warranties.
(a) Copy of PPA. As of the Assignment Agreement Effective Date, PPA Seller and PPA Buyer represent and warrant to MSCG that a true, complete, and correct copy of the PPA as of such date is attached hereto as Appendix 3.
(b) No Default. As of the Assignment Agreement Effective Date, PPA Seller and PPA Buyer represent and warrant to MSCG that no event or circumstance exists (or would exist with the passage of time or the giving of notice) that would give either of them the right to terminate the PPA or suspend performance thereunder.
(c) Representations. Each Party represents to each of the other Parties as of the Assignment Agreement Effective Date:
i. Status. It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing.
ii. Powers. It has the power to execute, deliver and to perform its obligations under this Agreement and has taken all necessary action to authorize such execution, delivery and performance.
iii. No Violation or Conflict. Such execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the incurrence by such Party of its obligations under this Agreement, will not result in any violation of, or conflict with: (i) any term of any material contract or agreement applicable to it; (ii) any of its charter, bylaws, or other constitutional documents; (iii) any determination or award of any arbitrator applicable to it; or (iv) any license, permit, franchise, judgment, writ, injunction or regulation, decree, order, charter, law, ordinance, rule or regulation of any Government Agency presently in effect, applicable to it or any of its assets or properties or to any obligations incurred by it or by which it or any of its assets or properties or obligations are bound or affected, and shall not cause a breach of, or default under, any such term or result in the creation of any lien upon any of its properties or assets.

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8 iv. Consents. All consents, approvals, orders or authorizations of, registrations, declarations, filings or giving of notice to, obtaining of any licenses or permits from, or taking of any other action with respect to, any Person or Government Agency that are required to have been obtained by such Party with respect to this Agreement and the transactions contemplated hereby, including the due authorization of such Party and its governing body and any approval or consent of any security holder of such Party or any holder (or any trustee for any holder) of any indebtedness or other obligation of such Party, have been obtained and are in full force and effect and all conditions of any such consents have been complied with. v. Obligations Binding. Its obligations under this Agreement constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).
vi. Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other Parties as investment advice or as a recommendation to enter into this Agreement; it being understood that information and explanations related to the terms and conditions of this Agreement shall not be considered investment advice or a recommendation to enter into this Agreement. It is entering into this Agreement as a bona-fide, arm’s-length transaction involving the mutual exchange of consideration and, once executed by all Parties, considers this Agreement a legally enforceable contract. No communication (written or oral) received from any of the other Parties shall be deemed to be an assurance or guarantee as to the expected results of this Agreement. vii. Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Agreement. It is also capable of assuming, and assumes, the risks of this Agreement. viii. Status of Parties. None of the other Parties is acting as a fiduciary for or an adviser to it in respect of this Agreement.

6. Miscellaneous.

Article 18 (Confidential Information), 19.2 (Amendments), 19.4 (No Agency, Partnership, Joint Venture or Lease), Sections 19.5 (Severability), 19.8 (Electronic Delivery), 19.7 (Counterparts), Section 19.9 (Binding Effect) and 19.11 (Forward Contract) of the PPA are incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein. For avoidance of doubt, and notwithstanding anything to the contrary in this Agreement: (i) nothing in this Agreement shall modify any provision of the PPA; (ii) PPA Buyer remains obligated to perform DRAFT Item 5
Attachment 1
9 all its obligations under the PPA notwithstanding the limited assignment under this Agreement (including without limitation any such obligations not timely performed by MSCG under this Agreement) and any failure by MSCG to make payments to PPA Seller when due under the PPA shall be a Buyer Event of Default under the PPA if not cured within the applicable cure period specified in Section 11(a)(i) of the PPA; (iii) this Agreement shall not purport to convey or otherwise allege any right of PPA Buyer or MSCG to make any prepayment to PPA Seller under the PPA or to file or impose any lien on the Facility; and (iv) neither MSCG nor PPA Buyer shall make any assignment of its rights or delegation of its obligations under this Agreement without the prior written consent of PPA Seller, which it may withhold in its sole discretion.

7. Costs and Expenses.

The Parties shall each pay their own costs and expenses (including legal fees) incurred in connection with this Agreement and as a result of the negotiation, preparation, and execution of this Agreement.

8. Notices.

Any notice, demand, or request required or authorized by this Agreement to be given by one Party to another Party shall be delivered in accordance with PPA Section 9.2 and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Buyer agrees to notify MSCG of any updates to such notice information, including any updates provided by PPA Seller to PPA Buyer. Notices to MSCG shall be provided to the address set forth in Appendix 2.

Each Party may update its address from time to time by notice to the other Parties.

9. Governing Law, Arbitration, Judicial Reference.
(a) Governing Law. This Agreement and the rights and duties of the Parties under this Agreement will be governed by and construed, enforced and performed in accordance with the laws of the State of New York, without reference to any conflicts of laws provisions that would direct the application of another jurisdiction’s laws; provided, however, that the authority of PPA Buyer to enter into and perform its obligations under this agreement shall be determined in accordance with the laws of the State of California. (b) Arbitration. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope of this agreement to arbitrate, shall be determined by final, non-appealable binding arbitration in San Francisco, California before three (3) arbitrators. The arbitration shall be administered by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days after the commencement of arbitration, each of MSCG and PPA Buyer shall select one person to act as arbitrator, and the two so-selected arbitrators shall select a third arbitrator (the “chairperson”) within thirty (30) days of the commencement of the arbitration. If either MSCG or PPA Buyer is unable or fails to select one person to act as arbitrator, such arbitrator shall be appointed by JAMS. If the MSCG and PPA Buyer-selected arbitrators are unable or fail to agree upon a chairperson, the chairperson shall be appointed by JAMS. The chairperson shall be a person DRAFT Item 5
Attachment 1
10 who has experience in renewable energy-related transactions, and none of the arbitrators shall have been previously employed by any Party or have any direct pecuniary interest in any Party or the subject matter of the arbitration, unless such conflict is expressly acknowledged and waived in writing by all of the Parties. The Parties shall maintain the confidential nature of the arbitration proceeding and any award, including any hearing(s), except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as necessary in connection with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision. Any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration provision shall be governed by the Federal Arbitration Act. The arbitrator(s) shall have no authority to award consequential, treble, exemplary, or punitive damages of any type or kind regardless of whether such damages may be available under any law or right, with the Parties hereby affirmatively waiving their rights, if any, to recover or claim such damages.

The responsibility for compensation and expenses of the three arbitrators and all other expenses charged by JAMS shall be equally split in one-third (1/3) shares by each of MSCG, PPA Buyer, and PPA Seller. In any arbitration arising out of or related to this Agreement, the arbitrators shall award to the prevailing Party or Parties, if any, the costs and attorney’s fees reasonably incurred in seeking to enforce the application of this Section 9(b) and by the prevailing party in connection with the arbitration. Notwithstanding the foregoing provisions of this Section 9(b), any costs incurred by a Party in seeking judicial enforcement of any written decision of the arbitrators shall be chargeable to and borne exclusively by the Party against whom such court order is obtained. The award shall be final and binding on the Parties and judgment upon any award may be entered in any court of competent jurisdiction. (c) Judicial Reference. Without limiting the provisions in Section 9(b), if Section 9(b) is deemed ineffective or unenforceable in any respect, any dispute between the Parties arising out of or in connection with this Agreement or its performance, breach, or termination (including the existence, validity and interpretation of this Agreement and the applicability of any statute of limitation period) (each, a “Dispute”) shall be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections (a “Reference Proceeding”), which shall constitute the exclusive remedy for the resolution of any Dispute. As a condition precedent to initiating a Reference Proceeding with respect to any Dispute, the Parties shall comply with the provisions of Section 9(c)(i).
i. Notice of Dispute. Prior to initiating the Reference Proceeding, a Party (the “Disputing Party”) shall provide the other Parties (the “Responding Parties”) with a written notice of each issue in dispute, a proposed means for resolving each such issue, and support for such position (the “Notice of Dispute”). Within 10 days after receiving the Notice of Dispute, the Responding Parties shall provide the Disputing Party with a written Notice of each additional issue (if any) with respect to the dispute raised by the Notice of Dispute, a proposed means for resolving every issue in dispute, and support for such position (the “Dispute Response”). Thereafter, the Parties shall meet to discuss the matter and attempt in good faith to reach a negotiated resolution of the dispute. If the Parties do not resolve the dispute by unanimous agreement within sixty 60 days after receipt of the Dispute Response, (the “Negotiation Period”), then any Party may provide DRAFT Item 5
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11 to the other Parties written notice of intent for judicial reference (the “Impasse Notice”) in accordance with the further provisions of this Section 9. ii. Applicability; Selection of Referees. Within 10 days of the delivery of an Impasse Notice, each of MSCG and PPA Buyer shall nominate one (1) referee. The two (2) referees (the “Party-Appointed Referees”) shall appoint a third referee (the “Third Referee”, together with the Party-Appointed Referees, the “Referees”). The Party-Appointed Referees shall be competent and experienced in matters involving the electric energy business in the United States, with at least ten (10) years of electric industry experience as a practicing attorney. The Third Referee shall be an active or retired California state or federal judge. Each of the Party-Appointed Referees and the Third Referee shall be impartial and independent of each of the Parties and of the other referees and not employed by any of the Parties in any prior matter. iii. Inability to Agree upon Third Referee. If the Party-Appointed Referees are unable to agree on the Third Referee within 45 days from delivery of the Impasse Notice, then the Third Referee shall be appointed pursuant to CCP Section 640(b) in an action filed in the Superior Court of California, County of San Francisco (the “Court”), and with due regard given to the selection criteria above. A request for appointment of a referee may be heard on an ex parte or expedited basis, and the Parties agree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP Section 170.6, each of PPA Buyer and MSCG shall have one (1) peremptory challenge to the referee selected by the Court.
iv. Discovery; Proceedings.
(A) The Parties agree that time is of the essence in conducting the Reference Proceeding. Accordingly, the Referees shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within 20 days after the date of selection of the Third Referee, (ii) if practicable, try all issues of law or fact within 180 days after the date of the conference, and (iii) report a statement of decision within 20 days after the matter has been submitted for decision. (B) Discovery and other pre-hearing procedures shall be conducted as agreed to by the Parties, or if they cannot agree, as determined by the Third Referee after discussion with the Parties regarding the need for discovery and other pre-hearing procedures.
(C) Except as expressly set forth herein, the Third Referee shall determine the manner in which the Reference Proceeding is conducted, including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the Reference Proceeding. The Reference Proceeding, including the trial, shall be conducted at a neutral location selected by the Parties, or if not agreed by the Parties, by the Third Referee, in San Francisco, California.

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12 (D) All proceedings and hearings conducted before the Referees, except for trial, shall be conducted without a court reporter, except that when any Party so requests, a court reporter will be used at any hearing conducted before the Referees, and the Referees will be provided a courtesy copy of the transcript.

The Party making such a request shall have the obligation to arrange for and pay the court reporter.
v. Decision. The Referees shall render a written statement of decision setting forth findings of fact and conclusions of law. The decision shall be entered as a judgment in the court in accordance with the provisions of CCP Sections 644 and 645. The decision shall be appealable to the same extent and in the same manner that such decision would be appealable if rendered by a judge of the Court. The Parties intend this general reference agreement to be specifically enforceable in accordance with the CCP. vi. Expenses. Each of MSCG, PPA Seller and PPA Buyer shall bear the compensation and expenses of its respective own counsel, witnesses, consultants and employees. The responsibility for compensation and expenses of the Referees and all other expenses of judicial reference shall be equally split in one-third (1/3) shares by each of MSCG, PPA Buyer, and PPA Seller.

10. U.S. Resolution Stay. The Parties hereby confirm that they are adherents to the ISDA 2018 U.S. Resolution Stay Protocol (“ISDA U.S. Stay Protocol”), the terms of the ISDA U.S. Stay Protocol are incorporated into and form a part of this Agreement, and this Agreement shall be deemed a Protocol Covered Agreement for purposes thereof. For purposes of incorporating the ISDA U.S. Stay Protocol, MSCG shall be deemed to be a Regulated Entity, and PPA Buyer and PPA Seller each shall be deemed to be an Adhering Party. In the event of any inconsistences between this Agreement and the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.

DRAFT Item 5
Attachment 1
Signature Page to Limited Assignment Agreement
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the date first set forth above.
[PPA SELLER]
By: ____________________________
Name:_______________________
Title:________________________

SILICON VALLEY CLEAN ENERGY AUTHORITY
By: ____________________________
Name:_______________________
Title:________________________
MORGAN STANLEY CAPITAL GROUP INC.

By: ____________________________
Name:_______________________
Title:________________________
DRAFT Item 5
Attachment 1
Appendix 1 - 1
Appendix 1
Assigned Rights and Obligations
PPA: Renewable Power Purchase Agreement dated as of [____], by and between PPA Buyer and PPA Seller, as may be amended from time to time.

Delivery Point: Facility PNode (as defined in Exhibit A of the PPA) Further Information: PPA Seller shall transfer or, to the extent applicable, continue to transfer, to PPA Buyer the WREGIS Certificates associated with all Renewable Energy Credits corresponding to all PV Energy under the PPA pursuant to Section 4.10 of the PPA, provided that the transferee of such WREGIS Certificates may be changed from time to time in accordance with the written instructions of both MSCG and PPA Buyer upon fifteen (15) Business Days’ notice, which change shall be effective as of the first day of the next calendar month after such notice period has expired, unless otherwise agreed. Terms with initial capitalization used in this paragraph but not otherwise defined in this Agreement have the meaning set forth in the PPA. All Assigned Product delivered by PPA Seller to MSCG shall be a sale made at wholesale, with MSCG reselling all such Assigned Product.

Limitation of MSCG Liability. MSCG has separately agreed with the PPA Buyer and the Custodian (pursuant to the Custodial Agreement dated [---], among PPA Buyer, MSCG and the Custodian (the “Custody Agreement”)) to pay into the custodial account specified in the Custody Agreement (the “Custodial Account”) for the portion of the Assigned Monthly Quantity actually delivered in each Month of the Assignment Period at the “Day-Ahead Average Price” as defined below (“Floating Price Payments”). MSCG agrees for the benefit of the PPA Seller to pay the Floating Price Payments into the Custodial Account, and MSCG’s payment obligations under this Agreement are limited to making such payments into the Custodial Account, for application as provided in the Custody Agreement. PPA Buyer and PPA Seller each acknowledge and agree that the making of Floating Price Payments into the Custodial Account by MSCG shall not entitle (i) PPA Seller for payments in excess of the Renewable Rate for Assigned Product delivered hereunder or (ii) PPA Buyer to pay less than the Renewable Rate for Assigned Product delivered hereunder. PPA Buyer and MSCG each acknowledge and agree that the making of Floating Price Payments into the Custodial Account by MSCG shall not entitle (i) MSCG to any payments from PPA Seller or (ii) affect the Custodian’s obligation to pay the Monthly Gross Amount to PPA Seller on or before the applicable payment date in the PPA. At all times the PPA Buyer shall remain obligated for the payment of all amounts owing under the terms of the PPA including the Monthly Gross Amount under each invoice. “Day-Ahead Average Price” means (x) the sum of the Day-Ahead Market Prices for each Pricing Interval in a Month divided by (y) the number of Pricing Intervals in such Month; provided that in no case shall the Day-Ahead Average Price hereunder be less than $0.00/MWh. As used in this definition, “Pricing Interval” means the unit of time for which CAISO establishes a separate price. As used in this definition “Day-Ahead Market Price” means the Day Ahead Market or Locational Marginal Price for NP15 EZ GEN HUB for each applicable hour as published by CAISO, or as such price may be corrected or revised from time to time by CAISO in accordance DRAFT Item 5
Attachment 1
Appendix 1 - 1
with its rules. For the avoidance of doubt, the Day-Ahead Average Price can be a negative number.

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Attachment 1
Appendix 2 - 1
Appendix 2
MSCG Notice Information
[To be completed before signing.]
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Attachment 1
Exhibit M - 1
Appendix 3
Copy of PPA
[To be attached.]
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Attachment 1
Exhibit M - 1

FORM OF ASSIGNMENT SCHEDULE
[PROJECT NAME]
Assigned Product: [____]
Assigned Delivery Point: [____]
Assigned Prepay Quantity: As set forth in Appendix 2; provided that (i) all Assigned Products shall be delivered pursuant to the Limited Assignment Agreement during the Assignment Period as provided in Appendix 1 and (ii) the Assigned Prepay Quantity is defined for the convenience of PPA Buyer and J. Aron and shall have no impact on the obligations of the Parties under the Limited Assignment Agreement.

APC Contract Price: $[____]/MWh
Assignment Period: [____]
Other Provisions: [____]
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Attachment 1

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Silicon Valley Clean Energy Board of DirectorsNovember 8, 2023

Silicon Valley Clean Energy Board of Directors
November 8, 2023