HomeMy WebLinkAbout _ 9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement with Aypa Power GI �" Y C� F
� � �- ' � ° � � i � CITY OF REDDING
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REPORT TO THE CITY COUNCIL
MEETING DATE: July 15, 2025 FROM: Nick Zettel, Director of
ITEM NO. 9.5(b} Redding Electric Utility
***APPROVED BY***
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nzettel@cityofredding.org btippin@cityofredding.org
SUBJECT: 9.5(b)--Consider Third Phase Agreement with Northern California Power Agency
authorizing execution of the Energy Storage Service Agreement with Trolley Pass Project LLC
(A a Power on behalf of the Cit of Reddin 's Electric Utilit �.
Recommendation
Authorize the City Manager, or designee, to execute the Third Phase Agreement with Northern
California Power Agency (NCPA), authorizing NCPA to enter into an Energy Storage Service
Agreement with Trolley Pass Project LLC (Aypa Power) on behalf of the City of Redding's
Electric Utility for participation in the Trolley Battery Energy Storage Project.
Fiscal Impact
There are no immediate fiscal impacts associated with the approval of the Third Phase
Agreement. I�owever, the project will result in long-term capacity payments under the Energy
Storage Service Agreement funded through Redding Electric Utility's (REU) power supply
budget. The contract price is fixed at $12.71JkW-month for 20 years. Based on current
production cost modeling, this project is not expected to increase retail rates as it is expected to
have minimal impacts on net energy procurement costs. The cost of the project will be included
in the Fiscal Year 2027-29 budget along with the 5-year Financial Plan starting in 2029 with the
projected commercial operation date.
Alternative Actzon
Council may choose not to authorize the City Manager to approve the Third Phase Agreement
with NCPA and provide staff alternate direction.
Report to Redding City Council July 9, 2025
Re: 9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement
with Aypa Power Page 2
Background/Analysis
REU's 2024 Integrated Resource Plan (IRP), adopted by the Redding City Council and
submitted to the California Energy Commission, identified the need for both utility-scale solar
and long-duration storage starting in 2031, when the Big Horn Wind power purchase agreement
was expected to expire. These resources are critical components of REU's long-term power
supply strategy.
Staff recently learned that the current Big Horn Wind power purchase agreement provider will be
exercising an option to terminate the agreement earlier than 2031, most likely in 2028. The Big
Horn Wind project currently supplies 10 percent of REU's capacity, 25 percent of load-serving
energy, and over 50 percent of its renewable energy credits. Replacement energy resources are
required to ensure the ability to manage peak demand, integrate renewable energy, and maintain
reliability.
The Trolley Battery Energy Storage (Trolley) Project will provide REU with 45 megawatts
(MW) of dispatchable storage capacity starting in 2029, coinciding with the projected expiration
of the Big Horn Wind contract in 2028 and rising customer demand. The contract provides a
fixed 20-year rate of $12.71/kW-month with no escalation, offering budget certainty during a
period of market volatility. Trolley is fully deliverable within the California lndependent System
Operator's balancing area, and REU will deliver the capacity and energy through its existing
South of Tesla transmission rights, offering firm delivery with reduced transmission costs (see
attached: Trolley P�oject Details and Analysis for more information).
The Trolley Project is structured through two key agreements: First, REU would enter into a
Third Phase Agreement (TPA) with the Northern California Power Agency (NCPA), which
defines REU's participation share, financial obligations, and authorizes NCPA to administer the
project on REU's behalf. Under this agreement, NCPA would then execute an Energy Storage
Services Agreement (ESSA) with Aypa Power, the project developer. The ESSA establishes the
commercial terms for the battery facility, including pricing, operational rights, and performance
reguirements. Together, these agreements allow REU to access energy storage services through
its Joint Powers Agreement with NCPA.
Whi1e the Trolley project is moving forward independently as a standalone storage resource,
REU's intent is to also contract for utility-scale solar generation. Pairing the battery with solar
maximizes its value by improving renewable integration, enhancing clean energy compliance,
and increasing dispatch flexibility. Each resource is evaluated independently and must stand on
its own merit, with or without a pairing. Even without a dedicated solar resource, the Trolley
project delivers si�nificant benefits through dispatchable capacity, market optimization, and
improved reliability during peak demand and grid stress events. However, not pairing the storage
with solar may limit some optimization opportunities and could result in higher long-term costs
for meeting clean energy mandates.
The current capacity target is 45 1VIW; however, that is subject to change depending on final
participant capacity allocation. If the final MW guantity results in a projected increase in retail
rates, staff wi11 return to City Council for additional review and recommended approval. This
project is consistent with REU's long-term planning goals and provides a cost-effective,
dispatchable storage resource to support reliability and affordability. Approving the Third Phase
Agreement enables REU to secure favorable eontraet terms and meet future energy and capaeity
needs identified in the TRP.
Report to Redding City Council July 9, 2025
Re: 9.5(b)--Approve Agreement with NCPA Authorizing Energy Storage Service Agreement
with Aypa Power Page 3
EnviNonmental Review
Compliance with the California Environmental Quality Act (CEQA) is the responsibility of the
project developer. As a participating offtaker, REU is not the lead agency and bears no direct
responsibility for CEQA compliance or related environmental permitting requirements.
Council PNiority/City Manager Goals
� Government of the 215c Century — "Be relevant and proactive to the opportunities and
challenges of today's residents and workforce. Anticipate the future to make better
decisions today."
Attachments
Trolley Project Details and Analysis
Trolley BESS ESSA 06262025 (Redacted)
Trolley_BESS_Third_Phase_Agreement_06262025 Redacted
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From REU Staff
To Redding City Council
Title Trolley Project Details and Analysis
Date June 26, 2025
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REU filed its updated 2024 Integrated Resource P1an (IRP)with the California Energy Commission
(CEC) in November 2023.The IRP recommended contracting for additional renewable resources
and energy storage starting in 2031 to meet growing demand and increasing clean energy
mandates. However,several changes to our energy resource portfolio have occurred,prompting
staff to evaluate bringing new power resources under contract earlier than anticipated. REU staff
were recently notified that the current Big Horn Wind power purchase agreement provider will be
exercising an option to terminate the agreement earlier than 2031,most likely in 2028.
To hedge against the potential resource portfolio shortfall from the termination of Big Horn Wind
starting in 2029,staff recommend executing a 20-year agreement for 45 MW of storage from Aypa
Energy's Trolley Project with a scheduled online date in 2029 rather than 2031,as previously
recommended in the IRP.
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The Trolley Battery Energy Storage Project will provide REU with 45 MW of dispatchable storage
capacity starting in 2029,coinciding with the expiration of the Big Horn Wind contract and rising
system load.The project is fu11y deliverable within the California lndependent System Operator's
(CAISO) balancing area. REU's share will be delivered through its existing South of Tesla (SOT)
transmission rights, offering firm delivery and reduced transmission costs.The contract provides a
fixed 20-year rate of$12.71/kW-month with no escalation,offering budget certainty during a
period of market volatility.
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Trolley strengthens REU's power portfolio by adding long-duration storage that supports peak
reliability.The project participates in CAISO markets,generating additional value through energy
optimization when market prices are low,ancillary services,and potential resource adequacy(RA)
sales.As REU increases its solar procurement,storage will allow excess solar to be stored and used
during high-demand evening hours,improving clean energy integration and utilization.
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A structured set of offramps and safeguards protects REU. Price increases are capped at 6%and
require NCPA Commission approval. REU retains the right to withdraw before final commitment if
costs become misaligned, or if there are development delays,regulatory incompatibilities,or failure
to secure interconnection and deliverability.These provisions ensure REU can exit the project if it
no longer meets operational or financial objectives.
1
�ity +�f R�dding Supplemental Information
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In November 2023, REU filed its 2024 Integrated Resource Plan (IRP),outlining a 20-year strategy
to meet clean energy mandates while maintaining affordability and reliability.The IRP identifies
key procurement milestones aligned with RPS, Cap-and-Trade,SB 100,and SB 1020.
Since then, REU's planning position has shifted due to the anticipated early termination of the Big
Horn Wind Project,which currently supplies 10%of capacity, 25% of load-serving energy,and over
50% of RECs.The developer has indicated the contract likely won't extend beyond 2026,and
proposed extension pricing is no longer cost-effective. Staff is planning for the project's exit in 2026
and actively pursuing replacement resources.
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Staff have worked with a Joint Powers Agency QPA),the Northern California Power Agency(NCPA),
to solicit viable replacement resources. In 2024,NCPA solicited a Renewables RFP on behalf of its
members and received proposals for six standalone storage,ten standalone solar,and 14 solar+
storage projects.Staff evaluated these offers based on the following criteria designed to fulfill the
resource needs established in the IRP,along with the early termination of the Big Horn Wind
project.
• Commercial Operational Date (COD) as early as possible to replace Big Horn
• Project Sizing around 70-100 MW for solar and 35-SO MW for storage to fit in REU's portfolio
• Project terms of at least 10 years in compliance with RPS requirements
• Full deliverability status for firm capacity
Using these criteria,staff identified two projects that,when paired,will satisfy REU's capacity and
energy needs and meet clean energy mandates. One of those identified projects is a standalone
storage project from Aypa Energy that wi11 meet the long-term planning goals outlined in the IRP
when paired with a solar-only project.
Aypa Energy's storage-only project offer is for a battery storage toliing agreement with full
deliverability status and Resource Adequacy benefits.The project is currently in the CAISO Cluster
14 queue.The project offer details are in Table 1 below.
Table 1-Aypa Energy Trolley Project Details
Project Name Trolley�attery Energy Storage Project
Praject Type Battery Energy'Storage Systern
City&County San Bernardino County
Local Capaeity Area LA Basin
Utility Transrnission Territory Southern Califarnia Edison
Point of Interco�nection(PUi� Etiwanda 5ubstation 230 kV Bus
GIA Reference Gluster 14,Q#;2032
�eliverability Status �2eceived 400 MW FCDS
pNode Delivery Point(proxy) Proxy: ETIWANDA_6_N001 '
2
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COD June 1,2029
Size 300 MW/1,200 MWh(4 hour)
Product '+ Tolling Agreernent
PPA Term 20 years
Price $12.71/kW-mo
� �t 1
Staff recommends contracting 45 MW from the Trolley 4-hour battery energy storage system
(BESS� Project.Trolley was selected as a standalone storage project due to its full deliverability
with ancillary services and competitive price that set it apart from storage combined with solar. In
parallel, REU staff is currently negotiating a suitable solar project.
The Trolley BESS project is located in Southern California and can be delivered to REU's load using
our existing,firm transmission rights to provide a suitable long-term replacement for the Big Horn
capacity.While the storage project will replace the capacity,a solar project is planned to support
clean energy mandates by generating RECs.
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As a standalone product,battery storage systems offer essential advantages in California's energy
landscape,where the push for clean energy and grid reliability continues to grow.These systems
help us store electricity when it is economically advantageous,and use it when needed most,
especially during expensive or high-demand hours.
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Figure 1-Solar Generation,Battery Charge/Discharge,REU Load,and SP-15 market price;Peak August Day
3
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The SP-15 energy price typically follows the "duck curve" shape caused by significant solar
penetration during midday.The high solar generation drives energy prices low and even negative
during the middle of the day,then generation quickly drops off,causing a significant spike as the
sun sets. Other energy generation must be quickly brought online to meet high demand in peak
evening hours.
As shown in Figure 1,batteries can charge when electricity is inexpensive and discharge when
electricity prices spike in the evening after solar generation diminishes.Therefore,as a standalone
product,energy storage is a valuable tool for capturing 1ow energy prices while still providing the
capacity to meet Redding's high evening demand.
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Battery storage is even more valuable when combined with solar generation. REU staff is working
on a contract for the Wildcat Solar project to pair with Trolley,which would effectively replace the
RECs that will be lost from Big Horn and maintain cost-effective RPS compliance moving forward.
Battery storage increases the value of solar energy by storing it during low-price times when it is
not needed and using it during high-price times when it is required.
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The Trolley Storage project is not expected to increase portfolio costs,as shown in Table 2.
Compared to the current resource portfolio,which does not meet reliability or renewable energy
requirements,the addition of Trolley is not forecasted to significantly impact energy costs while
increasing system reliability and enhancing the value of future renewable procurements.
Adding storage will help meet reliability requirements,but wi11 not help meet renewable and clean
energy requirements.A renewable solar project,such as Wildcat,is expected to increase portfolio
costs slightly but will help meet clean energy requirements.
Table 2-Portfolio Cost Analysis,2028-2044
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Annual Average Energy Cost(miliion$/yr) $ 59.4 $ 59.7 $ 59 3
Ac�erage Energy Cost($JkWh) ; $ '0.0801 $ ; �.080b $ 0.0800
Meets Reliability Standards?1 ' No Yes Yes
Meets Clean Energy Goals?1 IVo Yes No
l. Meets goals/requirements through this procurement cycle.Additional resources will be needed in the future.
4
ENERGY STORAGE SERVICE AGREEMENT
COVERSHEET
Seller: Trolley Pass Project LLC ("Seller")
Buver: Northern California Power Agency, a joint powers agency of the State of California ("Buver")
Description of Facility: A 300.00 MWAC / 1,200 MWh-AC grid-connected battery energy storage
facility as further described below (the "Facilitv"), located in San Bernardino County, in the State of
Cali�ornia, as further described in Exhibit A.
Milestones:
Milestone Date for
Completion
Evidence of Site Control Complete
Executed Interconnection Agreement August l,2025
Financing September 1, 2028
Procure Major Facility Equipment December 15, 2027
Expected Construction Start Date September 1, 2028
Initial Synchronization January 15, 2029
Expected Commercial Operation Date June 1, 2029
Guaranteed Commercial Operation Date As Set Forth in
Exhibit B
Delivery Term: The period for Product delivery will be for twenty (20) Contract Years.
Storage Contract Capacity: 300.00 MW for four(4)hours
Stora�e Contract Output: 1,200.00 MWh
Guaranteed Efficiencv Rate:
Contract Year Guaranteed Efficiency Rate
1 �
2 _
3 �
4 _
Cover Sheet
5 _
6 _
7 �
8 _
9 _
10 _
11 _
12 _
13 _
14 _
15 _
16 _
17 �
18 _
19 _
20 _
Minimum Round-Trip Efficiency: Seventy percent(70.00%)
Dedicated Interconnection Capacitv: 300.00 MWac
Contract Price:
Contract Year Storage Rate
1 —20 �kW-month (flat)
with no escalation
Proposed Contract Price Increase Cap: �% of the Contract Price, in aggregate
Meterin�Arrangement: The Facility wi11 be registered as a CAISO Metered Entity
Delivery Point: Facility PNode, as further described in Exhibit A
Product:
� Discharging Energy
� Storage Capacity
� Capacity Attributes (select options below as applicable)
Cover Sheet
❑ Energy Only Status
� Full Capacity Deliverability Status
� Ancillary Services
Schedulin� Coordinator: Buyer or Buyer's agent
Development Secur�: -/kW of Storage Contract Capacity, provided such amount shall be
increased to /kW on January 1, 2028.
Performance Securitv: �kW of Storage Contract Capacity
Cover Sheet
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS ........................................................................................................ 1
1.1 Contract Definitions............................................................................................. 1
1.2 Rules of Interpretation...................................................................................... 24
ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................. 25
2.1 Contract Term.................................................................................................... 25
2.2 Conditions Precedent......................................................................................... 25
23 Development; Construction; Progress Reports............................................... 26
2.4 Remedial Action Plan........................................................................................ 27
2.5 Storage Rate Adjustment Event....................................................................... 27
2.6 [Reserved] ........................................................................................................... 28
2.7 CEQA.................................................................................................................. 28
ARTICLE3 PURCHASE AND SALE...................................................................................... 29
3.1 Purchase and Sale of Product........................................................................... 29
3.2 [Reserved] ........................................................................................................... 29
3.3 Imbalance Energy.............................................................................................. 29
3.4 [Reserved] ........................................................................................................... 29
3.5 [Reserved] ........................................................................................................... 29
3.6 [Reserved] ........................................................................................................... 29
3.7 Capacity Attributes............................................................................................ 29
3.8 Resource Adequacy Failure.............................................................................. 30
3.9 [Reserved] ........................................................................................................... 30
3.10 [Reserved ............................................................................................................ 30
3.11 Compliance Expenditure Cap........................................................................... 30
ARTICLE 4 OBLIGATIONS AND DELIVERIES................................................................... 31.
4.1 Delivery............................................................................................................... 31
4.2 Title and Risk of Loss........................................................................................ 32
4.3 Forecasting.......................................................................................................... 32
4.4 Dispatch Down/Curtailment............................................................................. 33
4.5 Charging Energy Management ........................................................................ 34
4.6 Reduction in Delivery Obligation..................................................................... 36
4.7 Interconnection Costs........................................................................................ 37
4.8 Storage Availability ........................................................................................... 37
4.9 Storage Capacity Tests...................................................................................... 37
4.10 Interconnection Capacity.................................................................................. 38
4.11 Station Use.......................................................................................................... 39
4.12 Facility Operations and Maintenance.............................................................. 39
ARTICLE5 TAXES .................................................................................................................. 39
5.1 Allocation of Taxes and Charges...................................................................... 39
5.2 Cooperation........................................................................................................ 40
ARTICLE 6 MAINTENANCE OF THE FACILITY................................................................ 40
i
6.1 Maintenance of the Facility............................................................................... 40
6.2 Maintenance of Health and Safety................................................................... 40
6.3 Shared Facilities................................................................................................. 40
ARTICLE '7 METERING........................................................................................................... 41
7.1 Metering.............................................................................................................. 41
7.2 Meter Verification.............................................................................................. 41
ARTICLE 8 INVOICING AND PAYMENT; CREDIT............................................................ 42
8.1 Invoicing.............................................................................................................. 42
8.2 Payment .............................................................................................................. 42
8.3 Books and Records............................................................................................. 43
8.4 Payment Adjustments; Billing Errors ............................................................. 43
8.5 Billing Disputes................................................................................................... 43
8.6 Netting of Payments........................................................................................... 43
8.7 Seller's Development Security.......................................................................... 44
8.8 Seller's Performance Security .......................................................................... 44
8.9 Buyer Credit Support........................................................................................ 44
8.10 First Priority Security Interest in Cash or Cash Equivalent Collateral....... 45
8.11 Buyer Statements............................................................................................... 46
ARTICLE9 NOTICES .............................................................................................................. 46
9.1 Addresses for the Delivery of Notices............................................................... 46
9.2 Acceptable Means of Delivering Notice ........................................................... 46
ARTICLE 10 FORCE MAJEURE............................................................................................. 46
10.1 Definition ............................................................................................................ 46
10.2 No Liability If a Force Majeure Event Occurs ............................................... 47
10.3 Notice................................................................................................................... 48
10.4 Termination Following Force Majeure Event................................................. 48
ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION..................................................... 48
11.1 Events of Default................................................................................................ 48
11.2 Remedies; Declaration of Early Termination Date ........................................ 50
11.3 Termination Payment........................................................................................ 51
11.4 Notice of Payment of Termination Payment................................................... 51.
11.5 Disputes With Respect to Termination Payment............................................ 52
11.6 Rights And Remedies Are Cumulative............................................................ 52
11.7 Seller's Pre-COD Liability Limitation............................................................. 52
ARTICLE 12 LIMITATTON OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 52
12.1 No Consequential Damages............................................................................... 52
12.2 Waiver and Exclusion of Other Damages........................................................ 52
ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY.......................... 53
13.1 Seller's Representations and Warranties ........................................................ 53
13.2 Buyer's Representations and Warranties........................................................ 54
ii
13.3 General Covenants............................................................................................. 55
13.4 Prevailing Wage and Workforce Deveiopment............................................... 55
ARTICLE 14 ASSIGNMENT.................................................................................................... 56
14.1 General Prohibition on Assignments ............................................................... 56
14.2 Collateral Assignment ....................................................................................... 56
14.3 Permitted Assignments by Seller...................................................................... 58
14.4 Buyer Limited Assignment Right..................................................................... 58
ARTICLE 15 DISPUTE RESOLUTION................................................................................... 59
15.1 Governing Law................................................................................................... 59
15.2 [Reserved] ........................................................................................................... 59
15.3 [Reserved] ........................................................................................................... 59
15.4 Dispute Resolution............................................................................................. 59
ARTICLE 16 INDEMNIFICATION ......................................................................................... 59
ARTICLE 17 INSURANCE ...................................................................................................... 61
17.1 Insurance ............................................................................................................ 61
ARTICLE 18 CONFIDENTIAL INFORMATION................................................................... 62
18.1 Definition of Confidential Information............................................................ 62
18.2 Duty to Maintain Confidentiality..................................................................... 62
18.3 Irreparable Injury; Remedies........................................................................... 63
18.4 Disclosure to Lenders, Etc................................................................................. 63
18.5 Public Announcements...................................................................................... 63
ARTICLE 19 MISCELLANEOUS............................................................................................ 64
19.1 Entire Agreement; Integration; Exhibits......................................................... 64
19.2 Amendments....................................................................................................... 64
19.3 No Waiver........................................................................................................... 64
19.4 No Agency, Partnership,Joint Venture or Lease........................................... 64
19.5 Severability......................................................................................................... 64
19.6 Mobile-Sierra...................................................................................................... 64
19.7 Counterparts; Electronic Signatures ............................................................... 65
19.8 Electronic Delivery............................................................................................. 65
19.9 Binding Effect..................................................................................................... 65
19.10 No Recourse to Members of Buyer................................................................... 65
19.11 Forward Contract.............................................................................................. 65
19.12 Service Contract................................................................................................. 65
19.13 Further Assurances............................................................................................ 65
19.14 Change in Electric Market Design ................................................................... 66
iii
Exhibits:
Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation
Exhibit C Compensation
Exhibit D-1 Scheduling Coordinator Responsibilities
Exhibit D-2 Buyer and Seller Operating Coordination
Exhibit E Progress Reporting Form
Exhibit F Form of Monthly Forecast
Exhibit G [Reserved]
Exhibit H Form of Commercial Operation Date Certificate
Exhibit I Form of Installed Capacity Certificate
Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L [Reserved]
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Storage Capacity Tests
Exhibit P Storage Facility Availability
Exhibit Q Operating Restrictions
Exhibit R Metering Diagram
iv
ENERGY STORAGE SERVICE AGREEMENT
This Energy Storage Service Agreement ("A�reement") is entered into as of
, 2025 (the "Effective Date"), between Buyer and Seller. Buyer and Seller are
sometimes referred to herein individually as a"Partv"and jointly as the"Parties."All capitalized
terms used in this Agreement are used with the ineanings ascribed to them in Article 1 to this
Agreement or as otherwise set forth in this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, permit, construct, own, and operate the
Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and
conditions set forth in this Agreement, the Product.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and for other good and valuable consideration, the sufficiency and adequacy of which
are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. The following terms, when used herein with initial
capitalization, shall have the meanings set forth below:
"AC"means alternating current.
"Accepted Compliance Costs"has the meaning set forth in Section 3.11.
"Actual Contract Price Increase"has the meaning set forth in Section 2.5(b).
"Actual Monthly NQC" means the amount of Net Qualifying Capacity from the Facility
that is eligible to count toward meeting Resource Adequacy Requirements by both the CPUC and
CAISO.
"Administrative NQC Reduction" means a reduction in the maximum achievable Net
Qualifying Capacity of the Facility able to be shown for each hour of the Resource Duration due
to a reduction that has been (i) generally applied to resources materially similar to the Facility in
terms of type, market and operational characteristics (including those characteristics specified in
the CPUC Master Resource Database),including any methodology that incorporates fleet averages
or other average outage rates or (ii) specifically applied to the Facility based on the operational
characteristics of the Facility (e.g. any changes with respect to unfarced capacity) to the extent
such reduction is not caused by Seller's failure to meet its obligations under this Agreement.
1
"Affiliate" means, with respect to any Person, each Person that directly or indirectly
controls, is controlled by, or is under common control with such designated Person. For purposes
of this definition and the definition of "Permitted Transferee" and "control" (including, with
correlative meanings, the terms "controlled by" and"under common control with"), as used with
respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%)
of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there
are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership
interest in such Person, or (b) the right to direct the policies or operations of such Person.
Notwithstanding the foregoing, with respect to Seller, "Affiliates" shall inean Ultimate Parent and
any of its subsidiaries that satisfy the requirements set forth in this definition; provided, however,
that the term "Affiliate," when used with respect to Seller shall not include any direct or indirect
tax equity investor.
"A�reement" has the meaning set forth in the Preamble and includes any E�ibits,
schedules and any written supplements hereto, the Cover Sheet, and any designated collateral,
credit support or similar arrangement between the Parties.
"Ancillarv Services" means a11 ancillary services, products and other attributes, that can
be produced by the Facility, as listed in E�ibit , and any other ancillary services added to the
Agreement in accordance with Section 4.5(�).
"Approved Maintenance Hours" means up to one hundred twenty (120) hours of full
capacity equivalent hours of Planned Outages each Contract Year during the calendar months
November through May, provided that such Planned Outages are scheduled in accordance with
Section 4.6(a).
"Availabilitv Ad�ustment" or"AA"has the meaning set forth in Exhibit P.
"Availability Notice" means Seller's availability forecasts issued pursuant to Section 43
with respect to the available Starage Capacity, which shall include any updates from Seller with
respect to Facility outages or availability as reported to CAISO (including as reported in OMS).
`Bankrupt" means with respect to any entity, such entity that (a) files a petition or
otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of
action under any bankruptcy, insolvency, reorganization or similar Law, (b)has any such petition
filed or commenced against it which remains unstayed or undismissed for a period of ninety (90)
days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d)
otherwise becomes bankrupt or insolvent(however evidenced), (e) has a liauidator, administrator,
receiver, trustee, conservator or similar official appointed with respect to it or any substantial
portion of its property or assets, or(� is generally unable to pay its debts as they fall due.
`Bid"has the meaning as set forth in the CAISO Tariff.
`Business Day" means any day except a Saturday, Sunday, or a Federal Reserve Bank
holiday in California.A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. local time for the
Party sending a Notice, or payment, or performing a specified action.
2
`Buyer"has the meaning set forth on the Cover Sheet.
`Buver Credit Support"has the meaning set forth in Section 8.9.
`Buver Delav"means Buyer has not made all necessary arrangements to deliver Charging
Energy to, and receive Discharging Energy at, the Delivery Point in accordance with Exhibit D,
and such �ailure is not the result of a Seller delay or Seller failure to satisfy its obligations in
accordance with Exhibit D.
`Buver Dispatched Test"has the meaning set forth in Section 49(a).
`Buver pown�rade Event" will have occurred if(A) (i) Buyer does not have or loses its
Investment Grade Credit Rating, and (ii) i�Buyer fails to maintain Days of Cash on Hand, or (B)
(i) the Third Phase Agreement is terminated for any reason or becomes legally unenforceable, or
(ii) any of the Participating Members' payment obligations under the Third Phase Agreement
(including the obligation to post security) are materially amended such that collection of payment
hereunder or remedies related to default become legally unenforceable, except in the case of B(ii)
no Buyer powngrade Event will have occurred if the other Participating Members assume the
Participating Members payment and/or security obligations under this Agreement and Buyer
maintains Days of Cash on Hand. Buyer shall provide notice to Seller no later than five (5)
Business Days after the occurrence of a Buyer powngrade Event.
"Buver Failure" means a fail�ure by Buyer (or its agents) to perform Buyer's obligations
hereunder and includes an Event of Default of Buyer, as specified in a Notice from Seller to Buyer,
which has a causal effect that limits or reduces the Charging Energy or Discharging Energy.
Notwithstanding any provision of this Agreement to the contrary,and without the intent of creating
the requirements of more than one notice provision related to an Event of Default in general,Buyer
Failure shall not become effective without Notice to Buyer from Seller no later than ten (10)
Business Days following Se11er's knowledge of the occurrence of such Buyer Failure.
"CAISO" means the California lndependent System Operator Corporation or any
successor entity performing similar functions.
"CAISO Approved Meter" means a CAISO approved revenue quality meter or meters,
metering scheme, CAISO approved data processing gateway or remote intelligence gateway,
telemetering equipment and data acquisition services sufficient for monitoring, recording and
reporting, in real time Charging Energy and Discharging Energy.
"CAISO Certification"means the certi�cation and testing requirements for a storage unit
set forth in the CAISO Tariff that are applicable to the Facility, including but not limited to,
certification and testing for all applicable Ancillary Services, PMAX, and PIVIIN.
"CAISO Grid" has the same meaning as "CAISO Controlled Grid" as defined in the
CAISO Tariff.
"CAISO Metered Entity"has the meaning set forth in the CAISO Tariff.
3
"CAISO Operating Order" means the Operating Instruction or Dispatch Instruction as
defined in the CAISO Tariff.
"CAISO Tarif�' means the California lndependent System Operator Corporation
Agreement and Tariff,Business Practice Manuals(BPMs),and Operating Procedures(as such term
in defined in Appendix A to the CAISO Tariff), including the rules, protocols, procedures and
standards attached thereto, as the same may be amended or modified from time-to-time and
approved by FERC; provided that if there is a conflict between the BPMs, the CAISO Operating
Agreement or the Operating Procedures (as such term in defined in Appendix A to the CAISO
Tariff�, on the one hand, and the CAISO Tariff, on the other hand, the CAISO Tariff will control.
"Capacity Attribute" means any current or future defined characteristic, certificate, tag,
credit, or accounting construct associated with the amount of power that the Facility can generate
and deliver to the Delivery Point at a particular moment and that can be purchased and sold under
CAISO market rules, including Resource Adequacy Benefits. Capacity Attributes are measured in
MW and shall exclude energy and any Incentives now or in the future associated with the
construction, ownership or operation of the Facility.
"Capacitv Dama�es"has the meaning set forth in Exhibit B.
"CEQA" means the California Environmental Quality Act, California Public Resources
Code §§ 21000, et seq. and Chapter 3 of Division 6 of Title 14 of the California Code of
Regulations.
"CEQA Completion Date"has the meaning set forth in Section 2.7(a).
"CEpA Documents" means an initial study, categorical exemption, negative declaration,
environmental impact report or equivalent document (as applicable) relied upon by the Lead
Agency in connection with the CEQA environmental review for the Facility, including but not
limited to any addend�um, supplement,or subsequent negative declaration or environmental impact
report.
"Chan�e in Law"means the occurrence, after the Effective Date, of any of the following:
(a) the adoption or implementation of any Law (including but not limited to any Laws related to
tariffs,import duties or fees,and/or tax credits);(b) any change in any Law or in the administration,
interpretation or application of any Law by any Governmental Authority(including but not limited
to any changes to the applicable rates of any tariffs, import d�uties or fees, and/or tax credits);
(c) the making or issuance of any request, guideline or directive (whether or not having the force
of law)by any Governmental Authority; (d) any change to a Resource Adequacy Ruling, (e) any
order,decision,resolution,rule,regulation,guidance document,or other determination of the CEC
or the CPUC or its Energy Division, or (� any change in the CAISO Tariff or any document
included in the definition thereof whether or not approved by FERC.
"Chan�e in Tax Law"means, after the Effective Date, (i) any change in or amendment to
the Code that substantively impacts any tax credit for the Facility or available to Seller with respect
to the Facility, (ii) the issuance, promulgation or change in, or of, any temporary, proposed, or
4
final Treasury Regulations promulgated under the Code with respect to any tax credits for the
Facility or available to Seller with respect to the Facility, or(iii) any notice, announcement, court
decision, revenue ruling, revenue procedure, or other official guidance published in the Internal
Revenue Bulletin that applies, advances, or articulates a new or different interpretation or analysis
of any tax credit or incentives for the Facility or available to Seller with respect to the Facility.
"Chan�e of Control" means, except in connection with public market transactions of
equity interests or capital stock of Seller's Ultimate Parent, any circuinstance in which Ultimate
Parent ceases to own, directly or indirectly through one or more intermediate entities, more than
fifty percent (50%) of the outstanding equity interests in Seller; provided that in calculating
ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or
more intermediate entities shall not be counted towards Ultimate Parent's ownership interest in
Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the
outstanding equity interests in each such intermediate entity; and
(b) ownership interests in Seller owned directly or indirectly by any Lender(including
any cash equity or tax equity provider and any trustee or agent or similar representative thereof
acting on their behal�or assignee or transferee thereof shall be excluded from the total outstanding
equity interests in Seller.
"Char�in� Ener�y" means the energy delivered to the Facility pursuant to a Charging
Notice, as measured by the Facility Meter in accordance with CAISO metering requirements and
Prudent Operating Practice, as such meter readings are adjusted pursuant to CAISO requirements
for any applicable Electrical Losses. For the purpose of clarity, pursuant to Section 4.11 Seller
will be responsible for procuring and paying for all Station Use; therefore, Charging Energy stored
in the Facility shall not be used to supply Station Use.
"Char�in�Notice"means the operating instruction, and any subsequent updates, given by
Buyer, Buyer's SC, or by the CAISO based on Bids submitted by Buyer or Buyer's SC, to Seller,
directing the Facility to charge with Charging Energy at a specific MW rate for a specified period
of time or to a specifed Stored Energy Level;provided, (a) any such operating instruction shall be
in accordance with the Operating Restrictions, and (b) any such "Charging Notice" may be
adjusted in accordance with Section 4.5. For the avoidance of doubt, any Buyer reguest to initiate
a Storage Capacity Test consistent with Section 4.9 shall be considered a Charging Notice.
"Claim"has the meaning set forth in Section 16.2.
"COD Certificate"has the meaning set forth in Exhibit B.
"COD Delay Damages"means an amount equal to (a) the Development Security amount
required hereunder, divided by (b) one hundred eighty (180).
"Code"means the U.S. Internal Revenue Code, as amended.
"Collateral Assi�nment A�reement"has the meaning set forth in Section 14.2.
5
"Commercial Operation"has the meaning set forth in Exhibit B.
"Commercial Operation Date" or"COD"has the meaning set forth in Exhibit B.
"Communications Protocols" means certain procedures and protocols regarding
communication with respect to the operation of the Facility pursuant to this Agreement.
"Compliance Actions"has the meaning set forth in Section 311(b).
"Compliance Costs" has the meaning set forth in Section 3.11(a).
"Compliance Expenditure Cap"has the meaning set forth in Section 3.11(a).
"Confidential Information" has the meaning set forth in Section 18.1.
"Construction Delav Damages"means an amount equal to (a) the Development Security
amount required hereunder, divided by (b) one hundred eighty (180).
"Construction Start"has the meaning set forth in Exhibit B.
"Construction Start Date"has the meaning set forth in Exhibit B.
"Contract Price" has the meaning set forth on the Cover Sheet. For clarity, the Contract
Price is the Storage Rate.
"Contract Term"has the meaning set forth in Section 2.1.
"Contract Year" means a period of twelve (12) consecutive months. The first Contract
Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall
commence on the anniversary of the Commercial Operation Date.
"Costs"means,with respect to the Non-Defaulting Party,brokerage fees, commissions and
other similar third-party transaction costs and expenses reasonably incurred by such Non-
Defaulting Party either in terminating any arrangement pursuant to which it has hedged or financed
its obligations or entering into new arrangements which replace this Agreement; and all reasonable
attorneys'fees and expenses incurred by the Non-Defaulting Party in connection with terminating
this Agreement.
"Cover Sheet" means the cover sheet to this Agreement, which is incorporated into this
Agreement.
"COVID-19"has the meaning set forth in S�ction 10.1(b).
"CPM Soft Offer Cap" has the meaning set forth in the CAISO Tariff, including its
functional successor.
"CPUC" means the California Public Utilities Commission or any successor agency
performing similar statutory functions.
6
"CPUC Master Resource Database" means the CPUC database of generation, energy
storage and other resources qualified to provide Resource Adequacy Benefits capacity to load
serving entities.
"CPUC Svstem RA Penaltv"means the Tier 1 System RA Penalties assessed against Load
Serving Entities (as defined in the CAISO Tariff� by the CPUC for RA deficiencies that are not
replaced or cured,as established in the Resource Adequacy Rulings and subsequently incorporated
into the annual "Filing Guide for System, Loca1 and Flexible Resource Adequacy Compliance
Filings"that is issued by the CPUC Energy Division,which is expected to be updated annually, or
any replacement or successor documentation established by the CPUC Energy Division to reflect
RA penalties that are established by the CPUC and assessed against Load Serving Entities for RA
deficiencies.
"Credit Ratin�"means, with respect to an entity other than Buyer, the current rating then
assigned to that entity's unsecured, senior long-term debt obligations (not supported by third party
credit enhancements), or if that entity does not have a rating for its senior unsecured long-term
debt, then the rating then assigned to such entity as an issuer rating by S&P, Fitch or Moody's.
With respect to Buyer, the long term issuer rating assigned by S&P, Moody's, and Fitch. If Buyer
does not have a long term issuer rating, then the highest rating assigned to Buyer's revenue bonds
(not supported by third party credit enhancements).
"Curtailment Order"means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, incl�uding a CAISO
Operating Order, to curtail deliveries of Charging Energy or Discharging Energy for the following
reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or
warning of an imminent condition or situation, which jeopardizes CAISO's electric system
integrity or the integrity of other systems to which CAISO is connected;
(b) a curtailment ordered by the Participating Transmission Owner for reasons
including, but not limited to, (i) any situation that affects normal function of the electric system
including,but not limited to, any abnormal condition that requires action to prevent circumstances
such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning,
forecast or anticipation of conditions or situations that jeopardize the Participating Transmission
Owner's electric system integrity or the integrity of other systems to which the Participating
Transmission Owner is connected;
(c) a curtailment ordered by CAISO or the Participating Transmission Owner due to
scheduled or unscheduled maintenance on the Participating Transmission Owner's transmission
system that prevent(i) Buyer from receiving or(ii) Seller from delivering Charging Energy to the
Facility and/or Discharging Energy to the Delivery Point; or
(d) a curtailment in accordance with the obligations applicable to the Facility under the
Interconnection Agreement with the Participating Transmission Owner or distribution operator.
�
"Curtailment Period" means the period of time, as measured using current Settlement
Intervals, during which Se11er reduces generation from the Facility pursuant to a Curtailment
Order.
"Cvcle" means a quantity of Discharging Energy (in MWh) equal to the Storage Contract
Output.
"Dama�e Pavment" means the dollar amount equal to the amount of the Development
Security set forth on the Cover Sheet.
"Day-Ahead Forecast"has the meaning set forth in Section 4.3(c).
"Dav-Ahead Market"has the meaning set forth in the CAISO Tariff.
"Day-Ahead Schedule"has the meaning set forth in the CAISO Tariff.
"Davs of Cash on Hand"means,with respect to Buyer,the amount of the required security
deposits under the Third Phase Agreement which shall be no less than the amount of Buyer's
estimated full payments for three(3) months of Product under the Agreement.
"Dedicated Interconnection Capacitv"has the meaning set forth in Section 4.10(a).
"Deemed Delivered RA"means the amount of Net Qualifying Capacity expressed in MW
that the Facility would have delivered, but for (a) the failure of Buyer to (i) obtain any rights or
capacities that Buyer is required to obtain, or take any other action that Buyer is required to take,
in order for Seller to provide or Buyer to make use of the Capacity Attributes of the Facility, (ii)
timely submit a Supply Plan for the Facility after the Facility has received a Net Qualifying
Capacity from CAISO, in each case as may be required under applicable Law and as may change
from time to time, (b) a Force Majeure Event as provided in Section 4.6(e), and (c) Planned
Outages permitted by the terms of this Agreement to the extent such Planned Outages reduce the
maximum achievable Net Qualifying Capacity of the Facility.
"Defaultin�Party"has the meaning set forth in Section 111(a).
"Delivered RA"means, in the applicable Showing Month, the sum, in MW, of(a) the Net
Qualifying Capacity of the Facility for such month able to be shown for each hour of the Resource
Duration on Buyer's monthly or annual Resource Adequacy P1an to the CAISO and CPUC (as
applicable) and counted as Resource Adeguacy Bene�its by both the CAISO and CPUC, (b)
Replacement RA, and (c) Deemed Delivered RA.
"Delivery Point"has the meaning set forth in Exhibit A.
"Deliverv Term"has the meaning set forth on the Cover Sheet.
"Development Cure Period"has the meaning set forth in E�ibit B.
8
"Development Security" means (a) cash or, (b) a Letter of Credit in the amount set forth
on the Cover Sheet.
"Dischar�ing Energy"means all energy delivered to the Delivery Point from the Facility,
net of Station Use, as measured by the Facility Meter in accordance with CAISO metering
requirements and Prudent Operating Practice, adjusted pursuant to CAISO requirements for any
applicable Electrical Losses. For the avoidance of doubt, al1 Discharging Energy will have
originally been delivered to the Facility as Charging Energy.
"Dischar�in�Notice"means the operating instruction, and any subsequent updates, given
by Buyer or Buyer's SC, or by the CAISO based on Bids submitted by Buyer or Buyer's SC, to
Seller or Sellers Agent, directing the Facility to discharge Discharging Energy at a specific MW
rate to a specified Stored Energy Level,provided that(a)any such operating instruction or updates
shall be in accordance with the Operating Restrictions, and(b)any such"Discharging Notice"may
be adjusted in accordance with Section 4S(d). For the avoidance of doubt, any Discharging Notice
sha11 not constit�ute a Curtailment Order.
"Disclosin�Partv"has the meaning set forth in Section 18.1.
"Earlv Termination Date"has the meaning set forth in Section 11.2(a).
"Effective Date"has the meaning set forth on the Preamble.
"Efficiencv Rate"means the measured round-trip efficiency rate of the Facility, expressed
as a percentage, calculated pursuant to a Storage Capacity Test in accordance with Exhibit O.
"Electrical Losses" means all transmission or transformation losses between the Facility
Meter and the Delivery Point for the receipt of Charging Energy and delivery of Discharging
Energy, calculated in accordance with CAISO approved methodologies applicable to revenue
metering.
"Ener�y In"has the meaning set forth in Exhibit O.
"Energy Out"has the meaning set forth in Exhibit O.
"Event of Default"has the meaning set forth in Section 11.1.
"Executed Interconnection Agreement Milestone" means the date for completion of
execution of the Interconnection Agreement by Seller (or Seller's Aff'iliate) and the PTO as set
forth on the Cover Sheet.
"Expected Commercial Operation Date" is the date set forth on the Cover Sheet by
which Seller reasonably expects to achieve Commercial Operation.
"Expected Construction Start Date" is the date set forth on the Cover Sheet by which
Seller reasonably expects to achieve Construction Start.
9
"Export and Import Costs" means all export (including any withholding tax in the
country of origin) and import customs and other similar taxes, tariffs and duties and other charges
or fees levied or assessed by any jurisdiction(including,without limitation,current and future anti-
dumping duty, countervailing duty, Section 301 of the Trade Act of 1974 or other duties or tariffs
imposed by any jurisdiction, including the country of manufacture, the country in which the
Facility is located and any other country through which the Facility equipment or material is
transported or stored),or other costs that inay be assessed or incurred in connection with the import
and export of the Facility equipment or material, including any such costs associated with any
Change in Law,provided, however, that Export and Import Costs shall exclude (i) any costs, fees,
duties, tariffs, penalties or other amounts that result from Se11er's failure to properly declare,
classify, label, document or otherwise comply with applicable import or export requirements or
customs regulations, (ii) any costs that could have been minimized through commercially
reasonable alternative sourcing arrangements, shipping routes or methods provided that(x) Seller
is not obligated to terminate any existing supply contracts and(y) "costs" as referred to within (ii)
shall be the aggregate of all of Seller's material and equipment costs for the Facility), (iii) any
penalties, fines or similar charges resulting from Seller's negligence or willful misconduct in
complying with customs requirements, (iv) any costs or penalties arising from Seller's failure to
maintain required import or export licenses or permits, and (v) any costs or charges that were
known or reasonably foreseeable to Seller as of the Effective Date based on then-existing Laws.
"Faciiitv" means the energy storage facility described on the Cover Sheet and in Exhibit
A (including the operational requirements of the energy storage facility), located at the Site and
including mechanical equipment and associated facilities and equipment required to deliver
Storage Product (but excluding any Shared Facilities, Network Upgrades and Interconnection
Facilities (other than Seller's Interconnection Facilities), and as such storage facility may be
expanded or otherwise modified from time to time in accordance with the terms of this Agreement.
"Facility Meter" means the bi-directional revenue quality meter or meters (with a 0.3
accuracy class) as shown in Exhibit R, along with a compatible data processing gateway or remote
intelligence gateway, telemetering equipment and data acguisition services sufficient for
monitoring,recording and reporting,in real time,the amount of Charging Energy and Discharging
Energy.
"FERC"means the Federal Energy Regulatory Commission or any successor government
agency.
"Financing Milestone" means the date upon which Seller has notified Buyer of the
financing arrangements for the fnancing of the construction of the Facility.
"Fitch" means Fitch Ratings Ltd., or its successor.
"Flexible RAR" means the flexible capaciry requirements established for load-serving
entities by the CAISO pursuant to the CAISO Tariff,the CPLTC pursuant to the Resource Adequacy
Rulings, or by any other Governmental Authority.
"Force Maieure Event" has the meaning set forth in Section 10.1.
10
"Forced Facility Outa�e"means an unexpected failure of one or more components of the
Facility that prevents Seller from receiving Charging Energy or making Discharging Energy
available at the Delivery Point and that is not the result of a Force Majeure Event.
"Full Capacity Deliverabilitv Status"has the meaning set forth in the CAISO Tariff.
"Full Capacity Deliverability Status Findin�" means a written confirmation from the
CAISO that the�Facility is eligible for Full Capacity Deliverability Status.
"Full Network Model"has the meaning set forth in the CAISO Tariff.
"Gains" means, with respect to any Non-Defaulting Party, an amount equal to the present
value of the economic benefit to it, if any (exclusive of Costs), resulting from the tennination of
this Agreement for the remaining Contract Term, determined in a commercially reasonable
manner,which economic benefit(if any)shall be deemed the gain(if any)to such Non-Defaulting
Party represented by, (a) if Buyer is the Non-Defaulting Party, the positive difference between the
present value of the payments required to be made by Buyer during the remaining Contract Term
of this Agreement and the present value of the payments that would be required to be made by
Buyer under any transaction(s) replacing this Agreement, regardless of whether Buyer enters any
such replacement transactions, and(b)if Seller is the Non-Defaulting Party,the positive difference
between the present value of the payments that would be required to be made to, or that would
otherwise be received by, Seller under any transaction(s) replacing this Agreement, regardless of
whether Seller enters any such replacement transactions, and the present value of the payments
required to be made to Seller during the remaining Contract Term of this Agreement. Factors used
in determining the economic benefit to a Non-Defaulting Party may include, without limitation,
reference to information supplied by one or more third parties, which shall exclude Affiliates of
the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of
relevant rates,prices, yields, yield curves, volatilities, spreads or other relevant market data in the
relevant markets, comparable transactions, forward price curves based on economic analysis of
the relevant markets, settlement prices for comparable transactions at liquid trading h�ubs (e.g., SP-
15), all of which should be calculated for the remaining Contract Term, and include the value of
Capacity Attributes.
"Governmental Authoritv" means any federal, state, provincial, local or municipal
government, any political subdivision thereof or any other governmental, congressional or
parliamentary,regulatory, or judicial instrumentality, authority,body, agency, department,bureau,
or entity with authority to bind a Party at law, including CAISO; provided, however, that
"Governmental Authority"for purposes of this Agreement shall not in any event include any Party.
"Guaranteed Efficiencv Rate" means the guaranteed Efficiency Rate of the Facility
throughout the Delivery Term, as set forth on the Cover Sheet.
"Guaranteed Commercial Operation Date"or"Guaranteed COD"has the meaning set
forth in Exhibit B.
"Guaranteed Construction Start Date"has the meaning set forth in Exhibit B.
11
"Guaranteed RAAmount"means an amount of Resource Adequacy Benefits equal to the
Qualifying Capacity, in MW, of an energy storage facility with an installed capacity equal to the
Storage Contract Capacity that is able to be shown for each hour of the Resource Duration, minus
Administrative NQC Reductions for the applicable Showing Month.
"Guaranteed Stora�e Availabilit "has the meaning set forth in Section 4.8.
"Imbalance Energy"means the amount of energy in MWh,in any given Settlement Period
or Settlement Interval, by which the amounts of Charging Energy or Discharging Energy deviates
from the amount of Scheduled Energy.
"Import Restriction Action" means any unport or customs-related action by a
Governmental Authority that, directly or indirectly, delays the delivery of major equipment
procured by Seller to be used in the Facility, including, without limitation, a U.S. Customs and
Border Protection withhold release order, issuance of a CF28 or CF29 instrument or seizure or
enforcement action, provided, that an Import Restriction Action shall not include (i) any action
resulting from Seller's or its suppliers' failure to comply with applicable Law, (ii) any action that
could have been prevented through reasonable due diligence by Seller in its supplier selection and
procurement processes, (iii) any action arising from Seller's failure to maintain required import
licenses, permits or certifications, (iv) any action targeting speci�c suppliers due to their prior
violations of trade laws or regulations that were known or should have been known to Seller at the
time of procurement, (v) any routine customs inspection or documentation request that does not
result in an extraordinary delay, (vi) any action arising from Se11er's failure to provide accurate or
complete information to customs authorities, or (vii) any action that was reasonably foreseeable
based on published governmental policies,regulations or enforcement priorities as of the Effective
Date.
"Incentives"means: (a) any federal, state, or local tax benefits, credits or other incentives,
including depreciation, associated with the construction, ownership, or production of electricity
from the Facility(including credits under Sections 38,45,46 and 48 of the Internal Revenue Code
of 1986, as amended); and(b) any federal, state, or local cash payments, grants, subsidies or other
like benefits relating in any way to the Facility.
"Indemnifiable Event"has the meaning set forth in Section 16.1.
"Indemnifiable Loss(es)"has the meaning set forth in Section 16.1.
"Independent Report"has the meaning set forth in Section 2.5.
"Initial Svnchronization" means the earlier of(a) initial delivery of Discharging Energy
to the Delivery Point or(b) the initial receipt of Charging Energy at the Delivery Point.
"Installed Battery Capacity"means the maximum dependable operating capability of the
Facility to discharge electric energy as measured in MW at the Delivery Point, that achieves
Commereial Operation, (up to but not in exeess of the Storage Contract Capacity set forth on the
Cover Sheet),adjusted for ambient conditions on the date of the performance test,and as evidenced
by a eerti�cate substantially in the form attached as E�ibit I hereto.
12
"Interconnection Agreement" means that certain Large Generator Interconnection
Agreement associated with CAISO Queue position 2032 among Seller or Seller's Affiliate, the
CAISO, and the Participating Transmission Owner, pursuant to which the Facility will be
interconnected with the Transmission System, and pursuant to which the Interconnection Facilities
will be constructed, operated and maintained during the Contract Term.
"Interconnection Facilities" means the interconnection facilities, control and protective
devices and metering facilities required to connect the Facility with the Transmission System in
accordance with the Interconnection Agreement.
"Interconnection Point"has the meaning set forth in E�ibit A.
"Interest Rate" has the meaning set forth in Section 8.2.
"Interim Deliverability Status"has the meaning set forth in the CAISO Tariff.
"Inter-SC Trade" or"IST"has the meaning set forth in the CAISO Tariff.
"Investment Grade Credit Ratin�"means a Credit Rating of BBB- or higher by S&P or
Fitch or Baa3 or higher by Moody's.
"Joint Powers Act" means the provisions of the California Joint Exercise of Powers Act
found in Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California,
beginning at California Government Code Section 6500, et seq.
"Joint Powers A�reement"means the Amended and Restated Northern California Power
Agency Joint Exercise of Power Agreement dated as of January 31, 2008, as such agreement may
be further amended or amended and restated from time to time, under which Buyer is organized
as a Joint Powers Agency in accordance with the Joint Powers Act.
"kW" means kilowatts in alternating current, unless expressly stated in terms of direct
current.
"Law" means any applicable law, statute, rule, regulation, decision, writ, order, decree or
judgment, permit or any interpretation thereof, promulgated or issued by a Governmental
A�uthority.
"Lead Agency" means the public agency with the principal responsibility for approving
the Facility or relevant portion thereof as defined pursuant to CEQA, 14 C.C.R. § 15367.
"Lender" means, collectively, any Person (i) providing senior or subordinated
construction, interim, back leverage or long-term debt, equity, or tax equity, tax credit or cash
financing or refinancing for ar in connection with the development, construction, purchase,
installation or operation of the Racility, whether that financing or refmancing takes the form of
private debt (including back-leverage debt), equity(including tax equity),public debt or any other
form (including financing or refinancing provided to a member or other direct or indirect owner
of Seller), including any Person (including equity or tax equity investor) directly or indirectly
13
providing financing or refinancing for the Facility or purchasing equity ownership interests of
Seller or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii)
providing Interest Rate or commodity protection under an agreement hedging or otherwise
mitigating the cost of any of the foregoing obligations or (iii) participating in a lease fmancing
(including a sale leaseback or leveraged leasing structure) with respect to the Facility.
"Letter(s) of Credit" means one or more irrevocable, standby letters of credit issued by a
U.S. commercial bank or the U.S. branch of a foreign bank, having assets of at least Ten Billion
Dollars ($10,000,000,000), and with such bank having a Credit Rating of at least A- from S&P or
A3 from Moody's, in a form substantially similar to the letter of credit set forth in Exhibit K.
"Letter of Credit Defauit"means with respect to a Letter of Credit,the occurrence of any
of the following events:
(a) The issuer of the Letter of Credit fails to comply with or perform its material
obligations under such Letter of Credit;
(b) The issuer of the Letter of Credit disaffirms, disclaims, repudiates, or rejects, in
whole or in part, or challenges the validity of, the Letter of Credit;
(c) The Letter of Credit fails or ceases to be in full force and effect at any time;
(d) The Party providing the Letter of Credit fails to provide an extended or replacement
Letter of Credit within twenty(20) days before the Letter of Credit expires or terminates;
(e) The issuer of the Letter of Credit become Bankrupt; or
(� The issuer has a Letter of Credit Derating; provided, no Letter of Credit Default
will be treated as having occurred or be continuing in any event with respect to a Letter of Credit
after the time such Letter of Credit is required to be canceled or returned to a Party in accordance
with the terms of this Agreement.
"Letter of Credit Deratin�"means the issuer of a Letter of Credit fails to maintain a Credit
Rating of at least(a) "A-", or equivalent, from S&P; or(b) "A3", or equivalent, from Moody's, if
such entity is rated by only one of the ratings agencies.
"Licensed Professional En�ineer" means an independent,professional engineer selected
by Seller and reasonably acceptable to Buyer, licensed in the state of California.
"Limited Assignee"has the meaning set forth in Section 14.4.
"Local Capacity Area Resources"has the meaning set forth in the CAISO Tariff.
"Local RAR" means the local Resource Adequacy Requirements established for load-
serving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource
Adequacy Rulings, or by any other Governmental Authority. "Local RAR"may also be known as
14
local area reliability, local resource adequacy, local resource adequacy procurement reguirements,
or local capacity requirement in other regulatory proceedings or legislative actions.
"Locational Mar�inal Price" or"LMP"has the meaning set forth in the CAISO Tariff.
"Losses"means, with respect to any Non-Defaulting Party, an amount equal to the present
value of the economic loss to it, if any (exclusive of Costs), resulting from tennination of this
Agreement for the remaining Contract Term, determined in a commercially reasonable manner,
which economic loss (if any) shall be deemed to be the loss (if any) to such Party represented by
(a) if Buyer is the Non-Defaulting Party, the positive difference between the present value of the
payments that would be required to be made by Buyer under any transaction(s) replacing this
Agreement,regardless of whether Buyer enters any such replacement transactions, and the present
value of the payinents required to be made by Buyer during the remaining Contract Term of this
Agreement and(b)if Seller is the Non-Defaulting Party,the positive difference between the present
value of the payments required to be made to Seller during the remaining Contract Term of this
Agreement and the present value of the payments that would be required to be made to, or that
would otherwise be received by, Seller under any transaction(s) replacing this Agreement,
regardless of whether Seller enters any such replacement transactions. Factors used in determining
economic loss to a Non-Defaulting Parry may include,without limitation,reference to information
supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party,
including without limitation, quotations (either firm or indicative) of relevant rates,prices,yields,
yield curves,volatilities, spreads or other relevant market data in the relevant markets, comparable
transactions, forward price curves based on economic analysis of the relevant markets, settlement
prices for comparable transactions at liquid trading h�ubs (e.g., SP-15), all of which should be
calculated for the remaining Contract Term, as applicable, and must include the value of Capacity
Attributes and Incentives (calculated on an after-tax basis).
"Maior Subcontractors" means any �rst-tier subcontractor of Seller with which Seller
has an agreement having an aggregate val�ue in excess of One Million Dollars ($1,000,000) for
performance of any part of the work at the Site.
"Master File"has the meaning set forth in the CAISO Tariff.
"Maximum Char�in� Capacity" means the highest level at which the Facility may be
charged, expressed in MW and as set forth in Exhibit A.
"Maximum Dischar�in� Capacity"means the highest level at which the Facility may be
discharged, expressed in MW and as set forth in Exhibit A.
"Meter Service A�reement" means "Meter Service Agreement for CAISO Metered
Entities" as de�ned in the CAISO Tariff.
"Meter Service Agreement for 1VIetered Enfities" ar "MSA" has the meaning set forth
in the CAISO Tariff.
"Milestones"means the development activities for significant permitting, interconnection,
financing and construetion milestones set forth on the Cover Sheet.
]5
"Monthly Forecast"has the meaning set forth in Section 4.3(b).
"Monthlv Stora�e Availability"has the meaning set forth in Exhibit P.
"Moody's"means Moody's Investors Service, Inc., or its successors.
"MW" means megawatts in alternating current, unless expressly stated in terms of direct
current.
"MWh" means megawatt-hour measured in alternating current, unless expressly stated in
terms of direct current.
"Ne�ative LMP"means,in any Settlement Interval,the Real-Time Market at the Facility's
PNode is less than Zero Dollars ($0).
"NERC" means the North American Electric Reliability Corporation or any successor
entity performing similar functions.
"Net Qualifyin� Capacitv"has the meaning set forth in the CAISO Tariff.
"Network Ungrades"has the meaning set forth in the CAISO Tariff.
"Non-Defaultin� Partv"has the meaning set forth in Section 11.2.
"Non-Dispatchable Capacity"has the meaning set forth in Section 49(d).
"Non-Material Deviations" means deviations from a Charging Notice in a Settlement
Interval of less than 0.75 MWh.
"Notice" shall, unless otherwise specified in this Agreement, mean written
communications by a Party to be delivered by hand delivery,United States mail, overnight courier
service, or electronic messaging (email).
"Notice of Claim"has the meaning set forth in Section 16.2.
"Off-Peak Hour"means any hour that is not an On-Peak Hour.
"On-Peak Hour" means any hour from hour-ending 0700 to hour-ending 2200 (i.e., 6:00
AM to 9:59 PM) on Monday through Sat�urday, Pacific Prevailing Time, excluding NERC
holidays.
"Operating Restrictions" means those rules, requirements, and procedures set forth on
E�ibit .
"Outa�e Management System"or"OMS"has the meaning set forth in the CAISO Tariff.
"Participatin� Generator A�reemenY'has the meaning set forth in the CAISO Tariff.
16
"Participatin� Member" means a member of Buyer that is signatory to the Third Phase
Agreement. The Participating Members are the Cities of Santa Clara for 200.00 MW, Alameda
for 10.00 MW, Lompoc for 3.00 MW, Pa10 Alto for 30.00 MW, Redding for 45 MW, Shasta Lake
for 5 MW,Ukiah for 3.00 MW, and the Port of Oakland for 4.00 MW. Buyer may provide written
notice to Seller requesting consent from Seller to change the then-current list of Participating
Members and/or volumes that are signatory to the Third Phase Agreement such consent not to be
unreasonably withheld. Upon consent from Seller, such written notice shall not be considered to
be an amendment to this Agreement.
"Participatin�Transmission Owner"or"PTO"means an entity that owns, operates and
maintains transmission or distribution lines and associated facilities or has entitlements to use
certain translnission or distribution lines and associated facilities where the Facility is
interconnected. For purposes of this Agreement, the Participating Transmission Owner is set forth
in Exhibit A.
"Partv" or"Parties"has the meaning set forth in the Preamble.
"Performance Securitv" means (a) cash, or (b) a Letter of Credit in the amount set forth
on the Cover Sheet.
"Permitted Transferee" means (a) any Affiliate of Seller or (b) any entity that satisfies,
or is controlled by another Person that satisfies the following requirements:
(a) A tangible net worth of not less than One Hundred Fifty Million Dollars
($150,000,000) or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from
Moody's; and
(b) is a Quali�ied Operator, or has retained a third-party to operate the Facility that is a
Qualified Operator.
"Person" means any individual, sole proprietorship, corporation, limited liability
company, limited or general partnership, joint venture, association, joint-stock company, trust,
incorporated organization, institution, public benefit corporation, unincorporated organization,
government entity or other entity.
"Planned Outa�e"has the meaning set forth in Section 4.6(a).
"PMAX"means the applicable CAISO-certified maximum operating level of the Facility.
"PMIN" means the applicable CAISO-certified minimum operating level of the Facility.
"PNode"has the meaning set forth in the CAISO Tariff..
"Postin� Party"has the meaning set forth in Section 8.10.
"Prevailin�Wa�e Requirement"has the meaning set forth in Section 13.4.
17
"Procure Maior Facility Equipment Milestone" means the date upon which Seller has
notified Buyer of the schedule, selection and procurement of the major equipment comprising the
Facility.
"Product"has the meaning set forth on the Cover Sheet.
"Pro�ress Report"means a progress report including the iteins set forth in Exhibit E.
"Proposed Contract Price Increase"has the meaning set forth in Section 2.5.
"Proposed Contract Price Increase Cap"has the meaning set forth on the Cover Pa�e.
"Prudent Operatin� Practice" means (a) the applicable practices, methods and acts
required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in
or approved by a significant portion of the electric utility industry during the relevant time period
with respect to grid-interconnected, utility-scale storage facilities in the Western United States, or
any of the practices,methods and acts which, in the exercise of reasonable judgment in light of the
facts known at the time the decision was made,could have been expected to accomplish the desired
result at a reasonable cost consistent with good business practices, reliability, safety and
expedition. Prudent Operating Practice is not intended to be limited to the optimum practice,
method or act to the exclusion of all others, but rather to acceptable practices, methods or acts
generally accepted in the industry with respect to grid-interconnected, utility-scale generating
facilities with integrated storage in the Western United States.Prudent Operating Practice includes
compliance with applicable Laws, applicable reliability criteria, and the criteria, rules and
standards promulgated in the National Electric Safety Code and the National Electrical Code, as
they may be amended or superseded from time to time, including the criteria, rules and standards
of any successor organizations.
"Qualifying Capacity"has the meaning set forth in the CAISO Tariff.
"Qualified Operator" means Seller (either itself or through the engagement of an
Affiliate) or an operator of a battery energy storage system that has suf�cient experience and
technical capability to perform for Seller's benefit the obligations of Seller under this Agreement
related to the operation and maintenance of the Facility in accordance with the applicable
reguirements of this Agreement, as evidenced by such operator having operated two (2) or more
battery energy storage systems under its control,each having a nameplate capacity rating of twenty
(20) MW or more, for not less than two (2)years.
"RA Compliance Showin�" means the (a) Local RAR compliance or advisory showings
(or similar or successor showings), (b) RAR compliance or advisory showings (or similar or
successor showings),and(c)Flexible RAR compliance or advisory showings(or similar successor
showings), in each case, an entity is required to make to the CAISO pursuant to the CAISO Tariff,
to the CPUC (and, to the extent authorized by the CPUC, to the CAISO)pursuant to the Resource
Adequaey Rulings, or to any Governmental Authority.
"RA Deficiency Amount" means the liquidated damages payment that Se11er shall pay to
Buyer for an applicable RA Shortfall Month as calculated in accordanee with Section 3.8(b).
18
"RA Guarantee Date" means the sooner of(a) the date that the Facility is first able to be
included on a Supply P1an by both the CPUC and CAISO for Buyer, and (b) the date that is (i)
ninety (90) days after Commercial Operation Date, if the Commercial Operation Date occurs on
or after the eleventh(llth) day of a month, or(ii) sixty (60) days after the Commercial Operation
Date if the Commercial Operation Date occurs prior to the eleventh (l lth) day of a month.
"RA Shortfall Amount" shall, for a given Showing Month, be determined by calculating
the difference of the Guaranteed RA Amount minus the Delivered RA, which shall be the "RA
Shortfall Amount" for purposes of calculating an RA Deficiency Amount under Section 3.8(b)for
such Showing Month; provided, if the CPUC or CAISO adopts another methodology for
calculating a load serving entity's procurement deficiencies in Resource Adequacy Benefits for
purposes of the Resource Adequacy Requirements, the Parties shall cooperate in good faith to
amend this definition to conform to such new methodology in order to preserve to the maximum
extent possible the benefits, burdens, and obligations set forth in this definition as of the Effective
Date.If the result of the calculation is a negative number,the RA Shortfall Amount shall be deemed
to be zero MW for such Showing Month.
"RA Shortfall Month" means, for purposes of calculating an RA Deficiency Amount
under Section 3.8(b), any month, commencing with the Showing Month that contains the RA
Guarantee Date, during which there is an RA Shortfall Amount.
"Real-Time Forecast"means any Notice of any change to the Storage Capacity delivered
by or on behalf of Seller pursuant to Section 4.3(d).
"Real-Time Market"has the meaning set forth in the CAISO Tariff.
"Real-Time Price" means the Resource-Specific Settlement Interval LMP as defined in
the CAISO Tariff.If there is more than one applicable Rea1-Time Price for the same period of time,
Real-Time Price shall mean the price associated with the smallest time interval.
"Receiving Party"has the meaning set forth in Section 18.1.
"Remedial Action Plan"has the meaning in Section 2.4.
"Replacement RA" means Resource Adequacy Benefits, if any, equivalent to those that
would have been provided by the Facility with respect to the applicable Showing Month in all
respects, including, as applicable, Flexible RAR, and any successor criteria applicable to the
Facility, and any Local RAR, unless Buyer consents to accept Replacement RA from another
facility that provides non-equivalent Resource Adequacy Benefits.
"Resource Adequacv Benefits" means the rights and privileges attached to the Facility
that satisfy any entity's resource adequacy obligations, as those obligations are set forth in any
Resource Adequacy Rulings and/or the CAISO Tariff, and includes any local, zonal or otherwise
locational attributes associated with the Facility, in addition to flex attributes.
"Resouree Adequacv Capaeit "has the meaning set forth in the CAISO Tarif�
19
"Resource Adepuacv plan"has the meaning set forth in the CAISO Tariff.
"Resource Adequacv Requirements" or "RAR" means the resource adequacy
requirements established for Buyer pursuant to the Resource Adequacy Rulings, the CAISO
pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction.
"Resource Adequacy Rulings" means CPUC Decisions 04-01-050, 04-10-035,
OS-10-042, 06-04-040, 06-06-064, 06-07-031 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-
06-036, 11-06-022, 12-06-025, 13-06-024 and any other existing or subsequent ruling or
decision, or any other resource adequacy Law, however described, as such decisions, rulings or
Laws may be amended or modified from time to time throughout the Delivery Term.
"Resource Duration"means four(4)hours.
"Rollin�Monthly Avera�e Stora�e Availability"has the meaning set forth in Exhibit P.
"S&P"means the Standard&Poor's Financial Services, LLC (a subsidiary of S&P Global
Inc.) or its successor.
"Schedule"has the meaning set forth in the CAISO Tariff,and"Scheduled"has a corollary
meaning.
"Scheduled Energy" means the Charging Energy and Discharging Energy that clears
under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as
defined in the CAISO Tarif�, or any other financially binding Schedule, market instruction or
dispatch for the Facility for a given period of time implemented in accordance with the CAISO
Tariff.
"Schedulin� Coordinator"or"SC"means an entity certified by the CAISO as qualifying
as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the
functions specified in "Responsibilities of a Scheduling Coordinator," of the CAISO Tariff, as
amended from time to time.
"Scheduling Coordinator Metered Entity" has the meaning set forth in the CAISO
Tariff.
"Security Interest"has the meaning set forth in Section 8.10.
"Secured Party" has the meaning set forth in Section 8.10.
"Seller"has the meaning set forth on the Cover Sheet.
"Seller Initiated Test"has the meaning set forth in Section 49(a).
"Settlement Amount" means the N�on-Defaulting Party's Costs and Losses, on the one
hand,netted against its Gains, on the other. If the Non-Defaulting Party's Costs and Losses exceed
its Gains, then the Settl�ment Amount shall be an amount owing to the Non-Defaulting Party. If
20
the Non-Defaulting Party's Gains exceed its Costs and Losses, then the Settlement Amount shall
be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive,
exemplary or indirect or business interruption damages.
"Settlement Interval"has the meaning set forth in the CAISO Tariff.
"Settlement Period"has the meaning set forth in the CAISO Tariff.
"Shared Facilities"means the gen-tie lines,transformers, substations, or other equipment,
permits, contract rights, and other assets and property(real or personal), in each case, as necessary
to enable delivery of energy from the Facility (which is excluded from Shared Facilities) to the
point of interconnection, including the Interconnection Agreement itself, that are used in cominon
with third parties.
"Showing Month" means the calendar month of the Delivery Term that is the subject of
the Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the
CAISO Tariff.For illustrative purposes only,pursuant to the CAISO Tariff and Resource Adequacy
Rulings in effect as of the EfFective Date, the monthly Compliance Showing made in June is for
the Showing Month of August.
"Site" means the real property on which the Facility is or will be located, as further
described in Exhibit A and as shall be updated by Seller at the time Seller provides an executed
Construction Start Date certificate in the form of Exhibit J to Buyer; provided, the Site must be
within the boundaries of the previously identified Site. Seller will be permitted to remove parcels
that are not incl�uded in the Site, if any, at the time Seller provides an executed Construction Start
Date certificate in the form of Exhibit J to Buyer; such update, if any, will be automatically
incorporated into Exhibit A and replace the information set forth as of the Effective Date without
any further action of the Parties.
"Site Control"means that, on and after the Construction Start Date, Seller(or,prior to the
Construction Start Date, its Af�liate): (a) owns or has the option to purchase the Site, including
through an ownership interest in an Aff'iliate that owns the Site; (b) is the lessee or has the option
to lease the Site; (c)is the holder of an easement or an option for an easement,right-of-way grant,
or similar instrument with respect to the Site; or (d) has rights to control the Site through
ownership, lease, right-of-way grant or similar instrument, as the managing partner or other entity
authorized to act in all manners relating to the control and operation of the Site.
"SP-15" means the Existing Zone Generation Trading I�ub for Existing Zone region SP-
15 as set forth in the CAISO Tariff.
"SQMD Plan"has the meaning set forth in the CAISO Tariff.
"Station Use"means energy(including produced or discharged by the Facility)that is used
within the Facility when the Facility is not charging or discharging pursuant to a Charging Notice
or Discharging Notice to power the lights, motors, cooling equipment, control systems and other
electrical loads that are necessary for operation of the Facility.Any energy that is used within the
Faeility to power the lights, motors, cooling equipment, eon�rol systems and other electrical loads
21
that are necessary for operation of the Facility during periods in which the Facility is charging or
discharging pursuant to a Charging Notice or Discharging Notice is not Station Use; except that
solely for the purposes of the calculation of the Energy In and Energy Out as set forth Exhibit O,
any energy that is used within the Facility to power the lights, motors, cooling equipment, control
systems and other electrical loads that are necessary for operation of the Facility shall be
considered Station Use for purposes of conducting such calculation of Energy In or Energy Out,
as applicable, and shall not be considered end use consumption.
"Stora�e Capacitv" means (a) the maximum dependable operating capability of the
Facility to discharge electric energy that can be sustained for four (4) consecutive hours and (b)
any other products that may be developed or evolve from time to time during the Contract Term
that the Facility is able to provide as the Facility is con�gured on the Coinmercial Operation Date
and that relate to the maximum dependable operating capability of the Facility to discharge electric
energy as the same shall be determined pursuant to Section 4.9 and Exhibit O to reflect the results
of the most recently performed Storage Capacity Test, in either case (a) or (b) up to but not in
excess of the Storage Contract Capacity.
"Stora�e Capacitv Test" or"SCT"means any test or retest of the Storage Capacity of the
Facility and/or Efficiency Rate conducted in accordance with the testing procedures,requirements
and protocols set forth in Section 4.9 and Exhibit O.
"Stora�e Contract Capacity" means the total capacity (in MV� of the Facility initially
equal to the amount set forth on the Cover Sheet, as the same may be adjusted from time to time
pursuant to Section 5 of Exhibit B.
"Stora�e Contract Output" means the total output (product of the Storage Contract
Capacity multiplied by four (4) hours, represented in MWh) of the Facility, initially equal to the
amount set forth on the Cover Sheet, as the same may be adjusted from time to time pursuant to
Section 5 of Exhibit B.
"Stora�e Product" means (a) Discharging Energy, (b) Capacity Attributes, if any, (c)
Storage Capacity, and(d)Ancillary Services, in each case arising from or relating to the Facility.
"Stora�e Rate" has the meaning set forth on the Cover Sheet.
"Stored Energy Level" means, at a particular time, the amount of electric energy in the
Facility available to be discharged as Discharging Energy, expressed in MWh-AC.
"Subsequent Purchaser" means the purchaser of Capacity Attributes from Buyer in a re-
sale of such Capacity Attributes by Buyer in accordance with Section 3.7(a).
"Supplementarv Stora�e Capacity Test Protocol" has the meaning set forth in Exhibit
O.
"Supply Chain Event"means any material delay or failure in Seller's performance of its
obligations hereunder arising out of any of the following, notwithstanding the foreseeability or
anticipation thereof at any time: (X) changes in Export and Import Costs, or (Y) any Import
22
Restriction Action; provided that a Supply Chain Event shall not include any delay or failure (i)
caused directly or indirectly by any action or inaction of Seller or its Affiliates (including any
failure to timely order equipment or make required payments, or any failure to implement
reasonable mitigation measures) that could have been prevented or mitigated through the exercise
of commercially reasonable efforts or Prudent Operating Practice, or (ii) resulting from any
economic or market conditions generally affecting the industry (except to the extent directly
resulting from clauses (X) or(Y) above).
"Supply Plad'has the meaning set forth in the CAISO Tariff:
"Svstem Emer�ency" means any condition that requires, as determined and declared by
CAISO or the PTO, automatic or immediate action to (i)prevent or limit harm to or loss of life or
property, (ii)prevent loss of transmission facilities or generation supply in the immediate vicinity
of the Facility, or(iii)preserve Transmission System reliability.
"Tax" or "Taxes" means all U.S. federal, state and local and any foreign taxes, levies,
assessments, surcharges, duties and other fees and charges of any nature imposed by a
Governmental Authority, whether currently in effect or adopted during the Contract Term,
including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and
use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding,
deficiency,penalty, additions, interest or assessment related thereto.
"Terminated Transaction"has the meaning set forth in Section 11.2(a).
"Termination Pavment"has the meaning set forth in Section 11.3.
"Third Phase A�reement" means the agreement between Buyer and the Participating
Members that sets forth the terms and conditions under which Buyer is authorized to enter into
this Agreement on behalf of the Participating Members.
"Transformer Failure" means failure of all or part of the main power transformer that
results in the Facility being unable to charge and discharge Energy during such failure, and such
failure is not caused directly or indirectly by Seller's fail�ure to comply with Prudent Operating
Practice or applicable Law or otherwise by the fault or negligence of Seller. Seller may claim a
Transformer Failure only once during the Contract Term, and the claimed impact associated with
such Transformer Failure shall not exceed twelve (12) months.
"Transmission Provider" means any entity or entities transmitting or transporting the
Charging Energy and Discharging Energy on behalf of Seller or Buyer to or from the Delivery
Point.
"Transmission Svstem"means the transmission facilities operated by the CAISO,now ar
herea$er in existence, which provide energy transmission service within the CAISO grid from the
D�livery Point.
"Ultimate Parent"means Aypa Power Holdings, LP.
23
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise
or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience
and reference purposes only and do not affect the meaning or interpretation of this Agreement;
(b) words iinporting the singular include the plural and vice versa and the
masculine, feminine and neuter genders include al1 genders;
(c) the words "hereof', "herein", and "hereunder" and words of similar import
shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
(d) a reference to an Article, Section, paragraph, clause, Parry, or Exhibit is a
reference to that Article, Section,paragraph, clause of, or that Party or Exhibit to, this Agreement
unless otherwise specified;
(e) a reference to a document or agreement, incl�uding this Agreement means
such document, agreement or this Agreement including any amendment or supplement to, or
replacement, novation or modification of this Agreement, but disregarding any amendment,
supplement, replacement, novation or modification made in breach of such document, agreement
or this Agreement;
(� a reference to a Person includes that Person's successors and permitted
assigns;
(g) the terms "include" and "including" mean "include or including (as
applicable) without limitation" and any list of examples following such terms shall in no way
restrict or limit the generality of the word or provision in respect of which such examples are
provided;
(h) references to any statute, code or statutory provision are to be construed as
a reference to the same as it may have been, or may from time to time be, amended, modified or
reenacted, and include references to all bylaws, instruments, orders and regulations for the time
being made thereunder or deriving validity therefrom unless the context otherwise reguires;
(i) in the event of a conflict, a mathematical formula or other precise
description of a concept or a term shall prevail over words providing a more general description
of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in
United States Dollars;
(k) the expression "and/or" when used as a conjunction shall connote "any or
all o�';
(1) words, phrases or expressions not otherwise de�ned herein that (i) have a
generally accepted meaning in Prudent Operating Practice shall have such meaning in this
24
Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating
Practice but that have we11 known and generally accepted technical or trade meanings, shall have
such recognized meanings; and
(m) each Party acknowledges that it was represented by counsel in connection
with this Agreeinent and that it or its counsel reviewed this Agreement and that any rule of
construction to the effect that ambiguities are to be resolved against the drafting Party shall not be
employed in the interpretation of this Agreement.
ARTICLE 2
TERM; CONDITIONS PRECEDENT
2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall
remain in full force and effect until the concl�usion of the Delivery Term, subject to any early
termination provisions set forth herein ("Contract Term"); provided, however, Buyer's
obligations to pay for or accept any Product are subject to Seller's completion of the conditions
precedent pursuant to Section 2.2.
(b) Applicable provisions of this Agreement shall continue in effect after
termination, including early termination, to the extent necessary to enforce or complete the duties,
obligations or responsibilities of the Parties arising prior to termination. The confidentiality
obligations of the Parties under Article 18 and all indemnity and audit rights shall remain in full
force and effect for two (2) years following the termination of this Agreement.
2.2 Conditions Precedent.
(a) Subject to Exhibit B, the Delivery Term shall not commence until Seller
completes each of the following conditions:
(i) Seller has delivered to Buyer (i) a completion certificate from a
Licensed Professional Engineer substantially in the form of Exhibit H and (ii) a certificate from a
Licensed Professional Engineer substantially in the form of Exhibit I setting forth the Installed
Battery Capacity on the Commercial Operation Date;
(ii) A Participating Generator Agreement and a Meter Service
Agreement far CAISO Metered Entities between Se11er and CAISO shall have been executed and
delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer;
(iii) An Interconnection Agreement between Se11er(or Seller's Af�liate)
and the PTO for the Facility shall have been executed and delivered and be in full force and effect
and a copy of the Interconnection Agre�ment delivered to Buyer;
(iv) Copies of executed agreements demonstrating Site Control shall
have been delivered to Buyer; provided that Seller will be permitted to redact any confidential
25
pricing or commercial terms and provided further that such information sha11 be subject to Article
18 of this Agreement;
(v) Insurance requirements for the Facility pursuant to Article 17 have
been met, with evidence provided in writing to Buyer;
(vi) All applicable regulatory authorizations, approvals and permits
required for operation of the Facility have been obtained and a11 conditions thereof that are capable
of being satisfied on the Commercial Operation Date have been satisfied, including but not limited
to applicable laws, ordinances codes and standards regarding fire safety and attaching a copy of
the applicable fire inspection and signoff, and shall be in full force and effect (including but not
limited to CEQA approvals), and Se11er has delivered to Buyer an attestation certificate from an
officer of Seller certifying to the satisfaction of this condition set forth in this Section 2.2(a��;
(vii) Seller has completed CAISO Certification of the Facility,and a copy
of the CAISO Certification has been delivered to Buyer;
(viii) Seller has provided notice that Seller (either itself or through the
engagement of an Affiliate)will act as the Qualified Operator for the Facility,or Seller has entered
into one or more agreements providing for the operation and maintenance of the Facility with one
or more other Qualified Operators;
(ix) Seller, with the reasonable cooperation of Buyer, has taken all
actions and executed and delivered to Buyer and the CAISO all documents that are reasonably
capable of being completed prior to the Commercial Operation Date necessary to register and
quality the Facility to participate and operate in the CAISO markets, as set forth in the CAISO
Tariff, including satisfying and completing the CAISO New Resource Implementation process
(commonly referred to as the"NRI Process") with respect to the Facility;
(x) Seller has delivered the Performance Security to Buyer in
accordance with Section 8.8;
(xi) Seller has paid Buyer for all amounts owing under this Agreement,
if any, including Construction De1ay Damages and COD Delay Damages; and
(xii) The Facility has obtained Full Capacity Deliverability StaYus for the
Storage Contract Capacity.
2.3 Development; Construction; Pro�ress Reports. Within fifteen(15)days after the
close of(i) each calendar quarter from the�rst calendar quarter following the Effective Date until
the Expected Construction Start Date, and (ii) each month thereafter, Seller shall provide a
Progress Report until the Commercial Operation Date to Buyer that (a) describes the progress
towards meeting the Milestones; (b) identi�es any missed Milestones, including the cause of the
delay; and (c) provides a detailed description of Seller's corrective actions to achieve the missed
Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date. The
form of the Progress Report is set forth in Exhibit E. Seller agrees to regularly scheduled telephonic
or video-conferenced meetings(unless otherwise agreed to by the Parties)between representatives
26
of Buyer and Se11er to review the Progress Reports and discuss Seller's construction progress.
Seller shall also provide Buyer with any reasonably requested documentation (subject to
confidentiality restrictions) directly related to the achievement of Milestones within ten (10)
Business Days of receipt of such request from Buyer.For the avoidance of doubt, as between Seller
and Buyer, Seller is solely responsible for the design and construction of the Facility, including
the location of the Site,obtaining all permits and approvals to build the Facility,the Facility layout,
and the selection and procurement of the equipment comprising the Facility.
2.4 Remedial Action Plan.If Seller misses any one(1)Milestone by more than fifteen
(15)days,except as the result of Force Maj eure Event or Buyer Delay, Seller shall submit to Buyer,
within thirty (30) days after the missed Milestone a remedial action plan ("Remedial Action
Plan"), which will describe in detail any delays (actual or anticipated) beyond the scheduled
Milestone dates, including the cause of the delay, if known (e.g., governmental approvals,
financing, property acquisition, design activities, equipment procurement, project construction,
interconnection, or any other factor), Seller's detailed description of its proposed course of action
to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial
Operation Date (including any extension thereo�; provided, that delivery of any Remedial Action
Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any
subsequent Milestones in accordance with the terms of this Agreement. Subject to the provisions
of Exhibit B, so long as Seller complies with its obligations under this Section 2.4, Seller shall not
be considered in default of its obligations under this Agreement solely because of missing any
Milestone.
2.5 Stora�e Rate Adiustment Event.
(a) If after J�une 1, 2026, a Change in Tax Law or Supply Chain Event occurs
that increases Seller's cost to develop, finance and construct, own or operate the Facility, then,
subject to the remainder of this Section 2.5, Seller shall see no compensation from Buyer to
mitigate such Change in Tax Law or Supply Chain Event. Notwithstanding the foregoing or
anything contrary in this Agreement, at any time prior to June 1, 2026, Seller may, in its sole
discretion provide written notice to Buyer of a proposed contract price increase to keep Seller
whole with respect to any estimated cost increases that Seller anticipates it will incurs, as
determined in a commercially reasonable manner,as a result of such Change in Tax Law or Supply
Chain Event(the"Proposed Contract Price Increase");provided, in which case Seller shall also
deliver to Buyer a report from an independent retained consultant or other qualified person not
employed by or affiliated with Se11er or Buyer, and where such independent consultant or other
qualified person is approved by Buyer, where such Buyer approval cannot be unreasonably
withheld, conditioned or delayed, that includes (i) analysis with comprehensive supporting
documentation of all increased costs directly attributable to such Proposed Contract Price Increase
resulting from the applicable Change in Tax Law or Supply Chain Event, and (ii) a report
demonstrating how the Proposed Contract Price I�ncrease was determined ("Initial Independent
Report"). Estimated cost impacts shall be shown in the Initial Independent Report in terms of
$/WAc to explain changes to the Contract Price.
(b) So long as the Proposed Contract Price Increase is equal to or less than the
Proposed Contract Price Increase Cap,then such Proposed Contract Price Increase shall be deemed
27
accepted by Buyer; provided, however, that the Proposed Contract Price Increase sha11 be
subsequently revised and trued up to be reflect Seller's actual cost increases as a result of such
Change in Tax Law or Supply Chain Event (the "Actual Contract Price Increase"); provided
further that such Actual Contract Price Increase sha11 be supported by a Final Independent Report,
except that in no event shall the Actual Contract Price Increase exceed the Proposed Contract Price
Cap, subject to Section 2.5(c). Upon the completion of the Facility, but no later than ninety (90)
days following the Commercial Operation Date, Se11er shall deliver to Buyer a report (the "Final
Independent Report") from an independent retained consultant or other qualified person not
employed by or affiliated with Se11er or Buyer, and where such independent consultant or other
qualified person is approved by Buyer, where such Buyer approval cannot be unreasonably
withheld, conditioned or delayed, that includes (i) analysis with comprehensive supporting
documentation of all increased costs directly attributable to such Actual Contract Price Increase
resulting from the applicable Change in Tax Law or Supply Chain Event, and (ii)how the Actual
Contract Price Increase was determined. Actual cost impacts sha11 be shown in the Final
Independent Report in terms of$/WAc to explain changes to the Contract Price. Upon Buyer's
approval of the Final Independent Report, which approval shall not be unreasonably withheld,
conditioned or delayed, the Parties shall amend the Contract Price in the Agreement so that the
Contract Price increases by the applicable Actual Contract Price Increase; provided that such
amended Contract Price shall not exceed the sum of (i) the original Contract Price and (ii) the
Proposed Contract Price Increase Cap. Any disputes regarding the Actual Contract Price Increase
or the Final Independent Report shall be subject to the dispute resolutions procedures contained in
this Agreement.
(c) If the Proposed Contract Price Increase and/or Actual Contract Price
Increase is greater than the Proposed Contract Price Increase Cap, Seller may,in its sole discretion
provide written notice to Buyer of a Proposed Contract Price Increase and/or Actual Contract Price
Increase,and if Buyer does not provide written acceptance of the Proposed Contract Price Increase
or Actual Contract Price Increase to Seller within sixty (60) days after Buyer's receipt of the
Proposed Contract Price Increase andlor Actual Contract Price Increase notice from Seller, then
Seller may terminate this Agreement upon written notice to Buyer; provided, if such termination
Notice is not provided by Seller within thirty (30) days after the sixty (60) day period has ended,
such termination right under this paragraph is forfeited and the terms and conditions of this
Agreement will remain unchanged, including the Contract Price. Neither Party shall have any
liability to the other Party as a result of any termination of this Agreement under this Section 2.5,
and within ten(10) Business Days thereafter each Party shall return any Development Security or
Buyer Security then held by such Party to Se11er or Buyer, as applicable.
2.6 jReservedl.
2.7 CE A.
(a) The Parties agree that Buyer has no obligation to accept or pay for any
Product under this Agreement until the date on which a11 of the following have occurred (such
date,the"CEQA Completion Date"): (a)any applicable review under CEQA has been completed
by the Lead Agency and all necessary CEQA approval(s) for the Facility have been issued by the
Lead Agency (the "CEQA Approval(s)"); and (b) (i) the applicable period for any judicial
28
challenges to the CEQA Approval(s) relating to the Facility has expired without any such
challenge having been filed in court, or (ii) in the event of any such challenge, the challenge has
been dismissed. The Delivery Term shall not occur without the occurrence of the CEQA
Completion Date.
(b) Buyer reserves the right, but not the obligation, to participate in the CEQA
review of the Facility by the Lead Agency.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the terms and conditions of this
Agreement, during the Delivery Term, Buyer will purchase all of the Product produced by or
associated with the Facility at the Contract Price and in accordance with Exhibit C,and Seller shall
supply and deliver to Buyer a11 of the Product produced by or associated with the Facility. At its
sole discretion, Buyer may during the Delivery Term resell or use for another purpose all or a
portion of the Product, provided that no such resale or use shall relieve Buyer of any obligations
hereunder, including under Section 5.2, or modify any of Seller's obligations hereunder. During
the Delivery Term, Buyer will have exclusive rights to offer,bid, or otherwise submit the Product,
or any component thereof, from the Facility after the Delivery Point for resale into the market or
to any third party, and retain and receive any and all related revenues.
3.2 f Reservedl.
3.3 Imbalance Ener�y. Buyer and Seller recognize that in any given Settlement Period
there may be Imbalance Energy. To the extent there is any Imbalance Energy, any payments or
charges related to such Imbalance Energy sha11 be for the account of Buyer.
3.4 fReserved).
3.5 IReservedl.
3.6 fReserved).
3.7 Capacity Attributes. Seller or an Aff'iliate of Seller shall reguest Full Capacity
Deliverability Status in the CAISO generator interconnection process and the Facility sha11 obtain
Full Capacity Deliverability Status by the Commercial Operation Date. As between Buyer and
Seller, Seller shaIl be responsible for the cost and installation of any Network Upgrades associated
with obtaining such Full Capacity Deliverability Status.
(a) Throughout the Delivery Term, Se11er grants, pledges, assigns and
otherwise commits to Buyer all the Capacity Attributes from the Facility;provided,Buyer may re-
sell all or part of the Capacity Attributes to a Subsequent Purchaser. If Seller fails to deliver
Capacity Attributes in accordance with this Agreement, Seller shall be liable to Buyer for the
liquidated damage amounts set forth in this Agreement regardless of whether Buyer has sold a11 or
part of the Capacity Attributes to a Subsequent Purchaser.
29
(b) Throughout the Delivery Term, Seller sha11 use commercially reasonable
efforts to maintain eligibility for Full Capacity Deliverability Status or Interim Deliverability
Status for the Facility froin the CAISO and shall perform all actions necessary to ensure that the
Facility qualifies to provide Resource Adequacy Benefits to Seller. Throughout the Delivery Term,
Seller hereby covenants and agrees to transfer all Resource Adequacy Bene�ts to Buyer.
(c) For the duration of the Delivery Term, Seller shall take all commercially
reasonable administrative actions, including complying with all applicable registration and
reporting requirements, and executing all documents or instruments necessary to enable Buyer to
use all of the Capacity Attributes cominitted by Seller to Buyer pursuant to this Agreement.
(d) If Seller anticipates it will have an RA Deficiency Amount in any month of
the Delivery Term, Se11er may, as an alternative to paying RA Deficiency Amounts, provide
Replacement RA up to the anticipated RA Shortfall Amount; provided, any Replacement RA
capacity shall be communicated by Seller to Buyer with Replacement RA product information in
a written notice substantially in the form of Exhibit M at least seventy-five (75) days before the
applicable CPUC Showing Month.
3.8 Resource Adeauacv Failure.
(a) RA Deficiency Determination. For each RA Shortfall Month, Seller shall
pay to Buyer the RA Deficiency Amount as liquidated damages or provide Replacement RA, in
each case, as the sole and exclusive remedy for the Capacity Attributes Seller failed to convey to
Buyer.
(b) RA Deficiencp Amount Calculation. For each RA Shortfall Month, Seller
shall pay to Buyer an amount (the "RA Deficiencv Amount") equal to the product of(i) the RA
Shortfall Amount, and (ii) the sum of(A)the CPUC System RA Penalty and (B) CPM Soft Offer
Cap.
39 fReserved).
3.10 Reserv_ed].
3.11 Compliance Expenditure Cap.
(a) If a Change in Law occurs after the Effective Date that affects the Facility's
eligibility to qualify for or maintain Resource Adequacy Benefits that comply with the Resource
Adeguacy Requirements or to provide Ancillary Services, then Seller shall use commercially
reasonable efforts to comply with such Change in Law as necessary to maintain the Product
eligibility described above. Notwithstanding anything to the contrary, the Parties agree that the
maximum out-of-pocket costs and expenses("Compliance Costs") Seller shall be required to bear
durin the term of this A reement to comply with all of such obligations shall be capped at
per MW of Starage Contract Capacity with respect to
Change in Law occurring after the Effective Date that affects the Facility's eligibility to qualify
for or maintain Resource Adequacy Benefits that comply with the Resource Adequacy
Reguirements or to provide Ancillary Services (the "Compliance Expenditure Cap"). Seller's
30
internal administrative costs associated with obtaining, maintaining, conveying or effectuating,
Buyer's use of(as applicable) any Product are excluded from the Compliance Expenditure Cap.
(a) Any actions required for Seller to comply with its obligations set forth in
the immediately preceding paragraph, the Compliance Costs of which will be included in the
Compliance Expenditure Cap, shall be referred to collectively as the "Compliance Actions."
Compliance Actions shall not include any requirement of Sellex to increase the Storage Capacity
beyond the Storage Contract Capacity.
(b) If Seller reasonably anticipates the need to incur Compliance Costs in
excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall
provide Notice to Buyer of such anticipated Compliance Costs.
(c) Buyer will have sixty(60) days to evaluate such Notice (during which tiine
period Seller is not obligated to take any Compliance Actions described in the Notice) and shall,
within such time, either (1) agree to reimburse Seller for all or some portion of the Compliance
Costs that exceed the Compliance Expenditure Cap(such Buyer-agreed upon costs,the"Accepted
Compliance Costs"), or (2) waive Seller's obligation to take such Compliance Actions, or any
part thereof for which Buyer has not agreed to reimburse Se11er.
(d) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs,
then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as
agreed upon by the Parties and Buyer shall reimburse Seller for Seller's actual costs to effect the
Compliance Actions, not to exceed the Accepted Compliance Costs, within ninety(90) days from
the time that Buyer receives an invoice and documentation of such costs from Seller.
(e) If (i) Buyer does not pay any Accepted Compliance Costs within the
timeline required by Section 3.11(e), (ii) does not agree to pay the Compliance Costs in excess of
the Compliance Expenditure Cap within the timeline required by Section 3.11(d), or (iii) it is not
possible for Seller to achieve compliance with a Change in Law through the payment or incurrence
of costs,then in each case (A) Seller shall be excused from the corresponding Compliance Actions
under this Agreement, (B) Buyer shall continue to pay Se11er under this Agreement without any
reduction in revenues so long as such reduction in revenue is directly attributed to the Change in
Law, and (C) with respect to Resource Adequacy Benefits, the Guaranteed RA Amount shall be
adjusted downward to reflect the effect of the Change in Law.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Deliverv. Subject to the provisions of this Agreement, commencing on the �rst day
of the Delivery Term through the end of the Contract Term, Seller shall supply and deliver
Discharging Energy to Buyer at the Deliv��ry Point, and Buyer shall take delive�ry of Discharging
Energy at the Delivery Point in aeeordanee with the terms of this Agreement. Seller will be
responsible for paying or satisfying when due any costs or charges imposed in connection with the
delivery of Discharging Energy to the Delivery Point, any costs assoeiated with delivering the
Charging Energy from the Delivery Point to the Facility, and any operation and maintenance
31
charges imposed by the Transmission Provider directly relating to the Facility's operations. Buyer
shall be responsible for all costs, charges and penalties, if any, imposed in connection with the
delivery of Discharging Energy at and after the Delivery Point and Charging Energy to the
Delivery Point, including without limitation transmission costs and transmission line losses and
imbalance charges. The Charging Energy and Discharging Energy wi11 be scheduled to the CAISO
by Buyer (or Buyer's designated Scheduling Coordinator) in accordance with Exhibit D-1 and
Exhibit D-2.
4.2 Title and Risk of Loss. Title to and risk of loss related to the Discharging Energy
shall pass and transfer from Seller to Buyer at the Delivery Point. Seller warrants that all Product
delivered to Buyer is free and clear of allliens, security interests, claims and encumbrances of any
kind.
4.3 Forecastin�. Seller shall provide the forecasts described below at its sole expense
and in a format reasonably acceptable to Buyer(or Buyer's designee). Seller shall use reasonable
efforts to provide forecasts that are accurate and, to the extent not inconsistent with the
requirements of this Agreement, shall prepare such forecasts, or cause such forecasts to be
prepared, in accordance with Prudent Operating Practice.
(a) Reserved.
(b) Monthly Forecast of Stora,_�pacity. No less than thirty (30) days before
the Commercial Operation Date, and thereafter ten (10) Business Days before the beginning of
each month d�uring the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a
non-binding forecast of the hourly expected Storage Capacity for each day of the following month
in a form substantially similar to the table found in Exhibit F ("Monthlv Forecast").
(c) Day-Ahead Forecast. By 5:30 AM Pacific Prevailing Time on the Business
Day immediately preceding the date of delivery, or as otherwise specified by Buyer consistent
with Prudent Operating Practice, Se11er shall provide Buyer and the SC (if applicable)with a non-
binding forecast of Storage Capacity for each hour of the immediately succeeding day ("Day_
Ahead Forecast"). A Day-Ahead Farecast provided in a day prior to any non-Business Day(s)
shall include non-binding forecasts for the immediate day, each succeeding non-Business Day and
the next Business Day. Each Day-Ahead Forecast shall clearly identify,for each hour, Seller's best
estimate of the Storage Capacity for each hour of each applicable day. Except as otherwise agreed,
Seller shall provide the Day-Ahead Forecast in the form of a CSV file or other mutually agreed
file format delivered to Buyer's SC and Buyer's File Transfer Protocol (FTP) site as set forth in
Exhibit D-2. If Seller fails to provide Buyer with a Day-Ahead Forecast as required herein for any
period, then for such unscheduled delivery period only Buyer and the SC (if applicable) shall rely
on any Real-Time Forecast provided in accordance with Section 4.3(d) or the Monthly Forecast or
Buyer's best estimate based on information reasonably available to Buyer.
(d) Real-Time Forecasts. During the Delivery Term, Seller shall notify Buyer
and the SC (if applicable) of any changes from the Day-Ahead Forecast of one (1) MW or more
in Storage Capacity, whether due to Forced Facility Outage, Force Majeur� Event or other cause,
as soon as reasonably possible, but no later than one (1)hour prior to the deadline for submitting
32
Schedules to the CAISO in accordance with the rules for participation in the Real-Time Market.
If the Storage Capacity changes by at least one (1) MW as of a time that is less than one (1) hour
prior to the Real-Time Market deadline, but before such deadline, then Seller must notify Buyer
as soon as reasonably possible. Such Rea1-Time Forecasts shall contain information regarding the
beginning date and time of the event resulting in the change in Storage Capacity,the expected end
date and time of such event, and any other information required by the CAISO or reasonably
requested by Buyer. These Real-Time Forecasts sha11 be communicated in a method reasonably
acceptable to Seller,provided that Buyer specifies the method no later than five(5)Business Days
prior to the effective date of such requirement. In the event Buyer fails to provide Notice of an
acceptable method for communications under this Section 4.3(d), then Se11er shall send such
communications by telephone and email to Buyer and the SC (if applicable).
(e) Forced Facility Outa�es. Notwithstanding anything to the contrary herein,
Seller shall notify the SC of Forced Facility Outages promptly but no later than the time periods
required by the CAISO Tariff and the CAISO's outage management rules and Seller shall keep
the SC informed of any developments that will affect either the duration of the outage or the
availability of the Facility during or after the end of the outage.
(� Forecasting Penalties. Unless excused by a Force Majeure Event, in the
event Seller does not in a given hour provide the forecast required in Section 4.3(d) and Buyer
incurs a loss or penalty resulting from Seller's failure with respect to Charging Energy or
Discharging Energy during such hour, Seller shall be responsible for any penalties, imbalance
energy charges, or other costs from CAISO resulting from Seller's failure to provide the forecast
required in Section 4.3(d) ("Forecastin� Penaltv"). Settlement of Forecasting Penalties sha11
occur as set forth in Article 8 of this Agreement.
(g) CAISO Tariff Rec�uirements. Seller sha11 comply with all applicable CAISO
Tariff requirements,procedures,protocols,rules and testing as necessary for Buyer to submit Bids
for the electric energy charged and discharged by the Facility.
4.4 Dispatch Down/Curtailment.
(a) General. Se11er agrees to reduce the amount of Discharging Energy
produced by the Facility, by the amount and for the period set forth in any Curtailment Order;
provided, Seller is not required to reduce such amount to the extent such reduction or any such
Curtailment Order is inconsistent with the limitations of the Facility set out in the Operating
Restrictions; provided, further, Seller shall notify Buyer as soon as reasonably practicable, but in
no event less than one (1) Business Day, if the CAISO's Master Data File for the Facility is
inconsistent with the Operating Restrictions such that a failure to follow a Curtailment Order is
due the limitations of the Facility set out in the Operating Restrictions.
(b) Reserved .
(c) Failure to Com�ly_. If S�ller fails to comply with a Curtailment Order, then,
for each MWh of Discharging Energy that is delivered by the Facility to the Delivery Point in
contradiction of the Curtailment Order, Seller shall pay Buyer for each such MWh at an amount
33
equal to the sum of(A) -�- (B), where: (A) is the sum, for a11 Settlement Intervals with a Negative
LMP during the Curtailment Period, of the absolute value of the product of such excess MWh in
each Settlement Interval and the Negative LMP for such Settlement Interval and (B) is any
penalties assessed by the CAISO or other charges assessed by the CAISO resulting from Seller's
failure to comply with the Curtailment Order. Such calculations shall exclude failures to comply
with a Curtailment Order to the extent such failure to comply is consistent with the CAISO Tariff.
(d) Seller Equipment Required for Curtailment Instruction Communications.
Se11er shall acquire, install, and maintain such facilities, communications links and other
equipinent as are required under the CAISO Tariff, and implement such protocols and practices,
as necessary to respond and follow instructions,including an electronic signal conveying real time
and intra-day instructions,to operate the Facility as reasonably directed by the Buyer in accordance
with this Agreement or a Governmental Authority, including to implement a Curtailment Order in
accordance with the then-current methodology used to transmit such instructions as it may change
from time to time. If at any time during the Delivery Term, Seller's facilities, communications
links or other equipment, protocols or practices are not in compliance with then-current
methodologies applicable to the Facility and required by CAISO, Seller shall take the steps
necessary to become compliant as soon as reasonably possible. Seller shall be liable pursuant to
Section 4.4(c)for failure to comply with a Curtailment Order during the time that Seller's facilities,
communications links or other equipment,protocols or practices are not in compliance with then-
current methodologies applicable to the Facility. For the avoidance of doubt, a Curtailment Order
communication via such systems and facilities shall have the same force and effect on Seller as
any other form of communication.
4.5 Char�in�Energy Mana�ement.
(a) Upon receipt of a valid Charging Notice, Se11er shall take any and all action
necessary to deliver the Charging Energy from the Delivery Point to the Facility in order to deliver
the Storage Product in accordance with the terms of this Agreement (including the Operating
Restrictions), including maintenance,repair or replacement of equipinent in Se11er's possession or
control used to deliver the Charging Energy to the Facility.
(b) Buyer will have the right to charge the Facility seven(7) days per week and
twenty-four (24) hours per day (including holidays), by providing Charging Notices to Seller
electronically, and subject to the requirements and limitations set forth in this Agreement,
including the Operating Restrictions. Subject to Seller's obligations to comply with the CAISO
Tariff and Section 4.5(e), Seller may provide notice to Buyer or Buyer's SC that it must adjust a
Charging Notice from Buyer to the extent necessary to maintain compliance with the Operating
Restrictions, the CAISO Tariff, or in accordance with Section 4.5(e), and upon Buyer's receipt of
such notice, a Charging Notice from Buyer will be deemed to have been adjusted as provided in
such notice. Each Charging Notice issued in accordance with this Agreement will be effective
unless and until Buyer modifies such Charging Notice by providing Seller with an updated
Charging Notice.
(c) Seller shall not charge the Racility during the Term other than pursuant to a
valid Charging Notice, or in connection with a Storage Capacity Test, or in accordance with
34
Section 4.5(e). If, during the Contract Term, Seller (a) charges the Facility to a Stored Energy
Level greater than the Stored Energy Level provided for in the Charging Notice or(b) charges the
Facility in violation of the first sentence of this Section 4.5(c), then (x) Seller shall be responsible
for all energy costs associated with such charging of the Facility, (y) Buyer shall not be required
to pay for the charging of such energy (i.e., Charging Energy), and (z) Buyer sha11 be entitled to
discharge such energy and entitled to all of the benefits (including Storage Product) associated
with such discharge. Seller will not be in violation of the first sentence of this Section 4.5(c) for
Non-Material Deviations in Charging Energy typical of battery storage facilities operating in the
CAISO consistent with Prudent Operating Practices.
(d) Buyer will have the right to discharge the Facility seven (7) days per week
and twenty-four (24) hours per day (including holidays), by providing Discharging Notices to
Seller electronically, and subject to the requirements and limitations set forth in this Agreement,
including the Operating Restrictions. Subject to Seller's obligations to comply with the CAISO
Tariff and Section 4.5(e), Seller may provide notice to Buyer or Buyer's SC that it must adjust a
Discharging Notice to the extent necessary to maintain compliance with the Operating
Restrictions,CAISO Tariff,or in accordance with Section 4.5(e), and upon Buyer's receipt of such
notice,a Discharging Notice from Buyer will be deemed to have been adjusted as provided in such
notice. Each Discharging Notice issued in accordance with this Agreement will be effective unless
and until Buyer modifies such Discharging Notice by providing Seller with an updated
Discharging Notice.
(e) Notwithstanding anything in this Agreement to the contrary, during any
Settlement Interval, CAISO Operating Orders, Curtailment Orders and any other orders from the
Governmental Authority or the PTO or the Transmission Provider applicable to such Settlement
Interval shall have priority over any Charging Notices and Discharging Notices applicable to such
Settlement Interval, and Seller shall have no liability for violation of this Section 4.5 or any
Charging Notice or Discharging Notice if and to the extent such violation is caused by Seller's
compliance with any CAISO Operating Order, Curtailment Order or other instruction or direction
from a Governmental Authority or the PTO or the Transmission Provider. Buyer shall have the
right, but not the obligation, to provide Seller with updated Charging Notices and Discharging
Notices during any CAISO Operating Order, or Curtailment Order consistent with the Operational
Restrictions.
(� Char��,,y Cost. The Facility shall be capable of receiving Charging
Energy from the CAISO Grid in accordance with Section 4.5(a); provided, Buyer shall be
responsible for all Charging Energy costs related to charging of the Facility.
(g) Ancillary Services. Buyer shall have the exclusive rights to a11 Ancillary
Services that the Facility is capable of providing during the Delivery Term, with characteristics
and quantities determined in accordance with the CAISO Tarif£ Seller sha11 operate and maintain
the Facility throughout the Delivery Term so as to be able to provide the Ancillary Services listed
in Exhibit and in accordance with the speci�cations set forth in the Facility's CATSO
Certification associated with the Installed Capacity, adjusted to reflect the Storage Capacity.Upon
Buyer's reasonable request, Seller shall submit the Facility for additional CAISO Certification so
that the Facility may provide additional Aneillary Services that the Facility is, at the relevant time,
35
actually physically capable of providing without modification of the Facility,provided that Buyer
has agreed to reimburse Seller for any costs Se11er incurs in connection with conducting such
additional CAISO Certification.
(h) Pre-Commercial Operation Date Period, Etc. Prior to the Commercial
Operation Date, (i) Buyer shall have no rights to issue or cause to be issued Charging Notices or
Discharging Notices, (ii) Seller sha11 have exclusive rights to test, charge and discharge the
Facility, and (iii) all CAISO costs, revenues, penalties and other amounts owing to or paid by
CAISO in respect of the Facility shall be for Se11er's account. Seller is responsible to procure, at
its own cost, any energy required for commissioning purposes and to arrange to discharge such
energy into the grid. Upon the Commercial Operation Date, Buyer shall have exclusive rights to
issue or cause to be issued Charging Notices or Discharging Notices and all CAISO costs,
revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility
operations shall be for Buyer's account.
4.6 Reduction in Deliverv Obli�ation.
(a) Facility Maintenance. Between June 1 and October 31, Seller shall not
schedule non-emergency maintenance that reduces the Storage Capacity of the Facility by more
than ten percent (10%), unless (i) such outage is required to avoid damage to the Facility, (ii) such
maintenance is necessary to maintain equipment warranties and cannot be scheduled outside the
period of June 1 to October 3 l, (iii) such outage is required in accordance with Prudent Operating
Practice, or (iv) the Parties agree otherwise in writing (each scheduled maintenance permitted
under this clause (a) and each of the foregoing outages described in foregoing clauses (a)(i) —
(a)(iv), a"Planned Outa�e"). To the extent notice is not already required under the terms hereof,
Seller shall notify Buyer as soon as practicable of any extensions to scheduled maintenance and
expected end dates thereof.
(b) Between November 1 and May 30, Seller may, without Buyer's consent,
perform routine maintenance and undertake augmentation, improvement or modification of the
Facility, including repairs and replacements of all or portions thereof with newer technology, if
such work is done in accordance with Prudent Operating Practice and does not negatively impact
the Facility's ability to meet the availability and performance specifications of this Agreement or
the Operating Requirements and the implementation of such repair does not have any adverse
impact on Buyer's ability to receive Product from the Facility or charge or discharge the Facility
in the manner provided for in this Agreement; provided, (i) Seller shall provide Buyer with prior
written notice before undertaking any of the foregoing that would result in any reduction in the
availability of the Facility, and(ii)all outages and derates associated with the foregoing shall count
toward the maximum Approved Maintenance Hours in accordance with Exhibit P.
(c) Forced Facilitv Outage. Se11er shall be permitted to reduce deliveries of
Product except Capacity Attributes during any Forced Facility Outage. Seller shall provide Buyer
with Notice and expected duration(if known) of any Forced Facility Outage.
(d) �stem Emer�encies and other Interconn�ction Events. Seller sha11 be
permitted to reduce deliveries of Product exeept Capaeity Attributes during any period of System
36
Emergency, or upon Notice of a Curtailment Order pursuant to the terms of this Agreement, the
Interconnection Agreement or applicable tariff.
(e) Force Majeure Event. Seller shall be permitted to reduce deliveries of
Product during any Force Majeure Event.
(� Health and Safetv. Seller shall be permitted to reduce deliveries of Product
except Capacity Attributes as necessary to maintain health and safety pursuant to Section 6.2.
4.7 Interconnection Costs. As between Buyer and Seller, Seller is responsible for all
costs and charges associated with Interconnection Facilities and Network Upgrades
necessitated by the interconnection of the Facility.
4.8 Stora�e Availabilitv.
(a) During the Delivery Term, the Facility shall maintain a Rolling Monthly
Average Storage Availability of no less than ninety-six percent (96.0%) (the "Guaranteed
Stora�e Availability"), which Rolling Monthly Average Storage Availability shall be calculated
in accordance with Exhibit P.
(b) If, the Rolling Monthly Average Storage Availability during any month is
less than the Guaranteed Storage Availability, then Buyer's payment for the Storage Product sha11
be calculated by reference to the Availability Adjustment (as determined in accordance with
Exhibit P).
4.9 Stora�e Capacity Tests.
(a) Prior to the Commercial Operation Date, Seller shall schedule and complete
a Storage Capacity Test in accordance with Exhibit O. Thereafter, Se11er and Buyer shall have the
right to run additional Storage Capacity Tests in accordance with Exhibit O. Any testing of the
Facility requested by Buyer after the Commercial Operation Date sha11 be deemed Buyer-
instructed dispatches of the Facility (`Buver Dispatched Test"). Any test of the Facility that is
not a Buyer Dispatched Test, including a11 tests conducted prior to Commercial Operation, all
reguired annual tests pursuant to Section B ("Subseguent Storage Capacity Tests") in Exhibit O,
any Storage Capacity Test conducted if the Storage Capacity immediately prior to such Storage
Capacity Test is below seventy-five percent (75%) of the Storage Contract Capacity, any test
required by CAISO (including any test required to maintain CAISO Certification), and other
Seller-reguested discretionary tests or dispatches, at times and for durations reasonably agreed to
by Buyer,that Seller deems necessary for purposes of reliably operating or maintaining the Facility
or for re-performing a required test within a reasonable number of days of the initial required test
(considering the circumstances that led to the need for a retest) shall be deemed a"Se�1er Initiatied
Test". For all Seller Initiated Tests, Seller shall (i) be liable for all CAISO costs and charges for
associated Charging Energy, and (ii) be entitled to any CAISO revenues associated with
Discharging Energy. For any Buyer Dispatched Test, Buyer shall (x)pay for all CAISO costs and
charges far associated Charging Energy, and (y) be entitled to any CAISO revenues associated
37
with associated Discharging Energy. Any Storage Capacity Test shall be deemed an Excused
Event for the purposes of calculating the Monthly Storage Availability.
(b) Buyer shall have the right to send one or more representative(s) to witness
all Storage Capacity Tests. Buyer shall (i) comply with all reasonable and notified Se11er health
and safety policies and procedures and instructions while present at the Site, and(ii)conduct itself
in a manner that will not unreasonably interfere with the operation of the Facility or other activities
of Seller and its subcontractors on the Site. Buyer acknowledges that it will be escorted at a11 times
while on the Site. Alternatively, to the extent that any Storage Capacity Tests are done remotely,
and no representatives are needed on-site, Seller shall arrange for both Parties to have access to all
data and other information arising out of such tests. Buyer sha11 be responsible for all costs,
expenses and fees payable or reimbursable to its representative(s)witnessing any Storage Capacity
Test. Except as otherwise specified in Exhibit O, all other costs or revenues associated with any
Storage Capacity Test shall be borne by, or accrue to, Seller, as applicable.
(c) Following each Storage Capacity Test, Seller shall submit a testing report
in accordance with Exhibit O. The Storage Capacity and Efficiency Rate determined pursuant to a
Storage Capacity Test shall become the new Storage Capacity and/or Efficiency Rate, at the
beginning of the day following the completion of the test for all purposes under this Agreement,
including compensation under Exhibit C.
(d) It is acknowledged that Seller shall have the right and option in its sole
discretion to install capacity in excess of the Storage Contract Capacity ("Non-Dispatchable
Capacity"); provided, for all purposes of this Agreement the amount of:;Installed Battery
Capacity and Storage Capacity shall never be deemed to exceed the Storage Contract Capacity,
and (for the avoidance of doubt) (i) any Non-Dispatchable Capacity shall not be included in the
CPUC Master Resource Database or CAISO Master Data File, (ii) Buyer sha11 have no rights to
instruct Seller to (A) charge or discharge the Facility at an instantaneous rate (in MW) in excess
of the lesser of the Installed Battery Capacity or Storage Capacity, or(B) charge the Facility to a
level(in MWh) in excess of the lesser of the Installed Battery Capacity or Storage Capacity times
four (4) hours, (iii) Buyer shall have no obligation to dispatch such Non-Dispatchable Capacity
on behalf of Seller, or to make payment to Seller for such Non-Dispatchable Capacity, (iv) for
purposes of calculating the Monthly Storage Availability of the Facility, the unavailability of
such Non-Dispatchable Capacity will not be considered in such calculations, and(v) Seller shall
have no right to dispatch such Non-Dispatchable Capacity.
4.10 Interconnection Capacity. Seller shall ensure that throughout the Delivery Term
the Facility will have an Interconnection Agreement providing for interconnection capacity
available or allocable to the Facility that is no less than the Storage Contract Capacity and (b)
Seller shall have sufficient interconnection capacity and rights under such Interconnection
Agreement to interconnect the Facility with the CAISO Grid, to fulfill Seller's obligations under
the Agreement, including with respect to Resouree Adequacy Benefits, and to allow Buyer's
dispatch rights of the Facility to be fu11y refl�cted in the CAISO's market optimization and not
result in CAISO market awards that are not physically feasible ("Dedicated Interconneetion
Ca aci "). Seller shall hold Buyer harmless from any penalties, imbalanc� energy charges, ar
other costs from CAISO or under the Agreement resulting from Seller's inability to provide the
38
foregoing interconnection capacity.
4.11 Station Use. Seller will be responsible for procuring and paying for,or reimbursing
Buyer for (to the extent Buyer pays for any Station Use), all Station Use (including Station Use
provided through retail service to Se11er). Se11er shall indemnify and hold harmless Buyer from
any and all costs,penalties,charges or other adverse consequences that result from energy supplied
for Station Use by any means other than retail service from the applicable utility, and sha11 take
any additional lneasures to ensure Station Use is supplied by the applicable utility's retail service
if necessary to avoid any such costs,penalties, charges or other adverse consequences.
4.12 Facility Operations and Maintenance.
(a) Seller shall comply with Law and Prudent Operating Practice, and to the
extent applicable the CAISO Tarif�and the Interconnection Agreement, relating to the operation
and maintenance of the Facility and the generation and sale of Prod�uct. Seller shall be responsible
for maintenance of the Facility, and Buyer shall have no responsibility or liability for the
maintenance of the Facility. Seller shall be responsible for the operation of the Facility,and Buyer
shall have no responsibility or liability for the operation of the Facility other than with respect to
its role as Sched�uling Coordinator. Seller wi11 maintain 24-'7 remote monitoring of the
Facility. This includes advanced alarm management, data analytics, emergency response,
scheduling of preventative and corrective maintenance, troubleshooting, remote resets and
dispatch of on-site resources.
(b) Seller shall, if applicable, obtain in its own name and at its own expense
all pollution or environmental credits or offsets necessary to operate the Facility in compliance
with any requirement of Law.
(c) Without regard to whether or not there is any applicable Law requiring
decommissioning or demolition of the Facility or any environmental or other liability associated
with the decommissioning or demolition of the Facility, Buyer sha11 not be responsible for any
cost of decommissioning or demolition of the Facility or any environmental or other liability
associated with the decommissioning or demolition of the Facility without regard to the timing
or cause of the decommissioning or demolition.
ARTICLE 5
TAXES
5.1 Allocation of Taxes and Charges. Seller sha11 pay or cause to be paid all Taxes
on or with respect to the Facility or on or with respect to the sale and making available of Product
to Buyer, that are imposed on Product prior to its delivery to Buyer at the Delivery Point. Buyer
shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer
of Product that are imposed on Product at and after its delivery to Buyer at the Delivery Point
(other than withholding or other Taxes imposed on Seller's income, revenue, receipts or
employees), and with respect to Charging Energy priar to its delivery to Seller at the Delivery
Point, if any. If a Party is required to remit or pay Taxes that are the other Party's responsibility
hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement
39
from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not
subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within
thirty (30) days after the Effective Date to evidence such exemption or exclusion. If Buyer does
not provide such documentation, then Buyer sha11 indemnify, defend, and hold Seller harmless
from any liability with respect to Taxes from which Buyer claims it is exempt.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions
of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes,
so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to
minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any
financial or operational burden to reduce Taxes for which the other Party is responsible hereunder
without receiving due compensation therefor from the other Party. All Product delivered by Seller
to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.
ARTICLE 6
MAINTENANCE OF THE FACILITY
6.1 Maintenance of the Facilitv. Seller shall comply with Law and Prudent Operating
Practice relating to the operation and maintenance of the Facility and the generation and sale of
Product.
6.2 Maintenance of Health and Safetv. Seller shall take reasonable safety precautions
with respect to the operation, maintenance, repair and replacement of the Facility. If Seller
becomes aware of any circumstances relating to the Facility that create an imminent risk of damage
or injury to any Person or any Person's property, Seller shall take prompt, reasonable action to
prevent such damage or injury and sha11 give Notice to Buyer's emergency contact identified on
Exhibit N of such condition. Such action may include, to the extent reasonably necessary,
disconnecting and removing all or a portion of the Facility, or suspending the supply of energy or
Discharging Energy to Buyer.
6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Shared
Facilities and Interconnection Facilities, and Seller's rights and obligations under the
Interconnection Agreement, may be subject to certain shared facilities or co-tenancy agreements
to be entered into among Seller, the Participating Transmission Owner, Se11er's Affiliates, or third
parties pursuant to which certain Interconnection Facilities may be subject to joint ownership and
shared maintenance and operation arrangements; provided that such agreements shall (i) ensure
that the Facility shall be separately metered from any other generation or storage facility and all of
the output and services available from the Facility sha11 be conveyed to Buyer under this
Agreement, (ii) ensure that the Facility has its own CAISO Resource ID, and(iii) permit Seller to
perform or satisfy, and shall not purport to limit, its obligations hereunder, including providing for
interconnection capacity available or allocable to the Facility that is no less than the Storage
Contract Capacity.
40
ARTICLE 7
METERING
7.1 Meterin�. Se11er shall measure the amount of Charging Energy and Discharging
Energy using the Facility Meter; all of which will be subject to adjustment in accordance with
applicable CAISO meter requirements and Prudent Operating Practice, including to account for
Electrical Losses and Station Use. All meters will be operated pursuant to applicable CAISO-
approved calculation methodologies and maintained as Seller's cost. Subject to meeting any
applicable CAISO requirements, the meters shall be programmed to adjust for Electrical Losses
and Station Use in a manner subject to Buyer's prior written approval, not to be unreasonably
withheld. Seller shall obtain and maintain a single CAISO resource ID dedicated exclusively to
the Facility. Seller shall not obtain additional CAISO resource IDs for the Facility without the
prior written consent of Buyer, which shall not be unreasonably withheld. Metering will be
consistent with the Metering Diagram set forth as Exhibit R, a final version of which shall be
provided to Buyer at least thirty (30) days before the Commercial Operation Date. Each meter
shall be kept under seal, such seals to be broken only when the meters are to be tested, adjusted,
modified or relocated. In the event Seller becomes aware of a broken seal, Seller shall notify Buyer
as soon as practicable. In addition, Seller hereby agrees to provide all meter data to Buyer in a
form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO
meter data directly relating to the Facility and all inspection, testing and calibration data and
reports. Seller and Buyer shall cooperate to a11ow both Parties to retrieve the meter reads from the
CAISO Market Results Interface — Settlements (MRI-S) (or its successor) or directly from the
CAISO meter(s)at the Facility.
The Parties intend as of the Effective Date that the applicable MSA will be a CAISO
Metered Entity; provided, however, Seller may decide that the Facility should be a Sched�uling
Coordinator Metered Entity or the CAISO may require the Facility to be a Scheduling Coordinator
Metered Entity, and in either case Seller, with the reasonable cooperation of Buyer, shall be
responsible for the retention of a third-party qualified meter data management agent to perform
any such required activities and functions on behalf of the Scheduling Coordinator incl�uding in
connection with the development of a SQMD Plan and the collection, validation and submission
of ineter data to the CAISO in accordance with the CAISO Tarif£ If Seller decides that the Facility
should be a Scheduling Coordinator Metered Entity, or if CAISO requires the Facility to be a
Scheduling Coordinator Metered Entity, Buyer or Buyer's agent, in its role as Scheduling
Coordinator for the Facility, sha11 reasonably cooperate with Seller and any meter data
management agent retained by Seller to perform functions on behalf of the Scheduling Coordinator
to enable Seller or such meter data management agent to submit the SQMD Plan and Facility
Settlement Quality Meter Data to the CAISO, including granting Seller or any meter data
management agent retained by Se11er access to applicable CAISO system for such purpose (e.g.,
the CAISO Market Results Interface—Settlements or successor system)to comply with applicable
Scheduling Coordinator Metered Entity requirements as set forth in the CAISO Tariff.
7.2 Meter Verification. Annually, if Seller has reason to believe there may be a meter
malfunction, or upon Buyer's reasonable request, Seller sha11 test the meter. The tests shall be
conducted by independent third parties qualified to conduct such tests. Buyer shall be notified
seven (7) days in advance of such tests and have a right to be present during such tests. If a meter
41
is inaccurate it shall be promptly repaired or replaced. If a meter is inaccurate by more than one
point two percent (1.2%) and it is not known when the meter inaccuracy commenced (if such
evidence exists such date will be used to adjust prior invoices), then the invoices covering the
period of time since the last meter test shall be adjusted for the amount of the inaccuracy on the
assumption that the inaccuracy persisted during one-half of such period so long as such
adjustments are accepted by CAISO;p�ovided, such period may not exceed twelve (12)months.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Se11er shall make good faith efforts to deliver an invoice to Buyer for
Product within ten (10) days after, but not prior to, the end of each month of the Delivery Term.
Each invoice shall include (a) records of inetered data, including CAISO metering and transaction
data to the extent then available (but excluding any missing interval data that is not available from
CAISO) sufficient to document and verify the amount of Product delivered by the Facility for any
Settlement Period during the preceding month, including the amount of Charging Energy charged
by the Facility and the amount of Discharging Energy delivered from the Facility to the Delivery
Point (in each case, as read by the Facility Meter) the amount of Replacement RA delivered to
Buyer (if any), the LMP prices at the Delivery Point for each Settlement Period, and the Contract
Price applicable to such Product in accordance with Exhibit C; (b) access to any records, including
invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; and
(c) be in a format reasonably specified by Buyer, covering the services provided in the preceding
month determined in accordance with the applicable provisions of this Agreement. Buyer shall,
and shall cause its Scheduling Coordinator to,provide Se11er with a11 reasonable access (including,
in real time, to the maximum extent reasonably possible) to any records, including invoices or
settlement data from the CAISO, forecast data and other information, a11 as may be necessary from
time to time for Seller to prepare and verify the accuracy of all invoices. The invoice shall be
delivered by electronic mail in accordance with Exhibit N.
8.2 Payment. Buyer shall make payment to Se11er for Product by wire transfer or ACH
payment to the bank account designated by Se11er in Exhibit N, which may be updated by Seller
by Notice hereunder;provided, however, that changes to the invoices,payment, and wire transfer
information set forth in Exhibit N must be made in writing and delivered via certified mail or by a
regularly scheduled next business day delivery carrier with delivery fees either prepaid or an
arrangement with such carrier made for the payment of such fees, and shall include contact
information for an authorized person who is available by telephone to verify the authenticity of
such reguested changes. Buyer shall pay undisputed invoice amounts within thirty (30) days after
receipt of the invoice. If such due date falls on a weekend or legal holiday, such due date shall be
the next Business Day. Payments made after the due date will be considered late and will bear
interest on the unpaid balance. If the amount due is not paid on or before the due date or if any
other payment that is due and owing from one Party to another is not paid on or before its applicable
due date, a late payment charge shall be applied to the unpaid balance and shall be added to the
next billing statement. Such late payment charge shall be calculated based on the Secured
Ov�rnight Financing Rate (SOFR)published on the date of the invoice plus two percent(2%) (the
"Interest Rate"). If the due date occurs on a day that is not a Business Day, the late payment
charge shall begin to accrue on the next succeeding Business Day.
42
8.3 Books and Records. To facilitate payment and verification, each Party shall
maintain all books and records necessary for billing and payments, including copies of al1 invoices
under this Agreement, for a period of at least two (2)years or as otherwise required by Law. Upon
ten (10) Business Days' Notice to the other Party, either Party shall be granted reasonable access
to the accounting books and records within the possession or control of the other Party pertaining
to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with
California Government Code Section 8546.7, Seller may be subject to audit by the California State
Auditor with regard to Seller's performance of this Agreement because the compensation under
this Agreement exceeds Ten Thousand Dollars ($10,000).
8.4 Payment Adiustments; Billin�Errors. Invoice adjustments sha11 be made if(a)
there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section
8.5, (b) an adjustment to an amount previously invoiced or paid is required due to a correction of
data by the CAISO, or(c)there have been meter inaccuracies;provided, howeve�, that there shall
be no adjustments to prior invoices based upon meter inaccuracies except to the extent that such
meter adjustments are accepted by CAISO for revenue purposes. If the required adjustment is in
favor of Buyer, Buyer's next monthly payment sha11 be credited in an amount equal to the
adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount
to Buyer's next monthly invoice. Adj ustments due to good faith inaccuracies in invoicing sha11
not be subject to interest, but any other adjustments in favor of either Buyer or Seller shall bear
interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the
adjusted amount should have been due.
8.5 Billin�Disputes. A Party may,in good faith, dispute the correctness of any invoice
or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any
arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment
to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or
adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall
be required to be made when due. Any invoice dispute or invoice adjustment sha11 be in writing
and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not
be required until the dispute is resolved. Upon resolution of the dispute, any required payment
shall be made within five (5) Business Days of such resolution along with interest accrued at the
Interest Rate from and including the original due date to but excluding the date paid. Inadvertent
overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with
respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5
within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the
extent any misinformation was from a third party not affiliated with any Party and such third party
corrects its information after the twelve-month period. If an invoice is not rendered within twelve
(12) months after the close of the month during which performance occurred, the right to payment
for such performance is waived.
8.6 Nettin� of Pavments. Th� Parties hereby agree that they shall discharge mutual
debts and payment obligations due and owing to each other under this Agreement on the same date
through netting, in which case all amounts owed by each Party to the other Party for the purchase
and sale of Product during the monthly billing period under this Agreement or otherwise arising
out of this Agreement, including any related damages calculated pursuant to Exhibits B and P,
43
interest, and payments or credits, shall be netted so that only the excess amount remaining due
sha11 be paid by the Party who owes it.
8.7 Seller's Development Securitv. To secure its obligations under this Agreement,
Se11er sha11 deliver the Development Security to Buyer within thirty (30) days of the Effective
Date. Seller shall maintain the Development Security in full force and effect. Within five (5)
Business Days following any draw by Buyer on the Development Security, including for payment
of Construction Delay Damages or COD Delay Damages, Seller shall replenish the amount drawn
such that the Development Security is restored to the amount specified on the Cover Sheet. Upon
the earlier of (a) Seller's delivery of the Performance Security, or (b) sixty (60) days after
termination of this Agreement, Buyer shall return the Development Security to Seller, less the
amounts drawn in accordance with this Agreement. If the Development Security is a Letter of
Credit and a Letter of Credit Default occurs, Seller shall have ten(10)Business Days to either post
cash or deliver a substitute Letter of Credit in the amount of the Development Security and that
otherwise meets the requirements set forth in the definition of Development Security. For
avoidance of doubt, and notwithstanding anything to the contrary in this Section 8.7 or elsewhere
in this Agreement, Seller's replenishment obligation in addition to the initial Development
Security amount with respect to the Development Security shall be limited to � in the
aggregate.
8.8 Seller's Performance Securitv. To secure its obligations under this Agreement,
Seller sha11 deliver Performance Security to Buyer on or before Commercial Operation Date.
Seller shall maintain the Performance Security in full force and effect until the following have
occurred: (a)the Delivery Term has expired or terminated early; and (b) all payment obligations
of the Seller then due and payable under this Agreement, including compensation for penalties,
Termination Payment, indemnification payments or other damages are paid in full (whether
directly or indirectly such as through set-off or netting). Following the occurrence of both
events, Buyer shall promptly return to Seller the unused portion of the Performance Security.
Within five (5) Business Days after any draw by Buyer on the Performance Security, Seller
shall replenish the amount drawn from the Performance Security so that such Performance
Security is restored to the amount specified on the Cover Sheet. If the Performance Security is
a Letter of Credit and a Letter of Credit Default occurs, Seller shall have ten (10) Business Days to
either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in
the definition of Performance Security. For avoidance of doubt, and notwithstanding anything to
the contrary in this Section 8.8 or elsewhere in this Agreement, Seller's replenishment obligation
in addition to the initial Performance Security amount with respect to the Performance Security
shall be limited to�in the aggregate. Se11er may at its option exchange one permitted
form of Development Security or Performance Security for another permitted form of
Development Security or Performance Security, as applicable.
8.9 Buver Credit Support. In the event of a Buyer powngrade Event, within five
(5) Business Days of such Buyer powngrade Ev�nt occurring, Buyer shall provide and maintain
for the benefit of Se11er credit support in the form of cash or a Letter of Credit (with appropriate
modifications to make Seller the beneficiary thereo� in the amount of one-hundred dollars
�kW (the `Buyer Credit Support") multiplied by the Storage Contract Capacity if prior
to the Commercial Operation Date and the Installed Battery Capacity if on or after the
44
Commercial Operation Date. Buyer shall maintain the Buyer Credit Support in full force and
effect;provided, however, that if after posting the Buyer Credit Support, Buyer demonstrates to
Seller that Buyer is no longer subject to a Buyer powngrade Event, then Buyer shall no longer
be required to post the Buyer Credit Support and Seller shall return the Buyer Credit Support to
Buyer. Return of any Buyer Credit Support shall not prejudice or diminish Seller's rights or
Buyer's obligations with respect to any subsequent Buyer powngrade Events,which subsequent
Buyer powngrade Events shall trigger the requirement for Buyer to repost the Buyer Credit
Support in accordance with the terms of this Section 8.9. Subject to this Section 8.9 and the other
terms of this Agreement governing the Buyer Credit Support requirements, Buyer may change
the type and/or issuer (as applicable) of the Buyer Credit Support from time to time and at any
time. If the Buyer Credit Support is a Letter of Credit and a Letter of Credit Default occurs,
Buyer shall have five (5)Business Days to either post cash or deliver a substitute Letter of Credit
that meets the requirements set�orth in the definition of Buyer Credit Support. For avoidance of
doubt, and notwithstanding anything to the contrary in this Section 8.9 or elsewhere in this
Agreement, Buyer shall have no replenishment obligation with respect to the Buyer Credit
Support. Buyer shall not terminate or rescind the Third Phase Agreement, or waive or amend
any material payment right or obligation (including the obligation to post security) due to it
thereunder, in each case, without prior written consent of Se11er.
8.10 First Priority Security Interest in Cash or Cash Equivalent Collateral. To
secure its obligations under this Agreement, and until released as provided herein, each Party (the
"Postin�Partv")hereby grants to the other Party(the"Secured Partv") a present and continuing
first-priority security interest ("Securitv InteresY') in, and lien on (and right to net against), and
assignment of the Development Security, Performance Security, Buyer Credit Support, or any
other cash collateral and cash equivalent collateral posted by the Posting Party pursuant to
Sections 8.7, 8_8, and/or 8_9, as applicable, and any and all interest thereon or proceeds resulting
therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for
the benefit of the Secured Party, and the Posting Party agrees to take a11 action as the Secured Party
reasonably reguires in order to perfect the Secured Party's Security Interest in, and lien on (and
right to net against), such collateral and any and all proceeds resulting therefrom or from the
liauidation thereo£ Upon or any time after the occurrence of an Event of Default caused by the
Posting Party, an Early Termination Date resulting from an Event of Default caused by the Posting
Party, or an occasion provided for in this Agreement where the Secured Party is authorized to
retain all or a portion of the Development Security,Performance Security,or Buyer Credit Support,
as applicable, the Secured Party may do any one or more of the following (in each case subject to
the final sentence of this Section 8.10):
(a) Exercise any of its rights and remedies with respect to the Development
Security,Performance Security, and Buyer Credit Support, including any such rights and remedies
under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain
any cash held by the Secured Party as Development Security, Performance Security, or Buyer
Credit Support; and
45
(c) Liquidate all Development Security, Performance Security, or Buyer Credit
Support(as applicable) then held by or for the benefit of the Secured Party free from any claim or
right of any nature whatsoever of the Posting Party, including any equity or right of purchase or
redemption by the Posting Party.
The Secured Party shall apply the proceeds of the collateral realized upon the exercise of any such
rights or remedies to reduce the Posting Party's obligations under this Agreement;provided, that
the Posting Party shall remain 1iable for any amounts owing to the Secured Party after such
application,except to the extent limited in this Agreement, subject to the Secured Party's obligation
to return any surplus proceeds remaining after such obligations are satisfied in full.
8.11 Buver Statements. Buyer shall provide to Seller the location where Buyer
publishes its unaudited quarterly and audited annual financial statements of the Buyer(including
a balance sheet and statements of income and cash flows), a11 prepared in accordance with
generally accepted accounting principles in the United States, consistently applied.
ARTICLE 9
NOTICES
9.1 Addresses for the Deliverv of Notices. Except as provided in Exhibit D-1, any
Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to
the Party to be notified at the address set forth on Exhibit N or at such other address or addresses
as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Deliverin� Notice. Each Notice required, permitted, or
contemplated hereunder shall be deemed to have been validly served, given or delivered as
follows: (a)if sent by United States mail with proper first class postage prepaid,three(3)Business
Days following the date of the postmark on the envelope in which such Notice was deposited in
the United States mail; (b)if sent by a regularly scheduled overnight delivery carrier with delivery
fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next
Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by
electronic communication(including electronic mail or other electronic means) and if concurrently
with the transmittal of such electronic communication the sending Party provides a copy of such
electronic Notice by hand delivery or express courier, at the time indicated by the time stamp upon
delivery without any bounce back or rejection; or (d) if delivered in person, upon receipt by the
receiving Party. Notwithstanding the foregoing,Notices of outages or other scheduling or dispatch
information or reguests and Replacement RA Notices, may be sent by electronic communication
and shall be considered delivered upon successful completion of such transmission.
ARTICLE 10
FORCE MAJEURE
10.1 Definition.
(a) "Force 1Vlaieure Event" means any act or event occurring after the
Effective Date that delays or prevents a Party from timely performing all or a portion of its
46
obligations under this Agreement or from complying with all or a portion of the conditions under
this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided
by and is beyond the reasonable control (whether direct or indirect) of and without the fault or
negligence of the Party relying thereon as justification for such delay, nonperformance, or
noncompliance.
(b) Without limiting the generality of the foregoing, so long as the following
events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the
reasonable control (whether direct or indirect) of and without the fault or negligence of the Party
relying thereon as justification for such delay,nonperformance or noncompliance,a Force Majeure
Event may include an act of God or the elements, such as flooding, lightning, hurricanes,
tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic or pandemic;
quarantine; landslide; mudslide; sabotage; terrorism; earthquake or other cataclysmic events; an
act of public enemy; cyber-attack; war; blockade; civil insurrection; riot; civil disturbance; or
strikes or other labor difficulties caused or suffered by a Party or any third party, except as set
forth below. For the avoidance of doubt, so long as the event, despite the use of reasonable
efforts, cannot be avoided by, and is beyond the reasonable control of(whether direct or indirect)
and without the fault or negligence of the Party relying thereon as justification for such delay,
nonperformance, or noncompliance, Force Majeure Event may include the impacts of and efforts
to combat ormitigate the epidemic disease designated COVID-19 and the related virus designated
SARS-CoV-2 and any mutations thereof ("COVID-19"). For the period of time prior to the
Commercial Operation Date, a Force Majeure Event includes delays caused by the PTO that result
in the Interconnection Facilities not being complete and ready for the Facility to connect and sell
Product to Buyer at the Delivery Point by the Guaranteed Commercial Operation Date, despite the
exercise of diligent and commercially reasonable efforts by Seller.
(c) Notwithstanding the foregoing, the term "Force Majeure Event" does not
include (i) economic conditions that render a Party's performance of this Agreement at the
Contract Price unprofitable or otherwise uneconomic (including an increase in component costs
for any reason, including foreign or domestic tariffs, Buyer's ability to buy electric energy at a
lower price, ar Seller's ability to sell the Product, or any component thereof, at a higher price, than
under this Agreement); (ii) Seller's inability to obtain permits or approvals of any type for the
construction, operation, or maintenance of the Facility, except to the extent such inability is caused
by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this
Agreement, unless the cause of such inability is an event that would otherwise constitute a Force
Majeure Event as described above that disables physical or electronic facilities necessary to
transfer funds to the payee Party; (iv) a Curtailment Order except to the extent caused by a Force
Majeure Event; (v) Seller's inability to obtain sufficient labor, equipment, materials, or other
resources to build or operate the Facility except to the extent such inability is caused by a Force
Majeure Event; or(vi)any equipment failure except if such equipment failure is caused by a Force
Majeure Event.
10.2 No Liability If a Force Majeure Event Occurs. Neither Seller nor Buyer shall
be liable to the other Party in the event it is prevented from performing its obligations hereunder
in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any
obligation by reason of a Force Majeure Event sha11 take reasonable actions necessary to remove
47
such inability. Nothing herein shall be construed as permitting that Parry to continue to fail to
perform after said cause has been removed. Neither Party sha11 be considered in breach or default
of this Agreement if and to the extent that any failure or delay in the Party's performance of one
or more of its obligations hereunder is caused by a Force Majeure Event. Notwithstanding the
foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or
excuse the obligation of a Party to make any payments due hereunder unless the cause of such
inability is an event that would otherwise constitute a Force Majeure Event as described herein that
disables physical or electronic facilities necessary to transfer funds to the payee Party or renders
payee staff unavailable to make payment, (b) suspend or excuse the obligation of Seller to achieve
the Guaranteed Construction Start Date, or Guaranteed Commercial Operation Date beyond the
extensions provided in Exhibit B, (c) limit Buyer's right to declare an Event of Default pursuant
to Section 11.1(b)(i) or Section 11.1(b)(ii) and receive a Damage Payment upon exercise of
Buyer's default rights pursuant to Section 11.2.
10.3 Notice. Within two (2) Business Days of obtaining knowledge of the
commencement of Force Majeure Event, the claiming Party shall provide the other Party with oral
notice of the Force Majeure Event, and within two (2) weeks of obtaining knowledge of a Force
Majeure Event the claiming Party shall provide the other Party with Notice in the form of a letter
describing in detail the occurrence giving rise to the Force Majeure Event, including the nature,
cause, estimated date of commencement thereof, and the anticipated extent of any delay or
interruption in performance;provided that the failure of the claiming Party to notify the other Party
within such two (2) Business Day period will not preclude the claiming Party from claiming a
Force Majeure Event hereunder but for any Force Majeure Event notification provided after the
two (2) Business Day period, the Force Majeure Event will be deemed to have commenced as of
the date of such notice. Upon written request from Buyer, Se11er shall provide documentation
demonstrating to Buyer's reasonable satisfaction that each day of the claimed delay was the result
of a Force Majeure Event and did not result from Seller's actions or failure to exercise due
diligence ar take reasonable actions. The claiming party sha11 promptly notify the other Party in
writing of the cessation or termination of such Force Majeure Event, a11 as known or estimated in
good faith by the affected Party. The suspension of performance due to a claim of a Force Maj eure
Event must be of no greater scope and of no longer duration than is required by the Force Majeure
Event.
10.4 Termination Followin� Force Majeure Event. If a Force Majeure Event has
occurred after the Commercial Operation Date that has caused either Party to be wholly or partially
unable to perform its obligations hereunder, and the impacted Party has claimed and received relief
from performance of its obligations for a consecutive twelve (12) month period, then the non-
claiming Party may terminate this Agreement upon written Notice to the other Party. Upon any
such termination,neither Party shall have any liability to the other Party, save and except for those
obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Performance
Security then held by Buyer, less any amounts drawn in accardance with this Agreement.
ARTICLE 11
DEFAULTS; REMEDIES; TERMTNATION
1 l.l Events of Default. An"Event of Default" sha11 mean,
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(a) with respect to a Party(the"Defaulting Party") that is subject to the Event
of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required
pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after
Notice thereof unless such failure is the subject of a Force Majeure Event;
(ii) any representation or warranty made by such Party herein is false or
misleading in any material respect when made or when deemed made or repeated, and such default
is not remedied within thirry (30) days after Notice thereof(or such longer additional period, not
to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default
within such initial thirty (30) day period despite exercising commercially reasonable efforts);
(iii) the failure by such Party to perfonn any material covenant or
obligation set forth in this Agreement (except to the extent constituting a separate Event of Default
set forth in this Section 111; except for (1) failure to deliver Capacity Attributes, the exclusive
remedies for which are set forth in Section 3.8; and (2) failures related to the Rolling Monthly
Average Storage Availability that do not trigger the provisions of Section ll 1(b)(iii�, the
exclusive remedies for which are set forth in Section 4.8), and such failure is not remedied within
thirty (30) days after Notice thereof(or such longer additional period, not to exceed an additional
sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty
(30) day period despite exercising commercially reasonable efforts);
(iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder
other than in compliance with Article 14; or
(vi) such Party consolidates or amalgamates with, or merges with or into,
or transfers all or substantially all of its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails
to assume all the obligations of such Party under this Agreement to which it or its predecessor was
a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party.
(b) with respect to Seller as the Defaulting Party, the occurrence of any of the
following:
(i) The failure of Seller to achieve Construction Start within one
hundred eighty (180) days after the Guaranteed Construction Start Date;
(ii) the failure by Seller to achieve Commercial Operation within one
hundred eighty (180) days after the Guaranteed Commercial Operation Date;
(iii) if, in any two (2) consecutive Contract Years, the average Rolling
Monthly Average Storage Availability over the two-year period is less than seventy percent(70%)
and the Facility was not subject to a Transformer Failure;
49
(iv) if, Seller fails to maintain an average Efficiency Rate of at least
seventy percent (�0%) over a rolling 12-month period;
(v) if, Seller fails to maintain a Storage Capacity (as determined
pursuant to Exhibit O) equal to at least seventy-five percent (75%) of the Storage Contract
Capacity set forth on the Cover Sheet for longer than three hundred siYty (360) consecutive days
and the Facility was not subject to a Transformer Failure during such period, provided, that if a
Transformer Failure occurred during such period, the Transformer Failure must be cured within
eighteen (18) months;
(vi) if not remedied within ten (10) days after Notice thereof, the failure
by Seller to deliver a Remedial Action Plan required under Section 2.4;
(vii) failure by Seller to satisfy the collateral requirements pursuant to
Sections 8.7 or 8_8 within five (5) Business Days after Notice and expiration of the cure periods
set forth therein; or
(viii) the occurrence of a Letter of Credit Default and the fail�ure by Seller
to provide for the benefit of Buyer either (1) cash or (2) a substitute Letter of Credit from a
different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in
the amount required hereunder within ten (10) Business Days after Seller receives Notice of the
occurrence of a Letter of Credit Default.
(c) with respect to Buyer as the Defaulting Party, the occurrence of any of the
following:
(i) failure by Buyer to satisfy the collateral requirements pursuant to
Section 8.9 within five (5) Business Days after Notice and expiration of the cure periods set forth
therein, with respect to the Buyer Credit Support amount in accordance with this Agreement in the
event of a Buyer powngrade Event; or
(ii) the occurrence of a Letter of Credit Default and the failure by Buyer
to provide for the benefit of Seller either (1) cash or (2) a substitute Letter of Credit from a
different issuer meeting the criteria set forth in the de�nition of Letter of Credit, in each case, in
the amount reguired hereunder within ten (10) Business Days after Buyer receives Notice of the
occurrence of a Letter of Credit Default.
11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with
respect to a Defaulting Party shall have occurred and be continuing, the other Party ("Non-
Defaulting Party") shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is
deemed to be received and no later than twenty (20) days after such Notice is deemed to be
received, as an early termination date of this Agreement ("Early Termination Date") that
terminates this Agreement(the"Terminated Transaction") and ends the Delivery Term effective
as of the Early Termination Date;
50
(b) to accelerate all amounts owing between the Parties, and to collect as
liquidated damages (i)the Damage Payment(in the case of an Event of Default by Seller occurring
before the Commercial Operation Date, including an Event of Default under Section 11.1(b)(i),
Section 11.1(b)(ii)), or (ii) the Termination Payment calculated in accordance with Section 11.3
below (in the case of any other Event of Default by either Party);
(c) to withhold any payments due to the Defaulting Party under this Agreement;
(d) to suspend performance; or
(e) to exercise any other right or remedy available at 1aw or in equity,including
specific performance or injunctive relief, except to the extent such remedies are expressly limited
under this Agreement;p�ovidecl, that payment by the Defaulting Party of the Damage Payment or
Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting
Party's sole and exclusive remedy for the Terminated Transaction and the Event of Default related
thereto.
ll.3 Termination Pavment. The termination payment ("Termination Pavment") for
the Terminated Transaction shall be the aggregate of all Settlement Amounts plus any or all other
amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a
single amount. If the Non-Defaulting Party's aggregate Gains exceed its aggregate Losses and
Costs, if any, resulting from the termination of this Agreement, the net Settlement Amount shall
be zero. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a
Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties
supplying information for purposes of the calculation of Gains or Losses may include, without
limitation, dealers in the relevant markets, end-users of the relevant product, information vendors
and other sources of market information. Without prejudice to the Non-Defaulting Party's duty to
mitigate,the Non-Defaulting Party shall not have to enter into replacement transactions to establish
a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the
Non-Defaulting Party would incur in connection with the Terminated Transaction would be
difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment
described in Section 11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate
approximation of such damages, and (c) the Damage Payment or Termination Payment described
in Section 11.2 or this Section 11.3 (as applicable) is the exclusive remedy of the Non-Defaulting
Party in connection with the Terminated Transaction but sha11 not otherwise act to limit any of the
Non-Defaulting Party's rights or remedies if the Non-Defaulting Party does not elect a Terminated
Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment. As soon as practicable after a
Terminated Transaction,Notice shall be given by the Non-Defaulting Party to the Defaulting Party
of the amount of the Damage Payment or Termination Payment, as applicable, and whether, in the
case of a Termination Payment, the Termination Payment is due to the Non-Defaulting Party. The
Notice shall include a written statement explaining in reasonable detail the calculation of such
amount and the sources for such calculation. The Termination Payment shall be made to the Non-
Defaulting Party, as applicable, within ten(10) Business Days after such Notice is effective.
51
11.5 Disputes With Respect to Termination Pavment. If the Defaulting Party
disputes the Non-Defaulting Party's calculation of the Termination Payment, in whole or in part,
the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party's
calculation of the Termination Payment, provide to the Non-Defaulting Parry a detailed written
explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be
determined in accordance with Article 15.
11.6 Ri�hts And Remedies Are Cumulative. Except where an express and exclusive
remedy or measure of liquidated damages is provided, the rights and remedies of a Party pursuant
to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided
in this Agreement.
11.7 Seller's Pre-COD Liability Limitation. Notwithstanding any other provision of
this Agreement, if this Agreement is terminated pursuant to Section 11.2 prior to the Commercial
Operation Date and Seller is the Defaulting Party, Seller's aggregate liability for any Event of
Default other than arising due to fraud, misrepresentation, or willful misconduct shall be limited
to an amount equal to two hundred percent (200%) of the amount of Development Security.
ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Dama�es. EXCEPT TO THE EXTENT PART OF AN
EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, OR PART OF AN ARTICLE
16 INDEMNITY CLAIM, OR INCLUDED 1N A LIQUIDATED DAMAGES CALCULATION,
OR ARISING FROM FRAUD OR 1NTENTIONAL MISREPRESENTATION, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER OR ITS 1NDEMNIFIED PERSONS FOR ANY
SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR
LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER
FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS
AGREEMENT, BY STATUTE, IN TORT OR CONTRACT.
12.2 Waiver and Exclusion of Other Dama�es. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE
DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY T�IE
ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED 1N
THIS AGREEMENT, INCLUDiNG, WITHOUT LIMITATION, THOSE PERTAINING TO
SELLER'S LIMITATION OF LIABILITY AND THE PARTIES' WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH
OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO "FAIL OF THEIR
ESSENTI�AL PURPOSE" OR ARE OTHERWISE HELD TO BE INVALID OR
UNENFORCEABLE.
FOR BREACI� OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
52
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE
OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND
ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE
OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. THE
VALUE OF ANY INCENTIVES, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE
TO BUYER'S EVENT OF DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO
MITIGATE AFTER USE OF COMMERCIALLY REASONABLE EFFORTS), AND
AMOUNTS DUE IN CONNECTION WITH THE RECAPTURE BY THE 1NTERNAL
REVENUE SERVICE DUE TO A DEFAULT BY BUYER OF ANY INCENTIVES
PREVIOUSLY RECEIVED BY SELLER, IF' ANY, SHALL BE DEEMED TO BE DIRECT
DAMAGES.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED, INCLUDING UNDER SECTIONS 3.8 4.8 11.2 113 AND AS PROVIDED IN
EXHIBIT B, EXHIBIT C, AND EXHIBIT P. THE PARTIES ACKNOWLEDGE THAT THE
DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE
OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THAT THE
LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE
ANTICIPATED HARM OR LOSS. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES
BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING
THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT
OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WANE ANY
RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND
THE EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR
TI�E BREACIH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH
PARTY WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH
RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller's Representations and Warranties. As of the Effective Date, Seller
represents and warrants as follows:
(� Seller is a limited liability company, duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation, and is qualified to conduct
business in the state of California and each jurisdiction where the failure to so qualify would have
a material adverse effect on the business or financial condition of Seller.
(g) Seller has the power and authority to enter into and perform this Agreement
and is not prohibited from entering into this Agreement or discharging and performing all
covenants and obligations on its part to be performed under and pursuant to this Agreement,except
53
where such failure does not have a material adverse effect on Seller's performance under this
Agreement. The execution, delivery and performance of this Agreement by Seller has been duly
authorized by all necessary limited liability company action on the part of Seller and does not and
will not require the consent of any trustee or holder of any indebtedness or other obligation of
Seller or any other party to any other agreement with Seller.
(h) The execution and delivery of this Agreement, consummation of the
transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions
of this Agreement will not conflict with or constitute a breach of or a default under any Law
presently in effect having applicability to Se11er, subject to any permits that have not yet been
obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed
of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or
instrument to which Seller is a party or by which any of its property is bound.
(i) This Agreement has been duly executed and delivered by Seller. This
Agreement is a legal, valid and binding obligation of Se11er enforceable in accordance with its
terms, except as limited by laws of general applicability limiting the enforcement of creditors'
rights or by the exercise of judicial discretion in accordance with general principles of equity.
(j) Seller shall comply with all applicable federal, state and local laws, statutes,
ordinances,rules and regulations, and the orders and decrees of any courts or administrative bodies
or tribunals, including, without limitation those related to employment discrimination and
prevailing wage, non-discrimination and non-preference, and conflict of interest.
(k) Seller shall maintain Site Control throughout the Delivery Term.
(1) Seller shall obtain or cause to be obtained any and all applicable permits
and approvals, including without limitation, environmental clearance under the California
Environmental Quality Act ("CEOA") or other environmental law, from the local jurisdiction
where the Facility will be constructed. Se11er acknowledges that Buyer is purchasing the Product
under this Agreement and does not intend to be the lead agency for the Facility.
(m) Seller shall source and install batteries from a manufacturer that has at least
one (1) gigawatt(GV� of utility scale batteries installed and in operation.
13.2 Buyer's Representations and Warranties. As of the Effective Date, Buyer
represents and warrants as follows:
(a) Buyer is a validly existing California joint powers authority, and has the
legal power and authority to own its properties, to carry on its business as now being conducted
and to enter into this Agreement, and to carry out the transactions contemplated hereby, and to
perform and carry out all covenants and obligations on its part to be performed under and pursuant
to this Agreement.
(b) Buyer has the power and authority to enter into and perform this Agreement
and is not prohibited from entering into this Agreement or discharging and performing all
covenants and obligations on its part to be performed under and pursuant to this Agreement, except
54
where such failure does not have a material adverse effect on Buyer's performance under this
Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly
authorized by all necessary action on the part of Buyer and does not and will not require the consent
of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any
other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the
transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions
of this Agreement will not conflict with or constitute a breach of or a default under any Law
presently in effect having applicability to Buyer, the documents of formation of Buyer or any
outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of
indebtedness or any other agreement or instrument to which Buyer is a party or by which any of
its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This
Agreement is a 1ega1, valid and binding obligation of Buyer enforceable in accordance with its
terms, except as limited by laws of general applicability limiting the enforcement of creditors'
rights or by the exercise of judicial discretion in accordance with general principles of equity.
13.3 General Covenants. Each Party covenants that commencing on the Effective Date
and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation and to be qualified to conduct business in
California and each jurisdiction where the failure to so qualify would have a material adverse effect
on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory
authorizations, approvals and permits necessary for the operation of the Facility and for Seller to
legally perform its obligations under this Agreement; and
(c) It shall perform its obligations under this Agreement in compliance with all
terms and conditions in its governing documents and in material compliance with any Law.
13.4 Prevailin�Wa�e and Workforce Development
Seller shall ensure that a11 employees hired by Seller, and its contractors and
subcontractors, that will perform construction work or provide services at the Site related to
construction of the Facility are paid wages at rates not less than those prevailing for workers
performing similar work in the locality in which the Facility is located in accordance with the
prevailing wage requirements for eligibility for increased tax credits under Sections 45(b)(6)-(7)or
Sections 48(a)(9)-(10),as applicable,of the United States Internal Revenue Code of 1986, or any
successor statute("Prevailing Wage Requirement"). To the extent applicable to the construction
of the Facility, Seller shall comply with all applicable federal, state and local laws, statutes,
ordinances, rules and regulations, and orders and decrees of any courts or administrative bodies
or tribunals, including without limitation employment discrimination laws and prevailing wage
55
laws. Seller or its construction contractor for the Facility may either (i) execute a project labor
agreement with the appropriate building or construction trade unions for construction of the
Facility, or (ii) award the contract for construction to a union signatory entity which will
employ a union workforce governed by that entity's existing labor agreements.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assi�nments. Except as provided in this Article 14,
neither Party may voluntarily assign this Agreement or its rights or obligations under this
Agreement, without the prior written consent of the other Party, which consent shall not be
unreasonably withheld, conditioned or delayed. Except as provided in this Article 14, any Change
of Control of Seller or direct or indirect change of control of Buyer (whether voluntary or by
operation of law) will be deemed an assignment and wi11 require the prior written consent of the
other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any
assignment made in violation of the conditions to assignment set out in this Article 14 shall be nu11
and void. Buyer shall reasonably cooperate with Seller or any Lender, to execute or arrange for
the delivery of consents (subject to Section 14.2), and estoppels reasonably requested (where
"reasonably" and "reasonable" means that no additional burdens other than noticing are placed
upon Buyer) by Seller or Lender in order to consummate any �nancing or refinancing and shall
enter into reasonable agreements with such Lender that provide that Buyer recognizes the
Lender's security interest and provide notice of default as may be reasonable requested by Seller,
such Lender or potential Lender;provided, howeve�, Buyer will have no obligation to provide any
consent, or enter into any agreement,that adversely affects any of Buyer's rights,bene�ts,risks or
obligations under this Agreement. Seller shall be responsible for Buyer's reasonable costs
associated with the preparation, review, execution and delivery of documents in connection with
any assignment of this Agreement by Seller, including without limitation reasonable attorneys'
fees.
14.2 Collateral Assi�nment.
Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as
collateral for any financing or re�nancing of the Facility. In connection with any financing or
refinancing of the Facility by Seller, Buyer shall in good faith work with Seller and Lenders to
agree upon a consent to collateral assignment of this Agreement ("Collateral Assi�nment
A�reement"). Each Collateral Assignment Agreement must be in form and substance agreed to
by Buyer, Seller and the applicable Lender, such agreement not to be unreasonably withheld,
conditioned or delayed. Buyer wi11 not be subject to obligations under more than one Collateral
Assignment Agreement at any time. Each Collateral Assignment Agreement must include,
among others, the following provisions unless otherwise agreed to by Buyer, Seller and the
applicable Lender.
(a) Buyer shall give notice of an Event of Default by Seller to the Person(s) to
be specified by Lender in the Collateral Assignment Agreement befare exercising its right to
terminate this Agreement as a result of such Event of Default; provided that any cure period
56
specific in this Agreement shall not commence as to Lender until Lender has received notice of
such Event of Default;
(b) Lender will have the right to cure an Event of Default on behalf of Seller if
Lender sends a written notice to Buyer before the later of(i)the expiration of any cure period, and
(ii) five (5) Business Days after Lender's receipt of notice of such Event of Default from Buyer,
indicating Lender's intention to cure. Lender must remedy or cure such Event of Default within
the cure period under this Agreement (or,in the event of a bankruptcy of Seller or any foreclosure
or similar proceeding if required by Lender to cure any Event of Default, an additional reasonable
period of time to complete such proceedings and effect such cure not to exceed one hundred eighty
(180) days without the written consent of Buyer, provided that if Lender is prohibited by any
court order or bankruptcy or insolvency proceedings from curing the Event of Default or from
commencing or prosecuting foreclosure proceedings,the foregoing time periods sha11 be extended
by the period of such prohibition, but in no event shall the cure period exceed two hundred and
seventy(270) days;
(c) Following an Event of Default by Seller under this Agreement, Buyer may
require Seller (or Lender, if Lender has provided the notice set forth in subsection (b) above) to
provide to Buyer a report concerning:
(i) The stat�us of efforts by Seller to Lender to develop a plan to cure
the Event of Default;
(ii) Impediments to the cure plan or its development;
(iii) If a cure plan has been adopted, the status of the cure plan's
implementation (including any modifications to the plan as well as the expected timeframe within
which any cure is expected to be implemented); and
(iv) Any other information which Buyer may reasonably require related
to the development, implementation and timetable of the cure plan.
Seller or Lender must provide the report to Buyer within ten(10) Business Days after Notice from
Buyer requesting the report. Buyer wi11 have no further right to require the report with respect to
a particular Event of Default after that Event of Default has been cured;
(d) If this Agreement is transferred to Lender pursuant to subsection(b) above,
Lender must assume all of Seller's obligations arising under this Agreement on and after the date
of such assumption; provided, before such assumption, if Buyer advises Lender that Buyer will
reguire the Lender to cure (or cause to be cured) any Event of Default (other than any Events of
D�fault which relate (i) to Se11er's bankruptcy or similar insolvency proceedings, or (ii) to
representations and warranties made by Se11er, or to Seller's failure to perform obligations which,
in either case are personal to Seller) existing as of the transfer date in order to avoid the exercise
by Buyer(in its sole discretion) of Buyer's right to terminate this Agreement with respect to such
Event of Default), then Lender at its option, and in its sole discretion, may elect to either:
(i) Cause such Event of Default to be cured, or
57
(ii) Not assume this Agreement.
(e) If Lender elects to transfer this Agreement, then Lender must cause the
transferee to assume all of Seller's obligations arising under this Agreement as a condition of the sale
or transfer. Such sale or transfer may be made only to an entity that meets the definition of Permitted
Transferee. Lender shall be responsible for Buyer's reasonable costs associated with the preparation,
review, execution and delivery of documents in connection with any transfer of this Agreement by
Lender, including without limitation reasonable attorneys' fees.
14.3 Permitted Assi�nments bv Seller. Except as may be precluded by, or would cause
Buyer to be in violation of, the Political Reform Act(Cal. Gov. Code Section 81000 et seq.) or the
regulations thereto, California Government Code Section 1090, or any other conflict of interest
Law, Seller may, without the prior written consent of Buyer, transfer or assign this Agreement,
including through a Change of Control, to (a) an Affiliate of Seller, or(b) any Person succeeding
to all or substantially all of the assets of Seller(whether voluntary or by operation of law); if, and
only i£
(i) In the case of(b) only, the assignee is a Permitted Transferee;
(ii) Seller has given Buyer Notice at least fifteen (15) Business
Days before the date of such proposed assignment; and
(iii) Seller has provided Buyer a written agreement signed by the Person
to which Seller wishes to assign its interests that (x)provides that such Person will assume all of
Seller's obligations and liabilities under this Agreement upon such transfer or assignment and (y)
certifies that such Person meets the definition of a Permitted Transferee.
Except as provided in the preceding sentence, any assignment by Se11er or its successors or assigns
under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement
by the assignee have been received and accepted by Buyer.
Seller shall be responsible for Buyer's reasonable costs associated with the preparation, review,
execution and delivery of documents in connection with any assignment of this Agreement by
Seller, including without limitation reasonable attorneys' fees.
14.4 Buver Limited Assignment Right. Notwithstanding anything to the contrary in
this Agreement,���Buyer may make a limited assignment of Buyer's right to receive a11 or a portion
of the Product that would otherwise be delivered to Buyer hereunder to an entity ("Limited
Assi�nee") that has, or provides a parent guaranty, in form and substance reasonably acceptable
to Seller from an entity with a credit rating equal to or greater than an Investment Grade Credit
Rating of Buyer's right to receive Product (which shall not be for retail sale) and its obligation to
make payments to Seller, which assignment shall be expressly subject to Limited Assignee's
timely payment of amounts due under this Agreement, at any time upon not less than thirty (30)
days' Notice by delivering a written request for such assignment. In connection with any such
assignment, Buyer and Seller agree to execute a limited assignment agreement in a form that is
reasonably acceptable to Buyer, Se11er, and eaeh Party's respective Lenders and financing parties.
58
For the avoidance of doubt, Buyer will remain responsible for a11 its obligations under this
Agreement related to such assigned Product, including (i) the obligation to pay for such Product
to the extent the assignee thereof does not do so and (ii) any damages associated with such
assignee's failure to take any such Product. Buyer shall be responsible far Seller's reasonable costs
associated with the preparation, review, execution and delivery of documents in connection with
any assignment of this Agreement by Buyer, including without limitation reasonable attorneys'
fees.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governin�Law. This Agreement and the rights and duties of the Parties hereunder
shall be governed by and construed, enforced and performed in accordance with the laws of the
state of California, without regard to principles of conflicts of Law. To the extent enforceable at
such time, each Party waives its respective right to any jury trial with respect to any litigation
arising under or in connection with this Agreement. The Parties agree that any suit, action or other
legal proceeding by or against any party (or its affiliates or designees) with respect to or arising
out of this Agreement shall be brought in the federal courts of the United States or the courts of
the State of California sitting in Placer County, California.
15.2 fReservedl.
15.3 fReservedl.
15.4 Dispute Resolution. In the event of any dispute arising under this Agreement,
within ten (10) days following the receipt of a written Notice from either Party identifying such
dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly
and informally without significant legal costs. If the Parties are unable to resolve a dispute arising
hereunder within thirty (30) days after Notice of the dispute, the Parties may pursue all remedies
available to them at Law in or equity.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnification. Seller agrees to defend, indemnify and hold harmless Buyer, its
directors, officers, agents, attorneys, consultants, employees and representatives from and against
all third party claims, demands, losses, liabilities, penalties, and expenses, including reasonable
attorneys' and expert witness fees(collectively,"Indemnifiable Event")arising from negligence,
willful misconduct, or breach of the Agreement(collectively, "Indemnifiable Losses").
16.2 Notice of C1aim. Subject to the terms of this Agreement and upon obtaining
knowledge of an Indemnifiable Loss for which it is entitled to indemnity under this Article 16,
Buyer will promptly provide Notice to Seller in writing of any damage, claim, loss, liability or
expense which Buyer has determined has given or could give rise to an Indemni�able Loss under
Section 16.1 ("Claim"). The Notice is referred to as a"Notice of Claim". A Notice of Claim wi11
specify, in reasonable detail,the faets known to Buyer regarding the Indemni�able Loss.
59
16.3 Failure to Provide Notice. A failure to give timely Notice or to include any
specified information in any Notice as provided in Section 16.2 wi11 not affect the rights or
obligations of any Party hereunder except and only to the extent that, as a result of such failure,
any Party which was entitled to receive such Notice was deprived of its right to recover any
payment under its applicable insurance coverage or was otherwise materially damaged as a direct
result of such failure.
16.4 Defense of Claims. If, within thirty (30) Business Days after giving a Notice of
Claim regarding a Claim to Se11er pursuant to Section 16.2,Buyer receives Notice from Seller that
Seller has elected to assume the defense of such Claim, Seller will not be liable for any legal
expenses subsequently incurred by Buyer in connection with the defense thereof;provided,
however, that if Seller fails to take reasonable steps necessary to defend diligently such Claim
within thirty(30)Business Days after receiving Notice from Buyer that Buyer believes Seller has
failed to take such steps, or i�Se11er has not undertaken fully to indemnify Buyer in respect of all
Indemnifiable Losses relating to the matter, Buyer may assume its own defense, and Seller will be
liable for all reasonable costs or expenses,including attorneys' fees,paid or incurred in connection
therewith. Without the prior written consent of Buyer, Seller will not enter into any settlement of
any Claim which would lead to liability or create any financial or other obligation on the part of
Buyer for which Buyer is not entitled to indemnification hereunder;provided,however,that Seller
may accept any settlement without the consent of Buyer if such settlement provides a full release
to Buyer and no requirement that Buyer acknowledge fault or culpability. If a firm offer is made
to settle a Claim without leading to liability or the creation of a financial or other obligation on the
part of Buyer for which Buyer is not entitled to indemnification hereunder and Seller desires to
accept and agrees to such offer, Seller will give Notice to Buyer to that effect. If Buyer fails to
consent to such firm offer within thirty (30) calendar days after its receipt of such Notice, Buyer
may continue to contest or defend such Claim and, in such event, the maximum liability of Seller
to Buyer under such Claim will be the amount of such settlement offer, plus reasonable costs and
expenses paid or incurred by Buyer up to the date of such Notice.
16.5 Subrogation of Ri�hts. Upon making any indemnity payment, Seller will, to the
extent of such indemnity payment,be subrogated to a11 rights of Buyer against any third party in
respect of the Indemnifiable Loss to which the indemnity payment relates; provided that until
Buyer recovers full payment of its Indemnifiable Loss, any and a11 claims of Se11er against any
such third party on account of said indemnity payment are hereby made expressly subordinated
and subjected in right of payment to Buyer's rights against such third party. Without limiting the
generality or effect of any other provision hereof, Buyer and Seller sha11 execute upon reguest all
instruments reasonably necessary to evidence and perfect the above-described subrogation and
subordination rights.
16.6 R�'z hts and Remedies are Cumulative. Except for express remedies already
provided in this Agreement, the rights and remedies of a Party pursuant to this Article 16 are
cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
60
ARTICLE 17
INSURANCE
17.1 Insurance
(a) General Liability. Seller shall maintain,or cause to be maintained at its sole
expense, (i) commercial general liability insurance, including sudden and accidental pollution
coverage, products and completed operations and personal injury insurance, with a minimum
amount of Two Million Dollars ($2,000,000) per occurrence, and an annual aggregate of not less
than Five Million Dollars ($5,000,000), endorsed to provide contractual liability in said amount,
specifically covering Seller's obligations under this Agreement and including Buyer as an
additional insured but only to the extent of the liabilities assumed hereunder by Seller; and (ii) an
umbrella insurance policy in a minimum amount of liability of Ten Million Dollars ($10,000,000).
Defense costs shall be provided as an additional benefit and not included with the limits of liability.
Such insurance shall contain standard cross-liability and severability of interest provisions.
Insurance may be evidenced through primary and excess policies.
(b) Em�loyers' Liabilit_y Insurance. Seller shall maintain, or cause to be
maintained at its sole expense Employers' Liability insurance with One Million Dollars
($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily
injury by disease, the One Million Do11ar ($1,000,000) policy limit will apply to each employee.
(c) Workers' Compensation Insurance. Seller, if it has employees, shall also
maintain at all times d�uring the Contract Term workers' compensation and employers' liability
insurance coverage in accordance with applicable requirements of California Law.
(d) Business Auto Insurance. Seller shall maintain at all times d�uring the
Contract Term business auto insurance for bodily injury and property damage with limits of One
Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of
Seller's use of all owned(if any), non-owned and hired vehicles, including trailers or semi-trailers
in the performance of this Agreement.
(e) Construction All-Risk Insurance. Se11er sha11 maintain or cause to be
maintained during the construction of the Facility construction all-risk form property insurance
covering the Facility during such construction periods, and naming the Seller (and Lender if any)
as the loss payee.
(� Contractor's Pollution Liabilitv. Se11er sha11 maintain or cause to be
maintained during the construction of the Facility prior to the Commercial Operation Date,
Pollution Legal Liability Insurance in the amount of Two Million Dollars ($2,000,000) per
occurrence and in the aggregate, naming the Se11er (and Lender if any) as additional named
insured.
(g) Subcontractor Insurance. Se11er shall require all of its Major Subcontractors
to carry the same levels of insurance as Se11er,provided Majar Subcontractors sha11 not be required
to carry Construction All-Risk Insurance. All Major Subcontractors shall include Seller as an
61.
additional insured to (i) comprehensive general liability insurance; (ii) workers' compensation
insurance and employers' liability coverage; and(iii)business auto insurance far bodily injury and
property damage. All Major Subcontractors shall provide a primary endorsement and a waiver of
subrogation to Seller for the required coverage pursuant to this Section 17.1(�).
(h) Evidence of Insurance. Within siYty (60) days after the Effective Date and
upon annual renewal of required insurance coverage thereafter, Seller shall deliver to Buyer
certificates of insurance evidencing such coverage as is required to be in effect at the times
specified above. These certificates shall specify that Buyer shall be given at least thirty (30) days
prior Notice by Seller in the event of any material modification, cancellation or termination of
coverage. Such insurance sha11 be primary coverage without right of contribution from any
insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Se11er
and shall not in any manner inure to the benefit of Buyer.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes"Confidential
Information," whether oral or written which is delivered or conveyed by one Party (the
"Disclosing Part ") to the other Party (the "Receivin� Partv"): (a) the terms and conditions of,
and proposals and negotiations related to, this Agreement (except that this Agreement sha11 be
disclosable upon its approval by Buyer), and(b) information that either Seller or Buyer stamps or
otherwise identifies as"confidential"or"proprietary"before disclosing it to the other. Confidential
Information does not include (i) information that was publicly available at the time of the
disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that
becomes publicly available through no fault of the recipient after the time of the delivery; (iii)
information that was rightfully in the possession of the recipient (without confidential or
proprietary restriction) at the time of delivery or that becomes available to the recipient from a
source not subject to any restriction against disclosing such information to the recipient; and (iv)
information that the recipient independently developed without a violation of this Agreement.
18.2 Duty to Maintain Confidentiality. Upon receiving or learning of Confidential
Information, the�Receiving Party wilL• (a) treat such Confidential Information as confidential and
use reasonable care not to divulge such Con�idential Information to any third party except as set
forth in this Article 18; (b) restrict access to such Confidential Information to only those of its
Affiliates and its and their employees, officers, directors, advisors (including legal and accounting
advisors), agents, contractors, subcontractors, actual and potential lenders, equity investors
(including tax equity), and other fmancing parties (including Lenders), and actual and potential
acquirors and assignees, and with respect to Buyer as the Receiving Party Buyer's Participating
Members,in each case who reasonably need to know it and are bound by confidentiality provisions
no less stringent than those in this Article 18; and (c) use such Con�dential Information for
purposes of administering this Agreement and, in cases where Seller is the Receiving Party, for
the purpose of developing, financing,owning,and operating the Facility. Confidential Information
will retain its character as Con�dential Information but may be disclosed by the Receiving Party
if and to the extent such disclosure is requir�d (a) to be made by any requirements of Law, (b)
pursuant to an order of a court or(c)in order to enforce this Agreement;provided, each Party shall,
62
to the extent practicable, use reasonable efforts to prevent or limit the disclosure. If the Receiving
Party becomes legally compelled (by interrogatories, requests for information or documents,
subpoenas, summons, civil investigative demands, or similar processes or otherwise in connection
with any litigation or to comply with any applicable Law, order, regulation, ruling, regulatory
request, accounting disclosure rule or standard or any exchange, control area or independent
system operator request or rule) to disclose any Cont"idential Information of the Disclosing Party,
Receiving Party shall provide Disclosing Party with proinpt notice so that Disclosing Party, at its
sole expense, may seek an appropriate protective order or other appropriate remedy. If the
Disclosing Party takes no such action after receiving the foregoing notice from the Receiving
Party, the Receiving Party is not required to defend against such request and shall be permitted to
disclose such Confidential Information of the Disclosing Party, with no liability for any damages
that arise from such disclosure. The Parties acknowledge and agree that this Agreement or its
performance, and inforination and documentation provided in connection with this Agreement,
incl�uding Confidential Information, may be subject to the California Public Records Act
(Government Code Section 7920 et seq.) and Buyer shall incur no liability arising out of any
disclosure of such information or documentation provided in connection with this Agreement,
including Confidential Information, that is subject to public disclosure under the California Public
Records Act.
18.3 Irreparable Iniurv; Remedies. Receiving Party acknowledges that its obligations
hereunder are necessary and reasonable in order to protect Disclosing Party and the business of
Disclosing Parry, and expressly acknowledges that monetary damages would be inadequate to
compensate Disclosing Party for any breach or threatened breach by Receiving Party of any
covenants and agreements set forth in this Article 18. Accordingly, Receiving Party acknowledges
that any such breach or threatened breach will cause irreparable injury to Disclosing Party and
that, in addition to any other remedies that may be available except as otherwise limited under this
Agreement (but notwithstanding any prohibition contained in the last paragraph of Section 12.2),
in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against
the threatened breach of this Article 18 or the continuation of any such breach, without the
necessity of proving actual damages or the posting of any bond.
18.4 Disclosure to Lenders, Etc. Notwithstanding anything to the contrary in this
Article 18, Confidential Information may be disclosed by Seller to any actual or potential Lender
or investor or any of their Affiliates, and Seller's actual or potential agents, consultants,
contractors,ar trustees,so long as the Person to whom Confidential Information is disclosed agrees
in writing to be bound by the confidentiality provisions no less stringent than those in this
Article 18.
18.5 Public Announcements. Except as may otherwise be reguired by applicable Law,
neither Party will, nor wi11 it allow its affiliates, contractors and vendors to, make any public
announcement, press release or statement regarding this Agreement unless the public
announcement, press release or statement is approved in advance by the other Party, in its
reasonable discretion.
63
ARTICLE 19
MISCELLANEOUS
19.1 Entire Agreement; Inte�ration; Exhibits. This Agreement, together with the
Cover Sheet and Exhibits attached hereto, constitutes the entire agreement and understanding
between Seller and Buyer with respect to the subject matter hereof and supersedes all prior
agreements relating to the subject matter hereof, which are of no further force or effect. The
Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by
reference. The headings used herein are for convenience and reference purposes on1y. In the event
of a conflict between the provisions of this Agreement and those of the Cover Sheet or any E�iibit,
the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such E�iibit
shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared
through the joint efforts of the Parties and shall not be construed against one Party or the other
Party as a result of the preparation, substitution, submission or other event of negotiation, drafting
or execution hereof.
19.2 Amendments. This Agreement may only be amended, modified or supplemented
by an instrument in writing executed by duly authorized representatives of Se11er and Buyer;
p�ovided, that, for the avoidance of doubt,this Agreement may not be amended by electronic mail
communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be
construed as a waiver of any other default.
19.4 No A�ency, Partnership, Joint Venture or Lease. Seller and the agents and
employees of Seller shall, in the performance of this Agreement, act in an independent capacity
and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer
intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated
as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or
any business related to the Facility. This Agreement shall not impart any rights enforceable by any
third party (other than a permitted successor or assignee bound to this Agreement or, to the extent
set forth herein, any Lender) or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable
or held to be unenforceable,the Parties agree that all other provisions of this Agreement have force
and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors
to agree on the replacement of the void, illegal or unenforceable provision(s) with legally
acceptable clauses which correspond as closely as possible to the sense and purpose of the affected
provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither
Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively
revise the rates, terms or conditions of s�rvice of this Agreement through application or complaint
to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any
other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further,
absent the prior written agreement in writing by both Parties, the standard of review for ehanges
64
to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the
"public interest" standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Sei^vice
Corp., 350 U.S. 332 (1956) and Federal Power Comrr�ission v. Sie�ra Pacific Powe�Co., 350 U.S.
348 (1956). Changes proposed by a non-Party or FERC acting sua sponte sha11 be subject to the
most stringent standard permissible under applicable law.
19.7 Counterparts; Electronic Si�natures. This Agreement may be executed in one
or more counterparts, all of which taken together shall constitute one and the same instrument and
each of which shall be deemed an original. The Parties may rely on electronic or scanned
signatures as originals.
19.8 Electronic Delivery. Delivery of an executed signature page of this Agreement by
electronic format (including portable document format (.pd�) shall be the same as delivery of an
original executed signature page.
19.9 Bindin� Effect. This Agreement shall inure to the benefit of and be binding upon
the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buver. Buyer is organized as a Joint Powers
Authority in accordance with the Joint Exercise of Powers Act of the State of California
(Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public
entity separate from its constihtent members. Buyer shall solely be responsible for all debts,
obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights
and shall not make any claims, take any actions or assert any remedies against any of Buyer's
constituent members, or the employees, directors, officers, consultants or advisors or Buyer or its
constituent members, in connection with this Agreement.
19.11 Forward Contract. The Parties intend that this Agreement constitutes a "forward
contract" within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are "forward
contract merchants" within the meaning of the U.S. Bankruptcy Code. Each Party further agrees
that,for all purposes of this Agreement, each Party waives and agrees not to assert the applicability
of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Pariy is a debtor.
In any such proceeding, each Party further waives the right to assert that the other Party is a
provider of last resort to the extent such term relates to ll U.S.C. §366 or another provision of 11.
U.S.C. § 101-1532.
19.12 Service Contract. The Parties intend this Agreement to be a "service contract"
within the meaning of Section 7701(e) of the Internal Revenue Code of 1986, as amended.
19.13 Further Assurances. Each of the Parties hereto agree to provide such information,
execute and deliver any instruments and documents and to take such other actions as may be
necessary or reasonably requested by the other Party which are not inconsistent with the provisions
of this Agreement and which do not involve the assumptions of obligations other than those
provided for in this Agreement, to give fu11 effect to this Agreement and to carxy out the intent of
this Agreement.
65
19.14 Chan�e in Electric Market Desi�n. If a change in the CAISO Tariff renders this
Agreement or any provisions hereof incapable of being performed or administered,then any Party
may request that Buyer and Se11er enter into negotiations to make the minimum changes to this
Agreement necessary to make this Agreement capable of being performed and administered,while
attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set
forth in this Agreement as of the Effective Date. Upon delivery of such a request,Buyer and Seller
shall engage in such negotiations in good faith. I�Buyer and Seller are unable, within sixty (60)
days after delivery of such request, to agree upon changes to this Agreement or to resolve issues
relating to changes to this Agreement, then any Party may submit issues pertaining to changes to
this Agreement to the dispute resolution process set forth in Article 15. Notwithstanding the
foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any
of the provisions hereof incapable of being performed or administered,and(ii)all of the unaffected
provisions o� this Agreement shall remain in full force and effect during any period of such
negotiation or dispute resolution.
�Signatures on following pageJ
66
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as
of the Effective Date.
Trolley Pass Project LLC NORTHERN CALIFORNIA POWER
AGENCY, a California Joint Action Agency
By: By:
Name: Name:
Title: Title:
[Signature Page to Energy Storage Service Agreement]
EXHIBIT A
FACILITY DESCRIPTION
Name of Facility: Trolley Battery Energy Storage Project
Owner: Seller
Type of Facility: Battery Energy Storage System
Qualified Operator: Seller shall provide notice of the initial Qualified Operator(s) to Buyer at
least thirty (30) days prior to Initial Synchronization
Site Address:
Site includes ail or some of the following APNs:
County: San Bernardino County
CEQA Lead Agency: City of Rancho Cucamonga
Delivery Point: Facility PNode described in the CAISO Full Network Model.
Facility P-node: To be established prior to the Commercial Operation Date at the Southern
California Edison Etiwanda Substation 230 kV bus. Se11er shall promptly notify Buyer following
the establishment of the P-node.
Facility Meter: CAISO Metered Entity
Facility Interconnection Point: The Facility shall interconnect to the Etiwanda Substation 230
kV Substation (the "Interconnection Point")
Participating Transmission Owner: Southern California Edison Company ("SCE")
Energy Management Software: Seller must provide remotely operable, 2-4 second timestamps,
data historian(at least 5 years of storage), SCADA/AGC communication and operability with the
Facility controller and offtaker, and include the following applications/modes:
• Dynamic Voltage Support
• Shifting
• Regulation
• Flexible Ramp
• Spinning Reserve
Operating Characteristics of Facility:
1Vlaximum Stored Energy Level at COD: 1,200 MWh
Exhibit A - 1
Maximum Charging Capacity at COD: 300 MW
Maximum Discharging Capacity at COD: 300 MW
Operating Restrictions of Facility: See Exhibit D-2 and Exhibit
Storage Contract Capacity: See definition in Section Ll
Facility Battery Manufacturer/Make/Model: Canadian Solar(E-storage) Solbank 3.0 provided
Seller may update in its sole discretion
Facility Battery Warranty: 20-years provided Seller may update in its sole discretion
Site Map:
Exhibit A - 2
ExxisiT s
FACILITY CONSTRUCTION AND COMMERCIAL OPERATION
1. Facilitv Construction.
(a) "Construction Start" will occur following Seller's execution of an engineering,
procurement and construction (EPC) contract related to the Facility and issuance of a full notice
to proceed with the construction of the Facility under the EPC contract, mobilization to site by
Seller and/or its designees, and includes the physical movement of soil at the Site. The date of
Construction Start will be evidenced by and subject to Seller's delivery to Buyer of a certificate
substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the
"Construction Start Date." Seller shall cause Construction Start to occur no later than the
Guaranteed Construction Start Date.
(b) The "Guaranteed Construction Start Date" means the Expected Construction
Start Date, subject to extensions on a day-for-day basis for the Development Cure Period.
(c) If Seller fails to achieve Construction Start on or before the Guaranteed
Construction Start Date, Seller shall pay Construction Delay Damages to Buyer for each day of
delay in achieving Construction Start. Construction Delay Damages shall be paid to Buyer in
arrears on a monthly basis. Buyer shall invoice Seller for Construction Delay Damages, if any,
accrued during the prior month and, within ten (10) Business Days following Seller's receipt of
such invoice, Seller shall pay Buyer the amount of Construction Delay Damages set forth in such
invoice. Construction Delay Damages shall be refundable to Seller pursuant to Section 2(b1 of
this Exhibit B. The Parties agree that Buyer's receipt of Construction Delay Damages shall be
Buyer's sole and exclusive remedy(other than set forth in(y)below) for Seller's unexcused delay
in achieving Construction Start on or before the Guaranteed Construction Start Date, but shall
(x) not be construed as Buyer's declaration that an Event of Default has occurred under any
provision of Section ll.1 and(y)not limit Buyer's right to declare an Event of Default pursuant to
Section 11.1(b)(i) and receive a Damage Payment upon exercise of Buyer's default right
pursuant to Section 11.2.
2. Commercial Operation of the Facility. "Commercial Operatiod' means the condition
existing when(i) Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement
and provided Notice to Buyer substantially in the form of Exhibit H (the "COD Certificate") (ii)
Seller has notified Buyer in writing that it has provided the required documentation to Buyer and
met the conditions for achieving Commercial Operation, and (iii) Buyer has acknowledged to
Seller in writing that Buyer agrees that Commercial Operation has been achieved. Buyer shall
respond to Seller's notification that it has provided the required documentation to Buyer and met
the conditions for achieving Commercial Operation within five (5) Business Days of receipt of
Notice or be deemed to have accepted such Notice. The "Commercial Operation Date" shall be
the date on which Commercial Operation is achieved;pNovided, the Commercial Operation Date
shall not be earlier than the date that is one hundred twenty (120) days prior to the Expected
Commercial Op�ration Date.
Exhibit B - 1
(a) Seller shall cause Commercial Operation for the Facility to occur by the Expected
Commercial Operation Date (as such date may be extended by the Development Cure Period
(defined below), the "Guaranteed Commercial O�eration Date"). Se11er shall notify Buyer that
it intends to achieve Commercial Operation at least sixty (60) days befare the anticipated
Commercial Operation Date.
(b) If Seller achieves Commercial Operation far the Facility by the Guaranteed
Cominercial Operation Date, all Construction Delay Damages paid by Seller sha11 be refunded to
Seller minus an amount (but not exceeding the amount of Construction Delay Damages paid by
Seller) equal to the commercially reasonable and documented costs actually incurred by Buyer to
procure products in substitution for the Product as a result of such delay. Seller shall include a
request for refund of the Construction Delay Damages with the first invoice to Buyer after
Commercial Operation.
(c) If Seller does not achieve Commercial Operation by the Guaranteed Commercial
Operation Date, as it may be extended as provided herein, Seller shall pay COD Delay Damages
to Buyer for each day after the Guaranteed Commercial Operation Date until the Commercial
Operation Date to Buyer in advance on a monthly basis. A prorated amount wi11 be returned to
Seller if COD is achieved during the month for which COD Delay Damages were paid in advance.
The Parties agree that Buyer's receipt of COD Delay Damages shall be Buyer's sole and exclusive
remedy (other than set forth in(y) below) for Seller's failure to achieve the Commercial Operation
Date on or before the Guaranteed Commercial Operation Date, but shall (x) not be construed as
Buyer's declaration that an Event of Default has occurred under any provision of Section 11.1 and
(y) not limit Buyer's right to declare an Event of Default pursuant to Section 11.1(b)(ii�and receive
a Damage Payment upon exercise of Buyer's default right pursuant to Section 11.2.
3. Termination for Faiiure to Achieve Commercial Operation. If the Facility has not
achieved Commercial Operation within one hundred eighty (180) days after the Guaranteed
Commercial Operation Date, Buyer may elect to terminate this Agreement in accordance
with Sections 11.1(b)(ii) and Section 11.2.
4. Extension of the Guaranteed Dates. The Guaranteed Construction Start Date and the
Guaranteed Commercial Operation Date shall both, subject to notice and documentation
reguirements set forth below, be extended on a day-for-day basis due to delays arising out of the
following circumstances to the extent such circumstances are not the result of Seller's failure to
take all commercially reasonable actions to meet its requirements herein:
(a) Force Majeure Event;
(b) Buyer Delay.
Notwithstanding the foregoing, the cumulative day-for-day extensions granted above (other than
extensions granted pursuant to clause 4(b) above) shall not exceed a period of up to one-hundred
eighty (180) days on a cumulative basis (the "Develo�ment Cure Period"). No extension shall
be given under the Development Cure Period if, and to the extent that (a) the delay was due to
Seller's failure to take commercially reasonable actions to meet its requirements and deadlines or,
with respect to a Force Majeure Event, does not otherwise satisfy the requirements of a Force
Exhibit B - 2
Majeure Event, (b) Seller failed to provide requested documentation as provided below,or(c) with
respect to a Force Majeure Event, Seller failed to provide written notice of such Force Majeure
Event to Buyer as required under this Agreement. Upon written request from Buyer, Se11er
shall promptly provide documentation demonstrating to Buyer's reasonable satisfaction that the
delay was the result of one of the circulnstances set forth above and did not result from Seller's
actions or failure to take commercially reasonable actions.
5. Failure to Reach Stora�e Contract Capacit . If, at Commercial Operation,the Installed
Battery Capacity is less than one hundred percent (100%) of the Storage Contract Capacity, Seller
shall have one hundred twenty(120)days after the Commercial Operation Date to install additional
capacity or Network Upgrades such that the Installed Battery Capacity is equal to (but not greater
than) one hundred percent (100%) of the Storage Contract Capacity, and Seller shall provide to
Buyer a new certificate substantially in the form attached as Exhibit I hereto specifying the new
Installed Battery Capacity. If Seller fails to construct the Storage Contract Ca acity b such date,
Seller shall a " a a i Dama e " to Buyer, in an amount equal to �
for each MW that the Storage Contract Capacity exceeds the
Installed Battery Capacity, and the Storage Contract Capacity and other applicable portions of the
Agreement shall be adjusted accordingly.
Exhibit B - 3
EXHIBIT C
COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C.
(a) Stora�e Rate. All Storage Product shall be paid on a monthly basis at the Storage
Rate inultiplied hy 1,000, multiplied by the Storage Capacity for such month, as adjusted for the
most recent Storage Capacity Test, multiplied by the Availability Adjustment for such month (as
determined under Exhibit P). Such payment constitutes the entirety of the amount due to Seller
from Buyer for the Storage Product. If the Storage Capacity is adjusted pursuant to a Storage
Capacity Test on any day other than the first day of a calendar month,payment shall be calculated
separately for each portion of the month in which the different Storage Capacity is applicable.
(b) Liquidated Dama�es for Failure to Achieve Guaranteed Efficiencv Rate. If during
any month during the Delivery Term, the Efficiency Rate applicable to such month is less than the
Guaranteed Efficiency Rate, Seller shall owe liquidated damages to Buyer, which damages shall
be calculated by multiplying (i) the total Charging Energy for such month, by (ii) the percentage
amount by which such applicable Efficiency Rate is less than the Guaranteed Efficiency Rate, by
(iii) the simple average of the On-Peak Hour Day-Ahead Market LMP for all the hours of the
applicable month, as published by the CAISO, for the Delivery Point, provided, that if the
foregoing calculation results in a negative value, then Seller shall pay Buyer the absolute value
of such result, which amount shall be credited by Seller against amounts owed by Buyer in
the applicable monthly invoice.
(c) Incentives. Other than as provided in Section 2.5, the Parties agree that the Storage
Rate is not subject to adjustment or amendment if Seller fails to receive any Incentives, or if
any Incentives expire, are repealed or otherwise cease to apply to Se11er or the Facility in whole
or in part, or Seller or its investors are unable to benefit from any Incentives. Seller shall bear all
risks, financial and otherwise, throughout the Contract Term, associated with Se11er's or the
Facility's eligibility to receive Incentives or to qualify for accelerated depreciation for Seller's
accounting, reporting ar Tax purposes. The obligations of the Parties hereunder, including those
obligations set forth herein regarding the purchase and price for and Seller's obligation to deliver
Product, shall be effective regardless of whether the sale of Product is eligible for, or receives
Incentives during the Contract Term.
Exhibit C - 1
ExxrsrT �-1
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Bu,yer as Scheduling Coordinator for the FacilitX. Upon Initial Synchronization of
the Facility to the CAISO Grid,Buyer shall be the Scheduling Coordinator or designate a qualified
third party to provide Scheduling Coordinator services with the CAISO for the Facility for the
delivery of Product at the Delivery Point. At least thirry (30) days prior to the Initial
Synchronization of the Facility to the CAISO Grid, (i) Seller shall take all actions and execute and
deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or
Buyer's designee) as the Scheduling Coordinator for the Facility effective as of the Initial
Synchronization of the Facility to the CAISO Grid, and (ii) Buyer shall, and shall cause its
designee to, take all actions and execute and deliver to Seller and the CAISO all documents
necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the
Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid. On and after
Initial Synchronization of the Facility to the CAISO Grid, Seller shall not authorize or designate
any other party to act as the Facility's Scheduling Coordinator,nor shall Seller perform for its own
benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer's authorization to
act as the Facility's Scheduling Coordinator unless agreed to by Buyer. Prior to the Commercial
Operation Date, Buyer as Scheduling Coordinator sha11 reasonably assist with the need for the
Facility to test,commission and to timely achieve the Commercial Operation Date,and Buyer shall
not provide any scheduling instructions which interferes with those purposes. Buyer (as the
Facility's Scheduling Coordinator) shall submit bids to the CAISO in accordance with this
Agreement and the applicable CAISO Tariff, protocols and the Sched�uling and operating
procedures developed under E�ibit D-2 for Product on a day-ahead, hour-ahead, fifteen-minute
market, real time or other market basis that may develop after the Effective Date, as determined
by Buyer.
(b) Notices. Buyer (as the Facility's SC) shall provide Seller with access to a
web-based system through which Seller sha11 submit to Buyer and the CAISO all notices and
updates reguired under the CAISO Tariff regarding the Facility's status, including,but not limited
to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer
waiver forms. Seller shall cooperate with Buyer to provide such notices, information and updates
in accordance with the applicable requirements of the CAISO Tariff and the Scheduling and
operating procedures developed under Exhibit D-2. If the web-based system is not available,
Seller shall promptly submit such information to Buyer and the CAISO (in arder of preference)
telephonically or electronic mail to the personnel designated to receive such information.
(c) CAISO Costs and Revenues. Except as otherwise set forth below or elsewhere in
this Agreement,Buyer(as Scheduling Coordinator for the Facility)shall be responsible for CAISO
costs (including penalties, Imbalance Energy costs or revenues, and other charges) and shall be
entitled to all CAISO revenues (including credits, Imbalance Energy revenues or costs, and other
payments), including revenues associated with CAISO dispatches, bid cost recove�ry, Inter-SC
Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility.
Seller shall be liable for and reimburse Buyer for any and all CAISO costs and penalties incurred
by Buyer in its role as Scheduling Coordinator under a CAISO settlement statement because of
Seller's failure to perform any covenant or obligation set forth in this Agreement,or Seller's failure
Exhibit D-1 - 1
to comply with applicable provisions of the CAISO Tariff or the outage notification requirements
set forth in this Agreement (each except to the extent such non-compliance is caused by Buyer's
failure to perform its duties as Scheduling Coordinator for the Facility). The Parties agree that any
Availability Incentive Payments (as defined in the CAISO Tarif� are for the benefit of Seller and
for Seller's account and that any Non-Availability Charges (as defined in the CAISO Tarif� are
the responsibility of Seller and for Seller's account. In addition, if during the Delivery Term, the
CAISO impleinents or has implemented any sanction or penalty related to scheduling, outage
reporting,or generator operation,and any such sanctions or penalties are imposed upon the Facility
or to Buyer as Scheduling Coordinator due to failure by Se11er to abide by the CAISO Tariff or the
outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties
shall be Seller's responsibility.
(d) CAISO Settlements. Buyer (as the Facility's Scheduling Coordinator) shall be
responsible for all settlement functions with the CAISO related to the Facility. Buyer shall render
a separate invoice to Seller for any CAISO payments, charges or penalties ("CAISO Char�es
Invoice") for which Seller is responsible under this Agreement. CAISO Charges Invoices shall
be rendered after settlement information becomes available from the CAISO that identifies any
CAISO charges. Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue
additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer shall review,
validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the
responsibility of Seller in a timely manner and consistent with Buyer's existing settlement
processes for charges that are Buyer's responsibilities. Subject to Seller's right to dispute and to
require Buyer to pursue the dispute of any such invoices, Seller shall pay the amount of CAISO
Charges Invoices within ten(10)Business Days of Seller's receipt of the CAISO Charges Invoice.
If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any
amounts owing to it for such CAISO Charges Invoices against any future amounts it may owe to
Seller under this Agreement. The obligations under this Section with respect to payment of CAISO
Charges Invoices shall survive the expiration or termination of this Agreement.
(e) Dispute Costs. If requested by Seller, Buyer (as the Facility's SC) shall dispute
CAISO settlements in respect of the Facility. Seller agrees to pay Buyer's costs and expenses
(including reasonable attorneys' fees) associated with its involvement with such CAISO disputes
to the extent they relate to CAISO charges payable by Seller with respect to the Facility that Se11er
has directed Buyer to dispute.
(� Terminatin� Buyer's Desi�nation as Scheduling Coordinator. At least thirty (30)
days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier
termination of this Agreement, the Parties will take all actions necessary to terminate the
designation of Buyer as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration
ar earlier termination date.
(g) Master Data File and Resource Data Tem�late. Se11er shall provide the data to the
CAI�SO (and to Buyer) that is required for the CATSO's Master Data Fil� and Resource Data
Template (or successor data systems) for the Facility consistent with this Agreement. Neither
Party shall change such data without the other Party's prior written consent.
Exhibit D-1 - 2
(h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate
reasonably with Seller to the extent necessary to enable Se11er to comply, and for Seller to
demonstrate Seller's compliance with,NERC reliability standards. This cooperation shall include
the provision of information in Buyer's possession that Buyer (as Scheduling Coordinator) has
provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling
Coordinator)related to Seller's compliance with NERC reliability standards.Buyer(as Scheduling
Coordinator) shall be responsible for Buyer's compliance with NERC reliability standards related
to Scheduling Coordinators. Unless otherwise specifically provided for herein, the Parties
acknowledge that Buyer and Seller are both individually responsible for coinpliance with the
WECC and NERC reliability standards and criteria applicable to the functions for which each Party
is respectively registered with NERC. The reference to WECC and NERC reliability standards, if
any, throughout this Agreement does not make any alteration to, or enlargement of, the
requirements or standards applicable to each Party beyond their individual registrations with
NERC; provided, however, each Party shall perform certain functions on behalf of, or in
coordination with, the other Party, as further set forth in this Exhibit D-2.
(i) Settlement Quality Meter Data (SQMD) Reportin�. If Seller elects, or is required
by the CAISO, to register the Facility as a Scheduling Coordinator Metered Entity, and therefore
is required to submit a SQMD Plan for the Facility, then for any time period covered by the
CAISO-approved SQMD Plan, and pursuant to Section 7.1, Seller shall provide or cause to be
provided to Buyer(or Buyer's designee including any Buyer Scheduling Coordinator)with respect
to the Facility Meters, Settlement Quality Meter Data no later than eight (8) Business Days after
the relevant flow date. In connection with any SQMD Plan or designation of the Facility as a
Scheduling Coordinator Metered Entity (as defined in the CAISO Tarif�, Buyer (as Scheduling
Coordinator)shall reasonably cooperate with Se11er and any meter data management agent retained
by Seller to perform on behalf of the Scheduling Coordinator the SQMD Plan submission and
approval process and the obligations required by the SQMD Plan or the CAISO Tariff applicable
to a Scheduling Coordinator Metered Entity,including the submission of Settlement Quality Meter
Data to the CAISO by the meter data management agent retained by Seller on behalf of Buyer,
and such meter data management agent sha11 assist and support the Scheduling Coordinator with
respect to any the submission of reguired affirmations and attestations by the Scheduling
Coordinator (if any). To enable Seller or Seller's meter data management agent to submit
Settlement Quality Meter Data to the CAISO, Buyer shall grant Seller or Seller's meter data
management agent access to use the MRI-S System (or any alternate system designated by the
CAISO) in accordance with the SQMD Plan and the CAISO Tariff; provided, Seller shall
indemnify Buyer against any costs or penalties imposed on Buyer(as Scheduling Coordinator) as
a result of the failure of Se11er or any meter data management agent retained by Seller to submit
or cause to be submitted Settlement Quality Meter Data consistent with the SQMD Plan to the
CAISO, with respect to the Facility Meter(s).
Exhibit D-1 - 3
ExxisiT D-2
BUYER AND SELLER OPERATING COORDINATION
The Parties shall work together after the Effective Date to develop Scheduling and operating
procedures, which the Parties sha11 finalize no later than thirty (30) days prior to the Commercial
Operation Date, or such other date agreed to by the Parties. Procedures may be reviewed annually
(date and time to be mutually agreed), or as needed to account for actual Scheduling and operating
requirements, to optiinize operations for both Parties. The Parties shall cooperate to integrate the
systems and controls necessary to implement such procedures. Such procedures to be developed
may pertain to the following subjects or as otherwise agreed by the Parties: (i) voice and data
communications; (ii)outage management and operational reliability data; (iii)event reporting; (iv)
operating instructions and emergency assistance; and (v) Scheduling and bidding.
Exhibit D-2 - 1
ExxisiT E
PROGRESS REPORTING FORM
Each Progress Report must include the following items:
1. Executive Summary.
2. Facility description.
3. Site plan of the Facility.
4. Description of any material planned changes to the Facility or the site.
5. Gantt chart schedule showing progress on achieving each of the Milestones.
6. Summary of activities during the previous calendar quarter, including any OSHA labor
hour reports.
7. Forecast of activities scheduled for the current calendar quarter or month as applicable.
8. Written description about the progress relative to Seller's Milestones, including whether
Seller has met or is on target to meet the Milestones.
9. List of issues that are likely to potentially affect Seller's Milestones.
10. A status report of start-up activities including a forecast of activities ongoing and after
start-up, a report on Facility performance incl�uding performance projections for the next
twelve (12) months.
1 l. The utilization of union labor by Seller's principal EPC contractor.
12. Progress and schedule of a11 major agreements, contracts, permits, approvals, technical
studies, financing agreements and major equipment purchase orders showing the start
dates, completion dates, and completion percentages.
13. Pictures, in sufficient quantity and of appropriate detail, in order to document construction
and startup progress of the Facility, the interconnection into the Transmission System and
all other interconnection utility services.
14. Any other documentation reasonably requested by Buyer.
Exhibit E - 1
EXHIBIT F
FORM OF MONTHLY FORECAST
Storage Capacity, MW Per Hour— [Insert Month]
1:00 2:00 3:00 4:00 5:00 fi:00 7:00 8:00 9:00 ]0:00 ll:00 12:00 13:00 14:00 15:00 1fi:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00
Day
1
Day
2
Day
3
Day
4
Day
5
[insert additional rows for each day in the month]
Dav
29
Day
30
Day
31
Exhibit F-2 - 1
ExxisiT G
[RESERVED]
E�ibit G - 1
ExxisiT x
FORM OF COMMERCIAL OPERATION DATE CERTIFZCATE
This certification ("Certification") of Commercial Operation is delivered by []ic��sed
pro#`es�it�nal �ngineer] ("Engineer") to Northern California Power Agency, a California joint
powers agency (`Buyer") in accordance with the terms of that certain Energy Storage Service
Agreement dated[Date] by and between [Entity na�e,state c�f"formati�n,typ���enti�] ("Seller")
and Buyer ("Agreement"). All capitalized terms used in this Certification but not otherwise
defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of[I}�te], Engineer hereby certi�es and represents to Buyer the following:
1. The Facility is fully operational, and interconnected, fu11y integrated and
synchronized with the Transmission System.
2. Seller has installed equipment for the Facility with a nameplate capacity of no
less than ninety-five percent (95%) of the Storage Contract Capacity.
3. Seller has commissioned all Facility equipment in accordance with its respective
manufacturer's specifications.
4. Seller has demonstrated functionality of the Facility's communication systems and
automatic generation control (AGC) interface to operate the Facility as necessary to respond
and follow instructions, incl�uding an electronic signal conveying real time and intra-day
instructions, directed by the Buyer in accordance with the Agreement and the CAISO.
5. The Facility is fully capable of charging, storing and discharging energy up to no
less than ninety-five percent (95%) of the Storage Contract Capacity and receiving instructions
to charge, store and discharge energy, all within the operational constraints and subject to the
applicable Operating Restrictions.
6. A�uthorization to parallel the Facility was obtained from the Participating
Transmission Owner.
7. The Transmission Provider has provided documentation supporting full
unrestricted release for Commercial Operation.
8. The PTO has provided notification supporting Commercial Operation, in
accordance with the PTO Tariff, as applicable.
9. Seller shall have caused the Facility to be included in the Full Network Model (as
defined in the CAISO Tariff j and has the ability to offer Bids (as defined in the CAISO Tariff j into
the CAISO Day-Ahead Market and Rea1-Time Market.
E�ibit H - 1
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this day of , 20_.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Exhibit H - 2
ExxisiT I
FORM OF INSTALLED CAPACITY CERTIFICATE
This certification ("Certification") of Installed Capacity is delivered by [1ir,ensed prc�fessii�nal
engineer] ("Engineer") to Northern California Power Agency, a California joint powers agency
(`Buyer") in accordance with the terms of that certain Energy Storage Service Agreement dated
[Date] by and between �Entity name, s�te c�f form�tic�n, ty�� c�f entity] (" eller") and Buyer
("Agreement"). All capitalized terms used in this Certification but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the following:
The Storage Capacity Test demonstrated a maximum operating capability that can be sustained
for four (4) consecutive hours to discharge electric energy of MW to the Delivery Point, in
accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and
Exhibit O (the "Installed Battery Capacity").
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this day of , 20_.
[LICENSED PROFESSIONAL ENGINEER�
By:
Its:
Date:
E�ibit I- 1
ExxisiT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date ("Certification") is delivered by [�'ntify name, state
c�f formation, type +�f entity] ("Seller") to Northern California Power Agency, a California joint
powers agency (`Buyer") in accordance with the terms of that certain Energy Storage Service
Agreement dated [Date] by and between Seller and Buyer ("Agreement"). A11 capitalized terms
used in this Certification but not otherwise de�ned herein shall have the respective meanings
assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
1. Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a
copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is
attached hereto;
2. the Construction Start Date occurred on (the "Construction Start
Date"); and
3. the precise Site on which the Facility is located is:
(such description shall amend the description
of the Site in Exhibit A of the Agreement).
4. Seller or its construction contractor for the Facility has either(i) executed a project
labor agreement with the appropriate building or construction trade unions for construction of the
Facility, or(ii) awarded the contract for construction to a union signatory entity which will employ
a union workforce governed by that entity's existing labor agreements and provided reasonably
reguested documentation demonstrating such compliance.
IN WITNESS WIHEREOF, the undersigned has executed this Certification on behalf of Se11er as
of the_day of
[SELLER ENTITY]
By:
Its:
Date:
Exhibit J- 1
ExxisiT x
FORM OF LETTER OF CREDIT
(issued on behalf of Seller for the benefit of Buver
[BANK NAME and ADDRESS]
Irrevocable Standby Letter of Credit No: Date of Issuance: [1�3���T'i��L7��C�� C��"��];
��r���������������
Beneficiary: Northern California Power Initial Expiration Date: [1�I���b��t l��s��n�
Agency ��r°�f��r c��t� c��'i����r���]
Applicant: [��t����t'��P�.,�C�A�'I��,'�`A�L,�,]
As the Issuing Bank("Issuer"),we, [Bank Name],hereby establish this irrevocable Standby Letter
of Credit No. [I�S��`�` I��F�;���i��]; (this "Letter of Credit") in favor of the above-named
beneficiary (`Beneficiary") for the account of the above-named applicant ("Applicant") in the
amount of LT�� � �"Iil��ca� LT.�d I��l���s�.
Beneficiary may draw all or any portion of this Letter of Credit at any time and from time to time,
and Issuer will make funds immediately available to Bene�ciary upon presentation of
Beneficiary's draft(s) at sight in substantially the form attached hereto as Exhibit "A" ("Sight
Draft"), drawn on Issuer and accompanied by this Letter of Credit.
All Sight Drafts must be purportedly signed on behalf of Beneficiary, and the signator must
indicate his or her title or other official capacity. No other documents will be required to be
presented. Issuer will effect payment under this Letter of Credit within twenty-four (24) hours
after presentment of any Sight Draft. Payment shall be made in U.S. Dollars with Issuer's own
funds in immediately available funds.
Issuer will honor any Sight Draft presented in substantial compliance with the terms of this Letter
of Credit at the Issuer's letterhead office, the office located at , [:Bank Address] or any other full
service office of the Issuer with our close of business on or before the above-stated expiration date,
as such expiration date may be extended hereunder. Partial and multiple draws and presentations
are permitted on any number of occasions. Following any partial draw, Issuer will endorse this
Letter of Credit and return the original to Beneficiary. FUNDS UNDER THIS �ETTER OF CREDIT ARE
AVAILABLE TO BENEFICIARY BY PRESENTATION IN STRICT COMP�IANCE WITH THE TERMS AND
Exhibit K- 1
CONDITIONS OF THIS LETTER OF CREDIT ON OR BEFORE 5:00 P.M., NEW YORK TIME, ON OR BEFORE A
BUSINESS DATE OF THE EXPIRATION DATE.
FOR THE PURPOSES OF THIS LETTER OF CREDIT, "BUSINESS DAY" MEANS ANY DAY OTHER THAN A
SATURDAY, SUNDAY, OR OTHER DAY ON WHICH COMMERCIA� BANKS ARE AUTHORIZED OR REQUIRED
TO CLOSE IN THE STATE OF NEW YORK.
This Letter of Credit is issued pursuant to the provisions of that certain Energy Storage Service
Agreement between Beneficiary and Applicant dated as of , 20_(as the same
may have been or may be amended from time to time,the"PPA"). Notwithstanding any reference
in this Letter of Credit to the PPA or any other documents,instruments or agreements,or references
in the PPA or any other documents, instruments or agreements to this Letter of Credit, this Letter
of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations
of Issuer hereunder.
This Letter of Credit will be automatically extended each year without amendment for a successive
period of one (1)year from the expiration date hereof, as extended, unless at least thirty (30) days
prior to the expiration date, Issuer notifies Beneficiary by registered mail that it elects not to extend
this Letter of Credit for such additional period. Notice of non-extension wi11 be given by Issuer to
Beneficiary at Beneficiary's address set forth herein or at such other address as Beneficiary may
designate to Issuer in writing at Issuer's letterhead address.
This Letter of Credit is freely transferable by Beneficiary in whole or in part, and the number of
transfers is unlimited. Issuer shall effect any transfers immediately upon presentation to Issuer of
this Letter of Credit and a completed written transfer request substantially in the form attached
hereto as Exhibit "B." Such transfer will be effected at no cost to Beneficiary. Any transfer fees
assessed by Issuer will be payable solely by Applicant, and the payment of any transfer fees will
not be a condition to the validity or effectiveness of the transfer of this Letter of Credit.
THIS LETTER OF CREDIT MAY NOT BE TRANSFERRED TO ANY PERSON WITI�
WHICH U.S. PERSONS ARE PROHIBITED FROM DOING BUSINESS UNDER U.S.
FOREIGN ASSETS CONTROL REGULATIONS OR OTHER APPLICABLE U.S. LAWS AND
REGULATIONS
Issuer waives any rights it may have, at law or otherwise, to subrogate to any claims which
Beneficiary may have against Applicant or Applicant may have against Beneficiary.
All commissions, expenses, and charges incurred with this Letter of Credit are for the account of
the Applicant.
This Letter of Credit sets forth in full our undertaking, and such undertaking sha11 not in any way
be modified, amended, amplified or limited by reference to any document, instrument or
agreement referred to herein.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS LETTER OF CREDIT,
BENEFICIARY SHALL HAVE THE OPTION TO PRESENT TO US EAC�I DOCUMENT
REQUIRED UNDER THIS LETTER OF CREDIT AS AN ELECTRONIC OR PORTABLE
DOCUMENT FORMAT (".PDF") ATTACHNIENT TO AN EMAIL. TRANSIVIISSION MADE
Exhibit K
FROM BENEFICIARY'S EMAIL ADDRESS TO US AT OUR EMAIL ADDRESS [1NSERT];
PROVIDED THAT SUCH EMAIL TRANSMISSION MUST CONTAIN THE FOLLOWING
CERTIFICATION"(I)WE CERTIFY THAT WE ARE THE BENEFICIARY OF THE LETTER
OF CREDIT INDICATED IN� THE .PDF ATTACHMENT(S) AND (II) EACH DOCUMENT
WE HAVE TRANSMITTED TO YOU VIA ELECTRONIC MEANS RATHER THAN IN THE
FORM OF A PHYSICAL DOCUMENT REPRODUCES ALL TEST, IMAGES AND OTHER
FEATURES OF TH ORIGINAL DOCUMENT (INCLUDING ANY SIGNATURES AND ANY
UNIVERSALLY UNIQUE IDENTIFIER OR OTHER UNIQUE STRING OF CHARACTERS,
MARKS OR OTHER IDENTIFYING INFORMATION APPEARING ON SUCH DOCUMENT)
AND HAS NOT BEEN ALTERED." ANY SUCH EMAIL TRANSMISSION SHALL BE
DEEMED A SITE DRAFT.
THIS PRESENTATION MAY BE DELIVERED TO US IN ELECTRONIC FORM, AND SUCH ELECTRONIC COPY
SHA�L BE DEEMED TO BE THE ORIGINAL AND VALID FOR PURPOSES OF PRESENTATION HEREUNDER. IN
THE EVENT A REQUEST IS PRESENTED VIA EMAIL TO THE ISSUER, IT IS UNDERSTOOD AND AGREED THAT
THE ISSUER MAY ACT ON SUCH REQUEST WITHOUT THE NEED OR THE OBLIGATION TO SECURE THE
ORIGINAL. IN ANY EVENT, THE ISSUER SHAL� NOT BE LIABLE FOR ANY DISCREPANCY THAT MAY ARISE
BETWEEN THE REQUEST TRANSMITTED BY EMAI�AND THE ORIGINAL REQUEST DELIVERED AS PROVIDED
HEREIN.
THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE 1NTERNATIONAL
STANDBY PRACTICES 1998, 1NTERNATIONAL CHAMBER OF COMMERCE
PUBLICATION NO. 590 ("ISP98"). AS TO MATTERS NOT GOVERNED BY ISP98, THIS
LETTER OF CREDIT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH TI�E LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE
CONFLICT OF LAW PROVISIONS THEREOF THAT WOULD DIRECT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
VERY TRULY YOURS,
[BANK NAME]
Exhibit K
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
Exhibit K
(CONFIDENTIAL) EXHIBIT "A"
TO LETTER OF CREDIT
SIGHT DRAFT
Draft Number
$
At sight (or electronic format as authorized in the Letter of Credit), pay to the order of
[Name of Beneficiary to be inserted],the amount of USD $ (
and O01100ths U.S. Dollars).
Value received and charged to the account of: [BANK NAME and ADRESS]. Drawn under
[BANK NAME] Standby Letter of Credit No.,,;[INSERT REFERENCE]
Dated: Northern California Power Agency
By:
[name and title]
Account: jA��licant to be inserted1
Exhibit K
ExxisiT ��s��
TO LETTER OF CREDIT
FORM OF TRANSFER REQUEST
Irrevocable Standby Letter of Credit No.
Current Beneficiary: Applicant:
To: [Name of Issuer] ("Issuer")
The undersigned, as the current "Beneficiary" of the above-referenced Letter of Credit, hereby
requests that you reissue the Letter of Credit in favor of the transferee named below [insert
transferee name and address below]:
Exhibit K
From and after the date this transfer request is delivered to Issuer, the transferee shall be the
"Beneficiary" under the Letter of Credit for a11 purposes and shall be entitled to exercise and enjoy
all of the rights,privileges and benefits thereof.
Dated: Northern California Power Agency
By:
Name:
Title:
[Notary Acknowledgement]
To be signed by a person purporting to be an authorized representative of Beneficiary and
indicating his or her title or other official capacity, and acknowledged by a notary public.
Exhibit K
ExxisiT L
[RESERVED]
Exhibit L- 1.
ExxisiT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this"Notice") is delivered by [Entity��me,state�f fc�rrnatitrn,type
c�f �ntity] ("Seller") to Northern California Power Agency, a California joint powers agency
("Buyer") in accordance with the terms of that certain Energy Storage Service Agreement dated
[Date] by and between Seller and Buyer ("Agreement"). All capitalized terms used in this Notice
but not otherwise defined herein shall have the respective meanings assigned to such terms in the
Agreement.
Pursuant to Section 3.7(d) of the Agreement, Seller hereby provides the below Replacement RA
product information:
Unit In#orma#i�rng
hl�me
LOCB�.:Cf.,Oil
CAI54 Rescau..mce�IID
U'.n.it SCI�
Prarat�d PerceinKa�e cef Untt Faetoir
Resource l�ype
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Ca�tralled GricS�"subs3atiow�ar transmissi4n
f,irne„)
R�ati�..26(�V�arth...or Southj
LCR.Area..,{[.:f a..,nY�
�eliv�ra6ulity restrictitans„if any,as d'escrikaed
in rnast recernt CAISC3 deliveralbi�idy
ass�ssmriem�&
R.un HQure�R�stn;ctii�ains.
�eliv�ry R�riod
mc�,tn unit cn�so r�qc;ru��v) unat cor�zract c�u�rasixy{mv��
�ancaary
���ar�aary
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Auag�as�
Septembe�
OctQber
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Exhibit M - 1
EXHIBIT N
NOTZCES
Trolley Pass Project LLC Northern Caiifornia Power Agency
("Seller") ("Buyer")
All Notices: All Notices:
11801 Domain Blvd, Suite 450
Austin, TX 78758 Street: 651 Commerce Drive
Attn: Tim Fagan, EVP Asset Management City: Roseville, CA 956'78
Phone: (201) 669 - 9942 Attn: Contract Administration
Email: tfagan@aypa.com Phone: 916-781-4229
Email: tony.zimmer(�a,ncpa.com
Email: mike.whitney@ncpa.com
Reference Numbers: Reference Numbers:
Duns: To be provided separately Duns: To be provided separately
Federal Tax ID Number: To be provided Federal Tax ID Number: To be provided
se aratel separately
Invoices: Invoices:
Attn: Accounting Department Attn: Accounts Payable
Phone: (647) 982 -9296 Phone: 916-'781-4221 /4230
E-mai1: accountin�(a�a�pa.com Email: AcctsPa. a�(a�nc�a.com
Facsimile: 916-781-4255
Scheduling: Scheduling:
Attn: Director of Operations Attn: NCPA Scheduling Desk
Phone: TBD Phone: (DA CAISO Desk)
Email: ops@aypa.com 916-781-4290
Phone: (Rea1 Time Desk)
916-781-4237
Email: Preschedulers nc a.com.
Confirmations: Confirmations:
Attn: Tim Fagan Attn: Tony Zimmer
Email: tfa a�n(cr�ay�a.eom Phone: 916-781-4229
Email: ton .zimmer nc a.com
Payments: Payments:
Attn: See Invoices Attn: See Invoices
Phone: See Invoices Phone: See Invoices
E-mail: See Invoices Email: See Invoices
E�ibit N - 1
Trolley Pass Project LLC Northern California Power Agency
("Seller") (`Buyer")
Wire Transfer: [Seller shall provide to Buyer Wire Transfer:
the information below at least 60 days prior BNK: Information provided upon request
to the Commercial Operation Date.] ABA:
BNK: ACCT:
ABA:
ACCT:
Notices of an Event of Default: Notices of an Event of Default to:
Attn: General Counsel Attn: Jane Luckhardt, General Counsel
11801 Domain Blvd, Suite 450 Phone: 916-781-4268
Austin, TX 78758 Facsimile: 916-781-�693
Phone: (416) 779 -6681 Email: jane.luckhardt�a�,ncpa.com
Email: le�al�c�ayp a.com
With copy to:
With copy to: Attn: Tony Zimmer
Attn: Tim Fagan Phone: 916-781-4229
Phone: (201) 669—9942 Email: tonv.zimmer�a,ncpa.com
Email: tfagan@aypa.com And
Attn: Mike Whitney
Phone: 916-781-4205
Email: mike.whitney@ncpa.com
Emergency Contact: Emergency Contact:
Attn: Dispatch and Scheduling
Phone: 916-781-4281 /4237
Attn: Tim Fagan Email: Dispatch&Scheduling@ncpa.com
Phone: (201) 669 - 9942
Email: tfagan@aypa.com
Exhibit N - 2
ExxisiT o
STORAGE CAPACITY TESTS
Storage Capacitv Test Notice and Frequency
(a) Commercial Operation Date Storage Capacit,v Test. Upon no less than ten Business
Days' prior Notice to Buyer, Seller shall schedule and complete a Storage Capacity Test prior to
the Commercial Operation Date. Such initial Storage Capacity Test shall be performed in
accordance with this Exhibit O and shall establish the initial Storage Capacity and Efficiency
Rate hereunder based on the actual capacity and measured round-trip efficiency of the Facility
determined by such Storage Capacity Test.
(b) Subsequent Storage Ca�acity Tests. Following the Commercial Operation Date,
once each Contract Year, Se11er will perform a Storage Capacity Test and will give Buyer ten
(10) Business Days' prior Notice of such test. Up to twice per Contract Year, Buyer shall have the
right to require Seller to schedule and complete a Storage Capacity Test. In addition, Buyer shall
have the right to require a test or retest of the Storage Capacity Test at any time upon no less than
five (5) Business Days' prior written Notice to Se11er if Buyer provides data with such Notice
reasonably indicating that the Storage Capacity has varied materially from the results of the most
recent Storage Capacity Test. Se11er sha11 have the right to run a retest of any Storage Capacity
Test upon five (5)Business Days' prior written Notice to Buyer (or any shorter period reasonably
acceptable to Buyer consistent with Prudent Operating Practice).
(c) Test Results and Re-Setting of Storage Capacity and Efficienc,v Rate. No later
than five (5) days following any Storage Capacity Test, Seller shall submit a testing report
detailing results and findings of the test. The report sha11 include Facility Meter readings and plant
log sheets verifying the operating conditions and output of the Facility. In accordance with Section
4.9 c of the Agreement and Part II(I) below, the actual Ef�ciency Rate and Storage Capacity
determined pursuant to a Storage Capacity Test (up to, but not in excess of, the original Storage
Contract Capacity set forth on the Cover Sheet, as such original Storage Contract Capacity on the
Cover Sheet may have been adjusted(if at all)pursuant to Exhibit B) shall become the new Storage
Capacity and Efficiency Rate at the beginning of the day following the completion of the test for
calculating the Storage Rate and all other purposes under this Agreement.
(d) Bu_yer's Ri�ht to Witness Storage Ca�acit_�.Buyer sha11 have the right to send
one or more representative(s)to witness all Storage Capacity Tests. Buyer shall(i)comply with all
reasonable and notified Seller health and safety policies and procedures and instructions while
present at the Site, and (ii) shall conduct itself in a manner that will not unreasonably interfere
with the operation of the Facility or other activities of Seller and its subcontractors on the Site.
Buyer acknowledges that it wi11 be eseorted at all times while on the Site.
Storage Capaci�Test Procedures
PART L GENERAL.
Each Storage Capacity Test (including the initial Storage Capacity Test and all re-performances
E�ibit O - 1
thereof� shall be conducted in accordance with Prudent Operating Practice and the provisions of
this Exhibit O. For ease of reference, a Storage Capacity Test is sometimes referred to in this
Exhibit O as a "SCT". Buyer or its representative may be present for the SCT and may, for
informational purposes only, use its own metering equipment(at Buyer's sole cost).
PART II. REQUIREMENTS APPLICABLE TO ALL STORAGE CAPACITY TESTS.
(a) Purpose of Test. Each SCT shall:
i. Determine an updated Storage Capacity;
ii. Determine the amount of energy required to fully charge the Facility;
iii. Determine the Facility charge ramp rate;
iv. Determine the Facility discharge ramp rate;
v. Determine an updated Efficiency Rate.
(b) Test Elements. Each SCT shall include the following test elements:
i. The measurement of charging energy exclusive of Station Use (for clarity, Station
Use during an SCT shall not be subject to the carveout for energy consumed by
end uses during charging and discharging) and Electrical Losses, as measured
by the Facility Meter or other mutually agreed meter, that is required to charge
the Facility up to the Maximum Stored Energy Level (as set forth in Exhibit )
not to exceed the Storage Contract Output (MWh) ("Ener�v In");
ii. The measurement of discharging energy exclusive of Station Use (for clarity,
Station Use during an SCT sha11 not be subject to the carveout for energy
consumed by end uses during charging and discharging) and Electrical Losses,
as measured by the Facility Meter or other mutually agreed meter, that is
discharged from the Facility to the Delivery Point until the Stored Energy Level
reaches zero MWh as indicated by the battery management system ("Ener�y
Out");
iii. Electrical output at Maximum Discharging Capacity (as defined in Exhibit A) at
the Facility Meter(MV�;
iv. Electrical input at Maximum Charging Capacity (as defined in Exhibit A) at the
Facility Meter(MW);
v. Amount of time between the Facility's electrical output going from 0 to
Maximum Discharging Capacity;
vi. Amount of time between the Facility's electrical input going from 0 to
Maximum Charging Capacity;
Exhibit O - 2
vii. Amount of energy required to go from 0% Stored Energy Level to 100% Stored
Energy Level charging at a rate equal to the Maximum Charging Capacity.
(c) Parameters. During each SCT, the following parameters sha11 be measured and
recorded simultaneously for the Facility, at ten(10)minute intervals:
i. discharge time (minutes);
ii. charging energy (MWh);
iii. discharging energy(MWh);
iv. Stored Energy Level (MWh).
(d) Site Conditions. During each SCT, the following conditions at the Site shall be
measured and recorded simultaneously at thirty (30) minute intervals:
i. Relative humidity (%);
ii. Barometric pressure (inches Hg) near the horizontal centerline of the Facility; and
iii. Ambient air temperature (°F).
(e) Test Showin�. Each SCT must demonstrate that the Facility:
i. successfully started;
ii. operated for at least four(4) consecutive hours at Maximum Discharging Capacity
+/- 2%;
iii. operated for at least four (4) consecutive hours at Maximum Charging Capacity
+/- 2%;
iv. has a Storage Capacity of an amount that is, at least, equal to the Maximum Stored
Energy Level (as set forth in E�ibit ); and
v. is able to deliver Discharging Energy to the Delivery Point as measured by the
Facility Meter for four (4) consecutive hours at a rate equal to the Maximum
Discharging Capacity+/-2%.
(� Test Conditions.
i. General. At all times during a SCT, the Facility shall be operated in compliance
with Prudent Operating Practice and all operating protocols recommended,
reguired or established by the manufacturer for operation at Maximum Discharging
Capacity and Maximum Charging Capacity(as each is defined in Exhibit A).
Exhibit O - 3
ii. Abnormal Conditions. If abnormal operating conditions that prevent the
recordation of any required parametex occur during a SCT, Seller may postpone
or reschedule all or part of such SCT in accordance with Part II.G below.
iii. Instrumentation and Meterin�. Seller shall provide all instrumentation, metering
and data collection equipment required to perform the SCT. The instrumentation,
metering and data collection equipment electrical meters shall be calibrated in
accordance with Prudent Operating Practice.
(g) Incomplete Test. If any SCT is not completed in accordance herewith, Buyer may
in its sole discretion: (i) accept the results up to the time the SCT stopped; (ii) require that the
portion of the SCT not completed,be completed within a reasonable specified time period; or (iii)
require that the SCT be entirely repeated. Notwithstanding the above, if Seller is unable to
complete a SCT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO
or the PTO or the Transmission Provider, Seller shall be permitted to reconduct such SCT on
dates and at times reasonably acceptable to the Parties.
(h) Final Re�ort. Within fifteen (15) Business Days after the completion of any SCT,
Seller sha11 prepare and submit to Buyer a written report of the results of the SCT, which report
shall include:
i. a record of the personnel present during the SCT that served in an operating, testing,
monitoring or other such participatory role;
ii. the measured data for each parameter set forth in Part ILA through C, including
copies of the raw data taken during the test;
iii. the level of Storage Capacity, Energy In, Energy Out, Efficiency Rate,
Maximum Charging Capacity, the current charge and discharge ramp rate, and
Stored Energy Leve1 determined by the SCT, including supporting calculations;
and
iv. Seller's statement of either Seller's acceptance of the SCT or Seller's rejection
of the SCT results and reason(s)therefor.
Within ten(10)Business Days after receipt of such report, Buyer shall notify Seller
in writing of either Buyer's acceptance of the SCT results or Buyer's rejection of
the SCT and reason(s) therefor.
If either Party rejects the results of any SCT, such SCT shall be repeated in
accordance with Part ILG.
(i) Supplementary Storage Capacity Test Protocol. No later than sixty (60) days prior
to commencing Facility construction, Se11er shall deliver to Buyer for its review and approval
(such approval not to be unreasonably delayed or withheld) an updated supplement to this
Exhibit O with additional and supplementary details, procedures and requirements applicable to
Storage Capacity Tests based on the then current design of the Facility ("Supplementary Stora�e
Capacity Test Protocol"). Thereafter, from �ime to time, Se11er may deliver to Buyer for its
Exhibit O -4
review and approval (such approval not to be unreasonably delayed or withheld) any Seller
recommended updates to the then current Supplementary Storage Capacity Test Protocol. The
initial Supplementary Storage Capacity Test Protocol (and each update thereto), once approved
by Buyer, shall be deemed an amendment to this Exhibit O.
(j) Adjustment to Storage Capacity. The total amount of Discharging Energy delivered
to the Delivery Point(expressed in MWh-AC) during each of the first four(4)hours of discharge
(up to, but not in excess of, the product of (i) the Storage Contract Capacity set forth on the
Cover Sheet, as such Storage Contract Capacity on the Cover Sheet may have been adjusted(if
at all)under this Agreement,multiplied by(ii) four (4) hours), shall be divided by four (4) hours
to determine the Storage Capacity,which shall be expressed in MW, and sha11 be the new Storage
Capacity in accordance with Section 4.9(c) of the Agreement until updated pursuant to a
subsequent Storage Capacity Test.
(k) Adjustment to Efficiency Rate. The total amount of Energy Out(as reported in Part
II.B above) divided by the total amount of Energy In (as reported in Part ILB above), measured
at the Facility Meter location, and expressed as a percentage, shall be the new Efficiency Rate,
and shall be used for the calculation of liguidated damages (if any) under Exhibit C until updated
pursuant to a subsequent Storage Capacity Test.
Part III. SUPPLEMENTARY STORAGE CAPACITY TEST PROTCOL
(a) Conditions Precedent to SCT
(j) Control System Functionality: The Facility control system shall be
successfully configured to receive data from the battery system, exchange
distributed network protocol 3 data with the Buyer SCADA device, and
transfer data to the database server for the calculation,recording and archiving
of data points.
i. Communications: Remote Terminal Unit (RTU) testing should be successfully
completed prior to SCT. The interface between Buyer's RTU and the Facility
SCADA system should be fu11y tested and functional prior to starting testing. This
includes verification of data transmission pathway between the Buyer's RTU and
Seller's control system interface and the ability to record SCADA data.
ii. Commissionin� Checklist: Commissioning checklist shall be successfully
completed on a11 installed facility equipment, including verification that all
controls, set points, and instruments of the control system are configured.
iii. Control System Functionality: The control system is operable within the
requirements and has been successfully configured to receive data from the
battery system and transfer data to the onsite servers for the calculation,
recording and archiving of data points.
iv. The following Commercial Operation tests wi11 be repeated annually and to the
extent feasible may be conducted simultaneously with any other tests:
Exhibit O - 5
• PMAX Capacity Test
• Round-Trip Efficiency and Energy Test
(b) PMAX Capacity Test
i. Purpose: This test will demonstrate the PMAX and wi11 hold the Facility's
maximum operating level (MW), up to the Storage Capacity, for up to five (5)
minutes ("Qualified Power Capacitv").
ii. Procedure:
a. System starting state: The Facility will be in the on-line state with each
battery subsystem at 100% usable state of charge (SOC) and at an initial
active power level of 0 MW and reactive power level of 0 MVAR.
b. Record the Facility active power level at the Facility Meter.
c. Command the Facility to follow a signal equal to the Facility's
maximum operating level for five (5)minutes.
d. Record and store the Facility active power response. Measurements will be
made at the Facility Meter and by the control system with a recording in
the Facility historian.
e. System end state: The Facility will be in the on-line state and at a
commanded active power level of 0 MW.
PasslF"ail Criteria
The Facility active power response and the commanded level shall be within�2% as
measured by the sum of values at the Facility Meter. The time to full output shall be less
than 2 seconds subject to CAISO or Transmission Owner limitations to the contrary.
The hold period of such active power value sha11 be five (5)minutes and recorded in the
control system historian.
Passed F�iled T7ate:
Test Perfarmed by:
T�st Witnessed by;
(c) Round-Trip Efficiency and Energy Test
i. The following test demonstrates the updated Efficiency Rate and amount of
energy required to fully charge the Facility (when performed annually or ad hoc).
Exhibit O - 6
a. The resulting quantity of discharging energy is the Energy Out (as
reported in Part II.B above) and the resulting quantity of charging
energy is the Energy In (as reported in Part II.B above).
b. The Qualified Energy is the sum of the total quantity of Discharging
Energy at the Facility Meter.
c. The Facility will be operated in both the charge and discharge directions in
the following order:
d. [Seller to specify, example language below]
e. [Set each Battery Subsystem to[3%J SOC.
£ Allow each Battery Subsystem to enter background cell balancing mode by
maintaining a SOC of[3% for 20 minutesJ. Afte� the backg�ound cell
balancing inode begins the system can be operated as normal.Allow the cell
balancing function to operate in the backg�ound for at least 24 hours to
allow the automatic cell balancing procedure to reach completion. This
time inay be �educed based on equiprnent supplie�s' �ecommendations.
g. Discharge each Batte�y Subsystein to 0%SOC.
h. Immediately perfor m the Round-T�ip Efficiency and Capacity Test set
.forth below.J
i. To be valid, the SCT must be started within twenty-four (24) hours of the
end of the period (greater than four (4) days) during which cell balancing
was completed. For the duration of the SCT, the control system will be
configured to have the power limiting mechanisms disabled, and each
battery subsystem shall be configured to follow the charge and discharge
current limits specified by their respective battery management system.
(d) Procedure:
i. System Starting State: The Facility will be in the on-line state with each Battery
Subsystem at 0% SOC.
ii. Verify that in the previous twenty-four (24) hour period, each Battery Subsystem
completed the ce11 balancing procedure allowing full ce11 balancing to occur, as
described in steps i-iv.
iii. Record initial values of each Battery Subsystem SOC.
iv. Command a real power charge that results in an AC power of Facility's full
charging power and continue the charge until the power is 2% different.
Exhibit O - 7
v. Record and store the AC energy charged to the system as measured at the Facility
Meter. Measurements will be made by the Facility Meter with recording in the
Facility historian.
1. Within 30 minutes, command a real power discharge that results in an AC
power output of the Facility's maximum discharge power.
vi. Maintain the discharging until the power is 2% different.
vii. Record and store the AC energy discharged as measured at the Facility Meter.
Measurements will be made by the Facility Meter with recording in the Facility
historian.
PasslFai� Criteria
The measured Efficiency Rate is greater than or equal to the Guaranteed Efficiency
Rate. The Qualified Energy is greater than or equal to the Storage Contract Output.
I'assed Fai��d t?�te:
Test 1'erfQrrned by:
'I'est Witnessed by:
Exhibit O - 8
EXHIBIT P
STORAGE FACILITY AVAILABILITY
Ro in Monthlv Avera�e Stora�e Availabilitv and Monthlv Stora�e Availabilitv
(a) Calculation of Monthly Storage Availability. Seller sha11 calculate the "Monthlv
Stora�e Availabilitv" in a given month using the formula set forth below:
��T�r���l�l�������a�,�=a�Ll�b�l�����°���_
r����� ���������.��
����'��������
where:
m =relevant month"m" in which availability is calculated;
MNTHHRS„1 is the total number of hours for the month.
UNAVAILHRSrn, is the total number of hours in the month during which the Facility was
unavailable to deliver Storage Product as reported in ether (a) Seller's most recent Availability
Notice or (b) by Seller's real-time EMS data feed to Buyer for the Facility, for any reason other
than the occurrence of any of the following (each, an "Excused Event"): a Force Majeure
Event,Approved Maintenance Hours,Curtailment Orders, Buyer Failure, Storage Capacity Tests,
System Emergencies, or the Operating Restrictions in Exhibit . To be clear, hours of
unavailability caused by any Excused Event will not be included in ITNAVAILHRSm for such
month. Any other event that results in unavailability of the Facility for less than a fu11 hour (as
reported in either(a)or(b)above)will count as an equivalent percentage of the applicable hour(s)
for this calculation. Additionally, if during any applicable hour the Facility is available, but
for less than the full amount of the then effective Storage Capacity, the LTNAVAiLIHRSm for
such hour, or partial hour, shall be calculated by multiplying such LTNAVAILHRSm by a
percentage determinedby dividing by(b); where(a)is the lower of such capacity amount reported
as unavailable by (i) Seller's real-time EMS data feed to Buyer for the Facility for such hours,
or partial hours, and(ii) Seller's most recent Availability Notice (as updated pursuant to Section
4.3 d ), and(b) is the then effective Storage Capacity.
If the Facility ar any component thereof was previously deemed unavailable for an hour or part of
an hour and Seller provides a revised Availability Notice indicating the Facility is available for that
hour or part of an hour prior to the time the Buyer is required to schedule or bid the Facility
in the Real-Time Market, and the Facility is reported as available in Seller's real-time EMS data
feed to Buyer for the Facility for such hour, or partial hour, the Facility will be deemed to be
available to the extent set forth in the revised Availability Notice.
(b) Rollin� Monthlv Average Stora�e Availability. Seller shall calculate an "Rollin� 1VIonthly
Avera�e Storage Availabilit "for each month of the Delivery Term by averaging the Monthly
Storage Availabilities for each of the prior twelve (12)months;pNovided, for each month of the
first(1 st)Contract Year, Seller shall calculate the Rolling Monthly Average Storage Availability
Exhibit P - 1
utilizing a Monthly Availability of 96% for any months that do not have a Monthly Storage
Availability.
Availabilitv Adjustment
The applicable"Availabilitv Adjustment" or"AA"is calculated as follows:
i. If the Rolling Monthly Average Storage Availability is greater than or equal to
the Guaranteed Storage Availability, then:
AA= 100%
ii. If the Rolling Monthly Average Storage Availability is less than the Guaranteed
Storage Availability,then:
AA = 100% - (the Guaranteed Storage Availability — Rolling Monthly
Average Storage Availability)
Exhibit P - 2
ExxisiT Q
OPERATING RESTRICTIONS
The Parties will develop and finalize the Operating Restrictions prior to the Commercial Operation Date,
provided that the Operating Restrictions (i) may not be materially more restrictive of the operation
of the Facility than as set forth below, unless agreed to by Buyer in writing, (ii) will, at a minimum,
include the rules, requirements and procedures set forth in this Exhibit , (iii) wi11 include protocols
and parameters for Seller's operation of the Facility in the absence of Charging Notices, Discharging
Notices or other similar instructions from Buyer relating to the use of the Facility,and(iv) may include
Facility Scheduling, Operating Restrictions and Communications Protocols.
Interconnection Capacity Limit: 300 MW
Maximum Stored Energy Level: 1,200 MWh
Minimum Stored Energy Level: 0 MWh
Maximum Charging Capacity: 300 MW
Minimum Charging Capacity: 0.01 MW
Maximum Discharging Capacity: 300 MW
Minimum Discharging Capacity: 0.01 MW
Maximum State of Charge (SOC) during 100%
Charging:
Minimum State of Charge (SOC) during 0%
Discharging:
Ramp Rate: The Facility sha11 have the ability to discharge
at Maximum Discharging Capacity in two
seconds and shall reflect this ability in the
Facility Master File submitted to the CAISO to
the extent CAISO does not generally limit the
ability to do so.
Annual Cycles per Contract Year: 365 cycles with no monthly cap
Daily Dispatch Limits: Charging: 1.5 per day
Discharging: 1.5 per
Maximum Time at Minimum Stored N/A
Energy Level:
Grid Charging of Facility: Yes
E�ibit Q - 1
Response Time: The Facility shall have the ability to execute the
commanded power within two (2) seconds and
shall reflect this ability in the Facility Master
File submitted to the CAISO to the extent
CAISO does not generally limit the ability to do
so.
Ancillary Services Capability: The Facility shall be able to provide the
following Ancillary Services: spinning reserve,
non-spinning reserve, regulation up, and
regulation down; provicled, Ancillary Services
may be expanded in accordance with Section
4.5(�).
Exhibit Q - 2
EXHIBIT R
METERING DIAGRAM
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�+:$'+"�.`�'P�.'�.^f'd+wk+.�'&a%UC�GE ______ _________ _________ _________ _________ _________ ________ y� + }
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_______ _________ _________ ____ __ ____________" r����i����w�G�l�t:�
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Exhibit R- 1
THIRD PHASE AGREEMENT
FOR
ENERGY STORAGE SERVICE AGREEMENT
WITH
TROLLEY PASS PROJECT LLC
TAPLE OF CONTENTS
Section1. Definitions ....................................................................................................3
Section2. Purpose .......................................................................................................10
Section 3. Sale and Purchase of Product..................................................................10
Section 4. Billing and Payments................................................................................11
Section 5. Security Deposit Administration.............................................................13
Section 6. Cooperation and Further Assurances.....................................................19
Section 7. Participant Covenants and Defaults.......................................................19
Section 8. Administration of Agreement .................................................................23
Section 9. Transfer of Rights by Participants...........................................................25
Section 10. Term and Termination..............................................................................26
Section 11. Withdrawal of Participants......................................................................26
Section 12. Settlement of Disputes and Arbitration .................................................26
Section 13. Miscellaneous.............................................................................................26
EXHIBIT A. Project Participation Percentages...........................................................40
EXHIBIT B. Eenergy Storage Services Agreement ....................................................41.
i
THIRD PHASE AGREEMENT FOR BATTERY ENERGY STORAGE AGREEMENT
This THIRD PHASE AGREEMENT ("this Agreement") is dated as of
, 20_by and among the Northern California Power Agency, a joint
powers agency of the State of California ("NCPA"), and the signatories to this Agreement
other than NCPA ("Participants"). NCPA and the Participants are referred to herein
individually as a "Party" and collectively as the "Parties".
RECITALS
A. NCPA has heretofore been duly established as a public agency pursuant to
the Joint Exercise of Powers Act of the Government Code of the State of California and,
among other things, is authorized to acquire, construct, finance, and operate buildings,
works, facilities, and improvements for the generation and transmission of electric
capacity and energy for resale.
B. Each of the Participants is a signatory to the Joint Powers Agreement which
created NCPA and therefore is a Member.
C. Each of the Participants to this Agreement have executed the Amended and
Restated Facilities Agreement, dated October 1, 2014, which establishes the framework
under which Project Agreements are created for the development, design, financing,
construction, and operation of specific NCPA Projects.
1
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
D. The Participants desire NCPA to enter into an Energy Storage Service
Agreement ("ESSA") with Trolley Pass Project LLC ("Seller"), to purchase the Product for
the benefit of the Participants' customers.
E. Each Participant is authorized by its Constitutive Documents to obtain the
Product for its present or future requirements, through contracts with NCPA or otherwise.
F. To enable NCPA to enter into the ESSA on behalf of the Participants,
pursuant to the terms and conditions of the Amended and Restated Facilities Agreement,
NCPA and the Participants wish to enter into this Agreement to provide al1 means
necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the Participants
pursuant to the ESSA, and to enable and obligate the Participants to take delivery of and
pay for the Product and to pay NCPA for all costs it incurs for undertaking the foregoing
activities.
G. Upon full execution of this Agreement, NCPA will enter into the ESSA on
behalf of the Participants, and such ESSA shall be deemed a NCPA Project by the
Commission.
H. Each of the Parties intends to observe the provisions of this Agreement in
good faith and shall cooperate with all other Parties in order to achieve the full benefits of
joint action.
I. The Parties desire to equitably allocate costs of NCPA's provision of services
under this Agreement among the Participants.
2
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
J. The Participants further desire, insofar as possible, to insulate other
Members who are not Participants, from risks inherent in the services and transactions
undertaken on behalf of the Participants pursuant to this Agreement.
NOW, THEREFORE, the Parties agree as follows:
Section 1. Definitions.
1.1 Definitions. Whenever used in this Agreement (including the Recitals
hereto), the following terms shall have the following respective meanings, provided,
capitalized terms used in this Agreement (including the Recitals hereto) that are not
defined in Section 1 of this Agreement shall have the meaning indicated in Section 1 of the
Power Management and Administrative Services Agreement, dated October 1, 2014:
1.1.1 "Actual Contract Price Increase" has the meaning set forth in
Section 1.1 of the ESSA.
1.1.2 "Administrative Services Costs" means that portion of the NCPA
administrative, general and occupancy costs and expenses, including those costs and
expenses associated with the operations, direction and supervision of the general
affairs and activities of NCPA, general management, treasury operations, accounting,
budgeting, payroll, human resources, information technology, facilities management,
salaries and wages (including retirement benefits) of employees, facility operation and
maintenance costs, taxes and payments in lieu of taxes (if any), insurance premiums,
fees for legal, engineering, financial and other services, power management services,
3
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
general settlement and billing services and general risk management costs, that are
charged directly or apportioned to the provision of services under this Agreement.
Administrative Services Costs as separately defined herein and used in the context of
this Agreement is different and distinct from the term Administrative Services Costs as
defined in Section 1 of the Power Management and Administrative Services
Agreement.
1.1.3 "Agreement" means this Third Phase Agreement, including all
Exhibits attached hereto.
1.1.4 "A11 Resources Bill" has the meaning set forth in the Power
Management and Administrative Services Agreement.
1.1.5 "CAISO" means the California lndependent System Operator
Corporation, or its functional successor.
1.1.6 "CAISO Tariff" means the duly authorized tariff, rules, protocols
and other requirements of the CAISO, as amended from time to time.
1.1.7 "Change in Tax Law" has the meaning set forth in Section 1.1 of
the ESSA.
1.1.8 "Commercial Operation Date" has the meaning set forth in Section
1.1 of the ESSA.
1.1.9 "Commission" has the meaning set forth in the Power
Management and Administrative Services Agreement.
4
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
1.1.10 "Constitutive Documents" means, with respect to NCPA, the Joint
Powers Agreement and any resolutions or bylaws adopted thereunder with respect to
the governance of NCPA, and with respect to each Participant, the California
Government Code and other statutory provisions applicable to such Participant, any
applicable agreements, charters, contracts, or other documents concerning the
formation, operation or decision making of such Participant, including, if applicable, its
city charter, and any codes, ordinances, bylaws, and resolutions adopted by such
Participant's governing body.
1.1.11 "Contract Price" has the meaning set forth in Section 1.1 of the
ESSA.
1.1.12 "Defaulting Participant" has the meaning set forth in Section �.2.
1.1.13 "Electric System" has the meaning set forth in the Power
Management and Administrative Services Agreement.
1.1.14 "Event of Default" has the meaning set forth in Section 7.2.
1.1.15 "Facility" has the meaning set forth in Section 1.1 of the ESSA.
1.1.16 "Fina1 Independent Report" has the meaning set forth in Section
1.1 of the ESSA.
1.1.17 "General Operating Reserve" means the NCPA General Operating
Reserve created through resolution of the Commission, as the same may be amended
from time to time.
5
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
1.1.18 "Initial Independent Report" has the meaning set forth in Section
1.1 of the ESSA.
1.1.19 "MW" means megawatt.
1.1.20 "MWh" means megawatt hour.
1.1.21 "NCPA" has the meaning set forth in the Recitals hereto.
1.1.22 "Participant" has the meaning set forth in the recitals of this
Agreement.
1.1.23 "Party" or "Parties" has the meaning set forth in the preamble
hereto; provided that "Third Parties" are entities that are not Party to this Agreement.
1.1.24 "Power Management and Administrative Services Agreement"
means the NCPA Power Management and Administrative Services Agreement, dated
as of October 1, 2014, between NCPA and the Members who are signatories to that
agreement by which NCPA provides Power Management and Administrative Services.
1.1.25 "Product" has the meaning set forth in Section 1.1 of the ESSA.
1.1.26 "Project" or "ESSA" means the Energy Storage Service Agreement,
dated as of , 20_between NCPA and Seller, under which NCPA, on
behalf of the Participants, purchases Product from the Facility located in San
Bernardino County, California, consisting of a separately metered 300 MWac section of
a larger battery energy storage facility commonly known as the Trolley Battery Energy
Storage Project. Upon final execution of the ESSA, the Project shall be deemed a NCPA
6
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
Project in accordance with the Amended and Restated Facilities Agreement. The ESSA
has been attached to this Agreement as Exhibit B.
1.1.27 "Project Costs" means all costs charged to and paid by NCPA
pursuant to the ESSA.
1.1.28 "Project Participation Percentage" has the meaning set forth in the
Power Management and Administrative Services Agreement, and are set forth in
Exhibit A of this Agreement.
1.1.29 "Proposed Contract Price Increase" has the meaning set forth in
Section 1.1 of the ESSA.
1.1.30 "Proposed Contract Price Increase Cap" has the meaning set forth
in Section 1.1 of the ESSA.
1.1.31 "Revenue" means, with respect to each Participant, all income,
rents, rates, fees, charges, and other moneys derived by the Participant from the
ownership or operation of its Electric System, including, without limiting the generality
of the foregoing: (a) all income, rents, rates, fees, charges or other moneys derived from
the sale, furnishing and supplying of electric capacity and energy and other services,
facilities, and commodities sold, furnished, or supplied through the facilities of its
Electric System; (b) the earnings on and income derived from the investment of such
income, rents, rates, fees, charges or other moneys to the extent that the use of such
earnings and income is limited by or pursuant to law to its Electric System; (c) the
7
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
proceeds derived by the Participant directly or indirectly from the sale, lease or other
disposition of all or a part of the Electric System; and (d) the proceeds derived by
Participant directly or indirectly from the consignment and sale of freely allocated
greenhouse gas compliance instruments into periodic auctions administered by the
State of California under the California Cap-and-Trade Program, provided that such
proceeds are a permitted use of auction proceeds, but the term Revenues shall not
include (i) customers' deposits or any other deposits subject to refund until such
deposits have become the property of the Participant or (ii) contributions from
customers for the payment of costs of construction of facilities to serve them.
1.1.32 "Scheduling Protocols" means the applicable provisions of the
Amended and Restated Scheduling Coordination Program Agreement, and any other
contractual or other arrangements between NCPA and the Participants concerning the
scheduling, delivery and metering of the ESSA.
1.1.33 "Security Deposit" means the account established by NCPA and
funded by the Participants in accordance with Section 5, the funds of which are
available for use by NCPA in accordance with the terms and conditions hereof.
1.1.34 "Seller" means Trolley Pass Project LLC, as set forth in Recital D of
this Agreement, or as otherwise set forth in the ESSA.
1.1.35 "Storage Contract Capacity" has the meaning set forth in Section
1.1 of the ESSA.
8
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
1.1.36 "Supply Chain Event" has the meaning set forth in Section 1.1 of in
the ESSA.
1.1.37 "Term" has the meaning set forth in Section 10.
1.1.38 "Third Party" means an entity (including a Member) that is not
Party to this Agreement.
1.2 Rules of Interpretation. As used in this Agreement (including the Recitals
hereto), unless in any such case the context requires otherwise: The terms "herein,"
"hereto," "herewith" and "hereof" are references to this Agreement taken as a whole and
not to any particular provision; the term "include," "includes" or "including" sha11 mean
"including, for example and without limitation;" and references to a "Section,"
"subsection," "clause," "Appendix", "Schedule", or "Exhibit" shall mean a Section,
subsection, clause, Appendix, Schedule or Exhibit of this Agreement, as the case may be.
All references to a given agreement, instrument, tariff or other document, or law,
regulation or ordinance shall be a reference to that agreement, instrument, tariff or other
document, or law, regulation or ordinance as such now exists and as may be amended
from time to time, or its successor. A reference to a "person" includes any individual,
partnership, firm, company, corporation,joint venture, trust, association, organization or
other entity, in each case whether or not having a separate legal personality and includes
its successors and permitted assigns. A reference to a "day" shall mean a Calendar Day
9
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
unless otherwise specified. The singular shall include the plural and the masculine shall
include the feminine, and vice versa.
Section 2. Pur�ose. The purpose of this Agreement is to: (i) set forth the terms and
conditions under which NCPA shall enter into the ESSA on behalf of the Participants, (ii)
authorize NCPA, acting on behalf of the Participants, to engage in all activities related to
that basic purpose, and (iii) specify the rights and obligations of NCPA and the
Participants with respect to the ESSA.
Section 3. Sale and Purchase of Product. By executing this Agreement, each
Participant acknowledges and agrees to be bound by the terms and conditions of the
Agreement, and that the Agreement is written as a "take-or-pay" agreement. Any Product
delivered to NCPA under the ESSA shall be delivered to each Participant in proportion to
such Participant's Project Participation Percentage as set forth in Exhibit A, and each
Participant shall accept and pay for its respective percentage of such Product. To the
extent a Participant is unable to accept such deliveries in ful1, NCPA shall dispose of such
surplus in its sole discretion, in such a manner to attempt to maximize Participant value
and that Participant shall reimburse to NCPA any costs incurred by NCPA in doing so.
Notwithstanding the above, NCPA may allocate Product procured through the ESSA
among the Participants in such percentages as NCPA may, in its reasonable discretion,
determine are necessary, desirable, or appropriate, in order to accommodate Participant
transfer rights pursuant to Section 9.
10
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
3.1 Schedulin�. Product delivered from Seller shall be scheduled for and to the
Participants in accordance with Scheduling Protocols, and the terms and conditions of the
ESSA.
Section 4. Billing and Payments
4.1 Participant Pa�ment Obli at� ions• Each Participant agrees to pay to NCPA
each month its respective portion of the Project Costs, Administrative Services Costs,
scheduling coordination costs, and all other costs for services provided in accordance with
this Agreement and the Amended and Restated Facilities Agreement. In addition to the
aforementioned monthly payment obligations, each Participant is obligated to fund: (i)
any and all required Security Deposits calculated in accordance with Section 5, and (ii) any
working capital requirements for the Project maintained by NCPA as determined,
collected and set forth in the Annual Budget.
4.2 Invoices. NCPA will issue an invoice to each Participant for its share of
Project Costs, Administrative Services Costs, scheduling coordination costs, and all other
costs for services provided in accordance with this Agreement and the Amended and
Restated Facilities Agreement. Such invoice may be either the All Resources Bill or
separate special invoice, as determined by NCPA. At NCPA's discretion, invoices may be
issued to Participants using electronic media or physical distribution.
4.3 Pa�ment of Invoices. All invoices delivered by NCPA (including the All
Resources Bill) are due and payable thirty (30) Calendar Days after the date thereof;
11
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
provided, however, that any amount due on a day other than a Business Day may be paid
on the following Business Day.
4.4 Late Pa�ments. Any amount due and not paid by a Participant in accordance
with Section 4.3 shall be considered late and bear interest computed on a daily basis until
paid at the lesser of(i) the per annum prime rate (or reference rate) of the Bank of America
NT&SA then in effect, plus two percent (2%) or (ii) the maximum rate permitted by law.
4.5 Billin�Disputes. A Participant may dispute the accuracy of any invoice
issued by NCPA under this Agreement by submitting a written dispute to NCPA, within
thirty (30) Calendar Days after the date of such invoice; nonetheless the Participant sha11
pay the full amount billed when due. If a Participant does not timely question or dispute
the accuracy of any invoice in writing, then the invoice shall be deemed to be correct.
Upon review of a submitted dispute, if an invoice is determined by NCPA to be incorrect,
then NCPA sha11 issue a corrected invoice and refund any amounts that may be due to the
Participant. If NCPA and the Participant fail to agree on the accuracy of an invoice within
thirty (30) Calendar Days after the Participant has disputed it, then the General Manager
shall promptly submit the dispute to the Commission for resolution. If the Commission
and the Participant fail to agree on the accuracy of a disputed invoice within sixty (60)
Calendar Days after its submission to the Commission, then the dispute may then be
resolved under the mediation and arbitration procedures set forth in Section 12 of this
12
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
Agreement; provided, however, that prior to resorting to either mediation or arbitration
proceedings, the full amount of the disputed invoice must be paid by the Participant.
4.6 Billin�;/Settlement Data and Examination of Books and Records.
4.6.1 Settlement Data. NCPA shall make billing and settlement data
available to the Participants in the All Resources Bill, or other invoice, or upon request.
NCPA may also, at its sole discretion, make billing and settlement support information
available to Participants using electronic media (e.g. electronic data portal).
Procedures and formats for the provision of such electronic data submission may be
established by the Commission from time to time. Without limiting the generality of
the foregoing, NCPA may, in its reasonable discretion, require the Participants to
execute a non-disclosure agreement prior to providing access to the NCPA electronic
data portal.
4.6.2 Examination of Books and Records. Any Participant to this
Agreement shall have the right to examine the books and records created and
maintained by NCPA pursuant to this Agreement at any reasonable, mutually agreed
upon time.
Section 5. Security De�osit Administration
5.1 Securitv Deposit ReQuirements. Each Participant agrees that any funds
deposited at NCPA to satisfy Participant's Security Deposit requirements pursuant to this
Agreement shall be irrevocably committed and held by NCPA in the General Operating
13
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
Reserve, and that such funds may be used by NCPA in accordance with Section 5.1.3.
Each Participant's Security Deposit will be accounted separately from and in addition to
any other security accounts or deposits maintained pursuant to any other agreement
between NCPA and the Participant, or any other such security account or deposits
required of Members. In connection with fulfilling the Security Deposit requirements of
this Agreement, Participant may elect to use its uncommitted funds held in the General
Operating Reserve to satisfy in whole or in part its Security Deposit required under
Section 5. If Participant chooses to satisfy in whole or in part its security requirements
using its uncommitted funds held in the General Operating Reserve, then Participant is
required to execute and deliver to NCPA an Irrevocable Letter of Direction, directing
NCPA to utilize Participant's uncommitted General Operating Reserve funds for such
purposes, and the designated funds will thereafter be irrevocably committed and held by
NCPA to satisfy the requirements of this Agreement.
5.1.1 Initial Amounts. No later than ninety (90) day prior to the
Commercial Operation Date, each Participant sha11 ensure that sufficient Security
Deposit funds have been deposited with and are held by NCPA in an amount not
greater than the highest three (3) months of estimated Project Costs, as estimated by
NCPA. Such Security Deposit requirement may be satisfied by Participant in whole or
part either in cash, through irrevocable commitment of its uncommitted funds held in
14
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
the General Operating Reserve in accordance with Section 5.1, or through a clean,
irrevocable letter of credit satisfactory to NCPA's General Manager.
5.1.2 Subsec�uent De�osits. Periodically, and at least quarterly, NCPA
shall review and revise its estimate of Project Costs for which Participant shall be
obligated to pay under this Agreement. Following such review, NCPA shall determine
whether each Participant has a sufficient Security Deposit balance at NCPA. To the
extent that any Participant's Security Deposit balance is greater than one hundred and
ten percent (110%) of the amount required herein, NCPA sha11 credit such amount as
soon as practicable to the Participant's next following All Resources Bill, or by separate
special invoice. To the extent that any Participant's Security Deposit balance is less
than ninety percent (90%) of the amount required herein, NCPA shall add such amount
as soon as practicable to such Participant's next A11 Resources Bi11, or as necessary, to a
special invoice to be paid by Participant upon receipt. Credits or additions shall not be
made to Participants who satisfy these Security Deposit requirements in whole through
the use of a letter of credit; provided, that the amount of the letter of credit sha11 be
adjusted, as required from time to time, in a like manner to assure an amount not to
exceed the highest three (3) months of estimated Project Costs is available to NCPA, as
determined by NCPA.
5.1.3 Use of Securitv Deposit Funds. NCPA may use any and all
Security Deposit funds held by NCPA (or utilize a letter of credit provided in lieu
15
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
thereof) to pay any costs it incurs hereunder, including making payments to Seller,
without regard to any individual Participant's Security Deposit balance or
proportionate share of Project Costs, and irrespective of whether NCPA has issued an
All Resources Bill or special invoice for such costs to the Participants or whether a
Participant has made timely payments of All Resources Bills or special invoices.
Should Participant have satisfied its Security Deposit requirements in whole or part
through a letter of credit, NCPA may draw on such letter of credit to satisfy
Participant's obligations hereunder at NCPA's sole discretion. Notwithstanding the
foregoing, if any Participant fails to pay any costs incurred by NCPA pursuant to this
Agreement, NCPA shall first use that non-paying Participant's Security Deposit and
shall not use any other Participants' Security Deposit until such non-paying
Participant's Security Deposit has been exhausted.
5.1.4 Accountin�. If Security Deposit funds or a letter of credit are used
by NCPA to pay any costs it incurs hereunder as described in Section 5.1.3, then NCPA
will maintain a detailed accounting of each Participant's shares of funds withdrawn,
and upon the collection of all or a part of such withdrawn funds, NCPA will credit
back to each non-defaulting Participant the funds collected in proportion to such non-
defaulting Participant's share of funds initially withdrawn.
5.1.5 Emer�encv Additions. In the event that funds are withdrawn
pursuant to Section 5.1.3, or if the Security Deposit held by NCPA is otherwise
16
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
insufficient to allow for NCPA to pay any invoice, demand, request for further
assurances by Seller, or claims, NCPA sha11 notify all Participants of the deficiency. In
conjunction with such notice, NCPA shall send a special or emergency assessment
invoice to the Participant or Participants that caused or are otherwise responsible for
the deficiency. Each Participant of such an invoice shall pay to NCPA such assessment
when and if assessed by NCPA within two (2) Business Days of the invoice date of the
assessment, or shall consent to and direct NCPA to draw on any existing letter of credit
Participant has established for such purposes. In the event that the Participant or
Participants that caused or are otherwise responsible for the deficiency cannot, does
not or will not pay to NCPA the special or emergency assessment within two (2)
Business Days after the invoice date, NCPA shall immediately submit a special or
emergency invoice to all remaining Participants, and such remaining Participants sha11
pay to NCPA such assessment within two (2) Business Days after the invoice date of
the assessment, or shall consent to and direct NCPA to draw on any existing letter of
credit that Participant has established for such purposes.
5.1.6 SecuritV Deposit Interest. NCPA shall maintain a detailed
accounting of each Participant's Security Deposits, and withdrawals of such funds,
held by NCPA. Security Deposits held by NCPA shall be invested by NCPA in
accordance with the General Operating Reserve policies and investment policies
adopted by the NCPA Commission. Interest earned on the Security Deposit funds
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THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
shall be proportionately credited to the Participants in accordance with their weighted
average balances held therein. Any Security Deposit losses caused by early
termination of investments shall be allocated among the Participants in accordance
with the General Operating Reserve provisions and guidelines approved by the
Commission, as the same may be amended from time to time; provided, however, to
the extent that either the General Operating Reserve provisions and guidelines do not
apply or the Security Deposit is not adequate to cover the losses, then such losses shall
be allocated among the Participants in accordance with their proportionate Security
Deposit balances.
5.1.7 Return of Funds. Upon termination or a permitted withdrawal of
a Participant in accordance with this Agreement, the affected Participant may apply to
NCPA for the return of their share of Security Deposit funds ninety (90) days after the
effective date of such termination or withdrawal. However, NCPA shall, in its sole but
reasonable discretion, as determined by the NCPA General Manager, estimate the then
outstanding liabilities of the Participant, including any estimated contingent liabilities
and shall retain all such funds, if any, until all such liabilities have been fully paid or
otherwise satisfied in full. After all such liabilities have been satisfied in full, as
determined by NCPA's General Manager, any remaining balance of the Participant's
share of the Security Deposit will be refunded to the Participant within sixty (60) days
thereafter.
18
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
Section 6. Coo�eration and Further Assurances. Each of the Parties agree to provide
such information, execute and deliver any instruments and documents and to take such
other actions as may be necessary or reasonably requested by any other Party which are
consistent with the provisions of this Agreement and which do not involve the assumption
of obligations other than those provided for in this Agreement, in order to give full effect
to this Agreement and to carry out the intent of this Agreement. The Parties agree to
cooperate and act in good faith in connection with obtaining any credit support required
in order to satisfy the requirements of this Agreement.
Section 7. Partici�ant Covenants and Defaults
7.1 Each Participant covenants and agrees: (i) to make payments to NCPA, from
its Electric System Revenues, of its obligations under this Agreement as an operating
expense of its Electric System; (ii) to fix the rates and charges for services provided by its
Electric System, so that it will at all times have sufficient Revenues to meet the obligations
of this Agreement, including the payment obligations; (iii) to make all such payments due
NCPA under this Agreement whether or not there is an interruption in, interference with,
or reduction or suspension of services provided under this Agreement, such payments not
being subject to any reduction, whether by offset or otherwise, and regardless of whether
any reasonable dispute exists; and (iv) to operate its Electric System, and the business in
connection therewith, in accordance with Good Utility Practices.
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THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
7.2 Events of Default. An Event of Default under this Agreement shall exist
upon the occurrence of any one or more of the following by a Participant (the "Defaulting
Participant"):
(i) the failure of any Participant to make any payment in full to NCPA when
due;
(ii) the failure of a Participant to perform any covenant or obligation of this
Agreement where such failure is not cured within thirty (30) Calendar Days following
receipt of a notice from NCPA demanding cure; provided, that this subsection shall not
apply to any failure to make payments specified by subsection 7.2 (i));
(iii) if any representation or warranty of a Participant material to the services
provided hereunder shall prove to have been incorrect in any material respect when made
and the Participant does not cure the facts underlying such incorrect representation or
warranty so that the representation or warranty becomes true and correct within thirty
(30) Calendar Days after the date of receipt of notice from NCPA demanding cure; or
(iv) if a Participant is in default or in breach of any of its covenants or
obligations under any other agreement with NCPA and such default or breach is not cured
within the time periods specified in such agreement.
7.3 Uncontrollable Forces. A Party shall not be considered to be in default in
respect of any obligation hereunder if prevented from fulfilling such obligation by reason
20
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
of Uncontrollable Forces; provided, that in order to be relieved of an Event of Default due
to Uncontrollable Forces, a Party affected by an Uncontrollable Force shall:
(i) first provide oral notice to the General Manager using telephone
communication within two (2) Susiness Days after the onset of the Uncontrollable Force,
and provide subsequent written notice to the General Manager and all other Parties within
ten (10) Susiness Days after the onset of the Uncontrollable Force, describing its nature
and extent, the obligations which the Party is unable to fulfill, the anticipated duration of
the Uncontrollable Force, and the actions which the Party will undertake so as to remove
such disability and be able to fulfill its obligations hereunder; and
(ii) use due diligence to place itself in a position to fulfill its obligations
hereunder and if unable to fulfill any obligation by reason of an Uncontrollable Force such
Party shall exercise due diligence to remove such disability with reasonable dispatch;
provided, that nothing in this subsection sha11 require a Party to settle or compromise a
labor dispute.
7.4 Cure of an Event of Default. An Event of Default sha11 be deemed cured only
if such default shall be remedied or cured within the time periods specified in Section 7.2
above, as may be applicable, provided, however, upon request of the Defaulting
Participant the Commission may waive the default at its sole discretion, where such
waiver shall not be unreasonably withheld.
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THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
7.5 Remedies in the Event of Uncured Default. Upon the occurrence of an Event
of Default which is not cured within the time limits specified in Section 7.2, without
limiting other rights or remedies available under this Agreement, at law or in equity, and
without constituting or resulting in a waiver, release or estoppel of any right, action or
cause of action NCPA may have against the Defaulting Participant, NCPA may take any
or all of the following actions:
(i) suspend the provision of services under this Agreement to such
Defaulting Participant; or
(ii) demand that the Defaulting Participant provide further assurances to
guarantee the correction of the default, including the collection of a surcharge or increase
in electric rates, or such other actions as may be necessary to produce necessary Revenues
to correct the default.
7.6 Effect of Sus�ension.
7.6.1 Generallv. The suspension of this Agreement will not terminate,
waive, or otherwise discharge any ongoing or undischarged liabilities, credits or
obligations arising from this Agreement until such liabilities, credits or obligations are
satisfied in full.
7.6.2 Suspension. If performance of all or any portion of this Agreement
is suspended by NCPA with respect to a Participant in accordance with subsection
7.5(i), then such Participant shall pay any and all costs incurred by NCPA as a result of
22
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
such suspension including reasonable attorney's fees, the fees and expenses of other
experts, including auditors and accountants, or other reasonable and necessary costs
associated with such suspension and any portion of the Project Costs, scheduling and
dispatch costs, and Administrative Services Costs that were not recovered from such
Participant as a result of such suspension.
Section 8. Administration of Agreement
8.1 Commission. The Commission is responsible for the administration of this
Agreement. Each Participant shall be represented by its Commissioner or their designated
alternate Commissioner ("Alternate") pursuant to the Joint Powers Agreement. Each
Commissioner shall have authority to act for the Participant represented with respect to
matters pertaining to this Agreement.
8.2 Forum. Whenever any action anticipated by this Agreement is required to be
jointly taken by the Participants, such action shall be taken at regular or special meetings
of the NCPA Commission.
8.3 C�uorum. For purposes of acting upon matters that relate to administration
of this Agreement, a quorum of the Participants shall consist of those Commissioners, or
their designated Alternate, representing a numerical majority of the Participants.
8.4 Votin�• Each Participant sha11 have the right to cast one vote with respect to
matters pertaining to this Agreement. A unanimous vote of all Participants shall be
required for action regarding: (i) any transfer of rights to a Third Party as described in
23
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
Section 9 of this Agreement; and (ii) for matters related to any of the following actions as
provided for in the ESSA: (a) exercising any early termination provisions as set forth in the
ESSA, and (b) exercising any assignment rights as set forth in the ESSA. For all other
matters pertaining to this Agreement, a majority vote of the Participants shall be required
for action.
8.5 Stora�e Rate Ad�ustment Event. Section 2.5 of the ESSA permits the Se11er to
request a Contract Price adjustment from NCPA to address cost increases that Seller
incurs as a result of a Change in Tax Law or Supply Chain Event. If the Proposed Contract
Price Increase or Actual Contract Price Increase is equal to or less than the Proposed
Contract Price Increase Cap, then as further set forth in Section 2.5 of the ESSA, such
Proposed Contract Price Increase or Actual Contract Price Increase shall be deemed
accepted by the Participants and NCPA, and the parties to the ESSA shall amend the
Contract Price in the ESSA.
If the Proposed Contract Price Increase and/or Actual Contract Price Increase is
greater than the Proposed Contract Price Increase Cap by an amount that is less than or
equal to of the original Contract Price, in aggregate, then the
NCPA General Manager is hereby delegated authority by the Participants to approve the
price increase based on their determination that (1) the Initial Independent Report or Final
Independent Report supports the Proposed Contract Price Increase and/or Actual Contract
Price Increase, and (2) the ESSA with the Proposed Contract Price Increase and/or Actual
24
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
Contract Price Increase is still favorable when compared to current market conditions for
similar products. The NCPA General Manager shall notify the Commission of the
acceptable Proposed Contract Price Increase and/or Actual Contract Price Increase and
associated modifications to the ESSA with the foregoing findings, if any, at the next
available Commission meeting. If the Proposed Contract Price Increase and/or Actual
Contract Price Increase is greater than of the original Contract
Price, in aggregate, then the proposed modifications to the ESSA will be brought to the
Commission for discussion and further action.
Section 9. Transfer of Ri h� ts by Partici�ants
9.1 A Participant has the right to make transfers, sales, assignments and
exchanges (collectively "transfers(s)") of any portion of its Project Participation Percentage
and rights thereto, subject to the approval provisions in Section 8.4 of this Agreement,
provided that the transferee satisfies all applicable criterion in the ESSA. If a Participant
desires to transfer a portion or its entire share of the Project for a specific time interval, or
permanently, then NCPA will, if requested by such Participant, use its best efforts to
transfer that portion of the Participant's share of the Project.
9.2 Unless otherwise set forth in this Agreement, before a Participant may
transfer an excess Project share pursuant to Section 9.1 to any person or entity other than a
Participant, it shall give all other Participants the right to purchase the share on the same
terms and conditions. Before a Participant may transfer an excess Project share pursuant
25
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
to Section 9.1 to any person or entity other than a Member, it shall give all Members the
right to purchase the share on the same terms and conditions. Such right shall be
exercised within thirty (30) days of receipt of notice of said right.
No transfer shall relieve a Participant of any of its obligations under this
Agreement except to the extent that NCPA receives payment of these obligations from a
transferee.
Section 10. Term and Termination. This Agreement shall become effective when it has
been duly executed by all Participants, and delivered to and executed by NCPA (the
"Effective Date"). NCPA shall notify all Participants in writing of the Effective Date. The
Term of this Agreement shall be coterminous with the ESSA, and shall commence on the
Effective Date, and shall continue through the term of the ESSA.
Section 11. Withdrawal of Partici�ants. No Participant may withdraw from this
Agreement except as otherwise provided for herein.
Section 12. Settlement of Dis�utes and Arbitration. The Parties agree to make best
efforts to settle all disputes among themselves connected with this Agreement as a matter
of normal business under this Agreement. The procedures set forth in Section 10 of the
Power Management and Administrative Services Agreement shall apply to all disputes
that cannot be settled by the Participants themselves; provided, that the provisions of
Section 4.5 sha11 first apply to all disputes involving invoices prepared by NCPA.
Section 13. Miscellaneous
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THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
13.1 Confidentialitv. The Parties will keep confidential all confidential or trade
secret information made available to them in connection with this Agreement, to the extent
possible, consistent with applicable laws, including the California Public Records Act.
Confidential or trade secret information sha11 be marked or expressly identified as such.
If a Party ("Receiving Party") receives a request from a Third Party for access to, or
inspection, disclosure or copying of, any other Party's (the "Supplying Party") confidential
data or information, which the Receiving Party has possession of ("Disclosure Request"),
then the Receiving Party shall provide notice and a copy of the Disclosure Request to the
Supplying Party within three (3) Business Days after receipt of the Disclosure Request.
Within three (3) Business Days after receipt of such notice, the Supplying Party shall
provide notice to the Receiving Party either:
(i) that the Supplying Party believes there are reasonable legal grounds for
denying or objecting to the Disclosure Request, and the Supplying Party requests the
Receiving Party to deny or object to the Disclosure Request with respect to identified
confidential information. In such case, the Receiving Party shall deny the Disclosure
Request and the Supplying Party shall defend the denial of the Disclosure Request at its
sole cost, and it shall indemnify the Receiving Party for all costs associated with denying
or objecting to the Disclosure Request. Such indemnification by the Supplying Party of the
Receiving Party shall include all of the Receiving Party's costs reasonably incurred with
27
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
respect to denial of or objection to the Disclosure Request, including but not limited to
costs, penalties, and the Receiving Party's attorney's fees; or
(ii) that the Receiving Party may grant the Disclosure Request without any
liability by the Receiving Party to the Supplying Party.
13.2 Indemnification and Hold Harmless. Subject to the provisions of Section
13.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its
Members, including their respective governing boards, officials, officers, agents, and
employees, from and against any and all claims, suits, losses, costs, damages, expenses
and liability of any kind or nature, including reasonable attorneys' fees and the costs of
litigation, including experts, to the extent caused by any acts, omissions, breach of
contract, negligence (active or passive), gross negligence, recklessness, or willful
misconduct of that Participant, its governing officials, officers, employees, subcontractors
or agents, to the maximum extent permitted by law.
13.3 Several Liabilities. No Participant sha11, in the first instance, be liable under
this Agreement for the obligations of any other Participant or for the obligations of NCPA
incurred on behalf of other Participants. Each Participant shall be solely responsible and
liable for performance of its obligations under this Agreement, except as otherwise
provided for herein. The obligation of each Participant under this Agreement is, in the
first instance, a several obligation and not a joint obligation with those of the other
Participants.
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THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
Notwithstanding the foregoing, the Participants acknowledge that any debts
or obligations incurred by NCPA under this Agreement on behalf of any of them shall be
borne solely by such Participants in proportion to their respective Project Participation
Percentages, and not by non-Participant Members of NCPA, pursuant to Article IV,
Section 3(b) of the Joint Powers Agreement.
In the event that a Participant should fail to pay its share of the debts or
obligations incurred by NCPA as required by this Agreement, the remaining Participants
sha11, in proportion to their Project Participation Percentages, pay such unpaid amounts
and shall be reimbursed by the Participant failing to make such payments.
13.4 No Consec�uential Damages. FOR ANY BREACH OF ANY PROVISION OF
THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES
IS PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY
SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER
DAMAGES OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF
DAMAGE IS EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY
SHALL BE LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES
AND REMEDIES ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY
PARTICIPANT OR THEIR RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES,
DIRECTORS, OFFICERS, AGENTS, OR EMPLOYEES BE LIABLE FOR ANY LOST
PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE, OR
29
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
INCIDENTAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE, LOSS OF
GOODWILL, LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND
NCPA AND EACH PARTICIPANT EACH HEREBY WAIVES SUCH CLAIMS AND
RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM ANY SUCH
LIABILITY.
The Parties acknowledge that California Civil Code section 1542 provides that: "A general
release does not extend to claims which the creditor does not know or suspect to exist in
his or her favor at the time of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor." The Parties waive the
provisions of section 1542, or other similar provisions of law, and intend that the waiver
and release provided by this Section of this Agreement shall be fully enforceable despite
its reference to future or unknown claims.
13.5 Waiver. No waiver of the performance by a Party of any obligation under
this Agreement with respect to any default or any other matter arising in connection with
this Agreement shall be effective unless given by the Commission or the governing body
of a Participant, as applicable. Any such waiver by the Commission in any particular
instance shall not be deemed a waiver with respect to any subsequent performance,
default or matter.
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THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
13.6 Amendments. Except where this Agreement specifically provides otherwise,
this Agreement may be amended only by written instrument executed by the Parties with
the same formality as this Agreement.
13.7 Assignment of A�reement.
13.7.1 Bindin� Upon Successors. This Agreement shall inure to the
benefit of and shall be binding upon the respective successors and assignees of the
Parties to this Agreement.
13.7.2 No Assi n� ment• Neither this Agreement, nor any interest herein,
shall be transferred or assigned by a Party hereto except with the consent in writing of
the other Parties hereto, which consent shall not be unreasonably withheld.
13.8 Severabilitv. In the event that any of the terms, covenants or conditions of
this Agreement or the application of any such term, covenant or condition, shall be held
invalid as to any person or circumstance by any court having jurisdiction, all other terms,
covenants or conditions of this Agreement and their application shall not be affected
thereby, but shall remain in force and effect unless the court holds that such provisions are
not severable from all other provisions of this Agreement.
13.9 Governing Law. This Agreement shall be interpreted, governed by, and
construed under the laws of the State of California.
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THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
13.10 Headin�s. All indices, titles, subject headings, section titles and similar items
are provided for the purpose of convenience and are not intended to be inclusive,
definitive, or affect the meaning of the contents of this Agreement or the scope thereof.
13.11 Notices. Any notice, demand or request required or authorized by this
Agreement to be given to any Party shall be in writing, and shall either be personally
delivered to a Participant's Commissioner or Alternate, and to the General Manager, or
shall be transmitted to the Participant and the General Manager at the addresses shown on
the signature pages hereof. The designation of such addresses may be changed at any
time by written notice given to the General Manager who sha11 thereupon give written
notice of such change to each Participant. All such notices sha11 be deemed delivered
when personally delivered, two (2) Business Days after deposit in the United States mail
first class postage prepaid, or on the first Business Day following delivery through
electronic communication.
13.12 Warranty of Authorit� Each Party represents and warrants that it has been
duly authorized by all requisite approval and action to execute and deliver this Agreement
and that this Agreement is a binding, legal, and valid agreement enforceable in accordance
with its terms. Upon execution of this Agreement, each Participant shall deliver to NCPA
a resolution of the governing body of such Participant evidencing approval of and
authority to enter into this Agreement.
32
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
13.13 Counter�arts. This Agreement may be executed in any number of
counterparts, and each executed counterpart shall have the same force and effect as an
original instrument and as if all the signatories to all of the counterparts had signed the
same instrument. Any signature page of this Agreement may be detached from any
counterpart of this Agreement without impairing the legal effect of any signatures thereon,
and may be attached to another counterpart of this Agreement identical in form hereto but
having attached to it one or more signature pages.
13.14 Venue. In the event that a Party brings any action under this Agreement, the
Parties agree that trial of such action shall be vested exclusively in the state courts of
California in the County of Placer or in the United States District Court for the Eastern
District of California.
13.15 Attornevs' Fees. If a Party to this Agreement brings any action, including an
action for declaratory relief, to enforce or interpret the provisions of this Agreement, then
each Party shall bear its own fees and costs, including attorneys' fees, associated with the
action.
13.16 Counsel Representation. Pursuant to the provisions of California Civil Code
Section 1717 (a), each of the Parties were represented by counsel in the negotiation and
execution of this Agreement and no one Party is the author of this Agreement or any of its
subparts. Those terms of this Agreement which dictate the responsibility for bearing any
attorney's fees incurred in arbitration, litigation or settlement in a manner inconsistent
33
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
with the provisions of Section 13.2 were intentionally so drafted by the Parties, and any
ambiguities in this Agreement shall not be interpreted for or against a Party by reason of
that Party being the author of the provision.
13.17 No Third Part�Beneficiaries. Nothing contained in this Agreement is
intended by the Parties, nor shall any provision of this Agreement be deemed or construed
by the Parties, by any third person or any Third Parties, to be for the benefit of any Third
Party, nor shall any Third Party have any right to enforce any provision of this Agreement
or be entitled to damages for any breach by the Parties of any of the provisions of this
Agreement.
34
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
IN WITNESS WHEREOF, NCPA and each Participant have, by the signature of its
duly authorized representative shown below, executed and delivered a counterpart of this
Agreement.
NORTHERN CALIFORNIA CITY OF SANTA CLARA
POWER AGENCY 1500 Warburton Avenue
651 Commerce Drive Santa C1ara, CA 95050
Roseville, CA 95678
By: Randy S. Howard By:
Title: General Manager Title:
Date: Date:
Approved as to form: Approved as to form:
By: Iane E. Luckhardt By:
Its: General Counsel Its: Cit�Attorne�
Date• Date:
Attestation (if applicable): Attestation (if applicable):
By: By:
Its: Its:
Date• Date:
35
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
CITY OF ALAMEDA CITY OF LOMPOC
2000 Grand Street 100 Civic Center Plaza
P.O. Box H Lompoc, CA 93436
Alameda, CA 94501
By: Sy:
Title: Ti�le:
Date: Date:
Approved as to form: Approved as to form:
By: By:
Its: Citv Attorne� Its: City Attorne�
Date: Date:
Attestation (if applicable) Attestation (if applicable)
By: By:
Its: Its:
Date: Date:
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THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
CITY OF PALO ALTO CITY OF REDDING
250 I Iamilton Avenue 777 Cypress Avenue
Palo Alto, CA 94301 Redding, CA 96001
By: By:
Title: Title:
Date: Date:
Approved as to form: Approved as to form:
By: By:
Its: Citv Attornev Its: Cit�Attorne�
Date: Date:
Attestation (if applicable) Attestation (if applicable)
By: By:
Its: Its:
Date• Date:
37
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
CITY OF SHASTA LAKE CITY OF UKIAH
4477 Main Street 300 Seminary Avenue
Shasta Lake, CA 96019 Ukiah, CA 95482
By: By:
Title: Title:
Date: Date:
Approved as to form: Approved as to form:
By: By:
Its: Citv Attornev Its: Cit�Attorne�
Date: Date:
Attestation (if applicable) Attestation (if applicable)
By: By:
Its: Its:
Date• Date:
38
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
CITY OF OAKLAND, acting
by and through its
Board of Port Commissioners
530 Water Street
Oakland, CA 94607
By:
Title:
Date:
Approved as to form:
By:
Its City Attorne�
Date:
Attestation (if applicable)
By:
Its:
Date•
39
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
EXHIBIT A
PROJECT PARTICIPATION PERCENTAGES
The following is a list of the Participants who are signatory to this Agreement, and their
respective Project Participation Percentage share of the Project.
F�r+�jec�k Pr��e�#
P!"ar#ici���i;�� Parti�ci���i�n
��er��e�����e Per��en�a�e
�'ar�i�i����� ��"�� ���`�
�it��f S�r�t� �I�r� �r�.���7� ���t.t��
�itw��f.�l�raa�d� �.����°.� ��t.�JC�
�it���L�rr�p�� �.��Q��°� �.�c7
�i�r�af IF'�la�Ita �CJ.�1C��lfi�� ��t.�1C�
�ity��af I��d�iir�� ��.C7C��C�� ��.t�fi�
�i�caf�h��t� L�k� �.�r���� S.C��t
�it��a�Uki�t� �.��lC��i� �.��t
Part�a���kN�rad �.����i� �.��t
T��al i�J. `�..� ��J.
40
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT
EXHIBIT B
Energy Storage Service Agreement
The Energy Storage Service Agreement between Trolley Pass Project LLC and
Northern California Power Agency has been attached to this Agreement as Exhibit B.
41
THIRD PHASE AGREEMENT FOR ENERGY STORAGE SERVICE AGREEMENT