RESOLUTION NO. 2025-005
RESOLUTION RELATING TO THE MILFORD SOLAR PHASE II PROJECT:
AUTHORIZING THE NEGOTIATION, EXECUTION, AND DELIVERY OF A POWER PURCHASE AGREEMENT AI\D RELATED DOCUMENTS,
AGREEMENTS, AND INSTRUMENTS, INCLUDING AN OPTION AGREEMENT
BETWEEN SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY AND
MILFORD SOLAR PHASE II, LLC; THREE SEPARATE POWER SALES
AGREEMENTS BETWEEN SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY AND EACH OF THE CITIES OF BURBANK GLEIIDALE, AND LOS
ANGELES, ACTING BY AND THROUGH THE DEPRTMENT OF WATER AND POWER; AND SUCH OTHER DOCUMENTS, INSTRUMENTS, AND AGREEMENTS
AS MAY BE NECESSARY OR APPROPRIATE TO ACHIEVE THE FT'LL
UTILIZATION OF THE RESOURCES OF THE PROJECT AND AS SHALL BEST CARRY FORWARD TIIE INTERESTS AND OBJECTIVES OF THE AUTHORITY;
AND FINDING THAT SUCH ACTION IS EXEMPT FROM THE CALIFORNIA
EIIVIRONMENTAL QUALITY ACT
WHEREAS, the Southern California Public Power Authority ("SCPPA" or "the Authority") has issued Requests for Proposals for potential renewable electric resources to address SCPPA member renewable energy needs as part of that process the Authority, and as part of that process, the Authority, together with the cities of Burbank, Glendale, and Los Angeles acting by and through the Department of Water & Power ("LADWP") (collectively the "Project Participants") have expressed an interest in receiving energy generated from a resource denominated as the Milford Solar Phase II Project and located in Beaver County, Utah (the "Project"); and WHEREAS, SCPPA and the Project Participants have negotiated with Milford Solar Phase II, LLC (the "Power Purchase Provider") and developed in substantial final form a power purchase agreement (the "Power Purchase Agreement") whereby the Power Purchase Provider will sell and SCPPA will purchase solar energy and associated environmental rights and benefits of the Project; and
WHEREAS, the Authority and the Project Participants have negotiated with the Power Purchase Provider and developed in substantial final form an Option Agreement whereby the Authority would be provided the ability to exercise an option to purchase or acquire the Project or otherwise success to the ownership of the Project (the "Option Agreement); and WHEREAS, the Authority and the Project Participants desire to enter into three separate power sales agreements (each, a 'oPower Sales Agreement"), one with each of the Project
EXHIBIT A
Participants, whereby the Authority will provide to the Project Participants the full output of the Project, and the Project Participants will pay all costs, liabilities, and obligations of the Authority in connection with the Project; and
WHEREAS, the Authority and LADWP desire to enter into an agency agreement (the "Agency Agreement") to designate LADWP to act as the agent and project manager for SCppA in connection with the management and administration of the Project and to carry out the necessary project management tasks associated with the project; and WHEREAS, the under the terms of the Power Purchase Agreement, SCPPA may terminate the Power Purchase Agreement if SCPPA and Project Participants are unable to negotiate, approve and execute the Power Sales Agreements and Agency Agreement by an approval deadline specified in the Power Purchase Agreement (the "Approval Deadline,,); and WHEREAS, SCPPA and the Project Participants desire to provide for, and authorize, the further development, negotiation, entering into, execution, and delivery of such other documents, instruments, agreements, and arrangements with respect to the resources of the project so as to facilitate the generation, transmission, and delivery of energy associated with the project and to provide for the negotiation and approval of those terms and conditions with respect to such agreements and arrangements as shall best carry forward the interests of the Authority and the project Participants and as shall best achieve the Authority's and the Project Participants' objectives; and WHEREAS, the Authority's approval of the aforementioned agreements and actions taken in furtherance thereof is not a "project" under the California Environmental euality Act (..CEeA") as it would not result in a direct or reasonably foreseeable indirect change in the physical environment and further, is exempt from CEQA as (a) the action does not have the potential to cause a significant effect on the environment; and (b) the Milford Solar Phase II facility will be located out of state and the Power Purchase Provider is required to obtain all permits, including all necessary environmental review, for the construction and operation of the project.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Southem California Public Power Authority as follows:
1. This action is exempt from the requirements of CEQA pursuant to Section 21065 of the California Public Resources Code and sections 15061(bx3) and Sections 15061(bx3) and 15277 of Title 14 of the California Code of Regulations (the State CEeA Guidelines).
2. The Executive Director is hereby delegated all right, power, and authority to negotiate andftnalize, and each of the President, Vice President, and Executive Director of the Authority is hereby authorized and directed upon the successful negotiation thereof, to execute and deliver the power purchase Agreement, in substantial form as presented to the Board of Directors, and each of such other agreements, documents, and 2 instruments, the substance or form of which are referenced in or otherwise attached to the Power Purchase Agreement (including but not limited to, the substance and form of the Option Agreement attached to the Power Purchase Agreement), or which may be contemplated by the terms of the Power Purchase Agreement and to which the Authority is to be aparty or is to sign, each with such changes, insertions, and omissions as shall be approved by said President, Vice President, or Executive Director (such approval to be conclusively evidenced by her or his execution and delivery thereof), and each ofthe Secretary and any Assistant Secretary is hereby authorized to attest to such signature.
3. The Executive Director is hereby delegated all right, power, and authority to negotiate and finalize, and each of the President, Vice President, and Executive Director of the Authority is hereby authorized and directed upon the successful negotiation thereof, to execute and deliver the Power Sales Agreements, in substantial form as presented to the Board of Directors, and each of such other agreements, documents, and instruments, the substance or form of which are referenced or which may be contemplated by the terms of the Power Sales Agreements and to which the Authority is to be apafiy or is to sign, each with such changes, insertions, and omissions as shall be approved by said President, Vice President, or Executive Director (such approval to be conclusively evidenced by her or his execution and delivery thereof), and each ofthe Secretary and any Assistant Secretary is hereby authorized to attest to such signature.
4. The Executive Director is hereby delegated all right, power, and authority to negotiate and finalize, and each of the President, Vice President, and Executive Director of the Authority is hereby authorized and directed upon the successful negotiation thereof, to execute and deliver the Agency Agreement, which provides for LADWP to act as agent and project manager for the Authority, in substantially the form as presented to the Board of Directors, and each of such other agreements, documents, and instruments, the substance or form of which are referenced or which may be contemplated by the terms of the Agency Agreement and to which the Authority is to be aparty or is to sign, each with such changes, insertions, and omissions as shall be approved by said President, Vice President, or Executive Director (such approval to be conclusively evidenced by her or his execution and delivery thereof), and each ofthe Secretary and any Assistant Secretary is hereby authorized to attest to such signature.
5. In addition to the foregoing, in order to facilitate the negotiation and consummation of the contemplated arrangements for the generation and delivery of energy from the Project and to carry forward other necessary or appropriate agreements associated with the acquisition of energy and solar generation resources of the Project and the delivery of the energy and environmental attributes of the Project to Southern California, and to achieve the full utilization ofthe resources of the Project, the Board of Directors hereby delegates to the Executive Director of the Authority all right, power, and authority to negotiate, approve, and execute agreements, documents, and arrangements with respect to the resources of the Project to facilitate the generation, transmission, and delivery of energy associated with the Project and to negotiate and approve those terms and conditions with respect to such agreements and arrangements as shall best carry forward the interests of the Authority and the Project Participants and as shall best achieve the Authority's and the Project Participants' objectives, including the negotiation, development, and execution ofany consent agreement or other agreement pursuant to a change in control, project-related financing, or as otherwise necessary or appropriate to cany forward the interests of the Authority and the Project Participants, which does not require a material modification to or material change to the Power Purchase Agreement.
J
5. Each of the President, Vice President, Secretary, any Assistant Secretary, and the Executive Director is hereby authorized to execute and deliver any and all agreements, documents, and instruments and to do and cause to be done any and all acts and things deemed necessary or advisable for carrying out the transactions contemplated by this Resolution (including, but not limited to, making such changes to the agreements, documents, and instruments referred to in this Resolution if such changes are determined by the President, Vice President, or Executive Director to be necessary or advisable, and including, but not limited to, executing and delivering notice of termination of the power purchase Agreement if SCPPA and the Project Participants are unable to negotiate, approve, and execute the power Sales Agreements on or before the Approval Deadline, as defined in the Power Purchase Agreement).
Each reference in this Resolution to the President, Vice President, Secretary, Assistant Secretary, or Executive Director shall refer to the person holding such office or position, as applicable, at the time a given action is taken and shall not be limited to the person holding such office or position at the time of the adoption of this Resolution. All actions heretofore taken by the officers, employees, and agents of the Authority in furtherance of the transactions contemplated by this Resolution are hereby approved, ratified, and confirmed.
THE FOREGOING RESOLUTION NO. 2025-005 is approved and adopted by the Authority this 30tr day of January,2025 and is effective immediately.
California
Public Power Authority
ATTEST
L
r
E GARCIA
ASSISTANT SECRETARY
Southem California Public
Power Authority
4 AGENDA ITEM STAFF REPORT
AGENDA STAFF REPORT TEMPLATE Page 1 of 4 v.8/6/2019
MEETING DATE: January , 2025 RESOLUTION NUMBER: 2025-005 SUBJECT:
Approval of a Power Purchase Agreement and an Option Agreement with Milford Solar Phase II, LLC for the Milford Solar Phase II Project, a Power Sales Agreement with each of Los Angeles Department of Water and Power, Burbank, and Glendale, and an Agency Agreement with Los Angeles Department of Water and Power; finding such action exempt from the California Environmental Quality Act
DISCUSSION:܈܈OR CONSENT:܆
Select the appropriate box(es):
FROM: METHOD OF SELECTION:
Finance܆Competitive܈
Project Development܈Cooperative Purchase ☐
Program Development܆Sole Source ☐
Regulatory/Legislative܆Single Source ☐
Project Administration܆Other (Please describe):
Legal܆
Executive Director܆
MEMBER PARTICIPATION:
Sponsoring Member: Burbank, Glendale, and Los Angeles Department of Water and Power Other Members Potentially Participating: None
Approved by Executive Director: ___________________________________ RECOMMENDATION:
Authorize the negotiation, execution, and delivery of a Power Purchase Agreement (PPA) and Option Agreement with Milford Solar Phase II LLC, and Power Sales Agreements (PSA) with each of the participating Members (Participating Members), and an Agency Agreement with the Los Angeles
AGENDA STAFF REPORT TEMPLATE Page 2 of 4 v.8/6/2019
Department of Water & Power (LADWP) for the Milford Solar Phase II Project (Milford Project or Milford Solar), and find that such action is exempt from the California Environmental Quality Act. The Milford Project will provide long term renewable energy through the Southern California Public Power Authority (SCPPA) for three Participating Members, the city of Burbank, the city of Glendale, and the Los Angeles Department of Water and Power (LADWP), the purpose of satisfying each utility’s renewable resource goals.
BACKGROUND:
In order to assist Members in complying with re newable mandates, and to address the renewable electrical energy needs of its Members, SCPPA issued a Request for Proposals for Renewable Energy Resources and Energy Storage Solutions. The RFP solicited competitive proposals for renewable energy projects or products consistent with the California Renewable Energy Resources Program (Public Resources Code sec. 25740 et seq.) and the California Renewables Portfolio Standard Program (Public Utilities Code sec. 399.11 et seq.), includ ing amendments enacted by passage of SB 100 (De Leon 2018). SCPPA targeted proposals for renewable resources with commercial operation or delivery starting in 2024 and beyond.
Longroad Energy Holdings, LLC, submitted a proposal for the Milford Solar Project. The Milford Project is a solar facility that will be located near Beaver County, Utah. Milford Solar will have a net capacity of 300 MW of Solar.
DISCUSSION:
x Key Terms of the Agreements:
The Milford Project will deliver 300 MW of renewable solar capacity to SCPPA for Burbank, Glendale, and LADWP. SCPPA will purchase the energy, capacity, and environmental attributes under a PPA with Milford Solar Phase II, LLC, a special purpose entity (Seller). SCPPA will sell such energy, capacity, and environmental attributes to Burbank, Glendale, and LADWP under a PSA with each of the Participating Members. LADWP will serve as the agent for the Milford Project under an Agency Agreement between SCPPA and LADWP. Of the project’stotal 300 MW capacity, the participating Members’shares are as follows:
Member MW (AC) of PV
Capacity
Project
Entitlement
Share
LADWP 235 78.4%
Burbank 40 13.3%
Glendale 25 8.3%
Total 300 100%
The Milford Project’s point of delivery is at Intermountain Power Plant (IPP). The Milford Project will have a commercial operation date (COD) of December 31, 2026, and the PPA will deliver renewable energy for a 30-year term. Beginning on COD, the price of the delivered energy under the PPA (along with all associated environmental attributes and capacity rights) is $37.75/MWh.
The PPA includes a “change in law” provision that provides for an adjustment in price in limited circumstances. For example, as further detailed in the PPA, the change in law provision allows for the Seller to propose a change in price in the event that a federal tax credit event (as
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defined in the PPA) occurs prior to January 3, 2026, which will have tax credit event impact on Seller of more than $2 Million. In such event, Seller may submit a proposed price increase, along with an independent evaluator evaluation, for SCPPA and the Participating Members’ consideration. SCPPA will then have 60 days to notify Seller whether the “Tax Credit Event Proposal” will be submitted to the Participating Members for approval, or whether the proposal is rejected. If SCPPA does not provide the written notice within such 60-day period, then Seller may terminate the PPA. If the Tax Credit Event Proposal is approved by the City Councils of the Participating Members, then the Tax Credit Event Proposal would be submitted to the SCPPA Board for approval.
x Option Agreement
The Option Agreement provides SCPPA with the right, but not the obligation, to negotiate with Seller for the potential purchase the Milford Project at various times over the term of the PPA:
o one (1) year prior to the tenth (10th) anniversary of the COD; o one (1) year prior to the fifteenth (15th) anniversary of the COD; o one (1) year prior to every subsequent five (5) years after the fifteenth (15th) anniversary of the COD until the end of the PPA term; and
o during the sixty (60) day period commencing on the date on which SCPPA provides Seller with a Termination Notice under the PPA.
The Fair Market Value for any such purchase would be determined at the time the option is exercised through a procedure set forth in the Option Agreement. x Effective Date of PPA and Option Agreement – Termination Right if PSAs not Executed:
The PPA and Option Agreement will become effective immediately upon execution by SCPPA and the Seller. However, the corresponding PSAs between SCPPA and each of the Participating Members will not be executed and effective unle ss and until each of Burbank, Glendale, and LADWP obtain their respective governing bodies’ approval of the PSAs for the Milford Project.
Similarly, the Agency Agreement between SCPPA and LADWP will not be executed unless and until LADWP obtains its governing bodies’ approval of the Agency Agreement.
In order to protect SCPPA from the risk of entering into a long-term PPA without having in place corresponding PSAs with Members to purchase the energy and capacity, the PPA and Option Agreement provide each of SCPPA and Seller with a termination right if all Member approvals are not obtained and all PSAs not executed by a specified deadline.
The PPA specifies an “Approval Deadline” of eight (8) months from the PPA’s effective date.
During this time, Burbank, Glendale, and LADWP will seek governing body approvals to execute the PSAs. If all participating Member approvals are not obtained and PSAs not executed by the Approval Deadline, SCPPA or the Seller has the right to terminate the PPA and Option Agreement. The proposed Resolution would au thorize SCPPA officers or the Executive Directors to provide notice of termination in the event that the PSAs are not approved and executed by the Participating Members by the Approval Deadline. x Selection Method:
The proposal for the Milford Project was select ed from twenty-four (24) proposals received in response to a competitive procurement -- the rolling Q1/Q2 Request for Proposals for Renewable Energy Resources and Energy Stor age Solutions (RFP) which was issued by SCPPA on February 7, 2023, and closed on July 31, 2023. The proposal for the Milford Project was selected by the participating Members as a viable and cost-effective solar project to be
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delivered at IPP. The Milford Project will help the participating Members in achieving their RPS goals and energy needs.
x Environmental Review:
The proposed Board action is exempt from the requirements of the California Environmental Quality Act (CEQA). The SCPPA Board’s approval of the aforementioned agreements and actions taken in furtherance thereof is not a “project” as defined by CEQA1 as it would not result in a direct or reasonably foreseeable indirect change in the physical environment. Further, the action does not have the potential to cause a significant effect on the environment and is thus exempt from CEQA under Section 15061(b)(3) of the State CEQA Guidelines
2. Additionally, the
Project is exempt from CEQA under Section 15277 of the State CEQA Guidelines as it is located out of state, and the Seller is required to obtain all permits, including all necessary environmental review and permitting, for the construction and operation of the Project. x SCPPA’s Authority:
In accordance with the Joint Powers Agreement, SCPPA may facilitate and enter into contracts for the procurement of electric generation capacity for SCPPA Members.
FISCAL IMPACT:
There is a de minimis impact on SCPPA’s Administrative and General Budget outside of staff time to administer the PPA, Option Agreement, PSAs, and Agency Agreement.
SCPPA does not anticipate any significant expenses for the PPA and Option Agreement prior to execution of the PSAs and Agency Agreement. To the extent that SCPPA incurs any costs and expenses associated with the Milford Project before the PSAs and Agency Agreement are executed, such costs and expenses will be paid by the participating Members under the terms of the Renewable Phase II Agreement between SCPPA and each of its Members, and such expenses will be billed to the participating Members via Resolution Billing und er Resolution No. 2012-008. After the PSAs are executed, Burbank, Glendale, and LADWP will pay for any, and all, energy products and services associated with the Milford Project (including costs of LADWP as agent, under the Agency Agreement) under the terms of the PSAs.
ATTACHMENTS:
1. Resolution 2025-005
2. Longroad Milford Solar II Power Purchase Agreement
3. Longroad Milford Solar II Power Sales Agreement - LADWP
4. Longroad Milford Solar II Power Sales Agreement - Burbank
5. Longroad Milford Solar II Power Sales Agreement – Glendale
6. Agency Agreement
1 California Public Resources Code §21065
2 14 California Code of Regulations, §15000 et seq.