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“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 financial institution, or U.S. branch of a foreign bank or financial institution, with such bank or financial institution having (i) a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s or (ii) a parent company of such issuer that has 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 such parent company has issued a confirmation of the Letter of Credit in a form reasonably acceptable to Buyer ensuring that such parent company will honor the payment obligations of the issuing bank or financial institution under such letter of credit in case the issuing bank or financial institution defaults, and (b) in a form substantially similar to the letter of credit set forth in Exhibit I or as otherwise reasonably acceptable to Buyer.
“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 Facility other than as the independent engineer for the Lenders, and (d) is Item 3
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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 a Settlement Period or Settlement Interval, provided, if
applicable, that the Market Curtailment Period shall also include the time required for the Facility to ramp down to implement such curtailment (if any) and ramp up following such curtailment (if any) 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.
“Modification Notice” has the meaning set forth in Section 4.9. “Moody’s” means Moody’s Investors Service, Inc., or its successor.
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“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.
“Pacific Prevailing Time” means the prevailing standard time or daylight savings time, as applicable, in the Pacific time zone.
“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(a). “Performance Security” means, at Seller’s option (i) cash (ii) one or more Letters 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:
(b)
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
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“Point of Interconnection” has the meaning set forth in the Interconnection Agreement. “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. “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). “RA Deficiency Amount Cap” means the maximum RA Deficiency Amount that Seller shall pay to Buyer
“RA Guarantee Date” means
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“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 4.4(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). “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.
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“Replacement Green Attributes” means Renewable Energy Credits meeting the RPS requirements for Portfolio Content Category 1.
“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 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 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.
“Self-Schedule” has the meaning set forth in the CAISO Tariff. “Seller” has the meaning set forth on the Cover Sheet.
“Seller’s WREGIS Account” has the meaning set forth in Section 4.8(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.
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“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.
“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.
“SPTO” has the meaning set forth in the Recitals hereto. “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 South PPA” has the meaning set forth in Section 4.9. “SunZia Transmission Line” means that certain 3,000-MW high-voltage (+/-525-kV) transmission line originating at the Point of Interconnection in New Mexico and terminating near 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 (1) the amount of Energy generated by the Facility and delivered to Buyer at the Delivery Point, equal to Buyer’s Share of Energy delivered from the Facility to the Point of Interconnection, as measured in MWh by the Approved Meter, subject to the Hourly Delivery Cap, as such amount may be reduced as a result of a Curtailment Order, (a) commencing on the later of (i) the Item 3
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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.
“
“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;
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(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; (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 for following, and Buyer’s obligation to return to Seller the Development Security and/or Item 3
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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 Reserved.
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 Participating Generator Agreement (as defined in the CAISO Tariff) between Seller and CAISO 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
(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.
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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 each calendar month from the first calendar month following the Effective 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.
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 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 Non-SPTO Modifications.
The Parties acknowledge and agree that this Agreement contemplates the Facility becoming part of the CAISO Balancing Authority area prior to the Commercial Operation Date via the SPTO process.
Notwithstanding the foregoing, at any time prior to the Commercial Operation Date Seller may provide Notice to Buyer that the Facility is no longer anticipated to become part of the CAISO Balancing Authority via the SPTO process. Immediately and automatically upon delivery of such Notice, this Agreement shall be amended as set forth in Exhibit H, with no further action required on the part of any Person.
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.
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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.
Delivered Energy. For each MWh of Delivered Energy and Replacement Energy in each Settlement Period or Settlement Interval, as applicable, Buyer shall pay Deemed Delivered Energy. For each Settlement Period or Settlement Interval, as applicable, during the Delivery Term, Buyer shall pay
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.
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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 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 anticipated to be 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 the year for the annual Supply Plan. The Parties acknowledge Item 3
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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, the Resource Adequacy Benefits that are not delivered or that cannot be delivered (or that Buyer cannot make use of) 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.
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]
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(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”):
(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 Item 3
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(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 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, 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.
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(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.
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. (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.
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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 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. (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 the hourly Energy expected to be produced by the Facility and delivered to the Delivery Point, net of all Item 3
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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 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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(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) 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 (b)
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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(c) 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. If required by the CAISO Tariff, WREGIS, the CPUC or otherwise under applicable Law, WREGIS Certificates must be matched with E-Tags associated with the Delivered Energy and WREGIS Certificates without matching E-Tags associated with Delivered Energy 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.
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(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.
4.9 Modification of Certain Agreement Terms.
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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 have provided to the other Party all necessary documentation within thirty (30) days after the Effective Date evidencing 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-emergency maintenance of the Facility
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 Item 3
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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 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 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 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, Item 3
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; (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 Delivered Energy, to the extent such matching is required by the CAISO Tariff, WREGIS, the CPUC, or otherwise under applicable Law; (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.
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 Item 3
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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.
8.7 Seller’s Development Security. To secure its obligations under this Agreement, Seller shall have delivered the 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, or to provide a confirmation of such Letter of Credit in a form reasonably acceptable to Buyer from a parent company of such issuer that meets the required Credit Rating, which confirmation ensures that such parent company will honor the payment obligations of the issuing bank or financial institution under such letter of credit in case the issuing bank or financial institution defaults, (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).
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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 required Credit Rating, or to provide a confirmation of such Letter of Credit in a form reasonably acceptable to Buyer from a parent company of such issuer that meets the required Credit Rating, which confirmation ensures that such parent company will honor the payment obligations of the issuing bank or financial institution under such letter of credit in case the issuing bank or financial institution, (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.
(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 Item 3
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may do any one or more of the following (in each case subject to 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.
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 Item 3
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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 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 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.
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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 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) Item 3
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(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, 14.3 or 14.4, as appropriate; or (vii) 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) [Reserved];
(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;
(D) the Guarantor shall fail to meet the criteria for an acceptable Guarantor as set forth in the definition of Guarantor;
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(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; (v) 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 (i) maintain a Credit Rating of at least “A-” by S&P or “A3” by Moody’s, or (ii) provide and maintain a confirmation of the outstanding Letter of Credit ensuring that such parent company will honor the payment obligations of the issuing bank or financial institution under such letter of credit in case the issuing bank or financial institution defaults, from a parent company of the issuer that has 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;
(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.
(vi) 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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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 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 11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (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.
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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.
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
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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, 4.8(e), 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.
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.
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(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 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.
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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 (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.
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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 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:
(e)
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, 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 Item 3
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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 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 Item 3
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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 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 Item 3
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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. (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 Item 3
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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.).
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 Item 3
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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.
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.
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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 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 the Interconnection Point and/or any of the Transmission Systems utilized to deliver Product to the Delivery Point under this Agreement (i) are integrated into a new or existing regional transmission organization or independent system operator (other than the CAISO Balancing Authority), or (ii) leave a regional transmission organization or independent system operator, and such integration or departure 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. [Signatures on following page]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
SunZia Wind North LLC
By:
Name:
Title:
Silicon Valley Clean Energy
By:
Name:
Title:
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EXHIBIT A
FACILITY DESCRIPTION
The Facility description provided herein reflects Seller’s expectation for the Facility and the Site as of the Effective Date. 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
Site Map:
[Seller to provide map]
Site Location: San Miguel County, New Mexico
Technology: Utility Scale Wind Technology
Guaranteed Capacity: 14.9 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 Item 3
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EXHIBIT B
FACILITY COMMERCIAL OPERATION
1. Reserved.
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,
3. Extension of the Guaranteed Dates. “Development Cure Period” means, :
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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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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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EXHIBIT D
FORM OF AVERAGE FORECAST OF ENERGY (MWh)
1:
00 2:
00 3:
00 4:
00 5:
00 6:
00 7:
00 8:
00 9:
00 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 JA
N
FE
B
M
AR
AP
R
M
AY
JU
N
JU
L
AU
G
SE
P
OC
T
NO
V
DE
C
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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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, 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 Item 3
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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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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 Silicon Valley Clean Energy Authority, a California joint powers authority (“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 SunZia Wind North 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.
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]
New Mexico License No. [##]
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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 Silicon Valley Clean Energy Authority, a California joint powers authority (“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 SunZia Wind North 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 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]
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EXHIBIT H
NON-SPTO MODIFICATIONS
[Seller to provide]
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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, AT 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
DEVELOPMENT SECURITY PURSUANT TO THAT CERTAIN RENEWABLE POWER PURCHASE AND SALE AGREEMENT DATED AS OF ___________, 2025 BETWEEN APPLICANT
AND BENEFICIARY, AS AMENDED, SUPPLEMENTED, OR RESTATED FROM TIME TO TIME (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 NINETY (90) 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.
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.
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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, UNLESS IT
IS THE FULL AND FINAL DRAW THEN THE ORIGINAL LETTER OF CREDIT AND ANY AND ALL AMENDMENTS MUST BE RETURNED FOR DISPOSITION PURPOSES.
THE DRAWING CERTIFICATE MAY BE PRESENTED BY (A) PHYSICAL DELIVERY TO [ADDRESS], OR (B) AS A PDF ATTACHMENT TO AN EMAIL TO [BANK EMAIL ADDRESS], AS FOLLOWS:
DRAWINGS PRESENTED TO US BY EMAIL (EACH, AN “EMAIL DRAWING”) MUST COME
FROM ONE OF THE EMAIL ADDRESS(ES) (INSERT BENEFICIARY EMAIL(S)) OF BENEFICIARY AND MUST BE SENT TO EACH OF THE FOLLOWING EMAIL ADDRESSES: [●] AND [●]. EACH REQUESTED EMAIL DRAWING MUST BE CONFIRMED BY CALLING US AT TELEPHONE NUMBER [●], AND NO EMAIL DRAWING SHALL BE COMPLETE UNTIL SO CONFIRMED. IF YOU PRESENT AN EMAIL DRAWING UNDER THIS LETTER OF CREDIT YOU
DO NOT NEED TO PRESENT THE ORIGINAL OF ANY DRAWING DOCUMENTS AND IF WE
RECEIVE ANY SUCH ORIGINAL DRAWING DOCUMENTS THEY WILL NOT BE EXAMINED BY US. IF A DRAWING IS THE FINAL DRAWING UNDER THIS LETTER OF CREDIT OR A
DRAWING FOR THE FULL AMOUNT THEN AVAILABLE UNDER THIS LETTER OF CREDIT
THE ORIGINAL LETTER OF CREDIT MUST BE PROMPTLY RETURNED TO US BY OVERNIGHT COURIER FOLLOWING SUCH DRAWING.
IN THE EVENT A DRAWING IS COMPLIANT AND HONORED BY CoBank ACB FUNDS ARE TO BE REMITTED TO THE BENEFICIARY PER PAYMENT INSTRUCTIONS AS FOLLOWS:
BENEFICIARY BANK: _______________________________
ABA NUMBER: _______________________________
BENEFICIARY ACCOUNT NUMBER: _______________________________ OR (C) BY FACSIMILE TO [FAX NUMBER] WITH PHONE NOTIFICATION TO THE US AT TIME OF TRANSMISSION.
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.
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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 CALIFORNIA 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 COMMERCE PUBLICATION NO. 590 (‘ISP98’) AND AS TO MATTERS NOT ADDRESSED BY ISP98 SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
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: [●] OR THE ADDRESS STATED ABOVE.
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 “A”
DRAWING CERTIFICATE
TO: [ - ]
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 ___________, 2025, AS AMENDED, SUPPLEMENTED, OR RESTATED FROM TIME TO TIME (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 AVAILABLE FUNDS TO: (INSERT WIRE INSTRUCTIONS), WHICH, [____] CERTIFIES IT IS ENTITLED TO UNDER THE AGREEMENT.
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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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EXHIBIT J
FORM OF GUARANTY
This Guaranty (this “Guaranty”) is entered into as of [_____] (the “Effective Date”) by and between [_____], a [______] (“Guarantor”), and Silicon Valley Clean Energy Authority, a California joint powers authority (together with its successors and permitted assigns, “Buyer”).
Recitals
A. Buyer and SunZia Wind North LLC, a Delaware limited liability company (“Seller”), entered into that certain Renewable Power Purchase and Sale 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 (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.
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 Item 3
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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 (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).
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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 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 Item 3
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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 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 Item 3
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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 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:
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By:
Printed Name:
Title:
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EXHIBIT K
NOTICES
SUNZIA WIND NORTH LLC SILICON VALLEY CLEAN ENERGY
AUTHORITY
All Notices:
Street: 1088 Sansome St.
City: San Francisco, CA
Attn: Chief Legal Officer
Phone:
Fax:
Email:
All Notices:
333 W. El Camino Real, Suite 330
Sunnyvale, CA 94087
Attn: Monica Padilla, CEO and Kris Van Vactor,
Director of Power Resources
Phone:
Email:
Reference Numbers: Reference Numbers:
Invoices:
Attn: Accounts Payable
Phone:
Email:
Invoices:
Attn: Power Supply Group
Phone
Email:
Scheduling:
Attn: 24/7 Operations Control Center
888 Westheimer Road, Suite 213
Houston, TX 77006
Email:
Phone:
Facsimile:
Scheduling:
Attn: Tenaska
Team Email:
Attn: 24x7 Operations Desk
Phone:
Email:
Attn:
Phone:
Email:
Attn:
Phone:
Email:
Outage information:
Resource testing information:
Confirmations:
Attn: Pattern Energy Settlements
Phone:
Email:
Confirmations:
Kris Van Vactor, Director of Power Resources
Phone:
Email:
Item 3
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SUNZIA WIND NORTH LLC SILICON VALLEY CLEAN ENERGY
AUTHORITY
Payments:
Attn: Accounts Payable
Phone: (
Email:
Payments:
Attn: Finance Group
Phone:
Email:
Wire Transfer: Wire Transfer:
Emergency Contact:
Attn: 24/7 Operations Control Center
Phone:
Email:
With additional Notices of an Event of Default
to:
Michael Callahan, General Counsel
Email:
and to:
Attn:
Email:
Attn:
Email:
Emergency Contact:
Attn: Monica Padilla, CEO
Phone: (
Email:
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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:
1 Item 3
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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 North LLC in connection with that certain Renewable Power Purchase and Sale Agreement dated [DATE] (“Agreement”) by and between SunZia Wind North 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:
Title:
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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 SunZia Wind North LLC, 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. “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 Item 3
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(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.
“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 Item 3
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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. (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.
Item 3
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(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. (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 Item 3
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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 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 Item 3
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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.
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 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 Item 3
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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 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 Item 3
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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 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 Item 3
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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. (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.
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Attachment 2
Draft SunZia Wind North LLC - Redacted
SMRH:4922-6982-7112.6 -12-
050725
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the date first set forth above.
SUNZIA WIND NORTH LLC
By: ____________________________
Name:_______________________
Title:________________________
SILICON VALLEY CLEAN ENERGY AUTHORITY
By: ____________________________
Name:_______________________
Title:________________________
MORGAN STANLEY CAPITAL GROUP INC.
By: ____________________________
Name:_______________________
Title:________________________
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Attachment 2
Draft SunZia Wind North LLC - Redacted
SMRH:4922-6982-7112.6 -13-
050725
Appendix 1
Assigned Rights and Obligations
PPA: Renewable Power Purchase and Sale 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 4.8 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 with its rules. For the avoidance of doubt, the Day-Ahead Average Price can be a negative number.
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Draft SunZia Wind North LLC - Redacted
SMRH:4922-6982-7112.6 -14-
050725
Appendix 2
MSCG Notice Information
[To be completed before signing.]
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Attachment 2
Draft SunZia Wind North LLC - Redacted
SMRH:4922-6982-7112.6 -15-
050725
Appendix 3
Copy of PPA
[To be attached.]
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Attachment 2
Draft SunZia Wind North LLC - Redacted
SMRH:4922-6982-7112.6 -16-
050725
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 2
Draft SunZia Wind North LLC - Redacted
Staff Report – Item 4
Item 4: Adopt Resolution Authorizing the Chief Executive Officer to Execute a Main Services Agreement with Lunar Energy for a Distributed Energy Resources Management System (DERMS) and Related Customer Demand Flexibility Services From: Monica Padilla, CEO
Prepared by: Don Bray, Director of Strategic Development Maren Wenzel, Director of Regulatory Policy and Planning Joey Lande, Energy Services Manager
Colton Heath, Trading Planner
Date: 5/14/2025
RECOMMENDATION
Staff recommends the Silicon Valley Clean Energy (SVCE) Board of Directors (Board) adopt Resolution 2025- 11 authorizing the Chief Executive Officer (CEO) to negotiate and execute a five-year Main Services Agreement with Lunar Energy for a Distributed Energy Resources Management System (DERMS) and related program operation and load modification services, to support SVCE’s customer demand flexibility goals in an amount not-to-exceed $971,238, including all scopes of work needed to implement the agreement.
EXECUTIVE COMMITTEE RECOMMENDATION
Staff delivered an information-only presentation to the Executive Committee on April 22, 2025, on needs, opportunities and plans for offering expanded demand flexibility services to SVCE customers. The Executive Committee recognized the importance of Staff’s goals for expanding demand flexibility to help make electricity more affordable, clean and reliable, and was supportive of providing customers with opportunities to ‘flex’ their usage to cleaner, lower-cost hours. Given the complexity of the topic, the Executive Committee encouraged staff to provide the Board with clear examples of the role that a DERMS will play in enabling new/expanded demand flexibility services.
BACKGROUND
Since 2010, renewable electricity from sources such as solar and wind has risen from 12% of the grid power mix in California to over 40% in 2023. Additionally, rooftop solar has increased significantly due to favorable rate offerings and declining cost of equipment and installation, creating a surplus of solar energy during the middle of the day and shifting the demand peak to later in the day. Solar and wind are intermittent resources, and as a result, grid prices for electricity now vary widely each day – often near $0/MWh during the sunniest hours, to well over $100/MWh in the early evening when the grid relies on gas-fired power plants.
From a grid capacity standpoint, intermittent resources are more challenging to manage. Capacity market benchmarks have risen dramatically in recent years, from $3/kW-month in 2019 to nearly $40/kW-month in 2025. If SVCE’s customers reduce their usage during a demand peak, it can reduce the capacity-related compliance obligations for SVCE and can reduce supply costs for SVCE, including energy and capacity costs.
As renewables make grid economics more dynamic, the ability for customers to flex their electric demand is increasingly valuable. Channeling significant new load growth from electrification into hours when grid utilization is lower and clean power is plentiful will limit the need for investment in additional grid capacity, and help to keep power affordable, reliable and clean.
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SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 4 Agenda Date: 5/14/2025
To date, Demand Response (DR) programs and Time-of-Use (TOU) electric rates have been the primary tools for flexing customer demand and reducing peak loads. With DR, large commercial customers are contracted and paid to manually turn down their factory loads during grid emergencies – typically reserved for peak hours on the hottest summer days. And most commercial and residential customers are now on daily ‘Time of Use’ electric rates, encouraging behavioral changes to reduce usage and avoid higher electric rates during peak hours, e.g., 4:00 - 9:00 PM. Together, DR and TOU have been shown to reduce overall peak demand on the California grid by approximately five to six percent (5-6%), or approximately three gigawatts.
California has set a goal to approximately double load flex capacity by 2030, to seven gigawatts. Much of this new load shift potential is expected to come from expanded use of automation – connecting dynamic prices or demand reduction signals with ‘smart’ loads - distributed energy resources (DERs) such battery storage, electric vehicles, smart control thermostats, heat pump water heaters, and commercial building energy management systems. In context, a proportional load-weighted ‘share’ of this new load flex goal would be approximately 70 megawatts (MW) in SVCE’s service area – to be met by SVCE, PG&E, and a broad range of third-party equipment manufacturers (OEMs) and DR service providers.
New demand flexibility approaches including day-ahead hourly pricing or real-time pricing (RTP), and load modification (LM) programs, are now being piloted. SVCE pilots include the use of RTP to help direct EV charging into the hours when electricity is cheapest and cleanest, typically 11:00am – 3:00pm, and a third-party LM program in which a fleet of residential batteries are managed to discharge during the evening peak.
There are many DERs already deployed in SVCE’s service area, and the number is growing rapidly. SVCE’s goal is to provide all customers with opportunities to earn savings by easily, automatically and comfortably flexing their electricity use daily. In turn, they will contribute to a reliable and clean grid and generate operational savings for SVCE.
ANALYSIS & DISCUSSION
In late 2024, SVCE teamed with Peninsula Clean Energy (PCE) on a Request for Proposal (RFP) to identify potential vendor partners for SVCE’s demand flexibility efforts. To meet SVCE’s goals, the RFP included requirements for a Distributed Energy Resource Management System (DERMS), a software platform that communicates with DERs and manages them according to pre-defined, device-specific load shifting strategies.
A DERMS would provide SVCE with the ability to support customers in maximizing benefits from their DER(s), including participation in capacity and energy markets. A DERMS is essential for enrollment and management of customer devices in future SVCE-hosted demand flexibility programs, including planned programs for battery energy storage, and commercial and industrial buildings.
The RFP had two parts:
• Part 1: installation of a DERMS, and provision of 5 MW or more of existing demand flexibility capacity (DR or LM) from currently installed DERs by 2026
• Part 2: enrollment of 25 MW of new SVCE demand flexibility capacity by 2030 The RFP sought DERMS provider experience in integrating a range of device types and original equipment manufacturers (OEMs), aggregators or sub-aggregators of DERs, as well as the platform’s ability to scale over time as the market for DER technology expands. Demonstrated ability to deliver demand flexibility as a capacity product from existing DERs was crucial to RFP Part 1, and a vision and capability for delivery of new demand flexibility from new DERs was instrumental to Part 2.
Seventeen responses were received from firms across the demand flexibility industry. Several submissions did not meet the minimum RFP response requirements. Staff identified six proposals as finalists, for further consideration in two rounds of in-person interviews, where offers were presented and discussed in detail.
During the interview process, two vendors addressing complementary scopes were identified as providing offers that best fit SVCE’s needs.
Item 4
Agenda Item: 4 Agenda Date: 5/14/2025
Lunar Energy was determined to offer the best range of DERMS and programmatic services, including support for Part 1 and Part 2 battery storage programs, and a Part 2 program for support of commercial/industrial building energy management systems. Lunar’s DERMS product is also capable of managing water heater, HVAC and EV charging loads, and SVCE may leverage the platform for these products in time. Approval of the Lunar Energy contract is the focus of this staff report. Approval of a recommended second contract for demand flexibility capacity focused on smart control thermostats will be addressed with the Board later this year.
Across both DERMS and program services, Lunar’s proposed scope of work provided the best value to SVCE, providing SVCE an opportunity to benefit from Lunar’s proven, flexible DERMS platform, global and California-specific expertise, and optionality to integrate new programs or launch new programs based on SVCE’s needs.
Lunar Energy’s leading ‘GridShare’ DERMS platform supports more than 110,000 battery storage installations around the world. Based in the United Kingdom, Lunar’s U.S. headquarters and product development center are located in Mountain View.
Lunar currently operates the DERMS platform that supports SVCE’s third-party solar + battery load modification program. Also, Lunar was recently selected by Ava Community Energy as their DERMS provider.
The proposed five-year contract with Lunar involves the following elements:
• Main Services Agreement, including over-arching contract terms • Scope 1: DERMS installation and operation, including one-time start-up costs, an annual fixed platform management fee, and a variable capacity fee based on devices being managed/controlled on the DERMS
• Scope 2: Integration of devices with the DERMS sourced from SVCE-managed incentive and rebate programs, for devices such as battery storage and heat pumps • Scope 3: Enabling agreement for SVCE procurement of load-modifying capacity, from existing battery storage systems in SVCE’s service area, independently contracted and managed by Lunar Energy • Scope 4: Program design services for a forthcoming SVCE battery storage incentive program; Lunar Energy will manage the design of the program, oversee the customer enrollment, and the incentive settlement and disbursement. The marketing and customer acquisition initiatives necessary to drive battery enrollment will be sub-contracted by Lunar to ICF, a major energy industry services firm.
SVCE staff recommend approving the proposed contract with Lunar Energy for the Gridshare DERMS platform (Scope 1), the integration of SVCE-administered programs (Scope 2), the provision of pre-existing battery capacity (Scope 3), and the program design work for a new, integrated battery storage program (Scope 4).
Staff will return to the Board with an additional funding request to approve the final program design and budget of the new battery storage program under Scope 4.
Budget
The proposed contract term is for five years with an initial not-to-exceed amount of $971,238. This budget would cover fixed costs under Scope 1, forecasted fees for Scope 2, and program design and start-up fees for Scope 4. SVCE staff expect to return to the Board over the next year with additional funding requests for the full costs of a new battery storage program, a commercial and industrial (C&I) demand response program, and increased budget for growing connected capacity fees.
Item 4
Agenda Item: 4 Agenda Date: 5/14/2025
Scope 3 is for an enabling agreement to purchase load modification capacity. This would be arranged separately as a supply agreement, by the SVCE’s power supply team, based on negotiated term, volume, and contract price/kW-year. Any capacity purchase utilizing the enabling agreement would either be brought to the Board for approval or are within the delegated authority under SVCE’s Energy Risk Management Policy.
Since 2018, the Board has allocated $1.6M of SVCE’s Programs budget to be spent on demand flexibility efforts, largely used to run the GridShift app. Of that allocation, $630,420 is currently unspent and not assigned to any specific program and staff proposes to dedicate it to the agreement with Lunar. The remaining $340,818 required to cover this contract’s not-to-exceed amount will need to come from the roughly $10M in currently unallocated Programs budget. Approval of this item will allocate both the remaining $630,420 of demand flexibility funds to this contract, and the balance from the Programs budget. Future expenditures on demand flexibility will be paid for using the power supply budget or an additional allocation from the Programs budget.
STRATEGIC PLAN
Implementing a comprehensive demand flexibility strategy supports a number of the Goals identified in SVCE’s Strategic Plan, including:
Goal 5: “Manage and optimize load and power resources to meet affordability, GHG reduction and reliability objectives.”
Goal 7: “Support all SVCE communities to decarbonize through local investments that reduce barriers and demonstrate sensible, scalable, and equitable solutions.”
ALTERNATIVE
A DERMS platform enables SVCE to directly offer new demand flexibility services to our customers, that can provide savings to customers and help lower SVCE’s capacity and energy-related costs.
Alternatives include leveraging demand flexibility offerings from PG&E or third-party providers. SVCE could reference PG&E offers for interested customers but would have little opportunity to manage or optimize flexible loads. SVCE can also purchase RA from portfolios of demand-side resources, although the load flexibility may not stem from SVCE customers.
FISCAL IMPACT
This recommendation will have no incremental fiscal impact on SVCE’s budget, as it uses funds that the Board has already authorized to be spent on programs. Expenditures will be captured in the regular budget process moving forward.
ATTACHMENT
1. Resolution 2025-11 Authorizing the Chief Executive Officer to Negotiate and Execute a Contract with Lunar Energy for a Distributed Energy Resource Management System (DERMS) and Related Services
2. Draft Main Services Agreement with Lunar Energy
Item 4
SILICON VALLEY CLEAN ENERGY AUTHORITY
RESOLUTION NO. 2025-11
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SILICON VALLEY CLEAN
ENERGY AUTHORITY AUTHORIZING THE CHIEF EXECUTIVE OFFICER TO NEGOTIATE
AND EXECUTE A MAIN SERVICES AGREEMENT WITH LUNAR ENERGY FOR A
DISTRIBUTED ENERGY RESOURCE MANAGEMENT SYSTEM (DERMS) AND RELATED
SERVICES
THE BOARD OF DIRECTORS OF THE SILICON VALLEY CLEAN ENERGY AUTHORITY HEREBY RESOLVES AS FOLLOWS:
WHEREAS, the Silicon Valley Clean Energy Authority (“SVCE”) 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, on April 1, 2017 Silicon Valley Clean Energy began offering service to residents and businesses throughout Santa Clara County; and
WHEREAS, Silicon Valley Clean Energy’s mission is to reduce dependence on fossil fuels by providing carbon free, affordable, and reliable electricity and innovative programs for the SVCE community; and
WHEREAS, increased penetration of solar and other renewables on the California grid has made energy and capacity costs highly dynamic hour to hour, and seasonally; and WHEREAS, significant load growth is anticipated over the next 10-20 years, from electrification of buildings and transportation; and
WHEREAS, major cost and GHG impacts will result if load growth drives new usage peaks requiring significant new distribution infrastructure and fossil fuel-based generation; and WHEREAS, new loads from electrification are growing rapidly in SVCE’s service area and are increasingly ‘smart’, capable of receiving grid status and pricing signals to optimize usage for the benefit of the customer and the grid while reducing compliance obligations and supply costs for SVCE; and
WHEREAS, SVCE’s goal is to provide all customers with the ability to earn savings, by easily, automatically and comfortably flexing their electricity use daily, contributing to a reliable and clean grid, and generating operational value for SVCE; and
WHEREAS, SVCE plans to develop customer programs for demand flexibility, integrating customer devices such as batteries and heat pumps with an SVCE-hosted Distributed Energy Management System (DERMS), needed to optimize usage for customer savings and grid benefits; and WHEREAS, SVCE issued an RFP in the fall of 2024 for Customer Demand Flexibility Services, including a DERMS software platform, recruitment and management of demand flexibility capacity Item 4
Attachment 1
from existing resources in SVCE’s service area, and support of new SVCE demand flexibility programs; and
WHEREAS, SVCE received seventeen RFP responses, and selected Lunar Energy for their DERMs platform and related demand flexibility services, based on Lunar’s proven expertise, technical capabilities, and fit with SVCE’s requirements; and
WHEREAS, SVCE wishes to establish a five-year contract with Lunar Energy for an amount not-to-exceed $971,238 for Lunar’s DERMS platform, support services for integration of customer devices from existing SVCE decarbonization programs, establishment of an enabling agreement for load modification capacity from existing batteries in SVCE’s service area, and design of a new battery program; and
WHEREAS, there will be no incremental fiscal impact on SVCE’s budget for the proposed contract with Lunar Energy, as sufficient funding can be allocated from funds already authorized for expenditure on programs; and
WHEREAS, potential future budget requests associated with Lunar Energy and demand flexibility, e.g., a load modification capacity contract, or battery incentive program implementation, will be brought for approval to the SVCE Board of Directors as needed, at a later date.
NOW THEREFORE, the Board of Directors of the Silicon Valley Clean Energy Authority does hereby resolve that:
1. The foregoing recitals are true and correct.
2. The Board of Directors hereby approves and adopts the recommendation to authorize the CEO to negotiate and execute a five-year Main Services Agreement with Lunar Energy for a Distributed Energy Resource Management System (DERMS) to support services for integration of customer devices from existing SVCE decarbonization programs, establish of an enabling agreement for load modification capacity from existing batteries in SVCE’s service area, and design of a new battery program; for an amount not-to-exceed $971,238; and to execute all scopes of work needed to implement the contract.
ADOPTED and APPROVED this 14th day of May, 2025 by the following vote:
JURISDICTION NAME AYE NO ABSTAIN ABSENT
City of Campbell Director Scozzola
City of Cupertino Director Fruen
City of Gilroy Director Hilton
City of Los Altos Director Meadows
Town of Los Altos Hills Director Tyson
Town of Los Gatos Alternate Director Ristow
City of Milpitas Director Barbadillo
Item 4
Attachment 1
City of Monte Sereno Director Mekechuk
City of Morgan Hill Director Martinez Beltran
City of Mountain View Director Showalter
County of Santa Clara Director Lee
City of Saratoga Director Walia
City of Sunnyvale Director Klein
Chair
ATTEST:
Clerk
Item 4
Attachment 1
1/2025 Version 1.0
1 MAIN SERVICES AGREEMENT
(DRAFT IN SUBSTANTIAL FORM)
This main services agreement (“Agreement”) is made and effective on the date of last signature below (“Effective Date”), by and between Silicon Valley Clean Energy, an independent public agency (“SVCE”) and Lunar Energy Limited, an English limited liability company with registered address at 55 Baker Street, London, W1U 7EU United Kingdom and with offices located at 11-29 Fashion Street, London E1 6PX United Kingdom (“Service Provider”).
SVCE and Service Provider may be referred to herein in the singular as “Party” or jointly as “Parties”.
RECITALS
WHEREAS, SVCE requires distributed energy resources management services, including Service Provider hosted “software as a service” services, as further described herein, with respect to certain of its information technology needs;
WHEREAS, SVCE requested a proposal from Service Provider for the Services (defined below); WHEREAS, Service Provider has experience and expertise in the business of providing the Services; WHEREAS, Service Provider submitted a proposal to SVCE to perform such Services on behalf of SVCE; WHEREAS, based on Service Provider’s knowledge and experience relating to such Services SVCE has selected Service Provider to provide and manage the Services; WHEREAS, Service Provider wishes to perform the Services and acknowledges that the successful performance of the Services and the security and availability of SVCE’s data are critical to the operation of SVCE’s business; and,
WHEREAS, Service Provider has agreed to provide the Services to SVCE, all on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and representations set forth in this Agreement and each Scope, the Parties hereby agree as follows:
1. Term. This Agreement is legally binding as of the Effective Date and shall continue until terminated as provided for herein. Unless this Agreement is terminated earlier in accordance with the terms set forth herein, the initial term (the “Initial Term”) shall commence on the Effective Date and continue for five (5) years.
Following the Initial Term and unless otherwise terminated as provided for in this Agreement, this Agreement may be renewed for successive one (1) year terms (each, a “Renewal Term”) upon mutual written agreement of the Parties.
2. Termination of Scopes. Unless otherwise provided herein, termination of the Agreement shall mean termination of the Agreement and all Scopes (as defined in Section 3). Notwithstanding anything to the contrary herein, in the event that SVCE terminates Scope One for cause pursuant to the terms herein or therein, SVCE may, at its sole election and in its sole discretion, terminate one or more other Scopes for cause. In the event that SVCE terminates all Scopes pursuant to the terms herein or therein, then SVCE may, at its sole election and in its sole discretion, terminate the Agreement.
3. The Services. This Agreement sets forth the terms and conditions under which Service Provider agrees to provide distributed energy resource management services to SVCE for distributed energy resources such as residential solar battery systems, electric vehicles, electric vehicle supply equipment, smart thermostats, heat Item 4
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1/2025 Version 1.0
2 pump water heaters and to license certain Service Provider hosted software, for the visibility and performance tracking of such management services including, customization / integration, user identification and password change management, data import / export, monitoring, technical support, maintenance, training, backup and recovery, and change management services (collectively, the “Services”) as further set forth in various “Scopes” in writing from time to time, for the provision of, access to and use of the Services (as appropriate), each Scope further describing the specific Services to be provided, fees for such Services (“Services Fees”), and any other terms the Parties mutually agree to, excepting any delays impacted by Force Majeure events and Excused Events (as defined in the Scope). Services includes any Software Services (as may be defined in the applicable Scope). Once duly executed by both parties, each Scope shall be incorporated herein by reference and shall stand alone with respect to any other Scope. If there is a conflict between the terms of this Agreement and the terms of a Scope, the terms of the Scope will take precedence over this Agreement, but only with respect to the Services specified in that Scope. Except as otherwise set forth herein, a breach or default by one Party under one Scope shall not automatically result in a breach or default by the same Party under a separate Scope unless the same circumstances result independently in a breach or default of such other independent Scope and the matter is separately enforced by the Parties to such Scope. Any amendment or modification made by the Parties to one Scope in accordance with its terms shall not serve to amend or modify this Agreement as it pertains to any other separate and independent Scope.
Any amendment or modification by the Parties to a Scope, or waiver given by a Party under one Scope, shall only apply to amend, modify, or waive provisions of the separate and independent Scope to which it relates.
The first Scopes issued pursuant to this Section are attached hereto and incorporated herein by reference.
3.1 Compliance with All Laws. During the Term, Service Provider shall keep itself informed of all applicable federal, state and local laws, ordinances, codes, regulations and requirements which may, in any manner, affect those employed by it or in any way affect the performance of its services pursuant to this Agreement (and the Scopes). During the Term, Service Provider shall, at all times, observe and comply with all such laws and regulations, including, but not limited to the Americans with Disabilities Act, the Stored Communications Act, 18 U.S.C. Section 2701, et seq., California Civil Code Sections 1798.80 through 1798.84, and the California Consumer Privacy Act, Civil Code Section 1798.100, et seq. SVCE, and its officers and employees, shall not be liable at law or in equity by reason of the failure of the Service Provider to comply with this paragraph.
3.2 Subcontractors. During the Term, Service Provider shall not enter into any subcontracts for the performance of the Services, or assign or transfer any of its rights or obligations under this Agreement (or any Scope), without SVCE’s prior written consent and any attempt to do so shall be void and without further effect and shall be a material breach of this. Service Provider’s use of subcontractors shall not relieve Service Provider of any of its duties or obligations under this Agreement (or any Scope). Service Provider shall ensure that all subcontractors comply with the terms and conditions of this Agreement, carry the insurance required of Service Provider as set forth in Section 16.7 and make the representations and warranties applicable to Service Provider set forth in Section 11. Service Provider shall be fully responsible and liable for the works, services, and materials furnished by and the acts, defaults and neglects of any subcontractor, its agents or employees as fully as if they were Service Provider’s own or those of Service Provider’s agents or employees. For avoidance of doubt, a breach by a subcontractor of any provision of this Agreement shall be considered a breach by Service Provider, and SVCE may obtain complete relief from Service Provider arising out of any breach of this Agreement as a result of such breach without the need to pursue the subcontractor directly. Service Provider shall only subcontract with subcontractors that are suitably qualified, experienced and duly licensed to perform the Services as required by applicable law and that have posted license bonds as required by applicable law.
3.3 Software Services. Notwithstanding anything to the contrary, the following terms of this Section 3.3 are only applicable to the Software Services (as may be defined in the applicable Scope):
3.3.1 Authorized Users. Unless otherwise limited herein, Service Provider grants SVCE a renewable, irrevocable, nonexclusive, royalty-free, and worldwide right and license for any SVCE employee, contractor, or agent, or any other individual or entity authorized by SVCE, (each, an “Authorized User”) to access and use the Software Item 4
Attachment 2
1/2025 Version 1.0
3 Services; provided that no Authorized Users are permitted without Service Provider’s express written consent to (i) copy, transmit or modify the Software Services; (ii) decompile or reverse engineer the Software Services; (iii) use the Software Services to provide services to third parties; or (iv) sell or sublicense the Software Services.
Other than any limitations otherwise described herein, Authorized Users will have no other limitations on their access to or use of the Software Services.
3.3.2 Unauthorized Use. SVCE is responsible for the actions and omissions of its Authorized Users as if such actions and omissions were those of SVCE provided such Authorized Users have accessed the Software Services by virtue of their employment or contract with SVCE or as otherwise authorized by SVCE. If there is unauthorized access and/or use by anyone who obtained access to the Software Services and/or Documentation (defined below) directly or indirectly through SVCE, SVCE will notify Service Provider and take all steps reasonably necessary promptly to terminate such unauthorized access and/or use. SVCE will cooperate and assist with any actions taken by the Service Provider to prevent or terminate unauthorized access and/or use of the Software Services and/or any Documentation. The Service Provider reserves the right to suspend SVCE’s or an Authorized User’s access to, or their account on, the Software Services if SVCE materially breaches this Agreement.
3.3.3 Acknowledgement of License Grant. For the purposes of 11 U.S.C. § 365(n), the Parties acknowledge and agree that this Agreement constitutes a grant of license to use intellectual property in software form, to SVCE by Service Provider.
3.3.4 Control and Location of Services. The method and means of providing the Software Services shall be under the exclusive control, management, and supervision of Service Provider, giving due consideration to the written requests of SVCE. The Parties hereby acknowledge and agree that Service Provider will use cloud-based storage in the provision of the Software Services. Such cloud-based storage shall be in compliance with ISO 27001 or successor standards thereto. Except as otherwise expressly set forth herein, the Software Services (including all data storage, including cloud-based storage), shall be provided solely from within the continental United States, and all such locations shall be disclosed to SVCE annually and within thirty (30) days of the Effective Date of this Agreement. The SVCE Data will at all times be stored on servers located within the continental United States.
3.3.5 Storage. The Software Services shall include the applicable allocation of base data storage.
3.3.6 Test Environment. In addition to production use of the Software Services, SVCE is entitled to one test environment for use by Authorized Users at no additional charge.
Service Provider shall cooperate with SVCE’s requests in managing the non-production environments such as refreshing SVCE Data upon request.
3.3.7 Documentation. The documentation for the Software Services (“Documentation”) will accurately and completely describe the functions and features of the Software Services, including all subsequent revisions thereto. The Documentation shall be understandable by a typical end user and shall provide Authorized Users with sufficient instruction such that an Authorized User can become self-reliant with respect to access and use of the Software Services. SVCE shall have the right to make any number of additional copies of the Documentation at no additional charge.
3.3.8 Changes in Functionality. During the term of this Agreement, Service Provider shall not reduce or eliminate functionality in the Software Services. Where Service Provider has reduced or eliminated functionality in the Software Services, SVCE, at SVCE’s sole election and in SVCE’s sole determination, shall: (a) have, in addition to Item 4
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4 any other rights and remedies under this Agreement or at law, the right to immediately terminate this Agreement with respect to some or all of the Scopes where functionality has been reduced or eliminated and be entitled to a return of any prepaid Services Fees for any terminated Software Services; or, (b) determine the value of the reduced or eliminated functionality and Service Provider will immediately adjust the Services Fees accordingly on a prospective basis. Where Service Provider has introduced like functionality in other services, SVCE shall have an additional license and subscription right to use and access the new services, at no additional charge, with the same rights, obligations, and limitations as for the Software Services. Where Service Provider increases functionality in the Software Services, such functionality shall be provided to SVCE without any increase in the Services Fees.
3.3.9 No Effect of Click-Through Terms and Conditions. Where an Authorized User is required to “click through” or otherwise accept or made subject to any online terms and conditions in accessing or using the Software Services, such terms and conditions are not binding and shall have no force or effect as to the Software Services or this Agreement.
3.3.10 Modification of the Services. SVCE’s Director of Information Technology, Senior Manager of Information Technology or another person authorized by SVCE, shall be authorized to waive, in writing, any of the Service Provider’s obligations with respect to the Software Services, where deemed to be in SVCE’s best interests, provided that no such modification shall result in any increase in the amount of the Services Fees.
4. Service Level Standards. Notwithstanding anything to the contrary, the following terms of this Section 4 are only applicable to the Software Services.
4.1 Service Levels. For the term of this Agreement, Service Provider shall provide the Software Services, Force Majeure events and Excused Events (as defined in the applicable Scope) excepted, in accordance with the applicable Service Level Standards, each as described the applicable Scope.
4.2 Cure Plan; Historical Reports. On (a) a biannual basis, commencing on the date that is six (6) months after the Effective Date, in arrears and no later than the sixtieth (60th) calendar day after the end of each biannual period, provided Performance Credits have been included or deemed included on an invoice provided in accordance with Section 10.1 during such biannual period, and (b) upon SVCE’s reasonable request if Performance Credits have been included or deemed included on an invoice provided in accordance with Section 10.1, Service Provider shall provide a cure plan to SVCE, in a form mutually agreed by SVCE and Service Provider, describing (x) the cause or basis for not meeting the Service Level Standard, and (y) the specific remedial actions Service Provider has undertaken or will undertake to ensure that the Service Level Standard will be subsequently achieved. Service Provider and SVCE will meet as often as shall be reasonably requested by SVCE to review the performance of Service Provider as it relates to the Service Level Standards. Service Provider shall, without charge, make SVCE’s historical Service Level Standard reports available to SVCE upon request.
4.3 Failure to Meet Service Level Standards. In the event Service Provider does not meet a Service Level Standard, Service Provider shall: (a) owe to SVCE any applicable Performance Credit, as liquidated damages and not as a penalty; and (b) use commercially reasonable efforts to ensure that any unmet Service Level Standard is subsequently met. Notwithstanding the foregoing, Service Provider will use commercially reasonable efforts to minimize the impact or duration of any outage, interruption, or degradation of Service. In no case shall SVCE be required to notify Service Provider that a Performance Credit is due as a condition of payment of the same. Except as set forth in Section
4.4, this Section sets forth the Service Provider’s sole and exclusive remedy with respect to failure to meet Service Level Standards.
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5 4.4 Termination for Repeated Failures. SVCE shall have, in addition to any other rights and remedies under this Agreement (or applicable Scope) or at law, the right to immediately terminate this Agreement (or applicable Scope) in accordance with the following sentence, and be entitled to a return of any prepaid Services Fees where Service Provider fails to meet any Service Level Standard for four (4) months out of any twelve (12) month period. If SVCE exercises its termination right under this Section 4.4, SVCE may, at its sole discretion, elect to terminate the Agreement with respect to (i) the Scope(s) for which Service Provider failed to meet any Service Level Standard, or (ii) all Scopes.
4.5 Audit of Service Levels. No more than annually, SVCE or SVCE’s agent shall have the right to audit Service Provider’s books, records, and measurement and auditing tools to verify Service Level Standard achievement and to determine correct payment of any Performance Credit on giving at least ten (10) Business Days’ prior notice in writing and during normal business hours; provided, if SVCE has cause to believe that Service Provider has not accurately reported the Service Level Standard achievement and/or determined any Performance Credit due to SVCE, SVCE may exercise the audit right described in this sentence more frequently than annually. Where it is determined that any Performance Credit was due to SVCE but not paid, Service Provider shall immediately owe to SVCE such Performance Credit. As used herein, “Business Day” means any day other than a Saturday, Sunday, or a United States of America Federal Reserve Bank holiday.
5. Support; Maintenance; Additional Services.
5.1 Technical Support. Service Provider shall provide the Technical Support as defined and described in each Scope. The Services Fees shall be inclusive of the fees for the Technical Support.
5.2 Maintenance. Service Provider shall provide bug fixes, corrections, modifications, enhancements, upgrades, and new releases to the Services to ensure: (a) the functionality of the Services, as described in the Documentation, is available to Authorized Users; (b) the functionality of the Services in accordance with the representations and warranties set forth herein, including but not limited to, the Services conforming in all material respects to the specifications, functions, descriptions, standards, and criteria set forth in the Scopes and the Documentation; (c) the Service Level Standards can be achieved; and, (d) the Services work with the then-current version and the three prior versions of Internet Explorer, Mozilla Firefox, and Google Chrome Internet browsers.
The Services Fees shall be inclusive of the fees for maintenance.
5.2.1 Required Notice of Maintenance. Unless as otherwise agreed to by SVCE on a case-by-case basis, Service Provider shall provide no less than thirty (30) calendar day’s prior written notice to SVCE of all non-emergency major maintenance to be performed on the Services involving code interfacing with SVCE and the management system directly and which would have the effect of taking the management system offline, such written notice including a detailed description of all such non-emergency major maintenance to be performed. For emergency maintenance, Service Provider shall provide as much prior notice as commercially practicable to SVCE and shall provide a detailed description of all such emergency maintenance performed no greater than one (1) calendar day following the implementation of the emergency maintenance.
5.2.2 Acceptance of Non-Emergency Major Maintenance. Unless as otherwise agreed to by SVCE on a case-by-case basis, for major non-emergency maintenance described in Section 5.2.1, SVCE shall have a ten (10) Business Day period to test any such major non-emergency maintenance changes prior to Service Provider introducing such maintenance changes into production (the “Maintenance Acceptance Period”). In the event that SVCE rejects, for good cause, any such major non-emergency maintenance changes during the Maintenance Acceptance Period, Service Provider shall not introduce such rejected maintenance changes into production. At the end of the Maintenance Acceptance Period, if SVCE has not rejected the major non-emergency maintenance changes, the maintenance changes shall be deemed to be accepted by Item 4
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6 SVCE and Service Provider shall be entitled to introduce the maintenance changes into production.
6. Audit Rights of Service Provider. Service Provider shall have no right to conduct an on-premises audit of SVCE’s compliance with the use of the Services. No more than once annually, Service Provider shall have the right to request from SVCE its certification of compliance of Authorized Users with this Agreement and each relevant Scope.
7. Change Control Procedure. SVCE may, upon written notice, request changes to any applicable Scope. If SVCE requests any changes to an applicable Scope, SVCE shall notify Service Provider, and, not more than five (5) Business Days (or other mutually agreed upon period) after receiving the request, Service Provider shall notify SVCE whether or not the change has an associated cost impact that will require an adjustment to the relevant Services Fees. If SVCE approves, SVCE shall issue a change order, which will be executed by the Service Provider.
8. Termination; Renewals.
8.1 Termination for Convenience. Without limiting the right of a Party to terminate this Agreement as provided for in this Agreement, SVCE may terminate this Agreement with respect to some or all of the Scopes, for convenience upon not less than sixty (60) days’ prior written notice to the Service Provider. If Service Provider is directed by SVCE to use a certain subcontractor to perform a Scope, and SVCE elects to terminate the services under such Scope by exercising its rights as a third party beneficiary under the applicable agreement between such subcontractor and Service Provider, then Service Provider may immediately terminate or suspend the performance of its obligations under this Agreement with respect to such Scope without liability.
8.2 Termination for Cause. Without limiting the right of a Party to immediately terminate this Agreement for cause as provided for in this Agreement, including, without limitation, in Section
14.8, if either Party materially breaches any of its duties or obligations under this Agreement and such breach is not cured, or the breaching Party is not diligently pursuing a cure to the non-breaching Party’s sole satisfaction, within thirty (30) calendar days after written notice of such breach, the non-breaching Party may terminate this Agreement, with respect to some or all of the Scopes, for cause as of a date specified in such notice. Notwithstanding the foregoing, SVCE shall have the right to immediately terminate this Agreement with respect to some or all of the Scopes if a change in law renders the Services provided under this Agreement (or any applicable Scope) illegal (and such illegality cannot be cured within thirty (30) calendar days after written notice of such illegality) or if an Event of Bankruptcy occurs with respect to Service Provider.
8.3 Payments upon Termination. Upon the termination of this Agreement (or applicable Scope), SVCE shall pay to Service Provider all undisputed amounts due and payable hereunder (or thereunder), if any, and Service Provider shall pay to SVCE all amounts due and payable hereunder (or thereunder), such as Performance Credits and prepaid Services Fees, if any. Due to SVCE’s termination for (i) convenience in accordance with Section 8.1, or (ii) cause due to illegality, where no cure is possible within the thirty (30) calendar day timeframe in accordance with Section 8.2, and unless otherwise agreed upon by the Parties, SVCE shall pay, or Service Provider shall retain if Services Fees were prepaid, two (2) month’s] worth of additional Service Fees for the terminated Scope(s) calculated based on the most recent month’s Service Fees for such terminated Scope(s) multiplied by two (2); provided that if SVCE terminates this Agreement (or applicable Scope) for (i) convenience in accordance with Section 8.1 or (ii) cause due to illegality, where no cure is possible within the thirty (30) calendar day timeframe in accordance with Section 8.2, less than [UNDER NEGOTIATION] after the Effective Date, then SVCE shall pay, or Service Provider shall retain if Services Fees were prepaid, one (1) month’s worth of additional Services Fees for the terminated Scope(s) for every month that the termination date is shy of the six (6) month anniversary of the Effective Date, based on the most recent month’s Services Fees for such terminated Scope(s). Any remaining prepaid funds shall be refunded to SVCE.
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7 8.4 Return of SVCE Data. Upon the termination of this Agreement (or an applicable Scope), Service Provider shall, within thirty (30) days following the termination of this Agreement (or applicable Scope), provide SVCE, without charge and without any conditions or contingencies whatsoever (including but not limited to the payment of any Services Fees due to Service Provider), with a final extract of the SVCE Data in the format reasonably specified by SVCE. Further, Service Provider shall certify to SVCE the destruction of any SVCE Data within the possession or control of Service Provider, in accordance with Section 13.5, but such destruction shall occur only after the SVCE Data has been returned to SVCE.
8.5 Renewals. Should the Services continue beyond the Initial Term, so long as the scope of the Services have stayed substantially similar, the Services Fees for the Renewal Term may be increased no more than three percent (3%) on an annualized basis.
9. Transition Services. Provided that this Agreement (or applicable Scope) has been terminated by SVCE, Service Provider will provide to SVCE and/or to the service provider selected by SVCE (“Successor Service Provider”) assistance reasonably requested by SVCE to effect the orderly transition of the applicable Services, in whole or in part, to SVCE or to Successor Service Provider (“Transition Services”) following the termination of this Agreement (or such Scope), in whole or in part. The Transition Services shall be provided for a period of no greater than six (6) months from the date of termination at the then-current Services Fees for the applicable Services, and may include: (a) developing a plan for the orderly transition of the terminated Services from Service Provider to SVCE or Successor Service Provider; (b) if required, transferring the SVCE Data to Successor Service Provider; (c) using commercially reasonable efforts to assist SVCE in acquiring any necessary rights to legally and physically access and use any third-party technologies and documentation then being used by Service Provider in connection with the applicable Services; (d) using commercially reasonable efforts to make available to SVCE, pursuant to mutually agreeable terms and conditions, any third-party services then being used by Service Provider in connection with the terminated Services; and, (e) such other activities upon which the Parties may agree. All applicable terms and conditions of this Agreement shall apply to the Transition Services.
10. Fees; Billing. SVCE shall be responsible for and shall pay to Service Provider the Services Fees as further described in each Scope, subject to the terms and conditions contained in this Agreement (and such Scope).
Any sum due to Service Provider for the Services for which payment is not otherwise specified shall be due and payable thirty (30) days after receipt by SVCE of an invoice from Service Provider.
10.1 Billing Procedures. Service Provider shall, on a monthly basis in arrears and within fifteen (15) days after the end of each month, provide SVCE a Service Level Standard report and bill to SVCE the sums due pursuant to each Scope by Service Provider’s invoice, which shall contain: (a) SVCE’s purchase order number, if any, and Service Provider’s invoice number; (b) description of Services for which an amount is due; (c) a statement of the Services Fees or portion thereof that are due; (d) a statement of taxes, if any; (e) a statement of actual performance compared to the Service Level Standards; (f); a statement of any credit for failing to meet the Service Level Standard, as determined in accordance with the applicable Scope (“Performance Credits”) or other credits as required by a Scope due to SVCE; and, (g) total amount due from SVCE. Where Service Provider fails to timely provide an invoice meeting the requirements set forth in (e) and (f) of the foregoing sentence, the Service Level Standard shall be deemed unmet for the purpose of calculating Performance Credits, and such Performance Credits shall be deemed included on such invoice.
Service Provider shall forward invoices in digital format to [email protected]. Service Provider shall submit a completed W-8BEN-E form electronically to the same email addresses.
Service Provider understands that no invoice will be paid by SVCE unless and until a W-8BEN-E form is received by SVCE.
10.2 Invoice Disputes. If SVCE disputes any invoice, or part thereof, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute shall be made only in good faith, in writing and shall state the basis for the dispute. The Parties shall seek to resolve all such disputes expeditiously and in good faith within two (2) months. Upon resolution of the dispute, any required payment shall be made (or any inadvertent overpayment shall be returned) within five Item 4
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8 (5) Business Days of such resolution. Except for invoiced payments that SVCE has successfully disputed, all late payments shall bear interest at lower of (a) the rate of four per cent (4%) per month, or (b) the highest rate permissible under applicable law, calculated daily and compounded monthly.
10.3 Taxes. Service Provider represents and warrants that it is an independent contractor for purposes of federal, state, and local taxes. Service Provider agrees that SVCE is not responsible to collect or withhold any such taxes, including income tax withholding and social security contributions, for Service Provider. Any and all taxes, interest, or penalties, including any federal, state, or local withholding or employment taxes, imposed, assessed, or levied as a result of this Agreement shall be paid or withheld by Service Provider.
10.4 Credits. Any amounts due to SVCE, such as a Performance Credit, from Service Provider may be applied by SVCE, at the sole election of SVCE, against any current or future Services Fees due to Service Provider. Any such amounts that are not so applied by SVCE shall be paid to SVCE by Service Provider within thirty (30) Business Days following Service Provider’s delivery of the invoice detailing such amounts.
10.5 Non-binding Terms. Any terms and conditions included in a Service Provider invoice shall be deemed to be solely for the convenience of the Service Provider, and no such term or condition shall be binding upon the SVCE.
10.6 Auditable Records. Service Provider shall maintain accurate records relating to the Services and records of all fees billable to, and payments made by, SVCE in a format that will permit audit by SVCE for a period of no less than five (5) years, for records relating to the Services, and three (3) years, for records of all fees billable to, and payments made by, SVCE, after SVCE makes final payment and all other pending matters are closed, and Service Provider shall be subject to the examination and/or audit by SVCE, a Federal grantor agency, and the State of California. Service Provider shall [UNDER NEGOTIATION] with all program and fiscal reporting requirements set forth by applicable Federal, State, and local agencies and as required by SVCE Service Provider agrees upon reasonable notice to provide to SVCE, to any Federal or State department having monitoring or review authority, to SVCE’s authorized representative, and/or to any of their respective audit agencies access to and the right to examine all records and documents necessary to determine compliance with relevant Federal, State, and local statutes, rules, and regulations, to determine compliance with this Agreement, and to evaluate the quality, appropriateness, and timeliness of services performed. For the term of this Agreement, upon SVCE’s written request, Service Provider shall provide SVCE with a copy of its annual American Institute of Certified Public Accountants Service Organization Control (SOC) 2 Type 1 report and SOC 2 Type 2 report (for at least three (3) SOC 2 Trust Services Criteria), or successor form of SOC reports.
10.7 No Suspension of Services. Except as set forth in Section 8.2, Service Provider shall not suspend any part of the Services where: (a) SVCE is reasonably disputing any amount due to Service Provider in accordance with Section 10.2; or, (b) any unpaid but undisputed amount due to Service Provider is less than thirty (30) calendar days in arrears.
11. Representations and Warranties.
11.1 Mutual. SVCE and Service Provider represent and warrant that:
11.1.1 it is a public entity or business duly incorporated, validly existing, and in good standing under the laws of its country or state of incorporation (as applicable) and is authorized to do business and in good standing in the state of California;
11.1.2 it has all requisite corporate power, financial capacity, and authority to execute, deliver, and perform its obligations under this Agreement and each Scope; Item 4
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9 11.1.3 the execution, delivery, and performance of this Agreement has been (and for each Scope, will be) duly authorized by it, and this Agreement constitutes (and for each Scope, will constitute) the legal, valid, and binding agreement of it and is enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganizations, moratoriums, and similar laws affecting creditors’ rights generally and by general equitable principles;
11.1.4 it shall comply with all applicable federal, state, local, or other laws and regulations applicable to the performance by it of its obligations under this Agreement (and Scope) and shall obtain all applicable permits and licenses required of it in connection with its obligations under this Agreement (and each Scope);
11.1.5 there is no outstanding litigation, arbitrated matter or other dispute to which it is a party which, if decided unfavorably to it, would reasonably be expected to have a potential or actual material adverse effect on its ability to fulfill its obligations under this Agreement or any Scope; and
11.1.6 no Event of Bankruptcy has occurred. As used herein “Event of Bankruptcy” means the occurrence of any of the following events: (i) the filing by such Party of a voluntary case or the seeking of relief under any chapter of Title 11 of the United States Bankruptcy Code, as now constituted or hereafter amended (the “Bankruptcy Code”), (ii) the making by such Party of a general assignment for the benefit of its creditors, (iii) the admission in writing by such Party of its inability to pay its debts as they mature, (iv) the filing by such Party of an application for, or consent to, the appointment of any receiver or a permanent or interim trustee of such Party or of all or any portion of its property, including the appointment or authorization of a trustee, receiver or agent under applicable law or under a contract to take charge of its property for the purposes of enforcing a lien against such property or for the purpose of general administration of such property for the benefit of its creditors, (v) the filing by such Party of a petition seeking a reorganization of its financial affairs or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law or statute, (vi) an involuntary case is commenced against such Party by the filing of a petition under any chapter of Title 11 of the Bankruptcy Code and within ninety (90) calendar days after the filing thereof either the petition is not dismissed or the order for relief is not stayed or dismissed, (vii) an order, judgment or decree is entered appointing a receiver or a permanent or interim trustee of such Party or of all or any portion of its property, including the entry of an order, judgment or decree appointing or authorizing a trustee, receiver or agent to take charge of the property of such Party for the purpose of enforcing a lien against such property or for the purpose of general administration of such property for the benefit of the creditors of such Party, and such order, judgment or decree shall continue unstayed and in effect for a period of sixty (60) calendar days, or (viii) an order, judgment or decree is entered, without the approval or consent of such Party, approving or authorizing the reorganization, insolvency, readjustment of debt, dissolution or liquidation of such Party under any such law or statute, and such order, judgment or decree shall continue unstayed and in effect for a period of sixty (60) calendar days.
11.2 By Service Provider. Service Provider represents and warrants that:
11.2.1 it is in the business of providing the Services;
11.2.2 EXCEPT AS EXPRESSLY SET FORTH HEREIN AND TO THE FULLEST
EXTENT PERMITTED BY LAW, THE SERVICES AND DOCUMENTATION ARE PROVIDED “AS IS” WITHOUT WARRANTIES OF ANY KIND (EXPRESS, Item 4
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10 STATUTORY OR IMPLIED) INCLUDING WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT;
11.2.3 it is the lawful licensee or owner of the Services (excluding any SVCE Data therein) and has all the necessary rights in the Services to provide the Services to SVCE;
11.2.4 the Services and any other work performed by Service Provider hereunder shall not infringe upon any United States or foreign copyright, patent, trade secret, or other intellectual proprietary right, or misappropriate any trade secret, of any third-party, and that it has neither assigned nor otherwise entered into an agreement by which it purports to assign or transfer any right, title, or interest to any technology or intellectual property right that would conflict with its obligations under this Agreement or any Scope;
11.2.5 it shall disclose any third-party (which shall, for purposes of this Agreement and any Scope, be deemed a subcontractor) whose intellectual property is incorporated into the Services or who is necessary for the performance of the Services and it shall maintain in-force written agreements with such third-party, if any, for the term of this Agreement;
11.2.6 it has the expertise to perform the Services in a competent, workmanlike, and professional manner and in accordance with the highest professional standards;
11.2.7 it will use its commercially reasonable efforts to ensure that no computer viruses, worms, malware, or similar items (collectively, a “Virus”) are introduced into SVCE’s computing and network environment by the Services, and that, where it transfers a Virus to SVCE through the Services, it shall reimburse SVCE the actual documented cost incurred by SVCE to remove or recover from the Virus, including the costs of persons employed by SVCE to perform such services;
11.2.8 the Services are free of any mechanism which may disable the Services and Service Provider warrants that no loss of SVCE Data will result from such items if present in the Services;
11.2.9 unless otherwise permitted by this Agreement, in the case of SVCE’s reasonable dispute of any Service Provider invoice in accordance with Section 10.2, it shall not withhold the performance of Services for up to two (2) months, including, without limitation, access and use of the Services, Technical Support, Maintenance, and extract of SVCE Data; and,
11.2.10 the Services will conform in all material respects to the specifications, functions, descriptions, standards, and criteria set forth in the applicable Scope and the Documentation.
12. SVCE Data.
12.1 Ownership. SVCE’s data (“SVCE Data,” which shall also be known and treated by Service Provider as Confidential Information) shall include any and all data, including personally identifiable information (“PII”), originating from SVCE and/or from any Authorized User, that is collected, accessed, transmitted, used, processed, stored, or generated by Service Provider, or that is otherwise made accessible to Service Provider, as the result of or in connection with SVCE’s use, or Service Provider’s provision of the Services. PII includes, without limitation, “personal information” as defined in California Civil Code Section 1798.81.5(d), any information that identifies an individual, such as an individual’s social security number or other government-issued identification number, Item 4
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11 date of birth, address, telephone number, biometric data, mother’s maiden name, email address, credit card information, or an individual’s name in combination with any other of the elements listed herein. Except where subject to a third party’s intellectual property rights, all SVCE Data is and shall remain the sole and exclusive property of SVCE and all right, title, and interest in the same belongs to SVCE. Notwithstanding the foregoing, Service Provider may use the SVCE Data to create anonymized, deidentified datasets (“Resulting Data”), provided that (a) the SVCE Data has been made “anonymous” using technology that irreversibly alters data in such a way that the data subject can no longer be identified directly or indirectly, either by the data controller alone or in collaboration with any other party, and such data is thereby rendered “anonymized data”, as generally described in ISO 29100:2024, Section 3.3, and (b) the resulting datasets do not identify SVCE as the source thereof and do not include any non-anonymized or individual identifiable information of any person, and may use the Resulting Data for its business purposes, only to improve its products and services, including the provision of the Services to SVCE, and may not, for the avoidance of doubt, use the Resulting Data for direct marketing.
12.2 AMI Data. Lunar shall treat all advanced metering infrastructure data, (“AMI Data”), received from SVCE as SVCE Data under all circumstances. Lunar will treat all data sets generated with AMI Data as SVCE Data and shall not generate any Resulting Data from them.]
12.3 Service Provider Use of SVCE Data. Except as set forth in Section 12.1, Service Provider is provided a limited license to access SVCE Data for the sole and exclusive purpose of providing the Services, including a license to collect, process, store, generate, and display SVCE Data only to the extent necessary in the providing of the Services. Service Provider shall: (a) keep and maintain SVCE Data in strict confidence, maintaining reasonable and appropriate security measures and using such degree of care as is appropriate and consistent with its obligations as further described in this Agreement, each Scope and applicable law to avoid unauthorized access, use, disclosure, or loss; (b) use and disclose SVCE Data solely and exclusively for the purpose of providing the Services, such use and disclosure being in accordance with this Agreement, such Scope, and applicable law; (c) allow access to SVCE Data only to those employees of Service Provider who are directly involved with and responsible for providing the Services; (d) not use, sell, rent, transfer, distribute, or otherwise disclose or make available SVCE Data for Service Provider’s own purposes or for the benefit of anyone other than SVCE without SVCE’s prior written consent, except as set forth in Section 12.1; and (e) inform SVCE immediately upon learning that here has a breach in the security of the system or in the security of PII. For the purposes of this Section 12.3, security procedures are “reasonable and appropriate” when Service Provider complies with ISO27001 and SOC 2 Type 1, and Type 2 controls in connection with its access of PII.
12.4 Access to, and Extraction of SVCE Data. SVCE shall have full and complete virtual access to, and ability to virtually download (with Service Provider’s assistance but without the need for physical access), its SVCE Data twenty-four (24) hours per day, seven (7) days per week, except during SVCE periods of maintenance conducted by Service Provider pursuant to Section 5.2. Further, Service Provider shall, within ten (10) Business Days of SVCE’s request, provide SVCE, without charge and without any conditions or contingencies whatsoever (including, but not limited to, the payment of any Service Fees due to Service Provider), an extract of the SVCE Data in the format reasonably specified by SVCE, provided Service Provider shall within a reasonable amount of additional time, if necessary, furnish such extract if needed to support the format type specified by SVCE. In the event SVCE gives Service Provider written notice of a “litigation hold” or request under the California Public Records Act (Gov. Code § 7920.000 et seq., “Public Records Act”), then as to all data identified in such notice or request, Service Provider shall, at no additional cost to SVCE, isolate and preserve all such data pending receipt of further direction from SVCE.
12.5 Backup and Recovery of SVCE Data. As a part of the Services, Service Provider is responsible for maintaining a backup of SVCE Data and for an orderly and timely recovery of such data in the event that the Services may be interrupted. Service Provider shall maintain a contemporaneous backup of SVCE Data that can be recovered within eight (8) hours at any point in time. Additionally, Service Provider shall store a backup of SVCE Data in an off-site (but within the continental United States) Item 4
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12 “hardened” facility no less than daily, maintaining the security of SVCE Data, the security requirements of which are further described herein.
12.6 Loss or Unauthorized Access to Data. In the event of any act, error or omission, negligence, misconduct, or breach involving SVCE Data in the possession of Service Provider that permits any unauthorized access to, or that compromises or is suspected to compromise the security, confidentiality, or integrity of SVCE Data or the physical, technical, administrative, or organizational safeguards put in place by Service Provider that relate to the protection of the security, confidentiality, or integrity of SVCE Data, Service Provider shall, as applicable: (a) notify SVCE as soon as practicable but no later than forty eight (48) hours of becoming aware of such occurrence; (b) cooperate with SVCE in investigating the occurrence, including making available all relevant records, logs, files, data reporting, and other materials required to comply with applicable law or as otherwise reasonably required by SVCE; (c) in the case of PII, at SVCE’s sole election, (i) notify the affected individuals who comprise the PII as soon as practicable but no later than is required to comply with applicable law including, but not limited to, the provisions of California Civil Code Section 1798.82, or, in the absence of any legally required notification period, within ten (10) calendar days of becoming aware of the occurrence; or, (ii) reimburse SVCE for any costs in notifying the affected individuals; (d) in the case of PII, provide third-party credit and identity monitoring services to each of the affected individuals who comprise the PII for the period required to comply with applicable law, or, in the absence of any legally required monitoring services, for no less than twelve (12) months following the date of notification to such individuals; (e) perform or take any other actions required to comply with applicable law as a result of the occurrence; (f) without limiting Service Provider’s obligations of indemnification as further described in this Agreement, indemnify, defend, and hold harmless SVCE for any and all Claims (as defined herein) to the extent caused by breach of obligations of Service Provider in providing the Services, including reasonable attorneys’ fees, costs, and expenses incidental thereto, which may be suffered by, accrued against, charged to, or recoverable from SVCE in connection with the occurrence; (g) be responsible for recreating lost SVCE Data in the manner and on the schedule set by SVCE without charge to SVCE; (h) provide to SVCE a detailed plan within ten (10) calendar days of the discovery of the occurrence, describing the measures Service Provider will undertake to prevent a future occurrence and (i) upon conclusion of the occurrence, or at SVCE’s reasonable request, provide to SVCE a comprehensive summary of the occurrence, including reason for occurrence, details of occurrence, how occurrence was addressed and any other information required by SVCE, which shall be executed by Service Provider and may be relied upon by SVCE as a true and accurate account of the occurrence. Notification to affected individuals, as described above, shall comply with applicable law, be written in plain language, and contain, at a minimum: name and contact information of Service Provider’s representative; a description of the nature of the loss; a list of the types of data involved; and the known or approximate date of the loss; how such loss may affect the affected individual; what steps Service Provider has taken to protect the affected individual; what steps the affected individual can take to protect himself or herself; contact information for major credit card reporting agencies; and, information regarding the credit and identity monitoring services to be provided by Service Provider.
13. Non-Disclosure of Confidential Information. The Parties acknowledge that each Party may be exposed to or acquire communication or data of the other Party that is confidential, privileged communication not intended to be disclosed to third parties.
13.1 Meaning of Confidential Information. For the purposes of this Agreement, the term “Confidential Information” shall mean all SVCE: information and documentation of a Party that: (a) has been marked “confidential” or with words of similar meaning, at the time of disclosure by such Party; (b) if disclosed orally or not marked “confidential” or with words of similar meaning, was subsequently summarized in writing by the disclosing Party and marked “confidential” or with words of similar meaning; or, (c) should reasonably be recognized as confidential information of the disclosing Party.
Confidential Information may include, without limitation, the following information about SVCE customers: (i) names; (ii) service agreement numbers and account numbers; (iii) meter and other identification numbers; (iv) SVCE-designated account numbers; (v) electricity and gas usage Item 4
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13 (including monthly usage, monthly maximum demand, electrical or gas consumption, HP load, and other data detailing electricity or gas needs and patterns of usage); (vi) billing information (including rate schedule, baseline zone, CARE participation, end use code (heat source) service voltage, medical baseline, meter cycle, bill cycle, balanced payment plan and other plans); (vii) payment / deposit status; (viii) number of units; and (ix) other similar information specific to SVCE customers individually or in the aggregate. Confidential Information shall also include specifically any copies, drafts, revisions, analyses, summaries, extracts, memoranda, reports and other materials prepared by Service Provider or its representatives that are derived from or based on Confidential Information disclosed by SVCE, regardless of the form of media in which it is prepared, recorded or retained.
Except for electric and gas usage information provided to Service Provider pursuant to this Agreement, the term “Confidential Information” does not include any information or documentation that was: (A) already in the possession of the receiving Party without an obligation of confidentiality; (B) developed independently by the receiving Party, as demonstrated by the receiving Party, without violating the disclosing Party’s proprietary rights; (C) obtained from a source other than the disclosing Party without an obligation of confidentiality; (D) publicly available when received, or thereafter became publicly available (other than through any unauthorized disclosure by, through, or on behalf of, the receiving Party); (E) disclosed pursuant to a requirement of law, including, but not limited to, the California Public Records Act (Cal. Gov’t Code Section 7920, et seq.); or (F) disclosed to or by a duly empowered government agency, or a court of competent jurisdiction after due notice and an adequate opportunity to intervene is given to SVCE, unless such notice is prohibited. For purposes of this Agreement, in all cases and for all matters, SVCE Data shall be deemed to be Confidential Information.
13.2 Obligation of Confidentiality. The Parties agree to hold all Confidential Information in strict confidence, take all reasonable measures to prevent unauthorized or improper disclosure or use of Confidential Information, and not to copy, reproduce, sell, transfer, or otherwise dispose of, give or disclose such Confidential Information to third parties (other than employees, agents, lenders or investors, counsel, advisors, or subcontractors of a Party who have agreed to be bound by the confidentiality terms of this Agreement and have a need to know in connection with this Agreement) or to use such Confidential Information for any purposes whatsoever other than the purposes permitted by this Agreement, or as required by law, or in connection with a proposed financing or purchase of the receiving Party; provided, in connection with a proposed financing or purchase of the receiving Party, SVCE Data or PII shall not be disclosed. The Parties agree to advise and require their respective employees, agents, and subcontractors of their obligations to keep all Confidential Information confidential in accordance with the terms of this Agreement and to remain responsible for the actions and omissions of such employees, agents, and subcontractors as if such actions and omissions were those of such Party; however, such liability shall not limit or prevent any actions by SVCE directly against such employees or representatives for improper disclosure and/or use. In no event shall Service Provider or its employees or representatives take any actions related to Confidential Information that are inconsistent with holding Confidential Information in strict confidence.
13.3 Cooperation to Prevent Disclosure of Confidential Information. Each Party shall use its commercially reasonable efforts to assist the other Party in identifying and preventing any unauthorized use or disclosure of any Confidential Information. Without limiting the foregoing, each Party shall advise the other Party immediately in the event either Party learns or has reason to believe that any person who has had access to Confidential Information has violated or intends to violate the terms of this Agreement and each Party will cooperate with the other Party in seeking injunctive or other equitable relief against any such person. Nothing in this Agreement shall obligate SVCE to monitor or enforce the Service Provider’s compliance with the terms of this Agreement.
It is understood that SVCE is subject to the California Public Records Act. If a request under the California Public Records Act is made to view Service Provider’s Confidential Information, SVCE shall notify Service Provider of the request and the date that such records will be released to the requester unless Service Provider obtains a court order enjoining that disclosure. If Service Provider Item 4
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14 fails to obtain a court order enjoining that disclosure, SVCE will release the requested information on the date specified. Service Provider shall promptly notify SVCE should Service Provider, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any Party regarding this Agreement and the work performed hereunder or with respect to any project or property located within SVCE’s jurisdiction.
SVCE may, but has no obligation to, represent Service Provider or be present at any deposition, hearing or similar proceeding. Service Provider agrees to cooperate fully with SVCE and to provide SVCE with the opportunity to review any response to discovery requests provided by Service Provider. However, SVCE’sright to review any such response does not imply or mean the right by SVCE to control, direct or rewrite the response.
13.4 Remedies for Breach of Obligation of Confidentiality. Each Party acknowledges that breach of its obligation of confidentiality as set forth in Section 13.2 may give rise to irreparable injury to the other Party, which damage may be inadequately compensable in the form of monetary damages.
Accordingly, a Party may seek and obtain injunctive relief against the breach or threatened breach of the foregoing undertakings (without posting bond), in addition to any other legal or equitable remedies which may be available, to include, in the case of SVCE, at the sole election of SVCE, the immediate termination, without liability to SVCE, of this Agreement (and all Scopes).
13.5 Surrender of Confidential Information upon Termination. SVCE: Upon termination of this Agreement or a Scope, in whole or in part, each Party shall, within five (5) calendar days from the date of termination, return to the other Party any and all Confidential Information received from the other Party, or created or received by a Party on behalf of the other Party, which is in such Party’s possession, custody, or control; provided, however, that Service Provider shall return SVCE Data to SVCE following the timeframe and procedure described in Section 8.4. Should Service Provider or SVCE determine that the return of any SVCE Data or non-SVCE Data Confidential Information is not feasible, Service Provider shall destroy the data comprising such Confidential Information in compliance with the most current version of NIST standard SP800-88, or other standard acceptable to SVCE, and shall certify the same in writing within five (5) calendar days from the date of termination to the other Party.
14. Data Privacy and Information Security.
14.1 Undertaking by Service Provider. Without limiting Service Provider’s obligation of confidentiality as further described herein, Service Provider shall be responsible for establishing, maintaining, and providing a written description to SVCE of, a data privacy and information security program, including physical, technical, administrative, and organizational safeguards, that comply with or are substantially similar to the security controls identified in the current version of NIST SP800-53, and that is designed to, consistent with prudent industry standards: (a) ensure the security and confidentiality of the SVCE Data; (b) protect against any anticipated threats or hazards to the security or integrity of the SVCE Data; (c) protect against unauthorized disclosure, access to, or use of the SVCE Data; (d) ensure the proper disposal of SVCE Data; and, (e) ensure that all employees, agents, and subcontractors of Service Provider, if any, comply with all of the foregoing. In no case shall the safeguards of Service Provider’s data privacy and information security program used to protect SVCE Data be less stringent than the safeguards used by Service Provider for its own data.
If the Services include handling credit card information, then the Service Provider shall comply at all times with all applicable Payment Card Industry Data Security Standards (PCI-DSS). Service Provider agrees and warrants that it is responsible for the security of “cardholder data” that Service Provider possesses, stores, processes or transmits on behalf of SVCE, and for any impact on the security of SVCE’s cardholder data environment adversely affected by any failure of Service Provider to maintain compliance with provisions of the PCI-DSS applicable to the Services.
14.2 SOC 2 report. Annually, Service Provider shall provide SVCE with its SOC 2 Type 2 report (for at least three (3) SOC 2 Trust Services Criteria), or successor form of SOC reports, when available, to Item 4
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15 demonstrate Services Provider’s ongoing SOC 2 compliance, where relevant to the Services, and shall conduct a comprehensive independent third-party audit of its data privacy and information security program and provide such audit findings to SVCE. The required audit shall be a SOC 2 Type 2 (or successor standard) compliant audit, and Service Provider shall provide the audit findings in the form of a SOC 2 Type 2 (or successor standard) report.
14.3 Right of Audit by SVCE. Without limiting any other audit rights of SVCE, SVCE shall have the right to review Service Provider’s data privacy and information security program prior to the commencement of Services and from time to time during the term of this Agreement or relevant Scope. During the providing of the Services, no more than annually, for not more than three (3) Business Days, on no less than thirty (30) days’ prior written notice, and during normal business hours, on an ongoing basis from time to time, SVCE, at its own expense, shall be entitled to perform, or to have performed, an on-site audit of Service Provider’s data privacy and information security program. In lieu of an on-site audit, upon request by SVCE, Service Provider agrees to complete, within forty-five (45 days) of receipt, an audit questionnaire provided by SVCE regarding Service Provider’s data privacy and information security program.
14.4 Audit Findings. Service Provider shall use reasonable commercial efforts, consistent with prudent industry standards, to implement any required safeguards as identified by SVCE or by any audit of Service Provider’s data privacy and information security program as applicable to the Services.
14.5 Pattern of Violations. It shall be considered a material breach of this Agreement if Service Provider engages in a pattern or practice of accessing, storing, using, or disclosing the Confidential Information in violation of the contractual obligations described herein. Service Provider understands that if SVCE finds that Service Provider is engaged in a pattern or practice of accessing, storing, using, or disclosing Confidential Information in violation of this Agreement SVCE may promptly cease all disclosures of Confidential Information to Service Provider. Service Provider further understands that if SVCE receives a customer complaint about Service Provider’s misuse of data or other violation of the Disclosure Provisions, SVCE may promptly cease disclosing that customer’s information to Service Provider and may notify the California Public Utilities Commission (“CPUC”) of the complaint.
14.6 CPUC Compliance. Service Provider shall comply with the consumer protections concerning subsequent disclosure and use set forth in Attachment B to California Public Utilities Commission (CPUC) Decision No. 12-08-045.
14.7 [UNDER NEGOTIATION]
14.8 SVCE’s Right to Termination for Deficiencies. SVCE reserves the right, at its sole election, to immediately terminate this Agreement (with respect to some or all of the Scopes) without limitation and without liability if SVCE reasonably determines that Service Provider fails or has failed materially to meet its obligations under this Section 14.8 and such breach is not cured, or the Service Provider is not diligently pursuing a cure to SVCE’ssole satisfaction, within thirty (30) days after receiving written notice of such failure.
15. Proprietary Rights.
15.1 Pre-existing Materials. SVCE acknowledges that, in the course of performing the Services, Service Provider may use software and related processes, instructions, methods, and techniques that have been previously developed by Service Provider (collectively, the “Pre-existing Materials,” which shall include the Services) and that the same shall remain the sole and exclusive property of Service Provider.
15.2 No License. Except as expressly set forth herein, including in Section 3, no license is granted by either Party to the other with respect to the Confidential Information or Pre-existing Materials.
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16 Nothing in this Agreement (or any Scope) shall be construed to grant to either Party any ownership or other interest, in the Confidential Information or Pre-existing Materials, except as may be provided under a license specifically applicable to such Confidential Information or Pre-existing Materials.
15.3 Reports.
15.3.1 Each and every report, draft, work product, map, record and other document, hereinafter collectively referred to as "Report", reproduced, prepared or caused to be prepared by Service Provider pursuant to or in connection with this Agreement, shall be the exclusive property of SVCE. Service Provider shall not copyright any Report required by this Agreement and shall on request, and at SVCE expense execute appropriate documents to assign to SVCE the copyright to Reports created pursuant to this Agreement. Any Report, information and data (other than Resulting Data) acquired or required by this Agreement shall become the property of SVCE, and all publication rights are reserved to SVCE. Service Provider may retain a copy of any Report furnished to the SVCE pursuant to this Agreement.
15.3.2 All Reports prepared by Service Provider may be used by SVCE in execution or implementation of: (1) the original project for which Service Provider was hired; (2) completion of the original project by a Successor Service Provider; (3) subsequent additions to the original project; and/or (4) other SVCE projects as SVCE deems appropriate in its sole discretion.
15.3.3 No Report, information or other data given to or prepared or assembled by Service Provider pursuant to this Agreement that has not been publicly released shall be made available to any individual or organization by Service Provider without prior approval by SVCE, other than as permitted pursuant to Section 13.2, and as described in Sections 13.1(E) and (F).
15.3.4 SVCE shall be the owner of and shall be entitled upon request to immediate possession of accurate reproducible copies of Reports or other pertinent data and information gathered or computed by Service Provider prior to termination of this Agreement or upon completion of the work pursuant to this Agreement.
16. Indemnification; Limitation of Liability; Insurance.
General Indemnification. Service Provider agrees to indemnify, defend, and hold harmless SVCE and its elected officials, officers, directors, agents, attorneys and employees (each, an “Indemnitee”) from and against any and all liabilities, damages, losses, expenses, claims, demands, suits, fines, or judgments (each, a “Claim,” and collectively, the “Claims”), including reasonable attorneys’ fees, costs, and expenses incidental thereto, which may be suffered by, incurred by, accrued against, charged to, or recoverable from any Indemnitee, by reason of any Claim arising out of or relating to: (a) bodily injury (including death) or damage to tangible personal or real property caused by Service Provider’s performance hereunder, provided any such Claim is brought by a third party; (b) any payment required to be paid to subcontractors, if any, of Service Provider, provided any such Claim is brought by a third party; (c) any material misrepresentation or breach of warranty set forth in this Agreement; (d) any destruction, or unauthorized access, use, or theft of SVCE Data (collectively, “Cyber Theft”), to the extent arising out of or relating to Service Provider’s breach of any covenant set forth in this Agreement, provided, however, that Service Provider’s liability for Cyber Theft shall be limited to the cyber liability insurance policy limits set forth in Section 16.5; and/or, (e) any other material breach of any covenant set forth in this Agreement not covered by the foregoing clauses (a) - (d) provided any such Claim is brought by a third party; provided, however, that the foregoing indemnity shall not apply to the extent that the applicable Claim was caused by an Indemnitee.
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17 16.1 Proprietary Rights Indemnification. Service Provider agrees to indemnify, defend, and hold harmless Indemnitees from and against any and all Claims, including reasonable attorneys’ fees, costs, and expenses incidental thereto, which may be suffered by, incurred by, accrued against, charged to, or recoverable from any Indemnitee, by reason of any Claim arising out of or relating to the Services allegedly or actually infringing or misappropriating any United States or foreign patent, copyright, trade secret, trademark, or other proprietary right. In the event that Service Provider is enjoined from providing the Services and such injunction is not dissolved within thirty (30) calendar days, or in the event that SVCE is adjudged, in any final order of a court of competent jurisdiction from which no appeal is taken, to have infringed upon or misappropriated any patent, copyright, trade secret, trademark, or other proprietary right in the access or use of the Services, then Service Provider shall, at its expense: (a) obtain for SVCE the right to continue using such Services; (b) replace or modify such Services so that they do not infringe upon or misappropriate such proprietary right and is free to be used by SVCE; or, (c) in the event that Service Provider is unable or determines, in its reasonable judgment, that it is commercially unreasonable to do either of the aforementioned, Service Provider shall reimburse to SVCE any prepaid Service Fees and the full cost associated with any Transition Services.
16.2 Indemnification Procedures. Promptly after receipt by SVCE of a threat, notice, or filing of any Claim against an Indemnitee, SVCE shall give notice thereof to Service Provider, provided that failure to give or delay in giving such notice shall not relieve Service Provider of any liability it may have to the Indemnitee except to the extent that Service Provider demonstrates that the defense of the Claim is prejudiced thereby. Service Provider shall have sole control of the defense and of all negotiations for settlement of a Claim and SVCE shall not independently defend or respond to a Claim; provided, however, that: (a) SVCE may defend or respond to a Claim, at Service Provider’s expense, if SVCE’s counsel determines, in its sole discretion, that such defense or response is necessary to preclude a default judgment from being entered against an Indemnitee; and, (b) SVCE shall have the right, at its own expense, to monitor Service Provider’s defense of a Claim. At Service Provider’s request, SVCE shall reasonably cooperate with Service Provider in defending against or settling a Claim; provided, however, that Service Provider shall reimburse SVCE for all reasonable out-of-pocket costs incurred by SVCE (including, without limitation, reasonable attorneys’ fees and expenses) in providing such cooperation.
16.3 Third-Party Beneficiaries. Nothing, express or implied, in this Agreement (or any Scope, unless expressly provided therein) is intended to benefit, or to create or be construed to create any rights of enforcement in any persons or entities who are neither signatories to this Agreement nor Indemnitees (nor, in relation to a specific Scope, such Scope).
16.4 LIMITATION OF LIABILITY. NOTWITHSTANDING ANY OTHER PROVISION SET FORTH
HEREIN, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, AND / OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (OR ANY SCOPE); PROVIDED, HOWEVER, THAT THE FOREGOING
EXCULPATION OF LIABILITY SHALL NOT APPLY WITH RESPECT TO (I) DAMAGES
INCURRED AS A RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY, (II) DAMAGES INCURRED AS A RESULT OF A PARTY’S BREACH OF ITS
OBLIGATIONS OF CONFIDENTIALITY OR CYBER SECURITY, OR (III) SERVICE PROVIDER’S INDEMNIFICATION OBLIGATIONS, PROVIDED THAT IN THE CASE OF
CLAUSE (II) RELATING TO DATA BREACHES OR OTHER CYBER SECURITY LIABILITY,
THE LIABILTY OF A PARTY SHALL NOT EXCEED THE AMOUNT OF THE APPLICABLE INSURANCE LIMITS SET FORTH IN SECTION 16.7. A PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY DIRECT DAMAGES ARISING OUT OF OR RELATING TO ITS
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT (OR ANY SCOPE); PROVIDED, HOWEVER, THAT EXCEPT AS OTHERWISE SPECIFICALLY NOTED IN SECTION 16.1, THE LIABILITY OF A PARTY, WHETHER BASED ON AN
ACTION OR CLAIM IN CONTRACT, EQUITY, NEGLIGENCE, TORT, OR OTHERWISE FOR
ALL EVENTS, ACTS, OR OMISSIONS UNDER THIS AGREEMENT (OR ANY SCOPE) SHALL NOT EXCEED [UNDER NEGOTIATION], AND PROVIDED, FURTHER, THAT THE Item 4
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18 FOREGOING LIMITATIONS SHALL NOT APPLY TO: (A) DAMAGES INCURRED AS A RESULT OF A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; (B) DAMAGES INCURRED AS A RESULT OF A PARTY’S BREACH OF ITS OBLIGATIONS OF CONFIDENTIALITY; OR (C) SERVICE PROVIDER’S INDEMNIFICATION OBLIGATIONS, AS FURTHER DESCRIBED IN THIS AGREEMENT.
16.5 Insurance. Unless otherwise approved in writing by SVCE’s risk manager, Service Provider shall, at its own expense, procure and maintain in full force and effect during the term of this Agreement, policies of insurance, of the types and in the minimum amounts as follows, with responsible insurance carriers duly admitted and qualified in California covering the operations of Service Provider, pursuant to this Agreement: commercial general liability ($1,000,000 per occurrence, $2,000,000 aggregate); excess liability ($2,000,000 per occurrence, $2,000,000 aggregate); workers’ compensation (statutory limits) and employers’ liability ($500,000 per accident); cyber liability [UNDER NEGOTIATION], providing protection against claims and liabilities arising from: (i) errors and omissions in connection with maintaining security of SVCE Data; (ii) data breach including theft, destruction, and/or unauthorized use of SVCE Data; (iii) identity theft; and (iv) violation of privacy rights due to a breach of SVCE Data ; and professional liability ($1,000,000 per occurrence, $1,000,000 aggregate). Any of the foregoing policy limits shall be subject to reasonable modification by the SVCE’s risk manager upon thirty (30) days prior, written notice to Service Provider, and at any time prior to commencement of the Services.
17. General.
17.1 Relationship between SVCE and Service Provider. Service Provider represents and warrants that it is an independent contractor with no authority to contract for SVCE or in any way to bind or to commit SVCE to any agreement of any kind or to assume any liabilities of any nature in the name of or on behalf of SVCE. Under no circumstances shall Service Provider, or any of its staff, if any, hold itself out as or be considered an agent employee, joint venture, or partner of SVCE. In recognition of Service Provider’s status as an independent contractor, SVCE shall carry no Workers’ Compensation insurance or any health or accident insurance to cover Service Provider or Service Provider’s agents or staff, if any. SVCE shall not pay any contributions to Social Security, unemployment insurance, federal or state withholding taxes, any other applicable taxes whether federal, state, or local, nor provide any other contributions or benefits which might be expected in an employer-employee relationship. Neither Service Provider nor its staff, if any, shall be eligible for, participate in, or accrue any direct or indirect benefit under any other compensation, benefit, or pension plan of SVCE.
17.2 Governing Law. This Agreement and each Scope shall be governed by and construed in accordance with the laws of the State of California and the federal laws of the United States of America. Service Provider hereby consents and submits to the jurisdiction and forum of the state and federal courts in the County of Santa Clara, State of California, in all questions and controversies arising out of this Agreement or any Scope.
17.3 Attorneys’ Fees and Costs. In any arbitration, litigation, or other proceeding, informal or formal, by which one Party either seeks to enforce this Agreement or a Scope or seeks a declaration of any rights or obligations under this Agreement or Scope, the non-prevailing Party shall pay the prevailing Party’s costs and expenses, including but not limited to, reasonable attorneys’ fees.
17.4 Compliance with Laws; SVCE Policies and Procedures. Service Provider agrees to comply with all applicable federal, state, and local laws, executive orders and regulations issued, where applicable.
Service Provider shall comply with SVCE policies and procedures where the same are posted, conveyed, or otherwise made available to Service Provider.
17.5 Cooperation. Where agreement, approval, acceptance, consent or similar action by either Party hereto is required by any provision of this Agreement or Scope, such action shall not be unreasonably delayed or withheld. Each Party will cooperate with the other by, among other things, Item 4
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19 making available, as reasonably requested by the other, management decisions, information, approvals, and acceptances in order that each Party may properly accomplish its obligations and responsibilities hereunder, subject to such Party’s need to comply with confidentiality provisions as set forth in Section 13. Without limiting the foregoing, Service Provider shall, at SVCE’s cost, execute and deliver any instruments and documents and take such other actions as may be necessary or reasonably requested in order for SVCE to comply with CPUC, California Energy Resources Conservation and Development Commission (“CEC”), and/or California Independent System Operator (“CAISO”) requirements applicable to SVCE’s intended use of the Services where such cost has not been included in the relevant Scope. Service Provider will, at SVCE’s cost, cooperate with any SVCE supplier performing services, and all parties supplying hardware, software, communication services, and other services and products to SVCE, including, without limitation, the Successor Service Provider. Service Provider agrees, at SVCE’s cost, to cooperate with such suppliers, and shall not commit or permit any act which may interfere with the performance of services by any such supplier.
17.6 Force Majeure; Excused Performance. Neither Party shall be liable for delays or any failure to perform the Services or this Agreement due to Force Majeure. As used herein, “Force Majeure” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of commercially reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance Such Force Majeure events may include fire, explosion, flood or other natural catastrophe, pandemic, governmental legislation, acts, orders, or regulation, strikes or labor difficulties, and failures in communication lines and routes not under a Party’s control. Any such excuse for delay shall last only as long as the event remains beyond the reasonable control of the delayed Party. However, the delayed Party shall use commercially reasonable efforts to minimize the delays caused by any Force Majeure event. Where Service Provider fails to use commercially reasonable efforts to minimize such delays, the delays shall be included in the determination of Service Level Standard achievement for the applicable Scope. The delayed Party must notify the other Party promptly upon the occurrence of any such event, or performance by the delayed Party will not be considered excused pursuant to this Section, and inform the other Party of its plans to resume performance. A Force Majeure event does not excuse Service Provider from providing Services and fulfilling its responsibilities relating to the requirements of backup and recovery of SVCE Data. In no event shall any of the following constitute a Force Majeure event: (a) failure, inadequate performance, or unavailability of Service Provider’s subcontractors, unless their failure, inadequate performance or unavailability is itself due to a Force Majeure event; (b) configuration changes, other changes, Viruses, or other errors or omissions introduced, or permitted to be introduced, by Service Provider that result in an outage or inability for SVCE to access or use the Services unless such event is caused as a result of the gross negligence or willful misconduct of SVCE; or (c) economic conditions that render a Party’s performance of this Agreement unprofitable or otherwise uneconomic. Within thirty (30) calendar days following the Effective Date and on an annual basis thereafter until the termination of this Agreement, Service Provider shall provide its then-current business continuity plan (“Business Continuity Plan”) to SVCE upon SVCE’s request.
The Business Continuity Plan shall include: (a) Services and SVCE Data backup and recovery procedures, including procedures and resources for disaster recovery; (b) fail-over procedures; and, (c) how Service Provider will interact with its business continuity suppliers, if any. Service Provider shall test its Business Continuity Plan on an annual basis in line with the renewal of ISO 27001 certification, until the termination of this Agreement and shall provide the test results to SVCE upon SVCE’s request.
17.7 Advertising and Publicity. Service Provider shall not refer to SVCE directly or indirectly in any advertisement, news release, or publication, or use any SVCE logo, seal or mark, without prior written approval from SVCE.
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20 17.8 No Waiver. The failure of either Party at any time to require performance by the other Party of any provision of this Agreement (or Scope) shall in no way affect that Party’s right to enforce such provisions, nor shall the waiver by either Party of any breach of any provision of this Agreement (or Scope) be taken or held to be a waiver of any further breach of the same provision.
17.9 Notices. Any notice given pursuant to this Agreement (or any Scope) shall be in writing and shall be given by personal service or by United States certified mail, return receipt requested, postage prepaid, or by email to the addresses appearing at the end of this Agreement, or as changed through written notice to the other Party. Notice given by personal service shall be deemed effective on the date it is delivered to the addressee, and notice mailed shall be deemed effective on the third day following its placement in the mail addressed to the addressee. Notice given by email shall be deemed effective on the next Business Day following transmission.
17.10 Assignment of Agreement (and Scope). This Agreement (and any applicable Scope) and the obligations of Service Provider hereunder are personal to Service Provider. Neither Service Provider nor any successor, receiver, or assignee of Service Provider shall directly or indirectly assign this Agreement (or applicable Scope) or the rights or duties created by this Agreement (or such Scope), without the prior written consent of SVCE, which consent shall not be unreasonably conditioned, delayed, or withheld, whether such assignment is to an affiliate or effected in connection with a sale of Service Provider’s assets or stock or through merger, an insolvency proceeding or otherwise. In the case of an assignment by Service Provider, Service Provider represents and warrants that it has all requisite rights and power to transfer any agreements or other rights with third-parties whose software is incorporated into the Services or who are necessary for the performance and use of the Services. SVCE, at SVCE’s sole election, may assign any and all of its rights and obligations under this Agreement to any company that succeeds to substantially all of SVCE’s business.
17.11 Counterparts; Facsimile/PDF/Electronic Signature. This Agreement (and each Scope) may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement (or Scope, as applicable). The Parties agree that a facsimile, PDF or electronic signature may substitute for and have the same legal effect as the original signature.
17.12 Entire Agreement. This Agreement, together with each Scope, and any and all attached addenda, schedules and exhibits, each of which is incorporated by reference herein, constitute the entire agreement between the Parties and supersede any and all previous representations, understandings, or agreements between SVCE and Service Provider as to the subject matter hereof. No representation or promise not expressly set forth herein shall be binding. The provisions of each Scope shall govern over any inconsistent or conflicting provisions contained in this Agreement.
This Agreement and each Scope may only be amended by an instrument in writing signed by the Parties. This Agreement and each Scope shall be construed without regard to the Party that drafted it. Any ambiguity shall not be interpreted against either Party and shall, instead, be resolved in accordance with other applicable rules concerning the interpretation of contracts.
17.13 Cumulative Remedies. All rights and remedies of each Party herein (and each Scope) shall be in addition to all other rights and remedies available at law or in equity, including, without limitation, specific performance against the other Party for the enforcement of this Agreement (and each Scope), and temporary and permanent injunctive relief.
17.14 No Recourse against Constituent Members of Authority. SVCE is organized as a Joint Powers SVCE in accordance with the Joint Powers Act of the State of California (Government Code Section 6500 et seq.) pursuant to a Joint Powers Agreement dated March 31, 2016 and is a public entity separate from its constituent members. SVCE shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Service Provider shall have no rights and shall not make any claims, take any actions or assert any remedies against any of SVCE’s constituent members in connection with this Agreement.
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21 a. Section 504 of the Rehabilitation Act of 1973. Service Provider shall comply with Section 504 of the Rehabilitation Act of 1973, as amended, which provides that no otherwise qualified individual with a disability shall, solely by reason of a disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination in the performance of any services this Agreement. This Section applies only to contractors who are providing services to members of the public under this Agreement.
b. Employee Benefits. With respect to the provision of benefits to its employees, Service Provider shall ensure that employee benefits provided to employees with domestic partners are the same as those provided to employees with spouses.
c. Discrimination Against Individuals with Disabilities. The nondiscrimination requirements of 41 C.F.R. 60-741.5(a) are incorporated into this Agreement as if fully set forth here, and Service Provider and any subcontractor shall abide by the requirements of 41 C.F.R. 60–741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.
17.15 Conflict Of Interest. Service Provider warrants that it, its officers, employees, associates and subcontractors, presently have no interest, and will not acquire any interest, direct or indirect, financial or otherwise, that would conflict in any way with the performance of this Agreement, and that it, its officers, employees, associates and subcontractors, will not employ any person having such an interest. Service Provider and its officers, employees, associates and subcontractors, if any, shall comply with all conflict of interest statutes of the State of California applicable to Service Provider’s services under this Agreement, including the Political Reform Act (Gov. Code § 81000, et seq.) and Government Code Section 1090. During the term of this Agreement, Service Provider may perform similar services for other clients, but Service Provider and its officers, employees, associates and subcontractors shall not, without the SVCE Representative’s prior written approval, perform work for another person or entity for whom Service Provider is not currently performing work that would require Service Provider or one of its officers, employees, associates or subcontractors to abstain from a decision under this Agreement pursuant to a conflict of interest statute. Service Provider shall incorporate a clause substantially similar to this Section into any subcontract that Service Provider executes in connection with the performance of this Agreement.
Service Provider understands that it may be required to fill out a conflict of interest form if the services provided under this Agreement require Service Provider to make certain governmental decisions or serve in a staff SVCE, as defined in Title 2, Division 6, Section 18700 of the California Code of Regulations.
17.16 Severability. If any provision in this Agreement (or any Scope) is held by a court of competent jurisdiction to be illegal, invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way.
17.17 Final Payment Acceptance Constitutes Release. The acceptance by Service Provider of the final payment made under this Agreement shall operate as and be a release of SVCE from all claims and liabilities for compensation to Service Provider for anything done, furnished or relating to Service Provider’s work or services. Acceptance of payment shall be any negotiation of SVCE’s check or the failure to make a written extra compensation claim within ten calendar days of the receipt of that check. However, approval or payment by SVCE shall not constitute, nor be deemed, a release of the responsibility and liability of Service Provider, its employees, subcontractors and agents for the accuracy and competency of the information provided and/or work performed; nor shall such approval or payment be deemed to be an assumption of such responsibility or liability by SVCE for any defect or error in the work prepared by Service Provider, its employees, subcontractors and agents.
17.18 SVCE’s Rights to Employ Other Consultants. SVCE reserves the right to employ other consultants in connection with the subject matter of the Services.
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22 17.19 Captions and Terms. The captions in this Agreement (and any Scope) are for convenience only, are not a part of the Agreement (or Scope) and in no way affect, limit or amplify the terms or provisions of this Agreement (or Scope).
17.20 Successors and Assigns. The terms and conditions of this Agreement shall be binding on the successors and assigns of the Parties to this Agreement.
17.21 Survival. The following sections shall survive the termination or expiration of this Agreement or any Scope: Section 4.2, Section 4.3, Section 4.5, Section 8.4, Section 9, Section 10.3, Section 10.4, Section 10.6, Section 12.1, Section 12.3, Section 12.6, Section 13, Section 15, Sections 0 - 16.4, Section 17.
Executed on the dates set forth below by the undersigned authorized representative of SVCE and Service Provider to be effective as of the Effective Date.
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23 RECOMMENDED FOR APPROVAL
_______________________________
Enter Your Name, Enter Your Title
APPROVED AS TO FORM
_________________________
SILICON VALLEY CLEAN ENERGY (SVCE)
By:
Name:
Title:
Date:
Address for Notice:
LUNAR ENERGY LIMITED (SERVICE PROVIDER)
By:
Name: Ed Franklin
Title: General Manager
Date:
Address for Notice: ℅ Lunar Energy, Inc., 755 Ravendale Drive, Mountain View, CA 94043 Email for Notice: [email protected] cc [email protected] Item 4
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24 Draft Contract with Lunar Energy Ltd. - Description of Contract Scopes Governed by a Main Service Agreement (MSA) with Lunar Energy will be four contract Scope attachments as outlined below. These include a Distributed Energy Resource Management System (DERMS) and related support services. Services definition and structure, key deliverables, general service level obligations, and costs associated with the initial contract have been agreed upon. Detailed terms and conditions are in the process of final negotiation. Upon finalization by SVCE and Lunar Energy, the MSA and four contract Scopes will be signed as a single agreement.
Scope Title / Description Key Elements
1 DERMS Platform
Software and operational support services for
a Distributed Energy Resource Management
System, utilized to manage customer-sited
devices enrolled in SVCE-sponsored demand
flexibility programs
• Gridshare DERMS Platform functions, tasks,
and deliverables
• Operations services tasks and deliverables
• DER program administration services tasks
and deliverables
• Service level standards and performance
credits
• Fixed and capacity-based fee structure
2 SVCE-Administered Programs
Establishes a framework and statement of
work template for onboarding specific device
types to the DERMS platform for control and
optimization, from customers participating in
current and past SVCE-led electrification
incentive and rebate programs.
Template with definitions/instructions needed
for onboarding SVCE-originated customer
devices to the DERMS Platform, e.g.
• Customer and device eligibility criteria
• Device integration
• Dispatch parameters
• Performance metrics for reporting
• Measurement and verification
• Program-specific service levels
• Budget/capacity forecasting per Scope 1
3 Load Modification Agreement
Establishes an enabling agreement for future
procurement of Load Modifying capacity from
Lunar Energy, sourced by Lunar Energy from
existing battery installations in SVCE’s service
area, via third-party aggregators, operators
and original equipment manufacturers
(OEMs).
• Portfolio development/recruitment
• Portfolio operational characteristics and
reporting
• Form for procurement term, qualifying
capacity and associated contract price
• Operations
• Dispatch
• Measurement and verification
• Service levels and performance assurance
4 Vendor-Administered Programs
Residential Energy Storage Program Design
Development of a program design manual for
a new, large-scale incentive program for
residential battery installation and enrollment
• Customer/SVCE grid service value modeling
• Dispatch strategy /asset optimization design
• Approved vendor list and technical
requirements
• Measurement and verification setup and
baseline design
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25 in a DERMS-supported demand flexibility
program, for customers in SVCE’s service
area.
• Customer recruitment, marketing, outreach
• Program incentive design and budgeting
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