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MASTER POWER PURCHASE AND SALE AGREEMENT
(EEI Version 2.1, modified 4/25/00)
COVER SHEET
This Master Power Purchase and Sale Agreement (“Master Agreement”) is made as of the following date: , 2016 (“Effective Date”). The Master Agreement, together with the exhibits, schedules, annexes and any written supplements hereto, the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any confirmations accepted in accordance with Section 2.3 hereto) shall be referred to as the “Agreement.” The Parties to this Master Agreement are the following:
Name: (“Counterparty ” or “Party A”) Name: City of Palo Alto (“Counterparty” or “Party B”) All Notices:
Attn:
Phone:
Facsimile:
E-mail:
Duns
Federal Tax ID Number:
All Notices:
Attn: Assistant Director, Resource Management
Department of Utilities
City of Palo Alto
250 Hamilton Avenue, 3rd Floor
Palo Alto, CA 94301
Phone: 650-329-2523119
Facsimile: 650-617-3140
Duns: 17-892-8479
Federal Tax ID Number: 94-6000389
With additional Notices of an Event of Default or
Potential Event of Default to:
Attn:
Phone:
Facsimile:
With additional Notices of an Event of Default or
Potential Event of Default to:
Attn: Senior Assistant City, Attorney,
/Utilities, City of Palo Alto
Phone: 650-329-2171
Facsimile: 650-329-2646
Invoices:
Attn:
Phone:
Facsimile:
E-mail:
Duns
Federal Tax ID Number:
Invoices:
Attn: Power Accounts Administrator
Northern California Power Agency
651 Commerce Drive
Roseville, CA 95678-6420
Phone: (916) 781-421124/36364262
Facsimile: (916) 781-42525
Day Ahead Pre-Scheduling:
Attn:
Phone:
Facsimile:
E-mail:
Day Ahead Pre-Scheduling:
Confirmations: [email protected] Attn: Pre-Scheduler Desk
Northern California Power Agency
651 Commerce Drive
Roseville, CA 95678
Phone: 916-781-4240/4227/4228
Facsimile: 916-781-4239
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Real Time Scheduling:
Attn:
Phone:
Facsimile:
E-mail:
Real Time Scheduling:
Attn: Chief Dispatcher/Scheduler
Northern California Power Agency
651 Commerce Drive
Roseville, CA 95678
Phone: 916-781-4237/3636
Facsimile: 916-781-4226
Payments:
Attn:
Phone:
Facsimile:
E-mail:
Payments:
Attn: Accounts Payable
Northern California Power Agency
651 Commerce Drive
Roseville, CA 95678
Phone: 916-781-
4211/426237/3636
Facsimile: 916-781-425526Wire Transfer:
BNK
ABA:
ACCT:
Confirmation
Wire Transfer:
Deposit to Northern California Power Agency, “to the
benefit of City of Palo Alto”
BNK U.S. Bank
ABA:
12112267602105
2053
ACCT: 1-534-0216-274455797786
Attn: Cyndy Husebye
U.S. Bank
555 SW Oak Street, Suite 400
Portland, OR. 97204
Phone: 877-295-2509
Facsimile: 877-324-1680Credit and Collections:
Attn:
Phone:
Facsimile:
Credit and Collections:
Attn: Power Accounts Analyst
Northern California Power Agency
651 Commerce Drive
Roseville, CA 95678
Phone: 916-781-
42121/426224
Facsimile: 916-781-4255
The Parties hereby agree that the General Terms and Conditions are incorporated herein, as selected, modified and amended by the following specific provisions, as provided for in such General Terms and Conditions:
Party A Tariff: FERC Electric Rate Schedule , dated , Docket Number: ER - -_ Party B Tariff: N/A
Article One
General Definitions Section 1.4 is amended by deleting the first sentence and replacing it to read as follows: “Business Day” means any day except a Saturday, Sunday, the Friday immediately following the Thanksgiving holiday or a Federal Reserve Bank Holiday.
Section 1.10 is amended by adding after “the price” in line 1 the words “, including any and all AB 32 fees” and substituting “U.S. $” for “$U.S.” in line 1.
Section 1.11 is amended by adding the following after “Party” in the third line: “after using commercially reasonable efforts to mitigate costs”.
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Section 1.12 is amended by deleting in the fourth line the word “issues” and replacing it with the word “issuer”.
Section 1.24 is amended by adding before the period at the end thereof the following: “in accordance with Section 5.2”.
Section 1.27 is amended by inserting the phrase “and in an amount” in the third line after the word “form” and before the word “acceptable”.
Section 1.28 is amended by adding before the period at end thereof the following: “in accordance with Section 5.2”.
Section 1.45 is amended by adding the following sentence at the end of that provision:
“Party B shall be deemed to have complied with any request from Party A for the provision of Performance Assurance by furnishing a copy of a resolution adopted by Party B’s City Council within a reasonable period of time after receipt of such request, determining that Party B’s retail rates are set at levels sufficiently high to recover all costs of providing electric service to Party B’s retail electric customers, including the costs incurred by Party B under all Transactions executed under this Agreement.” Section 1.46 is amended by adding before the period at the end thereof the following:
“; provided that the failure to comply with any requirement of this Master Agreement or a Transaction, including the requirements of Article 8, before the expiration of the time period expressly specified for such compliance in this Master Agreement or the Transaction, if any, shall not be considered a Potential Event of Default unless and until the applicable time period has expired without compliance”.
Section 1.50 is amended by deleting the reference to “Section 2.4” and replacing it with “Section
2.5”.
Section 1.51 is amended by (a) inserting the phrase “for delivery” in the second line after the word “purchases” and before the phrase “at the Delivery Point”, and (b) deleting the phrase “at Buyer’s option” in the fifth line and inserting in their place the following: “absent a purchase” and (c) inserting in the seventh line after the words, “any penalties” and before “, ratched demand”, the following: “(other than penalties imposed on Buyer under the CAISO Tariff, the NCPA Metered Subsystem Agreement, or an open access transmission tariff as a result of the non-delivery)”.
Section 1.53 is amended by (a) deleting the phrase “at the Delivery Point” in the second line, and (b) deleting the phrase “at Seller’s option” in the fifth line and inserting in their place the following: “absent a sale, assuming a sale could not have been made in a commercially reasonable manner.”
Section 1.56 is amended by deleting the words “pursuant to Section 5.2” and by adding before the period at the end thereof the following: “, as determined in accordance with Section 5.2.” Section 1.60 is amended by inserting the words “in writing” immediately following the words “agreed to”.
Article Two
Transaction Terms
and Conditions
Section 2.1 shall be amended by deleting the second sentence thereof. 3 CITY OF PALO ALTO V.2016
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For purposes of Section 2.3, Party B requires that all Transactions be confirmed in writing.
Accordingly, the provision is amended by striking the word “may” from the first line thereof and replacing it with the word “shall.”
For purposes of Section 2.3, all references to Seller shall be instead to Party A.
X Optional provision in Section 2.4. If not checked, inapplicable.
A new Section 2.6 is added to Article Two, worded as follows:
“2.6 No Oral Agreements or Modifications. Notwithstanding anything to the contrary in this Master Agreement, including in this Article Two, no Transaction between the Parties shall become binding unless and until a Confirmation for such Transaction is signed by both Parties, and this Master Agreement and any and all Transactions may not be orally amended or modified, including by Recording pursuant to Section 2.5.” Article Four
Remedies for Failure
to Deliver or
Receive
X Accelerated Payment of Damages. If not checked, inapplicable.
A new Section 4.3 is added to Article Four, worded as follows:
“4.3 Suspension of Performance. In addition to the remedies provided pursuant to Sections
4.1, 4.2 and 5.7, if Seller or Buyer fails to schedule, deliver or receive all or part of the Product pursuant to a Transaction for a period of three (3) or more consecutive days, and such failure is not excused under the terms of the Product, by Force Majeure, by the other Party’s failure to perform or by agreement of the Parties, then upon one (1) Business Day’s prior written notice, and for so long as the non-performing Party fails to perform, the performing Party shall have the right to suspend its performance under such Transaction. In the event the performing Party suspends performance pursuant to this Section 4.3, it shall not be obligated to resume performance until it has received notice from the non-performing Party at least one (1) Business Day prior to the date upon which the non-performing Party intends to resume its performance; provided that, if the performing Party has entered into a replacement contract with a term of 31 days or less, the performing Party may resume performance at the end of the term of such replacement contract. Remedies available under this provision to the performing Party are in addition to, not in replacement of, other remedies specified in this Agreement.”
Article Five
Events of Default;
Remedies
X Cross Default provision of Section 5.1(g) shall apply for both Party A and Party B. Cross Default amount for each shall be $20,000,000.
Section 5.1(g) is amended by inserting, “or any Affiliate of such Party” after the first appearance of the word “Party” in subsections (i) and (ii).
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Section 5.1 is further amended by replacing the period at the end of subsection (h) with a semi- colon, and adding new subsections “(i),” “(j)" , “(k)” and “(l)”, which read as follows:
“(i) during any consecutive ninety (90) day period, there have occurred five (5) or more “Seller Failures” as that term is used in Section 4.1, under any or all Transactions, regarding which the Seller shall be deemed to be the Defaulting Party, and Buyer shall also be entitled to its remedies under Section 4.1; (j) during any consecutive ninety (90) day period, there have occurred five (5) or more “Buyer Failures” as that term is used in Section 4.2 under any or all Transactions, regarding which the Buyer shall be deemed to be the Defaulting Party, and Seller shall also be entitled to its remedies under Section 4.2; (k) a representation or warranty with respect to the Defaulting Party's financial statement or position that is false or materially misleading; or
(l) revocation by the Federal Energy Regulatory Commission of Party A’s authorization to make sales and market-based rates.”
Section 5.2 is amended in line 3 by changing “right (i) to” to “right to (i)” and by adding the following sentence to the end of that provision:
“If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the Settlement Amount shall be zero, notwithstanding any provision of this Agreement to the contrary. Any Party who is in default at the time of the Early Termination Date, or whose default is the cause of the Early Termination Date, shall not be entitled to receive any Termination Payment or Settlement Amount.”
Section 5.3 is amended by inserting the phrase “plus, at the option of the Non-Defaulting Party, any cash or other form of security then available to the Defaulting Party pursuant to Article Eight”, between the words “that are due to the Non-Defaulting Party,”, and “plus any and all other amounts” in the sixth line thereof
Section 5.6 Closeout Setoff
Option A (Applicable if no other selection is made.)
X Option B - Affiliates shall have the meaning set forth in the Master Agreement unless otherwise specified as follows: Option B is amended as set forth in Article 10 below.
Option C (No Setoff)
Section 5.6 is further amended by inserting before the last sentence in Option B:
“At the election of the Non-Defaulting Party, all obligations owing by or to an Affiliate of a Party shall be treated as if they were owing by or to the Party itself for purposes of set- off.”
Article Six Section 6.4 is amended by deleting “and owing to each other on the same date”.
Section 6.8 is amended by deleting the words, “may by agreement of the Parties,” in line 3 and inserting in their place the word “shall”.
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Article Seven Section 7.1 is amended by (i) deleting in the fifteenth line the words, “UNLESS EXPRESSLY HEREIN PROVIDED,”, (ii) adding in the nineteenth line the words, “; PROVIDED, HOWEVER,
NOTHING IN THIS SECTION SHALL AFFECT THE ENFORCEABILITY OF THE PROVISIONS OF SECTIONS 4.1 AND 4.2 OF THIS AGREEMENT RELATING TO REMEDIES FOR FAILURE TO DELIVER/RECEIVE AND OF SECTIONS 5.2 AND 5.3 OF
THIS AGREEMENT RELATING TO THE CALCULATION AND PAYMENT OF THE TERMINATION PAYMENT” immediately after the words “ANY INDEMNITY PROVISION OR OTHERWISE”, and (iii) adding at the end of the last sentence the words, “AND ARE NOT PENALTIES”.
Article Eight 8.1 Party A Credit Protection
Credit and Collateral
Requirements
Financial Information from Party B, Section 8.1(a)
Option A
X Option B Specify: Audited financial statements for City of Palo Alto and for City of Palo Alto Enterprise Fund
Option C
Credit Assurances from Party B, Section 8.1(b)
X Not Applicable
Applicable
Collateral Threshold for Party B, Section 8.1(c)
X Not Applicable
Applicable
Party B Independent Amount: N/A
Party B Rounding Amount: N/A
Party B Minimum Transfer Amount: N/A
Downgrade Event, Section 8.1(d):
Not Applicable
X Applicable
If applicable, complete the following:
X It shall be a Downgrade Event for Party B only if (a) Party B’s underlying rating, determined without reference to third party credit enhancement, on its utility revenue bond ("Debt") by S&P or Moody's is respectively below BBB- or Baa3, (b) (ii) both S&P and Moody's refuse to rate Party B's Debt, or and (c) Party B’s City Council no longer has the legal authority under the Act, as defined by Schedule M, to adjust electric rates as necessary to recover Party B’s costs of providing retail electric service to its customers.
Guarantor for Party B, Section 8.1(e): N/A
Guarantee Amount: N/A
8.2 Party B Credit Protection:
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Financial Information from Party A, Section 8.2(a):
Option A
X Option B Specify: Audited financial statements to be provided by Party A as described in Section 8.2(a) shall be for Party A or parent entity, if any, providing credit support.
Option C
Credit Assurances from Party A, Section 8.2(b):
Not Applicable
X Applicable
If Party B has reasonable grounds to believe that Party A’s creditworthiness or performance under this Agreement has become unsatisfactory, Party B will provide Party A with written notice requesting Performance Assurance in an amount determined by Party B in a commercially reasonable manner. Upon receipt of such notice Party A shall have three (3) Business Days to remedy the situation by providing such Performance Assurance to Party B. In the event that Party A fails to provide such Performance Assurance, or a guaranty or other credit assurance acceptable to Party B within three (3) Business Days of receipt of notice, then an Event of Default under Article Five will be deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement. For purpose of this Master Agreement, creditworthiness shall mean a credit rating for Party A rating established as of the Effective Date of the Master Agreement of not less than a BBB- credit rating established by Standard & Poor’s and a Baa3 credit rating established by Moody’s Investors Service, continuing throughout the term of this Agreement.
Collateral Threshold for Party A, Section 8.2(c ):
Not Applicable
X Applicable
If applicable, complete the following:
Party A Collateral Threshold: means with respect to Party A, at any time the amount specified in the table below under the relevant heading opposite the lower of the ratings at that time assigned by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (“S&P”) or Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation (“Moody’s”) to the long term, senior, unenhanced, unsecured debt securities or obligations of Party A’s Guarantor; provided, that (a) if the long term, senior, unenhanced, unsecured debt securities of Party A’s Guarantor is no longer rated by one of S&P or Moody’s, the Threshold with respect to Party A will be zero dollars and (b) if an Event of Default or Potential Event of Default with respect to Party A has occurred and is continuing, the Threshold with respect to such party shall be zero dollars.
S&P Rating Moody’s Rating Threshold
A- or above A3 or above $25,000,000
BBB+ Baa1 $15,000,000
BBB Baa2 $10,000,000
BBB- Baa3 $ 5,000,000
Below BBB- (or rating Below Baa3 (or rating $ 0 (zero)
suspended or withdrawn suspended or withdrawn
by both S&P and by both S&P and
Moody’s) Moody’s)
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Party A Independent Amount: $0
Party A Rounding Amount: $100,000
Party A Minimum Transfer Amount: $250,000
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Downgrade Event, Section 8.2(d):
Not Applicable
X Applicable
If applicable, complete the following:
X It shall be a Downgrade Event for Party A only if the Credit Rating of Party A or Party A’s Guarantor falls below BBB- from S&P or Baa3 from Moody's or if the unenhanced, unsecured senior long-term debt securities or obligations of Party A or Party A’s Guarantor ceases to be rated by either S&P or Moody's.
Guarantor for Party A, Section 8.2(e):
X Guarantor for Party A:
[Name of investment grade parent guarantor]
Guarantee Amount:
[Unlimited Guarantee amount preferred]
Article Ten
Section 10.1 is amended by replacing “upon (thirty) 30 days’ prior written notice” in lines 2 and 3, with “, which termination shall be effective immediately upon receipt of written notice thereof”.
Section 10.2 (ix) is amended to read in its entirety as follows: “(ix) (1) it is an “eligible contract participant” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a) (12); and (2) it is an “eligible commercial entity” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a) (11).
Section 10.2 shall be amended by deleting the “and” at the end of sub-section 10.2(xi), replacing the period at the end of subsection 10.2(xii) with a semi-colon, and adding a new sub-section (xiii) as follows:
“Notwithstanding any provision in this Agreement to the contrary, all information, statements, reports and similar materials, conveyed by Party A orally or in writing to Party B to demonstrate Party A’s financial condition, are true and accurate in all material respects. Any representation made by Party A regarding its financial performance or condition or that of its corporate parent (“Financial Representation”) as an inducement to Party B during the solicitation, bidding or negotiation of any Transaction entered into under this Master Agreement shall be deemed to be repeated and reaffirmed as of the date of the applicable Transaction and incorporated as a representation of Party A or a related party, if any, who makes the Financial Representation in that Transaction, without the need for any further action by either Party; and” Section 10.4 shall be amended by inserting the phrase "To the extent permitted by law," at the beginning of each of the first two sentences, and substituting the word, “each” for “Each” after the insertion of each such phrase.
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Section 10.5 shall be amended by deleting clause (ii) and the portion of clause (iii) prior to the words “provided, however”, and replacing them with the following: “(ii) transfer or assign this Agreement to an Affiliate of such Party so long as (x) such Affiliate’s creditworthiness is equal to or higher than that of such Party or the Guarantor as of the Effective Date and the date of entering into each Transaction under this Agreement, if any, for such Party, or (y) the obligations of such Affiliate are guaranteed by such Party or its Guarantor, if any, in accordance with a guaranty agreement in form and substance satisfactory to the other Party, and (iii) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets of such Party whose creditworthiness is equal to or higher than that of such Party or its Guarantor, if any, as of the Effective Date and the effective date of any such transfer or assignment.
Section 10.6 is amended by deleting the words “New York” from the fourth line thereof and replacing it with the word “California.”
Further, Section 10.6 is amended by deleting the last sentence thereof and replacing it with the following sentence:
“With respect to any proceeding in connection with any claim, counterclaim, demand, cause of action, dispute and controversy arising out of or relating to this Agreement, the parties hereby consent to the exclusive jurisdiction of the federal courts sitting in the Northern District of the State of California; provided, however, that if the federal courts sitting in the Northern District of the State of California refuse jurisdiction, the Parties agree to the exclusive jurisdiction of the state courts sitting in the County of Santa Clara, State of California.”
Section 10.8 is modified by adding before the word “constitute” in line four of Section 10.8, “, and all financial and other information, explanations, statements, reports provided by one party to the other in connection therewith”.
Section 10.8 shall be amended by deleting its penultimate sentence in its entirety and replacing it with the following sentences: “The indemnity provisions of this Agreement shall survive the termination of this Agreement for the period of the applicable statute of limitations. The audit provisions of this Agreement shall survive the termination of this Agreement for a period of twelve (12) months.”
Section 10.10 is deleted in its entirety and replaced with the following new section:
“Bankruptcy. The Parties acknowledge and agree that (i) any Transaction with a maturity date more than two days after the date the Transaction is entered into constitutes a "forward contract" within the meaning of the United States Bankruptcy Code“, as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and from time to time (the “Bankruptcy Code”); (ii) each believes that it is or intends that it shall be deemed for all purposes to be a “forward contract merchant” within the meaning of the Bankruptcy Code; (iii) all payments made or to be made by one Party to the other Party pursuant to this Agreement are "settlement payments" within the meaning of the Bankruptcy Code; and (iv) all transfers of Performance Assurance by one Party to the other Party under this Agreement are "margin payments" within the meaning of the Bankruptcy Code. Each Party further agrees that, for purposes of this Agreement, the other Party is not a "utility" as such term is used in 11 U.S.C. Section 366, and each Party agrees to waive and not to assert the applicability of the provisions of 11 U.S.C. Section 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further agrees to waive the right to assert that the other Party is a provider of last resort." Confidentiality X Confidentiality Applicable, subject to Section
10.11 as amended.
If not checked, inapplicable.
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Section 10.11 shall be replaced in its entirety with the following:
“Party A acknowledges that Party B is subject to California Constitution Article 1, Section 3, and the California Public Records Act, Cal. Gov. Code § 6250 et seq. (“Public Records Act”) in regard to the documents comprising this Master Agreement and the Transactions, which items may constitute public records subject to inspection and copying by the public under the authority of the California Constitution and the Public Records Act. Party B shall, consistent with those laws, use reasonable efforts to provide Party A with notice of any third party request to inspect and copy any of the documents that comprise this Master Agreement and the Transactions, which Party A might deem confidential and exempt from disclosure, in order that Party A may timely seek to protect those documents from disclosure to the third party. Party A acknowledges and agrees that Party B shall not be liable to Party A if Party B makes disclosure in accordance with the California Constitution and/or the Public Records Act before Party A has timely obtained an order to prevent Party B from making the requested disclosure to the third party.” A new Section 10.12 shall be added to Article 10 as follows:
"10.12. No Agency. In performing their respective obligations hereunder, neither Party is acting, or is authorized to act, as the agent of the other Party.” A new Section 10.13 shall be added to Article 10 as follows:
10.13 Dispute Resolution. In the event of any controversy or claim, whether based in contract, tort, or otherwise, arising out of or based upon, or relating to this Agreement or the scope, breach, termination or validity of each of them (a “Dispute”), the Parties will resolve such Dispute in the following manner:
10.13.1 Negotiation. The Parties will attempt in good faith to resolve the Dispute promptly by negotiations between duly authorized representatives of the Parties who have authority to settle the Dispute. When a Party believes there is a Dispute, that Party will give the other Party written notice describing the Dispute with reasonable particularity.
Within thirty (30) days after receipt of such notice, the receiving Party will submit a written response to the other Party.
10.13.2 Mediation. If the Dispute is not resolved within forty-five (45) days of the date of the response given pursuant to Section 10.13.1, or such additional time, if any, that the Parties mutually agree to in writing, the Parties shall try in good faith to settle the Dispute by mediation. The form of mediation and the mediator(s) selected to resolve the Dispute shall be acceptable to both Parties.
10.13.3 Additional Rights. If the Dispute is not resolved through mediation within ninety (90) days after the first meeting of the Parties and mediator(s), or such additional time, if any, that the Parties mutually agree to in writing, either Party shall be free to pursue any and all legal actions and remedies as it may deem necessary. 11 CITY OF PALO ALTO V.2016
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A new Section 10.14 shall be added to Article 10 as follows:
10.14: “The Parties acknowledge and agree that any purchase of power made under this Agreement and any Transaction shall be executed and delivered in compliance with applicable laws and regulations in effect at the time this Agreement is signed by the Parties and at the time of entering into any particular Transaction, including, but not limited to, Senate Bill 1368 (California Public Utilities Code section 8340 et seq.) and related regulations (Title 20, Sections 2900 – 2930 of the California Code of Regulations), as amended, to the extent such laws and regulations, including SB 1368 and related regulations, apply or are deemed to apply to this Agreement and any Transaction. To the extent SB 1368 and related regulations require Party B as a local publicly owned electric utility to submit a compliance filing in accordance with such laws, Party A, upon the request of Party B, shall in good faith provide promptly to Party B (to the extent Party B lacks such information) the information to the extent Party A has knowledge of or access to such information, and shall work cooperatively with and provide commercially reasonable assistance to Party B in Party B’s compliance with such laws. A failure by Party A to provide such information which is within its possession or knowledge shall constitute a default under this Agreement.”
A new Section 10.15 shall be added to Article 10 as follows:
10.15: “The Parties intend that the standard of review for changes to any rate, charge, classification, term or condition of this Agreement at FERC shall be the most stringent standard permissible under applicable law. As to the Parties, it is understood and agreed that the standard shall solely be the “public interest” application of the “just and reasonable” standard of review, as stated by the United States Supreme Court in Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 of Snohomish County, Nos. 06-1457, 128 S.Ct. 2733 (2008), and consistent with the order of the Supreme Court in NRG Power Marketing, LLC, et al., v. Maine Public Utilities Commission et al., No. 08-674, 130 S.Ct. 693 (2010) (“NRG Order”). As to all other persons, the Parties intend and agree that the same standard, to the maximum degree as may be made applicable to other than the Parties, apply, to the maximum degree permitted under the NRG Order.” A new Section 10.16 shall be added to Article 10 as follows:
10.16 ““AB 32 fees” means the regulatory assessments, charges, fees imposts and/or taxes imposed upon and required to be paid by suppliers of energy in accordance with the Global Warming Solutions Act of 2006, Chapter 488, Statutes 2006, including, without limitation, the Compliance Offset Protocols, which shall be included (or be deemed included to the extent they are not expressly included) in the Contract Price, defined in Section 1.10 of the General Terms and Conditions, and that are in effect as of the Effective Date of this Agreement and/or the date the Parties enter into each Transaction hereunder.”
A new Section 10.17 shall be added to Article 10 as follows:
10.17 “The Parties understand and agree that the Transactions under this Agreement are physical transactions for deferred delivery, and that the Parties contemplate making or taking physical delivery of electric energy. Party B is a commercial entity engaged in the business of delivering electric energy to its retail load and routinely makes or takes delivery of electric energy in order to provide service to its retail electric customers.”
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A new Section 10.18 shall be added to Article 10 as follows:
10.18 “Nondiscrimination. As set forth in Palo Alto Municipal Code section 2.30.510, Party A agrees that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. Party A acknowledges that it has read and understands the provisions of Chapter 2.30 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Chapter 2.30 pertaining to nondiscrimination in employment, including completing the form furnished by Party B and set forth in Exhibit D.” A new Section 10.19 shall be added to Article 10 as follows:
10.19 “Imaged Agreement. Any original executed Agreement, Confirmation or other related document may be photocopied and stored on computer tapes and disks (the “Imaged Agreement”).
The Imaged Agreement, if introduced as evidence on paper, the Confirmation, if introduced as evidence in automated facsimile form, the Recording, if introduced as evidence in its original form and as transcribed onto paper, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings, will be admissible as between the Parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissibility of the Recording, the Confirmation or the Imaged Agreement (or photocopies of the transcription of the Recording, the Confirmation or the Imaged Agreement) on the basis that such were not originated or maintained in documentary form under either the hearsay rule, the best evidence rule or other rule of evidence.”
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A new Section 10.19 shall be added to Article 10 as follows:
Index Transactions. If the Contract Price for a Transaction is determined by reference to a Price Source, then:
a) Market Disruption Event. If a Market Disruption Event occurs on any one or more days during a Determination Period (each day, a “Disrupted Day”), then:
i) The fallback Floating Price, if any, specified by the Parties in the relevant Confirmation shall be the Floating Price for each Disrupted Day. ii) If the Parties have not specified a fallback Floating Price, then the Parties will endeavor, in good faith and using commercially reasonable efforts, to agree on a substitute Floating Price, taking into consideration, without limitation, guidance, protocols or other recommendations or conventions issued or employed by trade organizations or industry groups in response to the Market Disruption Event and other prices published by the Price Source or alternative price sources with respect to the Delivery Point or comparable Delivery Points that may permit the Parties to derive the Floating Price based on historical differentials. iii) If the Price Source retrospectively issues a Floating Price in respect of a Disrupted Day (a “Delayed Floating Price”) before the parties agree on a substitute Floating Price for such day, then the Delayed Floating Price shall be the Floating Price for such Disrupted Day. If a Delayed Price is issued by the Price Source in respect of a Disrupted Day after the Parties agree on a substitute Floating Price for such day, the substitute Floating Price agreed upon by the Parties will remain the Floating Price without adjustment unless the Parties expressly agree otherwise. iv) If the Parties cannot agree on a substitute Floating Price and the Price Source does not retrospectively publish or announce a Floating Price, in each case, on or before the fifth Business Day following the first Trading Day on which the Market Disruption Event first occurred or existed, then the Floating Price for each Disrupted Day shall be determined by taking the arithmetic mean of quotations requested from four leading dealers in the relevant market that are unaffiliated with either Party and mutually agreed upon by the Parties (“Specified Dealers”), without regard to the quotations with the highest and lowest values, subject to the following qualifications:
1. If exactly three quotations are obtained, the Floating Price for each such Disrupted Day will be the quotation that remains after disregarding the quotations having the highest and lowest values.
2. If fewer than three quotations are obtained, the Floating Price for each such Disrupted Day will be the average of the quotations obtained.
3. If the Parties cannot agree upon four Specified Dealers, then each of the Parties will, acting in good faith and in a commercially reasonable manner, select up to two Specified Dealers separately, and those selected dealers shall be the Specified Dealers. 14 CITY OF PALO ALTO V.2016
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v) Unless otherwise agreed, if at any time the Parties agree on a substitute Floating Price for any Disrupted Day, then such substitute Floating Price shall be the Floating Price for such Disrupted Day, notwithstanding the subsequent publication or announcement of a Delayed Floating Price by the relevant Price Source or any quotations obtained from Specified Dealers.
"Determination Period" means each calendar month a part or all of which is within the Delivery Period of a Transaction.
"Exchange" means, in respect of a Transaction, the exchange or principal trading market specified as applicable to the relevant Transaction. "Floating Price" means a Contract Price specified in a Transaction that is based upon a Price Source.
"Market Disruption Event" means, with respect to any Price Source, any of the following events:
(a) the failure of the Price Source to announce, publish or make available the specified Floating Price or information necessary for determining the Floating Price for a particular day;
(b) the failure of trading to commence on a particular day or the permanent discontinuation or material suspension of trading in the relevant options contract or commodity on the Exchange, RTO or in the market specified for determining a Floating Price;
(c) the temporary or permanent discontinuance or unavailability of the Price Source;
(d) the temporary or permanent closing of any Exchange or RTO specified for determining a Floating Price; or
(e) a material change in the formula for or the method of determining the Floating Price by the Price Source or a material change in the composition of the Product.
"Price Source" means, in respect of a Transaction, a publication or such other origin of reference, including an Exchange or RTO, containing or reporting or making generally available to market participants (including by electronic means) a price, or prices or information from which a price is determined, as specified in the relevant Transaction.
“RTO” means any regional transmission operator or independent system operator. 15 CITY OF PALO ALTO V.2016
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y
"Trading Day" means a day in respect of which the relevant Price Source ordinarily woulwould announce, publish or make available the Floating Price. (b) Corrections to Published Prices. If the Floating Price published, announced or made available on a given day and used or to be used to determine a relevant price is subsequently corrected by the relevant Price Source (i) within 30 days of the original publication, announcement or availability, or (ii) in the case of RTO Transactions only, within such longer time period as is consistent with the RTO’s procedures and guidelines, then either Party may notify the other Party of that correction and the amount (if any) that is payable as a result of that correction. If, not later than thirty (30) days after publication or announcement of that correction, a Party gives notice that an amount is so payable, the Part that originally either received or retained such amount will, not later than three (3) Business Days after such notice is effective, pay, subject to any applicable conditions precedent, to the other Party that amount, together with interest at the Interest Rate for the period from and including the day on which payment originally was (or was not) made to but excluding the day of payment of the refund or payment resulting from that correction.
Notwithstanding the foregoing, corrections shall not be made to any Floating Prices agreed upon by the Parties or determined based on quotations from Specified Dealers pursuant to paragraph (a) above unless the Parties expressly agree otherwise.
(c) Rounding. When calculating a Floating Price, all numbers shall be rounded to four (4) decimal places. If the fifth (5th) decimal number is five (5) or greater, then the fourth (4 th) decimal number shall be increased by one (1), and if the fifth (5th) decimal number is lesless than five (5), then the fourth (4th) decimal number shall remain unchanged.
Schedule M Party A is a Governmental Entity or Public Power System X Party B is a Governmental Entity, Schedule M Applicable Part A Part A of Schedule M is amended by including the following definition for the term “Act”:
“Act” means the Constitution of the State of California, the California statute(s), charter and municipal ordinances under which Party B was created, organized and authorized to enter into this Master Agreement and each Transaction thereunder.
Part A is further amended by adding the following sentence at the end of the definition of the term “Special Fund”:
“Party A has conducted such investigation as it deems necessary of the City of Palo Alto Enterprise Fund and the Act under which such Fund was established to determine, for its purposes under this Agreement, that such Fund meets this definition of Special Fund.” Part C Part C of Schedule M is amended by adding the phrase in line 7 “and to the extent applicable,” immediately following the word “limitation” in clause (i).
Part D Section 3.4 is modified by inserting a period after “Master Agreement” in line 7 and deleting the rest of the sentence.
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Part E X Section 3.6 under Part E of Schedule M applies; however, the portion of that provision following the semicolon on the eighth line thereof is replaced in its entirety with the following:
“any breach of clause (ii) of this provision shall be deemed to have arisen during a fiscal period of Governmental Entity or Public Power System for which such budgetary approval or certification of its obligations under this Master Agreement is required to be in effect and an Event of Default shall be deemed to have occurred for purposes of Section 5.1 under which Governmental Entity or Public Power System shall be treated as the Defaulting Party.” Part F Add Section 8.4. If not checked, inapplicable.
Part G Part G does not apply.
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Schedule P The following defined terms are added to Schedule P:
“CAISO” means the California Independent System Operator Corporation, or its successor.
“CAISO Tariff” means the Federal Energy Regulatory Commission approved tariff of CAISO, including all CAISO protocols, as the same may be amended from time to time. “CAISO Energy” means a Transaction in which the Seller shall sell and the Buyer shall purchase a quantity of Energy equal to the hourly quantity without Ancillary Services (as defined in the CAISO Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the CAISO Tariff as amended from time to time for which the only excuse for failure to deliver or receive is an “Uncontrollable Force” (as defined in the CAISO Tariff) called by the CAISO in accordance with the CAISO Tariff.
“HLH (Heavy Load Hour)” is defined as energy delivered from hours ending (HE) 0700- 2200 Monday-Saturday, excluding NERC holidays, PPT.
“IST” means Inter-Scheduling Coordinator Trade shall mean a trade between Scheduling Coordinators of Energy or Ancillary Services in accordance with the CAISO Tariff. “LLH (Light Load Hour)” is defined as energy delivered from hours ending (HE) 0100- 0600 and 2300-2400 Monday-Saturday, all day Sunday and NERC holidays, PPT. “NP15 Zone Delivery Point” means the NP15 Zone; provided, however, if CAISO implements trading hubs under a locational marginal pricing design during the Delivery Period, the Delivery Point shall be the Existing Zone Generation NP15 Trading Hub (“NP15 EZ Gen Hub”), as such trading hub is contemplated by the CAISO in its filing made to the FERC dated March 15, 2005 (“Comprehensive Design Proposal for Inter- Scheduling Coordinator Trades Under the California Independent System Operator Corporation’s Market Redesign and Technology Upgrade, Docket No. ER02-1656-025”); provided further, if the NP15 EZ Gen Hub (under any name) is not established as part of a market redesign that is implemented during the Delivery Period, the parties agree to promptly work together in good faith to designate an alternate Delivery Point to reasonably approximate the characteristics of the NP-15 Zone. "West Firm", or “WSPP Schedule C” or “Schedule C” or “WSPPC-Firm” or any similar description means with respect to a Transaction, a Product that is or will be scheduled as firm energy consistent with the most recent rules adopted by the WECC for which the only excuses for failure to deliver or receive are if an interruption is (i) due to an Uncontrollable Force as provided in Section 10 of the WSPP Agreement; or (ii) where applicable, to meet Seller's public utility or statutory obligations to its customers.
Notwithstanding any other provision in this Agreement, if Seller exercises its right to interrupt to meet its public utility or statutory obligations, Seller shall be responsible for payment of damages for failure to deliver firm energy as provided in Article 4 of this Agreement.
"WECC" means the Western Electricity Coordinating Council. "WSPP Agreement" means the Western Systems Power Pool Agreement as amended from time to time.
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EXHIBIT A MASTER POWER PURCHASE AND SALE AGREEMENT CONFIRMATION LETTER EXHIBIT B RESOURCE ADEQUACY (“RA”) CAPACITY
The Parties acknowledge and agree that after the execution of this Master Agreement, they may enter into one or more contracts or confirmations concerning Resource Adequacy, which products, terms, conditions and definitions shall be documented in an Resource Adequacy Confirmation (“RA Confirm”), the terms and conditions of which the Parties agree to negotiate in good faith at the time such Transactions are contemplated.
EXHIBIT C RENEWABLE ENERGY CREDIT (“REC”)
The Parties acknowledge and agree that after the execution of this Master Agreement, they may enter into one or more contracts or confirmations concerning RECs, which terms and conditions shall be documented in a REC Confirmation and which the Parties agree to negotiate in good faith at the time such Transactions are contemplated.
EXHIBIT D CERTIFICATION OF NONDISCRIMINATION
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IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be duly executed as of the date first above written.
Party B: City of Palo Alto Party A:
Approval as to Form:
By: …………………………….. By: ……………………………..
Name: Name: ……………………………..
Title: Sr. Asst. City Attorney Title: ……………………………..
Date: _________ , 20 Date: ____, 20
Party B: City of Palo Alto
Approval by City Manager’s Office:
By: ……………………………..
Name: __
Title: City Manager
Date: _____, 20
Party B: City of Palo Alto
Approval by Administrative Services Department:
By: ……………………………..
Name:
Title: Administrative Services Director
Date: ___, 20
Party B: City of Palo Alto
Approval by Utilities Department:
By: ……………………………..
Name: ___
Title: _
Date: ______, 20
DISCLAIMER: This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (“EEI”) and National Energy Marketers Association (“NEM”) member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting therefrom. By providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial objectives will be achieved and their legal interests are adequately protected. 20 CITY OF PALO ALTO V.2016
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Exhibit D
Certification of Nondiscrimination
As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below certify that they do not and will not during the course of this contract discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person and that they are in compliance with all Federal, State and local directives and executive orders regarding nondiscrimination in employment.
THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW.
Authorized Signature:
Date: