We have acted as bond counsel to California Community Choice Financing Authority (the “Issuer”) in connection with issuance of $[ PAR] aggregate principal amount of California Community Choice Financing Authority Clean Energy Project Revenue Bonds, Series 2025[_] (Green Bonds) (Term Rate) (the “Bonds”), issued pursuant to a Trust Indenture, dated as of [___________] 1, 2024 (the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Indenture provides that the Bonds are issued for the purpose of financing the Cost of Acquisition of the Clean Energy Project. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture.
The Issuer is authorized under the Joint Exercise of Powers Act (the “Act”) constituting Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the California Government Code, as amended or supplemented from time to time, to issue the Bonds to finance the Cost of Acquisition of the Clean Energy Project.
In such connection, we have reviewed the Indenture, the Prepaid Energy Sales Agreement, the Power Supply Contract, the Commodity Swap, the Seller Swap (as defined in the Prepaid Energy Sales Agreement), the Tax Certificate and Agreement, dated the date hereof (the “Tax Certificate”), opinions of counsel to the Issuer and the Trustee, certificates of the Issuer, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein.
We have examined such proceedings, documents, statutes and decisions, as we consider necessary as the basis for this opinion, including, inter alia, the Act and an executed and authenticated Bond. We assume that all other Bonds have been similarly executed and authenticated. We also assume that all documents, records, certifications and other instruments examined by us are genuine (including the signatures thereon), accurate and complete and we have not undertaken, by independent investigation, to verify the factual matters set forth in any such documents, records, certifications or other instruments.
The rights and obligations under the Bonds, the Indenture, the Prepaid Energy Sales Agreement, the Power Supply Contract, the Commodity Swap, the Seller Swap, the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, receivership, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public entities in the State of California. We express no opinion with Item 4
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respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute or having the effect of a penalty), right of set-off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained in the foregoing documents, nor do we express any opinion with respect to the state or quality of title to or interest in any of the assets described in or as subject to the lien of the Indenture or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such assets. Our services did not include financial or other non-legal advice.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:
1. The Bonds constitute the valid and binding limited obligations of the Issuer.
2. The Indenture has been duly executed and delivered by, and constitutes the valid and binding obligation of, the Issuer. The Indenture creates a valid pledge, to secure the payment of the principal of and interest on the Bonds, of the Trust Estate, subject to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture, and a valid pledge of the Commodity Swap Payment Fund and the amounts and investments on deposit therein in favor of the Commodity Swap Counterparties.
3. Interest on the Bonds [(including original issue discount)] is excludable from gross income for purposes of federal income tax under existing laws as enacted and construed on the date of initial delivery of the Bonds, assuming the accuracy of the certifications of the Issuer and continuing compliance by the Issuer with the requirements of the Internal Revenue Code of 1986, as amended (the “Code”). Interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals; however, such interest is taken into account in determining the adjusted financial statement income of applicable corporations, as provided in the Code, for purposes of computing the alternative minimum tax imposed on such corporations. We express no opinion regarding other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds.
4. Under existing laws as enacted and construed on the date of initial delivery of the Bonds, interest on the Bonds is exempt from State of California personal income taxes. We express no opinion regarding any other state or local tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds, including, but not limited to, whether the interest on the Bonds is exempt from taxation under the laws of any jurisdiction other than the State of California.
In rendering the opinion set forth in paragraph 3, we have assumed compliance with all covenants and agreements contained in the Indenture, the Prepaid Energy Sales Agreement, the Power Supply Contract, the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes.
Our engagement as bond counsel imposed no duty on us (a) to undertake any investigation as to either: (i) the adequacy of the security for the Bonds, (ii) the business or financial condition of the Issuer, Item 4
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and (iii) the veracity of any representations or certification made by the Issuer on which we have relied, or (b) to prepare, file or monitor the filing of continuation statements. We assume no obligation to file continuation statements under the Uniform Commercial Code of any jurisdiction, or to advise you to do so.
Our opinions represent our legal judgment based upon our review of the law and the facts that we deem relevant to render such opinion and are not a guarantee of a result. This opinion letter is given solely for the benefit of the addressees and their successors and assigns. This opinion letter is not intended to be employed in any transaction other than the one described above and is being delivered to the addressees with the understanding that it may not be published, quoted, relied on or referred to by, and copies may not be delivered or made available to, in whole in or part, any other person or entity (other than the addressees’ counsel or any applicable rating agency) or used for any other purpose without the express prior written consent of this firm in each instance.
We render this opinion as of the date hereof on the basis of federal law and the laws of the State of California as enacted and construed on the date hereof. We express no opinion as to any matter not set forth in the numbered paragraphs herein, including, without limitation, the accuracy or completeness of the preliminary or final official statement or other documents prepared or statements made in connection with the offering and sale of the Bonds, and make no representation that we have independently verified the contents thereof.
Sincerely yours,
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APPENDIX F
FORM OF SECOND PARTY OPINION REGARDING GREEN BOND DESIGNATION (Please see attached)
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APPENDIX G
BOOK-ENTRY SYSTEM
The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. If, however, the aggregate principal amount of any maturity of the Bonds exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of such maturity.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.
Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested Item 4
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by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity of the Bonds are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to CCCFA of securities as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts such Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds and payments of principal and interest on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from CCCFA or the Trustee on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, CCCFA or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds and principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of CCCFA or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to CCCFA or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.
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CCCFA may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates are required to be printed and delivered to DTC.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that CCCFA believes to be reliable, but CCCFA takes no responsibility for the accuracy thereof.
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APPENDIX H
REDEMPTION PRICE OF THE BONDS
The following table sets forth the Redemption Price of the Bonds (being the Amortized Value of the Series 2025[_] Bonds, but excluding accrued interest, upon an extraordinary mandatory redemption following an early termination of the Prepaid Energy Sales Agreement, as of the redemption dates shown below during the Initial Interest Rate Period.
REDEMPTION DATE REDEMPTION PRICE
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APPENDIX I
SCHEDULE OF TERMINATION PAYMENTS
The Termination Payment for any Early Termination Payment Date will be the amount set forth below in the column corresponding to the month in which the Early Termination Date occurs. In the event that the Early Termination Date occurs on other than the last day of a month, the Early Termination Payment will be increased by an amount equal to the product of (a) the Monthly Projected Quantity for such Month, minus the quantity of Energy delivered in such Month prior to the effectiveness of such Early Termination Date, multiplied by (b) the result of (i) the applicable Fixed Price (as defined in the CCCFA Commodity Swap), minus (ii) the Specified Discount then in effect. The Early Termination Payment Date is the last Business Day of the Month following the Month of Early Termination.
MONTH OF EARLY TERMINATION TERMINATION PAYMENT
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APPENDIX J
[TO COME]
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APPENDIX A
THE PROJECT PARTICIPANT
SILICON VALLEY CLEAN ENERGY
General
Silicon Valley Clean Energy (“SVCE”) is a joint powers authority organized and existing pursuant to the Joint Exercise of Powers Act (constituting Chapter 5 of Division 7 of Title 1 (commencing with Section 6500), as amended or supplemented from time to time) (the “Joint Powers Act”), as a “community choice aggregator” (“CCA”) as defined in Section 331.1 of the Public Utilities Code of the State of California, as amended (the “Public Utilities Code”). For a general description of CCAs in California, see the section “COMMUNITY CHOICE AGGREGATORS” in this Official Statement.
SVCE was created in 2016 under the name “Silicon Valley Clean Energy Authority” as a CCA in California pursuant to a Joint Powers Agreement, as amended, by and among the cities and towns participating in SVCE and named therein. SVCE began providing service to customers in 2017.
Originally created to serve communities in Santa Clara County, SVCE now serves 13 member communities. SVCE offers carbon-free power at stable rates, significantly reducing energy-related greenhouse emissions and enabling millions of dollars of reinvestment in local energy programs. SVCE’s mission is to drive increasing access to clean energy, serving the needs of our customers and the well-being of our community by delivering positive environmental impacts and local economic benefits.
Formation and History of SVCE
General. SVCE was formed in March 2016 as a “joint powers authority” to provide electric power and related benefits within its service area, including developing a wide range of renewable energy sources and local clean energy programs. The formation of SVCE was made possible by the passage of California Assembly Bill 117 in 2002, enabling communities to purchase power on behalf of their residents and businesses and creating competition in the electric power market.
Under California Public Utilities Commission designations, SVCE (like other CCAs) is a “load-serving entity” to the communities it serves and does not provide transmission, distribution or billing services. Transmission, distribution, and billing services are provided by Pacific Gas and Electric Company (“PG&E”). PG&E collects and remits SVCE’s billings for electricity to SVCE on a daily basis.
Commencement of Service and Expansion. SVCE began serving customers in communities in Santa Clara County in 2017, with the exceptions of the City of Santa Clara and City of Palo Alto, each having its own municipal utility, and the City of San Jose, which established its own CCA. In December 2017, the Board of Directors accepted the City of Milpitas as a new community member and began providing service to them in June 2018. As further described below, SVCE now serves 13 communities.
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Service Area
Communities Served by SVCE. SVCE currently serves 13 jurisdictions in Santa Clara County, as follows:
City of Campbell City of Cupertino City of Gilroy
City of Los Altos Town of Los Altos Hills Town of Los Gatos City of Milpitas City of Monte Sereno City of Morgan Hill City of Mountain View City of Saratoga City of Sunnyvale Unincorporated County of Santa Clara
Service Area Map. The service area of SVCE is shown on the map below:
Governance and Management
Board of Directors. SVCE is governed by its Board of Directors. Each community that has elected to join SVCE appoints a representative to the Board of Directors. Members of the Board of Directors serve at the pleasure of their respective communities. Meetings of the full Board of Directors are scheduled every month. There is also an Executive Committee, a Finance and Administration Committee, an Audit Committee, and an Ad Hoc Regulatory and Legislative Committee, with members appointed by the Board of Directors that review and report to the Board on various matters.
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Management.
Monica Padilla, Chief Executive Officer. As the Chief Executive Officer of SVCE since April 1, 2024, Monica Padilla works with the elected Board to develop and implement strategies empowering the SVCE team and community to achieve SVCE’s decarbonization goals and its mission of reducing fossil fuels and reinvesting in the community. Previously, Monica was the Chief Operating Officer and Director of Powers Resources at SVCE where she led the team responsible for planning and procurement. Since joining SVCE in 2018, Monica and her team helped negotiate and execute more than $3.6 billion in 20 long-term power purchase agreements for clean and renewable projects including solar-plus-storage, geothermal, wind, and long-duration storage resources. Monica also led the effort on behalf of SVCE and seven other CCAs to acquire long-duration storage to help with the integration of intermittent resources and in support of the California grid. Before joining SVCE, Monica worked for the City of Palo Alto Utilities for over 30 years where she was instrumental in developing and implementing Palo Alto’s Carbon Neutral Plan in 2013, the first carbon-neutral policy adopted for a municipal utility in California. Monica also represented Palo Alto at several joint action agencies, including the Northern California Power Agency and the Transmission Agency of Northern California and oversaw the contract with Palo Alto’s largest supplier – Western Area Power Administration. Monica holds a B.S. in Business from California State University East Bay.
Amrit Singh, Chief Financial Officer and Director of Administrative Services. As the Chief Financial Officer, Amrit oversees and leads the finance, information technology and human resources activities of SVCE. Amrit brings over two decades of experience in the California Energy Markets with extensive experience in managing risks of complex energy procurement portfolios as well as in energy regulation, rate design, and commodity portfolio management.
Amrit’s prior experiences include serving as Pacific Gas and Electric Company’s Senior Director, Market and Credit Risk Management and Senior Director, Revenue Requirements and Rates.
Amrit also worked at startup companies and provided strategic consulting in areas of risk management and utility operations. Amrit has an MBA from the University of California, Berkeley, and a BS in Managerial Economics from the University of California, Davis.
Kris Van Vactor, Director of Power Resources. As the Director of Power Resources, Kris leads a team responsible for planning and carrying out the various energy and capacity procurement, management, and reporting needs consistent with SVCE’s aggressive greenhouse gas reduction policies, portfolio cost and risk management objectives and California’s legislative and regulatory requirements. Kris joined SVCE in August 2022 on the Power Resources Team as SVCE’s Wholesale Energy Markets Manager. Kris has over 20 years of experience serving in energy consulting, energy reporting and energy procurement roles for organizations throughout the Western United States. Kris holds a B.S. in Economics from the University of Oregon.
Maren Wenzel, Director of Regulatory, Policy and Planning. As the Director of Regulatory, Policy and Planning, Maren works to ensure the resources procured by SVCE meet the organization’s greenhouse gas reduction goals as well as the reliability and policy objectives of the state. Maren has worked on decarbonization and resource planning efforts for utilities across the US since 2015. Immediately prior to SVCE, she worked for PG&E where she focused on electricity system forecasting, including for the Integrated Resource Plan and SB100 Joint Agency Item 4
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efforts. She holds a B.A in International Relations from Mills College and an M.A in International Affairs, with a focus on Energy, Resources and the Environment, from the Johns Hopkins School of Advanced International Studies.
Scott Wrigglesworth, Director of Risk Management and Analytics. Scott serves as Director of Risk Management and Analytics after six years at Ascend Analytics. While with Ascend, Scott led the PowerSIMM team which delivered software models and consulting for risk management, procurement and resource planning to dozens of clients including seven California CCAs (including SVCE). Scott’s expertise is in portfolio risk management and he takes an applied focus to the discipline placing emphasis on actionable reporting and clear communication. Prior to Ascend, Scott spent seventeen years at the Dayton Power & Light Company and AES Corporation where he led portfolio analytics for utility, retail and merchant generation portfolios.
Scott teaches Energy Markets at the University of Dayton where he’s been an adjunct professor for a decade. He earned his MBA from the University of Dayton and holds a bachelors in Global Economics from Cedarville University.
Justin Zagunis, Director of Customer Success. Justin works with the SVCE team to plan and design a platform and portfolio of programs to achieve SVCE’s mission of deep decarbonization. He leads efforts in developing, deploying and evaluating innovative programs and technologies related to mobility, the built environment and grid integration and innovation.
Prior to SVCE, Justin worked at City of Palo Alto Utilities on demand side management program design, management and evaluation. Justin has a bachelor’s degree in environmental engineering from California Polytechnic State University and a master’s degree in civil and environmental engineering from Stanford University.
Zoe Elizabeth, Director of Decarbonization Policy and Community Strategies. Zoe serves as the head of the Department of Decarbonization Programs and Policy, where she collaborates with a dedicated team to strategize and create a comprehensive platform and assortment of initiatives aimed at advancing SVCE's mission of achieving substantial decarbonization. Her leadership is instrumental in the development, implementation, and assessment of cutting-edge programs and technologies within the spheres of mobility, urban infrastructure, and grid integration and innovation. Zoe supports all customer segments. She is the key contact for Silicon Valley Transportation Electrification Clearinghouse and the Community Energy Resilience Program. Zoe has over a decade of experience leading regional decarbonization and resilience initiatives. She served as Sustainability Manager for the County of Santa Clara, as Associate Director of the Los Angeles Regional Collaborative for Climate Action and Sustainability, and co-founded the California Center for Sustainable Communities at UCLA. Zoe has a Master’s Degree in Urban Planning from UCLA where she focused on regional approached to climate action. She also earned a Leadership in Sustainability certificate from UCLA’s Anderson School of Management.
Bena Chang, Director of Government and Legislative Affairs: Bena Chang serves as the Director of Government and Legislative Affairs, where she focuses on legislative initiatives and coalition building. Prior to her role at SVCE, Bena held the position of Intergovernmental Relations Director for the City of San Jose, one of the largest cities in the United States, where she advocated for a wide range of municipal policy issues at regional, state, and federal levels, Item 4
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encompassing topics such as homelessness, pandemic response, and clean energy. Additionally, Bena was the Senior Vice President of Transportation, Housing, and Health at the Silicon Valley Leadership Group, where she played a pivotal role in various projects and programs, including a successful 2008 Measure B campaign to secure operational funding for BART in Silicon Valley.
Bena holds a degree in English with a minor in Astronomy from Wellesley College.
Gia Ilole, Director of Human Resources: As Director of Human Resources, Gia leads all the people and culture strategies and functions to recruit, retain, engage, and develop the best workforce to support SVCE’s programs and operations. Gia has a breadth and depth of experience in HR across public and private agencies, including leading HR, Labor, Procurement and Administration at BART, developing diversity pipeline and workforce development programs at PG&E, as well as heading up HR for the County of Ventura’s District Attorney and a Bay Area start-up. Gia is certified as a Senior Professional in Human Resources as well as a Strategic HR Business Partner. Gia attended UC Santa Barbara on an academic scholarship and graduated with Highest Honors in three years with a Bachelor of Arts in Linguistics, minoring in French.
Customers
General. SVCE provides energy to more than 280,000 residential, commercial, and industrial accounts, serving approximately 700,000 residents and businesses in its service area.
The current mix of SVCE’s customer base is approximately 34% residential and 66% commercial/industrial by the percentage of load served and 35% residential and 65% commercial/industrial by the percentage of revenue. SVCE’s 10 largest customers represent 23% of SVCE’s overall load, and none of them individually represent more than 7% of the overall load.
Customer Energy Choices. SVCE offers two different energy service choices, called GreenStart and GreenPrime. In 2024, customers receiving GreenStart service were provided with a minimum of 43% renewable energy, sourced from a mix of wind, geothermal, solar, small hydro, and biomass/biowaste, with 36% coming from large hydroelectric facilities. Customers electing to receive GreenPrime service are provided with 100% renewable energy from solar/wind sources.
Customers on the GreenPrime Direct service receive a custom mix of supply sources.
Customer Enrollment. All customers are automatically enrolled in GreenStart and may change their product after enrollment. Approximately 98.93% of SVCE customers receive GreenStart service, with the remaining approximately 1.07% receiving GreenPrime service. Due to commercial enrollments, GreenPrime customers represent a slightly higher percentage in terms of load (4.81%).
New Customers. SVCE has fully subscribed the cities and unincorporated portions of Santa Clara County, with the exceptions of the cities of Santa Clara, San Jose, and Palo Alto, which are served by separate public power providers.
Customer Election to Opt-out of SVCE Service. Customers can opt-out of SVCE service and return to service from their traditional electric service provider, PG&E, either initially upon the transition to SVCE or at any time after SVCE becomes the energy provider. For customers enrolled in the SVCE GreenStart program, there is no fee to opt out before their SVCE service Item 4
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starts or within 60 days after your SVCE service starts. After that time, there is a one-time administrative fee ($5 residential and $25 commercial). Customers that opt out and return to PG&E, will not have the option to return to SVCE for a full year and will be subject to PG&E’s terms and conditions of service. SVCE has not experienced a single customer opt-out that had a significant financial impact on SVCE’s revenues.
Cumulative Opt-Out Rate and Customer Retention. Overall, opt-out rates have remained stable throughout the course of SVCE’s service history. Opt-outs were at their lowest point in August of 2022 (3.55%). Currently, SVCE opt-outs account for 3.85% of the eligible customer base. On an ongoing basis, most opt-outs occur during the 120-day transition period to SVCE service.
Service Rates
General. Rates for SVCE energy service are determined by its Board of Directors and are not regulated by the CPUC. In addition to SVCE’s charges for energy, customers’ rates include amounts for transmission and distribution of electricity established by PG&E, as well as a “power charge indifference adjustment” (“PCIA”) and other non-by-passable load charges imposed by the CPUC in order to compensate investor-owned utilities for investments in power generation and long-term power purchase contracts associated with the loss of customers to CCAs, which in each case are passed through on a customer’s bill in the amounts established or imposed.
Determination of Rates for Energy. The rates SVCE charges for GreenStart and GreenPrime services are based on the current generation rate charged by PG&E and the current PCIA fee. All value propositions are priced inclusive of the PCIA. GreenStart service is priced at 4% below the cost of PG&E, and GreenPrime is $.017 per kilowatt-hour in addition to the GreenStart rate.
Current and Historical Rate Information. An SVCE customer’s total cost of electric service is determined by SVCE’s charges for energy and includes PG&E charges for transmission, distribution, and other non-by-passable charges. Additionally, SVCE’s customers pay a PCIA which can vary annually based on several market factors including benchmarks for regional energy costs, resource adequacy, the year in which their community joined SVCE, and other considerations.
SVCE has priced its generation rate, inclusive of PCIA, below PG&E’s comparable generation rate since the organization’s initial enrollments. The primary alternative to SVCE service is to opt-out of SVCE service and return to PG&E service where the customer would pay a generation rate, inclusive of the PCIA, higher than SVCE’s rate. SVCE strives to maintain this value as a customer retention tool. Given the nature of an opt-out energy program, there are no assurances that customers will continue service should SVCE’s bundled costs become higher than PG&E’s or that SVCE customers will not opt-out for reasons unrelated to the cost of service.
California Renewable Portfolio Standards and Other Regulations Item 4
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General. Community choice aggregators such as SVCE are “load-serving entities” (“LSEs”) and as such are required to comply with California’s Renewable Portfolio Standard, Resource Adequacy requirements and Power Source Disclosure requirements described below.
Renewable Portfolio Standard. California’s Renewable Portfolio Standard (“RPS”) requires LSEs to supply their retail sales with minimum quantities of eligible renewable energy.
Senate Bill 100 directs all LSEs to procure 60% of their portfolios from RPS-eligible resources by 2030 and 100% of their retail sales from zero-carbon resources (or eligible renewable resources) by 2045. SVCE’s current policy is to procure 100% of retail sales from zero-carbon resources comprised of RPS-eligible resources, such as solar, wind, geothermal and biomass, and zero-carbon non-RPS resources such as large hydroelectricity. SVCE’s RPS directive is to exceed California’s mandated RPS. SVCE’s 2023 retail sales contained 36.7% RPS PCC1 eligible resources for GreenStart service 100% RPS for GreenPrime, and 62.2% for GreenPrime Direct.
To date SVCE has executed 19 RPS contracts of ten years or more in duration and has met its RPS requirements for long-term procurement. SVCE intends to solicit additional long-term renewable resources to meet Board-directed goals and as ordered by the CPUC under the Mid-term Reliability Procurement decision (D.21-06-035) and the Supplemental Mid-Term Reliability Procurement Order (D-23-02-040). SVCE has already made significant progress towards procuring its share of the decision’s mandated procurement.
Resource Adequacy. Resource Adequacy (“RA”), a California program jointly administered by the CPUC, the California Energy Commission (“CEC”) and the California Independent System Operator (“CAISO”), directs LSEs to secure forward capacity and offer it into the CAISO’s Day-Ahead and Real-Time markets to ensure that there will be enough supply in the right locations and with sufficient ramping capability to meet load. The RA program is comprised of three products: System RA; Local RA; and Flexible RA, although rules and categories are subject to modification by state agencies. Local RA obligations have been assigned to a Central Procurement Entity as of 2023. SVCE has a strong track record of meeting its RA obligations and expects to meet its future RA obligations in compliance with its Energy Risk Management Policy.
Integrated Resource Planning. Integrated Resource Planning (“IRP”) requires LSEs to forecast their customer load and develop a plan to serve such load in alignment with their own vision and values and in accordance with regulatory requirements. In October 2015, California codified this LSE responsibility with the passage of SB 350, which requires the CPUC to establish and oversee an IRP process to assist with meeting the state’s aggressive GHG targets (40% below 1990 levels by 2030). The IRP process, which is used in many states across the US, generally produces 10- to 20-year plans that map out both the supply-side and demand-side resources required for meeting customer load. Given the complexity of the grid and the time required to plan and build generating facilities, IRPs are critical for ensuring safe, reliable and clean power in a cost-effective manner. In addition to addressing the long-term planning horizon typical of an IRP process, the IRP process has been used in recent years to direct procurement of new capacity to meet near- and mid-term reliability and clean energy needs per CPUC Decision (“D.”) 19-11-016, D. 21-06-035 and D. 23-02-040. Pursuant to the procurement orders in these CPUC Decisions, LSEs are required to procure “Incremental System Capacity,” which is RA capacity from non-Item 4 Attachment 11
A-8
emitting, storage, and/or renewable resources that are in addition to the resources identified on a baseline list of existing, on-line and operating resources.
Power Source Disclosure. California law requires LSEs to disclose the types of power resources used to supply retail sales. This mandate, known as the Power Source Disclosure Program (“PSDP”), is a consumer information program managed by the CEC on an annual basis.
A key output of the PSDP is the Power Content Label (“PCL”). The PCL is an LSE-specific document that shows the breakdown of power resource types for each of the LSE’s energy products used to serve retail load, as well as a breakdown of resource types for the overall California grid.
The PCL is distributed to customers each year.
Energy Demand
Long-term Load Forecast. SVCE’s long-term load forecast is a 10-year projection of the energy (reflected in MWh) that its customers will annually consume. SVCE’s long-term load forecast is driven primarily by the number and types of customers that SVCE expects to serve, in conjunction with weather projections. SVCE’s long-term load forecast also incorporates the load-modifying effects of increasing electric vehicle adoption and charging, behind-the-meter solar and/or storage (via net energy metering), and energy efficiency. *Source IEPR Adopted Numbers 2024
Sources of Energy
General. SVCE uses a portfolio risk-management approach in its power purchasing program, seeking low-cost supply and diversity among technologies, production profiles, project sizes and locations, counterparties, length of contract, and timing of market purchases. SVCE currently has 86 renewable, hydro, system energy, hedge, and Resource Adequacy contracts from diversified sources and counterparties, totaling over $3.9 billion in notional energy contracts to provide energy to its customers over the next 20-25 years. 0 1,000
2,000
3,000
4,000
5,000
6,000
7,000
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
GWh
SVCE Load Forecast IEPR 2024
Item 4
Attachment 11
A-9
Energy Purchases. In 2024, SVCE procured approximately 3.98 million MWh of electricity for its customers. SVCE anticipates that roughly 100% of its total 2025 retail sales will be sourced from carbon-free resources including renewables, large hydroelectric, and nuclear energy (primarily large hydroelectric energy from the Pacific Northwest, but also relatively small amounts of nuclear energy). SVCE’s procurement strategy through 2030 includes regularly procuring new and existing California renewables by 2030 via both short- and long-term contracts.
These renewables contracts will be in addition to the 3.066 million MWh of annual generation from 972 MW, or roughly 62.3% of its retail sales in 2030, of new and existing California and neighboring states renewables that SVCE has already procured. The strategy also includes investing in additional storage paired with solar, stand-alone storage, long-duration storage, and large hydroelectric resources.
Energy Load and Supply Risk Management. SVCE continually manages its forward load obligations and supply commitments to balance cost stability and cost minimization while leaving some flexibility to take advantage of market opportunities or technological improvements that may arise. SVCE closely monitors its open positions for Portfolio Content Category 1 (“PCC 1”) renewable energy and carbon-free, non-RPS eligible, based on calendar-year targets. SVCE maintains its clean portfolio coverage targets of up to 100% in the near term and leaves a greater portion open in the medium- to long-term, consistent with generally accepted industry practice.
SVCE monitors its positions on a regular basis with its Scheduling Coordinator, who produces a daily and weekly report of positions and pricing along with using sophisticated models to simulate hundreds of market conditions to assess optimal hedge levels and net revenue at risk.
SVCE uses fixed-price energy contracts to hedge CAISO day-ahead market price exposure associated with its portfolio. More specifically, for the volumes and hours where SVCE does not have supply contracts that yield CAISO day-ahead revenue, SVCE uses fixed-price energy contracts where SVCE pays a fixed price per MWh in order to receive a floating price that clears for each hour. This helps hedge SVCE’s CAISO day-ahead market price exposure. SVCE employs a laddering hedge strategy for up to five years out, requiring minimum and maximum tolerance bands of percent of load covered with fixed-price and firm volumes of resources. As SVCE procures increasing portions of fixed-price renewables with storage and fixed-price large hydroelectric and ACS energy, SVCE expects to reduce its use of fixed-price energy contracts.
Procurement. SVCE procures energy and Resource Adequacy consistent with its Board-approved Energy Risk Management Policy. To effectively plan and manage its portfolio, SVCE differentiates contracts by their term length: short-term and long-term (longer than ten years).
Based upon the expected contract tenor, SVCE may use various methods, including competitive solicitations, standard contract offerings, and bilaterally negotiated agreements. With regard to short-term power purchases, SVCE may negotiate bilateral agreements directly, especially for unique or time-sensitive transactions that do not lend themselves to inclusion in a competitive solicitation. Alternatively, particularly in markets with sufficient transparency to ensure competitive outcomes, SVCE may negotiate short-term transactions via its scheduling coordinator or independent energy brokers or marketers.
Item 4
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A-10
GreenStart Procurement Targets. Reducing GHG emissions is at the heart of SVCE’s mission. SVCE’s GreenStart and GreenPrime products provide a source of 100% clean, carbon-free energy. GreenStart is offered at 50% RPS-eligible resources and 50% carbon-free, non-RPS-eligible resources, while GreenPrime is comprised of 100% RPS-eligible resources. Both products deliver a higher renewable content and a competitive cost compared to PG&E.
SVCE 2023 GreenStart Resource Mix*
SVCE 2023 GreenPrime Resource Mix*
*The charts above are the energy supply that SVCE used to serve its 2023 retail sales for the GreenStart and GreenPrime product offerings
Nuclear
25%
Biomass &
Biowaste
3%
Geothermal
14%
Solar
12%
Wind
8%
Large
Hydroelectric
38%
SVCE 2023 GreenStart Resource Mix
Solar
50%
Wind
50%
SVCE 2023 GreenPrime Resource Mix
Item 4
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A-11
SVCE 2025 Estimated GreenStart Resource Mix*
SVCE 2025 Estimated GreenPrime Resource Mix*
*The charts directly above are estimates of the energy supply that SVCE was expected to use to serve its 2025 retail sales for the GreenStart and GreenPrime product offerings.
Nuclear
31%
Biomass & Biowaste
4%
Geothermal
13%
Solar
27%
Wind
10%
Large
Hydroelectric
15%
2025 GreenStart Resource Mix
Solar
50%
Wind
50%
2025 GreenPrime Resource Mix
Item 4
Attachment 11
A-12
Further descriptions of SVCE’s policies and procedures addressing energy procurement and risk management can be found on the SVCE website at www.svcleanenergy.org. The reference to this website address is presented herein for informational purposes only, and information on such website is not incorporated by reference to this Official Statement.
SVCE Technology and Analytics
SVCE’s analytics and data management are handled by teams across the organization, consisting of IT personnel, data analysts, and power analysts. SVCE employs a cloud-first data strategy, where all mission-critical data is stored on cloud services, including Box for cloud file storage, Microsoft Office365 for collaboration, and the Google Cloud Platform (GCP) for data warehousing. GCP offers a modern infrastructure for storing, processing, and analyzing sensitive data in the cloud, with encryption by default of data at-rest and in-transit, as well as fine-grained access control to sensitive resources.
In addition to the security infrastructure embedded in GCP, SVCE IT staff also oversee general compliance with rules and regulations established by the California Public Utilities Commission (CPUC) related to data privacy and security. SVCE conducts independent tri-annual audits of its security and data privacy practices – which are submitted to the CPUC – and produces additional data privacy reports for the CPUC annually, in compliance with CPUC regulations.
SVCE customer data has not been the subject of any breaches or data security incidents.
Through the guidance from the VCISO, SVCE continually increases its Cyber Security Posture. SVCE analyzes cyber risks identified through audits and security assessments and uses VCISO’s guidance to prioritize and roadmap remediations and implementations.
Finally, the IT staff oversees device and application security and related policies. In addition to standard threat mitigation and security measures (such as password policies and antivirus software), SVCE enforces multi-factor authentication (MFA) on all mission-critical applications and employs email screening tools and endpoint security systems.
Ultimately, by using a centralized cloud-first policy for critical resources and attendant applications, enforcing modern security practices such as MFA, and limiting the use of distributed storage devices, SVCE can minimize its exposure to security incidents.
Energy Storage
SVCE currently has over 486 MW of 4-hour or longer equivalent wholesale (i.e., in front of the meter) storage capacity contracted over the next twenty years. Of the 486 MW of already contracted storage capacity, 231 MW is paired with solar, 25 MW is 8-hour standalone, 24 MW is 4-hour standalone, 131 MW is paired with a thermal resource, and 75 MW is RA-only. SVCE plans to procure additional solar with storage and standalone storage to meet new procurement mandates.
In 2020, SVCE launched its Lights on Silicon Valley program to deploy customer-sited solar and battery storage systems capable of providing backup power and behind-the-meter Item 4
Attachment 11
A-13
dispatch, driving decarbonization, lowering utility costs for program participants, and enabling local grid management through load shaping. This program prioritizes vulnerable customers and populations disproportionately affected by grid outages.
Financial Information
Revenues from Energy Sales and Operating Expenses. SVCE derives its operating revenues primarily from energy sales to its customers.
Other Sources of Revenue. SVCE also receives revenues from sources other than retail customer sales. These sources include wholesale energy sales to other suppliers and grant income used to assist with various customer programs.
Results of Operations. The following is a summary of SVCE’s results of operations for fiscal years ending September 30:
2024 2023 2022 2021 2020
Operating revenues 534,489,788 503,675,151 363,521,534 242,600,167 297,043,720 Nonoperating revenues 23,348,067 9,262,831 1,870,954 273,985 1,729,841 Total revenues 557,837,855 512,937,982 365,392,488 242,874,152 298,773,561 Operating expenses 397,162,572 401,057,113 318,708,488 257,751,261 260,274,619 Nonoperating expenses 14,224 28,576 36,126 230,632 350,511 Total expenses 397,176,796 401,085,689 318,744,614 257,981,893 260,625,130 Change in net position 160,661,059 111,852,293 46,647,874 (15,107,741) 38,148,431 Item 4
Attachment 11
A-14
Assets, Liabilities, Deferred Inflows or Resources and Net Position. The following table is a summary of SVCE’s assets, liabilities, deferred inflows, and net position for the fiscal years ending September 30:
2024 2023 2022 2021 2020
Current assets
Noncurrent
assets
Capitaland lease assets, net
420,352,985
761,171
376,699,458
1,259,365
270,632,455
1,681,871
206,813,185
2,122,391
220,538,554
1,403,175
Other noncurrent assets 150,052,998 56,864,643 45,330 45,330 145,130 Totalnoncurrent assets 150,814,169 58,124,008 1,727,201 2,167,721 1,548,305 Total assets 571,167,154 434,823,466 272,359,656 208,980,906 222,086,859 Current liabilities
70,667,155 86,003,663 51,733,663 34,519,867 40,094,131
Noncurrent liabilities 15,303,125 24,283,988 7,942,472 8,425,392 1,141,410 Totalliabilities 85,970,280 110,287,651 59,676,135 42,945,259 41,235,541 Net position
Net investment (deficit) in capitalassets
358,431 348,144 287,728 269,927 (172,895)
Restricted forsecuritycollateral
- - - 4,000,216 4,500,000
Unrestricted 484,838,443 324,187,671 212,395,793 161,765,504 176,232,143 Total Net Position 485,196,874 324,535,815 212,683,521 166,035,647 180,559,248 Deposit Accounts. SVCE maintains its cash in both interest-bearing and non-interest-bearing demand and term deposit accounts at River City Bank of Sacramento, California, and through the California Asset Management Program (“CAMP”) at US Bank of St. Paul, Minnesota.
SVCE’s deposits with River City Bank are subject to California Government Code Section 16521, which requires that River City Bank collateralize public funds in excess of the Federal Deposit Insurance Corporation limit of $250,000 by 110%. CAMP is a California Joint Powers Authority (JPA) offering professional investment services to public agencies across California, including the use of the Cash Reserve Portfolio (CAMP Pool) and CAMP Term investments, which are accessible to all local agencies in accordance with California Government Code Section 53601(p).
As of 2023, SVCE has appointed PFMAM (PFM Asset Management, LLC) as an investment advisor to manage the funds in CAMP accounts in accordance with our current investment policy Section 5. SVCE monitors its risk exposure to both River City Bank and CAMP on an ongoing basis. SVCE’s Investment Policy permits the investment of funds in depository accounts, certificates of deposit, and the Local Agency Investment Fund program operated by the California State Treasury, United States Treasury obligations, Federal Agency Securities, California municipal obligations, commercial paper, money market funds, mortgage pass-through and asset-backed securities, supranational obligations, joint power authority pool, and FDIC insured placement service deposits.
Liquidity. In September 2024, the SVCE Board of Directors approved increasing the target financial reserve levels to 350 days of cash on hand. SVCE currently provides cash collateral for only one outstanding letter of credit, totaling $147,000.
Credit Rating. SVCE has an ‘A’ issuer credit rating from S&P Global with a stable outlook and has been upgraded to A3 with a stable outlook stable rating from Moody’s in 2025.
Item 4
Attachment 11
Attachment 12.
First Prepay Timeline
June-2019 SVCE presents Prepay Structure Overview Presentation (developed by Goldman Sachs) to Finance and Administration Committee
Aug-2019 SVCE presents a brief verbal update on prepay process to Finance and Administration Committee
Sept-2019 SVCE and PFM Financial Advisors provide an update on the upcoming RFP process to Finance and Administration Committee
Nov-2019 SVCE provides Prepay RFP Overview to Executive Committee - PFM issues RFP to select Prepay Bank Supplier on behalf of EBCE and SVCE on Nov 12th
- RFP Proposals were due December 5th
Jan-2020 SVCE presents Prepay Structure Overview to Finance and Administration Committee Spring-2020SVCE and EBCE conduct RFP evaluations to select Prepay Bank Supplier July-2020 SVCE and EBCE select Morgan Stanley as Prepay Bank Supplier Aug-2020 SVCE provides Prepay Status Report to Finance and Administration Committee Sept-2020 SVCE provides Board with Prepay Overview on preparing for a Prepay Transaction SVCE provides Prepay Status Report to Finance and Administration Committee Oct-2020 SVCE Board Authorizes CEO to enter legal service agreements to finalize Prepayment Transaction (Orrick, Herrington & Sutcliffe and Chapman & Cutler LLP) Nov-2020 SVCE provides Prepay Status Report to Finance and Administration Committee Mar-2021 SVCE provides Prepay Status Report to Finance and Administration Committee SVCE provides Prepay Status Report to Executive Committee April-2021 SVCE Board Approves Participation in the California Community Choice Financing Authority Joint Powers Authority
Aug-2021 The Finance and Administration Committee reviews the Prepay Transaction and votes to recommend Board approval. Board authorizes execution of the first Prepay Transaction subject to parameters including that bonds are not obligations of SVCE, size of the bonds, and minimum savings target.
Sept-2021 Sept 9, 2021 bonds priced
Jan-2022 Power delivery under Prepay begins
Item 4
Attachment 15
Attachment 13.
Summary of the Details of the First Prepay Transaction
Aggregate Principal Bond Amount $1,234,720,000 (SVCE and EBCE combined) Total Bond Proceeds $1,475,895,642.5 (SVCE and EBCE combined) Municipal Bond Rating A1
Green Certification Designated Green Bonds by Kestrel Verifiers Initial Bond Pricing Period • 10 years.
• After the initial period, bonds will be repriced per
the negotiated repricing agreement, and a new
discount will be established based on the then
prevailing market conditions.1
Final Bond Maturity Date • February 1, 2052.
Discount Achieved • $4.38 per MWh, about 10% of the energy cost of SVCE’s 3-year transaction initially assigned into the
Prepay.
• ~$1.9 million per year for SVCE during the initial
bond pricing period of ten years.
Energy Volume Supported by Bond
Proceeds
109 MW, of which SVCE’s share is 50 MW (about 11%
of load) and EBCE’s share is 59 MW for approximately
the first ten years of the transaction; after that, the same proportional volume split will be maintained
between SVCE and EBCE.
Summary of the Transaction Cost Breakdown ($000)
Bond and Tax Counsel: Orrick, Herrington & Sutcliffe 425 Credit Rating: Moody’s 315
Issuer’s Counsel and Disclosure Counsel: Chapman & Cutler LLP 310 Municipal Advisor: Public Financial Management 250
Investment Advisor: Public Financial Management Asset Mgmt 42 Trustee: Bank of New York (BNY) 32
Trustee Counsel: BNY Counsel 35
Printing Cost 3
Contingency/Other 10
Total COI 1,422
Morgan Stanley Underwriting 6,341
Total 7,763
1 The repricing agreement has a minimum savings requirement of $2 per MWh.
Item 4
Attachment 15
Summary of the Details of the Second Prepay Transaction Aggregate Principal Bond Amount $841,550,000
Total Bond Proceeds $891,418,648.10
Municipal Bond Rating A1
Green Certification Designated Green Bonds by Kestrel Verifiers Initial Bond Pricing Period • 6.5 years.
• After the initial period, bonds will be repriced per
the negotiated repricing agreement, and a new
discount will be established based on the then
prevailing market conditions.2
Final Bond Maturity Date • July 1, 2053.
Discount Achieved • $9.77 per MWh, about 10% of the price established for energy deliveries under the power
supply contract.
• ~$4.7 million per year during the initial bond
pricing period of 6.5 years.
Energy Volume Supported by Bond
Proceeds
~55 MW (about 12% of load; a slight escalation in the
latter half of the transaction)
Power Delivery Start Date June 1, 2023
Summary of the Transaction Cost Breakdown ($000)
Bond and Tax Counsel: Ballard Spahr 300
Credit Rating: Moody’s 232.5
Issuer’s Counsel and Disclosure Counsel: Chapman & Cutler LLP 200 Municipal Advisor: Public Financial Management 175
Investment Advisor: Public Financial Management Asset Mgmt 35 Trustee: Bank of New York (BNY) 30.9
Trustee Counsel: Ballard Spahr 30
Printing Cost 3.3
Contingency/Other 22
Total COI 1,045.5
Morgan Stanley Underwriting 4,359.2
Total 5,404.7
2 The repricing agreement has a minimum savings requirement of $2 per MWh.
Item 4
Attachment 15
Summary of the Details of the Third Prepay Transaction
Aggregate Principal Bond Amount $1,101,625,000
Total Bond Proceeds $1,165,919,381.75
Municipal Bond Rating A1
Green Certification Designated Green Bonds by Kestrel Verifiers Initial Bond Pricing Period • ~8 years.
• After the initial period, bonds will be repriced per
the negotiated repricing agreement, and a new
discount will be established based on the then
prevailing market conditions.3
Final Bond Maturity Date • May 1, 2054
Discount Achieved • $11.32 per MWh, about 13.1% of the price established for energy deliveries under the power
supply contract.
• ~$7.7 million per year during the initial bond
pricing period of 8 years.
Energy Volume Supported by Bond
Proceeds
~77 MW (about 17% of load; a slight escalation in the
latter half of the transaction)
Power Delivery Start Date April 1, 2024
Summary of the Transaction Cost Breakdown ($000)
Bond and Tax Counsel: Ballard Spahr 250
Credit Rating: Moody’s 273
Issuer’s Counsel and Disclosure Counsel: Chapman & Cutler LLP 175 Municipal Advisor: Public Financial Management 155
Investment Advisor: Public Financial Management Asset Mgmt 30 Trustee: Bank of New York (BNY) 41.4
Trustee Counsel: Ballard Spahr 30
Printing Cost 4
Contingency/Other 66
Total COI $1,041.3
Morgan Stanley Underwriting $5,712.1
Total $6,753.4
3 The repricing agreement has a minimum savings requirement of $5.50 per MWh.
Item 4
Attachment 15
Attachment 14.
Overview of the Prepay structure
Structural Overview of Power Prepay
1. Under the existing, non-Prepay structure, SVCE has Power Purchase Agreements (PPA) and other carbon-free energy transactions with a counterparty (Energy Supplier). The Energy Supplier provides energy and any associated renewable/carbon-free credits (environmental credits) to SVCE, and SVCE pays the Energy Supplier the contract price. Under the prepayment structure:VCE partially assigns its rights to energy under the energy contract equivalent to the prepaid quantity to the Energy Supplier (Morgan Stanley) at the contract price. Now, the PPA Counterparty will provide Morgan Stanley with the assigned quantity of energy with any associated environmental credits. The Energy Supplier, will pay the contract price to the PPA Counterparty.
2. SVCE, along with the other initial founding member CCAs4, created the California Community Choice Financing Authority (CCCFA), a separate legal entity that can issue tax-exempt municipal bonds.
3. CCCFA issues non-recourse tax-exempt bonds secured by the contractual rights and transaction cashflows under a trust indenture. The bonds are not secured or guaranteed by SVCE or CCCFA. Based on the contractual agreements securing the bonds, the bonds will carry the credit ratings of the Funding Recipient.
4. CCCFA uses the proceeds from the bonds, net of all prepay transaction fees, and pays Energy Supplier the present value of energy cost and any environmental credits that the Energy 4SVCE along with Central Coast Community Energy (3CE), East Bay Community Energy (now Ava), and Marin Clean Energy (MCE), as the first set of founding members, established CCCFA.
Item 4
Attachment 15
Upfront Funds
Prepayment $$$
MWhs + RECs
MWhs+ RECs
MWhs+ RECs
SVCE CCCFA
Existing PPA
Counterparty
Monthly
Payments Contract Price
Less Discount
Energy Supplier
(ES, Morgan
Stanley)
Non-Recourse
Tax-Exempt Bonds
Bond
Proceeds
Existing
PPA - Partially
Assigned
Contract
Price
Debt
Service
Funding
Recipient (FR)
Supplier will deliver to CCCFA over the 30-year term of the transaction under a prepaid power agreement.
5. SVCE and CCCFA execute a power supply agreement. Under this agreement, SVCE pays CCCFA the initial contract price less a discount as CCCFA delivers to SVCE the energy and environmental credits it receives from the Energy Supplier.
6. CCCFA uses payments received from SVCE to pay interest and principal payments to the Bondholders.
7. The Energy Supplier and the funding recipient execute a funding agreement where the Funding Recipient receives upfront funds and makes monthly payments to the Energy Supplier, which they use to pay the PPA Counterparty.
Under the prepayment structure, SVCE receives the same energy and environmental credits from the PPA Counterparty (indirectly via Energy Supplier, Morgan Stanley, and then CCCFA) but for a lower price. The savings or lower price source is primarily the difference between taxable and tax-exempt debt interest rates. The Funding Recipient's capital needs are funded by a variety of means in taxable corporate markets, which have higher interest rates than tax-exempt debt. As a public agency, CCCFA can issue tax-exempt debt. When CCCFA provides the prepayment to Morgan Stanley for energy that Morgan Stanley will deliver over the term of the transaction, Morgan Stanley is effectively raising capital at a lower cost for the Funding Recipient. Based on the funding agreement with the Funding Recipient, Morgan Stanley flows the savings to SVCE by lowering the price SVCE pays for the energy and any environmental credits. By using this prepayment structure, SVCE can reduce the cost of energy purchases.
The bonds can have an initial term of about 5-10 years, and SVCE will not execute the transactions unless the Board-authorized savings can be realized. At the end of the initial term, the bonds will be refinanced, and the terms of the discount will be set per a Repricing Agreement, which will also specify a minimum discount threshold.
The risks to SVCE are minimal as the debt will not be recourse to SVCE. If, for any reason, the structure falls apart, the original energy contract will revert to SVCE, and the loss to SVCE will be the staff time invested in the project and the future savings expected to be generated by the prepayment transaction. The initial consultant and attorney fees are all contingent upon the execution of the transaction and will be financed from the bond proceeds.
Item 4
Attachment 15
Attachment 15.
Estimated Cost Breakdown
Firm Expected Cost ($000)
Bond and Tax Counsel: Ballard Spahr $250
Credit Rating: [Moody’s Investors Service/S&P Global Ratings] 321.5 Issuer’s Counsel and Disclosure Counsel: Chapman & Cutler LLP
175
Municipal Advisor: PFM Financial Advisors LLC 230
Swap Advisor: PFM Swap Advisors LLC 25
Investment Advisor 50
Trustee: Bank of New York (BNY) 20.2
Trustee Counsel: BNY Counsel 35
CCCFA JPA Administrative Fee 20
Green Bond Second Party Opinion (Kestrel Verifiers) 22.6 Printing Cost 4
Contingency/Other 10
Total COI 1,163
Morgan Stanley Underwriting 4700
Underwriters Counsel 115
Miscellaneous 85
Total 6,063
Item 4
Attachment 15
Staff Report – Item 5
Item 5: Authorize the Chief Executive Officer to Execute a 10-Year Power Purchase Agreement with IP Darden III, LLC for Up to 93.01 MW of Solar Photovoltaic Energy and a 91.48 MW Co-located, Four-Hour Battery Energy Storage System From: Monica Padilla, CEO
Prepared by: Kris Van Vactor, Director of Power Resources Britta Bradshaw, Power Resource Manager
Date: 08/13/2025
RECOMMENDATION
Staff recommends that the Silicon Valley Clean Energy (SVCE) Board of Directors (Board) delegate authority to the Chief Executive Officer (CEO) to finalize and execute a Power Purchase Agreement (PPA), and any non-substantive subsequent amendments and ancillary agreements, for co-located solar energy and battery energy storage system (BESS) with Intersect Power, LLC for IP Darden III, LLC (“Agreement”), with the following provisions:
• Up to 93.01 megawatt (MW) or approximately 250,000-270,000 megawatt hours (MWh) per year of renewable and clean energy;
• 91.48 MW or 365.92 MWh 4-hour lithium-ion BESS;
• 10-Year term PPA with expected commercial operation dates (COD) and term from June 1, 2028, through May 31, 2038; and
• Total amount not-to-exceed $330,000,000.
Execution of the Agreement will help SVCE meet SVCE Board-directed clean energy targets, California’s Renewable Portfolio Standard (RPS) requirements for Portfolio Category Content One (“PCC1”) resources and clean procurement mandates, and Resource Adequacy (RA) requirements, including Mid-Term Reliability requirements for new clean capacity. The Agreement is provided in substantive form (Attachment 1). Any substantive future amendments to the recommended contract shall be subject to the not-to-exceed (NTE) limit and authority set forth in Resolution 2022-08 or any subsequent authority.
BACKGROUND
In August 2024, Silicon Valley Clean Energy (SVCE) issued a Request for Offers (RFO) for long-term clean resources. The goal of the RFO was to secure a diverse set of renewable energy and clean capacity to meet SVCE’s (RPS) and carbon-free objectives, while also complying with California’s RPS and clean mandates. The Darden Agreement was selected resulting from this RFO.
As a load serving entity (LSE), SVCE is subject to clean energy and RPS targets under Senate Bill 100 (“SB 100”) which set a goal of achieving a 60% RPS by 2030 and a 100% clean energy grid by 2045 with interim targets of 90% by 2035 and 95% by 2040 as provided for under Senate Bill 1020. Additionally, SVCE’s Board set a 100% clean energy target on an annual basis and directed staff to achieve a 75% RPS in 2030-2034 (with a 10% margin of error) as approved by the Board in the November 13, 2024 SVCE Board of Directors Meeting, Item 4.
Item 5
SILICON VALLEY \3/ CLEAN ENERGY
Agenda Item: 5 Agenda Date: 08/13/2025
Clean resources were also sought to meet obligations as ordered in the California Public Utilities Commission (CPUC) issuing Decisions (D.) 21-06-035 and (D.) 23-02-040—together, the Mid-term Reliability Procurement Orders (MTR Orders)—requiring CPUC-jurisdictional LSEs, such as SVCE, to procure and/or develop a collective 15,500 MW of new capacity by 2028. SVCE’s total share of the MTR Order and Supplemental MTR Order is 317 MW, which was determined based on SVCE’s load ratio share of the CPUC’s jurisdictional load in the Pacific Gas and Electric transmission access area. While SVCE has made significant progress towards meeting the Supplemental MTR order, an open position still exists.
In support of SVCE’s goals and mandates, SVCE has 24 long-term contracts for clean energy, capacity and/or reliability products totaling over $3 billion over the life of the contracts. Currently, nine resources are online and estimated to meet approximately 45% of SVCE’s retail sales in 2025 with the following RPS mix: Solar:
27%, Geothermal: 13%, Wind: 10%.
In 2030, when all resources are on-line, SVCE will have achieved a 78% RPS from long-term resources and 57% of its peak capacity will be met from clean resources including paired and stand-alone storage. Tables 1 and 2 summarize the PPAs executed to date to meet RPS, resource adequacy and/or MTR requirements.
Table 1: Board Authorized Clean Energy Contracts - Online Table 2: Board Authorized Clean Energy Contracts - In Development
ANALYSIS & DISCUSSION
IP Darden is a 1,150 MW solar and 1,150 MW storage new-build resource in Fresno County. Intersect Power ("Intersect") is the parent company and developer of IP Darden.
SVCE will be among multiple off-takers of IP Darden, with a share of 91.48 MW of battery energy storage and up to 93.01 MW of solar energy, and approximately 250,000-270,000 MWh of PCC1 RPS energy and renewable energy certificates (RECs) annually, which will account for approximately 6% of SVCE’s retail sales and count towards annual and long-term RPS requirements. Intersect Power is still finalizing the engineering design of the solar and battery systems, and has requested optionality for SVCE’s share of the solar project to be flexible between 91.48-93.01 MW, with the final confirmed shortly after execution.
Item 5
Seller Project Name Technology
Generation
MW Storage MW Storage MWh
Term
(years)
SVCE Board
Approval Status
1 MN8 Slate Solar + Storage 93 46.5 186 17 Oct-18 Online 2 Ormat Casa Diablo Geothermal 7 10 Feb-20 Online
3 Atlantica Coso Geothermal 43.8 15 Mar-20 Online
4 Leeward Rabbitbrush Solar + Storage 40 8 20 15 Apr-20 Online 5 NextEra Yellow Pine Solar + Storage 50 26 104 20 May-20 Online 6 AES MountainView Wind 33.3 20 Apr-21 Online
7 Clearway VictoryPass Solar + Storage 100 25 100 15 May-21 Online 8 Terra-Gen Cameron Crest Wind 77.7 15 May-21 Online
9 AES Baldy Mesa (RA-only) Storage 0 75 300 10 Sep-22 Online Seller Project Name Technology
Generation
MW Storage MW Storage MWh
Term
(years)
SVCE Board
Approval Status
1 Avantus Aratina Solar +Storage 80 50 200 20 Jun-20 Construction 2 174 Power Global Atlas Solar 50 10 Jan-21 Pre-construction 3 SB Energy Angela Solar +Storage 20 10 40 15 Mar-21 Construction 4 Origis San Luis West Solar +Storage 62.5 15.625 62.5 15 Apr-21 Pre-construction 5 Rev Renewables Tumbleed Long Duration Storage 15.9375 127.5 15 Feb-22 Construction 6 Ormat GeothermalPortfolio Geothermal 16.75 20 Jun-22 Pre-construction 7 OME Fish Lake Geothermal 1.82 20 Jun-22 Pre-construction 8 Middle River Power Hanford Thermal+ BESS 99.4 131.4 131.4 12 Apr-23 Construction 9 NextEra Grace Solar 120 15 Aug-23 Pre-construction
10 NextEra Yellow Pine III Storage 0 24 96 15 Aug-23 Pre-construction 11 NextEra Yellow Pine III LongDuration Storage 0 9 72 15 Aug-23 Pre-construction 12 Pattern SunZia Wind 100 15 Nov-23 Construction
13 VCI Energy Glossy Garlic Solar +Storage 50 50 200 10 Oct-24 Pre-construction 14, 15 Pattern SunZia Wind North & South Wind 25 10 May-25 Construction Agenda Item: 5 Agenda Date: 08/13/2025
The resource is offered at a fixed price in dollars per MWh for solar generation and dollars per kilowatt-month ($/kW-mo) for storage capacity, under a ten-year term with an expected COD of June 1, 2028. The project will have Full Capacity Deliverability Status (FCDS) from the CAISO and be able to provide resource adequacy attributes to help SVCE meet its annual compliance obligation.
Tables 3 is a summary of the key features of the Darden PPA.
Table 3: Summary of Darden Agreement
Counterparty IP Darden III, LLC
Parent Company Intersect Power, LLC
Product New build solar PV PCC1
RPS Energy and lithium-ion 4-hour battery storage
Need and/or
Compliance Obligation
SVCE’s 100% Clean
energy goal and RPS
target
SB100, SB350 and B1020
MTR Order and RA starting
in 2028
Expected Delivery
Term
10 years, June 1, 2028, through
May 31, 2038.
Contract Capacity 93.01 MW solar, 91.48 MW, 4-
hour storage (total capacity to be
contracted to SVCE at point of
interconnection is 93.01 MW)
Location Fresno County, CA
Percentage of Retail
Load Served/RPS
5-6%
RPS Compliance & Integrated Resource Plan
SB100 sets annual RPS targets starting in 2020 growing to 60% in 2030 and further sets a 100% clean energy goal by 2045. SVCE’s board-approved IRP further sets an RPS target of 75% by 2030. The Darden Agreement provides an estimated average of 260,000 MWh of RPS eligible energy, bringing SVCE’s expected RPS in 2029 to 87%.
SB350, passed in 2016, requires Load Serving Entities (LSE) such as SVCE to acquire a minimum of 65% of the state-mandated RPS requirement through long-term PPAs (10 years or greater) starting with Compliance Period No. 4 “CP4” (2021-2024). Darden is expected to come online in 2028, helping meet long-term obligations in CP6 (2028-2030). With the inclusion of Darden, SVCE’s long-term RPS is 79.4% in CP6, which is above California’s mandated long-term RPS requirement of 37%. This represents SVCE’s position assuming all contracts are operational based on the online dates specified in the PPAs and that the resources perform consistent with the generation profiles provided in the PPAs as well. Table 4 shows SVCE’s progress towards meeting its RPS and clean goals.
Item 5
Agenda Item: 5 Agenda Date: 08/13/2025
Table 4: Impact to SVCE RPS and Clean Energy Targets
Calendar
Year
SB 100
RPS
Target
Board
RPS Target
Expected
SB 1001
Position
(without
Darden)
SB 1001
Position
with Darden
Clean
Position
(expected,
without
Darden)
Clean
Position
with
Darden
2028 55% 57% 80% 86% 90% 96%
2029 57% 59% 81% 87% 89% 95%
2030 60% 65-75% 78% 84% 81% 87%
Mid-term Reliability Procurement Order & Resource Adequacy Capacity SVCE has made significant progress towards meeting its allocation in all tranches of procurement mandates per the MTR Order. SVCE is slightly deficient in meeting its generic 2026, 2027 and 2028 requirements, which orders the procurement of new clean energy capacity including standalone storage. The Darden Agreement will contribute approximately 70 MW of qualifying capacity, helping to meet SVCE’s obligation in 2028, and, with the use of imports to serve as bridges for capacity delayed from 2026 and 2027, can help close SVCE’s overall obligation.
SVCE has an obligation to procure sufficient capacity to meet grid reliability as prescribed by the CPUC’s RA Program. Resources such as Darden, which pair solar and storage, provide a profile that is beneficial to SVCE’s portfolio under the state’s Slice of Day RA program.
Clean Energy and Capacity
SVCE works towards a 100% clean energy goal measured annually. This will be achieved through a mix of RPS-eligible resources, including wind, solar and geothermal combined with non-RPS eligible, but carbon-free resources such as large hydroelectricity and nuclear energy. Strategically, resources that can deliver clean energy in all hours of the day, such as geothermal, will best help SVCE balance its objectives; however, such resources are scarce. Solar plus storage, whether paired at the same site or virtually co-located, helps achieve a more sustainable grid by pushing out solar generation into later hours of the day, when demand peaks.
These types of resources are necessary to meet current retail product needs, including GreenStart, GreenPrime, and GreenPrime Direct, in addition to helping us build a pathway to 24/7 clean energy.
SVCE does not have a clean capacity goal. Currently, short-term natural gas RA-only capacity contracts account for the vast majority of SVCE’s RA portfolio. In 2024, 69% of SVCE’s requirements were from RA-only contracts. By including the Darden Agreement into the portfolio, Energy Source from Solar increases by up to 6% and peak capacity from clean sources increases by 4%. Table 5 is an illustration of SVCE’s energy and capacity portfolio in 2028.
Table 5: Energy and RA Capacity Portfolio with Darden – Estimated for 2030 Estimated for 2030 Annual Energy
(GWh)
Energy Source as a
Percent of Total
Retail Sales
Capacity Source as a
Percent of Total RA
Requirement
Biomass 0 0% 0%
Geothermal 412 10% 7%
1 RPS figures provided in this table represent SB 100, which provides an overall RPS target. SB 350 targets are not included in the table; SB 350 applies a requirement that 65% of the SB 100 RPS target be met by long-term resources. With the inclusion of Darden, SVCE is projected to achieve an RPS position of 79.4% from long-term contracts.
Item 5
Agenda Item: 5 Agenda Date: 08/13/2025
Solar with Darden 2218 51% 12%
Wind 713 16% 10%
Large Hydroelectric 915 21% 0%
Battery Storage with
Darden
0 0% 4%
Natural Gas RA-only 0 0% 52%
Hanford - Natural Gas 70 2% 14%
Total 4,328 100% 100%
Given the complementary solar and storage generation profile, the PPA will help balance clean energy throughout the day. By charging the battery when solar energy is abundant, and discharging when there are fewer clean resources generating, co-located solar and storage facilities can provide clean energy in more hours, and help reduce solar curtailment in hours when solar energy is over-abundant. Tables 6 and 7 below show SVCE’s hourly clean energy position without the Agreement (Table 6) and the impact of the proposed Agreement (Table 7).
Table 6: Expected SVCE Hourly Clean Energy Profile in 2029 without Darden Agreement Table 7: Net Change to Expected SVCE Hourly Clean Energy Profile in 2029 with Darden Agreement PPA Project Selection Policy
On April 9, 2025, the Board adopted the PPA Project Selection Policy (“Policy”) which set evaluation criteria for new PPAs. The Darden PPA was shortlisted prior to the Board-adopted policy; however, the Agreement meets many of the Policy requirements including payment of prevailing wages.
Project Development Status
IP Darden is a new-build project in its early stage. The project has completed all permitting under the California Energy Commission (CEC) “Opt-In Certification program,” a new process offering streamlined permitting at the state-level for eligible new clean energy projects.
Item 5
Hour Ending 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Month
1 25% 25% 26% 26% 26% 26% 26% 37% 64% 72% 61% 52% 46% 29% 55% 70% 54% 42% 42% 44% 50% 40% 39% 24% 2 23% 24% 24% 24% 24% 23% 27% 48% 78% 84% 70% 63% 40% 61% 70% 87% 61% 68% 51% 43% 52% 42% 25% 22% 3 31% 32% 33% 33% 32% 32% 68% 89% 109% 114% 120% 101% 92% 67% 88% 98% 104% 59% 42% 61% 55% 65% 40% 31% 4 37% 37% 37% 37% 36% 40% 84% 113% 125% 127% 130% 111% 114% 108% 113% 120% 114% 54% 65% 79% 78% 68% 35% 36% 5 40% 40% 39% 39% 38% 56% 113% 133% 136% 118% 135% 124% 97% 98% 114% 138% 136% 100% 57% 78% 90% 75% 52% 39% 6 41% 40% 37% 37% 37% 65% 109% 132% 134 l 102% 103% 89% 64% 93% 124% 125% 119% 96% 63% 89% 92% 91% 67% 39% 7 35% 32% 30% 30% 29% 45% 82% 115% 93% 80% 67% 65% 89% 113% 112% 108% 102% 81% 63% 85% 72% 61% 51% 35% 8 30% 30% 30% 30% 30% 34% 71% 112% 94% 73% 56% 78% 86% 108% 107% 104% 96% 70% 80% 84% 73% 62% 32% 30% 9 32% 31% 31% 31% 31% 32% 60% 101% 105% 80% 73% | 48% 67% 86% 102% 97% 84% 60% 82% 76% 56% 38% 34% 33% 10 37% 32% 32% 32% 33% 41% 48% 82% 107% 95% 72% 65% 46% 77% 95% 101% 70% 43% 1 87% 58% 46% 32% 41% 38% 11 31% 29% 31% 31% 37% 54% 51% 64% 83% 72% 57% 44% 34% 54% 79% 75% 67% 53% 42% 45% 51% 48% 48% 35% 12 26% 28% 27% 28% 28% 30% 30% 42% 66% 71% 48% 43% 37% 22% 53% 59% 60% 42% 53% 47% 48% 36% 43% 26% Hour Ending 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Month
1 1% 1% 0% 0% 0% 0% 0% 0% 5% 6% 0% | -8% -9% -8% -6% 8% 8% 12% 11% 6% 6% 1 12% 6% 0% 2 0% 0% 0% 0% 0% 1% 1% 2% 9% 11% 4% -4% -5% -6% -6% 13% 6% 14% 14% 12% 11% 7% 2% 0% 3 1% 0% 0% 0% 0% 2% 12% 12% 14% 16% 17% I 11% -2% -3% -6% -8% 10% 2% 6%n 15% 10% 15% 9% 1% 4 0% 0% 0% 0% 0% 0% 10% 17% 18% 18% 18% 19% 9% -2% -1% -12% 21%| 7% 18% 18% 18% 1 Q0.4. Z77O 0% 5 0% 0% 0% 0% 0% 1% 16% 20% 19% 20% | 13%| 0% 0% -1% -1% 18% 16% y /0 1% 19% 18% 19% 15% 0% 6 1% 0% 0% 0% 0% 5% 16% 19% 19% 10% | 0% 0% 0% 0% 18% 18% 17% 12% 3% J 17% 17% 17% 16% 0%
7 0% 0% 0% 0% 0% 2% 14% 21% 8% 0% 0% 0% 5% 18% 18% 17% 15% 12% 15% 16% 16% 16% 2% 0% 8 0% 0% 0% 0% 0% 1% 10% 19% 15% -1% -1% -1% 0% 15% 17% 16% 15% QCx- ZT7O 15% 16% 16% 13% ] 2% 0% 9 1% 0% 0% 0% 0% 1% 9% 16% 18% 7% -1% -1% -2% 1% 17% 16% 12% 13% 15% 16% 12% 1% 0% 3% 10 0% 0% 0% 0% 0% 0% 3% 11% 15% 15% 1 0% J
-5% -5% -5% 5% 14% 5% 17% 17% 18% 13% 0% 0% 0%
11 1% 0% 0% 1% 3% 19% 6% 4% 11% 11% -7% -8% -8% -8% 6% 9% 8% 9% 2% 4% 1% 1% 1 14% 7% 12 0% 0% 0% 0% 0% 0% 1% 0% 5% 7% 1% ] -10% -9% -10% -8% 5% 11% 13% 10% 8% 6% 5% 10% 0% Agenda Item: 5 Agenda Date: 08/13/2025
Impact of Federal Regulatory Uncertainty
While the solar and storage equipment will be manufactured within the U.S., the project may rely on foreign imports for project components, particularly for the battery. Potential federal tax changes, including potential tariffs on battery components, may impact the cost to Intersect Power to develop this resource. To account for this uncertainty, the contract includes a provision that allows the battery capacity price to adjust accordingly with changes to the tariffs from current levels. The maximum impact of this proposed rate adjustment is expected to fall within the total Not-To-Exceed threshold being requested herein.
Other federal tax incentives for renewable energy projects, such as the Investment Tax Credit (ITC), will also see changes under federal policy. However, Darden is expected to maintain its expected tax benefits due to its near-term construction timeline.
ALTERNATIVE
While the Darden Agreement is beneficial to meeting overall RPS goals, clean energy, and MTR goals, the Board may decide not to approve the resource and instead procure short-term clean resources and/or issue a new RFO for resources that can meet SVCE’s MTR requirement. Staff held a recent long-term RFO seeking similar resources, and the terms of the Darden Agreement remain competitive against recent offers.
Staff does not recommend this alternative, as MTR-eligible and renewable resources are scarce. Failure to comply with this mandate may result in the assessment of penalties by the CPUC. The amount of penalties is unknown and dependent on SVCE’s overall deficiency and cost of new resources.
STRATEGIC PLAN
Board approval to delegate authority to the CEO to execute the Darden Agreement will enable staff to meet the current board directed clean targets and California RPS requirement, consistent with goals and objective as outlines in SVCE’s Strategic Plan, in particular, Goal #4: Acquire power supply resources in a cost-effective manner to meet legislative and regulatory obligations, Board directives and customer specific products.
FISCAL IMPACT
Execution of the Agreement will result in cost to SVCE starting in Fiscal Year (FY) 2028, which will be included in the budget at that time. Staff’s spending authority over the life of the PPA will be limited to the amount recommended of $330,000,000 for IP Darden, LLC.
ATTACHMENTS
1. IP Darden Power Purchase Agreement – redacted version Item 5
CONFIDENTIAL
IP DRAFT
31 JULY 2025
1 RENEWABLE POWER PURCHASE AGREEMENT
COVER SHEET
Seller: [IP Darden III, LLC,] [IP Darden IV, LLC,] a Delaware limited liability company (“Seller”)
Buyer: [Silicon Valley Clean Energy Authority, a California joint powers authority][Central Coast Community Energy, a California joint powers authority] (“Buyer”) Description of Facility: A 91.48 MWAC1 solar photovoltaic generating facility, along with a co-located 91.48 MW/365.92 MWh2 battery energy storage facility, located in Fresno County, California, as further described in Exhibit A.
Milestones:
Milestone Date for
Completion
Obtain Site Control
CEC Precertification Obtained
Obtaining Federal and State Discretionary Permits
Executed Interconnection Agreement
Procure Major Equipment
Expected Construction Start Date
Initial Synchronization
Network Upgrades completed
Full Capacity Deliverability Status or Interim Deliverability Status
Expected Commercial Operation Date 6/01/2028
Delivery Term: Ten (10) Contract Years.
Expected Energy:
3 Contract Year
Expected Energy (as of
the Effective Date)
(MWh)
Expected Energy
(corresponding to
MWAC if updated
pursuant to Section 2.7)
(MWh)
1 2
3 1 NTD: This amount is on a per-CCA basis. 2 NTD: This amount is on a per-CCA basis. 3 NTD: This amount is on a per-CCA basis.
Item 5
Attachment 1
2 4
5 6
7 8
9 10
Seller shall have the right, upon delivery of Notice to Buyer on or before August 31, 2025, to update (i) the Expected Energy by no more than three percent (3%) and (ii) Exhibit R (Metering Diagram) to reflect updated Facility designs. Upon delivery of such Notice to Buyer, this Agreement will be automatically amended (without any further action required by the Parties) to reflect the updated Expected Energy amounts and Exhibit R.
Guaranteed Capacity: 91.48 MWAC
Storage Contract Capacity: 91.48 MWAC / 365.92 MWh (4-hour) discharge Storage Contract Output: 365.92 MWh
Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency
Rate
1 2
3 4
5 6
7 8
9 10
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 10
The Storage Rate shall be:
Contract Year Storage Rate
1 – 10
Item 5
Attachment 1
3 Product:
☒ Generating Facility Energy
☒ Green Attributes (Portfolio Content Category 1)
☒ Storage Capacity
☒ Capacity Attributes (select options below as applicable) ☐ Energy Only Status
☒ Full Capacity Deliverability Status or Interim Deliverability Status ☒ Ancillary Services
Scheduling Coordinator: Buyer/Buyer Third Party
Development Security and Performance Security:
Development Security:
Performance Security:
Item 5
Attachment 1
i
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.......................................................................................................... 1
1.1 Contract Definitions............................................................................................... 1
1.2 Rules of Interpretation ......................................................................................... 24 ARTICLE 2 TERM; CONDITIONS PRECEDENT................................................................... 25
2.1 Contract Term. ..................................................................................................... 25
2.2 Conditions Precedent to Delivery Term .............................................................. 26
2.3 Development; Construction; Progress Reports.................................................... 27
2.4 Remedial Action Plan .......................................................................................... 28
2.5 CPUC Mid-Term Reliability Requirements........................................................ 28 ARTICLE 3 PURCHASE AND SALE....................................................................................... 29
3.1 Purchase and Sale of Product............................................................................... 29
3.2 Sale of Green Attributes....................................................................................... 30
3.3 Imbalance Energy. ............................................................................................... 30
3.4 Ownership of Renewable Energy Incentives....................................................... 30
3.5 Future Environmental Attributes. ........................................................................ 30
3.6 Test Energy. ......................................................................................................... 30
3.7 Capacity Attributes. ............................................................................................. 31
3.8 Resource Adequacy Failure ................................................................................. 31
3.9 CEC Certification and Verification. .................................................................... 32
3.10 CPUC Non-Modifiable Standard Terms and Conditions (STC). ........................ 32
3.11 Change in Law. .................................................................................................... 33
3.12 Bridge Capacity ................................................................................................... 35 ARTICLE 4 OBLIGATIONS AND DELIVERIES.................................................................... 36
4.1 Delivery................................................................................................................ 36
4.2 Title and Risk of Loss.......................................................................................... 36
4.3 Forecasting........................................................................................................... 36
4.4 Dispatch Down/Curtailment. ............................................................................... 38
4.5 Charging Energy Management ............................................................................ 39
4.6 Reduction in Delivery Obligation........................................................................ 40
4.7 Guaranteed Energy Production............................................................................ 41
4.8 Storage Availability ............................................................................................. 41
4.9 Storage Capacity Tests......................................................................................... 42
4.10 WREGIS .............................................................................................................. 42
4.11 Station Use ........................................................................................................... 43
4.12 Interconnection Capacity ..................................................................................... 44
4.13 Excess Installed Battery Capacity........................................................................ 44 ARTICLE 5 TAXES.................................................................................................................... 44
5.1 Allocation of Taxes and Charges......................................................................... 44 Item 5
Attachment 1
ii
5.2 Cooperation. ......................................................................................................... 45 ARTICLE 6 MAINTENANCE OF THE FACILITY ................................................................. 45
6.1 Maintenance of the Facility. ................................................................................ 45
6.2 Maintenance of Health and Safety. ...................................................................... 45
6.3 Shared Facilities ................................................................................................... 45 ARTICLE 7 METERING ............................................................................................................ 45
7.1 Metering. .............................................................................................................. 45
7.2 Meter Verification. ............................................................................................... 46
7.3 Scheduling Coordinator Metered Entity .............................................................. 46 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................. 47
8.1 Invoicing. ............................................................................................................. 47
8.2 Payment. ............................................................................................................... 47
8.3 Books and Records. ............................................................................................. 47
8.4 Payment Adjustments; Billing Errors. ................................................................. 48
8.5 Billing Disputes. .................................................................................................. 48
8.6 Netting of Payments. ............................................................................................ 48
8.7 Seller’s Development Security. ........................................................................... 48
8.8 Seller’s Performance Security. ............................................................................. 49
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................ 49
8.10 Seller’s Financial Statements ............................................................................... 50 ARTICLE 9 NOTICES ................................................................................................................ 50
9.1 Addresses for the Delivery of Notices ................................................................. 50
9.2 Acceptable Means of Delivering Notice .............................................................. 50 ARTICLE 10 FORCE MAJEURE .............................................................................................. 51
10.1 Definition ............................................................................................................. 51
10.2 No Liability If a Force Majeure Event Occurs .................................................... 51
10.3 Notice ................................................................................................................... 52
10.4 Termination Following Force Majeure Event ...................................................... 52 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ...................................................... 52
11.1 Events of Default ................................................................................................. 52
11.2 Remedies; Declaration of Early Termination Date. ............................................. 55
11.3 Termination Payment ........................................................................................... 56
11.4 Notice of Payment of Termination Payment ....................................................... 57
11.5 Disputes with Respect to Termination Payment .................................................. 57
11.6 Rights and Remedies Are Cumulative ................................................................. 57 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES .......... 57
12.1 No Consequential Damages. ................................................................................ 57
12.2 Waiver and Exclusion of Other Damages ............................................................ 58 Item 5
Attachment 1
iii
ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY ........................... 58
13.1 Seller’s Representations and Warranties ............................................................. 58
13.2 Seller’s Covenants ............................................................................................... 59
13.3 Buyer’s Representations and Warranties............................................................. 60
13.4 General Covenants............................................................................................... 60
13.4 Prevailing Wage................................................................................................... 61 ARTICLE 14 ASSIGNMENT..................................................................................................... 61
14.1 General Prohibition on Assignments................................................................... 61
14.2 Collateral Assignment.......................................................................................... 62
14.3 Permitted Assignment by Seller........................................................................... 64
14.4 Buyer Limited Assignment.................................................................................. 64 ARTICLE 15 DISPUTE RESOLUTION.................................................................................... 65
15.1 Governing Law. ................................................................................................... 65
15.2 Dispute Resolution............................................................................................... 65 ARTICLE 16 INDEMNIFICATION........................................................................................... 66
16.1 Indemnification.................................................................................................... 66
16.2 Claim Notice ........................................................................................................ 66
16.3 Defense of Claims................................................................................................ 66
16.4 Subrogation of Rights. ......................................................................................... 67
16.5 Rights and Remedies are Cumulative.................................................................. 67 ARTICLE 17 INSURANCE........................................................................................................ 67
17.1 Insurance .............................................................................................................. 67 ARTICLE 18 CONFIDENTIAL INFORMATION .................................................................... 69
18.1 Definition of Confidential Information................................................................ 69
18.2 Duty to Maintain Confidentiality......................................................................... 69
18.3 Irreparable Injury; Remedies ............................................................................... 69
18.4 Permitted Disclosure............................................................................................ 70
18.5 Press Releases...................................................................................................... 70 ARTICLE 19 MISCELLANEOUS ............................................................................................. 70
19.1 Entire Agreement; Integration; Exhibits.............................................................. 70
19.2 Amendments........................................................................................................ 71
19.3 No Waiver............................................................................................................ 71
19.4 No Agency, Partnership, Joint Venture or Lease................................................. 71
19.5 Severability .......................................................................................................... 71
19.6 Mobile-Sierra ....................................................................................................... 71
19.7 Counterparts; Electronic Signatures .................................................................... 71
19.8 Electronic Delivery .............................................................................................. 72
19.9 Binding Effect...................................................................................................... 72
19.10 No Recourse to Members of Buyer ..................................................................... 72
19.11 Forward Contract; Service Contract .................................................................... 72 Item 5
Attachment 1
iv
19.12 Change in Electric Market Design....................................................................... 72
19.13 Further Assurances............................................................................................... 72 Exhibits:
Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F-1 Form of Average Expected Energy Report
Exhibit F-2 Form of Monthly Delivery Forecast
Exhibit G Guaranteed Energy Production Damages Calculation Exhibit H Form of Commercial Operation Date Certificate Exhibit I-1 Form of Installed PV Capacity Certificate
Exhibit I-2 Form of Installed Battery Capacity Certificate Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Guaranty
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Storage Capacity Tests
Exhibit P Storage Availability
Exhibit Q Operating Restrictions
Exhibit R Metering
Exhibit S Limited Assignment Agreement
Exhibit T Other Seller Commitments
Item 5
Attachment 1
RENEWABLE POWER PURCHASE AGREEMENT
This Renewable Power Purchase Agreement (“Agreement”) is entered into as of the last dated signature on the signature page hereto (the “Effective Date”), between Buyer and Seller.
Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, permit, construct, own, control and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS4
1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.11(d). “Adjusted Energy Production” has the meaning set forth in Section 4.7. “Administrative NQC Reduction” means a reduction in the maximum achievable Net Qualifying Capacity of Facility due to a reduction that has been generally applied to all resources materially similar to the Facility in terms of type, market and operational characteristics (including those characteristics specified in the CPUC Master Resource Database), including any methodology that incorporates fleet averages or other average outage rates, any CAISO outages not caused by Seller’s failure to comply with its obligations under the Agreement, or any changes with respect to storage duration requirements, or the elimination of Net Qualifying Capacity altogether.
“Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control” (including, with correlative meanings, the terms “controlled by”, and “under common control with”), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) 4 NTD: Agreement remains subject to all cross-references and definitions being checked.
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Attachment 1
2 of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person. “Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, the Cover Sheet, and any designated collateral, credit support or similar arrangement between the Parties. “Ambient Conditions” means the ambient temperature, relative humidity, solar irradiance, air mass and wind speed at the site. The Storage Facility performance tests under Ambient Conditions shall be adjusted to a temperature range of 0℃ - 25℃ and relative humidity less than 70%. The Generating Facility performance tests under Ambient Conditions shall be adjusted to calculate a P50 production estimate at PVUSA Test Conditions of 1,000 Watts per square meter solar irradiance, 20℃ air temperature and wind speed of 1 meter per second at 10 meters above ground level.
“Ancillary Services” means those ancillary services, as defined in the CAISO Tariff, that the Facility is, at the relevant time, actually physically capable of providing consistent with the Interconnection Agreement, Operating Restrictions, Prudent Operating Practice, and the requirements and limitations set forth in this Agreement. “Approved Forecast Vendor” means (a) the EIRP Forecast or (b) any other vendor reasonably acceptable to both Buyer and Seller for the purposes of providing or verifying the forecasts under Sections 4.3(c) and 4.3(d).
“Automated Dispatch System” or “ADS” has the meaning set forth in the CAISO Tariff. “Availability Adjustment” or “AA” has the meaning set forth in Exhibit P. “Available Generating Capacity” means the capacity of the Generating Facility, expressed in whole MWs, that is mechanically available to generate Energy. “Average Expected Energy Report” means the annual report delivered by Seller pursuant to Section 4.3(a).
“Bankrupt” or “Bankruptcy” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due.
“Baseline RA Deficiency Amount Cap” has the meaning set forth in Section 3.8(b).
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3 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. Pacific Prevailing Time for the Party sending a Notice, or payment, or performing a specified action. “Buyer” has the meaning set forth on the Cover Sheet.
“Buyer Bid Curtailment” means any curtailment of the Generating Facility arising out of or resulting from the manner in which Buyer or Buyer’s SC bids, offers or schedules the Generating Facility, the Energy or any Products, or in which Buyer or Buyer’s SC fails to do so, including a situation where all of the following occurs:
(a) the CAISO provides notice, including through ADS, to a Party or the Scheduling Coordinator for the Generating Facility, requiring the Party or the Scheduling Coordinator to deliver less Generating Facility Energy from the Generating Facility than the full amount of energy forecasted to be produced from the Facility for a period of time; and (b) for the same time period as referenced in (a), the notice referenced in (a) results from the manner in which Buyer or the SC schedules or bids the Generating Facility, Generating Facility Energy or Ancillary Services, including where the Buyer or the SC for the Facility:
(i) did not submit a Self-Schedule or an Energy Supply Bid for the MW subject to the reduction; or
(ii) submitted an Energy Supply Bid and the CAISO notice referenced in (a) is solely a result of CAISO implementing the Energy Supply Bid; or (iii) submitted a Self-Schedule for less than the full amount of Generating Facility Energy forecasted to be generated by the Generating Facility.
If the Generating Facility is subject to a Planned Outage, Forced Facility Outage, Force Majeure Event, or a Curtailment Period, during the same time period as referenced in (a), then the calculation of Deemed Delivered Energy in respect of such period shall not include any Generating Facility Energy that was not generated due to such Planned Outage, Forced Facility Outage, Force Majeure Event, or Curtailment Period.
“Buyer Curtailment Order” means the instruction from Buyer or Buyer’s SC to Seller to reduce Generating Facility Energy from the Facility by the amount, and for the period of time set forth in such instruction, which instruction shall be consistent with the Operating Restrictions, for reasons unrelated to a Planned Outage, Forced Facility Outage, Force Majeure Event affecting the Facility or Curtailment Order.
“Buyer Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces Generating Facility Energy from the Generating Facility pursuant to or as a result of (a) Buyer Bid Curtailment, (b) a Buyer Curtailment Order, or (c) Buyer’s Default; provided, that the duration of any Buyer Curtailment Period shall be inclusive of the time required for the Generating Facility to ramp down and ramp up.
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4 “Buyer’s Default” means a failure by Buyer (or its agents) to perform Buyer’s obligations hereunder, and includes an Event of Default of Buyer.
“Buyer’s WREGIS Account” has the meaning set forth in Section 4.10(a). “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Charges Invoice” has the meaning set forth in Exhibit D. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Operating Order” means “Operating Instruction” as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Facility can generate, charge, discharge and deliver to the Delivery Point at a particular moment and that can be purchased, sold or conveyed under CAISO or CPUC market rules, or used for compliance purposes, including Resource Adequacy Benefits.
“Capacity Damages” has the meaning set forth in Exhibit B. “CEC” means the California Energy Commission, or any successor agency performing similar statutory functions.
“CEC Certification and Verification” means that the CEC has certified (or, with respect to periods before the date that is days following the Commercial Operation Date, that the CEC has pre-certified, as such date may be extended pursuant to Section
3.9) that the Generating Facility is an Eligible Renewable Energy Resource for purposes of the California Renewables Portfolio Standard and that all Generating Facility Energy delivered to the Delivery Point qualifies as generation from an Eligible Renewable Energy Resource. “CEC Precertification” means that the CEC has issued a precertification for the Generating Facility indicating that the planned operations of the Generating Facility would comply with applicable CEC requirements for CEC Certification and Verification.
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5 “CEQA” means the California Environmental Quality Act. “Change in Law” means the enactment, adoption, promulgation, modification, suspension, repeal, or judicial determination, after the Effective Date, by any Governmental Authority of any Law, including a change in interpretation or enforcement of any existing Law. “Change of Control” means, except in connection with public market transactions of equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, at least fifty percent (50%) of the outstanding equity interests in Seller or otherwise ceases to retain the ability to control the decision making of Seller; provided that in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns at least fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any cash equity or tax equity provider) or permitted assignee or transferee thereof shall be excluded from the total outstanding equity interests in Seller.
“Charging Energy” means all Grid Energy delivered to the Storage Facility, as measured at the Storage Facility Metering Points by the Storage Facility Meter. “Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, instructing the Storage Facility to charge at a specific MW rate to a specified Stored Energy Level, including in connection with a Storage Capacity Test, provided that any such operating instruction shall be in accordance with the Operating Procedures and the CAISO Tariff.
For the avoidance of doubt, (i) any instruction to charge the Storage Facility pursuant to a Buyer Dispatched Test shall be considered a Charging Notice, and (ii) any Charging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order. “Claim” has the meaning set forth in Section 16.2(a).
“COD Certificate” has the meaning set forth in Exhibit B. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute, including the rules or regulations promulgated thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed to also refer to any successor sections.
“Collateral Assignment Agreement” has the meaning set forth in Section 14.2. “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Date” has the meaning set forth in Exhibit B.
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6 “Commercial Operation Delay Damages” means a daily amount equal to “Compliance Actions” has the meaning set forth in Section 3.11(b). “Compliance Expenditure Cap” has the meaning set forth in Section 3.11(b). “Confidential Information” has the meaning set forth in Section 18.1. “Construction Delay Damages” means a daily amount equal to
“Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Capacity” means the sum of the Guaranteed Capacity and the Storage Contract Capacity.
“Contract Price” has the meaning set forth on the Cover Sheet and is each of the Renewable Rate and the Storage Rate.
“Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. The last Contract Year shall end at midnight at the end of the day prior to the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Non-Defaulting Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating this Agreement.
“Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“CPUC REC Compliance Penalty” means the then-applicable CPUC penalty per MWh of shortfall owed by Buyer for its failure to procure long-term RECs. “Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by any third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then Item 5
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7 the rating then assigned to such entity as an issuer rating by S&P, Fitch or Moody’s. If the ratings by Fitch, S&P or Moody’s are not equivalent, the lowest rating shall apply. “Cumulative Curtailment Cap” is the cumulative quantity of Generating Facility Energy curtailed during a Buyer Curtailment Period during the Delivery Term not to exceed five hundred (500) hours multiplied by the Guaranteed Capacity.
“Curtailment Cap” is the yearly quantity per Contract Year, in MWh, equal to “Curtailment Order” means any of the following:
(a) a Governmental Authority orders, directs, alerts, or provides notice to a Party, to curtail deliveries of Facility Energy or Discharging Energy for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes electric system integrity or the integrity of other systems to which the Facility is connected;
(b) a curtailment ordered by the Participating Transmission Owner for reasons including, but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Participating Transmission Owner’s electric system integrity or the integrity of other systems to which the Participating Transmission Owner is connected or (iii) any public safety power shutoff or equivalent curtailment to address wildfire or related risks;
(c) a curtailment ordered by CAISO, or other Governmental Authority, or the Participating Transmission Owner due to scheduled or unscheduled maintenance on the Participating Transmission Owner’s transmission facilities that reasonably prevents (i) Buyer from receiving or (ii) Seller from delivering Facility Energy or Discharging Energy to the Delivery Point; or
(d) a curtailment in accordance with Seller’s obligations, or due to physical or operational limitations on the transfer of electric power, under its Interconnection Agreement with the Participating Transmission Owner or distribution operator. “Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which generation from the Generating Facility is reduced pursuant to a Curtailment Order; provided that the Curtailment Period shall be inclusive of the time required for the Generating Facility to ramp down and ramp up.
“Damage Payment” mean
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8 “Day-Ahead Forecast” has the meaning set forth in Section 4.3(c). “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Dedicated Interconnection Capacity” has the meaning set forth in Section 4.12. “Deemed Delivered Energy” means the amount of Energy expressed in MWh that the Generating Facility would have generated and delivered to the Delivery Point as Generating Facility Energy, but that is not generated by the Generating Facility and delivered to the Delivery Point during a Buyer Curtailment Period or Discharging Curtailment, which amount shall be equal to
“Deemed Delivered RA” means, for the applicable Showing Month, the amount of Net Qualifying Capacity, expressed in MW, that the Facility would have been able to deliver as Resource Adequacy Benefits, but for (a) a Force Majeure Event or (b) Planned Outages permitted by the terms of this Agreement to the extent such Planned Outages reduce the maximum achievable Net Qualifying Capacity of the Facility.
“Delivered RA” means an amount, expressed in MW, calculated for the applicable Showing Month as the sum of (a) the amount of the Net Qualifying Capacity of the Facility for such Showing Month able to be shown on Buyer’s monthly or annual Resource Adequacy Plan to the CAISO and CPUC and able to be counted as system RAR and, if applicable, Local RAR, by both the CAISO and CPUC, (b) Deemed Delivered RA and (c) Replacement RA. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Deficient Month” has the meaning set forth in Section 4.10(e). “Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (i) cash or (ii) a Letter of Credit in the amounts set forth on the Cover Sheet.
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9 “Discharging Curtailment” has the meaning set forth in Section 4.5(e). “Discharging Energy” means all Energy delivered to the Delivery Point from the Storage Facility, as measured by the Storage Facility Meter.
“Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, instructing the Storage Facility to discharge Discharging Energy at a specific MW rate to a specified Stored Energy Level, provided that any such operating instruction or updates shall be in accordance with the Operating Procedures and the CAISO Tariff. For the avoidance of doubt, any Discharging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order. Any instruction to discharge the Storage Facility pursuant to a Buyer Dispatched Test shall be considered a Discharging Notice. “Disclosing Party” has the meaning set forth in Section 18.2. “Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Preamble. “Efficiency Rate” means the measured round-trip efficiency rate of the Storage Facility, expressed as a percentage, calculated pursuant to a Storage Capacity Test in accordance with Exhibit O by dividing Energy Out by Energy In.
“EIRP Forecast” means the current CAISO forecast for intermittent resources using relevant Generating Facility availability, weather, historical and other pertinent data for the applicable period of time.
“Eligible Intermittent Resource Protocol” or “EIRP” has the meaning set forth in the CAISO Tariff or a successor CAISO program for intermittent resources. “Electrical Losses” means, subject to meeting any applicable CAISO requirements, including, as applicable, all transmission or transformation losses between the Facility and the Delivery Point, including losses associated with (i) delivery of Generating Facility Energy to the Delivery Point, (ii) delivery of Charging Energy to the Storage Facility, (iii) for all purposes other than the calculation of Generating Facility Energy, conversion of Charging Energy into Discharging Energy, and (iv) delivery of Discharging Energy to the Delivery Point. If any amounts included within the definitions of “Electrical Losses” and “Station Use” hereunder are duplicative, then for all relevant calculations hereunder it is intended that such amounts shall not be double counted or otherwise duplicated.
“Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means electrical energy measured in MWh.
“Energy In” has the meaning set forth in Exhibit O.
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10 “Energy Out” has the meaning set forth Exhibit O.
“Energy Supply Bid” has the meaning set forth in the CAISO Tariff. “Event of Default” has the meaning set forth in Section 11.1. “Excess MWh” has the meaning set forth in Exhibit C.
“Excused Event” has the meaning set forth in Exhibit P. “Expected Commercial Operation Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Commercial Operation. “Expected Construction Start Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Construction Start. “Expected Energy” means the quantity of Expected Energy specified on the Cover Sheet that Seller expects to be able to deliver to Buyer as Generating Facility Energy during each Contract Year.
“Facility” means the Generating Facility and the Storage Facility. “Facility Energy” means the sum of Generating Facility Energy and Discharging Energy from the Storage Facility during any Settlement Interval or Settlement Period, net of Electrical Losses and Station Use, as measured by the Facility meter, which will be adjusted in accordance with CAISO meter requirements to account for Electrical Losses and Station Use. If any adjustments for Electrical Losses and Station Use included within the definitions of “Generating Facility Energy” and “Facility Energy” hereunder are duplicative, then for all relevant calculations hereunder it is intended that such amounts shall not be double counted or otherwise duplicated. “FERC” means the Federal Energy Regulatory Commission.
“Flexible Capacity” has the meaning set forth in the CAISO Tariff. “Flexible Resource Adequacy Benefits” means the attributes, however defined, of a resource that can be used to satisfy the flexible resource adequacy obligations of a load serving entity, including Flexible Capacity.
“Force Majeure Event” has the meaning set forth in Section 10.1(a). “Forced Facility Outage” means an unexpected failure of one or more components of the Facility or any outage on the Transmission System that prevents Seller from generating Energy, receiving Charging Energy, or making Facility Energy available at the Delivery Point and that is not the result of a Force Majeure Event.
“Forecasting Penalty” means
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11 “Form of Average Expected Energy Report” has the meaning set forth in Section 4.3(a). “Form of Monthly Delivery Forecast” has the meaning set forth in Section 4.3(b). “Full Capacity Deliverability Status” has the meaning set forth in the CAISO Tariff. “Future Environmental Attributes” shall mean any and all generation attributes, other than Green Attributes or Renewable Energy Incentives, under the RPS regulations or under any and all other international, federal, regional, state or other law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable, now, or in the future, to the generation of electrical energy by the Facility and its displacement of conventional energy generation. Future Environmental Attributes do not include investment tax credits or production tax credits associated with the construction or operation of the Facility, or other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation.
“Gains” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner, which economic benefit (if any) shall be deemed the gain (if any) to such Non-Defaulting Party represented by, (a) if Buyer is the Non-Defaulting Party, the positive difference between the present value of the payments required to be made during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made under any transaction(s) replacing this Agreement and (b) if Seller is the Non-Defaulting Party, the positive difference between the present value of the payments that would be required to be made under any transaction(s) replacing this Agreement and the present value of the payments required to be made during the remaining Contract Term of this Agreement. Factors used in determining the economic benefit to a Non-Defaulting Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including, without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term, and include the value of Green Attributes and Capacity Attributes.
“Generating Facility” means the solar photovoltaic generating facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and Item 5
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12 associated facilities and equipment required to deliver Generating Facility Energy to the Delivery Point; provided, that the “Generating Facility” does not include the Storage Facility or the Shared Facilities.
“Generating Facility Energy” means, in any Settlement Interval or Settlement Period, the energy generated by the Generating Facility, net of Electrical Losses and Station Use, as measured by the Generating Facility Meter, which shall be adjusted to the extent necessary to account for Electrical Losses and Station Use, in accordance with the requirements of CAISO and Prudent Operating Practices, including WREGIS.
“Generating Facility Meter” means the CAISO-approved bi-directional revenue quality meter or meters (with a 0.3 accuracy class), along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Generating Facility Energy generated by the Generating Facility for the purpose of invoicing in accordance with Section 8.1.
For clarity, the Facility may contain multiple measurement devices that will make up the Generating Facility Meter, and, unless otherwise indicated, references to the Generating Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO and CPUC; provided, however, that “Governmental Authority” shall not in any event include any Party. “Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation of electricity from the Generating Facility and its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Facility Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) Tax Benefits associated with the construction or operation of the Facility and other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, or any Renewable Energy Incentives, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Facility for compliance with local, state, or federal operating or air Item 5
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13 quality permits. Green Attributes under the preceding definition are limited to Green Attributes that exist under applicable Law as of the Effective Date. “Green Tag Reporting Rights” means the right of a purchaser of renewable energy to report ownership of accumulated “green tags” in compliance with and to the extent permitted by applicable Law and include, without limitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS Operating Rules. “Grid Energy” means the Energy from the CAISO Grid delivered to the Storage Facility Meter pursuant to a Charging Notice or in connection with a Storage Capacity Test. “Guaranteed Capacity” means the amount of generating capacity of the Generating Facility, as measured in MW at the Delivery Point, in the amount set forth on the Cover Sheet, as may be adjusted pursuant to Exhibit B, Section 5.
“Guaranteed Commercial Operation Date” means the Expected Commercial Operation Date, subject to extensions on a day-for-day basis under the Development Cure Period. “Guaranteed Construction Start Date” means the Expected Construction Start Date, as such date may be extended by the Development Cure Period. “Guaranteed Efficiency Rate” means the guaranteed Efficiency Rate of the Storage Facility throughout the Delivery Term, as set forth on the Cover Sheet. “Guaranteed Energy Production” means an amount of Generating Facility Energy, as measured in MWh, equal to
“Guaranteed RA Amount” means an amount equal to the Qualifying Capacity of an energy storage facility with an installed capacity equal to the Storage Contract Capacity based on four (4) hour discharge for each hour of the relevant day in the applicable Showing Month, less an amount equal to the Administrative NQC Reduction and any Deemed Delivered RA, if any, for the applicable Showing Month.
“Guaranteed Storage Availability” has the meaning set forth in Section 4.8(a). “Guarantor” means, with respect to Seller, any Person that (a) Buyer does not already have any material credit exposure to under any other agreements, guarantees, or other arrangements at the time its Guaranty is issued, (b) is an Affiliate of Seller, or other third party reasonably acceptable to Buyer, (c) has a Credit Rating of BBB- or better from S&P or a Credit Rating of Baa3 or better from Moody’s or, has a tangible net worth of at least (d) is incorporated or organized in a jurisdiction of the United States and is in good standing in such jurisdiction, and (e) executes and delivers a Guaranty for the benefit of Buyer.
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14 “Guaranty” means a guaranty from a Guarantor provided for the benefit of Buyer substantially in the form attached as Exhibit L or in such other form as is reasonably agreed to by the Parties.
“Imbalance Energy” means the amount of Energy, in any given Settlement Period or Settlement Interval, by which the amount of Facility Energy deviates from the amount of Scheduled Energy.
“Indemnifiable Loss(es)” has the meaning set forth in Section 16.1. “Indemnified Party” has the meaning set forth in Section 16.1. “Indemnifying Party” has the meaning set forth in Section 16.1. “Independent Evaluator” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer.
“Initial Synchronization” means the initial delivery of Generating Facility Energy or Discharging Energy, as applicable, to the Delivery Point. “Installed Battery Capacity” means the maximum dependable operating capability of the Storage Facility to discharge electric energy, as measured in MW at the Storage Facility Meter, that achieves Commercial Operation, adjusted for Ambient Conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I-2 hereto. “Installed PV Capacity” means the actual generating capacity of the Generating Facility, as measured in MW at the Delivery Point, that achieves Commercial Operation, adjusted for Ambient Conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I-1 hereto. “Interconnection Agreement” means the interconnection agreement entered into by Seller or an Affiliate of Seller pursuant to which the Facility will (a) be interconnected with the Transmission System and (b) will have capacity rights equal or greater than the amount of the Contract Capacity, and pursuant to which Seller’s Interconnection Facilities and any other Interconnection Facilities will be constructed, operated and maintained during the Contract Term. “Interconnection Conditions” mean (a) the completion of the 500 kV Harlan switching station; (b) the installation of two (2) series capacitors at the Harlan switching station; and (c) the installation of a 500 kV shunt reactor at the Midway substation. “Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.2. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff.
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15 “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “Investment Grade Credit Rating” means a Credit Rating of BBB- or higher by S&P or Fitch or Baa3 or higher by Moody’s.
“ITC” means the investment tax credit established pursuant to Section 48 of the Code. “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 [SVCE:
March 31, 2016][3CE: February 21, 2017],
5 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, all the tariffs (including the CAISO Tariff), and the WREGIS Operating Rules. “Lender” means, collectively, any Person (i) providing senior or subordinated development, construction, interim, letter of credit, back leverage or long-term debt, working capital, equity, cash equity or tax equity financing or refinancing of any of the foregoing or in connection with the development, construction, purchase, installation, operation, maintenance, repair, replacement or improvement of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt or portfolio financing), equity (including cash equity or tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent or similar representative 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, (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility, or (iv) acting as issuing bank for any Letter(s) of Credit issued pursuant hereto or letters of credit in connection with the Facility.
“Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank, or a foreign bank reasonably acceptable to Buyer with a U.S. branch, with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K, or as otherwise reasonably acceptable to Buyer. “Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer licensed in the State of California. “Local Capacity Area Resources” has the meaning set forth in the CAISO Tariff. 5 NTD: To be modified when form is split for each CCA.
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16 “Local Capacity Area Resource Adequacy Benefits” means the attributes, however defined, of a Local Capacity Area Resource that can be used to satisfy the local resource adequacy obligations of a load serving entity, expressed in kW.
“Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner.
Factors used in determining economic loss to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term and must include the value of Green Attributes, Capacity Attributes, and Renewable Energy Incentives. “Meter Service Agreement” means “Meter Service Agreement for Scheduling Coordinators” as defined in the CAISO Tariff.
“Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet. “Monthly Delivery Forecast” means the monthly forecast delivered by Seller pursuant to Section 4.3(b).
“Monthly Storage Availability” has the meaning set forth in Exhibit P. “Moody’s” means Moody’s Investors Service, Inc.
“MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Negative LMP” means, in any Settlement Period or Settlement Interval, the LMP in the Real-Time Market at the Facility’s PNode is less than Zero Dollars ($0). “NERC” means the North American Electric Reliability Corporation or any successor entity performing similar functions.
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17 “Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Network Upgrades” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or email. “Notice of Claim” has the meaning set forth in Section 16.2(a). “NP-15” means the Existing Zone Generation Trading Hub for Existing Zone region NP15 as set forth in the CAISO Tariff.
“On-Peak Hour” means any hour from hour-ending 0700 to hour-ending 2200 (i.e., 6:00 AM to 9:59 PM) on Monday through Saturday, Pacific Prevailing Time, excluding North American Electric Reliability Council (NERC) holidays.
“Operating Procedures” or “Operating Restrictions” means those rules, requirements, and procedures set forth on Exhibit Q.
“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 transmission or distribution lines and associated facilities 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.
“Party” or “Parties” has the meaning set forth in the Preamble. “Performance Measurement Period” means
“Performance Security” means (i) cash, (ii) a Letter of Credit, or (iii) a Guaranty, in the amount set forth on the Cover Sheet.
“Permitted Transferee”means
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18 “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.
“Planned Outage” has the meaning set forth in Section 4.6(a). “PNode” has the meaning set forth in the CAISO Tariff.
“Portfolio Content Category 1” or “PCC1” means any Renewable Energy Credit 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. “Progress Report” means a progress report including the items set forth in Exhibit E. “Property Tax Exclusion” means the exclusion from the definition of “newly constructed” as used in subdivision (a) of Section 2 of Article XIIIA of the California Constitution for “active solar energy systems” codified under Section 73 of the California Revenue and Taxation Code, and set to expire on January 1, 2027, as in effect as of [the Effective Date], but not including any successor statute, other statute that is similar to such exclusion, or any changes to such Section 73 of the California Revenue and Taxation Code, except with respect to its sunset date set forth in Section 73(i) of the California Revenue and Taxation Code. “Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric utility and independent power producer industry during the relevant time period with respect to grid-interconnected, utility-scale generating facilities with integrated storage in the Western United States, or (b) any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Operating Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale generating facilities with integrated storage in the Western United States. Prudent Operating Practice includes compliance with applicable Laws, applicable reliability criteria, and the criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations. “PTC” means the production tax credit established pursuant to Section 45 of the Code.
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19 “Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month as calculated in accordance with Section 3.8(b). “RA Guarantee Date” means
“RA Shortfall” has the meaning set forth in Section 3.8(b). “RA Shortfall Month” means the applicable calendar month following the RA Guarantee Date during which there is an RA Shortfall Amount.
“Real-Time Forecast” means any Notice of any change to the Available Generating Capacity, Storage Capacity, or hourly expected Generating Facility Energy delivered by or on behalf of Seller pursuant to Section 4.3(d).
“Real-Time Market” has the meaning set forth in the CAISO Tariff. “Receiving Party” has the meaning set forth in Section 18.2. “Recurring Certificate Transfers” has the meaning set forth in Section 4.10(a). “Remedial Action Plan” has the meaning set forth in Section 2.4. “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 (including cash grants) associated with the construction, ownership, or production of electricity from the Facility (including credits under Sections 38, 45, 46 and 48 of the Code); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the Facility; 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.
“Renewable Rate” has the meaning set forth on the Cover Sheet. “Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Storage Facility with respect to the applicable RA Shortfall Month, including, if applicable for such month, Flexible Resource Adequacy Benefits associated with the Storage Facility. In addition, if the CPUC requires Replacement RA to be provided by an incremental resource for purposes of CPUC Decision 21-06-035 in order for Buyer’s purchase of the Product to comply with the requirements of CPUC Decision 21-06-035, then the Replacement RA must also be provided by an incremental resource, including any sub-category attributes of D.21-06-035, to the extent required, if such sub-categories are contracted for under the Agreement.
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20 “Replacement Green Attributes” means Renewable Energy Credits of the same Portfolio Content Category (i.e., PCC1) as the Green Attributes portion of the Product and of the same year of production as the Renewable Energy Credits that would have been generated by the Generating Facility.
“Resource Adequacy Benefits” means the rights and privileges attached to the Capacity Attributes available from the Storage Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings (subject to the Operating Restrictions set forth in Exhibit Q), and shall include System Resource Adequacy Benefits, Flexible Resource Adequacy Benefits and Local Capacity Area Resource Adequacy Benefits associated with the Storage Facility.
“Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, 15-06-063, 16-06-045, 17-06-027, 18-06-030, 18- 06-031, 19-02-022, 19-06-026, 19-10-021, 20-01-004, 20-03-016, 20-06-002, 20-06-028, 20-12- 006 and any other existing or subsequent decisions, resolutions, or rulings related to resource adequacy, including, without limitation, the CPUC Filing Guide, in each case as may be amended from time to time by the CPUC, and any other existing or subsequent ruling or decision, or any other resource adequacy Law, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Contract Term. “Resource ID” 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.).
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” and “Scheduling” have a corollary meaning.
“Scheduled Energy” means the Facility Energy that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), or any other financially binding Schedule, market instruction or dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff. “Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator” of the CAISO Tariff, as amended from time to time. Consistent with Exhibit D, Buyer or an agent of Buyer will be the Scheduling Coordinator for the Facility as set forth in the Cover Sheet. “Scheduling Coordinator Metered Entity” or “SCME” has the meaning set forth in the CAISO Tariff.
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21 “Security Interest” has the meaning set forth in Section 8.9. “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 4.10(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 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. “Settlement Quality Meter Data” or “SQMD” has the meaning set forth in the CAISO Tariff.
“Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary to enable delivery of energy from the Facility (which is excluded from Shared Facilities) to the point of interconnection, including the Interconnection Agreement itself, that are used in common with third parties.
“Shared Facilities Agreements” has the meaning set forth in Section 6.3. “Showing Month” means the calendar month of the Delivery Term that is the subject of the Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly Compliance Showing made in June is for the Showing Month of August.
“Site” means the real property on which the Facility is or will be located, as further described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer. “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.
“SQMD Plan” has the meaning set forth in the CAISO Tariff. “Station Use” means:
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22 (a) the Energy produced or discharged by the Facility or consumed from the CAISO Grid that is used within the Facility to power the lights, motors, AC temperature control systems, control systems and other electrical loads, that are necessary for operation of the Facility; and (b) the Energy produced or discharged by the Facility or consumed from the CAISO Grid that is consumed within the Facility’s electric energy distribution system as losses; except, in the case of (a) or (b) above, during periods in which the Storage Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice. “Storage Capacity” means the maximum dependable operating capability of the Storage Facility to discharge electric energy that can be sustained for four (4) consecutive hours (in MW). “Storage Capacity Test” or “SCT” means any test or retest of the capacity of the Storage Facility and/or Efficiency Rate conducted in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O.
“Storage Contract Capacity” means the Storage Capacity (in MW) of the Storage Facility initially equal to the amount set forth on the Cover Sheet, as may be adjusted pursuant to (i) Exhibit B, Section 5 or (ii) Section 4.9 and Exhibit O to reflect the results of the most recently performed Storage Capacity Test.
“Storage Contract Output” means the product of the Storage Contract Capacity multiplied by four (4) hours, represented in MWh, initially equal to the amount set forth on the Cover Sheet.
“Storage Facility” means the energy storage facility described on the Cover Sheet and in Exhibit A (including the operational requirements of the energy storage facility), located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Storage Product (but excluding any Shared Facilities), and as such storage facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement. “Storage Facility Meter” means the CAISO-approved bi-directional revenue quality meter (with a 0.3 accuracy class), along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Storage Facility Metering Point and the amount of Discharging Energy discharged from the Storage Facility at the Storage Facility Metering Point to the Delivery Point for the purpose of invoicing in accordance with Section 8.1. For clarity, the Facility may contain multiple measurement devices that will make up the Storage Facility Meter, and, unless otherwise indicated, references to the Storage Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together. “Storage Facility Metering Point” means the location of the Storage Facility Meter at the Site, which is identified on Exhibit R.
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23 “Storage Product” means (a) the Discharging Energy, (b) the Capacity Attributes, if any, (c) Storage Capacity, and (d) Ancillary Services (as defined in the CAISO Tariff), if any, in each case arising from or relating to the Storage Facility.
“Storage Rate” has the meaning set forth on the Cover Sheet. “Stored Energy Level” means, at a particular time, the amount of electric energy in the Storage Facility available to be discharged as Discharging Energy, expressed in MWh. “Supplementary Storage Capacity Test Protocol” has the meaning set forth in Exhibit O.
“Supply Plan” has the meaning set forth in the CAISO Tariff. “System Emergency” means any condition that requires, as determined and declared by CAISO or the PTO, 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) preserve Transmission System reliability. “System Resource Adequacy Benefits” means the attributes, however defined, of a resource that can be used to satisfy the resource adequacy obligations of a load serving entity, other than Flexible Resource Adequacy Benefits and Local Capacity Area Resource Adequacy Benefits, expressed in kW.
“Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Tax Benefits” means any state, local and/or federal tax benefit or incentive, including energy credits determined under Section 45 or 48 of the Internal Revenue Code of 1986, as amended, investment tax credits, production tax credits, depreciation, amortization, deduction, expense, exemption, preferential rate, and/or other tax benefit or incentive associated with the production of renewable energy and/or the operation of, construction, investments in or ownership of the Facility (including any cash payment or grant).
“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 the Generating Facility Energy delivered commencing on the first date that the PTO informs Seller in writing that Seller has conditional or temporary permission to parallel and ending upon the occurrence of the Commercial Operation Date.
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24 “Test Energy Rate” has the meaning set forth in Section 3.6.
“Transmission Provider” means the CAISO, as applicable. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Point.
“Ultimate Parent” means Intersect Power, LLC, a Delaware limited liability company. “Variable Energy Resource” or “VER” has the meaning set forth in the CAISO Tariff. “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 4.10(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; Item 5
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25 (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Article, Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement means 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” (and its variants) 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) 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
(l) 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 Item 5
Attachment 1
26 Term”); provided, however, that subject to Buyer’s obligations in Section 3.6, Buyer’s obligations to pay for or accept any Product are subject to Seller’s completion of the conditions precedent pursuant to Section 2.2.
(b) 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 and all indemnity and audit rights shall remain in full force and effect for three (3) years following the termination of this Agreement. (c) Buyer may provide notice (the “Extension Notice”) to Seller no later than twelve (12) months prior to the expiration of the Delivery Term of its intent to extend the Delivery Term for an additional five (5) Contract Years (the “Extended Delivery Term”). Following Seller’s receipt of the Extension Notice, Buyer and Seller shall enter into good faith negotiations on the price and other terms that will apply to any Extended Delivery Term; provided, that the Renewable Rate and the Storage Rate for the Extended Delivery Term shall in no event be less than the applicable then-current fair market values. If the Parties have not reached agreement on such price and other terms within days of Seller’s receipt of the Extension Notice, then neither Party shall have any further obligation to negotiate for an Extended Delivery Term.
2.2 Conditions Precedent to Delivery Term. The Delivery Term shall not commence until Seller completes each of the following conditions:
(a) Seller has delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H, (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I-1 setting forth the Installed PV Capacity on the Commercial Operation Date, and (iii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I-2 setting forth the Installed Battery Capacity on the Commercial Operation Date;
(b) A Participating Generator Agreement and a Meter Service Agreement between Seller and CAISO 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 commencement of operation of the Facility have been obtained (or if not obtained, applied for and reasonably expected to be received within days) and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect;
(e) Seller has received CEC Precertification of the Generating Facility (and reasonably expects to receive final CEC Certification and Verification for the Generating Facility in no more than days from the Commercial Operation Date); Item 5
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27 (f) Seller (with the reasonable participation of Buyer) shall have completed or caused to be completed (or, for items normally occurring after commercial operation of the Generating Facility, expects to timely complete) all applicable WREGIS registration requirements that are reasonably capable of being completed prior to the Commercial Operation Date under WREGIS rules, including (as applicable) the completion and submittal of all applicable registration forms and supporting documentation, which may include applicable interconnection agreements, informational surveys related to the Generating Facility, QRE service agreement applications, and other appropriate documentation required to effect Generating Facility registration with WREGIS and to enable Renewable Energy Credit transfers related to the Generating Facility within the WREGIS system;
(g) Seller has provided Buyer with a copy of written notice from the CAISO supporting Commercial Operation, in accordance with the CAISO Tariff; (h) Seller has provided Buyer with a copy of written notice from the CAISO that the CAISO has approved the Scheduling Coordinator Metering Entity’s SQMD Plan; (i) the Storage Facility has achieved Full Capacity Deliverability Status or Interim Deliverability Status and Seller has provided Buyer with a copy of written notice from the CAISO that the Storage Facility has achieved Full Capacity Deliverability Status or Interim Deliverability Status;
(j) Seller has provided copies of the following documentation required to be provided as a condition precedent to commencement of the Delivery Term: proof of insurance required pursuant to this Agreement and proof of Seller’s satisfaction of the prevailing wage and other workforce requirements set forth in Section 13.4 and in Exhibit T; (k) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8; and
(l) Seller has paid Buyer all amounts due and owing under this Agreement as of the Commercial Operation Date, if any, including Construction Delay Damages and Commercial Operation Delay Damages.
2.3 Development; Construction; Progress Reports. Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Expected Construction Start Date, and (ii) each calendar month from the first calendar month following the Expected Construction Start Date until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report and shall be available to hold to regularly scheduled meetings between representatives of Buyer and Seller to review such reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit E. Seller shall also provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions such that Seller shall not be required to provide any confidential, proprietary or commercially sensitive information) directly related to the achievement of Milestones within ten (10) Business Days of receipt of such request by Seller. For the avoidance of doubt, as between Seller and Buyer, Seller is solely responsible for the design and construction of the Facility, including the location Item 5
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28 of the Site, obtaining all permits and approvals to build the Facility, the Facility layout, and the selection and procurement of the equipment comprising the Facility.
2.4 Remedial Action Plan. If Seller (a) misses the Guaranteed Construction Start Date, (b) misses three (3) or more Milestones (other than the Guaranteed Construction Start Date), or (c) misses any one (1) Milestone (other than the Guaranteed Construction Start Date) by more than days, Seller shall submit to Buyer, within ten (10) Business Days of either the Guaranteed Construction Start Date or third such missed Milestone, as applicable, or the end of the day period for any single uncompleted Milestone if applicable, 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, if known (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor), Seller’s detailed description of its proposed course of action to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date; provided, that delivery of any Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent Milestones and to achieve the Guaranteed Commercial Operation Date in accordance with the terms of this Agreement. Subject to the provisions of Exhibit B, so long as Seller complies with its obligations under this Section 2.4, Seller shall not be considered in default of its obligations under this Agreement solely as a result of missing any Milestone.
2.5 CPUC Mid-Term Reliability Requirements. The Parties acknowledge that Buyer intends to use this Agreement to comply with mandatory procurement obligations for incremental capacity pursuant to CPUC Decision 21-06-035, 23-02-040, and 24-02-040. Seller covenants that, subject to the terms of this Agreement:
(a) The Facility shall be incremental to the CPUC’s baseline generator list identified in CPUC Decision 21-06-035 as such list may be modified from time to time by the CPUC;
(b) The Product shall include the exclusive right to claim the Capacity Attributes of the Facility as an incremental resource, including for purposes of CPUC Decision 21- 06-035;
(c) Seller has not and will not sell, assign or transfer the right to claim procurement of the Capacity Attributes of the Facility as an incremental resource, including for purposes of CPUC Decision 21-06-035, to any other person or entity; and (d) Seller, upon reasonable request of Buyer, will provide additional information and documentation to Buyer to assist Buyer to meet compliance with regulatory agency requests and requirements that the Facility meets the procurement mandates, including as set forth in CPUC Decision 21-06-035. Seller hereby authorizes Buyer to submit this and similar documentation to any requesting regulatory agency as may be required in connection with satisfying Buyer’s compliance obligations for the Facility under the Agreement, provided that Buyer shall use reasonable efforts to obtain confidential treatment by the requesting regulatory agency for all information that qualifies as Confidential Information under the Agreement and is Item 5
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29 eligible for confidential or protective treatment under the requesting regulatory agency’s rules, orders, decisions on confidential or protected information.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Seller shall supply and deliver to Buyer the Product produced by or associated with the Facility, and Buyer will purchase the Product produced by or associated with the Facility at the Contract Price and in accordance with Exhibit C; provided, however, that prior to the occurrence of the Commercial Operation Date, Buyer shall pay Seller for Product at the Test Energy Rate. At its sole discretion, Buyer may during the Delivery Term re-sell all or a portion of the Product, after title and risk of loss thereto has been transferred to Buyer, provided that no such re-sale or use shall relieve Buyer of any obligations hereunder or modify any of Seller’s obligations hereunder, and provided further that in no event shall Seller make, or be deemed to make, any retail sale under this Agreement. 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 in the market, and retain and receive any and all related revenues. Subject to Buyer’s obligation to purchase the Product in accordance with this Section 3.1 and Exhibit C, Buyer has no obligation to purchase from Seller any Generating Facility Energy that cannot be delivered to the Delivery Point as a result of an outage of the Facility, a Force Majeure Event, or a Curtailment Order.
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30 3.2 Sale of Green Attributes. During the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase and receive from Seller, all Green Attributes attributable to the Generating Facility Energy generated and/or delivered by the Generating Facility.
3.3 Imbalance Energy. Buyer and Seller recognize that in any given Settlement Period there may be Imbalance Energy. To the extent there is any Imbalance Energy, any payments or charges related to such Imbalance Energy shall be for the account of Buyer, subject to Exhibit D.
3.4 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.
3.5 Future Environmental Attributes.
(a) The Parties acknowledge and agree that as of the Effective Date, environmental attributes sold under this Agreement are restricted to Green Attributes; however, Future Environmental Attributes may be created by a Governmental Authority through Laws enacted after the Effective Date. Subject to the final sentence of this Section 3.5(a) and Sections 3.5(b) and 3.11, in such event, Buyer shall bear all costs associated with the transfer, qualification, verification, registration and ongoing compliance for 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 such Future Environmental Attributes, the Parties shall determine the necessary actions and additional costs associated with such Future Environmental Attributes. Seller shall have no obligation to bear any costs, losses or liabilities, or alter the Facility, the operation of the Facility, or the Operating Restrictions, 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, losses, and liabilities associated with or arising therefrom, if any, on terms reasonably acceptable to Seller.
(b) If Buyer elects to receive Future Environmental Attributes pursuant to Section 3.5(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 to Buyer, as set forth above (in any event subject to Section 3.11); provided, that the Parties acknowledge and agree that such terms are not intended to alter the other material terms of this Agreement.
3.6 Test Energy. If and to the extent the Facility generates Test Energy, Seller shall sell and Buyer shall purchase from Seller all Test Energy and any associated Products of the Facility on an as-available basis. As compensation for such Test Energy and associated Product, For the avoidance of doubt,
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31 the conditions precedent in Section 2.2 are not applicable to the Parties’ obligations under this Section 3.6.
3.7 Capacity Attributes. The Storage Facility has obtained Full Capacity Deliverability Status or Interim Deliverability Status as of the Effective Date. (a) Throughout the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all the Capacity Attributes from the Facility. (b) Throughout the Delivery Term, Seller shall use commercially reasonable efforts to maintain eligibility for Full Capacity Deliverability Status or Interim Deliverability Status for the Storage Facility from the CAISO and shall perform all actions necessary to ensure that the Storage Facility qualifies to provide Resource Adequacy Benefits to Seller. Throughout the Delivery Term, and subject to Section 3.11, Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits to Buyer from the Facility.
(c) For the duration of the Delivery Term and subject to Section 3.11, Seller shall take all commercially reasonable actions, including complying with all applicable registration and reporting requirements, and execute all documents or instruments necessary to enable Buyer to use all of the Capacity Attributes committed by Seller to Buyer pursuant to this Agreement.
3.8 Resource Adequacy Failure.
(a) RA Deficiency Determination. Subject to Section 3.8(b), for each RA Shortfall Month, Seller shall pay to Buyer the RA Deficiency Amount as liquidated damages or provide Replacement RA, in each case, as Buyer’s sole remedy and Seller’s sole liability for the Capacity Attributes Seller failed to convey to Buyer.
(b) RA Deficiency Amount Calculation. For each RA Shortfall Month occurring after the RA Guarantee Date, unless otherwise caused by or arising out of Force Majeure Event or RAR Change in Law, Seller shall pay to Buyer an amount (the “RA Deficiency Amount”) equal to the product of the difference, expressed in kW, of (i) the Guaranteed RA Amount, minus (ii) the Delivered RA (such difference, the “RA Shortfall”), multiplied by the Replacement Price. “Replacement Price” means (a) the price at which Buyer, acting in a commercially reasonable manner, purchases a replacement for the Resource Adequacy Benefits in a quantity up to the amount of the RA Shortfall, plus actual costs directly incurred by Buyer in purchasing such replacement Resource Adequacy Benefits or (b) if Buyer does not purchase replacement Resource Adequacy Benefits, the market price for the Resource Adequacy Benefits not purchased by Buyer in a quantity up to the amount of the RA Shortfall, multiplied by the RA Shortfal
such amount, the “Baseline RA Deficiency
Amount Cap”);
Upon request from Seller, Buyer shall provide reasonable documentation demonstrating Item 5
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32 that the Replacement Price amounts sought by Buyer from Seller were incurred or determined, as applicable, by Buyer in a commercially reasonable manner consistent with the components set forth in the immediately preceding sentence.
3.9 CEC Certification and Verification. Subject to Section 3.11, 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 Generating 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 shall obtain Opt-In Certification (AB 205) prior to Construction Start. Subject to Section 3.11, Seller shall obtain and maintain throughout the remainder of the Delivery Term the CEC Certification and Verification, which deadline will be extended on a day-for-day basis if there is a delay in CEC Certification and Verification and that delay is caused by any reason other than an act or omission of Seller. 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 Generating Facility.
3.10 CPUC Non-Modifiable Standard Terms and Conditions (STC). (a) Eligibility. Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource (“ERR”) as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project’s output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6]. (b) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the Renewable Energy Credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1]. (c) Tracking of RECs in WREGIS. Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System will be taken prior to the first delivery under the contract. [STC-REC-2].
(d) With respect to the immediately preceding paragraphs, (i) the reference in Section 3.10(c) to “first delivery under the contract” has the same meaning as “first delivery of Facility Energy under this Agreement”, (ii) the references in Section 3.10(a) to “Project” have the same meaning as “Generating Facility”, (iii) the reference in Section 3.10(a)(ii) to “the Project’s output” has the same meaning as “Generating Facility Energy”, (iv) as used in Section 3.10(a), Item 5
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33 “certified by the CEC” means the Generating Facility has received CEC Certification and Verification and (v) each reference in the last sentences of Section 3.10(a) and Section 3.10(b) to “commercially reasonable efforts” means efforts consistent with and subject to Section 3.11 below.
3.11 Change in Law.
(a) The Parties acknowledge that an essential purpose of this Agreement to provide renewable generation that meets the requirements of the California Renewables Portfolio Standard and Capacity Attributes to meet Resource Adequacy Requirements and mid-term reliability requirements, and that Governmental Authorities, including the CEC, CPUC, CAISO and WREGIS, may undertake actions to implement a Change in Law. Seller agrees to use commercially reasonable efforts subject to this Section 3.11 to cooperate with respect to any future requested changes, modifications, or amendments to this Agreement needed to satisfy requirements of Governmental Authorities associated with a Change in Law to maximize benefits to Buyer, including (i) the Product’s eligibility to qualify for or maintain Resource Adequacy Benefits; (ii) modification of the description of Green Attributes or Capacity Attributes as may be required, including updating the Agreement to reflect any mandatory contractual language required by Governmental Authorities; (iii) submission of any reports, data, or other information required by Governmental Authorities; or (iv) all other reasonable actions that may be required to assure that this Agreement or the Generating Facility is eligible as an Eligible Renewable Energy Resource under the California Renewables Portfolio Standard; provided that Seller shall have no obligation to modify this Agreement, or take other actions not required under this Agreement, if such modifications or actions would materially adversely affect, or could reasonably be expected to have or result in a material adverse effect on, any of Seller’s rights, benefits, risks and/or obligations under this Agreement.
(b) If a Change in Law occurring after the Effective Date has increased Seller’s known or reasonably expected costs and expenses to comply with Seller’s obligations under this Agreement with respect to (i) Seller’s obligations under Section 3.11(a), or (ii) obtaining, maintaining, conveying or effectuating Buyer’s use of (as applicable) any Product pursuant to provisions of this Agreement relating to Future Environmental Attributes, Capacity Attributes, CEC Certification and Verification, RPS, CAISO Tariff requirements, Seller Equipment Required for Curtailment Instruction Communications, or WREGIS, including costs, fees, taxes, or charges imposed in connection with the foregoing (any such action required to be taken by Seller to comply with such Change in Law, a “Compliance Action”), then the Parties agree that the maximum aggregate amount of costs and expenses Seller shall be required to bear during the Delivery Term to comply with all such Compliance Actions shall be capped at per MW of Contract Capacity in aggregate over the Delivery Term; provided, that the maximum aggregate amount of costs and expenses Seller shall be required to bear for Compliance Actions (i) solely related to the Storage Facility, shall be capped at per MW of Storage Contract Capacity and (ii) solely related to the Generating Facility, shall be capped at per MW of Guaranteed Capacity (in each case, the
“Compliance Expenditure Cap”). Seller’s (i) internal administrative costs (including but not limited to wages) associated with obtaining, maintaining, conveying or effectuating Buyer’s use of (as applicable) any Product, and (ii) property taxes of general commercial applicability (not directed primarily at electricity generation resources or battery storage facilities) or increases thereof, are excluded from the definition of Compliance Action. For clarity, Compliance Actions Item 5
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34 shall not require Seller to install any additional MW or MWh of energy storage or generation capacity, or otherwise alter the physical design or configuration of the Facility in any material manner. Notwithstanding anything to the contrary hereunder, following a Change in Law and continuing for the period of time during which Seller is actively and diligently working to complete any Compliance Actions, to the extent such Change in Law and resulting work results in a reduction in capacity, efficiency and/or availability of the Storage Facility or production from the Generating Facility for a period of time, despite Seller’s use of commercially reasonable efforts to avoid any such reduction in capacity, efficiency, availability and/or production, such reduced capacity, efficiency, availability and/or production shall be excluded and shall not be counted against Seller for purposes of calculating the Monthly Storage Availability, Efficiency Rate, Storage Capacity and/or Adjusted Energy Production. The Parties acknowledge and agree that Seller shall not be required to take any Compliance Actions or incur any costs or expenses in connection with any Administrative NQC Reduction and the Guaranteed RA Amount shall be reduced by any Administrative NQC Reduction regardless of whether Seller has taken any such actions or incurred any such costs or expenses.
(c) If Seller reasonably anticipates the need to incur costs and expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated costs and expenses. (d) Buyer will have sixty (60) Days to evaluate such Notice (during which time period Seller shall not be obligated to take any Compliance Actions described in such Notice) and shall, within such time, either (1) agree to reimburse Seller for all of the costs and expenses to take the Compliance Action that exceed the Compliance Expenditure Cap (such costs and expenses (including lost production, if any), the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions, provided however that if Buyer waives Seller’s obligations to take such Compliance Actions, then Seller shall have the right to terminate this Agreement if such Compliance Actions or changes, modifications, payments, levies, assessments, or amendments are required to be made, paid, collected, or satisfied by Seller to satisfy requirements of Governmental Authorities associated with changes in Law. Any such termination shall be without further liability for either Party, other than payment of amounts due and/or owing, and except for any terms, covenants and conditions that by their own terms survive termination of this Agreement.
(e) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, Seller shall complete the Compliance Actions covered by such Accepted Compliance Costs as agreed upon by the Parties, provided that under no circumstances shall Seller be obligated to incur costs and expenses in excess of the Accepted Compliance Costs. Buyer shall pay Seller for the satisfactory completion of the Compliance Actions, not to exceed the Accepted Compliance Costs within thirty (30) days from the time that Buyer receives an invoice and documentation of such costs from Seller.
(f) If (x) Buyer fails to respond to such Notice within the time required by Section 3.11(d) or (y) does not pay, or refuses to pay, the Compliance Costs in excess of the Compliance Expenditure Cap, or (z) if it is not possible for Seller to achieve compliance with a Change in Law through the payment or incurrence of costs, then in each case (i) Seller shall be excused from the corresponding Compliance Actions under this Agreement and Seller shall not be Item 5
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35 deemed in breach or default hereunder as a result of or arising out of such Compliance Actions, and (ii) Buyer shall continue to pay Seller under this Agreement for the remainder of the Contract Term without any damages or reduction in payments, as if any such Compliance Actions were taken.
3.12 Bridge Capacity. Notwithstanding any provision in this Agreement to the contrary, if the Commercial Operation Date has not occurred by June 1, 2028, Seller shall either, at Seller’s option (a) use commercially reasonable efforts to provide Buyer with Bridge RA Capacity in the amount of the Storage Contract Quantity for each Showing Month until the first Showing Month of the Delivery Term or (b) reimburse Buyer for the Bridge RA Replacement Price of such Bridge RA Capacity, except that (i) the amount of Commercial Operation Delay Damages that would otherwise be owed by Seller during any such period of delivery of Bridge RA Capacity shall be reduced on a pro rata basis to reflect the quantity (in MW) of Bridge RA Capacity delivered to Buyer, and (ii) if the total cost of such Bridge RA Capacity for a Showing Month, including the costs and expenses incurred by Seller to (x) procure such Bridge RA Capacity or (y) reimburse Buyer for the Bridge RA Replacement Price of such Bridge RA Capacity, is greater than the amount of Commercial Operation Delay Damages that would have otherwise been paid by Seller during such time period, Buyer will credit or reimburse Seller for all reasonable and documented out of pocket costs in excess of such amount. To the extent that Seller exercises its option to provide the Bridge RA Capacity from an import resource, the Parties shall reasonably cooperate to ensure that there is sufficient maximum import capability (MIC) allocation for the associated Bridge RA Capacity and Seller shall deliver the Bridge RA Capacity in accordance with the delivery provisions to be set forth in the Agreement.
As used above:
“Bridge RA Capacity” means capacity that complies with the applicable requirements of D.21-06-035 and D.23-02-040, and any other relevant existing or subsequent decision, including compliance with the Resource Adequacy Requirements in effect as of the Effective Date.
“Bridge RA Replacement Price” means (a) the price at which Buyer, acting in a commercially reasonable manner, purchases a replacement for the Bridge RA Capacity in the amount of the Storage Contract Quantity not delivered by Seller, plus costs reasonably incurred by Buyer in purchasing such replacement Bridge RA Capacity, or at Buyer’s option, (b) the market price for such replacement Bridge RA Capacity as determined by Buyer in a commercially reasonable manner; provided, however, Buyer shall not be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Seller’s liability.
Upon request from Seller, Buyer shall provide reasonable documentation demonstrating that the Bridge RA Replacement Price amounts sought by Buyer from Seller were incurred or determined, as applicable, by Buyer in a commercially reasonable manner consistent with the components set forth in the immediately preceding sentence.
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36 ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery.
(a) Energy. Subject to the provisions of this Agreement, commencing on the Commercial Operation Date through the end of the Contract Term, Seller shall supply and deliver the Product to Buyer at the Delivery Point, and Buyer shall take delivery of the Product at the Delivery Point in accordance with the terms of this Agreement. Except as otherwise provided herein, Seller will be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Facility Energy to the Delivery Point, including without limitation, Station Use, Electrical Losses, and any operation and maintenance charges imposed by the Transmission Provider directly relating to the Facility’s operations. Buyer shall be responsible for all costs, charges and penalties, if any, imposed in connection with the delivery of the Charging Energy to the Delivery Point and Facility Energy at and after the Delivery Point, including without limitation transmission costs and transmission line losses and imbalance charges. Notwithstanding any of the foregoing to the contrary, Buyer shall assume all liability and reimburse Seller for any and all CAISO charges and penalties incurred by Seller as a result of Buyer’s actions or failures to comply with its obligations under this Agreement, including those resulting from a Buyer Curtailment Period. The Facility Energy will be scheduled to the CAISO by Buyer (or Buyer’s designated Scheduling Coordinator) in accordance with Exhibit D and the Operating Restrictions. (b) Green Attributes. All Green Attributes associated with the Generating Facility Energy during the Delivery Term are exclusively dedicated to and will be conveyed to Buyer. Seller represents and warrants that Seller holds the rights to all Green Attributes from the Generating 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 Generating Facility.
4.2 Title and Risk of Loss.
(a) Energy. Title to and risk of loss related to the Facility Energy, shall pass and transfer from Seller to Buyer at the Delivery Point. Seller warrants that all Product delivered to Buyer is free and clear of all liens, security interests, claims and encumbrances of any kind. (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 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 accurate 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 Practices. (a) 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 beginning of each calendar year for every subsequent Contract Year during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of each month’s average-day expected Item 5
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37 Generating Facility Energy, by hour, for the following calendar year in a form substantially similar to the table found in Exhibit F-1 (“Form of Average Expected Energy Report”), or as reasonably requested by Buyer.
(b) Monthly Forecast of Energy and Available Generating Capacity. No less than thirty (30) days before the Commercial Operation Date, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of the hourly expected Energy, Available Generating Capacity and Storage Capacity for each day of the following month in a form substantially similar to the table found in Exhibit F-2 (“Form of Monthly Delivery Forecast”). (c) Day-Ahead Forecast. By 5:30 AM Pacific Prevailing Time on the Business Day immediately preceding the date of delivery, or as otherwise specified by Buyer consistent with Prudent Operating Practice, Seller shall provide Buyer or its Scheduling Coordinator with a non-binding forecast of the Available Generating Capacity, Storage Capacity and hourly Generating Facility Energy, in each case, for each hour of the immediately succeeding day (“Day-Ahead Forecast”). A Day-Ahead Forecast provided in a day prior to any non-Business Day(s) shall include non-binding forecasts for the immediate day, each succeeding non-Business Day and the next Business Day. Each Day-Ahead Forecast shall clearly identify, for each hour, Seller’s best estimate of the Available Generating Capacity, Storage Capacity and hourly Generating Facility Energy. These Day-Ahead Forecasts shall be sent to the Scheduling Coordinator in the form of a CSV file or other mutually agreed file format. If Seller fails to provide Buyer or its Scheduling Coordinator with a Day-Ahead Forecast as required herein for any period, then for such unscheduled delivery period only Buyer shall rely on any real-time forecast or Buyer’s best estimate based on information reasonably available to Buyer. (d) Real-Time Forecasts. During the Delivery Term, Seller shall notify the Scheduling Coordinator of any changes from the Day-Ahead Forecast of one (1) MW or more in (i) Available Generating Capacity, (ii) Storage Capacity or (iii) hourly expected Generating Facility Energy, in each case, whether due to Forced Facility Outage, Force Majeure Event or other cause, as soon as reasonably possible, but no later than one (1) hour 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 Generating Capacity, Storage Capacity, or hourly expected Generating Facility Energy changes by at least one (1) MW 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 or its Scheduling Coordinator as soon as reasonably possible. Such Real-Time Forecasts of Generating Facility Energy shall be provided by an Approved Forecast Vendor and shall contain information regarding the beginning date and time of the event resulting in the change in Available Generating Capacity, Storage Capacity, or hourly expected Generating Facility Energy, as applicable, the expected end date and time of such event, and any other information required by the CAISO or reasonably requested by Buyer. These Real-Time Forecasts shall be communicated in a method reasonably acceptable to Buyer or its Scheduling Coordinator; provided that Buyer or its Scheduling Coordinator specifies the method no later than five (5) Business Days prior to the effective date of such requirement. In the event Buyer or its Scheduling Coordinator fails to provide Notice of an acceptable method for communications under this Section 4.3(d), then Seller shall send such communications by telephone and email to Buyer or its Scheduling Coordinator.
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38 (e) Forced Facility Outages. Notwithstanding anything to the contrary herein, Seller shall use commercially reasonable efforts to notify the Scheduling Coordinator of such outage within ten (10) minutes of such Forced Facility Outage, but no later than the time periods required by the CAISO Tariff and the CAISO’s outage management rules and Seller shall keep the Scheduling Coordinator 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 the outage. (f) Forecasting Penalties. Subject to a Force Majeure Event, in the event Seller does not provide the notification required in Section 4.3(e) and Buyer incurs a loss or penalty resulting from its scheduling activities with respect to Facility Energy due to the failure of Seller to provide such notification, Seller shall be responsible for a Forecasting Penalty. Settlement of Forecasting Penalties shall occur as set forth in Article 8 of this Agreement. (g) CAISO Tariff Requirements. Subject to the limitations expressly set forth in Section 3.11, to the extent such obligations are applicable to the Facility, Seller will comply with all applicable obligations for Variable Energy Resources under the CAISO Tariff and the Eligible Intermittent Resource Protocol, including providing appropriate operational data and meteorological data, and will fully cooperate with Buyer, Buyer’s SC, and CAISO, in providing all data, information, and authorizations required thereunder.
4.4 Dispatch Down/Curtailment.
(a) General. Seller agrees to reduce the amount of Facility Energy produced by the Facility and delivered to the Delivery Point, by the amount and for the period set forth in any Curtailment Order, Buyer Curtailment Order, or notice received from CAISO in respect of a Buyer Bid Curtailment, 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) Buyer Curtailment. Buyer shall have the right to order Seller to curtail deliveries of Facility Energy through Buyer Curtailment Orders, provided that Buyer shall pay Seller for all Deemed Delivered Energy associated with a Buyer Curtailment Period at the Renewable Rate, in accordance with Exhibit C.
(c) Failure to Comply. Subject to Section 4.4(a), if Seller fails to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, then, for each MWh of Facility Energy that is delivered by the Facility to the Delivery Point in contradiction to the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, Seller shall pay Buyer for each such MWh at an amount equal to the sum of (A) + (B) + (C), where: (A) is the amount, if any, paid to Seller by Buyer for delivery of such excess MWh of Facility Energy that is delivered by the Facility to the Delivery Point in contradiction to the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order and, (B) is the sum, for all Settlement Intervals with a Negative LMP during the Buyer Curtailment Period or Curtailment Period, of the absolute value of the product of such excess MWh in each Settlement Interval and the Negative LMP for such Settlement Interval, and (C) is any penalties assessed to Buyer by the CAISO or other charges assessed by the CAISO resulting from Seller’s failure to comply with the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order.
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39 (d) Seller Equipment Required for Curtailment Instruction Communications.
Subject to the last sentence of this Section 4.4(d), Seller shall acquire, install, and maintain such facilities, communications links and other equipment, and implement such protocols and practices, as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, to operate the Facility in accordance with this Agreement or a Governmental Authority, including to implement a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order in accordance with the then-current methodology used to transmit such instructions as it may change from time to time (“Seller Equipment Required for Curtailment Instruction Communications”). If at any time during the Delivery Term Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies, Seller shall take the steps necessary to become compliant as soon as reasonably possible. Seller shall be liable pursuant to Section 4.4(c) for failure to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, during the time that Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies. For the avoidance of doubt, a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order communication via such systems and facilities shall have the same force and effect on Seller as any other form of communication. If Seller is directed by Buyer to install or implement facilities, communications links or other equipment, protocols or practices pursuant to this Section 4.4(d) that are not otherwise required for the Facility pursuant to the CAISO Tariff, then the installation or implementation of such facilities, communications links or other equipment, protocols or practices will be deemed Compliance Actions subject to the Compliance Expenditure Cap as set forth in Section 3.11.
4.5 Charging Energy Management.
(a) Upon receipt of a valid Charging Notice, but subject to Section 4.5(b), Seller shall take any and all reasonable action necessary to deliver the Charging Energy from Grid Energy to the Storage Facility in order to deliver the Storage Product in accordance with the terms of this Agreement (including the Operating Restrictions). Except as expressly set forth in this Agreement, Buyer shall be responsible for paying all CAISO costs and charges associated with delivery of Charging Energy to the Storage Facility.
(b) During the Delivery Term, Buyer will have the right to instruct Seller to charge the Storage Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Charging Notices to Seller electronically, provided, that Buyer’s right to issue Charging Notices is subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions and the provisions of Section 4.5(a). Each Charging Notice issued in accordance with this Agreement will be effective unless and until Buyer modifies such Charging Notice by providing Seller with an updated Charging Notice. (c) Seller shall not charge the Storage Facility during the Delivery Term other than pursuant to a valid Charging Notice (it being understood that Seller may reject or adjust a Charging Notice in order to maintain compliance with the Operating Restrictions), or in connection with a Storage Capacity Test, or pursuant to a notice from CAISO, the PTO, Transmission Provider, or any other Governmental Authority or as provided in Section 4.4(a). If, during the Delivery Term, Seller (i) charges the Storage Facility to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (ii) charges the Storage Facility in Item 5
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40 violation of the first sentence of this Section 4.5(c), then (x) Seller shall be responsible for all energy costs associated with such charging of the Storage Facility specified in subsections (i) and (ii) in this sentence, (y) Buyer shall not be required to pay for the charging of such energy (i.e., Charging Energy), and (z) Buyer shall be entitled to instruct Seller to discharge such energy and entitled to all of the benefits (including Storage Product) associated with such discharge. (d) During the Delivery Term, Buyer will have the right to instruct Seller to discharge the Storage Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Discharging Notices to Seller electronically, and subject to the requirements and limitations set forth in this Agreement, including the Operating Procedures. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer modifies such Discharging Notice by providing Seller with an updated Discharging Notice. (e) Notwithstanding anything in this Agreement to the contrary, during any Settlement Interval, Curtailment Orders, Buyer Curtailment Orders, and Buyer Bid Curtailments applicable to such Settlement Interval shall have priority over any Charging Notices and Discharging Notices applicable to such Settlement Interval, and Seller shall have no liability for violation of this Section 4.5 or any Charging Notice or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any Curtailment Order, Buyer Curtailment Order, Buyer Bid Curtailment or other instruction or direction from Buyer, Buyer’s SC, a Governmental Authority, the PTO or the Transmission Provider. Buyer shall have the right, but not the obligation, to provide Seller with updated Charging Notices and Discharging Notices during any Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order consistent with the Operating Procedures. If Seller is required to reduce deliveries of Generating Facility Energy as necessary to avoid exceeding the Dedicated Interconnection Capacity at the Delivery Point, all such reduced Generating Facility Energy deliveries shall constitute (and be treated as) Deemed Delivered Energy (a “Discharging Curtailment”).
4.6 Reduction in Delivery Obligation. For the avoidance of doubt, and in no way limiting Section 3.1 or Exhibit G:
(a) Facility Maintenance. Seller shall be entitled to maintain, repair, replace, and modify the Facility in accordance with Prudent Operating Practices. The Parties shall plan outage of Storage Capacity and Generating Capacity to mutually accommodate the reasonable requirements of Seller and Buyer. Unless otherwise agreed in writing, during the period of June 1st to September 30th, Seller shall not schedule non-emergency maintenance that reduces the Energy generation or storage capability of the Facility by more unless (i) such outage is required to avoid damage to the Facility, (ii) such maintenance is necessary to maintain equipment warranties and cannot be scheduled outside the period of June 1st to September 30th, (iii) such outage is required in accordance with Prudent Operating Practices, or (iv) the Parties agree otherwise in writing (any of the scheduled maintenance permitted by this Section 4.6(a), a “Planned Outage”). Subject to providing Buyer thirty (30) days’ prior Notice, Seller has the right to replace or augment existing batteries and other equipment for purposes associated with maintaining the Storage Contract Capacity or Storage Contract Output, provided that any replacement or augmentation shall not occur during the period of June 1st to September 30th unless (i) such replacement or augmentation activity will not cause Storage Capacity to be less than the Storage Contract Capacity, (ii) Seller can demonstrate to Buyer’s reasonable Item 5
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41 satisfaction that the replacement or augmentation will not materially affect ongoing operations, (iii) such replacement or augmentation is required or recommended pursuant to Prudent Operating Practices, or (iv) the Parties otherwise mutually agree. (b) Forced Facility Outage. Seller shall be permitted to reduce deliveries of Product during any Forced Facility Outage. Seller shall provide the Scheduling Coordinator with Notice and expected duration (if known) of any Forced Facility Outage. (c) System Emergencies and Other Interconnection Events. Seller shall be permitted to reduce deliveries of Product during any period of System Emergency, Buyer Curtailment Period or upon Notice of a Curtailment Order pursuant to the terms of this Agreement, the Interconnection Agreement or applicable tariff.
(d) Force Majeure Event. Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event.
(e) Health and Safety. Seller shall be permitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2. (f) Buyer Default. Seller shall be permitted to reduce deliveries of Product during any period in which there is Buyer Default.
4.7 Guaranteed Energy Production. Seller shall be required to deliver to Buyer no less than the Guaranteed Energy Production in each Performance Measurement Period. For purposes of determining whether Seller has achieved the Guaranteed Energy Production, Seller shall be deemed to have delivered to Buyer (in addition to Generating Facility Energy) (1) any Deemed Delivered Energy and (2) Energy in the amount it could reasonably have delivered to Buyer but was prevented from delivering to Buyer by reason of any Force Majeure Events, System Emergency, Storage Capacity Tests, Buyer’s Default, and Curtailment Periods (“Adjusted Energy Production”). If Seller fails to achieve the Guaranteed Energy Production amount in any Performance Measurement Period, Seller shall pay Buyer damages calculated in accordance with Exhibit G.
4.8 Storage Availability.
(a) During the Delivery Term, the Storage Facility shall maintain a Monthly Storage Availability of for the first Contract Year and for all other Contract Years (the “Guaranteed Storage Availability”), which Monthly Storage Availability shall be calculated in accordance with Exhibit P. (b) If the Monthly Storage Availability during any month is less than the Guaranteed Storage Availability, then Buyer’s payment for the Storage Product shall be calculated by reference to the Availability Adjustment (as determined in accordance with Exhibit P).
Item 5
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42 4.9 Storage Capacity Tests.
(a) Prior to the Commercial Operation Date, Seller shall schedule and complete a Storage Capacity Test in accordance with Exhibit O. Thereafter, Seller and Buyer shall have the right to run additional tests of the Storage Capacity Test in accordance with Exhibit O. (b) Buyer shall have the right to send one or more representative(s) to witness all Storage Capacity Tests. Such representative(s) shall not interfere with the Storage Capacity Tests. Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representative(s) witnessing any Storage Capacity Test. Other than as may be agreed pursuant to Section 3.11, the Party bearing the costs for Storage Capacity Tests shall be specified in Exhibit O.
(c) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit O. If the actual capacity or efficiency rate determined pursuant to a Storage Capacity Test, adjusted for Ambient Conditions, varies from the then current Storage Capacity and/or Efficiency Rate, as applicable, then the actual capacity and/or efficiency rate, as applicable, determined pursuant to a Storage Capacity Test (up to, but not in excess of, the original Storage Contract Capacity set forth on the Cover Sheet, as such original Storage Contract Capacity on the Cover Sheet may have been adjusted (if at all) pursuant to Exhibit B) shall become the new Storage Capacity and/or Efficiency Rate, effective as of the day following the completion of the test, for all purposes under this Agreement, including compensation under Exhibit C.
4.10 WREGIS. Seller shall, at its sole expense, but subject to Section 3.11, 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 Generating Facility 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, it being acknowledged that Seller may not be able under WREGIS rules to complete all WREGIS registration requirements prior to the Commercial Operation Date. 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 be deemed to have satisfied the warranty in Section 3.10(c), provided that Seller fulfills its obligations under Sections 4.10(a) through (f) below. In addition:
(a) Prior to the Commercial Operation Date or as soon as reasonably possible thereafter, Seller shall register the Generating 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” (as described in the WREGIS Operating Rules) 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 Generating 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. Buyer shall Item 5
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43 be responsible for all expenses associated with establishing and maintaining 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 Generating Facility 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. (c) Seller shall, at its sole expense, ensure that the WREGIS Certificates for a given calendar month correspond with the Generating Facility Energy for such calendar month as evidenced by the Generating Facility’s metered data.
(d) Due to the 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 for such month may not have been formally transferred to Buyer in accordance with the WREGIS Operating Rules and this Section 4.10. Notwithstanding this delay, Buyer shall have all right and title to all such WREGIS Certificates upon payment to Seller in accordance with Section 8.2. (e) A “WREGIS Certificate Deficit” means any deficit or shortfall in WREGIS Certificates delivered to Buyer for a calendar month as compared to the Generating Facility Energy for the same calendar month (taking into account the timing of WREGIS’ issuance of WREGIS Certificates in the normal course and the carry forward of fractional MWh amounts) (“Deficient Month”) caused by an error or omission of Seller. If any WREGIS Certificate Deficit is caused, or the result of any action or inaction by Seller, and (A) remains uncured following the later of (i) thirty (30) days after Notice from Buyer thereof or (ii) days after the Deficient Month and (B) Seller has not provided Replacement Green Attributes to Buyer in the amount of such deficit or shortfall within days after the Deficient Month, then the amount of Generating Facility Energy in the Deficient Month shall be reduced by the amount of the WREGIS Certificate Deficit for purposes of calculating Buyer’s payment next coming due to Seller under Article 8 and the Guaranteed Energy Production for the applicable Performance Measurement Period. If there is a shortfall of WREGIS Certificates caused solely by an error or omission of WREGIS, the Parties shall cooperate in good faith to cause WREGIS to correct its error or omission.
(f) Subject to Section 3.11, if WREGIS changes the WREGIS Operating Rules after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Section 4.10 after the Effective Date, the Parties promptly shall modify this Section 4.10 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 Generating Facility Energy in the same calendar month.
4.11 Station Use. Seller shall be responsible for providing all energy to serve Station Use (including paying the cost of any Energy procured to serve Station Use) and all Station Use will be provided in accordance with applicable Law, including in accordance with the applicable tariff of the local utility providing retail service to the Site. Buyer will not be responsible for any Item 5
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44 costs associated with Station Use and Station Use will not be provided by the Generating Facility.
Prior to Construction Start, the Parties shall mutually agree upon a protocol for monitoring, recording and reimbursing Buyer for any Station Use consumed from Grid Energy.
4.12 Interconnection Capacity. Seller shall ensure during the Test Energy period and throughout the Delivery Term that (a) the Facility will have and maintain interconnection capacity available or allocable to the Facility under the Interconnection Agreement that is no less than the Guaranteed Capacity; and (b) Seller shall have sufficient interconnection capacity and rights under the Interconnection Agreement to interconnect the Facility with the CAISO Grid and to fulfill Seller’s obligations under this Agreement, including with respect to Resource Adequacy Benefits, and to allow Buyer to instruct the dispatch of the Facility in accordance with the CAISO Tariff and as contemplated under this Agreement, including the Operating Restrictions (collectively, and not to exceed the Guaranteed Capacity, the “Dedicated Interconnection Capacity”). Buyer shall be entitled to all rights and benefits associated with the Dedicated Interconnection Capacity, including any associated deliverability rights. Seller shall be responsible for all costs of interconnecting the Facility to the Transmission System. Seller shall hold Buyer harmless from any penalties, imbalance energy charges, or other costs from CAISO or under this Agreement resulting from Seller’s inability to provide, or any third party use of, the Dedicated Interconnection Capacity.
4.13 Excess Installed Battery Capacity. It is acknowledged that Seller has the right and option in its discretion to install capacity in excess of the Storage Contract Capacity set forth on the Cover Sheet solely for the purpose of providing back-up capacity for the Installed Battery Capacity and Storage Capacity. For all purposes of this Agreement, the amount of Installed Battery Capacity or Storage Capacity shall never be deemed to exceed the Storage Contract Capacity set forth on the Cover Sheet, and (for the avoidance of doubt) Buyer shall have no rights to instruct Seller to (i) charge or discharge the Storage Facility at an instantaneous rate (in MW) in excess of the Storage Capacity or (ii) charge the Storage Facility to a level (in MWh) in excess of the Storage Capacity multiplied by four (4) hours.
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 making available of Product to Buyer, that are imposed on Product prior to its delivery to Buyer at the time and place contemplated under the Agreement. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees), if any. If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within thirty (30) days after the Effective Date or promptly upon request by Seller to evidence such exemption or exclusion. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.
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45 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 applicable Law and Prudent Operating Practice relating to the operation and maintenance of the Facility and the generation and sale of Product.
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 action to prevent such damage or injury. Such action may include, to the extent reasonably necessary, disconnecting and removing all or a portion of the Facility, or suspending the supply of Generating Facility Energy, Charging Energy, or Discharging Energy.
6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities (including a transformer, substation and associated equipment and real property), and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities or co-tenancy agreements (“Shared Facilities Agreements”) to be entered into among Seller, the Participating Transmission Owner, Seller’s Affiliates, or third parties pursuant to which certain Interconnection Facilities may be subject to joint ownership and shared maintenance and operation arrangements; provided that such Shared Facilities Agreements (i) shall permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including providing the Dedicated Interconnection Capacity, (ii) continue to provide for separate metering and separate Resource IDs for each of the Generating Facility and the Storage Facility, and (iii) shall not allow any Affiliate of Seller or third party to use the Dedicated Interconnection Capacity. Seller shall hold Buyer harmless from any penalties, imbalance energy charges, or other costs or losses from CAISO or under the Agreement resulting from Seller’s breach of this provision.
ARTICLE 7
METERING
7.1 Metering. Seller shall measure the amount of Facility Energy using the Facility Meter, which will be subject to adjustment in accordance with applicable CAISO meter requirements and Prudent Operating Practices, including to account for Grid Energy, Electrical Losses and Station Use. Seller shall measure the Charging Energy and the Discharging Energy using the Storage Facility Meter. All meters will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained as Seller’s cost. Subject to meeting any Item 5
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46 applicable CAISO requirements, the meters shall be programmed to adjust for all losses from the Facility to the Delivery Point in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Metering shall be consistent with the requirements set forth in Exhibit R, an updated version of which shall be provided by Seller to Buyer at least thirty (30) days prior to Commercial Operation. Prior to Commercial Operation, Seller shall conduct a point-to-point test of the SCME metering configuration with Buyer (or its designee) present to observe such test.
Each 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 Seller breaks a seal outside of normal testing, Seller shall notify Buyer as soon as practicable. In addition, Seller hereby agrees to provide all meter data to Buyer in a form reasonably acceptable to Buyer. Seller and Buyer, or Buyer’s Scheduling Coordinator, shall cooperate to allow both Parties to retrieve the meter reads from the CAISO Market Results Interface – Settlements (MRI-S) (or its successor) or directly from the Facility meter(s) at the Facility. Seller shall obtain and maintain a separate CAISO Resource ID dedicated exclusively to each of the Generating Facility and the Storage Facility. Seller shall not obtain additional CAISO Resource IDs for the Generating Facility, the Storage Facility, or the Facility without the prior written consent of Buyer, which shall not be unreasonably withheld. In addition, upon the reasonable request of Buyer, Seller shall obtain one or more additional CAISO Resource IDs, provided that any out-of-pocket costs associated with obtaining such additional CAISO Resource IDs incurred by Seller shall be reimbursed by Buyer.
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 have a right to be present during such tests. If a meter is inaccurate it shall be promptly repaired or replaced.
7.3 Scheduling Coordinator Metered Entity. The Facility shall be configured as a Scheduling Coordinator Metered Entity. Buyer, as Scheduling Coordinator, shall therefore be responsible for (1) submitting the meter data to CAISO on behalf of the Facility and Seller, and (2) performing any other SCME functions that, per CAISO protocol, must be performed by the Scheduling Coordinator. In relation to the submission of meter data, Buyer may endorse a third party as an authorized user within the CAISO MRI-S system to submit such meter data on Buyer’s behalf (assuming the third party is approved by the CAISO User Access Administrator). Buyer may also elect for this third party to be contracted and managed by the Seller, in which case the Seller is ultimately responsible for satisfactory performance of this function and all associated costs. If such third party service becomes commercially unavailable the Parties will discuss alternatives, provided that both Buyer and Seller acknowledge and agree that Seller will remain responsible for such third party service costs. Seller shall be responsible for performing, or causing to be performed by third parties, all other functions associated with the SCME arrangement (other than the submission of meter data to CAISO, which is subject to the foregoing terms of this Section
7.3), including any work to support CAISO auditing, testing, certification, and requirements of the SC. Prior to Seller’s submission of the SQMD Plan to CAISO for review and approval, Seller shall provide a copy of the SQMD Plan to Buyer for Buyer’s comment, review and approval, with such approval not to be unreasonably withheld, conditioned or delayed. The SCME shall provide for metering granularity of no more than five (5) minutes. Buyer shall use reasonable efforts to coordinate with Seller with respect to these obligations, provided that Seller shall be fully responsible for all associated costs, liabilities and schedule delays arising from such SCME arrangement, including the costs of hiring third parties and payment of any CAISO penalties for Item 5
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47 non-compliance with SCME requirements. Buyer will be responsible for errors or penalties assessed by CAISO that are solely due to Buyer’s acts or inactions.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Within fifteen (15) Business Days after the end of each month of the Delivery Term, Seller shall send a detailed invoice to Buyer for the amount due for Product delivered during such month. Each invoice shall reflect (a) records of metered data, including CAISO metering and transaction data sufficient to document and verify the amount of Product delivered by the Facility for any Settlement Period during the preceding month, including the amount of Generating Facility Energy produced by the Generating Facility as read by the Generating Facility Meter, the amount of Charging Energy as read by the Storage Facility Meter, the amount of Discharging Energy delivered from the Storage Facility as read by the Storage Facility Meter, the amount of Replacement RA delivered to Buyer (if any), the calculation of Facility Energy, Deemed Delivered Energy and Adjusted Energy Production, and the Contract Price applicable to such Product in accordance with Exhibit C; and (b) be in a format reasonably specified by Buyer, covering the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices.
8.2 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account set forth in Exhibit N, as may be updated from time to time by Seller by Notice to Buyer. Buyer shall pay undisputed invoice amounts within thirty (30) days from receipt of the invoice. If the 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 3-Month Secured Overnight Financing Rate (SOFR) rate (or a successor rate mutually agreed to by the Parties) 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 five (5) years or as otherwise required by Law. Upon five (5) Business Days’ Notice to the other Party, either Party shall be granted access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with California Government Code Section 8546.7, Seller may be subject to audit by the California State Item 5
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48 Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds
8.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5 or an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO; provided, however, that there shall be no adjustments to prior invoices based upon meter inaccuracies. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment.
If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due. Unless otherwise agreed by the Parties, no adjustment of invoices shall be permitted after twenty-four (24) months from the date of invoice unless due to a correction of data by CAISO.
8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice, any payment, or any adjustment to an invoice or payment rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, payment 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 or payment dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment.
Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within ten (10) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
8.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product and Deemed Delivered Energy during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B, G and P, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
8.7 Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days of the Effective Date. Seller shall maintain the Development Security in full force and effect. Within ten (10) Business Days following any draw by Buyer on the Development Security , Seller shall replenish the amount drawn such that the Development Security is restored to the applicable amount. Upon the earlier of (i) Seller’s delivery of the Item 5
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49 Performance Security, or (ii) promptly, but no later than thirty (30) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. Provided that no Event of Default has occurred and is continuing with respect to Seller, Seller may replace Development Security or change the form of Development Security to another form of Development Security from time to time upon reasonable prior Notice to Buyer.
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.
Within ten (10) Business Days following any draw by Buyer on the Performance Security after the Commercial Operation Date, Seller shall replenish the amount drawn such that the Performance Security is restored to the applicable amount. 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 then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security not allocated to invoiced but unpaid amounts pursuant to this Section 8.8. Provided that no Event of Default has occurred and is continuing with respect to Seller, Seller may replace Performance Security or change the form of Performance Security to another form of Performance Security from time to time upon reasonable prior Notice to Buyer.
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, to the extent provided in the form of cash, any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
Upon or any time after the occurrence and continuance of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect;
(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; and Item 5
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50 (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.
8.10 Seller’s Financial Statements. In the event 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.
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 address set forth on Exhibit N or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice. Each Notice required, 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 on Exhibit N on the same date as such Notice is being served, given or delivered.
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51 ARTICLE 10
FORCE MAJEURE
10.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, except as set forth below, so long as an event otherwise satisfies the definition of a Force Majeure Event, a Force Majeure Event may include an act of God or the elements, including flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; a state of emergency declared by a relevant Governmental Authority; volcanic eruption; flood; pandemic or epidemic; landslide; mudslide; sabotage; terrorism; earthquake or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; insurrection; rebellion; violent demonstrations; or strikes, lock-outs, work stoppages 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 an increase in component costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy the Product, or any component thereof at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event; (iv) a Curtailment Period except to the extent caused by a Force Majeure Event; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Generating Facility or the Storage 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 Generating Facility or the Storage Facility; or (vii) any equipment failure except if such equipment failure is caused by a Force Majeure Event.
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 or delayed 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 promptly remove such inability or delay. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. 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 Item 5
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52 performance of one or more of its obligations hereunder is caused by a Force Majeure Event.
Notwithstanding any provision in this Agreement to the contrary, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Construction Start Date or the Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, or (c) limit Buyer’s right to declare an Event of Default pursuant to Section
11.1(b)(ii) or (iv) and receive a Damage Payment
upon exercise of Buyer’s remedies pursuant to Section 11.2.
10.3 Notice. Within five (5) Business Days after the claiming Party becomes aware of the impact of a Force Majeure Event, the claiming Party shall provide the other Party with oral notice of the Force Majeure Event, and within two (2) weeks of the claiming Party becoming aware of the impact of the Force Majeure Event, the claiming Party shall provide the other Party with Notice in the form of a letter describing in detail the particulars of the occurrence giving rise to the claim of Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure to provide timely Notice as described in the preceding sentence constitutes a waiver of a Force Majeure Event claim for all periods prior to the non-claiming Party’s receipt of such Notice, and the Force Majeure Event will be deemed to have commenced as of the date of such notice. Upon written request from the non-claiming Party, the claiming Party shall provide documentation demonstrating to the non-claiming Party’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from the claiming Party’s actions or failure to exercise due diligence or take reasonable actions. The claiming party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event.
10.4 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon written Notice to the other Party. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, Item 5
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53 (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts); (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1) and such failure is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional ninety (90) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts);
(iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Article 14; or
(vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) if at any time, Seller delivers or attempts to deliver electric energy to the Delivery Point for sale under this Agreement that was not generated or discharged by the Facility;
(ii) the failure by Seller to achieve Commercial Operation within ;
(iii)
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54 (iv) the failure by Seller to achieve the Construction Start Date within (v)
(vi)
(vii)
(viii)
(ix)
(x) failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 within five (5) Business Days after Notice from Buyer; (xi) 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 default 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; Item 5
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55 (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;
(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; or (xii) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within fifteen (15) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit;
(D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than forty-five (45) days prior to the expiration of the outstanding Letter of Credit.
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:
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56 (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 Delivery 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, including an Event of Default under Section 11.1(b)(ii) or
11.1(b)(iv))subject to the limitations in Section 11.7 or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party); (c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(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 any Terminated Transaction and the Event of Default related thereto.
11.3 Termination Payment. The Termination Payment (“Termination Payment”) for a Terminated Transaction shall be the aggregate of all Settlement Amounts plus any or all other amounts due to the Non-Defaulting Party (as of the Early Termination Date) minus any and all other amounts due 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 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. 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 a 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 a 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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57 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 Damage Payment or Termination Payment, as applicable, and whether, in the case of a Termination Payment, the Termination Payment is due to or from 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 or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
11.5 Disputes with Respect to Termination Payment. 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 an express and exclusive remedy or measure of liquidated damages is provided, 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. Any Non-Defaulting Party shall be obligated to use commercially reasonable efforts to mitigate its Costs, Losses and damages resulting from or arising out of any Event of Default of the other Party under this Agreement; provided, however, Buyer shall not be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Seller’s liability.
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, OR PART OF AN ARTICLE 16 INDEMNITY CLAIM, OR INCLUDED IN A LIQUIDATED DAMAGES
CALCULATION, OR ARISING FROM FRAUD OR INTENTIONAL
MISREPRESENTATION, OR CONSTITUTING LOST OR FOREGONE TAX CREDITS OR
RENEWABLE ENERGY INCENTIVES, 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.
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58 12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.8, 4.7, 4.8, 11.2 AND 11.3, AND AS
PROVIDED IN EXHIBIT B, EXHIBIT G, AND EXHIBIT P THE PARTIES ACKNOWLEDGE
THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THAT
THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES
BE WITHOUT REGARD TO THE CAUSE OR 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:
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59 (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 the State of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Seller’s performance under this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller. (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity.
13.2 Seller’s Covenants. Seller covenants that commencing on the Effective Date and continuing through the Contract Term:
(a) The Facility will be located in the State of California. (b) Seller shall maintain Site Control throughout the Contract Term and shall provide Buyer with prompt Notice of any material change in the status of Seller’s Site Control. (c) Seller will be responsible for obtaining any and all permits, approvals, including without limitation environmental clearance under the California Environmental Quality Act (“CEQA”) or other environmental law, from the local jurisdiction where the Facility is or will be constructed. Seller agrees and acknowledges that Buyer is simply purchasing energy and storage services under the Agreement and does not intend to be the lead agency for the Facility. (d) Seller covenants that it will not knowingly utilize equipment or resources for the construction, operation or maintenance of the Facility that rely on work or services exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily (“Forced Labor”). The Parties acknowledge that pursuant to the business advisory jointly issued by the U.S. Departments of State, Treasury, Commerce and Homeland Security on July 1, 2020, equipment or resources sourced from the Xinjiang region of China are presumed to involve Forced Labor.
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60 13.3 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 the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law.
(b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, 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 and affirmatively waives immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court (provided that such court is located within a venue permitted in Law and under this Agreement), (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; provided, however that nothing in this Agreement shall waive the obligations or rights set forth in the California Tort Claims Act (Government Code Section 810 et seq.). (f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
13.4 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
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61 (a) It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and to be qualified to conduct business in California and each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations, approvals and permits necessary to legally perform its obligations under this Agreement; and
(c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.
13.4 Prevailing Wage. Seller shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations, and orders and decrees of any applicable courts or administrative bodies or tribunals, including, without limitation employment discrimination laws and prevailing wage laws. Seller shall use reasonable efforts to ensure that all employees hired by Seller, and its contractors and subcontractors, that will perform construction work or provide services at the Site related to 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 California law, if any (“Prevailing Wage Requirement”). Buyer agrees that Seller’s obligations for the Prevailing Wage Requirement will be satisfied upon the execution of a project labor agreement related to construction of the Facility and delivery of a copy of such agreement to Buyer.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided in this Article 14, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Except as provided in this Article 14, any Change of Control of Seller or direct or indirect change of control of Buyer (whether voluntary or by operation of law) shall be deemed an assignment and will require the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed; provided, that a Change of Control of Seller shall not require Buyer’s prior consent if (i) the assignee is an Affiliate of Seller, (ii) if such Change of Control is a result of a Lender exercising remedies as permitted pursuant to a Collateral Assignment Agreement under Section 14.2, or (iii) the assignee is a Permitted Transferee in accordance with Section 14.3. Any assignment made in violation of the conditions to assignment set out in this Article 14 shall be null and void. Buyer shall work with Seller in good faith to negotiate and enter into reasonable consents, estoppels, or other required documentation in connection with Seller’s financing for the Facility, so long as the terms and conditions of such agreements are reasonably acceptable to both Parties. Seller shall pay Buyer’s reasonable and documented third party expenses, including reasonable attorneys’ fees, incurred to provide consents, estoppels, or other required documentation in connection with Seller’s financing for the Facility.
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62 14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement or any part of its ownership interests in the Facility as collateral for any financing or refinancing of the Facility, and to assign this Agreement to an Affiliate under the direct or indirect control of the Ultimate Parent without the consent of Buyer. In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith work with Seller and Lenders to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”), and, if requested by Seller in connection with any financing or refinancing by a Lender, estoppel certificates or similar instruments with substantially similar provisions as reasonably requested by Seller or any such Lender. Each Collateral Assignment Agreement must be in form and substance agreed to by Buyer, Seller and the applicable Lender, such agreement not to be unreasonably withheld, conditioned, or delayed. Buyer will not be subject to obligations under more than one Collateral Assignment Agreement at any time. Each Collateral Assignment Agreement must include, among others, the following provisions (with such changes as may be reasonably requested by a Lender) unless otherwise agreed to by Buyer, Seller and the applicable Lender:
(a) Buyer shall give notice of an Event of Default by Seller to the Person(s) to be specified by Lender in the Collateral Assignment Agreement before exercising its right to terminate or suspend performance under this Agreement as a result of such Event of Default; provided that such notice shall be provided to Lender at the time such notice is provided to Seller and any additional cure period of Lender agreed to in the Collateral Assignment Agreement shall not commence until Lender has received notice of such Event of Default; (b) Lender will have the right to cure an Event of Default on behalf of Seller if Lender sends Notice to Buyer before the later of (i) the expiration of any cure period, and (ii) ten (10) Business Days after Lender’s receipt of notice of such Event of Default from Buyer, indicating Lender’s intention to cure. Lender must remedy or cure such Event of Default within the cure period under this Agreement and any additional cure periods agreed in the Collateral Assignment Agreement up to a maximum of days (or, in the event of a bankruptcy of Seller or any foreclosure or similar proceeding if required by Lender to cure any Event of Default, an additional reasonable period of time to complete such proceedings and effect such cure not to exceed days without the written consent of Buyer, which consent shall not be unreasonably withheld, conditioned, or delayed), provided that if Lender is prohibited by any court order or bankruptcy or insolvency proceedings from curing the Event of Default or from commencing or prosecuting foreclosure proceedings, the foregoing time periods shall be extended by the period of such prohibition;
(c) Following an Event of Default by Seller under this Agreement, Buyer may require Seller (or Lender, if Lender has provided the notice set forth in subsection (b) above) to provide to Buyer a report concerning:
(i) The status of efforts by Seller or Lender to develop a plan to cure the Event of Default;
(ii) Impediments to the cure plan or its development;
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63 (iii) If a cure plan has been adopted, the status of the cure plan’s implementation (including any modifications to the plan as well as the expected timeframe within which any cure is expected to be implemented); and
(iv) Any other information which Buyer may reasonably require related to the development, implementation and timetable of the cure plan.
Seller or Lender must provide the report to Buyer within ten (10) Business Days after Notice from Buyer requesting the report. Buyer will have no further right to require the report with respect to a particular Event of Default after that Event of Default has been cured; (d) Lender will have the right to consent before any termination of or suspension by Buyer of its performance under this Agreement which does not arise out of an Event of Default and if pursuant to any Event of Default, is not cured in accordance with Section 14.2(c); (e) Lender will receive prior notice of and the right to approve material amendments to this Agreement, which approval will not be unreasonably withheld, delayed or conditioned;
(f) If this Agreement is transferred to Lender (or its assignee or transferee) pursuant to subsection (b) above, Lender (or its assignee or transferee) must assume all of Seller’s obligations arising under this Agreement on and after the date of such assumption (subject to such limits on liability as are mutually agreed by Seller, Buyer and Lender in the Collateral Assignment Agreement); provided, before such assumption, if Buyer advises Lender that Buyer will require that Lender cure (or cause to be cured) any Event of Default existing as of the transfer date in order to avoid the exercise by Buyer (in its sole discretion) of Buyer’s right to terminate this Agreement with respect to such Event of Default, then Lender at its option, and in its sole discretion, may elect to either:
(i) Cause such Event of Default to be cured (other than any Events of Default which relate to Seller’s bankruptcy or similar insolvency proceedings, to representations and warranties made by Seller or to Seller’s failure to perform obligations under other agreements, or which are otherwise personal to Seller or are not reasonably capable of cure), or (ii) Not assume this Agreement.
(g) If Lender or its assignee or transferee elects to sell or transfer this Agreement, then Lender must cause the transferee to assume all of Seller’s obligations arising under this Agreement arising after the date of such assumption as a condition of the sale or transfer. Such sale or transfer may be made only to an entity that meets the definition of Permitted Transferee; (h) Subject to Lender’s cure of any Events of Defaults under the Agreement in accordance with Section 14.2(f), if (i) this Agreement is rejected in Seller’s Bankruptcy or otherwise terminated in connection therewith Lender or its designee shall have the right to elect within ninety (90) days after such rejection or termination, to enter into a replacement agreement with Buyer having substantially the same terms as this Agreement for the remaining term thereof, and, promptly after Lender’s written request, Buyer must enter into such replacement agreement with Lender or Lender’s designee, or (ii) if Lender or its designee, directly or indirectly, takes Item 5
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64 possession of, or title to, the Facility after any such rejection or termination of this Agreement, promptly after Buyer’s written request, Lender must itself or must cause its designee to promptly enter into a new agreement with Buyer having substantially the same terms as this Agreement for the remaining term thereof, provided that in the event a designee of Lender, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), if such designee is not an entity that meets the definition of Permitted Transferee then such designee shall be subject to the prior written approval of Buyer, such approval not to be unreasonably withheld; and
(i) The Parties shall negotiate any Collateral Assignment Agreement in good faith, including variations to the provisions set forth in this Section 14.2, and to the extent the Collateral Assignment Agreement executed by Buyer and Lender varies from such provisions, the terms of such Collateral Assignment Agreement shall be controlling. In addition, Buyer shall cooperate with Seller or any Lender to execute or arrange for delivery of estoppels reasonably requested by Seller or Lender.
14.3 Permitted Assignment by Seller.
14.4 Buyer Limited Assignment.
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65 ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. [STC 17]. Subject to Section 15.2, 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 state courts of [Santa Clara County][Monterey County]7, or if appropriate, in the United States District Court, Northern District of California, San Francisco, California.
15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a written Notice from either Party identifying such dispute, the authorized members of the Parties’ senior management shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, the Parties shall submit the dispute to mediation prior to seeking any and all remedies available to it at Law in or equity. The Parties will cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator’s fee, equally, but such shared costs shall not include each Party’s own attorneys’ fees and costs, which shall be borne solely by such Party. If the mediation is unsuccessful, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
6 NTD: Exhibit S remains under Seller financing review. 7 NTD: To be modified when form is split for each CCA.
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66 ARTICLE 16
INDEMNIFICATION
16.1 Indemnification. Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, attorneys, employees, representatives and agents (collectively, the “Indemnified Party”) from and against all third-party claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees and expert witness fees), howsoever described, for personal injury or death to persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by negligence or willful misconduct of the Indemnifying Party, its Affiliates, directors, officers, employees, or agents, excepting only such claims, demands, losses, liabilities, penalties and expenses to the extent solely caused by the willful misconduct or negligence of a member of the Indemnified Party (collectively, “Indemnifiable Losses”).
16.2 Claim Notice.
(a) Notice of Claim. Subject to the terms of this Agreement and upon obtaining knowledge of an Indemnifiable Loss for which it is entitled to indemnity under this Article 16, the Indemnified Party will promptly provide Notice to the Indemnifying Party in writing of any damage, claim, loss, liability or expense which Indemnified Party has determined has given or could give rise to an Indemnifiable Loss under Section 16.1 (“Claim”). The Notice is referred to as a “Notice of Claim.” A Notice of Claim will specify, in reasonable detail, the facts known to the Indemnified Party regarding the Indemnifiable Loss. (b) Failure to Provide Notice. A failure to give timely Notice or to include any specified information in any Notice as provided in this Section 16.2 will not affect the rights or obligations of any Party hereunder except and only to the extent that, as a result of such failure, any Party which was entitled to receive such Notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise materially damaged as a direct result of such failure and, provided further, the Indemnifying Party is not obligated to indemnify the Indemnified Party for the increased amount of any Indemnifiable Loss which would otherwise have been payable to the extent that the increase resulted from the failure to deliver timely a Notice of Claim.
16.3 Defense of Claims. If, within ten (10) Business Days after giving a Notice of Claim regarding a Claim to the Indemnifying Party pursuant to Section 16.2(a), the Indemnified Party receives Notice from such Indemnifying Party that the Indemnifying Party has elected to assume the defense of such Claim, the Indemnifying Party will not be liable for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof; provided, however, that if the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Claim within ten (10) Business Days after receiving Notice from the Indemnified Party that the Indemnified Party believes the Indemnifying Party has failed to take such steps, or if the Indemnifying Party has not undertaken fully to indemnify the Indemnified Party in respect of all Indemnifiable Losses relating to the matter, the Indemnified Party may assume its own defense, and the Indemnifying Party will be liable for all reasonable costs or expenses, including attorneys’ fees, paid or incurred in connection therewith. Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter into any settlement of any Claim which would lead to Item 5
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67 liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder; provided, however, that the Indemnifying Party may accept any settlement without the consent of the Indemnified Party if such settlement provides a full release to the Indemnified Party and no requirement that the Indemnified Party acknowledge fault or culpability. If a firm offer is made to settle a Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder and the Indemnifying Party desires to accept and agrees to such offer, the Indemnifying Party will give Notice to the Indemnified Party to that effect. If the Indemnified Party fails to consent to such firm offer within ten (10) calendar days after its receipt of such Notice, the Indemnified Party may continue to contest or defend such Claim and, in such event, the maximum liability of the Indemnifying Party to such Claim will be the amount of such settlement offer, plus reasonable costs and expenses paid or incurred by the Indemnified Party up to the date of such Notice.
16.4 Subrogation of Rights. Upon making any indemnity payment, Indemnifying Party will, to the extent of such indemnity payment, be subrogated to all rights of Indemnified Party against any Third Party in respect of the Indemnifiable Loss to which the indemnity payment relates; provided that until Indemnified Party recovers full payment of its Indemnifiable Loss, any and all claims of Indemnifying Party against any such Third Party on account of said indemnity payment are hereby made expressly subordinated and subjected in right of payment to Indemnified Party’s rights against such Third Party. Without limiting the generality or effect of any other provision hereof, Buyer and Seller shall execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation and subordination rights.
16.5 Rights and Remedies are Cumulative. Except for express remedies already provided in this Agreement, the rights and remedies of a Party pursuant to this Article 16 are cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
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, including sudden and accidental pollution coverage, products and completed operations and personal injury insurance, with a minimum amount of per occurrence, and an annual aggregate of not less than , endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured but only to the extent of the liabilities assumed hereunder by Seller; and (ii) an umbrella insurance policy in a minimum amount of liability of Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions. Required insurance limits may be satisfied through coverage provided by either a commercial general liability policy, an umbrella/excess liability policy or a combination thereof.
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68 (b) Employer’s Liability Insurance. Employers’ Liability insurance shall be at least for injury or death occurring as a result of each accident.
With regard to bodily injury by disease, the policy limit will apply to each employee.
(c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of California Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of this Agreement.
(e) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, construction all-risk form property insurance covering the Facility during such construction periods, and naming the Seller (and Lender if any) as the loss payee where its interest may appear. (f) Contractor’s Pollution Liability. Seller shall maintain or cause to be maintained during the Delivery Term, Pollution Legal Liability Insurance in the amount per occurrence and in the aggregate, naming Seller (and Lender if any) as additional named insured. Insurance may be evidenced through primary and excess policies.
(g) Contractor Insurance. Seller shall require the contractor under its engineering, procurement, and construction contract for the Facility to carry (i) comprehensive general liability insurance with a combined single limit of coverage not less than ; (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of per occurrence. The
contractor shall name Seller as an additional insured to insurance carried pursuant to clauses (g)(i) and (g)(iii). The contractor shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(g). (h) Evidence of Insurance. Within thirty (30) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. These certificates shall specify that Buyer shall be given at least ten (10) days prior Notice by Seller in the event of any material adverse modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer.
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69 ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. “Confidential Information” means information, whether oral or written, that is delivered by Seller to Buyer or by Buyer to Seller, including (a) pricing and other commercially-sensitive or proprietary information provided to Buyer in connection with the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement. Notwithstanding the foregoing, the Parties acknowledge and agree that Buyer intends to make publicly available a version of this Agreement with certain commercially sensitive provisions removed or redacted. The Parties agree to work in good faith to agree on the scope of such redactions and Buyer’s public disclosure of this Agreement, redacted as agreed between the Parties, shall be in accordance with the requirements of Law and this Article 18.
18.2 Duty to Maintain Confidentiality. 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, including to comply with any requirements of Law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to the disclosing Party or any of its Affiliates (b) pursuant to an order of a court or (c) in order to enforce 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 request or 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. The Receiving Party is not required to defend against such request and shall be permitted to disclose such Confidential Information of the Disclosing Party, with no liability for any damages that arise from such disclosure. The Parties acknowledge and agree that this Agreement, and information and documentation provided in connection with this Agreement, including Confidential Information, may be subject to the California Public Records Act (Government Code Section 7920 et seq.). The provisions of this Article 18 shall survive and shall continue to be binding upon the Parties for period of one (1) year following the date of termination of this Agreement.
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to Item 5
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70 compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 Permitted Disclosure. Notwithstanding anything to the contrary in this Article 18, each Party may disclose Confidential Information to such Party’s Affiliates, actual or potential Lenders or investors or purchasers (including tax credit purchasers), actual or potential agents, consultants, contractors, trustees, members, employees or officers, and in the case of Buyer, to actual or potential Limited Assignees, so long as the Person (other than a Person that has an ethical duty to Buyer or Seller, as applicable) to whom Confidential Information is disclosed either is bound by similarly restrictive confidentiality obligations as those contained in this Agreement, or agrees in writing to be bound by the confidentiality provisions of this Article 18 to the same extent as if it were a Party. In addition, Buyer may, in its reasonable discretion, disclose a redacted version (or an unredacted version, if required by Law or a Governmental Authority) of this Agreement, or any portion thereof, and any information, data, analyses, documents, and materials furnished or made available to Buyer in connection with this Agreement to the CAISO, the CPUC, and all divisions thereof, the CEC, the CARB, and any other Government Authority having jurisdiction over Buyer or this Agreement; provided that Buyer shall use reasonable efforts to limit, to the extent possible, the ability of any such applicable Government Authority to further disclose such information that qualifies as Confidential Information and is eligible for confidential or protective treatment under the respective regulatory agency’s rules, orders, or decisions on confidential or protected information.
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. For the purposes of this section and to the extent the information is not prohibited by Law from disclosure, press release does not include records released by Buyer, including annual comprehensive financial reports; memorandums or reports to Buyer’s Board of Directors; documentations submitted to regulatory agencies; disclosures related to public financings; and production of records required by subpoena, court order, or under the California Public Records Act (Government Code Section 7920 et seq.).
ARTICLE 19
MISCELLANEOUS
19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared Item 5
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71 through the joint efforts of the Parties and shall not be construed against one Party or the other Party 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, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) or, to the extent set forth herein, or in any Collateral Assignment Agreement, any Lender or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” application of the “just and reasonable” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956), and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008), and NRG Power Marketing LLC v. Maine Public Utility Commission, 558 U.S. 527 (2010). 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; Electronic Signatures. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original. The Parties may rely on electronic or scanned signatures as originals.
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72 19.8 Electronic Delivery. Delivery of an executed signature page of this Agreement by electronic format (including portable document format (.pdf) shall be the same as delivery of an original executed signature page.
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 of Buyer or its constituent members, in connection with this Agreement.
19.11 Forward Contract; Service Contract. The Parties intend that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532. The Parties intend for this Agreement to be a service contract as described in Section 7701(e) of the Internal Revenue Code of 1986, as amended.
19.12 Change in Electric Market Design. If a change in the market structure or 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, within sixty (60) days 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. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
19.13 Further Assurances. Each of the Parties hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
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73 [signature page follows]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
[IP Darden III, LLC,][IP Darden IV, LLC]
a Delaware limited liability company
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
[Silicon Valley Clean Energy Authority][Central
Coast Community Energy], a California joint
powers authority
By:
Name:
Title:
Date:
Approved as to form:
By:
Name:
Title:
Date:
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Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Darden [III][IV] Project
Site includes all or some of the following APNs: See attached Schedule 1. This Agreement is specific to the Site and Seller may change the location of the Site only upon Buyer’s prior written consent, which consent is in Buyer’s sole discretion.
County: Fresno County, California
CEQA Lead Agency:
Type of Generating Facility: Solar photovoltaic electricity generating facility Type of Storage Facility: A lithium-ion battery energy storage system which is capable of receiving Charging Energy in the form of Grid Energy.
Guaranteed Capacity: See definition in Section 1.1.
Storage Contract Capacity: See definition in Section 1.1.
Maximum Charging Capacity: MW
Maximum Discharging Capacity: MW
Maximum Storage Level: MWh
Operating Restrictions of Storage Facility: See Exhibit Q Interconnection Point: PG&E’s Los Bano-Midway 500 kV transmission line Delivery Point: Facility Pnode on the CAISO Controlled Grid.
PNode:
Participating Transmission Owner: PG&E
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Exhibit A - 2
Schedule 1
List of all APNs8
[Darden III]
[Darden IV]
8 NTD: To be broken out for each CCA.
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Exhibit B - 1
EXHIBIT B
FACILITY CONSTRUCTION AND COMMERCIAL OPERATION
1. Construction of the Facility.
a. “Construction Start” will occur once Seller has executed an engineering, procurement, and construction contract or similar agreement and Seller or its designee has issued a full notice to proceed that authorizes the contractor to mobilize to the Site. The date of Construction Start will be evidenced by and subject to Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the “Construction Start Date.” Seller shall use commercially reasonable efforts to cause Construction Start to occur no later than the Guaranteed Construction Start Date. The “Guaranteed Construction Start Date” means the Expected Construction Start Date, subject to extensions on a day-for-day basis for the Development Cure Period. b. If Construction Start is not achieved by the Guaranteed Construction Start Date, Seller shall pay Construction Delay Damages to Buyer for each day for which Construction Start has not begun after the Guaranteed Construction Start Date.
Construction Delay Damages shall be payable to Buyer by Seller until Seller reaches Construction Start of the Facility. Buyer shall invoice Seller for Construction Delay Damages, if any, accrued during the prior month and, within ten (10) Business Days following Seller’s receipt of such invoice, Seller shall pay Buyer the amount of the Construction Delay Damages set forth in such invoice. If Seller fails to pay the Construction Delay Damages within ten (10) Business Days of receipt of Buyer’s invoice, Buyer shall be entitled to deduct such Construction Delay Damages from the Development Security. Construction Delay Damages shall be refundable to Seller pursuant to Section 2 b. of this Exhibit B. The Parties agree that Buyer’s receipt of Construction Delay Damages shall be Buyer’s sole and exclusive remedy and Seller’s sole and exclusive liability for Seller’s unexcused delay in achieving the Construction Start Date on the Guaranteed Construction Start Date, but shall (x) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Section 11.1 and (y) not limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(ii) or
11.1(b)(iv) and receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2.
2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when (i) Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice from a Licensed Professional Engineer to Buyer substantially in the form of Exhibit H (the “COD Certificate”) and (ii) Seller has notified Buyer in writing that it has provided the required documentation to Buyer and met the conditions for achieving Commercial Operation, and (iii) Buyer has acknowledged to Seller in writing that Buyer agrees that Commercial Operation has been achieved, which acknowledgement shall not be unreasonably withheld, conditioned or delayed; provided if Buyer fails to acknowledge or provide written notice disputing Commercial Operation Item 5
Attachment 1
Exhibit B - 2
within five (5) Business Days following Seller’s notice of Commercial Operation, Buyer’s right to acknowledge Commercial Operation shall be waived and Commercial Operation shall be deemed to have occurred as of the last day of such five (5)-Business Day period.
The “Commercial Operation Date” shall be the later of
a. Seller shall use commercially reasonable efforts to 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 that it intends to achieve Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
b. If Seller achieves Commercial Operation for the Facility by the Guaranteed Commercial Operation Date, all Construction Delay Damages paid by Seller shall be refunded to Seller. Seller shall include a request for refund of such Construction Delay Damages with the first invoice to Buyer after Commercial Operation. c. If Seller does not achieve Commercial Operation by the Guaranteed Commercial Operation Date, Seller shall pay Commercial Operation Delay Damages to Buyer for each day after the Guaranteed Commercial Operation Date until the Commercial Operation Date Commercial
Operation Delay Damages shall be paid to Buyer in advance on a monthly basis by the first day of the month in which such Commercial Operation Delay Damages begin accruing. If Seller fails to pay the Commercial Operation Delay Damages within ten (10) Business Days of receipt of Buyer’s invoice, Buyer shall be entitled to deduct such Commercial Operation Delay Damages from the Development Security. If Commercial Operation is achieved during a month for which Commercial Operation Delay Damages have been paid in advance, Buyer shall return to Seller a prorated amount equal to the Commercial Operation Delay Damages paid for each day in such month from and after the Commercial Operation Date. The Parties agree that Buyer’s receipt of Commercial Operation Delay Damages shall be Buyer’s sole and exclusive remedy and Seller’s sole and exclusive liability for delay in achieving the Commercial Operation Date on or before the date that is days after the Guaranteed Commercial Operation Date, but shall (x) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Section 11.1 and (y) not limit Buyer’s right to receive a Damage Payment upon exercise of Buyer’s remedies pursuant to Section
11.2. 3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation within
Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and 11.2.
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Attachment 1
Exhibit B - 3
4. Extension of the Guaranteed Dates. Both of the Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall, subject to notice and documentation requirements set forth below, be automatically extended on a day-for-day basis (the “Development Cure Period”) due to:
a. a Force Majeure Event;
Notwithstanding anything in this Agreement to the contrary, (i) the cumulative extensions granted under the Development Cure Period shall not exceed days for any reason, including a Force Majeure Event and (ii) the extensions granted pursuant to clause 4(c) under the Development Cure Period shall not exceed thirty (30) days. In addition, no extension under the Development Cure Period shall be given if (i) the delay was the result of Seller’s failure to take commercially reasonable actions to meet its requirements and deadlines, (ii) if Seller is asserting a claim of Force Majeure Event, and Seller does not satisfy the requirements of a Force Majeure Event, including the notice and documentation requirements under Section 10.3, or (iii) if Seller is asserting a claim for any delay provided for above and Seller fails to provide Notice to Buyer within thirty (30) days after Seller became aware of the impact of the actual delay affecting the Facility, except that in the case of a delay occurring within days of the Expected Commercial Operation Date, or after such date, Seller must provide Notice within five (5) Business Days of Seller becoming aware of the impact of such delay. Upon request from Buyer, Seller shall promptly provide documentation demonstrating to Buyer’s reasonable satisfaction that the delays described above did not result from Seller’s actions or failure to take reasonable actions.
5. Failure to Reach Guaranteed Capacity or Storage Contract Capacity. a. Guaranteed Capacity. If, at Commercial Operation, the Installed PV Capacity is less than one hundred percent (100%) of the Guaranteed Capacity, Seller shall have days after the Commercial Operation Date to install
additional capacity or Network Upgrades such that the Installed PV Capacity is at least equal to the Guaranteed Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I-1 hereto specifying the new Installed PV Capacity. If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay, as Buyer’s sole and exclusive remedy and Seller’s sole Item 5
Attachment 1
Exhibit B - 4
and exclusive liability for such shortfall, “Capacity Damages” to Buyer, in an amount equal to for each MW
(or portion thereof) that the Guaranteed Capacity exceeds the Installed PV Capacity, and the Guaranteed Capacity and other applicable portions of this Agreement shall be adjusted accordingly.
b. Storage Contract Capacity. If, at Commercial Operation, the Installed Battery Capacity is less than one hundred percent (100%) of the Storage Contract Capacity, Seller shall have days after the Commercial Operation
Date to install additional capacity or Network Upgrades such that the Installed Battery Capacity is at least equal to one hundred percent (100%) of the Storage Contract Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I-2 hereto specifying the new Installed Battery Capacity. If Seller fails to construct the Storage Contract Capacity by such date, Seller shall pay Capacity Damages to Buyer, as Buyer’s sole and exclusive remedy and Seller’s sole and exclusive liability for such shortfall, in an amount equal to for each MW (or portion thereof)
that the Storage Contract Capacity exceeds the Installed Battery Capacity, and the Storage Contract Capacity and other applicable portions of this Agreement shall be adjusted accordingly.
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Attachment 1
Exhibit C - 1
EXHIBIT C
COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C. (a) Renewable Rate.
(b) Excess Contract Year Deliveries Over
(c) Excess Settlement Interval Deliveries. If during any Settlement Interval, Seller delivers Product amounts, as measured by the amount of Generating Facility Energy, in excess of the product of the Guaranteed Capacity and the duration of the Settlement Interval, expressed in hours (“Excess MWh”), then the price applicable to all such Excess MWh in such Settlement Interval shall be and if there is a Negative LMP during such Settlement Interval, Seller shall pay to Buyer an amount equal to the absolute value of the Negative LMP times such Excess MWh.
(d) Storage Rate.
(e) Liquidated Damages for Failure to Achieve Guaranteed Efficiency Rate.
(f) Test Energy. Test Energy is compensated in accordance with Section 3.6. (g) Tax Benefits.
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Attachment 1
Exhibit C - 2
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Attachment 1
Exhibit C - 3
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Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon Initial Synchronization of the Facility to the CAISO Grid, Buyer (or its designated qualified third party) shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of Test Energy and the Product at the Delivery Point. At least thirty (30) days prior to the Initial Synchronization of the Facility to the CAISO Grid, (i) Seller shall take all reasonable actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid, and (ii) Buyer shall, and shall cause its designee to, expeditiously take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid. On and after Initial Synchronization of the Facility to the CAISO Grid, Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit Schedules to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen-minute market or real time basis, that may develop after the Effective Date, as determined by Buyer consistent with the CAISO Tariff. Buyer shall cause its Scheduling Coordinator to reasonably cooperate with Seller during the testing and commissioning of the Facility prior to the Commercial Operation Date. Buyer (or Buyer’s SC) shall comply with all applicable CAISO Tariff requirements, procedures, protocols, rules and testing as applicable to Buyer as the Scheduling Coordinator for the Facility. Seller, as owner of the Facility, shall comply with all applicable CAISO Tariff requirements, procedures, protocols, rules and testing as applicable to Seller as owner of the Facility. Seller shall ensure that Buyer or Buyer’s SC has all necessary data access or reporting, as applicable, to the extent necessary to satisfy any applicable CAISO requirements. (b) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer (as the Facility’s SC) and the CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, must offer waiver forms, inability to follow CAISO dispatches or directives, and any other notice or update required of a Generating Facility or a Non-Generator Resource. Seller will cooperate with Buyer to provide such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to Buyer (as the Facility’s SC) and the CAISO (in order of preference) telephonically, by electronic mail, transmission to the personnel designated to receive such information.
(c) CAISO Costs and Revenues. Except as otherwise set forth below, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs, charges, and penalties(including penalties, Imbalance Energy and Charging Energy costs or revenues, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy or Item 5
Attachment 1
Exhibit D - 2
Charging Energy revenues or costs, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, Inter-SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility. Notwithstanding the foregoing, Seller shall be responsible for all CAISO penalties incurred by Buyer because of Seller’s failure to perform its obligations in accordance with this Agreement, (ii) incurred by Buyer because of any outages for which notice has not been provided from Seller to Buyer as required by the CAISO Tariff or the outage notification requirements set forth in this Agreement, (iii) associated with RAIMM and other Non-Availability Charges (as defined by the CAISO), or (iv) to the extent arising as a result of Seller’s failure to comply with a timely Buyer Curtailment Order if such failure results in incremental costs to Buyer. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling requirements imposed on Facility owners (but not in connection with obligations of Buyer hereunder), outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or any CAISO directive, including Curtailment Orders, or to perform in accordance with this Agreement, including with respect to the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility. (d) CAISO Settlements. Buyer (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“CAISO Charges Invoice”) for which Seller is responsible under this Agreement. CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges.
Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer will review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for these CAISO Charges Invoices against any future amounts it may owe to Seller under this Agreement. The obligations under this Section with respect to payment of CAISO Charges Invoices shall survive the expiration or termination of this Agreement. (e) Dispute Costs. Buyer (as the Facility’s SC) may be required by Seller to dispute CAISO settlements in respect of the Facility. Seller agrees to pay Buyer’s costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes. (f) Terminating Buyer’s Designation as Scheduling Coordinator. At least thirty (30) days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier termination of this Agreement, the Parties will take all actions necessary to terminate the designation of Buyer or Buyer’s designated SC as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration date.
(g) Master File and Resource Data Template; Master Resource Database. The Parties will collaborate to comply with the applicable deadlines for filing and updating the information Item 5
Attachment 1
Exhibit D - 3
for the Facility in the Master Resource Database and Master File. Seller shall provide the data to Buyer that is required for the CAISO’s Master File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement at least five (5) Business Days before the deadline for submission to CAISO and Buyer (as SC) shall promptly provide such data to CAISO.
Seller shall provide the data that is required for the CPUC’s Master Resource Database for the Facility consistent with this Agreement to Buyer for review and approval at least five (5) Business Days before the deadline for submission of such to the CPUC. Neither Party shall change such CAISO or CPUC 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) and CPUC’s Master Resource Database for this Facility remains consistent with the actual operating characteristics of the Facility and provide such information to Buyer for review at least five (5) Business Days prior to submission to the CAISO or CPUC as applicable.
(h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate reasonably with Seller, or cause its designated SC to cooperate reasonably with Seller, to the extent necessary to enable Seller to comply, and for Seller to demonstrate Seller’s compliance with, NERC reliability standards. This cooperation shall include the provision of information in Buyer’s possession or its designated SC’s possession, as applicable, that Buyer (as Scheduling Coordinator) or its designated SC, as applicable, has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) or its designated SC, as applicable, related to Seller’s compliance with applicable NERC reliability standards.
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Attachment 1
Exhibit E - 1
EXHIBIT E
PROGRESS REPORTING FORM
Each Progress Report must include the following items, as applicable:
1. Executive Summary.
2. Facility description.
3. Site plan of the Facility.
4. Description of any material planned changes to the Facility or the Site.
5. Gantt chart schedule showing progress on achieving each of the Milestones.
6. Summary of activities during the previous calendar quarter or month, as applicable.
7. Forecast of activities scheduled for the current calendar quarter or month, as applicable.
8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones.
9. List of issues that are reasonably likely to affect Seller’s Milestones.
10. A status report of start-up activities including a forecast of activities ongoing and after start-up, a report on Facility performance including performance projections for the next twelve (12) months.
11. Progress and schedule of all 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 Transmission System and all other interconnection utility services.
13. Any other documentation reasonably requested by Buyer.
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Attachment 1
Exhibit F-1 - 1
EXHIBIT F-1
FORM OF AVERAGE EXPECTED ENERGY REPORT
Average Expected Energy (in MWh)
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
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Attachment 1
Exhibit F-2 - 1
EXHIBIT F-2
FORM OF MONTHLY DELIVERY FORECAST
The following tables are provided for informational purposes only, and shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
Hourly Expected Energy
Day
HE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
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Exhibit F-2 - 2
Available Generating Capacity, MW Per Hour – [Insert Month] 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Day
1 Day
2 Day
3 Day
4 Day
5 [insert additional rows for each day in the month]
Day
29 Day
30 Day
31 Storage Capacity, MW Per Hour – [Insert Month]
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Day
1 Day
2 Day
3 Day
4 Day
5 [insert additional rows for each day in the month]
Day
29 Day
30 Day
31 Item 5
Attachment 1
Exhibit G - 1
EXHIBIT G
GUARANTEED ENERGY PRODUCTION DAMAGES CALCULATION
In accordance with Section 4.7, if Seller fails to achieve the Guaranteed Energy Production during any Performance Measurement Period, a liquidated damages payment shall be due from Seller to Buyer, calculated as follows:
[(A – B) * (C – D)]
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 Renewable Rate for the Contract Year, in $/MWh
“Adjusted Energy Production” has the meaning given in Section 4.7 of the Agreement.
No payment shall be due if the calculation of (A - B) or (C - D) yields a negative number.
After each Performance Measurement Period, Buyer will send Seller Notice of the amount of damages owing, if any, which shall be payable to Buyer within thirty (30) days of Seller’s receipt of such Notice.
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Attachment 1
Exhibit H - 1
EXHIBIT H
FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by [licensed professional engineer] (“Engineer”) to [Silicon Valley Clean Energy Authority, a California joint powers authority][Central Coast Community Energy, a California joint powers authority] (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated ___________ by and between [IP Darden III, LLC,] [IP Darden IV, LLC,] a Delaware limited liability company (“Seller”) and Buyer (“Agreement”). 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], Engineer hereby certifies and represents to Buyer the following:
1. Seller has installed equipment for the Generating Facility with a nameplate capacity of no less than of the Guaranteed Capacity.
2. Seller has installed equipment for the Storage Facility with a nameplate capacity of no less than of the Storage Contract Capacity.
3. The Generating Facility’s testing included a performance test demonstrating peak electrical output of no less than of the Guaranteed Capacity for the Generating Facility at the Delivery Point, as adjusted for Ambient Conditions on the date of the Facility testing.
4. The Storage Facility is fully capable of charging, storing and discharging energy up to no less than of the Storage Contract Capacity and receiving instructions to charge, store and discharge energy, all within the operational constraints and subject to the applicable Operating Restrictions.
5. The Generating Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
6. Seller has demonstrated functionality of the Facility’s communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the Agreement and/or the CAISO;
7. Seller has commissioned all equipment substantially in accordance with its respective manufacturer’s specifications.
8. Authorization to parallel the Facility was obtained by the Participating Transmission Owner, [Name of Participating Transmission Owner as appropriate] on [Date].
9. Seller has caused the Facility to be included in the Full Network Model and has the ability to offer Bids into the CAISO Day-Ahead and Real-Time markets in respect of the Facility.
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Exhibit H - 2
10. The Transmission Provider has provided documentation supporting full unrestricted release for Commercial Operation by [Name of Participating Transmission Owner as appropriate] on [Date].
11. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on [Date].
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
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Exhibit I-1 - 1
EXHIBIT I-1
FORM OF INSTALLED PV CAPACITY CERTIFICATE
This certification (“Certification”) of Installed PV Capacity is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to [Silicon Valley Clean Energy Authority, a California joint powers authority][Central Coast Community Energy, a California joint powers authority] (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated [DATE] by and between [IP Darden III, LLC,] [IP Darden IV, LLC,] a Delaware limited liability company (“Seller”) and Buyer (“Agreement”). All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the performance test for the Generating Facility demonstrated peak electrical output of __ MW AC at the Delivery Point, as adjusted for Ambient Conditions on the date of the performance test (“Installed PV Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
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Exhibit I-2 - 1
EXHIBIT I-2
FORM OF INSTALLED BATTERY CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Battery Capacity is delivered by [licensed professional engineer] (“Engineer”) to [Silicon Valley Clean Energy Authority, a California joint powers authority][Central Coast Community Energy, a California joint powers authority](“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated [DATE] by and between [IP Darden III, LLC,] [IP Darden IV, LLC,] a Delaware limited liability company (“Seller”) and Buyer (“Agreement”). All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the Storage Capacity Test demonstrated a maximum dependable operating capability that can be sustained for four (4) consecutive hours to discharge electric energy of __ MW AC to the Delivery Point, in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O (the “Installed Battery Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
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Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [IP Darden III, LLC,] [IP Darden IV, LLC,] a Delaware limited liability company (“Seller”) to [Silicon Valley Clean Energy Authority, a California joint powers authority][Central Coast Community Energy, a California joint powers authority] (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated __________ by and between Seller and Buyer (“Agreement”). All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
1. Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the full notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto.
2. the precise Site on which the Facility is located is, which must include some or all of the previously identified APNs (such description shall amend the description of the Site in Exhibit A): ______________________________________________________________.
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller this ________ day of _____________, 20__.
[IP DARDEN III, LLC][IP DARDEN IV, LLC]
a Delaware limited liability company
By:
Printed Name:
Title:
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Exhibit K - 1
EXHIBIT K
FORM OF LETTER OF CREDIT
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Exhibit K - 3
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Exhibit K - 4
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Exhibit K - 5
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Exhibit K - 6
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Exhibit L - 1
EXHIBIT L
FORM OF GUARANTY9
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][Central Coast Community Energy, a California joint powers authority] (together with its successors and permitted assigns, “Buyer”).
Recitals
A. Buyer and [IP Darden III, LLC,] [IP Darden IV, LLC,] a Delaware limited liability company (“Seller”), entered into that certain Renewable Power Purchase Agreement (as amended, restated or otherwise modified from time to time, the “PPA”) dated as of [____], 20___.
B. Guarantor is entering into this Guaranty as Performance Security to secure Seller’s obligations under the PPA, as required by Section 8.8 of the PPA.
C. It is in the best interest of Guarantor to execute this Guaranty in as much 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 (the “Guaranteed Amount”), provided, that Guarantor’s aggregate liability under or arising out of this Guaranty shall not exceed ________ Dollars ($___________).
The Parties understand and agree that any payment by Guarantor or Seller of any portion of the Guaranteed Amount shall thereafter reduce Guarantor’s maximum aggregate liability 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 9 NTD: Form to be broken out for each CCA.
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Attachment 1
Exhibit L - 2
conditions of the Agreement. If Seller fails to pay any Guaranteed Amount as required pursuant to the PPA for five (5) Business Days following Seller’s receipt of Buyer’s written notice of such failure (the “Demand Notice”), then Buyer may elect to exercise its rights under this Guaranty and may make a demand upon Guarantor (a “Payment Demand”) for such unpaid Guaranteed Amount. A Payment Demand shall be in writing and shall reasonably specify in what manner and what amount Seller has failed to pay and an explanation of why such payment is due and owing, with a specific statement that Buyer is requesting that Guarantor pay under this Guaranty.
Guarantor shall, within five (5) Business Days following its receipt of the Payment Demand, pay the Guaranteed Amount to Buyer.
3. Scope and Duration of Guaranty. This Guaranty applies only to the Guaranteed Amount.
This Guaranty shall continue in full force and effect from the Effective Date until the earlier of the following: (x) all Guaranteed Amounts have been paid in full (whether directly or indirectly through set-off or netting of amounts owed by Buyer to Seller), or (y) replacement Performance Security is provided in an amount and form required by the terms of the PPA. Further, this Guaranty (a) shall remain in full force and effect without regard to, and shall not be affected or impaired by any invalidity, irregularity or unenforceability in whole or in part of this Guaranty, and (b) subject to the preceding sentence, shall be discharged only by complete performance of the undertakings herein. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be released, discharged, or otherwise affected and this Guaranty shall not be invalidated or impaired or otherwise affected for the following reasons:
(i) the extension of time for the payment of any Guaranteed Amount, or (ii) any amendment, modification or other alteration of the PPA, or (iii) any indemnity agreement Seller may have from any party, or (iv) any insurance that may be available to cover any loss, except to the extent insurance proceeds are used to satisfy the Guaranteed Amount, or
(v) any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, Seller or any of its assets, including but not limited to any rejection or other discharge of Seller’s obligations under the PPA imposed by any court, trustee or custodian or any similar official or imposed by any law, statue or regulation, in each such event in any such proceeding, or
(vi) the release, modification, waiver or failure to pursue or seek relief with respect to any other guaranty, pledge or security device whatsoever, or (vii) any payment to Buyer by Seller that Buyer subsequently returns to Seller pursuant to court order in any bankruptcy or other debtor-relief proceeding, or (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 Item 5
Attachment 1
Exhibit L - 3
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, defenses based on statute of frauds and accord and satisfaction;
provided that, subject to Guarantor’s payment of a Guaranteed Amount in accordance with Paragraph 2, Guarantor reserves the right to assert for itself in a subsequent proceeding any defenses, setoffs or counterclaims that Seller is or may be entitled to assert against Buyer (except for such defenses, setoffs or counterclaims that may be asserted by Seller with respect to the PPA, but that are expressly waived under any provision of this Guaranty).
4. Waivers by Guarantor. Guarantor hereby unconditionally waives as a condition precedent to the performance of its obligations hereunder, with the exception of the requirements in Paragraph 2, (a) notice of acceptance, presentment or protest with respect to the Guaranteed Amounts and this Guaranty, (b) notice of any action taken or omitted to be taken by Buyer in reliance hereon, (c) any requirement that Buyer exhaust any right, power or remedy or proceed against Seller under the PPA, and (d) any event, occurrence or other circumstance which might otherwise constitute a legal or equitable discharge of a surety. Without limiting the generality of the foregoing waiver of surety defenses, it is agreed that the occurrence of any one or more of the following shall not affect the liability of Guarantor hereunder:
(i) at any time or from time to time, without notice to Guarantor, the time for payment of any Guaranteed Amount shall be extended, or such performance or compliance shall be waived; (ii) the obligation to pay any Guaranteed Amount shall be modified, supplemented or amended in any respect in accordance with the terms of the PPA; (iii) subject to Paragraph 9, any (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 Paragraph 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][corporate] 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 Item 5
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Exhibit L - 4
with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this Guaranty does not and will not contravene Guarantor’s organizational documents, any applicable Law or any contractual provisions binding on or affecting Guarantor, (d) there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the Guarantor, threatened, against or affecting Guarantor or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of Guarantor to enter into or perform its obligations under this Guaranty, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority, and no consent of any other Person (including, any stockholder or creditor of the Guarantor), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by Guarantor.
7. Notices. Notices under this Guaranty shall be deemed received if sent to the address specified below: (i) on the day received if served by overnight express delivery, and (ii) four Business Days after mailing if sent by certified, first class mail, return receipt requested. If transmitted by facsimile, such notice shall be deemed received when the confirmation of transmission thereof is received by the party giving the notice. Any party may change its address or facsimile to which notice is given hereunder by providing notice of the same in accordance with this Paragraph 7.
If delivered to Buyer, to it at [____]
Attn: [____]
Email: [____]
If delivered to Guarantor, to it at [____]
Attn: [____]
Email: [____]
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 state courts of the County of [Santa Clara][Monterey], or if appropriate, in the United States District Court, Northern District of California located in San Francisco.
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 Item 5
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Exhibit L - 5
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.
[Signature on next page]
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Attachment 1
Exhibit L - 6
IN WITNESS WHEREOF, the Guarantor has caused an authorized representative to execute and deliver this Guaranty.
GUARANTOR:
[_______]
By:______________________________
Printed Name:__________________
Title:____________________________
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Attachment 1
Exhibit M - 1
EXHIBIT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) is delivered by [IP Darden III, LLC,] [IP Darden IV, LLC,] a Delaware limited liability company (“Seller”) to [Silicon Valley Clean Energy Authority, a California joint powers authority][Central Coast Community Energy, a California joint powers authority] (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated __________ by and between Seller and Buyer (“Agreement”). All capitalized terms used in this Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Pursuant to Section 3.8(b) of the Agreement, Seller hereby provides the below Replacement RA product information:
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Attachment 1
Unit Information1
Name
Location
CAISO Resource ID
Unit SCID
Prorated Percentage of Unit Factor
Resource Type
Point of Interconnection with the CAISO
Controlled Grid ("substation or transmission
line")
Path 26 (North or South)
LCR Area (if any)
Deliverability restrictions, if any, as described
in most recent CAISO deliverability
assessment
Run Hour Restrictions
Delivery Period
Month Unit CAISO NQC (MW) Unit Contract Quantity (MW)
January
February
March
April
May
June
July
August
September
October
November
December
1To be repeated for each unit if more than one.
Exhibit M - 2
[IP DARDEN III, LLC] [IP DARDEN IV, LLC]
a Delaware limited liability company
By:
Printed Name:
Title:
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Attachment 1
Exhibit N - 1
EXHIBIT N
NOTICES
[IP Darden III, LLC] [IP Darden IV, LLC] Silicon Valley Clean Energy Authority10
10 To be updated for 3CE
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Attachment 1
Exhibit N - 2
[IP Darden III, LLC] [IP Darden IV, LLC] Silicon Valley Clean Energy Authority10
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Attachment 1
Exhibit O - 1
EXHIBIT O
STORAGE CAPACITY TESTS
Storage Capacity Test Notice and Frequency
A. Commercial Operation Date Storage Capacity Test. Upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Storage Capacity Test prior to the Commercial Operation Date. Such initial Storage Capacity Test shall be performed in accordance with this Exhibit O and shall establish the initial Storage Contract Capacity hereunder based on the actual capacity of the Storage Facility determined by such Storage Capacity Test.
B. Subsequent Storage Capacity Tests. Following the Commercial Operation Date, once each Contract Year, Seller will perform a Storage Capacity Test and will give Buyer ten (10) Business Days prior Notice of such test. Subject to Section (L) herein, Buyer shall have the right (1) once per Contract Year to require Seller to schedule and complete a Storage Capacity Test and (2) to require a retest of the Storage Capacity Test at any time upon no less than ten (10) Business Days prior written Notice to Seller if Buyer provides data with such Notice reasonably indicating that the Storage Capacity has varied materially from the results of the most recent Storage Capacity Test. Seller shall have the right to run a retest of any Storage Capacity Test upon ten (10) Business Days’ prior written Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice). Any testing of the Storage Facility requested by Buyer following the Commercial Operation Date and all required tests pursuant to this Exhibit O shall be deemed Buyer-instructed dispatches of the Facility (each, a “Buyer Dispatched Test”). Any test of the Storage Facility that is not a Buyer Dispatched Test (including all tests conducted prior to Commercial Operation) and other Seller-requested discretionary tests that Seller deems necessary or recommended for purposes of reliably operating or maintaining the Storage Facility or for re-performing a required test within a reasonable number of days of the initial required test (considering the circumstances that led to the need for a retest) shall be deemed a “Seller Initiated Test”. For all Buyer Dispatched Tests, Buyer shall bear the costs of any Charging Energy to be used to charge the Storage Facility and Buyer shall be entitled to all CAISO revenues associated with a Storage Facility dispatch during a Buyer Dispatched Test. For all Seller Initiated Tests, Seller shall reimburse Buyer the amount of Buyer’s payment of the Charging Energy for such Seller Initiated Test, and Seller shall be entitled to all CAISO revenues associated with the discharge of such Energy. Buyer shall pay to Seller, in the month following Buyer’s receipt of such CAISO revenues and otherwise in accordance with Article 8, all applicable CAISO revenues received by Buyer and associated with the discharge Energy associated with such Seller Initiated Test.
C. Test Results and Re-Setting of Storage Contract Capacity and Efficiency Rate.
In accordance with Section 4.9(c) of the Agreement, Part II.J, and Part II.K. below, the actualstorage capacity and efficiency rate determined pursuant to the most recent Storage Capacity Test (up to, but not in excess of, the Storage Contract Capacity) shall become the new Storage Capacity and Efficiency Rate, effective as of the day following the completion of the test, for calculating the monthly payment for the Storage Product and all other purposes under this Agreement.
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Attachment 1
Exhibit O - 2
Storage Capacity Test Procedures
PART I. GENERAL.
Each Storage Capacity Test (including the initial Storage Capacity Test and all re-performances thereof) shall be conducted in accordance with Prudent Operating Practices, manufacturer guidelines, and the provisions of this Exhibit O. For ease of reference, a Storage Capacity Test is sometimes referred to in this Exhibit O as a “SCT”. Buyer or its representative may be present for the SCT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost).
PART II. REQUIREMENTS APPLICABLE TO ALL STORAGE CAPACITY TESTS AND EFFICIENCY TESTS.
A. Purpose of Test. Each SCT shall:
(1) Determine an updated Storage Capacity;
(2) Determine the amount of Energy required to fully charge the Storage Facility;
(3) Determine the Storage Facility charge ramp rate;
(4) Determine the Storage Facility discharge ramp rate; and (5) Determine an updated Efficiency Rate.
B. Test Elements. Each SCT shall include the following test elements:
• Electrical output at Maximum Discharging Capacity (as defined in Exhibit A) at the Storage Facility Meter and concurrently at the Facility Meter (MW);
• Electrical input at Maximum Charging Capacity (as defined in Exhibit A) at the Storage Facility Meter (MW);
• Amount of time between the Storage Facility’s electrical output going from 0 to Maximum Discharging Capacity;
• Amount of time between the Storage Facility’s electrical input going from 0 to Maximum Charging Capacity; and
• Amount of energy required to go from 0% Stored Energy Level to the Maximum Storage Level charging at a rate equal to the Maximum Charging Capacity.
C. Parameters. During each SCT, the following parameters shall be measured and recorded simultaneously for the Storage Facility, at minimum ten (10) minute intervals:
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Attachment 1
Exhibit O - 3
(1) Time;
(2) Net electrical energy output to the Storage Facility Meters (kWh) (i.e., to each measurement device making up the Storage Facility Meter); (3) Net electrical energy input from the Storage Facility Meters (kWh) (i.e., from each measurement device making up the Storage Facility Meter); and (4) Stored Energy Level (MWh).
D. Site Conditions. During each SCT, the following conditions at the Site shall be measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the Storage Facility; and
(3) Ambient air temperature (°F).
E. Test Showing. Each SCT must demonstrate that the Storage Facility:
(1) successfully started;
(2) operated for at least four (4) consecutive hours at Maximum Discharging Capacity (as defined in Exhibit A);
(3) operated for at least four (4) consecutive hours at Maximum Charging Capacity (as defined in Exhibit A);
(4) has a Storage Capacity of an amount that is, at least, equal to the Maximum Storage Level (as defined in Exhibit A); and
(5) is able to deliver Discharging Energy as measured by the Storage Facility Meter for four (4) consecutive hours at a rate equal to the Maximum Discharging Capacity.
F. Test Conditions.
(i) General. At all times during a SCT, the Storage Facility shall be operated in compliance with Prudent Operating Practices and all operating protocols recommended, required or established by the manufacturer for operation at Maximum Discharging Capacity and Maximum Charging Capacity (as each is defined in Exhibit A).
(ii) Abnormal Conditions. If abnormal operating conditions that prevent the recordation of any required parameter occur during a SCT, Seller may postpone or reschedule all or part of such SCT in accordance with Part II.G below.
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Exhibit O - 4
(iii) Instrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the SCT. The instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Operating Practice.
G. Incomplete Test. If any SCT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the SCT stopped; (ii) require that the portion of the SCT not completed, be completed within a reasonable specified time period; or (iii) require that the SCT be entirely repeated.
Notwithstanding the above, if Seller is unable to complete a SCT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO or the PTO or the Transmission Provider, Seller shall be permitted to reconduct such SCT on dates and at times reasonably acceptable to the Parties.
H. Final Report. Within fifteen (15) Business Days after the completion of any SCT, Seller shall prepare and submit to Buyer a written report of the results of the SCT, which report shall include:
(1) a record of the personnel present during the SCT that served in an operating, testing, monitoring or other such participatory role;
(2) the measured data for each parameter set forth in Part II.B through D, including copies of the raw data taken during the test; (3) the level of Storage Capacity, Energy In, Energy Out, Efficiency Rate, Maximum Charging Capacity, the current charge and discharge ramp rate, and Stored Energy Level determined by the SCT, including supporting calculations; and
(4) Seller’s statement of either Seller’s acceptance of the SCT or Seller’s rejection of the SCT results and reason(s) therefor.
Within ten (10) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the SCT results or Buyer’s rejection of the SCT and reason(s) therefor.
If either Party rejects the results of any SCT, such SCT shall be repeated in accordance with Part II.G.
I. Supplementary Storage Capacity Test Protocol. No later than sixty (60) days prior to commencing Facility construction, Seller shall deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) an updated supplement to this Exhibit O with additional and supplementary details, procedures and requirements applicable to Storage Capacity Tests based on the then current design of the Facility (“Supplementary Storage Capacity Test Protocol”). Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then current Supplementary Storage Capacity Test Item 5
Attachment 1
Exhibit O - 5
Protocol. The initial Supplementary Storage Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Exhibit O.
J. Adjustment to Storage Capacity. The total amount of Discharging Energy delivered to the Storage Facility Meter (expressed in MWh AC) during each of the first four (4) hours of discharge (up to, but not in excess of, the product of (i) the original Storage Contract Capacity set forth on the Cover Sheet, as such original Storage Contract Capacity on the Cover Sheet may have been adjusted (if at all) under this Agreement, multiplied by (ii) four (4)) shall be divided by four (4) hours to determine the Storage Capacity, which shall be expressed in MW AC, and shall be the new Storage Capacity in accordance with Section 4.9(c) of the Agreement.
K. Adjustment to Efficiency Rate. The total amount of Energy Out divided by the total amount of Energy In, measured at the Storage Facility Meter location, exclusive of Electrical Losses to the Delivery Point and separately metered Station Use associated with battery cooling and other thermal management equipment, and expressed as a percentage, shall be the new Efficiency Rate in accordance with Section 4.9(c) of the Agreement.
L. Following the initial Storage Capacity Test conducted prior to the Commercial Operation Date, upon request of Seller, Buyer shall consider in good faith an alternate methodology for conducting a Storage Capacity Test by reference to the operational data reflecting the net output of the Storage Facility from the point of interconnection. Upon Seller’s request, Seller and Buyer shall work in good faith to establish a mutually acceptable methodology for demonstrating the Storage Capacity and Efficiency Rate through such operational data. If Buyer and Seller mutually agree in writing on an alternate methodology, such alternate methodology shall become the Storage Capacity Test used to establish the Storage Capacity and Efficiency Rate for all purposes of this Agreement, including compensation under Exhibit C.
PART III - INITIAL SUPPLEMENTARY STORAGE CAPACITY TEST PROTOCOL A. Initial Supplementary Storage Capacity Test Protocol The initial Supplementary Storage Capacity Test Protocol outlined below shall not be binding on the Parties until delivery of the Supplementary Storage Capacity Test Protocol in accordance with Part II.I above and is included for the convenience of the Parties.
• Procedure:
(1) System Starting State: The Storage Facility shall be balanced using OEM procedures as appropriate and will be in the on-line state at the Minimum Storage Level.
(2) Record the initial value of the Storage Facility State-of-Charge (“SOC”).
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Exhibit O - 6
(3) Charge the Storage Facility at the maximum charging level until the battery reaches the maximum SOC allowed at that rate. Continue charging the Storage Facility at the fixed maximum battery voltage (CV charging). Stop the Storage Facility charge routine when the battery has reached the desired SOC, not to exceed six hours of charging.
(4) Record and store the AC energy charged to the Storage Facility as measured at the Storage Facility Meter at the Storage Facility Metering Point associated with Charging Energy (“Energy In”). All separately metered Storage Facility Station Use shall be excluded from the measurement of Energy In.
(5) Following an agreed-upon rest period, command a real power discharge that results in an AC power output of the Storage Facility’s maximum discharging level and maintain the discharging state until the earlier of (a) the Facility has discharged at the maximum discharging level for four (4) consecutive hours, (b) the Storage Facility has reached the Minimum Storage Level, or (c) the sustained discharging level is at least 2% less than the maximum discharging level.
(6) Record and store the AC Energy discharged (in MWh) as measured at the Storage Facility Meter. Such data point shall be used for purposes of calculation the Storage Capacity.
(7) Record and store the AC Energy discharged (in MWh) as measured at the Storage Facility Metering Point associated with Charging Energy. Such data point shall be used for purposes of calculation of the Efficiency Rate. (8) If the Storage Facility has not reached the Minimum Storage Level pursuant to Part III.A.5, continue discharging the Storage Facility until it reaches the Minimum Storage Level.
(9) Record and store the AC Energy discharged (in MWh) as measured at the Storage Facility Metering Points. “Energy Out” means that total AC Energy discharged (in MWh) as measured at the Storage Facility Metering Point associated with Charging Energy from the commencement of discharging pursuant to Part III.A.5 until the Storage Facility has reached the Minimum Storage Level pursuant to either Part III.A.5 or Part III.A.8, as applicable. All separately metered Storage Facility Station Use shall be excluded from the measurement of Energy Out.
• Test Results
(1) The resulting Efficiency Rate is calculated as Energy Out/Energy In. (2) The resulting Storage Capacity measurement is the sum of the total Discharging Energy at the Storage Facility Meter divided by four (4) hours.
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Attachment 1
Exhibit P - 1
EXHIBIT P
STORAGE AVAILABILITY
Monthly Storage Availability
(a) Calculation of Monthly Storage Availability. Seller shall calculate the “Monthly Storage Availability” in a given month using the formula set forth below:
Monthly Storage Availability (%) =
[MNTHHRSm - UNAVAILHRSm ]
MNTHHRSm
where:
m = relevant month “m” in which availability is calculated; MNTHHRSm is the total number of On-Peak Hours for the month; UNAVAILHRSm, is the total number of On-Peak Hours in the month during which the Storage Facility was unavailable to deliver Storage Product (as such unavailability is prorated for any Storage Contract Capacity that is available to deliver Storage Product at any given time) for any reason other than the occurrence of any of the following (each, an “Excused Event”): (i) a Force Majeure Event, (ii) Buyer Bid Curtailment, (iii) Buyer Curtailment Orders, (iv) Curtailment Orders, (v) System Emergencies, (vi) Buyer Default, (vii) main power transformer failure, (viii) any NERC, CAISO, or PTO related outage, (ix) limitations contained in the Operating Restrictions set forth in Exhibit Q, (x) Buyer Dispatched Tests, (xi) unavailability due to (A) Buyer instruction to operate the Facility outside of the Operating Restrictions of the Storage Facility or (B) Compliance Actions, or (xii)
To be clear, hours of
unavailability caused by any Excused Event will not be included in UNAVAILHRSm for such month. Any other event that results in unavailability of the Storage Facility for less than a full hour will count as an equivalent percentage of the applicable hour(s) for this calculation. Additionally, if during any applicable hour the Storage Facility is available, but for less than the full amount of the then effective Storage Contract Capacity, the UNAVAILHRSm for such hour shall be calculated as an equivalent percentage of such hour in proportion to the amount of available Storage Contract Capacity.
If the Storage Facility or any component thereof was previously deemed unavailable for an hour or part of an hour, and Seller provides a revised Notice indicating the Storage Facility is available for that hour or part of an hour by 5:00 a.m. of the morning Buyer schedules or bids the Storage Facility in the Day-Ahead Market, the Storage Facility will be deemed to be available to the extent set forth in the revised Notice.
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Exhibit P - 2
If the Storage Facility or any component thereof was previously deemed unavailable for an hour or part of an hour and Seller provides a revised Notice indicating the Storage Facility is available for that hour or part of an hour at least sixty (60) minutes prior to the time the Buyer is required to schedule or bid the Storage Facility in the Real-Time Market, and the Storage Facility is dispatched in the Real-Time Market, the Storage Facility will be deemed to be available to the extent set forth in the revised Notice.
Availability Adjustment
The applicable “Availability Adjustment” or “AA” is calculated as follows:
(i) If the Monthly Storage Availability is greater than or equal to the Guaranteed Storage Availability, then:
AA = 100%
(ii) If the Monthly Storage Availability is less than the Guaranteed Storage Availability, but greater than or equal to then:
(iii) If the Monthly Storage Availability is less than then:
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Exhibit Q - 1
EXHIBIT Q
OPERATING RESTRICTIONS
Maximum Storage Level: MWh
Minimum Storage Level: 0 MWh
Maximum Charging Capacity: MW
Minimum Charging Capacity: 0.01 MW
Maximum Discharging Capacity: MW
Minimum Discharging Capacity: 0.00 MW
Maximum State of Charge (SOC)
during Charging:
100%
Minimum State of Charge (SOC)
during Discharging:
0%
State of Charge: 0% to 100%
Ramp Rate: MW/minute
Charge Rate:
Discharge Rate:
Storage Maximum Daily
Throughput:
MWh per Day.
Storage Maximum Annual
Throughput:
MWh per Contract Year.
Ancillary Services: The Storage Facility is capable of providing Regulation Up, Regulation Down, and Spin Ancillary Services.
Grid Charging of Storage
Facility:
Maximum Time at Minimum:
Storage Level:
None
Other Operating Limits: None
Seller and Buyer agree that Charging Notices and Discharging Notices may be modified by Seller to the extent necessary to comply with the Operating Restrictions.
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Exhibit R - 1
EXHIBIT R
METERING
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Exhibit S - 1
EXHIBIT S
FORM OF LIMITED ASSIGNMENT AGREEMENT11
11 NTD: Buyer forms under Seller financing review.
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Exhibit T - 1
EXHIBIT T
OTHER SELLER COMMITMENTS
Seller to check as applicable:
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Attachment 1