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Home My WebLink AboutRESO 9433Resolution No. 9433 Resolution of the Council of the City of Palo Alto Approving Amendment No. 1 to the Power Purchase Agreement with Elevation Solar C LLC for the Purchase of Solar Electricity RECITALS A. On June 17, 2013, Council approved the power purchase agreement ("PPA") with Elevation Solar C LLC ("Elevation" or "Seller") for the purchase of electricity from Seller's 40 MW(ac) photovoltaic ("PV") solar electric generating facility (the "Plant") originally planned to be built and located in Fresno County, California ("Original Site") at a cost not to exceed $154 million with a Commercial Operation Date ("COD") deadline of December 31, 2016. B. The PPA is for a twenty-five year base contract term and will allow the City or Seller to extend the PPA at either party's option for an additional five-year term (First Option). After the First Option is exercised, the PPA allows the City to extend the PPA at its sole option for an additional five-year term (Second Option). C. Seller now desires to change the site for the Plant to a location in northern Los Angeles County, California (the "New Site"), where it can more efficiently build and interconnect the Plant. D. The PPA permits Seller to build the Plant at an alternate location, provided that the City provides written consent to the site change, which consent shall not be unreasonably withheld. E. The solar insolation is significantly greater at the New Site than at the Original Site, resulting in an increase in expected annual energy production from the New Plant as compared to the Original Plant, which would require Council to increase the cost under the PPA from a not to exceed amount of $154 million to a potential of $226 million over the base contract term, First Option and Second Option of the PPA. F. At the New Site, Seller agrees to attempt to achieve COD by June 30, 2016, which is six months earlier than the COD of December 31, 2016 anticipated at the Original Site; however, the contractually guaranteed COD deadline shall remain December 31, 2016. G. The City and Seller wish to approve Amendment No. 1 (the "Amendment") to the PPA to account for the relocation to the New Site, the associated change in the expected energy production of the Plant, the earlier targeted operating date of the Plant, to limit Seller's financing termination rights under Section 4.3(k) of the PPA, and to make other changes to the PPA to clarify or otherwise effectuate the Amendment. 140610 jb 0180044 H. Approval of the Amendment may result in surplus electric purchases that are inconsistent with the anti-speculation requirement of section D.1 of the City's existing Energy Risk Management Policy, including during the 2017-2020 time frame, due to variability of the City's hydroelectric resources, and potential uncertainties associated with the timeliness and viability of the renewable energy projects in the City's portfolio still under development. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council approves Amendment No. 1 to the PPA between Elevation Solar C LLC, as seller, and the City of Palo Alto, as buyer, with a delivery term of the amended PPA that is up to thirty-five {35) years (including the First Option and Second Option), commencing upon the COD for the Plant which shall be no later than December 31, 2016, but may occur by June 30, 2016. Spending authority under the amended PPA shall not exceed two hundred and twenty-six million dollars ($226,000,000). SECTION 2. The Council delegates to the City Manager, or his designee, the authority to execute the Amendment on behalf of the City, and the authority to execute any documents necessary to administer the PPA, as amended, that are consistent with the Palo Alto Municipal Code and City Council approved policies. SECTION 3. As permitted by section 2.30.290 of the Palo Alto Municipal Code, the Council delegates to the City Manager, or his designee, the authority to exercise the First Option and Second Option as defined herein, to extend the twenty-five year base contract to a full thirty-five year contract term for the City. SECTION 4. With respect to the Council's approval of the Amendment referred to in Section 1 above, the Council waives the anti-speculation requirement of Section 0.1 of the City's existing Energy Risk Management Policy, as that requirement may apply to surplus electricity purchases caused by the City's approval of the Amendment. SECTION 5. The Council's approval of this Amendment does not meet the definition of a project under the California Environmental Quality Act (CEQA), pursuant to Public Resources Code Section 21065. However, the City intends to receive o~.:~tput from a project that will constitute a project for the purposes of CEQA. The project developer will be responsible for acquiring necessary environmental reviews and permits on the project to be developed. II II II II II II II II 140610 jb 0180044 During the development phase of the project, the City will become a "responsible agency" under the CEQA proceedings. As such, the PPA allows for the City to review the project CEQA documents and issue a notice of determination with respect to its review ofthe projects. Staff anticipates working with the City Attorney's Office and the Planning Department to undertake this assessment and make a determination. INTRODUCED AND PASSED: June 16, 2014 AYES: BERMAN, BURT, HOLMAN, KLEIN, KNISS, PRICE, SCHARFF, SCHMID, SHEPHERD NOES: ABSENT: ABSTENTIONS: ;r&W.~ CityCierk t APPROVED AS TO FORM: 140610 jb 0180044 ll :i ! ] il I I. i I ! I i } \ 1 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ELEVATION SOLAR C LLC This Amendment No. 1 ("First Amendment") to t e Power Purchase Agreement dated July 10, 2013 {"Agreement") is entered into as of . 2014 (the "Amendment Date")~ by and between the. CITY OF PALO ALTO; a California chartered municipal corporation of the State of California {"CITY" or "BUYER"), and Elevation Solar C LLC, a Delaware Limited Liability Company, located at 2 Embarcadero Center, Suite 410, San Francisco, California 94111 {"SELLER") (collectively the "Parties"). RECITALS 1. The Agreement was entered into between the Parties for the sale of energy to Buyer from Seller's 40 MW(ac)· photovoltaic solar electric generating facility {the "Plant" as more particularly defined in the Agreement); 2. Seller has identified a different Site and Point of Interconnection where it can more efficiently build and interconnect the Plant and which will result in changes to the expected Energy production of the Plant; 3. Seller has determined that it can achieve Commercial Operation on June 30, . 2016 rather than December 31, 2016; 4. Buyer desires and Seller has agreed to certain changes to the Agreement related to milestones, Seller obligations, and termination rights; and 5. Buyer and Seller wish to amend the Agreement to account for the change in the Site and Point of Interconnection, certain Agreement milestones, Seller Obligations, and termination rights, as well as associated changes in the expected Energy production of the Plant. · NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this First Amendment, the Parties agree: SECTION 1.. The following is added to Article I in its proper alphabetical order: "Capacity Rights: The rights, whether in existence as of the Effective Date or arising hereafter during the Agreement Term, to capacity, resource adequacy, associated attributes and/or reserves or any of the foregoing associated with the electric generating capability of the Plant, including the right to resell such rights." SECTION 2. The definition of "Output" is hereby deleted in its entirety and replaced with the following: 0180047 jrm 051114 L \ i "Output: All Energy, Capacity Rights, Environmental Attributes; as well as any ancillary services and any other reliability or power attributes associated with the Initial Capacity and/or associated Energy." SECTION 3. The definition of "Participating .TO or Participating Transmission Owner" is hereby deleted in its entirety and replaced with the following: "Participating Transmission Owner, Participating TO or PTO: Southern California Edison Company, a California corporation, or any successor thereto acting as transmission provider from the Site to the CAISO grid." SECTION 4. The definition of "Point of Interconnection" is hereby deleted in its entirety and replaced with the following: "Point of Interconnection: The point on the electrical system where the Plant is physically interconnected with the PTO's System, which is anticipated to be at Southern California Edison's Antelope Substation." SECTION 5. The definition of "Site" is hereby deleted in its entirety and replaced with the following: "Site: The real property on which the Plant is to be built and located near Lancaster, CA as more particularly described in Exhibit A, or such other real property selected by Seller not identified in Exhibit A, and to which Buyer consents in writing, which consent shall not be unreasonably withheld." SECTION 6. Section 4.1(h) is hereby deleted in its entirety and replaced with the following: "(h) Negotiate and enter into an Interconnection Agreement with the Participating . TO to enable Seller to transmit Energy to the Point of Interconnection and into the CAISO-controlled grid. Seller shall be responsible for and pay all costs and charges arising under the Interconnection Agreement in compliance with the Interconnection Agreement and associated rules and requirements in place as of the Commercial Operation Date. Seller shall obtain a Full Capacity Deliverability Status Finding from the CAISO and provide to Buyer a copy of such finding as soon as reasonably possible, which date is expected to be no later than COD. Seller's interconnection, distribution and/or transmission arrangements shall provide for Seller to obtain and maintain Full Capacity Deliverability Status throughout the remainder of the Term of the Agreement." 2 0180047 jrm 051114 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BElWEEN THE CITY OF PALO ALTO AND ELEVATION SOLAR C LLC II ,: l l !I II I I ~ I SECTION 7. Se~tion 4.3(b) is hereby deleted in its entirety and replaced with the following: "(b) The following events are all of the Milestones: (i) By December 31, 2014, Seller shall obtain Site Control. (ii) By December 31, 2015, Seller shall receive a Conditional Use Permit and enter into an Interconnection Agreement; and by December 1, 2015, Seller shall obtain all additional Permits necessary, in final form, to · commence construction of the Plant. (iii) By March 1, 2016, Seller shall arrange for the financing of the construction of the Plant or otherwise make funds available to commence and complete construction. (iv) By April1, 2016, Seller shall have commenced construction of the Plant. (v) By December 31, 2016, Seller shall achieve Commercial oweration. Seller agrees to attempt to achieve Commercial Operation earlier, by June 30, 2016; provided, however, that Seller's failure to achieve such early Commercial Operation shall in no way change, relieve, justify or excuse Seller's obligation to achieve Commercial Operation by December 31, 2016." SECTION 8. Section 4.3(k) is hereby deleted in its entirety and replaced with the following: "(k) Seller may terminate this Agreement without liability of either Party to the other by giving notice of termination to Buyer, in writing, in the event that, solely as a result of that certain investigation by the United States International Trade Commission entitled "Certain Crystalline Silicon Photovoltaic Products From China and Taiwan," Investigation Nos. 701-TA-511 and 731-TA-1246-1247, any of the commitments and contractual rights to receive all equity, debt, tax equity and other financing described in Section 4.3(b)(iii) are not obtained by the date specified in Section 4.3(b)(iii) for satisfaction ofthe relevant Milestone or cannot be obtained in such form and from such parties as is satisfactory to Seller and as Seller determines necessary to develop, construct, operate and maintain the Plan over its useful life, or the conditions precedent to the effectiveness of any and all such financings have not been satisfied or waived. In the event that Seller exercises such term-ination right, and Seller or its affiliate(s) subsequently 3 01800~7jrm051114 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND . ELEVATION SOLAR C LLC ~ I I l i \ y \ j enters into or seeks to enter into any other agreem~nt to sell energy from a generating facility at the Site, then Buyer shall have a right of first refusal to purchase the Output of any electricity generating facility owned or controlled by Seller or its affiliate(s) located at the Site. Such right of first refusal shall conform to the provisions of Section 2.5. The 'provisions of this Section 4.3(j) shall survive the termination of this Agreement under this Section 4.3(j) for a period of forty- two (42) months from such termination." SECTION 9. Section 10.3 is hereby amended to replace the contact information for Elevation Solar C LLC within said section with the contact information listed below: The remainder of section 10.3 shall otherwise remain in full force and effect. "Eievation·Solar C LLC 2749 E Parley's Way Suite 310 Salt Lake City, UT 84109 Attention: Hans lsern I Sean McBride Email: notices@spower.com Telephone: (415) 692-7740" SECTION 10. Exhibit A-1 is hereby deleted in its entirety and replaced with Exhibit A-1 attached hereto. · SECTION 11. Exhibit A-2 is hereby deleted in its entirety and replaced with Exhibit A-2 attached hereto. SECTION 12. Exhibit E is hereby amended to replace the use of the term "Silverado" with the defined term "Seller" in said Exhibit. The remainder of Exhibit E shall otherwise remain in full force and effect. SECTION 13. Exhibit G is hereby deleted in its entirety. and replaced with Exhibit G attached hereto. SECTION 14. All capitalized terms used but not defined, or otherwise modified herein shall have the meaning ascribed to such term in the Agreement. SECTION 15. Except as modified by this First Amendment, all other provisions of the Agreement, including any exhibits and subsequent amendments, shall remain in full force and effect. Ill 0180047 jrm 051114 4 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ELEVATION SOLAR C LLC !! il ii ~ ! I I i I Ill ) ) \ J IN WITNESS WHEREOF, the· Parties have by their duly authorized representatives executed this First Amendment ~:>n the Amendment Date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: ior Deputy City Attorney 0180047 jrm 051114 ELEVATION SOLAR C LLC By:~ Name: Ryan Creamer Chief Execul~e Officer Title: __________ _ By: __________ _ 5 Name: _________ _ Title: __________ _ AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ELEVATION SOLAR C LLC ' i I I i I I ) EXHIBITA-1 PLANT SITE DESCRIPTION \. / Approximately 350 acres comprised of a combination of the proprieties listed below, located in Northern Los Angeles County, in or near lancaster, California and within a radius of approximately five (S) miles of Southern California Edison's Antelope Substation: 3203034025 3203034010 3203034026 3203021079 3203021044 3203021047 3203021063 3203021078 3203021050 3203021076 3203021075 3203021053 3203021067 3203021070 3203021080 . 3203021083 3203021045 3203021074 3203021077 3203021066 3203021069 3203021073 3203021046 0180047 jrm 051114 LOS ANGELES COUNTY APN LIST: 3248005006 3248005013 3248005027 3248006032 3248005021 3248005005 3248005011 3248010001 3248003016 3248005018 3248006005 3248010018 3248004016 3248007006 3248004014 3248011005 3248008015 3248008022 3248022024 3248003015 3248022026 3248004018 3248012023 3248007002 3248012015 3267010034 3248007019. 3248010026 3267010026 3248011008 3248003020 3267010033 3248011028 3248004010 3267010025 3248021012 3248()22031 3267010032 3248010013 3248005001 3267007040 3248008031 3248010063 3267007032 3248008014 3248005033 3267009028 3248008006 3248010007 3267013025 3248006010 3248006029 3267010004 3248007024 3248010019 3267012007 3248003018 3248006015 3267009023 3248010014 3248004013 3267012011 3248011003 3248011006 3267009013 3248021805 3248008030 3267007005 3248006022 3248008025 3267009047 3248006026 3248021051 3267009038 3248006011 3248005014 3267009035 3248011012 3248008001 3267009033 3248008028 3248005026 3267013017 3248004019 3248006034 3267012006 3248007027 3248010016 3267012012 3248008018 3248004017 3267008038 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ELEVATION SOLAR C LLC 6 I I I i i I, I ! I I :: I 3203021072 3203021051 3203021052 3203021081 32.03021082 3203034008 3203034009 3203034004 3248010024 3248005012 3248003019 3248005004 3248005023 3248005015 3248003008 3248005002 3248005010 3248005008 3248005009 3248005003 3248005031 3248005020 3248012022 3248022025 3248010021 3248005019 3248006006 3248011020 3248007017 3248011023 0180047 jrm 051114 3248010011 3248006017 3248011013 3248007009 3248010022 3248010009 3248006035 3248007033 3248007004 3248011029 3248012020 32480100:20 3248006012 3248011014 3248011009 3248022021 3248007022 3248022022 3248007003 3248007010 3248012027 3248007026 3248008016 3248008020 3248022005 3248005017 3248008019 3248008012 3248004015 3248008011 3248008005 3248007032 3267010027 3248021034 3248007005 3248022032 3248012021 3248011004 3248022901 3248006014 3248008010 3248022011 3248010027 3248008021 3248022012 3248006019 3248008004· 3248022029 3248006037 3267008025 3248021032 3248007015 3267008020 3248021001 3248007031 3267008021 3248008017 3248022028 3267009037 3248011027 3248004009 3267010008 3248004011 3248007018 3267010017 3248011035 3248021806 3267008007 3248010015 3248011031 3267008031 3248010012 3248007016 3267010005 3248007029 3248007007 3267010028 3248007023 3248007011 3267008030 3248006013 3248021015 3267008015 3248006038 3248006003 3267010012 .3248006030 3248007001 3267008001 3248006033 3248007021 3267008027 3248006002 3248011022 3267008006 3248010023 3248008009 3267007031 3248005029 3248008023 3267009036 3248005007 3248006023 3267013016 3248010003 3248006020 3267010023 3248010005 3248011021 3267007037 3248010006 3248007034 3267008028 3248010061 3248004012 3267012003 3248010052 3248008027 3267010013 3248010053 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND . ELEVATION SOLAR C LLC 7 3248011024 3248008013 3248008008 3248012018 3248005028 3248021035 3248006025 3248021025 3248006008 3248010025 3248004008 3248008032 3248006024 3248010004 3248007008 3248006016 3248005022 3248011030 3248010056 3248010055 3219017020 3219017020 3265006001 3265006001 3265007001 3265007001 3265007024 3265007024 3265021004 3265018002 3219016031 3265007027 3265005001 3265007008 3265007002 3265006002 0180047 jrm 051114 ) 3248021010 3267007004 3248010062 3248005030 3267009021 3248010047 3248005032 3267009029 3248010057 3248006027 3267013007 3248010059 ' 3248010008 3267012004 3248010054 3248006036 3267009048 3248010048 3248006009 3267009017 3248010058 3248004007 32.67009034 3248010060 3248007014 3267010036 3248010033 3203034005 3203021068 3267008002 3219017020 3219017020 3219017020 3265006001 3265006001 3265006001 3265007001 3265007001 3265007001 3265021002 3265021001 3265021003 3265019030 3219016030 3219016027 3265007023 3265007026 3265007025 3265007021 3265007007 3265007003 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ELEVATION SOLAR C LLC 8 ) ) ~ I ~ ' l ) j EXHIBITA-2 SITE DRAWINGS Seller shall provide to Buyer preliminary Site Drawings specifically identifying the parcels listed in Exhibit A-1 that will be used to construct the Plant by October 1, 2014. In the event the specific parcels identified by Seller in the preliminary Site Drawings are modified to include or ~xclude an alternate property identified in Exhibit A-1, Seller shall provide advance written notice of such change to Buyer. In the event that the specific parcels identified by Seller in the preliminary Site Drawings are modified to include or exclude an alternate property not identified in Exhibit A-1, the Buyer consent requirements set forth in the definition of Site under this Agreement shall apply. Seller shall provide to Buyer final Site Drawings prior to the Commercial Operation Date. 10 0180047 jrm 051114 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ELEVATION SOLAR C LLC i i I ll !i it :I 0180047 jrm 051U4 \ ) EXHIBITG \ ' I EXPECTED ANNUAL NET ENERGY PRODUOION Contract Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Expected Annual Net Energy Production (In MWhs) 11 100,788 100,284 99,783 99,284 98,787 98,293 97,802 97,313 96,826 96,342 95,860 95,381 94,904 94,430 93,958 93,488 93,020 92,555 92,093 91,632 91,174 90,718 90,264 89,813 89,364 88,917 88,473 88,030 87,590 87,152 86,716 86,283 85,851 85,422 84,995 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND ELEVA nON SOLAR C LLC Lunt, Kimberly From: Sent: To: Subject: Follow Up Flag: Flag Status: Kim, Billups, Janet Thursday, June 19, 2014 11:16 AM Lunt, Kimberly Requesting Reso Nos. Follow up Flagged Please provide Reso Nos. for the following items: 1. Resolution of the Council of the City of Palo Alto Consenting to the Assignment of the Power Purchase Agreement with Brannon Solar, LLC to CRE-Kettleman Hold co, LLC and Approving the Amended and Restated Power Purchase Agreement with EE Kettleman Land, LLC for the Purchase of Solar Electricity, PASSED ON 6/9/14 14 3 ~ 2. Resolution of the Council of the City of Palo Alto Approving Amendment No. 1 to .the Power Purchase Agreement with Elevation Solar C LLC for the Purchase of Solar Electricity, PASSED ON 6/16/14 ' 1433 3. Resolution of the Council of the City of Palo Alto Approving Amendment No. 1 to the Power Purchase Agreement with Western Antelope Blue Sky Ranch B LLC for the Purchase of Solar Electricity, PASSED ON ~~M. ~q3~ Thanks, Janet Billups Claims Investigator Office of the City Attorney City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Ph: 650-329-2171 Janet.Billups@CityofPaloAito.org .J; Please consider the environment before printing this email