SUBSTATION AGREEMENT
BY AND BETWEEN
THE CITY OF SANTA CLARA, CALIFORNIA
AND
1220 SANTA CLARA PROPCO, LLC
PREAMBLE
This Substation Agreement ("Agreement") is made and entered into on the date last signed by the Parties ("Effective Date") by and between the City of Santa Clara, California, a chartered California municipal corporation ("City") and 1220 Santa Clara PropCo, LLC, a Delaware limited liability company ("Customer"). The City and Customer may be referred to in this Agreement individually as a "Party" or collectively as the "Parties".
RECITALS
A. The City of Santa Clara owns and operates an electric utility, doing business as Silicon Valley Power ("SVP"), and currently provides electric service to Customer at 1200 Memorex Drive, parcel number 224-66-006, in the City of Santa Clara, California ("Premises"), which is shown on Exhibit A attached hereto and incorporated herein, pursuant to standard electric rate schedules authorized by the City Council of the City of Santa Clara;
B. Customer has requested that the City provide 90 MVA of total capacity to meet Customer's anticipated operating needs;
C. City has determined that a new single customer electric substation, which is shown as the area and equipment marked as the Substation Facilities on Exhibit C - attached hereto and incorporated herein with a capacity of 90 MVA, to be known as the Memorex Junction (MJ) ("Substation Facilities"), is required to be built to fulfill its obligations to Customer;
D. City has determined that the Substation Facilities require new 60kV transmission line extensions ("Transmission Facilities") to connect the Substation Facilities to SVP's electrical system.
E. The Parties acknowledge that significant system capacity improvement facilities will be required to provide the capacity of 90 MVA to the Customer. The Parties further acknowledge these system capacity improvements are not fully within their control and may impact the Customer's Available Capacity Schedule. SVP will use commercially reasonable efforts to provide the Customer with the requested Available Capacity as described in the Available Capacity Schedule in Exhibit E attached hereto and this will be the Customer's obligation to utilize the Available Capacity based upon the Available Capacity Schedule in Table E1.
F. The purpose of this Agreement is to set forth the mutual obligations of the Parties with respect to supplying Customer with initial interim electric power and then with permanent capacity and transmission infrastructure for the Premises.
Therefore, in consideration of the foregoing, the Parties agree as follows:
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AGREEMENT PROVISIONS
1. DEFINITIONS
A. "Capacity" is the maximum or peak amount of electric power (electricity) that may be received by Customer for use at a specific point in time and is determined by Transmission System Operating Limits
1. "Available Capacity" is the Capacity depicted in Exhibit E -Available Capacity Schedule and is the maximum Capacity available to be used by the Customer during each year of each Load Phase.
2. "Available Capacity Schedule" the phased schedule by which the City anticipates Capacity requested by Customer will be available. The Available Capacity Schedule is outlined in Exhibit E - Available Capacity Schedule.
3. "Interim Capacity" is the Capacity available from SVP from 12 kV distribution feeders prior to operation of the Substation Facilities
4. "Paid Capacity" is the Capacity for which Customer has paid Load Development Fees. Paid Capacity is greater than or equal to Available Capacity.
5. "Cumulative Paid Capacity" is the Paid Capacity required for the Available Capacity in the Exhibit E -Available Capacity Schedule.
6. "Total Capacity" is the Customer requested maximum MVA capacity and can not exceed 99 MVA. While, the Substation Facilities and Transmission Facilities will be designed to meet Total Capacity, the maximum Capacity available to Customer is Available Capacity for each Load Phase.
B. "Electric Service" is defined in SVP Rules and Regulations No. 1 C - Definitions.
C. "Estimated Duration" in Exhibit D - Project Schedule and Costs is an estimated duration for a set of tasks. This is a best case scenario and does not include potential delays such as weather or force majeure.
D. "Load Development Fee" is the Commercial Facilities Dedicated 60kV Fee in the City of Santa Clara Municipal Fee Schedule. This fee represents the share of costs associated with System Capacity Improvement Facilities required. This fee funds system wide capital expenditures directly related to the addition of infrastructure associated with new load increases and does not include costs directly attributed to Customer's Project. Customer will be obligated to pay the fee based on the City's Municipal Fee Schedule at the time of the invoice.
E. "Load Phase" is depicted in Exhibit D and are the periods for which a specific Available Capacity is in effect and available for Customer to use.
F. "System Capacity Improvement Facilities" are the system improvements required by City to support the Total Capacity requested by Customer. System Capacity Improvement Facilities include projects on SVP's 230kV, 115kV, and 60kV 1220 Santa Clara PropCo, LLC Substation Agreement
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transmission lines, receiving stations, and Pacific Gas & Electric Bulk Electric System Improvements.
2. PROJECT OVERVIEW
A. PROPOSED PROJECT:
The Proposed Project, (PLN2019-14055), was approved at the City Council meeting on November 9, 2021. On November 9, 2021, City Council approved the resolution to adopt the Environmental Impact Report and associated actions for the 1200 Memorex Drive project, including a new substation, equipment yards and onsite improvements.
The Proposed Project is the development of a four-story 472,920 square foot data center building with an attached six-story 87,520 square foot ancillary use office and storage component, for a combined square footage of 560,440, along with the associated electrical substation, paved parking areas and landscaping. The data center building would be approximately 85 feet in height, with additional screening features extending to a height of 99 feet. The data center portion of the building would house computer servers for private clients in a secure and environmentally controlled structure and would be designed to provide 60 megawatts (MW) of information technology (IT) power.
The Proposed Project includes the demolition of the existing historic industrial buildings on-site, and a minor modification to the Zoning Code standards to allow the increased height of 99 feet and a reduction in the zoning code parking standards for a data center.
8. ELECTRIC FACILITIES:
1. Customer will construct electrical Substation Facilities with a capacity of 90 megavolt amps (MVA) on the southeast corner of the Premises near Di Giulio Avenue and Memorex Drive.
2. Customer is also requesting electric power capacity of up to 4.5 MVA from SVP prior to completion of the Substation Facilities ("Interim Phase").
3. City and Customer have agreed that Customer will fund the development and construction of the Substation Facilities and Transmission Facilities ("Substation Development Phase") to serve the Premises.
4. In the course of the development of the Premises, City and Customer will finalize requirements for the interconnection facilities necessary for supplying electrical power within the project ("Connection Phase").
The layout of and requirements for the interconnection facilities shall be complete and agreed upon by the Parties prior to commencement of any construction on the Substation Facilities.
5. The beginning and the ends of these successive phases may overlap. The respective responsibilities and obligations of the City and Customer for each of these phases are more particularly described below.
6. Customer has requested a Total Capacity of 90 MVA. In the event that 90 MVA is not included in Exhibit E -Available Capacity Schedule, SVP and Customer shall meet at least once every two (2) years to consider amendments to this Agreement to modify or extend the Available Capacity 1220 Santa Clara PropCo, LLC Substation Agreement
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Schedule in Exhibit E to increase or decrease Capacity.
3. INTERIM PHASE
A. SVP OBLIGATIONS
To enable Customer to begin construction and operate without interruption until the Substation Facilities are fully constructed and begin operation, Customer will utilize the existing 4.5 MVA of Capacity of Electric Service. Interim Service is provided from one (1) 12 kV distribution feeder at or near the location set forth in the Interim Service diagram attached as Exhibit B.
B. CUSTOMER OBLIGATIONS
Customer acknowledges that up to 4.5 MVA Interim Service requested for the site is the combined allocation for the Premises. Customer shall pay all costs associated with the removal of the Interim Service. Customer shall work with SVP to transfer Customer's existing load from the Interim Service to the new Substation Facilities within three (3) months after energization of the Substation Facilities.
4. SUBSTATION DEVELOPMENT PHASE
A. SVP OBLIGATIONS
1. SVP will provide up to the Available Capacity for Customer's use in each Load Phase as detailed in Exhibit E - Available Capacity Schedule, to the Premises, upon completion of, and served by, the Substation Facilities, Transmission Facilities and required System Capacity Improvement Facilities which include projects on SVP's 230kV, 115kV, and 60kV transmission lines, receiving stations, and Pacific Gas & Electric Bulk Electric System Improvements ("System Capacity Improvement Facilities").
2. As the System Capacity Improvement Facilities completion schedules are not fully controlled by SVP, SVP at its sole discretion may limit Customer and Customer's tenants' Available Capacity until the Capacity is made available to SVP.
3. The initial approved Available Capacity Schedule is identified in Exhibit E.
4. The Parties agree that the Capacity from the Substation Facilities will also be provided pursuant to the Rules and Regulations, applicable Silicon Valley Power Rate Schedules, current Load Development Fees and subject to the completion of any system upgrades necessary to serve the load at the time the load capacity increase is initiated. The 90 MVA of Capacity shall be provided to the Customer at the cost of the Load Development Fee applicable at the time of payment.
5. SVP will make Electric Service available to the Customer, at the Utility Connection Point, from the Substation Facilities and connected to the Premises through the Transmission Facilities. The "Utility Connection Point" for a SVP junction facility is the Customer side of the 60kV disconnect switches located within the Substation Facilities as shown in 1220 Santa Clara PropCo, LLC Substation Agreement
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Exhibit C.
6. SVP will use commercially reasonable efforts to test and commission the Substation Facilities to be able to deliver the Capacity per the Available Capacity Schedule (inclusive of any Interim Service that is transferred to the Substation Facilities) in Table E1 of Exhibit E, at 60 kV, within thirty (30) months after the Effective Date of this Agreement.
7. SVP shall use commercially reasonable efforts to design, construct, test and commission the Transmission Facilities to be able to deliver the Capacity per the Available Capacity Schedule (inclusive of any Interim Service that is transferred to the Substation Facilities) in Table E1 of Exhibit E, within thirty (30) months after the Effective Date of this Agreement.
8. Completion of the Substation Facilities and Transmission Facilities is subject to the following terms:
a) SVP shall own, operate, and maintain all City-owned Substation Facilities and Transmission Facilities, to the Customer's point of connection with SVP.
b) SVP shall own, operate and maintain all City-owned Substation Facilities and Transmission Facilities, SVP control building and all equipment therein, as shown in Exhibit C.
c) The Parties agree to coordinate the design and construction of the Substation Facilities and Transmission Facilities in accordance with the Project Schedule and Costs attached hereto as Exhibit D, to ensure timely completion.
d) SVP shall design the City-owned control building within the Substation Facilities.
e) SVP shall take over the management of the Transmission Facilities once a complete 70% design package has been reviewed and approved.
f) SVP shall keep Customer informed on a regular ongoing basis as to the costs it is incurring associated with the design, construction, testing, commissioning, and completion of the Substation Facilities and Transmission Facilities, including periodic updates to Exhibit D as appropriate. Once preliminary engineering review is complete, SVP will provide Customer with a detailed estimate of SVP project cost to fully complete the Substation Facilities and the Transmission Facilities, including the control building within the Substation Facilities. SVP shall provide Customer with reasonable access to SVP's books and records that substantiate any costs SVP proposes to bill to Customer related to the Substation Facilities and Transmission Facilities.
g) In no way will City be held responsible or subject to any penalty if the Project is not complete by Customer's anticipated or proposed energization date.
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h) The Substation Facilities shall be substantially complete before SVP begins testing and commissioning activities. For purposes of this Agreement, "substantially complete" means that Substation Facilities construction is complete, in accordance with SVP's standards and requirements, and no Customer contractors remain working within the perimeter wall of the Substation Facilities. See Exhibit C for location of perimeter wall. SVP is not obligated to compress its testing and commissioning schedule to meet Customer's anticipated service date.
i) SVP acknowledges that the required interconnection study has been completed and it reflects development and Available Capacity schedules known at that time. SVP will update the Customer on projects and schedules that may impact the Available Capacity feasibility as they become available.
B. CUSTOMER OBLIGATIONS
1. The Customer shall design (with the exception of the City-owned control building), procure, and construct the Substation Facilities, as shown in Exhibit C (Station Plan), to provide 60kV service to the Premises, at its own financial risk, per SVP's standards and requirements.
2. The substation would consist of three (3) 50 MVA transformers. In the event one transformer fails, then the load, not to exceed 90 MVA, would be transferred to the redundant transformer.
3. Completion of the Substation and Transmission Facilities is subject to the following terms:
a) The Substation Facilities shall be for exclusive use of the Customer's building(s) to be constructed on the parcel 224-66-006, as shown on Exhibit A
b) Substation Facilities 60kV bus will be a breaker and half scheme with the complete 60kV junction being constructed to serve the Premises.
c) Customer shall obtain all land use entitlements, and provide any property rights, including easements, to the City, necessary to construct, complete and maintain the Substation Facilities. d) Customer shall be responsible for managing the transmission line design until a 70% design package has been reviewed and approved.
e) Customer shall be responsible for all costs associated with the acquisition of all easements necessary for the Transmission Facilities.
f) Customer shall construct a perimeter wall, marked as "Perimeter Wall" on Exhibit C, which shall create a physical boundary around the Substation Facilities and which is for ensuring the Substation Facilities' security ("Station Perimeter Wall"). The Station Perimeter 1220 Santa Clara PropCo, LLC Substation Agreement
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Wall shall be for the exclusive use of SVP. Only SVP approved signage is permitted on the Station Perimeter Wall. The substation shall have an all-weather asphalt surface underlain by an aggregate base.
g) The Customer shall procure the Substation Facilities control building to comply with SVP's design specifications and requirements. Any changes or substitutions to SVP's design package for the control building must have SVP approval prior to implementation, which approval shall not be unreasonably delayed or withheld. SVP, or SVP's designated representative shall oversee factory acceptance testing of the control building and inspect the control building prior to shipment of the building to the Premises. All deficiencies identified by SVP during the factory inspection visits shall be corrected prior to shipment of the control building to the Premises.
h) Customer-owned control, communication, and protection wiring from the Customer's control building to the marshalling termination cabinet located on Customer side of the demarcation fence, and related equipment, will be owned and maintained by Customer. All control and protection wiring must be clearly identified by Customer per SVP direction to avoid confusion when troubleshooting, maintaining, or repairing City-owned equipment to avoid possible misoperation of any SVP equipment.
i) Customer shall pay the City actual costs per Payment Milestones set forth in Exhibit D. These costs shall include but not be limited to all travel expenses incurred by SVP to perform factory inspections, oversee testing for any equipment purchased by Customer to be turned over for SVP's ownership, and all punch list items necessary to fully integrate the Substation Facilities into SVP's network. Invoiced costs by City shall be due within thirty (30) days of receipt of invoice. Invoices from City shall describe in detail the costs to Customer.
4. Customer must pay a Load Development Fee according to the current applicable fee schedule in the City of Santa Clara Municipal Fee Schedule and the schedule set forth in Exhibit D. The Load Development Fee will be payable 30 days prior to the energization of the additional Electric Service.
5. CONNECTION PHASE
A. SVP OBLIGATIONS
1. Upon completion of the Substation Facilities, Transmission Facilities and System Capacity Improvement Facilities, SVP shall provide the Available Capacity (inclusive of any Interim Service that is transferred to the Substation Facilities) for each Load Phase as detailed in Exhibit E. Such Capacity shall include primary and, as necessary, secondary, services to the Premises.
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2. All electrical equipment installed by Customer upon the Premises for the purpose of, but not limited to, delivery and metering of Customer's Electric Service, shall become the property of SVP. SVP shall own, operate, and maintain the Substation Facilities (including the City-owned control building and all other City-owned equipment) and the Transmission Facilities at its sole cost and expense, in accordance with good utility practices and SVP Rules and Regulations as they may be updated.
B. CUSTOMER OBLIGATIONS
1. SVP and Customer will negotiate and prepare one or more easement agreements providing limited easements on the Premises, as may be required by SVP, to install, operate, and maintain any necessary distribution facilities.
2. Customer shall work with SVP to transfer Customer's existing load from the Interim Service to the new Substation Facilities within three (3) months after energization of the Substation Facilities.
6. LOAD FORECAST AND LOAD DEVELOPMENT FEE PAYMENT SCHEDULE A. The Available Capacity - Table E1 is the agreed upon Available Capacity schedule. Exhibit E may only modified through an amendment to this Agreement or a Capacity Reduction as described in this Section. Customer shall pay Load Development Fees based on the Payment Schedule in Exhibit D.
B. Customer shall provide an annual 10-Year load forecast by month due within 30 days of request by SVP. A template will be provided annually by SVP to complete this process. This forecast will be used to determine Capacity available for use and incorporated into SVP's Transmission Planning Process. SVP may adjust this customer-provided load forecast to meet system capacity requirements. The resulting 10-Year load forecast (which may also be referred to as load ramp schedule) is for transmission planning purposes only and does not modify Exhibit E -Available Capacity Schedule.
C. City will invoice Load Development Fees based on the following schedule:
1. Following execution of this Agreement, City will invoice Customer for Load Development Fees based on 20 MVA. This amount will be reduced by the dollar amount of Load Development Fees paid for Interim Service.
2. Each time that Available Capacity exceeds Cumulative Paid Capacity in Exhibit E - Available Capacity Schedule, City will invoice Load Development Fees in 10 MVA increments based on the current municipal fee schedule rate at time of invoice date.
D. Capacity Reduction:
1. SVP will monitor the Customer's demand at the end of each Load Phase as described in Exhibit E.
2. After the end of each Load Phase, SVP at its sole discretion may reduce Available Capacity and Cumulative Paid Capacity based on Customer's 1220 Santa Clara PropCo, LLC Substation Agreement
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Peak Demand during the last completed Load Phase. The Customer's Peak Demand is calculated as the highest demand average over three (3) consecutive monthly billing periods within each Load Phase. This reduced Available Capacity is calculated as the Customer's Peak Demand plus 15%.
3. SVP shall notify the Customer of any Capacity reduction by means of a Capacity Reduction Notice in substantially the same format as Exhibit F - Sample Capacity Reduction Notice. The Capacity Reduction Notice shall include an updated Exhibit E and such updated Exhibit E shall replace the most recent Exhibit E. Any Load Development Fees paid by Customer for unavailable Capacity that has been reduced pursuant to a Capacity Reduction Notice shall be refunded to the Customer at the rate the Customer paid for such Capacity.
4. If the Available Capacity has been reduced through a Capacity Reduction Notice, and the City issues a refund of Load Development Fees, the Customer acknowledges and agrees that Customer shall have no right to any interest accrued by the entire payment or any amount refunded.
5. If the Available Capacity has been subject to Capacity Reduction at any time during the term of this Agreement and if the Customer's Demand is expected to increase above the reduced Available Capacity, then the Customer may request an amendment to this Agreement including an updated Exhibit E - Available Capacity Schedule. Customer shall provide any supporting information requested by SVP. Such amendment to this Agreement is not to be unreasonably withheld or delayed but is subject to SVP's system capacity limitations.
6. SVP may continue to issue Capacity Reduction Notices by evaluating the highest demand average over (3) three consecutive monthly billing periods during a 5-year window beginning with the end date of the final phase of the currently effective Available Capacity Schedule.
7. When evaluating Customer Peak Demand, SVP may evaluate any anomalies such as needle peaks that may artificially increase peak demand.
E. Customer shall be responsible to operate within the Available Capacity for each Load Phase. In the event of exceedance, the Customer shall pay any penalties, damages, or any other cost associated with Customer's load exceeding the Available Capacity as detailed in Table E1. Such costs include the de energization of SVP electric system for asset inspection and pass through of any penalties assessed to SVP by the California Independent System Operator (CAISO) relating to Resource Adequacy forecasted capacity based on the Customer's excess load above the Available Capacity.
F. Customer shall provide at least 14-day advance notice of any major maintenance or commissioning activities concerning the Substation Facilities.
7. NON-INTERFERENCE
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Neither Party nor any of its agents or contractors shall perform any work relating to the Interim Service, the Substation Facilities, the Transmission Facilities, or the Premises in a manner which unreasonably interferes with the other Party's work or property.
Customer and each of its respective agents and contractors shall use their best efforts to minimize disruption to the City. Without limiting the generality of the foregoing, each Party shall consult in good faith with the other regarding the manner in which work will be performed.
8. FORCE MAJEURE
A. Neither Party shall be considered to be in default in performance of any of its obligations under this Agreement when a failure of performance is due to an Uncontrollable Force. The term "Uncontrollable Force" as used in this Agreement, shall mean any cause beyond the reasonable control of the Party affected, and which by exercise of due diligence such Party could not reasonably have been expected to avoid and which by exercise of due diligence it has been unable to overcome or obtain or cause to be obtained a commercially reasonable substitute therefore. Such Uncontrollable Force includes the failure or threat of failure of facilities, Act of God, flood, drought, earthquake, storm, tornado, fire, explosion, lightning, epidemic, public emergency, war, riot, civil disobedience, labor strike, labor dispute, labor or materials shortage (however labor or materials shortage does not include the mere inability to obtain that labor or material at a particular price), sabotage, restraint by court order, restraint by public authority, or action or non-action by governmental authority or accident.
B. No Party shall, however, be relieved of liability for failure of performance if such failure is due to causes arising out of its own negligence or due to removable or remediable causes which it fails to take reasonable efforts to remove or remedy within a reasonable time, or due to mere fluctuations in market prices, or due to unreasonable delay by the Party claiming or seeking to claim relief from liability.
Nothing contained herein shall be construed to require a Party to settle any strike or labor dispute in which it may be involved. Either Party rendered unable to fulfill any of its obligations under this Agreement by reason of an Uncontrollable Force shall give prompt written notice of such fact to the other Party and shall exercise due diligence to remove such inability with all reasonable dispatch.
9. NO ASSIGNMENT OF AGREEMENT/SUCCESSORS IN INTEREST
A. Customer and City each bind itself, its successors, and assigns, to all of its respective covenants of this Agreement. Except as otherwise set forth in this Agreement, no interest in this Agreement or any of the work provided for under this Agreement shall be assigned or transferred, either voluntarily or by operation of law, by either Party without the prior written approval of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed; any such assignment shall not relieve the assignor from any of its obligations under this Agreement.
B. Notwithstanding anything to the contrary, Customer shall have the right to collaterally assign its rights under this Agreement to a lender providing 1220 Santa Clara PropCo, LLC Substation Agreement
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construction financing or other financing for the improvements being constructed by Customer on or about the Premises, including any Substation Facilities.
Customer shall provide written notice to SVP of Customer's collateral assignment of its rights under this Agreement to a lender. SVP agrees to reasonably cooperate with Customer's financing efforts pursuant to this Section 9, at no out of-pocket expense to SVP.
10. NO THIRD PARTY BENEFICIARY
Except permitted assignees per Section 9 above, this Agreement shall not be construed to be an agreement for the benefit of any third party or parties and no third party or parties shall have any claim or right of action under this Agreement for any cause whatsoever.
11. HOLD HARMLESS/INDEMNIFICATION
A. To the extent permitted by law, Customer agrees to protect, defend, hold harmless and indemnify City, its City Council, commissions, officers, employees, volunteers and agents from and against any claim, injury, liability, loss, cost, and/or expense or damage, including all costs and attorney's fees in providing a defense to any such claim or other action, and whether sounding in law, contract, tort, or equity, in any manner arising from, or alleged to arise in whole or in part from, or in any way connected with this Agreement, including claims of any kind by Customer's employees or persons contracting with Contractor to perform any portion of this Agreement, and shall expressly include passive or active negligence by City connected with the Agreement. However, the obligation to indemnify shall not apply if such liability is ultimately adjudicated to have arisen through the sole active negligence or sole willful misconduct of City; the obligation to defend is not similarly limited.
B. Customer's obligation to protect, defend, indemnify, and hold harmless in full City and City's employees, shall specifically extend to any and all employment-related claims of any type brought by employees, contractors, subcontractors or other agents of Customer, against City (either alone, or jointly with Customer), regardless of venue/jurisdiction in which the claim is brought and the manner of relief sought.
C. To the extent permitted by law, City agrees to protect, defend, hold harmless and indemnify Customer and its affiliates and their directors, officers, employees, and agents from and against any claim, injury, liability, loss, cost, and/or expense or damage, however same may be caused, including all costs and reasonable attorney's fees in providing a defense to any claim arising therefrom, for which Customer shall become legally liable arising from SVP and the City of Santa Clara's gross negligence or willful misconduct with respect to or in any way connected with its performance under this Agreement.
12. AMENDMENTS
It is mutually understood and agreed that no alteration or variation of the terms of this Agreement shall be valid unless made in writing and signed by the Parties and incorporated as an Amendment to this Agreement.
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13. SEVERABILITY CLAUSE
In case any one or more of the provisions contained herein shall be held invalid, illegal or unenforceable by a court of competent jurisdiction, it shall not affect the validity of the other provisions which shall remain in full force and effect.
14. WAIVER
Waiver by either Party of any provision of this Agreement shall not be construed as waiver(s) of any other provision of this Agreement.
15. NOTICES
All notices to the Parties shall, unless otherwise requested in writing, be sent to SVP addressed as follows:
Chief Electric Utility Officer
City of Santa Clara
1500 Warburton Avenue
Santa Clara, California 95050
And by e-mail at svpcontracts@santaclaraca .gov, and
[email protected]
And to Customer addressed as follows:
1220 Santa Clara PropCo, LLC
300 N. LaSalle Street, Suite 1500
Chicago, IL 60654
Attention: Nitin Sathe, General Counsel
Email: [email protected]
The workday the e-mail was sent shall control the date notice was deemed given. An e-mail transmitted after 1 :00 p.m. Pacific Standard Time on a Friday shall be deemed to have been transmitted on the following business day.
16. CAPTIONS
The captions of the various sections, paragraphs and subparagraphs of this Agreement are for convenience only and shall not be considered or referred to in resolving questions of interpretation .
17. GOVERNING LAW AND VENUE
This Agreement shall be governed and construed in accordance with the statutes and laws of the State of California. The venue of any suit filed by either Party shall be vested in the state courts of the County of Santa Clara, or if appropriate, in the United States District Court, Northern District of California, San Jose, California.
18. COMPLIANCE WITH LAWS
The Parties shall comply with all laws, ordinances, codes and regulations of the federal, state and local governments applicable to their respective obligations and activities contemplated by this Agreement, including but not limited to "The Code of the City of 1220 Santa Clara PropCo, LLC Substation Agreement
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Santa Clara, California" ("SCCC"). In particular, Customer's attention is called to the regulations regarding Campaign Contributions (SCCC Chapter 2.130), Lobbying (SCCC Chapter 2.155), Minimum Wage (SCCC Chapter 3.20), Business Tax Certificate (SCCC section 3.40.060), and Food and Beverage Service Worker Retention (SCCC Chapter
9.60), as such Chapters or Sections may be amended from time to time or renumbered.
Additionally Customer has read and agrees to comply with City's Ethical Standards (http://santaclaraca .gov/home/showdocument?id=58299 ).
19. DISPUTE RESOLUTION
A. Unless otherwise mutually agreed to by the Parties, any controversies between the Parties regarding the construction or application of this Agreement, and claims arising out of this Agreement or its breach, shall be submitted to mediation within thirty (30) days of the written request of one Party after the service of that request on the other Party.
B. The Parties may agree on one mediator. If they cannot agree on one mediator, the Party demanding mediation shall request the Superior Court of Santa Clara County to appoint a mediator. The mediation meeting shall not exceed one day (eight (8) hours). The Parties may agree to extend the time allowed for mediation under this Agreement
C. The costs of mediation shall be borne by the Parties equally.
D. Mediation under this section is a condition precedent to filing an action in any court. In the event of litigation or mediation that arises out of any dispute related to this Agreement , the Parties shall each pay their respective attorney's fees, expert witness costs and cost of suit, regardless of the outcome of the litigation.
20. OTHER AGREEMENTS
This Agreement shall not prevent either Party from entering into similar agreements with other entities or individuals.
21 . TERMINATION OF AGREEMENT
A. TERMINATION FOR CAUSE
For purposes of this Agreement, the term "default" shall mean the failure of any Party to perform any material obligation in the time and manner provided by this Agreement. Either Party may terminate this Agreement in the event of a default by the other Party by providing a written Notice of Termination to the defaulting Party. Such Notice of Termination shall become effective no less than thirty (30) calendar days after a Party receives such notice. Such Notice of Termination for cause shall include a statement by the terminating Party setting forth grounds for determination of default under the Agreement.
B. OPPORTUNITY TO CURE DEFAULT
Upon receipt of a Notice of Termination by a Party arising from its default under this Agreement , the defaulting Party shall have thirty (30) days from the receipt of such notice to cure the default by making such payment or performing the 1220 Santa Clara PropCo, LLC Substation Agreement
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required obligation (or additional time, if any that is reasonably necessary to promptly and diligently cure the default). If the default is cured to the reasonable, mutual satisfaction of the Parties, the Agreement shall remain in effect upon written acceptance of the cure by the Party who issued the Notice of Termination for cause.
C. TERMINATION WITHOUT CAUSE
At any time, Customer may elect to terminate construction of the Substation Facilities and Transmission Facilities upon delivery of one hundred eighty (180) days written notice thereof to the City. If Customer chooses to terminate construction of the Substation Facilities and Transmission Facilities, Customer will reimburse any and all City expenses, termination fees, and cancellation fees reasonably incurred by the City related to the Substation Facilities and Transmission Facilities prior to the expiration of such 180-day notice period.
Customer shall not be entitled to a refund of any Load Development Fees that have been paid prior to the written notice of termination.
22. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but both of which shall constitute one and the same instrument.
23. INTEGRATED DOCUMENT-TOTALITY OF AGREEMENT
This Agreement and its Exhibits embody the entire agreement between the Parties regarding the subject matter of this Agreement. No other understanding, agreements, conversations, or otherwise, with any officer, agent, or employee of the City shall affect or modify any of the terms in or obligations created by this Agreement. 1220 Santa Clara PropCo, LLC Substation Agreement
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The Parties acknowledge and accept the terms and conditions of this Agreement as evidenced by the following signatures of their duly authorized representatives. It is the intent of the Parties that this Agreement shall become operative on the Effective Date.
CITY OF SANTA CLARA , CALIFORN IA
a chartered California municipal corporation
Approved as to Form:
~-~~
e of the City Man
City Attorney
"CITY"
0 Warburton Aven e
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax (408) 241-6771
1220 SANTA CLARA PROPCO, LLC
a Delaware limited liability company,
Dated: Ap~ril 25, _022
By (Signature): -.;<---------------------Name: Nitin Sathe Title: Vice President
Principal Place of 300 N. LaSalle Dr., Ste. 1500 Chicago, IL Business Address: 60654 ------------------
Te I e phone: (202) 396-1907
"CUSTOMER"
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0 - 9/30/2021 Page 15 of 27
1~ Cityof ~ s,m,ci,,a
EXHIBIT A
Parcel Map
APN 224-66-006
Legend
Land Parcels
Rt.;iotWays
( OO'Vl'W/1.rrJJS
City Operational Boundary
I.__ _1 :_2_, oo_□ __ O_.I :=N=o=te=s ==========='.
0.1 NAO_ 1983_SlalePlane_ California _III_FIPS _ 0403_F eel C Cily of S,nl, Clan,
0,03
I
0.1 Miles This: map is a user generated static output t'rom an Internet mapping sne and Is for reference on~. Data layers lhal appear on lhls mop may or may not be accurate, cur1en~ or otherwise reliable.
THIS MAP IS NOT TO BE USED FOR NAVIGATION
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
EXHIBIT B
Interim Service Diagram
I
1------......!
s
0 50 100 200
-=--Foo l BM53 ➔
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UTILITY
CONNECTION
POINT
1230 MEMOREX DR
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"'-qi. ,.
• O.H. 600 AMP 12
U.G . 600 4MP. I
12KV FEEDER '1'
(l1P.)
_ ,
EXISTING O.H
POLE (TYP. OF 4)
APN: 224-66-006
TEMP. POWER
SWITCHBOARD
I / KV F~EDERfl:YP.)
: .. J
f
/
/
I
/ / /
./ .'
/ /
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
MEMOREX
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1 -
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DIGUILIO
TEMP. POWER
TRANSFORMER
EXHIBIT C
Station Plan
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Draft rev 0- 09/30/2021
EXHIBIT D
Project Schedule and Costs
Payment Rates
Customer will pay the Load Development Fee based on the current published fee in the Municipal Fee Schedule adopted by the City Council of the City of Santa Clara and amended from time to time. Customer shall also be responsible for actual costs for Substation Facilities and Transmission Facilities.
Payment Schedule
All SVP Estimated Amounts are based on estimated costs and fees at the time of this Agreement. Actual amounts will be based on actual costs and fees at the time of invoice.
Table D1 - Payment Milestone Schedule
Milestone SVP Invoice Date (payment due 30 days after
invoicing)
1 City will invoice within 30 Days following execution of Substation Agreement (Milestone payment amount
includes Load Development Fees for 20MVA
$6,979,800)
3 4
5 City will invoice for LDF for the difference between 20 MVA d th d II d f I t s
City will invoice 30 days before Notice to Proceed is
issued to Transmission Line contractor.
Invoiced after energization of Substation Facilities. City will invoice customer for the difference between
estimated costs billed in PM 1, PM 2, and PM 3 and
actual costs.
Phase O Load Development Fee; City will invoice 2
years following substation facilities energized; 10 MVA block
SVP's Estimated
Amount
$11,507,800
$840,000
$TSO
$3,489 ,900
Customer shall provide SVP written notice at least thirty (30) days prior to the substantial completion of the Substation Facilities, and SVP shall use its commercially reasonable efforts to complete its testing and commissioning activities within 120 days 1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
after the substantial completion of the Substation Facilities. SVP will use its commercially reasonable efforts to meet Customer's anticipated service date. SVP is not obligated to compress its testing and commissioning schedule to meet Customer's anticipated service date.
Table D2 - Substation Design and Construction Elements
Transmission Interconnection Process to run concurrent with Substation Design, Build and Test Process
All SVP Estimated Costs are based on estimated costs and fees at the time of this Agreement. Actual amounts will be based on actual costs and fees at the time of invoice.
Estimated
Substation Design Duration SVP Estimated & Construction Time Costs Payment Milestone Comments Elements Frame of
work
$1 ,340,000 includes all
PM #1 $940,000 - City will work for Substation
invoice within 30 days after Design and
agreement is executed. Transmission Design
Substation Design 3 Months $1,340,000 Payment is due within 30 elements. Funds days of invoice date. Work received from a Funding
will commence once City Agreement ($400,000)
receives payment in full. is credited to this
payment milestone .
Substation Design Build & Test Process: Start date based on date the substation agreement is executed by City Control Building
Procurement
Drawings & Contract 6 Months
Specification
Preparation
SVP Control Building
Bid Assistance and 9 Months Shop Drawing
Review
Substation Design
Drawings & Contract 8 Months Specification
Preparation
Substation
Construction 8 Months
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
Estimated costs included in Concurrent with
PM #1 (Substation Design) Substation Drawing
Preparation
Concurrent with Estimated costs included in Substation Drawing PM #1 (Substation Design) Preparation Customer may perform
Estimated costs included in this task concurrent with
PM #1 (Substation Design) Control Building
Drawinq Prep
Estimated costs of
Engineering support of Construction costs paid construction including directly by Customer submittal review is included in PM#1
I
I
I
I
Substation Design
& Construction
Elements
Substation
Commissioning &
Testing
Total Substation
Design, Construct,
Test process
Estimated
Duration
Time
Frame of
work
3 Months
22 months
Transmission Interconnection Process.
Transmission Line
Interconnection
Design
Transmission Pole
and Conductor
Procurement
Easement
Acquisition
Public Works
Bidding
Transmission (T
line) construction
6 months
5 months
9 Months
4 Months
SVP Estimated
Costs
$270,000
Payment Milestone Comments
$1 ,610,000 is a subtotal
This cost is a subtotal and not for SubStation Design,
$1 610 000 Construct, and Test ' ' a part of a payment milestone process. Best case time frame.
Concurrent with Substation Desi n, Build and Test rocess PM #1 $750,000. City will
invoice 30 days after
Substation Agreement is
executed Payment is due
$750,000 within 30 days of invoice date.
$2,210,000
$778,000
Work will commence once
City receives payment in full.
PM #1 : Route 1 -$2 ,210,000
City will invoice 30 days
before Public Works contract
is submitted to City Council
for approval. Payment is due
30 days from invoice date.
PM #1 $628,000. City will
invoice 30 days after
Substation Agreement is
executed. Payment is due
within 30 days of invoice date.
Work will commence once
City receives payment in full.
$2, 210,000 includes all
long lead time material
procurement and
fabrication work for the
Transmission Line
Interconnection
elements.
$778,000 is total for
easement acquisition
and negotiation. Funds
received from a Funding
Agreement Amendment
($150,000) is credited to
this payment milestone.
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
Estimated
Substation Design Duration SVP Estimated & Construction Time Costs Elements Frame of work
Construction of
Transmission Line
Extension
Includes the T-line 2 months $5,500,000 construct ion
associated with
connect ing the
substation to the
SVP 60kV loo
Transmission Line
Interconnection & 6 Months
Cit Labor
Transmission
Interconnection 30 months $9,238,000
rocess com lete
Not Miscellaneous costs $840,000 Applicable
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
Payment Milestone Comments
Estimated Costs included in
Construction of Transmission
Line Extension PM#2
This amount is a subtotal and Advisory Comment: not part of a payment milestone Best case time frame .
Potential miscellaneous
costs could include:
Permits from City of
Santa Clara or other
regulatory agencies, 3rd
party temporary
construction easement
fees that are not
included in transmission
PM #3: Payment due within line easement fees,
utility relocation work, 30 days of invoice from City. costs for soil remediation or disposal
of hazardous materials
not previously identified,
CEQA mitigation fees,
substation testing and
commissioning costs not
previously charged, and
5% Contribution in Lieu
to General Fund
Estimated
Substation Design Duration SVP Estimated & Construct ion Time Costs Elements Frame of work
Project close out and Not To be determined
reconciliation Applicable at end of Project
Estimated Total for
Substation &
30 Transmission $11,688,000 Design & Months
Construction
Elements
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
Payment Milestone Comments
Close out costs include
any costs that exceed
PM #4 _ City will invoke the cost estimates such as,
but not limited to: SVP difference between estimated labor and material costs costs and actual costs. incurred during the Payment is due 30 days after project, interim service invoice date. removal costs, If estimated costs are greater construction inspection
costs, as-built than actual costs, City will documentation costs refund remaining funds to and costs associated Customer within sixty (60) with adding new days of the conclusion of . transmission and invoicing by any third parties substation assets into performing work associated SVP inspection and with Agreement inventory databases, and 5% Contribution in
Lieu to General Fund.
Estimated duration
includes net duration
with schedule
overlaps included.
Schedule assumes
best case scenario
(Transm ission
Interconnection
Process) and no
delays due to
unforeseen events
such as weather for
force majeu re
Table D3 Load Development Fee Schedule (based on 40 MVA) All Estimated Amounts are based on fees at the time of this Agreement.
Actua l Amounts will be based on fees at the time of invo ice.
Additional Fees to Time
Frame from Estimated be paid by the Effective Cost Payment Milestone Comments Customer Date
Interim Service Fee $ Interim service already existing
(based on 4.5MVA) Existing None to site. No additional payment re uired.
Payment estimate based on
City will PM #1 $6,979,800 - PM #1 - Customer Load Development invoice Fee= $348.99/kVA. Load Load Development within 30 City will invoice first 20MVA Development Fees are based Fee (based on days of $6,979,800 of Interim Service. Payment on City of Santa Clara 20MVA) execution of is due 30 days after date of Municipal Fee Schedule in agreement invoice. effect at time of invoice to
Customer.
City will Payment estimate based on invoice PM #5 $3,489,900 - City will Customer Load Development within 30 invoice 10MVA of Available Load Development days after Capacity. Fee= $348.99/kVA. Load Fee (based on Available $3,489,900 Development Fees are based 10MVA) Capacity in City must receive payment in on City of Santa Clara Table E1 full before capacity will be Municipal Fee Schedule in effect at time of invoice to exceeds 20 made available to Customer. Customer. MVA City will
invoice
within 30
Load Development days after
Fee (based on Available $3,489,900
10MVA) Capacity in
Table E1
exceeds 30
MVA
Total for Load $13,959,600 Develo ment Fees
ESTIMATED GRAND TOTAL FOR ENTIRE PROJECT : $25,647 ,600 1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
EXHIBIT E
AVAILABLE CAPACITY SCHEDULE
I. SVP will make commercially reasonable efforts to make Available Capacity for Customer's use based on the timeline shown in Table E1 ("Available Capacity Schedule").
II. The start date of the Available Capacity Schedule is the July 1st following the energization date of the Substation Facilities ("Capacity Start Date").
Ill. The Phase Start Date for each phase assumes Customer has paid all amounts due including, but not limited to, Load Development Fees and charges included in Exhibit D before the start of that Phase.
IV. Table E1 - Available Capacity Schedule is subject to the provisions of Section 6.C. (Capacity Reduction) of the Agreement and may be modified pursuant to the terms of that section.
Table E1 -Available Capacity Schedule
Available Capacity for Cumulative Load Phase Start Phase End Load Phase Date Date Year
Date Date 2022
Interim Substation Substation
Agreement Facilities 2023
Executed Enerqization
Substation 3 years after 2024
0 Facilities Facilities 2025
Energization Energization 2026 Date Date
Substation 2027
Facilities 3 years after 2028
1 Energization Phase 1
date +3 Start Date 2029
years
Substation 2030
Facilities 2 years after
2 Energization Phase 2 2031 date +6 Start Date
years
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
Capacity Paid Development (MVA) Fee Payment Capacity
1 20 20
4.5 0 20
5 0 20
18 0 20
28 10 20
31 10 30
31 0 40
31 0 40
31 0 40
31 0 40
EXHIBIT F
Sample Capacity Reduction Notice
This Capacity Reduction Notice is made pursuant to the [INSERT SUBSTATION NAME] Substation Agreement (the "Agreement"), between the City of Santa Clara, California, a chartered California municipal corporation ("City") and [INSERT NAME OF ENTITY], [INSERT TYPE OF ENTITY] ("Customer") dated _ ____ , 20_ This Capacity Reduction Notice is governed by the provisions of the Agreement, and this Capacity Reduction Notice is incorporated into that Agreement.
Customer is hereby notified that the Available Capacity Schedule (Exhibit E -Available Capacity Schedule) of the Agreement has been modified according to the below calculations:
Capacity Reduction Calculation pursuant to Phase#: [INSERT SUBJECT PHASE] Available Capacity for year: ___ has been modified based on the following calculation:
1. Peak Demand for [INSERT FIRST CONSECUTIVE MONTH], 20_ during evaluation period [INSERT PHASE OR YEAR STATED IN STEP
1]: ____ MVA
2. Peak Demand for [INSERT SECOND CONSECUTIVE MONTH], 20_ during evaluation period [INSERT PHASE OR YEAR IN STEP
1]: ________ MVA
3. Peak Demand for [INSERT THIRD CONSECUTIVE MONTH], 20_ during evaluation period [INSERT PHASE OR YEAR STATED IN STEP
1]: ________ MVA
4. Peak Demand average of the 3 months: [INSERT AVERAGE OF STEPS 3, 4, AND 5] MVA
5. Peak Demand average with Additional 15%: [INSERT MVA FROM STEP 6 MULTIPLIED BY 1.15] MVA
Based on the above reduction calculation, Table E1 - Available Capacity Schedule in Exhibit E of the Agreement has been modified. This Capacity Reduction Notice is effective 30 days from the date signed by the SVP official below.
The new Available Capacity for each Load Phase of Agreement is as shown on Exhibit E -AVAILABLE CAPACITY SCHEDULE - AMENDED [ENTER DATE OF NOTICE +. 30 Days] attached and incorporated into the Agreement by reference. Such Exhibit E shall supersede any previous Exhibit E whether those Exhibits were modified by amendment to the Agreement or by Capacity Reduction Notice. 1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021
By:
Name: ------------
Tit I e: Chief Electric Utility Officer
Signature: _____________ _
Date: ------------
File: File signed copy of Notice with the City Clerk's Office in Memorex Junction Substation Agreement
1220 Santa Clara PropCo, LLC Substation Agreement
Draft rev 0- 09/30/2021