HomeMy WebLinkAboutRESO 9435Resolution No. 9435
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
RECITALS
A. On June 17, 2013, Council approved the power purchase agreement (11PPN') with
Western Antelope Blue Sky Ranch B LLC (11Biue Sky B11 or 1/Seller'') for the purchase of energy
from Seller's 20 MW(ac) photovoltaic (11PV11
) solar electric generating facility (the 11Piant11
) at a
cost not to exceed $97 million with a Commercial Operation Date (11COD11
) deadline of
December 31, 2016.
B. The PPA is for a twenty-five year base contract term and allows 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. At the time of execution of the PPA, Seller was to deliver energy, but not any
capacity rights, as part of the output delivered to the City.
D. Seller has developed an alternative interconnection position where it will be able
to interconnect the Plant and deliver to the City capacity rights for an additional five dollars
{$5.00) per MWh of Energy, along with energy Seller is already delivering to the City, and the
City can use such capacity rights to satisfy its capacity requirements under the California.
Independent System Operator {CAISO), or sell them to another entity.
E. The City desires and Seller has agreed that the additional payment from the City
to Seller for the aforementioned capacity rights shall only be in effect so long as Seller obtains
Full Capacity Deliverability Status for the Plant, and so long as the Plant's point of
interconnection to the electric grid is in an area designated as a Local Capacity Requirements
area or the equivalent by the CAISO.
F. With the alternative interconnection position, Seller may be able to achieve COD
by June 30, 2016, which is six months earlier than the COD of December 31, 2016 under the
current PPA; however, the contractually guaranteed COD deadline shall remain December 31,
2016.
G. The City and Seller now wish to approve Amendment No. 1 (11the Amendment")
to the PPA to account for the delivery of the aforementioned capacity rights as well as the
associated payment from the City to Seller for such capacity rights under specified conditions;
to provide for the earlier targeted COD; to limit Seller's financing termination right pursuant to
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Section 4.3(k) ofthe PPA; and to make other changes to the PPA to clarify or otherwise
effectuate the Amendment.
H. Under the current PPA, in the event the City desires to exercise the First Option,
the not to exceed cost under the PPA will be $97 million. If the City approves Amendment No.
1 and desires to exercise the Second Option, the additional five years plus the payments for the
capacity rights will bring the not to exceed cost to $125 million over the potential full 35 year
term of the PPA (including exercise of First and Second Option).
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council approves Amendment No. 1 to the PPA between Western
Antelope Blue Sky Ranch B LLC, as seller, and the City of Palo Alto, as buyer, with a delivery
term of up to thirty-five {35) years (including 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 PPA shall not exceed one hundred twenty five
million dollars ($125,000,000).
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. 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 output 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.
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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:
APPROVED AS TO FORM:
~b.put~y
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I .I K i i
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AMENDMENT N0.1 TO POWER PURCHASE AGREEMENT
BETWEEN THE CITY OF PALO ALTO AND
WESTERN ANTELOPE BLUE SKY RANCH B LLC
This Amendment No. 1 (the "First Amendment') tj the PogOr Purchase Agreement dated July
10, 2013 {the "Agreement'') Is entered Into as of I! H f • 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 Western Antelope Blue Sky Ranch B LLC, a Delaware
Umlted Liability Company, located at 2 Embarcadero Center, Suite 410, San ·Francisco, California
94111 ("SELLER111) (collectively, the "Parties").
RECITALS
1. The Agreement was entered Into between the Parties for the sale of the Output
of Seller's 20 MW(ac) photovoltaic solar electric generating facility to Buyer; ·
2. Under the Agreement, the Seller delivers Energy, but not capacity Rights as part
of the Output delivered to Buyer;
3. Seller has developed an alternative interconnection position where it will be able
to interconnect the Plant and deliver Capacity Rights along with the Energy to Buyer;
4. Buyer desires and Seller has agreed to also make certain change to the
Agreement related to milestones, Seller obligations and termination rights; and
s. Buyer and Seller wish to amend the Agreement to account for Seller's delivery of
capacity Rights to Buyer, Buyer's associated payment by Buyer for such delivery, and other
certain modifications to the Agreement related to milestones, Seller obligations and
termination rights.
NOW, THEREFORE, In consideration of the covenants, terms, conditions, and provisions
of this First Amendment, the Parties agree:
SECTION 1. The following definitions are added to Article 1 In their proper
alphabetical order:
"capacity Price: Has the meaning set forth In Section 2.3."
"capacity RJ&hts: 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."
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"Enei'IV Price: Has the meaning set forth in Section 2.3."
"Local Capacity Requirements: Has the meaning set forth in the CAISO Tariff'
"Monthly Invoiced Amounts: the total dollar amount billed by Seller to Buyer
each month which is the sum of: (I) the product of the Energy Price and the
metered Energy delivered 'in the prior calendar month (taking into account any
line losses to the Point of Interconnection); and, if applicable (ll) the product of
the Capacity Price and the metered Energy delivered In the prior calendar month ·
(taking into account any line losses to the Point of Interconnection)/'
•Price: Has the meaning set forth in Section 2.3.''
SECIION 2. The definition of "Output» In Article I is hereby deleted in its entirety and
replaced with the following:
110Utput: 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, Section 2.3 is hereby deleted in its entirety and replaced with the following:
"Section 2.3 Enersy and Capacity Price.
(a) Price Defined. Price means the Energy Price and the Capacity Price as
defined In this Section.
0180048 jrm 051114
(I} Energy Price. Subject to any performance-related adjustments
under the provisions of Section 9.4, during the entire Term, Buyer
shall pay Seller Sixty-Eight and n /100 Dollars ($68. 77) per MWh
of Energy ("Energy Price") delivered or tendered to Buyer at the
Point of Interconnection, prorated for partial MWh.
(ii) Capacity Price. Subject to any performance-related adjustments
under the provisions of Section 9.4, during the entire Term, Buyer
shall pay Seller· an additional Five Dollars ($5.00) per MWh of
Energy as compensation for Capacity . Rights (11Capacity Price")
delivered or tendered to Buyer at the Point of Interconnection,
prorated for partial MWh. Buyer shall only be obligated to pay
'the Capacity Price upon Seller's obtaining a Full Capacity
Deliverabllity Status Finding from the CAISO and provision to
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AMENDMENT N0.1 TO POWER PUROIASE AGREEMENT
IIETWEIN THE CI1Y OF PALO ALTO AND
WESTERN ANTELOPE BLUE SKY RANOI B UC
)
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Buyer of a copy of such finding and such Capacity Price payment
obligation shall only continue so long as the Point of
Interconnection is In an area designated as a Local Capacity
Requirements area or equivalent by CAISO.
(b). Total Compensation. The Price shall be t~e total compensation owed by
Buyer for the Output delivered or tendered to Buyer during the Term."
SECTION 4. Sections 3.1 is hereby amended to replace the use of the defined term
"Energy" with the defined term "Output'' in said Section. The remainder of section 3.1 shall
otherwise remain In full force and effect.
SECTION 5. Section 3.2 is hereby deleted In Its entirety and replaced with the
following:
(a) All invoices. Seller shall provide to Buyer on or before the. tenth (10th) day of
each month an invoice. for the Monthly Invoiced Amounts, enclosing reasonably
appropriate supporting CAISO documentation and any corresponding attestation
that may be required pursuant to Section 2.2(d). Such invoice may be
transmitted by e-mail to settlements@ncpa.com, or to any other e-mail address
designated, In writing, by Buyer, with a copy to be delivered In the mail of the
United States Postal Service or other entity to the notice address designated
below. Should either Seller or Buyer determine at a later date, but in no .event
later than two (2) years after the original Invoice date, that the Invoice amount
was incorrect, that Party shall promptly notify, in. writing, the other Party of the
error. If the amount Invoiced was lower than the amount that should have· been
Invoiced, then Buyer shall, upon receiving verification of· the error and
supporting documentation from Seller, pay any undisputed portion of the
difference within thirty (30) days of receipt of verification. If the amount Invoiced
was higher than the amount that should have been invoiced, then Seller shall,
upon receiving verification of the error and supporting documentation from
Buyer, pay any undisputed portion of the difference within thirty (30) days of
receipt of verification. Any such adjusted amount owing by Seller or Buyer shall
be subject to the Interest rate as designated in Section 3.3, running from the
original due date of payment.
(b) Invoices for capacity Rights. In addition to the requirements set forth in section
3.2(a), prior to first Including the delivery of any Capacity Rights In an invoice to
Buyer, Seller shall provide to Buyer documentation reasonably acceptable to
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0180048)rm051U4 · .
AMENDMENI' NO, 1 TO POWER PURatASE AGREEMENT
BEJWEEN THE 01Y OF PALO ALTO AND
WESTERN ANTELOPE BLUE SKY RANat 8 U.C
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Buyer evidencing that It qualifies to deliver said Capacity Rights. If at any time
during the Term Seller is notified by CAISO or the PTO that the Plant no longer
qualifies for the delivery of Capacity Rights, it shall promptly notify Buyer and
shall no longer Include ttie delivery of Capacity Rights In the Monthly Invoiced
Amounts unless It can re-quallfY the Plant for said Capacity Rights.
SEcriON 6. .Sections 3.3 is hereby amended to replace the use of the defined term
"Energy" with the defined term "Output'' in said Section. The remainder of section 3.3 shall
otherwise remain ln. full force and effect. ·
SECTION 7. 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 Dellverablllty
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 Dellverablllty Status
throughout the Term of the Agreement."
SECTION 8. Section 4.3(b) Is hereby deleted in its entirety and replaced with the
following:
"(b) The following events are all of the Milestones:
0180048)rm 051~4
(I) By December 31, 2014, Seller shall obtain Site Control.
(II) By December 31, 2Q15, 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.
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AMENDMENT N0.1 TO POWER PUROfASE AGREEMENT
BE1WE£N THE CITY OF PALO ALTO AND
WESTERN ANTELOPE BLUE SKY RANCH B LLC
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(iv) By Aprll1, 2016 Seller shall have commenced construction of the Plant.
(v) ~y December 31, 2016, Seller shall achieve Commercial Operation. 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 9. 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 tlie 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 Photovoltalc 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)(lll) are not obtained by the date
specified In Section 4.3(b}(iil) for satisfaction of the 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 flnancings have not been satisfied or waived. In the event that
Seller exercises such termination right, and Seller or Its afflllate(s) subsequently
enters into or seeks to enter into any other agreement 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 4.30} shall survive
the termination of this Agreement under this Section 4.30) for a period of forty-
two (42) months from such termination."
SECTION 10. 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.
0180048 Jrm 051114
Western Antelope Blue Sky B
2749 E Parley's Way
Suite 310
Salt Lake City, UT 84109
Attention: Hans lsem I Sean McBride
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AMENDMENT N0.1 TO POWER PURCHASE AGREEMENT
BETWEEN THE CITY OF PALO ALTO AND
wmtRNANTElOPE BLUE SKY RANOI B U.C
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Email: notices@spower.com
Telephone: (415) 692-n40
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SECTION 11. Exhibit E is hereby amended to replace the use of the term 1'SIIveradoH
with the defined term "Selle~ In said Exhibit. The remainder of Exhibit E shall otherwise
remain in full force and effect.
SECTION 12. Exhibit G Is hereby deleted In Its entirety and replaced with Exhibit G
attached hereto.
SECTION 13. ·All capitalized terms used but not defined or otherwise modified herein
shall have the meaning ascribed to such term In the Agreement.
SECTION 14. 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.
IN WIT~ESS ·wHEREOF, the Parties have by their duly authorized representatives
executed this First Amendment on the Amendment Date first above written.
CITY OF PALO ALTO
Title: _________ _
APPROVED:
By:·-----------
Name:. _____________________ _
~E:...--1------t~--!f TIUe:. _________ _
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0180048 jrm 051l14
AMENDMENT N0.1 TO POWER PURCHASE AGREEMENT
BETWEEN THE OTY OF PALO ALTO AND
WESTERN ANTELOPE BWE SKY RANOt 8 U.C
0180048 jnn 051114
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EXHIBITG
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)
7
50,394
50,142
49,891
49,642
49,394
49,147 .
48,901
. 48,656
48,413
48,171
47,930
47,691
47,452
47,215
46,~79
46,744
46,510
46,278
46,046
45,816
45,587
45,359
45,132
44,907
. 44,682
44,459
44,236
44,015
43,795
43,576
43,358
43141
42926
42,711
42,498
AMENDMENT N0.1 TO POWER PUROIASEAGREEMENT
BETWEEN THE 01Y OF PALO ALTO AND
WESI'ERN ANTELOPE BLUE SKY RANOt 8 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 Holdco, 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 q 43 &J
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
1!.l33
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
6/16/14. CJ y 5 s
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
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