1 Title Page
Southern California Edison Company FERC FPA Electric Tariff Tariff Title: Wholesale Distribution Access Tariff
Tariff Record Title: Service Agreement No. XXX
LETTER AGREEMENT
BETWEEN
CITY OF VERNON
AND
SOUTHERN CALIFORNIA EDISON COMPANY
PROJECT: DATA CENTERS TWO (SCE EAK048 AND SCE WDT1810EXP) Contract Effective Date: xx/xx/xx Tariff Record Proposed Effective Date: xx/xx/xx 905.xxx.x Version Number: 0.0.0
EAK048 AND WDT1810EXP Option Code: A
2 LETTER AGREEMENT
April 8, 2024
Carlos R. Fandino
City Administrator
City of Vernon
Vernon Public Utilities
4305 Santa Fe Avenue Vernon, CA 90058
Re: Letter Agreement for the Data Centers Two Project EAK048 and WDT1810EXP Mr. Fandino:
City of Vernon (“Interconnection Customer”) is proposing to construct and operate the Data Centers Two Project (“Project”), consisting of a 150 MW load project sited at three different locations within the City of Vernon service area. Each of the three new sites will have a 50 MW load, totaling 150 MW.
On May 12, 2022, Interconnection Customer submitted a load Interconnection Request to Southern California Edison Company (“SCE”), requesting to interconnect the Project at SCE’s existing Laguna Bell 66 kV Substation. Interconnection Customer’s load Interconnection Request was received by SCE on May 12, 2022. It describes the projected amount of load growth, the general location of the load, and the estimated in-service date for each load (“Data Centers Two Project Load Request”). Based on the Data Centers Two Project Load Request, SCE performed a Method of Service Study and provided Interconnection Customer with a Method of Service Study Subtransmission Assessment dated March 6, 2023, which describes the impacts to SCE’s electrical system from the Interconnection Customer’s Data Centers Two Project Load Request (“Method of Service Study Report”). As a result of the findings identified in the Method of Service Study Report, SCE performed an Interconnection Facilities Study and provided Interconnection Customer with a report dated September 7, 2023, which estimates the scope, cost and installation schedule of the required mitigations needed to accommodate the load requirements of the Project (“Interconnection Facilities Study Report”). The Method of Service Study Report and the Interconnection Facilities Study Report were provided to Interconnection Customer on September 7, 2023.
All capitalized terms used herein which are, not otherwise defined, shall have the meaning ascribed to that term in Section 2 of, or Attachment I to the SCE Wholesale Distribution Access Tariff (“WDAT”)(“GIP”) 1. Interconnection Customer and SCE are sometimes referred to herein individually as “Party” and collectively as “Parties.” 1 While the instant Agreement uses certain capitalized terms defined in the Generator Interconnection Procedures (“GIP”) Attachment to SCE’s WDAT, both Parties understand that the Project is a load interconnection project, not a generation interconnection project.
3 In the interest of working towards the achievement of Interconnection Customer’s expected operating date for the Project, as set forth in Exhibit D (Milestones), Interconnection Customer desires for SCE to commence certain engineering and design work prior to executing an Interconnection Facilities Agreement (“IFA”). Accordingly, the purpose of this letter agreement (“Agreement”) sets forth the terms and conditions of an interim arrangement pursuant to which SCE will perform, and Interconnection Customer will pay for, certain Work, as described herein:
1. Work. SCE will perform the Work, as described in Exhibit A, upon payment by Interconnection Customer of amounts described in Section 2 and according to the terms provided herein. SCE shall perform the Work only after receipt of the payments and Financial Security set forth in Exhibit C, as may be modified by Section 2.2 and any applicable Milestones set forth in Exhibit D. The Interconnection Customer acknowledges and understands that upon completion of the Work described in Exhibit A, additional Network Upgrades, Interconnection Facilities and/or Distribution Upgrades may be necessary to enable operation of the Project, and such will be included in the IFA contemplated by the Parties.
2. Payments and Financial Security
2.1. Payments/Financial Security. In order for SCE to perform its obligations under the terms and conditions of this Agreement, Interconnection Customer shall provide to SCE the payments and Financial Security, in such estimated amounts as set forth in Exhibits B and C (as may be modified as described in Section 2.2) and in such form and on such dates as set forth in Exhibit C. SCE will provide Interconnection Customer an invoice of such payment obligations, which must be paid by the payment dates set forth in Exhibit C.
4 2.2. Additional Amounts. SCE shall notify Interconnection Customer in writing within a reasonable time if SCE learns that charges and expenses are likely to exceed the estimated amounts specified in Exhibit B, warranting adjustments to amounts in Exhibit C. In the event of such notification, SCE shall specify the payment and corresponding Financial Security increase(s) and Interconnection Customer shall pay such additional amounts within thirty (30) Calendar Days of receipt of an invoice for such additional amounts. The Parties will agree to amend the Agreement in order to reflect and collect the additional amounts required, subject to FERC’s approval, as applicable, before an invoice for the additional amounts is issued to the Interconnection Customer.
2.3. Failure to Pay; Insolvency. Subject to Section 3.2, in the event that Interconnection Customer fails to provide payment for amounts incurred or irrevocably committed to be incurred, or fails to provide Financial Security, pursuant to this Agreement, SCE may (a) immediately stop Work; (b) draw on the Interconnection Financial Security for any amounts due to SCE during the term of this Agreement, and/or (c) terminate this Agreement by written notice of cancellation effective upon FERC approval. In the event that Interconnection Customer (i) is dissolved; (ii) becomes insolvent; (iii) becomes the subject of a petition in bankruptcy, either voluntary or involuntary, or in any other proceeding under federal bankruptcy laws; (iv) makes an assignment for the benefit of creditors, excluding any assignment for financing purposes; (v) is named in a suit for the appointment of a receiver, SCE may, in addition to (a) through (c) above, 5 draw on the Tax Security (as defined in the IFA) for any tax liability imposed on SCE during the term of this Agreement.
3. Dispute. Disputes arising out of or in connection with this Agreement shall be resolved as follows:
3.1. Submission. In the event either Party has a dispute, or asserts a claim, that arises out of or in connection with this Agreement or its performance, such Party (the “disputing Party”) shall provide the other Party with written notice of the dispute or claim (“Notice of Dispute”). Such dispute or claim shall be referred to a designated senior representative of each Party for resolution on an informal basis as promptly as practicable after receipt of the Notice of Dispute by the other Party. In the event the designated representatives are unable to resolve the claim or dispute through unassisted or assisted negotiations within thirty (30) Calendar Days of the other Party’s receipt of the Notice of Dispute, such claim or dispute may, upon mutual agreement of the Parties, be submitted to arbitration and resolved in accordance with the arbitration procedures set forth below. In the event the Parties do not agree to submit such claim or dispute to arbitration, each Party may exercise whatever rights and remedies it may have in equity or at law consistent with the terms of this Agreement.
3.2. Payment Dispute. In the event of a billing dispute between SCE and the Interconnection Customer, SCE shall continue to perform the Work under this Agreement as long as the Interconnection Customer: (i) continues to make all payments not in dispute; and (ii) pays to SCE or into an independent escrow account the portion of the invoice in dispute, pending resolution of such dispute. 6 If the Interconnection Customer fails to meet these two requirements for continuation of service, then SCE may invoke remedies in Section 2.3. Within thirty (30) Calendar Days after the resolution of the dispute, the Party that owes money to the other Party shall pay the amount due with interest calculated in accordance with the methodology set forth in FERC's Regulations at 18 C.F.R. §
35.19a(a)(2)(iii).
3.3. External Arbitration Procedures. Any arbitration initiated under this Agreement shall be conducted before a single neutral arbitrator appointed by the Parties. If the Parties fail to agree upon a single arbitrator within ten (10) Calendar Days of the submission of the dispute to arbitration, each Party shall choose one arbitrator who shall sit on a three-member arbitration panel. The two arbitrators so chosen shall within twenty (20) Calendar Days select a third arbitrator to chair the arbitration panel. In either case, the arbitrators shall be knowledgeable in electric utility matters, including electric transmission and bulk power issues, and shall not have any current or past substantial business or financial relationships with any party to the arbitration (except prior arbitration).
The arbitrator(s) shall provide each of the Parties an opportunity to be heard and, except as otherwise provided herein, shall conduct the arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“Arbitration Rules”) and any applicable FERC regulations; provided, however, in the event of a conflict between the Arbitration Rules and the terms of Section 3, the terms of this Section 3 shall prevail.
7 3.4. Arbitration Decisions. Unless otherwise agreed by the Parties, the arbitrator(s) shall render a decision within ninety (90) Calendar Days of appointment and shall notify the Parties in writing of such decision and the reasons therefor. The arbitrator(s) shall be authorized only to interpret and apply the provisions of this Agreement and shall have no power to modify or change any provision of this Agreement in any manner. The decision of the arbitrator(s) shall be final and binding upon the Parties, and judgment on the award may be entered in any court having jurisdiction. The decision of the arbitrator(s) may be appealed solely on the grounds that the conduct of the arbitrator(s), or the decision itself, violated the standards set forth in the Federal Arbitration Act or the Administrative Dispute Resolution Act. The final decision of the arbitrator must also be filed with FERC if it affects jurisdictional rates, terms and conditions of service, or Interconnection Facilities.
3.5. Costs. Each Party shall be responsible for its own costs incurred during the arbitration process and for the following costs, if applicable: (1) the cost of the arbitrator chosen by the Party to sit on the three-member arbitration panel and one half of the cost of the third arbitrator chosen; or (2) one half the cost of the single arbitrator jointly chosen by the Parties.
4. Milestone Schedule. The milestone schedule is attached as Exhibit D. SCE shall use commercially reasonable efforts to complete the Work in accordance with this schedule; however, SCE does not warrant the Work will be completed in time to meet such deadlines, and Interconnection Customer understands and acknowledges that such deadlines are only 8 estimates and that the due dates in Exhibit D are dependent on Interconnection Customer coordinating with SCE to complete the milestones as specified in a timely manner. SCE shall not be liable for any cost or damage incurred by Interconnection Customer as a result of or due to any delay in the completion of the Work pursuant to the milestone schedule.
5. Termination.
5.1. Except for terms that survive termination, this Agreement shall terminate upon the earliest of the following to occur: (i) notice that this Agreement is not accepted for filing by FERC, if applicable; (ii) the effective date of the IFA, which the Parties intend to supersede this Agreement; (iii) the Interconnection Customer’s receipt of SCE’s notice of cancellation pursuant to Section 2.3, which is subject to acceptance by FERC; (iv) two (2) Business Days after receipt by SCE of a termination notice from Interconnection Customer to SCE at any time and for any reason; or (v) withdrawal of the Interconnection Customer’s Interconnection Request for the Project.
5.2. In the event that either Party terminates this Agreement for reasons other than the execution of the IFA, SCE shall use commercially reasonable efforts to mitigate the costs, damages, and charges arising as a consequence of such termination. To that end, SCE shall cancel, to the extent possible, any pending orders of, or return, any materials, or equipment procured pursuant to this Agreement. To the extent that Interconnection Customer has already paid SCE for any or all costs of such materials, equipment or contracts cancelled or returned, SCE shall refund such amounts to Interconnection Customer, less any costs or penalties incurred by SCE to cancel pending orders, or return, of such materials and equipment. 9 5.3. In the event that this Agreement is terminated or if the Work is completed before the effective date of the IFA and a payment shortfall exists pursuant to Section
5.3.2 of this Agreement, SCE shall make reasonable efforts to submit a final invoice to Interconnection Customer of all charges and expenses within twelve (12) months from the date of termination of or completion of the Work performed under this Agreement. In such event, the following true-up process will be used:
5.3.1. Payment Excess. In the event that Interconnection Customer’s payment(s) paid in accordance with this Agreement exceeds the amount of SCE’s charges and expenses incurred or irrevocably committed to be incurred pursuant to this Agreement, SCE shall return the excess amount without interest to Interconnection Customer within thirty (30) Calendar Days after the date of a final invoice without offset for any amount that may be in dispute.
5.3.2. Payment Shortfall. In the event that Interconnection Customer’s payment(s) paid in accordance with this Agreement is less than the amount of SCE’s charges and expenses incurred or irrevocably committed to be incurred pursuant to this Agreement, then Interconnection Customer shall pay the difference, without interest, within thirty (30) Calendar Days of the date of receipt of a final invoice, without offset for any amount which may be in dispute. If Interconnection Customer fails to pay the final invoice, SCE shall also have the right to draw on the Interconnection Financial Security for any payment shortfall.
5.4. In the event that Interconnection Customer elects to terminate this Agreement but still take delivery of materials or equipment procured pursuant to this Agreement, 10 Interconnection Customer shall assume all payment obligations with respect to delivery of such materials, equipment, and contracts, and SCE shall transfer such materials and equipment, and, if necessary, assign such contracts, to Interconnection Customer as soon as reasonably practicable, at Interconnection Customer’s expense.
5.5. In the event that Interconnection Customer and SCE enter into a IFA concurrently with the termination of this Agreement, then any applicable work product generated by SCE and any associated payments made by Interconnection Customer pursuant to this Agreement not already credited shall be reflected in the scope of, and the amount due under, such IFA.
6. Taxes
6.1. ITCC: The Income Tax Component of Contribution specified in the Preliminary Statement, Part M of SCE’s tariff on file with the CPUC, applicable to the Interconnection Facilities Cost, and the Capital Additions Cost. The ITCC applicable to the Interconnection Facilities Cost is provided in Exhibit B.
6.2. If SCE or the IRS makes a determination that the payment(s) made pursuant to this Agreement are taxable as contributions in aid of construction, either: (i) SCE may draw on the financial security provided by the Interconnection Customer for the estimated tax liability held on behalf of the Project to pay the tax liability imposed on SCE; or (ii) Interconnection Customer may elect to make a nonrefundable cash payment to SCE within thirty (30) Calendar Days of receipt of the invoice in the actual amount of the resultant tax liability. The tax liability will be calculated in accordance with IRS Notice 2016-36. 11 7. Uncontrollable Force. No Party shall be considered to be in default with respect to any obligation hereunder, other than the obligation to pay money when due, if prevented from fulfilling such obligation by Uncontrollable Force, which for purposes of clarity shall include pandemic. A Party unable to fulfill any obligation hereunder (other than an obligation to pay money when due) by reason of Uncontrollable Force shall give notice and the full particulars of such Uncontrollable Force to the other Party in writing or by telephone as soon as reasonably possible after the occurrence of the cause relied upon. Telephone notices given pursuant to this Section 7 shall be confirmed in writing as soon as reasonably possible and shall specifically state the full particulars of the Uncontrollable Force, the time and date when the Uncontrollable Force occurred, and when the Uncontrollable Force is reasonably expected to cease. The Party affected shall exercise due diligence to remove such disability with reasonable dispatch, but shall not be required to accede or agree to any provision not satisfactory to it in order to settle and terminate a strike or other labor disturbance.
8. Indemnity. Each Party shall at all times indemnify, defend, and hold the other Party harmless from, any and all Losses arising out of or resulting from the other Party’s action or inactions with respect to its obligations under this Agreement on behalf of the indemnifying Party, except in cases of gross negligence or intentional wrongdoing by the indemnified Party.
9. Consequential Damages. In no event shall any Party be liable under any provision of this Agreement for any losses, damages, costs or expenses for any special, indirect, incidental, consequential, or punitive damages, including but not limited to loss of profit or revenue, loss of the use of equipment, cost of capital, or cost of temporary equipment or services, whether based in whole or in part in contract or in tort, including negligence, strict liability, or any 12 other theory of liability; provided, however, that damages for which a Party may be liable to another Party under another agreement will not be considered to be special, indirect, incidental, or consequential damages hereunder.
10. Entire Agreement. This Agreement, including all Exhibits attached hereto, constitutes the complete and final expression of the agreement between the Parties and is intended as a complete and exclusive statement of the terms of their agreement. This Agreement supersedes all prior and contemporaneous offers, promises, representations, negotiations, discussions, communications, and other agreements, which may have been made in connection with the subject matter of this Agreement. Nothing in this Agreement is intended or shall be deemed to require SCE or Interconnection Customer to enter into any other agreement, including without limitation any agreement to interconnect the Project. Should the Parties enter into an IFA, such IFA will supersede this Agreement.
11. Insurance. Each Party shall maintain insurance coverage consistent with the requirements as set forth in the IFA.
12. Access Rights. Each Party shall provide access rights consistent with the requirements as set forth in the IFA.
13. Waiver. Any waiver at any time by either Party of its rights with respect to this Agreement, shall not be deemed a waiver with respect to any other failure to comply with any obligation, right or duty of this Agreement. Any delay, with the exception of the statutory period of limitation in assessing or enforcing any right, shall not be deemed a waiver of such right.
14. No Joint Liability. The covenants, obligations, and liabilities of the Parties are intended to be several and not joint or collective, and nothing contained in this Agreement shall ever be 13 construed to create an association, joint venture, trust, or partnership, or to impose a trust or partnership covenant, obligation, or liability on or with regard to either Party. Each Party shall be individually responsible for its own covenants, obligations, and liabilities as provided in this Agreement. Neither Party shall be under the control of the other Party.
Neither Party shall be the agent of or have a right or power to bind the other Party without such other Party’s express written consent.
15. No Third Party Beneficiaries. The Parties do not intend to create rights in, or to grant remedies to, any third party as a beneficiary either of this Agreement or of any duty, covenant, obligation, or undertaking established herein.
16. Governing Law. This Agreement shall be interpreted by and in accordance with the laws of the State of California, without regard to the principles of conflict of laws therefor, or the laws of the United States, as applicable, as if executed and to be performed wholly within the United States.
17. Successors and Assigns. This Agreement shall be binding upon the Parties and their successors and assigns. This Agreement may be assigned by a Party only with the written consent of the other Party; provided that a Party may assign this Agreement without the consent of the other Party to any Affiliate of the assigning Party with an equal or greater credit rating and with the legal authority and operational ability to satisfy the obligations of the assigning Party under this Agreement; and provided further that the Interconnection Customer shall have the right to assign this Agreement, without the consent of the other Party, for collateral security purposes to aid in providing financing for the Generating Facility, provided that the Interconnection Customer will require any secured party, trustee or mortgagee to notify the other Party of any such assignment. Any financing arrangement 14 entered into by the Interconnection Customer pursuant to this Section will provide that prior to or upon the exercise of the secured party’s, trustee’s or mortgagee’s assignment rights pursuant to said arrangement, the secured creditor, the trustee or mortgagee will notify the other Party of the date and particulars of any such exercise of assignment right(s). Any attempted assignment that violates this Section is void and ineffective. Any assignment under this Agreement shall not relieve a Party of its obligations, nor shall a Party’s obligations be enlarged, in whole or in part, by reason thereof. Where required, consent to assignment will not be unreasonably withheld, conditioned or delayed.
18. Survival. Indemnity obligations and obligations to pay charges and expenses incurred or irrevocably committed to be incurred pursuant to this Agreement will survive termination of this Agreement.
19. FERC Filing. SCE will report this Agreement and amendments thereto in its Electronic Quarterly Report (“EQR”) in lieu of filing it at FERC, pursuant to Applicable Laws and Regulations.
20. Reservation of Rights. SCE shall have the right to make a unilateral filing with FERC to modify this Agreement with respect to any rates, terms and conditions, charges, classifications of service, rule or regulation under section 205 or any other applicable provision of the Federal Power Act and FERC’s rules and regulations thereunder, and Interconnection Customer shall have the right to make a unilateral filing with FERC to modify this Agreement pursuant to section 206 or any other applicable provision of the Federal Power Act and FERC’s rules and regulations thereunder; provided that each Party shall have the right to protest any such filing by another Party and to participate fully in any proceeding before FERC in which such modifications may be considered. Nothing in this 15 Agreement shall limit the rights of the Parties or of FERC under sections 205 or 206 of the Federal Power Act and FERC’s rules and regulations thereunder, except to the extent that the Parties otherwise mutually agree as provided herein.
21. Construction. Ambiguities or uncertainties in the wording of this Agreement shall not be construed for or against any Party, but shall be construed in the manner that most accurately reflects the Parties’ intent as of the date they executed this Agreement.
22. Amendment. The Parties may by mutual agreement amend this Agreement by a written instrument duly executed by all of the Parties. Such amendment shall become effective and a part of this Agreement upon satisfaction of all Applicable Laws and Regulations.
23. Confidentiality. The provisions governing confidentiality in the IFA are hereby incorporated herein, in their entirety.
24. Authority. Each Party hereby represents that it has the right, power, and authority to enter into this Agreement, to become a Party hereto and to perform its obligations hereunder. This Agreement is a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is sought in a proceeding in equity or at law).
25. Warranties. Interconnection Customer warrants that it is duly organized, validly existing and in good standing under the laws of the state in which it is organized, formed, or incorporated, as applicable; and that it is qualified to do business in the state or states in which the Interconnection Facilities will be located; and that it has the corporate power and 16 authority to own its properties, to carry on its business as now being conducted and to enter into this Agreement and carry out the transactions contemplated hereby and perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement.
26. Headings. The descriptive headings of the various Sections of this Agreement have been inserted for convenience of reference only and are of no significance in the interpretation or construction of this Agreement.
27. Execution. This Agreement may be executed in two or more counterparts, each of which is deemed an original, but all constitute one and the same instrument. 17 28. Effective Date. This Agreement shall become effective upon execution by all Parties subject to acceptance by FERC (if applicable), or if filed unexecuted, upon the date specified by FERC.
SOUTHERN CALIFORNIA EDISON COMPANY
By _________________________
Name: Jim Buerkle
Title: Managing Director of Major Projects, Design
Engineering, and Grid Contracts
ACCEPTED AND AGREED to this day of __________________
CITY OF VERNON
By: _____________________________
Name: _ Carlos R. Fandino_____________
Title: __City Administrator____________
ATTEST:
____________________________________
Yonnie Parker, Deputy City Clerk
APPROVED AS TO FORM:
_____________________________________
Zaynah N. Moussa, City Attorney
ACCEPTED AND AGREED to this day of __________________
18 EXHIBIT A
SCOPE OF WORK
A description of the Work to be performed by SCE. A one-line diagram of the interconnection is included.
SCE’s Interconnection Facilities described in this Exhibit A to the Agreement are based on SCE’s preliminary engineering and design and were derived from SCE’s Interconnection Facilities Study Report.
The Work to be performed under this Agreement is solely the detailed design, engineering, and procurement for the Interconnection Facilities described below, in order to advance the Project towards its in-service date using reasonable efforts prior to the execution of an IFA. SCE will not perform any construction for the Interconnection Facilities under this Agreement; such construction activities will be performed pursuant to a subsequent IFA.
SCE will commence detailed design, engineering, and procurement for the Interconnection Facilities described below.
1. Interconnection Facilities:
(i) Laguna Bell Substation (DE Section for 50 MW of the 150 MW) Perform relay coordination study
(ii) Laguna Bell Substation (AB Section for 100 MW of the 150 MW)
1. Install facilities for two (2) new 66 kV switchrack positions. This work includes the following for each of the new positions:
a. One (1) 66 kV dead-end switchyard structure.
b. Two (2) 66 kV voltage transformers with steel pedestal support structures. c. Three (3) 66 kV line drops.
d. Two (2) 66 kV circuit breakers.
e. Four (4) 66 kV group operated disconnect switches, one with grounding attachment.
2. Install the following relays to protect the new line position:
Two (2) line current differential relays. The make and type of current differential relays will be specified by SCE during final engineering of SCE Interconnection Facilities.
(iii) Laguna Bell-P.S.33 66 kV line (AB Section for 100 MW of the 150 MW).
1. Utilize approximately 3.75 miles of existing idle line. Use of this existing idle line will require pole replacements, pole head frames, and insulator replacements which will be determined during execution of the project.
2. Install new overhead and underground facilities to complete the line into Laguna Bell Substation (AB section). The actual scope will be determined during execution of the project. This study assumed the following:
a. Installation of three (3) tubular steel riser poles
19 b. Installation of three (3) underground vaults
c. Installation of approximately 1,500’ of duct bank
d. Installation of approximately 5,700’ of underground cable e. Installation of ten (10) wood poles
f. Thirty-three (33) pole head reframes
g. Thirteen (13) pole head insulator replacements
h. Approximately 2,500’ of overhead conductor
(iv) Laguna Bell-P.S.20-P.S.38 66 kV line. (AB Section for 100 MW of the 150 MW)
1. Utilize approximately 3.25 miles of existing idle line. Use of this existing idle line will require pothead replacements, pole head frames, and insulator replacements which will be determined during execution of the project.
2. Install new overhead and underground facilities to complete the line into Laguna Bell Substation (AB section). The actual scope will be determined during execution of the project. The Interconnection Facilities Study Report assumed the following:
a. Installation of two (2) tubular steel riser poles
b. Installation of six (6) underground vaults
c. Installation of approximately 5,700’ of duct bank
d. Installation of approximately 19,000’ of underground cable e. Installation of one (1) pole switch
f. Forty-one (41) pole head reframes
g. Sixteen (16) pole head insulator replacements
h. Two (2) tubular steel pole pothead replacements
i. One (1) tubular steel pole replacement
(v) Telecommunications. (AB Section for 100 MW of the 150 MW)
1. Install all required lightwave, channel banks, and associated equipment (including terminal equipment), supporting line protection and the RTU requirements at the Laguna Bell Substation.
2. Install fiber optic cable from Laguna Bell Substation to the City of Vernon boundary along the existing Laguna Bell-P.S.33 66 kV line. The Study assumed the installation of approximately 300’ of underground fiber optic cable from Laguna Bell Substation to outside the fence line and rise up with approximately 3.75 miles of overhead fiber optic cable to the City of Vernon boundary.
3. Install fiber optic cable from Laguna Bell Substation to the City of Vernon boundary along the existing Laguna Bell-P.S.20-P.S.38 66 kV line. The Study assumed the installation of approximately 300’ of underground fiber optic cable from Laguna Bell Substation to outside the fenceline and rise up with approximately 3.25 miles of overhead fiber optic cable to the City of Vernon boundary. (vi) Metering. (AB Section for 100 MW of the 150 MW).
Install meters required to meter the retail load at the City of Vernon. Notwithstanding that the meters will be located on the Interconnection Customer’s side of the Point of Change of Ownership, SCE shall own, operate and maintain such facilities as part of the SCE’s Interconnection Facilities.
(vii) Power System Controls. (AB Section for 100 MW of the 150 MW).
Add points to existing RTU at Laguna Bell Substation to include points for new protection 20 relay/status/alarm/control.
(viii) Real Properties. (AB Section for 100 MW of the 150 MW).
Obtain easements and/or acquire land for the installation of SCE’s Interconnection Facilities.
(ix) Environmental Activities, Permits, and Licensing. (AB Section for 100 MW of the 150 MW)
Perform and/or coordinate the required environmental activities and obtain required licensing and permits for the installation of SCE’s Interconnection Facilities, including any associated telecommunication equipment, if applicable.
1. SCE Scope of Work
i. SCE will act as the lead for regulatory agency communication for permits issued to SCE covering such SCE facilities.
ii. SCE environmental activities may include, but are not limited to, the following:
a. Perform all environmental studies and construction monitoring of SCE internal substation construction activities and provide study results to the City of Vernon for inclusion in its environmental documents, if applicable.
b. Collaborate with the City of Vernon during the environmental study phase on the City of Vernon’s proposed study methodologies and findings, as studies are being planned and performed for SCE’s scope of work.
c. Review City of Vernon’s CEQA and/or National Environmental Policy Act (“NEPA”) documents, technical studies, surveys, and other environmental documentation to ensure SCE’s scope of work is adequately described in such documents (City of Vernon will include SCE’s scope of work in its environmental documents. If the City of Vernon’s CEQA and/or NEPA documents do not sufficiently incorporate SCE’s scope of work, SCE’s assumed environmental work and permitting level of effort may increase, resulting in the need to update cost and duration estimates, and potentially amend the Interconnection Agreement).
d. Review SCE’s internal existing technical reports/documents when available.
e. Prepare SCE’s project description, including scope changes during permitting/preconstruction or construction.
f. Communicate scope changes to the City of Vernon’s environmental team and discuss/approve subsequent actions including new surveys as necessary.
g. Complete General Order 131-D Consistency Determination and Environmental Evaluation.
h. Regulatory agency communication, consultation, reporting, and acquisition of SCE permits addressing SCE's facilities and scope of work. i. Prepare environmental requirements for construction clearance. j. Develop communication plan.
21 k. Perform pre-construction coordination field visit. l. Provide Environmental Awareness/Worker Environmental Awareness Program (“WEAP”) training.
m. Perform construction monitoring oversight.
n. Complete construction and post-construction site assessments.
2. City of Vernon Scope of Work
i. City of Vernon will perform all environmental studies and prepare draft environmental permit applications related to the installation of such SCE facilities, except for the SCE internal substation activities as described above. The City of Vernon’s responsibilities include as applicable, but are not limited to:
notifications to the Native American Heritage Commission (“NAHC”) and follow up notifications to the tribes and individuals in the NAHC contact list; performing cultural and paleontological resources records searches, cultural resources inventories (survey and recording), testing and evaluation and/or data recovery of archaeological sites, and appropriate documents in the form of inventory reports, research design, and/or data recovery reports; cultural and paleontological monitoring when/if required, and arranging curation agreements for artifacts and fossil specimens collected; performing a California Natural Diversity Database search, habitat assessment, and protocol or focused surveys for species with the potential of occurring in identified suitable habitat; conducting jurisdictional delineations for wetlands and other regulated waters; preparing draft environmental permit applications, pre-construction biological resource surveys for such SCE facilities, biological resource monitoring during construction of such SCE facilities; mitigation costs including, but not limited to, offsite/compensatory mitigation and onsite restoration, and developing mitigation plans or other environmental reports or submittals to support installation of such SCE facilities.
ii. Prior to commencing work and during execution of work, the City of Vernon should collaborate and obtain SCE concurrence on all work outlined above.
Should the City of Vernon-performed environmental studies, surveys, or construction monitoring not meet the Federal or State industry standards in accordance with Applicable Laws and Regulations, and as determined by SCE, the City of Vernon shall be obligated to remedy deficiencies under SCE’s direction.
In the event the assumptions presume that the Interconnection Customer performs part of the environmental activities on SCE’s behalf, the Interconnection Customer will be required to:
1. Provide SCE the Environmental Services Costs Declaration of the actual costs incurred for work performed.
2. Remedy any and all deficiencies under SCE’s direction, should the environmental studies and resulting reports not comply with industry standards established by State of California and/or Applicable Laws and Regulations, as determined by SCE.
22 2. Point of Change of Ownership, Point of Interconnection and One-Line Diagram of Interconnection:
For purposes of the Work to be performed under this Agreement, the following assumptions shall apply with respect to the Point of Change of Ownership and Point of Interconnection:
i. Point of Change of Ownership.
(i) Laguna Bell-P.S.33 66 kV Line: The Point of Change of Ownership shall be the point where the conductors of the Laguna Bell-P.S.33 66 kV Line are attached to the Last Structure at the City of Vernon boundary. The City of Vernon shall own and maintain the Last Structure, the conductors, insulators, and jumper loops from such Last Structure to the City of Vernon facilities. SCE will own the insulators that are used to attach the SCE owned conductors to the Last Structure. (ii) Laguna Bell-P.S.33 66 kV Line telecommunication fiber optic cable: The Point of Change of Ownership shall be the point designated by SCE where the Interconnection Customer’s fiber optic cable is attached to the SCE owned fiber optic cable at the City of Vernon boundary.
(iii) Laguna Bell-P.S.20-P.S.38 66 kV Line: The Point of Change of Ownership shall be the point where the conductors of the Laguna Bell-P.S.33 66 kV Line are attached to the Last Structure at the City of Vernon boundary. The City of Vernon shall own and maintain the Last Structure, the conductors, insulators, and jumper loops from such Last Structure to the City of Vernon facilities. SCE will own the insulators that are used to attach the SCE owned conductors to the Last Structure. (iv) Laguna Bell-P.S.20-P.S.38 66 kV Line telecommunication fiber optic cable: The Point of Change of Ownership shall be the point designated by SCE where the Interconnection Customer’s fiber optic cable is attached to the SCE owned fiber optic cable at the City of Vernon boundary.
ii. Point of Interconnection. SCE’s Laguna Bell 66 kV Substation. 23 iii. One-Line Diagram of Interconnection.
24 EXHIBIT B
ESTIMATED COST OF THE WORK AND FINANCIAL SECURITY
SCE will provide an estimated cost of the Work identified in Exhibit A and any associated financial security, including Interconnection Financial Security and ITCC. a. Estimated Cost
Element- Interconnection
Facilities Cost
One-Time Cost ITCC Total
Distribution Provider’s Interconnection
Facilities
Laguna Bell-P.S.33 66kV Line $2,513,331 $603,199 $3,116,530 Laguna Bell-P.S. 20-P.S.38 66 kV Line $4,108,342 $986,002 $5,094,343 Laguna Bell Substation Switchrack $3,324,745 $797,939 $4,122,683 Power System Controls $15,904 $0.00 $15,904
Metering Services $62,044 $14,890 $76,934
IT Telecommunications $199,478 $47,875 $247,352
Laguna Bell-P.S.33 66kV Line
Transmission Telecommunication $395,926 $95,022 $490,948 Laguna Bell-P.S. 20-P.S.38 66 kV Line
Transmission Telecommunication $409,232 $98,216 $507,448 Environmental and Licensing $117,513 $28,203 $145,716
Real Properties $115,006 $27,601 142,607
Laguna Bell Relay Coordination $64,430 $0.00 $64,430
Total $11,245,614 $80,334 $2,698,947 $14,024,895
Note 1: All amounts shown above are in nominal dollars.
Note 2: The estimated costs provided in the table above are based on the Interconnection Facilities Study Report and have been adjusted to reflect solely the Work SCE will perform for the Facilities as provided in Exhibit A of this Agreement.
b. Financial Security
i. Interconnection Financial Security.
1. The Distribution Provider’s Interconnection Facilities: Pursuant to Section 2 of this Agreement, the Interconnection Customer shall provide Interconnection Financial Security in the total amount of $2,000,000 to cover the costs for the Work identified in Section a.i of Exhibit A. The Interconnection Customer can reduce the Inteconnection Financial Security amount on a dollar for dollar basis once the total Project Payment amount outstanding becomes less than the Interconnection Financial Security amount posted.
ii. Estimated Tax Liability.
Pursuant to Section 6 of this Agreement, the Interconnection Customer’s estimated tax liability is as follows:
Estimated tax liability for Distribution Provider’s Interconnection Facilities = The sum of the product of (i) the applicable ITCC rate for the year payments are to be received, and 25 (ii) the total of the payments to be received for the Interconnection Facilities Cost for that year.
Year(s) payments
to be received
Applicable ITCC
rate
Total payments to be
received for
Interconnection
Facilities Cost
ITCC for Distribution
Provider’s
Interconnection
Facilities
2023 & beyond See Section 4.4 of
Attachment J to
the Tariff
$11,245,614 Applicable ITCC rate x
Total payments to be
received for
Interconnection
Facilities Cost
*The rate(s) applicable to the Tax Security is in accordance with Attachment J to the WDAT. 26 EXHIBIT C
PAYMENT AND FINANCIAL SECURITY SCHEDULE
SCE will include a schedule(s) of the amount, and due date, for the payments and financial security, as applicable, reflected in Exhibit B.
a. Payment Schedule
The payment amounts shown below are based on an estimate of the monthly incurred costs for the scope of Work identified in Exhibit A.
Payment
No.
Payment
Due Date
Interconnection
Facilities Cost
OneTime
Cost
ITCC Project
Payment
1 5/1/2024 $132,670 $948 $31,841 $165,459
2 6/1/2024 $161,445 $1,153 $38,747 $201,345
3 7/1/2024 $195,893 $1,399 $47,014 $244,306
4 8/1/2024 $236,857 $1,692 $56,846 $295,395
5 9/1/2024 $285,176 $2,037 $68,442 $355,655
6 10/1/2024 $341,605 $2,440 $81,985 $426,030
7 11/1/2024 $406,703 $2,905 $97,609 $507,217
8 12/1/2024 $480,697 $3,434 $115,367 $599,498
9 1/1/2025 $566,745 $4,049 $136,019 $706,813
10 2/1/2025 $657,474 $4,697 $157,794 $819,965
11 3/1/2025 $753,885 $5,385 $180,932 $940,202
12 4/1/2025 $852,957 $6,093 $204,710 $1,063,760
13 5/1/2025 $950,582 $6,790 $228,140 $1,185,512
14 6/1/2025 $1,041,710 $7,441 $250,010 $1,299,161
15 7/1/2025 $1,120,741 $8,006 $268,978 $1,397,725
16 8/1/2025 $1,182,128 $8,445 $283,711 $1,474,284
17 9/1/2025 $1,221,117 $8,723 $293,068 $1,522,908
18 10/1/2025 $657,229 $4,697 $157,735 $819,661
Total $11,245,614 $80,334 $2,698,947 $14,024,895*
All amounts shown above are in nominal dollars.
*Interconnection Facilities Payment (Interconnection Facilities Costs $11,245,614 + One-Time Cost $80,334 + ITCC $2,698,947) = $14,024,895 (based on Estimated Cost) b. Financial Security Schedule
i. Interconnection Financial Security
The Interconnection Customer shall provide to SCE Interconnection Financial Security in the total amounts specified in Section b.i of Exhibit B of this Agreement by the dates as provided below.
27 Interconnection
Financial
Security (IFS)
Interconnection
Facilities
ITCC Total Amount Due Date
IFS amount
required
pursuant to this
Agreement
$11,325,948
$2,698,947
$2,000,000
Within thirty
calendar days
of the
Effective Date
Total $11,325,948 $2,698,947 $2,000,000
The Interconnection Financial Security posted by the Interconnection Customer in accordance with this Agreement shall be applied towards the Interconnection Customer’s obligation to post Interconnection Financial Security pursuant to the WDAT Section 8. 28 EXHIBIT D
MILESTONES
SCE will include a list of relevant milestones applicable to the Work.
Item Milestone Responsible
Party Due Date
(b) Submittal of written authorization to
proceed with design and procurement
of the Distribution Provider’s
Interconnection Facilities,
Distribution Upgrades and Network
Upgrades to SCE
Interconnection
Customer
Within thirty (30)
Calendar Days after the
Effective Date of this
Agreement
(c) Submittal of posting of
Interconnection Financial Security for
the Distribution Provider’s
Interconnection Facilities,
Distribution Upgrades and Network
Upgrades to SCE, pursuant to Section
b.i of Exhibit C of this Agreement
Interconnection
Customer
In accordance with the
schedule in Section b.i of
Exhibit C of this
Agreement
(e) Submittal of Tax Security for the
estimated tax liability to SCE,
pursuant to Section b.ii of Exhibit C
of this Agreement
Interconnection
Customer
In accordance with the
schedule in Section b.ii
of Exhibit C of this
Agreement
(f) Submittal of initial specifications for
the Interconnection Customer’s
Interconnection Facilities including
System Protection Facilities
Interconnection
Customer
Within thirty (30)
Calendar Days after the
Effective Date of this
Agreement
(g) Review of and comment on the
Interconnection Customer’s initial
specifications
SCE
Within thirty (30)
Calendar Days after the
Interconnection
Customer’s submission
of initial specifications
(h) Submittal of initial information
including SCE’s Transmission
System information necessary to
allow the Interconnection Customer
to select equipment SCE
Within ninety (90)
Calendar Days after the
Effective Date of this
Agreement
(i) Submittal of final specifications for
the Interconnection Customer’s
Interconnection Facilities including
System Protection Facilities, to SCE
Interconnection
Customer
At least twelve (12)
months prior to
completion of the
Distribution Provider’s
Interconnection
Facilities, Distribution
29 Item Milestone Responsible
Party Due Date
Upgrades and Network
Upgrades
(j) Review of and comment on the
Interconnection Customer’s final
specifications
SCE
Within thirty (30)
Calendar Days after the
Interconnection
Customer’s submission
of final specifications
(k) Submittal of updated information by
the Interconnection Customer,
including manufacturer information Interconnection
Customer
No later than one
hundred eighty (180)
Calendar Days prior to
Trial Operation
(l) Completion of the Distribution
Provider’s Interconnection Facilities *
SCE
Within thirty-six (36)
months following the
Effective Date of this
Agreement
(m) In-Service Date* Interconnection
Customer May 1, 2027
* Note: SCE shall use commercially reasonable efforts to complete the Work described in Exhibit A to support a May 1, 2027, In-Service Date assuming this Agreement is executed by April 30, 2024; however, pursuant to Section 4 of the Agreement, the timeline in this Exhibit D is dependent on the Interconnection Customer coordinating with SCE to complete the milestones as specified in a timely manner. SCE does not warrant that such Work will be completed in time to meet such date, and the Interconnection Customer acknowledges and understands that such date is only an estimate and therefore, SCE shall not be liable for any cost or damage incurred by the Interconnection Customer as a result of or due to any delay in the completion of the Work provided for in this Agreement. In the event SCE reasonably expects that it will not be able to complete the Distribution Provider’s Interconnection Facilities, by the specified date, SCE shall promptly provide written notice to the Interconnection Customer and shall undertake commercially reasonable efforts to meet the earliest date thereafter.