Agenda Packet — Redding City Council, July 15, 2025 (part 3 of 4)

CITY OF REDDING

REPORT TO REDDING PLANNING COMMISSION
Recommendation
Conduct a public hearing and, upon conclusion, forward a recommendation to City Council to determine that the necessary findings for approval are in evidence, adopt the Mitigated Negative Declaration and Mitigation Monitoring Program, and approve Tentative Subdivision Map Application S-2022-02416 and Rezoning Application RZ-2024-00156, Zinco Subdivision, subject to the attached conditions.

PROJECT DESCRIPTION
The project applicant, Zinco Holding, LLC, is requesting approval to subdivide 4.42 acres into 16 single-family residential lots. The property is located adjacent to existing residential development at the intersection of Deodar Way and Jordan Lane. Lot sizes range from 7,229 square feet to 15,549 square feet, with the average being approximately 9,500 square feet. The applicant is also requesting approval of a rezone to change the project site’s zoning district from “RS-3” Residential Single-Family to “RS-3.5” Residential Single-Family.

PARCEL SIZE: The project spans two parcels totaling 4.42 acres (2.27 and 2.15 acres).

TERRAIN/VEGETATION: The site is relatively flat and undeveloped. Vegetation consists of a moderate coverage of scattered small-to-medium-sized blue oak trees interspersed with gray pine and live oak trees, shrubs consisting of manzanita and poison oak, and annual grasses and forbs.

EXISTING LAND USE: Vacant and undeveloped.

MEETING DATE: May 13, 2025
ITEM NO. 5(b)1
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 5(b)1-- Subdivision Application S-2022-02416 and Rezoning Application RZ2024-00156, by Zinco Holding, LLC, to subdivide two parcels, totaling an area of 4.42 acres, into 16 parcels, and to rezone those parcels from “RS-3” Residential Single Family: 3 Units per Acre to “RS-3.5” Residential Single Family: 3.5 Units per Acre. The properties are located at 3150 and 3250 Jordan Lane in an “RS-3” Residential Single-Family District. The project also includes the off-site extension of a water line.

Danny Castro, Associate
Planner
Packet Pg. 997 Packet Pg. 11 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Report to Redding Planning Commission May 9, 2025
Re: 5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding Page 2
GENERAL PLAN DESIGNATION: “Residential, 2 to 3.5 dwelling units per acre” and “Residential,

3.5 to 6 dwelling units per acre.”
ZONING DESIGNATION: “RS-3” Residential Single-Family.

SURROUNDING LAND USES:

North: Single-family homes
East: Mobile home park
South: Single-family homes
West: Single-family homes

BACKGROUND
This project was brought before the Planning Commission on April 9, 2024, and was continued to a date uncertain. In the week preceding the hearing, the project applicant removed a number of trees without having obtained the proper permits. The unpermitted tree removal along with concerns regarding the quality of the initial Biological Review prompted staff to recommend a continuance in order to properly address these issues. Since the April 9, 2024 hearing, a penalty has been issued for the unpermitted tree removal and a new Biological Resources Assessment completed, as discussed further in this staff report under the Biological Resources/Trees section below.

The proposed 16 lot single-family subdivision site consists of 4.42 acres located in the northwest quadrant of the City, west of Lake Boulevard and south of Keswick Dam Road. The site is surrounded on all sides by existing residential development and is considered an “in-fill” site.

From the north the project site is accessible from the Lake Boulevard and Keswick Dam Road intersection via Deodar Way to Jordan Lane. From the south, the site is accessible from the Lake Boulevard and Santa Rosa Way intersection, also via Deodar Way to Jordan Lane. Access to the subdivision would be provided from a new street (Road A) proposed at the westerly portion of the site which intersects with Jordan Lane. This road segment would continue to the northly edge of the site for a potential future extension of the roadway. An interior cul-de-sac street (Road B) connected to Road A would provide access to the remaining lots in the subdivision. The Conditions of Approval require construction of necessary improvements, including construction of curb, gutter, and sidewalk. No vehicular access would be taken from Deodar Way.

The project includes the off-site extension of the water line in Road A to the existing water main stub approximately 30 feet to the north of the subdivision. Looping the water system in this way increases water quality to properties at the end of the pipeline while also cutting down on maintenance costs associated with dead ends in the system.

Issues

GENERAL PLAN AND ZONING CONFORMANCE, DENSITY AND REZONING Currently, two existing parcels make up the project site. The property addressed as 3150 Jordan Lane is designated on the General Plan as “Residential, 2 to 3.5 dwelling units per acre” while the property addressed as 3250 Jordan Lane is designated “Residential, 3.5 to 6 dwelling units Packet Pg. 998 Packet Pg. 12 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Report to Redding Planning Commission May 9, 2025
Re: 5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding Page 3
per acre.” Both properties are currently zoned “RS-3” Residential Single-Family. The project proposes to rezone both properties to “RS-3.5” Residential Single-Family which would provide consistency with the General Plan designation of 3250 Jordan Lane, having a minimum density of 3.5 units per acre in the General Plan, and allow for the overall development as proposed. This zoning is also consistent with the area south and east of Jordan Lane, which is also zoned “RS3.5” with a General Plan designation of “Residential, 3.5 to 6 dwelling units per acre.” The map proposes to subdivide each of the two parcels into eight lots, for a total of 16 lots and an overall density of 3.6 units per acre. The number of lots is consistent with the proposed zoning district and is well within the General Plan range over both properties. The design of the subdivision is also consistent with the surrounding development in the area with similar lot sizes and dimensions.

BIOLOGICAL RESOURCES/TREES
Originally, a Biological Review by Wildland Resource Managers, dated October 2022, was provided for the project. Comments received in response to public review of the first report identified inadequacies in the report regarding the potential for special status species and wetlands to occur onsite: Since the initial writing of the Biological Review in 2022, tire ruts created from clearing activities had allowed for the pooling of water and creation of wetlands.

Two new reports were completed for the project site in order to account for changes to the site since 2022. These included a Biological Resources Assessment prepared by Vestra Resources Incorporated dated October 2024 and a report titled Zinco Property Wetlands Delineation by Wildland Resource Managers dated December 2024. A Mitigated Negative Declaration has also been prepared for the project with a recommendation of its adoption replacing staff’s previous recommendation to determine the project categorically exempt under the California Environmental Quality Act (CEQA).

The project site consists of blue oak woodland and forest alliance. Dominant species observed were blue oak and foothill pine with a sparse understory of manzanita, toyon, and poison oak.

The Project proposes to save six (6) of the remaining trees over 6 inches DBH and the conditions of approval require a tree preservation plan be submitted with the final grading plan for all trees designated to be preserved.

In March of 2024 there were 144 trees on site with more than a 6-inch diameter at breast height (DBH). On April 4, 2024 it was brought to the City’s attention that unpermitted tree removal was occurring on the project site. Staff visited the site and asked workers to cease all activity. Fiftynine (59) trees over 6 inches DBH had already been removed. This illegal tree removal violates Chapter 18.45, Tree Management, of the Redding Zoning Ordinance by removing the trees without a permit. Chapter 18.45, Tree Management, of the Zoning Ordinance outlines the applicable penalties for violations of Chapter 18.45. A monetary fine was issued in accordance with Chapter 18.45 and payment of this fine will remedy the violation in conformance with the City’s tree management regulations. The prior illegal removal of trees is being resolved separately from this project in accordance with the Municipal Code.

DEODAR WAY
The segment of Deodar Way adjacent to the project site is notably narrower than the segments to the north and south. While the existing travel lane width is adequate for two-way travel, it lacks Packet Pg. 999 Packet Pg. 13 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Report to Redding Planning Commission May 9, 2025
Re: 5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding Page 4
the width necessary for parking lanes. To achieve the full street width, dedication from the mobile home park to the east is necessary. The City’s Traffic Engineer has determined the number of average vehicle trips that would be generated with development of the project would not trigger any requirements to widening Deodar Way. Further, the City’s Fire Marshal concurs that adequate street width exists for emergency access. Therefore, the conditions of approval do not require the project to acquire right-of-way from the mobile home park.

FENCING/LANDSCAPING
The boundaries of new subdivisions often abut arterial roads. The Redding Municipal Code requires that the double frontage lots abutting these roads relinquish access to the arterial street and take access from the interior of the subdivision. In these cases, a masonry wall is required between the lots and the arterial road.

As an in-fill development, this subdivision’s boundaries are not arterial roads; however, they are collector streets. These smaller collectors have lower traffic volumes and require less intense boundary delineation. For this reason, the conditions of approval require a block-post fence along Jordan Lane and Deodar Way instead of a wall. This discretionary requirement meets the intent of providing a higher quality, durable barrier between the rear of double frontage lots and the public right-of-way which is normally achieved on bigger subdivisions with a masonry wall.

In addition, the block-post fence would be required to be installed at the back of a 5-foot public service easement (PSE) behind the public right-of-way along Jordan Lane and Deodar Way, providing space for landscaping.

The block-post fence and landscaping along the Jordan Lane and Deodar Way help to make the project consistent with the policies under General Plan Goal CDD9: Preserve existing community character and fabric and promote the development of livable and cohesive neighborhoods and districts. These features provide a higher quality visual transition from the street to the subdivision for the neighborhood. A masonry wall at the back of the sidewalk would be an abrupt and aesthetically undesirable solution to having double frontage lots. Likewise, a typical dog-eared backyard fence lacks character and durability. A block-post fence behind 5 feet of landscaping provides a more livable and aesthetically pleasing streetscape.

LANDSCAPE MAINTENANCE DISTRICT
There are different tools for maintaining shared amenities of a subdivision. Homeowner associations are one common tool. Another method is to place a subdivision into a landscape maintenance district (LMD). The conditions of approval require that each property in the subdivision be included in a landscape maintenance district (LMD) for all irrigation, landscaping, and fencing along Jordan Lane and Deodar Way. The LMD will also include the storm-water detention areas. All properties within the subdivision would be required to pay into the LMD and the City would use the money generated to maintain these shared features of the subdivision.

ENVIRONMENTAL DETERMINATION
Based on the Initial Study prepared for the project, staff prepared a Mitigated Negative Declaration which was distributed to surrounding property owners and also State and local agencies for a 30-day public review. The public-review period ended on May 2, 2025. A copy of Packet Pg. 1000 Packet Pg. 14 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Report to Redding Planning Commission May 9, 2025
Re: 5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding Page 5
the Initial Study and Mitigated Negative Declaration and accompanying public/agency comments, and staff’s response to those comments, are attached, as well as the Mitigation Monitoring Program. Mitigation measures were incorporated into the project and were made conditions of approval in the area of biological resources.

PUBLIC COMMENT
Staff received a number of public comments both after the project’s initial hearing in April of 2024 and during the public noticing period for the May 2025 hearing. Comments largely focused on a few key areas.

Unpermitted Removal of Trees
Commenters expressed the desire for the payment of a fine and the removal of the brush piles created by the unpermitted action. A fine of $30,000 has been issued to the project applicant and is still outstanding. In accordance with Zoning Ordinance Chapter 18.45, Tree Management, this penalty has been determined by the Development Services Director and has been levied apart from this project. A hold has been placed on both 3150 and 3250 Jordan Lane that will preclude the applicant from the ability to develop (obtain a grading permit and building permit) the site until the fine has been paid.

As for the piles of woodland debris, condition number 24 of the attached Draft Conditions of Approval require these piles to be removed prior to the start of the fire season or, if generated during fire season, immediately. Non-compliance with this condition would be enforced through the Code Enforcement Division.

Site Drainage
There is public concern about the drainage of this site, particularly to the north east. Currently, a layer of hard dirt about 18-inches below the grounds surface prevents rain water from soaking deeper into the ground. Instead, it pools at the surface. This notably occurs at the northeast section of the site. With development of the subdivision, water that would otherwise run off onto adjacent properties would instead be captured by the onsite storm drain system and deposited into a drainage pipe that runs under Deodar Way.

Deodar Way
It has been pointed out that Deodar Way needs maintenance. While this observation is not disputed, the City cannot force a developer to fix a problem that is technically the responsibility of the City without being able to make a significant case for it. In this case, the number of automobile trips generated by 16 units does not cross any thresholds that could trigger a requirement for the project to fix the street. With over 900 lane miles in the City and limited funds for maintenance, the Public Works Department does their best to keep up on maintenance with the resources available. That being said, curb, gutter, and sidewalk can be and will be required of the project.

The 20-foot wide two-way travel lane width for the portion of Deodar Way that flanks the project, while technically adequate, is not ideal. The mobile home park to the east of the project sits on what would ideally be half of the normal public right-of-way. Because the area needed to Packet Pg. 1001 Packet Pg. 15 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Report to Redding Planning Commission May 9, 2025
Re: 5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding Page 6
widen the road does not fall on the project’s side, the project is unable to offer it for dedication.

Requiring the project to acquire the land from the mobile home park in order to dedicate it to the City would be out of proportion with the low number of added vehicle trips attributed to the project. Furthermore, because the City’s Traffic Engineer and Fire Marshall have deemed the roadway width technically acceptable per the Municipal Code for transportation and emergency access, the need for requiring the Project to acquire some of the mobile home park’s land for more right-of-way is unjustifiable.

The Previous Biological Report
Many members of the public expressed concerns over the quality of the original Biological Review supplied for the project by the applicant. While staff previously shared some of these concerns, through consultation with the California Department of Fish and Wildlife (CDFW) it was determined that the report was sufficient enough to move forward with the project. As was brought to light in last April’s hearing, due to deep tire rutting that had not previously existed, vernal pools (wetlands) had since been created onsite. This prompted a second biological report to be completed by a different consultant. This updated and more complete Biological Resource Assessment was used as the basis for writing the biological section of the initial study. The initial study is an attachment to the Mitigated Negative Declaration (MND) which is a more detailed way of complying with the California Environmental Quality Act (CEQA) than the categorical exemption previously proposed with the project last year.

PROJECT CONDITIONS
The conditions for this project are attached.

REQUIRED FINDINGS
Certain findings must be found to be in evidence to support approval of the tentative map as set forth in Section 66474 of the State Government Code and Section 17.20.120 of the City Subdivision Ordinance. The findings are provided as an attachment to this report.

PLANNING COMMISSION AUTHORITY
The Planning Commission typically has the authority to approve a tentative map under Section

17.120.100 of the City’s Subdivision Ordinance. However, in this case the City Council has the responsibility for approval of the rezoning application that the tentative subdivision map is dependent upon. Therefore, the Planning Commission is asked to forward a recommendation on the project to City Council.

ALTERNATIVES
The following alternatives are offered for consideration:

1. Recommend the project for approval with modifications to the draft conditions that the Planning Commission deems necessary to support the project. Minor modifications may be incorporated into a motion for approval.

Packet Pg. 1002 Packet Pg. 16 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Report to Redding Planning Commission May 9, 2025
Re: 5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding Page 7

2. Recommend denial to the City Council of the tentative map and rezoning application.

Such action must be based upon a finding that the project is inconsistent with the General Plan or other City development standards or poses a threat to public health, safety, or welfare. Staff has not identified any justification for denial of the project.

CONCLUSION
The proposed single-family subdivision, as conditioned, represents a project that would be consistent with the proposed zoning district as well as with the goals and policies of the City’s General Plan. Staff recommends that the Planning Commission recommends that the City Council determines that the necessary findings for approval are in evidence, adopts the Mitigated Negative Declaration and Mitigation Monitoring Program, and approves Tentative Subdivision Map Application S-2022-02416 and Rezoning Application RZ-2024-00156, Zinco Subdivision, subject to the attached conditions.
c:

Zinco Holding, LLC
Horrocks
Attachments
Findings
Draft Conditions
Location Map
General Plan Map
Zoning Map
Draft Ordinance & Proposed Zoning Map
Mitigated Negative Declaration (MND), Initial Study and Mitigation Monitoring Program (MMP)- [AVAILABLE ONLINE - CLICK HERE]
Tentative Map - Cover Sheet/Grading, Drainage, & Utilities/Trees Public Comments
Planning Commission Staff Report April 9, 2024 [AVAILABLE ONLINE - CLICK HERE] Packet Pg. 1003 Packet Pg. 17 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-

FINDINGS

ZINCO HOLDING, LLC
TENTATIVE SUBDIVISION MAP APPLICATION S-2022-02416
REZONING APPLICATION RZ-2024-00156

ENVIRONMENTAL FINDINGS
The following two findings are necessary for approval of the Mitigated Negative Declaration:

1. Based on the Initial Study and the information contained in the record, there will be no significant effect on the environment. A Mitigated Negative Declaration is appropriate for the Project.

2. The Mitigated Negative Declaration and its supporting documentation reflect the independent judgment and analysis of the City of Redding.

TENTATIVE MAP FINDINGS (GOVERNMENT CODE SECTION 66474)
In accordance with Section 66474 of the Government Code, the Planning Commission makes the following findings:

1. That the density or use of the proposed map is consistent with the General Plan designation of Residential 2 to 3.5 Units per Acre and Residential 3.5 to 6 Units per Acre or applicable area and specific plans as specified in Section 65451 of the Government Code.

Currently, two existing parcels make up the project site. The property addressed as 3150 Jordan Lane has a General Plan designation of “Residential, 2 to 3.5 dwelling units per acre” and the property addressed as 3250 Jordan Lane, “Residential, 3.5 to 6 dwelling units per acre.” The proposed map subdivides each of the two parcels into 8 lots for an overall total of 16 lots. The density of the project is consistent with the General Plan.

The project proposes a rezoning of both properties from their current designations of “RS-3” Residential Single-Family to “RS-3.5” Residential Single-Family in order for the density of the project to be consistent with the Zoning Ordinance. Furthermore, a rezoning of 3250 Jordan Lane would make the property’s zoning consistent with the General Plan: It is currently zoned for 3 units per acre while the General Plan calls for a minimum of 3.5 units per acre.

2. That the design or improvement of the proposed subdivision is consistent with the General Plan or area or specific plans.

The project’s street and lot design conform to the standards of the General Plan and Zoning Ordinance within the guidelines and purpose of the “RS-3.5” District. Adequate transportation and utility infrastructure exist adjacent to the project. The Conditions of Approval require construction of utilities and allow for their logical extension to surrounding properties. They also require improvements to Jordan Lane and Deodar Way including curb, gutter, and sidewalk. In addition, the Conditions of Approval require the undergrounding of overhead lines along Deodar Way in accordance with General Plan policy.

Packet Pg. 18
Attachment: Findings (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1004 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416/Zinco Holding, LLC
Findings

3. The site is physically suitable for the proposed density and type of development due to steepness of terrain; location of water courses; size or shape of the property; inadequate frontage, access, or building area; or other physical condition.

The site is relatively flat with no steepness of terrain and does not contain any area within the 100-year floodplain. There are no physical conditions that would make the site physically unsuitable for the proposed density and type of development proposed with this tentative map application.

4. The design of the subdivision or the proposed improvements are not likely to cause substantial environmental damage or substantially and avoidably injure wildlife or their habitat.

A Biological Resources Assessment was completed for the project site in 2024 by Vestra Resources. An initial study and Mitigated Negative Declaration (MND) have been prepared for the project. The only potentially significant impacts identified with the project were to Redding checkerbloom, dubious pea, and Henderson’s bent grass. Protocol level preconstruction surveys for these special status plants are required with the MND and in the conditions of approval for the project. If any of these special status plants are positively identified onsite, consultation with the California Department of Fish and Wildlife (CDFW) is required. With the adoption of the MND and its associated Mitigation Monitoring Program the project would have no significant effect on the environment. The conditions of approval also contain provisions for the protection of nesting birds and bats that may inhabit the site. With these avoidance and minimization measures in place, the project would not cause substantial harm to the environment or wildlife.

5. The design of the proposed division and improvements will not cause serious public health problems.

Adequate measures have been applied with the Conditions of Approval to address potential concerns related to public health, including, but not limited to, provisions for water for domestic use and fire protection, extension of sanitary sewer facilities to ensure proper management of wastewater, installation of necessary storm drainage, construction of public streets and sidewalk, the undergrounding of overhead utilities along Deodar Way, and provision for proper and orderly timing for construction of necessary improvements. The Conditions of Approval also require the project to loop water to the existing stub to the north west of the subdivision to improve municipal water quality in the area.

6. The design of the proposed division and improvements will not conflict with easements acquired by the public at large for access through, or use of, property within the proposed subdivision.

There are no easements that grant public right-of-way across the project site. Any Bureau of Land Management patent easements that may remain are conditioned to be abandoned with the map. In addition to dedication of public right-of-way for streets interior to the subdivision, additional easements are required for the two detention ponds required for stormwater management and associated infrastructure. These easements are necessary for the maintenance Packet Pg. 19
Attachment: Findings (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1005 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416/Zinco Holding, LLC
Findings
of these stormwater features by the City. No existing public access would be obstructed or otherwise impeded by the proposed project.

Packet Pg. 20
Attachment: Findings (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1006 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-

DRAFT CONDITIONS OF APPROVAL

ZINCO HOLDING, LLC
TENTATIVE SUBDIVISION MAP APPLICATION S-2022-02416
Conditions marked with a double asterisk (**) are also mitigation measures.

General Requirements

1. The standard conditions for subdivisions delineated in Resolution 92-18 shall be met.

2. The developer shall note that Section 711.4 of the State Fish and Game Code requires payment of a fee to the County Clerk for filing a Notice of Determination for an environmental document; payment of this fee is the responsibility of the project proponent.

3. In accordance with Chapter 18.40.040 of the Zoning Code (Compliance with Map Requirements), all conditions applicable to post-subdivision construction (as marked with an asterisk*) shall be noted on the final map under a "Statement of Conditions" to provide notification to future property owners of building limitations and other requirements for the subdivision.

4. The developer shall dedicate to the City all necessary right-of-way and easements to provide public access and utilities to all lots and as otherwise necessary to facilitate the development requirements of the subdivision.

5. Unless noted otherwise by these conditions, all public-street, storm-drain, and utility improvements required of the subdivision shall comply with City Public Works Construction Standards or equivalent standards as approved by the City Engineer or affected private-utility company.

6. In accordance with correspondence from the Bureau of Land Management dated April 27, 2005, the existing easements created through Small Tract Act patent reservations that have not been accepted by a public entity are no longer needed to fulfill the provisions of the Small Tract Act. These easements are not to be shown on the final map.

7. Access to the subdivision shall be via Road A. Access rights to the subdivision from Jordan Lane and Deodar Way, with the exception of Road A, are to be waived and so indicated on the final map. This shall not affect access to the detention basin along Deodar Way for maintenance.

Streets and Circulation

8. Road “A” shall be developed within a standard 56-foot-wide right-of-way improved as follows:

Packet Pg. 21
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1007 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 2
a. Construction of a 36-foot-wide street section (curb to curb). b. Curb, gutter, and 5-foot-wide sidewalk.
c. Installation of street lights per City of Redding and REU standards.

9. Road ‘A’ shall properly align with the existing right-of-way/public service easement to the north, and a COR standard barricade constructed at its northerly extent.

10. Road “B” (the cul-de-sac street) shall be developed within a standard 56-foot-wide right-of-way improved as follows:
a. Construction of a 36-foot-wide street section (curb to curb). b. Curb, gutter, and 5-foot-wide sidewalk.
c. Installation of City standard cul-de-sac at terminus. d. Installation of street lights per City of Redding and REU standards.

11. At time of final map recordation, Roads A and B shall be dedicated to the City along with the following additional dedications:
a. A 5-foot-wide Public Service Easement along the west side of Deodar Way and the north side of Jordan Lane.
b. Adequate dedication on Jordan Lane to equal the 50-foot minimum right-of-way per City of Redding Construction Standard No. 112.00.

12. Deodar Way and Jordan Lane shall be developed with 5-foot sidewalk, curb, gutter, any necessary restriping, street lights, tie-in paving and overlay adjacent to project frontage as necessary to achieve a cross slope with a uniform cross slope from lip of gutter to roadway centerline.

13. Prior to recordation of the final map, Deodar Way along the project frontage shall be signed “No Parking.”

14. Prior to recordation of the final map, the yellow centerline shall be refreshed/replaced in-kind on Deodar Way from approximately 1246 Deodar to 1066 Deodar Way.

Construction, Grading, Drainage, Utilities

15. Improvement plans for clearing, grading, drainage, utilities, and other required improvements shall be approved by the Engineering Division and other concerned Packet Pg. 22
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1008 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 3
City of Redding departments prior to the beginning of any clearing or grading activities or site improvement activities and must be in conformance to Redding Municipal Code (RMC) Title 16.12. An Interim Erosion and Sediment Control Plan shall be included as part of all clearing and grading permit applications and must be approved by the City Engineer before a clearing and/or grading permit will be issued. "As-built" improvement plans with the Engineer's Declaration are required in conformance with RMC 16.12.230.

16. The final design of the detention basin in the northwest corner of the subdivision on Parcel 4 shall incorporate grading and landscaping/screening techniques that will visually enhance the basin. Basin design and screening/landscaping shall be depicted on the improvement plans for consideration and approval by the Development Services Director. The detention basin shall have alternating slopes of 3:1 to 5:1.

17. The detention basin in the northeast corner of the subdivision on Parcel 10 may have minimum 3:1 slopes and shall be completely screened from public view with a 12-foot wide solid metal double swing gate, and decorative wall or fence to be approved by the Development Services Director.

18. The access roads to the detention basins shall be at grade with the top of bank.

19. The proposed retaining walls shall be located along the northerly project boundary and designed to be entirely within the project.

20. Both detention basins shall be placed into a public service easement with recordation of the final map.

21. Prior to grading permit final, the water system serving the subdivision shall be extended north of Road A to connect to the existing 6-inch stub to the north of the subdivision creating a looped system.

22. Prior to recordation of the final map, the existing overhead utilities along Deodar Way shall be placed underground in accordance with the requirements of Redding Electric Utility. All costs associated with the relocation shall be the responsibility of the developer.

Fire Safety

23. This subdivision lies within the High Fire Severity Zone and all construction shall meet the requirements of the California Building Code Chapter 7A.*

24. Slash vegetation piles resulting from approved land-clearing activity, in addition to any past unpermitted land-clearing activity, shall be fully removed from the site prior to the start of the fire season or, if generated during fire season, be removed immediately, as approved by the Fire Marshal. Burning of debris is prohibited.

Packet Pg. 23
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1009 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 4
Landscape, Fencing, and Tree Preservation

25. A 6-foot-high, block-post with wood-insert fence (or other material acceptable to the Development Services Director) shall be constructed at back of public-service easement along Jordan Lane and Deodar Way. Construction of the fence shall be in accordance with the specifications of the Engineering Division and shall be constructed in conjunction with the subdivision improvements. Fencing shall be constructed so as not to obstruct sight distance at the corner of Jordan Lane and Deodar Way and/or the project entrance per City of Redding Municipal Code Section 18.41.100.

26. Interior and side yard 6-foot high fencing shall be constructed abutting the public service easements on Parcel 4 and Parcel 10 and shall be privately maintained for the lifetime of the easements.*

27. This condition shall be recorded on the final map and noted in the title report. The escrow instructions for the sale of each lot shall require that the purchaser and seller of each lot sign a statement that they have read and understand this condition of sale. The property owner(s) shall consent to the formation of a landscape maintenance district for all storm-water detention areas and all irrigation, landscape, and fencing improvements installed along Deodar Way and Jordan Lane relating to the subdivision. Said district shall be formed in accordance with the following:*
a. Prior to recordation of a final map, the property owner(s) shall submit a landscape maintenance district petition and consent form, a landscape maintenance agreement form, and applicable application fees to the Development Services Department. The district shall be formed and the landscape installed prior to issuance of a building permit for any structure within the subdivision. Formation of the district will obligate each lot owner within the subdivision to participate in the district.
b. The landscape and associated irrigation system for the district shall be designed in accordance with the specifications available from the Development Services Department and installed in accordance with the final plans as approved by the City. The landscape and irrigation plans shall be submitted to the Development Services Department at the time the subdivision improvement plans are submitted to the Engineering Division and are subject to approval prior to recordation of a final map.
c. The irrigation system shall be installed and accepted by the City in conjunction with the public improvements within the subdivision; landscape improvements shall be installed and accepted by the City prior to issuance of a building permit with the subdivision.

Packet Pg. 24
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1010 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 5
d. The developer shall be responsible for all costs and fees associated with the formation, installation, and connection to City water and electric utilities. Such fees include, but are not necessarily limited to, formation costs, meter fees, connection charges, benefit fees, inspection fees, and development fees. The developer shall also be responsible for maintenance of the landscape and irrigation system until such time as the district is formed and fees are levied.

The minimum maintenance responsibility shall be 90 days for plant material and 1 year for the irrigation system from the date improvements are accepted by the City.

28. The following areas shall be maintained by a landscape maintenance district:
a. Landscaping and irrigation on all unimproved areas between the sidewalk and required fence for a total landscaped width of at least 5-feet along Jordan Lane and Deodar Way.
b. All rear-yard fencing along Jordan Lane and Deodar Way. c. All storm-drain detention basins, their landscaping, and any associated fencing/screening that fronts a public street.
d. All MS4 treatment facilities.
e. Fencing along the north side of Parcel 10.*

29. All trees identified for preservation as “Trees to Remain” on the Existing Site and Tree Survey page of the approved tentative map shall be clearly identified on the subdivision improvement plans. A tree construction/protection plan shall be prepared by a qualified (tree) professional in accordance with Chapter 18.45, Tree Management, of the Zoning Ordinance and included as part of the subdivision grading improvement-plan package. Tree-protection measures identified in the tree construction/protection plan shall be reflected in the final subdivision improvement plans and followed during construction.

Biological Resources

30. Removal of large trees with cavities, crevices and/or exfoliated bark shall occur before bat maternity colonies form (i.e., prior to March 1) or after young are volant (i.e., after August 31). If construction (including the removal of trees) occurs during the bat non-volant season (March 1 through August 31), a qualified professional shall conduct a pre-construction survey of the study area to locate maternity colonies and identify measures to protect colonies from disturbance. The preconstruction survey will be performed no more than seven days prior to the implementation of construction activities. If a maternity colony is located within the study area, or adjacent to the study area, a disturbance free buffer shall be Packet Pg. 25
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1011 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 6
established by a qualified professional or, in consultation with the California Department of Fish and Wildlife (CDFW), to ensure the colony is protected from project activities. Upon consultation with CDFW, if humane eviction of bats is deemed to be an acceptable wildlife management solution, it would also satisfy this condition.

31. The applicant shall have a pre-construction rare plant survey of the proposed disturbance area or other Project features that may impact special status species of the Project site conducted by a qualified botanist during the appropriate survey window (blooming period) for rare and endangered plants that have the potential to occur within the Project site if such a survey has not been provided to the City.

Surveys shall be done in accordance with the most current version of California Native Plant Society Botanical Survey Guidelines (CNPS 2001), California Department of Fish and Wildlife Protocols for Surveying and Evaluating Impacts to Special Status Plant Species Native Plant Populations and Natural Communities and U.S. Fish and Wildlife’s Guidelines for Conducting and Reporting Botanical Inventories for Federally Listed, Proposed and Candidate Plants. If present, special status plant species plant populations will be flagged and, if possible, avoided during construction. If the population cannot be avoided during construction, a plan will be developed for approval by the California Department of Fish and Wildlife which may include transplanting the plant population, compensation, or other measures established by that agency.**

32. If feasible, vegetation removal and/or construction shall be conducted between September 1 and January 31. If vegetation removal and/or construction activities are to occur during the nesting season (February 1 through August 31), a qualified biologist shall conduct a preconstruction survey no more than seven (7) days before vegetation removal or construction activities begin. If an active nest is found, a nondisturbance buffer shall be established by a qualified biologist in coordination with CDFW. Construction may resume once the young have left the nest or as approved by the qualified biologist. The survey shall be provided to the CDFW. If construction activities cease for a period greater than seven (7) days, additional preconstruction surveys will be required.**

33. Prior to issuance of a grading permit affecting any federal and/or state jurisdictional waters, including wetlands, as identified in the Project wetland delineation, the Project applicant shall provide written verification to the City of Redding Development Services Department that all necessary resource agency permits and mitigation requirements have been successfully secured from the USACOE, CDFW, CVRWQCB, or any other agency with jurisdiction over waters involved with the Project.

34. Prior to issuance of a grading permit, protocol level surveys for the Crotch’s bumble bee shall be performed by a qualified biologist in accordance with California Department of Fish and Wildlife’s (CDFW) June 2023 Survey Considerations for California Endangered Species Act (CESA) Candidate Bumble Bee Species survey Packet Pg. 26
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1012 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 7
protocol. If Crotch’s bumble bee is detected during surveys, the designated biologist shall notify CDFW as further coordination may be required to comply with CESA.

Cultural Resources

35. If, during the course of development, any archaeological, historical, or paleontological resources are uncovered or otherwise detected or observed, construction activities in the area affected shall cease and the City shall be notified immediately. A qualified archaeological professional must then be retained by the developer to investigate the discovered cultural object to determine its significance.

If the cultural object is deemed potentially significant by the archaeologist, appropriate treatment and measures shall be followed in accordance with applicable laws, as reviewed and approved by the City, prior to the resumption of work in the affected area.

Packet Pg. 27
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1013 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 8

STANDARD CONDITIONS OF APPROVAL FOR SUBDIVISIONS
EFFECTIVE MAY 24, 2011
In accordance with City of Redding Ordinance 2469, Section 26, the following standard conditions of approval apply to all subdivision projects requiring a final map. Projectspecific conditions of approval will take precedence in the event of a conflict with standard conditions. References to the Grading Ordinance are based on Redding Municipal Code (RMC) Title 16, Chapter 12. References to the Subdivision Ordinance are based on RMC Title 17. References to the Zoning Ordinance are based on RMC Title 18.

FINAL MAP

1. A final map shall be prepared in accordance with Chapter 17.40 of the Subdivision Ordinance. The final map and all necessary supporting documents and information must be filed with the City Engineer prior to the expiration date of the tentative map as required by Section 17.40.020 of the Subdivision Ordinance.

2. In accordance with Chapter 17.50 of the Subdivision Ordinance, the property owner shall dedicate to the City all right-of-ways and easements necessary to provide public access and utilities to the subdivision as required by the tentative map approval.

3. Prior to the recording of a final map, a complete application shall be submitted to the City to apportion any special assessment-district lien (Improvement Bond Act of 1915) affected by the subdivision, including the applicable fees, an assessment segregation diagram, and any required additional information.

4. In-lieu park fees must be paid prior to the recording of the final map in accordance with Chapter 17.54 of the Subdivision Ordinance, unless an equivalent parkland dedication is made in conformance with the tentative map approval.

5. Proposed street names must be submitted for City and agency review in accordance with Section 17.64.020 of the Subdivision Ordinance prior to the recording of the final map. The final map shall reflect only street names approved by the City.

6. A 5-foot-wide public-service easement shall be dedicated on the final map abutting all public-street right-of-ways within the subdivision.

7. In the case where a regulatory floodplain exists on a subdivision site, the final map shall clearly delineate the limits of the 100-year base floodplain and elevations. The floodplain identified on the final map shall be consistent with Section 18.51.020, Basis for Establishing Areas of Special Flood Hazard, of the Zoning Ordinance.

8. For residential subdivisions, covenants, conditions, and restrictions (CC&Rs) shall be recorded in conjunction with recordation of a final map which prohibit the Packet Pg. 28
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1014 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 9
storage of recreational vehicles in the front-yard or street side-yard-setback areas as described in Schedule 18.31.030-C(8) of the Zoning Ordinance.

CONSTRUCTION - GENERAL REQUIREMENTS

9. In accordance with Chapter 17.70 of the Subdivision Ordinance, the developer must secure approval of subdivision improvement plans for grading and all street, utility, and drainage infrastructure from the City Engineer prior to the start of any construction. Subdivision improvement plans must be prepared by a registered civil engineer and fully address the construction of all improvements required of the subdivision under the approved tentative map.

10. Acquisition of all off-site interests in title or easements necessary to satisfy the requirements of the subdivision approval shall be the responsibility of the developer. In the event the developer is unable to acquire such interests, the developer may petition the City Council for adoption of a resolution initiating eminent-domain proceedings over the lands needed for the off-site improvements.

The developer shall bear all costs for such proceedings, including attorney fees, court costs, and land-value costs.

11. Unless a project-specific development standard is identified and approved for the subdivision project with the tentative map, all public improvements required of the subdivision shall comply with City Construction Standards and other adopted standards specified under Section 17.70.020 of the Subdivision Ordinance and/or equivalent standards, as determined necessary by the City Engineer.

12. Prior to approval of subdivision improvement plans and issuance of a grading permit, the property owner shall secure all other necessary permits/approvals required by law from outside agencies also having jurisdiction over the project, including, but not limited to:
a. Regional Water Quality Control Board (RWQCB). In most cases, the developer must prepare a Storm Water Pollution Prevention Plan and secure a Construction Activity Storm Water Permit from RWQCB.
b. Department of Fish and Game (DFG). Where a project would impact a waterway, a Section 1602 Streambed Alteration Agreement must be finalized with DFG.
c. U.S. Army Corps of Engineers (ACOE). Where a project would impact jurisdictional waters of the U.S., appropriate Nationwide or Individual Permit approvals shall be obtained from ACOE.

Copies of required agency permits/approvals shall be submitted to the City Engineer. Any special development requirements of these agencies affecting Packet Pg. 29
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1015 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 10
improvements within the subdivision shall be reflected on the final improvement plans.

13. Required subdivision improvements shall be properly and fully constructed, inspected, and accepted by the City in accordance with Chapter 17.74 of the Subdivision Ordinance. Any incomplete improvements shall be secured under the provisions of Schedule 17.40.060.B and Chapter 17.74 of the Subdivision Ordinance. Final survey, as-built improvement plans, and related engineering certifications are required at the completion of work in conformance with Sections

17.70.070 and 17.70.080 of the Subdivision Ordinance and Section 16.12.230 of the Grading Ordinance.

CONSTRUCTION - STANDARD IMPROVEMENT REQUIREMENTS
Grading, Erosion Control, Tree Preservation

14. Subdivision clearing, grading, and erosion-control plans shall be in full conformance with the Grading Ordinance. The final grading improvement plans shall be consistent with the preliminary grading plan and any tree-preservation plans considered with the approved tentative map.

15. The project developer shall prepare a site and construction-phase-specific Storm Water Pollution Prevention Plan (SWPPP) and secure a Construction Activity Storm Water Permit from the Central Valley Regional Water Quality Control Board in compliance with the requirements of the State General Construction Activity Storm Water Permit. Best Management Practices (BMPs) prescribed in the SWPPP shall be utilized and followed in all project site-development activities.

16. All trees identified for preservation shall be clearly identified on the subdivision improvement plans. A tree construction/protection plan shall be prepared by a qualified (tree) professional in accordance with Chapter 18.45, Tree Management, of the Zoning Ordinance and included as part of the subdivision grading improvement-plan package. Tree-protection measures identified in the tree construction/protection plan shall be reflected in the final subdivision improvement plans and followed during construction.

Drainage System

17. Storm-drain facilities shall be designed consistent with the requirements of City Construction Standards, the City of Redding Storm Water Quality Improvement Plan, and the City of Redding Phase II NPDES Permit from the California Regional Water Quality Control Board (Water Quality Order No. 2003–05 - DWQ). Project design shall incorporate Best Management Practices (BMPs) to minimize the polluting of stormwater, both during construction and long-term. Should the maintenance costs of the long-term pollution-control measures exceed typical storm-drain-system costs, such costs shall be borne by the project by way of a Packet Pg. 30
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1016 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 11
landscape maintenance district, escrow account, or other such financing mechanism.

18. Prior to improvement-plan approval, the developer must obtain approval for proper management of stormwater peak flows in accordance with City Council Policy 1806 and the specifications of the City Engineer. Such measures shall address impacts from the 10-, 25-, and 100-year-storm events. Projects shall address peak flows to maintain predevelopment levels at all locations downstream of the project.

A drainage report shall be prepared to the format outlined by the Engineering Division, stamped and signed by a qualified engineer, and provided to the Engineering Division with submittal of project improvement plans.

Utilities

19. Essential utilities, including, but not limited to, sanitary sewer, water, electric, natural gas, and communication distribution lines, including main lines and service laterals, shall be extended and sized appropriately to serve each lot and to provide logical extensions of service to subsequent phases and adjacent properties in accordance with Section 17.60.080 of the Subdivision Ordinance. These utilities shall be installed in accordance with the capacity, construction, metering, and testing standards of the City and other involved private utility company(s), including applicable utility master plans.

20. Any necessary off-site utility extensions shall be placed in a public-street right-ofway or public-service easement in a location approved by the City Engineer and other responsible utility companies. Vehicular access for maintenance purposes shall be provided to all utility infrastructure outside a public right-of-way as determined necessary by, and in a manner approved by, the City Engineer.

21. New "dry" utilities, including electric, telephone, and cable television, must be installed underground in accordance with Section 17.60.090 of the Subdivision Ordinance. Any existing overhead facilities within a proposed subdivision and along peripheral streets must also be placed underground, unless waived under the project-specific conditions.

22. Electric-supply facilities shall be furnished and installed in accordance with the Redding Electric Utility Service Policy Resolution currently in effect at the time the developer's plans are approved by the City.

23. The developer shall be responsible for all costs associated with the relocation or modification of existing utility facilities or structures necessitated by the construction of the project or of improvements required as a condition of approval of this project, including reimbursement of any costs to the affected utility for work performed to support the project.

Packet Pg. 31
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1017 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 12

24. After the initial review of project improvement plans by the Engineering Division, the developer shall consult with the Redding Electric Utility (REU) for preparation of an electric-service plan. A copy of the electric-service plan, developed and approved by REU, shall be incorporated into the final improvement plans.

25. Streetlights shall be provided in accordance with applicable Redding Electric Utility Construction Standards 553.0, et seq.

Fire Department

26. Fire hydrants shall be installed at locations throughout the subdivision in accordance with the California Fire Code as approved by the Fire Marshal. All fire hydrants shall have a minimum fire flow meeting Appendix-B of the California Fire Code and meet the maximum daily demand for the area. "On-lot" hydrants and necessary easements to service development on flag lots or oversized lots shall also be installed as required by the Fire Marshal.

27. Brush piles resulting from land-clearing activity shall be fully removed from the site prior to the start of the fire season or, if generated during fire season, be removed immediately.

Air Quality

28. The following Air Quality Element Standard Mitigation Measures shall be applied during grading and construction activities to control dust and PM10 emissions:
a. Nontoxic soil stabilizers shall be applied according to manufacturer’s specifications to all inactive construction areas (previously graded areas inactive for 10 days or more).
b. All grading operations may be suspended by the City Engineer when winds (as instantaneous gusts) exceed 20 miles per hour.
c. Temporary traffic control shall be provided as appropriate during all phases of construction to improve traffic flow (e.g., flag person). d. Construction activities that could affect traffic flow shall be scheduled in offpeak hours. e. Active construction areas, haul roads, etc., shall be watered at least twice daily or more as needed to limit dust.
f. Exposed stockpiles of soil and other backfill material shall either be covered, watered, or have soil binders added to inhibit dust and wind erosion.

Packet Pg. 32
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1018 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 13
g. All trucks hauling soil and other loose material shall be covered or should maintain at least 2 feet of freeboard (i.e., minimum vertical distance between top of the load and the trailer) in accordance with the requirements of CVC Section 23114. This provision is enforced by local law enforcement agencies. h. All public roadways used by the project contractor shall be maintained free from dust, dirt, and debris caused by construction activities. Streets shall be swept at the end of the day if visible soil materials are carried onto adjacent public paved roads. Wheel washers shall be used where vehicles enter and exit unpaved roads onto paved roads, or trucks and any equipment shall be washed off leaving the site with each trip.
i. Alternatives to open burning of cleared vegetative material on the project site shall be used, unless otherwise approved by the Planning Division, Fire Marshal, and Shasta County Air Quality Management District. Suitable alternatives include, but are not limited to, on-site chipping and mulching and/or hauling to a biomass fuel site.

Cultural Resources

29. If, during the course of development, any archaeological, historical, or paleontological resources are uncovered or otherwise detected or observed, construction activities in the area affected shall cease and the City shall be notified immediately. A qualified archaeological professional must then be retained by the developer to investigate the discovered cultural object to determine its significance.

Miscellaneous

30. Issuance of building permits for structures on lots resulting from the subdivision will not occur until a final map is recorded and necessary public-street and utility improvements are available. An exception may be granted at the discretion of the Building Official allowing issuance of a building permit for the construction of model homes and other special circumstances in accordance with Section 17.04.090 of the Subdivision Ordinance.

31. Permanent and temporary signs related to the subdivision shall comply with Chapter 18.42 of the Zoning Ordinance.

32. In the event of any confusion, conflict, vagueness, typographical error, or special circumstance where implementation of any standard or project-specific condition is in question, the Development Services Director has the authority, in accordance with Section 17.04.080 of the Subdivision Ordinance, to determine an appropriate Packet Pg. 33
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1019 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- S-2022-02416 May 9, 2025
Draft Conditions of Approval Page 14
remedy as necessary to ensure that the intent of the condition and related tentative map approval is met in accordance with applicable laws and policies, and as necessary to ensure orderly development.

33. The developer/applicant shall note that pursuant to Chapter 16.20 of the Redding Municipal Code, City development impact fees are required to be paid at the time of building occupancy/final inspection for new construction, building enlargement, or other improvement. These fees are structured to mitigate the project's fair share of cumulative impacts to the City's transportation, fire-suppression, utility, and parks infrastructure systems based upon necessary improvements to accommodate new development under the City's General Plan. The developer/applicant is hereby notified that he/she has the right to protest/appeal imposition of any of these fees or fee amounts. Any protest/appeal must comply with the provisions of Government Code Section 66020(a).*
Packet Pg. 34
Attachment: Draft Conditions (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1020 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 35
Attachment: Location Map (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1021 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 36
Attachment: General Plan Map (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1022 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 37
Attachment: Zoning Map (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1023 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- ORDINANCE NO. _____

AN ORDINANCE OF THE CITY OF REDDING

ADOPTING AN AMENDMENT TO THE CITY OF REDDING ZONING MAP

RELATING TO THE REZONING OF THE ZINCO SUBDIVISION
(APN 114-050-005 & 114-050-006) CONSISTING OF 4.42 ACRES LOCATED AT 3150 AND 3250 JORDAN LANE IN THE CITY OF REDDING (RZ-2024-00156) Whereas, the Zoning Map of the City of Redding is incorporated in and made part of the Redding Municipal Code Title 18, known as the City of Redding Zoning Ordinance, and; Whereas, an application was submitted to the City of Redding Development Services Department requesting to rezone property addressed as 3150 and 3250 Jordan Lane in association with Tentative Subdivision Map Application S-2022-02416, and;
Whereas, the Planning Commission held a duly-noticed public hearing pertaining to the amendment to the Zoning Map on May 13, 2025 (RZ-2024-00156), and recommended that the City Council adopt the attached amendment to the Zoning Map, and;
Whereas, the City Council held a public hearing on ________, 2025, duly-noticed prior to the first reading of the ordinance;

NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF REDDING AS FOLLOWS:

Section 1. Finding of fact: The City finds and declares as follows:

A. The proposed amendments to the Zoning Map are consistent with the General Plan and any applicable specific plan.

B. Adoption of this ordinance will not impact the welfare of the citizens of Redding and its surrounding region.

Section 2. On the basis of the initial study prepared for Rezoning Application RZ-2024-00156 prepared by the Development Services Department, the City Council finds that the subject rezoning will not have a significant effect on the environment and approves the Mitigated Negative Declaration with the following findings:

1. The City of Redding has completed a Mitigated Negative Declaration for the rezoning. Based on the analysis of the potential impacts associated with the rezoning, the project will not have a significant effect on the environment.

2. The Mitigated Negative Declaration and its supporting documentation reflect the independent judgment and analysis of the City of Redding.

Section 3. That the boundaries of the districts referred to in Section 18.01.050 of the Redding Municipal Code, as designated on a map entitled "Zoning Map of the City of Redding, California," Packet Pg. 38
Attachment: Draft Ordinance & Proposed Zoning Map (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Packet Pg. 1024 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- dated January 7, 2003, are hereby altered as set forth on the map attached hereto and made a part hereof by:

REZONING: 3150 and 3250 Jordan Lane
FROM: “RS-3” Residential Single-Family District
TO: “RS-3.5” Residential Single-Family District
Section 4. This ordinance shall take effect thirty (30) days after the date of its adoption; and the City Clerk shall certify to the adoption of this ordinance and cause its publication according to law.

I HEREBY CERTIFY that this ordinance was introduced and read at a regular meeting of the City Council on the _________ day of _____, 2025, and was read and adopted at a regular meeting of the City Council on the _______ day of _______, 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

Jack Munns, Mayor
Attest: Form Approved:
_
Sharlene Tipton, City Clerk Christian Curtis, City Attorney Packet Pg. 39
Attachment: Draft Ordinance & Proposed Zoning Map (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Packet Pg. 1025 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- RS-3.5
RS-3.5
GC
NC
GO
RM-9
HC
RM-1
RM-12
RM-6
RS-2
RM-12
RS-2.5

SANTA ROSA WAY

DEODAR WAY

E KESWICK DAM RD
ONA LN

DARA CT

GREENBACK LN

MISHKA CT VALLI CT

HENRY MOORE LN
OASIS
RD

LAKE BLVD

JORDAN LN
MTG. DATE:

ITEM:

ATTACHMENT:

GIS DIVISION

INFORMATION TECHNOLOGY DEPARTMENT
DATE PRODUCED:
-
0 200 400 Feet

PROPOSED ZONING MAP
P:\Planning\ProProjects\RZ\RZ-2024-00156.aprx
FEBRUARY 21, 2024
RZ-2024-00156

ZINCO HOLDING, LLC
3150 & 3250 JORDAN LN
AP# 114-050-006 & -005
RS-3..__
RS-3..__
Packet Pg. 40
Attachment: Draft Ordinance & Proposed Zoning Map (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Packet Pg. 1026 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 41
Attachment: Tentative Map - Cover Sheet/Grading, Drainage, & Utilities/Trees (5(b)1- Subdivision Application S-2022-02416 & Rezoning Packet Pg. 1027 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 42
Attachment: Tentative Map - Cover Sheet/Grading, Drainage, & Utilities/Trees (5(b)1- Subdivision Application S-2022-02416 & Rezoning Packet Pg. 1028 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 43
Attachment: Tentative Map - Cover Sheet/Grading, Drainage, & Utilities/Trees (5(b)1- Subdivision Application S-2022-02416 & Rezoning Packet Pg. 1029 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 44
Attachment: Public Comments (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1030
Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 45
Attachment: Public Comments (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1031
Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- From: Shasta Environmental Alliance
To: Toy, Lily
Cc: Pagan, Jeremy; Castro, Danny; Curtis, Christian; Planning Commission; [email protected] Subject: SEA Comments Zinco Project: S-2022-02416, RZ-2024-00156 Date: Thursday, May 9, 2024 2:07:55 PM
Attachments: image.png
SEA COMMENTS ZINCO PROJECT MAY 9 2024 v3.pdf
CAUTION: This email originated from outside the City of Redding; please be careful with links or attachments.

May 9, 2024
Lily Toy, Planning Manager
Redding Planning Department
777 Cypress Ave
Redding, CA 96001
Re: Zinco Project: S-2022-02416, RZ-2024-00156
Dear Ms. Toy,
In addition to the previous comments Shasta Environmental Alliance has submitted on the Zinco Project on Jordan Lane on April 4, 2024, we would like to emphasize and add the following statements to the record.

1. The applicant has flagrantly violated Redding’s Tree Management Ordinance and should be fined the maximum amount allowed under the ordinance as originally suggested by the Planning Department.

2. The Biological Survey done on the project by Wildland Resource Managers listed two special-status plants: The nine-awned pappus grass (Enneapogon desvauxii, California Rare Plant Rank 2B.2) and hairy erioneuron (Erioneuron pilosum, CRPR 2B.3). As you may be aware, species designated with the 2B CRPR status meet the definitions of “Rare” or “Endangered” pursuant to Section 15380(d) of the State CEQA Guidelines. Therefore, a Categorical Exemption cannot be made in this case and mitigation measures must be implemented. (We realize the consultant did not notate these as rare to the Planning Department as is required.)

3. The project was given a categorical exemption because it is under 5 acres in size, however there is a requirement under CEQA Section 15332, subsection a. “The project is consistent with the applicable general plan designation and all applicable general Packet Pg. 46
Attachment: Public Comments (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1032 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- plan policies as well as with applicable zoning designations and regulations.” This project is not consistent with applicable zoning applications designations and requires a zoning change thus the project does not meet the requirements for a Categorical Exemption and an Initial Study or EIR must be prepared.

In addition to our comments of April 4, we add the above three reasons for this project not to be approved as currently proposed.

Sincerely,
David Ledger, President
Cc: Jeremy Pagan
Lily Toy
Danny Castro
Aaron Hatch
Christian Curtis
Planning Commission
David Ledger
President
Shasta Environmental Alliance
530-355-8542
Packet Pg. 47
Attachment: Public Comments (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1033 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- From:

To: Castro, Danny; Toy, Lily
Cc:

Subject: Zinco Holding, LLC rezoning of 3150 & 3250 Jordan Lane Date: Friday, April 18, 2025 5:02:25 PM
CAUTION: This email originated from outside the City of Redding; please be careful with links or attachments.

To The Planning Commission,
Hello,
My name is . I live the requested subdivision at 3150 & 3250 Jordan Lane. I have observations and concerns.

My first observation stems from the clearing of trees and brush which started a little over a year ago. That clearing started even before the meeting on 4-9-24 I attended regarding the rezoning request by Zinco Holding. It is my understanding that unpermitted clearing of trees is against regulations and warrants consequences, such as fines for every tree cut without a permit. That meeting last year touched on this issue but shelved any further persuit of Zinco or their tree cutting employees. A year later, those cut trees lie in brush piles as they did right after cutting. If nothing else, this is an obvious fire hazard. I have heard nothing regarding consequences to Zinco or the company or people doing the cutting. Has the planning commission turned a blind eye to this offense? The Current Project Application report for this project contains an elaborate and comprehensive map of all the trees and brush that were on those lots prior to the rezoning request and meeting last year. Credit where credit is due for the work put into that map and the condition of the foliage. However, the map is now laughable and woefully inaccurate. It just as well show the current brush piles. A fraction of the trees shown on that map still exist. The subdivision map shows a small fraction of those trees to remain for some of the houses to be built. And if the subdivision map is to be believed, some of those remaining trees will be in the footprint of their respective houses.

That doesn’t fit with any fire organization’s definition of “defensible space”.

Responses by Mr. Castro, included in the current package available online, have attempted to address any excess stormwater runoff from the subdivision, exceeding the detention basins, will be into the Sulphur Creek and Boulder Creek basins to the northwest. He states there are no “wetlands”. I would invite Mr. Castro or Ms. Toy to visit and walk the area north and west of the proposed subdivision during the wet months. The landscape is too flat for adequate runoff to occur at an acceptable rate. Runoff that occurs, is in all directions, including through the current housing to the northeast of the subdivision. The residents in that area will take exception to the statement there are no wetlands. Those residents have had to take into account the ponding that occurs in their backyards. It does not all go to Sulphur Creek or Boulder Creek! It goes from their backyard to the storm sewer along Deodar Way. Slowly! This could be construed as a health hazard. We do not want any additional runoff! Another observation I have, and felt, is the inadequacy of Deodar Way for any increased traffic, even if speed limits are observed. The condition of the surface of the roadway exhibits inadequate repairs of repairs. Inattentive drivers may find themselves out of control during evasive maneuvers if children, pedestrians or pets happen to get in their way. Increased traffic, especially construction traffic will only make the situation worse. The map in the report notes the constricted lane width just west of the mobile home park. An 18’ wide road with curbs on either side will cause problems until it is widened somehow in the future. That is not a comfortable situation with two way traffic and will likely lead to property damage, if not personal injury. I’m refering to construction traffic, waste disposal trucks, and street sweepers to name a few. Maybe Deodar has been swept too many times and that is the reason for the condition of the roadway.

A concern I have is the size of the homes and the lots they sit on. My research has shown that these homes and lots will be smaller than most of the existing R-3 zoned properties in the area. It isn’t apparent to me that these new homes will have garages. If they do, then the home square footage will be even more imbalanced with the current Packet Pg. 48
Attachment: Public Comments (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1034 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- neighborhood. If they don’t, then where will the residents park? Modern neighborhoods don’t plan on street parking in a subdivision of this size. Street parking can lead to property damage and vandalism.

So for the above observations, I am against the rezoning of these properties to R-3.5 and construction of the subdivision as proposed. I hope the planning commission looks beyond the possibility of a new revenue source and fully looks into the ramifications of rezoning and approving this subdivision by Zinco Holdings as proposed.

Sincerely,
Packet Pg. 49
Attachment: Public Comments (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1035 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- Packet Pg. 50
Attachment: Public Comments (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1036 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024- From:

To: Castro, Danny
Subject: Zinco holdings Jordan lane re zoning
Date: Friday, April 18, 2025 7:39:36 PM
CAUTION: This email originated from outside the City of Redding; please be careful with links or attachments.

Hello,
I'm concerned about the vegetation that was cut illegally by zinco holdings and left scattered across the apns for the proposed development on Jordan lane, as the governor has already decalerd state of emergency and the overwhelming fire season that is coming upon us. The piles left pose a huge fire risk to our neighbor hood and our community.

Sections 4551 and 4562, Public Resources Code. Reference: Sections 4423, 4513, 4551.5, and 4562, Public Resources Code.

And in the applied documents all vegitation was to be removed before fire season. And as per California timber harvest rules,April 15 winter ops are lifted. The slash and downed trees all remain on site.

It seems that there has been alot of foul play already on this project and it hasn't even really began. This is very concerning to the neighbors and my self.

There has been very little to no communication since the initial plan was conveyed.

As well as during the winter months starting in October the zinco holdings property and the adjacent property hold millions of gallons of water that drain through all homes on deodar.

This already imposes problems that we have to deal with. Several large diversion ditches had to be installed that help shed the access surface water.

There is at anything thru the winter months 8 to 10 inches of water and millions of frogs and multiple species that use for habitat.

Keith's towing is very familiar with this area due to numerous recoverys for trucks and cars that get stuck.

Deodar road is completely falling apart. You can clearly see where the potholing has occur and contractors have done work on the utilitys the pavement has sank and broken the asphalt and destroyed the driving surface. There are currently no speed bumps installed or traffic control devices with a choke point.

This poses new risk and possibility property damage.

As stated in the building plan no changes were to be made to deodar. I would support closing deodar to thru traffic with a fire gate. Speed is a huge issue on the street with multiple speeders that fly down the street. Rpd has been on several chases thru the street. That cause concern for my family as we have children and animals.

I hope to hear back from you soon.

Thanks
Packet Pg. 51
Attachment: Public Comments (5(b)1- Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-00156, by Zinco Holding) Packet Pg. 1037 Attachment: Planning Commission Staff Report - May 13, 2025 (6.3--Subdivision Application S-2022-02416 & Rezoning Application RZ-2024-

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize and approve the following:
(1) Offer Ordinance amending Redding Municipal Code Title 6 (Business Taxes, Licenses, and Regulation), Chapter 6.13 (Redding Municipal Code Tobacco Retailing) adopting a Tobacco Retail license for first reading by title only, waive the full reading; (2) Authorize the City Attorney to prepare a summary ordinance and the City Clerk to publish the same in accordance with law; and
(3) Find that the adoption of this ordinance is exempt from environmental review pursuant to California Environmental Quality Act guidelines 15060(c)(2) and 15061(b)(3) and further find that the passage of this ordinance will have no foreseeable direct or indirect physical change in the environment.

Fiscal Impact
If the ordinance is adopted, all tobacco retailers will be required to pay a fee of $1,176.63 - the fee is based on Code Enforcement administering the Tobacco Retail License Program that includes 119 tobacco retailers operating in the City of Redding (City). The program fees will fund one, full-time Neighborhood Preservation Officer and a half-time Administrative Assistant to operate the Tobacco Retail License Program. The fee could increase or decrease if the number of tobacco retailers is found to be more or less than 119.

Alternative Action
The City Council (Council) may choose not to adopt an ordinance regulating tobacco retailers; could direct staff to alter the licensing ordinance; or may provide alternate direction to staff.

MEETING DATE: July 15, 2025
ITEM NO. 9.1(b)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 9.1(b)--Consider adopting a tobacco retail ordinance in the City of Redding.

Jason Gibilisco, Management
Assistant to the City Manager
Packet Pg. 1038
Report to Redding City Council July 9, 2025
Re: 9.1(b)--Consider adopting a tobacco retail ordinance Page 2 Background/Analysis
On June 17, 2025, staff presented a tobacco-oriented retailer ordinance to the Council. This ordinance was specific to licensing smoke and vape shops only. The Council did not adopt the ordinance and gave further direction to staff to bring back a licensing ordinance that incorporates all tobacco retailers and includes a location restriction for new tobacco retailers to be 600 feet away from schools.

Staff worked with Code Enforcement and the City Attorney’s Office to edit the previous draft tobacco retailing ordinance (draft ordinance). Under the draft ordinance, all tobacco retailers will be required to obtain a Tobacco Retail License. The distance requirement of operating within 600 feet of a school will only apply to new tobacco retailers who operate following adoption of the draft ordinance.

Existing tobacco retailers will be allowed to continue to operate within 600 feet of a school as long as they submit a complete and accurate tobacco retail application and pay the required fee within 60 days of ordinance adoption. Following adoption, they will need to remain in good standing to continue to operate such as not having their tobacco retail license revoked due to violations. Staff defined school as any grades between kindergarten through grade 12 - this includes both public and private schools.

The draft ordinance allows for enforcement, inspections, and education to all tobacco retailers.

The sale of flavored tobacco products will be illegal in the draft ordinance and also includes that no tobacco products are to be sold to a person under the age of 21. This allows for the City to issue violations referencing the Redding Municipal Code instead of State Code.

Pending adoption of the ordinance, staff will bring back a resolution for adoption of a Tobacco Retail Licensing program and a resolution for adoption of administrative fines.

Environmental Review
This is not a project defined under the California Environmental Quality Act, and no further action is required.

Council Priority/City Manager Goals
• Government of the 21st Century – “Be relevant and proactive to the opportunities and challenges of today’s residents and workforce. Anticipate the future to make better decisions today.”
Attachments
^Draft Tobacco Retail License Ordinance
Previous Staff Report from September 17, 2024
Previous Staff Report from March 18, 2025
Previous Staff Report from June 17, 2025
Packet Pg. 1039

DRAFT NEW ORDINANCE
ORDINANCE NO. ______
AN ORDINANCE OF THE CITY OF REDDING AMENDING TITLE 6
(BUSINESS TAXES, LICENSES AND REGULATIONS) OF THE
REDDING MUNICIPAL CODE BY ADDING CHAPTER 6.13 (TOBACCO

RETAILING) RELATING TO THE REGULATION OF TOBACCO

RETAILERS
WHEREAS:

A. The City Council finds that a local licensing system for tobacco retailers is appropriate to ensure that retailers comply with tobacco control laws and business standards to protect the health, safety, and welfare of our residents; and
B. Approximately 480,000 people die in the United States from smoking-related diseases and exposure to secondhand smoke every year, making tobacco use the nation’s leading cause of preventable death;
i
and
C. The World Health Organization (WHO) estimates that tobacco kills 8 million people and causes over 1.4 trillion dollars in economic damage each year; ii and
D. 5.6 million of today’s Americans who are younger than 18 years of age are projected to die prematurely from a smoking-related illness;
i
and
E. Tobacco use is the number one cause of preventable death in Californiaiii and continues to be an urgent public health issue, as evidenced by the following:
• 40,000 California adults die from their own smoking annually;iv • More than 25% of all adult cancer deaths in California are attributable to smoking;v • Smoking costs California $13.29 billion in annual health care expenses, $3.58 billion in Medicaid costs caused by smoking, and $10.35 billion in smoking-caused productivity losses;vi
• Tobacco use can cause disease in nearly all of the organs of the body and is responsible for 87% of lung cancer deaths, 32% of coronary heart disease deaths, and 79% of all cases of chronic obstructive pulmonary disease in the United States.ii and F. State law prohibits the sale or furnishing of cigarettes, tobacco products and smoking paraphernalia to persons under 21 years of age except active duty military personnel who are 18 years of age or older (California Penal Code § 308); and G. State law requires that tobacco retailers check the identification of tobacco purchasers who reasonably appear to be under 21 years of age (California Business & Professions Code § Packet Pg. 1040 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) 22956) and provides procedures for using persons under 21 years of age to conduct onsite compliance checks of tobacco retailers (California Business & Professions Code § 22952); and H. Despite the state’s efforts to limit youth access to tobacco, youth are still able to access tobacco products, as evidenced by the following:
• In California, research indicates over 67% of current and former adult smokers started by the age of 18 and almost 100% start by age 26;vii
• In California, from 2017 to 2018, approximately 13% of high school students reported using tobacco;viii
• Unless smoking rates decline, an estimated 441,000 of all California youth who are alive today will die prematurely from smoking-related diseases;i • In 2017, 22.8% of high school students in California had tried cigarette smoking;ix • Between 2014 and 2018, electronic smoking device use among California youth increased from 14.1% to 46.2%;
x
and
I. In 2023, 41.2% of surveyed Shasta County high school students reported having previously used tobacco, the highest level of tobacco use recorded in the state; xi and
J. In 2023, 31.6% of surveyed Shasta County high school students stated that they vape to relax or relieve stress and anxiety;
xi and
K. In 2023, 16.8% of surveyed Shasta County high school students reported currently using tobacco products (including vapes, cigarettes, cigars, little cigars and cigarillos, smokeless tobacco, heated tobacco products, hookah and nicotine pouches); xi and
L. In 2023, Shasta County had the highest level of current tobacco use by high school students in the State;
xi and
M. In 2023, 63.2% of currently vaping high school students reported that they believed it was easy to obtain vapes and cigarettes from stores;
xi and
N. In 2023, 32.6% of surveyed Shasta County students reported buying vapes, pods, or e-liquid directly from a tobacco or smoke shop;
xi and
O. In 2023, 23.4% of surveyed Shasta County students under the age of 18 reported asking someone to buy them a vape, pod or e-liquid;
xi and
P. Both youth and adult tobacco users are more likely to also use cannabis; xiiˑxiii and
Q. State law requires that tobacco retailers post a conspicuous notice at each point of sale stating that selling tobacco products to anyone under 21 years of age is illegal (California Business & Professions Code § 22952, California Penal Code § 308); and R. The tobacco industry encourages youth and young adult tobacco initiation through predatory targeting,xiv as evidenced by the following:

Packet Pg. 1041 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) • Tobacco companies target young adults ages 18 to 24 to increase their frequency of tobacco use and encourage their transition to habitual users;xv • Tobacco industry documents state that if “a man has never smoked by the age of 18, the odds are three-to-one he never will. By age 24, the odds are twenty-to-one;”xvi • The tobacco industry spends an estimated $496 million annually to market tobacco products to California residents;
vi and
S. State law prohibits the sale or display of cigarettes through a self-service display and prohibits public access to cigarettes without the assistance of a clerk (California Business & Professions Code § 22962); and
T. State law prohibits the sale of "bidis" (a type of hand-rolled filterless cigarette) except at those businesses that prohibit the presence of minors (California Penal Code § 308.1); and U. State law prohibits the manufacture, distribution, or sale of cigarettes in packages of less than 20 and prohibits the manufacture, distribution, or sale of "roll-your-own" tobacco in packages containing less than six-tenths of an ounce of tobacco (California Penal Code § 308.3); and V. State law prohibits public school students from smoking or using tobacco products while on campus, while attending school-sponsored activities, or while under the supervision or control of school district employees (California Education Code § 48901(a)); and W. The City has a substantial interest in promoting compliance with federal, state, and local laws intended to regulate tobacco sales and use; in discouraging the illegal purchase of tobacco products by persons under 21 years of age; in promoting compliance with laws prohibiting sales of cigarettes and tobacco products to persons under 21 years of age; and in protecting youth and underserved populations from the harms of tobacco use. California courts in Cohen v. Board of Supervisors (Cal. 1985) 40 Cal.3d 277, Bravo Vending v. City of Rancho Mirage (4th Dist. 1993) 16 Cal.App.4th 383, and Prime Gas v. City of Sacramento (3rd Dist. 2010) 184 Cal.App.4th 697, have affirmed the power of local jurisdictions to regulate business activity in order to discourage violations of law. State law authorizes local tobacco retailer licensing laws to provide for the suspension or revocation of the local tobacco retailer license for any violation of a state tobacco control law (California Business & Professions Code § 22971.3); and X. Requiring tobacco retailers to obtain a tobacco retailer license will not unduly burden legitimate business activities of retailers who sell tobacco products to adults but will, however, allow the City council to regulate the operation of lawful businesses to discourage violations of federal, state, and local tobacco control and youth tobacco access laws, as evidenced by the following:
• Tobacco products are the number one seller in U.S. convenience stores, and in 2018, they generated an average of $523,084 in sales per store; xvii
• Systematic scientific reviews indicate that merchant compliance with youth tobacco sales laws reduces the rate of tobacco use among adolescents; xviiiˑxix
Packet Pg. 1042 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) • Studies found increased retailer compliance and reduced tobacco sales to youth following implementation and active enforcement of youth tobacco sales laws paired with penalties for violations;
xxˑxxi
• A review of 41 California communities with strong tobacco retailer licensing ordinances found that youth sales rates declined in 40 of these communities after the ordinances were enacted, with an average 69% decrease in the youth sales rate.xxii i U.S. Department of Health and Human Services. The Health Consequences of Smoking: 50 Years of Progress. A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health. 2014. Available at: https://www.ncbi.nlm.nih.gov/books/NBK179276/pdf/Bookshelf_NBK179276.pdf. ii World Health Organization. WHO Report on the Global Tobacco Epidemic, 2019: Offer Help to Quit Tobacco Use. 2019. Available at: https://apps.who.int/iris/handle/10665/326043. iii California Department of Public Health, California Tobacco Control Program. The #1 Preventable Cause of Death. https://tobaccofreeca.com/health/tobacco-is-the-number-one-preventable-cause-of-death. iv Centers for Disease Control and Prevention. Best Practices for Comprehensive Tobacco Control Programs — 2014. U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health. 2014. Available at:
https://www.cdc.gov/tobacco/stateandcommunity/best_practices/pdfs/2014/comprehensive.pdf. v Lortet-Tieulent J, Goding Sauer A, Siegel RL, et al. State-Level Cancer Mortality Attributable to Cigarette Smoking in the United States. JAMA Intern Med. 2016;176(12):1792-1798. doi: 10.1001/jamainternmed.2016.6530. vi Campaign for Tobacco-Free Kids. The Toll of Tobacco in California. https://www.tobaccofreekids.org/problem/toll-us/california. vii California Tobacco Control Program. California Tobacco Facts and Figures 2016. Sacramento, CA: California Department of Public Health. 2016.
viii California Tobacco Control Program. California Tobacco Facts and Figures 2019. Sacramento, CA: California Department of Public Health. 2019. Available at:
https://www.cdph.ca.gov/Programs/CCDPHP/DCDIC/CTCB/CDPH%20Document%20Library/ResearchandEvalua tion/FactsandFigures/CATobaccoFactsandFigures2019.pdf.
ix Kann L, McManus T, Harris WA, et al. Youth Risk Behavior Surveillance — United States, 2017. MMWR Surveill Summ. 2018;67(8):1-114 and Supplementary Tables 52-93. doi: 10.15585/mmwr.ss6708a1. x Lin C, Baiocchi M, Halpern-Felsher B. Longitudinal trends in e-cigarette devices used by Californian youth, 2014– 2018.Addict Behav. 2020;108:106459. doi: 10.1016/j.addbeh.2020.106459. xi Clodfelter, R., Dutra, L. M., Bradfield, B., Russell, s., Levine, B., & Von Jaglinsky, A. (2023). Annual results report for the California Youth Tobacco Survey 2023. RTI International. xii Richter L, Pugh BS, Smith PH, Ball SA. The co-occurrence of nicotine and other substance use and addiction among youth and adults in the United States: implications for research, practice, and policy. Am J Drug Alcohol Abuse. 2017;43(2):132-145. doi: 10.1080/00952990.2016.1193511. xiii Conway KP, Green VR, Kasza KA, et al. Co-occurrence of Tobacco Product Use, Substance Use, and Mental Health Problems Among Youth: Findings From Wave 1 (2013-2014) of the Population Assessment of Tobacco and Health (PATH) Study. Addict Behav. 2018;76:208-217. doi: 10.1016/j.addbeh.2017.08.009. xiv United States v. Philip Morris USA, Inc. 449 F.Supp.2d 1 (D.D.C. 2006) aff’d in part, vacated in part, 566 F.3d 1095 (D. C. Cir. 2009), and order clarified, 778 F.Supp.2d 8 (D.D.C. 2011). xv Ling PM, Glantz SA. Why and How the Tobacco Industry Sells Cigarettes to Young Adults: Evidence From Industry Documents. Am J Public Health. 2002;92(6):908-916. doi: 10.2105/ajph.92.6.908. xvi Burrows, D.S. “Estimated Change in Industry Trend Following Federal Excise Tax Increase.” UCSF Library Truth Tobacco Industry Documents. Date Mod. Industry, Apr. 17, 2012:
https://www.industrydocumentslibrary.ucsf.edu/tobacco/docs/nnnw0084. xvii National Association of Convenience Stores. U.S. Convenience Store Count. Available at:
https://www.convenience.org/Research/FactSheets/ScopeofIndustry/IndustryStoreCount; Statista. In-store

Packet Pg. 1043 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance)

merchandise sales of convenience stores in the United States in 2018, by product category. Available at:
https://www.statista.com/statistics/308783/usconvenience- stores-in-store-merchandise-sales-by-category (Cigarettes + Other Tobacco Products Sales = $81.056 billion). xviii U.S. Department of Health and Human Services. Preventing Tobacco Use Among Youth and Young Adults: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health. 2012. Available at: https://www.ncbi.nlm.nih.gov/books/NBK99237/pdf/Bookshelf_NBK99237.pdf. xix DiFranza JR. Which interventions against the sale of tobacco to minors can be expected to reduce smoking? Tob Control. 2012;21:436-442. doi: 10.1136/tobaccocontrol-2011-050145. xx McLaughlin I. License to Kill?: Tobacco Retailer Licensing as an Effective Enforcement Tool. Tobacco Control Legal Consortium. 2010. Available at: http://www.publichealthlawcenter.org/sites/default/files/resources/tclc-synretailer-2010.pdf. xxi Institute of Medicine. Public Health Implications of Raising the Minimum Age of Legal Access to Tobacco Products. Washington, DC: The National Academies Press. 2015. Available at:
https://www.nap.edu/catalog/18997/public-health-implications-of-raising-the-minimum-age-of-legal-access-totobacco-products. xxii The American Lung Association in California Center for Tobacco Policy and Organizing. Tobacco Retailer Licensing is Effective. 2018.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF REDDING DOES ORDAIN AS FOLLOWS:

Section 1. Redding Municipal Code Title 6 (Business Taxes, Licenses and Regulations) is hereby amended by adding Chapter 6.13, to read as follows:

6.13 – TOBACCO RETAILING

6.13.010 Purpose and intent.

It is the intent of the City, in enacting this Chapter, to ensure compliance with the business standards and practices of the City, to encourage responsible tobacco retailing, and to discourage violations of tobacco-related laws, especially those that prohibit or discourage the sale or distribution of tobacco and nicotine products to youth. This Chapter is not intended to expand or reduce the degree to which the acts regulated by federal or state law are criminally proscribed or to alter the penalties provided therein.

6.13.020 Definitions.
(1) "Arm's length transaction" means a sale in good faith and for valuable consideration that reflects the fair market value in the open market between two informed and willing parties, neither of whom is under any compulsion to participate in the transaction. A sale between relatives, related companies or partners, or a sale for which a significant purpose is avoiding the effect of the violations of this Chapter is not an arm's length transaction. (2) “Cannabis” has the meaning set forth in California Business and Professions Code Section 26001, as that section may be amended from time to time.

Packet Pg. 1044 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) (3) “Cannabis Product” has the meaning set forth in California Business and Professions Code Section 26001, as that section may be amended from time to time. (4) “Cannabis Retailer” means any retail establishment in which cannabis or cannabis products are sold or offered for sale to persons that do not hold a license to engage in a commercial cannabis activity issued by the State of California in accordance with the Business and Professions Code Section 26000 et seq., as that section may be amended from time to time.
(5) "City" means the City of Redding.
(6) "City Manager" means the manager of the City as appointed by the City Council in accordance with the City's Municipal Code, or the City Manager's designee. (7) "Department" means any City division or department charged with enforcement or administration of the provisions of this Chapter.
(8) "Director" means Chief of Police or the director of the Department of Development Services, the director's designee, or such other director as may be designated by the City Manager to administer the provisions of this Chapter.
(9) "Flavored tobacco product" means any tobacco product that imparts one or more of the following:
(A)A taste or odor distinguishable by an ordinary consumer, other than the taste or odor of tobacco, either prior to or during the consumption of such tobacco product, including but not limited to tastes or odors relating to any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, mint, wintergreen, menthol, herb, or spice; or
(B) A heating, cooling, or numbing sensation distinguishable by an ordinary consumer during the consumption of such tobacco product.
(10) “Lapse” means the cessation or expiration of a Tobacco Retail license due to the failure to renew it within the required time frame or the loss of eligibility for the Tobacco Retail license. A Tobacco Retail license is considered lapsed if the licensee does not complete the necessary steps to renew or maintain the Tobacco Retail license, resulting in the license no longer being valid or active. This does not include situations in which the license is temporarily suspended.
(11) "License" means a Tobacco Retail license issued by the City pursuant to this Chapter. (12) "Licensee" means any proprietor holding a Tobacco Retail license issued by the City pursuant to this Chapter.
(13) "Manufacturer" means any person, including any repacker or relabeler, who manufactures, fabricates, assembles, processes, or labels a tobacco product; or imports a finished tobacco product for sale or distribution into the United States.

Packet Pg. 1045 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) (14) "Owner" means any of the following:
(A)A person with sole or aggregate ownership in the Tobacco Retail business applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance;
(B) The chief executive officer of a nonprofit, Tobacco Retailer business, or other entity;
(C) A member of the board of directors of a nonprofit, Tobacco Retailer business, or other entity;
(D)The trustee(s) and all persons who have control of the trust and/or the Tobacco Retailer business that is held in trust;
(E) An individual who participates in the direction, control, or management of the person applying for a license. Such an individual includes, but is not limited to, any of the following:
a. A general partner of a Tobacco Retailer business that is organized as a partnership;
b. Anonymous member manager or managing member of a Tobacco Retail business that is organized as a limited liability company; c. An officer or director of a Tobacco Retailer that is organized as a corporation;
d. Any individual who assumes responsibility for the license. (15) “Permanent Revocation” means permanent invalidation of a Tobacco Retailer license, which results in the license holder being prohibited from operating as a Tobacco Retailer at the licensed location. This action is final and not subject to reinstatement unless specifically authorized after a successful appeal. Once a Tobacco Retail license is permanently revoked, the licensee is no longer eligible to operate under that license at the location, and no further renewal or reissuance of the license will be allowed unless new application requirements are met.
(16) "Person" means any individual, firm, partnership, joint venture, limited liability company, nonprofit organization, association, social club, fraternal organization, corporation, estate, trust, business trust, receiver, trustee, syndicate, state, county, city, municipality, district, or other political subdivision of the state, or any other group or combination acting as a unit.
(17) "Proprietor" means a person with an ownership or managerial interest in a business. A managerial interest shall be deemed to exist when a person has or does have or shares ultimate control over the day-to-day operations of a business.

Packet Pg. 1046 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) (18) “Retailer” means a person who engages in this state in the sale of cigarettes or tobacco products directly to the public from a retail location. Retailer includes a person who operates vending machines from which cigarettes or tobacco products are sold in this state. (19) "Sale" or "sell" means any transfer, exchange, barter, gift, offer for sale, or distribution for a commercial purpose, in any manner or by any means whatsoever. (20) “School” means a private or public kindergarten, elementary, middle, junior high or high school.
(21) "Self-service display" means the open display or storage of tobacco products or tobacco paraphernalia in a manner that is physically accessible in any way to the general public without the assistance of the tobacco retailer or the tobacco retailer's agent or employee and without a direct person-to-person transfer between a member of the public and the tobacco retailer or tobacco retailer's agent or employee. A vending machine is a form of self-service display.
(22) “Temporary Suspension” means temporary cessation of a Tobacco Retailer license during which the retailer is prohibited from operating their business for a specified period of time. This suspension is typically imposed as a penalty for noncompliance with applicable laws or regulations and can be lifted once the licensee has met all requirements for reinstatement. A temporary suspension does not result in the permanent loss of the license, and the retailer may resume business once the suspension period ends or the license has been reinstated.
(23) "Tobacco paraphernalia" means cigarette papers or wrappers, pipes, holders of smoking materials of all types, cigarette rolling machines, and any other item designed for the smoking, preparation, storing, or consumption of tobacco products. (24) "Tobacco Product" means any of the following:
(A) A product containing, made, or derived from tobacco or nicotine that is intended for human consumption, whether smoked, heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, including, but not limited to, cigarettes, cigars, little cigars, chewing tobacco, pipe tobacco, or snuff. (B) An electronic device that delivers nicotine or other vaporized liquids to the person inhaling from the device, including, but not limited to, an electronic cigarette, cigar, pipe, or hookah.
(C) Any component, part, or accessory of a tobacco product, whether or not sold separately.
“Tobacco product” does not include a product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product or for other therapeutic purposes where the product is marketed and sold solely for such an approved purpose by this Chapter.

Packet Pg. 1047 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) (25) "Tobacco Retailer" means any person who sells, offers for sale, or does or offers to exchange for any form of consideration tobacco products or tobacco paraphernalia. This definition shall be without regard to the quantity of tobacco, tobacco products, or tobacco paraphernalia sold, offered for sale, exchanged, or offered for exchange. (26) "Tobacco Retailing" means engaging in any of those activities of a Tobacco Retailer.

This definition shall be without regard to the quantity of tobacco, tobacco products, or tobacco paraphernalia sold, offered for sale, exchanged, or offered for exchange.

6.13.030 License required.

It shall be unlawful for any person to engage in Tobacco Retailing unless under and by authority of a valid, unexpired, unsuspended, unrevoked Tobacco Retailer License issued pursuant to this Chapter for each location at which tobacco retailing is to occur.

6.13.040 General Requirements and Prohibitions.

A. Operating regulations and conditions.
(1) The provisions of this section shall constitute terms and conditions applicable to each Tobacco Retail license issued by the Director.
(2) The provisions of this section shall also constitute operating regulations that are applicable to each holder of a Tobacco Retail license issued pursuant to this Chapter. (3) It shall be unlawful for any person or entity engaged in the retail sale of tobacco products, regardless of the nature of the business or whether they are licensed under this Chapter, to violate any provision of this Chapter.

B. Lawful Business Operation.

In the course of tobacco retailing or in the operation of the business or maintenance of the location for which a license issued or not issued, it shall be a violation of this Chapter for an owner, licensee, or any of the licensee’s or owner’s agents or employees, to violate any local, state, or federal law applicable to tobacco products, tobacco accessories, or tobacco retailing.

C. Display of License.

Each Tobacco Retailer license shall be prominently displayed in a publicly visible location at the licensed location at all times.

D. Minimum Legal Sales Age.

1. No person engaged in tobacco retailing shall sell a tobacco product to a person under twenty-one years of age except to active duty military personnel who are 18 years of age or older pursuant to California Penal Code § 308.

Packet Pg. 1048 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance)

2. No person engaged in tobacco retailing shall sell a tobacco product to another person without first verifying by means of government issued photographic identification that the recipient is at least 21 years of age.

E. Self-Service Displays Prohibited.

Tobacco Retailing by means of a self-service display is prohibited.

F. Mobile Vending.

No license may issue to authorize tobacco retailing at other than a fixed licensed location. No tobacco retail license will be issued to a moveable place of business. It shall be a violation of this chapter for any tobacco retailer or any of the tobacco retailer’s agents or employees to engage in the delivery sale of tobacco products or to knowingly or recklessly sell or provide tobacco products to any person that intends to engage in the delivery sale of the tobacco product in the City.

G. Business License.

In addition to the Tobacco Retail license, any Tobacco Retailer must have a valid business license as required by Title 6.

H. Limits on eligibility for a Tobacco Retailer license. (1) No Tobacco Retailer shall be located within six hundred feet of a school providing instruction in kindergarten or any grade levels one through twelve, as measured in a straight line between the boundary lines of the parcel of the school and the boundary lines of the parcel of the License applicant's proposed business location. (2) Notwithstanding subsection 1 of this section, a Tobacco Retailer operating lawfully on the date the ordinance codified in this Chapter is adopted that would otherwise be eligible for a Tobacco Retailer license for the location for which a license is sought may receive or renew a license for that location so long as all of the following conditions are met:

A. A complete and accurate application is submitted to the City within 60 days of the date this ordinance is adopted;
B. The license is timely obtained, maintained, and renewed without lapse or permanent revocation (as opposed to temporary suspension); C. The Tobacco Retailer has not experienced a business closure of 60 or more consecutive days to include the 30-day period immediately preceding the effective date of this ordinance;
D. The Tobacco Retailer maintains the right to operate the business under all other applicable laws;
E. The Tobacco Retailer has not substantially changed the business premises or business operation within 60 days of the date the ordinance codified in this Packet Pg. 1049 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) Chapter is adopted. A substantial change to the business operation includes, but is not limited to, the transferring of a location:
(1) To a new proprietor(s) in an arm’s length transaction; or (2) For which a significant purpose is avoiding the licensing requirements of this Chapter.

F. If the City determines that a Tobacco Retailer has substantially changed their business premises or operation and the Tobacco Retailer disputes this determination, the Tobacco Retailer bears the burden of proving to the Department by a preponderance of evidence that such change(s) do not constitute a substantial change.

I. Compliance inspection.

The Director, the Chief of Police and any City official charged with enforcing the provisions of this Code shall have the power and authority to enter any business engaging in tobacco retailing during regular business hours to inspect the premises and to determine compliance with the provisions of this Chapter.
(1) Should any inspection reveal noncompliance with any of the provisions of this Chapter and should reinspection be needed to determine compliance, the cost of any such reinspection shall be billed to the owner of the premises, the operator of the business engaging in tobacco retailing, and/or the holder of the Tobacco Retailing license in the amount set forth in the schedule of fees established by resolution of the City Council. (2) Prior notice of an inspection, investigation, review, or audit is not required. (3) It is unlawful and cause for immediate denial, suspension, or revocation of a license for any licensee, property owner, proprietor, landlord, lessee, tobacco retailer, and/or its owner, agent, or employee to refuse to allow, to impede, to obstruct, to delay, or to otherwise interfere with an inspection, investigation, review, or audit. (4) When a requirement is established pursuant to this Chapter for an inspection and/or copy of a record, the record shall be delivered immediately upon demand by City personnel.

J. Flavored tobacco products.
(1) It shall be unlawful for any tobacco retailer to sell any flavored tobacco product. (2) Presumptive Flavored Tobacco Product. There shall be a rebuttable presumption that a tobacco product is a flavored tobacco product if a tobacco retailer, manufacturer, or any employee or agent of a tobacco retailer or manufacturer has taken action directed to consumers that would be reasonably expected to cause consumers to believe the tobacco product is a flavored tobacco product. Any communication by or on behalf of the manufacturer or retailer of a tobacco product that such tobacco product imparts a taste or odor other than the taste or odor of tobacco, and/or that imparts a heating, cooling, or numbing sensation, constitutes presumptive evidence that the tobacco product is a flavored Packet Pg. 1050 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) tobacco product. This includes but is not limited to public statements that a product is flavored, such as describing the product as "chill," "ice," "fresh," "arctic," "sweet," "spicy," or "frost."
K. Other legal duties.
(1) Each Tobacco Retailer shall:

A. Comply with all applicable laws and ordinances governing the sale of any tobacco products or tobacco paraphernalia;
B. Comply with all conditions imposed by the Director as part of the tobacco retail license; and
C. Comply with all conditions imposed by any other permit or license required for a business engaging in tobacco retailing.
(2) Each Tobacco Retailer, and any other person(s) responsible for the operation of the business engaging in tobacco retailing, excluding the City, its agents, officers and employees, shall be jointly and severally liable for:

A. Any violation of this Chapter;
B. Any violation of the terms of the Tobacco Retail license; C. Any violation of any other license or permit required for the business engaging in tobacco retailing; and
D. Any violation of any other applicable law that arises out of the sale of tobacco products or tobacco paraphernalia.

L. Indemnification agreement required.

Any tobacco retailer applying for a Tobacco Retail license under this Chapter shall agree to fully indemnify, defend, and hold harmless the City, its officers, employees and agents for all claims, losses, or liabilities that arise out of the issuance or use of the Tobacco Retail license, or that arise out of any sale, distribution, transfer or use of tobacco products or tobacco paraphernalia, in a form approved by the City Attorney's Office.

M. Licensed cannabis businesses.

No license may issue, and no existing license may be renewed, to authorize tobacco retailing at a location licensed for commercial cannabis activity by the state of California in accordance with the Business and Professions Code Division 10, and the City in accordance with Chapter

6.12 Redding Municipal Code. In the course of tobacco retailing or in the operation of the business or maintenance of the location for which a license issued, it shall be a violation of this Chapter for a licensee, or any of the licensee’s agents or employees, to engage in commercial cannabis activity.

Packet Pg. 1051 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance)

6.13.050 Application procedure for Tobacco Retailer.

A. An application for a Tobacco- Retailer’s license shall be submitted in the name of each owner or proprietor proposing to conduct retail tobacco sales and shall be signed by each owner or proprietor or an authorized agent thereof. All applications shall be submitted on a form supplied by the Department.

B. A license issued contrary to this Chapter, contrary to any other law, or issued on the basis of false or misleading information shall be revoked pursuant to this Chapter. Nothing in this Chapter shall be construed to vest in any person obtaining or maintaining a Tobacco Retailer’s license any status or right to act as a Tobacco Retailer in contravention of any provision of law.

C. Applicant submissions shall contain the following information:
(1) The name, address, and telephone number of each owner and proprietor of the business seeking a license.
(2) The business name, address, and telephone number of the location for which a license is sought.
(3) The name and mailing address authorized by each owner and proprietor to receive all communications and notices required by, authorized by, or related to the enforcement of this Chapter.
(4) Proof that the business and location for which a Tobacco Retailer’s license is sought has been issued all necessary state and municipal licenses for the sale of tobacco products.
(5) Listing of all prior issuances, suspensions, and/or revocations of Tobacco Retail licenses for each named proprietor or owner of the business, or their agent, and the dates and locations of each action pursuant to this Chapter. (6) Listing of dates and locations for all prior violations of local, state, or federal law governing the sale of tobacco products or California Health and Safety Code section 11351, as amended from time to time, by each named proprietor or owner or their agent occurring within the previous five years.
(7) A statement by the applicant that the contents of the application are complete, true, and correct. Any person who signs a statement pursuant to this subdivision that asserts the truth of any material matter that he or she knows to be false is guilty of a misdemeanor punishable by imprisonment of up to one year in the county jail, or a fine of not more than one thousand dollars ($1,000), or both the imprisonment and the fine.
(8) A statement by the applicant that they are the owner, proprietor, or authorized agent of the Tobacco Retail business for which the license is sought pursuant to this Chapter.

Packet Pg. 1052 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) (9) A signed affidavit affirming that the proprietor has not sold and will not sell any tobacco product without a license required by this chapter. (10) Such other information as the Department deems necessary for the administration or enforcement of this Chapter as specified on the application form required by this section.

D. A licensed Tobacco Retailer or applicant shall inform the Department in writing of any change in the information submitted on an application for a tobacco retailer’s license within ten business days of a change.

6.13.060 License issuance or denial.

Upon the receipt of a complete and adequate application for a tobacco retailer’s license and the license fee required by this Chapter, the Department may approve or deny the application for a license, or it may delay action for a reasonable period of time to complete any investigation of the application or the applicant deemed necessary. The application shall be denied if one or more of the following circumstances exist:

A. The information presented in the application is inaccurate or false. Intentionally supplying inaccurate or false information shall be a violation of this Chapter.

B. The application seeks authorization for Tobacco Retailing at a location for which this Chapter prohibits issuance of Tobacco Retailer licenses.

C. The application seeks authorization for tobacco retailing for an owner or proprietor or their agent to whom this Chapter prohibits a license to be issued.

D. The application seeks authorization for tobacco retailing that is prohibited pursuant to this Chapter; that is unlawful pursuant to this Code, including without limitation, the zoning ordinance, building code, or business license tax ordinance; or that is unlawful pursuant to any other law.

E. The retailer, or if the retailer is not an individual, any person controlling the retailer or retail business, has previously been issued a license that is suspended or revoked by the Department for violation of any of the provisions of this Chapter.

F. The application is for a license or renewal of a license for a retail location that is the same retail location as that of a retailer whose license was revoked or is subject to revocation proceedings for violation of any of the provisions of this division, unless:
(1) It has been more than five years since a previous license for the retail location was revoked.
(2) The person applying for the license provides the Department with documentation demonstrating that the applicant has acquired or is acquiring the premises or business in an arm's length transaction.

Packet Pg. 1053 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) G. The retailer, or if the retailer is not an individual, any person controlling the retailer or retail business, has been convicted of a felony pursuant to Section 30473 or 30480 of the Revenue and Taxation Code.

6.13.070 License renewal and expiration.

A Tobacco Retailer’s license is invalid if the appropriate fee has not been timely paid in full, the application is incomplete, or the term of the license has expired. The term of a Tobacco Retailer license is one year. Each Tobacco Retailer shall apply for renewal of their Tobacco Retailer’s license and submit the license renewal fee no later than thirty days prior to expiration of the current license but no earlier than 60 days prior to the expiration of the current license. A licensee who submits an incomplete application may resubmit the application for renewal as long as the current license does not lapse. A Tobacco Retailer that fails to timely submit a renewal application and fee is ineligible for license renewal; however, a timely and complete application for renewal shall toll the existing license until the renewal application is approved or denied by the City. A license that has been revoked, or is subject to revocation proceedings, shall not be renewed.

6.13.080 Licenses nontransferable.

A. A Tobacco Retailer’s license may not be transferred from one person to another or from one location to another. A new Tobacco Retailer’s license is required whenever a tobacco retailing location has a change in proprietor(s) or owners or a change in location.

B. Notwithstanding any other provision of this Chapter, prior violations at a location shall continue to be counted against a location, and license ineligibility periods shall continue to apply to a location unless the location has been transferred to new proprietor(s) or owner(s) in an arm’s length transaction.

6.13.090 License conveys a limited, conditional privilege.

Nothing in this Chapter shall be construed to grant any person obtaining or maintaining a Tobacco Retailer’s license any status or right other than the limited conditional privilege to act as a Tobacco Retailer at the location in the City identified on the face of the license.

6.13.100 Fee for license.

The fee to issue or to renew a Tobacco Retailer’s license shall be established by resolution of the City Council, which may be amended as needed at the City Council’s discretion. The fee shall be calculated so as to recover the cost of administration and enforcement of this Chapter including, but not limited to, issuances of licenses, administration of the license program, retailer education, inspection and compliance checks of Tobacco Retailing businesses, documentation of violations, representation of the City at Board hearings, prosecution of violators, and other enforcement measures but shall not exceed the cost of the regulatory program authorized by this Chapter. All fees and interest upon proceeds of fees shall be used exclusively to fund the program. Fees are nonrefundable except as may be required by law.

Packet Pg. 1054 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance)

6.13.110 Suspension or revocation of license.

A. In addition to any other penalty authorized by law, a Tobacco Retailer’s license shall be suspended or revoked if any court of competent jurisdiction determines, or the Department finds based upon a preponderance of the evidence that the licensee, or any of the licensee’s agents, employees, or Tobacco Retailer locations, has violated any of the requirements, conditions, or prohibitions of this Chapter or has pleaded guilty, "no contest," or its equivalent, or admitted to a violation of any law applicable to the licensee in violation of this Chapter. Action taken by the director with respect to the suspension, modification, or revocation of a Tobacco Retail license shall be final and conclusive.

Any licensee aggrieved by the suspension, modification or revocation of a Tobacco Retail license may obtain review of such decision by appeal to the City Manager or the City Manager’s designee.
(1) Upon a finding by the Department of a first violation of this Chapter at a location within any five-year period, the license shall be suspended for fourteen (14) days.
(2) Upon a finding by the Department of a second violation of this Chapter at a location within any five-year period, the license shall be suspended for thirty (30) days.
(3) Upon a finding by the Department of a third violation of this Chapter at a location within any five-year period, the license shall be revoked. (4) Owners of Tobacco Retail businesses at more than one location are subject to increased penalties upon second and subsequent violations of this Chapter regardless of the business location where the earlier violation occurred. (5) The director or his designee shall have discretion to deviate from these guidelines and impose a harsher or more lenient penalty depending on the type and severity of violation, history of compliance or noncompliance by the licensee or location, and other relevant factors.
(6) Penalties shall increase with each subsequent violation without regard to type of violation.

B. A Tobacco Retailer’s license shall be revoked if the Department finds, after the licensee is afforded notice and an opportunity to be heard, that information contained in the license application, including supplemental information, if any, is false in any material respect.

C. A Tobacco Retailer’s license shall be revoked if the Department finds, after providing the licensee with notice and an opportunity to be heard, that one or more of the grounds for denial of a license pursuant to this Chapter existed at the time the application was made or at any point before the license was issued.

D. A licensee for whom a license suspension is in effect must remove all tobacco products and tobacco paraphernalia from the sales floor at the address that appears on the suspended or revoked license. Violation of this subsection or engaging in tobacco Packet Pg. 1055 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) retailing while the license suspension is in effect shall result in a permanent revocation of the Tobacco Retail License.

E. The suspension or revocation shall become effective immediately following notice of suspension or revocation from the Department, unless the holder of the license files an appeal in accordance with this Chapter. If such an appeal is filed, the suspension or revocation shall not become final until the appeal is resolved by a final decision of the City Manager or their designee, or withdrawal of the appeal.

6.13.120 Appeal of suspension or revocation.

A. A decision of the Department to suspend or revoke a license is appealable to the City Manager or their designee, and any appeal must be filed in writing with the City Manager within ten (10) days of mailing of the Department’s decision.

B. If such an appeal is timely made, it shall stay enforcement of the appealed action.

C. The decision by the City Manager or their designee shall be the final decision of the City.

6.13.130 Additional remedies.

A. The remedies provided by this Chapter are cumulative and in addition to any other remedies available at law or in equity, including, without limitation those remedies established in Title 1.

B. Whenever evidence of a violation of this Chapter is obtained in any part through the participation of a person under the age of eighteen (18) years, such a person shall not be required to appear or give testimony in any civil or administrative process brought to enforce this Chapter and the alleged violation shall be adjudicated based upon the sufficiency and persuasiveness of the evidence presented.

C. Violations of this Chapter are subject to a civil action brought by the City, punishable by an administrative penalty not less than one thousand dollars ($1000) per violation.

D. Subsequent violations of this Chapter are subject to increased administrative penalty amounts.

E. Violations of this Chapter may, in the discretion of the City Attorney, be prosecuted as infractions or misdemeanors when the interests of justice so require.

F. In addition to any other remedy or abatement authority allowed by law, the Director may take reasonable measures to enforce the suspension or revocation of a license. Such measures may include, but are not limited to, posting notices on the property which state tobacco products are not to be sold or purchased until the conclusion of the suspension, or requiring all tobacco products to be removed from the property during the suspension or revocation period. Removal of notices posted pursuant to this section shall, constitute a misdemeanor violation of this Chapter.

Packet Pg. 1056 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) G. Violations of this Chapter are hereby declared to be public nuisances and subject to abatement by the City.

H. For the purposes of the civil remedies provided in this Chapter:
(1) Each day on which tobacco products or tobacco accessories are offered for sale in violation of this Chapter shall constitute a separate violation of this Chapter; and (2) Each individual retail tobacco product and each individual retail item of tobacco accessories that is distributed, sold, or offered for sale in violation of this Chapter shall constitute a separate violation of this Chapter.

I. All tobacco retailers are responsible for the actions of their employees relating to the sale, offer to sell, and furnishing of tobacco products at the retail location. The sale of any tobacco product by an employee shall be considered an act of the tobacco retailer.

Section 2. The passage of this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change to the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) (Title 14 of the California Code of Regulations) because it has no potential for resulting in physical change to the environment, directly or indirectly
Section 3. If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held by a court of competent jurisdiction to be invalid or unconstitutional, such decision shall not affect the validity of remaining portions of the ordinance. The City Council of the City of Redding hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause and phrase thereof irrespective of the fact that one or more sections, subsections, sentences, clauses or phrases may be held invalid or unconstitutional.

Section 4. This Ordinance shall take effect thirty (30) days after the date of its adoption, and the City Clerk shall certify to the adoption thereof and cause its publication according to law.

Packet Pg. 1057 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance) I HEREBY CERTIFY that the foregoing ordinance was introduced and read by the City Council of the City of Redding at a regular meeting on the 15th day of July, 2025, and was duly adopted at a regular meeting on the ___ day of _______, 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:
___________________________________
JACK MUNNS, Mayor
ATTEST: FORM APPROVED:
______________________________ ___________________________________ SHARLENE TIPTON, City Clerk CHRISTIAN M. CURTIS, City Attorney DATE ATTESTED: ____________, 2025
Packet Pg. 1058 Attachment: ^Draft Tobacco Retail License Ordinance (9.1(b)--Consider adopting a tobacco retail ordinance)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Accept the report on tobacco retailing and provide direction to staff regarding next steps.

Fiscal Impact
There is no fiscal impact with accepting the report. If the City Council (Council) would like to pursue drafting an ordinance on tobacco retailing, there would be associated staff time costs.

Currently, the Redding Police Department (RPD) is running decoy operations through a grant.

The grant consists of five operations a year with each operation consisting of 10-12 retailer visits per operation - revenue received per operation is $1,500.

If the Council pursues a Tobacco Retail License (TRL) Program that is to be managed and enforced by Code Enforcement, staff would need to further examine cost recovery of the program. In TRL programs, the costs of education, inspections, and enforcement are funded by the cost of the license, and can be supplemented with grants. The cost of the license could fund a full time Code Enforcement position and even an administrative position to process the licenses.

Further examination would be required.

Alternative Action
The Council could choose to not accept the report.

Background/Analysis
On February 6, 2024, staff presented to the Council a report regarding what California (State) laws are in place and what other jurisdictions are doing in regards to tobacco enforcement. Staff presented a broad scope of what the majority of State jurisdictions are doing in regards to tobacco enforcement and specifically what the jurisdictions are doing in Shasta County. The MEETING DATE: September 17, 2024
ITEM NO. 9.1(a)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 9.1(a)--Consider report regarding tobacco retailing in the City of Redding.

Jason Gibilisco, Management
Assistant to the City Manager
Packet Pg. 1059 Packet Pg. 260 Attachment: Previous Staff Report from September 17, 2024 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 2 Council accepted the report and advised staff to further canvas State municipalities to determine what is and is not working regarding tobacco enforcement, retailer density, how youth are targeted, and any other information as it relates to tobacco retailers.

Since the previous meeting, the 2023 California Youth Tobacco Use Survey (survey) was released for Shasta County and there is new legislation, that, if signed by the Governor, will increase the fine for selling a tobacco product to youth. The survey was released in March 2024, and shows Shasta County has the highest rate of tobacco ever used by youth in the State of California at 41.2 percenti. The report shows that one in three Shasta County Youth report being able to purchase tobacco directly form a tobacco retaileri. On average, students reported first using tobacco at age 13 and 82.2 percent of students who have used tobacco reported trying vapes as their first tobacco producti.

Potential new tobacco enforcement legislation has moved forward to Governor Newsom for consideration. Senate Bill (SB) 2021 supplements the existing fine that can be issued to an individual who knowingly sells a tobacco product to a person under 21 years of age. This new bill allows for a fine to be issued to the retailing businesses or corporation. The fine amount that can be issued to the business for knowingly selling to a youth is punishable by a fine of $500 for the first offense, $1,000 for the second offense, and $5,000 for the third offense.

The California Department of Tax and Fee Administration (CDTFA) requires all retailers who sell cigarettes, or tobacco products, to obtain a cigarette and tobacco retailer's license. The CDTFA defines a tobacco product on their website as:
• “any product containing, made, or derived from tobacco or nicotine that is intended for human consumption;”
• “Any electronic smoking or vaping device that delivers nicotine or other vaporized liquids;” and
• “Any component, part, or accessory of tobacco product, whether or not sold separately.” Data Collection and Benchmarking
Staff analyzed 48 various jurisdictions throughout the State on what types of tobacco ordinances and enforcement other jurisdictions have in place. Staff specifically asked jurisdictions if they have a tobacco ordinance, if they enforce their tobacco ordinance, and if the ordinance is working. Staff also viewed each jurisdiction’s municipal code for specifications on tobacco related ordinances. Staff analyzed if a TRL is required, how many tobacco retailers are in the jurisdiction, what are the associated fees, population, penalties, and what specific ordinances are in place. Staff did not hear back from some jurisdictions through phone or email which resulted in reviewing online ordinances and information.

Of the 48 jurisdictions that were analyzed, 28 of them require retailers to have a local TRL. As of October 2023, at least 226 municipalities in California require a TRL to sell tobacco products.

Jurisdictions that require a TRL, required them to be renewed annually, allow them to have local control, and enforcement capabilities of the tobacco retailers in their jurisdiction. This allows the jurisdiction to set any additional requirements such as limits on how many retailers are operating in their jurisdiction and general oversight. It makes enforcement more effective and efficient and gives local governments the ability to intervene when needed. Many jurisdictions have set their ordinances to go above and beyond of what the federal and state law requires.

Staff found several jurisdictions have adopted tobacco ordinances but currently have no funding for their tobacco program or for enforcement. These jurisdictions are Butte County, Oroville, Packet Pg. 1060 Packet Pg. 261 Attachment: Previous Staff Report from September 17, 2024 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 3 Hollister, San Benito County, Arroyo Grande, and Merced County. The Cities of Anderson, Santa Rosa, and Vallejo, stated that they are in the process of working on updating or creating a TRL program.

The City of Benicia was found to have the most restrictive requirements for tobacco retailers.

Followed by Sonoma County and Sonoma County cities such as Petaluma, Sebastopol, Windsor, and Sonoma. These jurisdictions require each tobacco retailer to hold a TRL, implemented density requirements (with some no longer issuing TRLs due to being over density), proximity requirements to youth areas, distance/proximity requirements to other tobacco retailers, no selling of flavored tobacco, no tobacco retailing at pharmacies, minimum pricing requirements, and some even banning the sale of electronic cigarettes or vaping products.

There was a wide array of specific ordinances that have been implemented throughout the State.

The various ordinances in place include:

Proximity Requirement to a Youth Sensitive Area
Jurisdictions have set requirements for tobacco retailers operating near youth sensitive facilities. Youth sensitive facilities mainly include, schools, parks, libraries, day cares, playgrounds, and ultimately, specific areas defined by the jurisdiction. Jurisdictions set prohibitions for tobacco retailers near schools because of the belief that children are more likely to experiment with tobacco products when tobacco retailers are near youth areas.

Setting distance restrictions near youth areas may assist with reducing youth smoking rates. There are 16 jurisdictions that have set a distance requirement for tobacco retailers near youth sensitive areas. The distance set by the jurisdictions analyzed ranges from 300 feet to 1,000 feet.

Proximity Requirements Near Existing Tobacco Retailers
There are 10 jurisdictions that have requirements for no new tobacco retailers to operate within a specific proximity to other tobacco retailers. This requirement prevents the over concentration of tobacco retailers within particular neighborhoods and how close they can operate from one another. The overconcentration of tobacco retailers may affect youth smoking behaviors and youth access to tobacco products. The distance set by the jurisdictions analyzed ranges from 500 feet to 1,000 feet.

Tobacco Retailers per Population Density or Cap on the Amount of Tobacco Retailers Jurisdictions have imposed requirements for tobacco retailers based on the local population. Jurisdictions have based this requirement off of the State’s ability to limit the number of alcohol licenses. Greater tobacco density may lead to higher smoking rates. In the jurisdictions analyzed, 12 jurisdictions have adopted an ordinance based off the population. The jurisdictions analyzed had various densities adopted that include one tobacco retailer for every 1,500 residents (one jurisdiction), 1,750 residents (one jurisdiction), 2,000 residents (four jurisdictions), and 2,500 residents (three jurisdictions).

This sets local capacity of tobacco retailers based on the number of residents. If population increases then the number of tobacco retailers can be increased. The City of Sonoma has a set capacity of 15 retailers, and Nevada City has a set limit of five. The City of Oroville requires a use permit from planning and has a density requirement of one for every 4,000 residents for significant tobacco retailers which has been reached.

Packet Pg. 1061 Packet Pg. 262 Attachment: Previous Staff Report from September 17, 2024 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 4 No Selling of Flavored Tobacco
With the passing of SB 793, effective January 1, 2023, flavored tobacco or tobacco product flavor enhancers are now illegal to sell, offer for sale, or possess with the intent to sell or offer for sale in the State with a few exceptions. Flavored tobacco is considered a starter product for youth that assists with long term tobacco use. There are countless flavors that range from Cotton Candy, Cherry Crush, Pop Tart, Banana Blast, Wintergreen, and many more. There are 17 jurisdictions that were analyzed that have an ordinance that prohibits the sale of flavored tobacco with some going above and beyond SB 793 and banning all flavored tobacco. In communications with jurisdictions, flavored tobacco products are still being found, mainly at significant tobacco retailers such as smoke shops.

No Sale of Electric Smoking Devices (ESDs)/ Vapes
Electronic Cigarettes are also known as e-cigarettes, vapes, or e-vaporizers, and are battery operated devices used to deliver nicotine, flavorings, and other chemicals into the body in an aerosol form rather than smoke. The majority of ESDs or vapes are widely used for flavors. Following the ban on flavored tobacco, jurisdictions noticed that tobacco companies are finding ways to circumvent the flavor ban and are calling products by the names of colors such as “Blue.” Blue could mean that its flavor is blue raspberry or blueberry. ESDs are also what the youth are using in higher rates. The State’s flavor ban does leave room for interpretation on what is and is not considered flavored tobacco.

Jurisdictions have decided to go one step further and prohibit the sale of all ESDs for this reason. Since the majority of ESDs are flavored, jurisdictions reported minimal impacts to prohibiting the sale of ESDs. The Environmental Protection Agency classifies ESDs as hazardous waste due to their lithium batteries and nicotine in the liquid. There are seven jurisdictions analyzed that have prohibited the sale of ESDs.

No Selling of Tobacco at Pharmacies
Jurisdictions have restricted pharmacies from selling tobacco and tobacco related products. This ordinance is based off pharmacies being a place people go to for health care and medicine. It can send a mixed message about their safety because it is where people purchase healthcare products. There are 11 jurisdictions analyzed that have an ordinance in place prohibiting the sale of tobacco products at pharmacies.

Minimum Package Pricing/ Quantity Requirements/ No Free Samples or Discounts Jurisdictions have imposed minimum pricing requirements and minimum packaging requirements. The implementation of pricing requirements is that if tobacco products are priced higher, then they are likely to be unaffordable by youth. Higher prices make products less appealing and can make people use tobacco products less. Minimum packing requirements is thought to have the same logic. Cigarettes are already required to be sold in packs of 20 but cigars can be sold in singles. Some examples analyzed include:
minimum price for a pack of cigarettes to be no lower than $7 or $10; little cigars to be sold in packs of five or more and to be priced no less than $7; and smokeless tobacco to be no less than $10. Jurisdictions that have imposed minimum pricing and packaging ordinances have also imposed discount restrictions to back up the minimum pricing Packet Pg. 1062 Packet Pg. 263 Attachment: Previous Staff Report from September 17, 2024 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 5 requirement. Coupons and free samples are prohibited under State law. Six jurisdictions analyzed have requirements on tobacco pricing and quantity packaging requirements.

Smoke Free Multi-Family Housing
Jurisdictions have set no smoking requirements for multi-family housing. This restriction is in place to protect residents from second hand smoke, minimize fire risk, and provide overall quality of life to residents. The restriction includes no smoking in the building and in common areas with a designated smoking area away from the building or any units.

There are nine jurisdictions that were analyzed that have created an ordinance prohibiting smoking in multi-family housing.

Other Regulations Found
• Tobacco retailer must obtain a use permit through the jurisdiction’s planning department to operate within a certain distance to a youth facility; • No significant tobacco retailers. A significant tobacco retailer can be defined as their primary purpose is to sell tobacco and tobacco related products; • No significant tobacco retailers to operate within a certain distance to residential property;
• No deliveries of tobacco products to be made by employees or by private delivery drivers;
• No placing tobacco products or advertising within 5 feet of candy, snacks, and nonalcoholic beverages;
• No advertising of tobacco products within 500 feet of a youth sensitive area; and • No advertising of tobacco products on windows or advertising to be seen from outside the establishment.

Majority of all jurisdictions analyzed that have imposed tobacco retailing restrictions allowed legally operating tobacco retailers to continue to operate post adoption of their ordinance as long as the tobacco retailer was in good standing. This included businesses that were within required distances to youth facilities and within proximity to other tobacco retailers, and if a TRL cap was initiated. Some offered grace periods such as San Jose, to sell off flavored tobacco which was prior to the State banning flavored tobacco. Santa Maria required pharmacies to immediately stop selling tobacco and San Luis Obispo County immediately required businesses to cease selling ESDs. Further break down of ordinances and analysis can be found on the attached Tobacco Retailer Regulation Comparison spreadsheet.

What is and is not working
The Council directed staff to follow up on what is and is not working. The jurisdictions that are successfully running a TRL program, provide education, inspections, and enforcement, feel like their ordinance is working to prevent youth access to tobacco products. If the jurisdiction has a density limit, it prevents the over density of more tobacco retailers from operating. Jurisdictions feel that to be able to back up enforcement with fines and TRL suspension and revocation assist greatly in preventing retailers from being a bad actor. Fines allow the jurisdiction to immediately issue a citation for when violations are found such as a business selling flavored tobacco. If a business continues to sell flavored tobacco a jurisdiction can then issue a second citation and can suspend their TRL or work towards full revocation. Many jurisdictions expressed the use of discretion when deciding on the level of enforcement to be issued. It was reported that Packet Pg. 1063 Packet Pg. 264 Attachment: Previous Staff Report from September 17, 2024 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 6 suspension and revocation of TRL can be stronger than fines but having all available options is best.

The City of San Jose operates a decoy program and issues a citation amount of $2,500 for selling to a youth. The San Jose City Code Enforcement Inspector felt like the fine amount should be higher due to one business being fined twice for selling to a decoy on two different occasions.

The City of San Jose has smaller fine amounts for other violations such as selling flavored tobacco. Other cities have set fine amounts up to $5,000, and include suspension and revocation of the stores’ TRL. A TRL suspension could have a higher business impact over a smaller fine amount on a business because the store physically has to remove all tobacco products from their store shelfs for a certain amount of time. Sonoma County has the ability to suspend a TRL and issue a citation. Some jurisdictions are able to suspend a TRL for any violation of their Tobacco Retail Ordinance. Jurisdictions with higher fines, suspensions and revocation of TRL are able to effectively enforce tobacco restrictions to ensure retailers are always in compliance.

In the study that was performed, 2021 State of Tobacco Control: California Local Gradesii, for a TRL ordinance to be successful in reducing the sale of tobacco to minors it should include:
• A sufficient fee for the TRL to cover administration and enforcement efforts; • Permission to sell tobacco through an annual license that must be renewed annually; • Include provisions against any state laws in ordinance; and • Financial deterrent that includes fines, penalties, suspensions and revocation of the license.

In the report Tobacco Retailer Licensing is Effective, 41 jurisdictions were analyzed in 2018 and determined that youth sales rates dropped following the adoption of a strong tobacco retailer licensing ordinance. This was determined from youth purchase surveys administered by local agencies. The report indicates that a TRL alone will not decrease youth access but with enforcement and education regarding the local regulations will always be needed. Six of the jurisdictions that were analyzed were included this report (Davis, Elk Grove, Grass Valley, Oroville, San Luis Obispo County, and Woodland).

City of Redding (City) Tobacco Retailer Landscape
In the City there are 119 tobacco retailers. Staff worked with the County of Shasta and the State to obtain the actual amount of tobacco retailers to include sole proprietors, husband and wife coowners, and domestic partners. The below table shows the number of store types that hold a CDTFA issued tobacco retailers license:

Redding Tobacco Retailers
Gas Station 39
Smoke Shop/ Significant Tobacco Retailers 29
Small Market/ Convenience Store 25
Liquor Store 8
Pharmacy 8
Super Market 7
Golf Course 2
Winery 1
Staff worked with the City’s Information and Technology Department’s Geographic Information System personnel to map all tobacco retailer adresses and compare their distance to youth Packet Pg. 1064 Packet Pg. 265 Attachment: Previous Staff Report from September 17, 2024 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 7 sensitive locations, and their distance to other tobacco retailers. Staff defined youth sensitive locations as the same as in the City’s cannabis ordinance which includes schools, parks, and child care facilities. Of these stores there are 20 youth sensitive areas that are located within 1,000 feet of a tobacco retailer. There are 100 tobacco retailers that are located within 500 feet of another tobacco retailer. The population density is one tobacco retailer for every 787 residents.

Local Enforcement
RPD received a grant earlier this year to perform decoy operations. RPD receives $1,500 per operation and must perform five operations a year with each operation requiring 10-12 retailer visits. To date, RPD has performed three tobacco decoy operations that included 41 decoy attempt purchases of tobacco. In all, five sales were made by a youth decoy. One tobacco retailer sold to a decoy twice on two different operations. The four stores are smoke shops and would be considered a significant tobacco retailer. Of these four store stores, two are located within 500 feet of another tobacco retailer and none are located within 1,000 feet of a youth sensitive area.

In June of 2024 the CDTFA was in in the City doing inspections with Shasta County’s Tobacco Compliance Specialist and RPD. Their mission was to ensure tobacco retailers were properly licensed through the State and have all proper invoices for their products dating back to a year.

They are also able to confiscate illegally imported tobacco and cannabis products. They are unable to confiscate flavored tobacco which falls under the California Department of Public Health (CDPH) and they did not perform underage decoy purchases. They inspected seven tobacco retailers in Redding and found violations at all seven of the retailers. The violations range from confiscation of illegally imported products, confiscation of cannabis products, and confirmation of flavored tobacco. The seven stores inspected were all smoke shops. Two of these stores were issued a citation and the total amount of confiscated illegal products exceeded $9,000. Three of these seven retailers sold to a minor as part of RPDs decoy operations earlier this year.

The Food and Drug Administration (FDA) performs random and unannounced decoy operations and has their inspection logs publicly available on their website. From January 1, 2022, to July 16, 2024, there was one sale to a decoy out of 22 attempts. Their follow up procedure for a decoy sale is to send a warning letter, then after another confirmed sale, the FDA can follow up with civil penalties, injunctions, and criminal prosecution. The confirmed sale to a decoy was made at a smoke shop or significant tobacco retailer.

How Kids are Targeted
Kids are targeted by tobacco companies in several different ways. The largest is advertising. The U.S. Centers for Disease Control and Prevention reported that cigarette and smokeless tobacco companies spent $8.2 billion in 2019 on advertising and promotional expensesiii. This includes incentives to retailers by tobacco companies to offer price discounts, promotions, and stocking certain brands. Lower prices and discounts are more appealing to lower income residents and more appealing to youth. Tobacco products such as a pack of three small cigars can be found for $1.19 in the City.

The advertising of tobacco products includes how they are packaged. The packaging of tobacco products is made and designed similar to candy products. This can make it very appealing to youth. The placement of tobacco products and advertising are typically placed near candy, soft drinks, and adjacent to the cash register in places likely to be seen by youth. Advertisements can also be strategically placed outside to be seen by youth passing by.

Packet Pg. 1065 Packet Pg. 266 Attachment: Previous Staff Report from September 17, 2024 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 8 Flavors and ESDs are also more appealing to youth. Flavors can hide the distinct tobacco flavor and can make products easier to inhale. Flavored tobacco products have been banned in the State but flavored products are still being found in stores. ESDs come in a variety of designs, relatively low in price, easily concealable, and have high nicotine content that can make it very addicting to users.

Next Steps
If the Council would like to move forward with any potential tobacco retail ordinance and/ or TRL program, staff can further analyze and prepare an ordinance to bring back to the Council at a future date for possible adoption. This process will include necessary outreach with stakeholders, work with the City Attorney’s Office and any other necessary departments.

Environmental Review
This is not a project defined under the California Environmental Quality Act, and no further action is required.

Council Priority/City Manager Goals
• Public Safety – “Work to improve all aspects of public safety to help people feel secure and safe where they live, work, and play in the City of Redding.” Attachments
^Tobacco Staff Report February 6, 2024
^Tobacco Retailer Licensing is Effective September 2018 ^California Youth Tobacco Survey-Shasta County Data
California Youth Tobacco Survey 2023 Annual Report
^Jurisdictional Data

i Clodfelter, R., Dutra, L. M., Bradfield, B., Russell, S., Levine, B., & von Jaglinsky, A. (2023). Annual results report for the California Youth Tobacco Survey 2023. RTI International. ii County Grades. (2021). https://www.lung.org/getmedia/3b258a14-f355-42d0-9cac-18901c1802eb/state-oftobacco-control-california-local-grades.pdf iii CDC. (2018, May 4). Tobacco Industry Marketing. Centers for Disease Control and Prevention. https://www.cdc.gov/tobacco/data_statistics/fact_sheets/tobacco_industry/marketing/index.htm Packet Pg. 1066 Packet Pg. 267 Attachment: Previous Staff Report from September 17, 2024 (9.1(b)--Consider adopting a tobacco retail ordinance)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Accept the report on tobacco retailing and provide direction to staff regarding next steps.

Fiscal Impact
There is no fiscal impact with accepting this report. If the City Council (Council) would like to alter the former Council’s September 2024 previous direction to staff which was to create a Tobacco Retail License (TRL) ordinance specific to vape/smoke shops there would be associated staff time costs with updating the ordinance.

The Redding Police Department (RPD) has received two tobacco use prevention related grants.

The first grant is with the County of Shasta to perform decoy operations through March 15, 2026. The grant consists of five operations a year with each operation consisting of 10 to 12 retailer visits per operation – revenue received per operation is $1,500. The second grant is through the California Department of Justice that provides $630,569 through October 31, 2027.

This grant funds police officers to administer and conduct enforcement operations that include retail inspections, decoy operations, shoulder tap, undercover buys, and retailer education.

Alternative Action
The Council could choose to not accept the report or move forward with implementation of a TRL or provide other direction.

MEETING DATE: March 18, 2025
ITEM NO. 9.1(c)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 9.1(c)--Consider accepting report regarding tobacco retailing in the City of Redding.

Jason Gibilisco, Management
Assistant to the City Manager
Packet Pg. 1067 Attachment: Previous Staff Report from March 18, 2025 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council March 12, 2025
Re: 9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 2 Background/Analysis
On February 6, 2024, staff presented a report to the Council outlining current California laws and tobacco enforcement practices in various jurisdictions, including Shasta County. The Council accepted the report and directed staff to conduct further research on tobacco enforcement practices in other California municipalities and determine what is and is not working regarding tobacco enforcement, and any other information as it relates to tobacco retailers.

Staff canvased the municipalities for information related to tobacco retailers and returned to Council on September 17, 2024 to present this information. Staff analyzed 48 jurisdictions with 28 of them requiring retailers to have a local TRL. This is in addition to the state license that is required by the California Department of Tax and Fee Administration for any retailers who sell tobacco products. The cost of the state license is $265 and must be renewed annually. It is intended to prevent retailers from selling unregulated tobacco products.

Municipalities that require a TRL also require an annual fee in concert with the TRL, and allows for local control, and enforcement capabilities over tobacco retailers in their jurisdiction. Many jurisdictions have set their ordinances to go above and beyond what the federal and state law requires. Jurisdictions that are successfully running a TRL program also provide education, inspections, and enforcement to their tobacco retailers.

The Council accepted the September 17, 2024 staff report on tobacco retailing and directed staff to return with a TRL ordinance for vape and smoke shops, and include fee options to fund enforcement through both code enforcement and law enforcement, for consideration at a future Council meeting.

Following the September 17, 2024 meeting, staff worked on both a TRL ordinance specific to vape and smoke shops and worked on fee options to fund the TRL program. The TRL ordinance specific to vape and smoke shops is still under review and not ready to be presented at this time.

The options to oversee the TRL program could be either RPD or Redding Code Enforcement (RCE).

If the Council would like to pursue implementing a TRL program, the fee for the TRL will vary depending on the overseeing department; RPD or RCE. The fee will also vary depending if it is vape/smoke shop only, or for all tobacco retailers. It was noted at the September 17, 2024 Council meeting, that there are 29 vape/smoke shops and 119 tobacco retailers in the City of Redding.

RPDs identified resource needs to oversee a TRL program would be one full-time Police Officer position and a half-time Sergeant position. RPD is currently receiving funding through the above-mentioned grant for tobacco use prevention related enforcement and education activities.

RCE’s identified resource needs to run the TRL program would be one full-time Neighborhood Preservation Officer and a half-time Admin Assistant. The following are the estimated costs for RPD and RCE to successfully cover administration and enforcement efforts based on their identified needs to run a TRL program based off the number of tobacco retailers.

Packet Pg. 1068 Attachment: Previous Staff Report from March 18, 2025 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council March 12, 2025
Re: 9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 3 Redding Police
Department
Cost of a Full-time
Police Officer and halftime Sergeant
Estimated Cost of TRL
for Vape/ Smoke shops
only (29)
Estimated Cost
of TRL for all
Tobacco
Retailers (119)
$379,000 $13,068.96 $3,184.87
Redding Code
Enforcement
Cost of a Full-time
Neighborhood
Preservation Officer and
half-time Admin
Assistant
Estimated Cost of TRL
for Vape/ Smoke shops
only (29)
Estimated Cost
of TRL for all
Tobacco
Retailers (119)
$140,020 $4,828.27 $1,176.63
The TRL program costs are significantly reduced if requiring all tobacco retailers to be licensed versus the vape/smoke shops only. TRL program costs are even further reduced with RCE overseeing the program. The cost of the TRL covers staff time costs to run the TRL program and includes education, inspections, and enforcement for tobacco retailers. Of course the cost could be further reduced if the Council wanted to lower the amount of oversight or wished to subsidize the activity with the General Fund.

At the February 18, 2025, Council meeting, agenda item 12, the Council directed staff to bring back the TRL item for further direction. If the Council would like to move forward with altering the previously directed tobacco retail ordinance for vape/smoke shops, staff can further analyze and update the ordinance to bring back to the Council at a future date for possible adoption. This process will include necessary outreach with stakeholders, work with the City Attorney’s Office and any other necessary departments.

Environmental Review
This is not a project defined under the California Environmental Quality Act, and no further action is required.

Council Priority/City Manager Goals
• Public Safety – “Work to improve all aspects of public safety to help people feel secure and safe where they live, work, and play in the City of Redding.” Attachments
^Tobacco Staff Report February 6, 2024
^Staff Report City Council 9-17-24
^Jurisdictional Data
Tobacco Retailer Licensing is Effective September 2018
California Youth Tobacco Survey-Shasta County Data
California Youth Tobacco Survey 2023 Annual Report
Packet Pg. 1069 Attachment: Previous Staff Report from March 18, 2025 (9.1(b)--Consider adopting a tobacco retail ordinance)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize and approve the following:
(1) Offer an Ordinance amending Redding Municipal Code Title 6 (Business Taxes, Licenses, and Regulation), Chapter 6.13 (Redding Municipal Code Tobacco-Oriented Retailing) adopting a Tobacco-Oriented Retail license for first reading by title only, waive the full reading;
(2) Authorize the City Attorney to prepare a summary ordinance and the City Clerk to publish the same in accordance with law; and
(3) Find that the adoption of this ordinance is exempt from environmental review pursuant to California Environmental Quality Act guidelines 15060(c)(2) and 15061(b)(3) and further find that the passage of this ordinance will have no foreseeable direct or indirect physical change in the environment.

Fiscal Impact
If the new ordinance is adopted, all Tobacco-Oriented Retailers will be required to pay a fee of $4,828.27 - the fee is based on Code Enforcement administering the Tobacco-Oriented Retailer Program and that there are 29 vape/smoke shops that will be classified as Tobacco-Oriented Retailers. As proposed, Code Enforcement staff would include one full-time Neighborhood Preservation Officer and a half-time Administrative Assistant. The fee could increase or decrease if the number of Tobacco-Oriented Retailers is found to be more or less than 29.

Alternative Action
The City Council (Council) may choose not to adopt an ordinance regulating Tobacco-Oriented Retailers or the Council may direct staff to edit the licensing ordinance to incorporate licensing all tobacco retailers. This will significantly drop the fee for the program to $1,176.63 since it is spread out over approximately 119 retailers. The Council may also provide alternate direction to staff.

MEETING DATE: June 17, 2025
ITEM NO. 9.1(d)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 9.1(d)--Consider adopting a tobacco-oriented retailer ordinance.

Jason Gibilisco, Management
Assistant to the City Manager
Packet Pg. 1142 Packet Pg. 1070 Attachment: Previous Staff Report from June 17, 2025 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council June 12, 2025
Re: 9.1(d)--Consider adopting a tobacco-oriented retailer ordinance Page 2 Background/Analysis
On March 18, 2025, staff presented the Council with background information on previous tobacco retail items, including the Council's most recent direction from September 17, 2025, Council meeting and the fees associated with operating a tobacco retail program through both the City of Redding Police Department and Code Enforcement Division. At that meeting, the Council directed staff to return with a licensing ordinance that includes location restrictions and capacity limit for smoke and vape shops.

Staff worked with Code Enforcement and the City Attorney’s Office to create a draft tobacco retailing ordinance (Draft Ordinance) that was specific to creating a license requirement for vape and smoke shops. In addition to creating the draft ordinance staff also added location restrictions and capacity limit for smoke and vape shops. Staff has confirmed adding these restrictions does not require an update to the zoning code and can be accomplished via the ordinance.

Under the draft ordinance, all Tobacco-Oriented Retailers will be required to obtain a license unless they meet at least three out of seven exemption criteria. These criteria are designed to exclude general tobacco retailers such as gas stations, convenience stores, supermarkets, golf courses and other similar stores from the definition of “Tobacco-Oriented Retailer.” They include:

1. Businesses that have contracts with tobacco manufactures;

2. Businesses that have gas pumps and sell gas;

3. Businesses that have licenses to sell beer and wine or liquor;

4. Businesses who have ownership rights to the property;

5. Businesses that have a minimum gross sales of non-tobacco products in excess of 75 percent;

6. Businesses that include a pharmacy on site; and

7. Businesses whose primary use is a golf course.

To create this definition and establish the criteria, staff met with various business owners to learn the differences in their stores compared to smoke and vape shops. Staff also attempted to meet with smoke and vape shop staff but they were not interested in discussions.

In the City of Redding (City) there are approximately 29 Tobacco-Oriented Retailers. Staff determined that the capacity limit for Tobacco-Oriented Businesses is 20 and recommends reducing the total number of Tobacco-Oriented Retailers respectively. Current Tobacco-Oriented Retailers will be allowed to continue to operate as long as they submit a complete and accurate Tobacco-Oriented Retail application and pay the required fee within 60 days of ordinance adoption.

New Tobacco-Oriented Retailers will not be permitted to operate within 1,000 feet of a youthoriented facility following the adoption of the draft ordinance. A youth-oriented facility includes schools providing instruction of any grades Kindergarten through grade 12, public library, public parks, and other similar youth-oriented facilities that are primarily used to host recreation and social activities to youth.

Packet Pg. 1143 Packet Pg. 1071 Attachment: Previous Staff Report from June 17, 2025 (9.1(b)--Consider adopting a tobacco retail ordinance) Report to Redding City Council June 12, 2025
Re: 9.1(d)--Consider adopting a tobacco-oriented retailer ordinance Page 3 The final distance requirement of the draft ordinance restricts new Tobacco-Oriented Retailers to operate within 500 feet of an existing Tobacco-Oriented Retailers. The distance requirements for both youth-oriented facilities and existing Tobacco-Oriented Retailers will only come into effect once the total number of Tobacco-Oriented Retailers drops under 20, affecting only new Tobacco-Oriented Retailers that seek to operate following adoption of the draft ordnance.

The draft ordinance allows for enforcement, inspections, and education to all tobacco retailers not just Tobacco-Oriented Retailers. All retailers will be subject to inspections; retainment of purchase invoices for tobacco products for staff review; there will be no sale of flavored tobacco products; and no tobacco products to be sold to a person under the age of 21. This allows for the City to investigate complaints on retailers that are not classified as Tobacco-Oriented Retailers and hold all tobacco retailers accountable.

Pending adoption of the ordinance, staff will bring back a resolution for adoption of a TobaccoOriented Retailer licensing program and a resolution for adoption of administrative fines.

Environmental Review
This is not a project defined under the California Environmental Quality Act, and no further action is required.

Council Priority/City Manager Goals
• Government of the 21st Century – “Be relevant and proactive to the opportunities and challenges of today’s residents and workforce. Anticipate the future to make better decisions today.”
Attachments
^Draft Ordinance
^Public Health Law Center's Comprehensive Tobacco Retailer Licensing Ordinance Staff Report from September 17, 2024
Staff Report from March 18, 2025
Packet Pg. 1144 Packet Pg. 1072 Attachment: Previous Staff Report from June 17, 2025 (9.1(b)--Consider adopting a tobacco retail ordinance)

CITY OF REDDING

REPORT TO THE CITY COUNCIL
Recommendation
Authorize the City Manager, or designee, to execute the Third Phase Agreement with Northern California Power Agency (NCPA), authorizing NCPA to enter into an Energy Storage Service Agreement with Trolley Pass Project LLC (Aypa Power) on behalf of the City of Redding's Electric Utility for participation in the Trolley Battery Energy Storage Project.

Fiscal Impact
There are no immediate fiscal impacts associated with the approval of the Third Phase Agreement. However, the project will result in long-term capacity payments under the Energy Storage Service Agreement funded through Redding Electric Utility’s (REU) power supply budget. The contract price is fixed at $12.71/kW-month for 20 years. Based on current production cost modeling, this project is not expected to increase retail rates as it is expected to have minimal impacts on net energy procurement costs. The cost of the project will be included in the Fiscal Year 2027-29 budget along with the 5-year Financial Plan starting in 2029 with the projected commercial operation date.

Alternative Action
Council may choose not to authorize the City Manager to approve the Third Phase Agreement with NCPA and provide staff alternate direction.

MEETING DATE: July 15, 2025
ITEM NO. 9.5(b)
FROM:
***APPROVED BY***
[email protected] [email protected]
SUBJECT: 9.5(b)--Consider Third Phase Agreement with Northern California Power Agency authorizing execution of the Energy Storage Service Agreement with Trolley Pass Project LLC (Aypa Power) on behalf of the City of Redding's Electric Utility.

Nick Zettel, Director of
Redding Electric Utility
Packet Pg. 1073
Report to Redding City Council July 9, 2025
Re: 9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement with Aypa Power Page 2
Background/Analysis
REU’s 2024 Integrated Resource Plan (IRP), adopted by the Redding City Council and submitted to the California Energy Commission, identified the need for both utility-scale solar and long-duration storage starting in 2031, when the Big Horn Wind power purchase agreement was expected to expire. These resources are critical components of REU’s long-term power supply strategy.

Staff recently learned that the current Big Horn Wind power purchase agreement provider will be exercising an option to terminate the agreement earlier than 2031, most likely in 2028. The Big Horn Wind project currently supplies 10 percent of REU’s capacity, 25 percent of load-serving energy, and over 50 percent of its renewable energy credits. Replacement energy resources are required to ensure the ability to manage peak demand, integrate renewable energy, and maintain reliability.

The Trolley Battery Energy Storage (Trolley) Project will provide REU with 45 megawatts (MW) of dispatchable storage capacity starting in 2029, coinciding with the projected expiration of the Big Horn Wind contract in 2028 and rising customer demand. The contract provides a fixed 20-year rate of $12.71/kW-month with no escalation, offering budget certainty during a period of market volatility. Trolley is fully deliverable within the California Independent System Operator’s balancing area, and REU will deliver the capacity and energy through its existing South of Tesla transmission rights, offering firm delivery with reduced transmission costs (see attached: Trolley Project Details and Analysis for more information).

The Trolley Project is structured through two key agreements: First, REU would enter into a Third Phase Agreement (TPA) with the Northern California Power Agency (NCPA), which defines REU’s participation share, financial obligations, and authorizes NCPA to administer the project on REU’s behalf. Under this agreement, NCPA would then execute an Energy Storage Services Agreement (ESSA) with Aypa Power, the project developer. The ESSA establishes the commercial terms for the battery facility, including pricing, operational rights, and performance requirements. Together, these agreements allow REU to access energy storage services through its Joint Powers Agreement with NCPA.

While the Trolley project is moving forward independently as a standalone storage resource, REU’s intent is to also contract for utility-scale solar generation. Pairing the battery with solar maximizes its value by improving renewable integration, enhancing clean energy compliance, and increasing dispatch flexibility. Each resource is evaluated independently and must stand on its own merit, with or without a pairing. Even without a dedicated solar resource, the Trolley project delivers significant benefits through dispatchable capacity, market optimization, and improved reliability during peak demand and grid stress events. However, not pairing the storage with solar may limit some optimization opportunities and could result in higher long-term costs for meeting clean energy mandates.

The current capacity target is 45 MW; however, that is subject to change depending on final participant capacity allocation. If the final MW quantity results in a projected increase in retail rates, staff will return to City Council for additional review and recommended approval. This project is consistent with REU’s long-term planning goals and provides a cost-effective, dispatchable storage resource to support reliability and affordability. Approving the Third Phase Agreement enables REU to secure favorable contract terms and meet future energy and capacity needs identified in the IRP.

Packet Pg. 1074
Report to Redding City Council July 9, 2025
Re: 9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement with Aypa Power Page 3
Environmental Review
Compliance with the California Environmental Quality Act (CEQA) is the responsibility of the project developer. As a participating offtaker, REU is not the lead agency and bears no direct responsibility for CEQA compliance or related environmental permitting requirements.

Council Priority/City Manager Goals
• Government of the 21st Century – "Be relevant and proactive to the opportunities and challenges of today's residents and workforce. Anticipate the future to make better decisions today."
Attachments
Trolley Project Details and Analysis
Trolley BESS ESSA 06262025 (Redacted)
Trolley_BESS_Third_Phase_Agreement_06262025 Redacted
Packet Pg. 1075
Supplemental Information
1 From REU Staff
To Redding City Council
Title Trolley Project Details and Analysis
Date June 26, 2025
Summary
REU filed its updated 2024 Integrated Resource Plan (IRP) with the California Energy Commission (CEC) in November 2023. The IRP recommended contracting for additional renewable resources and energy storage starting in 2031 to meet growing demand and increasing clean energy mandates. However, several changes to our energy resource portfolio have occurred, prompting staff to evaluate bringing new power resources under contract earlier than anticipated. REU staff were recently notified that the current Big Horn Wind power purchase agreement provider will be exercising an option to terminate the agreement earlier than 2031, most likely in 2028.

To hedge against the potential resource portfolio shortfall from the termination of Big Horn Wind starting in 2029, staff recommend executing a 20-year agreement for 45 MW of storage from Aypa Energy's Trolley Project with a scheduled online date in 2029 rather than 2031, as previously recommended in the IRP.

Project Overview & Benefits
The Trolley Battery Energy Storage Project will provide REU with 45 MW of dispatchable storage capacity starting in 2029, coinciding with the expiration of the Big Horn Wind contract and rising system load. The project is fully deliverable within the California Independent System Operator's (CAISO) balancing area. REU's share will be delivered through its existing South of Tesla (SOT) transmission rights, offering firm delivery and reduced transmission costs. The contract provides a fixed 20-year rate of $12.71/kW-month with no escalation, offering budget certainty during a period of market volatility.

Strategic Value
Trolley strengthens REU's power portfolio by adding long-duration storage that supports peak reliability. The project participates in CAISO markets, generating additional value through energy optimization when market prices are low, ancillary services, and potential resource adequacy (RA) sales. As REU increases its solar procurement, storage will allow excess solar to be stored and used during high-demand evening hours, improving clean energy integration and utilization.

Risk Protections & Offramps
A structured set of offramps and safeguards protects REU. Price increases are capped at 6% and require NCPA Commission approval. REU retains the right to withdraw before final commitment if costs become misaligned, or if there are development delays, regulatory incompatibilities, or failure to secure interconnection and deliverability. These provisions ensure REU can exit the project if it no longer meets operational or financial objectives.

Packet Pg. 1076 Attachment: Trolley Project Details and Analysis (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement with Supplemental Information
2 Background
In November 2023, REU filed its 2024 Integrated Resource Plan (IRP), outlining a 20-year strategy to meet clean energy mandates while maintaining affordability and reliability. The IRP identifies key procurement milestones aligned with RPS, Cap-and-Trade, SB 100, and SB 1020.

Since then, REU's planning position has shifted due to the anticipated early termination of the Big Horn Wind Project, which currently supplies 10% of capacity, 25% of load-serving energy, and over 50% of RECs. The developer has indicated the contract likely won't extend beyond 2026, and proposed extension pricing is no longer cost-effective. Staff is planning for the project's exit in 2026 and actively pursuing replacement resources.

NCPA Renewables RFP
Staff have worked with a Joint Powers Agency (JPA), the Northern California Power Agency (NCPA), to solicit viable replacement resources. In 2024, NCPA solicited a Renewables RFP on behalf of its members and received proposals for six standalone storage, ten standalone solar, and 14 solar + storage projects. Staff evaluated these offers based on the following criteria designed to fulfill the resource needs established in the IRP, along with the early termination of the Big Horn Wind project.
• Commercial Operational Date (COD) as early as possible to replace Big Horn • Project Sizing around 70-100 MW for solar and 35-50 MW for storage to fit in REU's portfolio • Project terms of at least 10 years in compliance with RPS requirements • Full deliverability status for firm capacity
Using these criteria, staff identified two projects that, when paired, will satisfy REU's capacity and energy needs and meet clean energy mandates. One of those identified projects is a standalone storage project from Aypa Energy that will meet the long-term planning goals outlined in the IRP when paired with a solar-only project.

Aypa Energy's storage-only project offer is for a battery storage tolling agreement with full deliverability status and Resource Adequacy benefits. The project is currently in the CAISO Cluster 14 queue. The project offer details are in Table 1 below.

Table 1 - Aypa Energy Trolley Project Details
Project Name Trolley Battery Energy Storage Project
Project Type Battery Energy Storage System
City & County San Bernardino County
Local Capacity Area LA Basin
Utility Transmission Territory Southern California Edison Point of Interconnection (POI) Etiwanda Substation 230 kV Bus GIA Reference Cluster 14, Q # 2032
Deliverability Status Received 400 MW FCDS
pNode Delivery Point (proxy) Proxy: ETIWANDA_6_N001
Packet Pg. 1077 Attachment: Trolley Project Details and Analysis (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement with Supplemental Information
3 COD June 1, 2029
Size 300 MW / 1,200 MWh (4 hour)
Product Tolling Agreement
PPA Term 20 years
Price $12.71/kW-mo
Project Analysis
Staff recommends contracting 45 MW from the Trolley 4-hour battery energy storage system (BESS) Project. Trolley was selected as a standalone storage project due to its full deliverability with ancillary services and competitive price that set it apart from storage combined with solar. In parallel, REU staff is currently negotiating a suitable solar project.

The Trolley BESS project is located in Southern California and can be delivered to REU's load using our existing, firm transmission rights to provide a suitable long-term replacement for the Big Horn capacity. While the storage project will replace the capacity, a solar project is planned to support clean energy mandates by generating RECs.

Storage Economics
As a standalone product, battery storage systems offer essential advantages in California's energy landscape, where the push for clean energy and grid reliability continues to grow. These systems help us store electricity when it is economically advantageous, and use it when needed most, especially during expensive or high-demand hours.

Figure 1 - Solar Generation, Battery Charge/Discharge, REU Load, and SP-15 market price; Peak August Day $(100.00)
$-
$100.00
$200.00
$300.00
$400.00
$500.00
(50)
-
50 100
150
200
250
SP-15 ($/MWh)
Energy (MW)
90 MW Solar Generation (MW) Redding System Load (MW)
Battery Charge/Discharge (MW) SP-15 Energy Price, 5 yr. avg. ($/MWh) Packet Pg. 1078 Attachment: Trolley Project Details and Analysis (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement with Supplemental Information
4 Economic Analysis
The SP-15 energy price typically follows the "duck curve" shape caused by significant solar penetration during midday. The high solar generation drives energy prices low and even negative during the middle of the day, then generation quickly drops off, causing a significant spike as the sun sets. Other energy generation must be quickly brought online to meet high demand in peak evening hours.

As shown in Figure 1, batteries can charge when electricity is inexpensive and discharge when electricity prices spike in the evening after solar generation diminishes. Therefore, as a standalone product, energy storage is a valuable tool for capturing low energy prices while still providing the capacity to meet Redding's high evening demand.

Paired Solar
Battery storage is even more valuable when combined with solar generation. REU staff is working on a contract for the Wildcat Solar project to pair with Trolley, which would effectively replace the RECs that will be lost from Big Horn and maintain cost-effective RPS compliance moving forward.

Battery storage increases the value of solar energy by storing it during low-price times when it is not needed and using it during high-price times when it is required.

Portfolio Impact
The Trolley Storage project is not expected to increase portfolio costs, as shown in Table 2.

Compared to the current resource portfolio, which does not meet reliability or renewable energy requirements, the addition of Trolley is not forecasted to significantly impact energy costs while increasing system reliability and enhancing the value of future renewable procurements.

Adding storage will help meet reliability requirements, but will not help meet renewable and clean energy requirements. A renewable solar project, such as Wildcat, is expected to increase portfolio costs slightly but will help meet clean energy requirements.

Table 2 - Portfolio Cost Analysis, 2028-2044
Current
Portfolio
without Big
Horn
Wildcat
Solar +
Trolley
Storage
Trolley
Storage Only
(No Solar)
Annual Average Energy Cost (million $/yr) $ 59.4 $ 59.7 $ 59.3 Average Energy Cost ($/kWh) $ 0.0801 $ 0.0806 $ 0.0800
Meets Reliability Standards? 1 No Yes Yes
Meets Clean Energy Goals? 1 No Yes No

1. Meets goals/requirements through this procurement cycle. Additional resources will be needed in the future.

Packet Pg. 1079 Attachment: Trolley Project Details and Analysis (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement with Cover Sheet

ENERGY STORAGE SERVICE AGREEMENT

COVER SHEET
Seller: Trolley Pass Project LLC (“Seller”)
Buyer: Northern California Power Agency, a joint powers agency of the State of California (“Buyer”) Description of Facility: A 300.00 MWAC / 1,200 MWh-AC grid-connected battery energy storage facility as further described below (the “Facility”), located in San Bernardino County, in the State of California, as further described in Exhibit A.

Milestones:

Milestone Date for
Completion
Evidence of Site Control Complete
Executed Interconnection Agreement August 1, 2025
Financing September 1, 2028
Procure Major Facility Equipment December 15, 2027
Expected Construction Start Date September 1, 2028
Initial Synchronization January 15, 2029
Expected Commercial Operation Date June 1, 2029
Guaranteed Commercial Operation Date As Set Forth in
Exhibit B
Delivery Term: The period for Product delivery will be for twenty (20) Contract Years.

Storage Contract Capacity: 300.00 MW for four (4) hours Storage Contract Output: 1,200.00 MWh
Guaranteed Efficiency Rate:

Contract Year Guaranteed Efficiency Rate
1 84.50%
2 84.30%
3 84.10%
4 83.90%
Packet Pg. 1080 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Cover Sheet
5 83.70%
6 83.50%
7 83.30%
8 83.10%
9 82.90%
10 82.70%
11 82.50%
12 82.30%
13 82.10%
14 81.90%
15 81.70%
16 81.50%
17 81.30%
18 81.10%
19 80.90%
20 80.70%
Minimum Round-Trip Efficiency: Seventy percent (70.00%) Dedicated Interconnection Capacity: 300.00 MWAC
Contract Price:

Contract Year Storage Rate
1 – 20 $12.71/kW-month (flat)
with no escalation
Proposed Contract Price Increase Cap: 6.00% of the Contract Price, in aggregate Metering Arrangement: The Facility will be registered as a CAISO Metered Entity Delivery Point: Facility PNode, as further described in Exhibit A Product:
☒ Discharging Energy
☒ Storage Capacity
☒ Capacity Attributes (select options below as applicable) Packet Pg. 1081 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Cover Sheet
☐ Energy Only Status
☒ Full Capacity Deliverability Status
☒ Ancillary Services
Scheduling Coordinator: Buyer or Buyer’s agent
Development Security: $62.5/kW of Storage Contract Capacity, provided such amount shall be increased to $125/kW on January 1, 2028.

Performance Security: $100/kW of Storage Contract Capacity Packet Pg. 1082 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement

TABLE OF CONTENTS
i
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......................................................................................... 25

2.3 Development; Construction; Progress Reports............................................... 26

2.4 Remedial Action Plan ........................................................................................ 27

2.5 Storage Rate Adjustment Event ....................................................................... 27

2.6 [Reserved]........................................................................................................... 28

2.7 CEQA.................................................................................................................. 28 ARTICLE 3 PURCHASE AND SALE...................................................................................... 29

3.1 Purchase and Sale of Product........................................................................... 29

3.2 [Reserved]........................................................................................................... 29

3.3 Imbalance Energy .............................................................................................. 29

3.4 [Reserved]........................................................................................................... 29

3.5 [Reserved]........................................................................................................... 29

3.6 [Reserved]........................................................................................................... 29

3.7 Capacity Attributes............................................................................................ 29

3.8 Resource Adequacy Failure .............................................................................. 30

3.9 [Reserved]........................................................................................................... 30

3.10 [Reserved ............................................................................................................ 30

3.11 Compliance Expenditure Cap........................................................................... 30 ARTICLE 4 OBLIGATIONS AND DELIVERIES................................................................... 31

4.1 Delivery ............................................................................................................... 31

4.2 Title and Risk of Loss........................................................................................ 32

4.3 Forecasting.......................................................................................................... 32

4.4 Dispatch Down/Curtailment............................................................................. 33

4.5 Charging Energy Management ........................................................................ 34

4.6 Reduction in Delivery Obligation..................................................................... 36

4.7 Interconnection Costs........................................................................................ 37

4.8 Storage Availability ........................................................................................... 37

4.9 Storage Capacity Tests...................................................................................... 37

4.10 Interconnection Capacity .................................................................................. 38

4.11 Station Use .......................................................................................................... 39

4.12 Facility Operations and Maintenance.............................................................. 39 ARTICLE 5 TAXES .................................................................................................................. 39

5.1 Allocation of Taxes and Charges...................................................................... 39

5.2 Cooperation ........................................................................................................ 40 ARTICLE 6 MAINTENANCE OF THE FACILITY................................................................ 40 Packet Pg. 1083 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement ii

6.1 Maintenance of the Facility............................................................................... 40

6.2 Maintenance of Health and Safety ................................................................... 40

6.3 Shared Facilities................................................................................................. 40 ARTICLE 7 METERING........................................................................................................... 41

7.1 Metering.............................................................................................................. 41

7.2 Meter Verification.............................................................................................. 41 ARTICLE 8 INVOICING AND PAYMENT; CREDIT............................................................ 42

8.1 Invoicing.............................................................................................................. 42

8.2 Payment .............................................................................................................. 42

8.3 Books and Records............................................................................................. 43

8.4 Payment Adjustments; Billing Errors ............................................................. 43

8.5 Billing Disputes................................................................................................... 43

8.6 Netting of Payments........................................................................................... 43

8.7 Seller’s Development Security .......................................................................... 44

8.8 Seller’s Performance Security .......................................................................... 44

8.9 Buyer Credit Support........................................................................................ 44

8.10 First Priority Security Interest in Cash or Cash Equivalent Collateral....... 45

8.11 Buyer Statements............................................................................................... 46 ARTICLE 9 NOTICES .............................................................................................................. 46

9.1 Addresses for the Delivery of Notices............................................................... 46

9.2 Acceptable Means of Delivering Notice ........................................................... 46 ARTICLE 10 FORCE MAJEURE............................................................................................. 46

10.1 Definition ............................................................................................................ 46

10.2 No Liability If a Force Majeure Event Occurs ............................................... 47

10.3 Notice................................................................................................................... 48

10.4 Termination Following Force Majeure Event................................................. 48 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION..................................................... 48

11.1 Events of Default................................................................................................ 48

11.2 Remedies; Declaration of Early Termination Date ........................................ 50

11.3 Termination Payment........................................................................................ 51

11.4 Notice of Payment of Termination Payment ................................................... 51

11.5 Disputes With Respect to Termination Payment............................................ 52

11.6 Rights And Remedies Are Cumulative ............................................................ 52

11.7 Seller’s Pre-COD Liability Limitation............................................................. 52 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 52

12.1 No Consequential Damages............................................................................... 52

12.2 Waiver and Exclusion of Other Damages........................................................ 52 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY.......................... 53

13.1 Seller’s Representations and Warranties ........................................................ 53

13.2 Buyer’s Representations and Warranties........................................................ 54 Packet Pg. 1084 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement iii

13.3 General Covenants............................................................................................. 55

13.4 Prevailing Wage and Workforce Development............................................... 55 ARTICLE 14 ASSIGNMENT.................................................................................................... 56

14.1 General Prohibition on Assignments ............................................................... 56

14.2 Collateral Assignment ....................................................................................... 56

14.3 Permitted Assignments by Seller...................................................................... 58

14.4 Buyer Limited Assignment Right..................................................................... 58 ARTICLE 15 DISPUTE RESOLUTION................................................................................... 59

15.1 Governing Law................................................................................................... 59

15.2 [Reserved]........................................................................................................... 59

15.3 [Reserved]........................................................................................................... 59

15.4 Dispute Resolution ............................................................................................. 59 ARTICLE 16 INDEMNIFICATION ......................................................................................... 59 ARTICLE 17 INSURANCE ...................................................................................................... 61

17.1 Insurance ............................................................................................................ 61 ARTICLE 18 CONFIDENTIAL INFORMATION................................................................... 62

18.1 Definition of Confidential Information............................................................ 62

18.2 Duty to Maintain Confidentiality ..................................................................... 62

18.3 Irreparable Injury; Remedies........................................................................... 63

18.4 Disclosure to Lenders, Etc................................................................................. 63

18.5 Public Announcements...................................................................................... 63 ARTICLE 19 MISCELLANEOUS............................................................................................ 64

19.1 Entire Agreement; Integration; Exhibits......................................................... 64

19.2 Amendments....................................................................................................... 64

19.3 No Waiver ........................................................................................................... 64

19.4 No Agency, Partnership, Joint Venture or Lease ........................................... 64

19.5 Severability ......................................................................................................... 64

19.6 Mobile-Sierra...................................................................................................... 64

19.7 Counterparts; Electronic Signatures ............................................................... 65

19.8 Electronic Delivery............................................................................................. 65

19.9 Binding Effect..................................................................................................... 65

19.10 No Recourse to Members of Buyer................................................................... 65

19.11 Forward Contract.............................................................................................. 65

19.12 Service Contract................................................................................................. 65

19.13 Further Assurances............................................................................................ 65

19.14 Change in Electric Market Design ................................................................... 66 Packet Pg. 1085 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement iv
Exhibits:

Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C Compensation
Exhibit D-1 Scheduling Coordinator Responsibilities
Exhibit D-2 Buyer and Seller Operating Coordination
Exhibit E Progress Reporting Form
Exhibit F Form of Monthly Forecast
Exhibit G [Reserved]
Exhibit H Form of Commercial Operation Date Certificate Exhibit I Form of Installed Capacity Certificate
Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L [Reserved]
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Storage Capacity Tests
Exhibit P Storage Facility Availability
Exhibit Q Operating Restrictions
Exhibit R Metering Diagram
Packet Pg. 1086 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 1 ENERGY STORAGE SERVICE AGREEMENT
This Energy Storage Service Agreement (“Agreement”) is entered into as of ____________, 2025 (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 or as otherwise set forth in this Agreement.

RECITALS
WHEREAS, Seller intends to develop, design, permit, construct, own, and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:

ARTICLE 1

DEFINITIONS

1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.11. “Actual Contract Price Increase” has the meaning set forth in Section 2.5(b). “Actual Monthly NQC” means the amount of Net Qualifying Capacity from the Facility that is eligible to count toward meeting Resource Adequacy Requirements by both the CPUC and CAISO.
“Administrative NQC Reduction” means a reduction in the maximum achievable Net Qualifying Capacity of the Facility able to be shown for each hour of the Resource Duration due to a reduction that has been (i) generally applied to 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 or (ii) specifically applied to the Facility based on the operational characteristics of the Facility (e.g. any changes with respect to unforced capacity) to the extent such reduction is not caused by Seller’s failure to meet its obligations under this Agreement.

Packet Pg. 1087 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 2 “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” and “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.

Notwithstanding the foregoing, with respect to Seller, “Affiliates” shall mean Ultimate Parent and any of its subsidiaries that satisfy the requirements set forth in this definition; provided, however, that the term “Affiliate,” when used with respect to Seller shall not include any direct or indirect tax equity investor.
“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. “Ancillary Services” means all ancillary services, products and other attributes, that can be produced by the Facility, as listed in Exhibit Q, and any other ancillary services added to the Agreement in accordance with Section 4.5(g).
“Approved Maintenance Hours” means up to one hundred twenty (120) hours of full capacity equivalent hours of Planned Outages each Contract Year during the calendar months November through May, provided that such Planned Outages are scheduled in accordance with Section 4.6(a).
“Availability Adjustment” or “AA” has the meaning set forth in Exhibit P. “Availability Notice” means Seller’s availability forecasts issued pursuant to Section 4.3 with respect to the available Storage Capacity, which shall include any updates from Seller with respect to Facility outages or availability as reported to CAISO (including as reported in OMS). “Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due. “Bid” has the meaning as set forth in the CAISO Tariff. “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. local time for the Party sending a Notice, or payment, or performing a specified action.

Packet Pg. 1088 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 3 “Buyer” has the meaning set forth on the Cover Sheet. “Buyer Credit Support” has the meaning set forth in Section 8.9. “Buyer Delay” means Buyer has not made all necessary arrangements to deliver Charging Energy to, and receive Discharging Energy at, the Delivery Point in accordance with Exhibit D, and such failure is not the result of a Seller delay or Seller failure to satisfy its obligations in accordance with Exhibit D.
“Buyer Dispatched Test” has the meaning set forth in Section 4.9(a). “Buyer Downgrade Event” will have occurred if (A) (i) Buyer does not have or loses its Investment Grade Credit Rating, and (ii) if Buyer fails to maintain Days of Cash on Hand, or (B) (i) the Third Phase Agreement is terminated for any reason or becomes legally unenforceable, or (ii) any of the Participating Members’ payment obligations under the Third Phase Agreement (including the obligation to post security) are materially amended such that collection of payment hereunder or remedies related to default become legally unenforceable, except in the case of B(ii) no Buyer Downgrade Event will have occurred if the other Participating Members assume the Participating Members payment and/or security obligations under this Agreement and Buyer maintains Days of Cash on Hand. Buyer shall provide notice to Seller no later than five (5) Business Days after the occurrence of a Buyer Downgrade Event. “Buyer Failure” means a failure by Buyer (or its agents) to perform Buyer’s obligations hereunder and includes an Event of Default of Buyer, as specified in a Notice from Seller to Buyer, which has a causal effect that limits or reduces the Charging Energy or Discharging Energy.

Notwithstanding any provision of this Agreement to the contrary, and without the intent of creating the requirements of more than one notice provision related to an Event of Default in general, Buyer Failure shall not become effective without Notice to Buyer from Seller no later than ten (10) Business Days following Seller’s knowledge of the occurrence of such Buyer Failure. “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Approved Meter” means a CAISO approved revenue quality meter or meters, metering scheme, CAISO approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time Charging Energy and Discharging Energy. “CAISO Certification” means the certification and testing requirements for a storage unit set forth in the CAISO Tariff that are applicable to the Facility, including but not limited to, certification and testing for all applicable Ancillary Services, PMAX, and PMIN. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Metered Entity” has the meaning set forth in the CAISO Tariff.

Packet Pg. 1089 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 4 “CAISO Operating Order” means the Operating Instruction or Dispatch 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 (as such term in defined in Appendix A to the CAISO Tariff), 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; provided that if there is a conflict between the BPMs, the CAISO Operating Agreement or the Operating Procedures (as such term in defined in Appendix A to the CAISO Tariff), on the one hand, and the CAISO Tariff, on the other hand, the CAISO Tariff will control. “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 and deliver to the Delivery Point at a particular moment and that can be purchased and sold under CAISO market rules, including Resource Adequacy Benefits. Capacity Attributes are measured in MW and shall exclude energy and any Incentives now or in the future associated with the construction, ownership or operation of the Facility.
“Capacity Damages” has the meaning set forth in Exhibit B. “CEQA” means the California Environmental Quality Act, California Public Resources Code §§ 21000, et seq. and Chapter 3 of Division 6 of Title 14 of the California Code of Regulations.
“CEQA Completion Date” has the meaning set forth in Section 2.7(a). “CEQA Documents” means an initial study, categorical exemption, negative declaration, environmental impact report or equivalent document (as applicable) relied upon by the Lead Agency in connection with the CEQA environmental review for the Facility, including but not limited to any addendum, supplement, or subsequent negative declaration or environmental impact report.
“Change in Law” means the occurrence, after the Effective Date, of any of the following:
(a) the adoption or implementation of any Law (including but not limited to any Laws related to tariffs, import duties or fees, and/or tax credits); (b) any change in any Law or in the administration, interpretation or application of any Law by any Governmental Authority (including but not limited to any changes to the applicable rates of any tariffs, import duties or fees, and/or tax credits); (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; (d) any change to a Resource Adequacy Ruling, (e) any order, decision, resolution, rule, regulation, guidance document, or other determination of the CEC or the CPUC or its Energy Division, or (f) any change in the CAISO Tariff or any document included in the definition thereof whether or not approved by FERC. “Change in Tax Law” means, after the Effective Date, (i) any change in or amendment to the Code that substantively impacts any tax credit for the Facility or available to Seller with respect to the Facility, (ii) the issuance, promulgation or change in, or of, any temporary, proposed, or Packet Pg. 1090 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 5 final Treasury Regulations promulgated under the Code with respect to any tax credits for the Facility or available to Seller with respect to the Facility, or (iii) any notice, announcement, court decision, revenue ruling, revenue procedure, or other official guidance published in the Internal Revenue Bulletin that applies, advances, or articulates a new or different interpretation or analysis of any tax credit or incentives for the Facility or available to Seller with respect to the Facility. “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, more than fifty percent (50%) of the outstanding equity interests in 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 more than 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 and any trustee or agent or similar representative thereof acting on their behalf) or assignee or transferee thereof shall be excluded from the total outstanding equity interests in Seller.
“Charging Energy” means the energy delivered to the Facility pursuant to a Charging Notice, as measured by the Facility Meter in accordance with CAISO metering requirements and Prudent Operating Practice, as such meter readings are adjusted pursuant to CAISO requirements for any applicable Electrical Losses. For the purpose of clarity, pursuant to Section 4.11 Seller will be responsible for procuring and paying for all Station Use; therefore, Charging Energy stored in the Facility shall not be used to supply Station Use. “Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer, Buyer’s SC, or by the CAISO based on Bids submitted by Buyer or Buyer’s SC, to Seller, directing the Facility to charge with Charging Energy at a specific MW rate for a specified period of time or to a specified Stored Energy Level; provided, (a) any such operating instruction shall be in accordance with the Operating Restrictions, and (b) any such “Charging Notice” may be adjusted in accordance with Section 4.5. For the avoidance of doubt, any Buyer request to initiate a Storage Capacity Test consistent with Section 4.9 shall be considered a Charging Notice. “Claim” has the meaning set forth in Section 16.2.
“COD Certificate” has the meaning set forth in Exhibit B. “COD Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred eighty (180). “Code” means the U.S. Internal Revenue Code, as amended. “Collateral Assignment Agreement” has the meaning set forth in Section 14.2.

Packet Pg. 1091 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 6 “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Date” or “COD” has the meaning set forth in Exhibit B. “Communications Protocols” means certain procedures and protocols regarding communication with respect to the operation of the Facility pursuant to this Agreement. “Compliance Actions” has the meaning set forth in Section 3.11(b). “Compliance Costs” has the meaning set forth in Section 3.11(a). “Compliance Expenditure Cap” has the meaning set forth in Section 3.11(a). “Confidential Information” has the meaning set forth in Section 18.1. “Construction Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred eighty (180). “Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Price” has the meaning set forth on the Cover Sheet. For clarity, the Contract Price is the Storage Rate.
“Contract Term” has the meaning set forth in Section 2.1. “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such NonDefaulting Party either in terminating any arrangement pursuant to which it has hedged or financed its obligations or entering into new arrangements which replace this 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.
“COVID-19” has the meaning set forth in Section 10.1(b). “CPM Soft Offer Cap” has the meaning set forth in the CAISO Tariff, including its functional successor.
“CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.

Packet Pg. 1092 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 7 “CPUC Master Resource Database” means the CPUC database of generation, energy storage and other resources qualified to provide Resource Adequacy Benefits capacity to load serving entities.
“CPUC System RA Penalty” means the Tier 1 System RA Penalties assessed against Load Serving Entities (as defined in the CAISO Tariff) by the CPUC for RA deficiencies that are not replaced or cured, as established in the Resource Adequacy Rulings and subsequently incorporated into the annual “Filing Guide for System, Local and Flexible Resource Adequacy Compliance Filings” that is issued by the CPUC Energy Division, which is expected to be updated annually, or any replacement or successor documentation established by the CPUC Energy Division to reflect RA penalties that are established by the CPUC and assessed against Load Serving Entities for RA deficiencies.
“Credit Rating” means, with respect to an entity other than Buyer, the current rating then assigned to that entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements), or if that entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P, Fitch or Moody’s.

With respect to Buyer, the long term issuer rating assigned by S&P, Moody’s, and Fitch. If Buyer does not have a long term issuer rating, then the highest rating assigned to Buyer’s revenue bonds (not supported by third party credit enhancements).
“Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, including a CAISO Operating Order, to curtail deliveries of Charging 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 CAISO’s electric system integrity or the integrity of other systems to which CAISO 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;
(c) a curtailment ordered by CAISO or the Participating Transmission Owner due to scheduled or unscheduled maintenance on the Participating Transmission Owner’s transmission system that prevent (i) Buyer from receiving or (ii) Seller from delivering Charging Energy to the Facility and/or Discharging Energy to the Delivery Point; or (d) a curtailment in accordance with the obligations applicable to the Facility under the Interconnection Agreement with the Participating Transmission Owner or distribution operator.

Packet Pg. 1093 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 8 “Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces generation from the Facility pursuant to a Curtailment Order.
“Cycle” means a quantity of Discharging Energy (in MWh) equal to the Storage Contract Output.
“Damage Payment” means the dollar amount equal to the amount of the Development Security set forth on the Cover Sheet.
“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. “Days of Cash on Hand” means, with respect to Buyer, the amount of the required security deposits under the Third Phase Agreement which shall be no less than the amount of Buyer’s estimated full payments for three (3) months of Product under the Agreement. “Dedicated Interconnection Capacity” has the meaning set forth in Section 4.10(a). “Deemed Delivered RA” means the amount of Net Qualifying Capacity expressed in MW that the Facility would have delivered, but for (a) the failure of Buyer to (i) obtain any rights or capacities that Buyer is required to obtain, or take any other action that Buyer is required to take, in order for Seller to provide or Buyer to make use of the Capacity Attributes of the Facility, (ii) timely submit a Supply Plan for the Facility after the Facility has received a Net Qualifying Capacity from CAISO, in each case as may be required under applicable Law and as may change from time to time, (b) a Force Majeure Event as provided in Section 4.6(e), and (c) 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. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Delivered RA” means, in the applicable Showing Month, the sum, in MW, of (a) the Net Qualifying Capacity of the Facility for such month able to be shown for each hour of the Resource Duration on Buyer’s monthly or annual Resource Adequacy Plan to the CAISO and CPUC (as applicable) and counted as Resource Adequacy Benefits by both the CAISO and CPUC, (b) Replacement RA, and (c) Deemed Delivered RA.
“Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” has the meaning set forth on the Cover Sheet. “Development Cure Period” has the meaning set forth in Exhibit B.

Packet Pg. 1094 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 9 “Development Security” means (a) cash or, (b) a Letter of Credit in the amount set forth on the Cover Sheet.
“Discharging Energy” means all energy delivered to the Delivery Point from the Facility, net of Station Use, as measured by the Facility Meter in accordance with CAISO metering requirements and Prudent Operating Practice, adjusted pursuant to CAISO requirements for any applicable Electrical Losses. For the avoidance of doubt, all Discharging Energy will have originally been delivered to the Facility as Charging Energy. “Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer or Buyer’s SC, or by the CAISO based on Bids submitted by Buyer or Buyer’s SC, to Seller or Sellers Agent, directing the Facility to discharge Discharging Energy at a specific MW rate to a specified Stored Energy Level, provided that (a) any such operating instruction or updates shall be in accordance with the Operating Restrictions, and (b) any such “Discharging Notice” may be adjusted in accordance with Section 4.5(d). For the avoidance of doubt, any Discharging Notice shall not constitute a Curtailment Order.
“Disclosing Party” has the meaning set forth in Section 18.1. “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 Facility, expressed as a percentage, calculated pursuant to a Storage Capacity Test in accordance with Exhibit O. “Electrical Losses” means all transmission or transformation losses between the Facility Meter and the Delivery Point for the receipt of Charging Energy and delivery of Discharging Energy, calculated in accordance with CAISO approved methodologies applicable to revenue metering.
“Energy In” has the meaning set forth in Exhibit O.
“Energy Out” has the meaning set forth in Exhibit O.
“Event of Default” has the meaning set forth in Section 11.1. “Executed Interconnection Agreement Milestone” means the date for completion of execution of the Interconnection Agreement by Seller (or Seller’s Affiliate) and the PTO as set forth on the Cover Sheet.
“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.

Packet Pg. 1095 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 10 “Export and Import Costs” means all export (including any withholding tax in the country of origin) and import customs and other similar taxes, tariffs and duties and other charges or fees levied or assessed by any jurisdiction (including, without limitation, current and future antidumping duty, countervailing duty, Section 301 of the Trade Act of 1974 or other duties or tariffs imposed by any jurisdiction, including the country of manufacture, the country in which the Facility is located and any other country through which the Facility equipment or material is transported or stored), or other costs that may be assessed or incurred in connection with the import and export of the Facility equipment or material, including any such costs associated with any Change in Law, provided, however, that Export and Import Costs shall exclude (i) any costs, fees, duties, tariffs, penalties or other amounts that result from Seller’s failure to properly declare, classify, label, document or otherwise comply with applicable import or export requirements or customs regulations, (ii) any costs that could have been minimized through commercially reasonable alternative sourcing arrangements, shipping routes or methods provided that (x) Seller is not obligated to terminate any existing supply contracts and (y) “costs” as referred to within (ii) shall be the aggregate of all of Seller’s material and equipment costs for the Facility), (iii) any penalties, fines or similar charges resulting from Seller’s negligence or willful misconduct in complying with customs requirements, (iv) any costs or penalties arising from Seller’s failure to maintain required import or export licenses or permits, and (v) any costs or charges that were known or reasonably foreseeable to Seller as of the Effective Date based on then-existing Laws. “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, Network Upgrades and Interconnection Facilities (other than Seller’s Interconnection Facilities), and as such storage facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement. “Facility Meter” means the bi-directional revenue quality meter or meters (with a 0.3 accuracy class) as shown in Exhibit R, 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 and Discharging Energy.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Financing Milestone” means the date upon which Seller has notified Buyer of the financing arrangements for the financing of the construction of the Facility. “Fitch” means Fitch Ratings Ltd., or its successor.
“Flexible RAR” means the flexible capacity requirements established for load-serving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Force Majeure Event” has the meaning set forth in Section 10.1.

Packet Pg. 1096 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 11 “Forced Facility Outage” means an unexpected failure of one or more components of the Facility that prevents Seller from receiving Charging Energy or making Discharging Energy available at the Delivery Point and that is not the result of a Force Majeure Event. “Full Capacity Deliverability Status” has the meaning set forth in the CAISO Tariff. “Full Capacity Deliverability Status Finding” means a written confirmation from the CAISO that the Facility is eligible for Full Capacity Deliverability Status. “Full Network Model” has the meaning set forth in the CAISO Tariff. “Gains” means, with respect to any 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 by Buyer during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made by Buyer under any transaction(s) replacing this Agreement, regardless of whether Buyer enters any such replacement transactions, 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 to, or that would otherwise be received by, Seller under any transaction(s) replacing this Agreement, regardless of whether Seller enters any such replacement transactions, and the present value of the payments required to be made to Seller 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., SP15), all of which should be calculated for the remaining Contract Term, and include the value of Capacity Attributes.
“Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” for purposes of this Agreement shall not in any event include any Party. “Guaranteed Efficiency Rate” means the guaranteed Efficiency Rate of the Facility throughout the Delivery Term, as set forth on the Cover Sheet. “Guaranteed Commercial Operation Date” or “Guaranteed COD” has the meaning set forth in Exhibit B.
“Guaranteed Construction Start Date” has the meaning set forth in Exhibit B.

Packet Pg. 1097 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 12 “Guaranteed RA Amount” means an amount of Resource Adequacy Benefits equal to the Qualifying Capacity, in MW, of an energy storage facility with an installed capacity equal to the Storage Contract Capacity that is able to be shown for each hour of the Resource Duration, minus Administrative NQC Reductions for the applicable Showing Month. “Guaranteed Storage Availability” has the meaning set forth in Section 4.8. “Imbalance Energy” means the amount of energy in MWh, in any given Settlement Period or Settlement Interval, by which the amounts of Charging Energy or Discharging Energy deviates from the amount of Scheduled Energy.
“Import Restriction Action” means any import or customs-related action by a Governmental Authority that, directly or indirectly, delays the delivery of major equipment procured by Seller to be used in the Facility, including, without limitation, a U.S. Customs and Border Protection withhold release order, issuance of a CF28 or CF29 instrument or seizure or enforcement action, provided, that an Import Restriction Action shall not include (i) any action resulting from Seller’s or its suppliers’ failure to comply with applicable Law, (ii) any action that could have been prevented through reasonable due diligence by Seller in its supplier selection and procurement processes, (iii) any action arising from Seller’s failure to maintain required import licenses, permits or certifications, (iv) any action targeting specific suppliers due to their prior violations of trade laws or regulations that were known or should have been known to Seller at the time of procurement, (v) any routine customs inspection or documentation request that does not result in an extraordinary delay, (vi) any action arising from Seller’s failure to provide accurate or complete information to customs authorities, or (vii) any action that was reasonably foreseeable based on published governmental policies, regulations or enforcement priorities as of the Effective Date.
“Incentives” means: (a) any federal, state, or local tax benefits, credits or other incentives, including depreciation, associated with the construction, ownership, or production of electricity from the Facility (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as amended); and (b) any federal, state, or local cash payments, grants, subsidies or other like benefits relating in any way to the Facility.
“Indemnifiable Event” has the meaning set forth in Section 16.1. “Indemnifiable Loss(es)” has the meaning set forth in Section 16.1. “Independent Report” has the meaning set forth in Section 2.5. “Initial Synchronization” means the earlier of (a) initial delivery of Discharging Energy to the Delivery Point or (b) the initial receipt of Charging Energy at the Delivery Point. “Installed Battery Capacity” means the maximum dependable operating capability of the Facility to discharge electric energy as measured in MW at the Delivery Point, that achieves Commercial Operation, (up to but not in excess of the Storage Contract Capacity set forth on the Cover Sheet), 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 hereto.

Packet Pg. 1098 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 13 “Interconnection Agreement” means that certain Large Generator Interconnection Agreement associated with CAISO Queue position 2032 among Seller or Seller’s Affiliate, the CAISO, and the Participating Transmission Owner, pursuant to which the Facility will be interconnected with the Transmission System, and pursuant to which the Interconnection Facilities will be constructed, operated and maintained during the Contract Term. “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.
“Interconnection Point” has the meaning set forth in Exhibit A. “Interest Rate” has the meaning set forth in Section 8.2. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff. “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.
“Joint Powers Act” means the provisions of the California Joint Exercise of Powers Act found in Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, beginning at California Government Code Section 6500, et seq. “Joint Powers Agreement” means the Amended and Restated Northern California Power Agency Joint Exercise of Power Agreement dated as of January 31, 2008, as such agreement may be further amended or amended and restated from time to time, under which Buyer is organized as a Joint Powers Agency in accordance with the Joint Powers Act. “kW” means kilowatts in alternating current, unless expressly stated in terms of direct current.
“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.
“Lead Agency” means the public agency with the principal responsibility for approving the Facility or relevant portion thereof as defined pursuant to CEQA, 14 C.C.R. § 15367. “Lender” means, collectively, any Person (i) providing senior or subordinated construction, interim, back leverage or long-term debt, equity, or tax equity, tax credit or cash financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including 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 Person (including equity or tax equity investor) directly or indirectly Packet Pg. 1099 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 14 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 or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or the U.S. branch of a foreign bank, having assets of at least Ten Billion Dollars ($10,000,000,000), and with such bank having a Credit Rating of at least A- from S&P or A3 from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K. “Letter of Credit Default” means with respect to a Letter of Credit, the occurrence of any of the following events:
(a) The issuer of the Letter of Credit fails to comply with or perform its material obligations under such Letter of Credit;
(b) The issuer of the Letter of Credit disaffirms, disclaims, repudiates, or rejects, in whole or in part, or challenges the validity of, the Letter of Credit; (c) The Letter of Credit fails or ceases to be in full force and effect at any time; (d) The Party providing the Letter of Credit fails to provide an extended or replacement Letter of Credit within twenty (20) days before the Letter of Credit expires or terminates; (e) The issuer of the Letter of Credit become Bankrupt; or (f) The issuer has a Letter of Credit Derating; provided, no Letter of Credit Default will be treated as having occurred or be continuing in any event with respect to a Letter of Credit after the time such Letter of Credit is required to be canceled or returned to a Party in accordance with the terms of this Agreement.
“Letter of Credit Derating” means the issuer of a Letter of Credit fails to maintain a Credit Rating of at least (a) “A-“, or equivalent, from S&P; or (b) “A3”, or equivalent, from Moody’s, if such entity is rated by only one of the ratings agencies. “Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the state of California. “Limited Assignee” has the meaning set forth in Section 14.4. “Local Capacity Area Resources” has the meaning set forth in the CAISO Tariff. “Local RAR” means the local Resource Adequacy Requirements established for loadserving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority. “Local RAR” may also be known as Packet Pg. 1100 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 15 local area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulatory proceedings or legislative actions. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” means, with respect to any 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, which economic loss (if any) shall be deemed to be the loss (if any) to such Party represented by (a) if Buyer is the Non-Defaulting Party, the positive difference between the present value of the payments that would be required to be made by Buyer under any transaction(s) replacing this Agreement, regardless of whether Buyer enters any such replacement transactions, and the present value of the payments required to be made by Buyer during the remaining Contract Term of this Agreement and (b) if Seller is the Non-Defaulting Party, the positive difference between the present value of the payments required to be made to Seller during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made to, or that would otherwise be received by, Seller under any transaction(s) replacing this Agreement, regardless of whether Seller enters any such replacement transactions. Factors used in determining economic loss 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., SP-15), all of which should be calculated for the remaining Contract Term, as applicable, and must include the value of Capacity Attributes and Incentives (calculated on an after-tax basis). “Major Subcontractors” means any first-tier subcontractor of Seller with which Seller has an agreement having an aggregate value in excess of One Million Dollars ($1,000,000) for performance of any part of the work at the Site.
“Master File” has the meaning set forth in the CAISO Tariff. “Maximum Charging Capacity” means the highest level at which the Facility may be charged, expressed in MW and as set forth in Exhibit A. “Maximum Discharging Capacity” means the highest level at which the Facility may be discharged, expressed in MW and as set forth in Exhibit A. “Meter Service Agreement” means “Meter Service Agreement for CAISO Metered Entities” as defined in the CAISO Tariff.
“Meter Service Agreement for Metered Entities” or “MSA” has the meaning set forth in the CAISO Tariff.
“Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet.

Packet Pg. 1101 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 16 “Monthly Forecast” has the meaning set forth in Section 4.3(b). “Monthly Storage Availability” has the meaning set forth in Exhibit P. “Moody’s” means Moody’s Investors Service, Inc., or its successors. “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 Interval, 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.
“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. “Non-Dispatchable Capacity” has the meaning set forth in Section 4.9(d). “Non-Material Deviations” means deviations from a Charging Notice in a Settlement Interval of less than 0.75 MWh.
“Notice” shall, unless otherwise specified in this Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (email).
“Notice of Claim” has the meaning set forth in Section 16.2. “Off-Peak Hour” means any hour that is not an On-Peak Hour. “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 NERC holidays.
“Operating Restrictions” means those rules, requirements, and procedures set forth on Exhibit Q.
“Outage Management System” or “OMS” has the meaning set forth in the CAISO Tariff. “Participating Generator Agreement” has the meaning set forth in the CAISO Tariff.

Packet Pg. 1102 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 17 “Participating Member” means a member of Buyer that is signatory to the Third Phase Agreement. The Participating Members are the Cities of Santa Clara for 200.00 MW, Alameda for 10.00 MW, Lompoc for 3.00 MW, Palo Alto for 30.00 MW, Redding for 45 MW, Shasta Lake for 5 MW, Ukiah for 3.00 MW, and the Port of Oakland for 4.00 MW. Buyer may provide written notice to Seller requesting consent from Seller to change the then-current list of Participating Members and/or volumes that are signatory to the Third Phase Agreement such consent not to be unreasonably withheld. Upon consent from Seller, such written notice shall not be considered to be an amendment to this Agreement.
“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 Security” means (a) cash, or (b) a Letter of Credit in the amount set forth on the Cover Sheet.
“Permitted Transferee” means (a) any Affiliate of Seller or (b) any entity that satisfies, or is controlled by another Person that satisfies the following requirements:
(a) A tangible net worth of not less than One Hundred Fifty Million Dollars ($150,000,000) or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from Moody’s; and
(b) is a Qualified Operator, or has retained a third-party to operate the Facility that is a Qualified Operator.
“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). “PMAX” means the applicable CAISO-certified maximum operating level of the Facility. “PMIN” means the applicable CAISO-certified minimum operating level of the Facility. “PNode” has the meaning set forth in the CAISO Tariff.
“Posting Party” has the meaning set forth in Section 8.10. “Prevailing Wage Requirement” has the meaning set forth in Section 13.4.

Packet Pg. 1103 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 18 “Procure Major Facility Equipment Milestone” means the date upon which Seller has notified Buyer of the schedule, selection and procurement of the major equipment comprising the Facility.
“Product” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth in Exhibit E. “Proposed Contract Price Increase” has the meaning set forth in Section 2.5. “Proposed Contract Price Increase Cap” has the meaning set forth on the Cover Page. “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 industry during the relevant time period with respect to grid-interconnected, utility-scale storage facilities in the Western United States, or 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.
“Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Qualified Operator” means Seller (either itself or through the engagement of an Affiliate) or an operator of a battery energy storage system that has sufficient experience and technical capability to perform for Seller’s benefit the obligations of Seller under this Agreement related to the operation and maintenance of the Facility in accordance with the applicable requirements of this Agreement, as evidenced by such operator having operated two (2) or more battery energy storage systems under its control, each having a nameplate capacity rating of twenty (20) MW or more, for not less than two (2) years.
“RA Compliance Showing” means the (a) Local RAR compliance or advisory showings (or similar or successor showings), (b) RAR compliance or advisory showings (or similar or successor showings), and (c) Flexible RAR compliance or advisory showings (or similar successor showings), in each case, an entity is required to make to the CAISO pursuant to the CAISO Tariff, to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings, or to any Governmental Authority.
“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).

Packet Pg. 1104 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 19 “RA Guarantee Date” means the sooner of (a) the date that the Facility is first able to be included on a Supply Plan by both the CPUC and CAISO for Buyer, and (b) the date that is (i) ninety (90) days after Commercial Operation Date, if the Commercial Operation Date occurs on or after the eleventh (11th) day of a month, or (ii) sixty (60) days after the Commercial Operation Date if the Commercial Operation Date occurs prior to the eleventh (11th) day of a month. “RA Shortfall Amount” shall, for a given Showing Month, be determined by calculating the difference of the Guaranteed RA Amount minus the Delivered RA, which shall be the “RA Shortfall Amount” for purposes of calculating an RA Deficiency Amount under Section 3.8(b) for such Showing Month; provided, if the CPUC or CAISO adopts another methodology for calculating a load serving entity’s procurement deficiencies in Resource Adequacy Benefits for purposes of the Resource Adequacy Requirements, the Parties shall cooperate in good faith to amend this definition to conform to such new methodology in order to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this definition as of the Effective Date. If the result of the calculation is a negative number, the RA Shortfall Amount shall be deemed to be zero MW for such Showing Month.
“RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 3.8(b), any month, commencing with the Showing Month that contains the RA Guarantee Date, during which there is an RA Shortfall Amount. “Real-Time Forecast” means any Notice of any change to the Storage Capacity 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. “Real-Time Price” means the Resource-Specific Settlement Interval LMP as defined in the CAISO Tariff. If there is more than one applicable Real-Time Price for the same period of time, Real-Time Price shall mean the price associated with the smallest time interval. “Receiving Party” has the meaning set forth in Section 18.1. “Remedial Action Plan” has the meaning in Section 2.4.
“Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Facility with respect to the applicable Showing Month in all respects, including, as applicable, Flexible RAR, and any successor criteria applicable to the Facility, and any Local RAR, unless Buyer consents to accept Replacement RA from another facility that provides non-equivalent Resource Adequacy Benefits. “Resource Adequacy Benefits” means the rights and privileges attached to the Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and/or the CAISO Tariff, and includes any local, zonal or otherwise locational attributes associated with the Facility, in addition to flex attributes. “Resource Adequacy Capacity” has the meaning set forth in the CAISO Tariff.

Packet Pg. 1105 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 20 “Resource Adequacy Plan” has the meaning set forth in the CAISO Tariff. “Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements established for Buyer pursuant to the Resource Adequacy Rulings, the CAISO pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction. “Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10- 06-036, 11-06-022, 12-06-025, 13-06-024 and any other existing or subsequent ruling or decision, or any other resource adequacy Law, however described, as such decisions, rulings or Laws may be amended or modified from time to time throughout the Delivery Term. “Resource Duration” means four (4) hours.
“Rolling Monthly Average Storage Availability” has the meaning set forth in Exhibit P. “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of S&P Global Inc.) or its successor.
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduled Energy” means the Charging Energy and Discharging 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.
“Scheduling Coordinator Metered Entity” has the meaning set forth in the CAISO Tariff.
“Security Interest” has the meaning set forth in Section 8.10. “Secured Party” has the meaning set forth in Section 8.10. “Seller” has the meaning set forth on the Cover Sheet.
“Seller Initiated Test” has the meaning set forth in Section 4.9(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 Packet Pg. 1106 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 21 the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “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.
“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; provided, the Site must be within the boundaries of the previously identified Site. Seller will be permitted to remove parcels that are not included in the Site, if any, at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer; such update, if any, will be automatically incorporated into Exhibit A and replace the information set forth as of the Effective Date without any further action of the Parties.
“Site Control” means that, on and after the Construction Start Date, Seller (or, prior to the Construction Start Date, its Affiliate): (a) owns or has the option to purchase the Site, including through an ownership interest in an Affiliate that owns the Site; (b) is the lessee or has the option to lease the Site; (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; or (d) has rights to control the Site through ownership, lease, right-of-way grant or similar instrument, as the managing partner or other entity authorized to act in all manners relating to the control and operation of the Site. “SP-15” means the Existing Zone Generation Trading Hub for Existing Zone region SP15 as set forth in the CAISO Tariff. “SQMD Plan” has the meaning set forth in the CAISO Tariff. “Station Use” means energy (including produced or discharged by the Facility) that is used within the Facility when the Facility is not charging or discharging pursuant to a Charging Notice or Discharging Notice to power the lights, motors, cooling equipment, control systems and other electrical loads that are necessary for operation of the Facility. Any energy that is used within the Facility to power the lights, motors, cooling equipment, control systems and other electrical loads Packet Pg. 1107 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 22 that are necessary for operation of the Facility during periods in which the Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice is not Station Use; except that solely for the purposes of the calculation of the Energy In and Energy Out as set forth Exhibit O, any energy that is used within the Facility to power the lights, motors, cooling equipment, control systems and other electrical loads that are necessary for operation of the Facility shall be considered Station Use for purposes of conducting such calculation of Energy In or Energy Out, as applicable, and shall not be considered end use consumption. “Storage Capacity” means (a) the maximum dependable operating capability of the Facility to discharge electric energy that can be sustained for four (4) consecutive hours and (b) any other products that may be developed or evolve from time to time during the Contract Term that the Facility is able to provide as the Facility is configured on the Commercial Operation Date and that relate to the maximum dependable operating capability of the Facility to discharge electric energy as the same shall be determined pursuant to Section 4.9 and Exhibit O to reflect the results of the most recently performed Storage Capacity Test, in either case (a) or (b) up to but not in excess of the Storage Contract Capacity.
“Storage Capacity Test” or “SCT” means any test or retest of the Storage Capacity of the 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 total capacity (in MW) of the Facility initially equal to the amount set forth on the Cover Sheet, as the same may be adjusted from time to time pursuant to Section 5 of Exhibit B.
“Storage Contract Output” means the total output (product of the Storage Contract Capacity multiplied by four (4) hours, represented in MWh) of the Facility, initially equal to the amount set forth on the Cover Sheet, as the same may be adjusted from time to time pursuant to Section 5 of Exhibit B.
“Storage Product” means (a) Discharging Energy, (b) Capacity Attributes, if any, (c) Storage Capacity, and (d) Ancillary Services, in each case arising from or relating to the 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 Facility available to be discharged as Discharging Energy, expressed in MWh-AC. “Subsequent Purchaser” means the purchaser of Capacity Attributes from Buyer in a resale of such Capacity Attributes by Buyer in accordance with Section 3.7(a). “Supplementary Storage Capacity Test Protocol” has the meaning set forth in Exhibit O.
“Supply Chain Event” means any material delay or failure in Seller’s performance of its obligations hereunder arising out of any of the following, notwithstanding the foreseeability or anticipation thereof at any time: (X) changes in Export and Import Costs, or (Y) any Import Packet Pg. 1108 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 23 Restriction Action; provided that a Supply Chain Event shall not include any delay or failure (i) caused directly or indirectly by any action or inaction of Seller or its Affiliates (including any failure to timely order equipment or make required payments, or any failure to implement reasonable mitigation measures) that could have been prevented or mitigated through the exercise of commercially reasonable efforts or Prudent Operating Practice, or (ii) resulting from any economic or market conditions generally affecting the industry (except to the extent directly resulting from clauses (X) or (Y) above).
“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. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Third Phase Agreement” means the agreement between Buyer and the Participating Members that sets forth the terms and conditions under which Buyer is authorized to enter into this Agreement on behalf of the Participating Members.
“Transformer Failure” means failure of all or part of the main power transformer that results in the Facility being unable to charge and discharge Energy during such failure, and such failure is not caused directly or indirectly by Seller’s failure to comply with Prudent Operating Practice or applicable Law or otherwise by the fault or negligence of Seller. Seller may claim a Transformer Failure only once during the Contract Term, and the claimed impact associated with such Transformer Failure shall not exceed twelve (12) months. “Transmission Provider” means any entity or entities transmitting or transporting the Charging Energy and Discharging Energy on behalf of Seller or Buyer to or from the Delivery Point.
“Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service within the CAISO grid from the Delivery Point.
“Ultimate Parent” means Aypa Power Holdings, LP.

Packet Pg. 1109 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 24 1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that 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 terms “include” and “including” mean “include or including (as applicable) without limitation” and any list of examples following such terms shall in no way restrict or limit the generality of the word or provision in respect of which such examples are provided;
(h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) the expression “and/or” when used as a conjunction shall connote “any or all of”;
(l) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Packet Pg. 1110 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 25 Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(m) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement.

ARTICLE 2
TERM; CONDITIONS PRECEDENT

2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions set forth herein (“Contract Term”); provided, however, 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 two (2) years following the termination of this Agreement.

2.2 Conditions Precedent.
(a) Subject to Exhibit B, the Delivery Term shall not commence until Seller completes each of the following conditions:
(i) Seller has delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I setting forth the Installed Battery Capacity on the Commercial Operation Date;
(ii) A Participating Generator Agreement and a Meter Service Agreement for CAISO Metered Entities 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; (iii) An Interconnection Agreement between Seller (or Seller’s Affiliate) and the PTO for the Facility shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer; (iv) Copies of executed agreements demonstrating Site Control shall have been delivered to Buyer; provided that Seller will be permitted to redact any confidential Packet Pg. 1111 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 26 pricing or commercial terms and provided further that such information shall be subject to Article 18 of this Agreement;
(v) Insurance requirements for the Facility pursuant to Article 17 have been met, with evidence provided in writing to Buyer;
(vi) All applicable regulatory authorizations, approvals and permits required for operation of the Facility have been obtained and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied, including but not limited to applicable laws, ordinances codes and standards regarding fire safety and attaching a copy of the applicable fire inspection and signoff, and shall be in full force and effect (including but not limited to CEQA approvals), and Seller has delivered to Buyer an attestation certificate from an officer of Seller certifying to the satisfaction of this condition set forth in this Section 2.2(a)(iv); (vii) Seller has completed CAISO Certification of the Facility, and a copy of the CAISO Certification has been delivered to Buyer; (viii) Seller has provided notice that Seller (either itself or through the engagement of an Affiliate) will act as the Qualified Operator for the Facility, or Seller has entered into one or more agreements providing for the operation and maintenance of the Facility with one or more other Qualified Operators;
(ix) Seller, with the reasonable cooperation of Buyer, has taken all actions and executed and delivered to Buyer and the CAISO all documents that are reasonably capable of being completed prior to the Commercial Operation Date necessary to register and quality the Facility to participate and operate in the CAISO markets, as set forth in the CAISO Tariff, including satisfying and completing the CAISO New Resource Implementation process (commonly referred to as the “NRI Process”) with respect to the Facility; (x) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8;
(xi) Seller has paid Buyer for all amounts owing under this Agreement, if any, including Construction Delay Damages and COD Delay Damages; and (xii) The Facility has obtained Full Capacity Deliverability Status for the Storage Contract Capacity.

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 month thereafter, Seller shall provide a Progress Report until the Commercial Operation Date to Buyer that (a) describes the progress towards meeting the Milestones; (b) identifies any missed Milestones, including the cause of the delay; and (c) provides a detailed description of Seller’s corrective actions to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date. The form of the Progress Report is set forth in Exhibit E. Seller agrees to regularly scheduled telephonic or video-conferenced meetings (unless otherwise agreed to by the Parties) between representatives Packet Pg. 1112 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 27 of Buyer and Seller to review the Progress Reports and discuss Seller’s construction progress.

Seller shall also provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of receipt of such request from Buyer. 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 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 misses any one (1) Milestone by more than fifteen (15) days, except as the result of Force Majeure Event or Buyer Delay, Seller shall submit to Buyer, within thirty (30) days after the missed Milestone 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 (including any extension thereof); 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 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 because of missing any Milestone.

2.5 Storage Rate Adjustment Event.
(a) If after June 1, 2026, a Change in Tax Law or Supply Chain Event occurs that increases Seller’s cost to develop, finance and construct, own or operate the Facility, then, subject to the remainder of this Section 2.5, Seller shall see no compensation from Buyer to mitigate such Change in Tax Law or Supply Chain Event. Notwithstanding the foregoing or anything contrary in this Agreement, at any time prior to June 1, 2026, Seller may, in its sole discretion provide written notice to Buyer of a proposed contract price increase to keep Seller whole with respect to any estimated cost increases that Seller anticipates it will incurs, as determined in a commercially reasonable manner, as a result of such Change in Tax Law or Supply Chain Event (the “Proposed Contract Price Increase”); provided, in which case Seller shall also deliver to Buyer a report from an independent retained consultant or other qualified person not employed by or affiliated with Seller or Buyer, and where such independent consultant or other qualified person is approved by Buyer, where such Buyer approval cannot be unreasonably withheld, conditioned or delayed, that includes (i) analysis with comprehensive supporting documentation of all increased costs directly attributable to such Proposed Contract Price Increase resulting from the applicable Change in Tax Law or Supply Chain Event, and (ii) a report demonstrating how the Proposed Contract Price Increase was determined (“Initial Independent Report”). Estimated cost impacts shall be shown in the Initial Independent Report in terms of $/WAc to explain changes to the Contract Price.
(b) So long as the Proposed Contract Price Increase is equal to or less than the Proposed Contract Price Increase Cap, then such Proposed Contract Price Increase shall be deemed Packet Pg. 1113 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 28 accepted by Buyer; provided, however, that the Proposed Contract Price Increase shall be subsequently revised and trued up to be reflect Seller’s actual cost increases as a result of such Change in Tax Law or Supply Chain Event (the “Actual Contract Price Increase”); provided further that such Actual Contract Price Increase shall be supported by a Final Independent Report, except that in no event shall the Actual Contract Price Increase exceed the Proposed Contract Price Cap, subject to Section 2.5(c). Upon the completion of the Facility, but no later than ninety (90) days following the Commercial Operation Date, Seller shall deliver to Buyer a report (the “Final Independent Report”) from an independent retained consultant or other qualified person not employed by or affiliated with Seller or Buyer, and where such independent consultant or other qualified person is approved by Buyer, where such Buyer approval cannot be unreasonably withheld, conditioned or delayed, that includes (i) analysis with comprehensive supporting documentation of all increased costs directly attributable to such Actual Contract Price Increase resulting from the applicable Change in Tax Law or Supply Chain Event, and (ii) how the Actual Contract Price Increase was determined. Actual cost impacts shall be shown in the Final Independent Report in terms of $/WAc to explain changes to the Contract Price. Upon Buyer’s approval of the Final Independent Report, which approval shall not be unreasonably withheld, conditioned or delayed, the Parties shall amend the Contract Price in the Agreement so that the Contract Price increases by the applicable Actual Contract Price Increase; provided that such amended Contract Price shall not exceed the sum of (i) the original Contract Price and (ii) the Proposed Contract Price Increase Cap. Any disputes regarding the Actual Contract Price Increase or the Final Independent Report shall be subject to the dispute resolutions procedures contained in this Agreement.
(c) If the Proposed Contract Price Increase and/or Actual Contract Price Increase is greater than the Proposed Contract Price Increase Cap, Seller may, in its sole discretion provide written notice to Buyer of a Proposed Contract Price Increase and/or Actual Contract Price Increase, and if Buyer does not provide written acceptance of the Proposed Contract Price Increase or Actual Contract Price Increase to Seller within sixty (60) days after Buyer’s receipt of the Proposed Contract Price Increase and/or Actual Contract Price Increase notice from Seller, then Seller may terminate this Agreement upon written notice to Buyer; provided, if such termination Notice is not provided by Seller within thirty (30) days after the sixty (60) day period has ended, such termination right under this paragraph is forfeited and the terms and conditions of this Agreement will remain unchanged, including the Contract Price. Neither Party shall have any liability to the other Party as a result of any termination of this Agreement under this Section 2.5, and within ten (10) Business Days thereafter each Party shall return any Development Security or Buyer Security then held by such Party to Seller or Buyer, as applicable.

2.6 [Reserved].

2.7 CEQA.
(a) The Parties agree that Buyer has no obligation to accept or pay for any Product under this Agreement until the date on which all of the following have occurred (such date, the “CEQA Completion Date”): (a) any applicable review under CEQA has been completed by the Lead Agency and all necessary CEQA approval(s) for the Facility have been issued by the Lead Agency (the “CEQA Approval(s)”); and (b) (i) the applicable period for any judicial Packet Pg. 1114 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 29 challenges to the CEQA Approval(s) relating to the Facility has expired without any such challenge having been filed in court, or (ii) in the event of any such challenge, the challenge has been dismissed. The Delivery Term shall not occur without the occurrence of the CEQA Completion Date.
(b) Buyer reserves the right, but not the obligation, to participate in the CEQA review of the Facility by the Lead Agency.

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, Buyer will purchase all of the Product produced by or associated with the Facility at the Contract Price and in accordance with Exhibit C, and Seller shall supply and deliver to Buyer all of the Product produced by or associated with the Facility. At its sole discretion, Buyer may during the Delivery Term resell or use for another purpose all or a portion of the Product, provided that no such resale or use shall relieve Buyer of any obligations hereunder, including under Section 5.2, or modify any of Seller’s obligations hereunder. During the Delivery Term, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product, or any component thereof, from the Facility after the Delivery Point for resale into the market or to any third party, and retain and receive any and all related revenues.

3.2 [Reserved].

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.

3.4 [Reserved].

3.5 [Reserved].

3.6 [Reserved].

3.7 Capacity Attributes. Seller or an Affiliate of Seller shall request Full Capacity Deliverability Status in the CAISO generator interconnection process and the Facility shall obtain Full Capacity Deliverability Status by the Commercial Operation Date. As between Buyer and Seller, Seller shall be responsible for the cost and installation of any Network Upgrades associated with obtaining such Full Capacity Deliverability Status. (a) Throughout the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all the Capacity Attributes from the Facility; provided, Buyer may resell all or part of the Capacity Attributes to a Subsequent Purchaser. If Seller fails to deliver Capacity Attributes in accordance with this Agreement, Seller shall be liable to Buyer for the liquidated damage amounts set forth in this Agreement regardless of whether Buyer has sold all or part of the Capacity Attributes to a Subsequent Purchaser.

Packet Pg. 1115 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 30 (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 Facility from the CAISO and shall perform all actions necessary to ensure that the Facility qualifies to provide Resource Adequacy Benefits to Seller. Throughout the Delivery Term, Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits to Buyer. (c) For the duration of the Delivery Term, Seller shall take all commercially reasonable administrative actions, including complying with all applicable registration and reporting requirements, and executing all documents or instruments necessary to enable Buyer to use all of the Capacity Attributes committed by Seller to Buyer pursuant to this Agreement. (d) If Seller anticipates it will have an RA Deficiency Amount in any month of the Delivery Term, Seller may, as an alternative to paying RA Deficiency Amounts, provide Replacement RA up to the anticipated RA Shortfall Amount; provided, any Replacement RA capacity shall be communicated by Seller to Buyer with Replacement RA product information in a written notice substantially in the form of Exhibit M at least seventy-five (75) days before the applicable CPUC Showing Month.

3.8 Resource Adequacy Failure.
(a) RA Deficiency Determination. 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 the sole and exclusive remedy for the Capacity Attributes Seller failed to convey to Buyer.
(b) RA Deficiency Amount Calculation. For each RA Shortfall Month, Seller shall pay to Buyer an amount (the “RA Deficiency Amount”) equal to the product of (i) the RA Shortfall Amount, and (ii) the sum of (A) the CPUC System RA Penalty and (B) CPM Soft Offer Cap.

3.9 [Reserved].

3.10 [Reserved].

3.11 Compliance Expenditure Cap.
(a) If a Change in Law occurs after the Effective Date that affects the Facility’s eligibility to qualify for or maintain Resource Adequacy Benefits that comply with the Resource Adequacy Requirements or to provide Ancillary Services, then Seller shall use commercially reasonable efforts to comply with such Change in Law as necessary to maintain the Product eligibility described above. Notwithstanding anything to the contrary, the Parties agree that the maximum out-of-pocket costs and expenses (“Compliance Costs”) Seller shall be required to bear during the term of this Agreement to comply with all of such obligations shall be capped at Twenty-Five Thousand Dollars ($25,000) per MW of Storage Contract Capacity with respect to Change in Law occurring after the Effective Date that affects the Facility’s eligibility to qualify for or maintain Resource Adequacy Benefits that comply with the Resource Adequacy Requirements or to provide Ancillary Services (the “Compliance Expenditure Cap”). Seller’s Packet Pg. 1116 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 31 internal administrative costs associated with obtaining, maintaining, conveying or effectuating, Buyer’s use of (as applicable) any Product are excluded from the Compliance Expenditure Cap. (a) Any actions required for Seller to comply with its obligations set forth in the immediately preceding paragraph, the Compliance Costs of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions.” Compliance Actions shall not include any requirement of Seller to increase the Storage Capacity beyond the Storage Contract Capacity.
(b) If Seller reasonably anticipates the need to incur Compliance Costs in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated Compliance Costs. (c) Buyer will have sixty (60) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (1) agree to reimburse Seller for all or some portion of the Compliance Costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. (d) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Parties and Buyer shall reimburse Seller for Seller’s actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within ninety (90) days from the time that Buyer receives an invoice and documentation of such costs from Seller. (e) If (i) Buyer does not pay any Accepted Compliance Costs within the timeline required by Section 3.11(e), (ii) does not agree to pay the Compliance Costs in excess of the Compliance Expenditure Cap within the timeline required by Section 3.11(d), or (iii) 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 (A) Seller shall be excused from the corresponding Compliance Actions under this Agreement, (B) Buyer shall continue to pay Seller under this Agreement without any reduction in revenues so long as such reduction in revenue is directly attributed to the Change in Law, and (C) with respect to Resource Adequacy Benefits, the Guaranteed RA Amount shall be adjusted downward to reflect the effect of the Change in Law.

ARTICLE 4

OBLIGATIONS AND DELIVERIES

4.1 Delivery. Subject to the provisions of this Agreement, commencing on the first day of the Delivery Term through the end of the Contract Term, Seller shall supply and deliver Discharging Energy to Buyer at the Delivery Point, and Buyer shall take delivery of Discharging Energy at the Delivery Point in accordance with the terms of this Agreement. Seller will be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Discharging Energy to the Delivery Point, any costs associated with delivering the Charging Energy from the Delivery Point to the Facility, and any operation and maintenance Packet Pg. 1117 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 32 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 Discharging Energy at and after the Delivery Point and Charging Energy to the Delivery Point, including without limitation transmission costs and transmission line losses and imbalance charges. The Charging Energy and Discharging Energy will be scheduled to the CAISO by Buyer (or Buyer’s designated Scheduling Coordinator) in accordance with Exhibit D-1 and Exhibit D-2.

4.2 Title and Risk of Loss. Title to and risk of loss related to the Discharging 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.

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 Practice. (a) Reserved.
(b) Monthly Forecast of Storage 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 Storage Capacity for each day of the following month in a form substantially similar to the table found in Exhibit F (“Monthly 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 and the SC (if applicable) with a nonbinding forecast of Storage Capacity for each hour of the immediately succeeding day (“DayAhead 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 Storage Capacity for each hour of each applicable day. Except as otherwise agreed, Seller shall provide the Day-Ahead Forecast in the form of a CSV file or other mutually agreed file format delivered to Buyer’s SC and Buyer’s File Transfer Protocol (FTP) site as set forth in Exhibit D-2. If Seller fails to provide Buyer with a Day-Ahead Forecast as required herein for any period, then for such unscheduled delivery period only Buyer and the SC (if applicable) shall rely on any Real-Time Forecast provided in accordance with Section 4.3(d) or the Monthly Forecast or Buyer’s best estimate based on information reasonably available to Buyer. (d) Real-Time Forecasts. During the Delivery Term, Seller shall notify Buyer and the SC (if applicable) of any changes from the Day-Ahead Forecast of one (1) MW or more in Storage Capacity, 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 Packet Pg. 1118 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 33 Schedules to the CAISO in accordance with the rules for participation in the Real-Time Market.

If the Storage Capacity 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 as soon as reasonably possible. Such Real-Time Forecasts shall contain information regarding the beginning date and time of the event resulting in the change in Storage Capacity, 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 Seller, provided that Buyer specifies the method no later than five (5) Business Days prior to the effective date of such requirement. In the event Buyer 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 and the SC (if applicable). (e) Forced Facility Outages. Notwithstanding anything to the contrary herein, Seller shall notify the SC of Forced Facility Outages promptly but no later than the time periods required by the CAISO Tariff and the CAISO’s outage management rules and Seller shall keep the SC 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. Unless excused by a Force Majeure Event, in the event Seller does not in a given hour provide the forecast required in Section 4.3(d) and Buyer incurs a loss or penalty resulting from Seller’s failure with respect to Charging Energy or Discharging Energy during such hour, Seller shall be responsible for any penalties, imbalance energy charges, or other costs from CAISO resulting from Seller’s failure to provide the forecast required in Section 4.3(d) (“Forecasting Penalty”). Settlement of Forecasting Penalties shall occur as set forth in Article 8 of this Agreement.
(g) CAISO Tariff Requirements. Seller shall comply with all applicable CAISO Tariff requirements, procedures, protocols, rules and testing as necessary for Buyer to submit Bids for the electric energy charged and discharged by the Facility.

4.4 Dispatch Down/Curtailment.
(a) General. Seller agrees to reduce the amount of Discharging Energy produced by the Facility, by the amount and for the period set forth in any Curtailment Order; provided, Seller is not required to reduce such amount to the extent such reduction or any such Curtailment Order is inconsistent with the limitations of the Facility set out in the Operating Restrictions; provided, further, Seller shall notify Buyer as soon as reasonably practicable, but in no event less than one (1) Business Day, if the CAISO’s Master Data File for the Facility is inconsistent with the Operating Restrictions such that a failure to follow a Curtailment Order is due the limitations of the Facility set out in the Operating Restrictions. (b) [Reserved].
(c) Failure to Comply. If Seller fails to comply with a Curtailment Order, then, for each MWh of Discharging Energy that is delivered by the Facility to the Delivery Point in contradiction of the Curtailment Order, Seller shall pay Buyer for each such MWh at an amount Packet Pg. 1119 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 34 equal to the sum of (A) + (B), where: (A) is the sum, for all Settlement Intervals with a Negative LMP during the 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 (B) is any penalties assessed by the CAISO or other charges assessed by the CAISO resulting from Seller’s failure to comply with the Curtailment Order. Such calculations shall exclude failures to comply with a Curtailment Order to the extent such failure to comply is consistent with the CAISO Tariff. (d) Seller Equipment Required for Curtailment Instruction Communications.

Seller shall acquire, install, and maintain such facilities, communications links and other equipment as are required under the CAISO Tariff, 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 as reasonably directed by the Buyer in accordance with this Agreement or a Governmental Authority, including to implement a Curtailment Order in accordance with the then-current methodology used to transmit such instructions as it may change from time to time. 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 applicable to the Facility and required by CAISO, 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 Curtailment Order during the time that Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with thencurrent methodologies applicable to the Facility. For the avoidance of doubt, a Curtailment Order communication via such systems and facilities shall have the same force and effect on Seller as any other form of communication.

4.5 Charging Energy Management.
(a) Upon receipt of a valid Charging Notice, Seller shall take any and all action necessary to deliver the Charging Energy from the Delivery Point to the Facility in order to deliver the Storage Product in accordance with the terms of this Agreement (including the Operating Restrictions), including maintenance, repair or replacement of equipment in Seller’s possession or control used to deliver the Charging Energy to the Facility. (b) Buyer will have the right to charge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Charging Notices to Seller electronically, and subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Subject to Seller’s obligations to comply with the CAISO Tariff and Section 4.5(e), Seller may provide notice to Buyer or Buyer’s SC that it must adjust a Charging Notice from Buyer to the extent necessary to maintain compliance with the Operating Restrictions, the CAISO Tariff, or in accordance with Section 4.5(e), and upon Buyer’s receipt of such notice, a Charging Notice from Buyer will be deemed to have been adjusted as provided in such notice. 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 Facility during the Term other than pursuant to a valid Charging Notice, or in connection with a Storage Capacity Test, or in accordance with Packet Pg. 1120 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 35 Section 4.5(e). If, during the Contract Term, Seller (a) charges the Facility to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (b) charges the Facility in 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 Facility, (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 discharge such energy and entitled to all of the benefits (including Storage Product) associated with such discharge. Seller will not be in violation of the first sentence of this Section 4.5(c) for Non-Material Deviations in Charging Energy typical of battery storage facilities operating in the CAISO consistent with Prudent Operating Practices.
(d) Buyer will have the right to discharge the 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 Restrictions. Subject to Seller’s obligations to comply with the CAISO Tariff and Section 4.5(e), Seller may provide notice to Buyer or Buyer’s SC that it must adjust a Discharging Notice to the extent necessary to maintain compliance with the Operating Restrictions, CAISO Tariff, or in accordance with Section 4.5(e), and upon Buyer’s receipt of such notice, a Discharging Notice from Buyer will be deemed to have been adjusted as provided in such notice. 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, CAISO Operating Orders, Curtailment Orders and any other orders from the Governmental Authority or the PTO or the Transmission Provider 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 CAISO Operating Order, Curtailment Order or other instruction or direction from a Governmental Authority or 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 CAISO Operating Order, or Curtailment Order consistent with the Operational Restrictions.
(f) Charging Energy Cost. The Facility shall be capable of receiving Charging Energy from the CAISO Grid in accordance with Section 4.5(a); provided, Buyer shall be responsible for all Charging Energy costs related to charging of the Facility. (g) Ancillary Services. Buyer shall have the exclusive rights to all Ancillary Services that the Facility is capable of providing during the Delivery Term, with characteristics and quantities determined in accordance with the CAISO Tariff. Seller shall operate and maintain the Facility throughout the Delivery Term so as to be able to provide the Ancillary Services listed in Exhibit Q and in accordance with the specifications set forth in the Facility’s CAISO Certification associated with the Installed Capacity, adjusted to reflect the Storage Capacity. Upon Buyer’s reasonable request, Seller shall submit the Facility for additional CAISO Certification so that the Facility may provide additional Ancillary Services that the Facility is, at the relevant time, Packet Pg. 1121 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 36 actually physically capable of providing without modification of the Facility, provided that Buyer has agreed to reimburse Seller for any costs Seller incurs in connection with conducting such additional CAISO Certification.
(h) Pre-Commercial Operation Date Period, Etc. Prior to the Commercial Operation Date, (i) Buyer shall have no rights to issue or cause to be issued Charging Notices or Discharging Notices, (ii) Seller shall have exclusive rights to test, charge and discharge the Facility, and (iii) all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility shall be for Seller’s account. Seller is responsible to procure, at its own cost, any energy required for commissioning purposes and to arrange to discharge such energy into the grid. Upon the Commercial Operation Date, Buyer shall have exclusive rights to issue or cause to be issued Charging Notices or Discharging Notices and all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility operations shall be for Buyer’s account.

4.6 Reduction in Delivery Obligation.
(a) Facility Maintenance. Between June 1 and October 31, Seller shall not schedule non-emergency maintenance that reduces the Storage Capacity of the Facility by more than ten percent (10%), 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 1 to October 31, (iii) such outage is required in accordance with Prudent Operating Practice, or (iv) the Parties agree otherwise in writing (each scheduled maintenance permitted under this clause (a) and each of the foregoing outages described in foregoing clauses (a)(i) – (a)(iv), a “Planned Outage”). To the extent notice is not already required under the terms hereof, Seller shall notify Buyer as soon as practicable of any extensions to scheduled maintenance and expected end dates thereof.
(b) Between November 1 and May 30, Seller may, without Buyer’s consent, perform routine maintenance and undertake augmentation, improvement or modification of the Facility, including repairs and replacements of all or portions thereof with newer technology, if such work is done in accordance with Prudent Operating Practice and does not negatively impact the Facility’s ability to meet the availability and performance specifications of this Agreement or the Operating Requirements and the implementation of such repair does not have any adverse impact on Buyer’s ability to receive Product from the Facility or charge or discharge the Facility in the manner provided for in this Agreement; provided, (i) Seller shall provide Buyer with prior written notice before undertaking any of the foregoing that would result in any reduction in the availability of the Facility, and (ii) all outages and derates associated with the foregoing shall count toward the maximum Approved Maintenance Hours in accordance with Exhibit P. (c) Forced Facility Outage. Seller shall be permitted to reduce deliveries of Product except Capacity Attributes during any Forced Facility Outage. Seller shall provide Buyer with Notice and expected duration (if known) of any Forced Facility Outage. (d) System Emergencies and other Interconnection Events. Seller shall be permitted to reduce deliveries of Product except Capacity Attributes during any period of System Packet Pg. 1122 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 37 Emergency, or upon Notice of a Curtailment Order pursuant to the terms of this Agreement, the Interconnection Agreement or applicable tariff.
(e) Force Majeure Event. Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event.
(f) Health and Safety. Seller shall be permitted to reduce deliveries of Product except Capacity Attributes as necessary to maintain health and safety pursuant to Section 6.2.

4.7 Interconnection Costs. As between Buyer and Seller, Seller is responsible for all costs and charges associated with Interconnection Facilities and Network Upgrades necessitated by the interconnection of the Facility.

4.8 Storage Availability.
(a) During the Delivery Term, the Facility shall maintain a Rolling Monthly Average Storage Availability of no less than ninety-six percent (96.0%) (the “Guaranteed Storage Availability”), which Rolling Monthly Average Storage Availability shall be calculated in accordance with Exhibit P.
(b) If, the Rolling Monthly Average 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).

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 Storage Capacity Tests in accordance with Exhibit O. Any testing of the Facility requested by Buyer after the Commercial Operation Date shall be deemed Buyerinstructed dispatches of the Facility (“Buyer Dispatched Test”). Any test of the Facility that is not a Buyer Dispatched Test, including all tests conducted prior to Commercial Operation, all required annual tests pursuant to Section B (“Subsequent Storage Capacity Tests”) in Exhibit O, any Storage Capacity Test conducted if the Storage Capacity immediately prior to such Storage Capacity Test is below seventy-five percent (75%) of the Storage Contract Capacity, any test required by CAISO (including any test required to maintain CAISO Certification), and other Seller-requested discretionary tests or dispatches, at times and for durations reasonably agreed to by Buyer, that Seller deems necessary for purposes of reliably operating or maintaining the 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 Seller Initiated Tests, Seller shall (i) be liable for all CAISO costs and charges for associated Charging Energy, and (ii) be entitled to any CAISO revenues associated with Discharging Energy. For any Buyer Dispatched Test, Buyer shall (x) pay for all CAISO costs and charges for associated Charging Energy, and (y) be entitled to any CAISO revenues associated Packet Pg. 1123 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 38 with associated Discharging Energy. Any Storage Capacity Test shall be deemed an Excused Event for the purposes of calculating the Monthly Storage Availability. (b) Buyer shall have the right to send one or more representative(s) to witness all Storage Capacity Tests. Buyer shall (i) comply with all reasonable and notified Seller health and safety policies and procedures and instructions while present at the Site, and (ii) conduct itself in a manner that will not unreasonably interfere with the operation of the Facility or other activities of Seller and its subcontractors on the Site. Buyer acknowledges that it will be escorted at all times while on the Site. Alternatively, to the extent that any Storage Capacity Tests are done remotely, and no representatives are needed on-site, Seller shall arrange for both Parties to have access to all data and other information arising out of such tests. Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representative(s) witnessing any Storage Capacity Test. Except as otherwise specified in Exhibit O, all other costs or revenues associated with any Storage Capacity Test shall be borne by, or accrue to, Seller, as applicable. (c) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit O. The Storage Capacity and Efficiency Rate determined pursuant to a Storage Capacity Test shall become the new Storage Capacity and/or Efficiency Rate, at the beginning of the day following the completion of the test for all purposes under this Agreement, including compensation under Exhibit C.
(d) It is acknowledged that Seller shall have the right and option in its sole discretion to install capacity in excess of the Storage Contract Capacity (“Non-Dispatchable Capacity”); provided, for all purposes of this Agreement the amount of Installed Battery Capacity and Storage Capacity shall never be deemed to exceed the Storage Contract Capacity, and (for the avoidance of doubt) (i) any Non-Dispatchable Capacity shall not be included in the CPUC Master Resource Database or CAISO Master Data File, (ii) Buyer shall have no rights to instruct Seller to (A) charge or discharge the Facility at an instantaneous rate (in MW) in excess of the lesser of the Installed Battery Capacity or Storage Capacity, or (B) charge the Facility to a level (in MWh) in excess of the lesser of the Installed Battery Capacity or Storage Capacity times four (4) hours, (iii) Buyer shall have no obligation to dispatch such Non-Dispatchable Capacity on behalf of Seller, or to make payment to Seller for such Non-Dispatchable Capacity, (iv) for purposes of calculating the Monthly Storage Availability of the Facility, the unavailability of such Non-Dispatchable Capacity will not be considered in such calculations, and (v) Seller shall have no right to dispatch such Non-Dispatchable Capacity.

4.10 Interconnection Capacity. Seller shall ensure that throughout the Delivery Term the Facility will have an Interconnection Agreement providing for interconnection capacity available or allocable to the Facility that is no less than the Storage Contract Capacity and (b) Seller shall have sufficient interconnection capacity and rights under such Interconnection Agreement to interconnect the Facility with the CAISO Grid, to fulfill Seller’s obligations under the Agreement, including with respect to Resource Adequacy Benefits, and to allow Buyer’s dispatch rights of the Facility to be fully reflected in the CAISO’s market optimization and not result in CAISO market awards that are not physically feasible (“Dedicated Interconnection Capacity”). Seller shall hold Buyer harmless from any penalties, imbalance energy charges, or other costs from CAISO or under the Agreement resulting from Seller’s inability to provide the Packet Pg. 1124 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 39 foregoing interconnection capacity.

4.11 Station Use. Seller will be responsible for procuring and paying for, or reimbursing Buyer for (to the extent Buyer pays for any Station Use), all Station Use (including Station Use provided through retail service to Seller). Seller shall indemnify and hold harmless Buyer from any and all costs, penalties, charges or other adverse consequences that result from energy supplied for Station Use by any means other than retail service from the applicable utility, and shall take any additional measures to ensure Station Use is supplied by the applicable utility’s retail service if necessary to avoid any such costs, penalties, charges or other adverse consequences.

4.12 Facility Operations and Maintenance.
(a) Seller shall comply with Law and Prudent Operating Practice, and to the extent applicable the CAISO Tariff and the Interconnection Agreement, relating to the operation and maintenance of the Facility and the generation and sale of Product. Seller shall be responsible for maintenance of the Facility, and Buyer shall have no responsibility or liability for the maintenance of the Facility. Seller shall be responsible for the operation of the Facility, and Buyer shall have no responsibility or liability for the operation of the Facility other than with respect to its role as Scheduling Coordinator. Seller will maintain 24-7 remote monitoring of the Facility. This includes advanced alarm management, data analytics, emergency response, scheduling of preventative and corrective maintenance, troubleshooting, remote resets and dispatch of on-site resources.
(b) Seller shall, if applicable, obtain in its own name and at its own expense all pollution or environmental credits or offsets necessary to operate the Facility in compliance with any requirement of Law.
(c) Without regard to whether or not there is any applicable Law requiring decommissioning or demolition of the Facility or any environmental or other liability associated with the decommissioning or demolition of the Facility, Buyer shall not be responsible for any cost of decommissioning or demolition of the Facility or any environmental or other liability associated with the decommissioning or demolition of the Facility without regard to the timing or cause of the decommissioning or demolition.

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 Delivery Point. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the Delivery Point (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees), and with respect to Charging Energy prior to its delivery to Seller at the Delivery Point, 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 Packet Pg. 1125 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 40 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 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.

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 Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.

ARTICLE 6

MAINTENANCE OF THE FACILITY

6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent Operating Practice relating to the operation and maintenance of the Facility and the generation and sale of Product.

6.2 Maintenance of Health and Safety. Sellershall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of the Facility. If Seller becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt, reasonable action to prevent such damage or injury and shall give Notice to Buyer’s emergency contact identified on Exhibit N of such condition. Such action may include, to the extent reasonably necessary, disconnecting and removing all or a portion of the Facility, or suspending the supply of energy or Discharging Energy to Buyer.

6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities, and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities or co-tenancy 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 agreements shall (i) ensure that the Facility shall be separately metered from any other generation or storage facility and all of the output and services available from the Facility shall be conveyed to Buyer under this Agreement, (ii) ensure that the Facility has its own CAISO Resource ID, and (iii) permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including providing for interconnection capacity available or allocable to the Facility that is no less than the Storage Contract Capacity.

Packet Pg. 1126 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 41 ARTICLE 7

METERING

7.1 Metering. Seller shall measure the amount of Charging Energy and Discharging Energy using the Facility Meter; all of which will be subject to adjustment in accordance with applicable CAISO meter requirements and Prudent Operating Practice, including to account for Electrical Losses and Station Use. All meters will be operated pursuant to applicable CAISOapproved calculation methodologies and maintained as Seller’s cost. Subject to meeting any applicable CAISO requirements, the meters shall be programmed to adjust for Electrical Losses and Station Use in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Seller shall obtain and maintain a single CAISO resource ID dedicated exclusively to the Facility. Seller shall not obtain additional CAISO resource IDs for the Facility without the prior written consent of Buyer, which shall not be unreasonably withheld. Metering will be consistent with the Metering Diagram set forth as Exhibit R, a final version of which shall be provided to Buyer at least thirty (30) days before the Commercial Operation Date. 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 becomes aware of a broken seal, 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, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports. Seller and Buyer 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 CAISO meter(s) at the Facility.

The Parties intend as of the Effective Date that the applicable MSA will be a CAISO Metered Entity; provided, however, Seller may decide that the Facility should be a Scheduling Coordinator Metered Entity or the CAISO may require the Facility to be a Scheduling Coordinator Metered Entity, and in either case Seller, with the reasonable cooperation of Buyer, shall be responsible for the retention of a third-party qualified meter data management agent to perform any such required activities and functions on behalf of the Scheduling Coordinator including in connection with the development of a SQMD Plan and the collection, validation and submission of meter data to the CAISO in accordance with the CAISO Tariff. If Seller decides that the Facility should be a Scheduling Coordinator Metered Entity, or if CAISO requires the Facility to be a Scheduling Coordinator Metered Entity, Buyer or Buyer’s agent, in its role as Scheduling Coordinator for the Facility, shall reasonably cooperate with Seller and any meter data management agent retained by Seller to perform functions on behalf of the Scheduling Coordinator to enable Seller or such meter data management agent to submit the SQMD Plan and Facility Settlement Quality Meter Data to the CAISO, including granting Seller or any meter data management agent retained by Seller access to applicable CAISO system for such purpose (e.g., the CAISO Market Results Interface – Settlements or successor system) to comply with applicable Scheduling Coordinator Metered Entity requirements as set forth in the CAISO Tariff.

7.2 Meter Verification. Annually, if Seller has reason to believe there may be a meter malfunction, or upon Buyer’s reasonable request, Seller shall test the meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. If a meter Packet Pg. 1127 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 42 is inaccurate it shall be promptly repaired or replaced. If a meter is inaccurate by more than one point two percent (1.2%) and it is not known when the meter inaccuracy commenced (if such evidence exists such date will be used to adjust prior invoices), then the invoices covering the period of time since the last meter test shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during one-half of such period so long as such adjustments are accepted by CAISO; provided, such period may not exceed twelve (12) months.

ARTICLE 8
INVOICING AND PAYMENT; CREDIT

8.1 Invoicing. Seller shall make good faith efforts to deliver an invoice to Buyer for Product within ten (10) days after, but not prior to, the end of each month of the Delivery Term.

Each invoice shall include (a) records of metered data, including CAISO metering and transaction data to the extent then available (but excluding any missing interval data that is not available from CAISO) 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 Charging Energy charged by the Facility and the amount of Discharging Energy delivered from the Facility to the Delivery Point (in each case, as read by the Facility Meter) the amount of Replacement RA delivered to Buyer (if any), the LMP prices at the Delivery Point for each Settlement Period, and the Contract Price applicable to such Product in accordance with Exhibit C; (b) access to any records, including invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; and (c) 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. The invoice shall be delivered by electronic mail in accordance with Exhibit N.

8.2 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account designated by Seller in Exhibit N, which may be updated by Seller by Notice hereunder; provided, however, that changes to the invoices, payment, and wire transfer information set forth in Exhibit N must be made in writing and delivered via certified mail or by a regularly scheduled next business day delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, and shall include contact information for an authorized person who is available by telephone to verify the authenticity of such requested changes. Buyer shall pay undisputed invoice amounts within thirty (30) days after receipt of the invoice. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the Secured Overnight Financing Rate (SOFR) published on the date of the invoice 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.

Packet Pg. 1128 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 43 8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) years or as otherwise required by Law. Upon ten (10) Business Days’ Notice to the other Party, either Party shall be granted reasonable 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 Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds Ten Thousand Dollars ($10,000).

8.4 Payment Adjustments; Billing Errors. Invoice adjustments shall be made if (a) there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section

8.5, (b) an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or (c) there have been meter inaccuracies; provided, however, that there shall be no adjustments to prior invoices based upon meter inaccuracies except to the extent that such meter adjustments are accepted by CAISO for revenue purposes. 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 due to good faith inaccuracies in invoicing shall not be subject to interest, but any other 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.

8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) 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 under this Agreement 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 during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B and P, Packet Pg. 1129 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 44 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 five (5) Business Days following any draw by Buyer on the Development Security, including for payment of Construction Delay Damages or COD Delay Damages, Seller shall replenish the amount drawn such that the Development Security is restored to the amount specified on the Cover Sheet. Upon the earlier of (a) Seller’s delivery of the Performance Security, or (b) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If the Development Security is a Letter of Credit and a Letter of Credit Default occurs, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit in the amount of the Development Security and that otherwise meets the requirements set forth in the definition of Development Security. For avoidance of doubt, and notwithstanding anything to the contrary in this Section 8.7 or elsewhere in this Agreement, Seller’s replenishment obligation in addition to the initial Development Security amount with respect to the Development Security shall be limited to $37,500,000 in the aggregate.

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

Seller shall maintain the Performance Security in full force and effect until the following have occurred: (a) the Delivery Term has expired or terminated early; and (b) all payment obligations of the Seller 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.

Within five (5) Business Days after any draw by Buyer on the Performance Security, Seller shall replenish the amount drawn from the Performance Security so that such Performance Security is restored to the amount specified on the Cover Sheet. If the Performance Security is a Letter of Credit and a Letter of Credit Default occurs, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security. For avoidance of doubt, and notwithstanding anything to the contrary in this Section 8.8 or elsewhere in this Agreement, Seller’s replenishment obligation in addition to the initial Performance Security amount with respect to the Performance Security shall be limited to $30,000,000 in the aggregate. Seller may at its option exchange one permitted form of Development Security or Performance Security for another permitted form of Development Security or Performance Security, as applicable.

8.9 Buyer Credit Support. In the event of a Buyer Downgrade Event, within five (5) Business Days of such Buyer Downgrade Event occurring, Buyer shall provide and maintain for the benefit of Seller credit support in the form of cash or a Letter of Credit (with appropriate modifications to make Seller the beneficiary thereof) in the amount of one-hundred dollars ($100)/kW (the “Buyer Credit Support”) multiplied by the Storage Contract Capacity if prior to the Commercial Operation Date and the Installed Battery Capacity if on or after the Packet Pg. 1130 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 45 Commercial Operation Date. Buyer shall maintain the Buyer Credit Support in full force and effect; provided, however, that if after posting the Buyer Credit Support, Buyer demonstrates to Seller that Buyer is no longer subject to a Buyer Downgrade Event, then Buyer shall no longer be required to post the Buyer Credit Support and Seller shall return the Buyer Credit Support to Buyer. Return of any Buyer Credit Support shall not prejudice or diminish Seller’s rights or Buyer’s obligations with respect to any subsequent Buyer Downgrade Events, which subsequent Buyer Downgrade Events shall trigger the requirement for Buyer to repost the Buyer Credit Support in accordance with the terms of this Section 8.9. Subject to this Section 8.9 and the other terms of this Agreement governing the Buyer Credit Support requirements, Buyer may change the type and/or issuer (as applicable) of the Buyer Credit Support from time to time and at any time. If the Buyer Credit Support is a Letter of Credit and a Letter of Credit Default occurs, Buyer shall have five (5) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Buyer Credit Support. For avoidance of doubt, and notwithstanding anything to the contrary in this Section 8.9 or elsewhere in this Agreement, Buyer shall have no replenishment obligation with respect to the Buyer Credit Support. Buyer shall not terminate or rescind the Third Phase Agreement, or waive or amend any material payment right or obligation (including the obligation to post security) due to it thereunder, in each case, without prior written consent of Seller.

8.10 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, each Party (the “Posting Party”) hereby grants to the other Party (the “Secured Party”) 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, Buyer Credit Support, or any other cash collateral and cash equivalent collateral posted by the Posting Party pursuant to Sections 8.7, 8.8, and/or 8.9, as applicable, 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 the Secured Party, and the Posting Party agrees to take all action as the Secured Party reasonably requires in order to perfect the Secured Party’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 of an Event of Default caused by the Posting Party, an Early Termination Date resulting from an Event of Default caused by the Posting Party, or an occasion provided for in this Agreement where the Secured Party is authorized to retain all or a portion of the Development Security, Performance Security, or Buyer Credit Support, as applicable, the Secured Party may do any one or more of the following (in each case subject to the final sentence of this Section 8.10):
(a) Exercise any of its rights and remedies with respect to the Development Security, Performance Security, and Buyer Credit Support, 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 the Secured Party as Development Security, Performance Security, or Buyer Credit Support; and
Packet Pg. 1131 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 46 (c) Liquidate all Development Security, Performance Security, or Buyer Credit Support (as applicable) then held by or for the benefit of the Secured Party free from any claim or right of any nature whatsoever of the Posting Party, including any equity or right of purchase or redemption by the Posting Party.

The Secured Party shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce the Posting Party’s obligations under this Agreement; provided, that the Posting Party shall remain liable for any amounts owing to the Secured Party after such application, except to the extent limited in this Agreement, subject to the Secured Party’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full.

8.11 Buyer Statements. Buyer shall provide to Seller the location where Buyer publishes its unaudited quarterly and audited annual financial statements of the Buyer (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. Except as provided in Exhibit D-1, 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 electronic mail or other electronic means) and if concurrently with the transmittal of such electronic communication the sending Party provides a copy of such electronic Notice by hand delivery or express courier, at the time indicated by the time stamp upon delivery without any bounce back or rejection; 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 and Replacement RA Notices, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission.

ARTICLE 10

FORCE MAJEURE

10.1 Definition.
(a) “Force Majeure Event” means any act or event occurring after the Effective Date that delays or prevents a Party from timely performing all or a portion of its Packet Pg. 1132 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 47 obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance.
(b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic or pandemic; quarantine; landslide; mudslide; sabotage; terrorism; earthquake or other cataclysmic events; an act of public enemy; cyber-attack; war; blockade; civil insurrection; riot; civil disturbance; or strikes or other labor difficulties caused or suffered by a Party or any third party, except as set forth below. For the avoidance of doubt, so long as the event, despite the use of reasonable efforts, cannot be avoided by, and is beyond the reasonable control of (whether direct or indirect) and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance, Force Majeure Event may include the impacts of and efforts to combat or mitigate the epidemic disease designated COVID-19 and the related virus designated SARS-CoV-2 and any mutations thereof (“COVID-19”). For the period of time prior to the Commercial Operation Date, a Force Majeure Event includes delays caused by the PTO that result in the Interconnection Facilities not being complete and ready for the Facility to connect and sell Product to Buyer at the Delivery Point by the Guaranteed Commercial Operation Date, despite the exercise of diligent and commercially reasonable efforts by Seller. (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 electric energy 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 as described above that disables physical or electronic facilities necessary to transfer funds to the payee Party; (iv) a Curtailment Order except to the extent caused by a Force Majeure Event; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility except to the extent such inability is caused by a Force Majeure Event; or (vi) 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 from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove Packet Pg. 1133 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 48 such inability. 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 performance of one or more of its obligations hereunder is caused by a Force Majeure Event. Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party to make any payments due hereunder unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described herein that disables physical or electronic facilities necessary to transfer funds to the payee Party or renders payee staff unavailable to make payment, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Construction Start Date, or Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(i) or Section 11.1(b)(ii) and receive a Damage Payment upon exercise of Buyer’s default rights pursuant to Section 11.2.

10.3 Notice. Within two (2) Business Days of obtaining knowledge of the commencement of 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 obtaining knowledge of a Force Majeure Event the claiming Party shall provide the other Party with Notice in the form of a letter describing in detail the occurrence giving rise to the Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance; provided that the failure of the claiming Party to notify the other Party within such two (2) Business Day period will not preclude the claiming Party from claiming a Force Majeure Event hereunder but for any Force Majeure Event notification provided after the two (2) Business Day period, the Force Majeure Event will be deemed to have commenced as of the date of such notice. Upon written request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from Seller’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 nonclaiming 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, Packet Pg. 1134 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 49 (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 unless such failure is the subject of a Force Majeure Event; (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; except for (1) failure to deliver Capacity Attributes, the exclusive remedies for which are set forth in Section 3.8; and (2) failures related to the Rolling Monthly Average Storage Availability that do not trigger the provisions of Section 11.1(b)(iii), the exclusive remedies for which are set forth in Section 4.8), and such failure 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); (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) The failure of Seller to achieve Construction Start within one hundred eighty (180) days after the Guaranteed Construction Start Date; (ii) the failure by Seller to achieve Commercial Operation within one hundred eighty (180) days after the Guaranteed Commercial Operation Date; (iii) if, in any two (2) consecutive Contract Years, the average Rolling Monthly Average Storage Availability over the two-year period is less than seventy percent (70%) and the Facility was not subject to a Transformer Failure; Packet Pg. 1135 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 50 (iv) if, Seller fails to maintain an average Efficiency Rate of at least seventy percent (70%) over a rolling 12-month period;
(v) if, Seller fails to maintain a Storage Capacity (as determined pursuant to Exhibit O) equal to at least seventy-five percent (75%) of the Storage Contract Capacity set forth on the Cover Sheet for longer than three hundred sixty (360) consecutive days and the Facility was not subject to a Transformer Failure during such period, provided, that if a Transformer Failure occurred during such period, the Transformer Failure must be cured within eighteen (18) months;
(vi) if not remedied within ten (10) days after Notice thereof, the failure by Seller to deliver a Remedial Action Plan required under Section 2.4; (vii) failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 within five (5) Business Days after Notice and expiration of the cure periods set forth therein; or
(viii) the occurrence of a Letter of Credit Default and 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 ten (10) Business Days after Seller receives Notice of the occurrence of a Letter of Credit Default.
(c) with respect to Buyer as the Defaulting Party, the occurrence of any of the following:
(i) failure by Buyer to satisfy the collateral requirements pursuant to Section 8.9 within five (5) Business Days after Notice and expiration of the cure periods set forth therein, with respect to the Buyer Credit Support amount in accordance with this Agreement in the event of a Buyer Downgrade Event; or
(ii) the occurrence of a Letter of Credit Default and the failure by Buyer to provide for the benefit of Seller 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 ten (10) Business Days after Buyer receives Notice of the occurrence of a Letter of Credit Default.

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 (“NonDefaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
Packet Pg. 1136 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 51 (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)(i), Section 11.1(b)(ii)), 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 the Terminated Transaction and the Event of Default related thereto.

11.3 Termination Payment. The termination payment (“Termination Payment”) for the Terminated Transaction shall be the aggregate of all Settlement Amounts plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the net Settlement Amount shall be zero. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties 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. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with the Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is the exclusive remedy of the Non-Defaulting Party in connection with the Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.

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 the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to the NonDefaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.

Packet Pg. 1137 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 52 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.

11.7 Seller’s Pre-COD Liability Limitation. Notwithstanding any other provision of this Agreement, if this Agreement is terminated pursuant to Section 11.2 prior to the Commercial Operation Date and Seller is the Defaulting Party, Seller’s aggregate liability for any Event of Default other than arising due to fraud, misrepresentation, or willful misconduct shall be limited to an amount equal to two hundred percent (200%) of the amount of Development Security.

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, 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.

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 Packet Pg. 1138 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 53 MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO

REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. THE

VALUE OF ANY INCENTIVES, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S EVENT OF DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO

MITIGATE AFTER USE OF COMMERCIALLY REASONABLE EFFORTS), AND

AMOUNTS DUE IN CONNECTION WITH THE RECAPTURE BY THE INTERNAL

REVENUE SERVICE DUE TO A DEFAULT BY BUYER OF ANY INCENTIVES

PREVIOUSLY RECEIVED BY SELLER, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES.

TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.8, 4.8, 11.2, 11.3 AND AS PROVIDED IN EXHIBIT B, EXHIBIT C, 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:
(f) 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. (g) 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 Packet Pg. 1139 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 54 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. (h) 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. (i) 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. (j) Seller shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals, including, without limitation those related to employment discrimination and prevailing wage, non-discrimination and non-preference, and conflict of interest. (k) Seller shall maintain Site Control throughout the Delivery Term. (l) Seller shall obtain or cause to be obtained any and all applicable permits and approvals, including without limitation, environmental clearance under the California Environmental Quality Act (“CEQA”) or other environmental law, from the local jurisdiction where the Facility will be constructed. Seller acknowledges that Buyer is purchasing the Product under this Agreement and does not intend to be the lead agency for the Facility. (m) Seller shall source and install batteries from a manufacturer that has at least one (1) gigawatt (GW) of utility scale batteries installed and in operation.

13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a validly existing California joint powers authority, and has the legal power and authority to own its properties, to carry on its business as now being conducted and to enter into this Agreement, and to carry out the transactions contemplated hereby, and to perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement.
(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 Packet Pg. 1140 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 55 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.

13.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(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 for the operation of the Facility and for Seller 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 and Workforce Development
Seller shall 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 construction of the Facility are paid wages at rates not less than those prevailing for workers performing similar work in the locality in which the Facility is located in accordance with the prevailing wage requirements for eligibility for increased tax credits under Sections 45(b)(6)-(7) or Sections 48(a)(9)-(10), as applicable, of the United States Internal Revenue Code of 1986, or any successor statute (“Prevailing Wage Requirement”). To the extent applicable to the construction of the Facility, Seller shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations, and orders and decrees of any courts or administrative bodies or tribunals, including without limitation employment discrimination laws and prevailing wage Packet Pg. 1141 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 56 laws. Seller or its construction contractor for the Facility may either (i) execute a project labor agreement with the appropriate building or construction trade unions for construction of the Facility, or (ii) award the contract for construction to a union signatory entity which will employ a union workforce governed by that entity’s existing labor agreements.

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) will 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. Any assignment made in violation of the conditions to assignment set out in this Article 14 shall be null and void. Buyer shall reasonably cooperate with Seller or any Lender, to execute or arrange for the delivery of consents (subject to Section 14.2), and estoppels reasonably requested (where “reasonably” and “reasonable” means that no additional burdens other than noticing are placed upon Buyer) by Seller or Lender in order to consummate any financing or refinancing and shall enter into reasonable agreements with such Lender that provide that Buyer recognizes the Lender’s security interest and provide notice of default as may be reasonable requested by Seller, such Lender or potential Lender; provided, however, Buyer will have no obligation to provide any consent, or enter into any agreement, that adversely affects any of Buyer’srights, benefits, risks or obligations under this Agreement. Seller shall be responsible for Buyer’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by Seller, including without limitation reasonable attorneys’ fees.

14.2 Collateral Assignment.

Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility. In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith work with Seller and Lenders to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”). 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 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 this Agreement as a result of such Event of Default; provided that any cure period Packet Pg. 1142 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 57 specific in this Agreement shall not commence as to Lender 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 a written notice to Buyer before the later of (i) the expiration of any cure period, and (ii) five (5) 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 (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 exceedone hundred eighty (180) days without the written consent of Buyer, 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, but in no event shall the cure period exceed two hundred and seventy (270) days;
(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 to Lender to develop a plan to cure the Event of Default;
(ii) Impediments to the cure plan or its development;
(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) If this Agreement is transferred to Lender pursuant to subsection (b) above, Lender must assume all of Seller’s obligations arising under this Agreement on and after the date of such assumption; provided, before such assumption, if Buyer advises Lender that Buyer will require the Lender to cure (or cause to be cured) any Event of Default (other than any Events of Default which relate (i) to Seller’s bankruptcy or similar insolvency proceedings, or (ii) to representations and warranties made by Seller, or to Seller’s failure to perform obligations which, in either case are personal to Seller) 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, or
Packet Pg. 1143 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 58 (ii) Not assume this Agreement.
(e) If Lender elects to transfer this Agreement, then Lender must cause the transferee to assume all of Seller’s obligations arising under this Agreement as a condition of the sale or transfer. Such sale or transfer may be made only to an entity that meetsthe definition of Permitted Transferee. Lender shall be responsible for Buyer’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any transfer of this Agreement by Lender, including without limitation reasonable attorneys’ fees.

14.3 Permitted Assignments by Seller. Except as may be precluded by, or would cause Buyer to be in violation of, the Political Reform Act (Cal. Gov. Code Section 81000 et seq.) or the regulations thereto, California Government Code Section 1090, or any other conflict of interest Law, Seller may, without the prior written consent of Buyer, transfer or assign this Agreement, including through a Change of Control, to (a) an Affiliate of Seller, or (b) any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of law); if, and only if:
(i) In the case of (b) only, the assignee is a Permitted Transferee; (ii) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed assignment; and
(iii) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests that (x) provides that such Person will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment and (y) certifies that such Person meets the definition of a Permitted Transferee.

Except as provided in the preceding sentence, any assignment by Seller or its successors or assigns under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Buyer.

Seller shall be responsible for Buyer’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by Seller, including without limitation reasonable attorneys’ fees.

14.4 Buyer Limited Assignment Right. Notwithstanding anything to the contrary in this Agreement, Buyer may make a limited assignment of Buyer’s right to receive all or a portion of the Product that would otherwise be delivered to Buyer hereunder to an entity (“Limited Assignee”) that has, or provides a parent guaranty, in form and substance reasonably acceptable to Seller from an entity with a credit rating equal to or greater than an Investment Grade Credit Rating of Buyer’s right to receive Product (which shall not be for retail sale) and its obligation to make payments to Seller, which assignment shall be expressly subject to Limited Assignee’s timely payment of amounts due under this Agreement, at any time upon not less than thirty (30) days’ Notice by delivering a written request for such assignment. In connection with any such assignment, Buyer and Seller agree to execute a limited assignment agreement in a form that is reasonably acceptable to Buyer, Seller, and each Party’s respective Lenders and financing parties.

Packet Pg. 1144 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 59 For the avoidance of doubt, Buyer will remain responsible for all its obligations under this Agreement related to such assigned Product, including (i) the obligation to pay for such Product to the extent the assignee thereof does not do so and (ii) any damages associated with such assignee’s failure to take any such Product. Buyer shall be responsible for Seller’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by Buyer, including without limitation reasonable attorneys’ fees.

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. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in Placer County, California.

15.2 [Reserved].

15.3 [Reserved].

15.4 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 Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly and informally without significant legal costs. If the Parties are unable to resolve a dispute arising hereunder within thirty (30) days after Notice of the dispute, the Parties may pursue all remedies available to them at Law in or equity.

ARTICLE 16

INDEMNIFICATION

16.1 Indemnification. Seller agrees to defend, indemnify and hold harmless Buyer, its directors, officers, agents, attorneys, consultants, employees and representatives from and against all third party claims, demands, losses, liabilities, penalties, and expenses, including reasonable attorneys’ and expert witness fees (collectively, “Indemnifiable Event”) arising from negligence, willful misconduct, or breach of the Agreement (collectively, “Indemnifiable Losses”).

16.2 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, Buyer will promptly provide Notice to Seller in writing of any damage, claim, loss, liability or expense which Buyer 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 Buyer regarding the Indemnifiable Loss.

Packet Pg. 1145 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 60 16.3 Failure to Provide Notice. A failure to give timely Notice or to include any specified information in any Notice as provided in 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.

16.4 Defense of Claims. If, within thirty (30) Business Days after giving a Notice of Claim regarding a Claim to Seller pursuant to Section 16.2, Buyer receives Notice from Seller that Seller has elected to assume the defense of such Claim, Seller will not be liable for any legal expenses subsequently incurred by Buyer in connection with the defense thereof; provided, however, that if Seller fails to take reasonable steps necessary to defend diligently such Claim within thirty (30) Business Days after receiving Notice from Buyer that Buyer believes Seller has failed to take such steps, or if Seller has not undertaken fully to indemnify Buyer in respect of all Indemnifiable Losses relating to the matter, Buyer may assume its own defense, and Seller will be liable for all reasonable costs or expenses, including attorneys’ fees, paid or incurred in connection therewith. Without the prior written consent of Buyer, Seller will not enter into any settlement of any Claim which would lead to liability or create any financial or other obligation on the part of Buyer for which Buyer is not entitled to indemnification hereunder; provided, however, that Seller may accept any settlement without the consent of Buyer if such settlement provides a full release to Buyer and no requirement that Buyer 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 Buyer for which Buyer is not entitled to indemnification hereunder and Seller desires to accept and agrees to such offer, Seller will give Notice to Buyer to that effect. If Buyer fails to consent to such firm offer within thirty (30) calendar days after its receipt of such Notice, Buyer may continue to contest or defend such Claim and, in such event, the maximum liability of Seller to Buyer under such Claim will be the amount of such settlement offer, plus reasonable costs and expenses paid or incurred by Buyer up to the date of such Notice.

16.5 Subrogation of Rights. Upon making any indemnity payment, Seller will, to the extent of such indemnity payment, be subrogated to all rights of Buyer against any third party in respect of the Indemnifiable Loss to which the indemnity payment relates; provided that until Buyer recovers full payment of its Indemnifiable Loss, any and all claims of Seller against any such third party on account of said indemnity payment are hereby made expressly subordinated and subjected in right of payment to Buyer’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.

16.6 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.

Packet Pg. 1146 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 61 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 Two Million Dollars ($2,000,000) per occurrence, and an annual aggregate of not less than Five Million Dollars ($5,000,000), 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 Ten Million Dollars ($10,000,000).

Defense costs shall be provided as an additional benefit and not included with the limits of liability.

Such insurance shall contain standard cross-liability and severability of interest provisions.

Insurance may be evidenced through primary and excess policies. (b) Employers’ Liability Insurance. Seller shall maintain, or cause to be maintained at its sole expense Employers’ Liability insurance with One Million Dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) 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 One Million Dollars ($1,000,000) 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 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.
(f) Contractor’s Pollution Liability. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, Pollution Legal Liability Insurance in the amount of Two Million Dollars ($2,000,000) per occurrence and in the aggregate, naming the Seller (and Lender if any) as additional named insured.
(g) Subcontractor Insurance. Seller shall require all of its Major Subcontractors to carry the same levels of insurance as Seller, provided Major Subcontractors shall not be required to carry Construction All-Risk Insurance. All Major Subcontractors shall include Seller as an Packet Pg. 1147 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 62 additional insured to (i) comprehensive general liability insurance; (ii) workers’ compensation insurance and employers’ liability coverage; and (iii) business auto insurance for bodily injury and property damage. All Major Subcontractors 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 sixty (60) days after the Effective Date and upon annual renewal of required insurance coverage thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage as is required to be in effect at the times specified above. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material 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.

ARTICLE 18

CONFIDENTIAL INFORMATION

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

18.2 Duty to Maintain Confidentiality. Upon receiving or learning of Confidential Information, the Receiving Party will: (a) treat such Confidential Information as confidential and use reasonable care not to divulge such Confidential Information to any third party except as set forth in this Article 18; (b) restrict access to such Confidential Information to only those of its Affiliates and its and their employees, officers, directors, advisors (including legal and accounting advisors), agents, contractors, subcontractors, actual and potential lenders, equity investors (including tax equity), and other financing parties (including Lenders), and actual and potential acquirors and assignees, and with respect to Buyer as the Receiving Party Buyer’s Participating Members, in each case who reasonably need to know it and are bound by confidentiality provisions no less stringent than those in this Article 18; and (c) use such Confidential Information for purposes of administering this Agreement and, in cases where Seller is the Receiving Party, for the purpose of developing, financing, owning, and operating the Facility. Confidential Information will retain its character as Confidential Information but may be disclosed by the Receiving Party if and to the extent such disclosure is required (a) to be made by any requirements of Law, (b) pursuant to an order of a court or (c) in order to enforce this Agreement; provided, each Party shall, Packet Pg. 1148 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 63 to the extent practicable, use reasonable efforts to prevent or limit the disclosure. 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, 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. If the Disclosing Party takes no such action after receiving the foregoing notice from the Receiving Party, 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 or its performance, 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.) and Buyer shall incur no liability arising out of any disclosure of such information or documentation provided in connection with this Agreement, including Confidential Information, that is subject to public disclosure under the California Public Records Act.

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 compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth in this Article 18. 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 except as otherwise limited under this Agreement (but notwithstanding any prohibition contained in the last paragraph of Section 12.2), in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Article 18 or the continuation of any such breach, without the necessity of proving actual damages or the posting of any bond.

18.4 Disclosure to Lenders, Etc. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by Seller to any actual or potential Lender or investor or any of their Affiliates, and Seller’s actual or potential agents, consultants, contractors, or trustees, so long as the Person to whom Confidential Information is disclosed agrees in writing to be bound by the confidentiality provisions no less stringent than those in this Article 18.

18.5 Public Announcements. Except as may otherwise be required by applicable Law, neither Party will, nor will it allow its affiliates, contractors and vendors to, make any public announcement, press release or statement regarding this Agreement unless the public announcement, press release or statement is approved in advance by the other Party, in its reasonable discretion.

Packet Pg. 1149 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 64 ARTICLE 19

MISCELLANEOUS

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

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

19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy 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, 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 Packet Pg. 1150 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 65 to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable law.

19.7 Counterparts; 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.

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 or Buyer or its constituent members, in connection with this Agreement.

19.11 Forward 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.

19.12 Service Contract. The Parties intend this Agreement to be a “service contract” within the meaning of Section 7701(e) of the Internal Revenue Code of 1986, as amended.

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.

Packet Pg. 1151 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 66 19.14 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, 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.
[Signatures on following page]
Packet Pg. 1152 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement [Signature Page to Energy Storage Service Agreement]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

Trolley Pass Project LLC
By:

Name:

Title:

NORTHERN CALIFORNIA POWER
AGENCY, a California Joint Action Agency
By:

Name:

Title:

Packet Pg. 1153 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit A - 1

EXHIBIT A

FACILITY DESCRIPTION
Name of Facility: Trolley Battery Energy Storage Project Owner: Seller
Type of Facility: Battery Energy Storage System
Qualified Operator: Seller shall provide notice of the initial Qualified Operator(s) to Buyer at least thirty (30) days prior to Initial Synchronization Site Address: 8996 Etiwanda Ave, Rancho Cucamonga, CA 91739 (new address to be created during subdivision process)
Site includes all or some of the following APNs: Portion of APN 022928379 (new APN to be created during subdivision process)
County: San Bernardino County
CEQA Lead Agency: City of Rancho Cucamonga
Delivery Point: Facility PNode described in the CAISO Full Network Model.

Facility P-node: To be established prior to the Commercial Operation Date at the Southern California Edison Etiwanda Substation 230 kV bus. Seller shall promptly notify Buyer following the establishment of the P-node.

Facility Meter: CAISO Metered Entity
Facility Interconnection Point: The Facility shall interconnect to the Etiwanda Substation 230 kV Substation (the “Interconnection Point”)
Participating Transmission Owner: Southern California Edison Company (“SCE”) Energy Management Software: Seller must provide remotely operable, 2-4 second timestamps, data historian (at least 5 years of storage), SCADA/AGC communication and operability with the Facility controller and offtaker, and include the following applications/modes:
• Dynamic Voltage Support
• Shifting
• Regulation
• Flexible Ramp
• Spinning Reserve
Operating Characteristics of Facility:

Maximum Stored Energy Level at COD: 1,200 MWh
Packet Pg. 1154 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit A - 2
Maximum Charging Capacity at COD: 300 MW
Maximum Discharging Capacity at COD: 300 MW
Operating Restrictions of Facility: See Exhibit D-2 and Exhibit Q Storage Contract Capacity: See definition in Section 1.1 Facility Battery Manufacturer/Make/Model: Canadian Solar (E-storage) Solbank 3.0 provided Seller may update in its sole discretion
Facility Battery Warranty: 20-years provided Seller may update in its sole discretion Site Map:

Packet Pg. 1155 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit B - 1

EXHIBIT B

FACILITY CONSTRUCTION AND COMMERCIAL OPERATION

1. Facility Construction.
(a) “Construction Start” will occur following Seller’s execution of an engineering, procurement and construction (EPC) contract related to the Facility and issuance of a full notice to proceed with the construction of the Facility under the EPC contract, mobilization to site by Seller and/or its designees, and includes the physical movement of soil at 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 cause Construction Start to occur no later than the Guaranteed Construction Start Date.
(b) 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. (c) If Seller fails to achieve Construction Start on or before the Guaranteed Construction Start Date, Seller shall pay Construction Delay Damages to Buyer for each day of delay in achieving Construction Start. Construction Delay Damages shall be paid to Buyer in arrears on a monthly basis. 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 Construction Delay Damages set forth in such invoice. 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 (other than set forth in (y) below) for Seller’s unexcused delay in achieving Construction Start on or before 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)(i) 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 to Buyer substantially in the form of Exhibit H (the “COD Certificate”) (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. Buyer shall respond to Seller’s notification that it has provided the required documentation to Buyer and met the conditions for achieving Commercial Operation within five (5) Business Days of receipt of Notice or be deemed to have accepted such Notice. The “Commercial Operation Date” shall be the date on which Commercial Operation is achieved; provided, the Commercial Operation Date shall not be earlier than the date that is one hundred twenty (120) days prior to the Expected Commercial Operation Date.

Packet Pg. 1156 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit B - 2
(a) Seller shall cause Commercial Operation for the Facility to occur by the Expected Commercial Operation Date (as such date may be extended by the Development Cure Period (defined below), the “Guaranteed Commercial Operation Date”). Seller shall notify Buyer 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 minus an amount (but not exceeding the amount of Construction Delay Damages paid by Seller) equal to the commercially reasonable and documented costs actually incurred by Buyer to procure products in substitution for the Product as a result of such delay. Seller shall include a request for refund of the 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, as it may be extended as provided herein, Seller shall pay COD Delay Damages to Buyer for each day after the Guaranteed Commercial Operation Date until the Commercial Operation Date to Buyer in advance on a monthly basis. A prorated amount will be returned to Seller if COD is achieved during the month for which COD Delay Damages were paid in advance.

The Parties agree that Buyer’s receipt of COD Delay Damages shall be Buyer’s sole and exclusive remedy (other than set forth in (y) below) for Seller’s failure to achieve the Commercial Operation Date on or before 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 declare an Event of Default pursuant to Section 11.1(b)(ii) and receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2.

3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation within one hundred eighty (180) days after the Guaranteed Commercial Operation Date, Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and Section 11.2.

4. Extension of the Guaranteed Dates. The Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall both, subject to notice and documentation requirements set forth below, be extended on a day-for-day basis due to delays arising out of the following circumstances to the extent such circumstances are not the result of Seller’s failure to take all commercially reasonable actions to meet its requirements herein:
(a) Force Majeure Event;
(b) Buyer Delay.

Notwithstanding the foregoing, the cumulative day-for-day extensions granted above (other than extensions granted pursuant to clause 4(b) above) shall not exceed a period of up to one-hundred eighty (180) days on a cumulative basis (the “Development Cure Period”). No extension shall be given under the Development Cure Period if, and to the extent that (a) the delay was due to Seller’s failure to take commercially reasonable actions to meet its requirements and deadlines or, with respect to a Force Majeure Event, does not otherwise satisfy the requirements of a Force Packet Pg. 1157 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit B - 3
Majeure Event, (b) Seller failed to provide requested documentation as provided below, or (c) with respect to a Force Majeure Event, Seller failed to provide written notice of such Force Majeure Event to Buyer as required under this Agreement. Upon written request from Buyer, Seller shall promptly provide documentation demonstrating to Buyer’s reasonable satisfaction that the delay was the result of one of the circumstances set forth above and did not result from Seller’s actions or failure to take commercially reasonable actions.

5. Failure to Reach 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 one hundred twenty (120) days after the Commercial Operation Date to install additional capacity or Network Upgrades such that the Installed Battery Capacity is equal to (but not greater than) 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 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, in an amount equal to Two Hundred Fifty Thousand Dollars ($250,000) for each MW that the Storage Contract Capacity exceeds the Installed Battery Capacity, and the Storage Contract Capacity and other applicable portions of the Agreement shall be adjusted accordingly.

Packet Pg. 1158 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit C - 1

EXHIBIT C

COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C. (a) Storage Rate. All Storage Product shall be paid on a monthly basis at the Storage Rate multiplied by 1,000, multiplied by the Storage Capacity for such month, as adjusted for the most recent Storage Capacity Test, multiplied by the Availability Adjustment for such month (as determined under Exhibit P). Such payment constitutes the entirety of the amount due to Seller from Buyer for the Storage Product. If the Storage Capacity is adjusted pursuant to a Storage Capacity Test on any day other than the first day of a calendar month, payment shall be calculated separately for each portion of the month in which the different Storage Capacity is applicable. (b) Liquidated Damages for Failure to Achieve Guaranteed Efficiency Rate. If during any month during the Delivery Term, the Efficiency Rate applicable to such month is less than the Guaranteed Efficiency Rate, Seller shall owe liquidated damages to Buyer, which damages shall be calculated by multiplying (i) the total Charging Energy for such month, by (ii) the percentage amount by which such applicable Efficiency Rate is less than the Guaranteed Efficiency Rate, by (iii) the simple average of the On-Peak Hour Day-Ahead Market LMP for all the hours of the applicable month, as published by the CAISO, for the Delivery Point, provided, that if the foregoing calculation results in a negative value, then Seller shall pay Buyer the absolute value of such result, which amount shall be credited by Seller against amounts owed by Buyer in the applicable monthly invoice.
(c) Incentives. Other than as provided in Section 2.5, the Parties agree that the Storage Rate is not subject to adjustment or amendment if Seller fails to receive any Incentives, or if any Incentives expire, are repealed or otherwise cease to apply to Seller or the Facility in whole or in part, or Seller or its investors are unable to benefit from any Incentives. Seller shall bear all risks, financial and otherwise, throughout the Contract Term, associated with Seller’s or the Facility’s eligibility to receive Incentives or to qualify for accelerated depreciation for Seller’s accounting, reporting or Tax purposes. The obligations of the Parties hereunder, including those obligations set forth herein regarding the purchase and price for and Seller’s obligation to deliver Product, shall be effective regardless of whether the sale of Product is eligible for, or receives Incentives during the Contract Term.

Packet Pg. 1159 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit D-1 - 1
EXHIBIT D-1

SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon Initial Synchronization of the Facility to the CAISO Grid, Buyer shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for the delivery of 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 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, 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. Prior to the Commercial Operation Date, Buyer as Scheduling Coordinator shall reasonably assist with the need for the Facility to test, commission and to timely achieve the Commercial Operation Date, and Buyer shall not provide any scheduling instructions which interferes with those purposes. Buyer (as the Facility’s Scheduling Coordinator) shall submit bids to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and the Scheduling and operating procedures developed under Exhibit D-2 for Product on a day-ahead, hour-ahead, fifteen-minute market, real time or other market basis that may develop after the Effective Date, as determined by Buyer.
(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 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, or must offer waiver forms. Seller shall cooperate with Buyer to provide such notices, information and updates in accordance with the applicable requirements of the CAISO Tariff and the Scheduling and operating procedures developed under Exhibit D-2. If the web-based system is not available, Seller shall promptly submit such information to Buyer and the CAISO (in order of preference) telephonically or electronic mail to the personnel designated to receive such information. (c) CAISO Costs and Revenues. Except as otherwise set forth below or elsewhere in this Agreement, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including penalties, Imbalance Energy costs or revenues, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance 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.

Seller shall be liable for and reimburse Buyer for any and all CAISO costs and penalties incurred by Buyer in its role as Scheduling Coordinator under a CAISO settlement statement because of Seller’s failure to perform any covenant or obligation set forth in this Agreement, or Seller’s failure Packet Pg. 1160 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit D-1 - 2
to comply with applicable provisions of the CAISO Tariff or the outage notification requirements set forth in this Agreement (each except to the extent such non-compliance is caused by Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility). The Parties agree that any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of Seller and for Seller’s account. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, 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 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 Scheduling Coordinator) 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 shall 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 require Buyer to 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 such 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. If requested by Seller, Buyer (as the Facility’s SC) shall 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 to the extent they relate to CAISO charges payable by Seller with respect to the Facility that Seller has directed Buyer to dispute.
(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 as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration or earlier termination date.
(g) Master Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent.

Packet Pg. 1161 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit D-1 - 3
(h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall 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 that Buyer (as Scheduling Coordinator) has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) related to Seller’s compliance with NERC reliability standards. Buyer (as Scheduling Coordinator) shall be responsible for Buyer’s compliance with NERC reliability standards related to Scheduling Coordinators. Unless otherwise specifically provided for herein, the Parties acknowledge that Buyer and Seller are both individually responsible for compliance with the WECC and NERC reliability standards and criteria applicable to the functions for which each Party is respectively registered with NERC. The reference to WECC and NERC reliability standards, if any, throughout this Agreement does not make any alteration to, or enlargement of, the requirements or standards applicable to each Party beyond their individual registrations with NERC; provided, however, each Party shall perform certain functions on behalf of, or in coordination with, the other Party, as further set forth in this Exhibit D-2. (i) Settlement Quality Meter Data (SQMD) Reporting. If Seller elects, or is required by the CAISO, to register the Facility as a Scheduling Coordinator Metered Entity, and therefore is required to submit a SQMD Plan for the Facility, then for any time period covered by the CAISO-approved SQMD Plan, and pursuant to Section 7.1, Seller shall provide or cause to be provided to Buyer (or Buyer’s designee including any Buyer Scheduling Coordinator) with respect to the Facility Meters, Settlement Quality Meter Data no later than eight (8) Business Days after the relevant flow date. In connection with any SQMD Plan or designation of the Facility as a Scheduling Coordinator Metered Entity (as defined in the CAISO Tariff), Buyer (as Scheduling Coordinator) shall reasonably cooperate with Seller and any meter data management agent retained by Seller to perform on behalf of the Scheduling Coordinator the SQMD Plan submission and approval process and the obligations required by the SQMD Plan or the CAISO Tariff applicable to a Scheduling Coordinator Metered Entity, including the submission of Settlement Quality Meter Data to the CAISO by the meter data management agent retained by Seller on behalf of Buyer, and such meter data management agent shall assist and support the Scheduling Coordinator with respect to any the submission of required affirmations and attestations by the Scheduling Coordinator (if any). To enable Seller or Seller’s meter data management agent to submit Settlement Quality Meter Data to the CAISO, Buyer shall grant Seller or Seller’s meter data management agent access to use the MRI-S System (or any alternate system designated by the CAISO) in accordance with the SQMD Plan and the CAISO Tariff; provided, Seller shall indemnify Buyer against any costs or penalties imposed on Buyer (as Scheduling Coordinator) as a result of the failure of Seller or any meter data management agent retained by Seller to submit or cause to be submitted Settlement Quality Meter Data consistent with the SQMD Plan to the CAISO, with respect to the Facility Meter(s).

Packet Pg. 1162 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit D-2 - 1
EXHIBIT D-2

BUYER AND SELLER OPERATING COORDINATION
The Parties shall work together after the Effective Date to develop Scheduling and operating procedures, which the Parties shall finalize no later than thirty (30) days prior to the Commercial Operation Date, or such other date agreed to by the Parties. Procedures may be reviewed annually (date and time to be mutually agreed), or as needed to account for actual Scheduling and operating requirements, to optimize operations for both Parties. The Parties shall cooperate to integrate the systems and controls necessary to implement such procedures. Such procedures to be developed may pertain to the following subjects or as otherwise agreed by the Parties: (i) voice and data communications; (ii) outage management and operational reliability data; (iii) event reporting; (iv) operating instructions and emergency assistance; and (v) Scheduling and bidding.

Packet Pg. 1163 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit E - 1

EXHIBIT E

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

1. Executive Summary.

2. Facility description.

3. Site plan of the Facility.

4. Description of any 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, including any OSHA labor hour reports.

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 likely to potentially 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. The utilization of union labor by Seller’s principal EPC contractor.

12. 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.

13. 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.

14. Any other documentation reasonably requested by Buyer.

Packet Pg. 1164 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit F-2 - 1

EXHIBIT F

FORM OF MONTHLY FORECAST
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 Packet Pg. 1165 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Exhibit G
-1

EXHIBIT G
[RESERVED]
Packet Pg. 1166 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 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 Northern California Power Agency, a California joint powers agency (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated [Date] by and between [Entity name, state of formation, type of entity] (“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. The Facility is fully operational, and interconnected, fully integrated and synchronized with the Transmission System.

2. Seller has installed equipment for the Facility with a nameplate capacity of no less than ninety-five percent (95%) of the Storage Contract Capacity.

3. Seller has commissioned all Facility equipment in accordance with its respective manufacturer’s specifications.

4. 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 the CAISO.

5. The Facility is fully capable of charging, storing and discharging energy up to no less than ninety-five percent (95%) 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.

6. Authorization to parallel the Facility was obtained from the Participating Transmission Owner.

7. The Transmission Provider has provided documentation supporting full unrestricted release for Commercial Operation.

8. The PTO has provided notification supporting Commercial Operation, in accordance with the PTO Tariff, as applicable.

9. Seller shall have caused the Facility to be included in the Full Network Model (as defined in the CAISO Tariff) and has the ability to offer Bids (as defined in the CAISO Tariff) into the CAISO Day-Ahead Market and Real-Time Market.

Packet Pg. 1167 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit H - 2
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:

Its:

Date:

Packet Pg. 1168 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit I - 1

EXHIBIT I

FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity is delivered by [licensed professional engineer] (“Engineer”) to Northern California Power Agency, a California joint powers agency (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated [Date] by and between [Entity name, state of formation, type of entity] (“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 following:

The Storage Capacity Test demonstrated a maximum operating capability that can be sustained for four (4) consecutive hours to discharge electric energy of MW 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:

Its:

Date:

Packet Pg. 1169 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit J - 1

EXHIBIT J

FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [Entity name, state of formation, type of entity] (“Seller”) to Northern California Power Agency, a California joint powers agency (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated [Date] 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 notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto;

2. the Construction Start Date occurred on _____________ (the “Construction Start Date”); and

3. the precise Site on which the Facility is located is:
_________________________________________ (such description shall amend the description of the Site in Exhibit A of the Agreement).

4. Seller or its construction contractor for the Facility has either (i) executed a project labor agreement with the appropriate building or construction trade unions for construction of the Facility, or (ii) awarded the contract for construction to a union signatory entity which will employ a union workforce governed by that entity’s existing labor agreements and provided reasonably requested documentation demonstrating such compliance.

IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
[SELLER ENTITY]
By:

Its:

Date:

Packet Pg. 1170 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit K - 1

EXHIBIT K

FORM OF LETTER OF CREDIT
(issued on behalf of Seller for the benefit of Buyer)
[BANK NAME and ADDRESS]
Irrevocable Standby Letter of Credit No:
[INSERT REFERENCE]
Beneficiary: Northern California Power
Agency
Date of Issuance: [INSERT ISSUANCE DATE]
Initial Expiration Date: [Must be at least one
year after date of issuance]
Applicant: [INSERT APPLICANT DETAILS]
As the Issuing Bank (“Issuer”), we, [Bank Name], hereby establish this irrevocable Standby Letter of Credit No. [INSERT REFERENCE] (this "Letter of Credit") in favor of the above-named beneficiary (“Beneficiary”) for the account of the above-named applicant (“Applicant”) in the amount of US$__________ (_________________ Million U.S. Dollars).

Beneficiary may draw all or any portion of this Letter of Credit at any time and from time to time, and Issuer will make funds immediately available to Beneficiary upon presentation of Beneficiary’s draft(s) at sight in substantially the form attached hereto as Exhibit “A” (“Sight Draft”), drawn on Issuer and accompanied by this Letter of Credit.

All Sight Drafts must be purportedly signed on behalf of Beneficiary, and the signator must indicate his or her title or other official capacity. No other documents will be required to be presented. Issuer will effect payment under this Letter of Credit within twenty-four (24) hours after presentment of any Sight Draft. Payment shall be made in U.S. Dollars with Issuer’s own funds in immediately available funds.

Issuer will honor any Sight Draft presented in substantial compliance with the terms of this Letter of Credit at the Issuer’s letterhead office, the office located at , [Bank Address] or any other full service office of the Issuer with our close of business on or before the above-stated expiration date, as such expiration date may be extended hereunder. Partial and multiple draws and presentations are permitted on any number of occasions. Following any partial draw, Issuer will endorse this Letter of Credit and return the original to Beneficiary. FUNDS UNDER THIS LETTER OF CREDIT ARE

AVAILABLE TO BENEFICIARY BY PRESENTATION IN STRICT COMPLIANCE WITH THE TERMS AND Packet Pg. 1171 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit K
CONDITIONS OF THIS LETTER OF CREDIT ON OR BEFORE 5:00 P.M., NEW YORK TIME, ON OR BEFORE A BUSINESS DATE OF THE EXPIRATION DATE.

FOR THE PURPOSES OF THIS LETTER OF CREDIT, “BUSINESS DAY” MEANS ANY DAY OTHER THAN A

SATURDAY, SUNDAY, OR OTHER DAY ON WHICH COMMERCIAL BANKS ARE AUTHORIZED OR REQUIRED TO CLOSE IN THE STATE OF NEW YORK.

This Letter of Credit is issued pursuant to the provisions of that certain Energy Storage Service Agreement between Beneficiary and Applicant dated as of _______________, 20__ (as the same may have been or may be amended from time to time, the “PPA”). Notwithstanding any reference in this Letter of Credit to the PPA or any other documents, instruments or agreements, or references in the PPA or any other documents, instruments or agreements to this Letter of Credit, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.

This Letter of Credit will be automatically extended each year without amendment for a successive period of one (1) year from the expiration date hereof, as extended, unless at least thirty (30) days prior to the expiration date, Issuer notifies Beneficiary by registered mail that it elects not to extend this Letter of Credit for such additional period. Notice of non-extension will be given by Issuer to Beneficiary at Beneficiary’s address set forth herein or at such other address as Beneficiary may designate to Issuer in writing at Issuer’s letterhead address.

This Letter of Credit is freely transferable by Beneficiary in whole or in part, and the number of transfers is unlimited. Issuer shall effect any transfers immediately upon presentation to Issuer of this Letter of Credit and a completed written transfer request substantially in the form attached hereto as Exhibit "B." Such transfer will be effected at no cost to Beneficiary. Any transfer fees assessed by Issuer will be payable solely by Applicant, and the payment of any transfer fees will not be a condition to the validity or effectiveness of the transfer of this Letter of Credit.

THIS LETTER OF CREDIT MAY NOT BE TRANSFERRED TO ANY PERSON WITH WHICH U.S. PERSONS ARE PROHIBITED FROM DOING BUSINESS UNDER U.S.

FOREIGN ASSETS CONTROL REGULATIONS OR OTHER APPLICABLE U.S. LAWS AND

REGULATIONS
Issuer waives any rights it may have, at law or otherwise, to subrogate to any claims which Beneficiary may have against Applicant or Applicant may have against Beneficiary.

All commissions, expenses, and charges incurred with this Letter of Credit are for the account of the Applicant.

This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein.

NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS LETTER OF CREDIT,

BENEFICIARY SHALL HAVE THE OPTION TO PRESENT TO US EACH DOCUMENT

REQUIRED UNDER THIS LETTER OF CREDIT AS AN ELECTRONIC OR PORTABLE DOCUMENT FORMAT (".PDF") ATTACHMENT TO AN EMAIL. TRANSMISSION MADE Packet Pg. 1172 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit K
FROM BENEFICIARY'S EMAIL ADDRESS TO US AT OUR EMAIL ADDRESS [INSERT];

PROVIDED THAT SUCH EMAIL TRANSMISSION MUST CONTAIN THE FOLLOWING CERTIFICATION “(I) WE CERTIFY THAT WE ARE THE BENEFICIARY OF THE LETTER OF CREDIT INDICATED IN THE .PDF ATTACHMENT(S) AND (II) EACH DOCUMENT

WE HAVE TRANSMITTED TO YOU VIA ELECTRONIC MEANS RATHER THAN IN THE

FORM OF A PHYSICAL DOCUMENT REPRODUCES ALL TEST, IMAGES AND OTHER

FEATURES OF TH ORIGINAL DOCUMENT (INCLUDING ANY SIGNATURES AND ANY

UNIVERSALLY UNIQUE IDENTIFIER OR OTHER UNIQUE STRING OF CHARACTERS,

MARKS OR OTHER IDENTIFYING INFORMATION APPEARING ON SUCH DOCUMENT) AND HAS NOT BEEN ALTERED." ANY SUCH EMAIL TRANSMISSION SHALL BE DEEMED A SITE DRAFT.

THIS PRESENTATION MAY BE DELIVERED TO US IN ELECTRONIC FORM, AND SUCH ELECTRONIC COPY SHALL BE DEEMED TO BE THE ORIGINAL AND VALID FOR PURPOSES OF PRESENTATION HEREUNDER. IN

THE EVENT A REQUEST IS PRESENTED VIA EMAIL TO THE ISSUER, IT IS UNDERSTOOD AND AGREED THAT

THE ISSUER MAY ACT ON SUCH REQUEST WITHOUT THE NEED OR THE OBLIGATION TO SECURE THE ORIGINAL. IN ANY EVENT, THE ISSUER SHALL NOT BE LIABLE FOR ANY DISCREPANCY THAT MAY ARISE

BETWEEN THE REQUEST TRANSMITTED BY EMAIL AND THE ORIGINAL REQUEST DELIVERED AS PROVIDED HEREIN.

THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE INTERNATIONAL STANDBY PRACTICES 1998, INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 590 ("ISP98"). AS TO MATTERS NOT GOVERNED BY ISP98, THIS

LETTER OF CREDIT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE

WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE

CONFLICT OF LAW PROVISIONS THEREOF THAT WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

VERY TRULY YOURS,
[BANK NAME]
Packet Pg. 1173 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit K
_________________________________ _________________________________

AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
Packet Pg. 1174 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit K
(CONFIDENTIAL) EXHIBIT “A”

TO LETTER OF CREDIT

SIGHT DRAFT
Draft Number __________________
$____________________________
At sight (or electronic format as authorized in the Letter of Credit), pay to the order of [Name of Beneficiary to be inserted], the amount of USD $____________ (__________________ and 00/100ths U.S. Dollars).

Value received and charged to the account of: [BANK NAME and ADRESS]. Drawn under [BANK NAME] Standby Letter of Credit No. [INSERT REFERENCE] Dated: _____________ Northern California Power Agency
By: ________________________
[name and title]
Account: [Applicant to be inserted]
Packet Pg. 1175 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit K
EXHIBIT “B”

TO LETTER OF CREDIT

FORM OF TRANSFER REQUEST
Irrevocable Standby Letter of Credit No. ____________________ Current Beneficiary: Applicant:
__________________________ ____________________________ __________________________ ____________________________ __________________________ ____________________________ __________________________ ____________________________ To: [Name of Issuer] ("Issuer")
The undersigned, as the current "Beneficiary" of the above-referenced Letter of Credit, hereby requests that you reissue the Letter of Credit in favor of the transferee named below [insert transferee name and address below]:
_____________________________
_____________________________
_____________________________
_____________________________
Packet Pg. 1176 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit K
From and after the date this transfer request is delivered to Issuer, the transferee shall be the "Beneficiary" under the Letter of Credit for all purposes and shall be entitled to exercise and enjoy all of the rights, privileges and benefits thereof.

Dated: ________________ Northern California Power Agency By: ______________________
Name: ______________
Title: ______________
[Notary Acknowledgement]
To be signed by a person purporting to be an authorized representative of Beneficiary and indicating his or her title or other official capacity, and acknowledged by a notary public.

Packet Pg. 1177 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit L
-1

EXHIBIT L
[RESERVED]
Packet Pg. 1178 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit M - 1

EXHIBIT M

FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) is delivered by [Entity name, state of formation, type of entity] (“Seller”) to Northern California Power Agency, a California joint powers agency (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated [Date] 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 3.7(d) of the Agreement, Seller hereby provides the below Replacement RA product information:

Packet Pg. 1179 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit N - 1

EXHIBIT N

NOTICES
Trolley Pass Project LLC
(“Seller”)
Northern California Power Agency
(“Buyer”)
All Notices:
11801 Domain Blvd, Suite 450
Austin, TX 78758
Attn: Tim Fagan, EVP Asset Management
Phone: (201) 669 - 9942
Email: [email protected]
All Notices:

Street: 651 Commerce Drive
City: Roseville, CA 95678
Attn: Contract Administration
Phone: 916-781-4229
Email: [email protected]
Email: [email protected]
Reference Numbers:

Duns: To be provided separately
Federal Tax ID Number: To be provided
separately
Reference Numbers:

Duns: To be provided separately
Federal Tax ID Number: To be provided
separately
Invoices:

Attn: Accounting Department
Phone: (647) 982 -9296
E-mail: [email protected]
Invoices:

Attn: Accounts Payable
Phone: 916-781-4221 / 4230
Email: [email protected]
Facsimile: 916-781-4255
Scheduling:

Attn: Director of Operations
Phone: TBD
Email: [email protected]
Scheduling:

Attn: NCPA Scheduling Desk
Phone: (DA CAISO Desk)
916-781-4290
Phone: (Real Time Desk)
916-781-4237
Email: [email protected]
Confirmations:

Attn: Tim Fagan
Email: [email protected]
Confirmations:

Attn: Tony Zimmer
Phone: 916-781-4229
Email: [email protected]
Payments:

Attn: See Invoices
Phone: See Invoices
E-mail: See Invoices
Payments:

Attn: See Invoices
Phone: See Invoices
Email: See Invoices
Packet Pg. 1180 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit N - 2
Trolley Pass Project LLC
(“Seller”)
Northern California Power Agency
(“Buyer”)
Wire Transfer: [Seller shall provide to Buyer
the information below at least 60 days prior
to the Commercial Operation Date.]
BNK:

ABA:

ACCT:

Wire Transfer:

BNK: Information provided upon request
ABA:

ACCT:

Notices of an Event of Default:

Attn: General Counsel
11801 Domain Blvd, Suite 450
Austin, TX 78758
Phone: (416) 779 -6681
Email: [email protected]
With copy to:

Attn: Tim Fagan
Phone: (201) 669 – 9942
Email: [email protected]
Notices of an Event of Default to:

Attn: Jane Luckhardt, General Counsel
Phone: 916-781-4268
Facsimile: 916-781-7693
Email: [email protected]
With copy to:

Attn: Tony Zimmer
Phone: 916-781-4229
Email: [email protected]
And
Attn: Mike Whitney
Phone: 916-781-4205
Email: [email protected]
Emergency Contact:

Attn: Tim Fagan
Phone: (201) 669 - 9942
Email: [email protected]
Emergency Contact:

Attn: Dispatch and Scheduling
Phone: 916-781-4281 / 4237
Email: Dispatch&[email protected]
Packet Pg. 1181 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement 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 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 Capacity and Efficiency Rate hereunder based on the actual capacity and measured round-trip efficiency of the 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. Up to twice per Contract Year, Buyer shall have the right to require Seller to schedule and complete a Storage Capacity Test. In addition, Buyer shall have the right to require a test or retest of the Storage Capacity Test at any time upon no less than five (5) 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 five (5) Business Days’ prior written Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice). (c) Test Results and Re-Setting of Storage Capacity and Efficiency Rate. No later than five (5) days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Facility Meter readings and plant log sheets verifying the operating conditions and output of the Facility. In accordance with Section

4.9(c) of the Agreement and Part II(I) below, the actual Efficiency Rate and Storage Capacity 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 Efficiency Rate at the beginning of the day following the completion of the test for calculating the Storage Rate and all other purposes under this Agreement. (d) Buyer’s Right to Witness Storage Capacity Tests. Buyer shall have the right to send one or more representative(s) to witness all Storage Capacity Tests. Buyershall (i) comply with all reasonable and notified Seller health and safety policies and procedures and instructions while present at the Site, and (ii) shall conduct itself in a manner that will not unreasonably interfere with the operation of the Facility or other activities of Seller and its subcontractors on the Site.

Buyer acknowledges that it will be escorted at all times while on the Site.

Storage Capacity Test Procedures
PART I. GENERAL.

Each Storage Capacity Test (including the initial Storage Capacity Test and all re-performances Packet Pg. 1182 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit O - 2
thereof) shall be conducted in accordance with Prudent Operating Practice 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. (a) Purpose of Test. Each SCT shall:
i. Determine an updated Storage Capacity;
ii. Determine the amount of energy required to fully charge the Facility; iii. Determine the Facility charge ramp rate;
iv. Determine the Facility discharge ramp rate;
v. Determine an updated Efficiency Rate.
(b) Test Elements. Each SCT shall include the following test elements:
i. The measurement of charging energy exclusive of Station Use (for clarity, Station Use during an SCT shall not be subject to the carveout for energy consumed by end uses during charging and discharging) and Electrical Losses, as measured by the Facility Meter or other mutually agreed meter, that is required to charge the Facility up to the Maximum Stored Energy Level (as set forth in Exhibit Q) not to exceed the Storage Contract Output (MWh) (“Energy In”); ii. The measurement of discharging energy exclusive of Station Use (for clarity, Station Use during an SCT shall not be subject to the carveout for energy consumed by end uses during charging and discharging) and Electrical Losses, as measured by the Facility Meter or other mutually agreed meter, that is discharged from the Facility to the Delivery Point until the Stored Energy Level reaches zero MWh as indicated by the battery management system (“Energy Out”);
iii. Electrical output at Maximum Discharging Capacity (as defined in Exhibit A) at the Facility Meter (MW);
iv. Electrical input at Maximum Charging Capacity (as defined in Exhibit A) at the Facility Meter (MW);
v. Amount of time between the Facility’s electrical output going from 0 to Maximum Discharging Capacity;
vi. Amount of time between the Facility’s electrical input going from 0 to Maximum Charging Capacity;
Packet Pg. 1183 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit O - 3
vii. Amount of energy required to go from 0% Stored Energy Level to 100% Stored Energy 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 Facility, at ten (10) minute intervals:
i. discharge time (minutes);
ii. charging energy (MWh);
iii. discharging energy (MWh);
iv. 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:
i. Relative humidity (%);
ii. Barometric pressure (inches Hg) near the horizontal centerline of the Facility; and iii. Ambient air temperature (°F).
(e) Test Showing. Each SCT must demonstrate that the Facility:
i. successfully started;
ii. operated for at least four (4) consecutive hours at Maximum Discharging Capacity +/- 2%;
iii. operated for at least four (4) consecutive hours at Maximum Charging Capacity +/- 2%;
iv. has a Storage Capacity of an amount that is, at least, equal to the Maximum Stored Energy Level (as set forth in Exhibit Q); and
v. is able to deliver Discharging Energy to the Delivery Point as measured by the Facility Meter for four (4) consecutive hours at a rate equal to the Maximum Discharging Capacity +/-2%.
(f) Test Conditions.
i. General. At all times during a SCT, the Facility shall be operated in compliance with Prudent Operating Practice 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).

Packet Pg. 1184 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit O - 4
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. 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:
i. a record of the personnel present during the SCT thatserved in an operating, testing, monitoring or other such participatory role;
ii. the measured data for each parameter set forth in Part II.A through C, including copies of the raw data taken during the test;
iii. 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
iv. 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 StorageCapacity 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 Packet Pg. 1185 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit O - 5
review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then current Supplementary Storage Capacity Test 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 Delivery Point (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 Storage Contract Capacity set forth on the Cover Sheet, as such Storage Contract Capacity on the Cover Sheet may have been adjusted (if at all) under this Agreement, multiplied by (ii) four (4) hours), shall be divided by four (4) hours to determine the Storage Capacity, which shall be expressed in MW, and shall be the new Storage Capacity in accordance with Section 4.9(c) of the Agreement until updated pursuant to a subsequent Storage Capacity Test.
(k) Adjustment to Efficiency Rate. The total amount of Energy Out (as reported in Part II.B above) divided by the total amount of Energy In (as reported in Part II.B above), measured at the Facility Meter location, and expressed as a percentage, shall be the new Efficiency Rate, and shall be used for the calculation of liquidated damages (if any) under Exhibit C until updated pursuant to a subsequent Storage Capacity Test.

Part III. SUPPLEMENTARY STORAGE CAPACITY TEST PROTCOL
(a) Conditions Precedent to SCT
(j) Control System Functionality: The Facility control system shall be successfully configured to receive data from the battery system, exchange distributed network protocol 3 data with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points.
i. Communications: Remote Terminal Unit (RTU) testing should be successfully completed prior to SCT. The interface between Buyer’s RTU and the Facility SCADA system should be fully tested and functional prior to starting testing. This includes verification of data transmission pathway between the Buyer’s RTU and Seller’s control system interface and the ability to record SCADA data. ii. Commissioning Checklist: Commissioning checklist shall be successfully completed on all installed facility equipment, including verification that all controls, set points, and instruments of the control system are configured. iii. Control System Functionality: The control system is operable within the requirements and has been successfully configured to receive data from the battery system and transfer data to the onsite servers for the calculation, recording and archiving of data points.
iv. The following Commercial Operation tests will be repeated annually and to the extent feasible may be conducted simultaneously with any other tests:

Packet Pg. 1186 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit O - 6
• PMAX Capacity Test
• Round-Trip Efficiency and Energy Test
(b) PMAX Capacity Test
i. Purpose: This test will demonstrate the PMAX and will hold the Facility’s maximum operating level (MW), up to the Storage Capacity, for up to five (5) minutes (“Qualified Power Capacity”).
ii. Procedure:
a. System starting state: The Facility will be in the on-line state with each battery subsystem at 100% usable state of charge (SOC) and at an initial active power level of 0 MW and reactive power level of 0 MVAR. b. Record the Facility active power level at the Facility Meter. c. Command the Facility to follow a signal equal to the Facility’s maximum operating level for five (5) minutes.
d. Record and store the Facility active power response. Measurements will be made at the Facility Meter and by the control system with a recording in the Facility historian.
e. System end state: The Facility will be in the on-line state and at a commanded active power level of 0 MW.

Pass/Fail Criteria
The Facility active power response and the commanded level shall be within ±2% as measured by the sum of values at the Facility Meter. The time to full output shall be less than 2 seconds subject to CAISO or Transmission Owner limitations to the contrary.

The hold period of such active power value shall be five (5) minutes and recorded in the control system historian.

Passed Failed Date:

Test Performed by:

Test Witnessed by:
(c) Round-Trip Efficiency and Energy Test
i. The following test demonstrates the updated Efficiency Rate and amount of energy required to fully charge the Facility (when performed annually or ad hoc).

Packet Pg. 1187 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit O - 7
a. The resulting quantity of discharging energy is the Energy Out (as reported in Part II.B above) and the resulting quantity of charging energy is the Energy In (as reported in Part II.B above). b. The Qualified Energy is the sum of the total quantity of Discharging Energy at the Facility Meter.
c. The Facility will be operated in both the charge and discharge directions in the following order:
d. [Seller to specify, example language below]
e. [Set each Battery Subsystem to [3%] SOC.
f. Allow each Battery Subsystem to enter background cell balancing mode by maintaining a SOC of [3% for 20 minutes]. After the background cell balancing mode beginsthe system can be operated as normal. Allow the cell balancing function to operate in the background for at least 24 hours to allow the automatic cell balancing procedure to reach completion. This time may be reduced based on equipment suppliers’ recommendations. g. Discharge each Battery Subsystem to 0% SOC.
h. Immediately perform the Round-Trip Efficiency and Capacity Test set forth below.]
i. To be valid, the SCT must be started within twenty-four (24) hours of the end of the period (greater than four (4) days) during which cell balancing was completed. For the duration of the SCT, the control system will be configured to have the power limiting mechanisms disabled, and each battery subsystem shall be configured to follow the charge and discharge current limits specified by their respective battery management system. (d) Procedure:
i. System Starting State: The Facility will be in the on-line state with each Battery Subsystem at 0% SOC.
ii. Verify that in the previous twenty-four (24) hour period, each Battery Subsystem completed the cell balancing procedure allowing full cell balancing to occur, as described in steps i-iv.
iii. Record initial values of each Battery Subsystem SOC. iv. Command a real power charge that results in an AC power of Facility’s full charging power and continue the charge until the power is 2% different.

Packet Pg. 1188 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit O - 8
v. Record and store the AC energy charged to the system as measured at the Facility Meter. Measurements will be made by the Facility Meter with recording in the Facility historian.

1. Within 30 minutes, command a real power discharge that results in an AC power output of the Facility’s maximum discharge power. vi. Maintain the discharging until the power is 2% different. vii. Record and store the AC energy discharged as measured at the Facility Meter.

Measurements will be made by the Facility Meter with recording in the Facility historian.

Pass/Fail Criteria
The measured Efficiency Rate is greater than or equal to the Guaranteed Efficiency Rate. The Qualified Energy is greater than or equal to the Storage Contract Output.

Passed Failed Date:

Test Performed by:

Test Witnessed by:

Packet Pg. 1189 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit P - 1

EXHIBIT P

STORAGE FACILITY AVAILABILITY
Rolling Monthly Average Storage Availability and 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:
where:
m = relevant month “m” in which availability is calculated; MNTHHRSm is the total number of hours for the month.

UNAVAILHRSm, is the total number of hours in the month during which the Facility was unavailable to deliver Storage Product as reported in ether (a) Seller’s most recent Availability Notice or (b) by Seller’s real-time EMS data feed to Buyer for the Facility, for any reason other than the occurrence of any of the following (each, an “Excused Event”): a Force Majeure Event, Approved Maintenance Hours, Curtailment Orders, Buyer Failure, Storage Capacity Tests, System Emergencies, or the Operating Restrictions in Exhibit Q. 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 Facility for less than a full hour (as reported in either (a) or (b) above) will count as an equivalent percentage of the applicable hour(s) for this calculation. Additionally, if during any applicable hour the Facility is available, but for less than the full amount of the then effective Storage Capacity, the UNAVAILHRSm for such hour, or partial hour, shall be calculated by multiplying such UNAVAILHRSm by a percentage determined by dividing by (b); where (a) is the lower of such capacity amount reported as unavailable by (i) Seller’s real-time EMS data feed to Buyer for the Facility for such hours, or partial hours, and (ii) Seller’s most recent Availability Notice (as updated pursuant to Section

4.3(d)), and (b) is the then effective Storage Capacity.

If the Facility or any component thereof was previously deemed unavailable for an hour or part of an hour and Seller provides a revised Availability Notice indicating the Facility is available for that hour or part of an hour prior to the time the Buyer is required to schedule or bid the Facility in the Real-Time Market, and the Facility is reported as available in Seller’s real-time EMS data feed to Buyer for the Facility for such hour, or partial hour, the Facility will be deemed to be available to the extent set forth in the revised Availability Notice. (b) Rolling Monthly Average Storage Availability. Seller shall calculate an “Rolling Monthly Average Storage Availability” for each month of the Delivery Term by averaging the Monthly Storage Availabilities for each of the prior twelve (12) months; provided, for each month of the first (1st) Contract Year, Seller shall calculate the Rolling Monthly Average Storage Availability Packet Pg. 1190 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit P - 2
utilizing a Monthly Availability of 96% for any months that do not have a Monthly Storage Availability.

Availability Adjustment
The applicable “Availability Adjustment” or “AA” is calculated as follows:
i. If the Rolling Monthly Average Storage Availability is greater than or equal to the Guaranteed Storage Availability, then:

AA = 100%
ii. If the Rolling Monthly Average Storage Availability is less than the Guaranteed Storage Availability, then:

AA = 100% - (the Guaranteed Storage Availability – Rolling Monthly Average Storage Availability)
Packet Pg. 1191 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit Q - 1

EXHIBIT Q

OPERATING RESTRICTIONS
The Parties will develop and finalize the Operating Restrictions prior to the Commercial Operation Date, provided that the Operating Restrictions (i) may not be materially more restrictive of the operation of the Facility than as set forth below, unless agreed to by Buyer in writing, (ii) will, at a minimum, include the rules, requirements and procedures set forth in this Exhibit Q, (iii) will include protocols and parameters for Seller’s operation of the Facility in the absence of Charging Notices, Discharging Notices or other similar instructions from Buyer relating to the use of the Facility, and (iv) may include Facility Scheduling, Operating Restrictions and Communications Protocols.

Interconnection Capacity Limit: 300 MW
Maximum Stored Energy Level: 1,200 MWh
Minimum Stored Energy Level: 0 MWh
Maximum Charging Capacity: 300 MW
Minimum Charging Capacity: 0.01 MW
Maximum Discharging Capacity: 300 MW
Minimum Discharging Capacity: 0.01 MW
Maximum State of Charge (SOC) during
Charging:
100%
Minimum State of Charge (SOC) during
Discharging:
0%
Ramp Rate: The Facility shall have the ability to discharge at Maximum Discharging Capacity in two
seconds and shall reflect this ability in the
Facility Master File submitted to the CAISO to
the extent CAISO does not generally limit the
ability to do so.

Annual Cycles per Contract Year: 365 cycles with no monthly cap Daily Dispatch Limits: Charging: 1.5 per day
Discharging: 1.5 per
day Maximum Time at Minimum Stored
Energy Level:

N/A
Grid Charging of Facility: Yes
Packet Pg. 1192 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit Q - 2
Response Time: The Facility shall have the ability to execute the commanded power within two (2) seconds and
shall reflect this ability in the Facility Master
File submitted to the CAISO to the extent
CAISO does not generally limit the ability to do
so.

Ancillary Services Capability: The Facility shall be able to provide the following Ancillary Services: spinning reserve,
non-spinning reserve, regulation up, and
regulation down; provided, Ancillary Services
may be expanded in accordance with Section

4.5(g).

Packet Pg. 1193 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement Exhibit
R-1

EXHIBIT R

METERING DIAGRAM
Packet Pg. 1194 Attachment: Trolley BESS ESSA 06262025 (Redacted) (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement

THIRD PHASE AGREEMENT
FOR

ENERGY STORAGE SERVICE AGREEMENT
WITH

TROLLEY PASS PROJECT LLC
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THIRD PHASE AGREEMENT FOR BATTERY ENERGY STORAGE AGREEMENT

TABLE OF CONTENTS
Section 1. Definitions ....................................................................................................3 Section 2. Purpose .......................................................................................................10 Section 3. Sale and Purchase of Product ..................................................................10 Section 4. Billing and Payments ................................................................................11 Section 5. Security Deposit Administration.............................................................13 Section 6. Cooperation and Further Assurances.....................................................19 Section 7. Participant Covenants and Defaults .......................................................19 Section 8. Administration of Agreement .................................................................23 Section 9. Transfer of Rights by Participants...........................................................25 Section 10. Term and Termination..............................................................................26 Section 11. Withdrawal of Participants ......................................................................26 Section 12. Settlement of Disputes and Arbitration .................................................26 Section 13. Miscellaneous.............................................................................................26 EXHIBIT A. Project Participation Percentages...........................................................40 EXHIBIT B. Eenergy Storage Services Agreement ....................................................41 Packet Pg. 1196 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 1 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT This THIRD PHASE AGREEMENT (“this Agreement”) is dated as of ______________, 20__ by and among the Northern California Power Agency, a joint powers agency of the State of California (“NCPA”), and the signatories to this Agreement other than NCPA (“Participants”). NCPA and the Participants are referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS
A. NCPA has heretofore been duly established as a public agency pursuant to the Joint Exercise of Powers Act of the Government Code of the State of California and, among other things, is authorized to acquire, construct, finance, and operate buildings, works, facilities, and improvements for the generation and transmission of electric capacity and energy for resale.

B. Each of the Participants is a signatory to the Joint Powers Agreement which created NCPA and therefore is a Member.

C. Each of the Participants to this Agreement have executed the Amended and Restated Facilities Agreement, dated October 1, 2014, which establishes the framework under which Project Agreements are created for the development, design, financing, construction, and operation of specific NCPA Projects.

Packet Pg. 1197 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 2 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT D. The Participants desire NCPA to enter into an Energy Storage Service Agreement (“ESSA”) with Trolley Pass Project LLC (“Seller”), to purchase the Product for the benefit of the Participants’ customers.

E. Each Participant is authorized by its Constitutive Documents to obtain the Product for its present or future requirements, through contracts with NCPA or otherwise.

F. To enable NCPA to enter into the ESSA on behalf of the Participants, pursuant to the terms and conditions of the Amended and Restated Facilities Agreement, NCPA and the Participants wish to enter into this Agreement to provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the Participants pursuant to the ESSA, and to enable and obligate the Participants to take delivery of and pay for the Product and to pay NCPA for all costs it incurs for undertaking the foregoing activities.

G. Upon full execution of this Agreement, NCPA will enter into the ESSA on behalf of the Participants, and such ESSA shall be deemed a NCPA Project by the Commission.

H. Each of the Parties intends to observe the provisions of this Agreement in good faith and shall cooperate with all other Parties in order to achieve the full benefits of joint action.

I. The Parties desire to equitably allocate costs of NCPA’s provision of services under this Agreement among the Participants.

Packet Pg. 1198 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 3 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT J. The Participants further desire, insofar as possible, to insulate other Members who are not Participants, from risks inherent in the services and transactions undertaken on behalf of the Participants pursuant to this Agreement.

NOW, THEREFORE, the Parties agree as follows:

Section 1. Definitions.

1.1 Definitions. Whenever used in this Agreement (including the Recitals hereto), the following terms shall have the following respective meanings, provided, capitalized terms used in this Agreement (including the Recitals hereto) that are not defined in Section 1 of this Agreement shall have the meaning indicated in Section 1 of the Power Management and Administrative Services Agreement, dated October 1, 2014:

1.1.1 “Actual Contract Price Increase” has the meaning set forth in Section 1.1 of the ESSA.

1.1.2 “Administrative Services Costs” means that portion of the NCPA administrative, general and occupancy costs and expenses, including those costs and expenses associated with the operations, direction and supervision of the general affairs and activities of NCPA, general management, treasury operations, accounting, budgeting, payroll, human resources, information technology, facilities management, salaries and wages (including retirement benefits) of employees, facility operation and maintenance costs, taxes and payments in lieu of taxes (if any), insurance premiums, fees for legal, engineering, financial and other services, power management services, Packet Pg. 1199 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 4 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT general settlement and billing services and general risk management costs, that are charged directly or apportioned to the provision of services under this Agreement.

Administrative Services Costs as separately defined herein and used in the context of this Agreement is different and distinct from the term Administrative Services Costs as defined in Section 1 of the Power Management and Administrative Services Agreement.

1.1.3 “Agreement” means this Third Phase Agreement, including all Exhibits attached hereto.

1.1.4 "All Resources Bill” has the meaning set forth in the Power Management and Administrative Services Agreement.

1.1.5 “CAISO” means the California Independent System Operator Corporation, or its functional successor.

1.1.6 “CAISO Tariff” means the duly authorized tariff, rules, protocols and other requirements of the CAISO, as amended from time to time.

1.1.7 “Change in Tax Law” has the meaning set forth in Section 1.1 of the ESSA.

1.1.8 “Commercial Operation Date” has the meaning set forth in Section

1.1 of the ESSA.

1.1.9 "Commission” has the meaning set forth in the Power Management and Administrative Services Agreement.

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1.1.10 “Constitutive Documents” means, with respect to NCPA, the Joint Powers Agreement and any resolutions or bylaws adopted thereunder with respect to the governance of NCPA, and with respect to each Participant, the California Government Code and other statutory provisions applicable to such Participant, any applicable agreements, charters, contracts, or other documents concerning the formation, operation or decision making of such Participant, including, if applicable, its city charter, and any codes, ordinances, bylaws, and resolutions adopted by such Participant’s governing body.

1.1.11 “Contract Price” has the meaning set forth in Section 1.1 of the ESSA.

1.1.12 “Defaulting Participant” has the meaning set forth in Section 7.2.

1.1.13 “Electric System” has the meaning set forth in the Power Management and Administrative Services Agreement.

1.1.14 “Event of Default” has the meaning set forth in Section 7.2.

1.1.15 “Facility” has the meaning set forth in Section 1.1 of the ESSA.

1.1.16 “Final Independent Report” has the meaning set forth in Section

1.1 of the ESSA.

1.1.17 “General Operating Reserve” means the NCPA General Operating Reserve created through resolution of the Commission, as the same may be amended from time to time.

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1.1.18 “Initial Independent Report” has the meaning set forth in Section

1.1 of the ESSA.

1.1.19 “MW” means megawatt.

1.1.20 “MWh” means megawatt hour.

1.1.21 “NCPA” has the meaning set forth in the Recitals hereto.

1.1.22 “Participant” has the meaning set forth in the recitals of this Agreement.

1.1.23 “Party” or “Parties” has the meaning set forth in the preamble hereto; provided that “Third Parties” are entities that are not Party to this Agreement.

1.1.24 “Power Management and Administrative Services Agreement” means the NCPA Power Management and Administrative Services Agreement, dated as of October 1, 2014, between NCPA and the Members who are signatories to that agreement by which NCPA provides Power Management and Administrative Services.

1.1.25 “Product” has the meaning set forth in Section 1.1 of the ESSA.

1.1.26 “Project” or “ESSA” means the Energy Storage Service Agreement, dated as of ____________, 20__ between NCPA and Seller, under which NCPA, on behalf of the Participants, purchases Product from the Facility located in San Bernardino County, California, consisting of a separately metered 300 MWAC section of a larger battery energy storage facility commonly known as the Trolley Battery Energy Storage Project. Upon final execution of the ESSA, the Project shall be deemed a NCPA Packet Pg. 1202 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 7 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT Project in accordance with the Amended and Restated Facilities Agreement. The ESSA has been attached to this Agreement as Exhibit B.

1.1.27 “Project Costs” means all costs charged to and paid by NCPA pursuant to the ESSA.

1.1.28 “Project Participation Percentage” has the meaning set forth in the Power Management and Administrative Services Agreement, and are set forth in Exhibit A of this Agreement.

1.1.29 “Proposed Contract Price Increase” has the meaning set forth in Section 1.1 of the ESSA.

1.1.30 “Proposed Contract Price Increase Cap” has the meaning set forth in Section 1.1 of the ESSA.

1.1.31 “Revenue” means , with respect to each Participant, all income, rents, rates, fees, charges, and other moneys derived by the Participant from the ownership or operation of its Electric System, including, without limiting the generality of the foregoing: (a) all income, rents, rates, fees, charges or other moneys derived from the sale, furnishing and supplying of electric capacity and energy and other services, facilities, and commodities sold, furnished, or supplied through the facilities of its Electric System; (b) the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or pursuant to law to its Electric System; (c) the Packet Pg. 1203 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 8 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT proceeds derived by the Participant directly or indirectly from the sale, lease or other disposition of all or a part of the Electric System; and (d) the proceeds derived by Participant directly or indirectly from the consignment and sale of freely allocated greenhouse gas compliance instruments into periodic auctions administered by the State of California under the California Cap-and-Trade Program, provided that such proceeds are a permitted use of auction proceeds, but the term Revenues shall not include (i) customers' deposits or any other deposits subject to refund until such deposits have become the property of the Participant or (ii) contributions from customers for the payment of costs of construction of facilities to serve them.

1.1.32 “Scheduling Protocols” means the applicable provisions of the Amended and Restated Scheduling Coordination Program Agreement, and any other contractual or other arrangements between NCPA and the Participants concerning the scheduling, delivery and metering of the ESSA.

1.1.33 “Security Deposit” means the account established by NCPA and funded by the Participants in accordance with Section 5, the funds of which are available for use by NCPA in accordance with the terms and conditions hereof.

1.1.34 “Seller” means Trolley Pass Project LLC, as set forth in Recital D of this Agreement, or as otherwise set forth in the ESSA.

1.1.35 “Storage Contract Capacity” has the meaning set forth in Section

1.1 of the ESSA.

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1.1.36 “Supply Chain Event” has the meaning set forth in Section 1.1 of in the ESSA.

1.1.37 “Term” has the meaning set forth in Section 10.

1.1.38 “Third Party” means an entity (including a Member) that is not Party to this Agreement.

1.2 Rules of Interpretation. As used in this Agreement (including the Recitals hereto), unless in any such case the context requires otherwise: The terms “herein,” “hereto,” “herewith” and “hereof” are references to this Agreement taken as a whole and not to any particular provision; the term “include,” “includes” or “including” shall mean “including, for example and without limitation;” and references to a “Section,” “subsection,” “clause,” “Appendix”, “Schedule”, or “Exhibit” shall mean a Section, subsection, clause, Appendix, Schedule or Exhibit of this Agreement, as the case may be.

All references to a given agreement, instrument, tariff or other document, or law, regulation or ordinance shall be a reference to that agreement, instrument, tariff or other document, or law, regulation or ordinance as such now exists and as may be amended from time to time, or its successor. A reference to a “person” includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having a separate legal personality and includes its successors and permitted assigns. A reference to a “day” shall mean a Calendar Day Packet Pg. 1205 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 10 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT unless otherwise specified. The singular shall include the plural and the masculine shall include the feminine, and vice versa.

Section 2. Purpose. The purpose of this Agreement is to: (i) set forth the terms and conditions under which NCPA shall enter into the ESSA on behalf of the Participants, (ii) authorize NCPA, acting on behalf of the Participants, to engage in all activities related to that basic purpose, and (iii) specify the rights and obligations of NCPA and the Participants with respect to the ESSA.

Section 3. Sale and Purchase of Product. By executing this Agreement, each Participant acknowledges and agrees to be bound by the terms and conditions of the Agreement, and that the Agreement is written as a “take-or-pay” agreement. Any Product delivered to NCPA under the ESSA shall be delivered to each Participant in proportion to such Participant’s Project Participation Percentage as set forth in Exhibit A, and each Participant shall accept and pay for its respective percentage of such Product. To the extent a Participant is unable to accept such deliveries in full, NCPA shall dispose of such surplus in its sole discretion, in such a manner to attempt to maximize Participant value and that Participant shall reimburse to NCPA any costs incurred by NCPA in doing so.

Notwithstanding the above, NCPA may allocate Product procured through the ESSA among the Participants in such percentages as NCPA may, in its reasonable discretion, determine are necessary, desirable, or appropriate, in order to accommodate Participant transfer rights pursuant to Section 9.

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3.1 Scheduling. Product delivered from Seller shall be scheduled for and to the Participants in accordance with Scheduling Protocols, and the terms and conditions of the ESSA.

Section 4. Billing and Payments

4.1 Participant Payment Obligations. Each Participant agrees to pay to NCPA each month its respective portion of the Project Costs, Administrative Services Costs, scheduling coordination costs, and all other costs for services provided in accordance with this Agreement and the Amended and Restated Facilities Agreement. In addition to the aforementioned monthly payment obligations, each Participant is obligated to fund: (i) any and all required Security Deposits calculated in accordance with Section 5, and (ii) any working capital requirements for the Project maintained by NCPA as determined, collected and set forth in the Annual Budget.

4.2 Invoices. NCPA will issue an invoice to each Participant for its share of Project Costs, Administrative Services Costs, scheduling coordination costs, and all other costs for services provided in accordance with this Agreement and the Amended and Restated Facilities Agreement. Such invoice may be either the All Resources Bill or separate special invoice, as determined by NCPA. At NCPA’s discretion, invoices may be issued to Participants using electronic media or physical distribution.

4.3 Payment of Invoices. All invoices delivered by NCPA (including the All Resources Bill) are due and payable thirty (30) Calendar Days after the date thereof; Packet Pg. 1207 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 12 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT provided, however, that any amount due on a day other than a Business Day may be paid on the following Business Day.

4.4 Late Payments. Any amount due and not paid by a Participant in accordance with Section 4.3 shall be considered late and bear interest computed on a daily basis until paid at the lesser of (i) the per annum prime rate (or reference rate) of the Bank of America NT&SA then in effect, plus two percent (2%) or (ii) the maximum rate permitted by law.

4.5 Billing Disputes. A Participant may dispute the accuracy of any invoice issued by NCPA under this Agreement by submitting a written dispute to NCPA, within thirty (30) Calendar Days after the date of such invoice; nonetheless the Participant shall pay the full amount billed when due. If a Participant does not timely question or dispute the accuracy of any invoice in writing, then the invoice shall be deemed to be correct.

Upon review of a submitted dispute, if an invoice is determined by NCPA to be incorrect, then NCPA shall issue a corrected invoice and refund any amounts that may be due to the Participant. If NCPA and the Participant fail to agree on the accuracy of an invoice within thirty (30) Calendar Days after the Participant has disputed it, then the General Manager shall promptly submit the dispute to the Commission for resolution. If the Commission and the Participant fail to agree on the accuracy of a disputed invoice within sixty (60) Calendar Days after its submission to the Commission, then the dispute may then be resolved under the mediation and arbitration procedures set forth in Section 12 of this Packet Pg. 1208 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 13 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT Agreement; provided, however, that prior to resorting to either mediation or arbitration proceedings, the full amount of the disputed invoice must be paid by the Participant.

4.6 Billing/Settlement Data and Examination of Books and Records.

4.6.1 Settlement Data. NCPA shall make billing and settlement data available to the Participants in the All Resources Bill, or other invoice, or upon request.

NCPA may also, at its sole discretion, make billing and settlement support information available to Participants using electronic media (e.g. electronic data portal).

Procedures and formats for the provision of such electronic data submission may be established by the Commission from time to time. Without limiting the generality of the foregoing, NCPA may, in its reasonable discretion, require the Participants to execute a non-disclosure agreement prior to providing access to the NCPA electronic data portal.

4.6.2 Examination of Books and Records. Any Participant to this Agreement shall have the right to examine the books and records created and maintained by NCPA pursuant to this Agreement at any reasonable, mutually agreed upon time.

Section 5. Security Deposit Administration

5.1 Security Deposit Requirements. Each Participant agrees that any funds deposited at NCPA to satisfy Participant’s Security Deposit requirements pursuant to this Agreement shall be irrevocably committed and held by NCPA in the General Operating Packet Pg. 1209 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 14 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT Reserve, and that such funds may be used by NCPA in accordance with Section 5.1.3.

Each Participant’s Security Deposit will be accounted separately from and in addition to any other security accounts or deposits maintained pursuant to any other agreement between NCPA and the Participant, or any other such security account or deposits required of Members. In connection with fulfilling the Security Deposit requirements of this Agreement, Participant may elect to use its uncommitted funds held in the General Operating Reserve to satisfy in whole or in part its Security Deposit required under Section 5. If Participant chooses to satisfy in whole or in part its security requirements using its uncommitted funds held in the General Operating Reserve, then Participant is required to execute and deliver to NCPA an Irrevocable Letter of Direction, directing NCPA to utilize Participant’s uncommitted General Operating Reserve funds for such purposes, and the designated funds will thereafter be irrevocably committed and held by NCPA to satisfy the requirements of this Agreement.

5.1.1 Initial Amounts. No later than ninety (90) day prior to the Commercial Operation Date, each Participant shall ensure that sufficient Security Deposit funds have been deposited with and are held by NCPA in an amount not greater than the highest three (3) months of estimated Project Costs, as estimated by NCPA. Such Security Deposit requirement may be satisfied by Participant in whole or part either in cash, through irrevocable commitment of its uncommitted funds held in Packet Pg. 1210 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 15 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT the General Operating Reserve in accordance with Section 5.1, or through a clean, irrevocable letter of credit satisfactory to NCPA’s General Manager.

5.1.2 Subsequent Deposits. Periodically, and at least quarterly, NCPA shall review and revise its estimate of Project Costs for which Participant shall be obligated to pay under this Agreement. Following such review, NCPA shall determine whether each Participant has a sufficient Security Deposit balance at NCPA. To the extent that any Participant’s Security Deposit balance is greater than one hundred and ten percent (110%) of the amount required herein, NCPA shall credit such amount as soon as practicable to the Participant’s next following All Resources Bill, or by separate special invoice. To the extent that any Participant’s Security Deposit balance is less than ninety percent (90%) of the amount required herein, NCPA shall add such amount as soon as practicable to such Participant’s next All Resources Bill, or as necessary, to a special invoice to be paid by Participant upon receipt. Credits or additions shall not be made to Participants who satisfy these Security Deposit requirements in whole through the use of a letter of credit; provided, that the amount of the letter of credit shall be adjusted, as required from time to time, in a like manner to assure an amount not to exceed the highest three (3) months of estimated Project Costs is available to NCPA, as determined by NCPA.

5.1.3 Use of Security Deposit Funds. NCPA may use any and all Security Deposit funds held by NCPA (or utilize a letter of credit provided in lieu Packet Pg. 1211 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 16 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT thereof) to pay any costs it incurs hereunder, including making payments to Seller, without regard to any individual Participant’s Security Deposit balance or proportionate share of Project Costs, and irrespective of whether NCPA has issued an All Resources Bill or special invoice for such costs to the Participants or whether a Participant has made timely payments of All Resources Bills or special invoices.

Should Participant have satisfied its Security Deposit requirements in whole or part through a letter of credit, NCPA may draw on such letter of credit to satisfy Participant’s obligations hereunder at NCPA’s sole discretion. Notwithstanding the foregoing, if any Participant fails to pay any costs incurred by NCPA pursuant to this Agreement, NCPA shall first use that non-paying Participant’s Security Deposit and shall not use any other Participants’ Security Deposit until such non-paying Participant’s Security Deposit has been exhausted.

5.1.4 Accounting. If Security Deposit funds or a letter of credit are used by NCPA to pay any costs it incurs hereunder as described in Section 5.1.3, then NCPA will maintain a detailed accounting of each Participant’s shares of funds withdrawn, and upon the collection of all or a part of such withdrawn funds, NCPA will credit back to each non-defaulting Participant the funds collected in proportion to such nondefaulting Participant’s share of funds initially withdrawn.

5.1.5 Emergency Additions. In the event that funds are withdrawn pursuant to Section 5.1.3, or if the Security Deposit held by NCPA is otherwise Packet Pg. 1212 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 17 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT insufficient to allow for NCPA to pay any invoice, demand, request for further assurances by Seller, or claims, NCPA shall notify all Participants of the deficiency. In conjunction with such notice, NCPA shall send a special or emergency assessment invoice to the Participant or Participants that caused or are otherwise responsible for the deficiency. Each Participant of such an invoice shall pay to NCPA such assessment when and if assessed by NCPA within two (2) Business Days of the invoice date of the assessment, or shall consent to and direct NCPA to draw on any existing letter of credit Participant has established for such purposes. In the event that the Participant or Participants that caused or are otherwise responsible for the deficiency cannot, does not or will not pay to NCPA the special or emergency assessment within two (2) Business Days after the invoice date, NCPA shall immediately submit a special or emergency invoice to all remaining Participants, and such remaining Participants shall pay to NCPA such assessment within two (2) Business Days after the invoice date of the assessment, or shall consent to and direct NCPA to draw on any existing letter of credit that Participant has established for such purposes.

5.1.6 Security Deposit Interest. NCPA shall maintain a detailed accounting of each Participant’s Security Deposits, and withdrawals of such funds, held by NCPA. Security Deposits held by NCPA shall be invested by NCPA in accordance with the General Operating Reserve policies and investment policies adopted by the NCPA Commission. Interest earned on the Security Deposit funds Packet Pg. 1213 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 18 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT shall be proportionately credited to the Participants in accordance with their weighted average balances held therein. Any Security Deposit losses caused by early termination of investments shall be allocated among the Participants in accordance with the General Operating Reserve provisions and guidelines approved by the Commission, as the same may be amended from time to time; provided, however, to the extent that either the General Operating Reserve provisions and guidelines do not apply or the Security Deposit is not adequate to cover the losses, then such losses shall be allocated among the Participants in accordance with their proportionate Security Deposit balances.

5.1.7 Return of Funds. Upon termination or a permitted withdrawal of a Participant in accordance with this Agreement, the affected Participant may apply to NCPA for the return of their share of Security Deposit funds ninety (90) days after the effective date of such termination or withdrawal. However, NCPA shall, in its sole but reasonable discretion, as determined by the NCPA General Manager, estimate the then outstanding liabilities of the Participant, including any estimated contingent liabilities and shall retain all such funds, if any, until all such liabilities have been fully paid or otherwise satisfied in full. After all such liabilities have been satisfied in full, as determined by NCPA’s General Manager, any remaining balance of the Participant’s share of the Security Deposit will be refunded to the Participant within sixty (60) days thereafter.

Packet Pg. 1214 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 19 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT Section 6. Cooperation and Further Assurances. Each of the Parties 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 any other Party which are consistent with the provisions of this Agreement and which do not involve the assumption of obligations other than those provided for in this Agreement, in order to give full effect to this Agreement and to carry out the intent of this Agreement. The Parties agree to cooperate and act in good faith in connection with obtaining any credit support required in order to satisfy the requirements of this Agreement.

Section 7. Participant Covenants and Defaults

7.1 Each Participant covenants and agrees: (i) to make payments to NCPA, from its Electric System Revenues, of its obligations under this Agreement as an operating expense of its Electric System; (ii) to fix the rates and charges for services provided by its Electric System, so that it will at all times have sufficient Revenues to meet the obligations of this Agreement, including the payment obligations; (iii) to make all such payments due NCPA under this Agreement whether or not there is an interruption in, interference with, or reduction or suspension of services provided under this Agreement, such payments not being subject to any reduction, whether by offset or otherwise, and regardless of whether any reasonable dispute exists; and (iv) to operate its Electric System, and the business in connection therewith, in accordance with Good Utility Practices.

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7.2 Events of Default. An Event of Default under this Agreement shall exist upon the occurrence of any one or more of the following by a Participant (the “Defaulting Participant”):
(i) the failure of any Participant to make any payment in full to NCPA when due;
(ii) the failure of a Participant to perform any covenant or obligation of this Agreement where such failure is not cured within thirty (30) Calendar Days following receipt of a notice from NCPA demanding cure; provided, that this subsection shall not apply to any failure to make payments specified by subsection 7.2 (i)); (iii) if any representation or warranty of a Participant material to the services provided hereunder shall prove to have been incorrect in any material respect when made and the Participant does not cure the facts underlying such incorrect representation or warranty so that the representation or warranty becomes true and correct within thirty (30) Calendar Days after the date of receipt of notice from NCPA demanding cure; or (iv) if a Participant is in default or in breach of any of its covenants or obligations under any other agreement with NCPA and such default or breach is not cured within the time periods specified in such agreement.

7.3 Uncontrollable Forces. A Party shall not be considered to be in default in respect of any obligation hereunder if prevented from fulfilling such obligation by reason Packet Pg. 1216 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 21 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT of Uncontrollable Forces; provided, that in order to be relieved of an Event of Default due to Uncontrollable Forces, a Party affected by an Uncontrollable Force shall:
(i) first provide oral notice to the General Manager using telephone communication within two (2) Business Days after the onset of the Uncontrollable Force, and provide subsequent written notice to the General Manager and all other Parties within ten (10) Business Days after the onset of the Uncontrollable Force, describing its nature and extent, the obligations which the Party is unable to fulfill, the anticipated duration of the Uncontrollable Force, and the actions which the Party will undertake so as to remove such disability and be able to fulfill its obligations hereunder; and (ii) use due diligence to place itself in a position to fulfill its obligations hereunder and if unable to fulfill any obligation by reason of an Uncontrollable Force such Party shall exercise due diligence to remove such disability with reasonable dispatch; provided, that nothing in this subsection shall require a Party to settle or compromise a labor dispute.

7.4 Cure of an Event of Default. An Event of Default shall be deemed cured only if such default shall be remedied or cured within the time periods specified in Section 7.2 above, as may be applicable, provided, however, upon request of the Defaulting Participant the Commission may waive the default at its sole discretion, where such waiver shall not be unreasonably withheld.

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7.5 Remedies in the Event of Uncured Default. Upon the occurrence of an Event of Default which is not cured within the time limits specified in Section 7.2, without limiting other rights or remedies available under this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppel of any right, action or cause of action NCPA may have against the Defaulting Participant, NCPA may take any or all of the following actions:
(i) suspend the provision of services under this Agreement to such Defaulting Participant; or
(ii) demand that the Defaulting Participant provide further assurances to guarantee the correction of the default, including the collection of a surcharge or increase in electric rates, or such other actions as may be necessary to produce necessary Revenues to correct the default.

7.6 Effect of Suspension.

7.6.1 Generally. The suspension of this Agreement will not terminate, waive, or otherwise discharge any ongoing or undischarged liabilities, credits or obligations arising from this Agreement until such liabilities, credits or obligations are satisfied in full.

7.6.2 Suspension. If performance of all or any portion of this Agreement is suspended by NCPA with respect to a Participant in accordance with subsection

7.5(i), then such Participant shall pay any and all costs incurred by NCPA as a result of Packet Pg. 1218 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 23 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT such suspension including reasonable attorney’s fees, the fees and expenses of other experts, including auditors and accountants, or other reasonable and necessary costs associated with such suspension and any portion of the Project Costs, scheduling and dispatch costs, and Administrative Services Costs that were not recovered from such Participant as a result of such suspension.

Section 8. Administration of Agreement

8.1 Commission. The Commission is responsible for the administration of this Agreement. Each Participant shall be represented by its Commissioner or their designated alternate Commissioner (“Alternate”) pursuant to the Joint Powers Agreement. Each Commissioner shall have authority to act for the Participant represented with respect to matters pertaining to this Agreement.

8.2 Forum. Whenever any action anticipated by this Agreement is required to be jointly taken by the Participants, such action shall be taken at regular or special meetings of the NCPA Commission.

8.3 Quorum. For purposes of acting upon matters that relate to administration of this Agreement, a quorum of the Participants shall consist of those Commissioners, or their designated Alternate, representing a numerical majority of the Participants.

8.4 Voting. Each Participant shall have the right to cast one vote with respect to matters pertaining to this Agreement. A unanimous vote of all Participants shall be required for action regarding: (i) any transfer of rights to a Third Party as described in Packet Pg. 1219 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 24 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT Section 9 of this Agreement; and (ii) for matters related to any of the following actions as provided for in the ESSA: (a) exercising any early termination provisions as set forth in the ESSA, and (b) exercising any assignment rights as set forth in the ESSA. For all other matters pertaining to this Agreement, a majority vote of the Participants shall be required for action.

8.5 Storage Rate Adjustment Event. Section 2.5 of the ESSA permits the Seller to request a Contract Price adjustment from NCPA to address cost increases that Seller incurs as a result of a Change in Tax Law or Supply Chain Event. If the Proposed Contract Price Increase or Actual Contract Price Increase is equal to or less than the Proposed Contract Price Increase Cap, then as further set forth in Section 2.5 of the ESSA, such Proposed Contract Price Increase or Actual Contract Price Increase shall be deemed accepted by the Participants and NCPA, and the parties to the ESSA shall amend the Contract Price in the ESSA.

If the Proposed Contract Price Increase and/or Actual Contract Price Increase is greater than the Proposed Contract Price Increase Cap by an amount that is less than or equal to fifteen percent (15.00%) of the original Contract Price, in aggregate, then the NCPA General Manager is hereby delegated authority by the Participants to approve the price increase based on their determination that (1) the Initial Independent Report or Final Independent Report supports the Proposed Contract Price Increase and/or Actual Contract Price Increase, and (2) the ESSA with the Proposed Contract Price Increase and/or Actual Packet Pg. 1220 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 25 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT Contract Price Increase is still favorable when compared to current market conditions for similar products. The NCPA General Manager shall notify the Commission of the acceptable Proposed Contract Price Increase and/or Actual Contract Price Increase and associated modifications to the ESSA with the foregoing findings, if any, at the next available Commission meeting. If the Proposed Contract Price Increase and/or Actual Contract Price Increase is greater than fifteen percent (15.00%) of the original Contract Price, in aggregate, then the proposed modifications to the ESSA will be brought to the Commission for discussion and further action.

Section 9. Transfer of Rights by Participants

9.1 A Participant has the right to make transfers, sales, assignments and exchanges (collectively “transfers(s)”) of any portion of its Project Participation Percentage and rights thereto, subject to the approval provisions in Section 8.4 of this Agreement, provided that the transferee satisfies all applicable criterion in the ESSA. If a Participant desires to transfer a portion or its entire share of the Project for a specific time interval, or permanently, then NCPA will, if requested by such Participant, use its best efforts to transfer that portion of the Participant’s share of the Project.

9.2 Unless otherwise set forth in this Agreement, before a Participant may transfer an excess Project share pursuant to Section 9.1 to any person or entity other than a Participant, it shall give all other Participants the right to purchase the share on the same terms and conditions. Before a Participant may transfer an excess Project share pursuant Packet Pg. 1221 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 26 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT to Section 9.1 to any person or entity other than a Member, it shall give all Members the right to purchase the share on the same terms and conditions. Such right shall be exercised within thirty (30) days of receipt of notice of said right.

No transfer shall relieve a Participant of any of its obligations under this Agreement except to the extent that NCPA receives payment of these obligations from a transferee.

Section 10. Term and Termination. This Agreement shall become effective when it has been duly executed by all Participants, and delivered to and executed by NCPA (the “Effective Date”). NCPA shall notify all Participants in writing of the Effective Date. The Term of this Agreement shall be coterminous with the ESSA, and shall commence on the Effective Date, and shall continue through the term of the ESSA.

Section 11. Withdrawal of Participants. No Participant may withdraw from this Agreement except as otherwise provided for herein.

Section 12. Settlement of Disputes and Arbitration. The Parties agree to make best efforts to settle all disputes among themselves connected with this Agreement as a matter of normal business under this Agreement. The procedures set forth in Section 10 of the Power Management and Administrative Services Agreement shall apply to all disputes that cannot be settled by the Participants themselves; provided, that the provisions of Section 4.5 shall first apply to all disputes involving invoices prepared by NCPA.

Section 13. Miscellaneous
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13.1 Confidentiality. The Parties will keep confidential all confidential or trade secret information made available to them in connection with this Agreement, to the extent possible, consistent with applicable laws, including the California Public Records Act.

Confidential or trade secret information shall be marked or expressly identified as such.

If a Party (“Receiving Party”) receives a request from a Third Party for access to, or inspection, disclosure or copying of, any other Party’s (the “Supplying Party”) confidential data or information, which the Receiving Party has possession of (“Disclosure Request”), then the Receiving Party shall provide notice and a copy of the Disclosure Request to the Supplying Party within three (3) Business Days after receipt of the Disclosure Request.

Within three (3) Business Days after receipt of such notice, the Supplying Party shall provide notice to the Receiving Party either:
(i) that the Supplying Party believes there are reasonable legal grounds for denying or objecting to the Disclosure Request, and the Supplying Party requests the Receiving Party to deny or object to the Disclosure Request with respect to identified confidential information. In such case, the Receiving Party shall deny the Disclosure Request and the Supplying Party shall defend the denial of the Disclosure Request at its sole cost, and it shall indemnify the Receiving Party for all costs associated with denying or objecting to the Disclosure Request. Such indemnification by the Supplying Party of the Receiving Party shall include all of the Receiving Party’s costs reasonably incurred with Packet Pg. 1223 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 28 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT respect to denial of or objection to the Disclosure Request, including but not limited to costs, penalties, and the Receiving Party’s attorney’s fees; or (ii) that the Receiving Party may grant the Disclosure Request without any liability by the Receiving Party to the Supplying Party.

13.2 Indemnification and Hold Harmless. Subject to the provisions of Section

13.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its Members, including their respective governing boards, officials, officers, agents, and employees, from and against any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature, including reasonable attorneys’ fees and the costs of litigation, including experts, to the extent caused by any acts, omissions, breach of contract, negligence (active or passive), gross negligence, recklessness, or willful misconduct of that Participant, its governing officials, officers, employees, subcontractors or agents, to the maximum extent permitted by law.

13.3 Several Liabilities. No Participant shall, in the first instance, be liable under this Agreement for the obligations of any other Participant or for the obligations of NCPA incurred on behalf of other Participants. Each Participant shall be solely responsible and liable for performance of its obligations under this Agreement, except as otherwise provided for herein. The obligation of each Participant under this Agreement is, in the first instance, a several obligation and not a joint obligation with those of the other Participants.

Packet Pg. 1224 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 29 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT Notwithstanding the foregoing, the Participants acknowledge that any debts or obligations incurred by NCPA under this Agreement on behalf of any of them shall be borne solely by such Participants in proportion to their respective Project Participation Percentages, and not by non-Participant Members of NCPA, pursuant to Article IV, Section 3(b) of the Joint Powers Agreement.

In the event that a Participant should fail to pay its share of the debts or obligations incurred by NCPA as required by this Agreement, the remaining Participants shall, in proportion to their Project Participation Percentages, pay such unpaid amounts and shall be reimbursed by the Participant failing to make such payments.

13.4 No Consequential Damages. FOR ANY BREACH OF ANY PROVISION OF

THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES

IS PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY

SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF

DAMAGE IS EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY

SHALL BE LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY

PARTICIPANT OR THEIR RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES,

DIRECTORS, OFFICERS, AGENTS, OR EMPLOYEES BE LIABLE FOR ANY LOST

PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE, OR Packet Pg. 1225 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 30 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT

INCIDENTAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE, LOSS OF

GOODWILL, LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF

SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND

NCPA AND EACH PARTICIPANT EACH HEREBY WAIVES SUCH CLAIMS AND

RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM ANY SUCH LIABILITY.

The Parties acknowledge that California Civil Code section 1542 provides that: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” The Parties waive the provisions of section 1542, or other similar provisions of law, and intend that the waiver and release provided by this Section of this Agreement shall be fully enforceable despite its reference to future or unknown claims.

13.5 Waiver. No waiver of the performance by a Party of any obligation under this Agreement with respect to any default or any other matter arising in connection with this Agreement shall be effective unless given by the Commission or the governing body of a Participant, as applicable. Any such waiver by the Commission in any particular instance shall not be deemed a waiver with respect to any subsequent performance, default or matter.

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13.6 Amendments. Except where this Agreement specifically provides otherwise, this Agreement may be amended only by written instrument executed by the Parties with the same formality as this Agreement.

13.7 Assignment of Agreement.

13.7.1 Binding Upon Successors. This Agreement shall inure to the benefit of and shall be binding upon the respective successors and assignees of the Parties to this Agreement.

13.7.2 No Assignment. Neither this Agreement, nor any interest herein, shall be transferred or assigned by a Party hereto except with the consent in writing of the other Parties hereto, which consent shall not be unreasonably withheld.

13.8 Severability. In the event that any of the terms, covenants or conditions of this Agreement or the application of any such term, covenant or condition, shall be held invalid as to any person or circumstance by any court having jurisdiction, all other terms, covenants or conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effect unless the court holds that such provisions are not severable from all other provisions of this Agreement.

13.9 Governing Law. This Agreement shall be interpreted, governed by, and construed under the laws of the State of California.

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13.10 Headings. All indices, titles, subject headings, section titles and similar items are provided for the purpose of convenience and are not intended to be inclusive, definitive, or affect the meaning of the contents of this Agreement or the scope thereof.

13.11 Notices. Any notice, demand or request required or authorized by this Agreement to be given to any Party shall be in writing, and shall either be personally delivered to a Participant’s Commissioner or Alternate, and to the General Manager, or shall be transmitted to the Participant and the General Manager at the addresses shown on the signature pages hereof. The designation of such addresses may be changed at any time by written notice given to the General Manager who shall thereupon give written notice of such change to each Participant. All such notices shall be deemed delivered when personally delivered, two (2) Business Days after deposit in the United States mail first class postage prepaid, or on the first Business Day following delivery through electronic communication.

13.12 Warranty of Authority. Each Party represents and warrants that it has been duly authorized by all requisite approval and action to execute and deliver this Agreement and that this Agreement is a binding, legal, and valid agreement enforceable in accordance with its terms. Upon execution of this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of such Participant evidencing approval of and authority to enter into this Agreement.

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13.13 Counterparts. This Agreement may be executed in any number of counterparts, and each executed counterpart shall have the same force and effect as an original instrument and as if all the signatories to all of the counterparts had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more signature pages.

13.14 Venue. In the event that a Party brings any action under this Agreement, the Parties agree that trial of such action shall be vested exclusively in the state courts of California in the County of Placer or in the United States District Court for the Eastern District of California.

13.15 Attorneys’ Fees. If a Party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provisions of this Agreement, then each Party shall bear its own fees and costs, including attorneys’ fees, associated with the action.

13.16 Counsel Representation. Pursuant to the provisions of California Civil Code Section 1717 (a), each of the Parties were represented by counsel in the negotiation and execution of this Agreement and no one Party is the author of this Agreement or any of its subparts. Those terms of this Agreement which dictate the responsibility for bearing any attorney’s fees incurred in arbitration, litigation or settlement in a manner inconsistent Packet Pg. 1229 Attachment: Trolley_BESS_Third_Phase_Agreement_06262025 Redacted (9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage 34 THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT with the provisions of Section 13.2 were intentionally so drafted by the Parties, and any ambiguities in this Agreement shall not be interpreted for or against a Party by reason of that Party being the author of the provision.

13.17 No Third Party Beneficiaries. Nothing contained in this Agreement is intended by the Parties, nor shall any provision of this Agreement be deemed or construed by the Parties, by any third person or any Third Parties, to be for the benefit of any Third Party, nor shall any Third Party have any right to enforce any provision of this Agreement or be entitled to damages for any breach by the Parties of any of the provisions of this Agreement.

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NORTHERN CALIFORNIA

POWER AGENCY
651 Commerce Drive
Roseville, CA 95678
_____________________________
By: Randy S. Howard
Title: General Manager
Date:

Approved as to form:
_____________________________
By: Jane E. Luckhardt
Its: General Counsel
Date:

Attestation (if applicable):
_____________________________
By:__________________________
Its:

Date:

CITY OF SANTA CLARA
1500 Warburton Avenue
Santa Clara, CA 95050
_____________________________
By:__________________________
Title: __________________________
Date:

Approved as to form:
_____________________________
By:__________________________
Its: City Attorney
Date:

Attestation (if applicable):
_____________________________
By:__________________________
Its:

Date:

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CITY OF ALAMEDA
2000 Grand Street
P.O. Box H
Alameda, CA 94501
_____________________________
By:__________________________
Title: ________________________
Date:

Approved as to form:
_____________________________
By:__________________________
Its: City Attorney
Date: