HomeMy WebLinkAboutStaff Report 141-08City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: UTILITIES
FEBRUARY 19, 2008 CMR: 141:08
ADOPTION OF A RESOLUTION APPROVING THE NORTHERN
CALIFORNIA POWER AGENCY THIRD PHASE AGREEMENT
FOR WESTERN GEOPOWER INCORPORATED RENEWABLE
ENERGY POWER PURCHASE AGREEMENT FOR THE
ACQUISITION OF UP TO FIVE AVERAGE MEGAWATTS OF
ENERGY OVER TWENTY YEARSAT AN ESTIMATED COST
NOT TO EXCEED $86 MILLION
RECOMMENDATION
Staff recommends that the City Council adopt a resolution approving the Northern California
Power Agency (NCPA) Third Phase Agreement for Western Geopower Incorporated renewable
energy power purchase. Additionally, for this agreement, staff recommends Council waive the
investment-~’ade credit rating requirement under Section 2.30.340(d) of the Palo Alto Mmaicipal
Code.
BACKGROUND
In 2002, the Council adopted a renewable resource portfolio standard with the objective of
meeting 20 percent of the City’s electrical load with renewable resources by 2015, while
ensuring the retail rate impact does not exceed 0.5 cents per kilowatt-hour (C/kWh) on average,
or approximately 5 percent of the average retail rate premkma (CMR:398:02).
In March 2007, Council advanced and increased the renewable portfolio standard with a target to
meet 20 percent of City loads with renewable resources by 2008 and 33 percent by 2015. The
new target was to be achieved while maintaining the retail rate impact measure of 0.5C/kWh
(CMR: 158:07). It should be noted that the City’s renewable portfolio standard measure excludes
large hydro-electric resources that account for approximately 50 percent of the City’s electric
supply in an average hydro year.
CMR: 141:08 Page 1 of 4
The City made considerable renewable resource commitments in 2004 and 2005 at prices of 5 to
6 C!kWh, and should reach the 20 percent renewable portfolio goal by 2008 with miasmal impact
on retail rates. The City is still seeking new amounts of renewable energy equal to
approximately 13% of amaual usage to meet the 33 percent renewable portfolio goal by 2015.
The search is proceeding in 3 venues: ttv’ough City requests for proposals, tt~’ough NCPA’s
Green Power Project, and tln’ough NCPA’s full membership participation opportunities. The
current recommendation is one of NCPA’s full membership opportunities.
DISCUSSION
NCPA owns and operates two geothermal plants in the Geysers area of Sonoma County and
Lake County, California and was recently approached by a British Columbia corporation,
Western GeoPower Incorporated (WGI), which has rights to develop a geothermal project
roughly sized between 15 to 35 megawatts (MW) in the Geysers area not far from NCPA’s other
facilities. WGI would like to enter into a Power Purchase Agreement (PPA) with NCPA to sell
all output from the plant to NCPA for a fixed price of $98/MWh for a term of 20 years.
The plant, which qualifies as a renewable power project under state-adopted definitions, would
be electrically com~ected to the Califo~a Independent System Operator-managed transmission
system. The plant would be built on the site of a former Pacific Gas and Electric Company
(PG&E) 62 MW plant that operated from 1979 to 1989 before being dismantled. As a power
output purchaser rather than as an investor-owner, NCPA and its members would not be taking
the risk that power production levels may decline, as happened with PG&E’s former 62 MW
plant at this location. Under the terms of the PPA, NCPA members pay a fixed rate for any
energy delivered. If delivered volumes decline, NCPA’s payments to WGI, and thus Palo Alto’s
payments to NCPA, would be reduced proportionately, freeing up money to purchase
replacement renewable energy from other sources.
Eleven members of NCPA, including Palo Alto, expressed interest in purchasing shares that
totaled more than 400% of the PPA. NCPA allocated participation shares to the interested
members in proportion to those members’ loads with the result that Palo Alto’s share would be
11.28% of the output if all other interested members receive their governing board approvals for
their shares. At that participation level and expected plant output, Palo Alto’s share would
amount to about 2.8 average megawatts equaling roughly 2% of its load. If one or more other
participants do not receive approvals for their full shares, there may be additional shares
available for consideration.
In light of the relative economic attractiveness of the WGI proposal compared to other renewable
resource offerings, staff is seeking Council authority to participate in up to 5 average MW of the
project even though preliminary estimates are that Palo Alto’s nominal share is likely to be about
2.8 MW (11.28% times 25 MW). More output may materialize for Palo Alto in two ways: it is
possible some members may decrease their share giving Pato Alto a chance to increase its share,
and it is possible the steam field may be more productive than estimated. Even if Palo Alto were
able to get 5 average MW from the WGI project, the City would still need 8 more average MW
to reach its renewable energy procurement goals for 2015.
CMR: 141:08 Page 2 of 4
The Third Phase Agreement has been reviewed by staff and approved by the City Attorney’s
Office (Attachment B). The Pro Forma Power Purchase Agreement between NCPA and WGP
has also been reviewed (Attact~nent C).
Western GeoPower is a relatively small company that does not have a credit rating by Moody’s
or Standard and Poor’s. Since energy deliveries will be tied to a specific generator at a specific
location, as opposed to market contracts whose deliveries are often backed by financial strength
or collateral rather than a physical asset, staff reconvnends that Council waive the investment-
Fade credit requirement for public agency contracts required under Section 2.20.340 (d) of the
Palo Alto Municipal Code. This conforms to Council action on prior renewable resource
contracts (CMR: 46!:04). This waiver is intended only for smal! companies that do not have
credit ratings. The PPA was reviewed by NCPA staff, Palo Alto Utilities staff, and Palo Alto’s
Energy Risk Manager to determine that the combination of value, price, terms, credit worthiness
of provider, and any credit assurances wan’ant Palo Alto’s participation.
RESOURCE IMPACT
The cost of renewable supplies under the A~eement is expected to be $46 million over 20 years.
This assumes that Palo Alto’s participation level and the plant output would provide 2.8 aMW
(about 2% of Palo Alto’s load). If, however, Palo Alto is able to get an increased allocation of
the project up to a maximum of 5.0 average MW, then the cost is estimated to be $86 million. In
ether case, the incremental rate impact will remain within the 0.5C/kWh limit adopted by
Council.
POLICY IMPLICATIONS
Adoption of this resolution allows the City to participate in the NCPA Third Phase Agreeme.nt to
purchase renewable energy and thereby is consistent with the Council Top Four Priority of
Enviro~m~ental Protection. Participating in the Agreemem is also consistent with the following
CiD~ policies mad guidelines:
3.
4.
5.
6.
The Council-approved Climate Protection Plan adopted December 3, 2007 containing
Utilities Goal 2: Reduce carbon intensity of energy supply provided by Utilities;
The Council-approved Utilities Strategic Plaaa with regard to emp!oying balanced
enviromnental solutions;
The energy risk management policies;
The rate impact limits and the renewable portfolio targets in LEAP Guideline #6;
The portfolio diversification goals in LEAP Guideline #3; and
The City’s Sustainability Policy Statement, adopted April 2, 2001 (CMR 175:01) and
revised June 18, 2007 (CMR 260:07), the Green Govenvnent Pledge, adopted July 19,
1999 (CMR 284:99);
The US Mayors’ Climate Protection Agreement;
The Comprehensive Plan, specifically:
a. GOAL N-9: A clean, efficient, competitively-priced energy supply that makes use of
cost-effective renewable resources.
b. POLICY N-44: Maimain Palo Alto;s long-term supply of electricity and natural gas
while addressing environmental and economic concerns.
c. POLICY N-48: Encourage the appropriate use of alternative energy technologies.
CMR: 141:08 Page 3 of 4
ENVIRONMENTAL REVIEW
Execution of the agreement does not meet the definition of a project, pursuant to section 21065
of the California Enviromnental Quality Act (CEQA). However, the City and other participating
members intend to receive output fi’om projects that will constitute a project for the purposes of
CEQA. Project developers wil! be responsible for acquiring necessary enviromnental reviews
and permits on projects to be developed.
ATTACHMENTS
A: Resolution approving NCPA Third Phase Agreement for Western GeoPower Power Purchase
Agreement
B: NCPA Third Phase Ageement for Western GeoPower Power Purchase Agreement
C: Renewable Energy Power Purchase Agreement between Northern California Power Agency
and Western GeoPower Incorporated
D: NCPA Staff Report and Resolution 08-07 Approving both the 3ra Phase Agreement between
NCPA and members for Western GeoPower Power Purchase A~eement and the NCPA/
Western GeoPower Power Purchase Agreement
PREPARED BY:TOM KABAT
Senior Resource Originator
DEPARTMENT APPROVAL:VALE E O’. ON
Director of Utilities
CITY MANAGER APPROVAL:
EMILY~HARRISON
Assistant City Manager
CMR: !4!:08 Page 4 of 4
NOT YET APPROVED
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
APPROVING THE NORTHERN CALIFORNIA POWER AGENCY
THIRD PHASE AGREEMENT FOR WESTERN GEOPOWER
INCORPORATED RENEWABLE ENERGY POWER PURCHASE
AGREEMENT FOR THE ACQUISITION OF UP TO FIVE
AVERAGE MEGAWATTS OF ENERGY OVER TWENTY 5~EARS
AT AN ESTIMATED COST NOT TO EXCEED $86 MILLION
WHEREAS, the City of Palo Alto (~Tit?~), a municipal utility and a chartered city, is a
member of the Northern California Power Agency (%ICPN); and
WHEREAS, the City and other NCPA members desire to collectively enter into a
Power Purchase Agreement (~PPN’) with Western GeoPower Incorporated (~,VGI) for a term of
taventy (20) years; and
WHEREAS, NCPA is authorized to execute a power purchase agreement with WGI
to purchase the entire expected Project output from the new WGI geothermal project (the
’Project) located in the Geysers Geothermal Field, located in the Mayacamas mountains of
Sonoma County and Lake County in the State of California; and
WHEREAS, NCPA on behalf of its members, will purchase the Project output for a
price of ninety-eight dollars ($98.00) per megawatt-hour in accordance with the PPA between
NCPA and WGI; and
WHEREAS, NCPA’S Energy Risk and Counterparty Risk Management Regulations
require that, for power purchases and sales effected for delivery more than one week from the
date of execution of the purchase, competitive bids must be obtained; and
WHEREAS, NCPA’s Risk Oversight Committee approved and the NCPA
Commission concurred in granting an exception to standard procurement policy, because the
WGI PPA is an eligible renewable resource at long-term competitive rates and has advantages
due to its physical location adjacent to the NCPA Geothermal project site, thereby giving it
competitive, operational and economic advantages other than price; and
WHEREAS, the NCPA Commission, on JanuaU 25, 2008, approved the WGI PPA and
the Third Phase Agreement; and
WHEREAS, the Third Phase Agreement allocates all costs and benefits of the WGI
PPA to participating NCPA members; and
WHEREAS, the City desires to enter into the Third Phase Agreement with NCPA for
the execution of the WGI PPA between NCPA and WGI to meet a portion its renewable energy
goals, reduce reliance on fossil fuels and their associated fuel price volatilities, and assist the State
of California in meeting its renewable energy goals; and
WHEREAS, the City has been allocated a 11.28% participation share of the Third
Phase Agreement with respect to the costs and benefits of the PPA; and
080207jb 0072985
NOT YET APPROVED
WHEREAS, the City wishes to increase its participation share percentage in the Third
Phase Agreement and, if the opportunity should arise, this vdl! not exceed 20%;
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby approves the Northern California Power Agency
Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase
Agreement. The Council further approves the City ofPalo Altds participation in the Third Phase
Agreement for the purchase of renewable energy of up to five (5) average megawatts of energy,
within an average procurement price cap of $98/MWh. The total cost of renewable energy
purchases made in accordance with this Third Phase Agreement will not exceed $86 million over
the twenty-year term.
SECTION 2. With respect to the Third Phase Agreement, the Council hereby waives
the creditworthiness terms and conditions requirements of Palo Alto Municipal Code section
2.30.340(d), as the same may apply to the City’s purchases of energy, directly or indirectly,
through NCPA.
SECTION 3. The Council finds that the adoption of this resolution does not meet
the definition of a project under Section 21065 of the California Environmental Quality Act and,
therefore, no environmental assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Sr. Asst. City Attorney
Mayor
City Manager
Director of Utilities
080207jb 0072985
Director of Administrative Services
ATTACHMEN
THIRD PHASE AGREEMENT
WESTERN GEOPOWER INCORPOIL~TED
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
1
FOR T_,~-[E \~E$~L\: GEOPO\X,~_R, LNCORPOR_KT~_D ?d£N]ET<LKBLE PO\Z’~R PURCH_~_SE AGP~EB~XflENT
//GENSERV/18.23 /\’<,~STER~N GEOPO~<~RIiiP~LKSE
TABLE OF CONTENTS
Section ............................................................................................
!0.
11.
EXHIBIT A
EXHIBIT B
RECITALS ............................................................................3
Definitions ..........................................................................4
Effectiveness of Agreement ...................................................10
Deliver) of Electrici~ / Allocation of Resource Adequacy ..............
Capacity and Environmental Attributes ...................................
Cooperation and Further Assurances ......................................1!
Payment Obligations, Securib~ Account, L~voicing .......................12
Administration of Agreement ................................................!6
Transfer of Rights lay l°articipan[s ...........................................1S
Withdrawal of Participants ...................................................
Term and Termination .........................................................18
Default and Remedies ..........................................................
Miscellaneous ....................................................................23
This Ttzird Phase Agreement for Western GeoPower Incorporated Renewable Energy Power
Purchase Agreement is between the Northern California Power Agency, a joint powers agency
of the State of California ("NCPA") and those of its Members who execute this Agreement
("Participants"). NCPA and the Participants are referred to herein individually as a "Par~"
and collectively as the "Parties".
RECITALS
A.WHEREAS, NCPA and the Participaz~ts are interested in purchasing additional
renewable elec~ic capacib; and energy for the benefit of the Participants’ customers:
B.WHEREAS, The Participants desire that NCPA negotiate and enter into a
renewable energy power purchase agreement (PPA) with the Western GeoPower Incorporated
("Western GeoPower") for twenty (20) years; and
C.WHEREAS, NCPA has executed a .PPA with Western GeoPower to purchase the
entire expected Project Output from a new Western GeoPower geothermal project ("Project")
located in the Geysers Geothermal Field located in Mayacamas Mountains of Sonoma and Lake
Counties in the State of California; and
D.WHEREAS, NCPA, on behalf of the Participants, will purchase the Project
output of for at a fixed price not to exceed ninety-eight dollars ($98.00) per megawatt hour for
the initia! term of twenty (20) years; and
E.WHEREAS, NCPA and the Participants wish to enter into this Agreement to
provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the
Participants pursuant to the PPA and to enable and obligate the Participants to take delivery of
and pay for such electricity and to pay NCPA for the costs of undertaking the foregoing
activities; and
3
THIRD PRL~_SE AGREEbfENT
FOR T_~E~ ~X’~S~l:h’q GEOPO\X,%R, INCORPOP,_~TED _KENE\’~73_BLE PO’~R PUKCf~T,_~SE AG~EI,,FRNT
/ iGENSERV/! 8.23/\XqESTERNGEOPO\’(,%RIIIPHASE
F. %E-IEREAS, NCPA and its members have (or will have) entered into the Facilities
.Agreement, dated September 22, 1993, which provides for services which NCPA shal! perform
for its members, and for the provisions to be contained in third phase agreements such as this
Agreement.
G.WHEREAS, NCPA and its members have (or will have) entered into the
Scheduling Coordination Program Agreement ("SCPA"), dated August_~, -_°00~:, which
provides for CAISO schedu!ing services and cost allocations which NCPA shall perform for its
members.
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and
covenants hereinafter set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree and intend to be legally bound,
as follows:
Section 1.Definitions
1.1 Definitions. Whenever used ha this Agreement (including the Recitals
hereto), the following terms sha!l have the following respective meanings:
1.1.1 "Agreement" means this NCPA Third Phase Agreement for
Western GeoPower Incorporated Renewable Energy Power Purchase Agreement, including all
E,’Qibits attached hereto, as the same may be amended from time to time ha accordance with the
terms m~d conditions hereof.
1.1.2 "Aannual Budget" means the budget for the ensuing Budget
Year adopted by the Commission, as it may be amended from time to time.
1.!.3 "Associate Member" means an associate member of NCPA
admitted to NCPA in accordance with Article 1~, Section 7 of the Joint Powers Agreement.
4
I. 1.4 "Budget Year"’ means the NCPA fiscal )rear,; currently the t~Telve
month period beginning July I amid ending on the next followfng june 30.
1.1.5 "Business Day" means any day except a Sat~,trday, Sunday, or a
Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m.
!ocal time.
!.1.6 "CapaciU~ Attributes" means any current or future defined
charac~ertsn , certificate, tag, credit, or amcillaty service attribute, whether general in nacre or
specific as to the !ocadon or ~y o~er at~ibute of the Project, ~tended to value ~y aspect of
the capacity of ~e Project to produce Energy or ~cfllary services, ~clud~g, but no~ ~ted to,
~y acco~t~g cons~ct so ~at ~e ~Ll Contact CapaciO: of the Project may be co,ted
toward a Resource Adequacy Requ~ement or ~): other measure by the CFUC, the CAISO, ~e
FERC, or any other enfi~ invested wi~ the authority m~der feder~ or state law, to requ~e
Buyer to procure, or to procure at Buyer’s expense, Resource Adequacy or other such products.
1.1.7 "Claims" has the meaiing set forth in Section 11,2.
1.1.8 ’~Con~mission" means the NCPA Comnzission.
~.I.9 ~-ot Applicable under this Agreement.
!.1.10 "Constitutive Documents" means, with respect to NCPA, the
Joint Powers Agreement and any resolutions or bylaws adopted thereunder, and wid~ respect to
each Par~cipant, 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 Ci%-
Charter, and any codes, ordinances, bylaws, and resolutions adopted by such Participant’s
governing body.
1.1.12 "Defaulting Par~-" has the meaning set forth in Section 9.1.
1.1.13 "Not applicable under this Agreement"
Agreement.
1.1.14 "Effective Date" has the meaning set forth in the Section 9 of this
1.1.15 "Electric System" means, with respect to each Participant except
the San Francisco Bay Area Rapid Transit District ("BART"), all properties and assets, real and
personal, tangible and intangible, of the Participant now or hereafter existing., used or
pertaining to the generation, transmission, transformation, distribution or sale of eIectric
capacity and energy, or the utilization of such, including all additions, extensions, expansions,
improvements and betterments thereto and equipment thereof; provided, however, that to the
extent the Participant is not the sole owner of an asset or properb~ or to the extent that an asset
or property is used in part for the above described purposes, only the Participant’s ownership
interest in such asset or property or only the part of the asset or property used for electric
purposes sha!l be considered to be part of its Electric System.
1.1.16 "Environmental Attributes" means any and all credits, benefits,
emissions reductions, offsets, and allowances, howsoever entitled, dhectly attributable to the
power purchase. Enviro~nental Attributes include, but are not limited to: (1) any avoided
emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides
(NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon
dioxide (CO2), methane (CH4) and other gree~house gases (GHGs) that have been determined
by the United Nations II~tergovernmental Panel on Climate Change to contribute to the actual
or potentia! tkreat of altering the Earth’s climate by t-rapping heat in the atzmosphere; and (3) the
reporting rights to these avoided emissions such as Green Tag Reporting Rights.
Environmental Attributes do not include: (1) any energy, capacity-, reliability or other power
attributes; (2) production tax credits associated with the construction or operation of the energy
6
THIRD PRL~_SE AG_R_ERb~NT
FOR TIqE T~.~£STEtLN GEOPO~£R, INCOP, POR~_TED RENE\-9’3_BLE PO~Z~_R PURCH=~.SE AGR_EE~FRNT
/ iGENSERV/18.23!\X’%STERNGEOPO%’(/-ERIIIPKr4SE
Projects and other financial incentives in the form of credits, reductions., or allowances
associated with the Project that are applicable to a state or federal income taxation obligation:
(3) fue!-related subsidies or "tipping fees" that may be paid to Seller to accept certain fuels, or
local subsidies received by the generator for the destruction of particular pre-exis~g pollutants
or the promotion of local environmental benefits; or (4) emission reduction credits encumbered
or used by the L-nit(s) for compliance with loca!, state, or federal opera~g and/or air 9ualib~
permits.
Sec~on 10.1.
1.1.17 "Event of Default" has the meaning set forth in Se~tion o.o.o and
1.!.15 ;’Joint Po~.vers Agreement" means that certain Northern
California Power Agency Joint Power Agreement first made July 19, 1965 and revised as of
April 1., 1973, establishing NCPA, as the same may be amended from time to time.
1.1.19 "~;Iember" means any bfember of N-CPA or Associate Member
1.1.20 ’"_h~\,g’" means mega~-att.
1.1.21 "b,fWh" means megawatt hour.
1.1.22 "’ ~"NCPA has the mea_vffng set forth in the preamble hereto.
1.1.23 "Participation Percentage." has the meaning, with respect to
each Project Participant, the percentage of the total capacity of the Project, and the energy
associated with such capacity, to which such Participant is entitled pursuant to the terms of this
Agreement. The Project Participation Percentage. for each P shall be in the percentage set forth
in Exhibit B attached hereto and incorporated herein. Exhibit B, shall be amended from time to
time in accordance with this Agreement
7
THL, RI) P~L%SB AG_R_EEb_FBNT
FOR Tl-r~ \X~$TE~ILN GEOPOT<-£R, !NCORPOIK%TBD KENE~XL~_BLB POT<~R PURCI~L%SE AG~Eh~NT
/ / GIENSIERV/18.23/\X~]EST]ER!N~G]£OP O\X,~RIIIPRL%S]E
!.1.24 "’Project Cost Allocation"’ memos the Project Costs allocated to
the Participants in the P-~nnual Budget.
1.1.25 "Project Costs" means any and all costs, directly or indirectly,
incurred by NCPA as a result of entering into the PPA. NCPA costs include, but are not limited
to related legal fees and associated staff time, adminis~ative and general overhead costs,
charges for transmission, transmission related costs and costs associated with the .PPA or other
NCPA associated Agreements, including the Facilities Agreement and the SCPA.
1.1.26 "Project Out-put" means all energy generated from the
geothermal Project currently being deve!oped by Western GeoPower in conjunction with this
Project, related Environmental Attributes and Capaci~; Attributes;
!.1.27 "Participant" has the meaning set forth in the preamble hereto.
(i) "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.
1.1.28 "PPA" .. means the Renewable Energy Power Purchase
Agreement attached hereto as Exhibit A.
1.1.29 Not applicable under this Agreement.
1.1.30 "Resource Adequacy Capacity" is that capacity in megawatts
that has been approved by each Participant. as capacity available to ensure that adequate
resources are available to meet peak demand and operating and planning reserves for the
purposes of local area and system reliability.
1.1.31 "Revenues" means, with respect to each Participant with the
exception of BART, all income, rents, rates, fees, charges, and other moneys derived by the
8
Participant ~om the ow~ership or operation of its Electric System, including, without limiting
the generality of the foregoing, (a) all h~come, rents, rates, fees, charges or other moneys derived
from the sale, fun~islming and supplying of electric capaci~ and energy and other services,
facilities, and commodities sold,, furnished,, or supplied through the facilities of its Electric
System, [%) the earnings on and income derived from the fnvestTnent of such income, rents,
¯ ees, 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, and (c) the proceeds derived by the
Participant, directly or indirectly, from the sale, lease or ott~er disposition of al! or a part of the
Electric System, but the term "Revenues" shal! not include (i) customers’ deposits or any other
deposits subject to refund until such deposits have become the proper~~ of the Participant or (ii)
contributions from customers for the payment of costs of construction of facilities to serve them.
In regards to BART, "Revenues" means, all h~come, rents, rates, fees, charges., grm~ts, fares or
tariffs, subventions and other moneys derived by the Participant from its operation, including,
without limiting the generality of the foregoing, (i) d~e earnings on a~d income derived f~om
the invest-ment of such income., rents, rates, fees, charges grants, fares or tariffs, subventions or
ot~er moneys and (ii) the proceeds derived by the Participant, directly or indirectly, from the
sa!e,~ lease or other disposition of all or a part of its assets, but the term "Revenues" shall not
include any moneys derived fiom sources, the use of which is limited by law to expenditures
other than operating expenses.
1.1.32 "Scheduling Protocols" means the applicable provisions of the
.SCIK& and any other contractual or other arrangements between NCPA and the relevant
Participant concerning the scheduling, delivery and metering of the PPA.
1.1.33 "Securib~ Account" means the account established by NCPA
and funded by the Participants in accordance with Section 5.3, the f-u_nds of which are available
for use by NCPA in accordance with the terms and conditions hereof.
1.1.34 Not applicable under this Agreement.
9
1.1.35 "Term" has the meaning set forth in Section 9.
1.1.36 Not applicable ~_mder this Agreement.
1.1.37 Not applicable under this Agreement.
1.2 Rules of Interpretation. As used in this Agreement (including the Recitals
hereto)., m~iess in any such case the context requires otherwise: the ten-he "herein," "hereto,"
"herewith" and "hereof" are references to this Agreernent taken as a whole and not to any
particular provision; the term "include," "includes" or "including" shall mean "including, for
example and without limitation;" and references to a "Section," "subsection," "clause," or
"E~’~ibit" shal! mean a Section, subsection, clause or Exhibit of this Agreement, as the case may
be. All references to a given agreement, instrument or other document shall be a reference to
that agreement, instrument or other document as modified, amended, supplemented and
restated through the date as of which such reference is made, and reference to a law, regulation
or ordinance h~cludes any amendment or modification thereof. A reference to a "person"
includes any individual, partnership, firm, company., corporation, joint venire, twust
association, orga~<ization or other enti~.~, in each case whether or not having a separate legal
personaliD’ and includes its successors and permitted assigns. The singular shall include the
plural and the masculine shall include the femi~-~e, and vice
Section 2.Effectiveness of Agreement This Agreement shall be effective as ~o each
Participant as of the Effective Date upon execution by the Participant, as described in Section 9
below.
Section3.Delivery of Electricity / Allocation of Resource Adequacy Capacit-v- and
Environmental Attributes. By executing this Agreement, each Participant acknowledges and
agrees to be bound by the take-or-pay process contained in or referenced herein. Any electrici~
delivered to NCPA umder the PPA. shall be delivered to each Participant in proportion to such
Participant’s Participation Percentage and each Participant shall accept and pay for its relevant
10
THIRI) PBL~_SE AGP,_EE~NT
FOR TI~__ T(qESTER2q GEOPO’g<’~R; INCORPOR~%TED RENETgABLE PO\X.’ER PURCH_%SE AGREEMENT
/ iG]ENSERV/18.23 !T¢.%STER~\~ GE O P O \~%~R!IIPI-L%S E
percentage of such electrici%7. To the extent Participant is m~able to accept such deliveries in
full, NCPA shall dispose of such surplus in its discretion, in such a manner to maximize
Participant value. Notwithstanding the above, NCPA may allocate and pool capacity and
energy procured through the PPA among the Participants in such percentages as NCPA may, in
its reasonable discretion, determine are necessary, desirable, or appropriate. Such electrici%~
shall be scheduled for the Participants in accordance with the Scheduling Protocols. Resource
Adequacy Capacity and Environmental Attributes obtained by NCPA as a result of
performance m~der this Agreement shall likewise be allocated to each .Participant by .its
Participation Percentage.
3.1 Payments to Counteroar~< NCPA sha!l pay all costs incurred hereunder
using operat~mg funds or Security Account funds, paid to NCPA in accordance with Section 5,
or such other sources as may be agreed upon in writing by the Parties from time to time.
Section 4.Cooperation and Further Assurances Each of the Parties agrees 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 not inconsistent 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 ful! effect to this Agreement and to
carry out the intent of this Agreement. Further, the Parties agree to cooperate and act in good
faith in cormecflon with obtaining any credit support required in order to procure electrici%;
from an Eligible Contract Purchase, including, with respect to negotiating and executing, any
agreements to implement any credit support arrangements.
Section 5.Payment Obligations, Security Accoun% Invoicin~
5.1 Participant Pavment Oblisations. Each Participant agrees to pay to
NCPA each month its respective portion of the Project Costs. In addition, each Participant shall
maintain working capital in accordance with NCPA’s Annual Budget, and maintah~ its Security
Account as provided in this Agreement.
11
THIRD PRLKSR AGREE~fiENT
FOR TFrW~ ~9~STE_RN G]EOPO\X~R~ INCORPORATED R_ENEY£B_BLE PO~X’-£R PURCDZ~_SE AGREEb_~NT
//GENSERV! ! 8.23 / \~%8~1%’q G]EO PO\~qEKIIIPI-L%SE
5.2 Calculation of and True-Uo for Project Costs. Upon the conclusion of a
Budget Year NCPA shall compare each Participant’s payment of estimated Project Costs with
the actual Project Costs incurred on behalf of each Participant such that overpayments will be
credited to,. and m~derpayments will debited to the Participant’s account in accordance with
XCPA’s Armual Budget settlements.
5.3 Securit; Account.
5.3.1 Initial Amom~ts. NCPA shall notify each Participant three
months prior to the expected initial delivery of power of the initial security amounts which
Participant shall be obligated to pay for under this Agreement. Each Participant shah ensure
that sufficient funds are on deposit in the Securit~ Account equal to the highest (3) months of
the immediately following (12) months of estimated Project Costs ; provided, however, that
such deposit may be satisfied, in whole or part, either in cash or through a letter of credit
satisfactory to XCPA"s General Manager.
5.3.2 Subsequent Deposits. Periodically, and at least quarterly, NCPA
shall review and revise its estimate of all costs for which Participant shall be obligated to pay for
under this _’Agreement for the succeeding twelve (12) months. Following such review, NCPA
shall determine whether each Participant has a sufficient balance in the Security Account. To
the extent that any Participant’s balance in the Secturit); Account is greater than one hundred
and ten percent (!10%) of the amount required herein, NCPA shall credit such amount as soon
as practicable to the Participant’s next following invoice. To the extent that any Participant’s
balance in the Securi<y Account is less than nine~ percent (90%) of the amount required herein,
NCPA shall add such amount as soon as practicable to such Participant’s next invoice. Credits
or additions shall not be made to Participm-~ts who satisfy- these Security Account requirements
in whole, tt-uough the use of a letter of credit, provided that the mnount of the letter of credit
shall be adjusted in a like manner to assure an amount equal to the highest three (3) months of
estimated Project Costs.
12
5.3.3 Use of Security Account Funds. NCPA may use any and all
funds deposited into the Security Account to pay- any costs it incurs hereunder, including
making payments to the counterpar0~ under the PPA. NCPA may- use any and all funds
without regard to any individual Participant’s balance in the Securit}~ Account or proportionate
share of Project Costs and irrespective of whether NCPA has issued an invoice for such costs to
the Participants or whether a Participant has made timely payments of invoices. Should
Participant have satisfied its Securi%T ,Account requirements, in whole or in part, through a
letter of credit, NCPA may draw on such Ietter of credit to satisfy Participant’s obligations
hereunder.
5.3.4 Emergency Additions. In the event that the funds are
withdra~m pursuant to section 5.3.3, or if the Security Accom~t is insufficient to allow paymen~
of an invoice, demand, request for further assurances by Third Parties, or Claims, NCI°A shall
notify all Participants and then prepare and send a special or emergency assessment to the
Partidpants. Each Participant sha!l pay to NCPA such assessment when and if assessed by
NCPA within tm-o (2) Business Days of the invoice date of the assessment or consent to and
direct NCPA to draw on any exisffmg letter of credit Participant has esta]~lished for such
purposes..
5.3.5 Accom~tin~ and Interest. NCPA shall maintah~ a detailed
accounting of each Participant’s deposits into m~d shares of withdrawals from the Securibi
Account. Interest earned on the Security Account shall be proportionate!y credited to the
Participants in accorda~ce with their Security Account bala~ces. Any losses in the Securit)~
Account caused by early termination of inveshments shall be allocated among the Participants h-~
accordance with their proportionate Participation Percentages.
5.3.6 Return of Funds. Ch~ the termination of this Agreement with
respect to a Pariicipant or a permitted withdrawal of a Participant in accordance with this
Agreement, the affected Participant or Participants may apply to NCPA for the return of their
13
share of Securib~ Accomnt funds ninety (90) days after the effective date of such termination or
withdrawal. NCPA shall, in its sole discretion, as determined by the G6nerat ~1anager, es~dmate
the then outstanding liabilities of the Participant(s), including any estimated contingent
liabilities and shall retain all such funds until all such liabilities have been fully paid or
otherwise satisfied in full The balance of the Participant’s share of the Security Account will be
rehmded to the Par~cipant.
5.4 Invoicing.
5.5.1 Luvoices. As part of NCPA"s regular, monthIy, advance billing
or by separate special invoice, as required in the circumstances, NCPA will issue an invoice to
each Participant for its proportionate share of the Project Costs due (or any adjustments thereto)
based on Sections 5.1 and 5.2 above. Such invoices may include estLma~ed costs and estimated
settlement and meter data. Each invoice shall include: (i) the total Project Costs at~ibutable to
the activities under this Agreement for such month a~d the relevant Participant’s share thereof;
(ii) the quantity of electricity, Resource Adequacy Capacity a~d Environmental Attributes.
delivered ~o such Participant (or a~ estimate thereof) and the unit price for such electrici%’; (iii)
appropriate settlement and meter data (or a~ estimate thereof); (iv) including any adjus~nents
to prior invoices required based on actual data received that was estimated in a previous
invoice. In addition NCPA may invoice an amount, if any, that NCPA has paid or reasonably
expects to pay using funds available in the Security Account; and amounts due from (or
credited to) such Participant under Section 5.3.2.
5.4.2 Payment of Ia~voices. All invoices delivered by NCPA
hereunder are due and payable on the date indicated on such invoice, provided, however, that
any amount due on a day other than a Business Day may be paid on the following Business
Day. NCPA may apply a Participant’s share of the Security- Account to the payment of all or
any portion of an invoice issued to such Participant, provided tha~ application of such hmds
from the Security Account shall not relieve the Participant from any late payment charges
14
pursuant to Section 5.4.3. To the extent that XCPA applies funds from the Securi%T Account to
pay an amount due under m] invoice, fol!owing receipt of payment of such ~voice by ~e
relevant Particip~t, NCPA shall deposit ~e re!eva]t pordon of the payment ~to the Securi~"
Accost ~d credit such deposit to such Fardci~t
5.4.3 Late Payments. Any amount due m~d not Raid by a Participant
in accordance with Sec~on 5.4.2 shall bear interest computed on a daily basis until paid at the
lesser of (i) the per annum prime rate (or reference rate) of the Ba!i< of America NTA:SA then in
effect, plus two percent (2%) or (ii) the maxLrnum rate permitted by law.
5.5 Settlement Data mid Examination of Books and Records.
5.5.1 Settlement Data. NCPA will make metering and settlement data
available to the Participants. Procedures and formats for the provision of such data will be as
established by the Participants and NCPA from dme to time.
5.5.2 Examination of Books and Records. A~y l°articipant to this
Agreement shall have the right to examine the books and records created and maintaff~ed by
NCPA pursuant to the A~reement at any reasonable, mutually agreed upon time.
5.5.3 Revenue Covenant. Any failure of a Participant to meet its
obligations hereunder or to cure such failure in a tLmely m~u~ner shall constitute a Default and
the Defaulting Par%~ shall be subject to such remedies of NCPA as provided for herein. Each
Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric
department revenues only or, in the case of BART, its tariffs, fees or other sources of revenue,
provided that such sources shall not include any sums derived from sources, the use of which is
limited by law to expenditures other than operating expenses, its percentage share of the costs
authorized by Participants in accordance with this Agreement in connection with its
participation in the Project. Each Participant further agrees that it will fix the rates and charges
for services provided by its electric department, or in the case of BART, its general revenues, so
15
that it will at all times have sufficient money in its department revenue f~nds to meet this
obligation; (ii) to make payments under this Agreement from the Revenues of, and as an
operath~g expense of, its Electric System, or in the case of BART,Rs "~ general revenues; (iii) to
make payments 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
dispute exists provided such interruption, interference or reduction Ln services is caused by
forces constituting an Act of God and not reasonably contemplated by the Parties; and (iv) to
operate its Electric System., or in the case of BART; its transit system, in an efficient manner and
to maintain its facilities in good repair, condition and working order so that: (a) the Participant’s
obligations to make pa),_-ments m~der this _Agreement are not adversely affected or threatened;
and (b) NCI°A’s bond rating and ability to negotiate and enter into a .PI°A are not adversely
affected or threatened.
Section 6. Administration of Agreement
6.1 General. The NCPA Cormnission has sole overall responsibili~- and
authori~< for the administration of this Agreement. ,,Amy acts, decisions or approvals taken,
made or sought by NCPA under this Agreement shah be taken, made or sought, as applicable,
in accordance with NCI~A’s Constitutive I)ocuments and Section 6.2.
6.2 Action by Partdcioatin~ ~lembers.
(a) Forum:~’\~enever any action anticipated by this
Agreement is required to be taken by the Participating Members, such actions shall be taken at a
regular or special meeting of the NCPA Commission but shall b~ participated ~ only by ~ose
Commissioners, or the~ designated aRema~es, who are Par~cip~ts.
(b)0uo~m:A quormm at NCPA Commission meet~gs for
purposes of act~g upon matters rela~g to t~s Agreemen~ shall consis~ of Commissioners, or
the~ designated alternates repres~n~g at least two Participants ~av~g a comb~ed majori~
interest based upon Par~cipa~on Percentages.
(c)Vo~Each Par~cip~t sha~ have ~e right to cast one
vo~e wi~ respect to matters perta~g to this Agreement, with a majori%" vo~e of ~e
Participat~g Members required for action subject to the follow~g exceptions:
(i)Upon request of any Participant representative, the voting
on an issue related to this Agreement shall be by Participation Percentage with a 6598 or more
favorable vote necessary to carry the action. The 65% requked by the preceding sentence shal!
be reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but
shall not be reduced below a majori%" in interest
(ii)After any decision related to this Agreement is taken by
the affirmative vote of less than 65% of the Program Participants, the action can be reviewed
and revised if a Participant gives notice of intention to seek such review and revision to NCPA
and each of the other Participants witt~n ten (10) days following the date on which such action
was taken. Upon receipt of such a request for reconsideration, the Chair Person of the
Commission shall agendize the matter for reconsideration at the next regular meeting of the
Cormnission or at a special meeting if the circumstances so warrant The action shall be upheld
upon the affirmative vote of authorized representatives the Participants. Any action taken upon
reconsideration shall be final.
Section 7.Transfer of Rights by Participants
7.1 A Participant has the right to make transfers, sa!es, assignments and
, transfers(s) ) its Participation Percentage and rights thereto. If aexchanges (collectively " 4" "
Participant desires to transfer a portion or its enthe share of the Project for a specific time
interval, or perma~,ently, NPCA will, if requested by such Participant, use its best efforts to
transfer that portion of the Participant’s share of the Project.
7.2 Before NCPA may transfer am excess Project share pursuamt to section 7.I
to any person or entit)/,- other than a Participant, it shall give all Participants the right to
purchase the share on the same terms and conditions. Before NCPA may transfer an excess
Project share pursuant to section 7i to an)" person or entity other tham an NCPA member, it
shall give all NCPA 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.
7.3 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
trm~sferee.
Section8.Withdrawal of Participants.No Participant may withdraw from this
Agreement except as provided herein Refer Section 7 above for discussion. However, NCPA
will use its best efforts to assist any Participant that wishes to transfer ai! or any portion of its
rights pursuant to Section 7 above.
Section 9.Term and Termination. This Agreement shall become effective when it has
been executed and delivered to NCPA by Participants, the Participation Percentages of which,
in the aggregate, equal at least 65% participation in the Project. NCPA shall provide written
notices to all Participants establishing the "effective date". The remaining Participants listed in
Exhibit B shall have 45 days, following the notice of the effective date to execute and deliver
counterparts of this Agreement to NCPA. If any Participants listed on Exhibit B fails to execute
18
and deliver [l~/s Agreement ,~vithin such 45 days,, unless other~vise agreed to by the Participants
who have executed the Agreement, the Participating Percentages of such member or members
shall be spread among those Participants in proportion to their Participation Percentages. This
Agreement shall be coterminous with the PI°A contained in Zxi-dbit A.
Section I0. Default and Remedies
10.I Events of Default. ~An Event of Default under this Agreement shall exist
with respect to a Party (;’Defaulting Party") upon the occurrence of any one or more of the
following:
(i)if any Party fails to make any payment or to provide assurances as
required of NCPA under this Agreement when due hereunder t~o (2) Business Days after
receipt of notice given by NCPA of such non-pay~ent; or
(it)the failure of the Defaulting Party to perform an); other covenant
or obligation tu-~der tl~is Agreement ~vhere such failure is not cured ~ithin ten (i0) day-s
following receipt of a notice from ~-CPA demanding cure (provided that this shall not apply to
m-ty failure to make payments (which is covered by Section I0.i (i)); or
(iii) if any representation or warranty of the Defaulting ParDi material
to the transactions contemplated hereby shall prove to have been incorrect in any material
respect when made and the Defaulting Party does not cure the facts tmderlying such h~correct
representation or warran~ so that the representation or warranU becomes true and correct
within ten (10) calendar days of the date of receipt of notice from m~y other Party demanding
cure~ or
(iv) if a Farticipaa~t is in default or in breach of any of its covenants
under any other agreement with NCPA and such default or breach is not cured within the time
periods specified in such agreement; or
(v) the failure of NCPA to perform any covenant or obligation under
this Agreement following a ten (i0) day notice to cure by any non-defaulting bfember.
19
10.2 Cure of an Event of Default. A~ Event of Default shall be deemed cured
only ff such default shall be remedied within the time period specified in Section I0.I, above, as
may be applicable after written notice has been sent to the Defaulth-~g Par%- from NCPA
specifying the default and demanding that the same be remedied provided that failure of a
Party to provide such notice shall not be deemed a waiver of such default.
10.3 !~articipation Rights Of Defaultin~ Party. Notwithstat~ding anything
herein to the contrary, upon the occurrence of an Event of Default and until such Event of
Default is cured, the Participant that is the Defaulting Par%- shall not have the right to
participate under Section 6.2 on any matters with respect to this Agreement
10.4 Remedies in the Event of Default.
10.4.! Remedies of NCPA. Upon the occurrence of an Event of Default
where a Participant is the Defaulting Par%~, without limiting its other rights or remedies
available m~der this Agreement, at law or in equity, and without constituting or resulting in a
waiver, release or estoppels of any right, action or cause of action NCPA may have against the
Participm~t, NCPA may:
(i)suspend the provision of services under this Agreement to such
Defaulting l°arty, including the deliver), of electricity and other attributes of the FPA until the
Event of Default is cured; and
(ii)demand that the Defaulting Party provide fur~er assurances to
compel the correction of the default, including mandating the collection of a surcharge to
produce Revenues to secure the cure of the Event of Default; and
(iii) terminate this Agreement as to the DefauI@mg Party on ten (10)
days prior written notice to the Defaulting Party and fol!owing approva! of the non-defaulting
Participants.
10.4.2 Sale/Transfer of Participants Accotmt UPon Default. Upon any
default of a Participant caused by the failure of such Participant to pay any sums due, and
provided that such default is not cured in a timely marmer, then NCPA shall use its best efforts
to sell and transfer for the defaulting Participant’s account all or a portion of the Participant’s
capacity and/or energy and/or Enviro~mental Attributes for the remainder of the term of this
Agreement Notwithstanding that alI or any portion of the Participant’s capacity is so sold or
transferred, the Participant shall remain liable for all of its obligations hereunder unless released
therefrom by NCPA upon assumption by- a transferee or assignee.
10.4.3 Remedies of Participants. Upon the occurrence of an Event of
Default, and following d~e applicable cure periods, where NCPA is the Defaukh~g Party, tt~e
Participant may, without limiting their o~er ri$hts or remedies available trader this Agreement,
at law or ~ eflui%~, and without consfi~8 or resuI~8 in a waiver, release or estoppel of any
right, action or cause of action ~e Parficipm~ts may have agars[ NGPA, ter~ate d~is
Agreement in whole, subject to the provisions of Secfionl0.5.4.
10.4.4 S_pecial Covenants Regarding Security Account. Jm the event
that a Participant’s balance of the Security Account is insufficient to cover all invoices for costs
incurred under this Agreement sent to such Participant, then, without !htqiting NCPA’s other
rights or remedies available m~der this Agreement, at law or in equity, such Participant shall
cooperate in good faith with NCPA and shall cure the default promptly (or within seven (7)
days), on an emergency basis; taking al! such action as is necessary, including, but not limited
to, raising rates and charges to its customers to increase its Revenues to replenish its share of the
Securib~ Account as provided herein, drawing on its cash-on-hand m~d lines of credit, obtaining
further assurances by way of credit support and letters of credit, and taking all such other
action as will cure the default without delay.
22
THIRD P DZ%SB
-~OR THE V,]ES~P~\: GEOPOW~R, INCO_~OP~%TBD
/ / G]ENSERV! 18.23,/\X,%STEI~N- OB OP O \X;IEKIIIPI-L%S ]E
10.5 Effect of Termination or Suspension.
105.1 The suspension or termination of this Agreement will not
terminate, waive, or otherwise discharge any ongoing or tmdischarged contingent liabilities or
obligations arising from this Agreement until such obligations are satisfied in fu!!, and a!l of the
costs incurred by NCPA in connection with such suspension or termination, mcluding
reasonable attorneys’ fees, the fees and expenses of other experts, including auditors and
accountants, other costs and expenses that NCPA is endtled to recover under this Agreement,
and other reasonable and necessary costs associated with any and a!l of the remedies, are paid
in full.
10.5.2 Susoension by NCPA. If performance of al! or any portion of
this Agreement is suspended by NCPA with respect to a Participant in accorda~ce with Section
10.4.1(i), such Participant shall pay an) and all costs and obligations incurred by NCPA as a
result of such suspension, including reasonable attorneys’ fees, the fees and expenses of other
experts., including auditors m~d accountants, other reasonable and necessary costs associated
with such suspension m~d any portion of the Project Costs that were not recovered from such
Participant as a result of such suspension.
10.5.3 Termination by NCPA. If this Agreement is terminated by
~-CPA with respect to a Participant in accordance with Section 10.’4.1 (iii), (i) such Participant
shal! pay- any and all costs and obligations incurred by NCPA as a result of such termination
including reasonable attorneys’ fees, the fees and expenses of other experts, including auditors
and accountants, other reasonable and necessary costs associated with such termination and
an)." portion of the Project Costs that were not, or wil! not be, recovered from such Participant as
a result of such termination; provided, however, if NCPA terminates this Agreement with
respect to the last Participant, then this Agreement shall terminate.
10..5.4 Termination bv Particimants. If this Agreement is terminated by
a!l Participants in accordance with Section 10.4.3, or by unanimous consent of a!l of the Parties
hereto, then the Participants shall pay to NCPA a!l previously unpaid costs and obiigations
incurred as of the date of such termination,, and to!lowing such termination, the Participants
shall cooperate and act in good faith to negotiate and agree upon the method of a!!ocating
among the Participants in proportion to their respective Participation Percentages the costs and
benefits of the PPA and any, financing agreements or commitments and any matters pe~"~ammg "
to the administration, management, contro!, operation and maintenance of the PPA. NCPA
shall reasonably cooperate with the Participants in cor~nection with implementing the foregoing
and the Participants shall Lndemnify NCPA for an): costs and obligations incurred in connection
therewith, including reasonable attorneys’ fees, fees and expenses of other experts, including
auditors and accotmtants and other reasonable and necessary costs. If the Parties are unable to
reach agreement as to the foregoing, then the Parties agree to submit the matter to mediation
with a mutually agreed upon mediator. If the Parties are stiI1 tmable to reach agreement
following mediation, then the matter shall be submitted to binding arbitration subject to the
rules of the American Arbitration Association, the costs of such arbitration being borne
proportionally among the Participants.
Section II.:~,’fiscellaneous
II.I Confidentialit£ The Participants and NCPA 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 Calffonia
Public Records Act. It shall be the responsibilib~ of the holder of the claim of confidentiali~ or
trade secret to defend at its expense against any request that such information be disclosed.
Confidential or trade secret information shall be marked or expressly identified as such.
11.2 Indemnification and Hold Harmless. Subject to the provisions of Section
11.4, each Participant agrees to Lndemnify, defend and hold harmless NCPA and its Members,
2,4
including their respective govem_ing officials officers,, agentsj m~d employees, from ~d aga~st
any ~d roll cla~s~ suits, toe,e% ~~,,_ _ ~ co~, damages, exRenses and liabili~ of any k~d or nacre,
~clud~8 ~easonable attorneys’ fees ~S the cos%s of li~Sation, ~cI~d~8 experts (’Cla~s"), ~o
the exten£ caused by ~y acts, omissions, b~each of contact, nes~sence (ac~ve or ~assive), 8ross
neslisence, recklessness, o~ wil~al misconduct of a ~ar~ci~£, its $ove~8 officials, oflcers,
emplo~-ees, subcon~acto~s o~ asen~s, £o the maximum ex~en~ ~ermi%~ed by law.
11.3 Severa] Liabilities. No Participant shall be liable under this Agreement
for the obligations of any other Participant, and each Participant shall be solely responsible and
liable for performance of its obligations under this A~eement, except as otherwise provided for
herein, and the obligation of each Participant under this Agreement is a several obligation and
not a joint obligation with those of the other Participants.
11.4 No Conseauentia! Damases. 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 LIABILI~’ OF THE DEFAULTING PAR~ 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 ~EIR
RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES, DIRECTOr, OFFICERS,
AGENTS, OR EMPLOYEES BE LIABLE FOR ANY LOST PROFITS, CONSEQUENTIAL,
SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE OR INCIDENTAL LOSSES OR DAMAGES,
INCLUDING LOSS OF USE, LOSS OF GOODWILL, LOST REVENUES, LOSS OF PROFIT OR
LOSS OF CONTK4CTS EVEN IF SUCH PAR~ HAS BEEN ADVISED OF THE POSS~ILI~
OF SUCH DAMAGES, AND NCPA AND EACH PARTICIPANT EACH HEREBY WASTES
SUCH CLALYfS AND RELEASES EACH OTHER AND EACH OF SUCH PEICSONS FROb.I
ANY SUCH LIABILITY.
~ne Parties acknowledge that California Civil Code section 15.42 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 "l<no~m by hkm or her must have
materiaIly affected his or her settlement with the debtor." The Parties waive the provisions of
section lf42, or other similar provisions of law, and intend that the waiver and release provided
by ttJs section of this Agreement shah be fully enforceable despite its reference to future or
unknown claims.
11.5 Amendments. Except where this Agreement specifically provides
otherwise, this Agreement may be amended only by written instrument executed by the Parties
with the same formaIity as this Agreement.
11.6 Severabi!itv. In the event that any of the terms, covenants or conditions
of dis Agreement or the application of an},- such term, covenant or condition, shall be held
invalid as to any person or circumstal-~ce by amy 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.
11.7 Governing Law. This Agreement shall be interpreted, governed by, and
construed under the laws of the State of California.
11.8 Headings. 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.
11.9 Notices. _Any notice, demand or request required or authorized by this
Agreement to be given to an}, Par%~ shah be in writing, and shall either be personally delivered
26
to a Participant and the Secretary of the Commission or transmitted to the l°ardcipant and the
Secretary of the Commission at the address shown on the signature pages hereof. The
designation of such address may be changed at any- time by written notice given to the
Secretary of the Commission who shall thereupon give written notice of such change to each
Participant.
ll.10 %\;arra_ut; of Authoritw. Each Particips~nt, and NCPA., 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 as to the Participant and as to NCPA. Upon execution
of this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of
such Particil~ant, evidencing approva! of and authority to enter into this Agreement, that such
authority was dulF exercised in accordance with such Participant’s Constitutive Documents.
II.II Counternarts. Tl~is Agreement may be executed in ~ny number of
e~_ec~ as am originalcounterparts., and each executed counterpart shall have the same force and ’7 ~
instrument m~d as if all the signatories to a~ of the co~[erparts had si~ned the same
ins~ment. }m}~ side,re page of t~s A~reement may be detached from ~y co~terFart of
this Agreement ~xrithout imFairm~ tl~e legal effect of any s~]a~res thereon, and may be
attached to ~]other co~terpart of this Agreement identical in form hereto but havin~ attached
to it one or more sizna~te pa~es.
11.12 Assi~zment. Except as provided by Section 7 no Participant may assioom
or otherwise transfer its interest in its Participation Percentage or any other rights and
obligations under this Agreement without the express written consent of NCPA, which shall
not be unreasonably withheld.
11.t3 Exercise of the Rizht of First Refusal. Participants shall abide by the
NCPA Facilities Agreement in the exercise of any options by NCPA to purchase the m~derlying
assets of the PPA as per the rot;rag procedures of this Agreement outlined in Section 6.
Participation in any such purchase shall be in accordance with the then existing Participation
Percentages, unless such Participation Percentages are otherwise agreed upon by the
Participants.
follows:
11.14 List of Exhibits. The Exhibits referenced herein shall be denoted as
Exhibit A -RENEWABLE ENERGY POWER PURCHASE AGREEMENT between
NORTHERN CALIFORNIA POWER AGENCY and WESTERN GEOPOWER
INCORPORATED
Exhibit B -PARTICIPATION PERCENTAGES
IN WITNESS WHEREOF, each Participant has executed this Agreement with the approval of its
governing body, a~d NCI<-k has authorized this Agreement in accordance with the
authorization of its Com~missfon.
NORTHEI~’x CALIFORNIA
POWER AGENCY
[Address]
[Ci%;, State, Zip]
[Telephone]
[Facs~e]
CITY OF ALAMEDA
[Address]
[City, State, Zip]
[Telephone]
[~acsiz~lile]
By:
Title:
Date:
By:
Title:
Date:
Approved as to form:Approved as to form:
Its: Attorney
Date:
Its: Attorney
Date:
BART
[Address]
[~ity, State, Zip]
[Telephone]
[Facsimile]
CITY O~ LODI
[Address]
[City, State, Zip]
[Telephone]
[l~acsfmile]
Title:
Date:
By:
Title:
Date:
Approved as to form:Approved as to form:
Its: Attorney
Date:
Its: Attorney
Date:
CITY OF LOMPOC CITY OF PALO ALTO
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
By:
Title:
Date:
Approved as to form:
By:
Its: Attorney
Date:
PLUMAS-SIERRA RUR_%L
ELECTRIC COOPEI-<ATIVE
[Address]
[Ci~7, State, Zip]
[Telephone]
[Eacsimile]
By:
Title:
Date:
Approved as to form:
Its: Attorney
Date:
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
BV:
Title:
Date:
Approved as to form:
Its: Attorney
Date:
PORT OF OAKLAND
[Address]
[Ci~-, State, Zip]
[Telephone]
[Facsimile]
By:
Tide:
Date:
Approved as to form:
By:÷
Its: Attorney
Date:
CITY OF ROSEVILLE
[Address]
[City,, State, Zip]
[Telephone]
[Facsimile]
CITY OF SANTA CLA~6
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
By:
Title:
Date:
By:
Title:
Date:
Approved as to form:Approved as to form:
By:
Its: Attorney
Date:
By:
Its: Attorney
Date:
TRUCKEE DONNER PUBLIC
UTILITY DISTRICT
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
CITY OF TURLOCK
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
Title:
Date:
By:.
Tide:
Date:
Approved as to form:Approved as to form:
Bv:
Its: Attorney
Date:
By:
Its: Attorney
Date:
ATTACHMEN
RENEWABLE ENERGy PO~,VER PURCHASE AGREEMENT
NORTHERN CALIFORNIA PO~VER AGENcy
and
~i~STERN GEOPO~’~R, INC.
RENE%VABLE ENERGY PO~,~-ER PURCHASE AGREEMENT
This Renewable Energy Power Purchase Agreement, together with the exhibits,
attacl-~nents, and any referenced collateral agreement or similar arrangement between
~.~Aoomeemen~ ) is made and effective as of the followingthe Parties (co!Iectivelv, the "~"’
date: [Insert Date] ("Effective Date") by and bet~veen tee Northern California Power
;4gency, a ioint powers agency established pursuant to the laws of the State of
Callfornia ("Buyer" or "NCPA"), and Western GeoPower, Inc., a corporation organized
and existing pursuant to the laws of the State of California ("Seller").
WHEREAS, Seller intends to construct, own, and operate a 25.5-33.5 net MW
geothernCal-powered generating facility, which qualifies as of the Effective Date as an
eligible renewable energy resource ("ERR") under the State of California Renewable
Portfolio Standard Program ("RPS’), as codified at California Public Utilities Code
Section 399.11, et seq.; and desires to sell e!ecSicity produced by such generating facility
together with al! Environmental Attributes and Capacity At~ibutes, each as defined
be!ow, to Buyer pursuant to the terms and conditions set forth herein; and
~7-IEREAS, Buyer desires to purchase elec~ricity generated by SeLers
generating facility, together with at! Environmental Atvributes and Capacity AVh’ibutes
pursuant to the terms and conditions set forth herein.
NO~,V, THEREFORE, in consideraN_on of the prenises hereof, and the covenants
and conditions contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Buyer and Seller, intend~g to
be legally bound, hereby agree as fol!ows.
Power Purchase Agreement
1
AGREEMENT
ARTICLE 1: DEFINITIONS
Uniess otherwise required by the context in which any term appears, (i) initially-
capitalized terms used in this Agreement shall have the meanings specified in this
Article; (if) terms defined in the singular shall include the plural and vice versa; (iii)
references to Articles, ~ecuon~, and "Exhibits" shall be to articles, sections, or
exhibits hereof; (iv) all references to a particular entity shall include a ~eference to such
entity’s successors and permitted assigns; (v) the words "herein,"’ "’hereoL" and
"hereunder" shall refer to tMs Agreement as a whole ~d not to any particular section
or subsec~xoz hereof; (vi) a!! accounting terms not specifically defined herein shall be
construed in accordance with GAAE, consistently applied; (vii) references to this
Agreement shall include a reference to all appendices and Exhibits hereto, as the same
may be amended, modified., supplemented, or replaced from time to time; (viii) terms
used in the masculine shall include the feminine and neuter and vice versa; and (ix) the
term "including," when used in t~s Agreement, shall mean to include without
limitation.
1.1 "Adjus~q-nent Period" means (i) the actual period when inaccurate measurements
were made by a defective Meter, if that period can be determined to the mutual
satisfaction of the Parties, or (if) if the actual period capa~_ot be determined to the
mutual satisfaction of the Parties, one-half the period from the date of the last
previous test of the Meter to the date such failure is discovered.
"Agreement" has the meaning set forth in the recitals of this Agreement.
"Available Hours" means the number of hours in any month in which the
Generating Facility is capable of delivering Energy to the Delivery Point;
provided that, to the extent that the Generating Facility is not capable of
delivering all of the Contract Capacity in any hour, the Available Hours with
respect to such hour shall be reduced i~ro rain to reflect the fraction of the
Contracl Capaci~ that the Generating IVacilit}r is capable of delivering in such
hour.
1.4 "Availabilit}/’ means the ability of the Generating Facility to produce and of
Seller to deliver Output at a level at least equal to the Contract Capacity.
Availability shall be determined with the following formula:
AvailableAvailability = I00 Hours
x Base Hours
Draft Power Purchase Agreement
2
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
Ava!lao!n~,, Shor~a!l c;amaoes equals 100% o~ the ConSact C~pac_,L), minus
the actual delivered power times $5 per bN&2~, computed a~ the end of each
Con~’act Year.
"Base Hours" means the number of hours during any month minus the agreed
upon scheduled outage hours and/or Force Majeure hours.
"Business Day" means any day except a Saturday, Sunday, or a Federal Reserve
Bank holiday. A Business Day shall begin at 8:00 a.m. and end at 5:00 p.m. local
time for the relevant Party’s principal place of business. The relevant Party, in
each instance u_nless otherwise specified, shal! be the Party from whom the
notice, payment or delivery is being sent, or by whom the notice, payment or
delivery is received, as the context requires.
"Buyer" has the meaning set forth in the preamble of this Agreement.
"CAISO’" means the California Independent System Operator.
"Capacity Attributes" means any and all current or future defined
characteristics, certificates, tags, credits, anciIlary service at~ibutes, or ac,oummg
constructs, howsoever entitIed, including Resource Adequacy Benefits, and any
tracking or accounting associated with the foregoing, attributed to or associated
with the electricity generating capacity of the Generating Facility, or any unit of
electricity generating capacity of the Generating Facility, during the Term.
"CEC" means the California Enero~y" Commission.
t_ommercm_ Operauon means that: (i) the Generating Facility has been
constructed in accordance with Good Prudent Utility Practice, as defined herein,,
all Permits, Requirements of Law, and the specifications set forth in Exhibit 2
[Description of Generating FacilitF]; (ii) all of the requirements set forth in _Article
7 have been satisfied; and (iii) Seller has successfully completed the Commercial
Operation Performance Tests.
"Commercial Operation Date" means the date on which Commercial Operation
first occurs.
"Commercial Operation Performance Tests" means the tests set forth in Exhibit 3
[Commercial Operation Performance Tests].
"Confidential Information" means information in respect of the business of
either Party provided by one Part)" to the other in accordance with, or in
furtherance of, this Agreement including this Agreement, the content of
documents, ideas, business methods, finances, prices, business plans, financial
development plans, manpower plans, customer lists or details, computer
Draft Power Purchase Agreement
3
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.24
systems, software, know-how, trade secrets or other ma~ers connected ~,~th such
Party’s obligations hereunder; provided, however, tb, at "Confidential
Information" sh~l not include information that (i) at the time of disclosure or
thereafter is generally available to, or known by, the public other than as a result
of a disclosure by the receiving Party or its representatives; (ii) was available to
the receiving Par[y on a non-co~iden[ia! basis from a source other than the
disclosing Party;.; or (iii) was otherwise independen[ly acquired or developed by
the receiving Part)" without violating its obligations hereunder.
"Contract Capacity" means accurately prepared monthly forecast eleci-ricify
generating capacity of the Generating Facility, net of a!l on-site and other uses
permitted under this Agreement and of a!l line or transformation losses to the
Delivery Point delivered to NCPA at least ten (10) days prior to the begirming of
each month.
"Contract Price" means the price in United States Dollars. (unless otherwise
provided for) to be paid by Buyer to Seller for the purchase of the Output, as
specified in Exhibit 4 [Contract Price].
"Contractual Obligations" means, as to Seller, any materia! ao~’eement,
instrument or undertaking to which Seller is a party or by which it or anv of its
property is bound.
"Contract Year" means each year begimaing on January let and ending on
December 31st of such year following the Commercia! Operation Date; provided,
however, that the first Contract Year shall commence on the Commercial
Operation Date and end on the following December 31st, and the last Contract
Year shall end on the relevant arumiversary of the Cormnercial Operation Date as
set forth in Section 2.1.
"Control Area" means the electric power system (or combination of electric
power systems) under the operational contro! of the ISO or any other electric
power system under the operational control of another organization vested with
authority comparable to that of the ISO.
c;amaoes has the meaning set forth in Section 9.4.
"Delay Liquidated Damages" means an amount equa! to $1 per day.
"Delivery Point" means the point at which the Output will be delivered by SelIer
and received by Buyer hereunder, as specified in Exhibit 2 [Description of
Generating Facility].
"Environmental At~ibutes (EA)Agency" means any local, state or federal entity,
or any other Person, that has responsibility for or jurisdiction over a program
Draft Power Purchase Agreemen~
1.25
1.26
1.27
1.28
1.29
1.30
involving transferabiIity of Environmental Attributes, including the Clean Air
Markets Division of the United States Environmental Protection Agency, the
California Resources, Conservation and Development Commission, the
California Public Utilities Commission, and any successor agency thereto.
"Effective Date" has the meaning set forth in the preamble of this Agreement.
’;Emergency" means any condition or situation which poses an imminent threat
to: (i) life or propert?;, or (ii) Buyer’s, or any of its member’s, ability to maintain
safe, adequate, and continuous electric power and energy service to its
customers.
nnero,,., means the electricity generated by the Generating Facility pursuant to
this Agreement, as expressed in units of kwh or
’;Environmental At~ibutes" means any and all credits, benefits, emissions
reductions, ~;onsets, and allowances, howsoever entitled, attributable to the
generation from the Generating Facility or Expansion Plant(s), as the case may
be., and its displacement of conventional energF generation. Envirop~menta!
Attributes include: (i) any avoided emissions of pollutants to the air, soil or
water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon n-tonoxide (CO)
and other pollutants; (ii) anv avoided emissions of carbon dioxide (CO2),
methane (CH4) and other gree~ouse gases that have been determined by the
United Nations Intergovernmental Panel on Climate Change to contribute to the
actual or potential tbeat of altering the Earth’s climate by trapping heat in the
atmosphere; and (iii) the reporting rights to these avoided emissions such as
Green Tag Reporting Rights.
Envirommenta! Attributes do not include: (i) any enero%~, capacity, reliability or
other power attributes from the Generating Facility or Expansion Plant(s), (ii)
Production Tax Credits associated with the construction or operation of the
Generating Facility-, or Expansion Plant(s), and other financial incentives in the
form of credits, reductions, or allowances associated with the Generating Facility
or Expansion Plant(s) that are applicable to a state or federal income taxation
obIigation, (iii) fue!-reIated subsidies or "tipping fees" that may be paid to Seller
to accept certain fuels, or local subsidies received by- Seller or the owners of the
Site for the destruction of particular pre-existing pollutants or the promotion of
local envirom:nentaI benefits, or (iv) emission reduction credits encumbered or
used by the Generating Facility- or Expansion Plant(s) for compliance with Iocal,
state, or federal operating and!or air quality permits.
"Enviromaaental Attributes Reporting Rights"
ownersl-ip of the Environmental Attributes to
Section 1605(b) of the Energy- Policy Act of 1992.
means al! rights to report
any Person, including under
Draft Power Purchase Agreement
5
1.31
1.32
1.33
1.34
1.35
1.36
1.37
"ERR" has the meaning set forth in the recitals of this Agreement.
"Event of Default" has the meaning set forth Ln Article 10.
"Expansion Plant" means any expansion of the" Generating Facility from its
Contract Capacity. Each such expansion of the Generating Facility shall be
deemed to be an Expansion Plant. Production from the equipment and!or
resources defined in Exhibit 2 shall be exempt from Expansion of Plant.
"Expansion Plant Output"’ means a!l capacity and associated Energy, and
associated Environmental Attributes and Capacity Attributes produced by Seller
at an},- Expansion Plant.
"Expected Atonal Contract Quantity" means the amount of Energy and
Envirommenta! At~ibutes that Seller expects to deliver to Buyer hereunder in a
given Contract Year other than the first and last Contract Years (which may be
partial years), as set forth in Exhibit 6 [Expected Annua! Contract Quantity
Portal.
"Expected Corrmaercial Operation Date" means the date on which the
Commercia! Operation Date is expected to occur, as specified in Exhibit 7
[Milestones].
"FERC" means the Federa! Energ7 Regulatory Commission and its successor
organization, if any.
1.38
1.39
1.40
1.41
"Force Majeure Event" has the meaning set forth in Section 8.1.
"G ~k ~P"~, , means Generally Accepted Accounting Principles in the United States
of America that is consistently applied.
"Generating Facility" means Seller’s electricity generating facility as more
particularly described in Exhibit 2 [Description of Generating Facility], together
with all materials, equipment systems, structures, features and improvements
necessary to produce electricity at such facility, excluding the Site, land rights
and interests in land.
"Governmental Authority" means any federal or state government, or political
subdivision thereof, including, any municipality, township or county, or any
entity or authority exercising executive, legislative, judicial, reg-ulatory or
administrative functions of or pertaining to goverrm~ent, including, any
corporation or other entity owned or conta’olled by any of the foregoing.
Draft Power Purchase Agreement
1.42
1.43
1.44
1.45
1.46
1.47
1.48
"Green Tag Reporting Rights" are the right of a Green Tag purchaser to report
the ownership of accun-mlated Green Tags in compliance ; iLh federal or state
law, if app!icab!e, and to a federai or state agency or any other party at the Green
Tag purchaser’s discretion, and include those Green Tag Reporting Rights
accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present
or future federa!, state, or loca! taw, reg-ulation or bill, and international or
foreigm emissions trading program. Green Tags are accumulated on bD~’~ basis
and one Green Tag represents the Environmenta! Attributes associated with one
(1) MWh of energy.
"’Guarantor"’ means a Person that guarantees the obligations of Seller by
executing a Guaranty.
"Guaranky" means a guaranty in the form attached hereto as Exhibit 8 [Guaranty
Agreement
"Interconnection" means the intercormection of the Generating Facility with the
Transmission System, including construction, installation, operation and
maintenance of all Interconnection Facilities.
"Intercormection Agreement" means the agreement bet~veen Seller and the
Transmission Provider pursuant to which Seller and the Transmission Provider
set forth the terms and conditions for Interconnection of the Generating Facility
to the Transmission System, as amended from time to time.
"Interconnection Facilities" means all of the facilities installed for the purpose of
interconnecting the Generating Facility to the Transmission System, including
transformers and associated equipment, relay and switching equipment and
sadety equipment.
"Interest Rate" means, for any date, the lesser of: (i) the per armum prime
lending rate (or reference rate) of interest of the Bank of America NT & SA., then
in effect as may from time to time be published by the Bank of America NT &
SA. (or if not published on such day on the most recent preceding day on which
published); and (ii) the maximum rate permitted by applicable law.
1.49
1.50
"Investment Tax Credits" or "ITC" means investment tax credits under Section
48 of the Internal Revenue Code, as amended from time-to-time during the Term.
"ISO" means the Ca!ifornia Independent System Oper.ator Corporation, or its
functional successor.
Draft Power Purchase Aor .....ent
7
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1.61
1.62
1.63
1.64
1.65
I~O Tar~ means the duly authorized ’;tarlh, rules, protocols
requirements of the ISO, as amended from time to time.
"k)X,’~" means a ki!oWatt-hour of elec~’ic energy.
and other
"Lender(sK means any Person(s) providing money or extending credit
(including any capital lease) to Seller for: (i) the construction of the Generating
Facility; or (ii) the term or permanent financing of the Generating Facility.
"Meters" means the physical metering devices, data processing equipment and
apparatus associated with the meters owned by Seller or Transmission Provider
or its designee, and used to determine the quantities of Energy generated by the
Genera[-ing Facility and to record other related parameters required for the
reporting of data to Seller in accordance with the requirements of Article 4.
"Meter Service Agreement for ISO Metered Entities" has the meaning set forth in
the ISO Tariff.
Miles~ones means the events that are set forth in Exhibit 7 [Milestones].
iv_ _ means a mega%Vatt of electric energy.
MI~ means a megaWatt-hour of elec~ic energy.
"Outage" means a physic~ state in which ai! or a portion of the Generating
Facility is unavailable to provide Energy ~o the Delivery Point including any
duration or reduction in dae capaci%; of the Generating Facfli%;, whether planned
or unplanned.
"’Outpu~" means (i) the Confract Capacity and associated Energy, and (ii) all
Enviro~entaI A~ibutes and Capacity Athibutes.
"Pardcipa~ng Generator A~eement" has the meaning set forth in the ISO tariff.
"Parties" means Buyer and Seller, and their respective successors and permitted
assignees.
"Party" means Buyer or Seller, and each such Party’s respective successors and
the months of June, July, Augmst and
permitted assignees.
"Peak Months" means, collectively,
September during each Contract Year.
"Permits" means, collectively, all federal, state or local authorizations,
certificates, permits, licenses and approvals required by any Governmental
Drafe Power Purchase
1.66
1.67
i.68
1.69
1.70
Authority for the construction, ownership, operation and maintenance of the
Generating Facility.
"Person" means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other :~ -enL±~S~
"Production Tax Credits" or "PTC" means production tax credits under Section
45 of the Interna! Revenue Code, as amended from time-to-time during the Term.
"Prudent Utility Practice" means those practices, methods and equipment, as
changed from time to time, that: (i) when engaged in, or employed, are
commonly used in the State of California in prudent electrical engineering and
operations to operate electricity equipment lawfully and with safety, reliability,
efficiency and expedition; or (ii) in the exercise of reasonable judg-ment
considering the facts known, when engaged in could have been expected to
achieve the desired result consistent with applicable law, safety, reliability,
efficiency and expedition.
Prudent Utility Practices are not hm~Led to an optimum practice, method,
selection of equipment or act, but rather are a range of acceptable practices,
methods, selections of equipment or acts.
"Resource Adequacy Benefits" means the rights and privileges attached to any
generating resource that satisfv any "~ ’~enn~y s resource adequacy obligations.
1.71
1.72
1.73
"Requirements of Law" means, collectively, any federal or state law, ~’eaty,
h’anchise, rule, reg-ulation, order, writ, jud~nent, injunction, decree, award or
determination of any arbitxator or a court or other Governmental Authori%¢ in
each case applicable to or binding upon SelIer or Buyer or any of their property
or to which Seller or Buyer or an); of their respective properties are subject.
"RPS" or ’"Renewable Portfolio Standard Program" has the meaning set forth in
the recitals of this Agreement.
""Schedule" or Schedu!lno means the actions of Seller, Buyer and/or their
designated representatives, including each Party’s Transmission Providers, if
applicable, of notifying, requesting and confirming to each other the quantity of
Energy to be delivered on any given day or days hereunder during the Term at
the Delivery Point.
Draft Power Purchase Agr, eement
9
I. 74
1.75
1.76
1.77
1.78
1.79
1.80
1.81
1.82
"’Scheduling Coordinator" means an entity certified by the ISO for the purposes
of undertaking the responsibilities specified by ISO Tariff Section 2.2.6, as
amended from time-to-time.
"Se!ler" has the meaning set forth in the preamble of this Ag-reement.
"Site" means the real property on which the Generating_ Faci]itv_ ., is to be butt and
located, as more particuhrly described in Exhibit 2 [Description of Generating
Facility].
"Site Conto!" means the point at which Seller satisfies one or more of the
following conditions: (i) Seller is (a) the lessee under a lease, or (b) the grantee
under an exclusive easement, in each case with the owner of the Site that allows
Seller to consia’uct and operate the Generating Facility at the Site during the Term
in accordance with this Agreement; (it) Seller has a fee ownership of the Site; or
(iii) any other form of site control acceptable to Buyer in its reasonable discretion.
"Taxes" means any federal, state, !ocal or foreign income, g-ross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmenta!, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, rea! property
(including assessments, fees or other charges based on the use or ownership of
rea! property), personal property, transactional, sales, use, transfer, regis~’ation,
value added, alternaiive or add on minimum, estimated tax, or other tax of any
Rind whatsoever, or any liability for unclaimed property or escheatment under
common law principles, including any interest, penalty or addition thereto,
whether disputed or not, including any item for which liability arises as a
transferee or successor-in-interest
"Term" has the meaning set forth in Section 2.1, including five (5) options to
extend Term by- an additional five (5) years if exercised in accordance with
Section 2.4.
"Test Energy" means Energy generated by the Generating Facility prior to the
Con-maercial Operation Date.
"Transmission Provider" means any entity or entities responsible for the
interconnection of the Generating Facility- with a Control Area or transmitting
Energy on behalf of Seller from the Generating Facility to the Delivery Point, and
on behalf of Buyer from the Delivery- Point.
"Transmission System" means the facilities used for the transmission of
electricity in interstate commerce, including any modifications or up~ades made
to such facilities, owned or operated by the Transmission Provider.
Draft Power ]?u_~chase Agreement
I0
2.1
2.2
ARTICLE 2: TERM; TERMINATION AND SURVIVAL OF OBLIGATIONS
Effective Date and Term
This Aoc~reement shall become effective on the Effective Date and, unless earlier
terminated pursuant to an express provision of this Agreement, shall continue
until the day before the h.ventieth (2@:’) year anniversary of the Commercial
Operation Date, urtess extended or terminated pursuant to Sections 2.2 of this
Agreement. ("Term").
Effect of Termination - Survival of Obligations
(a) Upon expiration or termination of this Agreement, neither Part}; shall
have future or further rights or obligations under this A~eement.
(b) Survival of Obligations. The following rights, obligations or provisions
shall survive termination or expiration of this Agreement:
(i)obligations by one Party to the other for payment of an).- amounts, or
for performance of any duties, that have accrued or arose prior to, or
have dh’ectly resulted from, the expiration or termination of this
Agreement;
indemnity obligations contained in Section 9.4, which shall survive
to the fu!l extent of the statute of limitations period applicable to an};
ttird party claim;
(iii)limitation of liability provisions contained in Section t1.18;
(iv)for a period of one (1) year after the expiration or termination date,
the right to dispute an invoice pursuant to Section 5.1(b); or
(v) the obligations under Section11.5.
3.1
ARTICLE 3:PURCHASE AND SALE
Purchase and Sale of Output
In accordance with the terms and conditions hereof, commencing on the
Commercial Operation Date and continuing throughout the Term, Seller
shall sell and deliver at the Delivery Point, and Buyer shall purchase and
Draft Power Purchase Agreement
11
3.2
3.3
accept from Seller at the Delivery Point, and pay the Contract Price for, al!
of the Output Seller shall oriv Schedule and deliver Enero%; and
Environmental Attributes and Capacity Athibutes from the Generating
l<acilit};.
Buyer, at Seller’s request shall purchase Test EnergLy during the plant
startup phase, provided Seller appoints Buyer as his Scheduling
Coordinator (SC). Buyer. shall pay _qeller_ $88 per ’M%,VH of Test Eneroo%~_ .
delivered. As a condition of Seller selling Test Energy Seller further
ao~’ees to compensate Buyer for any cost/penalty imposed upon Buyer
resulting from Seller not meeting the scheduled delivery of Test Enero%7
which forced Buyer to not meet his +/-3 % Deviation Bend and subject to
the CAISO imposed penalty.
Scheduled and Delivered Amounts. Following the Commercial
Operation Date, Seller shall use good faith efforts to ensure that the
amounts Scheduled hereunder match the amounts generated by the
Generating Facility. Notwithstanding anything herein to the contrary, the
Parties acknowledge that, because of the scheduling requirements of the
ISO, Scheduled deliveries and metered generation may be unequal during
any period.
d.Intermittent Resources. This section is not applicable under this
Agreement..
Delivery Point
(a) Allocation of Costs and Risks. Seller shall be responsible for any costs or
charges imposed on or associated with the Output or the deliver) of the Output
hereunder up to and at the Delivery Point. Buyer shall be responsible for an)"
costs or charges imposed on or associated with the Output, or its receipt, after
the Delivery Point.
(b) Title and Risk of Loss. Title to, and risk of loss related to, the Output shall
h’ansfer from Seller to Buyer after the Delivery Point.
Environmental Attributes and Capacity- Attributes
(a) Genera!Iv. Throughout the Term, Seller shall transfer to Buyer, and Buyer
shall receive from Seller, al! rights, titles and interest in and to the Environmental
Attributes and Capacity Attributes, if any, whether now existing or subsequently
generated or acquired (other than by direct purchase from a third party) by
Seller, or that hereafter come into existence, during the Term, as a component of
the Output purchased by Buyer from Seller hereunder. Se!ler agrees to transfer
and make such EnviroRrnental Attributes and Capacity Attributes available to
Draft Power Purchase Agreement
12
Buyer immediate!}~ to the fullest extent allowed by applicable law upon Seller’s
production or acquisition of the Environmental A.~ibutes and Capacity
.Attributes. Seller agrees that the Contract Price is the full compensation for all
Energy, Environ_mental Attributes, and Capacit)z Attributes.
(b) No Assignment. Seller shall not assioom, transfer, conve)~, encumber, sel! or
otherwise dispose of an)7 portion of the Envirolwnental Attributes and Capacit),.-
Ath’ibutes to an),.- Person other than Bu)~er.
(c) RPS Comt01iance. Before de!ire:}< of an}; Erie:g}; hereunder, Seller shall
cause: (i) the Generating l~aci!it~~ to be certified by the appropriate entit}~ having
jurisdiction as an ERR for purposes of the RPS legislation; and (ii) all Output
delivered to Bu)-er from the Generating l~acility to qualify- as output of an ERR
for purposes of the RPS legislation. Seller shall ensure that the Generating
Facilit); maintains ERR status tl~’oughout the Term of this Agreement. Seller
shall cooperate reasonably with Buyer and provide such certifications or
attestations to Bu)~er as are reasonabI)~ necessar)- to verify that el! Environmental
Attributes attributable to the Enero%~ have been transferred to Bu)~er.
(d) Reportin8 Rights. During the Term., Seller shal! not report to anj< Person
that the Envirorumental Attributes and Capacit)~ Attributes oo~ranted hereunder to
Bu)~er belon8 to an)’one other than Bu)~er, and Bu):er me)7 report under an);
pro%am that such at~ibutes purchased hereunder belong to it.
(e) Attestation. Seller shall document the production of Enviro~mental
:Attributes under this Agreement b)~ delivering with each invoice to Bu)~er an
attestation for Envirmwnental Attributes produced by- the Generating l~acilit): and
purchased bv Bu?;er in the preceding calendar montt~. On or before March 31st
of each )~ear following a Contract Year, Seller shall document the transfer of
Environmental Attributes to Bu)~er under this A~’eement b)~ delivering to Bu?~er
an attestation for Envirom<nental Attributes transferred under this Agreement in
the preceding Contract Year. The form of attestation is set forth as Exhibit ~11
[l~orm of Attestation]. Exhibit 11 [t~orm of Attestation] shall be updated or
changed b),,- the Parties as necessar)~ to ensure that Bu)rer receives full and
complete title to, and the ability- to record with an)~ EA A~enc)~ as its own, all of
the Envirom~nental Attributes purchased hereunder.
(f) Documentation. At Buyer’s request, the Parties, each at their own
expense, shall execute all such documents and instruments in o~der to effect the
transfer of the Enviro~mental Attributes specified in this Ao~’eement to Bu)~er or
its desig~nees, as Bu?’er ma)r reasonabl)~ request. Upon notification b)r an EA
Agenc}~ that an)~ transfers contemplated b)~ this Agreement will not be recorded,
the Parties shalI promptly cooperate in taking eli reasonable actions necessar)- so
that such transfer can be recorded. Each Part)~ shall promptl)7 give the other
Draft Power Purchase A~reement
3.4
3.5
Party copies of a!l documents it submits to the EA Agency to effectuate any
~ansfers.
Tax Credits
Buyer a~’ees and acknowledges that a!l PTCs ,ITCs and other tax
credits/incentives in effect on the Effective Date shall be owned by Seller and/or
the owners of the Site. In the event that the value of such credits/incentives
applicable to the Generating Facility or the Output is increased after the Effective
Date and during the Term of the Agreement, Seller agrees to share with Buyer
twenty-five percent (25%) of the increased value of such credits/incentives
realized by Seller or its affiliates in respect of the Generating Facility or the
Output.
Right of First Refusal for Purchase of Existin~ Plant or Expansion of Plant and
Expansion Plant Output
(a) Buyer’s Right to Purchase. Seller may in its sole discretion determine,
from time to time, during the Term to develop, finance, construct and! or operate
an Expansion Plant. Each time such a determination is made, Seller shall notify
Buyer of such determination and shall offer in writing to sell the Expansion Plant
Output to Buyer at a contract price to be determined. The offer shall include the
price to be paid by Buyer for the Expansion Plant Output, and the term of the
proposed Power Purchase Agreement (’PPA"). The PPA shall otherwise
co~fform to the terms and conditions of this Agreement. If Buyer wishes to
accept such offer to purchase al! (or a portion) of the Expansion Plant Output,
Buyer shall so notify Seller within sixty (60) days of its receipt of such offer. The
Parties shall promptly thereafter enter into a definitive PPA incorporating the
terms of such offer. Until such an Expansion Plant PPA is executed, Seller’s
proposal accepted by Buyer (including any modifications agreed upon in writing
by both Parties), shall control all dealings between the Parties relating to the
Expansion Plant.
(b) Seller’s Right to Sel! to Third Parties. If Buyer does not accept Seller’s
offer to purchase all of the Expansion Plant Output within ninety (90) days of
receipt of Seller’s offer, Seller shall be free to offer to sell that portion of the
Expansion Plant Output not accepted by Buyer to one or more third parties at a
price and on other terms and conditions which, taken as a whole, are at least as
favorable to Seller as the price and other terms and conditions set forth in Seller’s
offer to Buyer. If Buyer does not purchase the Expansion Plant Output and Seller
sells such Expansion Plant Output to a third party, it shall promptly certify in
writing to Buyer that the terms and conditions of sale of such Expansion Plant
Output to such third party, taken as a whole, are at least as favorable to Seller as
the price and other terms and conditions set forth in Seller’s offer to Buyer, and
Draft Power Purchase Agreement
14
Seller shall .provide the relevant contract and an}; other supporting
documentation for such certification. Upon the sale of such Expansion Plant
Ou~ut in compliance with this Agreement, Buyer shall have no further rights to
be offered or to purchase such Expansion Plant Output. Buyer’s refusal of
Expansion Plant Output from one Expansion Plant shal! not affect Buyer’s right
to purchase the Expansion Plant Output from a later Expansion Plant under the
terms of this Agreement. Seller sha!l not sell nor provide Bu-er s Expansion
Plant Output to any third party unless it can do so without compromising in any
material way its ability to provide the Output to Buyer hereunder. The
materiality of any such impact shall be determined by Buyer in its reasonable
discretion.
4.]
ARTICLE 4: METERING
Metering Requirements
(a) Meters. The transfer of Energy from Seller to Buyer shall be measured by
revenue quaEty Meters at the Delivery Point or corrected to the Delivery Point.
Such Meters shah be selected, provided, installed, owned, maintained and
operated, at Seller’s sole cost and expense, by Seller or its designee in accordance
with the ISO Tariff. Seller shall exercise reasonable care in the maintenance and
operation of the Meters, and shal! test and ven~y the accuracy of each Meter at
least annually. Seller shall ix~orm Buyer in advance of the time and date of these
tests, and shall permit Buyer to be present at such tests and to receive tee results
of such tests.
(b) SCADA. Seller shall install and maintain all equipment and data circuits
necessary to determine and transmit real time supervisory control and data
acquisition ("SCADA") system data and reaI time data h’om the Meter to the ISO.
Seller shall provide to Buyer a cop), of each certificate of compliance issued by
ISO, if any.
(c) Access bv Buyer. Buyer shall be provided access to all monitored SCADA
points to be used at its discretion in real time monitoring. Buyer may further, at
its sole cost and expense, instal! any updates or up~’ades to the Meters, as well
as insta!l and maintain check meters and all associated measuring equipment
necessary to permit an accurate determination of the quantities of Energy
delivered under this Agreement, provided that such equipment does not
interfere with Seller’s Meters. Seller shall permit Buyer or Buyer’s representative
access to its Generating l~acility for the purpose of installing and maintaining
such check meters.
Draft Power Purchase Agreement
15
4.2
4.3
(d) ISO Requirements. Seller shall submit to the ISO, or al!ow the ISO to
retrieve, any meter data required by the ISO related to the Generating Facility
and its Output in accordance with the ISO’s ~:’’seLLlemen~ and billing protocol and
meter data tariffs.
Meter Inaccuracies and Retroactive Adjustments
If a ..’.Meter fails to register, or if the measurement made by a Meter is found upon
testing to be inaccurate by an amount exceeding plus or minus one percent (1%),
an adjustment shall be made correcting all measurements made by the inaccurate
or defective Meter during the Adjushnent Period. If the Parties are unable to
agree on the amount of the adjustment to be applied to the Adjustment Period.,
the amount of the adjustment shall be determined: (i) by correcting the error if
the percentage of error is ascertainable by calibration, tests or mathematical
calculation, or (it) if not so ascertainable, by estimating on the basis of the
deliveries under similar conditions during periods when the Meter was
registering accurately. Upon the determination of the amount of any adjustment
and upon acceptance of such adjustment by the ISO, if applicable, Buyer shall
pay to Seller any additional amounts then due for deliveries of Output during
the Adjustment Period at such time as other payments are due for the billing
period in which the determination is made, or Buyer shall be entided to a credit
against the next subsequent payments due for the deliveries of Outpu%
whichever case is applicable.
Records and Audits
Seller and Buyer shall each keep complete and accurate records and all other
data required by each Party for the purposes of proper administration of this
Ag~reement, including such records as may be required by state or federa!
regulatory authorities. To facilitate payment and verification, Seller and Bu)"er
shall keep all books and records necessary for billing and payments and %ant
the other Party reasonable access to those records. Seller and Buyer, at their own
expense, shal! have the right to audit and to examine the billing and operating
records and data kept by the other Party relating to the ~’ansactions under, and
the administration of, this Agreement at any time during normal business hours
throughout the Term of this Agreement and for two years thereafter. All such
records and data shall be maintained by each Party throughout the Term of this
Ao~reement and for a period of not less than two (2) years following the
termination hereof. All such audits and examinations shall be conducted upon
reasonable notice and during normal business hours.
Draft Power Purchase A~eemen~
16
5.1
5.2
ARTICLE. 5: BILLING AND PAYMENT
Bi!ling
(a) Seller shall provide to Buyer on or before the tenth (lOth) day of the
following month:
(i)An invoice based upon the Energy Produced and delivered to the
delivery point in such previous calendar month.
(it)The corresponding attestation pursuant to Exhibit 11 [Form of
Attestation].Such invoice shalI be delivered as specified under
Section 11.1.
(b) Disputes over Invoice. Should either Seller or Buyer determine at a later
date, but in no event later than one (1) year after the original invoice date, that
the invoice amount was incorrect, that Party shall promptly notify the other
Party of the error. In the event that 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, with notice of the
objection given to the other Part)..-. 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 thirty (30) Business Days of such
resolution along with interest accrued at the Interest Rate from, and including,
the due date to, but excluding the date paid. Inadvertent overpayments by
Buyer sha!l be returned upon request or deducted by Se!ler from subsequent
payments, with interest accrued at the Interest Rate from, and including, the date
of such overpayment to, but excluding the date repaid or deducted by, Seller.
Any dispute with respect to an invoice is waf,,’ed unless the other Party is
notified in accordance with this Section 5.1(b) within one (1) year after the
invoice is rendered or an)’ specific adjustment to the invoice is made. If an
invoice is not rendered within one (1))’ear after the c!ose of the month during
which performance occurred, the right to payment for such performance is
waived. Failure of Buyer or its agent to withhold any payment amount is not a
waiver of Buyer’s right to challenge such amount.
Payment
(a) Subject to Section 5.1(b), all invoices under this Agreement shal! be due
and payable on 20m day of the month in which the invoice was received or the
10m day after receipt of the invoice which ever is later or, if such day is not a
Business Day, then on the next Business Day. Each Party shati make payments
by elec~’onic funds t~’ansfer as set forth in Exhibit 12 [Payment/Wire
Dr~t Power Purchase A~eement
17
5.4
Instructions]~ or by other mu~aI!y a~eeable method(s), to the account
desiocmated by the other Party.
(b) Late Payments and Interest Rate. Payments made after the due date shall
be considered late and shall bear interest on the unpaid balance at an annual rate
equal to two percent (27/o) plus the Interest Rate. Interest shall be computed on
the basis of a 365-day year.
Netting of Payments
The Parties hereby agree that they shall discharge mutual debts and payment
obligations due and owing to each other on the same date through netting, in
which case all amounts owed by each Party to the other for the purchase and sale
of Output during the monthly billing period under this A~eement, including
any related damages, interest, and payments or credits, shall be netted so that
only the excess amount remaining due shall be paid by the Party who owes it.
Allocation of Taxes
Seller shall pay or cause to be paid a!l Taxes on or with respect to the Outpu~ sold
and delivered hereunder arising at, or prior to, the Delivery Point. Buyer shall
pay or cause to be paid al! Taxes on or with respect to the Output purchased and
received from the Delivery Point (other than ad va!orem, franchise or income
taxes which are related to the sale of the Output and are, therefore, the
responsibility of Seller). In the event Seller is required by law or regulation to
remit or pay Taxes which are Buyer’s responsibility hereunder, Buyer shall
promptly reimburse Se!ler for such Taxes. If Buyer is required by taw or
regulation to remit or pay Taxes which are Seller’s responsibility hereunder,
Buyer may deduct the amount of any such Taxes from the sums due to Seller
under this A~’eement. Nothing shall obligate or cause a Party to pay or be liable
to pay any Taxes for which it is exempt under the law. In the event that such
Party does not prepare audited financial statements, such Party shall provide
financial statements prepared in accordance with GAAP demonstrating its
financial condition in form and substance reasonably acceptable to the other
Party.
6.1
ARTICLE 6: CREDIT REQUIREMENTS
Financial Information
If requested by one Party, the other Par~ shall deliver: (i) within one hundred
and eighty (180) days following the end of each fiscal year, a copy of the other
Party’s annual report containing audited consolidated financial statements for
Draft Power Purchase A~eement
18
such fiscal year, and (it) wittin sixty (60) days after the end of each of its first
three (3) fiscal quarters of each fiscal year, a copy of the other Party’s quarterly
report containing unaudited consolidated financia! statements for such fiscal
quarter. In all cases the statements shaI1 be for the most recent accounting period
and prepared in accordance with GAAP; provided, however, that shou!d any
such statements not be available on a timely basis due to a delay in preparation
or certification, such delay shall not be an Event of Default so long as the other
Party diligently" pursues the preparation, certification and delivery of the
statements.
7.1
ARTICLE 7: SELLER’S ADDITIONAL OBLIGATIONS
During the Term of this Agreement, Seller hereby agrees to perform the
following obligations, in addition to Seller’s obligations pursuant to Articles 3, 4,
5, and 6:
Construction, Operation and Maintenance of the Generating Facilit-v
(a) Generally. Seller shall develop, finance, construct, own, operate, and
maintain the Generating Facility in accordance with this Aoo-reement, al!
Requirements of Law, Contractua] Obligations, Permits and Prudent Utility
Practice.
(by Comt)Iiance. Seller shall, in its own name and at its own expense, seek,
obtain, maintain, comply with and, as necesssa’y, renew and modify from time to
time, all Permits and other authorizations that are required by any Requirements
of Law or Governmental Authority as are necessary- for Seller to engage in the
activities and obligations required by the A~eement.
(c) Records. Seller shall keep complete and accurate operating and other
records and all other data for the purposes of proper administration of this
A~-eement as reasonably required by Buyer, including such records as may be
required by any Governmental Authority or Prudent Utility Practice.
(d) Disclosure. Seller shall provide to Buyer such irfformation regarding the
permitting, engineering, cons~uction or operations of the Generating Facility as
Buyer may from time to time reasonably request, subject to licensing or other
restrictions of Seller or a third party with respect to co~%{identiality, disclosure or
use.
(e) Insurance. Seller shall obtain and maintain the policies of insurance in
amounts and with coverage as set forth in Exhibit 14 [Seller’s Insurance
Information].
Draf~ Power Pu;chase Agreement
19
7.2 Milestones
(a) Generally. Seller covenants that it will diligently pursue all Milestones set
forth in Exhibit 7 [Milestones]_, including the Commercial Operation Date. The
Parties agree that time is of the essence in cormection with the completion of the
Generating Facility, and for achieving Commercial Operation, and that certain
Milestones for the development, financing and construction of the Generating
Facility must be achieved in a timely fashion or Buyer shall suffer damages.
~,da~es set forth in ExhibitSeller shall achieve the Milestones by the corresponding " ~
7 [Milestones].
(b) Monthly Reports. Starting on the Effective Date, Seller shall provide to
Buyer monthly- pro~’ess reports concerning the pro~ess towards completion of
the Milestones. In addition, within five (5) Business Days of the completion of
each Milestone, Seller shall provide a certification to Buyer (along with any
supporting documentation) demonstrating the satisfaction of such Milestone.
Seller shall provide to Buyer additional information concerning Seller’s pros’ess
towards, or confirmation of, achievement of the Milestones, as Buyer may
reasonably request from time to time.
(c) Notice of Failure To Achieve a Milestone. Upon becoming aware that
Seller wilt, or is reasonably likely to, fail to achieve one or more Milestone(s) by
the required date, for any reason including a Force Majeure Event, Seller shall so
notify Buyer in writing as soon as is reasonably practical. Such notice shall
explain the cause of the delay, provide an updated date for achievement of the
Mi!estone(s), and describe Seller’s plan for meeting such Milestone(s). Seller’s
notice will also explain any impact such delay may or wi!l have on any other
Milestone, and the measures to be taken to mitigate such impact.
(d) Failure To Achieve Milestone. In the event that Seller fails to meet any
Milestone by the applicabIe Milestone deadline as set forth in Exhibit 7
[Milestones], as such deadline may- be extended as a result of a Force Majeure
Event in accordance with Section 7.2@), Seller shall be liable for Delay- Liquidated
Damages for each full month (with parts of a month Fro ra~ed) that Seller is late in
satisfying the M,Ies~one. So long as Seller is paying such Delay Liquidated
Damages on a monthly- basis Buyer shall not be permitted to terminate this
Agreement, provided that fn no event shall the combined extensions by payment
of Delay- Liquidated Damages for any or all of the Milestones exceed twelve (12)
months. If an)" Milestone has not been satisfied within twelve (112) months
following the relevant Milestone deadline, or if for any- reason Seller fails to pay,
or discontinues paying, the monthly Delay- Liquidated Damages provided for
above, Seller shall have corn_mitred an Event of Default. The twelve (12) month
period referred to in the prior sentence shall not be extended as a result of a
Force Majeure Event.
Draft Power Purchase Agr_eement
2O
7.3
7.4
(e)Force Maieure Event In the event that a Force Ma]eure Event causes any
delay in the achievement of a Milestone, such Mi!es[one’s deadline may be
extended, together with any Force Majeure Event extensions for other
Milestones, for a period not flo exceed, in the aggresate, six (6) months. The
extension of the dea~ime for amy Milestone shall extend the deadline ~or aH
subsequent Milestones, provided that in no event shall the combined extensions
for ~orce Majeure Zven[s for any or al! of the Milestones exceed six (6) months.
The extension provided for in [his Section 7.2(e) shall be the o~y effect of a ~orce
Majeure Even[ on Seller’s obligations with respect to the Milestones.
Waiver of Right. Buyer may, at its discretion, grant waivers for Seller’s
failure to meet any of the N1ilestones, but in no way shall any such waiver
constitute a waiver of any future faiIures by Seller to meet other Milestones.
Commercial Operation Performance Tests
No later than fourteen (1~) days prior to conducting its Commercial Operation
Performance Tests, Seller sha!l notify Buyer of the date on which it intends to
conduct such tests. Within seven (7) days of the successful compIetion of Seller’s
Commercial Operation Performance Tests, Seller shall provide to Buyer written
notification of the Commercia! Operation Date, including any relevant data
demonstrating that Commercia! Operation has occurred. Buyer has the right to
be present during any Commercial Operation Performance Test, and to receive
al! irfformation, including meter and performance data associated with such
tests. Seller may change the date for such tests upon written notice to Buyer,
provided that Buyer has at least fourteen (14) days’ notice of the date of such
tests.
Performance Guaranties
(a) Availability. By noon on Wednesday of each week throughout the Term,
Seller shall deliver to Buyer a report detailing the expected Availability of the
Generating Facility for the next week m~d the actual availability of the
Generating Facility for the preceding week. The repor[ sh~l include any and al!
full or partial uMt shut-downs or derafio~, Force Majeure Events, scheduled
main%enance, forced outages, curtailments, m~d other events affecting
Availabili%< Uiess challenged by Buyer wRhin fifteen (15) days of the date of
fhe receip[ of report Seller’s report of actual Availability shall determine such
Availability. If challenged, Seller’s report shall be considered Seller’s
deter~nation of Availability and shall not be considered evidence of ac~al
Availability. Seller shall provide ~o Buyer, upon request, all i~ormation
concerning Availabili%y as Buyer may reasonably request Seller shall, with
respect to each Contract Year, maintain an Avaflabili%~ of ninety percen~ (90%).
Seller shall provide a quarterly performance report detailing the ac~al
Draft Power Purchase Agreement
21
7.5
7.6
Avai~ab~iitv of the Generating Facility for that quarter. In the event that Seller
fails to meet the Availability during any month of any Contract Year, Seller shall
pay to Buyer Availability Shortfall Damages within thirty (30) days of the period
performance report, or, at Buyer’s option (as effected by written notice to Seller
within fifteen (15) days of the period performance report), Buyer may offset
payments to Seller in the next monthly billing statement..
(b)This section is not applicable under this A~eement.
(c) Limitations. The Parties recognize and a~ee that (i) the actual damages to
Buyer for a failure by Seller to meet the required Availability are difficult or
inconvenient to determine, (ii) payment of amounts by Seller pursuant to this
Section 7.4 is an appropriate remedy, and (iii) any such payment does not
constitute a forfeiture or penalty of any kind, but rather constitutes anticipated
costs to Buyer under the terms of this Agreement.
Obligation to Schedule and Deliver
(a) Scheduling. Seller hereby elects NCPA to be its Scheduling Coordinator
as provided for in a separate agreement be>teen Buyer and Seller. Seller shal!
coordinate with Buyer to comply with applicable CAISO requirements and the
provisions of Exhibit 10 [Operations Forecasts and Scheduling Protocols].
(b) A~ree~"nent with Transmission Provider. Se!ler shall, at its own cost and
expense, negotiate and enter into an Intercormection Agreement and such other
aoo-reements with the Transmission Provider as needed to enable Seller to
transmit Energy to the Deiivery Point.
(c) Ag-reements
and enter into any
delivering power
A~’eement for ISO
with ISO. Seller shall, at its own cost and expense, negotiate
a~’eements with the ISO required by the ISO for generators
into the ISO-controI!ed grid, including a Meter Service
Metered Entities and a Participating Generator Agreement.
(d) Start-ups and Shut-downs. Seller shall coordinate all Generating Facility
start-ups and shut-downs, in whole or in part, with Buyer in accordance with
ISO scheduling protocols and the reasonable protocols established by Buyer that
a~e not inconsistent with the ISO Tariff and ISO procedures, as specified in
Exhibit 10 [Operations Forecasts and Scheduling Protocols].
Modifications to the Generating FaciIitv
Seller shall obtain Buyer’s written consent, which shall not be unreasonably
withheld or delayed, prior to making any- modifications to the Generating
Facility that are likely to adversely affect Seller’s or Buyer’s ability to perform its
obligations under this Ag-reement, incIuding the delivery of the Expected An_nua!
Draft Power Purchase Aomraement
22
Contract Quantity and ~" ~,,~.meeLmo the Avaihbilitv requirements of Section 7.4. Any
such modifications shall be conducted in accordance with Prudent Utility
Pracdce and all applicable hws and reliability criteria, as such may be amended
from time to time.
8.1
ARTICLE 8: FORCE MA_JEURE
Force Majeure Events
<a) Excuse. Subject to Section 8.2 below, and except as expressly set forth
herein, neither Party shall be considered in default under this Agreement for an};
delay or failure in its performance under this Agreement (including any
obligation to deliver or accept Output) if such delay or failure is due to a Force
Majeure Event, but only to the extent that:
such Force Mafieure Event is not attributable to fault or negligence on
the part of that Par%;;
such Force Mafieure Event is caused by factors beyond that Party’s
reasonable control; and
despite taking all reasonable tecl~ical and commercial precautions
and measures to prevent avoid, mitigate or overcome such event
and the consequences thereof, the Party affected has been unable to
prevent avoid, mitigate or overcome such event or consequences.
(b)Definition. "Force Majeure Event" may include, subject to Section 8.!(a)
above and (c) below:
(i)acts of God such as storms, floods, lightning and earthquakes;
(it)sabotage or destruction by a third party of facilities and equipment
relating to the performance by the affected Party of its obligations
under this Agreement;
(iii) Transmission System or generating equipment failure;
(iv)war, riot, acts of a public enemy or other civil disturbance;
(v)strike, walkout, lockout or other significant labor dispute;
(vi)curtailment by the ISO, or its successor, but only to the extent that
the ISO declares a "Force Majeure" under the ISO Tariff; or
Drab Power Purchase Agreement
8.2
Fxdusion. "Force biaieure Fvent" does not include the following:
(,i) economic hardship of either Party;
(ii)an Outage, except ff caused direcdy by an event or circums%ance
meets the requirements set forth in this Section 81;
failure or dehy in the gmanfing of Permits;
failures or delays by the Transmission Provider or the ISO hn.
entering into, or performing under, a!l agreements with Seller
contemplated by this Ag-reement;
curtailment or interruption of transmission services, other than by
the ISO where the ISO declares a "Force Majeure" under the ISO
Tariff.
Conditions
In addition to the conditions set forth in Section 8.1(a) above, a Party may rely on
a claim of a Force Majeure Event to excuse its performance only to the extent that
such Party:
(i)
(ii)
(iii)
(iv)
(v)
provides prompt notice of such Force Majeure Event to the other
Fatty, giving an estimate of its expected duration and the probable
impact on the performance of its obligations under this A~eement;
exercises al! reasonable efforts to continue to perform its obligations
under this Ag-reement;
expeditiously takes action to correct or cure the event or condition
excusing performance so that the suspension of performance is no
greater in scope and no longer in duration than is dictated by the
problem; provided, however, that settlement of strikes or other labor
disputes shall be completely within the sole discretion of the
affected by such strike or labor dispute;
exercises all reasonable efforts to mitigate or lhnit damages to the
other Party; and
provides prompt notice to the other Party of the cessation of the
event or condition giving rise to its excuse from performance.
Draft Power Purchase Agreement
24
8.3 Termination Due To Force Majeure Event
In addition to and without limiting any other provisions of this A~’eement, ff a
Party is prevented from performing its material obligations under this
Agreement for a period of either (i) tba’ee hundred and sixty five (365)
consecutive days or more, or (it) seven hundred and thirty (730) non-consecutive
days or more (whether full or partial days), the unaffected Party may terminate
this Agreement, without Uabilitv_ . of either Party.. to the other, upon thirty (30)
days written notice at an}; time during the Force Majeure Event.
9.].
ARTICLE 9:D EFAULT/REMEDIES/’fERMINATION
Events of Default Generally
An "Event of Default" shal! mean, with respect to each Part);, the occurrence of
any of the following:
(i)the failure to make, when due, any pa?rnen~ required pursuant to
this A~eement ff such failure is not remedied within thirty (30)
Business Days after written notice;
(it)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;
(iii)
(v)
the failure to perform any material covenant or obligation set forth in
this Agreement (except to the extent constituting a separate Event of
Default, and except for the obligations set forth in Sec~on 7.4, the
exclusive remedies for which are provided in such Section) if such
failure is not remedied within thirty (30) days after written notice
(provided that if such failure is not capable of being remedied within
such period., then for such longer period as is reasonably needed to
effect the remedy, not to exceed one-hundred-eighty (180) days, so
long as the failing Party diligently pursues such remedy);
the initiation of an involuntary proceeding against such Party under
the bankruptcy or insolvency laws, which involuntary proceeding
remains undismissed for sixty (60) days, or in the event of the
initiation by such Party of a voluntary proceeding under the
bankruptcy or insolvency laws;
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,
Draft Power Pttrclnase A~*eement
25
9.2
the resulting, surviving or transferee entity fails to assume all the
obligations of such Part}; under this A~reement to which it or its
predecessor was a party by operation of law or pursuant to an
ag"eement reasonably satisfactory to the other ParbT; or
(vi) with respect to each Party’s Guarantor, if any:
if any representation or warranty made by a Guarantor in
connection with this Agreement is false or misleading in any
material respect when made or when deemed made or
repeated;
the failure of a Guarantor to make any payment required or to
perform any other material covenant or obligation in any
Guaranty made in connection with this Agreement and such
failure is not remedied within three (3) Business Days after
written notice;
the iitiation of an involuntary proceeding against such
Guarantor under the bankruptcy or insolvency laws, which
involuntary proceeding remains undismissed for sixty (60)
consecutive days, or in the event of the initiation by such
Guarantor of a voluntary proceeding under the bankruptcy or
insolvency laws;
the failure of a Guarantor’s Guaranty to be in full force and
effect for purposes of this Agreement (other than in accordance
with its terms) prior to the satisfaction of all obligations of such
Party to which such Guaranty shall relate without the written
consent of the other Party; or
5.if a Guarantor repudiates, disaffirms, disclaims, or rejects, in
whole or in part, or challenges the validity of any Guaranty.
Additional Events of Default bv Seller
In addition to the Events of Default in Sections 7.2 and 9.1 above, the following
shall each constitute an "Event of Default" by Seller:
(i)Seller Schedules and!or delivers to Buyer energy or other product
from a resource other than the Generating Facility- specified in this
Ao~reement;
(ii)Seller sells or transfers Buyer’s share of the Output (or any
individual component thereof) to any Person other than Buyer; or
Draft Power Purchase Agreement
26
9.3
9.4
Remedies: Termination for DefauIt
(a) Termination for Default. In the event the defaulting Party fails to cure the
Event of Default within the period for curative action under Sections 9.1 or 9.2, as
applicable., the non-defaulting Part); may terminate the A~eement by notifying
the defaulting Party in writing of (i) the decision to terminate, and (ii) the
effective date of the termination.
(b) Remedies. For all claims, causes of action and damages with respect to an
Event of Default, in addition to the right to termination under Section 9.3(a), the
non-defauiting Part); shall be entitled to foreclose upon, or otherwise employ,
any security provided by the defaulting Party, and to recover actual damages
al!owed by law unless otherwise limited by- this Aoo-reement. Neither the
enumeration of Events of Default in Sections 9.1 and 9.2, nor the termination of
this Ag-reement by a non-defaulting Part); pursuant to Section 9.3(@, shall limit
the right of a non-defaulting Part); to rights and remedies available at law,
including claims for breach of contract or failure to perform by the other Party
and for direct damages incurred by the non-defaulting Party as a result of the
termination of this Aoc~reement.
(c) LLwfftations. Except as otherwise specifically and expressly provided in
this Agreement, neither Par%~ shall be liable to the other under this Agreement
for any indirect, special or consequential damages, including loss of use, !oss of
revenues, loss of profit, interest charges, cost of capital or claims of its customers
or members to which service is made. Under no circums[ances shall the non-
defaulting Party be required to make a [er~nation paymen[ or other payment in
respect of any damages to the defaulting Party (except for payments due under
this Agreement for performance prior to termination).
Indemnification
Seller and Buyer agree to defend, indemnify, and hold each other, and their
respective officers, directors, employees and agents, harmless from and against
all claims, demands, losses, liabilities, and expenses (including reasonable
a~orneys’ fees) (collectively, "Damages") for personal injury or death to persons
and damage to each other’s physical property or facilities or the property of any
other Person to the extent arising out of, resulting from, or caused by the
negligent or intentional and wrongful acts, errors, or omissions of the
indemnifying Part);. This inderruaification obligation shall apply
notwithstanding an); negligent or intentional acts, errors or omissions of the
inderrmitees but the indemnifying Party’s liability to pay Damages to the
indemnified Party shall be reduced in proportion to the percentage by which the
inderrmitees’ negligent or intentional acts, errors or omissions caused the
Damages. Neither Part); shall be indemnified for its Damages resulting from its
Draft Power Purchase Agreement
27
sole negligence or willfu! ~sconduct These indemnity provisions shal! not be
cons~ued to relieve any insurer of its obligation to pay claims consistent with the
provisions of a vaiid insurance policy.
10.1
ARTICLE 10: REPRESENTATIONS, WARRANTIES AND COVENANTS
Seller’s Representations, Warranties and Covenants
Seller represents, warrants and covenants to Buyer that as of the Effective Date:
(i>Seller is duly organized and validly existing as a corporation under
the laws of the State of California, and has the lawful power to
engage in the business it presently conducts and contemplates
conducting in this A~eement and Seller is duly qualified in each
jurisdiction wherein the nature of the business Vransacted b~; it
makes such qualification necessary;
(ii)Seller has the legal power and authority to make and carry out this
Agreement and to perform its obligations hereunder; all such actions
have been duly authorized by all necessary proceedings on its part.
As of the Corru-nercial Operation Date, (a) the Generating Facility is a
"qualifying small power production facility" as that term is defined
in Section 3(17)(C) of the Federal Power Act, and will possess all of
the exemptions Dora regulation provided in 18 C.F.R. Sections
292.601(c) and 292.602; or (b) Seller has market-based rate authority,
and has made all filings required in com-tection with this Agreement,
under Federal Power Act;
(iii)throughout the Term: (a) the Generating Facility will qualify and be
certified by the CEC as an ERR under the rules and requirements in
effect as of the Effective Date; and (b) the Output delivered to Buyer
wilt qua!ify as output from an ERR under the requirements of the
RPS Legislation and under the rules and requirements in effect as of
the Effective Date;
(iv)this Agreement has been duly and validly executed and delivered by
Seller and, as of the Effective Date, constitutes a legal, valid and
binding obligation of Seller, enforceab!e in accordance with its terms
against Seller, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorgmization, moratorium or
Draft Power Purchase Agreement
28
10.2
other sLmilar laws affecting the rights of creditors generally or by
general principles ofequ_~:- i~Z
there are no actions, suits, proceedings or investigations pending or,
to the knowledge of Seller, t~eatened in writing against SelIer, at
law or in equity before any Governmental Authority, which
individually or in the aggregate are reasonably Iikei~7 to have a
materially adverse effect on the business, properties or assets or the
condition, financiaI or otherwise, of Seller, or to result in any
impairment of Seller’s ability to perform its obligations under this
Agreement;
Seller will deliver to Buyer at the Delivery Point the Output free and
dear of all liens, security interests, claims and encumbrances or any
interest therein, or thereto, by any Person.
(vii)Seller holds and wi!l hold throughout the Term, the rights to all
Environmental Attributes and Capacity :Attributes, which it has
conveyed and has cmrmaitted to convey to Buyer hereunder; and
(viii)the execution, delivery and performance of this Agreement by Seller
will not conflict with its governing documents, any applicable laws,
or any covenant, a~eement, understanding, decree or order to
which Seiler is a party or by which it is bound or affected.
Buyer Representations and Warranties
Buyer represents and warrants to Seller that as of the Effective Date:
(i)Buyer is a joint powers agency established pursuant to the laws of
the State of California, and has al! reguisite corporate power and
authority to own, lease, and operate its properties and to carry on its
business as is now being conducted;
(ii)Buyer is duly qualified or licensed to do business as a joint powers
agency and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except
where the failure to be so duly qualified or licensed and in good
standing would not have a material adverse effect;
(iii)Buyer has the legal power and authority- to make and carry out this
Agu’eement and to perform its obligations hereunder and all such
actions have been duly authorized by all necessary proceedings on
its part;
Draft Power Purchase Agreement
29
(v)
(vi)
the execution, delivery and performance of this Agreement by Buyer
wi!! not com@ict with its governing documents, any applicable laws
or any covenant, agreement, understanding, decree or order to
which Buyer is a party or by wMch it is bound or affected;
this Agreement has been duly and validly executed and delivered by
~E~ec~ive Date, constitutes a lega!, valid andBuyer and, as of the "~ ~
binding obligation of Buyer, enforceable in accordance with its terms
against Buyer, except to the extent that its enforceability may be
limited bv~, bankruptcv,~. _~nsolvencv,~, reorganization, moratorium or
other similar laws affecting the rights of creditors generally or by
general principles of equity; and
there are no actions, suits, proceedings or investigations pending or,
to the knowledge of Buyer, threatened in writing against Buyer, at
law or in equity before any Governmental Authority, which
individually or in the aggregate are reasonably likely to have a
materially- adverse effect on the business, properties or assets or the
condition, financial or otherwise, of Buyer, or to result in any
impairment of Buyer’s ability to perform its obligations under this
Agreement.
11.1
11.2
ARTICLE 11: MISCELLANEOUS
Notices
All written notices, requests, statements or payments under this Agreement
shall, unless otherwise specified herein, be deemed properly sent if delivered in
person or sent by facsimile, reliable overnight courier, or sent by registered or
certified mail, postage prepaid to the persons specified in ]Exhibit 13A & B
[Contacts]. Notice by facsimile or hand delivery shall be effective at the close of
business on the day actually received, if received during a Business Day, and
otherwise shall be effective at the close of the next Business Day. Notice by
overnight United States mail or courier shall be effective on the next Business
Day after it was sent. A Party may change its contact information by providing
notice of same in accordance herewith.
Dispute Resolution
(a) Non-binding Arbitration or Mediation. Subject to Section 5.1(b), any
dispute under this Agreement between Seller and Buyer shaI1, at the request of
any Party-, be referred to a senior representative of each of the Parties for
resolution on an informal basis as promptly- as practicable. In the event the
Draft Power Purchase A~eement
3O
senior representatives are unable to resolve the dispute., the matter may be
submitted to non-binding arbih’ation or mediation on such terms and conditions
as the Pardes may agmee.
(b) Litigation. In the event the Pardes are unable to satisfactorily resolve the
Dispute within thirty (30) calendar days of such referra! or such other period as
the Parties may mutually ag-ree, subiect to any extensions of time as may be
mutualb, aoomeed upon in writing, or any arbitration agreement, either Part}; may
initiate litigation in a court of law with jurisdiction located in [To Be Determined]
attorneys to discuss County, California, or pursuant to Section !1.12, if
applicable, which shall be the exclusive venue to litigate disputes.
(c) Remedies. Nothing in this Section 11.2 shall be construed to delay the
exercise of remedies pursuant to Section 9.3 pending the resolution of any
dispute.
(a) Expert Arbitration (a~orneys handle). Notwithstanding the provisions of
Sections 11.2@) or (b), disputes expressly referred for resolution under this
Section ll.2(d) shall be resolved in the following maRner.
(i)Each Party shall, within fourteen (14) days of referral, appoint an
expert for inclusion on the arbitral panel.
(ii)Within fourteen (1’4) days of the later of such appoimh-nents, the two
Party-appointed experts shall appoint a third expert. The third
expert shall have at least five (5) years of experience in electricity
generation and sales matters in California and shall not have been
employed by either Party, including as a coimsultant, or have had any
other financial relationship to either Party, in the last thiee (3) years.
(iii)
Within fourteen (14) days of the appointment of the third expert,
each Party shall provide to the experts and the other Party such
materials as it determines to be relevant to the dispute. The experts
may, in their judoqnent, convene a hearing at which each Party may
be subject to inquiry by the experts and/or the other
provided, however, such Party shall not be required to provide
materials beyond those already provided.
Draft Power Purd~ase Agreement
31
11.3
11.4
11.5
The experts shall render a decision on the dispute by a simple
majority vote within sixty (60) days of the selection of the third
expert, and shall produce a written explanation for their decision.
Regulatory Compliance
Each Party shal! at all times comply with al! applicable laws, ordinances, rules
and regulations applicable to it. As applicable, each Party shal! give all required
notices, shall procure and maintain a!! Permits necessary for performance of this
Agreement, and sha!! pay its respective charges and fees in connection therewith.
In the event of any change to the ISO Tariff that materially impacts either Party’s
obligations or ability to perform under this A~eement., either Party may request
that the Parties engage in good faith negotiations to amend this Agreement such
that an equitable balance of benefits and burdens may be restored to the Parties.
In the event that the Parties are unable to agree upon any amendments to this
Agreement within sixty (60) days of fl-~e request for negotiations, either Path;
may invoke the dispute resolution provisions of Section 11.2(d). Pending any
resolution under Section ll.2(d), the Parties shall continue to comply with the
provisions of this Agreement
No Dedication of Facilities
Any undertaking by one Party to the other under any provision of this
Agreement shall not constitute the dedication of the Generating Facility or any
portion thereof to the public or to any portion thereof.
Confidentiality
Al! Confidential Information obtained by either Party from the other Party shall
be used o~9y in cormection with such Party’s exercise of its rights or performance
of its obligations under this Agreement and shal! not be disclosed to any third
party, except as may be required by law, applicable regulation or judicial
process; provided, however, that if the receiving Party is required to disclose
such Confidential Information by applicable law, regulation or legal process, the
receiving Party shall promptly notify the disclosing Party of such pending
disclosure prior to such disclosure; provided further that Buyer may, at any time,
disclose any information (i) determined by its attorney to be required by law to
be disclosed bv a public entity such as the Buyer, and (ii) to those of its members
that receive some or all of the Output, whether directly or indirectly, from Buyer.
The provisions of this Section 11.5 shall survive for th-ee (3) years after the
termination of this Agreement.
11.6 Assignment
Draft Rower Purchase AgTeement
32
11.7
11.8
(a) Buyer. Buyer may, without the consent of Seller (and without re!ieving
itself from liability hereunder) assign this Agreement or assign or de!egate its
righ[s and obligations under [his Agreement, if such assignament is made to: (i)
one or more of its member municipa! utilities; or (ii) where such assignment does
not occur by operation of law, an}7 successor to Buyer provided such successor is
a municipa! uti!ity or public utility ho!ding a certificate of public convenience
and necessity granted by the California Public Utilities Commission.
(b) Seller. Se]ler may, without the consent of Buyer (and without relieving
"’ ~ @ore liability hereunder) pledge, encumber, or assign this Agreement or
the account, revenues or proceeds he~eo~ as co!la~era! secui{y in coz~ectioD wi~h
any financing or other financial arrangements for the Generating Facility,
provided that in cmmection with any such pledge, encumbrance, or assi~>en%
the assignee agrees that upon any foreclosure or exercise of similar remedies
upon the Generating Facility or materia! assets thereoL such assi~ee shall be
bound by this Agreement.
(c) Written Consent Needed. Except as stated above, neither this Agreement
nor a: 7 of the rights, interests, or obligations hereunder shall be assigned by
either ’arty, without the prior written consent of the other Party, which consent
shall ot be unreasonably withheld or delayed. Any assigmn-tent of this
.Agree aent in violation of the foregoing shal! be, at the option of the non-
assign lng Party, void.
(d) 3inding on Parties. This Agreement and all of the provisions hereof are
bindb.5 upon, and inure to the benefit of, the Parties and their respective
successors and permitted assigns.
Waiver of Rights
Waivers of any rights hereunder must be in writing and shall not be implied
from performance or usage of trade. The failure of either Party to enforce or
insist upon compliance with or strict performance of any of the terms or
conditions hereof, or to take advantage of any of its rights hereunder, shall not
constitute a waiver or relinquishment of any such terms, conditions or rights, but
the same shall be and remain at all times in fuI1 force and effect.
Section Headings_
All titles, subject headings, section titles and similar items are provided for the
purpose of reference and convenience and are not intended to be inclusive,
definitive or to affect the meaning of the contents or scope of the Agreement.
Draft Power Purchase A~eement
11.9
11.10
11.11
11.12
11.13
11.14
No Third Party Beneficiary
This Agreement shall not be construed to create rights in, or to grant remedies to,
any third part)’ (other than a permitted successor or assignee bound to this
Agreement) as a beneficiary of this Agreement or any duty, obligation or
undertaking established herein.
Forward Contract
The Parties acknowledge and agree that this Agreement and the transactions
contemplated by this Agreement constitute a "forward contract" within the
meaning of the United States Bankruptcy Code.
A__p_plicable Law
This Agreement is made in the State of California and shall be interpreted and
governed by the laws of the State of California and/or the laws of the United
States, as applicable.
Venue
The Parties hereby submit to the exclusive jurisdiction of the federal courts for
the Northern District of the State of California; provided, however, that if such
federal courts sitting in the Northern District of the State of California refuse
jurisdiction, the Parties agree to the exclusive jurisdiction of the state courts
sitting in the County of [To Be Determined], State of California. (attorneys to
resolve)
Nature of Relationship
The duties, obligations and liabilities of the Parties are intended to be several and
not joint or collective. The Agreement shall not be interpreted or consta’ued to
create an association, joint venture, fiduciary- relationship or partnership between
Seller and Buyer or to impose any partnership obligation or liability or any trust
or agency obligation or relationship upon either Party. A Party shall not have
any right, power or authorib~ to enter into any agreement or undertaking for, or
act on behalf of, or act as or be an agent or representative of or otherwise bind
the other Party.
Good Faith and Fair Dealing; Reasonableness
The Parties agree to act reasonably and in accordance with the principles of good
faith and fair dealing in the performance of this Agreement. Unless expressly
provided otherwise in this Agreement: (i) wherever the Agreement requires the
consent, approval or similar action by a Par~~, such consent, approval or similar
Drafft Power Pin.chase Agreement
34
11.15
11.16
11.17
11.18
action shall not be m~easonabl7 witt~eld or delayed; and (ii) wherever the
Agreement gives a Party- a right to determhue, require, specify or take similar
action with respect to matters, such determination, requirement, specification or
similar action shall be reasonable.
Severabilitv
Should any provision of tt~is Agreement be or become void, illegal or
unenforceable, the validity or enforceability of the other provisions of this
Agreement shall not be affected and shal! continue in full force and effect. The
Parties wi!!, however, use their best endeavors to agree on the replacement of the
void, illegal, or uneigorceable provision(s) with legally acceptable clauses that
correspond as closely as possible to the sense and purpose of the affected
provision.
Counterparts
This Agreement may be executed in bvo or more counterparts and by different
Parties on separate counterparts, a!l of which sha!l be considered one and the
same A~eement, and each of which shall be deemed an original.
Cooperation
The Parties agree to reasonably cooperate with each other in the implementation
and performance of the Agreement. Such duty- to cooperate shall not require
either Party to act in a manner inconsistent with its rights under this Agreement.
Limitation of Liabilities
To the extent permitted by law, no Party’s directors, members of its governing
bodies, officers or employees shal! be liable to any other party or parties for any
loss or damage to property, loss of earnings or revenues, personal iniury, or any
other direct, indirect, or consequential damages or injury, or punitive damages,
which may occur or result from the performance or non-performance of this
Agreement, including any negligence arising hereunder. Any liability or
damages faced by an officer or employee of a federa! agency or by that agency
that would result from the operation of this provision sha!l not be inconsistent
with federa! law. 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 tN THIS
AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH
OF ANrY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF
DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE
Draft Power Purchase A~eement
35
11.19
11.20
OBLIGOR’S LIABILt~’ SHALL BE LIMITED AS SET FORTH IN SUCH
PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN
EQUITh~ ARE WAIVED, UNLESS THE PROVISION IN QUESTION PROVIDES
THAT THE EXPRESS REMEDIES ARE IN ADDITION TO OTHER REMEDIES
THAT MAY BE AVAILABLE. IF NO REMEDY OR MEASURE OF DAMAGES
IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITT SHALL BE
LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL
OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE
LIABLE EOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR
INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS
INTERRUPTION DAMAGES,BY STATUTE, IN TORT OR CONTRACT,
UNDER ANY INDEMNITY PROVISION OR OTHERWISE.UNLESS
EXPRESSLY HEREIN PROVIDED, AND SUBJECT TO THE PROVISIONS OF
SECTION 9.4, 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.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER
ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES
ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE
OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE
DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE
APPROXIMATION OF THE HARM OR LOSS.
Further Assurances
The Parties hereto agree to execute and deliver promptly, at the expense of the
Party requesting such action, any and all other and further instruments,
documents and information that a Party may request, and that are reasonably
necessary, or appropriate, to give full force and effect to the terms and intent of
this Ag-reement.
Time is of the Essence
Time is of the essence to this Agreement and in the performance of all of the
covenants, obligations and conditions hereof.
11.21 Construction
The Parties acknowledge that this Ag-reement was jointIy prepared by them, by
and through their respective legal counsel, and any uncertainty or ambiguity
Draft Power Purchase A~eement
36
11.22
existing herein shall not be interpreted against either Party on the basis that the
Party drafted the lansmage, but otherwise shall be interpreted according to the
app!ication of the rules on interpretation of contacts.
Entire Agureement; Inte~ation
This Agreement, together with all exhibits a~ached hereto, constitutes the entire
agreement between the Parties and supersedes any and ai! prior ora! or ~,.rlLLen
understandings. No amendment, addition to or modification of any provision
hereof shall be binding upon the Parties, and neither Party shall be deemed to
have waived an)- provision or any remedy available to i% u~ess such
amendment, addition, modification or waiver is in wridng and signed by a duly
authorized officer or representative of the Parries.
IN WITNESS %~IEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the Effective Date first written.
BUYER:
NORTHERN CALtFORJKIA POWER AGENCY
By:
Name:
Title:
SELLER:
WESTERN GEOPOWER, INC.
By:
Name:
Title:
Draft Power Purchase Agreement
37
Exhibit
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
Exhibit 9
Exhibit 10
Exhibit 11
Exhibit 12
Exhibit
Exhibit
Exhibit ~!4
EXHIBITS
Reserved
Description of Generating Facility
Commercial Operation Performance Tests
Contract Price
Reserved
Expected Armual Contract Quantity Form
Milestones
Guaranty Aoo-reement
Reserved
Operations l:orecasts and Schedulin8 Protocols
l~orm of Attestation
Payment / %\~ire Instructions
Contacts, Buyer
Contacts, Seller
Seller’s Insurance Information
Draft Power Purchase A~resment
Exhibit 2
DESCRIPTION- OF GENERATING FACILITY
Location:
Equipment:
Type of Facili .ty :
Delivery Point:
Operator:
Buyer:
Name
Sig-nat~re
Date
Western GeoPower incorporated
Leaseholds, Court%~ of Sonoma, State of California
(See Exhibit 2.1 attached)
Electric Power Generation
Western GeoPower Incorporated
NCPA
JAMES H. POPE
SeHer"
~ame
Signature
D ate
Western Geol°ower needs to add description of power generation equipment,
NCPA - 2006 Power Purchase Agreement
Exhibit 2
Page 1
Exhibit 2.1
Mayacamas Energy Leasehold:
DESCRIPTION:
Al! that certain real property si~aated in the County of Sonoma, State of
California, described as foIlows:
PARCEL ONE:
Lots 1, 2, 3, 4, .5, 6, 7, 9, 10, tl, !2, 13, !4 and 16 of Section 14, Township 11 North,
8 Range 9 West, M.D.B.&M., according to the official plat thereof.
SAVING AND EXCEPTING THEREFROM, that portion of Lots ~, 4, and lo,
]yii~g northerly of the center of Big Sulpher Creek.
ALSO, SAVING AND EXCEPTING THEREFROM, that portion ~hereof conveyed
to Frai~_k Albert Dewey, et ux, by Deed dated September 2, 1950 and recorded
September 11, 1950 as Recorder’s Serial No. D-22340, Sonoma County Records.
ALSO, SAVING AND EXCEPTING THEREFRO~ I, the mining rights reserved by
Walter Wayne Woods, et al, in Deed to Frank Albert Dewey, etux, dated September 2,
1950 and recorded September 11, 1950 as Recorder’s Serial No. D-22340, Sonoma
County Records.
ALSO, SAVING AND EXCEPTING THEREFROM, that portion of Lots 9 and 14
co~veyed to DanieI J. Nielsen, etux, by Deed dated Ja~uary 25,1950 and recorded
February 1, 1950 as Recorder% Serial No. D-6082, Sonorna County records.
ALSO, SAVING AND EXCEPTING TIiEREFROM, that portion thereof lying
within the bounds of the lands described in the Deed to Regan B. Kidd, etux, dated
November 25, 1951 and recorded December 7, 1951 and Recorder’s Serial No. D-55754,
Sonoma County Records.
ALSO SAVING AND EXCEPTING the West one-half of Lot 4, as granted to G.
William Fiiley, by Deed dated June 20, 1962 and recorded July 9, 1962 in Book 1900 of
Official Records at page 39, as Recorder’s Serial No. G-99005, Sonoma County Records.
ALSO, EXCEPTING THEREFROM that portion thereof conveyed to Pacific Gas
and Electric Company, a California corporation recorded November 14, 1978 in Book
3482 of Official Records at page 825, Sonoma County Records, and by Instrument
recorded Nove~nber 14, 1978 in Book 3482 of Official records at page 833, Sonoma
Count); Records.
PARCEL TWO:
All that parcel of land located in Section 14, Township 11 North, Range 9 }Vest,
M.D.B. & M., lying west of the centerline of the creek closest to the west boundary of the
Dewey property and south of the county road to Cloverdale, all as the location of these
landmarks existed on July 30, 1951 and as the above described parcel was granted to
NCPA - 2006 Power Puschase AgTeemen~
E.,-dibit 2
Page 1
Buckman Inc., a corporation by Deed dated July 30, 1951 and recorded August 7, 1951
as Recorder’s Serial No. D-47201, Sonoma Count); Records.
PARCEL THREE:
The Southwest one-quaffer of the Northeast one-quarter and the Southeast one-
quarter of the Northeast quarter of Section 15, in Township 11 North, Range 9 West,
M.D.B. & M., according to the officia! plat thereof.
SAVING AND EXCEPTING THEREFROM, al! mineral rights in the Southeast
one-quarter of the Northeast one-quarter, as same were ~anted to C. William Filley, by
Deed dated June 20, 1962, and recorded July 9, 1962 in Book 1900 of Official Records at
page 39, as Recorder’s Seria! No. G-99005, Sonoma County Records.
PARCEL FOUR:
That portion of the East one-half of the Southwest one-quarter of the Southwest
quarter of Section 11., Township 11 North, Range 9 West, according to the official plat
thereof, lying southerly of Big Sulpher Creek.
NCPA - 2006 Power Purchase A~eement
Exhibit 2
Page 2
Filley Leasehold:
DESCRIPTION:
Al! that certain rea! property situated in the County of Sonoma, State of
California, described as fo!lows:
PARCEL ONE:
The Northeast one-quarter of the Northeast one-quarter of Section 15 Township
11 North, Range 9 West, M.D.B. & M.
PARCEL T~VO:
All that portion lying South of the centerline of Big Sulphur Creek of the
Southeast one-quarter of the Soutt]east, one-quarter of Section 10, Township 11 North,
Range 9 West, M.D.B. & M.
PARCEL THREE:
All that portion lying Southwesterly of the centerline of Big Sulphur Creek in the
West one-ha!f of the Southwest one-quarter of the Southwest, one-quarter of Section 11
Township 11 North, Range 9 West, M.D.B. & M.
Together with all mineral rights in the Southeast one-quarter of the Northeast
One-quarer of Section 15, Township 11 North, Range 9 ].Vest M.D.B. & M.
Filley-Brown Leashold:
DESCRIPTION:
Al! that tea! property situated in the Unincorporated Area, County of Sonoma,
State of California, described as follows:
The Southwest one-quarter of the Southeast one-quarter of Section 10 and the
Northwest one-quarter of the Northeast one-quarter of Section 15, Township 11 North,
Range 9 West, M.D.B. & M.,
EXCEPTING THEREFROM that portion of the Southwest one-quarter of the
Southeast one-quarter of Section 10, Township !1 North, M.D.B. & M., described as
fol!ows:
Beginning at an iron stake set at the southeast corner of said Southwest one-
quarter of the Southeast one-quarter of Section 10, thence north 700 feet along the
easterly line of the Southwest one-quarter of the Southeast one-quarter of said section
10, to an iron stake; thence west 350 feet to a point; thence south 700 feet to a point in
the south line of said section 10; thence east 350 feet along said section line to the point
of beginning.
NCPA - 2006 Power Purchase A~eem~nt
Exhibit 2
Page 1
Exhibit 3
COMMERCIAL OPERATION PERFORMANCE TESTS
Seiler shall coordinate and schedule with Buyer a Performance Test after completion of al!
equipment startup and commissioning activities. This Performance Test may be
performed before completing punch list items. Buyer shall be permitted to witness the
Performance Test, including access to and copies of control room logs, control system
display screens, and instrumentation data for a reasonable period of time before, during
and after the Per{ormance Test, and may also concurrently conduct a site inspection of the
Generating Facility, systems and equipment. Seller shall be responsible for and bear the
costs of any Capacity Test. Buyer shall will pay for energy produced in accordance with
3.1.b. Seller shall supply a written copy of the Performance Test results to Buyer within
five (5) business days fol!owing the conclusion of such test. The Performance Test shall
consist of uninterrupted operation of the Generating Facili~; for a period of no less than
seven (7) days.
1) Compliance. The Performance Test shall demonstrate the ability of the Generating
Facility to comply with all material safety, system reliability, enviro~n~ental, and od~er
Requirements of Law, this Agreemenb and any related Agreements, including any
interconnection A~’eements.
2) Contract Capacity. The Performance Test shall demonstrate the ability of the
Generating Facility to reliably generate up to thirty-two (32) megawatts.
NCPA - 2006 Power Ptu’chase Agr., cement
Exhibit 3
Page 1
Exhibit 4
CONTRACT PRICE
$98F~fV~’7-I for twenty (20) years following the Commercial Operation Date.
NCPA - 2006 Power Purcihase A~eement
Exhibit 4
Page 1
Exhibit 5
RESERVED
NCPA - 2006 Power Purchase Agreemen~
Exhibit .5
Page 1
Exhibit 6
EXPECTED ANNUAL CONTRACT QUANTITY
Contract Year Expected Annual Contract Quanti~
Contract Year 1 [Expected Annual Contract Q~zantity]
Contract Year 2 [Expected Annual Contract Quantity]
Contract Year 3 [Expected Annual Contract Quantity]
Contract Year 4 [Expected Ann~aI Contract Quantity]
Contract Year 5 [Expected Annual Contract Quantity]
Contract Year 6 [Expected Annual Contract Q~zanti¢y]
Contract Year 7 ,~[Expected Annual Contract Quantity]
~[Expected Annual Contract Qztanfity]Contract Year 8 ~
Contract Year 9 ~[Expected Annual Contract Quantity]
Contract Year 10 ~[Expected Annual Contract Quantity]
Conl-~’act Year 11 ~[Expected Annual ConD’act Qz~antity]
Contract Year 12 [Expected Annual Contract Quantity]
Contract Year 13 ~[Expected Annual Contract Qzzantity]
Contract Year 14 [Expected Annual Contract Quantity]
Contract Year 15 [Expected Annual Contract Quantity]
Contract Year 16 [Expected Annual Contract Qz~antity]
Contract Year 17 [Expected Annual Contract Quantity]
ConD’act Year 18 [Expected Annual Contract Quantity]
Contract Year 19 [Expected Annual Contract Quantity]
Contract Year 20 [Expected Annual Contract Quantity]
NCPA - 2006 Power Purchase Agreement
Exhibit
Page 1
Exhibit 7
CON STRU CTION MILESTONE SCHEDULE
Identify Milestone Estimated Date for Completion
File CEC Certification and Verification Completed
Application
Submit Intercormection Application Completed
File PRMD Permit September 2007
Execute EPC Contract
Order major Equipment for Facility i Completed
Receive Completed System Impact St-udy i June 2008
Begin Construction of Facilit)7
Receive Conditional Use Permit
Receive Completed Interconnection Facility January 2009
Study
Receive Authority to Construct Permit July 2009
Achieve Ilitial Operation April 2010
bJCPA - 2006 Power Purchase Ag~eement
Exhibit 7
Page 1
Exhibit 8
GUARANTY AGREEMENT
This Guaranty Agreement (the "Guaranty") is made by [Insert Gzzaranfor’s Name]
("Guarantor"), a [Insert G~mrantor’s bz~siness regisfraffon and location HzereoI’], in favor
of Northern California Power Agency (individually and collect{rely, the "Counterparty").
WEIEREA$, Counterparty is a par~~ to the Renewable Energy Power Purchase Agreement
between Northern CaIifornia Power Agency and Western GeoPower, Inc. ("Agreement"’)
a subsidiary of Guarantor (the "Company"); and
WHEREAS, the Guarantor is the parent of Company, and wil! receive substantial and
direct benefits from the transactions contemplated bE- the Ag-reement and has agTeed to
enter into this Guaran%~ to provide assurance for the payment obligations of Company in
connection with the Ao~reement and to induce the Counterparty to enter into the
AgTeement
NOW, THEREFORE, in consideration of good and valuable consideration, the adequacy,
receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby a~ees as
follows:
Guaranty. The Guarantor hereby unconditionally, irrevocably and absolutely
guarantees the full and punc~al payment when due (subject to written demand in
accordance with Para~aph 6 below) of Company’s payment obligations arising
under the Agreement, as such Agreement may be amended or modified by
a~’eement between Company and the Counterparty from time to time (the
"Guaranteed Obligations"). In addition, Guarantor shall reimburse Counterpart), for
all sums paid to Counterparty by Company with respect to such Guaranteed
Obligations which Counterparty is subsequendy recluired to return to Company or a
representative of Company’s creditors as a result of Company’s bankruptcy-,
insolvency, reorganization, liquidation, receivership, or similar proceeding. The
Guarantor’s obligations and liability- under this Guaranty shall be limited to payment
obligations only- and the Guarantor shall have no obligation to perform under the
Agreement, including, without limitation, [o sell, deliver, supply or transport gas,
electricity or any other commodity.
If al! or a part of any payment made by Guarantor to Counterparty hereunder is later
determined to have been improper because such amount was not actually owed by
Company to Counterparty under the A~’eement, Counterparty shall repay such
amount to Guarantor within ten (10) business days of written demand by Guarantor
together with any interest, reasonable attorneys’ fees, and!or costs of collection, if
NCPA - 2006 Power Pu_~chase Ao~reement
Exhibit 8
Page 1
9
any, required by the Agreement to be Raid by Counterparty in the collection of such
amount.
Guaranty Absolute. The liability of Guarantor under this Guaran%~ shall be absolute,
irrevocable and unconditiona! irrespective of:
any defect or deficiency in the Agreement or any other documents executed in
cormection with the Agreement;
<b)any modification, extension or waiver of any of the terms of the Agreement;
any change in the time, manner, terms or place of payment of or in any other term o~
all or any of the Guaranteed Obligations, or any other amendment or waiver of or
any consem vo departure from the Agreement or any other Agreement or instrument
executed in connection therewith;
(d)
(~
any sale, exchange, release or non-perfection of any property standing as security for
the liabilities hereby guaranteed or any liabilities incurred directly or indirectly
hereunder or any setoff against any of said liabiIities, or any release or amendment or
waiver of or consent to departure from any ozher guaranty, for all or any of the
Guaranteed Obligations;
except as to applicable statutes of limitation, failure, omission, delay, waiver or
refusa! by the Counterpart); to exercise, in whole or in part, any right or remedy held
by the Counterparty xvith respect to the Agreement or any transaction under the
Agreement;
any change in the existence, structure or ownership of the Guarantor or Company, or
any barficruptcy, insolvency, reorganization, liquidation, receivership, or simitar
proceeding affecting Company or its assets; or
subject to Guarantor’s reservations in the last sentence of this Paragraph 2, any
dispute between Counterparty and the Company in connection with the Guaranteed
Obligations.
The obligations of the Guarantor hereunder are severa! and not joint with Company
or any other person, and are primary obligations for wl~ch the Guarantor is the
principal obligor. There are no conditions precedent to the enforcement of this
Guaranty, except as expressly contained herein. It shall not be necessary for the
Counterparty, in order to erfforce payment by the Guarantor under this Guaranty, to
exhaust its remedies against Company, any collateral pIedged by Company, any
other guarantor, or any other person liable for the payment or perforn-tance of the
Guaranteed Obligations. This Guaranty is one of payment and not of collection and
shall apply regardless of whether recovery of all such Guaranteed ObIigations may
be discharged, or uncolIectibte in any bankruptcy, insolvency, reorganization,
liquidation, receivership, or similar proceeding affecting Company or its assets. This
Guaranty is a continuing guaranty and sha!l apply to a!I present and future
transactions entered into under the Agreement
NCPA - 2006 Power Purchase A~eement
Exhibit 8
Page 2
I, Vithout limiting Guarantor’s own defenses and rights hereunder, Guarantor reserces
to itse!f all rights, setoffs, counterclaims and other defenses to which Company is or
may be en~dtled to arising from or out of the Agreements or otherwise, except as
limited herein and except for defenses arising out of any hal< of authori%; by
Company to enter into the Guaranteed Obligations or the bankruptcy, insolvency,
reorganization, liquidation, receivership, or skniIar proceeding affecting Company or
its assets.
"Waiver. Guarantor hereby waives:
(a)
(c)
(d)
(e)
excep~ for the acceptance required from CounterpaHy below; notice of acceptance of
this Guaranty, notice o~ the creation or existence of any of the Guaranteed
Obligations and notice of any action by the Counterparty in reliance hereon or in
coimection herewith;
notice of the entry into the Agreement between Company and the CounterpaHy and
notice of any amendments~ supplements or modifications thereto; or any waiver of
consent under the A~reemen% including waivers of ~he paymen~ and performance of
the obligations thereunder;
notice of an}; increase, reduction or rearrangemen~ of Company;s obligations under
the Agreement or noice of any extension of time for ~he payment of an}’ sums due
and payable to the Counterparty under the Agreement;
except as expressly set forth herein: presentment: demand for payment: notice of
dishonor or nonpayment; protest and notice of protest or rely other notice of any
other kind with respect to the Guaranteed Obligations; and
any requirement that suit be brought against, or any other action by the Counterparty
be taken against; or any- notice of default or other notice be given to, or any demand
be made on; Company or any other person, or that an)’ other action be taken or not
taken as a condition to the Guarantor;s liability- for the Guaranteed Obligations under
ttis Guaranty or as a condition to the enforcement of this Guaranty against the
Guarantor.
Subrogation. The Guarantor shall be subrogated to all rights of the Counterp~rty
against Company in respect of any amounts paid by the Guarantor pursuant to the
Guaranty, provided that the Guarantor waives any rights it may acquire by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise
(including, without limitation, any statutory rights of subrogation under Section 509
of the Bankruptcy Code, 11 U.S.C. §509, or otherwise), reimbursement, exoneration,
contribution, indemnification, or any right to participate in any claim or remedy of
the Counterpart- against Company or any collateral which the Counterparty now
has or acquires, until all of the Guaranteed Obligations shall have been irrevocably
paid to the Counterparty in full. If (a) the Guarantor shall perform and shall make
payment to the Counterparty of all or an); part of the Guaranteed Obligations and (b)
all the Guaranteed Obligations shall have been paid in full, the Counterparty shall, at
NCPA - 2006 Power Purchase Agreement
Exhibit 8
Page 3
the Guarantor’s request, execute and deliver to the Guarantor appropriate documents
necessary to evidence the transfer by subrogation to the Guarantor of an); interest in
the Guaranteed Obligations resulting from such payment by the Guarantor.
Notices. All demands, notices and other communications provided for hereunder
shall, unless otherwise specifically provided herein, (a) be in writing addressed to the
party receiving the notice at the address set forth below or at such other address as
may be designated by written notice, from time to time, to the other par%~, and (b) be
effective upon delivery-, when mailed by U.S. mail, registered or certified, return
receipt <’equested, postage prepaid, or personally delivered. NoVices shall be sent to
the fo!L wing addresses:
If to < ounterparty:
NOR- ½ERN CALIFORNIA POWER AGENCY
180 C .by Way
Rose~, !e, CA 95678
:\tten on: Treasurer/Controller
to ( .arantor:
[Inset Gz~arantor’s Address]
Oeman{ and Payment. Counterparty is not entitled to make demand upon
Guarani. r unti! a default occurs in payment of any Guaranteed Obligations by
/ompa~.- to Counterparty. Any demand by the Counterparty for payment
hereund.~r shall be in writing, reference this Guaranty, reference the Guaranteed
Obligati ,ns, and signed by a duly authorized representative of the Counterpart7 and
delivered to the Guarantor pursuant to Paragraph 5 hereof. There are no other
requirements of notice, presentment or demand. The Guarantor shall pay, or cause to
be paid, such Guaranteed Obligations within ten (10) business days of receipt of such
demand.
No Waiver; Remedies. Except as to applicable statutes of limitation, no failure on the
part of Counterparty ~o exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law-.
NCPA - 2006 Power Purchase Ao~reement
Exhibit 8
Page 4
10.
!1.
Term; Termination. This Guaranty shall continue in fu!l force and effect from the
Effective Date until all Guaranteed Obligations arising with respect to the Agreement
have been~ -¯ u!!? satisfied.
Assignment; Successors and Assigns. The Guarantor shall not assign its rights
hereunder without the prior written consent of the Counterparty, and any
assignment without such prior written consent shal! be null and void and of no force
or effect. This Guaranty shatI be binding upon and inure to the benefit of the each
party hereto and their respective successors and permitted assig-ns.
Amendments, Etc. No amendment of this Guaranty shall be effective unless in
writing and signed by Guarantor and Counterparty. No waiver of any- provision of
this Guaranty nor consent to an),- departure by the Guarantor therefrom shall in any
event be effective mJess such waiver shall be in writing .and signed by Counterpart)<
Any such waiver shall be effective only in the specific instance and for the specific
purpose for which it was given.
Caption. The captions in this Guaranty have been inserted for convenience only and
shall be given no substantive metaling or significance whatsoever in construing the
terms and provisions of this Guaranty.
!2.Representation and Warranties.
The Guarantor represents and warrants as fol!ows:
(a)
(b)
The Guarantor is du!y organized, validly existing and in good standing under the
laws of ~he jurisdiction of its incorporation and has full corporate power to execute,
deliver and perform this Guaranty.
The execution, delivery and performance of this Guaranty have been and remain
duly authorized by al! necessary corporate action and do not contravene the
Guarantor’s constitutional documents or any contractual restriction binding on the
Guarantor or its assets.
(c)This Guaranty constitutes the lega!, valid and binding obligation of the Guarantor
enforceable against Guarantor in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and o~her laws of general
applicabi!ity relating to or affecting creditor’s rights and to general equity principles.
13.Foreign Currency Obligations. Subject to the limitation of Guarantor’s tota! liability
set forth in Para~aph I hereof, the Guarantor shal! make payment in the currency in
which the Company is required to pay its payment obligations (the "Origina!
Currency"). For the purposes of calculating Guarantor’s total liability hereunder and
applying the limitation on Guarantor’s total liability, the value of the payment
obligation in the Original Currency- shalI be converted to US Dollars by the Guarantor
NCPA - 2006 Power Purchase Agreement
Exhibit 8
Page 5
14.
15.
at [he rate equal [o [he applicable spot exchange rate of a large commercial bank
located in Canada or the United States on the date that payment is made by the
Guarantor.
GOVERNING LA~V. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LA}VS OF THE STATE OF
CALIFORNIA ]~’TTHOUT REGARD OR REFERENCE TO THE CONFLICT OF
LA~VS PRINCIPLES OF ANY JURISDICTION. GUARANTOR HEREBY
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL
COURTS IN SACRAMENTO, CALIFORNIA IN CONNECTION ]A’TTH ANY
O~ ~hiSDISPUTE ARISING UNDER THIS GUARANTY. However, if any provision ; ~" "
Guaranty shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Guaranty.
Entire Ag-reement and Termination of Prior Guaranty. This Guaranty constitutes the
entire Agreement and understanding between Guarantor and Counterparty with
respect to the Guaranteed Obligations and supersedes and replaces in its entire<v any
and a!1 guaranties previously issued by Guarantor to Counterparty with respect to
the Guaranteed Obligations, or any part of them.
NCPA - 2006 Power Purdnase Agreement
Exhibit 8
Page 6
tN WITNESS WHEREOF, the Guarantor t]as caused ttis Guaranty to be duly
executed and delivered by its duly authorized representative effective as of this __
of 200[ ] ("Effective Date").
day
[Guarantor’s Name]
By:
Name:
Title:
ACCEPTED AND AGREED TO
THIS DAY OF ,200[ ]
By:
Name:
Title:
NCPA - 2006 Power Purchase Ao~reement
Exhibit 8
Page 7
Exhibit 9
Reserved
N-CPA - 2006 Power Purchase Agr.eemen[
]Exhibit 9
Page I
Exhibit 10
OPERATIONS FORECASTS
and
SCHEDULING PROTOCOLS
1.Annual Operations Forecast
1.1.No later than September lOth of each Contract Year, Seller will provide an A_nnual
Operations Forecast detailing hourly expected generation and all proposed planned
outages for the next Calendar Year. The _anmual Operations Forecast for the first
Calendar Year shal! be provided no later than ninety (90) days prior to the Commercial
Operation Date.
1.2.Buyer may request modifications to the Armual Operations Forecast at any time, and
Se!ler sha!l use good fakh efforts to accommodate Buyer’s requested modifications.
1.3.Seller shall not conduct plamaed outages at times other than as set forth in its Annua!
Operations Forecast, unless approved in advance by Seller, which approval shall not be
withheld or delayed unreasonably.
1.4.Seller shall not conduct planned outages during the Peak Months and furthermore, shall
coordinate the outages with NCPA..
2. Short Term Operations Forecasts
2. !. Quarterly Operations Forecast
2.1.t.Twenty (20) days prior to begi~aing of each quarter, Seller shall provide a
Quarterly Operations Forecast by hour of expected generation and all proposed
planned outages as approved by NCPA in advance.
2.!.2.Quarterly Operations Forecast will also include any requested additions or
modifications to plarmed outages for the next twelve (12) months.
2.! ._3.Buyer will approve or require modifications to the proposed Quarterly
Operations Forecast within ten (10) calendar days of receipt of the Quarterly
Operations Forecast.
2.1.4.If required by Buyer, Seller wil! provide a modified Quarterly Operations
Forecast to Buyer no later than seven (7) calendar days after receipt of required
modifications from Buyer.
NCPA - 2006 Power Purchase Agtreemen[
Exhibit 10
Page 1
2.2. Weekly Update
2.2.!.No later than 14:00 each Wednesday prior to the following week (Sunday
through Saturday), Seller may provide an electronic update, in a format specified
by Buyer, to the Quarterly Operations Forecast for the next seven (7) calendar
days
2.2.2.The Weekly Update shall include hourly expected generation and all proposed
plarmed Outages.
3.Outage Detail for Annual and Short Term Operations Forecasts
3.1.Outage information provided by Seller is to include, at a minimum, stun and stop time
of Outage, capacity out of service (kWh), equipment out of service, and reason for the
Outage.
4.General Scheduling Protocols
4.1.Daily modifications to forecasts. Uiess otherwise mutually agreed, Seller may
make changes to the weekly forecasts by providing such changes to Buyer prior to 08:00
two (2) Business Days before the active scheduling day.
4.1.1.Active scheduling day as determined by the WECC Prescheduling
calendar.
Example: For power that is scheduled for generation or delivery on
Thursday, March 29, changes must be submitted to Buyer no later than
08:00 on Tuesday, March 27.
4.2.Hourly modifications to active schedules. Unless otherwise mutually agreed, Se!ler
may make changes to active schedules by providing such changes to Buyer with a
minimum of four (4) hours notice before the active hour to be changed. Changes to
active schedules are limited to two (2) changes per day, excluding forced outages,
unless otherwise agreed to between the parties. One request for a schedule change, of
one hour or multiple hours duration, constitutes one schedule change.
4.2.1.Example For power that is scheduled for generation or delivery in
hour ending 1.5:00 (for the period from 14:01 to 15:00), changes must
be submitted to Buyer no later than 10:00.
4.3.At Seller’s request, Buyer may modify generation and load schedules for unforeseen
circumstances in accordance with the above scheduling timeline constraints and Buyer’s
Schedule Coordination Agreement.
4.4.In the absence of forecasts and schedules as required by this A~eement or this Exhibit,
Buyer sha!l utilize the most current information provided by Seller in the development and
submission of Schedules.
NCPA - 2006 Power Purc2aase A~eement
Exhibit 10
Page 2
4.5.Daily or Hourly modifications do not modify; Monthly Contractual Energy %r issues
related to pricing or default.
Additiona! Scheduling Protocols When NCPA is the Scheduling Coordinator
5. !. Seller is to noti~; NCPA of all planned or forced generation outages to ensure compliance
with ISO Outage Coordination and Enforcement Protocols.
5.1.1.Outage information provided by Seller is to include, at a minimum, start and stop
"~ime of Outage, capacity out of service (kW), equipment out of service, and reason
for the Outage.
5.1.2.Planned Outages not included in the Annual Operations Forecast, the Quarterly
Operations Forecast. or the Weekly Update, shall be provided by Seller to Buyer at
least four (4) business days prior to the start of the requested outage.
5.2.Forced Outages
5.2.1.~Forced Outages’; are any unplanned reduction in the capability of a generating
facility.
5.2.2.Forced Outages shal! be reported by Seller to NCPA within twenty (120) minutes of
such outages.
5.2.3.Notice by Seller to NCPA of a Forced Outage shall include the reason for the outage
(if know, a), expected duration of the outage, and the capacity reduction.
5.2.4.Within forty-six (46) hours of a Forced Outage, a detailed verbal report shall be
provided by Seller to NCPA speci~ing the reason for the outage, expected duration
of such outage, capacity reduction, and actions taken to mitigate such outage.
5.3.Commencement of an Outage - Seller shall not begin any planned Outage without prior
approval of NCPA and the ISO.
5.4.Return to Service - Seller shall noti~; NCPA innmediately whenever a generating unit is
returned to service.
V~hen NCPA is not the Scheduling Coordinator
~. 1. Seller shall cause its Scheduling Coordinator to provide a!l required Outage reporting
information directly to the ISO as required by the then existing ISO scheduling protocols.
7. Notices
7.1.All Scheduling notices and Schedules are to be submitted to Buyer by phone, fax or email
to the following persons:
NCPA - 2006 Power Purchase Agreement
Exhibit 10
Page 3
7.1.1.
7.1.2.
7.! .3.
7.!.4.
For Day Affaead Schedule changes; in%rm the Buyer’s Pre-Scheduling Contact listed
in Exhibit ! 3a [Contacts. Buyer].
For Hourly Modifications; inform the Buyer’s Schedule Coordinator Contact listed
in Exhibit 13 a [Contacts. Buyer].
For forced Outages; inform the Buyer’s Dispatcher Contact listed in Exhibit 13a
[Contacts. Buyer].
For planned Outages, inform the Buyer’s Dispatcher and Supervisor of Dispatch
Operations Contacts listed in Exhibit 13a [Contacts. Buyer].
NCPA - 2006 Power Purchase A~eement
Exhibit 10
Page 4
8. Example Form Of Day-Ahead Schedule:
June 0, 2007
Hour Ended Expected Capabili~T
1 2
3 2
4 2
5 2
6 2
7
8
9
10
1!
12 2
13 0
14 0
!5 0
16 1
17 2
18 2
19 2
20 2
21 2
22 2
2s
24 2
Expected Daily Temperatures {in Fahrenheit):
High
Contact Information:
NCPA - 2006 Power Pu_~chase A~eement
Exhibit 10
Page 5
Scheduling Coordinator:
Facility /
NCPA - 2006 Power Pu.rdnase AgTeemen[
Exhibit 10
Page 6
Exhibit 11
FORM OF ATTESTATION
Environmental Attribute Attestation and Bill of Sale
[Name of SelIer] ("Seller") hereby sells, transfers and delivers to Northern California Power Agency
("Buyer") the Environmenta! Ailributes and Environmental AVtributes Reporting Rights associated with the
generation of the indicated ener~, for delivery to the grid (as such terms are defined in the Long Term
Power Purchase Ag-reement ("Agreement") dated [Date], bebveen Buyer and Seller) arising from the
generation for deliveW to the grid of the energy,, by the Generating Facilib~ described below:
Facili~- name and !ocation: Projec~ Name
EIA ID #:CEC ID #:
Fuel Type:Capaci~ (MW):
( Counb,, California)
ISO Meter ID~.=
Operational Date:
Dates M~,Vhrs ~enerated Dates generated
in the amount of one Environmentai Attribute for each megaWati hour generated; and Seller further attests.,
warrants and represents as follows:
i)to the best of its knowledge, the information provided herein is true and correct;
this transfer to Buyer is the one and o~y sale of the Environmental Attributes and associated
Environmental Attributes Reporting Rights referenced herein;
iii)the Facili{T generated and delivered to the grid the ener~, in the amount indicated as
undifferentiated ener~/; and
(check one)
__ iv) Seller owns the facili~,’.
__ iv) to the best of Seller s knowledoe, each of the Environmental Attributes associated with the
generation of the indicated energT for delivery to the grid have been generated and sold by the
Facility.
This serves as a bill of sale, transferring from Seller to Buyer all of Seller’s right, title and interest in and to
the Environmental A~ributes associated with the generation of the ener~, for delivew_; to the o~rid.
Contact Person: Name:Phone:
WITNESS MY HAND.,
Seller:
By
NCPA - 2006 Power Purchase Agreement
Exhibit 11
Page 1
Title
Date:
NCPA - 2006 Power Pu_~chase Agreement
Exhibit 11
Page 2
Exhibit 12
PAYMENT / WIRE INSTRUCTIONS
NORTHERN CALIFORNIA POWER AGENCY (Buyer)
WIRE INSTRUCTIONS
Tt~e following information is to be used wt~en wiring funds for deposit to Buyer:
U.S. Bank
ABA# 121122676
For Deposit to:
Northern California Power Agency
Acct. No. 1-~o4-0_,1o-,_/44
For irdormation purposes, please fax a cop},, of tt~e wire ’ ’- ~ ~~.ms,~ruc~lon~ to Buyer at (916) 781-
4255, Attention Treasurer-Controller.
The foI!owing information is to be used for all other statements or payments ~o Buyer by
mail:
NCPA
Attention: Treasurer- Controller
180 Cirby Way, Roseville, 95678.
[Seller’s Name]
~,a, ffRE INSTRUCTIONS
(Seller)
The following information is to be used when wiring funds for deposit to [Seller’s Name]:
NCPA - 2006 Power Purchase Agreement
Exhibit 12
Page 1
For Deposit to:
For i~ormation purposes, please fax a copy of the wire instructions to [Seller’s Name]
[Seller’s phone number], A~en~ion [Seller’s releva;~t contact person].
NCPA - 2006 Power Purchase A~eement
Exhibit 12
Page 2
Exhibit 13a
NCPA (BUYER) CONTACTS
1. Contract Management
Name Phone Email
Ken Speer
Billing/Invoice Issues
916-781-4201 Ken. Speer(~ncpagen.com
Name Phone Email
Bob Caracristi
Mike Daniels
3. NCPA Pre-Scheduling
916-781-4224
916-781-4205
bob.caracristi@ncpa.com
mlke.damel~,~:ncpa.com
Monthly, weetdy and daily generation schedules are to be provided to NCPA Pre-
Scheduling contacts.
Name Phone Email
916-786-0123
916-781-4227
kevin.mcmahan@ncpa, corn
Norm \Vor~hington 916-786-0124
Don Imamura 9 i 6-781-4240
Ken Goeke 916-78!-4290
Pre-Scheduling (FAX) 916-781-4239
no~rn.worthingion@ncp a.com
don.~mamura:~ncpa.com
ken.goeke@ncpa.com
4. NCPA Schedule Coordination
¯T ,A!! Hour Ahead or Real-Time Schedule changes are to be provided to NCPA Scheduling
Coordinator Contacts.
Name Phone Email
NCPA Scheduling Coordinator 916-78 !-4237
(FAX) 916-781-4226
SC,~!.~:ncpa.com
NCPA - 2006 i°ower Purchase A~eement
Exhibit 13a
Page 1
NCPA Dispatch/Outage Coordination
All Planaed an&’or Forced Outages of Generating Facilities are to be provided to NCPA
Dispatch/Outage Coordination.
Name Phone Emai!
Dave Wilke 916-781-4225
(Su:nervisot" gt~Disparch @erariotTx)
NCPA Dispatch 916-786-3518
NCPA Scheduling Coordinator 916-781-4237
NCPA Dispatch (FAX) 916-781-4226
dave.wilke@ncpa, co~:q
Dispatch@ncpa.com
SC2@ncpa.com
NCPA - 2006 Power Purchase A~eement
Exhibit t 3 a
Page 2
Exhibit !3b
[Name of Sefle~i (SELLER) CONTACTS
Contract Management
~me Phone Email
2. Billing/In-¢oice Issues
~:ame Phone Emai!
o Pre-Scheduling and Dispatch!Outage Coordination
~nual, Quarterly, Weekly and Daily generation schedu!es:
Name Phone Emai!
Pre-Scheduling (FAX)
Operator and Real Time Issues
A!l Plan_ned and/or Forced Outages of generation facilities are to be provided to NCPA
DispatcMOutage Coordination.
Name Phone Email
N v.PA - 2006 Power Purchase Agreement
Exhibit 13b
Page 1
(FAX) 916-7S!-4226
NCPA - 2006 Power Purchase Agreemenz
Exhibit 13b
Page 2
Exhibit 14
SELLER’S INSURANCE INFORMATION
[TO BE DETEP,~MINED l
ATTACHMENT D
NORTHERN CALIFORNIA POWER
180 Cirby VVay, RoseviJte, CA 95678
phone (916) 781-3636
fax (916) 783-7693
web www.ncpa corn
Commission Staff Report AGENDA ITEM NO.:
Date:
To:
Subject:
January 25, 2008
NCPA Commission
Western GeoPower Incorporated Power Plant Project
Backqround
The Western GeoPower Incorporated (WGI) plans to develop a new geothermal power plant at
the Geysers by 2010-11 with an expected capacity of 25-35 MW. WGt advised NCPA
approximately a month ago that it was interested in entering into a Power Purchase Agreement
(PPA) with us. NCPA held a special meeting of the Commission on December 19, 2007, at
which we discussed the WGI project, sought members’ advice, and the Commission authorized
the General Manager to proceed with formal negotiations with VVG!.
The General Manager and staff has negotiated with WGI and is approaching an agreement for a
PPA. We are attempting to have the substance of the Agreement completed to bring to the
Commission at this meeting. The basic terms of theAgreem.ent are: (1) a take-and-pay form of
contract; (2) at a negotiated price and terms and (3) NCP,~’,. would own a!! of the energy,
capacity, and environ~,’nental attributes of the facility. The basis for the PPA is the NGPP (Green
Power Pool). A final PPA inclusive of the agreed upon terms and conditions is attached to this
report. ~ "
Staff at the same time developed a Third Phase Agreement for the members to participate in
this project. This Agreement is attached. The basis for this Agreement was the Market Power
Purchase Agreement currently being used by some of the members.
Both of these Agreements were discussed with the Utility Directors on January 10, 2008.
Fiscal Impact
Under the proposed ’take-and-pay’ PPA, and bec,ause the project is not expected to be
operational until 2010/2011 time period, there is no fiscal impact until the members start
receiving energy from the project. Prior to the expected operational date, staff will develop a
budget for approval by the participants covering the expected cost. This budget may augment
the current budget (FY 08) and will be included in the FY-09 budget.
Recommendation
Staff recommends that the Commission approve the attached Resolution which includes
approval of t.h_~a_s_~.A_gr~ee~t and the PPA as negotiated with WG!, if~~,
subject io participating members approving the Third Phase Agreement. Staff further
recommends that it authorize the General Manager to make any and all non-substantive
changes to the Third Phase Agreement and PPA as deemed appropriate by the General
Counsel.
SR: t12:8
Western GeoPower Corporation Power Plant Project
January 25, 2008
Page 2
Respectfully submitted,
JAMES° 14. POPE
Gen/eral Manager
Prepared by:
SPEER
Assistant General Manager
Generation Services
HM/KS!dg
Attachments (2)
Resolution
Third Phase Agreement
SR: 1!2:8
RESOLUTION 08-0T
RESOLUTION OF THE COMMISSION OF THE NORTHERN CALiFORNiA POWER AGENCY APPROVING
THE THIRD PHASE AGREEMENT FOR THE PURCHASE OF
GEOTHERMAL POWER FROM WESTERN GEOPOWER INCORPORATED
AND THE RENEWABLE ENERGY POWER PURCHASE AGREEMENT BETWEEN
NORTHERN CALIFORNIA POWER AGENCY AND WESTERN GEOPOWER INCORPORATED
WHEREAS, NCPA and the Participants are interested in purchasing additional renewable electric
capacity and energy for the benefit of the Participants’ customers:
WHEREAS, The Participants desire that NCPA negotiate and enter into a renewable Power
Purchase Agreement (PPA) with Western GeoPower Incorporated (WGI) for twenty (20) years; and
WHEREAS, NCPA has executed a PPA with WGI to purchase the entire expected Project Output
from a new Western GeoPower geothermal project ("Project") located in the Geysers Geothermal Field
located in the Mavacamas Mountaiq._s_cut_Sca3oma and Lake Counties in the State of California; and
WHEREAS, NCPA, on behalf of the Participants, will purchase the project output for a price of
ninety-eight dollars ($98.00) per megawatt hour; in accordance with the PPA between NCPA and WG!; and
WHEREAS, NCPA and the Participants ,,x.ish tp enter into this__Agreement to provide all means
necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the Participants pursuant to the
PPA and to enable and obligate the Participants to take delivery of and pay for such electricity and to pay
NCPA for the costs of undertaking the foregoing activities.
NOW, THEREFORE, BE IT RESOLVED, by the Commission of the Northern California Power
Agency as follows:
1. Approve the Agreement entitled "Third Phase Agreement for the Western GeoPower
: Incorporated Renewable Energy PPA" dated January 2008, is subject to minor an:d r}@r~csubstantive changes
. made as per the advice of the General Counsel. ~ ..
2. The Commission approves the RenewabJe-En.ergy P~wer.P0rchase Agreement between
No~thern California Power Agency and WGI (sukJjec~ t6 pa~::dcipating me~J:)erSappr0ving the Third Phase
Agreement in item 1), indluding any and all non-substantive changes made todocument as per the advice of
the General Counsel. " "
PASSED, ADOPTED and APPROVED this 25th day of January, 2008 by the following vote on roll
Alameda
BART
Biggs
Gridley
Healdsburg
Lodi
Lompoc
Palo Aito
Port of Oakland
Redding
Roseville
Santa Clara
Truckee Donner
Turlock
Ukiah
Plumas-Sierra
Vote Abstained Absent
PATRICK KOLSTAD
CHAIRMAN
ATTEST:DENISE DOW
ASSISTANT SECRETARY