11.3(a).
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“Excused Conditions” means; (a) any period during which Seller is unable to generate or deliver energy to the Point of Delivery to the extent caused by (i) an event of Force Majeure or (ii) System Emergency, (b) any Curtailment Period; (c) any Permitted Scheduled Outage Period; and (d) any curtailment of the Facility arising out of or resulting from the manner in which Buyer bids, offers, or schedules the Facility, the PV System Energy or any Products, or in which Buyer fails to do so, including any non-compliance with the Operating Restrictions. “Expected Commercial Operation Date” means September 19, 2023. “Facility” means the co-located PV System and BESS to be located on the Site, including the structures, facilities, equipment, fixtures, appurtenances, improvements and associated real and personal property, physical and intangible property, and other rights and interests as further described in Appendix B-1 and depicted on Appendix B-2, including all property interests and related transmission and other facilities.
“Facility Debt” means any senior or subordinated construction, interim or long-term debt financing (including any backleverage or working capital debt) or refinancing for or in connection with the development, construction, purchase, ownership, installation or operation of the Facility, including (a) any financing or refinancing provided to Seller or any Upstream Equity Owner with respect to the Facility (including as part of a portfolio with other energy generation projects) and (b) any interest rate protection agreements hedging any of the foregoing debt obligations. “Facility Lender” means (a) any financing party providing any Facility Debt or any trustee or agent acting on behalf of any such financing party or parties and (b) any Tax Equity Investor providing any equity financing or refinancing for or in connection with the development, construction, purchase, ownership, installation or operation of the Facility, including in connection with any Tax Equity Financing or Sale Leaseback Financing or refinancing. “Fair and Reasonable” has the meaning set forth in the definition of “Special Purpose Entity”.
“FERC” means the Federal Energy Regulatory Commission.
“Final Stub Year” means the period beginning on the first day of January following the nineteenth (19th) full calendar year referenced in clause (ii) of the definition of “Contract Year” and ending at 24:00 hours on the date that, together with the number of days in the Initial Stub Year, would be equal to three hundred sixty-five (365) days. “Force Majeure” has the meaning set forth in Section 14.6(b). “Force Majeure Notice” has the meaning set forth in Section 14.6(a). “Forced Outage” means the removal of service availability of the Facility, or any portion of the Facility, for emergency reasons or conditions in which the Facility, or any portion thereof, is unavailable due to unanticipated failure, including as a result of Force Majeure. “Full Capacity Deliverability Status” or “FCDS” has the meaning set forth in the CAISO Tariff.
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“Gains” has the meaning set forth in Section 13.4(f)(i). “Generator Interconnection Agreement” means the agreement and associated documents (or any successor agreement and associated documentation approved by FERC) by and among Seller, Southern California Edison, and the CAISO governing the terms and conditions of Seller’s interconnection with the CAISO grid, including any description of the plan for interconnecting to the CAISO grid.
“Governmental Authority” means any federal, state, regional, city or local government, any intergovernmental association or political subdivision thereof, or other governmental, regulatory or administrative agency, court, commission, administration, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, or other governmental authority with jurisdiction over the Parties, the Facility, or this Agreement, or any Person acting as a delegate or agent of any Governmental Authority; provided that “Governmental Authority” specifically excludes Buyer and the Participating Members. “Green Value” consists of the market value of (a) avoided greenhouse gas emissions and/or credits associated with RPS Compliant energy, and (b) all other Environmental Attributes and avoided emissions related attributes and benefits that would otherwise have been realized had Seller generated the PV Delivered Energy for the applicable Contract Year, and shall be calculated as an amount equal to the time weighted average of the prices of greenhouse gases and other Environmental Attributes (as published in commercial indices related to California energy markets) that would have been realized for each MWh of the Shortfall Energy; provided, that if for any Contract Year there does not exist a liquid trading market that is mutually agreeable to the Parties to determine such Green Value, the Green Value will be equal to the replacement cost for the attributes described in clauses (a) and (b) above, expressed in $/MWh, as of the final day of the Contract Year in which the applicable Shortfall Energy accrues. “Guaranteed Commercial Operation Date” means December 20, 2023, as may be extended pursuant to Section 3.5(b)(i).
“Guaranteed Delivered Energy” means, with respect to each Measurement Period, eighty-five (85%) of the Annual Contract Quantity for such Measurement Period as specified on Appendix C.
“Guaranteed Dischargeable Energy” has the meaning set forth on Appendix K-1. “IEEE” means the Institute of Electrical and Electronics Engineers. “Indemnitees” has the meaning set forth in Section 14.19(a). “Independent Engineer” means (a) DNV, RRC, REVAMP or Leidos, or (b) if none of the firms identified in clause (a) are selected by Seller, then a Person mutually acceptable to both Parties.
“Initial Stub Year” means the period beginning on the Commercial Operation Date and ending at 24:00 hours on December 31 in the year during which the Commercial Operation Date occurs.
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“Insurance” means the policies of insurance as set forth on Appendix F. “Interconnection Delay” means the Participating TO’s Interconnection Facilities, Distribution Upgrades, and Network Upgrades (each, as defined in the Generator Interconnection Agreement) are not complete such that the Facility can interconnect at the Point of Interconnection by April 15, 2023, except to the extent such delay is caused by any acts or omissions of Seller or any Affiliate of Seller.
“Interest Rate” has the meaning set forth in Section 11.4. “ISA” means the Instrument Society of America.
“Key Milestone” means a Milestone for which liquidated damages are provided in Appendix I.
“kW” means kilowatt in alternating current, or AC.
“kWh” means kilowatt-hours.
“Land Lease” means an agreement to be entered into for Seller to use real estate as described in Appendix M.
“Legal Opinion” means an executed original of a written legal opinion of counsel for Seller, or other counsel reasonably acceptable to Buyer, addressed to Buyer and dated as of the Effective Date, covering the opinions set forth on Appendix S. “Lessor” means any lessor of real property for the Facility pursuant to a Site Control Document.
“Licensed Professional Engineer” means an independent, professional engineer reasonably acceptable to Buyer, licensed in the State of California, and otherwise qualified to perform the work required hereunder.
“Lien” means any mortgage, deed of trust, lien, security interest, retention of title or lease for security purposes, pledge, charge, encumbrance, equity, attachment, claim, easement, right of way, covenant, condition or restriction, leasehold interest, purchase right or other right of any kind, including any option, of any other Person in or with respect to any real or personal property. “Local Capacity Requirement Attributes” means the benefits or attributes now or existing in the future based on the procurement obligations of Buyer with respect to local resource capacity requirements as prescribed by the PUC, the CAISO or other regional entity, and that are associated with the electric generating capability of the Facility. “Locational Marginal Price” or “LMP” has the meaning set forth on Appendix C of the CAISO Tariff.
“Losses” has the meaning set forth in Section 13.4(f)(ii). - 14 -
“Major Maintenance Blockout” has the meaning set forth in Section 4.4(b). “Market Price Index” means the weighted average of the Integrated Forward Market hourly price for all the Reference Hours in the Measurement Period, as published by the CAISO, for the SP-15 Existing Zone Generation Trading Hub (as defined in the CAISO Tariff) weighted by hourly and monthly volumes in the forecast most recently delivered by Seller pursuant to Section 7.3(c); provided, that in the event there are no longer market prices for SP-15 Existing Zone Generation Trading Hub, the Parties will mutually agree to a replacement market price index that most closely reflects the geographic location of the SP-15 Existing Zone Generation Trading Hub at the Effective Date; and, provided, further, that if a market price index for solar energy that would more accurately track the price of the PV Delivered Energy is created, the Parties may mutually agree to adapt such index price as the “Market Price Index” at such time. “Maximum Delivery Rate” means the maximum hourly rate of delivery of PV Delivered Energy in MWh, which shall be sixty-five (65) MW per hour. “Measurement Period” means each rolling two (2) Contract Year period, beginning with the first full Contract Year occurring after the Commercial Operation Date. “Milestone” has the meaning set forth in Section 3.5(a). “Milestone Date” has the meaning set forth in Section 3.5(a). “Minimum Dischargeable Energy Performance Guarantee” has the meaning set forth on Appendix K-1.
“Minimum Round Trip Efficiency Performance Guarantee” has the meaning set forth on Appendix K-1.
“Month” means a calendar month commencing at 12:01 a.m. Pacific Prevailing Time on the first day of such month and ending at 12:00 p.m. Pacific Prevailing Time on the last day of such month.
“Monthly BESS Availability” has the meaning set forth on Appendix K-1. “Monthly BESS Availability Guarantee” has the meaning set forth in Section 9.6(a). “Moody’s” means Moody’s Investor Services, Inc.
“MW” means megawatt in alternating current, or AC.
“MWh” means megawatt-hours.
“NERC” means the North American Electric Reliability Corporation. “New Resource Implementation Process” or “NRIP” means the process and requirements for new resource implementation, as amended from time to time, as set forth in the CAISO Tariff.
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“Non-Defaulting Party” has the meaning set forth in Section 13.4(a). “Notifying Party” has the meaning set forth in Section 14.3(a). “O&M Agreement” means the agreement for the provision of operation and maintenance services for the Facility entered into or to be entered into by and between Seller and a Qualified Operator.
“OFAC” means the U.S. Department of Treasury’s Office of Foreign Assets Control. “Operating Restrictions” means the restrictions set forth on Appendix Q. “OSHA” means the Occupational Safety and Health Administration of the United States Department of Labor.
“Outside Commercial Operation Date” means September 19, 2024, which date may not be extended for any reason.
“Pacific Prevailing Time” means the local time in the State of California. “Participating Members” means the City of Vernon and the City of Cerritos. “Party” or “Parties” has the meaning set forth in the preamble of this Agreement. “Performance Security” means the Project Development Security or Delivery Term Security for the Facility, together or individually, as applicable. “Period Hours” has the meaning set forth on Appendix K-1. “Permits” means all applications, permits, licenses, franchises, certificates, concessions, consents, authorizations, certifications, self-certifications, approvals, registrations, orders, filings, entitlements and similar requirements of whatever kind and however described that are required to be filed, submitted, obtained or maintained by any Person with respect to the development, siting, design, acquisition, construction, equipping, financing, ownership, possession, shakedown, start-up, testing, operation or maintenance of the Facility, the production, sale and delivery of Products from the Facility, including Energy, Capacity Rights and Environmental Attributes, or any other transactions or matter contemplated by this Agreement (including those pertaining to electrical, building, zoning, environmental and occupational safety and health requirements), including CEQA Determinations and the Permits described in Appendix B-1. “Permitted Encumbrances” means (a) the Lien in favor of the Facility Lender, (b) any Lien approved by Buyer in a writing separate from this Agreement that expressly identifies the Lien as a Permitted Encumbrance, (c) Liens for Taxes not yet due or for Taxes being contested in good faith by appropriate proceedings, so long as such proceedings do not involve a risk of the sale, forfeiture, loss or restriction on the use of the Facility or any part thereof, provided that such proceedings end by the expiration of the Agreement Term, (d) suppliers’, vendors’, mechanics’, workman’s, repairman’s, employees’ or other like Liens arising in the ordinary course of business for work or service performed or materials furnished in connection with the Facility for amounts - 16 -
the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings so long as such proceedings do not involve a risk of the sale, forfeiture, loss or restriction on use of the Facility or any part thereof, and (e) easements, rights-of-way, reservations, restrictions, defects in title, encroachments and other similar non-monetary encumbrances that have been identified to Buyer in writing prior to the Commercial Operation Date and that do not interfere with or impair the operation of the Facility or performance of Seller’s obligations as contemplated by this Agreement.
“Permitted Scheduled Outage Period” means eighty-eight (88) hours per Contract Year in which Seller performs Scheduled Outages meeting the requirements of Section 4.4, beginning in the first full Contract Year of the Delivery Term.
“Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust, unincorporated organization, entity, government or other political subdivision.
“Pnode Price” means the Locational Marginal Price of the Facility’s Pnode at the Point of Delivery, as determined by CAISO, which, for the avoidance of doubt, shall not include the value of any Environmental Attributes or Capacity Rights, if any. “Point of Delivery” means the COLWATER_2_LN001 CAISO PNODE at the Kramer Substation in San Bernardino County, California, or such other substantially similar point agreed to by the Parties prior to the Commercial Operation Date. “Point of Interconnection” means Seller’s 220kV bus of the Kramer Substation in San Bernardino County, California.
“Present Value Rate” means, at any date, the sum of 0.50% plus the yield reported on page “USD” of the Bloomberg Financial Markets Services Screen (or, if not available, any other nationally-recognized trading screen reporting on-line intraday trading in United States government securities) at 11:00 a.m. (New York City, New York time) for the United States government securities having a maturity that most nearly matches the Remaining Term at that date. “Products” means any and all Delivered Energy, Capacity Rights, Environmental Attributes, and ancillary products, services or attributes similar to the foregoing that are or can be produced by, or are associated with, the Facility, whether now attainable or established in the future, including delivered energy, renewable attributes, and renewable energy credits. The REC Products shall meet the standard of “Portfolio Content Category 1” as defined by RPS Law. “Project Development Security” has the meaning set forth in Section 5.7(a). “Prudent Utility Practices” means those practices, methods, and acts, that are commonly used by a significant portion of the solar-power generation industry and the battery energy storage industry, (including, if applicable, the co-located solar power generation and battery storage industry), in each case, in prudent engineering and operations to design, construct, and operate and maintain electric equipment (including solar-powered facilities and battery energy storage facilities) lawfully and with safety, dependability, reliability, efficiency, and economy, including any applicable practices, methods, acts, guidelines, standards and criteria of the CAISO, FERC, - 17 -
NERC, WECC, as each may be amended from time to time, and all applicable Requirements of Law. Prudent Utility Practices are not intended to be limited to the optimum practice, method, or act, to the exclusion of all others, but rather is intended to include a range of acceptable practices, methods, and acts generally accepted in the industry.
“Public Utilities Code” means the Public Utilities Code of the State of California, as may be amended from time to time.
“PUC” means the California Public Utilities Commission and any successor thereto. “PUC Performance Standard” means, at any time, the greenhouse gas emission performance standard in effect at such time for electric generation facilities owned or operated (or both) by load-serving entities and not local publicly-owned electric utilities, or for which a loadserving entity and not a local publicly owned electric utility has entered into a contractual agreement for the purchase of power from such facilities, as established by the PUC or other Governmental Authority under the EPS Law.
“PV Contract Capacity” means sixty-five (65) MWac, as measured by the sum of inverter nameplate capacity.
“PV Delivered Energy” means PV System Energy (net of all auxiliary loads, station electrical uses and electrical losses from the PV System to the Point of Delivery), as measured in MWh by the PV Energy Meter in compliance with CAISO metering rules. “PV Energy Meter” means CAISO-approved and CAISO-polled Electric Metering Device located at the PV System dedicated solely to the PV System as depicted on Appendix O. “PV System” means the solar photovoltaic electric generating facility to be developed, constructed, owned and operated by Seller (as further described on Appendix B-1). “PV System Energy” means Energy generated by the PV System. “QRE” has the meaning set forth in Section 8.4.
“Qualified Buyer Assignee” means any (a) Participating Member or (b) any other nonparticipating member of Buyer that, in each case, (i) executes a written assumption agreement in favor of Seller pursuant to which such Person assumes all of the obligations of Buyer under this Agreement and the Ancillary Documents and (ii) is rated (A) “Baa2” or higher by Moody’s and “BBB” or higher by S&P, if such Person is rated by both Moody’s and S&P, (B) “Baa2” or higher by Moody’s or “BBB” or higher by S&P if such Person is rated by either S&P or Moody’s, or (C) equivalent ratings by any other credit rating agency of recognized national standing. “Qualified Issuer” means a Person (a) acceptable to Buyer or (b) that maintains a United States domestic branch, and a current long-term credit rating (corporate or long-term senior unsecured debt) of (1) “A2” or higher by Moody’s and “A” or higher by S&P, if such Person is rated by both Moody’s and S&P or (2) “A2” or higher by Moody’s, or “A” or higher by S&P if such Person is rated by either S&P or Moody’s.
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“Qualified Operator” means Clearway Renewable Operation & Maintenance LLC, a limited liability company organized and existing under the laws of the State of California, or (a) with respect to the PV System portion of the Facility, a Person reasonably acceptable to Buyer that has at least three (3) years of operating experience with photovoltaic solar powered generation facilities that are in excess of sixty-five (65) MW in capacity and (b) with respect to the BESS, a Person reasonably acceptable to Buyer that has operating experience with battery energy storage systems that are comparable in size, configuration and capabilities to the BESS, including being connected to, or feeding Energy to, a high voltage transmission level. “Qualified Transferee” means a Person that (a) maintains, or whose direct or indirect parent maintains, a current long-term credit rating (corporate or long-term senior unsecured debt) of (i) “A2” or higher by Moody’s and “A” or higher by S&P, if such Person is rated by both Moody’s and S&P or (ii) “Aa2” or higher by Moody’s, or “AA” or higher by S&P if such Person is rated by either S&P or Moody’s, or (iii) equivalent ratings by any other credit rating agency of recognized national standing, (b) has a tangible net worth of at least One Hundred and Fifty Million Dollars ($150,000,000.00), or (c) is reasonably acceptable to Buyer, and in each case (d) (i) executes a written assumption agreement in favor of Buyer pursuant to which any such Qualified Transferee shall assume all the obligations of Seller under this Agreement (except in each case where Seller remains a Party to this Agreement); (ii) retains or causes the subsequent owner to retain a Qualified Operator to operate the Facility and has four (4) years of experience owning, leasing, or managing electrical generation through renewable resources with at least two (2) projects of fifty (50) MW or higher and (iii) is not at the time of transfer in a litigation, arbitration or other formal dispute resolution proceeding against Buyer or a Participating Member. “Quality Assurance Program” or “Q/A Program” has the meaning set forth in Section
5.5. “Real-Time LMP” means the LMP for the Real-Time Market for the applicable Settlement Interval.
“Real-Time Market” has the meaning set forth in the CAISO Tariff. “REC” or “Renewable Energy Credit” means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, which certificate is issued through the accounting system established, used or approved by the CEC pursuant to the RPS Law, evidencing that a stated quantity of energy (of at least one (1) MWh and in whole units only) was generated and delivered from such eligible renewable energy resource. Such certificate is a tradable environmental commodity (also known as a “green tag” or “renewable energy certificate”) for which the owner of the REC can evidence that it has purchased Energy that is CEC Certified. “Recapture Period” means the period from the date that the Facility is placed in service for U.S. federal income tax purposes until the date that is five (5) full years from the date that the Facility is placed in service for U.S. federal income tax purposes. “Recipient Party” has the meaning set forth in Section 14.3(a). - 19 -
“Reference Hour” means any hour from hour-ending 0700 to hour-ending 2200 (i.e., 7:00 a.m. to 9:59 p.m.) on Monday through Sunday, Pacific Prevailing Time, excluding NERC holidays.
“Remaining Term” means, at any date, the remaining portion of the Delivery Term at that date without regard to any early termination of this Agreement. “Remedial Action Plan” has the meaning set forth in Section 3.5(a). “Replacement Capacity Rights” means Capacity Rights, if any, equivalent to those that would have been provided by the Facility during the Contract Year for which the Replacement Product is being provided.
“Replacement Energy” means Energy that is produced by a facility (or facilities) other than the Facility that, at the time delivered to Buyer, (a) is both RPS Compliant and, if applicable, EPS Compliant, and (b) qualifies under California Public Utilities Code Section 399.16(b)(1). “Replacement Price” has the meaning set forth in Section 7.7(c). “Replacement Product” means (a) Replacement Energy, and (b) Replacement Capacity Rights.
“Requirement of Law” means any federal, state, local or other law (including AntiCorruption Laws, Anti-Terrorism Laws, Economic Sanctions Laws and any environmental law, EPS Law or RPS Law), resolution, standard, code, rule, ordinance, directive, regulation, order, judgment, decree, ruling, determination, permit, certificate, authorization, or approval of a Governmental Authority, including those pertaining to electrical, building, zoning, environmental and occupational safety and health requirements.
“Requirements” means, collectively, (a) any standards or requirements of ASTM, ASME, EPA, IEEE, ISA, National Electrical Code, National Electric Safety Code, OSHA, Cal-OSHA, Uniform Building Code, or Uniform Plumbing Code applicable to the design or construction of the Facility, (b) any applicable local county fire department standards or codes, (c) Prudent Utility Practices, (d) all applicable Requirements of Law, including the UCC, (e) Seller’s Quality Assurance Program, and (f) all other requirements of this Agreement. “Resource Adequacy Attributes” means the benefits or attributes, if any, now or existing in the future based on the procurement obligations of Buyer with respect to Resource Adequacy as prescribed by the PUC, the CAISO or any other regional entity, and that are associated with the electric generating capability of the Facility. Buyer will be entitled to all Resource Adequacy Attributes from the Facility. Resource Adequacy estimates will be calculated using the PUC methodology for calculating qualifying capacity for co-located resources. “RFP” has the meaning set forth in the recitals to this Agreement. “Round Trip Efficiency” or “RTE” has the meaning set forth on Appendix K-1. “Round Trip Efficiency Adjustment Factor” has the meaning set forth on Appendix K-2. - 20 -
“Round Trip Efficiency Performance Guarantee” has the meaning set forth in Section 9.6(a).
“RPS Compliance” or “RPS Compliant” means, when used with respect to the PV System or any other facility at any time, that all Energy generated by such facility at all times shall, together with all of the associated Environmental Attributes, qualify as a “portfolio content category 1” eligible renewable resource, or equivalent if the RPS Law is changed, under the RPS Law and meet the requirements of Public Utilities Code Section 399.16(b)(1). “RPS Compliance Period” means each “Compliance Period” as defined in the RPS Law. “RPS Law” means the California Renewable Energy Resources Act, including the California Renewables Portfolio Standards Program, Article 16 of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, California Public Resources Code § 25740 through 25751, Division
25.5 of California Health and Safety Code (commencing with Section 38580) and any related regulations or guidebooks promulgated by the CEC or, as applicable, the California Air Resources Board, and as all of the foregoing may be promulgated and implemented from time to time, and any replacement laws or regulations.
“S&P” means Standard & Poor’s Financial Services LLC.
“Sale Leaseback Financing” means a sale leaseback whereby the Facility or the Site (which for purposes of this definition shall exclude any easements associated with the transmission line) is sold by Seller to one or more investors (each, a “Sale Leaseback Lessor”) and leased back by Seller and Seller retains a right of quiet enjoyment over the Site (or the Facility, as applicable) during the lease term as long as Seller pays Sale Leaseback Lessor thereof rent and meets its other obligations under the lease; provided that a Sale Leaseback Financing shall comply with the provisions of Section 12.5(d).
“Sale Leaseback Lessor” has the meaning set forth in the definition of “Sale Leaseback Financing”.
“SCADA” means the supervisory control and data acquisition system for the Facility. “Schedule” or “Scheduling” means the actions of Seller and Buyer, their Authorized Representatives, and the Transmission Providers, if applicable, of notifying, requesting and confirming to the CAISO the amounts of Delivered Energy and Replacement Product expected to be delivered (from the PV System or the BESS) consistent with the Scheduling interval at the Point of Delivery on any given date following the Commercial Operation Date and during the Delivery Term, all in the manner contemplated by the CAISO Tariff. “Scheduled Outage” means any outage with respect to the Facility other than a Forced Outage.
“Scheduled Outage Projection” has the meaning set forth in Section 4.4(b). “Scheduling Coordinator” has the meaning set forth in the CAISO Tariff. - 21 -
“Scheduling Procedures” has the meaning set forth in Section 7.3(g). “Seller” has the meaning set forth in the preamble of this Agreement. “Seller’s Ultimate Parent” means, (a) as of the Effective Date, Clearway Energy Group LLC, (b) as of the effective date of any YieldCo Transfer, each of Clearway Energy Group LLC, Clearway Energy, Inc., or Hannon Armstrong Sustainable Infrastructure, and (c) from and after any other Change in Control where Seller’s Ultimate Parent entity changes, the entity set forth in Schedule 12.2(h) as Seller’s Ultimate Parent.
“Settlement Interval” has the meaning set forth in the CAISO Tariff. “Shortfall Damages” has the meaning set forth in Section 9.3. “Shortfall Energy” has the meaning set forth in Section 9.1. “Shortfall Makeup Period” means the Contract Year following the end of the Measurement Period during which Shortfall Energy accrues. “Site” means the real property (including all fixtures and appurtenances thereto) and related physical and intangible property generally identified in Appendix B-2 as owned or leased by Seller where the Facility is located or will be located, and including any easements, rights-ofway or contractual rights held or to be held by Seller for transmission lines or roadways servicing such Site or the Facility located (or to be located) thereon. “Site Control” means that the Site Control Documents have been executed by Seller and each counterparty thereto and are in full force and effect and such Site Control Documents are sufficient, in Seller’s reasonable discretion, to permit Seller to fulfill all of its then-current obligations under this Agreement.
“Site Control Documents” means the real property leases and easements for the Site that together establish Site Control, including (a) each Land Lease, and (b) the documents listed on Appendix M.
“Special Purpose Entity” means a limited liability company which at all times on and after the Effective Date meets the following conditions:
(a) shall not (i) (A) engage in any consolidation or merger with or into any other business entity, (B) acquire by purchase or otherwise all or substantially all of the business or assets of or beneficial interest in any other entity, or (C) transfer, lease or sell, in one transaction or any combination of transactions, all or substantially all of its properties or assets, except in each such case to the extent permitted herein; (ii) modify, amend or waive any provisions of its organizational documents in a manner inconsistent with its status as a Special Purpose Entity; (b) notwithstanding its omnibus powers was organized solely for the purpose of acquiring, developing, owning, holding, selling, financing, leasing, transferring, exchanging, managing and operating the Facility, entering into offtake agreements such as this Agreement with - 22 -
Buyer, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing;
(c) has not been, is not, and will not be engaged in any business unrelated to the acquisition, development, construction, ownership, management or operation of the Facility or a larger project of which the Facility is a component part; (d) other than excess real property rights, has not had, and does not have and will not have, any assets other than those related to the Facility or to any larger project of which the Facility is a component part;
(e) has held itself out as and will hold itself out to the public as a legal entity separate and distinct from any other entity and has not failed and will not fail to correct any known misunderstanding regarding the separate identity of such entity; (f) has maintained and will maintain its accounts, organizational books and records, resolutions and agreements separate from any other Person and has filed and will file its own tax returns (except to the extent treated as a “disregarded entity” for tax purposes and not required to file tax returns under applicable law);
(g) has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(h) has not entered into or been a party to, and will not enter into or be a party to, any transaction with its members or Affiliates, except (i) on terms that are intrinsically fair, commercially reasonable or no less favorable to it than would be obtained in a comparable arm’s length transaction with an unrelated third party (“Fair and Reasonable”); (ii) in connection with the development or construction of the Facility; or (iii) as otherwise set forth and permitted in this Agreement;
(i) does not and will not have any obligation to indemnify, and has not indemnified and will not indemnify any Person other than (i) its officers, managers, or members, as the case may be in connection with activities related to the performance of this Agreement, or (ii) entities requiring indemnification in the normal course of business in connection with the development, construction, ownership, and operation of the Facility; (j) has considered and shall consider the interests of its creditors, if any, in connection with all limited liability company actions, if at any time it perceives that it is not or believes that it may not be (i) solvent or (ii) able to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due; (k) does not and will not have any of its obligations guaranteed by any Affiliate and does not and will not hold itself out as being responsible for the debt obligations of any other Person, except (i) any parent guarantees that may be issued by an upstream Affiliate for any Facility Debt, hedge for the Facility, Tax Equity Financing or construction and/or supply agreements necessary for the construction of the Facility, or (ii) in accordance with the Generator Interconnection Agreement;
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(l) has (i) complied and will comply with the terms and provisions contained in its organizational documents, and (ii) has observed and will observe all customary limited liability company formalities under applicable laws and its organizational documents; (m) has not and will not commingle its funds or assets with those of any Person and has not participated and will not participate in any joint or connected bank accounts with any other Person;
(n) has held and will hold its assets in its own name and will conduct all business in its own name;
(o) has paid and will pay its own liabilities and expenses, including the salaries of any employees it might have, out of its own funds and assets and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations, except with respect to expenses paid by the tax equity partnership owning Seller, including asset management, accounting and legal, rent, operation and maintenance fees, property and sales taxes and filing fees; (p) has not assumed or guaranteed or become obligated for, and will not assume or guarantee or become obligated for, the debts of any other Person (other than an Affiliate of Seller in the interest of the financing of the Facility) and has not held out and will not hold out its credit as being available to satisfy the obligations of any other Person (other than an Affiliate of Seller in the interest of the financing of the Facility), except in accordance with the Generator Interconnection Agreement; provided, however, that it may join in any guarantee of the indebtedness of any Affiliate (i) in which all or substantially all of its other Affiliates join as guarantors or co-obligors and, provided further, that such guarantee contains a net worth limitation on the amount of the guaranteed obligations thereunder, a fraudulent transfer savings clause, or other terms as Seller determines to be appropriate to prevent the guarantee from rendering Seller insolvent, or (ii) as otherwise permitted pursuant to this Agreement; (q) does not have and will not acquire obligations or securities of its members or any Affiliate except as permitted under (h), (k) and (p) of this definition; (r) now maintains and uses, and will maintain and use, separate invoice bearing its name; such invoices utilized by it or utilized to collect its funds or pay its expenses have borne and shall bear its own name and have not borne and shall not bear the name of any other entity unless such entity is clearly designated as being its agent; (s) except in connection with the development or construction, or financing of the development or construction of the Facility of any larger project of which the Facility is a component part, has not pledged and will not pledge its assets for the benefit of any other Person, other than Permitted Encumbrances;
(t) is and intends to remain solvent and has paid and intends to continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall have or become due, and has maintained, is maintaining and intends to maintain through intercorporate capital allocation by loans and deposits pursuant to a central cash - 24 -
management system adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; and (u) will have no indebtedness other than (i) debt, if any, in an amount for construction and permanent operations of the Facility, as applicable, considered in light of the types and amounts of other sources of capital used for the Facility that is within reasonable and prudent market norms given the size, type and commercial attributes of the Facility and poses no material risk to its liquidity or its ability to perform its obligations under this Agreement and (ii) such other indebtedness that are expressly permitted pursuant to this Agreement. “Startup and Test Energy” means PV Delivered Energy, measured in MWh, generated prior to the Commercial Operation Date for which there are certified RECs, measured in MWh, delivered prior to the Commercial Operation Date.
“Storage Capacity Test” means any test or retest of the BESS to establish the Dischargeable Energy and/or Round Trip Efficiency, conducted in accordance with the testing procedures, requirements and protocols set forth on Appendix K-1 and Appendix K-3. “Subcontract” means any agreement or contract entered into on or after the Effective Date by Seller and a Person other than Buyer, which Person is providing goods or services to Seller that are related to the performance of Seller’s obligations under this Agreement. Subcontracts specifically include any agreement or contract that is referred to or defined as a “subcontract” in the policies, ordinances, codes or laws with which Seller must comply pursuant to this Agreement, or that is made with a “subcontractor” as such term is used or defined in such policies, ordinances, codes, or laws.
“Subcontractor” means any party to a Subcontract with Seller. “Supplementary Storage Capacity Test Protocol” has the meaning set forth on Appendix K-3.
“System Emergency” means each of the following: (i) “System Emergency” as set forth in the CAISO Tariff and (ii) a condition or situation that in the judgment of Buyer (a) is imminently likely to endanger life or property; or (b) is imminently likely (as determined in a non-discriminatory manner) to cause a material adverse effect on the security of, reliability of, or damage to the Transmission System, Transmission Provider’s interconnection facilities (as defined in the Generator Interconnection Agreement) or the transmission systems of others to which the Transmission System is directly connected.
“Taking” has the meaning set forth in Section 12.3(e).
“Tax” or “Taxes” means each federal, state, county, local and other (a) net income, gross income, gross receipts, sales, use, ad valorem, business or occupation, transfer, franchise, profits, withholding, payroll, employment, excise, property or leasehold tax and (b) customs, duty or other fee, assessment or charge of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amount with respect thereto. “Tax Equity Financing” means, with respect to Seller or any Upstream Equity Owner, - 25 -
any transaction or series of transactions (a) resulting in a portion of the membership interests in Seller or Upstream Equity Owner, as applicable, being issued or otherwise provided to another Person (a “Tax Equity Investor”) in exchange for capital contributions to Seller or Upstream Equity Owner, as applicable, or the Facility being sold to and leased by Seller from a Tax Equity Investor, in either case for the purpose of raising a portion of the funds needed to finance the construction of the Facility by monetizing the Tax credits, depreciation and other tax benefits associated with the Facility (including without limitation any transaction of the type described in this definition that utilizes a lease or inverted lease structure), or (b) consisting of a Sale Leaseback Financing.
“Tax Equity Investor” has the meaning set forth in the definition of “Tax Equity Financing”.
“Termination Notice” has the meaning set forth in Section 13.4(a). “Termination Payment” means a payment in an amount equal to the Non-Defaulting Party’s (a) Losses, plus (b) Costs, minus (c) Gains; provided, however, that if such amount is a negative number, the Termination Payment shall be equal to zero. “Third Party Sale Replacement Price” has the meaning set forth in Section 6.2. “Transmission Provider” means the Person operating the Transmission System to and from the Point of Delivery.
“Transmission Services” means the transmission and other services required to transmit Delivered Energy to or from the Point of Delivery.
“Transmission System” means the facilities utilized to provide Transmission Services. “UNAVAILHRSm” has the meaning set forth on Appendix K-1. “Unexcused Cause” has the meaning set forth in Section 14.6(b). “UNFCCC” has the meaning set forth in the definition of “Environmental Attribute”. “Upstream Equity Owner” means any upstream equity owner of Seller below Seller’s Ultimate Parent.
“Variable Energy Resource Forecast” means the final forecast of the Energy to be produced by the PV System prepared by the CAISO in accordance with the Eligible Intermittent Resources Protocol for use in submitting a Schedule for the output of the PV System in the RealTime Market, and if such forecast is not available, the final forecast for the Energy in the DayAhead Market. “WECC” means the Western Electricity Coordinating Council. “Western Interconnection” means the wide synchronous power grid overseen by the WECC.
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“WREGIS” means Western Renewable Energy Generation Information System. “WREGIS Certificates” has the meaning set forth in Section 8.4. “WREGIS Operating Rules” means the rules describing the operations of the WREGIS, as published by WREGIS.
“WREGIS Withhold Amount” has the meaning set forth in Section 11.2. “YieldCo Partnership” means Daggett 2 TargetCo LLC, in whom one hundred percent (100%) of the equity is owned directly or indirectly, by a combination of Clearway Energy Group LLC, Clearway Energy, Inc., and Hannon Armstrong Sustainable Infrastructure. “YieldCo Transfer” means any transaction or series of transactions in which the direct or indirect interests in Seller are transferred to Clearway Energy, Inc., or a subsidiary of Clearway Energy, Inc., and Hannon Armstrong Sustainable Infrastructure, or a subsidiary of Hannon Armstrong Sustainable Infrastructure, following which (a) a majority of the economic interests in the YieldCo Partnership is held, directly or indirectly, by Clearway Energy Group LLC and Hannon Armstrong Sustainable Infrastructure and (b)(i) Clearway Energy, Inc., retains management control over Seller, directly or indirectly through its capacity as the managing member of the YieldCo Partnership, by contract or otherwise and (ii) Clearway Renewable Operation & Maintenance LLC, or another Qualified Operator has been retained to perform the operation and maintenance of the Facility. For the avoidance of doubt, if at any time clause (a) or (b) is not satisfied, then Seller must comply with all requirements set forth in this Agreement with respect to a Change in Control.
Other terms defined herein have the meanings so given when used in this Agreement with initial-capitalized letters.
Section 1.2 Interpretation. In this Agreement, unless a clear contrary intention appears:
(a) time is of the essence;
(b) the singular number includes the plural number and vice versa; (c) reference to any Person includes such Person’s successors and assigns (regardless of whether such Person’s successors and assigns are expressly referenced in the provision) but, in case of a Party hereto, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;
(d) reference to any gender includes the other;
(e) reference to any agreement (including this Agreement), document, act, statute, law, instrument, tariff or Requirement means such agreement, document, act, statute, law, instrument, or tariff, or Requirement, as amended, modified, replaced or superseded and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof, - 27 -
regardless of whether the reference to the agreement, document, act, statute, law, instrument, tariff, or Requirement expressly refers to amendments, modifications, replacements, or successors; (f) reference to any Article, Section, or Appendix means such Article of this Agreement, Section of this Agreement, or such Appendix to this Agreement, as the case may be, and references in any Article or Section or definition to any clause means such clause of such Article or Section or definition;
(g) “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article or Section or other provision hereof or thereof;
(h) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term, regardless of whether words such as “without limitation” are expressly included in the applicable provision; (i) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including”; (j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) unless otherwise indicated, reference to time shall always refer to Pacific Prevailing Time; and reference to any “day” shall mean a calendar day, unless otherwise indicated; and
(l) the term “or” is not exclusive, regardless of whether “and/or” is used in the applicable provision.
ARTICLE II
EFFECTIVE DATE, TERM, AND EARLY TERMINATION
Section 2.1 Effective Date. This Agreement shall be effective as of the Effective Date. No more than five (5) Business Days after the Effective Date, Seller shall deliver (or caused to be delivered) to Buyer (a) copies of all resolutions and other documents evidencing the limited liability actions described in Section 12.2(b), certified by an authorized representative of Seller as being true, correct, and complete, (b) an incumbency certificate signed by the secretary of Seller certifying as to the names and signatures of the authorized representatives of Seller, and (c) the Legal Opinion. No more than ten (10) days after the Effective Date, Seller shall deliver to Buyer the Project Development Security. No more than thirty (30) days after the Effective Date, Seller shall deliver to Buyer, and Buyer shall have received evidence reasonably satisfactory to Buyer that Seller continues to maintain Site Control.
Section 2.2 Term.
(a) Agreement Term. The term of this Agreement (the “Agreement Term”) shall commence on the Effective Date and end on the last day of the Delivery Term or upon the earlier termination of this Agreement in accordance with the terms hereof. - 28 -
(b) Delivery Term. This Agreement shall have a delivery term (the “Delivery Term”) commencing on the Commercial Operation Date and ending at 11:59 p.m. on the date that is twenty (20) years after the Commercial Operation Date, unless sooner terminated in accordance with the terms of this Agreement.
Section 2.3 Survivability. The provisions of Section 2.3, 2.4, 13.4, 14.1 through 14.3, 14.8 through 14.22 and 14.25 shall survive for a period of one (1) year following the termination of this Agreement. The provisions of ARTICLE I shall survive to the extent necessary for the enforcement of other surviving provisions. The provisions of Sections 11.6 and
11.8 shall survive for a period of four (4) years following final payment made by Buyer hereunder or the expiration or termination date of this Agreement, whichever is later. The provisions of Section 5.7, ARTICLE VI, ARTICLE VIII, ARTICLE IX and Sections 11.1 through 11.5 and 11.7 shall continue in effect after termination to the extent necessary to provide for final billing, adjustments, and deliveries (including the provision to Buyer of Replacement Product or Shortfall Damages) related to any period prior to termination of this Agreement.
Section 2.4 Early Termination.
(a) Early Termination by Mutual Agreement. This Agreement may be terminated by mutual written agreement of the Parties.
(b) Early Termination for Default. This Agreement may be terminated for Default pursuant to Section 13.4.
(c) Early Termination for Failure to Obtain CEC Certification. Buyer may, in its sole discretion and without penalty to Buyer, terminate this Agreement, effective upon notice to Seller if Facility is not CEC Certified by the date that is six (6) months after the Commercial Operation Date.
(d) Early Termination for Force Majeure. This Agreement may be terminated pursuant to Section 14.6(c).
(e) Early Termination for Daily Delay Damages. Buyer may, in its sole discretion and without penalty to Buyer, terminate this Agreement, effective upon notice to Seller, if Seller incurs liability for Daily Delay Damages in an amount equal to, or in excess of, the amount of the Project Development Security.
(f) Effect of Termination. Except as otherwise provided herein, any early termination of this Agreement under this Section 2.4 shall be without prejudice to the rights and remedies of a Party for Defaults occurring prior to such termination.
ARTICLE III
DEVELOPMENT OF THE FACILITY
Section 3.1 General.
(a) Project Design. Seller shall determine the proposed location, design, and configuration of the Facility as it deems appropriate, subject to the Requirements, including the - 29 -
characteristics and other requirements for the Facility set forth in Appendix B-1, and also subject to any conditions imposed by the lead agency or any responsible agency as part of the CEQA review of the Facility and which Seller deems acceptable.
(b) Permitting. Seller, at its expense, shall timely take all steps necessary to obtain all Permits required to construct, maintain, and operate the Facility in accordance with the Requirements and for the performance of Seller’s obligations hereunder. (c) Meetings with Governmental Authorities. Seller shall represent the Facility as necessary in all meetings with and proceedings before all Governmental Authorities. (d) Construction. Seller shall use commercially reasonable and diligent efforts to site, develop, finance and construct the Facility. Seller shall develop, operate and maintain the Facility, at its sole risk and expense, and in compliance with the Requirements and applicable manufacturer’s and operator’s specifications and recommended procedures; provided, however, meeting these requirements shall not relieve Seller of its other obligations under this Agreement.
Seller shall ensure that the construction of the Facility is governed by a project labor agreement, community workforce agreement, work site agreement, collective bargaining agreement, or any other similar agreements providing for the terms and conditions of employment with the applicable labor organizations.
(e) Other Information. In addition to the reports required to be delivered under this Agreement, including Section 3.5 and Section 5.6, Seller shall provide to Buyer such other information regarding the permitting, engineering, construction or operations, of Seller, its Subcontractors or the Facility, as Buyer or Buyer’s Authorized Representative may, from time to time, reasonably request. Buyer and Buyer’s Authorized Representative shall be permitted to inspect the Facility from time to time upon reasonable notice to Seller and during reasonable business hours subject to Site safety protocols and orientation as set forth in Section 5.2, but Buyer and Buyer’s Authorized Representative shall not interfere with the activities at the Facility and be escorted while on the Site by an employee or other representative of Seller. Without limiting Seller’s indemnification obligations in Section 14.19(a), the presence of Buyer, its representatives or both on the Site shall be at Buyer’s sole expense and risk. (f) Certification Regarding Debt. No less than thirty (30) days before the Construction Start Date, and no more than ninety (90) days after the Commercial Operation Date, Seller shall deliver to Buyer a certificate of Seller’s authorized officer, certifying that the amount of debt Seller has incurred, if any, for construction and permanent operations of the Facility, as applicable, considered in light of the types and amounts of other sources of capital used for the Facility, (i) is within reasonable and prudent market norms given the size, type, and commercial attributes of the Facility and (ii) poses no material risk to Seller’s liquidity or to Seller’s ability to perform its obligations under the Agreement.
Section 3.2 Site Confirmation. Seller represents and warrants that (a) Seller’s agents and representatives have visited, inspected and are familiar with the Site and its surface physical condition relevant to the obligations of Seller pursuant to this Agreement, including surface conditions, normal and usual soil conditions, roads, utilities, the presence, if any, of archaeological and cultural artifacts and topography, and solar radiation, air and water quality - 30 -
conditions, (b) Seller is familiar with all local and other conditions that may be material to Seller’s performance of its obligations under this Agreement (including, transportation, seasons and climate, access, weather, the presence, if any, of endangered species, handling and storage of materials and equipment, and availability and quality of labor and utilities), and (c) Seller has determined that the Site constitutes an acceptable and suitable site for the construction and operation of the Facility in accordance herewith. Any failure by Seller to take the actions described in this Section 3.2 shall not relieve Seller from any responsibility for estimating properly the difficulty and cost of successfully constructing, maintaining or operating the Facility in accordance with this Agreement or from proceeding to construct, maintain and operate the Facility successfully without any additional expense to Buyer. The foregoing shall not restrict Seller’s right to claim Force Majeure hereunder to the extent the requirements therefor are satisfied.
Section 3.3 Subcontracts.
(a) Seller shall not allow terms in any Subcontract that would interfere with Buyer’s rights of access, inspection and audit provided for in this Agreement. (b) Seller shall deliver to Buyer a schedule of the performance of initial performance tests and other tests required under each Subcontract for Seller to achieve Commercial Operation hereunder, which schedule may be updated by Seller (and provided to Buyer) from time to time as needed based on the progress of the work.
Section 3.4 Certification of Commercial Operation Dates. Not less than ninety (90) days prior to the date upon which Seller expects to achieve all of the conditions precedent to Commercial Operation as specified in Appendix L-2, Seller shall give written notice to Buyer of such expected date of Commercial Operation. Seller shall deliver written completion certifications to Buyer in the form of Appendix L-2; provided, however, that (a) Buyer shall not be obligated to accept a Commercial Operation Date that is earlier than the Expected Commercial Operation Date unless Seller has provided Buyer with three (3) months’ notice of a proposed earlier Expected Commercial Operation Date and (b) Commercial Operation is not achieved earlier than March 31, 2023. Within ten (10) Business Days after delivery of Seller’s initial certification, and thereafter within five (5) Business Days after Seller resubmits a certification, Buyer shall in writing either accept or reject the certification in its reasonable discretion. Any rejection of a certification shall specify in detail the specific substantive deficiencies upon which it is based. Seller shall have the right to contest a rejection of its initial certification by providing information or documentation demonstrating that no such deficiencies exist. Subject to Seller’s right to contest a rejection of the initial certification, Seller shall promptly correct any defects or deficiencies identified in a rejection and resubmit the certification within five (5) Business Days.
If, during the required time period, Buyer does not either accept or reject any certification, then for all purposes of this Agreement Buyer shall be deemed to have accepted such certification.
The Commercial Operation Date shall be the date on which Seller delivered the certification that is accepted or deemed accepted by Buyer as provided in this Section 3.4.
Section 3.5 Milestone Schedule; Delay Damages.
(a) Milestone Schedule, Reporting and Startup and Test Energy. - 31 -
(i) Attached as Appendix I is a milestone schedule with deadlines for the development of the Facility through the Commercial Operation Date (each milestone, a “Milestone” and each date by which a Milestone is to be completed, a “Milestone Date”).
Seller shall achieve each Key Milestone by the Milestone Date therefor and shall use commercially reasonable efforts to achieve each other Milestone by the Milestone Date therefor.
(ii) Until the Commercial Operation Date, Seller shall provide Buyer with a report on a Monthly basis, except that Seller shall provide such report on a quarterly basis until construction of the Facility commences, that includes: (1) a description of the Site plan for the Facility, (2) a description of any planned changes to the Facility or Site plan since the previously delivered report, (3) a bar chart schedule showing progress to achieving the remaining Milestones with respect to the Facility, (4) a chart showing the critical path schedule of major items and activities, (5) a summary of activities at the Facility during the previous Month, (6) a forecast of activities during the then-current Month, (7) a list of any significant developments or delays or other issues that could impact Seller’s achievement of Milestones relating to the Facility by the applicable Milestone Dates, and (8) pictures, in sufficient quantity and of appropriate detail, documenting construction and startup progress with respect to the Facility. (iii) If Seller anticipates that it will not achieve a Milestone by the applicable Milestone Date (as such date may be extended pursuant to this Section 3.5), Seller shall promptly prepare and deliver to Buyer a remedial action plan (“Remedial Action Plan”), which shall set forth (1) the anticipated period of delay, (2) the basis for such delay, (3) an outline of the commercially reasonable steps that Seller is taking to address the delay and to ensure that future Milestones, including the Guaranteed Commercial Operation Date, will be timely achieved, (4) a proposed revised date for achievement of the applicable Milestone and (5) such other information and in such detail as may be reasonably requested by Buyer. Except as set forth in Section 3.5(b), Seller shall not have any liability for failure to timely achieve a Milestone other than the obligation to submit a Remedial Action Plan; provided, however, that the foregoing shall not limit Buyer’s right to exercise any right or remedy available under this Agreement or at law or in equity for any other Default occurring concurrently with or before or after Seller’s delay in achievement of the applicable Milestone.
(iv) Beginning no earlier than April 21, 2023, Seller shall have the right to sell and deliver, and Buyer shall purchase and accept from Seller, Startup and Test Energy at the rate for such Energy set forth in Appendix A-1, subject to Seller providing thirty (30) days’ prior written notice to Buyer. Seller shall provide a schedule of its best projection for delivery of Startup and Test Energy with its notice, which schedule shall be subject to Buyer’s reasonable approval in all respects. Buyer may curtail Startup and Test Energy, as a non-compensable curtailment, if necessary in its reasonable judgment, subject to Section 7.4(b). For the avoidance of doubt, Buyer shall have the right, but shall have no obligation hereunder, to purchase Startup and Test Energy at any time before April 21, 2023.
(b) Delays; Delay Damages.
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(i) Each Milestone Date (other than the Outside Commercial Operation Date) may be extended, on a day-for-day basis to the extent Seller is actually, demonstrably and unavoidably delayed in achieving such Milestone due to Force Majeure or an Interconnection Delay. Notwithstanding anything to the contrary set forth in this Agreement, the Outside Commercial Operation Date shall not be extended for any reason whatsoever, including due to Force Majeure or any Interconnection Delay, and the failure to achieve the Commercial Operation Date by the Outside Commercial Operation Date shall be an immediate Default by Seller, not subject to extension or cure of any kind. (ii) If Seller fails to achieve any Key Milestone by the applicable Milestone Date (as such Milestone Date may be extended pursuant to Section 3.5(b)(i)), Seller shall pay liquidated damages to Buyer for each day between the Milestone Date and the date upon which such Key Milestone is achieved (or the Agreement is terminated by Buyer) in the applicable daily liquidated damage amount set forth for such Key Milestone in Appendix I (the “Daily Delay Damages”). For the avoidance of doubt, if multiple Key Milestones are missed, Seller shall pay Daily Delay Damages for each Key Milestone. If Seller fails to achieve the Construction Start Date by the date that is one hundred eighty (180) days after the Milestone Date for the Construction Start Milestone, Buyer shall have the right in its sole discretion and without penalty to (1) terminate this Agreement for a Default under Section 13.4, or (2) allow Seller to continue to pay the Daily Delay Damages to Buyer, during which time Buyer shall not terminate the Agreement based on Seller’s failure to timely achieve the Construction Start Milestone. Seller shall pay to Buyer Daily Delay Damages within seven (7) days after receipt of an invoice therefor from Buyer. If Seller achieves (A) the Construction Start Milestone before the date that is six (6) months prior to December 20, 2023 and (B) Commercial Operation by the Guaranteed Commercial Operation Date, then Buyer shall refund to Seller any amounts previously paid to Buyer as Daily Delay Damages for failure to achieve the Construction Start Milestone by the Milestone Date therefor net of any costs and expenses incurred, or damages sustained, by Buyer directly as a result of Seller’s failure to achieve the Construction Start Milestone. If Seller fails to achieve the Construction Start Milestone on or before the date that is six (6) months prior to December 20, 2023, Buyer shall be entitled to all Daily Delay Damages accruing as a result of Seller’s failure to achieve the Construction Start Milestone by the Milestone Date therefor even if Seller achieves Commercial Operation by the Guaranteed Commercial Operation Date. If Seller fails to achieve Commercial Operation by the Outside Commercial Operation Date, Buyer shall have the right in its sole discretion and without penalty to terminate this Agreement for a Default under Section 13.4. (iii) The Parties agree that the damages that Buyer would incur due to Seller’s failure to timely achieve a Key Milestone would be difficult or impossible to predict with certainty, and it is impractical or difficult to assess actual damages in those circumstances, but the Daily Delay Damages are a fair and reasonable calculation of such damages for Seller’s failure to achieve any Key Milestone by the Milestone Date therefor.
The payment of Daily Delay Damages as provided in this ARTICLE III are Buyer’s sole remedy for Seller’s failure to timely achieve a Key Milestone, but shall not limit Buyer’s right to (a) exercise any right or remedy available under this Agreement or at law or in equity for any other breach or default occurring concurrently with, before, or after Seller’s delay in achieving the applicable Key Milestone by the Milestone Date therefor, or (b) - 33 -
terminate this Agreement pursuant to Section 13.4, provided that the payment of Daily Delay Damages shall be taken into account when determining any damages due Buyer for such termination; provided further that in no event shall any damages, including Daily Delay Damages, owed in connection with such termination exceed the limitation of liability provided in Section 14.19(e).
Section 3.6 Decommissioning and Other Costs. 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.
Section 3.7 CEC Certification. Seller shall provide Buyer with a copy of the CEC pre-certification of the PV System at least thirty (30) days prior to the date on which Startup and Test Energy is first delivered to Buyer. Promptly, but in no event more than ten (10) days following the Commercial Operation Date, Seller shall file with the CEC all materials and documents required to demonstrate that the Facility is entitled to be CEC Certified. Seller shall promptly provide Buyer with copies of all submittals to the CEC and other correspondence between Seller and the CEC. Failure by Seller to comply with the requirements set forth in this Section 3.7 shall constitute a Default by Seller, subject to the cure periods set forth in Section 13.1(b).
ARTICLE IV
OPERATION AND MAINTENANCE OF THE FACILITY
Section 4.1 General Operational Requirements. Seller shall, at all times:
(a) At its sole expense, operate and maintain the Facility in accordance with the Requirements and the requirements of applicable manufacturer’s and operator’s specifications and using commercially reasonable efforts to comply with any published recommendations of the manufacturers and suppliers of the solar panels, battery and other major components of the Facility; (b) At its sole expense, operate and maintain the Facility using a Qualified Operator in accordance with the Requirements;
(c) Use qualified and trained personnel for managing, operating and maintaining the Facility and for coordinating with Buyer, and ensure that necessary personnel are available on-site or on-call twenty-four (24) hours per day following the Commercial Operation Date and during the Delivery Term (for the avoidance of doubt, in no event will the operation of the Facility or any portion thereof by a third party, nor shall Buyer’s approval of any third-party operator, relieve Seller of any of its obligations hereunder); (d) Operate and maintain the Facility with due regard for the safety, security and reliability of the interconnected facilities and Transmission System; and (e) Ensure that the instantaneous AC output from the Facility does not exceed the PV Contract Capacity.
Section 4.2 Operation and Maintenance Plan.
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(a) General. Seller shall (i) devise and implement a plan of inspection, maintenance, and repair for the Facility and the components thereof (including a schedule for such inspections, maintenance and repairs) in order to maintain such equipment in accordance with Prudent Utility Practices, (ii) complete all such inspections, maintenance and repair of the Facility, and the components thereof, on a timely basis according to such plan and (iii) shall keep records with respect to inspections, maintenance, and repairs thereto. The aforementioned plan and all records of such activities shall be available for inspection by Buyer during Seller’s regular business hours upon reasonable notice.
(b) After Commercial Operation. Following the Commercial Operation Date, Seller shall provide to Buyer, on a quarterly basis, summaries or redacted versions of any regularly prepared operations and maintenance status reports of the Facility provided to WECC or the Facility Lenders.
Section 4.3 Operation and Use of the BESS; Grid Charging. (a) Seller shall procure, install, configure, operate, and maintain the BESS in a manner consistent with meeting all of the BESS Performance Guarantees described in Section 9.6 of this Agreement and shall otherwise cause the BESS to provide the services contemplated herein, and to operate throughout the Agreement Term, in accordance with the terms and conditions of this Agreement. Buyer or Buyer’s agent shall have the exclusive right to schedule or designate the BESS to charge or discharge via the BESS Instructions, subject to the Operating Restrictions. Other than auxiliary/parasitic load, Seller shall not dispatch or operate the BESS other than via the BESS Instructions. Seller shall implement safeguards, notices, and advance warning systems into the BESS to prohibit operation of the BESS outside of the limitations set forth in this Section 4.3. (b) Grid Charging. Seller shall design and construct the BESS as an integrated part of the PV System, and during the Recapture Period, notwithstanding any other provision of this Agreement, the BESS shall be charged exclusively using PV System Energy. After the end of the Recapture Period, in order to optimize the benefits of the Facility, Seller shall make reconfigurations of, or adjustments to, the Facility or interconnection facilities as necessary to allow for grid charging of the BESS at no additional cost and as soon as is reasonably practicable.
Section 4.4 Outages.
(a) Unless otherwise agreed, subject to compliance with Section 4.4(b), Seller shall be permitted to reduce deliveries of Product during any Scheduled 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 any Scheduled Outage and expected end dates thereof. Between June 1st and September 30th, Seller shall not schedule non-emergency maintenance that reduces the PV System Energy or the BESS Contract Capacity of the BESS, unless (1) (i) such Scheduled Outage complies with the CAISO Tariff and all applicable rules and regulations of CAISO, (ii) is required to avoid damage to the Facility, (iii) such maintenance is necessary to maintain equipment warranties and cannot be scheduled outside the period of June 1st to September 30th, and (iv) such Scheduled Outage is required in accordance with Prudent Utility Practices, or (2) the Parties agree otherwise in writing.
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(b) Buyer and Seller shall cooperate to minimize Scheduled Outages during specified periods of time during each calendar year in accordance with Prudent Utility Practices and this Section 4.4 (such periods, the “Major Maintenance Blockout”). No later than one hundred twenty (120) days prior to the anticipated Commercial Operation Date and the commencement of each Contract Year thereafter, Buyer shall provide Seller with its specified Major Maintenance Blockout. In the absence of such updated notification, the most recent previous Major Maintenance Blockout notification shall apply. Seller shall attempt to minimize its Scheduled Outages during the Major Maintenance Blockout consistent with Prudent Utility Practices; provided that Seller shall be permitted to perform scheduled and unscheduled maintenance on the Facility during Major Maintenance Blockouts during such hours when solar irradiance levels are insufficient to permit the production of Energy, if such maintenance is permitted under the CAISO Tariff and conducted in accordance with all applicable Requirements (including, for avoidance of doubt, the requirements of the Transmission Provider). In addition, no later than sixty (60) days prior to the anticipated Commercial Operation Date, and for each calendar year thereafter, no later than the deadline for providing the CAISO with proposed maintenance outages for the following year as described in the CAISO Tariff, Seller shall provide the CAISO and Buyer with its non-binding written projection of all Scheduled Outages for the succeeding calendar year (the “Scheduled Outage Projection”) reflecting a minimized schedule of scheduled maintenance during the Major Maintenance Blockout.
In addition, Seller shall cooperate in good faith with maintenance scheduling requests by Buyer consistent with Prudent Utility Practices. The Scheduled Outage Projection shall include information concerning all projected Scheduled Outages during such period, including (A) the anticipated start and end dates of each Scheduled Outage; (B) a description of the maintenance or repair work to be performed during the Scheduled Outage; and (C) the anticipated MW of operational capacity of the PV System, the BESS and the Facility, if any, during the Scheduled Outage. Seller shall use commercially reasonable efforts to notify Buyer of any change in the Scheduled Outage Projection as soon as practicable, but in no event later than sixty (60) days prior to the newly scheduled date for the Scheduled Outage. Seller shall use commercially reasonable efforts to accommodate reasonable requests of Buyer with respect to the timing of Scheduled Outages and shall, to the extent feasible and consistent with Prudent Utility Practices, (x) arrange for Scheduled Outages to occur between October 1 and May 1 of each year (or such other period as reasonably determined by Buyer from time to time) and coincident with planned transmission outages, but not to overlap with the Major Maintenance Blockout and (y) cause not more than fifty percent (50%) of the PV Contract Capacity to be unavailable during any Scheduled Outages. In the event of a System Emergency, Seller shall use commercially reasonable efforts to reschedule any Scheduled Outage previously scheduled so that it occurs during the System Emergency. (c) Seller shall report all outages, including all Forced Outages and Scheduled Outages, to CAISO in accordance with the CAISO Tariff and all applicable rules and regulations of CAISO. In addition, Seller shall notify Buyer immediately upon identification of a situation likely to result in a Forced Outage occurring within a twenty-four (24) hour period that is likely to cause or require removal of the PV System, the BESS or the Facility from service, or a reduction in the maximum output capability of the PV System, the BESS or the Facility by one (1) MW or more from the value most recently recorded in the Web Outage Management System for the CAISO. For all other Forced Outages, Seller shall provide Buyer with as much advance notice as practicably possible, but in all cases, shall notify Buyer and the CAISO within thirty (30) minutes after the commencement of the Forced Outage. Seller shall provide detailed information concerning each Forced Outage, including (i) the start and anticipated end dates of the Forced - 36 -
Outage; (ii) a description of the cause of the Forced Outage; (iii) a description of the maintenance or repair work to be performed during the Forced Outage; and (iv) the anticipated MW of operational capacity, if any, during the Forced Outage. Seller shall exercise commercially reasonable efforts to avoid Forced Outages and to limit the duration and extent of any such outages. (d) In addition to the requirements set forth in Section 4.4(a), Section 4.4(b) and Section 4.4(c), the Parties shall cooperate to develop mutually acceptable procedures for addressing Scheduled Outages and any other outages arising in connection with the Facility. (e) In the event of any inconsistency between the provisions in this Section 4.4 and any applicable requirements of CAISO, such CAISO requirements shall govern.
ARTICLE V
COMPLIANCE DURING CONSTRUCTION AND OPERATIONS; SECURITY Section 5.1 In General.
(a) Facility Covenants. Seller shall perform, or cause to be performed, all development, engineering, design and construction of the Facility in a good and workmanlike manner and in accordance with the Requirements. Seller shall obtain from the manufacturers of the equipment installed in the PV System and the BESS warranties and performance guarantees of market-standard terms of years and sufficient to allow Seller to meet the performance guarantees set forth in this Agreement. Seller shall not create, incur, assume or permit to exist any Lien other than Permitted Encumbrances on any portion of the Facility or the Site without the prior written approval of Buyer. Seller shall, throughout the Delivery Term, monitor the operation and maintenance of the Facility to ensure that the Facility, and said operation and maintenance, is, and will be, in full compliance with Prudent Utility Practices, other Requirements applicable to the Facility, Seller’s Quality Assurance Program, and any other provisions of this Agreement. (b) Equipment Suppliers. Seller shall only engage with Approved Vendors for the solar panels and batteries to be incorporated into the Facility.
Section 5.2 Buyers’ Rights to Monitor in General. Buyer shall have the right, and Seller shall permit Buyer and its Authorized Representative, advisors, engineers and consultants, upon reasonable advance notice to observe, inspect, review and monitor all construction, operations and activities of the Facility, including (a) reviewing and monitoring (x) the installation of the equipment, start up and testing, and Commercial Operation of the Facility, and (y) all initial performance tests during Facility start-up and all tests required under the Subcontracts to be performed prior to each Milestone and achievement of Commercial Operation and (b) performing such detailed examinations and inspections as, in the judgment of Buyer, are appropriate and advisable to determine that the Facility equipment and ancillary components of the Facility have been installed in accordance with the Requirements and (c) making notes about and copying all non-confidential or non-proprietary documents, drawing, plans, specifications, permits, test results, and information as Buyer may reasonably request; provided that such activities on the part of Buyer and its Authorized Representative shall be coordinated with Seller so as to not interfere with the construction or operation of the Facility. Seller shall endeavor to provide Buyer at least ten (10) Business Days prior notice of the commencement of any - 37 -
performance tests. Seller shall cause its personnel, consultants, and contractors to be available to, and cooperate in all reasonable respects with, Buyer and its Authorized Representative, advisors, engineers, and consultants at reasonable times and with prior notice for purposes of Buyer’s exercise of its rights under this Section 5.2; provided that in no event shall Seller be required to reschedule any such tests should Buyer or its representatives not be available on the scheduled date for such tests. Upon any visit to the Site, Buyer and its representatives shall: (i) not interfere with the orderly progression of the work on Site or operation of the Facility; (ii) follow Seller’s rules and policies with respect to safety and protection of property and the environment; and (iii) be escorted while on the Site by an employee or other representative of Seller. Without limiting Seller’s obligations under Section 14.19, the presence of Buyer, its representatives or both on the Site shall be at Buyer’s sole expense and risk. From and after the Commercial Operation Date, except in the event of a System Emergency, Seller shall accommodate Buyer’s requests to visit the PV System or the Facility during Seller’s regular business hours upon reasonable notice.
Section 5.3 Effect of Review by Buyer. Any review by Buyer or a Buyer’s Authorized Representative of the design, construction, engineering, operation or maintenance of the Facility, or observation of any testing, is solely for the information of Buyer. Buyer shall have no obligation to share the results of any such review or observations with Seller, nor shall any such review or the results thereof (whether or not the results are shared with Seller), nor any failure to conduct any such review, nor any observation of testing or failure to observe testing, relieve Seller from any of its obligations under this Agreement. By making any such review or observing any such testing, Buyer makes no representation as to the economic and technical feasibility, operational capability or reliability of the Facility. Seller shall in no way represent to any third party that any such review by Buyer or Buyer’s Authorized Representative of the Facility thereof, including any review of the design, construction, operation or maintenance, is a representation by Buyer as to the economic and technical feasibility, operational capability or reliability of the Facility. Seller is solely responsible for the economic and technical feasibility, operational capability and reliability thereof.
Section 5.4 Compliance with Standards.
(a) Seller shall cause the Facility and all parts thereof to be designed, constructed, tested, operated and maintained to meet all of the requirements of this Agreement, all applicable requirements of the latest revision of the ASTM, ASME, EPA, IEEE, IEC, ISA, National Electrical Code, National Electric Safety Code, OSHA, Uniform Building Code, Uniform Plumbing Code, Underwriters Laboratory Standards, National Fire Protection Agency as well as the applicable local County Fire Department Standards of the applicable county, NERC Reliability Standards, as applicable, and other codes and standards and operations and maintenance requirements applicable to the services, equipment, and work as generally shown in this Agreement, as well as all applicable Requirements of Law not specifically mentioned in this Section 5.4, including any presidential executive order, prohibition order, or other guidance by the U.S. government restricting the use of equipment supplied by vendors or manufacturers located in or controlled by foreign adversary countries that might be used to harm the U.S. bulk-power system; provided that, for the avoidance of doubt, Seller shall use commercially reasonably efforts, but shall not be obligated, to comply with any non-mandatory recommendations, or voluntary best practices, in any of the foregoing so long as Seller follows Prudent Utility Practices. Seller shall comply with - 38 -
all reporting requirements for the Facility required under Requirements of Law (including providing such information to Buyer as required thereunder).
(b) Seller shall cause all of its personnel and systems to adhere to any physical and cyber-related security policies, standards, requirements, and procedures applicable to the Facility under Requirements of Law and Prudent Utility Practices, including requirements that may be imposed by FERC, NERC, WECC, the United States Department of Energy, the EPA, or the United States Department of Homeland Security, as well as any applicable cyber-related policies and procedures of Buyer notified to Seller. Seller shall implement and maintain security measures reasonably consistent with the foregoing designed to (i) ensure the security and confidentiality of Buyer’s Confidential Information, (ii) prohibit unauthorized access to Buyer’s Confidential Information stored on or procured through servers, equipment, or repositories used by Seller or otherwise handled by Seller, (iii) protect against any anticipated threats or hazards to the security and integrity of Buyer’s Confidential Information, and (iv) ensure the proper disposal of Buyer’s Confidential Information.
Section 5.5 Quality Assurance Program. Seller agrees to maintain and comply with a written quality assurance policy (“Quality Assurance Program”) attached hereto as Appendix G, and Seller shall cause all work performed on or in connection with the Facility to materially comply with said Quality Assurance Program.
Section 5.6 Reporting and Information. Following the Commercial Operation Date, Seller shall provide to Buyer (a) monthly reports in a form to be agreed upon by Buyer and Seller regarding the performance of the Facility and (b) quarterly reports in a form to be agreed upon by Buyer and Seller regarding the operations and maintenance of the Facility; provided that Seller shall be deemed to have satisfied this obligation during any quarter in which Seller provides to Buyer the reports set forth in Section 4.2(b). Seller shall have no obligation to report any information subject to any confidentiality protections imposed by applicable law or a confidential settlement proceeding or agreement.
Section 5.7 Performance Security.
(a) Within ten (10) days after the Effective Date, Seller shall deliver to Buyer an Acceptable Form of Performance Assurance in the aggregate amount of Nine Million Eight Hundred Thousand Dollars ($9,800,000), which Acceptable Form of Performance Assurance shall secure Seller’s obligations under this Agreement prior to the achievement of the Commercial Operation Date (the “Project Development Security”). Seller shall maintain the Project Development Security until the Commercial Operation Date, or until Buyer is required to return the Project Development Security under Section 5.7(c).
(b) As a condition to the achievement of the Commercial Operation Date, Seller shall deliver to Buyer an Acceptable Form of Performance Assurance in the aggregate amount of Fourteen Million Seven Hundred Thousand Dollars ($14,700,000) which Acceptable Form of Performance Assurance shall secure all Seller’s obligations under this Agreement from and after the Commercial Operation Date, (the “Delivery Term Security”). Seller shall maintain the Delivery Term Security in the required amount until the end of the Delivery Term or until Buyer is required to return the Delivery Term Security to Seller as set forth in Section 5.7(c). - 39 -
(c) Buyer shall return the unused portion of the (i) Project Development Security, if any, to Seller promptly after: (A) the later of (1) Seller’s provision of the Delivery Term Security, unless Seller elects to apply the Project Development Security toward the Delivery Term Security and (2) the payment of all Daily Delay Damages due and owing to Buyer or (B) the effective date of any early termination of the Agreement by Buyer promptly upon payment of all damages due and owing to Buyer, and (ii) Delivery Term Security, if any, to Seller promptly after:
(A) the Agreement Term has ended, and (B) all obligations of Seller arising under this Agreement are paid (whether directly or indirectly such as through set-off or netting) or performed in full. (d) Buyer may draw on the Performance Security (i) at any time following Seller’s failure to timely pay Daily Delay Damages when due hereunder in the amount of such Daily Delay Damages or any other liquidated damages provided for hereunder, (ii) upon Seller’s failure to pay Buyer the Shortfall Damages prior to the end of the Shortfall Makeup Period as provided in Section 9.3, (iii) upon Seller’s failure to make any other payment due to Buyer hereunder in the amount of such unpaid payment, including any Termination Payment or (iv) upon the occurrence and during the continuation of any event of Default to pay all amounts due to Buyer hereunder at such time and all damages, costs, losses, expenses and other liabilities incurred by Buyer or its Indemnitees resulting from such event of Default. Buyer may draw all or any part of such amounts due to Buyer from any form of security provided under this Section 5.7, and in any sequence Buyer may elect, in its sole discretion. Any failure of, or delay by, Buyer in electing to draw any amount from the Performance Security shall in no way prejudice Buyer’s rights to subsequently recover such amounts from the Performance Security or in any other manner. Within five (5) Business Days following any draw by Buyer on the Delivery Term Security, Seller shall replenish the amount drawn such that the Delivery Term Security is restored to the applicable amount set forth in Section 5.7(b).
(e) Seller shall notify Buyer of the occurrence of a Downgrade Event within five (5) Business Days after obtaining knowledge of the occurrence of such event. Buyer shall notify Seller if at any time Buyer is directed by a Governmental Authority to terminate any relationship with the issuer of any Performance Security. If at any time there shall occur a Downgrade Event or Seller receives notice of Buyer’s termination of its relationship with the issuer of any Performance Security, Seller shall replace such Performance Security within ten (10) Business Days after such Downgrade Event or receipt of such notice. Such replacement security shall meet the requirements of this Section 5.7. If the replacement Performance Security is not provided by Seller, Buyer shall have the right to demand payment of the full amount of the Performance Security, and Buyer shall retain such amount in order to secure Seller’s obligations under this Agreement; provided that if and to the extent such amount exceeds payment and performance in full of all of Seller’s obligations under this Agreement, Buyer shall refund the excess to Seller promptly after all such obligations of Seller under this Agreement have been paid or performed in full.
(f) The Project Development Security shall remain in place from the date it is effective in accordance with clause (a) above until the Commercial Operation Date and the Delivery Term Security shall remain in place continuously for the entire Delivery Term (except, in each case, to the extent drawn upon as provided herein). If any Performance Security is in the form of a letter of credit expiring before the Commercial Operation Date (in the case of Project Development Security) or the end of the Delivery Term (in the case of Delivery Term Security), Seller shall cause - 40 -
their renewal or extension for additional consecutive terms of three hundred sixty (360) Days or more (or, if shorter, the remainder of the time such Performance Security must remain in place in accordance with the prior sentence) no later than thirty (30) Days prior to each expiration date of such letter(s) of credit and written proof of such renewal shall be provided to Buyer as soon as practicable thereafter, but in no event later than fifteen (15) Days prior to the expiration of the same.
If any such letter of credit is not renewed or extended as required herein or does not constitute an Acceptable Form of Performance Assurance, Buyer shall have the right to draw immediately upon the entire amount of such letter of credit and to place the amounts so drawn which shall thereafter be treated by Buyer as Performance Security hereunder, at Seller’s cost and with Seller’s funds, in an account controlled by Buyer until and unless Seller provides a substitute Acceptable Form of Performance Assurance.
(g) Seller shall, from time to time as requested by Buyer’s Authorized Representative, execute, acknowledge, record, register, deliver and file all such notices, statements, instruments and other documents as may be necessary to render fully valid, perfected and enforceable under all Requirements of Law the Performance Security and the rights, Liens and priorities of Buyers with respect to such Performance Security. Notwithstanding the other provisions of this Agreement, but subject to the cap in Section 14.19(e), the Performance Security:
(i) constitutes security for, but is not a limitation of, Seller’s obligations under this Agreement, and (ii) shall not be Buyers’ exclusive remedy against Seller for Seller’s failure to perform in accordance with this Agreement.
ARTICLE VI
PURCHASE AND SALE OF PRODUCT
Section 6.1 Deliveries; Purchases by Buyer.
(a) Seller shall deliver to Buyer, and Buyer or its designee shall receive from Seller under this Agreement, the Delivered Energy at the Point of Delivery. Notwithstanding anything to the contrary contained in this Agreement, Buyer shall be under no obligation to purchase, receive or pay for any PV System Energy in excess of the Maximum Delivery Rate. Seller shall use commercially reasonable efforts to achieve the Annual Contract Quantity in each Contract Year.
(b) Seller shall sell and deliver, and Buyer shall purchase and accept, all PV Delivered Energy delivered under Section 6.1(a) at the Contract Price. (c) During each Month, Buyer shall pay the BESS Capacity Payment to Seller.
Section 6.2 Third Party Sales. Except as provided in ARTICLE IX, in no event shall Seller have the right to procure Energy from sources other than the Facility for sale and delivery pursuant to this Agreement. During the Agreement Term and subject to the terms and conditions of this Agreement, all of the Energy from the Facility (and associated Environmental Attributes and Capacity Rights) shall be dedicated to Buyer. Except with the prior written consent of Buyer, Seller shall not sell or otherwise transfer all or any part of the Products required to be delivered by Seller under this ARTICLE VI, ARTICLE VII, ARTICLE VIII or ARTICLE X. An intentional violation of this Section 6.2 shall be an immediate Default, and in - 41 -
addition to any other rights and remedies available to it under Section 13.2, Seller shall pay Buyer, on the date payment would otherwise be due to Seller, an amount for each MWh of such deficiency equal to the positive difference, if any, obtained by subtracting (A) the price per MWh that would have been payable by Buyer for the Energy had such Energy been delivered to the Point of Delivery as PV Delivered Energy from (B) the sum of (1) the Market Price Index for such Energy and (2) the Green Value associated therewith (the “Third Party Sale Replacement Price”). Buyer shall provide Seller prompt written notice of the Third Party Sale Replacement Price, together with back-up documentation (including reasonable documentation as to the foregoing calculation and each component thereof). The remedy set forth in this Section 6.2 is in addition to, and not in lieu of, any other right or remedy of Buyer, under this Agreement or otherwise, for failure of Seller to sell and deliver the Products as and when required by this Agreement.
ARTICLE VII
TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS; COMPLIANCE Section 7.1 Transmission and Interconnection. Seller shall (a) arrange and be responsible for any Transmission Services required to transmit and deliver Delivered Energy to the Point of Delivery and Replacement Energy to the Point of Delivery or a point of interconnection with the CAISO grid , and (b) arrange and pay for the interconnection of the Facility to the CAISO grid, including all costs, expenses, fees, charges, and other amounts associated therewith. If Replacement Energy is delivered to a point of interconnection other than the Point of Delivery, Seller shall pay Buyer the amount, if any, by which the Real-Time LMP at such point of interconnection is less than the Real-Time LMP at the Point of Delivery.
Section 7.2 Scheduling Coordinator; CAISO Cost Allocation. Buyer or Buyer’s designee shall act as Scheduling Coordinator for the Facility and shall Schedule all Energy from the Facility on a day-ahead and real-time basis in accordance with the Scheduling Procedures, this Agreement, and all CAISO and other applicable requirements. Seller shall cause the Facility to have two separate resource IDs with CAISO for Scheduling purposes (one ID for each of the PV System and the BESS). Buyer shall be financially responsible for all costs, expenses, fees, charges, credits, penalties, sanctions, and other amounts associated with Scheduling the Delivered Energy into the CAISO grid, other than any such costs, expenses, fees, charges, credits, penalties, sanctions, and other amounts incurred by Buyer as a result of Seller’s failure to (a) perform any covenant under this Agreement, including but not limited to the failure to provide required notices for outages of the Facility, or Seller’s failure to comply with any curtailment order or any data request or (b) comply with any CAISO Tariff requirements.
Section 7.3 Forecasting and Scheduling of Energy.
(a) Except upon the occurrence of a curtailment under Section 7.4, Buyer, as the Scheduling Coordinator, shall Schedule all Delivered Energy in accordance with the Scheduling Procedures, Operating Restrictions, the CAISO Tariff, NERC and WECC operating policies and criteria, and any other applicable guidelines, based on either the then-most-current forecast of energy provided under the Variable Energy Resource Forecast, or Seller’s daily forecasts under Section 7.3(c). Seller, at its own cost, shall install metering, telemetry and control equipment so as - 42 -
to be able to provide Delivered Energy to the Point of Delivery and respond to CAISO, Transmission Provider, or reliability coordinator’s dispatch orders. (b) Seller will take all actions, at its sole cost and expense, required to comply with the Eligible Intermittent Resources Protocol and the New Resource Implementation Process.
Whenever applicable, Seller shall comply with EIRP and NRIP and all additional tariffs and protocols issued by the CAISO relating to eligible intermittent resources, non-generator resources, or storage facilities during the Delivery Term.
(c) Seller shall provide, or shall cause its designee to provide, the following non-binding forecasts, and any updates to such forecasts, to the Scheduling Coordinator and Buyer based on the most current forecast of PV Delivered Energy and Replacement Product:
(i) At least one hundred twenty (120) days before the scheduled Commercial Operation Date.
(ii) No later than ten (10) Business Days before the beginning of each Month during the Delivery Term, a non-binding forecast of each day’s average hourly deliveries of PV Delivered Energy and Replacement Product for the following Month. (iii) By 5:30 a.m. Pacific Prevailing Time on the Business Day immediately preceding each day of delivery of PV Delivered Energy and Replacement Product during the Delivery Term, a copy of a non-binding hourly forecast of deliveries of PV Delivered Energy and Replacement Product for each hour of the immediately succeeding day. Any forecast provided on a day prior to any non-Business Day shall include forecasts for the immediate day, each succeeding non-Business Day and the next Business Day. Seller shall, by 10:00 a.m. Pacific Prevailing Time, provide to the Scheduling Coordinator and Buyer a copy of any updates to such forecast indicating a change in forecasted PV Delivered Energy from the then-current forecast. (iv) Prior to 12:00 p.m. Pacific Prevailing Time of the Business Day immediately preceding each WECC Prescheduling Day (as defined by WECC) for each hour of the Delivery Day (as defined by WECC) in MW or MWh units (as applicable), in the format reasonably acceptable to Buyer, a non-binding preschedule forecast of PV Delivered Energy and Replacement Product via email. The pre-scheduled amounts of PV Delivered Energy and Replacement Product shall be the good faith estimate of Seller or Seller’s designee of the anticipated delivery of PV Delivered Energy and Replacement Product at the time. A forecast provided a day prior to any non-Business Day shall include forecasts for the next day, each succeeding non-Business Day and the next Business Day.
Seller or Seller’s designee shall provide a copy of any and all updates to the forecast of the Facility’s availability from the then-current forecast. Except for Forced Outages, Seller shall operate the Facility with the objective that, for each hour scheduled, the actual Facility availability shall be maintained in accordance with the pre-schedule plan submitted by Buyer to Seller in accordance with the Scheduling Procedures. (d) Seller shall notify the Scheduling Coordinator and Buyer via email, telephone, or other mutually acceptable method, of any hourly changes due to a change in Facility - 43 -
availability or an outage no later than one hundred five (105) minutes prior to the start of such Scheduling hour, or such other limit as specified in the CAISO Tariff. Seller shall notify the Scheduling Coordinator and Buyer of other unanticipated changes in availability by email or telephone as promptly as reasonably possible. Any notice delivered under this Section 7.3(d) shall include the reason for the outage and an estimated duration of the outage. Once the outage has ended, Seller shall notify Buyer that the outage has ended, the cause of the outage, and the actions taken to resolve the outage in order for the CAISO outage report to be updated accordingly. (e) Seller shall develop and install all communications systems necessary for the operation of the Facility in accordance with Prudent Utility Practices, including communications systems that provide for (w) the receipt and following of automated dispatch instructions from the CAISO, (x) enabling of automated generation control capability for Ancillary Services, (y) an online-based user interface for Buyer to monitor the BESS status in real time, including the BESS’ state of charge and all other relevant operating parameters of the BESS, and (z) data feed between the PV System and the BESS. No later than ninety (90) days prior to the date on which Startup and Test Energy is first received from the Facility, Buyer and Seller shall agree upon a communications protocol with respect to the matters set forth in the foregoing sentence, clauses (i)-(iv) below, and such other matters concerning communications to or from the BESS as Seller and Buyer shall deem appropriate (the “BESS Communication Protocol”). Commencing on the first date on which Startup and Test Energy is received from the Facility, and continuing throughout the Delivery Term, Seller shall provide to Buyer the following data on a real-time basis, upon request and in a format that reasonably allows Buyer to copy, paste or otherwise use such data:
(i) Read-only access via secure login credentials for information collected by the SCADA system related to (A) availability of the BESS for Energy that is charged and discharged, and (B) state of charge, grid charging, operating modes, and set points of the BESS;
(ii) Read-only access to meteorological and related solar measurements, megawatt capacity and any other Facility availability information required in accordance with EIRP requirements;
(iii) Read-only access via secure login credentials to Energy output information collected by the SCADA system for the Facility; provided that if Buyer is unable to access the Facility’s SCADA system, then upon written request from Buyer, Seller shall provide energy output information to Buyer in five (5) minute intervals in a format and on a frequency acceptable to Buyer. Seller shall store such information for up to three (3) months after delivery thereof to Buyer; and (iv) Read-only access to all Electric Metering Devices (including the PV Energy Meter, the BESS Energy Meter and the Electric Metering Device at the Point of Interconnection).
(f) Seller will provide Buyer (or its designee) with continuously updated nonbinding hourly forecasts of deliveries of PV Delivered Energy and Replacement Product for each hour of the succeeding twenty-four (24)-hour period via an internet website accessible via secure - 44 -
login credentials. Seller shall attempt to optimize the estimates for such time period two (2) hours prior to such forecasts. Seller shall enable such forecasts to be prepared in accordance with mutually agreed upon communications protocols between Seller, Scheduling Coordinator and Buyer as they are implemented or upgraded from time to time in accordance with Prudent Utility Practices.
(g) Seller, the Scheduling Coordinator and Buyer shall mutually develop forecasting and Scheduling procedures in addition to those set forth in this Section 7.3, (“Scheduling Procedures”) that allow Buyer to control when it receives PV Delivered Energy and BESS Metered Output from the Facility and that are in compliance with all applicable Requirements and requirements of the Transmission Provider, CAISO, NERC, WECC, and any balancing authority involved in the Scheduling of Energy under this Agreement. Seller and the Scheduling Coordinator shall promptly cooperate with Buyer to make any reasonably necessary and appropriate modifications to the Scheduling Procedures as may be required or requested by Buyer from time to time.
Section 7.4 Curtailment.
(a) Seller shall reduce deliveries of Delivered Energy to the Point of Delivery immediately upon notice from the CAISO, a Transmission Provider, or any balancing authority or reliability entity during Curtailment Periods. Buyer shall be excused from receiving any PV Delivered Energy from Seller and shall not be obligated to pay Seller for the amount of reduced PV Delivered Energy arising during a curtailment under this Section 7.4(a). If required by Buyer, the CAISO, a Transmission Provider, or any balancing authority or reliability entity, Seller shall provide the capability to implement curtailments and adjust ramp rates, megawatt output, and (if applicable) megavar output in real-time by means of setpoints received from the SCADA system of Seller.
(b) In addition to the curtailments described in Section 7.4(a), Buyer may curtail deliveries of PV Delivered Energy (including for economic reasons, including bid offers into CAISO), at any time and for the duration specified by Buyer. Seller shall comply with such request in accordance with Prudent Utility Practices. Seller shall respond to Buyer curtailment notices (including the end of such curtailment periods) in accordance with Prudent Utility Practices. Buyer shall not unreasonably curtail Startup and Test Energy. Buyer shall pay Seller for any Deemed Generated Energy associated with a circumstance described in subpart (d) of the definition of Excused Conditions or a Compensable Curtailment in an amount equal to the applicable Contract Price; provided, however, Seller shall use commercially reasonable efforts to sell PV System Energy (but not the Environmental Attributes or Capacity Rights associated therewith) equaling the amount of such Deemed Generated Energy associated with a Compensable Curtailment to third parties at a positive price to the extent permitted under the CAISO Tariff. To the extent any PV System Energy is sold to a third party under this Section 7.4(b), the obligation to pay the amounts set forth for a curtailment by Buyer under this Section 7.4(b) shall be reduced accordingly by an amount equal to the net proceeds Seller receives from such sales of PV System Energy (after subtracting any Scheduling fees, wheeling charges, and other associated costs, fees, and reasonable expenses incurred in connection with such sales). All Environmental Attributes and Capacity Rights associated with such PV System Energy sold to third parties shall be delivered at no additional cost to Buyer.
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(c) “Deemed Generated Energy” means the amount of energy, expressed in MWh, that the PV System would have produced and delivered to the Point of Delivery as PV Delivered Energy during any applicable Excused Condition, which amount shall be equal to (i) the amount of MWh that would have been delivered to the Point of Delivery provided for in the Variable Energy Resource Forecast applicable to the applicable Excused Condition period, regardless of whether Seller is participating in the EIRP during this period, less (ii) the amount of PV Delivered Energy delivered to the Point of Delivery during the applicable Excused Condition, if any, or, if there is no Variable Energy Resource Forecast available, (A) an amount of MWh calculated based on an equation that incorporates relevant Facility availability, weather and other pertinent data for the period of time during the applicable Excused Conditions in order to approximate the amount of PV Delivered Energy that would have been delivered, less (B) the amount of PV Delivered Energy delivered to the Point of Delivery during the applicable Excused Conditions, if any; provided that, if the applicable difference calculated pursuant to either of the formulas provided above is negative, the Deemed Generated Energy shall be zero (0). The equation in (A) and (B) shall be subject to reasonable review and approval by Buyer, which review shall not be unreasonably delayed.
Section 7.5 [Reserved].
Section 7.6 Title; Risk of Loss. As between the Parties, Seller shall be deemed to be in exclusive control (and responsible for any damages or injury caused thereby) of all Energy prior to and at the Point of Delivery and all Replacement Energy prior to and at the Point of Delivery thereof into the CAISO grid. For the avoidance of doubt, Seller shall not be deemed to be in control (and responsible for any damages or injury caused thereby) of Energy and any Replacement Energy from and after the Point of Delivery. Seller warrants that it will deliver all Energy, Replacement Product, Capacity Rights, and all of the associated Environmental Attributes to Buyer free and clear of all Liens created by any Person other than Buyer. Title to, and risk of loss for, all Energy and all of the associated Products shall pass from Seller to Buyer at the Point of Delivery; provided that title to, and risk of loss for, any Replacement Energy specified by Buyer to be delivered to a point or points of delivery other than the Point of Delivery shall pass from Seller to Buyer upon the delivery of such Replacement Energy to such point or points. Title to all of the associated Environmental Attributes and Capacity Rights shall pass from Seller to Buyer upon the creation thereof.
Section 7.7 RPS and EPS Compliance.
(a) Seller warrants and guarantees that from the time it receives notice from the CEC that the PV System is CEC Certified, and at all times thereafter until the expiration or earlier termination of the Agreement, the PV System (including the Energy and the associated Environmental Attributes) shall be RPS Compliant, CEC Compliant (including with regard to the PV System charging of the BESS) and EPS Compliant (“Compliant”). (b) If a Change in Law occurs after the Commercial Operation Date that (i) does not repeal the RPS Law or the EPS Law and (ii) causes the PV System to cease to be Compliant, then Seller shall (A) first, take all commercially reasonable efforts to bring the PV System into Compliance and (B) thereafter, take such actions as may be necessary to cause the PV System to remain Compliant; provided, that if, after a commercially reasonable period of time after such - 46 -
Change in Law, Seller reasonably determines that such efforts, together with any efforts to provide Buyer with any Product that was not in existence as of the Effective Date, are reasonably likely to require Seller to incur costs in excess of the Compliance Expenditure Cap, Seller shall provide Buyer with written notice containing a detailed description of prior compliance actions, the basis for Seller’s expectation that required compliance actions will exceed the Compliance Expenditure Cap, Seller’s projected overage (the “Excess Compliance Cost”) and Seller’s projected timeline for successfully completing such compliance actions.
(c) During any period in which the PV System is not Compliant, then Buyer shall pay Seller for PV Delivered Energy delivered during the period during which the PV System is not Compliant in an amount equal to eighty percent (80%) of the Pnode Price at the Point of Delivery (the “Replacement Price”). In no event shall the Replacement Price be more than the Contract Price. Payment for PV Delivered Energy at the Replacement Price shall continue until the PV System is brought back into Compliance or the Agreement is terminated pursuant to Section
7.7(d).
(d) If at any time after six (6) months of paying the Replacement Price, Buyer determines, in its reasonable discretion, that notwithstanding Seller’s commercially reasonable efforts, Seller will be unable to bring the PV System into Compliance, and neither Buyer nor Seller is willing to pay the Excess Compliance Cost, Buyer may elect, at its sole discretion, to terminate this Agreement by written notice to Seller, without liability to either Party, except for such liabilities that accrued prior to the date of termination or that otherwise survive termination in accordance with the terms of this Agreement.
(e) From time to time and at any time requested by Buyer or Buyer’s Authorized Representative, Seller will furnish to Buyer, Buyer’s Authorized Representative, Governmental Authorities, or other Persons designated by any Buyer, all certificates and other documentation reasonably requested by Buyer or Buyer’s Authorized Representative in order to demonstrate that the PV System, the PV System Energy, and the associated Environmental Attributes were or are Compliant.
(f) Seller’s Compliance Expenditure Cap shall be reduced by any amounts that have accrued toward Seller’s Compliance Expenditure Cap under any provision in this Agreement.
Section 7.8 Change in CAISO Tariff.
(a) If a change in the CAISO Tariff, including any change resulting from or relating to CAISO’s Hybrid Resources or Energy Storage and Distributed Energy Resources initiatives, requires any modifications to the Facility (i) to enable Seller to deliver, and Buyer to receive, Delivered Energy to and from the CAISO system, or (ii) to use the BESS and Capacity Rights, then Seller shall be solely responsible for bringing the Facility into compliance with the CAISO Tariff, as modified, in a manner that preserves Buyer’s economic benefits with respect to the Facility prior to any such change in the CAISO Tariff; provided that nothing in this Section 7.8 shall require Seller to expend funds that exceed the Compliance Expenditure Cap. It shall be a Default hereunder if Seller fails bring the Facility into compliance with such modified CAISO Tariff within ninety (90) days after such change; provided that no cure period provided under Section 13.1 shall apply with respect to any such Default after such ninety (90) day period has - 47 -
expired; provided further that, if Seller has reached the Compliance Expenditure Cap and Buyer has failed to approve Excess Compliance Costs, no such Default shall be deemed to have occurred. (b) If a change in the CAISO Tariff requires any modifications to the Facility to enable the Facility to qualify for any new product in the CAISO, then, at Buyer’s election, the Parties shall negotiate in good faith any necessary amendments to this Agreement to enable the Facility to meet the requirements for such new product; provided, that while the Parties may agree to amendments providing for cost allocation with respect to any necessary modifications to the Facility, including increased costs to either Buyer or Seller, such amendments will not increase the Contract Price or BESS Capacity Price or otherwise involve additional payment by Buyer for any new CAISO products themselves.
Section 7.9 Change in Market Structure. If a regionalization or other major change to the market structure of the Western Interconnection occurs during the Agreement Term (other than a Change in Law as addressed in Section 7.7 above), then the Parties agree to negotiate such modifications to this Agreement as may be necessary to enable the Parties to continue to perform their respective obligations under this Agreement, while preserving, to the maximum extent possible, the existing benefits, burdens and obligations set forth herein. Such negotiations shall commence promptly following the delivery by one Party to the other Party of a notice requesting negotiations pursuant to this Section 7.9.
ARTICLE VIII
ENVIRONMENTAL ATTRIBUTES
Section 8.1 Transfer of Environmental Attributes. For and in consideration of Buyer entering into this Agreement, and in addition to the agreement by and between Buyer and Seller to purchase and sell PV Delivered Energy on the terms and conditions set forth herein, Seller shall transfer to Buyer, and Buyer shall receive from Seller, all right, title, and interest in and to all Environmental Attributes, whether now existing or acquired by Seller or that hereafter come into existence or are acquired by Seller during the Agreement Term associated with the PV System Energy and any Replacement Energy. Seller agrees to transfer and make such Environmental Attributes available to Buyer immediately to the fullest extent allowed by applicable law upon Seller’s production or acquisition of the Environmental Attributes. Seller represents and covenants that it has not assigned, transferred, conveyed, encumbered, sold or otherwise disposed of and shall not assign, transfer, convey, encumber, sell or otherwise dispose of all or any portion of such Environmental Attributes to any Person other than Buyer or attempt to do any of the foregoing with respect to any of the Environmental Attributes. Buyer and Seller acknowledge and agree that the consideration for the transfer of Environmental Attributes is contained within the Contract Price.
Section 8.2 Reporting of Ownership of Environmental Attributes. During the Agreement Term, Seller shall not report to any Person that the Environmental Attributes granted hereunder to Buyer belong to any Person other than Buyer, and Buyer may report under any program that such Environmental Attributes purchased hereunder belong to it.
Section 8.3 Environmental Attributes. Upon the request of Buyer or Buyer’s Authorized Representative, Seller shall take all actions and execute all documents or instruments - 48 -
necessary under applicable law, regulations, guidebooks promulgated by the CEC or PUC, or bilateral arrangements, as applicable, to maximize the attribution, accrual, realization, generation, production, recognition and validation of Environmental Attributes throughout the Agreement Term and Seller shall file with the CEC and any other applicable Persons all materials and documents required to demonstrate that the PV System is entitled to be CEC Certified.
Section 8.4 WREGIS. In furtherance and not in limitation of Section 8.3, prior to Seller’s first delivery of PV Delivered Energy hereunder, Seller shall register with WREGIS to evidence the transfer of any Environmental Attributes under applicable law or any voluntary program (“WREGIS Certificates”) associated with PV System Energy or Replacement Product in accordance with WREGIS reporting protocols and WREGIS Operating Rules and shall register the Facility with WREGIS. After the Facility is registered with WREGIS, at the option of Buyer’s Authorized Representative, Seller shall transfer WREGIS Certificates using the Forward Certificate Transfer method as described in WREGIS Operating Rules from Seller’s WREGIS account to Buyer’s WREGIS accounts, as designated by Buyer’s Authorized Representative. Seller shall be responsible for WREGIS Certificate issuance fees and WREGIS expenses associated with registering the Facility, maintaining its account, acquiring and arranging for a Qualified Reporting Entity (“QRE”) and any applicable QRE agreements, and transferring WREGIS Certificates to Buyer, Buyer’s Authorized Representative, or any other designees. Buyer shall be responsible for its WREGIS expenses associated with maintaining its own account, or the accounts of its designees, if any, and subsequent transferring or retiring by it of WREGIS Certificates, or Seller’s fees for the retirement of WREGIS Certificates on behalf of Buyer. Forward Certificate Transfers shall occur monthly based on the certificate creation timeline established by the WREGIS Operating Rules. Seller shall be responsible for, at its expense, validating and disputing data with WREGIS prior to WREGIS Certificate creation each Month. In addition to the foregoing, Seller shall document the production and transfer of Environmental Attributes under this Agreement to Buyer by delivering to Buyer an attestation in substantially the form attached as Appendix D for the Environmental Attributes associated with PV System Energy or Replacement Product, if any, measured in whole MWh, or by such other method as Buyer shall designate.
Section 8.5 Further Assurances. If WREGIS (or any successor thereto) is not available to evidence the transfer of Environmental Attributes, Seller shall document the production of Environmental Attributes by delivering with each invoice to Buyer an attestation for the Environmental Attributes associated with PV System Energy or included with Replacement Product, if any, for the preceding Month in the form of the attestation set forth as Appendix D. At Buyer’s Authorized Representative’s request, the Parties shall execute all such documents and instruments and take such other action in order to effect the transfer of the Environmental Attributes specified in this Agreement to Buyer and to maximize the attribution, accrual, realization, generation, production, recognition and validation of Environmental Attributes throughout the Agreement Term. In the event of the promulgation of a scheme involving Environmental Attributes administered by CAMD, upon notification by CAMD that any transfers contemplated by this Agreement shall not be recorded, each Party shall promptly cooperate in taking all reasonable actions necessary so that such transfer can be recorded. Each Party shall promptly give the other Party copies of all documents it submits to CAMD to effectuate any transfers.
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ARTICLE IX
SHORTFALL ENERGY, AVAILABILITY, AND PERFORMANCE GUARANTEE
REQUIREMENTS
Section 9.1 Makeup of Shortfall. Within thirty (30) days after the end of each Contract Year and at the end of each Measurement Period, Seller shall provide Buyer with a calculation of PV Delivered Energy for such Contract Year and Measurement Period. If Seller fails during any Measurement Period to deliver the sum of PV Delivered Energy plus Deemed Generated Energy during such Measurement Period in an amount equal to the Guaranteed Delivered Energy for such Measurement Period, then Seller shall make up the shortfall of PV Delivered Energy (“Shortfall Energy”) in accordance with this ARTICLE IX.
Section 9.2 Replacement Product. During the Shortfall Makeup Period, the amount of Shortfall Energy shall first be reduced by the amount of any (a) PV Delivered Energy, including Excess Energy and Excess Energy > 120%, delivered during the applicable Shortfall Makeup Period in excess of the Guaranteed Delivered Energy and (b) Replacement Product delivered by Seller during the Shortfall Makeup Period. Such Replacement Product shall be delivered to the Point of Delivery or such other point of delivery as is mutually agreed upon by the Parties (which point of delivery shall be deemed the “Point of Delivery” for such Replacement Product and the other Scheduling and delivery provisions hereof) and on a delivery schedule mutually agreed to by Seller and Buyer, considering the as-available nature of the Product. Any additional costs or expenses associated with delivery of Replacement Product to a Point of Delivery designated under this Section 9.2 shall be borne by Seller. To the extent Seller is unable to deliver or provide sufficient PV Delivered Energy or Replacement Product in excess of the Guaranteed Delivered Energy to make up the remaining Shortfall Energy, then Seller shall, at the end of the Shortfall Makeup Period, pay Buyer damages in accordance with Section 9.3. Notwithstanding anything herein to the contrary, in the last year of each RPS Compliance Period during the Delivery Term, Seller shall provide written notice to Buyer no later than six (6) months prior to the end of such RPS Compliance Period with Seller’s good faith determination of whether it anticipates being able to make-up any Shortfall Energy amount thenexisting during such RPS Compliance Period and to achieve the Guaranteed Delivered Energy (on a pro-rata basis) for such Contract Year. If at such time, Buyer reasonably determines that Seller will be unable to make-up the Shortfall Energy or achieve the Guaranteed Delivered Energy with delivery of PV Delivered Energy or Replacement Product, Buyer may, but shall not be obligated to, purchase Replacement Product to make up and Seller shall reimburse Buyer for its actual costs associated therewith. If at the end of each RPS Compliance Period during the Delivery Term there is any Shortfall Energy at such time, Seller shall pay Buyer damages in accordance with Section 9.3 for the then remaining amount of Shortfall Energy in the last calendar year of such RPS Compliance Period. For the purposes of this Section 9.2, any Deemed Generated Energy in excess of the Guaranteed Delivered Energy shall be counted toward the Shortfall Energy as if it had been delivered as PV Delivered Energy.
Section 9.3 Shortfall Damages. If Seller fails to make up the full amount of any Shortfall Energy (as such may be reduced by Buyer’s purchase, if any, of Replacement Product, by the end of the Shortfall Makeup Period (or the end of the RPS Compliance Period, as the case may be), Seller shall within sixty (60) days after the end of the applicable Shortfall Makeup Period (or the end of the RPS Compliance Period, as the case may be), pay Buyer - 50 -
damages, which damages shall be an amount, for each MWh of remaining Shortfall Energy, equal to the positive difference, if any, obtained by subtracting (a) the Contract Price that Buyer would have paid for such remaining Shortfall Energy had it been timely delivered, from (b) the sum of (1) the Market Price Index for such remaining Shortfall Energy and (2) the Green Value associated therewith. For the avoidance of doubt, Buyer shall not be obligated to procure Replacement Product in order to recover Shortfall Damages. In addition, Seller shall reimburse Buyer for any and all amounts of reasonably documented penalties or fines incurred by Buyer as a result of Buyer’s noncompliance with EPS Law or RPS Law to the extent such non-compliance was caused by Seller’s failure to make up the full amount of any Shortfall Energy before the end of any RPS Compliance Period (“Shortfall Damages”). If Seller fails to pay Buyer the Shortfall Damages within sixty (60) days after the end of the Shortfall Makeup Period, Buyer shall have the right to immediately draw the applicable amount of Shortfall Damages owed to Buyer from the Delivery Term Security. The Parties acknowledge and agree that the damages that Buyer would incur due to the failure to deliver the Shortfall Energy would be difficult or impossible to predict with certainty, and it is impractical and difficult to assess actual damages in those circumstances and, therefore, the payment of Shortfall Damages is a fair and reasonable remedy for such damages. The provision of Shortfall Damages shall be in lieu of actual damages for the occurrence of any Shortfall Energy hereunder that is not cured with PV Delivered Energy and/or Replacement Energy and is Buyer’s sole remedy for Seller’s failure to deliver Shortfall Energy; however, the payment of Shortfall Damages shall not limit Buyer’s rights to exercise any right or remedy available under this Agreement or at law or in equity for any other breach or default occurring concurrently with, before, or after the failure to meet the Guaranteed Delivered Energy, including a Default under Section 13.1(l); provided that the payment of Shortfall Damages shall be taken into account when determining any damages due Buyer for such Default.
Section 9.4 Availability Requirement. Seller shall be responsible for all costs, charges, expenses, penalties, and obligations resulting from Availability Standards, if applicable, and Seller shall be entitled to retain all credits, payments, and revenues, if any, resulting from Seller achieving or exceeding Availability Standards, if applicable, other than the Capacity Rights.
Section 9.5 [Reserved].
Section 9.6 Performance Guarantees, Remedies and Termination Rights. (a) Throughout the Delivery Term, Seller warrants that (i) the BESS will perform at a rate that results in the Dischargeable Energy at any time equaling or exceeding the Guaranteed Dischargeable Energy, as illustrated in and calculated on an annual basis in accordance with Appendix K-1 (the “Dischargeable Energy Performance Guarantee”); (ii) the Round Trip Efficiency during each Contract Year, as calculated in accordance with Appendix K-1, will not fall below the amount specified in Appendix K-1 for such Contract Year (the “Round Trip Efficiency Performance Guarantee”); (iii) Monthly BESS Availability, as calculated in accordance with Appendix K-1, will be at least the percentage set forth in Appendix K-1 for each month (the “Monthly BESS Availability Guarantee”); (iv) the Annual PV System Availability during each Contract Year, as calculated in accordance with Appendix K-1, will equal or exceed the Annual PV System Availability Requirement for such Contract Year, as specified in Appendix K-1 (the “Annual PV System Availability Guarantee”); and (v) the BESS will charge and discharge from - 51 -
zero percent (0%) to one hundred percent (100%) without limitation, and the BESS Metered Output will not deviate from the automated dispatch system of the CAISO (the “ADS”). (b) In the event of a failure of the Dischargeable Energy Performance Guarantee, the Round Trip Efficiency Performance Guarantee, the Monthly BESS Availability Guarantee, or the Annual PV System Availability Guarantee, the BESS Capacity Price shall be reduced for each month that the applicable guarantee is not satisfied and continue until the first month that the applicable guarantee is satisfied. The resulting adjusted BESS Capacity Price for any non-compliant month (the “Adjusted BESS Capacity Price”) shall be determined as follows:
(i) In the event of a failure of the Dischargeable Energy Performance Guarantee, the Adjusted BESS Capacity Price shall be an amount equal to the product of (A) the BESS Capacity Price, multiplied by (B) the Dischargeable Energy Adjustment Factor calculated for such month in accordance with Appendix K-2. (ii) In the event of a failure of the Round Trip Efficiency Performance Guarantee, the Adjusted BESS Capacity Price shall be an amount equal to the product of (A) the BESS Capacity Price, multiplied by (B) the Round Trip Efficiency Adjustment Factor calculated for such month in accordance with Appendix K-2. (iii) In the event of a failure of the Monthly BESS Availability Guarantee, the Adjusted BESS Capacity Price shall be an amount equal to the product of (A) the BESS Capacity Price, multiplied by (B) a fraction where (I) the numerator is an amount equal to the actual Monthly BESS Availability for such month, calculated in accordance with Appendix K-1, and (II) the denominator is the percentage for Monthly BESS Availability Guarantee set forth in Appendix K-1.
(iv) In the event of a failure of the Annual PV System Availability Guarantee, the Adjusted BESS Capacity Price shall be an amount equal to the product of (A) the BESS Capacity Price, multiplied by (B) the Annual PV System Availability Adjustment Factor calculated for such Contract Year in accordance with Appendix K-2. (v) In the event of a failure of multiple guarantees addressed by this Section 9.6(b) in the same month, the Adjusted BESS Capacity Price for such month shall be an amount equal to the lowest Adjusted BESS Capacity Price resulting from application of the formulas set forth in the foregoing Section 9.6(b)(i)-(iv). (vi) Notwithstanding Section 9.6(b)(i)-(iv) and Section 9.6(c), in the event of a failure of either the Minimum Dischargeable Energy Performance Guarantee or the Minimum Round Trip Efficiency Performance Guarantee that, in either case, continues for a period of three (3) consecutive months following the last day of the first noncompliant month, the Adjusted BESS Capacity Price for each succeeding month shall be reduced to zero dollars ($0) until Seller has completed any necessary remedial measures to bring the BESS back into compliance with the applicable guarantee. (c) Notwithstanding Buyer’s recourse to the Adjusted BESS Capacity Price remedy, as described in Section 9.6(b), Seller shall be considered in Default under this Agreement:
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(i) for failure of the Minimum Dischargeable Energy Performance Guarantee, if: (A) any such failure continues for a period of six (6) consecutive months following the last day of the first non-compliant month, or (B) the total number of noncompliant months for such guarantee is equal to twelve (12) or more at any time during the Delivery Term;
(ii) if BESS Metered Output deviates from the ADS and such failure continues for a period of sixty (60) consecutive days; or (iii) for failure of the Monthly BESS Availability Guarantee, if any such failure continues for a period of twelve (12) months following the last day of any noncompliant month.
ARTICLE X
CAPACITY RIGHTS
Section 10.1 Capacity Rights. For and in consideration of Buyer entering into this Agreement, and in addition to the agreement by Buyer and Seller to purchase and sell Delivered Energy and Environmental Attributes on the terms and conditions set forth herein, Seller hereby transfers to Buyer, and Buyer hereby accepts from Seller, all of Seller’s rights, title and interest in and to the Capacity Rights, including resource adequacy, local capacity requirement, flexible resource capacity attributes, and other present and future capacity attribute values related to the Facility. Buyer and Seller acknowledge and agree that the consideration for the transfer of Capacity Rights, if any, is contained within the relevant prices for PV Delivered Energy and the BESS Capacity Payments. In no event shall Buyer have any obligation or liability whatsoever for any debt pertaining to the Facility by virtue of Buyer’s ownership of the Capacity Rights or otherwise.
Section 10.2 Covenant Regarding Capacity Rights. Seller represents and covenants that it has not assigned, transferred, conveyed, encumbered, sold or otherwise disposed of and shall not in the future assign, transfer, convey, encumber, sell or otherwise dispose of any of the Capacity Rights to any Person other than Buyer or attempt to do any of the foregoing with respect to any of the Capacity Rights. During the Agreement Term, Seller shall not report to any Person that any of the Capacity Rights belong to any Person other than Buyer.
Buyer may, its own risk and expense, report to any Person that the Capacity Rights belongs to it.
Section 10.3 Further Assurances. Seller shall execute and deliver such documents and instruments and take such other action as required by the CAISO and as Buyer’s Authorized Representative may reasonably request to effect recognition and transfer of the Capacity Rights to Buyer. Seller shall bear the costs associated therewith.
ARTICLE XI
BILLING; PAYMENT; AUDITS; METERING; ATTESTATIONS; POLICIES Section 11.1 Billing and Payment. Billing and payment for all Products shall be as set forth in this ARTICLE XI.
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Section 11.2 WREGIS Withholding. Prior to the PV System becoming CEC Certified and if, at any time after the PV System is CEC Certified, Seller fails to transfer Renewable Energy Credits to Buyer’s WREGIS account in accordance with Section 8.4 within one hundred twenty (120) days after delivery of the corresponding PV Delivered Energy or Replacement Product, Buyer shall have the right to withhold from any payment to Seller, for each MWh of PV Delivered Energy or Replacement Product delivered under Section 6.1, an amount equal to Twenty Dollars ($20) per MWh (such amount, the “WREGIS Withhold Amount”) until such time as the WREGIS Certificate associated with such MWh has been credited to Buyer’s WREGIS account as set forth in Section 8.4, and Buyer shall pay the WREGIS Withhold Amount previously withheld by Buyer for each MWh for which a WREGIS Certificate was credited to Buyer’s WREGIS account in such month. If Buyer’s right to withhold the WREGIS Withhold Amount is triggered after the PV System is CEC Certified in accordance with this Section 11.2, such right shall remain in effect until three hundred sixty-five (365) days after the date that Seller causes Renewable Energy Credits to once again be transferred to Buyer’s WREGIS account in accordance with Section 8.4.
Section 11.3 Calculation of Energy Delivered; Invoices and Payment. (a) Not later than the tenth (10th) day of each Month, commencing with the next Month following the Month in which Startup and Test Energy is generated, Seller shall deliver to Buyer a proper invoice showing the following for the preceding Month:
(i) PV Delivered Energy during such Month, specifying the portion of such PV Delivered Energy that is (A) Startup and Test Energy (and the payment owed in respect thereof according to the price on paragraph 1 of Appendix A-1), (B) Excess Energy; (C) Excess Energy > 120% and (D) PV Delivered Energy that is not Excess Energy, Excess Energy > 120% or Startup and Test Energy.
(ii) BESS Metered Output during such Month.
(iii) An accounting of the Guaranteed Delivered Energy for the applicable Contract Year and Measurement Period, an accounting of new or made up Shortfall Energy and/or Replacement Product, if applicable, and a confirmation as to whether Seller met or exceeded the Guaranteed Delivered Energy. (iv) The BESS Capacity Payment for such Month.
(v) Any reimbursement to Buyer for the purchase of Replacement Product.
(vi) Seller’s reasonable calculation of the amount of Deemed Generated Energy associated with any Compensable Curtailment for amounts owed by Buyer in accordance with Section 7.4(b).
(vii) Any other payments due to Buyer or to Seller under this Agreement, including amounts due to Buyer in connection with third party sales of curtailed Energy under Section 6.2 and any unpaid liquidated damages that have accrued prior to the invoice date.
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(b) Seller shall calculate the amount of PV Delivered Energy, BESS Metered Output, and BESS Metered Input from meter readings at the Electric Metering Devices at the Point of Interconnection, the PV Energy Meter, and the BESS Energy Meter, all as depicted on Appendix O, maintained pursuant to Section 11.7.
(c) Each invoice shall show the title of the Agreement and, if applicable, the Agreement number, the name, address and identifying information of Seller and the identification of material, equipment or services covered by the invoices, and shall be sent to the address set forth in Appendix J or such other address as Buyer may provide to Seller. (d) Any electronic information delivered by Seller under this ARTICLE XI shall be in a format such as Microsoft Excel (or its equivalent) that allows Buyer to cut, paste or otherwise readily use and work with such information or documentation or as otherwise mutually agreed by the Parties.
(e) Concurrently with the delivery of each Monthly invoice, if required under Section 8.5, Seller shall deliver attestations of all Environmental Attribute transfers substantially in the form set forth in Appendix D.
(f) Subject to Section 11.3(g) and Section 11.4, not later than the thirtieth (30th) day after receipt by Buyer of Seller’s Monthly invoice (or the next succeeding Business Day, if the thirtieth (30th) day is not a Business Day), Buyer (if the net payment in the applicable invoice is in favor of Seller) or Seller (if the net payment in the applicable invoice is in favor of Buyer), shall pay to Seller or Buyer, as applicable, by wire transfer of immediately available funds to an account specified by Seller or Buyer, as applicable, or by any other means agreed to by the Parties from time to time, the amount set forth as due in such Monthly invoice. (g) Notwithstanding Section 11.3(a), if Buyer believes that it has insufficient information to verify the amount of Deemed Generated Energy calculated by Seller in the invoice, or if Buyer requires additional time to verify such information, Buyer shall notify Seller thereof within thirty (30) days after receipt of an invoice from Seller, and timely pay the amounts set forth in such Monthly invoice not related to Deemed Generated Energy. Within thirty (30) days after receipt by Buyer of additional information regarding such Deemed Generated Energy calculation, or on the date mutually agreed to by the Parties, Buyer shall pay to Seller the amount specified in the invoice or notify Seller of any discrepancies with respect to its calculation of the Deemed Generated Energy, in which event such invoice shall be subject to the provisions of Section 11.4. (h) Seller shall, in subsequent invoices, adjust previously invoiced amounts to reflect (i) adjustments pursuant to Section 11.4, or (ii) adjustments, reconciliations or final settlements with WREGIS occurring after the date of the initial invoice, or any other adjustments agreed to by the Parties (which shall be without interest of any kind), provided that Buyer shall not be required to make invoice payments if the invoice is received more than one (1) year after the billing period.
(i) Buyer shall not be required to make invoice payments if the invoice is received more than six (6) Months after the applicable Monthly billing period except with respect to any disputed amounts where the dispute is first raised within six (6) months after the applicable - 55 -
Monthly billing period and for any corrections or adjustments resulting in amounts owing by Buyer pursuant to Section 11.7(a).
Section 11.4 Disputed Invoices. If any portion of any invoice is in dispute, the undisputed amount shall be paid when due. The Party disputing a payment shall promptly notify the other Party of the basis for the dispute, setting forth the details of such dispute in reasonable specificity. Disputes shall be discussed directly by the Parties’ Authorized Representatives, who shall use reasonable efforts to amicably and promptly resolve such Disputes, and any failure to agree shall be subject to resolution in accordance with Section 14.3. Upon resolution of any Dispute, if all or part of the disputed amount is later determined to have been due, then the Party owing such payment or refund shall pay within ten (10) days after receipt of notice of such determination the amount determined to be due plus interest thereon at the Interest Rate from the due date until the date of payment. For purposes of this Section 11.4, “Interest Rate” shall mean the lesser of (i) two percent (2%) above the per annum Prime Rate reported daily in The Wall Street Journal, or (ii) the maximum rate permitted by applicable Requirements of Law.
Section 11.5 Right of Setoff. In addition to any right now or hereafter granted under applicable law and not by way of limitation of any such rights, each Party shall have the right at any time or from time to time without notice to other Party or to any other Person, any such notice being hereby expressly waived, to set off against any amount due a Party from the other Party under this Agreement any undisputed amount due such Party from the other Party under this Agreement, including any undisputed amounts due because of breach of this Agreement or any other obligation.
Section 11.6 Records and Audits. Seller shall maintain, and the Authorized Auditors shall have access to, all records and data pertaining to the performance and management of this Agreement (including compliance with the Requirements) and related Subcontracts, and as necessary to properly reflect all costs claimed to have been incurred hereunder and thereunder, including (a) in their original form, all (i) documents provided to Seller in the ordinary course of business for the Facility, (ii) documents for billing, costs, metering, and Environmental Attributes, (iii) books, records, documents, reports, deliverables, employee time sheets, accounting procedures and practices, and (iv) records of financial transactions, and (b) other evidence, regardless of form (for example, machine readable media such as disk or tape, etc.) or type (for example, databases, applications software, database management software, or utilities).
If Seller is required to submit cost or pricing data in connection with this Agreement, Seller shall maintain all records and documents necessary to permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used. In the event of a Dispute, records that relate to the Agreement, Dispute, litigation or costs, or items to which an audit exception has been taken, shall be maintained. Buyer and the Authorized Auditors may discuss such records with Seller’s officers and independent public accountants (and by this provision Seller authorizes said accountants to discuss such billings and costs), all at such times and as often as may be reasonably requested. All such records shall be retained, and shall be subject to examination and audit by the Authorized Auditors, for a period of not less than four (4) years following final payment made by Buyer hereunder as it relates to a particular payment obligation, four (4) years after the expiration or termination date of this Agreement, or final settlement of all disputes, claims, or litigation that authorizes the records to no longer be retained, or the retention period under the Requirements of Law applicable to any Participating Members, - 56 -
whichever is later. Seller shall make said records or, to the extent accepted by the Authorized Auditors, photographs, micro-photographs, or other authentic reproductions thereof, available to the Authorized Auditors at Seller’s principal business office or any other of Seller’s offices as mutually agreed upon by Buyer and Seller, at all reasonable times and without charge. The Authorized Auditors may reproduce, photocopy, download, transcribe, and the like any such records. Any information provided by Seller on machine-readable media shall be provided in a format accessible and readable by the Authorized Auditors. Seller shall not, however, be required to furnish the Authorized Auditors with commonly available software. Seller shall be subject at any time with fourteen (14) days prior written notice to audits or examinations by Authorized Auditors, relating to all billings and required to verify compliance with all Agreement requirements relative to practices, methods, procedures, performance, compensation, and documentation. Examinations and audits shall be performed using generally accepted auditing practices and principles and applicable governmental audit standards. All information provided by Seller or Seller’s Subcontractors pursuant to this Section 11.6 shall be subject to the provisions of Section 14.21. If Seller utilizes or is subject to Federal Acquisition Regulation, Part 30 and 31, et seq. accounting procedures, or a portion thereof, examinations and audits shall utilize such information. To the extent that an Authorized Auditor’s examination or audit reveals inaccurate, incomplete or non-current records, or records are unavailable, the records shall be considered defective. Consistent with standard auditing procedures, Seller shall be provided fifteen (15) days to review an Authorized Auditor’s examination results or audit and respond to Buyer prior to the examination’s or audit’s finalization and public release. If an Authorized Auditor’s examination or audit indicates Seller has been overpaid under a previous payment application, the identified overpayment amount shall be paid by Seller to Buyer within fifteen (15) days after notice to Seller of the identified overpayment. If an Authorized Auditor’s examination or audit reveals that Buyer’s overpayment to Seller is more than five percent (5.0%) of the billings reviewed, Seller shall pay all expenses and costs incurred by the Authorized Auditors arising out of or related to the examination or audit, which examination or audit expenses and costs shall be paid by Seller to Buyers within fifteen (15) days after notice to Seller.
Seller shall use commercially reasonable efforts to contractually require all Subcontractors performing services under this Agreement to comply with the provisions of this Section 11.6 by inserting this Section 11.6 into each Subcontract.
Section 11.7 Electric Metering Devices.
(a) The PV Delivered Energy made available to Buyer by Seller under this Agreement shall be measured using a CAISO-approved and CAISO-polled revenue-quality Electric Metering Device (in compliance with the CAISO Tariff and relevant protocols and is dedicated exclusively to the Facility) procured, installed, owned and maintained by Seller at the PV System and the Point of Delivery, and the BESS Metered Input and BESS Metered Output shall be measured using CAISO-approved and CAISO-polled revenue-quality Electric Metering Devices (in compliance with the CAISO Tariff and relevant protocols and dedicated exclusively to the Facility) procured, installed, owned and maintained by Seller at the BESS and the Point of Delivery, in each case, as depicted in the metering diagram attached to this Agreement as Appendix O. All such Electric Metering Devices used to provide data for the computation of payments shall be sealed and Seller shall only break the seal when such Electric Metering Devices are to be inspected and tested or adjusted in accordance with this Section 11.7. Seller shall arrange and bear all costs associated with the installation of the Electric Metering Devices needed for the registration, - 57 -
recording and transmission of information regarding the Delivered Energy. Seller hereby agrees to provide a mutually agreed set of meter data to Buyer, which data shall be accessible to, and usable by, Buyer. In addition to providing Buyer with its meter data, Seller shall support Buyer’s efforts to obtain read-only access to CAISO meter data applicable to the Facility and all inspection, testing and calibration data and reports from the CAISO. If the CAISO makes any adjustment to any CAISO meter data for a given time period, Seller agrees that it shall submit revised Monthly invoices, pursuant to this ARTICLE XI covering the entire applicable time period in order to fully conform such adjustments to the meter data. Seller shall submit any revised invoices no later than thirty (30) days after the date on which the CAISO provides Seller with binding adjustments to the meter data.
(b) Seller or its Authorized Representative, at no expense to Buyer, shall inspect and test all Electric Metering Devices upon installation and at least annually thereafter. Seller shall provide Buyer with reasonable advance notice of, and permit representatives of Buyer to witness and verify, such inspections and tests. Upon request by Buyer or Buyer’s Authorized Representative, Seller or its Authorized Representative shall perform additional inspections or tests of any Electric Metering Device and shall permit a qualified representative of Buyer to inspect or witness the testing of any Electric Metering Device. The actual expense of any such requested additional inspection or testing shall be borne by Seller. Seller shall provide copies of any inspection or testing reports to Buyer.
(c) If an Electric Metering Device fails to register, or if the measurement made by an Electric Metering Device is found upon testing to be inaccurate by more than plus or minus one percent (+/- 1.0%), an adjustment shall be made correcting all measurements made by the inaccurate or defective Electric Metering Device for both the amount of the inaccuracy and the period of the inaccuracy, such adjustment to be made by the Scheduling Coordinator. The adjustment period shall be determined as far as can be reasonably ascertained by Buyer or Buyer’s Authorized Representative from the best available data, subject to review and approval by Seller (such approval not to be unreasonably withheld). If the period of the inaccuracy cannot be ascertained reasonably, any such adjustment shall be for a period equal to one third of the time elapsed since the preceding test of the applicable Electric Metering Devices. To the extent that the adjustment period covers a period of deliveries for which payment has already been made by Buyer, Buyer shall use the corrected measurements as determined in accordance with this Section 11.7 to recompute the amount due for the period of the inaccuracy and shall subtract the previous payments by Buyer for this period from such recomputed amount. If the difference is a positive number, the difference shall be paid by Buyer to Seller; if the difference is a negative number, that difference shall be paid by Seller to Buyer, or at the direction of Buyer, may take the form of an offset to payments due to Seller from Buyer. Payment of such difference by the owing Party shall be made not later than thirty (30) days after the owing Party receives notice of the amount due, unless Buyer elects payment via an offset.
(d) Commencing on the first date on which Startup and Test Energy is produced by the Facility, and continuing throughout the Delivery Term, Seller shall provide to Buyer read only access to all Electric Metering Devices installed, owned and operated by Seller that are used to measure PV Delivered Energy, BESS Metered Input, and BESS Metered Output.
Section 11.8 Taxes. Seller shall be responsible for and shall pay, before the due - 58 -
dates therefor, any and all federal, state, and local Taxes incurred by it as a result of entering into this Agreement and all Taxes imposed or assessed with respect to the Facility, the Site or any other assets of Seller, the Products or the transaction arising before or at the Point of Delivery.
Buyer shall pay or cause to be paid all Taxes on or with respect to the Products or the transaction from (but excluding) the Point of Delivery to such Buyer. If Seller is required by a Requirement of Law to remit or pay Taxes that are the responsibility of Buyer hereunder, Buyer shall promptly reimburse Seller for such Taxes. If Buyer is required by Requirement of Law to remit or pay Taxes that are Seller’s responsibility hereunder, Buyer may deduct such amounts from payments to Seller hereunder; if Buyer elects not to deduct such amounts from Seller’s payments, Seller shall promptly reimburse Buyer for such amounts upon request. Nothing shall obligate or cause a Party to pay or be liable to pay any Taxes for which it is exempt under law. A Party that is exempt at any time and for any reason from one or more Taxes shall bear the risk that such exemption shall be lost or the benefit of such execution be reduced.
ARTICLE XII
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 12.1 Representations and Warranties of Buyer. Buyer makes the following representations and warranties to Seller as of the Effective Date:
(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) The execution, delivery and performance by Buyer of this Agreement (i) have been duly authorized by all necessary action, and does not and will not require any consent or approval of such Buyer’s regulatory or governing bodies, other than that which has been obtained; and (ii) does not violate any federal, state, and local law, including the California Government Code and similar laws.
(c) This Agreement constitutes the legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.
Section 12.2 Representations and Warranties of Seller. Seller makes the following representations and warranties to Buyer as of the Effective Date:
(a) Seller is a limited liability company duly organized, validly existing and in good standing under the laws of its respective state of incorporation or organization and is qualified to do business in the State of California, and has the legal power and authority to own or lease 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 thereby and to perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement. - 59 -
(b) Seller has taken all corporate or limited liability company action required to authorize the execution, delivery, and performance of this Agreement, and Seller has delivered to Buyer (i) copies of all resolutions and other documents evidencing such corporate or limited liability company actions, certified by an authorized representative of Seller as being true, correct, and complete, and (ii) an incumbency certificate signed by the secretary of Seller certifying as to the names and signatures of the authorized representatives of Seller. (c) The execution, delivery and performance by Seller of this Agreement have been duly authorized by all necessary organizational action, and do not require any consent or approval other than those which have already been obtained. (d) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and the fulfillment of and compliance with the provisions of this Agreement, do not conflict with or constitute a breach of or a default under, any of the terms, conditions or provisions of any Requirement of Law, or any organizational documents, agreement, deed of trust, mortgage, loan agreement, other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which it or any of its property is bound, or result in a breach of or a default under any of the foregoing.
(e) This Agreement constitutes the legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law. (f) There is no pending, or to the knowledge of Seller, threatened action or proceeding affecting Seller before any Governmental Authority, which purports to affect the legality, validity or enforceability of this Agreement. (g) Seller is not in violation of any Requirement of Law, which violations, individually or in the aggregate, would reasonably be expected to result in a material adverse effect on the business, assets, operations, condition (financial or otherwise) or prospects of Seller, or the ability of Seller to perform any of its obligations under this Agreement. (h) As of the Effective Date (i) the corporate organizational structure and ownership of Seller and its Upstream Equity Owners up to Seller’s Ultimate Parent is set forth on Schedule 12.2(h) and (ii) Seller is a Special Purpose Entity. The limited liability company interests in each of Seller and each Upstream Equity Owner have been duly issued under and authorized by their respective limited liability company agreements and in accordance with applicable Requirements of Law.
(i) Seller has (i) not entered into this Agreement with the actual intent to hinder, delay or defraud any creditor, and (ii) received reasonably equivalent value in exchange for its obligations under this Agreement. No petition in bankruptcy has been filed against Seller (other than petitions that have been dismissed within sixty (60) days after filing), and Seller has never made an assignment for the benefit of creditors or taken advantage of any insolvency act for its benefit as a debtor.
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(j) Tax returns and reports of Seller required to be filed by it have been timely filed, and all Taxes shown on such Tax returns to be due and payable and all assessments, fees and other governmental charges upon Seller and upon its properties, assets, income, business and franchises that are due and payable have been paid when due and payable. Seller knows of no proposed Tax assessment against it that is not being actively contested by it in good faith and by appropriate proceeding.
(k) Seller owns or possesses or will acquire all patents, rights to patents, trademarks, copyrights and licenses necessary for the performance by Seller of its obligations under this Agreement, and, to Seller’s knowledge, Seller’s use thereof does not infringe on the intellectual property rights of third parties.
(l) Seller has not assigned, transferred, conveyed, encumbered, sold or otherwise disposed of the Products except as provided herein. (m) Seller has obtained all Permits (including the CEQA Determinations) required for the construction, operation, and maintenance of the Facility in accordance with the Requirements and the performance of Seller’s obligations hereunder, or such Permits are reasonably expected to be timely obtained in the ordinary course of business.
Section 12.3 Covenants of Seller Related to Site Control Documents. (a) Seller shall at all times maintain Site Control.
(b) Seller shall use commercially reasonable efforts to enforce the provisions of the Site Control Documents short of termination thereof such that Seller may enjoy all of the rights granted to Seller thereunder.
(c) For each Site Control Document capable of being recorded, Seller shall cause, or shall cause the Lessor, if applicable, either a memorandum of such Site Control Document or the Site Control Document itself to be timely and duly recorded in the land records of the applicable county or counties of the State of California, or as otherwise provided by applicable law, to the extent recordable under federal or state law.
(d) Seller shall give Buyer immediate notice after Seller is aware of any of the following: (i) any default notice received by Seller or the Lessor or delivered by Seller or the Lessor under any Site Control Document or (ii) the commencement or threat of any action, arbitration, mediation, or other proceeding pertaining to any Site Control Document. Seller shall deliver to Buyer, immediately upon service or delivery thereof on, to or by Seller or Lessor, a copy of each petition, summons, complaint, notice of motion, order to show cause and other pleading or paper, however designated, which shall be served or delivered in connection with any such action, proceeding or arbitration. Buyer’s cure of any default under a Site Control Document shall cure such default by Seller pursuant to Section 13.1(h).
(e) Throughout the Agreement Term, Seller shall notify Buyer of the institution of any proceeding for the condemnation or other taking of the Facility or any portion thereof (as applicable, a “Taking”), including the occurrence of any hearing associated therewith. Buyer may participate in any such proceeding and Seller shall deliver to Buyer all instruments necessary or - 61 -
required by Buyer to permit such participation. Subject to the consent of the Facility Lender, upon any condemnation of the Facility or any portion thereof, Seller shall diligently repair, replace or reconstruct the Facility or portion thereof so condemned. Subject to the consent of the Facility Lender, all awards and compensation for the Taking or purchase in lieu of condemnation of the Facility or any portion thereof shall be applied toward the repair, restoration, reconstruction or replacement of the Facility.
Section 12.4 [Reserved].
Section 12.5 Additional Covenants of Seller.
(a) Material Adverse Effect. In the event of a material adverse effect on the business, assets, operations, condition (financial or otherwise) or prospects of Seller or an event of default by Seller or the operator under the O&M Agreement, Seller shall promptly thereafter notify Buyer. Upon the reasonable request of Buyer, Seller shall, within thirty (30) days after Buyer’s request, provide Buyer with a plan or report, including the report (at Seller’s sole cost and expense) of a Licensed Professional Engineer with respect to any material change in operations that demonstrates in detail reasonably acceptable to Buyer, that the applicable event or occurrence has been mitigated or cured, or will be mitigated or cured within a reasonable period or within the cure periods provided therefor (and listing, in detail, the actions that Seller has taken, is taking, or proposes to take with respect to such condition or event), or that such event or occurrence will not have a material adverse effect on the performance of Seller under this Agreement. A failure to provide such plan or report within thirty (30) days, or to diligently undertake any of the actions set forth under such plan or report, will be deemed a failure by Seller to perform under Section 13.1(b). (b) Special Purpose Entity. Seller shall remain at all times throughout the Agreement Term a Special Purpose Entity.
(c) [Reserved].
(d) Sale Leaseback Financing.
(i) Seller shall provide Buyer with at least one hundred twenty (120) days’ prior written notice of the consummation of a Sale Leaseback Financing, which notice shall include (A) introductory and contact information about and for any potential Sale Leaseback Lessors and (B) a summary of the provisions related to such Sale Leaseback Financing. Such notice shall be in addition to, and not in lieu of, any notice required under Section 14.7.
(ii) In the event of a Sale Leaseback Financing, promptly after closing thereof, Seller shall provide Buyer true and correct copies of all agreements with the Sale Leaseback Lessor (with confidential terms redacted).
(iii) It shall be a Default (which shall be subject to cure only if such Default is reasonably capable of being promptly and completely cured by Seller, and if not capable of being promptly and completely cured by Seller, shall be an immediate Default without opportunity to cure hereunder) should Seller enter into a Sale Leaseback Financing unless the Sale Leaseback Lessor or Sale Leaseback Lessors thereunder and Seller shall - 62 -
have concurrently entered into an agreement with Buyer providing for (A) substantially the terms set forth in Appendix N, and (B) estoppel certificate(s) from such Sale Leaseback Lessor or Sale Leaseback Lessors certifying that this Agreement remains in full force and effect and binding on Seller and that each agreement providing for Seller’s rights in and to the Site remains in full force and effect and binding on the third parties thereto. (iv) Seller shall deliver, or cause to be delivered, copies of all resolutions and other documents evidencing the actions taken to approve, execute and deliver such Sale Leaseback Financing agreements and any the documents required in Section 12.5(d), in each case certified by an authorized representative of Seller as being true, correct and complete, and an incumbency certificate signed by the secretary of Seller certifying as to the names and signatures of the authorized representatives of Seller.
ARTICLE XIII
DEFAULT; TERMINATION AND REMEDIES; PERFORMANCE DAMAGE
Section 13.1 Default. Each of the following events or circumstances shall constitute a “Default” by the responsible Party (the “Defaulting Party”):
(a) Payment Default. Failure by a Party to make any payment (except for the payment of Daily Delay Damages) under this Agreement when and as due (other than payments disputed in good faith) that is not cured within twenty (20) days after receipt of notice thereof from the other Party (which amount shall include payment of interest from the due date at the Interest Rate).
(b) Performance Default. Failure by a Party to perform any of its duties or obligations under this Agreement (other than any failure that is separately listed as a Default of Seller under this Section 13.1) that is not cured within thirty (30) days after receipt of notice thereof from the other Party; provided that if such failure cannot be cured within such thirty (30) day period despite reasonable commercial efforts and such failure is not a failure to make a payment when due, such Party shall have up to ninety (90) additional days to cure. (c) Breach of Representation and Warranty. Any representation, warranty, certification or other statement made by a Party in this Agreement is false or inaccurate at the time made and materially and adversely affects Seller’s ability to perform its obligations hereunder; provided that no Default shall exist if such falsity or inaccuracy is remedied within thirty (30) days after receipt of notice thereof from another Party.
(d) Bankruptcy. Bankruptcy of Buyer or Seller.
(e) Performance Security Failure. (i) The failure of Seller to furnish Performance Security by the times set forth in Section 5.7(a) and Section 5.7(b); (ii) the failure of Seller to replace the Performance Security within ten (10) Business Days after a Downgrade Event occurs with respect to the issuer of the Performance Security; (iii) the failure of Seller to replace the Performance Security within ten (10) Business Days after Seller receives notice from Buyer of a termination of its relationship with the issuer of any Performance Security; or (iv) the issuer of any Performance Security provided by Seller hereunder contests the validity or enforceability of the Performance Security, the letter of credit provider denies that it has any liability in respect of - 63 -
any Performance Security, or the letter of credit provider fails to honor a draw request properly made and tendered under this Agreement and such Performance Security is not replaced within five (5) Business Days after Seller becomes aware of such occurrence. (f) Insurance Default. The failure of Seller to maintain and provide acceptable evidence of the required Insurance for the required period of coverage as set forth in Appendix F that is not cured within three (3) days after receipt of notice of such failure from Buyer. (g) Fundamental Change. Except as permitted by Section 14.7, (i) a Party makes an assignment of its rights or delegation of its obligations under this Agreement, or (ii) a Change in Control occurs.
(h) Site Control Document Default. Except as may be expressly permitted by this Agreement, any Site Control Document fails to be in effect or is terminated for any reason, and such Site Control Document is not reinstated to be in full force and effect within twenty (20) days thereafter; provided that Seller shall not be in Default under this Section 13.1(h) should the termination of a Site Control Document be disputed, so long as Seller is contesting such termination in good faith.
(i) Casualty. Seller fails to meet its obligations under Section 14.19(b). (j) Construction Start Milestone. (i) Seller fails to achieve the Construction Start Milestone on or before the date that is one hundred eighty (180) days after the Milestone Date for the Construction Start Milestone and (ii) Buyer elects not to allow Seller to continue to pay Daily Delay Damages to Buyer pursuant to Section 3.5(b)(ii). (k) Commercial Operation Date. Seller fails to achieve Commercial Operation on or before the Outside Commercial Operation Date. (l) Shortfall Energy Termination Default. The failure of the Facility during any Measurement Period to deliver PV Delivered Energy in an amount that equals at least seventyfive percent (75%) of the Annual Contract Quantity applicable for each such Measurement Period. (m) BESS Defaults. A BESS performance failure as set forth in Section
9.6(c)(i), Section 9.6(c)(ii) or Section 9.6(c)(iii).
Section 13.2 Default Remedy.
(a) If Buyer is in Default for nonpayment, subject to any duty or obligation under this Agreement, Seller may, at its sole option, (i) suspend performance hereunder, (ii) terminate this Agreement, or (iii) continue to provide services pursuant to its obligations under this Agreement; provided that nothing in this Section 13.2(a) shall affect Seller’s rights and remedies set forth in this Section 13.2. Seller’s continued service to Buyer shall not act to relieve Buyer of any of its duties or obligations under this Agreement.
(b) Notwithstanding any other provision herein, if any Default has occurred and is continuing, the affected Party may, whether or not the dispute resolution procedure set forth in Section 14.3 has been invoked or completed, bring an action in any court of competent jurisdiction - 64 -
as set forth in Section 14.3 seeking injunctive relief in accordance with applicable rules of civil procedure.
(c) Except as expressly limited by this Agreement, if a Default has occurred and is continuing and Buyer is the Defaulting Party, Seller may without further notice exercise any rights and remedies provided herein or otherwise available at law or in equity including a termination of this Agreement pursuant to Section 13.4. No failure of Seller to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Seller of any other right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. (d) Except as expressly limited by this Agreement, if a Default has occurred and is continuing and Seller is the Defaulting Party, Buyer may without further notice exercise any rights and remedies provided for herein, or otherwise available at law or equity, including (i) application of all amounts available under the Performance Security against any amounts then payable by Seller to Buyer under this Agreement and (ii) termination of this Agreement pursuant to Section 13.4. No failure of Buyer to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Buyer of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power by Buyer.
Section 13.3 Cure Rights of Facility Lender. Buyer shall provide such consents to assignment, substantially in the form attached as Appendix P, as may be reasonably requested by Seller or any Facility Lender (other than a Tax Equity Investor) which shall comply with the applicable terms and conditions of this Agreement (such consent, the “Consent and Agreement”). The Consent and Agreement shall provide the Facility Lender, as applicable, or its agent notice of the occurrence of any Default described in Section 13.1 and the opportunity to cure any such default to the extent Seller has an opportunity hereunder to cure such default.
Seller shall promptly repay Buyer for any costs or expenses incurred by Buyer in making any such payments or otherwise incurred by Buyer in connection with curing a default by Seller. In addition, Buyer shall, if reasonably requested by a Tax Equity Investor, provide a written consent providing such Tax Equity Investor with the right, but not the obligation, at any time, to pay any or all amounts due from Seller to Buyer hereunder, and to do any other act or thing required of Seller, in each case to cure any default of Seller under this Agreement in a manner that is consistent with the applicable terms and conditions of this Agreement, and provide a customary estoppel certificate, provided that the terms and conditions of any such consent, or any estoppel certificate, shall have no (and could not reasonably be expected to have any) adverse effect on Buyer’s rights under this Agreement, and, except for a reasonable additional cure period for the Tax Equity Investor to cure a default of Seller as set forth in the consent with such Tax Equity Investor, which additional cure period shall be no longer than the cure period afforded the Facility Lender, shall be consistent with the terms and conditions of this Agreement. Seller shall pay Buyer for the reasonable costs and expenses, including reasonable attorneys’ fees, incurred by Buyer in the negotiation of the documents Buyer is required to deliver hereunder.
Section 13.4 Termination for Default.
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(a) If a Default occurs, the Party that is not the Defaulting Party (the “NonDefaulting Party”) may, for so long as the Default is continuing and, to the extent permitted by applicable law, without limiting any other rights or remedies available to the Non-Defaulting Party under this Agreement, by notice by it (“Termination Notice”) to the Defaulting Party (i) establish a date (which shall be no earlier than the date of such notice and no later than twenty (20) days after the date of such notice) (“Early Termination Date”) on which this Agreement shall terminate, and (ii) withhold any payments due in respect of this Agreement; provided, upon the occurrence of any Default of the type described in Section 13.1(d), this Agreement shall automatically terminate, without notice or other action by either Party as if an Early Termination Date had been declared immediately prior to such event.
(b) If an Early Termination Date has been designated, the Non-Defaulting Party shall calculate in a commercially reasonable manner its Gains, Losses and Costs resulting from the termination of this Agreement and the resulting Termination Payment. The Gains, Losses and Costs relating to the Products that would have been required to be delivered under this Agreement had it not been terminated shall be determined by comparing the amounts Buyer would have paid for the Products under this Agreement to the equivalent quantities and relevant market prices, either quoted by one or more bona fide third party offers, or which are reasonably expected by the Non-Defaulting Party to be available in the market under a replacement contract for this Agreement covering the same products and having a term equal to the Remaining Term at the date of the Termination Notice, adjusted to account for differences in transmission, if any. To ascertain the market prices of a replacement contract, the Non-Defaulting Party may consider, among other valuations, quotations from dealers in Energy contracts and bona fide third party offers. The Non-Defaulting Party shall not be required to enter into any such replacement agreement in order to determine its Gains, Losses and Costs or the Termination Payment.
(c) For purposes of the Non-Defaulting Party’s determination of its Gains, Losses and Costs and the Termination Payment, it shall be assumed, regardless of the facts, that Seller would have sold, and Buyer would have purchased, each day during the Remaining Term (i) PV Delivered Energy in an amount equal to the Assumed Daily Deliveries, (ii) the Environmental Attributes associated therewith, (iii) all Capacity Rights and (iv) the full BESS Contract Capacity.
The “Assumed Daily Deliveries” shall be an amount equal to the greater of (A) the quotient of the Guaranteed Delivered Energy divided by three hundred sixty-five (365), and (B) the average daily amount of PV Delivered Energy during the Delivery Term, if any. (d) The Non-Defaulting Party shall notify the Defaulting Party of the Termination Payment, which notice shall include a written statement explaining in reasonable detail the calculation of such amount. If the Termination Payment is a positive number, the Defaulting Party shall, within ten (10) Business Days after receipt of such notice, pay the Termination Payment to the Non-Defaulting Party, together with interest accrued at the Interest Rate from the Early Termination Date until paid.
(e) If the Defaulting Party disagrees with the calculation of the Termination Payment and the Parties cannot otherwise resolve their differences, the calculation of the Termination Payment shall be submitted to the dispute resolution process provided in Section 14.3.
Following resolution of the dispute, the Defaulting Party shall pay the full amount of the Termination Payment (if any) as determined by such resolution as and when required, but no later - 66 -
than thirty (30) days following the date of such resolution, together with all interest, at the Interest Rate, that accrued from the Early Termination Date until the date the Termination Payment is paid. (f) For purposes of this Agreement:
(i) “Gains” means, with respect to a Party, an amount equal to the present value of the economic benefit (exclusive of Costs), if any, resulting from the termination of its obligations under this Agreement, determined in a commercially reasonable manner;
(ii) “Losses” means, with respect to a Party, an amount equal to the present value of the economic loss (exclusive of Costs), if any, resulting from the termination of its obligations under this Agreement, determined in a commercially reasonable manner;
(iii) “Costs” means, with respect to a Party, brokerage fees, commissions and other similar transaction costs and expenses reasonably incurred in terminating any arrangement pursuant to which it has hedged its obligations or in entering into new arrangements which replace this Agreement, excluding attorneys’ fees, if any, incurred in connection with enforcing its rights under this Agreement. Each Party shall use reasonable efforts to mitigate or eliminate its Costs.
(iv) In no event shall a Party’s Gains, Losses or Costs include any penalties or similar charges imposed by the Non-Defaulting Party. (v) The Present Value Rate shall be used as the discount rate in all present value calculations required to determine Gains, Losses and Costs. (g) At the time for payment of any amount due under this Section 13.4, each Party shall pay to the other Party, all additional amounts, if any, payable by it under this Agreement (including any amounts withheld pursuant to Section 13.4(a)).
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Authorized Representative. Each Party shall designate an authorized representative who shall be authorized to act on its behalf with respect to those matters contained herein (each an “Authorized Representative”), which shall be the functions and responsibilities of such Authorized Representatives. Each Party may also designate an alternate who may act for the Authorized Representative. Within thirty (30) days after execution of this Agreement, each Party shall notify the other Party of the identity of its Authorized Representative, and alternates if designated, and shall promptly notify the other Party of any subsequent changes in such designation. The Authorized Representatives shall have no authority to alter, modify, or delete any of the provisions of this Agreement. To the extent that an Authorized Representative’s contact information is not provided in Appendix J, at the time a Party designates such Authorized Representative, such Party shall concurrently provide written notice to the other Party of such Authorized Representative’s contact information. - 67 -
Section 14.2 Notices. All notices, requests, demands, consents, waivers and other communications which are required under this Agreement shall be in writing and shall be deemed properly sent if delivered in person, reliable overnight courier, or sent by registered or certified mail, postage prepaid to the persons specified in Appendix J. The Parties may update Appendix J, from time to time, to designate another person, address or office to which notices shall be delivered by delivering notice to the other Parties in accordance with this Agreement. In addition to the foregoing, the Parties may agree in writing at any time to deliver notices, requests, demands, consents, waivers and other communications through alternate methods, such as electronic mail.
Section 14.3 Dispute Resolution.
(a) In the event of any claim, controversy or dispute between the Parties arising out of or relating to or in connection with this Agreement (including any dispute concerning the validity of this Agreement or the scope and interpretation of this Section 14.3) (a “Dispute”), either Party (the “Notifying Party”) may deliver to the other Party (the “Recipient Party”) notice of the Dispute with a detailed description of the underlying circumstances of such Dispute (a “Dispute Notice”). The Dispute Notice shall include a schedule of the availability of the Notifying Party’s senior officers (having a title of senior vice president (or its equivalent) or higher) duly authorized to settle the Dispute during the thirty (30) day period following the delivery of the Dispute Notice.
(b) The Recipient Party shall, within five (5) Business Days following receipt of the Dispute Notice, provide to the Notifying Party a parallel schedule of availability of the Recipient Party’s senior officers (having a title of senior vice president (or its equivalent) or higher) duly authorized to settle the Dispute. Following delivery of the respective senior officers’ schedules of availability, the senior officers of the Parties shall meet and confer as often as they deem reasonably necessary during the remainder of the thirty (30) day period in good faith negotiations to resolve the Dispute to the satisfaction of each Party. (c) In the event a Dispute is not resolved pursuant to the procedures set forth in Section 14.3(a) and Section 14.3(b) by the expiration of the thirty (30) day period set forth in Section 14.3(a), then a Party may pursue any legal remedy available to it in accordance with the provisions of Section 14.12 and Section 14.13 of this Agreement. (d) In addition to the Dispute resolution process set forth in this Section 14.3, the Parties shall comply with California law governing claims against public entities and presentment of such claims.
Section 14.4 Further Assurances; Change in Electric Market Design. (a) Each Party agrees to execute and deliver all further instruments and documents, and take all further actions not inconsistent with the provisions of this Agreement that may be reasonably necessary to effectuate the purposes and intent of this Agreement. (b) If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then either Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make - 68 -
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 either Party may submit issues pertaining to changes to this Agreement to the Dispute resolution process set forth in Section 14.3. Notwithstanding the foregoing, 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, or constitute, or form the basis of, a Force Majeure.
Section 14.5 No Dedication of Facilities. Any undertaking by one Party to the other Party under any provisions of this Agreement shall not constitute the dedication of the Facility or any portion thereof of either Party to the public or to the other Party or any other Person, and it is understood and agreed that any such undertaking by either Party shall cease upon the termination of such Party’s obligations under this Agreement.
Section 14.6 Force Majeure.
(a) A Party shall not be considered to be in default in the performance of any of its obligations under this Agreement (other than the obligations of a Party to make payment of amounts due under this Agreement) when and to the extent such Party’s performance is prevented by a Force Majeure that, despite the exercise of due diligence, such Party is unable to prevent or mitigate, provided the Party has given a written detailed description of the full particulars of the Force Majeure to the other Party reasonably promptly after becoming aware thereof (and in any event within fourteen (14) days after the initial occurrence of the claimed Force Majeure event) (the “Force Majeure Notice”), which notice shall include information with respect to the nature, cause and date and time of commencement of such event, and the anticipated scope and duration of the delay. The Party providing such Force Majeure Notice shall be excused from fulfilling its obligations under this Agreement until such time as the Force Majeure has ceased to prevent performance or other remedial action is taken, at which time such Party shall promptly notify the other Party of the resumption of its obligations under this Agreement. If Seller is unable to deliver, or Buyer is unable to receive, PV Delivered Energy due to a Force Majeure, then Buyer shall have no obligation to pay Seller for PV Delivered Energy not delivered or received by reason thereof. It is understood by the Parties that, subject to the provisions of Section 7.4, the foregoing provisions shall not excuse any obligation of Seller with respect to delivery of the Guaranteed Delivered Energy under ARTICLE VI, or Shortfall Energy (and Replacement Product, as applicable), or either Party’s obligation to make payments to one another up to the time that Seller ceases deliveries of PV Delivered Energy, arising prior to the occurrence of any Force Majeure event. In no event shall Buyer or Seller be obligated to compensate the other Party or any other Person for any losses, expenses or liabilities that the other Party or such other Person may sustain as a consequence of any Force Majeure.
(b) The term “Force Majeure” means any act of God (including fire, flood, earthquake, extremely severe storm, lightning strike, tornado, volcanic eruption, hurricane or other natural disaster), labor disturbance, strike or lockout of a national scope, epidemic or pandemic, act of the public enemy, war, insurrection, riot, explosion, terrorist activities or any order, regulation or restriction imposed by governmental, military or lawfully established civilian authorities, or - 69 -
other occurrence that (i) prevents one Party from performing any of its obligations under this Agreement, (ii) could not reasonably be anticipated as of the date of this Agreement, (iii) is not within the reasonable control of, or the result of negligence, willful misconduct, breach of contract, intentional act or omission or wrongdoing on the part of the affected Party (or any subcontractor or Affiliate of that Party, or any Person under the control of that Party or any of its subcontractors or Affiliates, or any Person for whose acts such subcontractor or Affiliate is responsible), and (iv) by the exercise of due diligence the affected Party is unable to overcome or avoid or cause to be avoided; provided, nothing in clause (iv) above shall be construed so as to require a Party to accede or agree to any provision not satisfactory to it in order to settle and terminate a strike or labor dispute in which it may be involved. Notwithstanding the foregoing, the conditions existing as of the date of this Agreement due to the COVID-19 pandemic shall not be considered a Force Majeure, but any subsequent increase in government restrictions due to a worsening or resurgence of the COVID19 pandemic may be considered a Force Majeure. Any Party rendered unable to fulfill any of its obligations by reason of a Force Majeure shall exercise due diligence to remove such inability with reasonable dispatch within a reasonable time period and mitigate the effects of the Force Majeure.
The relief from performance shall be of no greater scope and of no longer duration than is required by the Force Majeure. Without limiting the generality of the foregoing, a Force Majeure does not include any of the following (each an “Unexcused Cause”): (1) any requirement to comply with a RPS Law or any change (whether voluntary or mandatory) in any RPS Law, or other Change in Law, that may affect the value of the Products; (2) events arising from the failure by Seller to construct, operate or maintain the Facility in accordance with this Agreement except to the extent such event is caused by a Force Majeure; (3) any increase of any kind in any cost; (4) delays in or inability of a Party to obtain financing or other economic hardship of any kind; (5) Seller’s ability to enter into a contract to sell PV System Energy at a more favorable price or Buyer’s ability to purchase the Product or any part thereof at a price lower than that provided in this Agreement; (6) curtailment or other interruption of any Transmission Service except to the extent such interruption is caused by a Force Majeure; (7) failure of third parties to provide goods or services essential to a Party’s performance except to the extent such failure is caused by a Force Majeure; (8) Facility or equipment failure of any kind except to the extent such failure is caused by a Force Majeure; (9) any changes in the financial condition of Buyer, Seller, the Facility Lender or any subcontractor or supplier affecting the affected Party’s ability to perform its obligations under this Agreement.
(c) Buyer may terminate this Agreement if (i) a Force Majeure event occurs that diminishes the production of the PV System by more than fifty percent (50%) of the PV Contract Capacity or the capacity of the BESS by more than fifty percent (50%) of the BESS Contract Capacity for a period of eighteen (18) consecutive months, or (ii) the Facility is rendered inoperable and an independent engineer that is mutually acceptable to both Parties determines that the Facility cannot be repaired or replaced within a period not to exceed twenty-four (24) months following the date of the occurrence of the Force Majeure event. (d) Any termination of this Agreement under Section 14.6(c) shall be “no-fault” and neither Party shall have any liability or obligation to the other Party arising out of such termination. Notwithstanding the foregoing, upon any such termination, each Party shall pay the other Party for any and all amounts hereunder that may be owing, including Seller’s obligation to make payments to Buyer for any existing Shortfall Energy, or other outstanding payments due in the ordinary course that occurred prior to the termination. Buyer shall return to Seller the - 70 -
Performance Security (less any amounts drawn by Buyer in accordance with this Agreement). The exercise by Buyer of its right to terminate the Agreement shall not render Buyer or Seller liable for any losses or damages incurred by the other Party whatsoever.
Section 14.7 Assignment of Agreement.
(a) Buyer may from time to time and at any time assign any or all of its rights, and delegate any or all of its obligations, under this Agreement in whole or in part without the consent of Seller to a Qualified Buyer Assignee. Buyer shall provide Seller with thirty (30) days’ prior notice of any such assignment or delegation. Notwithstanding the foregoing, in connection with any such assignment, such Qualified Buyer Assignee shall execute a written assumption agreement in favor of Seller pursuant to which any such Qualified Buyer Assignee shall assume all the obligations of Buyer under this Agreement, thereby relieving the assignor Buyer from its duties and obligations hereunder and thereunder.
(b) Except as set forth in this Section 14.7, Seller shall not assign any of its rights, or delegate any of its obligations, in or under this Agreement, without the prior written consent of Buyer, such consent not to be unreasonably withheld, conditioned, or delayed beyond the time period necessary for the internal review and approval process of Buyer. Any purported assignment or delegation in violation of this provision shall be null and void and of no force or effect.
(c) Seller may, without the prior written consent of Buyer, transfer or assign this Agreement if (A) the assignee is an Affiliate of Seller; (B) Seller has given Buyer notice at least fifteen (15) Business Days before the date of such proposed assignment; (C) Seller has provided Buyer a written agreement or certificate signed by the Affiliate to which Seller wishes to assign its interests that provides that such Affiliate will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment; and (D) such transfer or assignment is not in violation of applicable law.
(d) Buyer’s consent shall not be required in connection with the collateral assignment or pledge of this Agreement for the sole purpose of financing this Facility to any Facility Lender or the assignment of this Agreement to a Tax Equity Investor in connection with a Tax Equity Financing; provided, however, that (1) in connection with any such assignment or pledge and the exercise of remedies by any Facility Lender, the Facility Lender acknowledges and agrees to be bound by the requirement that the Facility be operated and maintained by a Qualified Operator and (2) in the event of any foreclosure, whether judicial or nonjudicial, or any deed in lieu of foreclosure, in connection with any deed of trust, mortgage, or other similar Lien, Facility Lender shall be bound by the covenants and agreements of Seller in this Agreement. Seller shall provide Buyer with ninety (90) days’ prior notice of any such collateral assignment or pledge.
Notwithstanding the foregoing or anything else expressed or implied herein to the contrary, Seller shall not assign, transfer, convey, encumber, sell or otherwise dispose of all or any portion of the Products (not including the proceeds thereof) to any Facility Lender; provided that nothing herein shall limit Seller’s right to encumber revenues earned from the sale of all or any portion of the Products, including Replacement Product.
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(e) Seller shall provide at least ninety (90) days’ written notice to Buyer prior to the occurrence of any (i) Change in Control pursuant to Section 14.7(f), (ii) any Tax Equity Financing or (iii) any proposed YieldCo Transfer. Concurrently with such notice, Seller shall provide Buyer with a then-current chart of the corporate organizational structure and ownership of Seller and a post-Change in Control, post-Tax Equity Financing or post YieldCo Transfer, as applicable, chart of the corporate organizational structure and ownership of Seller. In addition, following any permitted Change in Control, Seller and Buyer shall update the definition of Seller’s Ultimate Parent by updating Schedule 12.2(h) of this Agreement. (f) A Change in Control is permitted if (i) Buyer has given prior written consent to the transaction or transactions constituting the Change in Control, such consent not to be unreasonably withheld, conditioned or delayed and (ii) concurrently with the transaction or transactions constituting the Change in Control, if there is a successor entity to Seller, such successor entity executes a written assumption agreement in favor of Buyer pursuant to which such successor entity shall assume all of the obligations of Seller under this Agreement, and agree to be bound by all the terms and conditions of this Agreement. In connection with any Change in Control in which Seller remains party to this Agreement, at Buyer’s request, Seller shall deliver an estoppel certificate to Buyer confirming that this Agreement remains in full force and effect. (g) Except for a sale or transfer of the Facility by a Facility Lender as contemplated by Section 14.7(h), Seller shall not sell or transfer the Facility to any Person other than a Person to whom Seller assigns this Agreement in accordance with this Section 14.7, without the prior written consent of Buyer, other than a Sale Leaseback Financing (for which notice is required), without the prior written consent of Buyer; provided, that any such sale or transfer shall be in compliance with the provisions of Section 12.5(d). Any purported sale or transfer in violation of this Section 14.7(g) shall be null and void and of no force or effect. A Change in Control shall not be deemed a sale or transfer of the Facility.
(h) In no event shall Buyer be liable to any Facility Lender for any claims, losses, expenses or damages whatsoever other than liability a Buyer may have to Seller under this Agreement. In the event of any foreclosure, whether judicial or nonjudicial, or any deed in lieu of foreclosure, in connection with any deed of trust, mortgage, or other similar Lien, Facility Lender shall be bound by the covenants and agreements of Seller in this Agreement; provided, however, that until the Person who acquires title to the Facility executes and delivers to Buyer a written assumption of Seller’s obligations under this Agreement in form and substance acceptable to Buyer, such Person shall not be entitled to any of the benefits of this Agreement. Any sale or transfer of all or any portion of the Facility by any Facility Lender in connection with any foreclosure, whether judicial or nonjudicial, or any deed in lieu of foreclosure, in connection with any deed of trust, mortgage or similar Lien on the Facility, shall be made only to an entity that is a Qualified Transferee.
(i) Seller shall reimburse, or shall cause the Facility Lender to reimburse, Buyer for the incremental direct expenses reasonably incurred and documented by Buyer in the preparation, negotiation, execution or delivery of the Consent and Agreement for the Facility Lender and any other documents requested by Seller, the Facility Lender, or any Tax Equity Investor and provided by Buyer, in connection with to this Section 14.7 or any Tax Equity Financing.
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Section 14.8 Ambiguity. The Parties acknowledge that this Agreement was jointly prepared by them, by and through their respective legal counsel, and any uncertainty or ambiguity existing herein shall not be interpreted against either Party on the basis that the Party drafted the language, but otherwise shall be interpreted according to the application of the rules on interpretation of contracts.
Section 14.9 Attorneys’ Fees & Costs. Both Parties agree that in any action to enforce the terms of this Agreement that each Party shall be responsible for its own attorneys’ fees and costs. Each of the Parties to this Agreement was represented by its respective legal counsel during the negotiation and execution of this Agreement. Notwithstanding the foregoing, to the extent Buyer incurs legal costs in order to facilitate a Sale Leaseback Financing under Section 12.5(d) or the collateral assignment or pledge of this Agreement under Section 14.7(d), to evaluate whether a Change in Control has occurred, or such other action or review that is at the request of Seller, Seller shall bear Buyer’s reasonable and documented legal costs therefor.
Section 14.10Voluntary Execution. Both Parties acknowledge that they have read and fully understand the content and effect of this Agreement and that the provisions of this Agreement have been reviewed and approved by their respective counsel. The Parties further acknowledge that they have executed this Agreement voluntarily, subject only to the advice of their own counsel, and do not rely on any promise, inducement, representation or warranty that is not expressly stated herein.
Section 14.11Entire Agreement; Amendments. This Agreement (including all Appendices and Exhibits) contains the entire understanding concerning the subject matter herein and supersedes and replaces any prior negotiations, discussions or agreements between the Parties, or any of them, concerning that subject matter, whether written or oral, except as expressly provided for herein. This is a fully integrated document. Each Party acknowledges that no other party, representative or agent, has made any promise, representation or warranty, express or implied, that is not expressly contained in this Agreement that induced the other Party to sign this document. This Agreement may be amended or modified only by an instrument in writing signed by each Party.
Section 14.12Governing Law. This Agreement was made and entered into in the County of Los Angeles, California and shall be governed by, interpreted and enforced in accordance with the laws of the State of California, without regard to conflict of law principles.
Section 14.13Venue. All litigation arising out of, or relating to this Agreement, shall be brought in a state or federal court in the County of Los Angeles in the State of California.
The Parties irrevocably agree to submit to the exclusive jurisdiction of such courts in the State of California and waive any defense of forum non conveniens.
Section 14.14Execution in Counterparts. This Agreement may be executed in counterparts and upon execution by each signatory, each executed counterpart shall have the same force and effect as an original instrument and as if all signatories 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 signature thereon, and may be attached to another counterpart of this Agreement identical in form hereto by having attached to it one or - 73 -
more signature pages.
Section 14.15Effect of Section Headings. Section headings appearing in this Agreement are inserted for convenience only and shall not be construed as interpretations of text.
Section 14.16Waiver; Available Remedies. The failure of either Party to this Agreement to enforce or insist upon compliance with or strict performance of any of the terms or conditions hereof, or to take advantage of any of its rights hereunder, shall not constitute a waiver or relinquishment of any such terms, conditions or rights, but the same shall be and remain at all times in full force and effect. Except to the extent this Agreement expressly provides an exclusive remedy for a breach, nothing contained herein shall preclude either Party from seeking and obtaining any available remedies hereunder, including recovery of damages caused by the breach of this Agreement and specific performance or injunctive relief, or any other remedy given under this Agreement or now or hereafter existing in law or equity or otherwise. Seller acknowledges that money damages may not be an adequate remedy for violations of this Agreement and that Buyer may, in its sole discretion seek and obtain from a court of competent jurisdiction specific performance or injunctive or such other relief as such court may deem just and proper to enforce this Agreement or to prevent any violation hereof.
Seller hereby waives any objection to specific performance or injunctive relief. The rights granted herein are cumulative.
Section 14.17Relationship of the Parties. This Agreement shall not be interpreted to create an association, joint venture or partnership between the Parties hereto or to impose any partnership obligation or liability upon either Party. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as an agent or representative of, the other Party.
Section 14.18Third Party Beneficiaries. The provisions of this Agreement are solely for the benefit of the Parties, and, through Buyer, the Participating Members. Except for the Participating Members, nothing in this Agreement, whether express or implied, shall be construed to give to, or be deemed to create in, any other Person, whether as a third party beneficiary of this Agreement or otherwise, any legal or equitable right, remedy or claim in respect of this Agreement or any covenant, condition, provision, duty, obligation or undertaking contained or established herein. Except as provided herein, this Agreement shall not be construed in any respect to be a contract in whole or in part for the benefit of any Person that is not a party hereto.
Section 14.19Indemnification; Damage or Destruction; Insurance; Condemnation; Limit of Liability.
(a) Indemnification. Seller undertakes and agrees to indemnify and hold harmless Buyer, Participating Members, and all of their respective commissioners, officers, agents, employees, advisors, and Authorized Representatives and assigns and successors in interest (collectively, “Indemnitees”) and, at the option of Buyer, to defend such Indemnitees from and against any and all suits and causes of action (including proceedings before FERC), claims, charges, damages, demands, judgments, civil fines and penalties, other monetary remedies or losses of any kind or nature whatsoever, for death, bodily injury or personal injury to any person, including - 74 -
Seller’s employees and agents, or third persons, or damage or destruction to any property of either Party or third persons, in any manner arising by reason of any breach of this Agreement by Seller, any failure of a representation, warranty or guarantee of Seller hereunder to be true in all material respects, the negligent acts, errors, omissions or willful misconduct incident to the performance of this Agreement on the part of Seller, or any of the Seller’s officers, agents, employees, or subcontractors of any tier, except to the extent caused by the gross negligence or willful misconduct of any such Indemnitee.
(b) Damage or Destruction. Subject to the provisions of Section 14.6, and to the consent of Facility Lender, not to be unreasonably withheld, in the event of any damage or destruction of the Facility or any part thereof, the Facility or such part thereof shall be diligently repaired, replaced or reconstructed by Seller so that the Facility or such part thereof shall be restored to substantially the same general condition and use as existed prior to such damage or destruction, unless a different condition or use is determined by Seller using its reasonable discretion taking into account the economics of repair, replacement, or reconstruction. Proceeds actually received of Insurance with respect to such damage or destruction maintained as provided in this Agreement shall be applied in Seller’s reasonable discretion, subject to the consent of the Facility Lender, not to be unreasonably withheld, to the payment for such repair, replacement or reconstruction of the damage or destruction.
(c) Insurance. Seller shall obtain and maintain the Insurance coverages listed in Appendix F.
(d) [Reserved].
(e) Limitation of Liability. EXCEPT TO THE EXTENT INCLUDED IN
THE DAILY DELAY DAMAGES OR OTHER LIQUIDATED DAMAGES PROVIDED
HEREIN, INDEMNIFICATION OBLIGATIONS RELATED TO THIRD PARTY CLAIMS, OR
OTHER SPECIFIC CHARGES EXPRESSLY PROVIDED FOR HEREIN, IN NO EVENT
SHALL EITHER PARTY OR, IN THE CASE OF BUYER, ITS INDEMNITEES, BE LIABLE
FOR SPECIAL, INCIDENTAL, EXEMPLARY, INDIRECT, PUNITIVE OR
CONSEQUENTIAL DAMAGES, LOST PROFITS OR OTHER COSTS, BUSINESS INTERRUPTION DAMAGES RELATED TO OR ARISING OUT OF A PARTY’S
PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT, WHETHER BASED ON OR CLAIMED UNDER STATUTE, CONTRACT, TORT (INCLUDING SUCH PARTY’S OWN NEGLIGENCE) OR ANY OTHER THEORY OF LIABILITY AT LAW OR IN EQUITY.
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 OF SUCH DAMAGES, INCLUDING THE NEGLIGENCE OF ANY PARTY,
WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, CONTRIBUTORY, CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY. In no event shall Seller be liable to Buyer for any Losses and Costs (including any liquidated damages) that are in the aggregate in excess of Nine Million Eight Hundred Thousand Dollars ($9,800,000) during the period from the date of execution of this Agreement until the Commercial Operation Date; provided, however, that such limitation shall not apply to any Losses and Costs arising out of (i) Seller’s obligations under this Agreement to indemnify and hold harmless Buyer for death, bodily injury, or personal injury to any - 75 -
person or damage or destruction to any property or (ii) the gross negligence or willful misconduct of Seller or any of Seller’s Affiliates or subcontractors. (f) To the extent any damages required to be paid hereunder are liquidated, the Parties acknowledge that the damages are difficult or impossible to determine, and that the liquidated damages constitute a reasonable approximation of the anticipated harm or loss.
Section 14.20Severability. In the event any of the terms, covenants or conditions of this Agreement, or the application of any such terms, covenants or conditions, shall be held invalid, illegal or unenforceable by any court having jurisdiction, all other terms, covenants and conditions of this Agreement and their application not adversely affected thereby shall remain in force and effect, provided that the remaining valid and enforceable provisions materially retain the essence of the Parties’ original bargain.
Section 14.21Confidentiality.
(a) Each Party agrees, and shall use reasonable efforts to cause its parent, subsidiary and Affiliates, and its and their respective directors, officers, employees, representatives and agents, as a condition to receiving confidential information hereunder, to keep confidential, except as required by applicable laws: (i) all documents, data, drawings, studies, projections, plans and other written information that relate to economic benefits to, or amounts payable by, either Party under this Agreement, and (ii) documents that are clearly marked “Confidential” at the time a Party shares such information with the other Party (clauses (i) and (ii) above, the “Confidential Information”). The provisions of this Section 14.21 shall survive and shall continue to be binding upon the Parties for a period of one (1) year following the date of termination or expiration of this Agreement. Notwithstanding the foregoing, information shall not be considered Confidential Information which (A) is disclosed with the prior written consent of the originating Party, (B) was in the public domain prior to disclosure or is or becomes publicly known or available other than through the action of the receiving Party in violation of this Agreement, (C) was lawfully in a Party’s possession or acquired by a Party outside of this Agreement, which acquisition was not known by the receiving Party to be in breach of any confidentiality obligation, or (D) is developed independently by a Party based solely on information that is not considered confidential under this Agreement.
(b) Either Party may, without violating this Section 14.21, disclose matters that are made confidential by this Agreement:
(i) to its counsel, accountants, auditors, advisors, other professional consultants, credit rating agencies, actual or prospective, co-owners, investors, purchasers, lenders, underwriters, contractors, suppliers, and others involved in construction, operation, and financing transactions and arrangements for a Party or its subsidiaries or Affiliates;
(ii) to Governmental Authorities and parties involved in any proceeding in which either Party is seeking a Permit, certificate, or other regulatory approval or order necessary or appropriate to carry out this Agreement;
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(iii) to Governmental Authorities or the public as required by any law, regulation, order, rule, ruling or other Requirement of Law, including oral questions, discovery requests, subpoenas, civil investigations or similar processes and laws or regulations requiring disclosure of financial information, information material to financial matters, and filing of financial reports;
(iv) to WREGIS in accordance with WREGIS Operating Rules; and (v) with respect to Buyer, to any of its respective members from time to time.
(c) If a Party is requested or required, pursuant to any applicable law, regulation, order, rule, ruling or other Requirement of Law, discovery request, subpoena, civil investigation or similar process to disclose any of the Confidential Information, such Party shall provide prompt written notice to the other Party of such request or requirement so that at such other Party’s expense, such other Party can seek a protective order or other appropriate remedy concerning such disclosure.
(d) Notwithstanding the foregoing or any other provision of this Agreement, Buyer may record, register, deliver and file all such notices, statements, instruments and other documents as may be necessary or advisable to render fully valid, perfected and enforceable under all applicable law the credit support contemplated by this Agreement, including the Project Development Security, and the Delivery Term Security, and the rights, Liens and priorities of Buyer with respect to such credit support.
(e) Notwithstanding the foregoing or any other provision of this Agreement, Seller acknowledges that Buyer is subject to disclosure as required by the California Public Records Act, Cal. Govt. Code §§ 6250 et seq. (“CPRA”) and the Ralph M. Brown Act, Cal. Govt. Code §§ 54950 et seq. (“Brown Act”). Confidential Information of Seller provided to Buyer pursuant to this Agreement will become the property of Buyer, and Seller acknowledges that Buyer shall not be in breach of this Agreement or have any liability whatsoever under this Agreement or otherwise for any claims or causes of action whatsoever resulting from or arising out of Buyer copying or releasing to a third party any Confidential Information of Seller pursuant to CPRA or Brown Act. (f) Notwithstanding the foregoing or any other provision of this Agreement, Buyer may record, register, deliver and file all such notices, statements, instruments and other documents as may be necessary or advisable to render fully valid, perfected and enforceable under all applicable law the credit support contemplated by this Agreement, and the rights, Liens and priorities of Buyer with respect to such credit support. (g) If Buyer receives a CPRA request for Confidential Information of Seller, and Buyer or Buyer’s Authorized Representative determines that such Confidential Information is subject to disclosure under CPRA, then Buyer shall notify Seller of the request and its intent to disclose the documents. Buyer will comply with the disclosure requirements of the CPRA, including with respect to the release of documents unless Seller timely obtains a court order prohibiting such release. If Seller, at its sole expense, chooses to seek a court order prohibiting the release of Confidential Information pursuant to a CPRA request, then Seller undertakes and agrees - 77 -
to defend, indemnify and hold harmless Buyer and the Indemnitees from and against all suits, claims, and causes of action brought against Buyer or any Indemnitees for Buyer’s refusal to disclose Confidential Information of Seller to any person making a request pursuant to CPRA.
Seller’s indemnity obligations shall include, but are not limited to, all actual costs incurred by Buyer and any Indemnitees, and specifically including costs of experts and consultants, as well as all damages or liability of any nature whatsoever arising out of any suits, claims, and causes of action brought against Buyer or any Indemnitees, through and including any appellate proceedings.
Seller’s obligations to Buyer and all Indemnitees under this indemnification provision shall be due and payable on a Monthly, on-going basis within thirty (30) days after each submission to Seller of Buyer’s invoices for all fees and costs incurred by Buyer and all Indemnitees, as well as all damages or liability of any nature.
(h) Each Party acknowledges that any disclosure or misappropriation of Confidential Information by such Party in violation of this Agreement could cause the other Party or their Affiliates irreparable harm, the amount of which may be extremely difficult to estimate, thus making any remedy at law or in damages inadequate. Therefore each Party agrees that the non-breaching Party shall have the right to apply to any court of competent jurisdiction for a restraining order or an injunction restraining or enjoining any breach or threatened breach of this Agreement and for any other equitable relief that such non-breaching Party deems appropriate. This right shall be in addition to any other remedy available to the Parties in law or equity.
Section 14.22Mobile-Sierra. The Parties hereby stipulate and agree that this Agreement was entered into as a result of arm’s-length negotiations between the Parties. Further, the Parties believe that, to the extent the sale of Energy under this Agreement is subject to Sections 205 and 206 of the Federal Power Act, 16 U.S.C. Sections 824d and 824e, the rates, terms and conditions of this Agreement are just and reasonable within the meanings of Sections 205 and 206 of the Federal Power Act, and that the rates, terms and conditions of this Agreement will remain so during the Agreement Term. Notwithstanding any provision of this Agreement, the Parties waive all rights to challenge the validity of this Agreement or whether it is just and reasonable for and with respect to the Agreement Term, under Sections 205 and 206 of the Federal Power Act, and to request the FERC to revise the terms and conditions and the rates or services specified in this Agreement, and hereby agree not to seek, nor support any third party in seeking, to prospectively or retroactively revise the rates, terms or conditions of this Agreement through application or complaint to FERC or any other state or federal agency, board, court or tribunal, related in any manner as to whether such rates, terms or conditions are just and reasonable or in the public interest under the Federal Power Act, absent prior written agreement of the Parties. The Parties also agree that, absent prior agreement in writing by the Parties to a proposed change, the standard of review for changes to any rate, charge, classification, term or condition of this Agreement, whether proposed by a Party (to the extent that any provision of this Section is unenforceable or ineffective as to such Party), a non-party or the FERC acting sua sponte shall be the “public interest” application of the “just and reasonable” standard of review that requires FERC to find an “unequivocal public necessity” or “extraordinary circumstances where the public will be severely harmed” to modify a contract, as set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v.
Sierra Pacific Power Co., 350 U.S. 348 (1956), and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 at 550-51 (2008) and NRG Power Marketing, LLC v. Maine Public Utilities Comm’n, 558 U.S. 165 (2010). - 78 -
Section 14.23Future Phases. In the event that, after the Commercial Operation Date of the Facility, Seller or Affiliates of Seller develop additional phases of the Facility or additional projects that (i) share real estate or infrastructure with the Site and (ii) that interconnect through the Point of Interconnection, then Seller shall offer to Buyer a power purchase agreement and a purchase option for such additional phase or project. Buyer and Seller shall have ninety (90) days in which to negotiate diligently in good faith on the terms of an exclusivity agreement with respect to the purchase of energy from such additional phase or project. If Buyer and Seller cannot mutually agree on the terms of such exclusivity agreement after good faith diligent negotiation for a period of ninety (90) days, then Seller may sell the energy from such additional phase or project to a third party; provided that Seller may not offer terms with respect to such third party which are more favorable than the terms offered to Buyer. If Buyer and Seller mutually agree on the terms of an exclusivity agreement for the purchase of energy from such additional phase or project, then, for the period of time specified in the exclusivity period, Buyer and Seller shall negotiate diligently in good faith to reach agreement on the terms of a power purchase agreement and a purchase option with respect to such additional phase or project. If Buyer and Seller cannot mutually agree on terms of a power purchase agreement and a purchase option with respect to such additional phase or project after good faith diligent negotiation for the period of time specified in such exclusivity agreement, then Seller may sell the energy from such additional phase or project to a third party; provided that Seller may not offer terms with respect to the purchase of energy from such additional phase or project to such third party which are more favorable than the terms offered to Buyer.
Section 14.24Taxpayer Identification Number (TIN). Seller declares that its authorized TIN is 36-4840280. No payment will be made under this Agreement without a valid TIN.
Section 14.25Service Contract. The Parties intend that this Agreement will qualify as a “service contract” as such term is used in Section 7701(e) of the United States Internal Revenue Code of 1986.
Section 14.26Dodd-Frank Wall-Street Reform and Consumer Protection Act.
If and to the extent that this Agreement and the performance of the Parties’ obligations requires any reporting to the Commodity Futures Exchange Commission (together with any successor body, the “CFTC”) pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, Seller shall be responsible for all such reporting (and Seller shall bear all costs and expenses associated therewith) and shall be the reporting counterparty for purposes of applicable parts of the regulations of the CFTC promulgated under the Commodity Exchange Act. Buyer shall promptly provide information reasonably required by Seller for any such reporting and Seller shall be entitled to report and disclose information concerning all swaps transacted under this Agreement (including information regarding the economic terms and valuations of this Agreement) to any applicable Governmental Authority (or a third party swap data repository as required by a Governmental Authority), from time to time, to the extent required by any applicable laws, regulations, rules or orders of any Governmental Authority. Additionally, to the extent either Party needs additional information or details from the other Party in order to comply with any such applicable laws, regulations, rules or orders (including information concerning such other Party’s organization, corporate status, status under the CFTC’s regulations and/or unique entity identifier), such other Party shall promptly provide such additional information or - 79 -
details to the first Party upon request therefor. Buyer shall promptly reimburse Seller for any costs, fines or penalties Seller incurs as a result of Buyer’s failure to comply with this Section
14.26. Seller shall promptly reimburse Buyer for any costs Buyer incurs as a result of Seller’s failure to comply with this Section 14.26 and the Commodity Exchange Act, except to the extent such costs are a result of any action or omission of Buyer.
Signature Page to Power Purchase Agreement between Daggett Solar Power 2 LLC and Southern California Public Power Authority
Buyer and Seller were represented by legal counsel during the negotiation and execution of this Agreement and the Parties have executed this Agreement as of the dates set forth below, effective as of the Effective Date.
BUYER:
SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY
By:
Its:
Date:
Attest:
Signature Page to Power Purchase Agreement between Daggett Solar Power 2 LLC and Southern California Public Power Authority
SELLER:
DAGGETT SOLAR POWER 2 LLC
By:
Craig Cornelius
Its: President
Date: June ___, 2022
CiC li
Appendix A-1 - 1
APPENDIX A-1
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
CONTRACT PRICE
1. Startup and Test Energy. The Contract Price per MWh for Startup and Test Energy (including associated Environmental Attributes and Capacity Rights) is equal to fifty percent (50%) of the then-applicable price per MWh for PV Delivered Energy as provided in #2 below.
2. PV Delivered Energy. Commencing on the Commercial Operation Date, the Contract Price for PV Delivered Energy that is not Startup and Test Energy, Excess Energy or Excess Energy > 120% (including associated Environmental Attributes and Capacity Rights) is $28.10 per MWh, as such price may be adjusted in accordance with the Agreement.
3. Excess Energy. The Contract Price per MWh for Excess Energy (including associated Environmental Attributes and Capacity Rights) is fifty percent (50%) of the thenapplicable price per MWh for PV Delivered Energy as provided in #2.
4. Excess Energy > 120%. The Contract Price per MWh for Excess Energy > 120% (including associated Environmental Attributes and Capacity Rights) is equal to twenty-five percent (25%) of the then-applicable price per MWh for PV Delivered Energy as provided in #2 above.
Appendix B-1 - 1
APPENDIX B-1
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FACILITY, PERMITS AND OPERATOR
1. Name of Facility: Daggett Solar Power 2 Facility
Location: City of Daggett, San Bernardino County, California
2. Owner: Daggett Solar Power 2 LLC
3. Operator: Clearway Renewable Operation & Maintenance LLC
4. Equipment:
(a) Type of Facility: Solar Photovoltaic and Battery Energy Storage System (b) PV Contract Capacity: 65 MWac
(c) BESS Contract Capacity: 132 MWh (33 MW per hour for four (4) hours) (d) Capacity Factor: 36.6%*
5. Expected Commercial Operation Date: September 19, 2023 Guaranteed Commercial Operation Date (from Appendix I): December 20, 2023
6. Permits:
(a) CEQA Determination
(b) Building Permit
(c) Grading Permit
(d) Other permits, if any, required for the construction and operation of the Facility. _________________________________
* The actual Capacity Factor may vary depending on weather and other meteorological conditions, final Facility design and other factors, although the Annual Contract Quantities in Appendix C and the Guaranteed Delivered Energy levels are fixed for all purposes of the Agreement.
Appendix B-2 - 1
APPENDIX B-2
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
MAP OF THE FACILITY
Appendix C - 1
APPENDIX C
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
ANNUAL CONTRACT QUANTITY
Contract Year Annual Contract
Quantity, MWh
Guaranteed Delivered
Energy (85% of Expected
Annual Contract
Quantity)
1 208,499 177,224
2 207,456 176,338
3 206,414 175,452
4 205,371 174,566
5 204,329 173,679
6 203,286 172,793
7 202,244 171,907
8 201,201 171,021
9 200,159 170,135
10 199,116 169,249
11 198,074 168,363
12 197,031 167,477
13 195,989 166,590
14 194,946 165,704
15 193,904 164,818
16 192,861 163,932
17 191,819 163,046
18 190,776 162,160
19 189,734 161,274
20 188,691 160,388
(1) The Annual Contract Quantity for the Initial Stub Year (“Year 1 ACQ”) shall be calculated based on the actual Commercial Operation Date of the Facility using the following formula:
Year 1 ACQ = 208,499 MWh * Annual Adjustment (as defined below) (2) The Annual Contract Quantity for the Final Stub Year (“Year 21 ACQ”) shall be calculated based on the actual Commercial Operation Date of the Facility using the following formula:
Year 21 ACQ = 188,691 MWh * Annual Adjustment (as defined below)
Appendix C - 2
“Annual Adjustment” means the percentage, expressed as a decimal, of annual production for each of Initial Stub Year and Final Stub Year based on the actual Commercial Operation Date of the Facility and the Annual Production Breakdown table below.
Annual Production Breakdown
Month Days in Month Percent Annual
Production in Month
January 31 5.51%
February 28 6.35%
March 31 8.78%
April 30 9.61%
May 31 10.86%
June 30 10.91%
July 31 10.33%
August 31 10.06%
September 30 9.07%
October 31 7.77%
November 30 5.82%
December 31 4.94%
Appendix D - 1
APPENDIX D
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF ATTESTATION
____________(Seller)____________ Environmental Attribute Attestation and Bill of Sale __________________ (“Seller”) hereby sells, transfers and delivers to Southern California Public Power Authority (“Buyer”) the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation from the Facility described below:
Facility name and location:
Fuel Type: Capacity (MW): Operational Date:
As applicable: CEC Reg. no. ___ Energy Admin. ID no. ____ Q.F. ID no. ___ Dates MWhs delivered
________________ 20__ ___________
________________ 20__ ___________
________________ 20__ ___________
in the amount of one Environmental Attribute or its equivalent for each MWh delivered.
Seller further attests, warrants and represents as follows:
i) the information provided herein is true and correct; ii) its sale to Buyer is its one and only sale of the Environmental Attributes and associated Environmental Attribute Reporting Rights referenced herein; iii) the Facility generated and delivered to the grid the Energy in the amount indicated as undifferentiated Energy; and
iv) Seller owns the Facility and each of the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation of the indicated Energy for delivery to the grid have been generated and sold by the Facility.
This serves as a bill of sale, transferring from Seller to Buyer all of Seller’s right, title and interest in and to the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation of the Energy for delivery to the grid.
Contact Person/telephone: ____________________
Appendix E - 1
APPENDIX E
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF LETTER OF CREDIT
IRREVOCABLE AND UNCONDITIONAL
STANDBY LETTER OF CREDIT NO. ___________
Applicant:
[___________]
Beneficiary:
Southern California Public Power Authority
1160 Nicole Court
Glendale, CA 91740
Amount:
Expiration Date:
Expiration Place:
Ladies and Gentlemen:
We hereby issue our Irrevocable and Unconditional Standby Letter of Credit in favor of the beneficiary by order and for the account of the applicant which is available at sight for USD $XX,XXX,XXX by sight payment upon presentation to us at our office at [bank’s address], 1 of:
(i) your written demand for payment containing the text of Exhibit I, (ii) your signed statement containing the text of Exhibit II, and (iii) the original of this Letter of Credit and all amendments (or photocopy of the original for partial drawings) (the “Documents”). Drawings may be presented via fax to ______. The original Letter of Credit and documents are to be sent via overnight courier to our address indicated above.
A presentation under this Letter of Credit may be made only on a day, and during hours, in which such office is open for business, and payments can be effected via wire transfer (a “Business Day”).
Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided that the 1 Note to Issuer: The Letter of Credit must be payable in U.S. dollars within the continental U.S.
Appendix E - 2
Available Amount shall be reduced by the amount of each such drawing.
Upon presentation to us of your Documents in conformity with the foregoing, we will, on the third (3rd) succeeding Business Day after such presentation, irrevocably and without reserve or condition except as otherwise stated herein, make payment hereunder in the amount set forth in the demand. Payment shall be made to your order in the account at the bank designated by you in the demand in immediately available funds. We agree that if, on the Expiration Date, the office specified above is not open for business by virtue of an interruption of the nature described in the Uniform Customs Article 36, this Letter of Credit will be duly honored if the specified Documents are presented by you within thirty (30) days after such office is reopened for business.
Provided that the presentation on this Letter of Credit is made on or prior to the Expiration Date and the applicable Documents as set forth above conform to the requirements of this Letter of Credit, payment hereunder shall be made regardless of: (a) any written or oral direction, request, notice or other communication now or hereafter received by us from the Applicant or any other person except you, including without limitation any communication regarding fraud, forgery, lack of authority or other defect not apparent on the face of the documents presented by you, but excluding solely a written order issued by a court, which order specifically orders us not to make such payment; (b) the solvency, existence or condition, financial or other, of the Applicant or any other person or property from whom or which we may be entitled to reimbursement for such payment; and (c) without limiting clause (b) above, whether we are in receipt of or expect to receive funds or other property as reimbursement in whole or in part for such payment.
We agree that the time set forth herein for payment of any demand(s) for payment is sufficient to enable us to examine such demand(s) and the related Document(s) referred to above with care so as to ascertain that on their face they appear to comply with the terms of this credit and that if such demand(s) and Document(s) on their face appear to so comply, failure to make any such payment within such time shall constitute dishonor of such demand(s).
This Letter of Credit shall terminate upon the earliest to occur of (i) our receipt of a notice in the form of Exhibit IV hereto signed by an authorized officer of Beneficiary, accompanied by this Letter of Credit for cancellation, (ii) our close of business at our aforesaid office on the Expiration Date, or if the Expiration Date is not a Business Day, then on the next Business Day.
It is a condition of this Letter of Credit that it shall be deemed automatically extended without amendment for one (1) year from the Expiration Date, or any future expiration date, unless at least thirty (30) calendar days prior to the Expiration Date (or any future expiration date), we send you notice by registered mail, return receipt requested or overnight courier at your address herein stated or such other address of which you notify us in advance in writing that we elect not to consider this Letter of Credit extended for any such additional period.
We may, in our sole discretion, increase or decrease the stated amount of this Letter of Credit , and the Expiration Date may be extended, by an amendment to this Letter of Credit in the form of Exhibit III signed by us. Any such amendment for decrease shall become effective only upon acceptance by your signature on a hard copy amendment.
You shall not be bound by any written or oral agreement of any type between us and the Applicant
Appendix E - 3
or any other person relating to this credit, whether now or hereafter existing.
We hereby engage with you that your demand(s) for payment in conformity with the terms of this Letter of Credit will be duly honored as set forth above. All fees and other costs associated with the issuance of and any drawing(s) against this Letter of Credit shall be for the account of the Applicant. All of the rights of the Beneficiary set forth above shall inure to the benefit of your successors by operation of law. In this connection, in the event of a drawing made by a party other than the Beneficiary, such drawing must be accompanied by the following signed certification and copy of document proving such successorship:
“The undersigned does hereby certify that [drawer] is the successor by operation of law to the Southern California Public Power Authority, a beneficiary named in [name of bank] Letter of Credit No. __________.”
Except so far as otherwise expressly stated herein, this Letter of Credit is subject to the “Uniform Customs and Practices for Documentary Credits,” (2007 Revision) of the International Chamber of Commerce Publication No. 600 (the “Uniform Customs”). As to matters not governed by the Uniform Customs, this Letter of Credit shall be governed by and construed in accordance with the laws of the State of California. Any litigation arising out of, or relating to this Letter of Credit, shall be brought in a State or Federal court in the County of [___________] in the State of California. The Parties irrevocably agree to submit to the exclusive jurisdiction of such courts in the State of California and waive any defense of forum non conveniens.
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, except for Exhibit I, II, III and IV hereto and the notices referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except as otherwise provided in this paragraph.
Communications with respect to this Letter of Credit shall be in writing and shall be addressed to us at the address referred to above, and shall specifically refer to this Letter of Credit no. _____.
Yours faithfully,
(name of issuing bank)
By
Title
Appendix E - 4
EXHIBIT I
DEMAND FOR PAYMENT
Re: Irrevocable and Unconditional Standby Letter of Credit No. ________________ Dated ___________, 20__
[Insert Bank Address]
To Whom It May Concern:
Demand is hereby made upon you for payment to us of $___________ by deposit to our account no. __________ at [insert name of bank]. This demand is made under, and is subject to and governed by, your Irrevocable and Unconditional Standby Letter of Credit no. __________ dated __________, 20__ in the amount of $__________ established by you in our favor for the account of ____________________ as the Applicant.
DATED: ____________________, 20__.
SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY
By
Title
Appendix E - 5
EXHIBIT II
STATEMENT
Re: Your Irrevocable and Unconditional Standby Letter of Credit No. _____________ Dated ________, 20__
[Insert Bank Address]
To Whom It May Concern:
Reference is made to your Irrevocable and Unconditional Standby Letter of Credit no. __________, dated __________, 20____ in the amount of $_____________________ established by you in our favor for the account of _______________________, as the Applicant.
We hereby certify to you that $________________ is due, owing and unpaid to us by the Applicant in that certain [DESCRIBE AGREEMENT].
DATED: ____________________, 20__.
SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY
By
Title
Appendix E - 6
EXHIBIT III
AMENDMENT
Re: Irrevocable and Unconditional Standby Letter of Credit No. ________________ Dated ________________, 20__
Beneficiary: Applicant:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
To Whom It May Concern:
The above referenced Irrevocable and Unconditional Standby Letter of Credit is hereby amended as follows: by increasing / decreasing / leaving unchanged (strike two) the stated amount by $ _______________ to a new stated amount of $ __________________ or by extending the Expiration Date to _____________________ from ____________________. All other terms and conditions of the Letter of Credit remain unchanged.
An amendment is effective only when accepted by the Southern California Public Power Authority, below.
Dated: _______________________
Yours faithfully,
(name of issuing bank)
By
Title
ACCEPTED
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By
Title
Date
Appendix E - 7
EXHIBIT IV
SURRENDER
Re: Your Irrevocable and Unconditional Standby Letter of Credit No. _____________ Dated ________, 20__
[Insert Bank Address]
Notice of Surrender of Letter of Credit
Date: ________________________
Attention: Letter of Credit Department
Ladies and Gentlemen:
We refer to your above-mentioned Irrevocable and Unconditional Standby Letter of Credit (the “Letter of Credit”). The undersigned, an authorized signer of the Southern California Public Power Authority, hereby surrenders this Letter of Credit to you for cancellation as of the date set forth above. No payment is demanded of you under this Letter of Credit in connection with this surrender.
Very truly yours,
SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY
By
Title
Appendix F - 1
APPENDIX F
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
INSURANCE
I. GENERAL REQUIREMENTS
Within thirty (30) days after the Effective Date, Seller shall furnish Buyer evidence of commercial automobile liability, commercial general liability, excess liability, and workers’ compensation coverage meeting the requirements set forth in this Appendix F from insurers acceptable to Buyer and in a form acceptable to the risk management section of the project manager for Buyer or acceptable to Buyer’s agent for this purpose. Such insurance shall be maintained by Seller at Seller’s sole cost and expense. Prior to the date on which each of Builders’ Risk, Property All Risk and Professional Liability insurance is required to be obtained, Seller shall furnish Buyer evidence of coverage meeting the requirements of this Appendix F.
Such insurance shall not limit or qualify the liabilities and obligations of Seller assumed under this Agreement. Buyer shall not by reason of its inclusion under these policies incur liability to the insurance carrier for payment of premium for these policies.
Any insurance carried by Buyer which may be applicable shall be deemed to be excess insurance and Seller’s insurance is primary for purposes under this Agreement despite any conflicting provision in Seller’s policies to the contrary.
Such insurance shall not be canceled without Seller first giving thirty (30) days’ prior notice thereof (ten (10) days for non-payment of premium) to Executive Director, Southern California Public Power Authority, 1160 Nicole Court, Glendora, CA 91740.
Should any portion of the required insurance be on a “Claims Made” policy, Seller shall, at the policy expiration date following completion of work, provide evidence that the “Claims Made” policy has been renewed or replaced with the same limits, terms and conditions of the expiring policy, or that an extended discovery period has been purchased on the expiring policy at least for the contract under which the work was performed.
Appendix F - 2
II. SPECIFIC COVERAGES REQUIRED
A. Commercial Automobile Liability
Seller shall provide Commercial Automobile Liability insurance which shall include coverages for liability arising out of the use of owned (if applicable), non-owned, and hired vehicles for performance of the work by Seller or its officers, agents, or employees, as required, to be licensed under the California or any other applicable state vehicle code. The Commercial Automobile Liability insurance shall have not less than One Million Dollars ($1,000,000.00) combined single limit per occurrence and shall apply to all operations of Seller.
The Commercial Automobile Liability policy shall include Buyer, its members, and their officers, agents, and employees while acting within the scope of their employment, as additional insureds with Seller, and shall insure against liability for death, bodily injury, or property damage resulting from the performance of this Agreement by Seller or its officers, agents, or employees. The evidence of insurance shall be a form acceptable to Buyer’s risk management agent.
B. Commercial General Liability
Seller shall provide Commercial General Liability insurance that includes coverage for Bodily Injury, Contractual Liability, Independent Contractors, Property Damage, Premises and Operations, Products and Completed Operations, and Personal & Advertising Injury coverages included. Such insurance shall provide coverage for total limits actually arranged by Seller, but not less than Ten Million Dollars ($10,000,000.00) per occurrence and in the aggregate. . Umbrella or Excess Liability coverages may be used to supplement primary coverages to meet the required limits. Evidence of such coverage shall be a form acceptable to Buyer’s risk management agent, and shall provide for the following:
1. Include Buyer and its officers, agents, and employees as additional insureds with the Named Insured for the activities and operations of Seller and its officers, agents, or employees under this Agreement.
2. Severability-of-Interest or Cross-Liability Clause.
3. A description of the coverages included under the policy.
C. Excess Liability
Seller may use an Umbrella or Excess Liability Coverage to meet coverage limits specified in this Agreement. Seller shall require the carrier for Excess Liability to properly schedule and to identify the underlying policies to the policy acceptable to Buyer’s risk management agent. Such policy shall include, as appropriate, coverage for Commercial General Liability, Commercial Automobile Liability, Employer’s Liability, or other applicable insurance coverages on a follow form basis.
Appendix F - 3
D. Workers’ Compensation/Employer’s Liability Insurance Seller shall provide Workers’ Compensation insurance covering all of Seller’s employees in accordance with the laws of any state in which the work is to be performed and including Employer’s Liability insurance and a Waiver of Subrogation in favor of Buyer. The limit for Employer’s Liability coverage shall be not less than One Million Dollars ($1,000,000.00) each accident and shall be a separate policy if not included with Workers’ Compensation coverage. Umbrella or Excess Liability coverages may be used to supplement primary coverages to meet the required limits. Evidence of such insurance shall be a form of Buyer Special Endorsement of insurance or on an endorsement to the policy acceptable to Buyer’s risk management agent. Workers’ Compensation/Employer’s Liability exposure may be self-insured provided that Buyer is furnished with a copy of the certificate issued by the state authorizing Seller to self-insure. Seller shall notify Buyer’s Risk Management Section by receipted delivery as soon as possible of the state withdrawing authority to self-insure.
E. Builders’ Risk
Prior to commencing Site construction activities, Seller, or Seller’s EPC Contractor, shall provide Builder’s Risk insurance, which shall be of the “all risk” type, shall be written in completed value form, and shall protect Seller, the Southern California Public Power Authority, the Board of Directors, and Buyer’s members against risks of damage to buildings, structures, and materials and equipment that constitute part of the Facility, whether on site or in transit from any location worldwide. Outside of the United States, this transit insurance requirement may be satisfied by the purchase of a global marine specific policy, if applicable. The amount of such insurance shall be not less than the insurable value of the work at completion except for sublimits that are prudent with industry practice Buyer shall be a named additional insured on the policy as their interest may appear. The Builder’s Risk insurance shall provide for losses to be payable to Seller and the aforementioned additional insured, as their interests may appear. The policy shall contain a provision that in the event of payment for any loss under the coverage provided, the insurance company shall have no rights of recovery against Seller and the aforementioned named additional insured. The Builders’ Risk policy shall insure against all risks of direct physical loss or damage to property from any cause including testing, ensuing loss, commissioning, and, to the extent available in the insurance market on generally commercially reasonable terms, earthquake and flood, provided, that should Seller determine that either coverage is not available on generally commercially reasonable terms as aforesaid, Seller shall notify Buyer not less than thirty (30) days in advance of the date when such coverage will not, or will no longer, be available together with a description of Seller’s efforts to obtain such coverage and an explanation of the basis for Seller’s determination in reasonable detail. The policy shall be in full force and effect until the earlier of: (1) the Commercial Operation Date or the substantial completion of the Facility, whichever date is the later, or (2) the effective date of the Property All Risk Insurance referenced below.
Appendix F - 4
F. Property All Risk Insurance
Seller shall procure and maintain or cause to be procured and maintained an All Risk Physical Damage policy to insure the full replacement value of the property located at Facility as described in this Agreement and with sublimits prudent with industry practice and commercial availability. The policy shall include coverage for expediting expense, extra expense, Business Interruption, ensuing loss from faulty workmanship, faulty materials, or faulty design (LEG 2). This policy shall be obtained and placed in full force and effect prior to the expiration of the Builder’s Risk Policy. This policy shall have the same insureds, and all losses shall be payable in the same manner, as provided for the Builders’ Risk Policy in Paragraph II.E.
G. Professional Liability
Prior to the commencement of work by Seller’s EPC Contractor under Seller’s engineering, procurement and construction contract for the Facility, and subject to the following paragraph, Seller shall provide (or cause its EPC Contractor to provide) Professional Liability insurance with contractual liability coverage included covering Seller’s (or such EPC Contractor’s, as applicable) liability arising from errors and omissions made directly or indirectly during the execution of this Agreement (or the engineering, procurement and construction contract, as applicable) and shall provide coverage for the total limits actually arranged by Seller, but not less than $1,000,000.00, each claim. Such policy shall be maintained for not less than three (3) years after the Commercial Operation Date under this Agreement.
The Parties agree to confer in good faith prior to the hiring of Seller’s EPC Contractor (i) to determine whether the preceding requirement for Professional Liability insurance is reasonably necessary to be included in this Agreement to protect Buyer or the Buyer’s Members consistent with Prudent Utility Practices and (ii) to modify (or eliminate) such requirement as mutually agreed to be appropriate based on the foregoing standard in clause (i).
Appendix G - 1
APPENDIX G
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
QUALITY ASSURANCE PROGRAM
Seller shall implement a Quality Assurance (“Q/A”) Program to ensure that the performance of the Facility fulfills the Requirements. The Q/A Program shall provide assurance that the Facility will comply with the Requirements and the manufacturers’ or suppliers’ requirements for successful operation of the Facility.
Quality at Seller
Seller believes that quality is the unit of measure for assessing fulfillment of project goals. A quality project meets or exceeds the contract requirements and accepted standards of professional and industry practice. Furthermore, high quality projects are those that address client and societal needs more successfully than “low” quality projects. While this may seem like a straightforward definition, the process to ensure quality is much more involved and includes quality management, quality planning, quality control, quality assurance, a quality system, and total quality management.
“Quality assurance” refers to a process that reduces the potential for error throughout the phases of a project. On projects with a Q/A Program, the chances of producing a poor quality deliverable are substantially reduced. Quality control procedures are an integral part of quality assurance.
Historically, industry has used the term “quality control” to indicate a checking procedure for verifying the quality of deliverables. This checking commonly occurs at the end of the process, long after an error may have been made and compounded by subsequent work. While quality control checks at the end of a project are an essential exercise, scheduled periodic reviews at each phase of project conceptual and final design are integral to the Seller’s Q/A Program. In addition, quality maintenance which meets or exceeds manufacturers’ or suppliers’ requirements and best industry practices must be an integral part of Seller’s Q/A Program.
The Quality Management Process
The surest way to achieve satisfactory quality is to adhere to a proven quality process. The term “quality” most accurately refers to a project’s ability to satisfy needs when considered as a whole and each part of the process meets or exceeds the standards of Prudent Utility Practices.
Seller’s project management team is responsible for proactively planning and directing the quality of the work process, services, and deliverables. Seller’s project management team targets the following areas to monitor quality:
Appendix G - 2
1) A written Quality Plan.
2) Independent engineering review of the entire project process, from design review through Commercial Operation.
3) A written maintenance manual for the Facility for the duration of the commercial operation that complies with the maintenance manuals of the manufacturers and suppliers from whom Seller has purchased equipment and/or material and best industry practices.
Quality Plan
The idea of a Quality Plan is to incorporate quality assurance in all areas of project execution.
Seller has found that quality needs to be institutionalized into the project process, not only in the budgeting process, but everywhere. For example, specific tasks and duties need to be allocated to specific individuals; roles and interface points need to be clearly defined; individual assignments need to be realistic; special attention needs to be paid to complex areas within projects; schedules need to be realistic and achievable; and lastly the work culture needs to be enjoyable and open so that employees are empowered to react quickly to symptoms of quality problems before they actually manifest.
The Seller’s quality program shall be documented in a Quality Plan (the “Quality Plan”). The form and the format of the Quality Plan shall be developed by Seller, but must comply with Prudent Utility Practices and follow manufacturers’ and suppliers’ recommendations without deviation.
The content of the Quality Plan shall provide written descriptions of policies, procedures and methodology to accomplish a quality project. Seller shall submit three (3) copies of the Quality Plan within ninety (90) days after the Effective Date to Buyer or Buyer’s Authorized Representative. The Quality Plan shall be kept current by Seller throughout the term of this Agreement through the submittal of revisions, as appropriate, by Seller to Buyer or Buyer’s Authorized Representative.
The Quality Plan shall describe the authority and the responsibility of the Persons in charge of the Q/A Program and inspection activities. Furthermore, it shall provide the plan and strategy for quality control and review during the construction period. The Quality Plan shall strive, at a minimum, to define control procedures or methods to assure the following:
(a) The design documents, drawings, specifications, Q/A procedures, records, inspection procedures and purchase documents are maintained to be current, accurate and in compliance with all applicable law.
(b) The purchased materials, equipment and services comply with the Requirements. (c) The materials received at the site are inspected for compliance with specifications. (d) The subcontracted work is adequately inspected by third parties as necessary. (e) Proper methods are employed for the qualification of personnel who are performing work for the construction of the Facility.
Appendix G - 3
(f) Proper documentation, control and disposition of nonconforming equipment and materials is maintained.
(g) Proper records are kept and available following project completion to ensure accurate documentation of as-built conditions.
(h) Detailed and complete plan for maintenance and operation during commercial operations consistent with manufacturers’ and suppliers’ recommendations and best industry practices.
Conceptual Design Review
Seller has a team of professionals who develop and review conceptual design. The team consists of specialists in land-use and planning, permitting, meteorology, engineering, construction, project management, and finance. A preliminary site plan is developed in order to assess the solar resource, project constructability, site access, cultural and biological impact, land use restrictions, and landowner requirements. At this stage, the site plan is reviewed, modified as necessary, and used to begin the permitting and public review process. The site plan may be further modified based on comments received during the permitting and public review process. Subsequent to this phase, final third party engineering will commence.
Final Engineering Design
Third party engineering firms, licensed to practice in the state in which the project is to be constructed, will commence the detailed design necessary for the permitting and construction of the Facility. Seller and a third party independent engineer will review the final work products to ensure conformance with this Agreement. When Seller and third party independent engineer have completed a review process, and all substantial comments have been addressed, the design is considered final.
Quality Assurance at the Construction Site
Seller will employ a contractor to construct the project. The contractor will be required to have a quality assurance program implemented by its own staff, and utilizing third party inspectors as necessary. The primary areas of focus are assuring conformance of construction to design drawings, conformance of materials to specifications, and to ensure prudent industry standards and best practices are being utilized. The contractor will be required to provide third party inspection and testing as necessary. The contractor will also be required to maintain a set of drawings during the course of construction, which will be used to document any changes to the design documents.
Proposed project changes would be reviewed and approved in the field by Seller's construction management team prior to implementation.
The contractor will provide the required oversight and training of its installation crew to ensure the construction of the Facility meets its quality guidelines. As necessary, equipment suppliers may have technical advisors on site to inspect, advise, and sign off on installation means and methods. In addition, Seller will have its own construction management team on site consisting of a construction manager and quality inspectors who will observe performance of all areas of the work and ensure compliance with design documents and Q/A procedures. The contractor and
Appendix G - 4
appropriate equipment suppliers will commission the Facility per prudent industry standards, equipment specifications, and utility requirements. Prior to construction completion, a punchlist will be developed by the contractor, Seller, Seller's representatives, and third party independent engineer. This punchlist is maintained by the contractor, and is signed off by Seller upon completion of all punchlist items. Lastly, the independent engineer may perform periodic audits during construction to oversee critical items, confirm construction progress, and provide independent reporting and assessments to the project stakeholders.
Following completion of the project, the contractor will be required to provide to Seller as-built design drawings, record of all testing documentation, and final permit approvals. This documentation will be maintained at the project site during operations of the Facility.
Quality Assurance During Commercial Operations
Seller shall supply a Quality Assurance Plan for Buyer’s review no less than sixty (60) days prior to the anticipated Commercial Operation Date. Upon receipt of Quality Assurance Plan, Buyer shall provide written comment within ten (10) Business Days. Seller shall reasonably address substantial comments.
Appendix G - 5
EXHIBIT A
TO
QUALITY ASSURANCE PROGRAM
QUALITY PLAN TEMPLATE
PROJECT NAME:
PROJECT MANAGER: DATE:
QUALITY MANAGEMENT APPROACH:
The Project Management Team is fully committed through all Project engineering, construction and commissioning phases, to the Quality Management System. The focus is on the project’s deliverable and the standards and criteria being used will ensure the project meets established quality standards and stakeholder satisfaction. The project team will work with the EPC’s Quality Group to define and document all organizational and project specific quality standards for the project. All quality documentation will become part of the Project Plan and will be transitioned to O&M upon the completion of the project.
QUALITY REQUIREMENTS/STANDARDS:
x To ensure those human resources working on the Project are suitably qualified, given clear definition of their working responsibilities and provided with the necessary work instructions and procedures. To identify any specific training needs where necessary to project resources; x To ensure that all Contractor, Sub-contractor and Vendor designs of manufactured items or components and respective services comply with the same quality policy and objectives set out in the Site Quality Management Plan;
x To establish and maintain systems in place for preventive action and continual improvement, such as checking, reviewing and auditing of activities to ensure that specified requirements are met both during and after installation. Particular attention shall be given to system interfaces and areas that will be subject to difficult, complex and program sensitive from the point of rectification, to minimize cost and schedule effect should a quality problem evolve; x To establish, document, implement and maintain an effective and efficient Project Quality Management System with a focus on prevention rather than cure; x To ensure that actions are taken without undue delay to eliminate detected nonconformities and their causes;
x To continually improve the effectiveness of the Project Quality Management System through the use of the project quality policy, quality objectives, audit results, analysis of data, corrective and preventive action and management review to ensure "getting it right first time, every time"; To comply with the respective legislative requirements, codes, standards and specifications.
Appendix G - 6
QUALITY ASSURANCE: The Project Manager will schedule regularly occurring process, management, and document reviews. In these reviews, an agenda item will include a review of project processes, any discrepancies and/or audit findings from the quality manager, and a discussion on process improvement initiatives. Quality assurance reviews, findings, and assessments will result in some form of process improvement and, as a result, project improvement. All process improvement efforts will be documented, implemented, and communicated to stakeholders as changes are made. Project Sheet Set drawings including the detailed Field Assembly instructions shall be studied by foreman and workers alike in an effort to ensure complete understanding of both the specifications and work practices needed to comply prior to first article installation. The craft foreman holds the responsibility for first article inspections and release of workers under his/ her supervision to continue and ensure subsequent units are completed to specification. After release the craft foreman shall perform periodic inspections through walk downs to ensure units remain installed to spec and sequence, and shall repeat training where necessary upon observation of deviations. The quality assurance process provides a project commitment to a world class performance in Quality issues to all personnel, contractors, vendors and sites involved in project.
Determination of policy compliance shall be verified on the basis of objectives evidence, through concise contractual strategy that include carefully developed engineering and quality requirements, and by good coordination and communications, supported by vigilance in review, audit and surveillance of the scope of the project.
QUALITY CONTROL: The Clearway Construction Quality group shall develop, implement, and maintain the completed installation process of Product Electrical and Civil/Mechanical Quality Control Plans. These plans shall include details of the end-to-end critical-to-quality (CTQ) checkpoints, specific characteristics to inspect, how to inspect them, sampling rates and accept/ reject quantities. The Installing Contractor shall be responsible for performing Level 1 audits to ensure compliance to specifications post installation using the checks and sampling rates as defined on the applicable Control Plan. The General Contractor shall be responsible for performing Level 2 audits to ensure the installing contractors have complied with specifications at reduced sampling rates as defined on the applicable Control Plan. Where a GC is self-performing the installation, the Level 1 and 2 audits shall be executed by different individuals. Clearway Construction Quality shall perform Level 3 audits to ensure contractors have complied with the specifications at further reduced sampling rates as defined on the applicable control plans.
x Quality Surveillance is a critical activity to ensure standard attributes are met during the installation process. All contractors and CEG employees are expected to cooperate and collaborate through Quality Surveillance to reach the common goals of the project.
x Surveying agents are expected to use Control Plans, standard work Instructions, project sheet sets, or any known information to validate the works are being completed per the source of truth and to effectively ensure the works are being completed to print, both in process and finished product attributes. Surveying agents shall not be prohibited from examining the works as needed. Surveying agents are additionally expected to cooperate with the contractors performing the works such that the work plan is not impeded in any substantial way.
x Quality Surveillance is viewed as a collective responsibility to be carried out by all individuals working on the project.
Appendix G - 7
QUALITY CONTROL MEASUREMENTS:
Each inspecting entity is not limited to the content of the control plans themselves. The Issue for Construction plan set and subsequent RFI’s shall be used in the determination. In certain cases records shall be kept detailing which specific items were inspected along with measurements to inform if the finished attributes meet the defined attributes. The intent is to capture specific items audited such that subsequent inspections can perform sampling on both previously included, as well as omitted items. Note: it is the contractor’s responsibility to formulate record forms needed for this task. These records can be in word document, excel, or annotated site drawing format. It is a requirement to review the planned method of recording with the Site Quality Manager to ensure adequacy.
Said record forms shall be turned over along with the applicable control plan, which should indicate pass/fail of the respective item to the Clearway Construction Manager. Where deviations are observed in excess of the defined reject quantities the inspection shall cease, and be cause for increased sampling and correction by the contractor, and then the audit re-performed. This sampling shall be determined on a case by case basis with cooperation from the contractor, the General Contractor and Clearway Quality in the determination. Where defects are observed that do not exceed the defined reject quantities, each identified defect shall be documented using the Quality Incident Report Log sheet, and corrected prior to turn over for the subsequent audits. This methodology is applicable to each Level of the Quality Control Inspection process.
APPROVED BY PROJECT MANAGER:
Name Signature Date
OTHER COMPONENTS:
Appendix G - 8
QUALITY PLAN TEMPLATE INSTRUCTIONS
PROJECT NAME - PROJECT MANAGER - DATE: Fill in the requested information.
QUALITY MANAGEMENT APPROACH:
տ Who will be handling quality management issues?
տ Will the project conform to established quality standards? տ How will quality requirements be enforced?
տ How will quality performance be measured and reported? QUALITY REQUIREMENTS/STANDARDS:
տ How does the project team identify appropriate quality standards? տ How does the project team document quality standards? տ How will the project team be able to demonstrate compliance with quality standards? տ Does the quality plan include quality standards for both products and work processes? QUALITY ASSURANCE:
տ Who will be auditing quality processes while work is being performed? տ What basic approach will the auditor use to assess quality performance? տ What is the quality assessment schedule?
տ How will audit results be directed toward process and product improvement?
Appendix G - 9
QUALITY CONTROL:
տ Who will assess overall project quality performance and product quality? տ How will quality activities be monitored and recorded, and how will those records be used to evaluate quality performance?
տ How will final product quality be evaluated?
տ What measurements and standards should be used for quality control activities? տ What process will be used for recommending necessary changes? QUALITY CONTROL MEASUREMENTS:
տ What quality metrics will be used over the life of the project? տ How will quality measurements be recorded and maintained? տ How will metric standards and tolerances be established? տ If measurements do not fall within its corresponding tolerance range, what action will be taken?
տ If multiple responses to a failed quality metric are plausible, how will an action be chosen?
APPROVED BY PROJECT MANAGER: Name, signature and date of Project Manager.
OTHER COMPONENTS: This checklist contains other documents that must be completed and approved before this Plan is considered complete. Exceptions must be approved by the Director of Construction.
Appendix H - 1
APPENDIX H
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
[RESERVED]
Appendix I - 1
APPENDIX I
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
MILESTONE SCHEDULE
Pre-Commercial Operation Date
No. Guaranteed Date Milestone Description Daily Liquidated Damages/Mitigation
Plan
Security Deposit at
Milestone Achievement
1. 10 days following
Effective Date
Provision of
development security Contractual provision
without specific daily
damages
$100/kW
2. Guaranteed
Commercial
Operation Date
Post-Commercial
Operation Date security
Contractual provision
without specific daily
damages
$150/kW
3. Complete Execute Site Control
Agreements
Mitigation Plan to
maintain Guaranteed
Commercial Operation
Date
4. Complete
Execute
Interconnection
Agreement
Mitigation Plan to
maintain Guaranteed
Commercial Operation
Date
5. 9 months prior to
Guaranteed
Commercial
Operation Date
Execute Facility
Financing documents
Mitigation Plan to
maintain Guaranteed
Commercial Operation
Date
6. 9 months prior to
Guaranteed
Commercial
Operation Date
Construction Start
Milestone:
Begin construction of
the Facility.
$52,750.00/day for up to
180 days of delay (up to
amount of Facility
development security)
7. December 20, 2023
Guaranteed
Commercial Operation
Date
$80,000.00/day for up to
180 days of delay (up to
amount of Facility
development security)
Post-Commercial Operation Date
8. Within 6 months
after COD
Proof of CEC
Certification Contractual provision
without specific daily
damages
9. On-going
Verification of
WREGIS Registration
(pre-COD, Seller must
provide sufficient
evidence to Buyer that
Contractual provision
without specific daily
damages
Appendix I - 2
it has prepared and
registered all required
documents and have
taken all necessary
steps for final WREGIS
approval, including the
Notice of Substantial
Completion or COD
notice to WREGIS, as
appropriate. Post-COD,
Seller must provide
sufficient evidence to
Buyer that substantial
completion of the
Facility is verified, and
it has provided
WREGIS with the
notice of COD and are
only waiting for
WREGIS to approve
the unit so that RECs
can be created.
10. Monthly on-going
Seller to provide
monthly reports of
expected generation
and indicators of when
there may be a
Shortfall.
Contractual provision
without specific daily
damages
11. Monthly on-going
Seller to provide
monthly reports of past
generation performance
that include but are not
limited to: Facility
performance summary
with month/year to date
Facility performance on
MWh, capacity factor,
comparison of actual
vs. expected,
availability, wind
speed/average
illumination;
operational summary
including weather for
the month, reasons for
downtime, scheduled
maintenance and
repairs, curtailment
events; safety and
environmental
summary.
Contractual provision
without specific daily
damages
Appendix J - 1
APPENDIX J
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
AUTHORIZED REPRESENTATIVES;
BUYER AND SELLER BILLING, NOTIFICATION AND
SCHEDULING CONTACT INFORMATION
1. Authorized Representative. The initial Authorized Representatives of Buyer and Seller pursuant to Section 14.1 are as follows:
1.1 Buyer:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Telephone: (626) 793-9364
Facsimile: (626) 704-9461
Email: [email protected]
1.2 Seller:
4900 Scottsdale Road, Suite 5000
c/o Solar Asset Management LLC
Scottsdale, AZ 85251
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
With a copy to:
5790 Fleet Street, Suite 200
Carlsbad, CA 92008
Attn: General Counsel
Phone: 760-710-2187
Email: [email protected]
2. Billings. Billings and payments pursuant to ARTICLE XI and Appendix A-1 shall be transmitted to the following addresses:
Appendix J - 2
2.1 If Billing to Buyer:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Attention: Accounts Payable
Telephone: (626) 793-9364
Facsimile: (626) 704-9461
Email: [email protected] (with a copy to [email protected])
2.2 If Payment to Buyer:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Attention: Finance and Accounting
Telephone: (626) 793-9364
Facsimile: (626) 704-9461
Email: [email protected]
2.3 If Payment or Billing to Seller:
4900 Scottsdale Road, Suite 5000
c/o Solar Asset Management LLC
Scottsdale, AZ 85251
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
3. Notices. Unless otherwise specified by Buyer all notices (other than Scheduling notices, curtailment notices, and Deemed Generated Energy notices):
If to Buyer:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Attention: Executive Director
Telephone: 626-793-9364
Facsimile: 626-793-9461
Email: [email protected]
Appendix J - 3
And with a copy to:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Telephone: 626 793 9364
Attention: Randy Krager, [email protected]
Email: [email protected]
If to Seller:
4900 Scottsdale Road, Suite 5000
c/o Solar Asset Management LLC
Scottsdale, AZ 85251
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
With a copy to:
5790 Fleet Street, Suite 200
Carlsbad, CA 92008
Attn: General Counsel
Phone: 760-710-2187
Email: [email protected]
Appendix K-1 - 1
APPENDIX K-1
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
BESS PERFORMANCE GUARANTEES; ANNUAL PV SYSTEM AVAILABILITY
GUARANTEE
A. BESS Performance Guarantees
a. Round Trip Efficiency Performance Guarantee shall be the efficiency rate listed in the table below for the applicable Contract Year:
Contract Year Efficiency Rate
1 86.8%
2 86.7%
3 86.5%
4 86.3%
5 86.1%
6 86.0%
7 85.8%
8 85.6%
9 85.5%
10 85.3%
11 85.1%
12 84.9%
13 84.8%
14 84.6%
15 84.4%
16 84.3%
17 84.1%
18 83.9%
19 83.8%
20 83.6%
The “Minimum Round Trip Efficiency Performance Guarantee” shall be 90% of the Round Trip Efficiency Performance Guarantee.
Appendix K-1 - 2
b. “Guaranteed Dischargeable Energy” shall be 132 MWh as measured in accordance with Sections B and C below. The “Minimum Dischargeable Energy Performance Guarantee” shall be 90% of Guaranteed Dischargeable Energy. c. Monthly BESS Availability Guarantee shall be 98%.
B. Storage Capacity Tests
The following methods shall be used to track, measure and verify the applicable metrics for determining Seller’s satisfaction of the BESS Performance Guarantees:
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. At least 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 Dischargeable Energy 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 Utility Practices).
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 BESS Energy Meter readings and plant log sheets verifying the operating conditions and output of the BESS. In accordance with Section 9.6 of the Agreement and Appendix K-3, the actual Round Trip Efficiency and Dischargeable Energy determined pursuant to a Storage Capacity Test shall become the new Round Trip Efficiency and Dischargeable Energy at the beginning of the day following the completion of the test for calculating the BESS Capacity Price and all other purposes under this Agreement.
C. BESS Performance Guarantee Calculations
For purposes of this Appendix K-1, the following terms shall have the respective meanings ascribed to them:
“Energy In” has the meaning set forth in Part II.B of Appendix K-3. “Energy Out” has the meaning set forth in Part II.B of Appendix K-3. “Cycle” means a single cycle of operation of the BESS during which the BESS is fully charged and discharged, as tracked by the BMS.
“UNAVAILHRSm” means the total number of hours in a given month during which the BESS was unavailable (as such unavailability is prorated for any BESS Contract Capacity that is available to charge and discharge Energy at any given time) for any reason other than the occurrence of any BESS Excused Condition. To be clear, hours of Appendix K-1 - 3
unavailability caused by any BESS Excused Condition will not be included in UNAVAILHRSm for such month. Any other event that results in unavailability of the BESS for less than a full hour will count as an equivalent percentage of the applicable hour(s) for this calculation.
(i) Dischargeable Energy (DE):
The total amount of Energy Out during each of the first four (4) hours of discharge, measured at the BESS Energy Meter pursuant to a Storage Capacity Test in accordance with Appendix K-3, shall be the new Dischargeable Energy (“DEy”) and shall be compared to the Guaranteed Dischargeable Energy (“GDEy”) until updated pursuant to a subsequent Storage Capacity Test.
(ii) Round Trip Efficiency:
The total amount of Energy Out divided by the total amount of Energy In, measured at the BESS Energy Meter pursuant to a Storage Capacity Test in accordance with Appendix K-3, exclusive of electrical losses to the Point of Delivery and separately metered station use associated with battery cooling and other thermal management equipment, and expressed as a percentage, shall be the new Round Trip Efficiency (“RTEy”) and shall be compared to the Round Trip Efficiency Performance Guarantee for the applicable Contract Year (“RTE Performance Guaranteey”), until updated pursuant to a subsequent Storage Capacity Test. (iii) Monthly BESS Availability:
Calculated on a monthly basis for month k and compared to a fixed constant:
= ݕݐ݈ܾ݈ܽ݅ܽ݅݅ݒܣ ܵܵܧܤ ݕ݄݈ݐ݊ܯ
ܶܪ,௬ െ ܷܰܣܸܪܮܫܣܴܵ,௬
ܶܪ,௬
݁݁ݐܽ݊ݎܽݑܩ ݕݐ݈ܾ݈ܽ݅ܽ݅݅ݒܣ ܵܵܧܤ ݕ݄݈ݐ݊ܯ
where UNAVAILHRSk,y represents the UNAVAILHRSm for the kth month of the yth contract year and THk,y represents the total number of hours in the same corresponding month.
C. Annual PV System Availability Guarantee
No later than 60 days after each Contract Year, Seller shall deliver to Buyer a calculation showing Seller’s computation of the Annual PV System Availability of the PV System for the previous Contract Year.
Appendix K-1 - 4
“Annual PV System Availability” or “PVSAy” means a percentage calculated as (a) 100, multiplied by (b) the result of (i) the sum of all Available Hours for all inverters electrically connected to and capable of delivering energy through the interconnection facilities at the beginning of the relevant Contract Year, divided by (ii) the sum of all Period Hours in the relevant Contract Year for all PV System inverters at the beginning of the Contract Year. “Annual PV System Availability Requirement” or “PVSARy” means for the first full Contract Year and each Contract Year thereafter, 80%.
“Available Hours” mean (a) the number of Period Hours in which a PV System inverter was electrically interconnected to the interconnection facilities, plus (b) the number of hours during any BESS Excused Condition. Available Hours are counted by an inverter’s programmable logic controller.
“Period Hours” mean the sum total of all daylight hours for the applicable Contract Year.
Appendix K-2 - 1
APPENDIX K-2
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
REMEDY CALCULATIONS FOR FAILURE OF BESS PERFORMANCE
GUARANTEES AND ANNUAL PV SYSTEM AVAILABILITY GUARANTEE
A. For purposes of determining the Adjusted BESS Capacity Price due to a failure of the Dischargeable Energy Performance Guarantee, the “Dischargeable Energy Adjustment Factor” shall be equal to the result of the following formula (where y represents the applicable Contract Year that such guarantee is not satisfied):
ܧܦ௬
ܧܦܩ௬
B. For purposes of determining the Adjusted BESS Capacity Price due to a failure of the Round Trip Efficiency Performance Guarantee, the “Round Trip Efficiency Adjustment Factor” shall be equal to the result of the following formula (where y represents the applicable Contract Year that such guarantee is not satisfied):
ܴܶܧ௬
݁݁ݐܽ݊ݎܽݑܩ ݉ܽ݊ܿ݁ݎ݂ݎܲ݁ ܧܴܶ
ݕ
C. For purposes of determining the Adjusted BESS Capacity Price due to a failure of the Annual PV System Availability Guarantee, the “Annual PV System Availability Adjustment Factor” shall be equal to the result of the following formula (where y represents the applicable Contract Year that such guarantee is not satisfied):
ܸܲܵܣ௬
ܸܲܵܣܴ௬
Appendix K-3 - 1
APPENDIX K-3
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
STORAGE CAPACITY TEST PROCEDURES
PART I. GENERAL.
Each Storage Capacity Test shall be conducted in accordance with Prudent Utility Practices and the provisions of this Appendix K-3. For ease of reference, a Storage Capacity Test is sometimes referred to in this Appendix K-3 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:
(1) Determine the amount of Energy required to fully charge the BESS; (2) Determine the BESS charge ramp rate;
(3) Determine the BESS discharge ramp rate;
(4) Determine an updated Dischargeable Energy;
(5) Determine an updated Round Trip Efficiency.
B. Test Elements. Each SCT shall include the following test elements:
x The measurement of charging energy exclusive of station use and electrical losses, as measured by the BESS Energy Meter or other mutually agreed meter, that is required to charge the BESS up to the Maximum Stored Energy Level (as defined in Appendix Q) Level not to exceed the BESS Contract Capacity (MWh) (“Energy In”);
x The measurement of discharging energy exclusive of station use and electrical losses, as measured by the BESS Energy Meter or other mutually agreed meter, that is discharged from the BESS to the Point of Delivery until the Stored Energy Level reaches zero MWh as indicated by the battery management system (“Energy Out”);
Appendix K-3 - 2
x Electrical output at Maximum Discharging Capacity (as defined in Appendix Q) at the BESS Energy Meter (MW);
x Electrical input at Maximum Charging Capacity (as defined in Appendix Q) at the BESS Energy Meter (MW);
x Amount of time between the BESS’s electrical output going from 0 to Maximum Discharging Capacity;
x Amount of time between the BESS’s electrical input going from 0 to Maximum Charging Capacity;
x 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 BESS, at ten (10) minute intervals:
(1) discharge time (minutes);
(2) charging energy (MWh);
(3) discharging energy (MWh);
(4) Stored Energy Level (MWh).
D. Site Conditions. During each SCT, the following conditions at the Site shall be measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the BESS; and
(3) Ambient air temperature (°F).
E. Test Showing. Each SCT must demonstrate that the BESS:
(1) successfully started;
(2) operated for at least four (4) consecutive hours at Maximum Discharging Capacity;
(3) operated for at least four (4) consecutive hours at Maximum Charging Capacity;
(4) is able to deliver discharging energy to the Point of Delivery as measured by the BESS Energy Meter for four (4) consecutive hours at a rate equal to Appendix K-3 - 3
the Maximum Discharging Capacity.
F. Test Conditions.
(i) General. At all times during a SCT, the BESS shall be operated in compliance with Prudent Utility Practices and all operating protocols recommended, required or established by the manufacturer for operation at Maximum Discharging Capacity and Maximum Charging Capacity (as each is defined in Appendix Q).
(ii) Abnormal Conditions. If abnormal operating conditions that prevent the recordation of any required parameter occur during a SCT (including a level of irradiance that does not permit the PV System to produce sufficient charging energy), 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 Utility Practices.
G. Incomplete Test. If any SCT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the SCT stopped; (ii) require that the portion of the SCT not completed, be completed within a reasonable specified time period; or (iii) require that the SCT be entirely repeated.
Notwithstanding the above, if Seller is unable to complete a SCT due to a Force Majeure event or the actions or inactions of Buyer or the CAISO or the PTO or the Transmission Provider, Seller shall be permitted to reconduct such SCT on dates and at times reasonably acceptable to the Parties.
H. Final Report. Within fifteen (15) Business Days after the completion of any SCT, Seller shall prepare and submit to Buyer a written report of the results of the SCT, which report shall include:
(1) a record of the personnel present during the SCT that served in an operating, testing, monitoring or other such participatory role;
(2) the measured data for each parameter set forth in Part II.A through C, including copies of the raw data taken during the test; (3) the level of Dischargeable Energy, Energy In, Energy Out, Round Trip Efficiency, Maximum Charging Capacity, the current charge and discharge ramp rate, and Stored Energy Level determined by the SCT, including supporting calculations; and
(4) Seller’s statement of either Seller’s acceptance of the SCT or Seller’s rejection of the SCT results and reason(s) therefor.
Appendix K-3 - 4
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 Appendix K-3 with additional and supplementary details, procedures and requirements applicable to Storage Capacity Tests based on the then current design of the Facility (“Supplementary Storage Capacity Test Protocol”). Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then current Supplementary Storage Capacity Test Protocol. The initial Supplementary Storage Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Appendix K-3.
Part III. SUPPLEMENTARY STORAGE CAPACITY TEST PROTOCOL
A. Conditions Precedent to SCT
x Control System Functionality: The storage 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.
x Communications: Remote Terminal Unit (RTU) testing should be successfully completed prior to SCT. The interface between Buyer’s RTU and the storage 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.
x 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. x 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.
x The following Commercial Operation tests will be repeated annually:
Appendix K-3 - 5
x Round-Trip Efficiency and Energy Test
B. Round-Trip Efficiency and Dischargeable Energy Test
1. The following test demonstrates the updated Round Trip Efficiency and amount of Energy required to fully charge the BESS (when performed annually or ad hoc).
i. The resulting quantity of discharging energy is the Energy Out (as reported in Part II.B above) and the resulting quantity charging energy is the Energy In (as reported in Part II.B above).
ii. The Qualified Energy is the sum of the total quantity of discharging energy at the BESS Energy Meter.
2. The BESS will be operated in both the charge and discharge directions in the following order:
i. [Seller to specify, example language below]
ii. [Set each Battery Subsystem to [3%] SOC.
iii. 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 begins the 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.
iv. Discharge each Battery Subsystem to 0% SOC.
v. Immediately perform the Round-Trip Efficiency and Energy Test set forth below.]
3. To be valid, the SCT must be started within twenty-four (24) hours of the end of the period (greater than four 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.
4. Procedure:
i. System Starting State: The BESS 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. Verify that ambient temperature measurements at all Battery Subsystems are between [18°C and 28 °C ] throughout this test. iv. Record initial values of each Battery Subsystem SOC.
Appendix K-3 - 6
v. Command a real power charge that results in an AC power of the BESS’s full charging power and continue the charge until the power is 2% different.
vi. Record and store the AC energy charged to the system as measured at the BESS Energy Meter. Measurements will be made by the BESS Energy Meter with recording in the storage facility historian. vii. Within 5 minutes, command a real power discharge that results in an AC power output of the BESS’s maximum discharge power.
viii. Maintain the discharging until the power is 2% different. ix. Record and store the AC energy discharged as measured at the BESS Energy Meter. Measurements will be made by the BESS Energy Meter with recording in the BESS historian.
Pass/Fail Criteria
The measured Round Trip Efficiency is greater than or equal to the Round Trip Efficiency Performance Guarantee. The Dischargeable Energy is greater than or equal to the Guaranteed Dischargeable Energy.
Passed Failed Date:
Test Performed by:
Test Witnessed by:
Notes/Test Conditions:
________________________________________________________________________ ________________________________________________________________________ Appendix L-1 - 1
APPENDIX L-1
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF CONSTRUCTION START DATE CERTIFICATION
This certification (“Certification”) of the Construction Start Date is delivered by Daggett Solar Power 2 LLC (“Seller”) to Southern California Public Power Authority (“Buyer”) in accordance with the terms of that certain Power Purchase Agreement dated __________ (“Agreement”) by and between Seller and Buyer. 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. the engineering, procurement and construction contract related to the Facility was executed on __________;
2. the notice provided by Seller to EPC Contractor by which Seller authorizes the EPC Contractor to begin construction of the Facility without any delay or waiting periods was issued on ______________ (attached); and
3. the Construction Start Date has occurred.
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
DAGGETT SOLAR POWER 2 LLC
By:
Its:
Date:
Appendix L-2 - 1
APPENDIX L-2
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF COMMERCIAL OPERATION DATE CERTIFICATION
In accordance with the terms of that certain Power Purchase Agreement dated as of [_______], 2022 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) by and between Southern California Public Power Authority (“Buyer”) and Daggett Solar Power 2 LLC (“Seller”), in order to determine achievement of Commercial Operation of the Facility, Seller shall demonstrate to Buyer that the Facility is operating and able to produce and deliver Delivered Energy to Buyer in accordance with the terms of the Agreement by delivery of a Commercial Operation Date Certification (the “Certificate”), signed by an authorized representative of Seller as to all of the items below, and which shall include a certificate in the form attached hereto of an Independent Engineer, licensed in the State of California, regarding the Facility’s ability to deliver Delivered Energy and confirming the items set forth therein. Any capitalized term used herein but not defined in the Certificate shall have the meaning set forth in the Agreement. The Certificate shall be submitted by Seller, along with reasonable documentation as may be requested by Buyer, and certify as to the following:
1. All solar panels comprising the PV System have been installed in accordance with the manufacturer’s specifications.
2. The electrical collection system related to the solar panels referenced in paragraph (1) above is complete, functional, and energized for the Facility.
3. Seller’s collector substation is complete and capable of delivering an as-available product.
4. The Facility is operational and interconnected with the Point of Delivery and capable of delivering the Delivered Energy and receiving and storing the BESS Metered Input as required under the Agreement.
5. The battery comprising the BESS has been installed in accordance with the manufacturer’s specifications.
6. Copies of any documentation provided by the manufacturer of the solar panels referenced in paragraph (1) or the battery referenced in paragraph (5) (including a copy of the full BESS specifications) stating the solar panels or battery, Appendix L-2 - 2
as applicable, have been manufactured in accordance with such manufacturer’s specifications, have been provided to Buyer.
7. Construction of the Facility has been completed in accordance with the terms and conditions of this Agreement, and the Facility possesses all of the characteristics required by, and satisfies all of, the Requirements.
8. The Facility has successfully completed all testing required by Prudent Utility Practices or any Requirement of Law to be completed prior to full commercial operation. Testing shall include but not be limited to operating the Facility for a period of not less than twenty (20) consecutive days delivering PV Delivered Energy in an amount equal to the PV System Contract Capacity and BESS Metered Output in an amount equal to the BESS Contract Capacity, in each case, during such period to the Point of Delivery.
9. The BESS has passed the Storage Capacity Test set forth in the Agreement.
10. Seller has obtained all of the Permits required for the development, construction, operation and maintenance of the Facility, including those identified in Appendix B-1 of the Agreement, and all such Permits are final and effective.
11. Seller has obtained the insurance specified on Appendix F of the Agreement.
12. Seller shall have entered into, and delivered to Buyer, an agreement providing for the operation and maintenance of the Facility with a Qualified Operator (which may be redacted for confidential or proprietary information), in form and substance reasonably satisfactory to Buyer, unless Seller provides the operation and maintenance of the Facility.
13. Buyer has received the Performance Security that complies with the terms of the Agreement.
14. Buyer has accepted Seller’s proof of timely registration with NERC for all applicable Function Types in the NERC Compliance Registry in accordance with the currently effective NERC Rules of Procedure, including Seller’s registration as both Generator Owner and Generator Operator.
15. Buyer has accepted Seller’s mapping of NERC registered Function Types in accordance with the currently-effective WECC Entity Function Mapping procedures.
16. Buyer has received and found reasonably acceptable Seller’s Q/A Program in accordance with Appendix G of the Agreement.
17. Full Capacity Deliverability Status has been achieved with respect to the Facility.
Appendix L-2 - 3
Upon reasonable notice and during regular business hours, Buyer’s representative(s) may inspect the Facility and observe the testing associated with achievement of Commercial Operation, provided that such representative(s) of Buyer shall at all times comply with Seller’s written instructions regarding safety and security while on the Site.
Signed,
___________________________
Name:
Title:
Date:
Appendix 1 to Appendix L-2 - 1
APPENDIX 1
to
APPENDIX L-2
to
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF INDEPENDENT ENGINEER’S CERTIFICATE (COMMERCIAL
OPERATION DATE CERTIFICATE)
This Independent Engineer Certificate is delivered by [selected Independent Engineer] (“Independent Engineer”) in accordance with the terms of that certain Power Purchase Agreement dated as of [________], 2022 (the “Agreement”) by and between Southern California Public Power Authority (“Buyer”) and Daggett Solar Power 2 LLC (“Seller”). Capitalized terms used herein but not defined in this Certificate shall have the meaning set forth in the Agreement.
In order to determine achievement of Commercial Operation of the Facility, Independent Engineer hereby certifies the following regarding the Facility’s ability to deliver Delivered Energy:
1. Based on my professional judgment, after reasonable inquiry consistent with prudent industry practice, the solar panels comprising the PV System have been installed in accordance with the manufacturer’s specifications.
2. The electrical collection system related to the solar panels referenced in paragraph (1) above is complete, functional, and energized for the Facility.
3. Seller’s collector substation is complete and capable of delivering an as-available product.
4. The battery comprising the BESS has been installed in accordance with the manufacturer’s specifications.
5. To the best of our knowledge, copies of any documentation provided by the manufacturer of the solar panels referenced in paragraph (1) or the battery referenced in paragraph (4) above (including a copy of the full BESS specifications) stating the solar panels or battery, as applicable, have been manufactured in accordance with such manufacturer’s specifications, have been provided to Buyer.
6. The Facility is operational and interconnected with the Point of Delivery and capable of delivering the Delivered Energy and receiving and storing the BESS Metered Input as required under the Agreement.
Appendix 1 to Appendix L-2 - 2
7. Construction of the Facility has been completed in accordance with Prudent Utility Practices.
8. The Facility has successfully completed all testing required by Prudent Utility Practices to be completed prior to full commercial operation, including operating the Facility for a period of not less than twenty (20) consecutive days and delivering PV Delivered Energy up to the PV System Contract Capacity and BESS Metered Output up to the BESS Contract Capacity, in each case, during such period to the Point of Delivery.
9. The BESS has passed the Storage Capacity Test set forth in the Agreement.
The undersigned is a Licensed Professional Engineer in the State of California. [Signature page follows]
Appendix 1 to Appendix L-2 - 3
Sincerely,
[SELECTED INDEPENDENT ENGINEER]
___________________________
Name:
Title:
Date:
APPENDIX M
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
SITE CONTROL DOCUMENTS
1. Solar Facility Ground Lease Agreement, dated as of October 29, 2021, by and between Daggett Land Holdings 2 LLC, a Delaware limited liability company, and Daggett Solar Power 2 LLC, a Delaware limited liability company, as evidenced by that certain Memorandum of Solar Facility Ground Lease, recorded October 29, 2021, as Document No. 2021-0491006 in the Official Records of the County of San Bernardino, State of California
2. Easement for Access and Utility Facilities, dated as of December 17, 2020, by and between George A. Stark and Jayne E. Stark and Daggett Solar Power 2 LLC, a Delaware limited liability company, recorded on January 14, 2021, as Document No. 2021-0021329 in the Official Records of the County of San Bernardino, State of California
3. Grant of Easement for Operations and Maintenance, Access and Utilities Facilities, dated as of September 30, 2021, by and between Daggett Land Holdings LLC, a Delaware limited liability company, and Daggett Solar Power 2 LLC, a Delaware limited liability company, and Daggett Solar Power 1 LLC, a Delaware limited liability company, recorded on October 14, 2021, as Document No. 2021-0468314 in the Official Records of the County of San Bernardino, State of California
4. Grant of Substation Area, dated as of September 30, 2021, by and between Daggett Land Holdings LLC, a Delaware limited liability company, and Daggett Solar Power 2 LLC, a Delaware limited liability company, recorded on October 14, 2021, as Document No. 2021-0468315 in the Official Records of the County of San Bernardino, State of California
5. Easement for Access and Utility Facilities, dated as of March 10, 2021, by and between Glen A. Van Dam and Jennifer Van Dam, Trustees of the Van Dam Family Trust, dated October 28, 2009, and Daggett Solar Power 3 LLC, recorded March 15, 2021 as Document No. 2021- 0116684 in the Official Records of the County of San Bernardino, State of California, as partially assigned to Daggett Solar Power 1, LLC, a Delaware limited liability company, and Daggett Solar Power 2 LLC, a Delaware limited liability company, per that certain Assignment and Assumption of Co-Tenancy Interest in Gen-Tie Easements, dated as of September 30, 2021 and recorded on October 14, 2021 as Document No. 2021-0468313 in the Official Records of the County of San Bernardino, State of California
6. Grant of Easement(s), by and between Southern California Edison Company, a corporation, and Daggett Solar Power 3 LLC, a Delaware limited liability company, recorded on January 14, 2021 as Document No. 2021-0021328 in the Official Records of the County of San Bernardino, State of California, as amended by that certain Amendment of Grant of Easement, dated August 10, 2021, and recorded on August 11, 2021, as Document No. 2021-0362231 in the Official Records of the County of San Bernardino, State of California, as partially assigned to Daggett Solar Power 1 LLC and Daggett Solar Power 2 LLC, per that certain Assignment and Assumption of Co-Tenancy interest in Gen-Tie Easements, dated as of September 30, 2021, and recorded on October 14, 2021 as Document No. 2021-0468313 in the Official Records of the County of San Bernardino, State of California
7. Grant of Easement, dated as of December 28, 2017, by and between Genon California South, L.P., a Delaware limited partnership, formerly known as NRG California South LP, a Delaware limited partnership, and Daggett Solar Power 1 LLC, and recorded on January 10, 2018, as Document No. 2018-0008134 in the Official Records of the County of San Bernardino, State of California, as amended by that certain First Amendment to Grant of Easement, dated as of October 11, 2021 and recorded on October 12, 2021, as Document No. 2021-0464372 in the Official Records of the County of San Bernardino, State of California, as partially assigned to Daggett Solar Power 2 LLC and Daggett Solar Power 3 LLC, per that certain Assignment and Assumption of Co-Tenancy Interest in Gen-Tie Easements, dated as of September 30, 2021 and recorded on October 14, 2021, as Document No. 2021-0468313 in the Official Records of the County of San Bernardino, State of California
8. License and Consent Agreement, dated as of April 13, 2022, by and between the City of Los Angeles, a California municipal corporation and entity, acting by and through its Department of Water and Power, and Daggett Land Holdings LLC, Daggett Solar Power 1 LLC, Daggett Solar Power 2 LLC, and Daggett Solar Power 3 LLC
9. License and Consent Agreement, dated as of April 7, 2022, by and between Intermountain Power Agency, a political subdivision of the State of Utah, and Daggett Land Holdings LLC, Daggett Solar Power 1 LLC, Daggett Solar Power 2 LLC, and Daggett Solar Power 3 LLC Appendix N - 1
APPENDIX N
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
SALE LEASEBACK REQUIREMENTS
(a) Performance of Lease Obligations. Seller shall at all times keep, perform, observe and comply with, or cause to be kept, performed, observed and complied with, all material covenants, agreements, conditions and other provisions required to be kept, performed, observed and complied with by or on behalf of Seller from time to time pursuant to the Lease, and Seller shall not do or permit anything to be done, the doing of which, or refrain from doing anything, the omission of which, would reasonably be expected to impair the rights of Seller under the Lease, or could be grounds for the Sale Leaseback Lessor to terminate the Lease. (b) Notice of Default. Seller shall give Buyer immediate notice of (i) any default or of any event which, with the giving of notice or passage of time, or both, would become a default under the Lease or of the receipt by Seller of any notice from the Sale Leaseback Lessor thereof, or (ii) the commencement or threat of any action or proceeding or arbitration pertaining to the Lease.
Buyer, at its option, may take any action (but shall not be obligated to take any action) from time to time deemed necessary or desirable by Buyer to prevent or cure, in whole or in part, any default by Seller under the Lease. Seller shall deliver to Buyer, promptly following service or delivery thereof on, to or by Seller, a copy of each petition, summons, complaint, notice of motion, order to show cause and other pleading or paper, however designated, which shall be served or delivered in connection with any such action, proceeding or arbitration. (c) Sale Leaseback Lessor Bankruptcy. In the event of the termination, rejection, or disaffirmance by Sale Leaseback Lessor (or by any receiver, trustee, custodian, or other party that succeeds to the rights of the Sale Leaseback Lessor) under the Lease pursuant to the Bankruptcy Code (U.S.C. §§ 101 et seq.), Seller shall cooperate and work in good faith with Buyer to exercise Seller’s rights under Section 365 of the Bankruptcy Code (including, without limitation, the election available pursuant to Section 365(h) of the Bankruptcy Code, and any successor provision) in a manner consistent with and in furtherance of the purpose of the Agreement and Buyer’s interests in the Agreement (by which Seller acknowledges the importance of the Lease as security). Without limiting the generality of the foregoing sentence, Seller shall not, without Buyer’s prior written consent, which shall not be unreasonably withheld, elect to treat the Lease or the leasehold estate created thereby as terminated under Section 365 of the Bankruptcy Code, after rejection or disaffirmance of the Lease by the Sale Leaseback Lessor (whether as debtor in possession or otherwise) or by any trustee of the Sale Leaseback Lessor, and any such election made without such consent shall be void at inception and of no force or effect. At the request of Buyer, Seller will join in any election made by Buyer under the Bankruptcy Code and will take no action in contravention of the rights granted to Buyer pursuant this Section (c). In the event there Appendix N - 2
is a termination, rejection, or disaffirmance by the Sale Leaseback Lessor (whether as debtor in possession or otherwise) or by any trustee of the Sale Leaseback Lessor pursuant to the Bankruptcy Code and, Seller elects, with Buyer’s consent, to have Seller remain in possession under any legal right Seller may have to occupy the property pursuant to the Lease, then Seller shall remain in such possession and shall perform all acts necessary for Seller to retain its right to remain in such possession, whether such acts are required under the then existing terms and provisions of the Lease or otherwise.
(d) Seller Bankruptcy. In the event that a petition under the Bankruptcy Code shall be filed by or against Seller and Seller or any trustee of Seller shall decide to reject or disaffirm the Lease pursuant to the Bankruptcy Code (or allow the same), Seller shall give Buyer at least ten (10) days prior notice of the date on which application shall be made to the court for authority to reject or disaffirm the Lease or the Lease will be otherwise rejected. Buyer shall have the right, but not the obligation, to serve upon Seller or such trustee within such ten (10) day period a notice stating that (i) Buyer demands that Seller (whether as debtor in possession or otherwise) or such trustee assume and assign the Lease to Buyer pursuant to the Bankruptcy Code, and (ii) Buyer covenants to cure, or to provide adequate assurance of prompt cure of, all defaults (except defaults of the type specified in Section 365(b)(2) of the Bankruptcy Code) and to provide adequate assurance of future performance under the Lease. In the event that Buyer serves any such notice as provided above, Seller (whether as debtor in possession or otherwise) shall not seek to reject or disaffirm the Lease and Seller (whether as debtor in possession or otherwise). (e) Default Cure (non-bankruptcy). In the event of monetary default under the Lease other than in connection with a bankruptcy filing by or against Seller, upon any payment by Buyer to cure any default of Seller, as lessee thereunder, and thereby to prevent termination of the Lease or the exercise of any other remedy of the Sale Leaseback Lessor thereunder arising out of such default, Seller, within ten (10) days following receipt of notice from Buyer that it made such payment, shall pay the amount of such payment to Buyer plus interest accruing thereon at the Interest Rate, from and including the date of the payment by Buyer to cure such default to but excluding the date of such payment by the Seller.
(f) Memorandum. A memorandum of the Lease shall be recorded in the applicable county.
Appendix O - 1
APPENDIX O
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
METERING DIAGRAM
Appendix P - 1
APPENDIX P
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF CONSENT AND AGREEMENT
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this “Consent”), dated as of ________, 202__, is executed by and among Southern California Public Power Authority, a public entity and joint powers authority formed and organized pursuant to the California Joint Exercise of Powers Act (California Government Code Section 6500, et seq.) (“Buyer”), [_______], in its capacity as collateral agent for the Secured Parties (as defined in the below defined Financing Agreement) (together with its successors and permitted assigns in such capacity, the “Collateral Agent”) and Daggett Solar Power 2 LLC, a Delaware limited liability company (“Seller”). Each of Buyer, Seller and the Collateral Agent is referred to under this Agreement as a “Party,” and together they are referred to as the “Parties”. Capitalized terms used but not defined herein shall have the meanings set forth in the PPA (as defined below) in effect on the date hereof.
RECITALS
A. [_________] (“Borrower”)[, an indirect owner of Seller,] has entered into that certain Financing Agreement, dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), with the financial institutions from time to time party thereto as lenders and letter of credit issuing banks (collectively, the “Lenders”), [_______], as administrative agent for the Lenders, the Collateral Agent, and the other agents and Persons party thereto, pursuant to which the Lenders have agreed to extend financing to Borrower, the proceeds of which are to be utilized for the construction, ownership, operation and maintenance of an approximately 65 MWac solar-powered electric generating facility (the “PV System”) and 132 MWh battery energy storage system (“BESS” and, together with the PV System, the “Facility”, as further described in the PPA) located in San Bernardino County, California.
B. Seller and Collateral Agent have entered into a [Guarantee and Security Agreement], dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”) under which Seller collaterally assigned its interest under the PPA to Collateral Agent as collateral for the credit facilities under the Financing Agreement and a deed of trust or mortgage under which Seller has granted to Collateral Agent a lien on the Facility to be recorded in San Bernardino County, California (the “Financing Deed of Trust”). Additionally, [_____________] (“Pledgor”) has entered into a [Guarantee, Pledge and Security Agreement], dated as of the date hereof (as amended, amended Appendix P - 2
and restated, supplemented or otherwise modified from time to time, the “Pledge Agreement” and, together with the Security Agreement and Financing Deed of Trust, the “Construction Period Collateral Documents” and, together with the Financing Agreement and any related agreements or documents, the “Financing Documents”) with Collateral Agent pursuant to which it has pledged to Collateral Agent all of the membership interests in Seller, to secure Borrower’s obligations under the Financing Agreement.
C. Buyer and Seller entered into that certain Power Purchase Agreement, dated as of [________] (as may be amended, amended and restated, supplemented or otherwise modified from time to time, the “PPA”), pursuant to which Seller will develop, finance, construct, own, and operate the Facility, and will, except as otherwise provided in the PPA, sell the Energy from the Facility to Buyer.
D. Pursuant to Section 13.3 of the PPA, Seller has requested Buyer’s consent to collateral assignment, pursuant to the Security Agreement, by Seller to the Collateral Agent of all of Seller’s right, title and interest in, to and under the PPA, to the grant of the liens in the Facility pursuant to the Financing Deed of Trust and to the pledge of the direct and indirect membership interests in Seller to the Collateral Agent.
AGREEMENT
1. Assignment and Agreement.
1.1 Consent to Assignment. Buyer hereby consents to the collateral assignment to the Collateral Agent, pursuant to the Security Agreement, of all of Seller’s rights, title and interest in, to and under the PPA (including, without limitation, the right to receive payment thereunder), the granting of Liens on all property of Seller pursuant to the Construction Period Collateral Documents, the pledge of direct membership interests in Seller to the Collateral Agent as security for Borrower’s obligations under the Pledge Agreement, the pledge of the indirect membership interests in Seller to the Collateral Agent pursuant to the terms of the Financing Agreement and Buyer acknowledges that the Collateral Agent and is a “Facility Lender” for purposes of the PPA.
Subject to the terms and conditions of this Consent, Buyer agrees that, in exercising its remedies under the Construction Period Collateral Documents, the Collateral Agent may exercise Seller’s rights under the PPA.
1.2 Notices: Right to Cure by the Collateral Agent. Upon the occurrence of a Default (as defined under the PPA) by Seller under the PPA, Buyer shall give concurrent notice of such Default to Seller and the Collateral Agent. Upon receipt of notice from the Collateral Agent, Buyer agrees to accept the exercise and cure by the Collateral Agent of the Default if such exercise and cure is in compliance with the PPA and this Consent. Buyer shall not terminate or suspend its performance under the PPA until the Collateral Agent has been given: (a) if such Default is a monetary Default, thirty (30) days after the later of (i) the expiration of all cure periods available to Seller under the PPA and (ii) receipt of such notice to cure a monetary Default or, (b) if such Default is a nonmonetary Default, sixty (60) days after the later of (i) the expiration of all cure periods available to Seller under the PPA and (ii) receipt of such notice (or up to thirty (30) additional days, so long as the Collateral Agent reasonably demonstrates to Buyer that it is diligently pursuing appropriate action to cure and is making sufficient progress toward curing such Appendix P - 3
Default); provided, however, that (x) if possession of the Facility is necessary to cure any such nonmonetary Default and the Collateral Agent commenced foreclosure proceedings within thirty (30) days after the Collateral Agent’s receipt of notice of Default from Buyer and are diligently pursuing such foreclosure proceedings, the Collateral Agent will be allowed a reasonable additional period of time, not to exceed ninety (90) days after receipt of such notice of Default from Buyer, to complete such proceedings and cure such Default, and (y) if the Collateral Agent is prohibited from curing any such Default by any process, stay or injunction issued by any Governmental Authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving Seller, then the time periods specified herein for curing a Default shall be extended for the period of such prohibition, so long as the Collateral Agent has diligently pursued removal of such process, stay or injunction, but in no event more than two hundred thirty (230) days. Failure of Buyer to provide such notice to the Collateral Agent shall not constitute a breach of the PPA or this Consent by Buyer and the Collateral Agent agrees that Buyer shall have no liability to the Collateral Agent for such failure whatsoever; provided that no claim of Default or termination of the PPA by Buyer shall be binding without such notice and the lapsing of the applicable periods set forth above. If the Collateral Agent fails to cure a Default within the applicable period, Buyer shall have all its rights and remedies with respect to such Default as set forth in the PPA.
1.3 Subsequent Owner. Subject to the terms and conditions of this Consent, the Parties agree that the Collateral Agent shall, concurrent with any statutory notice required to be delivered to Seller, give notice in writing to Buyer not less than thirty (30) days prior to the date of any foreclosure or transfer of the Facility and the PPA (a “Foreclosure Sale”) and, in addition, the Collateral Agent shall subsequently notify Buyer following any transfer pursuant to such foreclosure. If the Collateral Agent notifies Buyer in writing that it has completed foreclosure on the Facility and PPA pursuant to the Construction Period Collateral Documents, taken a “deed in lieu of foreclosure” with respect to the Facility and PPA, or otherwise transferred the Facility and PPA, the Collateral Agent or its permitted successors or assigns, or any other purchaser of the Facility (each such Person, including the Collateral Agent that is a transferee, a “Subsequent Owner”), shall be recognized as a party substituting for Seller under the PPA so long as such the Subsequent Owner meets the qualifications for a Qualified Transferee and each Subsequent Owner expressly assumes Seller’s obligations under the PPA, and the terms and conditions of the PPA as in effect on such date of transfer or foreclosure shall continue to apply to such Subsequent Owner; provided, however, it is acknowledged and agreed that [insert name of Collateral Agent that is a party to this Consent] is a Qualified Transferee.
1.4 [Reserved].
1.5 Foreclosure Sale. In the event a Foreclosure Sale or deed in lieu of foreclosure under the Construction Period Collateral Documents shall take place, Buyer or any Participating Member shall have the right to bid at such Foreclosure Sale for the purchase of the Facility. The Collateral Agent may sell the membership interests in Seller pursuant to such Foreclosure Sale.
1.6 Third Party Beneficiary. No action of Buyer taken pursuant to the exercise of its rights as provided in this Consent shall be deemed to be a waiver of any right accruing to Buyer on account of the occurrence of any matter which constitutes a default or a breach of Seller’s obligations under the Financing Agreement or the PPA.
Appendix P - 4
1.7 No Assignment. Buyer agrees that it shall not, without the prior written joint consent of Seller and the Collateral Agent (such consent to not be unreasonably withheld, conditioned or delayed) sell, assign or transfer any of its rights under the PPA, other than in accordance with Section 14.7 of the PPA. The Collateral Agent shall be deemed to have consented to such sale, assignment or transfer should it fail to respond within forty-five (45) days after the date of the notice from Buyer is received by the Collateral Agent.
1.8 Limitation of Liability.
(a) Seller agrees that it shall indemnify and hold Buyer harmless from any third-party claims, losses, liabilities, damages, costs or expenses (including, without limitation, any direct, indirect or consequential claims, losses, liabilities, damages, costs or expenses, including legal fees) in connection with or arising out of any of the transactions related to the Financing Agreement and the Construction Period Collateral Documents or this Consent. (b) In the event of any Foreclosure Sale, or the taking of any deed in lieu of foreclosure, in connection with an exercise of remedies under any Construction Period Collateral Documents, the Collateral Agent shall, if performance of the PPA is reasonably possible, cause the Subsequent Owner to assume in writing and agree to be bound by the covenants and agreements of Seller in the PPA; provided, however, that until the Subsequent Owner executes and delivers to Buyer a written assumption of Seller’s obligations under the PPA, in form and substance reasonably acceptable to Buyer, such Person will not be entitled to any of the benefits of the PPA. The Collateral Agent agrees that in no event shall Buyer be liable to the Collateral Agent or any Subsequent Owner for any claims, losses, expenses or damages whatsoever under the PPA other than liability Buyer may have to Seller under the PPA. In the event a Subsequent Owner elects to perform Seller’s obligations under the PPA in accordance with Section 1.3 hereof, the recourse of Buyer in seeking the enforcement of such obligations shall be limited to any Project Development Security, or the Delivery Term Security, as applicable, provided pursuant to the PPA and the value (taking into account indebtedness secured by the Facility, including indebtedness arising in connection with such Project Development Security or the Delivery Term Security, as applicable) of the Subsequent Owner’s interest in the Facility.
1.9 Reinstatement. In the event that the PPA is rejected by a trustee or debtor-inpossession in any bankruptcy or insolvency proceeding, and if, within forty-five (45) calendar days after such rejection, the Collateral Agent shall so request, Buyer will execute and deliver to the Collateral Agent a new power purchase agreement, which power purchase agreement shall be on the same terms and conditions as the original PPA for the remaining term of the original PPA before giving effect to such rejection, and which shall require the Collateral Agent to cure any defaults then existing under the original PPA other than the default under the original PPA attributed to the bankruptcy or insolvency of Seller.
2. Payments under the PPA. Without limiting the rights of Buyer under the PPA, Buyer shall pay any amounts owed in the manner and when required under the PPA directly to the accounts specified below or otherwise designated by the Collateral Agent to Buyer in writing.
From and after such time as an entity qualifies as a Subsequent Owner, Buyer shall pay all such amounts owed directly to or at the written direction of such Subsequent Owner. Commencing on the date of this Consent and until the occurrence of the Term Conversion Date (as defined in the Appendix P - 5
Financing Agreement and which shall only occur for purposes of this Consent after Buyer receives written notice thereof from the Collateral Agent) (the “Construction Loan Discharge Date”), Seller hereby directs Buyer, and Buyer agrees, to make all payments and amounts Buyer is obligated to pay to Seller under the PPA, which payments shall satisfy any such payment obligations of Buyer to Seller in full and complete satisfaction of Buyer’s obligations to Seller under the PPA to the following account:
Bank Name: [______]
Account Number: [______]
ABA Number: [______]
Account Name: [______]
Ref: [_____]
The Collateral Agent and Seller agree that any change in payment notification shall become effective within thirty (30) days after receipt by Buyer of written notice thereof in accordance with this Consent. Buyer shall have no liability to Seller or any Secured Party (or their successors and assigns) for making payments due or to become due under the PPA to any Secured Party or for failure to direct any payments to the Collateral Agent rather than Seller.
3. Acknowledgements; Representations and Warranties.
3.1 Buyer. Buyer hereby represents and warrants to the Collateral Agent as of the date of this Consent as follows:
Buyer agrees that any foreclosure by the Collateral Agent on the direct or indirect membership interests in Seller, or any parent entity of Seller and any subsequent transfer to a third party by the Collateral Agent after such foreclosure, upon the occurrence of a default under the Financing Agreement shall not constitute a breach under the PPA so long as the Facility is operated and maintained by a Qualified Operator following any such foreclosure and subsequent transfer.
Collateral Agent shall obtain Buyer’s consent (such consent not to be unreasonably withheld) prior to any transfer by Collateral Agent of the membership interests in Borrower or Pledgor upon the occurrence of a default by Borrower under the Financing Agreement to an entity other than a Qualified Transferee.
3.2 Seller and Collateral Agent.
(a) Seller and the Collateral Agent acknowledge that Buyer has not made and hereby makes no representation or warranty, expressed or implied, that Seller has any right, title or interest in the collateral secured by the Construction Period Collateral Documents (the “Collateral”) and the Collateral Agent acknowledges that it has not relied upon any such representations of Buyer.
The Collateral Agent acknowledges that it is responsible for satisfying itself as to the existence and extent of Seller’s right, title, and interest in the Collateral. (b) Except as otherwise expressly provided herein, the Collateral Agent acknowledges Appendix P - 6
that Buyer shall not have any contractual obligations to the Collateral Agent, and the Collateral Agent acknowledges that it has not relied upon any representations of Buyer in connection with its lending arrangements with Borrower for the Facility. (c) Except with respect to performance of the agreements contained herein, Seller and the Collateral Agent acknowledge that Buyer shall have no liability to Seller or the Collateral Agent resulting from or related to this Consent, or for consenting to any future assignments of the Collateral or any interest of Seller or the Collateral Agent therein. (d) Seller and the Collateral Agent each agree that Buyer shall, at all times, have (and Buyer hereby expressly reserves) the right to set off or deduct from payments due to Seller under the PPA amounts owing to Buyer by Seller under the PPA, in each case solely in accordance with Section 11.5 of the PPA.
(e) Collateral Agent represents and warrants that it is duly authorized, on behalf of the Secured Parties it represents, to enter into and perform its obligations under this Consent.
4. Miscellaneous.
4.1 Governing Law; Submission to Jurisdiction.
(a) This Consent shall be governed by, interpreted, and enforced in accordance with the laws of the State of California, without regard to conflict of law principles. (b) All litigation arising out of, or relating to this Consent, shall be brought in a State or Federal court in the County of Los Angeles in the State of California. The Parties irrevocably agree to submit to the exclusive jurisdiction of such courts in the State of California and waive any defense of forum non conveniens.
4.2 Conflicts. Except as otherwise set forth herein, this Consent does not modify or alter any of the terms of the PPA. As between the Buyer and the Seller, to the extent the terms and conditions herein conflict with those in the PPA, the terms and conditions of the PPA shall control.
Except as set forth herein, Buyer shall have no obligation or liability to the Collateral Agent with respect to the PPA. For purposes of this provision, Seller and Buyer agree that the acknowledgments and consents provided in Section 1.1, the extended cure periods provided in Section 1.2, the rights of a Subsequent Owner in Section 1.3, the restriction on assignment in Section 1.7, the payments pursuant to Article 2, and the agreement regarding change in control in Section 3.1 do not conflict with the PPA.
4.3 Counterparts. This Consent may be executed in any number of counterparts and by the different Parties on separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which shall together constitute one and the same instrument. Any signature page of this Consent may be detached from any counterpart of this Consent without impairing the legal effect of any signature thereon, and may be attached to another counterpart of this Consent identical in form hereto by having attached to it one or more signature pages.
4.4 Amendment; Waiver. Neither this Consent nor any of the terms hereof may be terminated, amended, supplemented, waived or modified except by an instrument in writing signed Appendix P - 7
by Buyer, Seller and the Collateral Agent.
4.5 Successors and Assigns. This Consent shall be binding upon and inure to the benefit of Buyer, Seller, the Collateral Agent and each of their respective successors and permitted assigns.
4.6 Attorneys’ Fees. Seller shall reimburse Buyer for all actual and documented costs and expenses incurred by Buyer in connection with the facilitation of Seller’s collateral assignment or pledge of the PPA, or any other action taken in connection with the transactions contemplated in this Consent, or otherwise pursuant to any request made by Seller or the Collateral Agent.
4.7 Representation by Counsel. Each of the Parties was represented by its respective legal counsel during the negotiation and execution of this Consent.
4.8 Estoppel Certificate. Buyer agrees to deliver to the Collateral Agent and any Tax Equity Investor a customary estoppel certificate, substantially in the form of Exhibit A, on or about the date of delivery of this Consent[, in connection with the initial funding by the Tax Equity Investors,] and in connection with the achievement of Commercial Operation of the Facility following receipt of a written request therefor from Seller.
4.9 Notices. Any communications between the Parties or notices provided herein to be given shall be given to the following addresses:
If to Seller:
Daggett Solar Power 2 LLC
c/o [_____________]
If to Buyer:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Attn: Executive Director
Tel: (626) 793-9364
Fax: (626) 793-9461
If to the Collateral Agent:
[_________]
Appendix P - 8
as Collateral Agent
[_________]
[_________]
Attention: [________]
Email: [_______]
All notices or other communications required or permitted to be given hereunder shall be in writing and shall be considered as properly given (a) if delivered in person, (b) if sent by overnight delivery service, (c) if mailed by first-class United States Mail, postage prepaid, registered or certified with return receipt requested, or (d) if sent by prepaid telegram or by facsimile. Any Party may change its address for notice hereunder by giving written notice of such change to the other Parties.
4.10 Termination of Collateral Documents and Consent. Seller and Collateral Agent agree that upon the termination of the Construction Period Collateral Documents on the Term Conversion Date, the only remaining collateral security of the Collateral Agent securing the obligations of the Borrower under the Financing Agreement will be the membership interests in, and any assets of, the Pledgor and the Borrower and [__], and there will be no remaining collateral security of the Collateral Agent in the Seller or its assets that secures the obligations of the Borrower under the Financing Documents. Seller agrees to deliver notice of the occurrence of the Term Conversion Date to Buyer (with a copy to Collateral Agent) promptly but in no event more than 10 days after such Term Conversion Date. The Parties agree that, as of such date, any rights, duties or obligations arising hereunder shall terminate and no longer be applicable; provided, that Sections 1.1, 1.8(a), 3, 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.9 and 4.10 shall survive the termination of this Consent. Upon the occurrence of the Term Conversion Date, if requested by Seller, Buyer shall enter into an agreement that provides to Seller’s direct or indirect tax equity investors rights substantially the same as those set forth in Section 4.11 of the Form of Consent to Collateral Assignment attached as Appendix P to the PPA.
4.11 [Tax Equity Investor Accession. Each of Buyer, Lender, Seller and the Tax Equity Investors hereby agree as follows:
(a) Effective as of the earlier to occur of (1) the date that the obligations under the Financing Documents are repaid in full; (2) the Term Conversion Date and (3) [__________]; provided that clause 4.11(a)(i) below shall not be applicable until the earlier to occur of one of subclauses (1) or (2) of this clause 4.11(a):
i. The rights of the Lender under Section 1 hereof and the payment direction in Section 2 hereof will terminate.
ii. Buyer will not terminate the PPA or suspend its performance under the PPA on account of any Default (as defined under the PPA) of Seller thereunder, without written notice to the Tax Equity Investors and first providing to the Tax Equity Investors and the right to cure the relevant Default during the cure period (if any) applicable to such Default under the PPA.
Appendix P - 9
Failure of Buyer to provide notice to the Tax Equity Investors shall not constitute a breach of the PPA or this Consent by Buyer, and Buyer shall have no liability to any Tax Equity Investor for any such failure; provided that no claim of Default or termination of the PPA by Buyer shall be binding without such notice and the lapsing of the applicable cure periods (if any) set forth in the PPA. Following notice to the Tax Equity Investors and the lapsing of any applicable cure period, Buyer may exercise any remedies under the PPA with respect to such Default, including terminating the PPA or suspending its performance under the PPA.
(b) The address of the Tax Equity Investors for purposes of all notices and other communications is:
[_______________________]
and
[_______________________]
With copies to:
[_______________________]
and
[_______________________]
and
[_______________________]
[SIGNATURE PAGES TO FOLLOW]
Appendix P - 10
IN WITNESS WHEREOF, the Parties have caused this Consent and Agreement to be duly executed and delivered as of the date first above written.
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY,
as Buyer
By: ___________________________________
President
Date:
Attest: ___________________________________
Assistant Secretary
DAGGETT SOLAR POWER 2 LLC,
a Delaware limited liability company
as Seller
By: ___________________________________
Name:
Title:
[_____________],
as Collateral Agent for the Secured Parties
By: ___________________________________
Name:
Title:
Appendix P - 11
EXHIBIT A
TO
CONSENT AND AGREEMENT
FORM OF PPA ESTOPPEL CERTIFICATE
[Insert Date]
Reference is made to that certain Power Purchase Agreement, dated as of [________], 202[__] (as amended, amended and restated, supplemented or otherwise modified from time to time, the “PPA”), by and between the Southern California Public Power Authority, a public entity and joint powers agency formed and organized pursuant to the California Joint Exercise of Powers Act (California Government Code Section 6500, et seq.) (“Buyer”), and Daggett Solar Power 2 LLC, a Delaware limited liability company (“Seller”). Terms used herein but not defined herein have the same meanings as in the PPA.
Buyer hereby confirms and agrees as of the date hereof as follows:
1. The copy of the PPA, as amended, attached hereto as Exhibit A, constitutes a true and complete copy of the PPA.
2. The PPA is in full force and effect and has not been modified or amended in any way [since [__________], 20[__]], and constitutes the only agreement between Buyer and Seller, other than that certain Consent and Agreement dated as of [__________], 202[__], by and among Buyer, Seller and [_____], as the Collateral Agent (as defined therein).
3. Buyer has not transferred or assigned its interest in the PPA.
4. Buyer is not in default under the PPA, nor has Buyer breached any of its representations, warranties, agreements or covenants under the PPA and, to Buyer’s knowledge, no facts or circumstances exist which, with the passage of time or the giving of notice nor both, would constitute a default or breach by Buyer under the PPA or which would give Seller the right to terminate the PPA. To Buyer’s knowledge, Seller is not in default under the PPA nor, to Buyer’s knowledge, has Seller breached any of its representations, warranties, agreements or covenants under the PPA and, to Buyer’s knowledge, no facts or circumstances exist which, with the passage of time or the giving of notice nor both, would constitute a default or breach by Seller under the PPA or which would allow Buyer to terminate the PPA.
5. All representations made by Buyer in the PPA were true and correct as of the effective date of the PPA and continue to be true and correct as of the date hereof.
6. To Buyer’s knowledge, no event, act, circumstance, or condition constituting an event of Force Majeure under the PPA has occurred and is continuing.
7. Seller has not claimed any amounts under the indemnification obligation of Buyer set forth in the PPA (except as disclosed to the investors in the applicable Tax Equity Financing).
Appendix P - 12
8. To Buyer’s knowledge, Buyer has no existing counterclaims, offsets, or defenses against Seller under the PPA. Buyer has no present knowledge of any facts entitling Buyer to any material claim, counterclaim or offset against Seller in respect of the PPA.
9. All payments due and payable as of the date hereof, if any, under the PPA, by Buyer have been paid in full through the period ending on the date hereof.
10. Seller has achieved each Milestone set forth in Appendix I to the PPA that is to be completed on or prior to the date hereof.
11. To Buyer’s knowledge, Buyer has no notice of, and has not consented to, any previous assignment of all or any part of Seller’s rights under the PPA.
12. [The Commercial Operation Date of the Facility occurred on [__________], 20[__].
13. The PV System Contract Capacity of the Facility as of the Commercial Operation Date is [___] MW.]
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Appendix P - 13
IN WITNESS WHEREOF, Buyer has caused this Certificate to be duly executed by its officer thereunto duly authorized as of the date first set forth above.
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By: ___________________________________
Name
Title:
Appendix P - 14
Exhibit A to Estoppel Certificate
PPA
See attached.
Appendix Q - 1
APPENDIX Q
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
OPERATING RESTRICTIONS
A. BESS Operating Restrictions
The BESS shall be subject to the following Operating Restrictions:
Description Value Notes
1. BESS Contract Capacity 33 MW
2. Maximum Stored Energy
Level 33 MW for 4 hours
3. Minimum Stored Energy
Level 0 MWh Maximum time at Minimum Stored Energy Level is 100hrs
4. Maximum Charging Capacity 33 MW
5. Minimum Charging Capacity 0 MW
6. Maximum Discharging
Capacity 33 MW
7. Minimum Discharging
Capacity 0 MW
8. Maximum State of Charge
(SOC) during Charging 100 % SOC is relative to Maximum Stored Energy Level
9. Minimum State of Charge
(SOC) during Discharging 0 % SOC is relative to Maximum Stored Energy Level
10. Annual Average State of
Charge Range (SOC) <40% Measured during each Contract Year
11. Annual Cycle Limit 365 cycles / year
One (1) cycle is equal to 1
kWh throughput per kWh
calculated by the product of
the Storage Contract Capacity
and discharge hours
Not to exceed the stated value
Measured during each Contract
Year
Appendix Q - 2
12. Daily Dispatch Limits
Two cycles per
operating day
One (1) cycle is equal to 1
kWh throughput per kWh
calculated by the product of
the Storage Contract Capacity
and discharge hours
Not to exceed the stated value
13. Manual Dispatch Commands
All dispatch
commands from the
Buyer must use the
Seller-supplied EMS
B. Additional Operating Restrictions
The Facility shall be subject to the follow Operating Restrictions:
1. Dispatch cannot cause Delivered Energy to exceed the PV Contract Capacity.
Appendix R - 1
APPENDIX R
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
APPROVED VENDORS
Solar Panels:
JA Solar
Trina
Longi
Canadian Solar
Waaree
Batteries:
Wärtsilä
CATL
Samsung SSDI
Appendix S - 1
APPENDIX S
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
LEGAL OPINIONS
1. Based solely upon our review of the Opinion Party’s articles of organization and the Good Standing Certificates, the Opinion Party is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware, is qualified to do business in, and is in good standing under the laws of, the State of California, and has all requisite limited liability company power and authority to execute, deliver, and perform its obligations under the Agreement.
2. The execution and delivery by the Opinion Party of the Agreement, and the performance by the Opinion Party of its obligations thereunder, have been duly authorized by all necessary limited liability company action on the part of the Opinion Party. The Opinion Party has duly executed and delivered the Agreement.
3. The Agreement constitutes the legally valid and binding obligation of the Opinion Party, enforceable against the Opinion Party in accordance with its terms, in each case except (a) as may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer, or other similar laws relating to or affecting the rights of creditors generally and (b) as the enforceability of the Agreement is subject to the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law), including without limitation (i) the possible unavailability of specific performance, injunctive relief or any other equitable remedy, and (ii) concepts of materiality, reasonableness, good faith and fair dealing.
4. Neither the Opinion Party’s execution and delivery of the Agreement, nor the performance by the Opinion Party of its obligations thereunder, violates (a) any law or regulation of the United States of America, the State of California, or the State of Delaware applicable to the Opinion Party, (b) any provision of the Opinion Party’s articles of organization and limited liability company agreement, or (c) any judgment, order, writ, injunction or decree, in each case, that is binding on the Opinion Party.
5. No authorization, consent, or other approval of, or registration, declaration, or other filing (a) with any governmental authority of the United States of America, the State of California, or the State of Delaware is required on the part of the Opinion Party for the execution and delivery by the Opinion Party of the Agreement, or (b) under any law or regulation of the United States, the State of California, or the State of Delaware is required on the part of the Opinion Party for the performance by the Opinion Party of its obligations under the Agreement, other than those routine Appendix S - 2
authorizations, consents, approvals, registrations, and filings which may be required in the future for the Opinion Party to conduct its business, maintain its existence, and remain in good standing in the State of Delaware.
6. The Opinion Party has the limited liability company power to (a) execute, deliver, and perform its obligations under the Agreement, (b) own, lease, and operate its properties, and (c) carry on its business.
Schedule 12.2(h) - 1
SCHEDULE 12.2(h)
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 2022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
UPSTREAM EQUITY OWNERS, SELLER’S ULTIMATE PARENT AND
ORGANIZATIONAL AND OWNERSHIP STRUCTURE OF SELLER AND UPSTREAM
EQUITY OWNERS
Daggett Solar Power 2
LLC
Clearway Energy Group
LLC
Clearway Renew LLC
Daggett 2 Project Holdco
LLC
Clearway Holdco Corp
LLC
Clearway Renew
Consolidated Devco LLC
Daggett 2 Project Sub
LLC
Daggett 2 Project Sub II
LLC
Clearway Draft 12.22.21Execution Version __.__.22
POWER PURCHASE AGREEMENT
BETWEEN
DAGGETT SOLAR POWER 2 LLC
AND
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
Dated as of [_], 20212022
POWER PURCHASE AGREEMENT
PARTIES
THIS POWER PURCHASE AGREEMENT (this “Agreement”), dated as of this [_] day of [_], 2021,2022, is being entered into by and between the SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (“Buyer”), a public entity and joint powers authority formed and organized pursuant to the California Joint Exercise of Powers Act (California Government Code Section 6500, et seq.), and Daggett Solar Power 2 LLC, a limited liability company organized and existing under the laws of the State of Delaware (“Seller”). Each of Buyer and Seller is referred to individually in this Agreement as a “Party” and together as the “Parties.”
RECITALS
WHEREAS, Buyer’s members have adopted or are adopting policies that are designed to increase the amount of energy that they provide to their retail customers from eligible renewable energy resources and to comply with the California Renewable Energy Resources Act; and WHEREAS, in 2019, Buyer issued a request for proposals (“RFP”) to acquire renewable energy resources; and
WHEREAS, an affiliate of Seller, responded to Buyer’s RFP on behalf of, Seller, and, following negotiation, Seller has agreed to sell to Buyer, and Buyer has agreed to purchase from Seller, certain renewable energy, capacity rights and associated environmental attributes for the purchase price set forth in Appendix A-1 hereto; and
WHEREAS, the Parties desire to set forth the terms and conditions pursuant to which such sales and purchases shall be made.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein, the mutual covenants and agreements herein set forth, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. The following terms in this Agreement and the appendices hereto shall have the following meanings when used with initial capitalized letters:
“AC” means alternating current.
“Acceptable Form of Performance Assurance” means, at the option of Seller, any of (a) cash to be held in escrow by Buyer, (b) cash held in an escrow account and subject to an escrow agreement in form and substance satisfactory to Buyer in its sole discretion (an “Escrow Account”), or (c) a separate letter of credit substantially in the form of Appendix E from a Qualified Issuer.
- 1 -
product of the BESS Capacity Price or Adjusted BESS Capacity Price, as applicable, multiplied by the BESS Contract Capacity (measured in kW).
“BESS Capacity Price” means SixSeven Dollars and EightyNinety Five Cents ($6.807.95) per kW-month.
“BESS Communication Protocol” has the meaning set forth in Section 7.3(e). “BESS Contract Capacity” means thirty-three (33) MW net nameplate capacity. “BESS Energy Meter” means the CAISO-approved and CAISO-polled Electric Metering Device at the BESS dedicated solely to the BESS, depicted on Appendix O. “BESS Excused Conditions” means (a) any Excused Condition and (b) any period during which Seller is unable to generate or deliver energy to the Point of Delivery to the extent caused by (i) the Operating Restrictions in Appendix Q or (ii) a Storage Capacity Test (as described in Appendix K-1 and Appendix K-3).
“BESS Instructions” means the instructions, and any subsequent updates, in either case directed by Buyer or the CAISO via the BMS or another method of communication, to charge or discharge the BESS, in each case in a manner consistent with the BESS Communication Protocol and the terms and conditions of this Agreement.
“BESS Metered Input” means all Energy delivered to the BESS, as measured in MWh by the BESS Energy Meter in compliance with CAISO metering rules. “BESS Metered Output” means all Energy delivered to the Point of Delivery from the BESS (net of all auxiliary loads, station electrical uses and electrical losses from the BESS to the Point of Delivery), as measured in MWh by the BESS Energy Meter in compliance with CAISO metering rules.
“BESS Performance Guarantees” means, collectively, the Dischargeable Energy Performance Guarantee, the Round Trip Efficiency Performance Guarantee and the Monthly BESS Availability Guarantee.
“BMS” means the battery control and management system for the BESS. “Brown Act” has the meaning set forth in Section 14.21(e). “Business Day” means any day that is not a Saturday, a Sunday, or a day on which commercial banks are authorized or required to be closed in Los Angeles, California or New York, New York.
“Buyer” has the meaning set forth in the preamble of this Agreement. “CAISO” means the California Independent System Operator. - 4 -
hundred and ten percent (110%), and up to one hundred and twenty percent (120%), of the Annual Contract Quantity for such Contract Year, which deliveries shall be verified in invoices provided by Seller as set forth in Section 11.3(a).
“Excess Energy > 120%” means, in any Contract Year, PV Delivered Energy in excess of one hundred and twenty percent (120%) of the Annual Contract Quantity for such Contract Year, which deliveries shall be verified in invoices provided by Seller as set forth in Section
11.3(a).
“Excused Conditions” means; (a) any period during which Seller is unable to generate or deliver energy to the Point of Delivery to the extent caused by (i) an event of Force Majeure or (ii) System Emergency, (b) any Curtailment Period; (c) any Permitted Scheduled Outage Period; and (d) any curtailment of the Facility arising out of or resulting from the manner in which Buyer bids, offers, or schedules the Facility, the PV System Energy or any Products, or in which Buyer fails to do so, including any non-compliance with the Operating Restrictions. “Expected Commercial Operation Date” means June 30,September 19, 2023. “Facility” means the co-located PV System and BESS to be located on the Site, including the structures, facilities, equipment, fixtures, appurtenances, improvements and associated real and personal property, physical and intangible property, and other rights and interests as further described in Appendix B-1 and depicted on Appendix B-2, including all property interests and related transmission and other facilities.
“Facility Debt” means any senior or subordinated construction, interim or long-term debt financing (including any backleverage or working capital debt) or refinancing for or in connection with the development, construction, purchase, ownership, installation or operation of the Facility, including (a) any financing or refinancing provided to Seller or any Upstream Equity Owner with respect to the Facility (including as part of a portfolio with other energy generation projects) and (b) any interest rate protection agreements hedging any of the foregoing debt obligations.
“Facility Lender” means (a) any financing party providing any Facility Debt or any trustee or agent acting on behalf of any such financing party or parties and (b) any Tax Equity Investor providing any equity financing or refinancing for or in connection with the development, construction, purchase, ownership, installation or operation of the Facility, including in connection with any Tax Equity Financing or Sale Leaseback Financing or refinancing. “Fair and Reasonable” has the meaning set forth in the definition of “Special Purpose Entity”.
“FERC” means the Federal Energy Regulatory Commission.
“Final Stub Year” means the period beginning on the first day of January following the nineteenth (19th) full calendar year referenced in clause (ii) of the definition of “Contract Year” and ending at 24:00 hours on the date that, together with the number of days in the Initial Stub Year, would be equal to three hundred sixty-five (365) days. - 11 -
“Force Majeure” has the meaning set forth in Section 14.6(b). “Force Majeure Notice” has the meaning set forth in Section 14.6(a). “Forced Outage” means the removal of service availability of the Facility, or any portion of the Facility, for emergency reasons or conditions in which the Facility, or any portion thereof, is unavailable due to unanticipated failure, including as a result of Force Majeure. “Full Capacity Deliverability Status” or “FCDS” has the meaning set forth in the CAISO Tariff.
“Gains” has the meaning set forth in Section 13.4(f)(i). “Generator Interconnection Agreement” means the agreement and associated documents (or any successor agreement and associated documentation approved by FERC) by and among Seller, Southern California Edison, and the CAISO governing the terms and conditions of Seller’s interconnection with the CAISO grid, including any description of the plan for interconnecting to the CAISO grid.
“Governmental Authority” means any federal, state, regional, city or local government, any intergovernmental association or political subdivision thereof, or other governmental, regulatory or administrative agency, court, commission, administration, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, or other governmental authority with jurisdiction over the Parties, the Facility, or this Agreement, or any Person acting as a delegate or agent of any Governmental Authority; provided that “Governmental Authority” specifically excludes Buyer and the Participating Members. “Green Value” consists of the market value of (a) avoided greenhouse gas emissions and/or credits associated with RPS Compliant energy, and (b) all other Environmental Attributes and avoided emissions related attributes and benefits that would otherwise have been realized had Seller generated the PV Delivered Energy for the applicable Contract Year, and shall be calculated as an amount equal to the time weighted average of the prices of greenhouse gases and other Environmental Attributes (as published in commercial indices related to California energy markets) that would have been realized for each MWh of the Shortfall Energy; provided, that if for any Contract Year there does not exist a liquid trading market that is mutually agreeable to the Parties to determine such Green Value, the Green Value will be equal to the replacement cost for the attributes described in clauses (a) and (b) above, expressed in $/MWh, as of the final day of the Contract Year in which the applicable Shortfall Energy accrues. “Guaranteed Commercial Operation Date” means September 30,December 20, 2023, as may be extended pursuant to Section 3.5(b)(i).
“Guaranteed Delivered Energy” means, with respect to each Measurement Period, eighty-five (85%) of the Annual Contract Quantity for such Measurement Period as specified on Appendix C.
“Guaranteed Dischargeable Energy” has the meaning set forth on Appendix K-1. - 12 -
“Monthly BESS Availability Guarantee” has the meaning set forth in Section 9.6(a). “Moody’s” means Moody’s Investor Services, Inc.
“MW” means megawatt in alternating current, or AC.
“MWh” means megawatt-hours.
“NERC” means the North American Electric Reliability Corporation. “New Resource Implementation Process” or “NRIP” means the process and requirements for new resource implementation, as amended from time to time, as set forth in the CAISO Tariff.
“Non-Defaulting Party” has the meaning set forth in Section 13.4(a). “Notifying Party” has the meaning set forth in Section 14.3(a). “O&M Agreement” means the agreement for the provision of operation and maintenance services for the Facility entered into or to be entered into by and between Seller and a Qualified Operator.
“OFAC” means the U.S. Department of Treasury’s Office of Foreign Assets Control. “Operating Restrictions” means the restrictions set forth on Appendix Q. “OSHA” means the Occupational Safety and Health Administration of the United States Department of Labor.
“Outside Commercial Operation Date” means June 30,September 19, 2024, which date may not be extended for any reason.
“Pacific Prevailing Time” means the local time in the State of California. “Participating Members” means the City of Vernon and the City of Cerritos. “Party” or “Parties” has the meaning set forth in the preamble of this Agreement. “Performance Security” means the Project Development Security or Delivery Term Security for the Facility, together or individually, as applicable. “Period Hours” has the meaning set forth on Appendix K-1. “Permits” means all applications, permits, licenses, franchises, certificates, concessions, consents, authorizations, certifications, self-certifications, approvals, registrations, orders, filings, entitlements and similar requirements of whatever kind and however described that are required to be filed, submitted, obtained or maintained by any Person with respect to the development, siting, design, acquisition, construction, equipping, financing, ownership, possession, - 15 -
Seller shall promptly prepare and deliver to Buyer a remedial action plan (“Remedial Action Plan”), which shall set forth (1) the anticipated period of delay, (2) the basis for such delay, (3) an outline of the commercially reasonable steps that Seller is taking to address the delay and to ensure that future Milestones, including the Guaranteed Commercial Operation Date, will be timely achieved, (4) a proposed revised date for achievement of the applicable Milestone and (5) such other information and in such detail as may be reasonably requested by Buyer. Except as set forth in Section 3.5(b), Seller shall not have any liability for failure to timely achieve a Milestone other than the obligation to submit a Remedial Action Plan; provided, however, that the foregoing shall not limit Buyer’s right to exercise any right or remedy available under this Agreement or at law or in equity for any other Default occurring concurrently with or before or after Seller’s delay in achievement of the applicable Milestone. (iv) Beginning no earlier than January 31,April 21, 2023, Seller shall have the right to sell and deliver, and Buyer shall purchase and accept from Seller, Startup and Test Energy at the rate for such Energy set forth in Appendix A-1, subject to Seller providing thirty (30) days’ prior written notice to Buyer. Seller shall provide a schedule of its best projection for delivery of Startup and Test Energy with its notice, which schedule shall be subject to Buyer’s reasonable approval in all respects. Buyer may curtail Startup and Test Energy, as a non-compensable curtailment, if necessary in its reasonable judgment, subject to Section 7.4(b). For the avoidance of doubt, Buyer shall have the right, but shall have no obligation hereunder, to purchase Startup and Test Energy at any time before January 31,April 21, 2023.
(b) Delays; Delay Damages.
(i) Each Milestone Date (other than the Outside Commercial Operation Date) may be extended, on a day-for-day basis to the extent Seller is actually, demonstrably and unavoidably delayed in achieving such Milestone due to Force Majeure or an Interconnection Delay. Notwithstanding anything to the contrary set forth in this Agreement, the Outside Commercial Operation Date shall not be extended for any reason whatsoever, including due to Force Majeure or any Interconnection Delay, and the failure to achieve the Commercial Operation Date by the Outside Commercial Operation Date shall be an immediate Default by Seller, not subject to extension or cure of any kind. (ii) If Seller fails to achieve any Key Milestone by the applicable Milestone Date (as such Milestone Date may be extended pursuant to Section 3.5(b)(i)), Seller shall pay liquidated damages to Buyer for each day between the Milestone Date and the date upon which such Key Milestone is achieved (or the Agreement is terminated by Buyer) in the applicable daily liquidated damage amount set forth for such Key Milestone in Appendix I (the “Daily Delay Damages”). For the avoidance of doubt, if multiple Key Milestones are missed, Seller shall pay Daily Delay Damages for each Key Milestone. If Seller fails to achieve the Construction Start Date by the date that is one hundred eighty (180) days after the Milestone Date for the Construction Start Milestone, Buyer shall have the right in its sole discretion and without penalty to (1) terminate this Agreement for a Default under Section 13.4, or (2) allow Seller to continue to pay the Daily Delay Damages to Buyer, during which time Buyer shall not terminate the - 32 -
Agreement based on Seller’s failure to timely achieve the Construction Start Milestone.
Seller shall pay to Buyer Daily Delay Damages within seven (7) days after receipt of an invoice therefor from Buyer. If Seller achieves (A) the Construction Start Milestone before the date that is six (6) months prior to September 30,December 20, 2023 and (B) Commercial Operation by the Guaranteed Commercial Operation Date, then Buyer shall refund to Seller any amounts previously paid to Buyer as Daily Delay Damages for failure to achieve the Construction Start Milestone by the Milestone Date therefor net of any costs and expenses incurred, or damages sustained, by Buyer directly as a result of Seller’s failure to achieve the Construction Start Milestone. If Seller fails to achieve the Construction Start Milestone on or before the date that is six (6) months prior to September 30,December 20, 2023, Buyer shall be entitled to all Daily Delay Damages accruing as a result of Seller’s failure to achieve the Construction Start Milestone by the Milestone Date therefor even if Seller achieves Commercial Operation by the Guaranteed Commercial Operation Date. If Seller fails to achieve Commercial Operation by the Outside Commercial Operation Date, Buyer shall have the right in its sole discretion and without penalty to terminate this Agreement for a Default under Section 13.4. (iii) The Parties agree that the damages that Buyer would incur due to Seller’s failure to timely achieve a Key Milestone would be difficult or impossible to predict with certainty, and it is impractical or difficult to assess actual damages in those circumstances, but the Daily Delay Damages are a fair and reasonable calculation of such damages for Seller’s failure to achieve any Key Milestone by the Milestone Date therefor.
The payment of Daily Delay Damages as provided in this ARTICLE III are Buyer’s sole remedy for Seller’s failure to timely achieve a Key Milestone, but shall not limit Buyer’s right to (a) exercise any right or remedy available under this Agreement or at law or in equity for any other breach or default occurring concurrently with, before, or after Seller’s delay in achieving the applicable Key Milestone by the Milestone Date therefor, or (b) terminate this Agreement pursuant to Section 13.4, provided that the payment of Daily Delay Damages shall be taken into account when determining any damages due Buyer for such termination; provided further that in no event shall any damages, including Daily Delay Damages, owed in connection with such termination exceed the limitation of liability provided in Section 14.19(e).
Section 3.6 Decommissioning and Other Costs. 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.
Section 3.7 CEC Certification. Seller shall provide Buyer with a copy of the CEC pre-certification of the PV System at least thirty (30) days prior to the date on which Startup and Test Energy is first delivered to Buyer. Promptly, but in no event more than ten (10) days following the Commercial Operation Date, Seller shall file with the CEC all materials and documents required to demonstrate that the Facility is entitled to be CEC Certified. Seller shall promptly provide Buyer with copies of all submittals to the CEC and other correspondence between Seller and the CEC. Failure by Seller to comply with the requirements set forth in this Section 3.7 shall constitute a Default by Seller, subject to the cure periods set forth in Section 13.1(b).
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SELLER:
DAGGETT SOLAR POWER 2 LLC
By:
Craig Cornelius
Its: President
Date:
June ___, 2022
Signature Page to Power Purchase Agreement between Daggett Solar Power 2 LLC and Southern California Public Power Authority
TABLE OF CONTENTS
Page
APPENDIX A-1
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
CONTRACT PRICE
1. Startup and Test Energy. The Contract Price per MWh for Startup and Test Energy (including associated Environmental Attributes and Capacity Rights) is equal to fifty percent (50%) of the then-applicable price per MWh for PV Delivered Energy as provided in #2 below.
2. PV Delivered Energy. Commencing on the Commercial Operation Date, the Contract Price for PV Delivered Energy that is not Startup and Test Energy, Excess Energy or Excess Energy > 120% (including associated Environmental Attributes and Capacity Rights) is $24.8528.10 per MWh, as such price may be adjusted in accordance with the Agreement.
3. Excess Energy. The Contract Price per MWh for Excess Energy (including associated Environmental Attributes and Capacity Rights) is fifty percent (50%) of the then-applicable price per MWh for PV Delivered Energy as provided in #2.
4. Excess Energy > 120%. The Contract Price per MWh for Excess Energy > 120% (including associated Environmental Attributes and Capacity Rights) is equal to twenty-five percent (25%) of the then-applicable price per MWh for PV Delivered Energy as provided in #2 above.
Appendix A-1 - 1
APPENDIX B-1
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FACILITY, PERMITS AND OPERATOR
1. Name of Facility: Daggett Solar Power 2 Facility
Location: City of Daggett, San Bernardino County, California
2. Owner: Daggett Solar Power 2 LLC
3. Operator: Clearway Renewable Operation & Maintenance LLC
4. Equipment:
(a) Type of Facility: Solar Photovoltaic and Battery Energy Storage System (b) PV Contract Capacity: 65 MWac
(c) BESS Contract Capacity: 132 MWh (33 MW per hour for four (4) hours) (d) Capacity Factor: 36.6%*
5. Expected Commercial Operation Date: June 30,September 19, 2023 Guaranteed Commercial Operation Date (from Appendix I): September 30,December 20, 2023
6. Permits:
(a) CEQA Determination
(b) Building Permit
(c) Grading Permit
(d) Other permits, if any, required for the construction and operation of the Facility. _________________________________
* The actual Capacity Factor may vary depending on weather and other meteorological conditions, final Facility design and other factors, although the Annual Contract Quantities in Appendix C and the Guaranteed Delivered Energy levels are fixed for all purposes of the Agreement.
Appendix B-1 - 1
APPENDIX B-2
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
MAP OF THE FACILITY
Appendix B-2 - 1
APPENDIX C
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
ANNUAL CONTRACT QUANTITY
Contract Year Annual Contract
Quantity, MWh
Guaranteed Delivered
Energy (85% of Expected
Annual Contract Quantity)
1 208,499 177,224
2 207,456 176,338
3 206,414 175,452
4 205,371 174,566
5 204,329 173,679
6 203,286 172,793
7 202,244 171,907
8 201,201 171,021
9 200,159 170,135
10 199,116 169,249
11 198,074 168,363
12 197,031 167,477
13 195,989 166,590
14 194,946 165,704
15 193,904 164,818
16 192,861 163,932
17 191,819 163,046
18 190,776 162,160
19 189,734 161,274
20 188,691 160,388
(1) The Annual Contract Quantity for the Initial Stub Year (“Year 1 ACQ”) shall be calculated based on the actual Commercial Operation Date of the Facility using the following formula:
Year 1 ACQ = 208,499 MWh * Annual Adjustment (as defined below) (2) The Annual Contract Quantity for the Final Stub Year (“Year 21 ACQ”) shall be calculated based on the actual Commercial Operation Date of the Facility using the following formula:
Year 21 ACQ = 188,691 MWh * Annual Adjustment (as defined below) “Annual Adjustment” means the percentage, expressed as a decimal, of annual production for Appendix C - 1
APPENDIX D
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF ATTESTATION
____________(Seller)____________ Environmental Attribute Attestation and Bill of Sale __________________ (“Seller”) hereby sells, transfers and delivers to Southern California Public Power Authority (“Buyer”) the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation from the Facility described below:
Facility name and location:
Fuel Type: Capacity (MW): Operational Date:
As applicable: CEC Reg. no. ___ Energy Admin. ID no. ____ Q.F. ID no. ___ Dates MWhs delivered
________________ 20__ ___________
________________ 20__ ___________
________________ 20__ ___________
in the amount of one Environmental Attribute or its equivalent for each MWh delivered.
Seller further attests, warrants and represents as follows:
i) the information provided herein is true and correct; ii) its sale to Buyer is its one and only sale of the Environmental Attributes and associated Environmental Attribute Reporting Rights referenced herein; iii) the Facility generated and delivered to the grid the Energy in the amount indicated as undifferentiated Energy; and
iv) Seller owns the Facility and each of the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation of the indicated Energy for delivery to the grid have been generated and sold by the Facility.
This serves as a bill of sale, transferring from Seller to Buyer all of Seller’s right, title and interest in and to the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation of the Energy for delivery to the grid.
Contact Person/telephone: ____________________
Appendix D - 1
APPENDIX E
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF LETTER OF CREDIT
IRREVOCABLE AND UNCONDITIONAL
STANDBY LETTER OF CREDIT NO. ___________
Applicant:
[___________]
Beneficiary:
Southern California Public Power Authority
1160 Nicole Court
Glendale, CA 91740
Amount:
Expiration Date:
Expiration Place:
Ladies and Gentlemen:
We hereby issue our Irrevocable and Unconditional Standby Letter of Credit in favor of the beneficiary by order and for the account of the applicant which is available at sight for USD $XX,XXX,XXX by sight payment upon presentation to us at our office at [bank’s address], 1 of:
(i) your written demand for payment containing the text of Exhibit I, (ii) your signed statement containing the text of Exhibit II, and (iii) the original of this Letter of Credit and all amendments (or photocopy of the original for partial drawings) (the “Documents”). Drawings may be presented via fax to ______. The original Letter of Credit and documents are to be sent via overnight courier to our address indicated above.
A presentation under this Letter of Credit may be made only on a day, and during hours, in which such office is open for business, and payments can be effected via wire transfer (a “Business Day”). Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided that 1 Note to Issuer: The Letter of Credit must be payable in U.S. dollars within the continental U.S.
Appendix E - 1
APPENDIX F
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
INSURANCE
I. GENERAL REQUIREMENTS
Within thirty (30) days after the Effective Date, Seller shall furnish Buyer evidence of commercial automobile liability, commercial general liability, excess liability, and workers’ compensation coverage meeting the requirements set forth in this Appendix F from insurers acceptable to Buyer and in a form acceptable to the risk management section of the project manager for Buyer or acceptable to Buyer’s agent for this purpose. Such insurance shall be maintained by Seller at Seller’s sole cost and expense. Prior to the date on which each of Builders’ Risk, Property All Risk and Professional Liability insurance is required to be obtained, Seller shall furnish Buyer evidence of coverage meeting the requirements of this Appendix F.
Such insurance shall not limit or qualify the liabilities and obligations of Seller assumed under this Agreement. Buyer shall not by reason of its inclusion under these policies incur liability to the insurance carrier for payment of premium for these policies.
Any insurance carried by Buyer which may be applicable shall be deemed to be excess insurance and Seller’s insurance is primary for purposes under this Agreement despite any conflicting provision in Seller’s policies to the contrary.
Such insurance shall not be canceled without Seller first giving thirty (30) days’ prior notice thereof (ten (10) days for non-payment of premium) to Executive Director, Southern California Public Power Authority, 1160 Nicole Court, Glendora, CA 91740.
Should any portion of the required insurance be on a “Claims Made” policy, Seller shall, at the policy expiration date following completion of work, provide evidence that the “Claims Made” policy has been renewed or replaced with the same limits, terms and conditions of the expiring policy, or that an extended discovery period has been purchased on the expiring policy at least for the contract under which the work was performed.
Appendix F - 1
APPENDIX G
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
QUALITY ASSURANCE PROGRAM
Seller shall implement a Quality Assurance (“Q/A”) Program to ensure that the performance of the Facility fulfills the Requirements. The Q/A Program shall provide assurance that the Facility will comply with the Requirements and the manufacturers’ or suppliers’ requirements for successful operation of the Facility.
Quality at Seller
Seller believes that quality is the unit of measure for assessing fulfillment of project goals. A quality project meets or exceeds the contract requirements and accepted standards of professional and industry practice. Furthermore, high quality projects are those that address client and societal needs more successfully than “low” quality projects. While this may seem like a straightforward definition, the process to ensure quality is much more involved and includes quality management, quality planning, quality control, quality assurance, a quality system, and total quality management.
“Quality assurance” refers to a process that reduces the potential for error throughout the phases of a project. On projects with a Q/A Program, the chances of producing a poor quality deliverable are substantially reduced. Quality control procedures are an integral part of quality assurance.
Historically, industry has used the term “quality control” to indicate a checking procedure for verifying the quality of deliverables. This checking commonly occurs at the end of the process, long after an error may have been made and compounded by subsequent work. While quality control checks at the end of a project are an essential exercise, scheduled periodic reviews at each phase of project conceptual and final design are integral to the Seller’s Q/A Program. In addition, quality maintenance which meets or exceeds manufacturers’ or suppliers’ requirements and best industry practices must be an integral part of Seller’s Q/A Program.
The Quality Management Process
The surest way to achieve satisfactory quality is to adhere to a proven quality process. The term “quality” most accurately refers to a project’s ability to satisfy needs when considered as a whole and each part of the process meets or exceeds the standards of Prudent Utility Practices.
Seller’s project management team is responsible for proactively planning and directing the quality of the work process, services, and deliverables. Seller’s project management team targets the following areas to monitor quality:
Appendix G - 1
APPENDIX H
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
[RESERVED]
Appendix H - 1
APPENDIX I
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
MILESTONE SCHEDULE
Pre-Commercial Operation Date
No. Guaranteed Date Milestone Description Daily Liquidated Damages/Mitigation
Plan
Security Deposit at
Milestone Achievement
1. 10 days following
Effective Date
Provision of
development security Contractual provision
without specific daily
damages
$100/kW
2. Guaranteed
Commercial
Operation Date
Post-Commercial
Operation Date security
Contractual provision
without specific daily
damages
$150/kW
3. Complete Execute Site Control
Agreements
Mitigation Plan to
maintain Guaranteed
Commercial Operation
Date
4. Complete Execute Interconnection
Agreement
Mitigation Plan to
maintain Guaranteed
Commercial Operation
Date
5. 9 months prior to
Guaranteed
Commercial
Operation Date
Execute Facility
Financing documents
Mitigation Plan to
maintain Guaranteed
Commercial Operation
Date
6. 9 months prior to
Guaranteed
Commercial
Operation Date
Construction Start
Milestone:
Begin construction of the
Facility.
$52,750.00/day for up to
180 days of delay (up to
amount of Facility
development security)
7. September
30,December 20,
2023
Guaranteed Commercial
Operation Date
$80,000.00/day for up to
180 days of delay (up to
amount of Facility
development security)
Post-Commercial Operation Date
8. Within 6 months after
COD
Proof of CEC
Certification Contractual provision
without specific daily
damages
9. On-going Verification of WREGIS
Registration (pre-COD,
Seller must provide
Contractual provision
without specific daily
damages
Appendix I - 1
APPENDIX J
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
AUTHORIZED REPRESENTATIVES;
BUYER AND SELLER BILLING, NOTIFICATION AND
SCHEDULING CONTACT INFORMATION
1. Authorized Representative. The initial Authorized Representatives of Buyer and Seller pursuant to Section 14.1 are as follows:
1.1 Buyer:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Telephone: (626) 793-9364
Facsimile: (626) 704-9461
Email: [email protected]
1.2 Seller:
4900 Scottsdale Road, Suite 5000
c/o Solar Asset Management LLC
Scottsdale, AZ 85251
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
With a copy to:
5790 Fleet Street, Suite 200
Carlsbad, CA 92008
Attn: General Counsel
Phone: 760-710-2187
Email: [email protected]
2. Billings. Billings and payments pursuant to ARTICLE XI and Appendix A-1 shall be transmitted to the following addresses:
Appendix J - 1
APPENDIX K-1
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
BESS PERFORMANCE GUARANTEES; ANNUAL PV SYSTEM AVAILABILITY
GUARANTEE
A. BESS Performance Guarantees
a. Round Trip Efficiency Performance Guarantee shall be the efficiency rate listed in the table below for the applicable Contract Year:
Contract Year Efficiency Rate
1 86.8%
2 86.7%
3 86.5%
4 86.3%
5 86.1%
6 86.0%
7 85.8%
8 85.6%
9 85.5%
10 85.3%
11 85.1%
12 84.9%
13 84.8%
14 84.6%
15 84.4%
16 84.3%
17 84.1%
18 83.9%
19 83.8%
20 83.6%
Appendix K-1 - 1
APPENDIX K-2
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
REMEDY CALCULATIONS FOR FAILURE OF BESS PERFORMANCE
GUARANTEES AND ANNUAL PV SYSTEM AVAILABILITY GUARANTEE
A. For purposes of determining the Adjusted BESS Capacity Price due to a failure of the Dischargeable Energy Performance Guarantee, the “Dischargeable Energy Adjustment Factor” shall be equal to the result of the following formula (where y represents the applicable Contract Year that such guarantee is not satisfied):
B. For purposes of determining the Adjusted BESS Capacity Price due to a failure of the Round Trip Efficiency Performance Guarantee, the “Round Trip Efficiency Adjustment Factor” shall be equal to the result of the following formula (where y represents the applicable Contract Year that such guarantee is not satisfied):
C. For purposes of determining the Adjusted BESS Capacity Price due to a failure of the Annual PV System Availability Guarantee, the “Annual PV System Availability Adjustment Factor” shall be equal to the result of the following formula (where y represents the applicable Contract Year that such guarantee is not satisfied):
Appendix K-2 - 1
APPENDIX K-3
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
STORAGE CAPACITY TEST PROCEDURES
PART I. GENERAL.
Each Storage Capacity Test shall be conducted in accordance with Prudent Utility Practices and the provisions of this Appendix K-3. For ease of reference, a Storage Capacity Test is sometimes referred to in this Appendix K-3 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:
(1) Determine the amount of Energy required to fully charge the BESS; (2) Determine the BESS charge ramp rate;
(3) Determine the BESS discharge ramp rate;
(4) Determine an updated Dischargeable Energy;
(5) Determine an updated Round Trip Efficiency.
B. Test Elements. Each SCT shall include the following test elements:
The measurement of charging energy exclusive of station use and electrical losses, as measured by the BESS Energy Meter or other mutually agreed meter, that is required to charge the BESS up to the Maximum Stored Energy Level (as defined in Appendix Q) Level not to exceed the BESS Contract Capacity (MWh) (“Energy In”);
The measurement of discharging energy exclusive of station use and electrical losses, as measured by the BESS Energy Meter or other mutually agreed meter, that is discharged from the BESS to the Point of Delivery Appendix K-3 - 1
APPENDIX L-1
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF CONSTRUCTION START DATE CERTIFICATION
This certification (“Certification”) of the Construction Start Date is delivered by Daggett Solar Power 2 LLC (“Seller”) to Southern California Public Power Authority (“Buyer”) in accordance with the terms of that certain Power Purchase Agreement dated __________ (“Agreement”) by and between Seller and Buyer. 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. the engineering, procurement and construction contract related to the Facility was executed on __________;
2. the notice provided by Seller to EPC Contractor by which Seller authorizes the EPC Contractor to begin construction of the Facility without any delay or waiting periods was issued on ______________ (attached); and
3. the Construction Start Date has occurred.
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
DAGGETT SOLAR POWER 2 LLC
By:
Its:
Date:
Appendix L-1 - 1
APPENDIX L-2
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF COMMERCIAL OPERATION DATE CERTIFICATION
In accordance with the terms of that certain Power Purchase Agreement dated as of [_______], 20212022 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) by and between Southern California Public Power Authority (“Buyer”) and Daggett Solar Power 2 LLC (“Seller”), in order to determine achievement of Commercial Operation of the Facility, Seller shall demonstrate to Buyer that the Facility is operating and able to produce and deliver Delivered Energy to Buyer in accordance with the terms of the Agreement by delivery of a Commercial Operation Date Certification (the “Certificate”), signed by an authorized representative of Seller as to all of the items below, and which shall include a certificate in the form attached hereto of an Independent Engineer, licensed in the State of California, regarding the Facility’s ability to deliver Delivered Energy and confirming the items set forth therein. Any capitalized term used herein but not defined in the Certificate shall have the meaning set forth in the Agreement. The Certificate shall be submitted by Seller, along with reasonable documentation as may be requested by Buyer, and certify as to the following:
1. All solar panels comprising the PV System have been installed in accordance with the manufacturer’s specifications.
2. The electrical collection system related to the solar panels referenced in paragraph (1) above is complete, functional, and energized for the Facility.
3. Seller’s collector substation is complete and capable of delivering an as-available product.
4. The Facility is operational and interconnected with the Point of Delivery and capable of delivering the Delivered Energy and receiving and storing the BESS Metered Input as required under the Agreement.
5. The battery comprising the BESS has been installed in accordance with the manufacturer’s specifications.
6. Copies of any documentation provided by the manufacturer of the solar panels referenced in paragraph (1) or the battery referenced in paragraph (5) (including a copy of the full BESS specifications) stating the solar panels or Appendix L-2 - 1
APPENDIX 1
to
APPENDIX L-2
to
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF INDEPENDENT ENGINEER’S CERTIFICATE (COMMERCIAL
OPERATION DATE CERTIFICATE)
This Independent Engineer Certificate is delivered by [selected Independent Engineer] (“Independent Engineer”) in accordance with the terms of that certain Power Purchase Agreement dated as of [________], 20212022 (the “Agreement”) by and between Southern California Public Power Authority (“Buyer”) and Daggett Solar Power 2 LLC (“Seller”).
Capitalized terms used herein but not defined in this Certificate shall have the meaning set forth in the Agreement.
In order to determine achievement of Commercial Operation of the Facility, Independent Engineer hereby certifies the following regarding the Facility’s ability to deliver Delivered Energy:
1. Based on my professional judgment, after reasonable inquiry consistent with prudent industry practice, the solar panels comprising the PV System have been installed in accordance with the manufacturer’s specifications.
2. The electrical collection system related to the solar panels referenced in paragraph (1) above is complete, functional, and energized for the Facility.
3. Seller’s collector substation is complete and capable of delivering an as-available product.
4. The battery comprising the BESS has been installed in accordance with the manufacturer’s specifications.
5. To the best of our knowledge, copies of any documentation provided by the manufacturer of the solar panels referenced in paragraph (1) or the battery referenced in paragraph (4) above (including a copy of the full BESS specifications) stating the solar panels or battery, as applicable, have been manufactured in accordance with such manufacturer’s specifications, Appendix 1 to Appendix L-2 - 1
APPENDIX M
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
SITE CONTROL DOCUMENTS
[To be provided by Seller.]
Appendix M - 1
APPENDIX N
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
SALE LEASEBACK REQUIREMENTS
(a) Performance of Lease Obligations. Seller shall at all times keep, perform, observe and comply with, or cause to be kept, performed, observed and complied with, all material covenants, agreements, conditions and other provisions required to be kept, performed, observed and complied with by or on behalf of Seller from time to time pursuant to the Lease, and Seller shall not do or permit anything to be done, the doing of which, or refrain from doing anything, the omission of which, would reasonably be expected to impair the rights of Seller under the Lease, or could be grounds for the Sale Leaseback Lessor to terminate the Lease. (b) Notice of Default. Seller shall give Buyer immediate notice of (i) any default or of any event which, with the giving of notice or passage of time, or both, would become a default under the Lease or of the receipt by Seller of any notice from the Sale Leaseback Lessor thereof, or (ii) the commencement or threat of any action or proceeding or arbitration pertaining to the Lease.
Buyer, at its option, may take any action (but shall not be obligated to take any action) from time to time deemed necessary or desirable by Buyer to prevent or cure, in whole or in part, any default by Seller under the Lease. Seller shall deliver to Buyer, promptly following service or delivery thereof on, to or by Seller, a copy of each petition, summons, complaint, notice of motion, order to show cause and other pleading or paper, however designated, which shall be served or delivered in connection with any such action, proceeding or arbitration. (c) Sale Leaseback Lessor Bankruptcy. In the event of the termination, rejection, or disaffirmance by Sale Leaseback Lessor (or by any receiver, trustee, custodian, or other party that succeeds to the rights of the Sale Leaseback Lessor) under the Lease pursuant to the Bankruptcy Code (U.S.C. §§ 101 et seq.), Seller shall cooperate and work in good faith with Buyer to exercise Seller’s rights under Section 365 of the Bankruptcy Code (including, without limitation, the election available pursuant to Section 365(h) of the Bankruptcy Code, and any successor provision) in a manner consistent with and in furtherance of the purpose of the Agreement and Buyer’s interests in the Agreement (by which Seller acknowledges the importance of the Lease as security). Without limiting the generality of the foregoing sentence, Seller shall not, without Buyer’s prior written consent, which shall not be unreasonably withheld, elect to treat the Lease or the leasehold estate created thereby as terminated under Section 365 of the Bankruptcy Code, after rejection or disaffirmance of the Lease by the Sale Leaseback Lessor (whether as debtor in possession or otherwise) or by any trustee of the Sale Leaseback Lessor, and any such election made without such consent shall be void at inception and of no force or effect. At the request of Buyer, Seller will join in any election made by Buyer under the Bankruptcy Code and will take no action in contravention of the rights granted to Buyer pursuant this Section (c). In the event Appendix N - 1
APPENDIX O
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
METERING DIAGRAM
Appendix O - 1
APPENDIX P
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
FORM OF CONSENT AND AGREEMENT
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this “Consent”), dated as of ________, 202__, is executed by and among Southern California Public Power Authority, a public entity and joint powers authority formed and organized pursuant to the California Joint Exercise of Powers Act (California Government Code Section 6500, et seq.) (“Buyer”), [_______], in its capacity as collateral agent for the Secured Parties (as defined in the below defined Financing Agreement) (together with its successors and permitted assigns in such capacity, the “Collateral Agent”) and Daggett Solar Power 2 LLC, a Delaware limited liability company (“Seller”). Each of Buyer, Seller and the Collateral Agent is referred to under this Agreement as a “Party,” and together they are referred to as the “Parties”. Capitalized terms used but not defined herein shall have the meanings set forth in the PPA (as defined below) in effect on the date hereof.
RECITALS
A. [_________] (“Borrower”)[, an indirect owner of Seller,] has entered into that certain Financing Agreement, dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), with the financial institutions from time to time party thereto as lenders and letter of credit issuing banks (collectively, the “Lenders”), [_______], as administrative agent for the Lenders, the Collateral Agent, and the other agents and Persons party thereto, pursuant to which the Lenders have agreed to extend financing to Borrower, the proceeds of which are to be utilized for the construction, ownership, operation and maintenance of an approximately 65 MWac solar-powered electric generating facility (the “PV System”) and 132 MWh battery energy storage system (“BESS” and, together with the PV System, the “Facility”, as further described in the PPA) located in San Bernardino County, California.
B. Seller and Collateral Agent have entered into a [Guarantee and Security Agreement], dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”) under which Seller collaterally assigned its interest under the PPA to Collateral Agent as collateral for the credit facilities under the Financing Agreement and a deed of trust or mortgage under which Seller has granted to Collateral Agent a lien on the Facility to be recorded in San Bernardino County, California (the “Financing Deed of Trust”). Additionally, [_____________] (“Pledgor”) has entered into a [Guarantee, Pledge and Security Agreement], dated as of the date hereof (as amended, amended Appendix P - 1
APPENDIX Q
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
OPERATING RESTRICTIONS
A. BESS Operating Restrictions
The BESS shall be subject to the following Operating Restrictions:
Description Value Notes
1. BESS Contract Capacity 33 MW
2. Maximum Stored Energy Level 33 MW for 4 hours
3. Minimum Stored Energy Level 0 MWh Maximum time at Minimum Stored Energy Level is 100hrs
4. Maximum Charging Capacity 33 MW
5. Minimum Charging Capacity 0 MW
6. Maximum Discharging
Capacity 33 MW
7. Minimum Discharging
Capacity 0 MW
8. Maximum State of Charge
(SOC) during Charging 100 % SOC is relative to MaximumStored Energy Level
9. Minimum State of Charge
(SOC) during Discharging 0 % SOC is relative to MaximumStored Energy Level
10. Annual Average State of
Charge Range (SOC) <40% Measured during each ContractYear
11. Annual Cycle Limit 365 cycles / year
One (1) cycle is equal to 1 kWh
throughput per kWh calculated
by the product of the Storage
Contract Capacity and discharge
hours
Not to exceed the stated value
Measured during each Contract
Year
Appendix Q - 1
APPENDIX R
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
APPROVED VENDORS
Solar Panels:
JA Solar
Trina
Longi
Canadian Solar
Waaree
Batteries:
Wärtsilä
CATL
Samsung SSDI
Appendix R - 1
APPENDIX S
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
LEGAL OPINIONS
1. Based solely upon our review of the Opinion Party’s articles of organization and the Good Standing Certificates, the Opinion Party is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware, is qualified to do business in, and is in good standing under the laws of, the State of California, and has all requisite limited liability company power and authority to execute, deliver, and perform its obligations under the Agreement.
2. The execution and delivery by the Opinion Party of the Agreement, and the performance by the Opinion Party of its obligations thereunder, have been duly authorized by all necessary limited liability company action on the part of the Opinion Party. The Opinion Party has duly executed and delivered the Agreement.
3. The Agreement constitutes the legally valid and binding obligation of the Opinion Party, enforceable against the Opinion Party in accordance with its terms, in each case except (a) as may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer, or other similar laws relating to or affecting the rights of creditors generally and (b) as the enforceability of the Agreement is subject to the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law), including without limitation (i) the possible unavailability of specific performance, injunctive relief or any other equitable remedy, and (ii) concepts of materiality, reasonableness, good faith and fair dealing.
4. Neither the Opinion Party’s execution and delivery of the Agreement, nor the performance by the Opinion Party of its obligations thereunder, violates (a) any law or regulation of the United States of America, the State of California, or the State of Delaware applicable to the Opinion Party, (b) any provision of the Opinion Party’s articles of organization and limited liability company agreement, or (c) any judgment, order, writ, injunction or decree, in each case, that is binding on the Opinion Party.
5. No authorization, consent, or other approval of, or registration, declaration, or other filing (a) with any governmental authority of the United States of America, the State of California, or the State of Delaware is required on the part of the Opinion Party for the execution and delivery by the Opinion Party of the Agreement, or (b) under any law or regulation of the United States, the State of California, or the State of Delaware is required on the part of the Opinion Party for the performance by the Opinion Party of its obligations under the Agreement, Appendix S - 1
SCHEDULE 12.2(h)
TO
POWER PURCHASE AGREEMENT,
DATED AS OF [_], 20212022
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
DAGGETT SOLAR POWER 2 LLC
UPSTREAM EQUITY OWNERS, SELLER’S ULTIMATE PARENT AND
ORGANIZATIONAL AND OWNERSHIP STRUCTURE OF SELLER AND UPSTREAM
EQUITY OWNERS
Schedule 12.2(h) - 1
Daggett Solar Power 2 LLC
Clearway Energy Group
LLC
Clearway Renew LLC
Daggett 2 Project Holdco
LLC
Clearway Holdco Corp LLC
Clearway Renew
Consolidated Devco LLC
Daggett 2 Project Sub LLC
Daggett 2 Project Sub II
LLC
City Council Agenda Item Report
Submitted by: Jessica Balandran
Submitting Department: Public Utilities
Meeting Date: June 21, 2022
SUBJECT
Cancellation of Vernon’s Transmission Owner Tariff
Recommendation:
A. Find that the proposed action does not constitute a “project” pursuant to Section 15378(b)(2) of the Guidelines to the California Environmental Quality Act (CEQA) because such action constitutes an administrative activity; and even if the adoption of the proposed item did constitute a project, it would be exempt in accordance with CEQA Guidelines Section 15061(b)(3), the general rule that CEQA only applies to projects that may have an effect on the environment; and
B. Adopt Resolution 2022-21 approving the cancellation of Vernon’s Transmission Owner Tariff.
Background:
The City of Vernon is a Participating Transmission Owner (PTO) in the California Independent System Operator Corporation (CAISO). Vernon was provided PTO status solely because it turned over operational control of its three existing transmission contracts to the CAISO’s operational control. The City’s three existing transmission contracts are: (i) an agreement with the City of Los Angeles Department of Water and Power entitled “Los Angeles-Vernon Adelanto-Victorville-Lugo Firm Transmission Service Agreement” (the LAWDP ETC); (ii) an agreement with Southern California Edison Company (SCE) entitled “Amended and Restated Edison-Vernon Victorville-Lugo Firm Transmission Service Agreement” (the SCE VictorvilleLugo ETC); and (iii) an agreement with SCE entitled “Amended and Restated Edison-Vernon Mead Firm Transmission Services Agreement” (the SCE Mead ETC).
The relationship between the City as a PTO and CAISO is governed by the CAISO’s Transmission Control Agreement (TCA) which sets forth the specific duties and obligations of all PTOs, including the filing of a Transmission Owner Tariff (TO Tariff) with the Federal Energy Regulatory Commission (FERC), in which a PTO sets forth its charges for transmission access to the CAISO Controlled Grid. The TO Tariff filed with FERC sets forth Vernon’s Transmission Revenue Requirement (TRR) for its high voltage transmission facilities and entitlements under the CAISO’s operational control. While the City does not own any transmission assets and has no high voltage transmission facilities, the Transmission Revenue Requirement (TRR) merely includes a pass-through of the costs of the three existing transmission contracts incurred by the City. The TRR for each PTO is included in the formula used by the CAISO to develop the transmission access charges for the use of the CAISO transmission grid.
Consequently, the City has determined that its three existing transmission contracts are no longer economically beneficial and decided to terminate each of them, which results in the need to cancel the City’s TO Tariff on file with FERC and terminate its participation in the CAISO as a PTO. The City has provided notices of termination of the existing transmission contracts with SCE and LADWP, each with an effective date for the termination of October 7, 2022. SCE and LADWP have confirmed in writing that termination of the existing transmission contracts will be effective October 7, 2022. In addition, the CAISO has also confirmed that it can accommodate the City’s termination date of October 7, 2022.
The City provided the CAISO with a notice of withdrawal from the TCA, with an effective date of November 1, 2022. On May 17, 2022, the CAISO posted on its website the City’s notice of withdrawal from the TCA. The CAISO has more recently indicated that the CAISO will be able to file an amendment of the TCA to withdraw Vernon as a signatory to the agreement effective October 7, 2022. To effectuate the City’s termination of participation in the CAISO as a PTO, the City must provide FERC notice of cancellation of its TO Tariff on file with FERC.
In addition to being a PTO, the City is a metered subsystem (MSS) in the CAISO. After the City ceases to be a PTO with the CAISO upon cancellation of its TO Tariff and withdrawal from the TCA, the City will continue to operate under the MSS agreement with the CAISO. As a non- PTO MSS, the City will be assessed wheeling access charges for transmission service based on wheel-through transactions from or across the CAISO grid. The basis for wheeling access charge assessment by the CAISO will change from the current gross load basis to a net load basis.
Currently, the City is assessed the CAISO’s transmission access charges based on gross electric load. The City’s termination of its participation in the CAISO as a PTO will allow the City to net its electric load with internal generation for wheeling access charge assessment purposes, potentially lowering the City’s costs.
Therefore, staff recommends the City Council approve the cancellation of the TO Tariff.
Cancellation of the City’s TO Tariff will not result in increased rates to the City's electric customers; as a result, no public hearing is necessary.
Fiscal Impact:
The fiscal impact is unknown at this time, although t he basis for the wheeling access charge assessment by the CAISO will change from the current gross load basis to a net load basis, potentially lowering the City's costs.
Attachments:
1. Resolution No. 2022-21
2. Draft Transmission Owner Tariff Termination Filing
RESOLUTION NO. 2022-21
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON
APPROVING THE CANCELLATION OF VERNON’S TRANSMISSION
OWNER TARIFF
SECTION 1. Recitals.
A. The City of Vernon (City) is a chartered municipal corporation of the State of California that owns and operates a system for the generation, purchase, transmission, distribution and sale of electric capacity and energy.
B. The City is a Participating Transmission Owner (PTO) with the California Independent System Operator (CAISO) by virtue of it having turned over operational control of its three existing transmission contracts to the CAISO’s operational control.
C. The City’s three existing transmission contracts are: (i) an agreement with the City of Los Angeles Department of Water and Power entitled “Los Angeles-Vernon AdelantoVictorville-Lugo Firm Transmission Service Agreement” (the LAWDP ETC); (ii) an agreement with Southern California Edison Company (SCE) entitled “Amended and Restated Edison-Vernon Victorville-Lugo Firm Transmission Service Agreement” (the SCE Victorville-Lugo ETC); and (iii) an agreement with SCE entitled “Amended and Restated Edison-Vernon Mead Firm Transmission Services Agreement” (the SCE Mead ETC). Two of the three existing transmission contracts are with SCE; the remaining is with the Los Angeles Department of Water and Power (LADWP).
D. The relationship between the City as a PTO and CAISO is governed by the CAISO’s Transmission Control Agreement (TCA) which sets forth the specific duties and obligations of all PTOs, including the filing of a Transmission Owner Tariff (TO Tariff) with the Federal Energy Regulatory Commission (FERC) as the means by which a PTO sets forth its charges for transmission access to the CAISO Controlled Grid.
E. The City’s TO Tariff filed at FERC sets forth the City’s Transmission Revenue Requirement (TRR) for its high voltage transmission facilities and entitlements placed under the ISO’s operational control. The City has no high voltage transmission facilities, so the City’s TRR merely includes a pass-through of the costs of the three existing transmission contracts incurred by the City. The TRR for each PTO is then included in the formula used by the CAISO to develop the CAISO’s transmission access charges for use of the CAISO transmission grid.
F. On October 19, 2021, the City Council adopted Resolution No. 2021-32 approving, among other things, the establishment of the City’s most recently revised TRR and Appendix I to the TO Tariff implementing the revised TRR, to be effective January 1, 2022.
G. Further, the TO Tariff provides for the use of a Transmission Revenue Balancing Resolution No. 2022-21