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 nonbreaching 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 14.22 Mobile-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).
- 146 -
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Section 14.23 Future Phases. In the event that, after the Commercial Operation Date of the Facility, Seller or Affiliates of Seller (excluding Seller’s affiliate Desert Harvest and - 147 -
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Maverick projects sharing certain interconnection and electrical equipment) develop additional phases of the Facility or additional projects that (i) share real estate, infrastructure, equipment, land or other facilities with the Site and (ii) interconnect through the Point of Interconnection, then Seller shall provide Buyer with a right of first offer to evaluate and negotiate a power purchase agreement for the output from any such additional phases of the Facility or additional projects; provided that Seller’s obligations under this Section 14.23 shall not apply with respect to any additional battery energy storage project developed by Seller or its Affiliates (1) following the circumstances described in Section E of Appendix A-2 or (2) that uses any FCDS or PCDS awarded to Seller or its Affiliates with respect to the Point of Interconnection that exceeds the FCDS or PCDS awarded to Seller and that is utilized by the BESS. Notwithstanding anything to the contrary in this Agreement, the Facility and such battery energy storage project may enter into shared ownership (including co-tenancy) arrangements and arrangements regarding related interconnection rights and facilities on commercially reasonable terms that are customary in the industry. 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 without providing Buyer with a subsequent right to purchase the output for the more favorable price. 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 with respect to such additional phase or project. If Buyer and Seller cannot mutually agree on terms of a power purchase agreement 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 without providing Buyer with a subsequent right to purchase the output for the more favorable price.
Section 14.24 Taxpayer Identification Number (TIN). Seller declares that its authorized TIN is 92-1191811. No payment will be made under this Agreement without a valid TIN.
Section 14.25 Tax Treatment. The Parties acknowledge that Seller is the owner of the Facility for federal, state and local tax purposes. Seller shall be entitled to any and all: (a) federal, state or local investment tax credits (including ITCs), federal, state or local production tax credits (including PTCs) or other tax credits providing a tax benefit to Seller or any other Person based on an ownership or security interest in the Facility or PV System Energy, (b) depreciation deductions or similar benefits, and any other tax benefits arising from ownership or operation of the Facility and (c) cash grants or other financial incentives from any federal, state or local government available to Seller with respect to the Facility (including cash payments or grants of money in lieu - 148 -
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of tax credits). 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. - 149 -
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Section 14.26 Dodd-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 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.
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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:
/2-/f zL SOUTHERN CALIFORNIA PUBLIC Date
POWER AUTHORITY
By: '(ho l<rr
Its: P..> i <-4JDate: / /5.
A
Approved as to legal form and content:
By A,r'o/" Adq//a
Its: kritlon* 6en &t"t I Co unce I
Signature Page to Power Purchase Agreement between Sapphire Solar' LLC and Southern California Public Power Authority
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SELLER:
SAPPHIRE SOLAR, LLC
By:
Hanson Wood Its:
Vice President
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Signature Page to Power Purchase Agreement between Sapphire Solar, LLC and Southem Califarnia Public Power Authority
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APPENDIX A-1
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
CONTRACT PRICE AND COST-BASED ADJUSTMENT
A. General Pricing Provisions
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 eighty percent (80%) 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 price payable by Buyer per MWh of PV Delivered Energy that is not Excess Energy (including associated Environmental Attributes and Capacity Rights) is the Contract Price. All transmission and Ancillary Service costs, including Scheduling from the Facility to the Point of Delivery and any transformer crossover fees for transmitting energy between substations and the assumption that Buyer has no economic curtailment rights are included or assumed in calculating the Contract Price for PV Delivered Energy.
3. Excess Energy. The Contract Price per MWh for Excess Energy (including associated Environmental Attributes and Capacity Rights) is twenty-five percent (25%) of the thenapplicable price per MWh for PV Delivered Energy as provided in #2 above.
4. BESS Capacity. Following the Commercial Operation Date, the price payable by Buyer for BESS Contract Capacity per kW-month shall be the BESS Capacity Price.
B. EP&C Adjustments.
1. General. The Parties acknowledge and agree that:
(a) The Base Contract Price has been agreed by the Parties based upon Seller’s estimate, as of the Effective Date, of the “all-in” costs for all amounts payable by or on behalf of Seller to third parties to complete the design, engineering, procurement, installation and construction of the PV System. Such estimated total “all-in” costs amount is herein referred to as the “Estimated PV System EP&C Costs”, which amount and the line item categories of costs included therein are set forth in Exhibit 1-A to this Appendix A-1 (the “PV System EP&C Budget”), and the total amount of such “all-in” costs that are actually incurred by Seller and its Affiliates is herein referred to as the “Actual PV System EP&C Costs”. (b) The BESS Base Capacity Price has been agreed by the Parties based upon Seller’s estimate, as of the Effective Date, of the “all-in” costs for all amounts payable by or on behalf of Seller to third parties to complete the design, engineering, procurement, installation and Item14 Page143of226
Appendix A-1 - 1
4124-7072-0319.14
Appendix A-1 - 2
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construction of the BESS. Such estimated total “all-in” costs amount is herein referred to as the “Estimated BESS EP&C Costs”, which amount and the line item categories of costs included therein are set forth in Exhibit 1-B to this Appendix A-1 (the “BESS EP&C Budget”), and the total amount of such “all-in” costs that are actually incurred by Seller and its Affiliates is herein referred to as the “Actual BESS EP&C Costs”.
2. NTP Updates.
(a) PV System. At least sixty (60) days prior to the Construction Start Date for the PV System, Seller shall provide a certificate executed by an authorized Seller officer (“EP&C Cost Certificate”) to Buyer certifying as to then current and updated (as of the date of such certificate) “NTP PV System EP&C Costs”, which EP&C Cost Certificate shall be accompanied with an updated PV System EP&C Budget. If, as of the date of such EP&C Cost Certificate, there has been a change between the Estimated PV System EP&C Costs and the NTP PV System EP&C Costs, then:
(i) if the Adjusted Contract Price is not greater than the Contract Price Ceiling and is not less than the Contract Price Floor, then the Contract Price shall be adjusted, up or down, to equal the “Adjusted Contract Price” as determined according to the following formula:
Adjusted Contract Price = Base Contract Price + [((B-A)/1,000,000) x C] + [(E – D) x F] where:
A = Estimated PV System EP&C Costs
B = NTP PV System EP&C Costs
C = $0.25/MWh
D = Eighteen (18)-month trailing average of ten (10)-year U.S. Treasury bill rates (calculated based on the closing price on each trading day) as of the Effective Date (expressed in Basis Points)
E = Eighteen (18)-month trailing average of ten (10)-year U.S. Treasury bill rates (calculated based on the closing price on each trading day) as of the date of the EP&C Cost Certificate (expressed in Basis Points) F = $0.038/MWh
“Basis Point” means one one-hundredth (1/100th) of one percent (1%) (ii) if the Adjusted Contract Price is greater than the Contract Price Ceiling, then Section B(3)(a) shall apply; and
(iii) if the Adjusted Contract Price is less than the Contract Price Floor, then Section B(3)(b) shall apply.
(b) BESS. At least than sixty (60) days prior to the Construction Start Date for the BESS, Seller shall provide an EP&C Cost Certificate to Buyer certifying as to then current and updated (as of the date of such certificate) “NTP BESS EP&C Costs”, which EP&C Cost Certificate shall be accompanied with an updated BESS EP&C Budget. If, as of the date of such Appendix A-1 - 3
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EP&C Cost Certificate, there is a difference between the Estimated BESS EP&C Costs and the NTP BESS EP&C Costs, then:
(i) if the Adjusted BESS Capacity Price is not greater than the BESS Capacity Price Ceiling and is not less than the BESS Capacity Price Floor, then the BESS Capacity Price shall be adjusted, up or down, to equal the “Adjusted BESS Capacity Price” as determined according to the following formula:
Adjusted BESS Capacity Price = BESS Base Capacity Price + [((B-A)/1,000,000) x C] + [(E – D) x F]
where:
A = Estimated BESS EP&C Costs (subject to adjustment if the BESS is constructed pursuant to Section D(1)(a) of Appendix A-2) B = NTP BESS EP&C Costs
C = $0.13/kW-mo
D = Eighteen (18)-month trailing average of ten (10)-year U.S. Treasury bill rates (calculated based on the closing price on each trading day) as of the Effective Date (expressed in Basis Points)
E = Eighteen (18)-month trailing average of ten (10)-year U.S. Treasury bill rates (calculated based on the closing price on each trading day) as of the date of the EP&C Cost Certificate (expressed in Basis Points) F = $0.03/kW-month
“Basis Point” means one one-hundredth (1/100th) of one percent (1%) (ii) if the Adjusted BESS Capacity Price is greater than the BESS Capacity Price Ceiling, then Section B(4)(a) shall apply; and (ii) if the Adjusted BESS Capacity Price is less than the BESS Capacity Price Floor, then Section B(4)(b) shall apply.
3. Contract Price Ceiling and Contract Price Floor.
(a) Contract Price Ceiling. If, as of the date of the EP&C Cost Certificate for the PV System, the Adjusted Contract Price is greater than the Contract Price Ceiling, then, the Parties shall confer with one another and, unless Seller has consented in writing, within thirty (30) days after delivery of such EP&C Cost Certificate, to set the Contract Price at an amount equal to the Contract Price Ceiling, or the Parties have agreed otherwise, Buyer shall thereafter have the right to terminate this Agreement by written notice delivered to Seller any time after such thirty (30) days, and prior to ninety (90) days, following delivery of such EP&C Cost Certificate. Any such termination shall be no-fault, and Buyer shall return all Project Development Security to Seller. If Buyer fails to exercise such termination right within such ninety (90) days, Buyer shall be deemed to have terminated this Agreement unless the Parties agree otherwise; provided that if, within such ninety (90) days, Buyer has consented in writing to set the Contract Price at an amount Appendix A-1 - 4
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equal to the Adjusted Contract Price, this Agreement shall remain in full force and effect with a Contract Price equal to the Adjusted Contract Price.
Appendix A-1 - 5
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(b) Contract Price Floor. If, as of the date of the EP&C Cost Certificate for the PV System, the Adjusted Contract Price is less than the Contract Price Floor, then, the Parties shall confer with one another and, unless Buyer has consented in writing, within thirty (30) days after delivery of such EP&C Cost Certificate, to set the Contract Price at an amount equal to the Contract Price Floor, or the Parties have agreed otherwise, Seller shall thereafter have the right to terminate this Agreement by written notice delivered to Buyer any time after such thirty (30) days, and prior to sixty (60) days, following delivery of such EP&C Cost Certificate. Any such termination shall be no-fault, and Buyer shall return all Project Development Security to Seller. If Seller fails to exercise such termination right within such sixty (60) days, Seller shall be deemed to have terminated the Agreement unless the Parties agree otherwise; provided that if, within such sixty (60) days, Seller has consented in writing to set the Contract Price at an amount equal to the Adjusted Contract Price, this Agreement shall remain in full force and effect with a Contract Price equal to the Adjusted Contract Price.
4. BESS Capacity Price Ceiling and Floor.
(a) BESS Capacity Price Ceiling. If, as of the date of the EP&C Cost Certificate for the BESS, the Adjusted BESS Capacity Price is greater than the BESS Capacity Price Ceiling, then, the Parties shall confer with one another and, unless Seller has consented in writing, within thirty (30) days after delivery of such EP&C Cost Certificate, to set the BESS Capacity Price at an amount equal to the BESS Capacity Price Ceiling, or the Parties have agreed otherwise, Buyer shall thereafter have the right to elect to remove the BESS from this Agreement by written notice delivered to Seller any time after such thirty (30) days, and prior to ninety (90) days, following delivery of such EP&C Cost Certificate, upon which election the Facility shall be deemed not to include the BESS and all provisions relating to the BESS herein shall have no force or effect. If Buyer fails to exercise such BESS removal right within such ninety (90)-day period, Buyer shall be deemed to have elected to remove the BESS in accordance with the foregoing sentence unless the Parties agree otherwise; provided that if, within such ninety (90) days, Buyer has consented in writing to set the BESS Capacity Price at an amount equal to the Adjusted BESS Capacity Price, provisions relating to the BESS shall remain in full force and effect with a BESS Capacity Price equal to the Adjusted BESS Capacity Price. (b) BESS Capacity Price Floor. If, as of the date of the EP&C Cost Certificate for the BESS, the Adjusted BESS Capacity Price is less than the BESS Capacity Price Floor, then, the Parties shall confer with one another and, unless Buyer has consented in writing, within thirty (30) days after delivery of such EP&C Cost Certificate, to set the BESS Capacity Price at an amount equal to the BESS Capacity Price Floor, or the Parties have agreed otherwise, Seller shall thereafter have the right to elect to remove the BESS from this Agreement by written notice delivered to Buyer any time after such thirty (30) days, and prior to sixty (60) days, following delivery of such EP&C Cost Certificate, upon which election the Facility shall be deemed not to include the BESS and all provisions relating to the BESS herein shall have no force or effect. If Seller fails to exercise such BESS removal right within such sixty (60) days, Seller shall be deemed to have elected to remove the BESS in accordance with the foregoing sentence unless the Parties agree otherwise; provided that if, within such sixty (60) days, Seller has consented in writing to set the BESS Capacity Price at an amount equal to the Adjusted BESS Capacity Price, provisions Appendix A-1 - 6
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relating to the BESS shall remain in full force and effect with a BESS Capacity Price equal to the Adjusted BESS Capacity Price.
(c) For the avoidance of doubt, following any election to remove the BESS from this Agreement in accordance with this Section B(4) (whether deemed or otherwise), this Agreement shall continue in full force and effect other than with respect to the terms and conditions relating to the BESS.
5. Commercial Operation Date Pricing and Reconciliation. (a) Generally. Within sixty (60) days following the Commercial Operation Date, Seller shall provide to Buyer an EP&C Cost Certificate, accompanied with an updated final PV System EP&C Budget and an updated final BESS EP&C Budget, and certifying as to (i) the final Actual PV System EP&C Costs and the final Actual BESS EP&C Costs and (ii) the final Adjusted Contract Price and final Adjusted BESS Capacity Price based on the adjustment formula calculations set forth in Sections B(2)(a)(i) and B(2)(b)(i) above, but disregarding “+ [(E – D) x F]” in such formulas and substituting the final Actual PV System EP&C Costs for the NTP PV EP&C Costs in variable “B” in Section B(2)(a)(i), and the final Actual BESS EP&C Costs for the NTP BESS EP&C Costs in variable “B” in Section B(2)(b)(i); provided, that the adjustments pursuant to this Section B(5)(a) shall not result in adjusting the Contract Price above the Contract Price Ceiling or below the Contract Price Floor, or adjusting the BESS Capacity Price above the BESS Capacity Price Ceiling or below the BESS Capacity Price Floor.
(b) Reconciliation for Prior Payments. If there has been any change to the Contract Price or the BESS Capacity Price pursuant to Section B(5)(a), Seller shall promptly calculate the difference between any amount(s) previously paid by Buyer to Seller based on the Contract Price and/or BESS Capacity Price (as applicable) and the amounts that should have been paid based on the adjusted pricing under Section B(5)(a), and deliver such calculations to Buyer, and within thirty (30) days of such delivery either Buyer shall make an additional payment to Seller, or Seller shall provide a refund payment to Buyer, in the applicable amount set forth in such calculations.
6. Buyer Audit Rights. Promptly following delivery of any EP&C Cost Certificate, a mutually-agreed independent auditor shall have access to, and shall conduct an audit of, all reasonably necessary and appropriate records, data and documentation to confirm and prepare an audit report regarding (a) the accuracy of any pricing or budget information and the calculation of the adjusted Contract Price, and (b) the differences between the NTP PV System EP&C Costs and/or the NTP BESS EP&C Costs and the Actual PV System EP&C Costs and/or the Actual BESS EP&C Costs, which examination and audit shall be performed using generally accepted auditing practices and principles and applicable governmental audit standards. Seller shall make visually available to Buyer and the Participating Members such audit report and documentation on a secure portal (e.g., sharepoint) during a reasonable period of review in a manner that prevents downloading, copying or otherwise enables the documents to come into the physical or electronic possession of Buyer or the Participating Members.
Appendix A-1 - 7
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7. Cooperation and Further Assurances. Each Party agrees to cooperate in good faith to carry out the intent of this Appendix A-1, including to execute and deliver all further Appendix A-1 - 8
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confirmations and documents, and take all further actions not inconsistent with the provisions of this Appendix A-1 as requested by the other as may be reasonably necessary to effectuate the purposes and intent hereof.
Exhibit 1-A to Appendix A-1
Appendix A-1 - 9
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Estimated PV System EP&C Costs
PV System EP&C Cost Categories:
Cost Category
Module Sales Contract
Electrical Transformer Supply Agreement
High voltage contract
BOP Contract
Cost ($)*
Total (“Estimated PV System EP&C
Costs”)
$143,700,000
*Amounts (as estimated or in any EP&C Cost Certificate) do not include sales tax. The cost of any tariffs, duties, or other import costs incurred by Seller but not included in the contract price for a given cost category shall be added by Seller to such contract price in the version of this table prepared by Seller and included in any EP&C Cost Certificate.
Exhibit 1-B to Appendix A-1
Appendix A-1 - 10
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Estimated BESS EP&C Costs
BESS EP&C Cost Categories:
Cost Category
Battery Energy Storage System Supply and
Services Agreement
Battery Energy Storage System EPC
Contract
Cost ($)*
Total (“Estimated BESS EP&C Costs”) $82,650,000**
*Amounts (as estimated or in any EP&C Cost Certificate) do not include sales tax. The cost of any tariffs, duties, or other import costs incurred by Seller but not included in the contract price for a given cost category shall be added by Seller to such contract price in the version of this table prepared by Seller and included in any EP&C Cost Certificate. **If the BESS Build Option is considered by the Parties pursuant to Section D of Appendix A-2 following an Award Notice for PCDS, the Estimated BESS EP&C Costs as of the Effective Date as set forth in the above table shall be revised for purposes of the calculation of the Adjusted BESS Capacity Price on a pro rata basis to reflect the capacity in the Award Notice relative to 59 MWac.
Appendix A-2 - 1
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APPENDIX A-2
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
FCDS/BESS ADJUSTMENT PROVISIONS
A. Background. The Parties acknowledge and agree that:
1. As of the Effective Date, the BESS has not been awarded FCDS, or any PCDS, but Seller has submitted an application to the CAISO in 2022 to obtain an award of FCDS for the BESS pursuant to applicable CAISO application procedures (such procedures, the “CAISO Deliverability Procedures”). Awards of FCDS or PCDS pursuant to applications under CAISO Deliverability Procedures submitted in any calendar year ordinarily are issued in March or April of the calendar year following application, and therefore the Parties currently anticipate that the CAISO may provide Seller with notice of a final binding award of FCDS or PCDS for the BESS (any such notice, an “Award Notice”) in March or April of 2023.
2. The BESS Capacity Price and all of the other terms and conditions of the Agreement related to the BESS (including its BESS Contract Capacity size of fifty-nine (59) MW (AC)) are based on the Parties’ assumption that the BESS will receive an Award Notice awarding FCDS for the BESS on or before April 30, 2024 (the “Outside BESS Date”). If such assumption proves correct, then, following the date of such FCDS Award Notice, Seller shall proceed with construction of the BESS in accordance with the Agreement (without reference to this Appendix A-2), and this Appendix A-2 shall become null and void and cease to be applicable to the Agreement.
B. Additional CAISO Deliverability Submissions. If FCDS is not obtained for the BESS pursuant to an Award Notice issued in 2023 based on Seller’s 2022 application therefor, then Seller shall submit a new application to CAISO in 2023 for FCDS for the BESS, and each calendar year thereafter, until the earlier of obtaining FCDS for the BESS or the submission that is made in calendar year 2027.
C. FCDS Awards After the Outside BESS Date. If Seller receives an Award Notice awarding FCDS for the BESS after the Outside BESS Date and before a BESS Build Option (as defined herein) election by Buyer has become fully agreed and effective, Seller shall promptly notify Buyer thereof and Seller shall proceed with construction of the BESS in the manner contemplated by the Agreement only if the Parties reach mutual agreement on changes to the Agreement regarding the BESS Capacity Price, Milestones, and related provisions as may be requested by Seller within ninety (90) days after the Award Notice awarding FCDS is received. The Parties shall cooperate in good faith to endeavor to agree on such changes as promptly as practicable Appendix A-2 - 2
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within such ninety (90) day period after the Award Notice; however, each Party shall retain sole discretion to approve all such changes.
Appendix A-2 - 3
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D. PCDS Awards and Buyer’s BESS Build Option.
1. Generally. If Seller receives an Award Notice awarding PCDS for the BESS in an amount not less than twenty (20) MWac x four (4) hours (the “Minimum BESS Size”), Seller shall as promptly as is reasonably possible provide notice thereof to Buyer, and Buyer shall have either (i) up to thirty (30) days if the Award Notice is received on or before the Outside BESS Date and (ii) ninety (90) days if the Award Notice is received after the Outside BESS Date, from the date of Seller’s notice to elect by written notice to Seller to direct Seller to proceed with construction of the BESS at the size/capacity equal to the amount for which PCDS has been obtained (the “BESS Build Option”), provided that:
(a) If the Award Notice giving rise to Buyer’s election of the BESS Build Option is received on or before the Outside BESS Date, Seller shall proceed to construct the BESS in accordance with the provisions of the Agreement, and (i) the BESS Base Capacity Price, BESS Capacity Price Ceiling, and BESS Capacity Price Floor shall each be reduced by the product of (1) $0.054/kw-month and (2) the difference between 59 MWac and the actual BESS Contract Capacity (subject to further adjustment in accordance with Section
6.1(b)(ii) of the Agreement and Appendix A-1), and (ii) the BESS Contract Capacity and the “Guaranteed Dischargeable Energy” set forth in the table in Section A of Appendix K-1 shall be decreased pro rata to reflect the capacity of PCDS awarded as a percentage of fifty nine (59) MW AC; and
(b) If the Award Notice giving rise to Buyer’s BESS Build Option is received after the Outside BESS Date, then the exercise of such option shall only be effective if the Parties reach mutual agreement on changes to the Agreement regarding the BESS Capacity Price, Milestones, and related provisions as may be requested by Seller at such time. The Parties shall cooperate in good faith to endeavor to agree on such changes; however, each Party shall retain sole discretion to approve all such changes.
2. Subsequent Deliverability Awards. If Buyer has made a BESS Build Option election that has become finally effective, and thereafter any additional PCDS (or FCDS) is awarded to Seller for the BESS, Seller shall reasonably promptly provide notice thereof to Buyer, and if Buyer desires Seller to add additional capacity to the BESS, any such addition will be subject to mutual agreement of the Parties, including on changes to the BESS Capacity Price and construction schedule and milestones.
E. Seller’s Right to Proceed with BESS. If (i) Seller has provided an Award Notice of PCDS or FCDS to Buyer prior to the BESS Outside Date, but Buyer elects to remove the BESS pursuant to Section B(4)(a) of Appendix A-1 or (ii) Seller has provided an Award Notice of FCDS to Buyer pursuant to Section C above, or an Award Notice of PCDS pursuant to Section D(1)(b) above, and the Parties fail to reach final mutual agreement in writing on the terms and conditions under which Seller will proceed with constructing the BESS in accordance with such provisions within one hundred and twenty (120) days after Seller’s delivery of the Award Notice to Buyer of PCDS or FCDS, then at any time thereafter Seller (or a Seller Affiliate) shall have the right to proceed with constructing such battery energy storage project and to make arrangements with another third party Appendix A-2 - 4
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offtaker to whom to sell battery energy storage services and related products from such battery energy storage project or sell storage services into CAISO, provided that, before entering into a contract with any such third party, Seller shall first provide Buyer with a written offer to sell the battery energy storage products to Buyer on pricing, the revised Commercial Operation Date and Guaranteed Commercial Operation Date, if applicable, and other terms and conditions materially similar to the terms and conditions Seller intends to offer to such third party (the “ROFO Offer”).
Buyer shall have thirty (30) days after receipt of the ROFO Offer to notify Seller of its desire to transact with Seller for the construction of the BESS (the “ROFO Notice”). If Buyer timely delivers the ROFO Notice to Seller, then the Parties shall negotiate in good faith regarding such ROFO Offer and for a period of ninety (90) days following Seller’s delivery of the ROFO Offer, Seller (or its Affiliate) may not concurrently negotiate any agreement or arrangement with any third parties regarding any transaction contemplated under this Section E. Seller (or its Affiliate) may transact with such a third party only if (i) Buyer fails to provide the ROFO Notice within thirty (30) days after receipt of the ROFO Offer or the Parties fail to reach an agreement within ninety (90) days after Seller’s delivery of the ROFO Offer, (ii) such battery energy storage project will not materially and adversely interfere with the operation or use of the Facility, (iii) such battery energy storage project will operate under a separate resource ID and (iv) such battery energy storage project will not materially or adversely affect the rights of Buyer under this Agreement. If Seller contracts with one or more third parties for such battery energy storage project, the Parties shall modify this Agreement as reasonably necessary to facilitate the construction and operation of such battery energy storage project and the sale of products from such battery energy storage project to such third parties; provided that such modifications shall not materially and adversely affect the rights of Buyer under this Agreement.
F. Elimination of BESS Following March 31, 2028. If (i) as of March 31, 2028, there has been no Award Notice to Seller for the BESS granting FCDS or PCDS for which the Parties are obligated (or have finally mutually agreed) to move forward with the BESS pursuant to Section D above, or (ii) prior to March 31, 2028, Seller has elected to move forward with the BESS with a third party pursuant to Section E above, then, and in either such case, the BESS shall be eliminated from the Facility and Agreement, in which case the Facility shall be deemed not to include the BESS and all provisions relating to the BESS herein shall have no force or effect.
G. Cooperation and Further Assurances. Each Party agrees to cooperate in good faith to carry out the intent of this Appendix A-2, including to execute and deliver all further instruments and documents, and take all further actions not inconsistent with the provisions of this Appendix A-2 as requested by the other as may be reasonably necessary to effectuate the purposes and intent of this Appendix A-2.
Appendix B-1 - 1
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APPENDIX B-1
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
FACILITY, PERMITS AND OPERATOR
1. Name of Facility: Sapphire Solar Facility
Property: City of Desert Center, Riverside County, California Located at the following APNs: 811270011, 808260005, 811121008, 808240006, 808240002, 808240003, 808240015, 811270010, 808240001, 808240014, 808250014, 808260006, 808250013, 807172010, 808250016, 808250002, 808250010, 807172022, 808250004, 808240010, 808260013, 807172011, 808240004, 807172019, 808240005, 811121007, 808240016, 808260007, 811270013, 807172027, 808240011, 811270008, 811270009, 808250011, 808250007, 807172015, 808250006, 811270012, 808250001, 808250003, 808240009, 808250005, 808260014, 808260015, 808250012, 808250009, 808240012, 808250015, 808250008, 808240013, 808121002, 811201001, 811201002, 808053003, 808053004, 808054003, 808054004, 808072006, 811211001, 811212001, 811221001
2. Owner: Sapphire Solar, LLC
3. Operator: EDF Renewables, Inc.
4. Equipment:
(a) Type of Facility: Solar Photovoltaic and Battery Energy Storage System (b) PV Contract Capacity: One hundred seventeen (117) MW AC. (c) BESS Contract Capacity: Not to exceed fifty-nine (59) MW AC. To be determined in accordance with Appendix K-1 Section C.(i).
(d) Capacity Factor: 36.66%*
(e) The BESS will be designed to be capable of following the ADS.
5. Target Commercial Operation Date: December 31, 2025 Guaranteed Commercial Operation Date (from Appendix I): December 31, 2026
6. Permits:
(a) CEQA Determination documentation including, as applicable, but not limited to:
Appendix B-1 - 2
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(1) Notice of Exemption in compliance with CEQA;
(2) Notice of determination in compliance with CEQA; and Appendix B-1 - 3
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(3) Initial Study or environmental impact report or equivalent document prepared by or relied upon by the lead agency to make its CEQA Determination. (b) Land Use Permit, if applicable
(c) Building Permit
(d) Grading Permit
(e) Other permits, if any, required for the Seller or EPC Contractor to constructor operate 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
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APPENDIX B-2
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
MAP OF THE FACILITY
Appendix B-2 - 2
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APPENDIX C
TO
POWER PURCHASE AGREEMENT
BETWEEN
Appendix C - 1
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SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
ANNUAL CONTRACT QUANTITY AND EXPECTED RA CAPACITY
Contract Year Annual Contract
Quantity, MWh
Guaranteed Delivered
Energy, MWh (80% of
the Annual Contract
Quantity)
Expected RA
Capacity (MWs)***
1 372,021* 297,616* 59
2 370,160 296,128 59
3 368,310 294,648 59
4 366,468 293,174 59
5 364,636 291,709 59
6 362,813 290,250 59
7 360,999 288,799 59
8 359,194 287,355 59
9 357,398 285,918 59
10 355,611 284,488 59
11 353,833 283,066 59
12 352,063 281,651 59
13 350,303 280,242 59
14 348,552 278,841 59
15 346,809 277,447 59
16 345,075 276,060 59
17 343,349 274,679 56.5
18 341,633 273,306 55.425
19 339,924** 271,940** 54.2
* Figure assumes 365 days in Contract Year 1 and shall be adjusted pro rata to reflect 365 days plus the number of days in the Initial Stub Period.
** Figure assumes 365 days in Contract Year 19 and shall be adjusted pro rata to reflect 365 days plus the number of days in the Final Stub Period.
*** Subject to updating by Buyer based on final BESS Contract Capacity (as adjusted pursuant to Section 3.11(b) and Appendix A-2) and amount of deliverability actually available for the BESS Appendix C - 2
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Annual Production Breakdown
Month Days in Month Percent Annual
Production in Month
January 31 6%
February 28 6%
March 31 9%
April 30 10%
May 31 11%
June 30 11%
July 31 10%
August 31 10%
September 30 9%
October 31 8%
November 30 6%
December 31 5%
Appendix D - 1
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APPENDIX D
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
FORM OF ATTESTATION
____________(Seller)____________ Environmental Attribute Attestation and Bill of Sale Sapphire Solar, LLC (“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
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APPENDIX E
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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 1 Note to Issuer: The Letter of Credit must be payable in U.S. dollars within the continental U.S.
Appendix E - 2
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remain in full force and effect with respect to any continuing balance; provided that the Available Amount shall be reduced by the amount of each such drawing.
Appendix E - 3
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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 of competent jurisdiction, which order is legally binding on us and 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 III 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. Any such amendment for decrease shall become effective only upon acceptance by your signature on a hard copy amendment.
Appendix E - 4
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You shall not be bound by any written or oral agreement of any type between us and the Applicant or any other person relating to this credit, whether now or hereafter existing.
Appendix E - 5
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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.
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, and III 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
TABLE OF CONTENTS
Page
Appendix E - 6
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EXHIBITI
DEMANDFORPAYMENT
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
EXHIBITII
Appendix E - 7
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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
EXHIBITIII
Appendix E - 8
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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
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APPENDIX F
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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 or reduced in coverage or amount without Seller first giving thirty (30) days’ prior notice thereof (ten (10) days for non-payment of premium) by registered mail 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
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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
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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, 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 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 substantial completion date of the Facility, whichever completion date is the later or (2) the effective date of the Property All Risk Insurance referenced below.
Appendix F - 4
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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 for 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 2/96). 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 insured 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. Evidence of such insurance shall be in the form of a special endorsement of insurance and shall include a Waiver of Subrogation in favor of Buyer, its officers, agents and employees.
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
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APPENDIX G
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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
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1) A written Quality Plan.
Appendix G - 3
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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 operations 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 - 4
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(f) Proper documentation, control and disposition of nonconforming equipment and materials is maintained.
Appendix G - 5
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(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 appropriate equipment suppliers will commission the Facility per prudent industry standards, equipment Appendix G - 6
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specifications, and utility requirements. Prior to construction completion, a punchlist will be developed by the contractor, Seller, Seller's representatives, and third party independent Appendix G - 7
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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 H - 1
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APPENDIX H
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
[RESERVED]
APPENDIX i
TO
POWER PURCHASE AGREEMENT
BETWEEN
Appendix i - 1
Item14 Page176of226
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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
Vesting Date
Provision of Project
Development Security
Contractual provision
without specific daily
damages
$100/kW of PV
Contract Capacity,
which amount shall be
recalculated inclusive
of the BESS Contract
Capacity upon
determination of such
capacity, if any
2. Upon the
Commercial
Operation Date
Post-Commercial Operation
Date security
Contractual provision
without specific daily
damages
$150/kW of PV
Contract Capacity
and BESS Contract
Capacity, if
applicable
3. 12/31/2024 Execute Site Control
Documents
Contractual provision
without specific daily
damages
4. 12/31/2023 Execute Generator
Interconnection Agreement
Contractual provision
without specific daily
damages
5. Upon the Target
Commercial
Operation Date
CEQA Determination has
been obtained
Contractual provision
without specific daily
damages
6. 3/31/2026 Or an
earlier date
notified by the
Seller
Begin construction of the
Facility
$50,000 per day for up to
180 days of delay
APPENDIX ii
TO
POWER PURCHASE AGREEMENT
BETWEEN
Appendix ii - 2
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7. Guaranteed
Commercial
Operation Date or
an earlier date
notified by the
Seller
Guaranteed Commercial
Operation Date
$32,000 (subject to
proportional increase
following a decision or
election (in accordance
with Appendix A-2) to add
the BESS to the Facility for
up to 365 days of delay (up
to amount of Project
Development Security))
Appendix iii - 3
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Post-Commercial Operation Date
8. Within six(6)
months after
COD
Proof of CEC Certification
Contractual provision
without specific daily
damages
9. Ongoing
Verification of WREGIS
Registration (pre-COD Seller
must provide sufficient
evidence to Buyer that 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.
Contractual provision
without specific daily
damages
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
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APPENDIX J
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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:
SAPPHIRE SOLAR, LLC
15445 Innovation Drive, San Diego, CA 92128
Attn: Blaine Sundwall
Phone: (503) 593-9698
Email: [email protected]
With a copy to:
EDF Renewable Development, Inc.
505 14th Street, Suite 1150, Oakland, CA 94612
Attn: Sohinaz Sotoudeh
Phone: (917) 549-3346
Email: [email protected]
2. Billings. Billings and payments pursuant to ARTICLE XI and Appendix A-1 shall be transmitted to the following addresses:
2.1 If Billing to Buyer:
Appendix J - 2
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Southern California Public Power Authority
1160 Nicole Court
Appendix J - 3
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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:
EDF RE Account Receivable
15445 Innovation Drive, San Diego, CA 92128
Phone: 858-521-3300
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 - 4
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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:
SAPPHIRE SOLAR, LLC
15445 Innovation Drive, San Diego, CA 92128
Attn: Blaine Sundwall
Phone: (503) 593-9698
Email: [email protected]
With a copy to:
EDF Renewable Development, Inc.
505 14th Street, Suite 1150, Oakland, CA 94612
Attn: Sohinaz Sotoudeh
Phone: (917) 549-3346
Email: [email protected]
Appendix K-1 - 1
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APPENDIX K-1
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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.
b. The “Minimum Round Trip Efficiency Performance Guarantee” shall be of no less than seventy percent (70%) of the Round Trip Efficiency Performance Guarantee. c. “Guaranteed Dischargeable Energy” shall be the MWh values listed in the table below for the applicable Contract Year as measured in accordance with Sections B and C below.
d. The “Minimum Dischargeable Energy Performance Guarantee” shall be ninety percent (90%) of Guaranteed Dischargeable Energy.
e. Peak Season BESS Availability Guarantee shall be ninety-eight percent (98%). f. Off-Peak Season BESS Availability Guarantee shall be ninety-six percent (96%).
Contract
Year
Guaranteed
Dischargeable Energy
(MWh)
Round Trip Efficiency
Performance Guarantee
1 236.0 89.00%*
2 236.0 88.70%
3 236.0 88.50%
4 236.0 88.30%
5 236.0 88.10%
6 236.0 87.90%
7 236.0 87.70%
8 236.0 87.50%
9 236.0 87.30%
10 236.0 87.10%
11 236.0 86.90%
12 236.0 86.70%
Appendix K-1 - 2
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13 236.0 86.50%
14 236.0 86.30%
Appendix K-1 - 3
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Contract
Year
Guaranteed
Dischargeable Energy
(MWh)
Round Trip Efficiency
Performance Guarantee
15 236.0 86.10%
16 236.0 85.90%
17 226.6 85.70%
18 221.7 85.50%
19 216.8 85.30%**
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 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 ten (10) days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test and a certificate of the Independent Engineer substantially in the form attached as Appendix K-4 hereto, provided, that such certificate shall only be required (i) in the event of a reasonable dispute by Buyer of the results or (ii) if the results from such Storage Capacity Test varied materially from the results of the most recent Storage Capacity 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. Seller or Buyer each may cause to be conducted two additional Storage Capacity Tests each per Contract Year; provided that written notice requesting any such additional test must be provided within thirty (30) days from receipt of the testing report from the previously conducted Storage Capacity Test and such additional Storage Capacity Test must be conducted within thirty (30) days of the receipt of the testing report from the previously conducted Storage Capacity Test. If an initially conducted Storage Capacity Test is subject to one or more retests pursuant to the preceding sentence, the last of such retests shall be considered the applicable Storage Capacity Test for purposes of satisfaction of applicable BESS Performance Guarantees.
Appendix K-1 - 4
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C. BESS Performance Guarantee Calculations
Appendix K-1 - 5
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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.
• “UNAVAILHRS”means the total number of hours in the applicable measurement period 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 unavailability caused by any BESS Excused Condition will not be included in UNAVAILHRS for such applicable measurement period. 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. The Guaranteed Dischargeable Energy divided by four (4) is the BESS Contract Capacity (in MW) for the given Contract Year.
(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) “Peak Season BESS Availability”:
Calculated for each Peak Season and compared to a fixed constant:
−
=
≥
Appendix K-1 - 6
Item14 Page183of226
where UNAVAILHRSy is calculated by the summation of Unavailable BESS Houri,y for yth Peak Season and THy represents the total number of hours in the same Appendix K-1 - 7
Item14 Page184of226
corresponding Peak Season. Unavailable BESS Houri,y is the prorated unavailability of the BESS for each hour “i” for yth Peak Season. Unavailable BESS Houri,y shall be calculated as follows:
where “Available BESS Capacity” shall be the sum of the available capacity of each of the system inverters, in MW AC, to receive charging energy and deliver discharging energy to the BESS Energy Meter for the corresponding Peak Season. (iv) “Off-Peak Season BESS Availability”:
Calculated for each Off-Peak Season and compared to a fixed constant:
−
− =
≥ −
where UNAVAILHRSy is calculated by the summation of Unavailable BESS Houri,y for each yth Off-Peak Season and THy represents the total number of hours in the corresponding Off-Peak Season. Unavailable BESS Houri,y is the prorated unavailability of the BESS for each hour “i” in yth Season. Unavailable BESS Houri,y shall be calculated as follows:
where “Available BESS Capacity” shall be the sum of the available capacity of each of the system inverters, in MW AC, to receive charging energy and deliver discharging energy to the BESS Energy Meter for in the corresponding Off-Peak Season.
C. Annual PV System Availability Guarantee
No later than sixty (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.
“Annual PV System Availability” or “PVSAy” means a percentage calculated as (a) 100, multiplied by (b) the result of (i) the product of (1) the PV Contract Capacity divided by the BESS Contract Capacity, and (2) 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 Appendix K-1 - 8
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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.
Appendix K-1 - 9
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“Annual PV System Availability Requirement” or “PVSARy” means for the first full Contract Year and each Contract Year thereafter, seventy-five percent (75%). “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 or 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
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APPENDIX K-2
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
REMEDY CALCULATIONS FOR FAILURE OF BESS PERFORMANCE
GUARANTEES AND ANNUAL PV SYSTEM AVAILABILITY GUARANTEE
A. For purposes of determining the Modified 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 during which such guarantee is not satisfied):
B. For purposes of determining the Modified 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 during which such guarantee is not satisfied):
C. For purposes of determining the Modified BESS Capacity Price due to a failure of the Peak Season BESS Availability Guarantee, the “Peak Season BESS Availability Adjustment Factor” shall be equal to the result of the following formula (where y represents the applicable Peak Season during which such guarantee is not satisfied):
D. For purposes of determining the Adjusted BESS Capacity Price due to a failure of the Off- Peak Season BESS Availability Guarantee, the “Off-Peak Season BESS Availability Adjustment Factor” shall be equal to the result of the following formula (where y represents the applicable Off-Peak Season during which such guarantee is not satisfied):
Appendix K-2 - 2
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E. 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 during which such guarantee is not satisfied):
Appendix K-3 - 1
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APPENDIX K-3
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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) (“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 until the Stored Energy Level reaches zero MWh as indicated by the battery management system (“Energy Out”);
Electrical output at Maximum Discharging Capacity (as defined in Appendix Q) at the BESS Energy Meter (MW);
Appendix K-3 - 2
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Electrical input at Maximum Charging Capacity (as defined in Appendix Q) at the BESS Energy Meter (MW);
Amount of time between the BESS’s electrical output going from 0 to Maximum Discharging Capacity;
Amount of time between the BESS’s electrical input going from 0 to Maximum Charging Capacity;
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 (%); and
(2) 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 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 Appendix K-3 - 3
Item14 Page190of226
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.
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.
Appendix K-3 - 4
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If either Party rejects the results of any SCT, such SCT shall be repeated in accordance with Part II.G.
Appendix K-3 - 5
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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
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 (or other mutually agreed upon communication protocol between Parties) with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points.
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.
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.
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.
The following Commercial Operation tests will be repeated annually:
Round-Trip Efficiency and Dischargeable Energy Test
Appendix K-3 - 6
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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 and the BESS will be operated in the same fashion as normal day-to-day operation. No special changes will be made to the control system or BESS Operating Restrictions for the SCT.
3. Procedure:
i. System Starting State: The BESS will be in the on-line state with each Battery Subsystem at zero percent (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 20°C and 30°C throughout this test. Exception can be made if the BESS is liquid cooled and the ambient temperature inside the BESS enclosures are not conditioned.
iv. Record initial values of each Battery Subsystem SOC. Exception can be made if the BESS is liquid cooled and the ambient temperature inside the BESS enclosures are not conditioned.
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 two percent (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 the amount of time required by the BESS supplier, 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 two percent (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
Appendix K-3 - 7
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The Dischargeable Energy is greater than or equal to the Guaranteed Dischargeable Energy.
Passed Failed Date:
Test Performed by:
Test Witnessed by:
Pass/Fail Criteria
The measured Round Trip Efficiency is greater than or equal to the Round Trip Efficiency Performance Guarantee.
Passed Failed Date:
Test Performed by:
Test Witnessed by:
Notes/Test Conditions:
________________________________________________________________________ ________________________________________________________________________ Appendix K-4 - 1
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APPENDIX K-4
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
FORM OF STORAGE CAPACITY TEST CERTIFICATE
This certification (“Certification”) of Installed Capacity and related characteristics of the Facility is delivered by [licensed professional engineer] (“Engineer”) to Southern California Public Power Authority (“Buyer”) in accordance with the terms of that certain Power Purchase Agreement dated December 15, 2022 (“Agreement”) by and between Sapphire Solar, LLC 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.
I hereby certify the following:
a. The Storage Capacity Test conducted on [Date] demonstrated a maximum dependable operating capability to discharge electric energy of [ ] MW AC to the Delivery Point at four (4) hours of continuous discharge, in accordance with the testing procedures, requirements and protocols set forth in Section 9.6, Appendix K-1 and Appendix K-3;
b. Such Storage Capacity Test demonstrated (i) a Round Trip Efficiency of [ ]% and (ii) Dischargeable Energy of [ ] MWh, each in accordance with the testing procedures, requirements and protocols set forth in Section 9.6, Appendix K-1 and Appendix K-3.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ______ day of __________, 20___.
[LICENSED PROFESSIONAL ENGINEER]
By: ___________________
Its: _________________
Appendix L-1 - 1
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APPENDIX L-1
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
FORM OF CONSTRUCTION START DATE CERTIFICATION
This certification (“Certification”) of the Construction Start Date is delivered by Sapphire Solar, LLC (“Seller”) to Southern California Public Power Authority (“Buyer”) in accordance with the terms of that certain Power Purchase Agreement dated December 15, 2022 (“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 ________.
Sapphire Solar, LLC
By:
Its:
Date:
Appendix L-2 - 1
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APPENDIX L-2
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
FORM OF COMMERCIAL OPERATION DATE CERTIFICATION
In accordance with the terms of that certain Power Purchase Agreement dated as of December 15, 2022 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) by and between Southern California Public Power Authority (“Buyer”) and Sapphire Solar, 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:2
1. 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.
2. Construction of the Facility has been completed in accordance with the terms and conditions of the Agreement, the Facility possesses all of the characteristics required by this Agreement.
3. The Facility has successfully completed all testing required by the Transmission Provider under the Generator Interconnection Agreement and consistent with the Facility design and manufacturer’s requirements to be completed prior to Commercial Operation. Testing shall include but not be limited to operating the Facility for a period of not less than seven (7) consecutive days delivering PV Delivered Energy in an amount equal to at least ninety-five percent (95%) of the PV Contract Capacity[ and BESS Metered Output in an amount equal to at least ninety-five percent (95%) of the BESS Contract Capacity, in each case,] during such period to the Point of Delivery.
2 Bracketed terms apply as indicated or are only applicable if Facility includes the BESS as determined under Appendix A-2.
Appendix L-2 - 2
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4. Seller has segregated and separately metered station use to the extent reasonably possible in accordance with the metering diagram set forth in Appendix Appendix L-2 - 3
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O, and any such meter(s) have the same or greater level of accuracy as required by the CAISO for such meters.
5. The BESS and its meters have been designed and installed in a manner that all Energy used for auxiliary use and station use within the BESS portion of the Facility is metered, and any such meter(s) have the same or greater level of accuracy as required by the CAISO for such meters.
6. Seller has obtained the insurance specified on Appendix F of the Agreement.
7. Seller shall have entered into an agreement providing for the operation and maintenance of the Facility with a Qualified Operator, unless Seller provides the operation and maintenance of the Facility.
8. Buyer has received the Performance Security that complies with the terms of the Agreement.
9. Buyer has accepted (which acceptance shall not be unreasonably withheld, conditioned or delayed) Seller’s proof of timely registration with NERC for all applicable function types and the NERC Compliance Registry in accordance with the currently affective NERC Rules Of Procedure, including Seller’s registration as both Generator Owner and Generator Operator.
10. Buyer has accepted (which acceptance shall not be unreasonably withheld, conditioned or delayed) Seller’s mapping of NERC registered Function Types in accordance with the currently-effective WECC Entity Function Mapping procedures.
11. Buyer has received and found reasonably acceptable Seller’s Q/A Program in accordance with Appendix G of the Agreement.
12. [Full Capacity Deliverability Status has been achieved with respect to the Facility.] or [Full Capacity Deliverability Status has been achieved with respect to the PV System and Partial Capacity Deliverability Status has been achieved in the amount of [X] MW with respect to the BESS].
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.
TABLE OF CONTENTS
Page
Appendix L-2 - 4
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Signed,
___________________________
Name:
Title:
Date:
Appendix 5 to Appendix L-2 - 5
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APPENDIX 1
to
APPENDIX L-2
to
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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 December 15, 2022 (the “Agreement”) by and between Southern California Public Power Authority (“Buyer”) and Sapphire Solar, 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. The PV System is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System and has been installed in accordance with the manufacturer’s specifications.
2. [The battery comprising the BESS has been installed in accordance with the manufacturer’s specifications.]
3. The Facility has successfully completed all testing required by the Transmission Provider under the Generator Interconnection Agreement and consistent with the Facility design and manufacturer’s requirements to be completed prior to Commercial Operation, including operating the Facility for a period of not less than seven (7) consecutive days and delivering PV Delivered Energy equal to at least ninety-five percent (95%) of PV Contract Capacity [and BESS Metered Output equal to at least ninety-five percent (95%) of the BESS Contract Capacity, in each case,] during such period to the Point of Delivery.
4. Seller has installed equipment for the PV System with an Installed PV Capacity of no less than ninety-five percent (95%) of the PV Contract Capacity.
5. [Seller has installed equipment for the BESS with an Installed Storage Capacity of no less than ninety-five percent (95%) of the BESS Contract Capacity.]3
6. Authorization to parallel the Facility was obtained by the Transmission Provider, [Name of Transmission Provider as appropriate] on___[DATE]____. 3 Only applicable if Facility includes the BESS as determined under Appendix A-2.
Appendix 6 to Appendix L-2 - 6
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7. The Transmission Provider has provided documentation supporting full unrestricted release for Commercial Operation by [Name of Transmission Provider as appropriate] on _______[DATE]_____.
8. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
9. Seller has installed meters in accordance with Prudent Operating Practice, and any such meter(s) have the same or greater level of accuracy as is required by the CAISO for such meters.
The undersigned is a Licensed Professional Engineer in the State of California. [Signature page follows]
Appendix 7 to Appendix L-2 - 7
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Sincerely,
[SELECTED INDEPENDENT ENGINEER]
___________________________
Name:
Title:
Date:
Appendix 8 to Appendix L-2 - 8
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APPENDIX 2
to
APPENDIX L-2
to
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity and related characteristics of the Facility is delivered by [licensed professional engineer] (“Engineer”) to Southern California Public Power Authority (“Buyer”) in accordance with the terms of that certain Power Purchase Agreement dated December 15, 2022 (“Agreement”) by and between Sapphire Solar, LLC 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.
I hereby certify the following:
a. The peak electrical output of the PV System at the Delivery Point is [ ] MW AC (“Installed PV Capacity”);
b. The Commercial Operation Storage Capacity Test conducted on [Date] demonstrated a maximum dependable operating capability to discharge electric energy of [ ] MW AC to the Delivery Point at four (4) hours of continuous discharge, in accordance with the testing procedures, requirements and protocols set forth in Section 9.6, Appendix K-1 and Appendix K-3 (the “Installed Storage Capacity”);
c. The sum of the Installed PV Capacity and the Installed Storage Capacity is [ ] MW AC and shall be the “Installed Capacity”; and
d. Such Commercial Operation Storage Capacity Test demonstrated (i) a Round Trip Efficiency of [ ]% and (ii) Dischargeable Energy of [ ] MWh, each in accordance with the testing procedures, requirements and protocols set forth in Section 9.6, Appendix K-1 and Appendix K-3.
[Signature Page Follows.]
Appendix 9 to Appendix L-2 - 9
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EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ______ day of __________, 20___.
[LICENSED PROFESSIONAL ENGINEER]
By: ___________________
Its: ___________________
Title: ___________________
Appendix M - 1
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APPENDIX M
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
SITE CONTROL DOCUMENTS
1. Solar Land Lease, dated as of July 9, 2021, by and between Ravi Madan and EDF Renewables Development, Inc., as recorded under that Memorandum of Solar Land Lease in the Official Records of the County of Riverside on July 12, 2021, as Document # 2021-041758.
2. Solar Land Lease, dated as of November 5, 2020, by and between Fred T. Tafazoli and EDF Renewables Development, Inc.
3. Solar Land Lease, dated as of April 24, 2020, by and between Reza Sarmadi and EDF Renewables Development, Inc.
Note that the above Site Control Documents will be assigned from EDF Renewables Development, Inc. to Sapphire Solar, LLC after the Effective Date.
Appendix N - 1
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APPENDIX N
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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 material 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 similar 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 is Appendix N - 2
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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 Appendix N - 3
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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 (e) 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). (f) 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.
(g) Memorandum. A memorandum of the Lease shall be recorded in the applicable county.
Appendix O - 1
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APPENDIX O
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
METERING DIAGRAM
Appendix P - 1
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APPENDIX P
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, 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 Sapphire Solar, 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 one hundred seventeen (117) MWac solar-powered electric generating facility (the “PV System”) and up to two hundred thirty six (236) MWh battery energy storage system, if constructed, (“BESS” and, together with the PV System, the “Facility”, as further described in the PPA) located in Riverside 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 Riverside 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
Item14 Page209of226
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 December 15, 2022 (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) Appendix P - 3
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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 - 4
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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 Appendix P - 5
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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 - 6
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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, and, at Buyer’s option, defend, Buyer and its Indemnitees from and against from any third-party claims, losses, liabilities, damages, judgments, fines, penalties, 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 Appendix P - 7
Item14 Page212of226
the date of this Consent and until the occurrence of the Term Conversion Date (as defined in the 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.
Appendix P - 8
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(b) Except as otherwise expressly provided herein, the Collateral Agent acknowledges 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.
Appendix P - 9
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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 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: Sapphire
Solar, 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
Appendix P - 10
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If to the Collateral Agent:
Appendix P - 11
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[_________]
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.
Appendix P - 12
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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 Appendix P - 13
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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. 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 - 14
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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
Sapphire Solar, LLC,
a Delaware limited liability company as
Seller
By: ___________________________________
Name:
Title:
[_____________],
as Collateral Agent for the Secured Parties
By: ___________________________________
Name:
Appendix P - 15
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Title:
Appendix P - 16
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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 December 15, 2022 (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 Sapphire Solar, 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 Appendix P - 17
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set forth in the PPA (except as disclosed to the investors in the applicable Tax Equity Financing).
Appendix P - 18
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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 Contract Capacity of the Facility as of the Commercial Operation Date is [___] MW.]
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Appendix P - 19
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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 - 20
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Exhibit A to Estoppel Certificate
PPA
See attached.
Appendix P - 1
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SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
BESS AND FACILITY OPERATING RESTRICTIONS4
A. BESS Operating Restrictions The BESS shall be subject to the following Operating Restrictions:
Description Value Notes
1. BESS Contract Capacity 59 MW
As determined by the
procedure stated in Appendix
K-1 Section C.(i)
2. Maximum Stored Energy
Level 59 MW for 4 hours
3. Minimum Stored Energy
Level 0 MWh
Maximum time at Minimum
Stored Energy Level is 48 hrs
and immediately following any
such 48-hour period the SOC
must be increased to at least
5%
4. Maximum Charging Capacity 59 MW
Or as determined by the
procedure stated in
Appendix K-1 Section C.(i)
5. Minimum Charging Capacity 0 MW
6. Maximum Discharging
Capacity 59 MW
Or as determined by the
procedure stated in
Appendix K-1 Section C.(i)
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
4 NTD: To be determined after FCDS is received or Buyer exercises the BESS Build Option.
Appendix P - 2
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10. Annual Average State of
Charge Range (SOC) <40 % Measured during each Contract Year Appendix Q - 3
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11. Annual Cycle Limit 365 cycles / Contract
Year*
One (1) cycle is equal to one
(1) kWh discharge throughput
per kWh calculated by the
product of the BESS Contract
Capacity and discharge hours
Not to exceed the stated value
Measured during each Contract
Year
12. Daily Dispatch Limits
2 cycles per operating
day
One (1) cycle is equal to 1
kWh throughput per kWh
calculated by the product of the
BESS 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
* Increased pro rata for any Contract Year exceeding 365 days.
C. 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
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APPENDIX R
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
PTC OPTION AMENDMENT
Upon Seller’s Notice to Buyer of its election to qualify the Facility for PTC in accordance with Section 3.8 of the Agreement, the Agreement shall be deemed amended as follows:
1. Section 7.4(b) of the Agreement is deleted and replaced in its entirety as follows:
“In addition to the curtailments described in Section 7.4(a), Buyer may curtail deliveries of (i) PV Delivered Energy, (ii) PV System Energy or (iii) BESS Metered Output that results in curtailment of PV System Energy, in each of the foregoing cases for any Compensable Curtailment 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. Except for Non-Compensable Curtailments, Buyer shall pay Seller for any Deemed Generated Energy for Compensable Curtailments in an amount equal to (i) the amount of Deemed Generated Energy in MWh, multiplied by (ii) (1) the applicable Contract Price plus (2) (A) the PTC rate determined pursuant to Section 45(b)(2) of the Code or Section 45Y(c)(1) of the Code, as applicable, as in effect during the Compensable Curtailment (and taking into account any then-applicable PTC rate increases under Section 45 of the Code or Section 45Y of the Code, as applicable), converted to a dollar per MWh basis, divided by (B) one (1) minus the highest then-applicable federal income tax rate (expressed as a percentage) applicable to Seller or its Affiliates or Tax Equity Investor. 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.”
2. Section 7.6 of the Agreement is deleted and replaced in its entirety as follows:
“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 Appendix R - 2
Item14 Page224of226
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, Appendix R - 3
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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 Delivered Energy and all of the associated Products shall pass from Seller to Buyer at the Point of Delivery; provided that (i) 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, and (ii) title to all PV Delivered Energy shall pass and transfer from Seller to Buyer at the PV Energy Meter. Notwithstanding the foregoing, Title to all of the associated Environmental Attributes and Capacity Rights shall pass from Seller to Buyer upon the creation thereof.”
3. In the definition of “Losses” in Section 13.4(f)(ii) of the Agreement, the following sentence is added to the end thereof:
“In circumstances where Seller is a Non-Defaulting Party, the value of lost PTCs (if any) shall be included as “Losses” and such value shall be considered direct compensable damages, and not indirect or consequential damages.”
In addition to the foregoing amendments, the Parties agree that upon Seller’s Notice to Buyer or its election to qualify the Facility for PTC in accordance with Section 3.8 of the Agreement, the applicable Contract Price, Contract Price Floor and Contract Price Ceiling for PV Delivered Energy shall be reduced in accordance with Section 6.1(b)(iii) of the Agreement.
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SCHEDULE 12.2(h)
TO
POWER PURCHASE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
SAPPHIRE SOLAR, LLC
UPSTREAM EQUITY OWNERS, SELLER’S ULTIMATE PARENT AND
ORGANIZATIONAL AND OWNERSHIP STRUCTURE OF SELLER AND UPSTREAM
EQUITY OWNERS
19800281_v15
Item14 Page226of226
Schedule 12.2(h) - 1
City Council Agenda Report
Meeting Date: January 17, 2023
From: Lisa Pope, City Clerk
Department: City Clerk
Submitted by: Lisa Pope, City Clerk
Subject
City Council Appointments to Outside Agencies
Recommendation
A. Appoint an alternate representative to the Central Basin Water Association; B. Appoint an alternate representative to County Sanitation District No. 1; and C. Appoint an alternate representative to County Sanitation District No. 2.
Background
Following the retirement of Council Member William Davis on December 19, 2022, vacancies exist on several of the City’s outside agencies.
Council Member Davis was the City’s alternate on the Central Basin Water Association, which meets quarterly upon notice. Council Member Merlo serves as the representative. This position requires the filing of a Statement of Economic Interest Form 700. The Council should select an alternate to the Central Basin Water Association.
County Sanitation District No. 1 meets the second Wednesday of each month and District No. 2 meets on the second and fourth Wednesdays of each month. Council Member Davis’ retirement leaves the alternate representative positions vacant. Mayor Lopez serves as the representative to both District No. 1 and District No. 2. The positions require the filing of a Statement of Economic Interest Form 700. The Council should select an alternate to County Sanitation District No. 1 and District No. 2.
Fiscal Impact
There is no fiscal impact associated with this report.
Attachments
1. Outside Agency Appointments
Item15 Page1of4
COUNCIL OUTSIDE AGENCY APPOINTMENTS
Outside Agency Appointments Page 3 of 3
Item15 Page2of4
Board/Agency Delegate
Alternate
Meetings Stipend/
Filings
California Contract Cities
Association
Ybarra
Lopez
3rd Wednesday monthly, 6 p.m. (dark Jan., July and Sept.) None Central Basin Water Association Merlo
Vacant
VPU Rep
Quarterly, will provide notice of meetings Form 700
City Selection Committee (Mayor) Lopez
Council
Meets as needed None
County Sanitation District #1
(Mayor)
Lopez
Vacant
2nd Wednesday monthly, 1:30 p.m. $125
Form 700
County Sanitation District #2
(Mayor)
Lopez
Vacant
2nd & 4th Wednesday monthly, 1:30 p.m. $125
Form 700
County Sanitation District #23 Entire Council 2nd Wednesday monthly, 1:30 p.m. $125 Form 700
Gateway Cities Council of
Governments
Ybarra
Lopez
1st Wednesday monthly, 6:00 p.m. $125
Form 700
Greater Los Angeles County Vector
Control District
Health and Safety Code Section 2024
Lopez 2nd Thursday of each month, 7 p.m. $100
Form 700
Independent Cities Association Ybarra
Larios
2nd Thursday monthly, 7:00 pm None
Independent Cities Finance
Authority
Lopez
Merlo
Annual meeting 1st Wednesday in June, 12 p.m. and special meetings as necessary
$150
Form 700
Southern California Association of
Governments
N/A Appointment should be made prior to Annual General Assembly meeting in April or May
Form 700
Following
annual conference Southeast Community Development
Corporation
Ybarra This is not a City appointment but listed to show comprehensive outside agency appointments.
None
Southeast Water Coalition Ybarra
Lopez
1st Thursday of even months, 6:30 p.m. $150
Form 700
Vernon Solid Waste Hearing Panel –
Up to 3 Councilmembers
Public Resources Code Section 44308
Ybarra
Lopez
Merlo
Meet as needed. None
COUNCIL OUTSIDE AGENCY APPOINTMENTS
Outside Agency Appointments Page 3 of 3
Item15 Page3of4
California Contract Cities Association
To develop and foster public and private partnerships between member cities and the business community in order to provide mutually beneficial resources and services that educate and inform; to create revenue opportunities, long term relationships and a forum to better serve the goals and priorities of the CCCA and its Associate Members.
Central Basin Water Association
Composed of water rights holders in the West Coast Basin. CBWA membership includes municipalities and private owners. This Association provides a forum to members to discuss current water rights issues and policies.
City Selection Committee (Mayor)
Each city appoints an elected official (usually the Mayor) as a delegate. Their duties are to appoint City representatives to such Boards, Commissions and Agencies (i.e. LAFCO, South Coast Air Quality Management District, Los Angeles County Metropolitan Transportation Authority, Los Angeles County Hazardous Waste Management Advisory Committee; and to nominate for appointment Members to the California Coastal Commission).
Los Angeles County Sanitation Districts
Its mission is to protect public health and the environment through innovative and cost-effective wastewater and solid waste management, and in doing so convert waste into resources such as recycled water, energy, and recycled materials. Pursuant to Health and Safety Code, Section 4730, the presiding officer of the City is the designated member of the Board of Directors for this District and requires the selection of an alternate.
District #1 (Mayor) – Bell, Compton, Cudahy, Huntington Park, Long Beach, Los Angeles, Lynwood, Maywood, Paramount, South Gate, Vernon, Los Angeles County
District #2 (Mayor) – Alhambra, Artesia, Bell, Bellflower, Bell Gardens, Cerritos, Compton, Downey, Long Beach, Los Angeles, Montebello, Monterey Park, Norwalk, Paramount, Pico Rivera, San Gabriel, South Gate, Vernon, Whittier, Los Angeles County District #23 – Vernon
Gateway Cities Council of Governments
For the purpose of engaging in regional and cooperative planning and coordination of government services and responsibilities to assist its members in the conduct of their affairs for the collective benefit of cities in the Southeast Los Angeles County area.
Greater Los Angeles County Vector Control District
The Greater Los Angeles County Vector Control District provides property inspections on a case-by-case basis to help identify the source of mosquito problems. Membership includes 37 members (36 city representatives and one LA County representative).
Independent Cities Association
Focuses on education, legislative advocacy, intergovernmental relationships and other major issues that transcend the boundaries of its member cities.
ICA holds two annual seminars bringing together city council members, other city officials and business partners for the purpose of being better informed and to share relevant experiences. The Winter Seminar addresses public safety and the Summer Seminar focuses on contemporary issues Independent Cities Finance Authority
Joint Powers Agreement with several cities for the purpose of providing low-cost sources of financing for the acquisition, construction, installation, and/or equipping of public capital improvements.
Southern California Association of Governments
Nation's largest metropolitan planning organization, undertakes a variety of planning and policy initiatives to encourage a more sustainable Southern California now and in the future.
COUNCIL OUTSIDE AGENCY APPOINTMENTS
Outside Agency Appointments Page 3 of 3
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Southeast Community Development Corporation
Appointments to SCDC are made by the Corporation. Promote community health, education, and safety, provide economic development, and to improve the standard of living for residents of southeast Los Angeles County.
Southeast Water Coalition
Formed to improve and protect the quantity and quality of the regional water supply. SEWC's mission is to prevent the contamination of the Central Groundwater Basin from migrating contaminated groundwater and to encourage good governance of water policies to ensure the availability of reliable, quality, and affordable water. SEWC's water purveyors service a population of 670,000 in a service area of 93+ square miles. The Board of Directors consists of one representative (normally a Councilmember) from each member city. The Administrative Entity acts as a steering committee consisting ofne Public Works type staff member from each member city plus three non-voting (advisory) members from the Central Basin Watermaster, Golden State Water Company, and California Water Service (two private utilities serving several member cities).
Vernon Solid Waste Hearing Panel
The Vernon Health and Environmental Control Department serves as the Local Enforcement Agency for Solid Waste Facilities in the City of Vernon.
The hearing panel is available to convene and provide resolution to solid waste related issues that may arise from within the local enforcement agency’s purview. Pursuant to Section 44308 of the Public Resources Code, the City Council may appoint three of its members to serve.