HomeMy WebLinkAboutStaff Report 399-08TO:
ATTN:
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
City of Palo Alto
City Manager’s Report
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:OCTOBER 21, 2008 CMR: 399:08
SUBJECT:Adoption of a Resolution Approving the Ameresco Butte County Landfill Gas
Renewable Energy Power Purchase Agreement for the Acquisition of Up to
Four Average Megawatts of Energy Over Twenty Years at an Estimated Cost
Not to Exceed $71 Million
RECOMMENDATION
Staff recommends that the Finance Committee recommend the Council adopt a resolution
approving the Power Purchase Agreement (PPA) with Ameresco Butte County LLC, a Delaware
limited liability company. Additionally, for this agreement, staff recommends the Council waive
the application of the investment-grade credit rating requirement of Section 2.30.340(d) of the
Palo Alto Municipal Code to this transaction.
BACKGROUND
In 2002, the Council adopted a renewable resource portf~olio 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 premium (CMR:398:02).
In March 2007, the 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 California’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.
The City expects to meet the 20 percent renewable portfolio goal by 2009 (about a year later than
targeted) with minimal impact on retail rates. The City is still seeking new renewable energy
equal to approximately 13% of annual usage to meet the 33 percent renewable portfolio goal by
2015. The search is proceeding in four venues: 1) the City’s requests for proposal; 2) the
Northern California Power Agency’s (NCPA) Green Power Project; 3) NCPA opportunities
available to all members; and 4) new opportunities with current counterparties. The
CMR: 399:08 Page 1 of 4
recommended agreement under consideration in this report was found through a new opportunity
with a current counterparty.
DISCIJSSION
Ameresco owns and operates several landfill gas-fired plants in the grea~er Bay Area and is
executing a landfill gas fuel agreement with the Butte County Landfill in Paradise, California.
The project arose after the commencement of Palo Alto’s and NCPA’s separate 2007 RFP
processes. In July 2008, Ameresco approached Palo Alto and Alameda, both of whom currently
have PPAs with three other Ameresco landfill gas-fired power projects, to explore interest in
purchasing the output of the Butte County Landfill Gas Power Project (Plant). As a result of
negotiations, Ameresco would like to enter into a new PPA with the City to sell one-half of the
output from the Plant to Palo Alto for a price starting at 8.7C/kWh and escalating 1.5% per year
for a texan of 20 years.
The Plant, which qualifies as a renewable power project under State-adopted definitions, would
be electrically connected to the California Independent System Operator-managed transmission
system. The Plant would be built by Ameresco at the Butte County Landfill in Paradise,
California. Under the terms of the PPA, Palo Alto would pay a series of predetermined rates
over the term of the agreement for any energy delivered. If delivered volumes should decline,
Palo Alto’s payments to Ameresco would be reduced proportionately, freeing up money to
purchase replacement renewable energy from other sources.
Palo Alto and Alameda would each receive and pay for equal shares of output from the 4.3
Megawatt (MW) plant. At the expected Plant output, Palo Alto’s share would amount to about 2
average MWs, or roughly 1.7% of the City’s total electric load:
In light of the relative economic attractiveness of the Ameresco proposal compared to other
renewable resource offerings, staff is seeking the Council’s authorization to participate in up to 4
average MW of the project even though it is estimated that Pato Alto’s nominal share is likely to
be about 2 average MW. Palo Alto may get more output if Alameda chooses to decrease its
share, thereby giving Palo Alto a chance to increase its share. If, in the future, Ameresco were to
propose a plant expansion for additional generation at the site and City staff found this option
attractive, staff would return to Council for an amendment to this agreement, addressing the plant
expansion.
Ameresco is a relatively small company that does not have a credit rating by Moody’s or
Standard and Poor’s. The credit analysis of the Risk Manager does indicate a relatively strong
financial condition for the company. Since energy deliveries will be tied to a specific generator
at a specific location, in contrast to market contracts whose deliveries are often backed by
financial strength or collateral of a companies rather than a physical asset, staff recommends that
the Council waive the in.vestment-grade 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 with similar characteristics (CMR: 461:04). This waiver is
intended to benefit only small but sound companies that do not have credit ratings. Palo Alto has
had a positive experience to date with Ameresco in regards to its three existing landfill gas-to-
energy agreements that provide 8 MW. The agreement between Palo Alto and Ameresco
CMR: 399:08 Page 2 of 4
(Attachment B) was revised by Palo Alto Utilities staff and the Energy Risk Manager to
determine that the combination of value, price, terms, credit worthiness of provider, and credit
assurances warrant Palo Alto’s_ participation.
RESOURCE IMPACT
The cost of renewable supplies under the PPA is expected to be $36 million over 20 years. The
annual expected cost is $1.54 million in the first year and the cost escalates 1.5% per year over
the 20-year term of the PPA. This assumes that Palo Alto’s participation leveland the plant
output would provide 2 average MW (about 1.7% 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 $90 million over the 20-year term. In either case, the incremental rate
impact will remain within the 0.5C/kWh limit adopted by Council. The PPA incremental cost of
about $200,000/year more than the cost of non-renewable power is expected to use about 5% of
the allowed limit adopted by Council.
POLICY IMPLICATIONS
Adoption of this resolution allows the City to participate in the agreement to purchase renewable
energy and thereby is consistent with the Council’s Top Four Priority of Environmental
Protection. Participating in the agreement is also consistent with the following City policies and
guidelines:
3.
4.
5.
6.
7.
8.
9.
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 Plan with regard to employing balanced
environmental solutions;
The energy risk management policies;
The rate impact limits and the renewable portfolio targets in Long-term Electric
Acquisition Plan Guideline (LEAP) #6; ~
The portfolio diversification goals in LEAP Guideline #3;
The City’s Sustainability Policy Statement, adopted April 2, 2001 (CMR 175:01) and
revised June 18, 2007 (CMR 260:07);
The Green Government Pledge, adopted July 19, 1999 (CMR 284:99);
The US Mayors’ Climate Protection Agreement; and
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: Maintain 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.
ENVIRONMENTAL REVIEW
Execution of the agreement does not meet the definition of a project, pursuant to section 21065
of the California Environmental Quality Act (CEQA). However, the City intends to receive
output from projects that will constitute a project for the purposes of CEQA. Project developers
will be responsible for acquiring necessary environmental reviews and permits on projects to be
developed.
CMR: 399:08 Page 3 of 4
ATTACHMENTS
A: Resolution approving Renewable Energy Power Purchase Agreement between Palo Alto and
Ameresco
B: RenewableEnergy Power )urchase Agreement between Palo Alto m~d Ameresco
PREPARED BY:
REVIEWED BY:
DEPARTMENT APPROVAL:
CITY MANAGER APPROVAL:
TOM KABAT
Senior Resource Originator
RATCHYE
Assistant Director, Resource Management
VALERI~ 0, F~NG
Director ot’Ut~es
A S ?NE
Ci~anager
CMR: 399:08 Page 4 of 4
NOT YET APPROVED
ATTACHMENT-A
RESOLUTION
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
APPROVING THE AMERESCO BUTTE COUNTY RENEWABLE ENERGY
POWER PURCHASE AGREEMENT FOR THE ACQUISITION OF UP TO
FOUR AVERAGE MEGAWATTS OF ENERGY OVER TWENTY YEARS AT
AN ESTIMATED COST NOT TO EXCEED $71 MILLION
WHEREAS, the City of Palo Alto("City"), a munic!pal utility and a chartered city is a member
of the Northern California Power Agency ("NCPA");
WHEREAS, on March 5, 2007, the City approved eight electric portfolio planning and
management guidelines to guide the development and management of the City’s long-term electricity
acquisition plan; one of the guidelines is to pursue and target levels of new renewable resource energy
purchases equal to thirty percent and thirty three percent of the City’s expected energy load by 2012
and 2015, respectively;
WHEREAS, the City is interested in purchasing power generated by renewable resources for
the benefit of its electric customers;
WHEREAS, by purchasing these sources of renewable energy, the City will help reduce the
production of greenhouse gases and assist in reducing volatile organic compound emissions;
WHEREAS, Ameresco Butte County L.L.C. proposal best responds to the City’s and NCPA’s
recent requests for proposals;
WHEREAS, executing an agreement with Ameresco Butte County L.L.C. will not fully satisfy
the City’s need to acquire renewable energy, which the City could expect to acquire from other
suppliers;
WHEREAS, the City will be initially allocated 50% of the power from the Ameresco project,
amounting to 2.15 megawatts;
WHEREAS, the City’s allocation of the Ameresco project may be allowed to increase to 100%
under some circumstances;
WHEREAS, Butte County will be the lead agency for the purposes of California
Environmental Quality Act ("CEQA") review of the Ameresco project.
NOW, THEREFORE, the Council of the City of Palo Alto hereby RESOLVE as follows:
SECTION 1. The Council hereby approves the City’s execution of the Long Term Power
Purchase Agreement (Landfill Gas Power) made between Ameresco Butte County L.L.C., as Seller,
and the City of Palo Alto, as Purchaser. The Term of the contract is twenty (20) years, commencing on
the Commercial Operation Date of the proposed generation facility. Quantity is a fifty percent or
higher share of the four average megawatt plant net output. Spending authority under the contract is
080924jb 0073070
NOT YET APPROVED
approved up to seventy one million dollars ($71,000,000). The City Manager or his designee is hereby
authorized on behalf of the City to sign the contract with Ameresco Butte County L.L.C.
SECTION-2. With respect to the Council’s award of the Long Term Power Purchase
Agreement referred to in Section 1 above, the Council hereby waives the choice of venue and credit
rating terms, and conditions requirements of Palo Alto Municipal Code section 2.30.340(c).
SECTION 3. The Council finds that the adoption of this resolution does not constitute a
project under the California Environmental Quality Act and no environmental assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
AB SENTIONS:
ABSENT:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Mayor
City Attorney
City Manager
Director of Administrative
Services
Director of Utilities
080924 jb 0073070
ATTACHMENT B
POWER PURCHASE AGREEMENT
This Power Purchase Agreement is entered into this __ day of ,
2008 by and between The City of Palo Alto, a Ca!ifornia chartered municipal
corporation and Ameresco Butte County LLC, a Delaware limited liability company.
RECITALS
Seller intends to develop, finance, buildl own and operate a Landfill Gas
electric generating facility to be located at the Butte County Neal Road
Landfill (the "Landfill") in Paradise, California, on a site leased from Butte,
which owns the Landfill.
o
Buyer is engaged in the procurement and supply of electricity to residential
and commercial customers in the City of Palo Alto.
Buyer wishes to purchase a portion of the Output of the Plant and intends to
resell related Energy to its residential and commercial customers.
J
Buyer is willing to purchase, and Seller is willing to sell, a portion of the
Output of the Plant, on the ten, as and conditions and at the prices set forth in
this Agreement.
Seller may determine to expand the Plant in the future depending on the
avai!ability of Landfitl Gas and other factors in accordance with the terms of
this Agreement.
o Buyer will have a right of first refusal to purchase Expansion Plant Output,
such right to be exercisable as provided in this Agreement.
NOW THEPJEFORE, in consideration of these premises and the mutual
promises set forth below, Seller and Buyer agree as follows.
SANFRAN 90103 (2K)
AGREEMENT
ARTICLE I - DEFINITIONS
Initially capitalized terms, whenever used in this Agreement, have the meanings set
forth below unless otherwise herein defined. The term "including," when used in
this Agreement, shall mean to include "without limitation."
1ol Agreement: This Power Purchase Agreement, including all appendices, as it
may be amended from time to time.
1.3
Alameda: Alameda Power & Telecom, a department of the City of Alameda.
Alameda Agreement: That certain power purchase agreement entered into by
Alameda and Seller on or about the date hereof concerning a portion of the
Output of the Plant. -
1.4 Availability Threshold: The mechanical availability of the Plant calculated
as of the end of each calendar month during the Term as a percentage in
accordance with the following:
A=100 x Available Hours
Base Hours ~
Where:
A = Availability Threshold
Available Hours = the number of hours during the twenty-four (24) prior
months in which the Plant is capable of delivering Elaergy to the
Point of Interconnection; provided that, to the extent that the
Plant is not capable of delivering all of the net Initial Capacity in
any hour, the Available Hours with respect to such hour shall be
reduced pro rata to reflect the fraction of the net Initial Capacity
the Plant is capable of delivering in such hour.
Base Hours = the number of hours during the twenty-four (24) prior
months; provided that, to the extent that the Plant is partially or
wholly incapable or otherwise unable to deliver Energy i1~ any
hour as a result of a Force Majeure Event or because of fuel
unavailability in any hour due to no fault or negligence of Seller,
that hour (or if the Plant’s capacity is only partially constrained,
2SANFR.,\N 90103
the pl, o rata portion of that hour) shall be excluded from the Base
Hours.
There shall be no Availability Threshold during the first twelve (12) months
following the Commercial Operation Date. Starting with the thirteenth (13th)
month after the Commercial Operation Date and continuing through the
twenty-fourth (24th) month, the above formula will be used to determine the
Availability Threshold with the exception that both Available Hours and Base
Hours will be calculated starting with ~he first hour of operation on the
Commercial Operation Date and including all relevant hours thereafter to the
end of the month relevant. Starting with the twenty-fifth (25th) month, the
Availability Threshold shall be calculated on a rolling basis using the previous
twenty-four (24) months.
1.5 Butte: The County of Butte, a political subdivision of the State of California.
Buyer: The City of Palo Alto, a California chartered municipal corporation,
and any successor or permitted assignee.
1.7 Commercial Operation: The condition of the Plant whereupon it (a) is
certified by Seller to be complete in accordance with manufacturers’
recommendations except for punch list items, and (b) has passed the
performance test set forth in Appendix E wl~ile synchronized with the LDC
System or ISO transmission grid.
1.8 Commercial Operation Date: The date upon which Commercial Operation
first occurs.
1.9 Contractual Obligations: As to Seller, any material agreement, instrument or
undertaking to which Seller is a party or by which it or any of its property is
bound.
1.10 EA Agency: Any local, state or federal entity, or any other Person, that has
responsibility for or jurisdiction over a program involving transferability of
Environmental Attributes, including the Clean Air Markets Division of the
United States Environmental Protection Agency, the California Resources,
Conservation and Development Con~nission, the California Public Utilities
Commission, and any successor agency thereto.
3SANFR,,\N 90103 (2K)
!.1!Emergency: Any condition or situation which (i) endangers life or property or
(ii) affects Buyer’s physical ability to maintain safe, adequate, and continuous
electric power and energy to Buyer’s customers.
1.12 Energy: The electricity generated by the Plant and delivered to Buyer and
Alameda by the Seller, pursuant to this Agreement and the Alameda
Agreement, respectively, at the Point of Interconnection, as expressed in units
of kilowatt-hours (kWh) or megawatt-hours (MWh), including Test Energy.
1.13 EnvironmentM Attributes: Any and all credits, benefits, emissions
reductions, offsets, and allowances, howsoever entitled, attributable to the
generation from the Plant or Expansion Plant(s), as the case may be, and its
displacement of conventional energy generation. Environmental 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 greenhouse gases (GHGs) that have
been determined by the United Nations Intergovemmental Panel on Climate
Change to contribute to the actual or potential threat of altering the Earth’s
climate by trapping heat in the atmosphere; and (3) the reporting rights to
these avoided emissions such as Green Tag Reporting Rights. Green Tag
Reporting Rights are the right of a Green Tag purchaser to report the
ownership of accumulated Green Tags in comp~liance with federal or state law,
if applicable, and to a federal or state agency or any other party at the Green
Tag purchaser’s discretion, and include without limitation those Green Tag
Reporting Rights accruing under Section 1605(b) of The Energy Policy Act of
1992 and any present or future federal, state, or local law, regulation or bill,
and international or foreign emissions trading program. Green Tags are
accumulated on kWh basis and one Green Tag represents the Environmental
Attributes associated with one (1) MWh of energy. Environmental Attributes
do not include (i) any energy, capacity, reliability or other power attributes
from the Plant or Expansion Plant(s), (ii) production tax credits associated
with the construction or operation of the Plant, Expansion Plant(s), Landfill, or
any other associated contract or right, and other financial incentives in the
fO1Ti1 of credits, reductions, or allowances associated with the Plant, Expansion
Plant(s), Landfill, or any other associated contract or right, that are applicable
to a state or federal income taxation obligation, (iii) fuel-related subsidies or
"tipping fees" that may be paid to Seller to accept certain fuels, or local
subsidies received by the Seller or the owner of the Landfill for the destruction
4SANFRAN 90103 (2K)
of particular pre-existing pollutants or the promotion of local environmental
benefits, or (iv) emission reduction credits encumbered or used by the Plant or
Expansion Plant(s) for compliance with local, state, or federal operating
and/or air quality permits.
1.14 Environmental Attributes Reporting Rights: All rights to report ownership
of the Environmental Attributes to any person or entity, under Section 1605(b)
of the Energy Policy Act of 1992 or otherwise.
1.15 Environmental Law: Any federal, state and local laws including statutes,
regulations, rulings, orders, administrative interpretations and other
governmental restrictions and requirements relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to the
environment or hazardous substances, as amended from time to time.
1.16 Expansion Plant: Any expansion of the Plant from its Initial Capacity, or hny
other electricity generating facility owned or controlled by Seller or its
affiliate(s) located at the Landfill and fueled by Landfill Gas. Each such
expansion of the Plant or additional facility shall be deemed to be an
"Expansion Plant."
1.17 Expansion Plant Output: All capacity, energy, associated Environmental
Attributes, ancillary services, contributions towards resource adequacy or
reserve requirements (if any) and any other reliability or power attributes
produced by Seller at any Expansion Plant. ’
1.18 FERC: Federal Energy Regulatory Cormnission and its successor
organization, if any.
1.19 Force Majeure Event: Any act or event that delays or prevents a Party from
timely performing obligations under this Agreement or from complying with
conditions required under this Agreement to the extent that such act or event is
reasonably unforeseeable and beyond the reasonable control of and without the
fault or negligence of the Party relying thereon as justification for such delay,
nonperformance, or noncompliance. Force Majeure Events typically include:
(i) acts of God or the elements, extreme or severe weather conditions,
explosion, fire, epidemic, landslide, mudslide, sabotage, lightning, earthquake,
flood or similar cataclysmic event, acts of public enemy, war, blockade, civil
insurrection, riot, civil disturbance or strike or other labor difficulty caused or
SANFRAN 90103 (2K}
1.20
1.21
suffered by a Party; (ii) any restraint or restriction imposed by law or by rule,
regulation or other acts or omissions of governmental authorities, whether
federal, state or local which by exercise of due diligence and in compliance
with applicable law a Party could not reasol~ably have been ex, pected to avoid
and to the extent which, by exercise of due diligence and in compliance with
applicable law, has been unable to overcome (so long as the affected Party has
not applied for or assisted such act by a governmenta! authority); and (iii)
electric transmission interruptions or curtailments (not including any such
event that results from a failure by Buyer tO obtain firm transmission or similar
rights, or otherwise to make congestion-related payments); provided that the
term "Force Majeure Event" does not include (a) economic conditions that
render a Party’s performance of this Agreement at the Price unprofitable or
otherwise uneconomic (including Buyer’s ability to buy Energy or
Environmental Attributes at a lower price, or Seller’s ability to sell Energy or
Environmental Attributes at a higher price, than the Price), (b) a governmental
act by Buyer that delays or prevents Buyer from timely performir~g-its
obligations under this Agreement, (c) a Plant Outage, including as a result of a
failure or shortage of landfill gas, except, in any case, if caused by an event or
circumstance that meets the requirements set forth in this Section 1.19 (other
than as described in (iii) above), (d) failure or delay in grant of Permits, or (e)
failures or delays by the LDC or the ISO in entering into all agreements with
Seller contemplated by this Agreement.
Governmental Authority: Any federal or state government, or political
subdivision thereof, including, without limitatior~, any municipality, township
or county, or any entity or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including, without limitation, any corporation or other entity owned or
controlled by any of the foregoing.
l[nitial Capacity: The installed gross capacity of the Plant on the Commercia!
Operation Date, such capacity to be not less than 3.5 MW and not more than
5.0 MW (gross nameplate), and not less than 2.9 MW and not more than 4.25
MW (net at the Point of Interconnection) and.as further specified pursuant to
Section 4.3(c).
1.22 ][nterconnection: Construction, installation, operation and maintenance of all
Interconnection Facilities.
SANFRAN 90103 (2K)
.23 ~nterc(mnectionAgreement: The agreement between Seller and LDC
pursuant to which Seller and LDC set forth the terms and conditions for
Interconnection of the Plant to the LDC System, as amended from time to
time.
.24 ][nterconnection Facilities: All the facilities installed for the purpose of
interconnecting the Plant to the LDC System, including, but not limited to,
transformers and associated equipment, relay and switching equipment and
safety equipment.
lo25 ][SO: The California Independent System Operator Corporation, or its
functional successor.
1.26 kWh: kilowatt-hour.
1.27 Landfill Gas: The gas (and its constituent elements) generated, from
decomposition of materials deposited in the Landfill.
1.28 LD Amount: The Monthly LD Amount multiplied by 12 (twelve).
1.29 LDC: Pacific Gas and Electric Company, a California corporation.
1.30 LDC System: The electric power generation, transmission, substation and
distribution facilities owned, operated and/or maintained by LDC, which shall
include, without limitation, after construction and installation, the circuit
reinforcements, extensions, and associated terminal facility reinforcements or
additions required to interconnect LDC’s facilities with the Plant.
1.31 Lender(s): Any Person(s) providing money or extending credit (including any
capital lease) to Seller for (i) the construction of the Plant, (ii) the term or
permanent financing of the Plant, or (iii) working capital or other ordinary
business requirements for the Plant. "Lender(s)" shall not include trade
creditors of Seller.
1.32 LFG Agreement: As defined in Section 4.2(d).
1.33 Monthly LD Amount: The product of (i) $7000 per MW, (ii) Buyer’s
Percentage Share and (iii) the Initial Capacity specified under Section 4.3(c)
(net at the Point of Interconnection).
SANFRAN 90103 (2K)
1.34 MW: Megawatt.
1.35 MWh: Megawatt hour.
1.36 NCPA: As defined in Section 5.1.
1.37 Outage: A physical state in which all or a portion of the Plant is unavailable
to provide Energy to the Point of Interconnection, or in which any portion’ of
the LDC System is unavailable to receive Energy, to the extent that the
unavailability affects the LDC System’s ability to accept delivery of Energy at
the Point of Interconnection, whether planned or unplanned.
1.38 Output: All actual capacity of the Initial Capacity and associated Energy, as
well as the following, as associated with the Initial Capacity and/or associated
Energy: Environmental Attributes; ancillary services; contributions towgrds
resource adequacy or reserve requirements (if any) and any other reliability or
power attributes.
1.39 Parties: Buyer and Seller, and their respective successors and permitted
assignees.
1.40 Party: Buyer or Seller, and each such Party’s respective successors and
permitted assignees.
1.41 PercentageShare: Fifty percent (50%), as may be adjusted from time to time
in accordance with Section 2.2(e).
1.42 Permits: All material federal, state or local authorizations, certificates,
permits, licenses and approvals required by any Governmental AuthOrity for
the construction, ownership, operation and maintenance of the Plant.
.43 Person: An individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity.
1.44 Plant: The generation-facilities described in the Recitals to be constructed
and owned by Seller and located on the Site for the generation and delivery of
electricity, including the step-up transformer, revenue quality meter and all
8SANFRAN 90103 (2K)
other facilities up to the Point of Interconnection, but not including any
Expansion Plant.
Point ~f ][nterconnection: The point on the electrical system where the Plant
is physically interconnected with the LDC System, which is anticipated to be
at the high side of Seller’s step-up transformers at the Plant.
1,46 Price: As defined in Section 2.3.
1.47 Production Incentives: Any and all tax credits, deductions, allowances and
exemptions applicable to federal, state and local taxes and any other payment,
credit, deduction, benefit, grant or monetary incentive provided by any federal,
state or local governmental authority or any Person, and all air emission
credits, reductions or Offsets, whether now in effect or arising in the future, in
each case arising from the activities contemplated by this Agreement,
including the extraction, sale, purchase, processing and/or distribution of
Landfill Gas and/or the generation and sale of electricity using Landfill Gas as
a fuel, including "Renewable Energy Production Incentive Payments" from the
U.S. Department of Energy, emission credits, reductions, offsets or any other
similar benefits arising from the generation, collection, production, purchase,
use, reduction, conversion, destruction or resale of Landfill Gas.
Notwithstanding the foregoing, Production Incentives shall not include
anything that qualifies as Output as defined herein (including any
Environmental Attributes), and shall include Section 29 Credits and Section 45
Credits.
1.48 Prudent UtilityPractice:Those practices, methods and equipment, as
changed from time to time, that:
(i)when engaged in are commonly used in the United States of America in
prudent electrical engineering and operations to operate landfill gas
generation electric equipment and related electrical equipment lawfully
and with safety, reliability, efficiency and expedition; or
(ii)in the exercise of reasonable judgment 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.
9SANFRAN 90103 (2K)
Prudent Utility Practices are not limited to an optimum practice, method,
selection of equipment or act, but rather are a range of acceptable practices,
methods,-Selections of equipment or acts.
1.49
1.50
Requirements of Law: Col!ectively, any federal or state law, treaty,
franchise, rule, regulation, order, writ, judgment, injunction, decree, award or
determination of any arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon Seller or Buyer or any of their
property or to which Seller or Buyer or any of their respective properties are
subject.
Section 29 Credits: Those tax credits available under Section 29 of Subtitle
A, Chap. 1A, Part IV of the Internal Revenue Code of 1986, as amended as of
the date of this Agreement.
1.5t Section 45 Credits: Those tax credits available under Section 45 of Subtitle
A, Chap. 1A, Part IV of the Internal Revenue Code of 1986, as amended, or
any other similar state, federal or local tax credits, deductions, payments or
benefits arising from the purchase of Landfill Gas or the generation and sale of
electricity using Landfill Gas as a fuel, not including any Environmental
Attributes.
1.52
!.53
Seller: Ameresco Butte County LLC, a Delaware limited liability .company,
and any successor or permitted assignee.
Site: The real property in Paradise, California on Which the Plant is to be built
and located, as more particularly described in Appendix A.
1.54 Site Control: The point at which Seller satisfies one or more of the following
conditions: (1) Seller is (a) the lessee under a lease, or (b) the grantee under
an exclusive easement, with the owner (or its subsidiary) of the Landfill that
allows Seller to construct and operate the Plant at the Site during the TeiTn in
accordance with this Agreement; (2) Seller has a fee ownership of the Site; or
(3) any other form of site control acceptable to Buyer in its reasonable
discretion.
1.55 Term: The period of time during which the Agreement is in effect.
10SANF!~4.N 90103 (2K)
1.56 Test Energy: Energy generated by the Plant and delivered to the Point of
Interconnection prior to the Commercial Operation Date.
ARTICLE II
TERM, PURCHASE AND SALE
2.1 Term
This Agreement shall be effective upon execution by authorized
representatives of both Parties and, unless earlier terminated pursuant to an
express provision of this Agreement, shall contiriue until the twentieth (20th)
anniversary of the Commercial Operation Date.
2.2 Purchase and Sale of the Out~
(a) In accordance with the terms and conditions hereof, colrmaencing on the
Commercial Operation Date and continuing throughout the Term, Seller shall
sell and deliver at the Point of Interconnection, and Buyer shall purchase,
accept from Seller at the Point of Interconnection and pay for, its Percentage
Share of the Output produced during the Term pursuant to the terms of this
Agreement. Prior to the Commercial Operation Date, Buyer shall purchase
and accept from Seller at the Point of Interconnection and pay for, the
Percentage Share of Output relating to Test Energy pursuant to the terms, of
this Agreement. All Test Energy shall be scheduled in accordance with the
procedures set forth in Appendix D. The Parties acknowledge that Alameda
has agreed to purchase, accept from Seller at the Point of Interconnection and
pay for, the remainder of the Output produced during the Term pursuant to the
terms of the Alameda Agreement. Seller shall not sell to any other party, and
Buyer may claim credit for, Buyer’s Percentage Share of the Output as may be
available from time to time.
(b) Throughout the Term, Seller shall sell and transfer to Buyer, and Buyer
sha!l purchase and receive from Seller, all right, title and interest in and to the
Environmental Attributes associated with Buyer’s Percentage Share of the
Output, if any, whether now existing or subsequently generated or acquired
(other than by direct purchase from a third party) by Se!ler, or that hereafter
come into existence, during the Term, as a component of the Output purchased
SANFRAN 90 | 03 (2K.)
li
by Buyer from Seller hereunder. Seller agrees to transfer and make such
Environmental Attributes available to Buyer immediately to the fu!lest extent
allowed, by applical31e law upon Seller’s production or acquisition of the
Environmental Attributes. If Seller receives any tradable Environmental
Attributes based on the greenhouse gas reduction benefits or other emission
offsets attributed to its fuel usage, it shall be entitled to retain sufficient
Environmental Attributes to ensure that there are zero net emissions associated
with the production of electricity from such facility. Seller shall not assign,
transfer, convey, encumber, sell or otherwise dispose of all or any portion of
the Buyer’s Percentage Share of the Environmental Attributes to any Person
other than Buyer. Seller makes no written or oral representation or warranty,
either express or implied, regarding the current or future existence of any
Environmental Attributes.
(c) During the Term, Seller .sha!l not report to any person or entity that the
Environmenta! Attributes granted hereunder to Buyer belong to anyone other
than Buyer, and Buyer may report under any program that such Environmeiatal
Attributes purchased hereunder belong to it.
(d) Seller will document the production of Environmental Attributes under
this Agreement by delivering with each invoice to Buyer an attestation for
Environmental Attributes produced by the Plant and purchased by Buyer in the
preceding calendar month. The fol-m of attestation is set forth as Appendix B.
Appendix B shall be updated or changed by th~ Parties, as necessary, to ensure
that Buyer receives full and complete title to, and the ability to record with any
EA Agency as its own, all of the Environmental Attributes purchased
hereunder. At Buyer’s request, the Parties, each at their own expense, shall
execute all such documents and instruments in order to effect the transfer of
the .Environmental Attributes specified in this Agreement to Buyer or its
designees as Buyer may reasonably request. In the event of the promulgation
of a scheme involving Environmental Attributes administered by EA Agency,
upon notification by EA Agency that any transfers contemplated by this
Agreement will not be recorded, the Parties shall promptly cooperate in taking
all reasonable actions necessary so that such transfer can be recorded. Each
Party shall promptly give the other Party copies of all documents it submits to
the EA Agency to effectuate any transfers.
(e) From time to time during any portion of the Term when the Alameda
Agreement is in effect, upon notice to Seller signed by both Buyer and
Alameda, Buyer and Alameda may adjust the Percentage Share in their sole,
12
SANFRAN 90103 (2K)
unlimited discretion, provided that the sum of Buyer’s Percentage Share and
the percentage share of Alameda under the Alameda Agreement shall equal
100%. -
(1) In the event that Alameda fails, for any reason, to purchase or accept
delivery of its share of the Output, or any portion thereof, under the Alameda
Agreement and such failure can reasonably be expected to continue for less
than thirty (30) consecutive days, Seller shall, as soon as practicable, offer to
Buyer in writing the right to purchase such Output under the same terms as set
forth in this Agreement. Buyer shall have twenty-four (24) hours to accept
such offer. Should such failure reach thirty (30) consecutive days, and is
reasonably expected to continue for an additional twenty-nine (29) consecutive
days or less, then Buyer shall again have the opportunity to purchase such
Output under the same terms as set forth in this Agreement. Buyer shall have
twenty-four (24) hours from the time Seller notifies Buyer in writing of such
extension to accept such offer. The foregoing shall be repeated for each
failure that is reasonably expected to last for less than thirty (30) consecutive
days. Should any such failure be reasonably expected to continue for thirty
(30) consecutive days or more, the Parties shall employ the procedure set forth
in Section 2.2(e)(2) below.
(2) In the event that Alameda fails, for any reason, to purchase or accept
delivery of its share of the Output, or any portion thereof, under the Alameda
Agreement and such failure can be reasonably expect to continue for thirty
(30) consecutive days or more, Seller shall, as soon as practicable, offer to
Buyer in writing the right to purchase such Output at the price determined by
¯ Seller in good faith to reflect the prevailing market price for the Output, but, in
other respects, under the terms of this Agreement. Buyer shall have five (5)
days to inform Seller, in writing, of its intent to consider the offer. Should
Buyer inform Seller that it is considering the offer, Buyer shall have sixty (60)
days in which to notify Seller, in writing, of its acceptance or rejection of the
offer. During the period in which Buyer is considering Seller’s offer (which
period may be te~Tninated upon twenty-four (24) hours written notice to
Seller), Buyer shall purchase such Output, in addition to its own Percentage
Share of Output, under the same terms as set forth in this Agreement. If Buyer
accepts Se!ler’s offer to purchase the Alameda Output, the parties shall
execute an amendment to this Agreement setting forth the price of the
additional Output. If Buyer rejects Seller’s offer to purchase the Alameda
Output, Se!ler shal! have the right to sell to one or more third party buyers. In
SANFRAN 90103 (2K) 1 3
such case, Sei!er shall promptly certify in writing to Buyer that the terms and
conditions of the sale to such third party buyer(s), 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 Seller shall provide the relevant contract and any
other supporting documentation for such certification. If such terms are less
favorable to Seller than as previously offered to Buyer, Buyer shall have the
right of first refusal consistent with the terms offered to the third party
buyer(s). Buyer shall have sixty (60) days to notify Seller in writing of its
intent to accept such offer. Upon the sale of such Output to any third party
buyer(s), Buyer shall have no further rights to be offered or to purchase such
Output.
Buyer consents to a corresponding provision being included in the Alameda
Agreement, and agrees that if the conditions requiring Seller to offer Buyer’s
share of the Output to Alalneda are satisfied, Seller’s duties to mitigate
damages, if any, shall be affected by Seller’s obligations as stated herein in
Section 2.2(e).
(f) Seller agrees that it shall not consent to an assignment, amend or waive
any of its material rights under the Alameda Agreement, administer the
Alameda Agreement in a manner materially different than its administration of
this Agreement, or otherwise treat Alameda materially differently than Buyer,
without Buyer’s express prior written approval, which approva! may be
withheld in Buyer’s sole and unlimited discreti6n.
(g) Buyer agrees to provide to Alameda in a timely manner upon its execution
a copy of this Agreement and any changes or amendments thereto.
2.3 Price
Subject to the provisions of Section 4. !(k), Buyer shall pay Seller $0.087 per
k\Vh of Energy delivered or tendered to Buyer at the Point of Interconnection,
which price shall be escalated at a rate of 1.5% (of the then-cmTent price)
annually on the anniversmT of (i) the first day of the first full month following
the Commercial Operation Date or (ii) if the Cormnercial Operation Date falls
on the first day of the month, the Comlnercial Operation Date. The Price shall
be the total compensation owed by Buyer for Output delivered or tendered to
Buyer hereunder.
14
SANFRAN 90103 {2K)
2.4 Tan Credits
Buyer agrees and acknowledges that all Production Incentives shall be owned
by Seller and/or the owner of the Landfill; provided, that to the extent Buyer
pays in full for emission offsets and otherwise makes any additional payments
pursuant to Section 4.3(j) in full, Seller shall pay Buyer the Percentage Share
of up to fifty percent (50%) of the net economic value (net of reasonable
transaction fees) realized by Seller from the Section 45 Credits until Seller has
reimbursed Buyer for all such payments made by Buyer pursuant to Section
4.3@. Buyer shall not claim Production Incentives. Buyer agrees to cooperate
with Alameda and Seller and/or the owner of the Landfill as may be necessary
to allow maximization of the value of, and realization of, all Production
Incentives; provided that Buyer shall not be required to incur additional costs
or accept any diminution in value of its rights under this Agreement or of the
Output purchased hereunder. In addition, Buyer shall not take any adtion
(except as otherwise permitted under this Agreement), that would in any way
reduce or eliminate the availability to Seller or the owner of the Landfill of any
Production Incentive, including without limitation the Section 29 Credits, and
Buyer shall forego any credits or benefits available to it (other than
Environmental Attributes) to the extent necessary to alto~v Se!ler and the owner
of the Landfill to obtain the full benefit of the Production Incentives, but in no
event shall Buyer be required to forego receipt of Energy.
2.5 _.~ght of First Refusal %r Expansion Plant and Expansion Plant Output
(a) Seller 1Tiny in its sole discretion determine, from time to time, during the
Tenr~ 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 Percentage Share of the
Expansion Plant Output to Buyer. Seller shall offer the remainder of the
Expansion Plant Output to Alameda under the same terms and conditions as
are offered to Buyer. If Alameda does not take such share of this Expansion
Plant Output or if Alameda desires and Seller allows Alameda to take a portion
of such share of this Expansion Plant Output, then Buyer shall have the right
to take all or a portion of the rejected Expansion Plant Output under the same
terms as those offered in connection with Buyer’s Percentage Share of the
Expansion Plant Output, such right to be exercised by Buyer within sixty (60)
days followilag written notice from Seller or be deemed in’evocably to have
5ANFRAN 90103
been waived. The offer shall include the price to be paid by Buyer for the
Percentage Share of the Expansion Plant Output, the telTn of the proposed
power purchase agreement and the other principal te~-Tns and conditions of the
proposed sale. If Buyer wishes to accept such offer to purchase all (but not less
than all) of such Percentage Share of the Expansion Plant Output, Buyer shall
so notify Seller within sixty (60) days of its receipt of such offer. Buyer and
Seller shall promptly thereafter enter into good faith negotiation of a definitive
power purchase agreement incorporating the terms of such offer. Until such
an Expansion Plant power purchase agreement is executed, the 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. Should any issue arise that is not covered by such
documentation, the terms of this Agreement shall apply.
(b) If Buyer does not accept Seller’s offer to purchase its Percentage Share
of the Expansion Plant Output within sixty (60) days of receipt of Seller’s
offer, Seller shall be free to offer to sell that portion of the Expansion Plant
Output 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
Seller offers to break up Buyer’s Percentage Share of the Expansion Plant
Output to sell to multiple independent buyers, Seller shall notify Buyer in
writing of the temas and conditions of such offers and Buyer shall again have
the right of first refusal consistent with the teiTns Set forth above for each of
the lesser amounts being offered to the third parties. If Buyer does not
purcl~ase its Percentage Share of 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 par~y, 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 Seller shall provide the relevant contract and any other supporting
documentation for such certification. Upon the sale of such Expansion Plant
Output 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
~ts Percentage Share of the Expansion Plant Output from one Expansion Plant
shall not affect Buyer’s right to purchase its Percentage Share of the
Expansion Plant Output from a later Expansion Plant under the terms of this
Agreement. Seller shall not sell or provide Buyer’s Percentage Share of the
Expansion Plant Output to any third party unless it can do so without
I6
SANFRAN 90103 (2K)
compromising in any material way its ability to provide Buyer’s Percentage
Share of the Output to Buyer hereunder. The materiality of any such impact
shall be-detem~ined by Buyer in its reasonable discretion. If Seller sells or
provides Expansion Plant Output to any third party, Seller shall not employ
Landfill Gas to fuel such Expansion Plant in any hour unless the Landfill Gas
flow requirements of the Initia! Capacity have been, and shall continue to be,
met.
2.6 Option to Install Emission ControIs
Buyer and Alameda may at their option, exercised jointly from time to time,
install emission controls on the Plant in connection with the Initial Capacity
and on any Expansion Plant from which Buyer or Alameda purchases
Expansion Plant Output (so long as Buyer and/or Alameda purchase all such
Expansion Plant Output) beyond those then required to meet the Requirements
of Law applicable to Seller or the Plant; provided that (a) Buyer and Alameda
shall (i) bear all costs and financial, regulatory and operational risks thereof,
including without limitation the capital cost thereof and any increase in
operation or maintenance expenses, and (ii) shall keep Se!ler whole in all
respects, including for decreases in Output and other adverse effects on the
Initial Capacity and the Expansion Plant and its performance, increases in
operations and maintenance costs and failures of such emission controls to
operate, and (b) neither Buyer nor Alameda shall make any such changes to
the Initial Capacity or the Expansion Plant without the consent of Se!ler to the
design and plan for implementation of such changes, such approval not to be
unreasonably withheld.
ARTICLE
METERING AND BILLING
3. !Meter in_p_g__Re_N__Rir e merits
The transfer of Energy from Seller to Buyer shall be measured by revenue
quality metering equipment at the Point of Interconnection. Such metering
equipment, including any equipment required for con~rmnicating meter data
(e.g., a dedicated data line) to Buyer or the ISO, shall be selected, provided,
installed, owned, maintained and operated, at Seller’s sole cost and expense,
17SANFRAN 90103 (2K)
by Seller or its designee in accordance with applicable ISO rules. Seller shall
exercise reasonable care in the maintenance and operation of any such
metering- equipment,-and shall test and verify the accuracy of each meter at
least annually. Seller shall inform Buyer in advance of the time and date of
these tests, and shall permit Buyer to be present at such tests and to receive the
results of such tests. Subject to Buyer paying for its Percentage Share of the
cost of any update or upgrade to such metering equipment pursuant to a new
requirement of the ISO, the LDC or any other Governmental Authority
adopted following the Commercial Operxtion Date, each of Seller’s meters
shall be accurate to the metering specifications then in effect for ISO meter
accuracy. Seller shall further install and maintain all equipment and data
circuits necessary to transmit all monitored real time supervisory control and
data acquisition ("SCADA") system data and real time data from the ISO
meter to the ISO and the Northern California Power Agency ("NCPA’), while
adhering to bo~h ISO and NCPA communications protocols. Seller shall
provide a copy of each Certificate of Compliance issued by ISO, if any. -
Buyer and NCPA shall be provided access to all monitored SCADA points to
be used at their discretion in real time monitoring. Buyer may further, at its
sole cost and expense, install 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 said
equipment does not interfere with the Seller~’s metering equipment. Seller
shall permit Buyer or Buyer’s representative access to its Plant for the purpose
of installing and maintaining such check meters. Seller shall submit to the
ISO, or allow the ISO to retrieve, any meter data required by the ISO related to
the Plant output in accordance with t,he ISO’s settlement and billing protocol
and meter data tariffs. Buyer shall have reasonable access to relevant meters
and associated facilities, as well as real time access to all meter data, as is
necessary for Buyer or its agent to perform its duties as scheduling coordinator
and comply with the requirements of the ISO tariff.
Buyer shall use commercia!ly reasonable efforts to coordinate with Alameda
concerning check meters, associated measuring equipment and meter tests so
as to avoid unnecessary duplication of equipment or efforts.
3.2 Billing
t8SANFRAN 90103 (2K
Seller shall read the meter at the end of each calendar month of the Term, and
provide to Buyer on or before the ! 0th day of the following month an invoice
based upon the meter data for Energy delivered in such calendar month and the
col-responding attestation pursuant to Section 2.2(d). Such invoice may be
transmitted electronically via e-mail to [*AcctsPayable@ncpa.com], or to at~y
other email address designated in writing by Buyer, with a copy to follow via
United States Mail to the notice address designated below. Should either the
Seller or the Buyer determine at a later date, but in no event later than two (2)
years after the original invoice date, that tl{e invoice amount was incorrect, that
Party shall promptly notify the other Party of the error. If the amount invoiced
was too low, Buyer shall, upon receiving verification of the error and
supporting documentation from the Seller, pay any undisputed portion of the
difference within thirty (30) days of receipt of verification. If the amount
invoiced was too high, Seller shall, upon receiving verification of the error and
supporting documentation from the Buyer, pay any undisputed portion of the
difference within thirty (30) days of receipt of verification. Any such am~)unt
shall be subject to the interest rate as designated in Section 3.3 tanning from
the original due date of payment.
For Energy delivered to Buyer pursuant this Agreement, Buyer or its agent
shall pay Seller by electronic transfer of funds by the later of the 20th day of
the month or the 10th business day after the invoice is received in accordance
with Section 3.2. If such due date falls on a weekend or legal holiday, such
due date shall be the next day which is not a weekend or legal holiday.
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 (2%) plus
the average daily prime rate as determined from the "Money Rates" section of
the West Coast Edition of Yke I~Zall Street ~our~al for the days of the late
payment period multiplied by the number of days elapsed from and including
the day after the due date, to and including the payment date. Interest shall be
computed on the basis of a 365-day year. In the event this index is
discontinued or its basis is substantially modified, the Parties shall agree on a
substitute equivalent index. Should Buyer in good faith dispute the amount of
an invoice, Buyer or its agent may withhold such disputed amounts until the
dispute is resolved by arbitration or other permissible method. Such disputed
amounts shall bear interest at the interest rate described above. Failure of
Buyer or its agent to withhold any amount is not a waiver of Buyer’s right to
SANFRAN 90103 12K)19
challenge such amount. Both Parties shall maintain all records relating to the
other Party or this Agreement for a minimum of two (2) years, and shall permit
the other Party, upon reasonable notice, to inspect and audit such records as
the requesting Party deems reasonably necessary to protect its rights.
ARTICLE IV
SELLER’S OBLIGATIONS
During the Term, Seller hereby agrees to perform the following affirmative
obligations:
4.1 Development~ Finance~ Construction and Operation of the Plant
Seller shall:
(a) Develop, finance and construct the Plant.
(b) Provide Buyer access to a "real time" Plant monitoring system (which,
at a minimum, shall provide "real time" information regarding the net output
of the Plant) that is anticipated to be internet-based and include alarms.
(c) Seek, obtain, maintain, comply with and, as necessary, renew and
modify from time to time, all Pen-nits, certificates or other authorizations
which are required by any Requirements of Law or Governmental Authority as
prerequisites to engaging in the activities required of Seller by the Agreement
and to meeting Seller’s obligation to operate the Plant consistently with the
terms of the Agreement.
(d) Operate, maintain, and repair the Plant in accordance with this
Agreement, all Requirements of Law applicable to Seller or the Plant,
Contractual Obligations, Permits and in accordance with Prudent Utility
Practice, including with respect to efforts to maintain availability of the Initial
Capacity.
(e) Obtain and maintain the policies of insurance in amounts and with
coverages as set forth in Appendix C.
2OSAN FRAN 90103 (2K)
(f) Operate and maintain in a manner consistent with Prudent Utility
Practice the facilities it wi!l own and othetavise cooperate with LDC in the
physical-interconnection of the Plant to the LDC System in accordance with
the Interconnection Agreement.
(g) By October 1 st of each year of the Terns, provide Buyer and NCPA with
an annual projection of scheduled Outages for the following calendar year.
Should Seller make any changes to such projection, it will notify Buyer and
NCPA of such changes at least fourteen (14) days in advance of any newly
scheduled or rescheduled Outage. If Buyer requests a change to the scheduled
date of any Outage (including to a date set forth in a change notice from
Seller), Seller shall consider such request in good faith and notify Buyer of its
decision within seven (7) days. !n no instance will Seller schedule Outages of
more than twenty-four (24) hours between June 1 st and September 30th during
the Term. In connection with any Outage, whether a scheduled or unscheduled
Outage, Seller shall notify Buyer and NCPA, as soon as practicable, ofthe
percentage of Plant expected to be out of service and how long the Outage is
expected to last. If the Outage is total and is due to failure of the Plant rather
than the transmission and distribution system beyond the Point of
Interconnection, Seller shall give Buyer and NCPA at least four (4) hours
notice before re-energizing the Plant. In addition, Seller will comply with
NCPA’s reasonable scheduling protocols, as they may be changed from time
to time. A copy of the current version of NCPA’s scheduling protocols, which
the Parties agree are reasonable, is attached as Appendix D. Buyer shall use
commercially reasonable efforts to coordinate with Alameda regarding any
requested changes to scheduled outages to avoid duplication.
(h) Negotiate and enter into an Interconnection Agreement with LDC to
enable Buyer to transmit Energy received at the Point of Interconnection
through the ISO-controlled grid. Seller shall be responsible for and pay all
initial non-recurring costs and charges arising under the Interc0nnection
Agreement (even if not actually incurred) prior to the Con~nercial Operation
Date in compliance with the Interconnection Agreement and associated rules
and requirements in place as of the Commercial Operation Date. All other out-
of-pocket costs and charges related to interconnection other than these initial
non-recurring costs and charges will be reimbursed, on a pro rata, energy
basis, by the purchasers of energy from the Plant. During the Term of this
Agreement prior to any Expansion Plant becoming available for commercial
service, Buyer will reimburse Seller for its Percentage Share of such other out-
21SANFRAN 90103 (2K)
of-pocket costs and charges under the Interconnection Agreement paid or
required to be paid by Seller to LDC or its successor; provided, however,
Buyer shall be responsible for its Percentage Share of such other out-of-pocket
costs and charges under the Intercormection Agreement only to the extent
Buyer has approved in writing, in the sole discretion of Buyer, the
Interconnection Agreement, including any amenclments (which shall not
include changes in relevant tariffs) from time to time. Upon completion of an
Expansion Plant which uses the Interconnection Facilities, such other out-of-
pocket costs and charges shall be prorated, on a Percentage Share of energy
basis, and Buyer’s share would be based on its Percentage Share of Energy
compared to the energy of the Expansion Plant delivered to the Point of
Interconnection. Seller shall cooperate with Buyer to minimize any such costs
as are to be reimbursed by Buyer.
(i) Negotiate and enter into a Participating Generator Agreement and a
Meter Service Agreement for ISO Metered Entities with the ISO, who is "the
load control area operator for the LDC System to which the Plant is
interconnected. Buyer shall pay for-or reimburse Seller for its Percentage
Share of any such costs or charges associated with these agreements, except to
the extent such cost or charge is required to be paid by Seller under this
Agreement in Sections 3.1 and 4.1(h). Seller shall cooperate with Buyer to
minimize any such costs as are to be reimbursed by Buyer.
(j) Coordinate all Plant 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 are not inconsistent with the ISO tariff and
ISO procedures.
(k) Maintain an Availability Threshold of seventy percent (70%). Should
Seller fail to maintain such an Availability Threshold, the Price applicable to
Output sold and purchased during each month during which the Availability
Threshold is below seventy percent (70%) shall be seven and one-half percent
(7.5%) below the Price that would otherwise be in effect pursuant to Section
2.3 until the Availability Threshold is increased to at least seventy percent
(70%). Except as othe~cise expressly stated in Sections 6.4 and 7.6, the
foregoing shall be Buyer’s sole remedy for any shortfall of or failure to
produce Output or failure to maintain any particular Availability Threshold.
4.2 General Obligations
22SANFRAN 90103 (2K)
(a) Seller shall obtain in its own name and at its own expense any and all
pollution or environr~ental credits or offsets necessary to operate the Plant in
compliance with the Environmemal Laws.
(b) Seller shall keep complete and accurate operating and other records and
all other data for the purposes of proper administration of the Agreemer~t,
including such records as may be required, by any Governmental Authority or
Prudent Utility Practice.
(c) Seller shall continue to (i) preserve, renew and keep in full force and
effect its organizational existence and good standing, and take all reasonable
action to maintain all applicable Permits, rights, privileges, licenses and
franchises necessary or desirable in the ordinary course of its business; and (ii)
comply with all Contractual Obligations and Requirements of Law applicable
to Seller or the Plant.
(d) Prior to the date ninety (90) days following the later of (a) the date of
this Agreement and (b) the date of the Alameda Agreement, Seller shall make
available for review by Buyer, and its representatives, at Buyer’s offices in
Palo Alto, Califoruia, a fully executed copy of its contract with Butte,
including al! exhibits, attachments, and other supporting documents thereto,
for the purchase of Landfill Gas (the "LFG Agreement"). Such contract may
be redacted to remove pricing information. If (i) Seller does not fulfill its
obligations under the first two sentences of this Section 4.2(d) in the time
al!owed, or (ii) Seller fulfills such obligations but Buyer in its reasonable
discretion does not approve of the terms of the LFG Agreement, then Buyer
may, as its sole remedy and without liability of one party to the other,
terminate this Agreement by written notice given no later than sixty (60) days
after Seller has fulfilled, or failed to fulfill, as the case may be, such
obligations under such first two sentences. If Alameda exercises its
corresponding right of termination under the Alameda Agreement, then Seller
shall by written notice offer Buyer the option to amend this Agreement to
increase the Percentage Share to one hundred percent (100%). If Buyer does
not exercise such option by written notice to Seller within sixty (60) days
following such written notice from Seller, then such option shall expire and
Seller may, at its sole option exercised by written notice to Buyer, terminate
this Agreement without liability of one party to the other. Other than
increasing the amount of fuel purchased thereunder, Seller shall not allow such
SAN FRAN 90103 (2K)
23
contract to be amended or otherwise modified, nor shall it waive or fail to
enforce any of its rights thereunder, without Buyer’s prior written approval,
whose a-pproval shall not be unreasonably withheld. Seller shall make the
LFG Agreement available to Buyer for review during normal business hours at
Buyer’s offices in Palo Alto, California throughout the term of this Agreement
within seven (7) days of a written request by Buyer.
(e) Seller shall provide to Buyer such other information regarding the
permitting, engineering, construction or operations of the Plant as Buyer may
from time to time reasonably request, subject to licensing or other restrictions
of Seller or a third party with respect to confidentiality, disclosure or use.
(f) Seller shall enter into any agreements with the ISO required by the ISO
for generators delivering power into the ISO-controlled grid. Except for such
costs and charges as are expressly identified in this Agreement as Seller’s
costs, Buyer shall reimburse Seller for all costs and charges under st~ch
agreements. Seller shall cooperate with Buyer to minimize any such costs as
are to be reimbursed by Buyer.
(g) Seller shall provide Buyer with a copy of its ultimate corporate parent’s
audited financial statements as at the end of its accounting year prepared in
accordance with GAAP, no later than four (4) months after the end of such
accounting year of such entity. Seller shall al~o provide, on a quarterly basis,
an unaudited financi!l statement in the form of Appendix F, prepared in
accordance with GAAP consistently applied for Seller and for Seller’s ultimate
corporate parent. Such financial statements shall be certified by an officer of
Seller as fairly presenting the financial condition of the Seller subject only to
what would typically be included in year-end audit adjustments and footnotes.
If, from time to time, an audited year-end financial statement is prepared for
Seller, Seller shall provide it to Buyer no later than four (4) months after the
end of Seller’s accounting year.
4.3 Construction 3{ilestones
(a) The Parties agree that time is of the essence and that certain milestones
("Milestones") for the development, financing and construction of the Plant
must be achieved in a timely fashion or Buyer shall suffer damages. Seller
shall provide Buyer with documentation satisfactory to Buyer, in Buyer’s
24SANFR.~.N 90103 (2K)
reasonable discretion, to support the achievement of Milestones by the dates
set forth below.
(b)The following events are all of the Milestones:
(i) By the date ninety (90) days following the date of the later of (a)
this Agreement and (b) the Alameda Agreement, Seller shall have
signed an LFG Agreelnent with Butte and have obtained Site
Control.
(ii)By the date twenty (20) montt~s following the later of (a) the later
of the date that (i) Buyer and (ii) Alameda approves the LFO
Agreement, and (b) if applicable pursuant to Section 4.2(d), the
date Buyer exercises an option to increase its Percentage Share to
one hundred percent (100%) or such option expires, Seller shall
(a) have obtained all Permits necessary, in final form, to
commence construction of the Plant and (b) have entered into an
Interconnection Agreement.
(iii)By the date one (1) month following the later of (a) the
finalization of all necessary PelTnits described in Section
4.3(b)(ii), and (b) entering into an Interconnection Agreement,
Seller shall have arranged financing for construction of the Plant
or otherwise made funds available to con~nence and complete
construction.
(iv)By the date .twelve (12) months~ following the later of (a) the
finalization of all necessary Permits described in Section
4.3(b)(ii), and (b) entering into an Interconnection Agreernent,
Seller shall have corrunenced construction of the Plant.
(v)By the date eighteen (18) months following the arrar~gement of
financing or availability of funds for construction, Seller shall
have achieved the Co~nercial Operation Date.
(c) Starting on the effective date of this Agreement, Seller shall provide to
Buyer monthly progress reports concerning the progress towards completion
of the Milestones. In addition, within five business days of the completion of
each Milestone, Seller shall provide a certification to Buyer alo~g with any
supporting documentation, demonstrating the satisfaction of the Milestone.
Seller shall provide to Buyer additional information concerning Seller’s
progress towards, or confirmation of, achievement of the Milestones, as Buyer
may reasonably request from time to time. Within seven (7) days of the later
of (i) obtaining the authority to construct for the Plant from the applicable air
25SANFRAN 90103 (2K)
quality management district or (ii) Seller’s receipt of the system impact and
facility cost studies from the LDC, but in no event later than the date set forth
in Section 4.3(b)(ii); Seller shall specify the Initial Capacity of the Plant
(which shall be subject to the limits contair~ed in Section 1.21).
(d) Upon becoming aware that it will, or is reasonably likely to, fail to
achieve a Milestone by the required date, for any reason including 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 Milestone(s) arid describe Seller’s plan for meeting
the Milestone. Seller’s notice will also explain any impact such delay may or
wi!l have on any other Milestone, and measures to be taken to mitigate such
impact.
(e) In the event that a Force Majeure Event causes any delay to the
achievement of the Milestones set forth in Sections 4.3(b)(iii), (iv), or (v), such
Milestone’s deadline may be extended, together with any Force Majeure Event
extensions for other Milestones, for a period not to exceed six (6) months. The
extension of the deadline for any Milestone shall extend the deadline for all
subsequent Milestones, provided that in no event shall the combined
extensions for Force Majeure Events for any or all of the Milestones exceed
six (6) 1-nonths.
(f) In the event that Seller fails to meet the Milestone set forth in Section
4.3(b)(i) for any reason, Buyer may terminate this Agreement, without liability
of either Party to the other, by giving notice to Seller in writing of such
termination at any time prior to Seller curing its failure. Such option to
terminate shall be Buyer’s sole remedy for any failure to meet the Milestone
set forth in Section 4.3(b)(i).
(g) In the event that Seller fails to meet the Milestone set forth in Section
4.3(b)(ii) for any reason, Buyer may terminate this Agreement, without
liability of either Party to the other, within ten (10) business days after the
Milestone date by giving notice to Seller in writing of such tem~ination. If
Seller meets the Milestone set forth in Section 4.3(b)(ii) prior to Buyer giving
written notice of termination, this Agreement shall remain in full force and
effect. If Buyer does not terminate this Agreement within ten (10) business
days after the Milestone date, Seller shall continue to pursue satisfaction of the
relevant Milestone and Buyer must give Seller sixty (60) days notice to
26
SANFRAN 90103 (2K)
terminate this Agreement, during which period if Seller cures such defect and
achieves the relevant Milestone, such termination shall be void and this
Agreement shal! remain in full force and effect. Such option to terminate sha!l
be Buyer’s sole remedy for any failure to meet the Milestone set forth in
Section 4.3(b)(ii).
(h) In the event that Seller fails to meet the Milestone set forth in Section
4.3(b)(iv) within six (6) months after the relevant Milestone date for any
reason (or up to twelve (12) months if also delayed by a Force Majeure Event),
Seller may deposit an amount, per month, equal to the Monthly LD Amount
into a segregated escrow account reasonably acceptable to Buyer by the first
day of such month, for every month after such date until the Milestone is met.
Such funds will be used towards any liquidated damages as set forth in Section
7.4(c), and shall be held in escrow until such time that liquidated damages, if
any, become payable to Buyer. Should the amount in the escrow account
exceed the final amount of liquidated damages, such excess funds shall be
returned to Seller. Should Seller (i) at any time fail to make such monthly
deposits or (ii) fai! to satisfy the Milestone set forth in Section 4.3(b)(iv) for
more than twelve (12) months, Buyer may tern~inate this Agreement upon
written notice to Seller of such termination. Upon such termination, Seller
will pay to Buyer, within thirty (30) days of the termination notice, an amount
equal to the LD Amount as liquidated damages. Such Seller escrow option,
Buyer option to tern~inate, and liquidated ~lamages shall be Buyer’s sole
rernedy for any failure of Seller to meet the Milestones set forth in Section
4.3(b)(iii) or (iv).
(i) Seller covenants that it will diligently pursue all Milestones including
the Commercial Operation Date, which Seller envisions will occur within
thirty (30) months following the execution of this Agreement.
(j) In the event that any of the approvals described in Section 4.3(b)(ii) are
not obtained by the date specified in Section 4.3(b)(ii) for satisfaction of the
relevant Milestone or are obtained on a basis not reasonably satisfactory to
Seller, including without limitation, in the case of the air pen-nit, approval of
construction and operation of the Plant on a basis not consistent with internal
combustion engines without emission controls, pollution or environmental
credits or offsets, Seller may teiTninate this Agreement without liability of
either Party to the other by giving notice to Buyer in writing of such
telTnination; provided that such notice must be given no later than fourteen
SANFRAN 90103 (2K)27
(14) days following the earlier of (a) the date on which a given approval not
satisfactory to Seller is received in writing or (b) the date specified in Section
4.3(b)(ii-) for satisfaction of the relevant Milestone; further provided, that such
notice and such termination shall tq_ot be effective if Buyer ~nd Alameda each,
by written notice to Seller within fourteen (14) days following such notice
from Seller, agrees (i) to pay Seller with the first invoice following the
Commercial Operation Date the reasonable all-in cost (including reasonable
broker fees, if any) to purchase all such offsets sufficient to operate the Plant
at full Initial Capacity (less reasonably projected scheduled Outages for
maintenance) for the term of this Agreement, and (ii) to adjust equitably the
price payable under Section 2.3 of this Agreement and within thirty (30) days
thereafter agrees with Seller in writing (each in their sole discretion) to an
amendment of this Agreement revising such price. Failure to provide notice of
termination by the date specified above shall constitute a waiver of the right to
terminate this Agreement as provided in this Section 4.3(j). In the event that
Seller exercises such termination right, Buyer shall have a right of first refrasal
to purchase the output of any electricity generating facility owned or
controlled by Seller or its affiliate(s) located at the Landfill and fueled by
Landfill Gas. Such right of first refusal shall conform to the provisions of
Section 2.5. The provisions of this Section 4.3(j) shall survive termination of
this Agreement under this Section 4.3(j) for a period of five (5) years from
such termination.
ARTICLE V
BUYER’S OBLIGATIONS
5.1 De,irefuL and Transmission
Except for Seller’s obligations pursuant to Sections 3.1 and 4. !(h), Buyer shall
be solely responsible for paying its Percentage Share of costs and charges
associated with the receipt of Energy, under this Agreement, at the Point of
Interconnection and for the transmission and delivery of the Energy from_ the
Point of Interconnection to any other point downstream of the Point of
Interconnection (including, without limitation, transmission costs and charges,
competition transition charges, applicable control area service charges,
transmission congestion charges, inadvertent energy tlows, any other ISO
charges related to the transmission of such Energy by the ISO and any charge
28
SANFRAN 90103 (2K)
assessed or collected in the future pursuant to any utility tariff or rate schedule,
however defined, for transmission or transmission-related service rendered by
or for any transmission-owning or operating entity). NCPA, acting on behalf
of Buyer, shall be scheduling coordinator for the transmission of Energy from
the Plant in accordance with applicable ISO rules. Buyer’s duties as
scheduling coordinator shall be limited to those duties as are specifically
rectuired of scheduling coordinators in the ISO tariff and the ISO protocols.
Commercial arrangements for such transmission and delivery services will be
coordinated and settled by NCPA directiy With the ISO or other third parties.
At the option of Buyer and Alameda, to be exercised jointly, the Plant may be
included within NCPA’s metered sub-system in connection with the
scheduling of power over the ISO grid and related functions; provided that
such inclusion shall have no adverse effect on Plant operations or Seller (or
any such effect shall be fully mitigated by Buyer and/or Alameda). Seller will
do all things reasonably needed to allow Buyer to comply with any
obligations, and minimize any potential liability, under the ISO tariff;
provided, that if such actions require any actions beyond the giving of notice
provided by Buyer, then Buyer shall reimburse its Percentage Share of all out-
of-pocket costs and charges of such actions. If and to the extent that Seller
fails to comply with the notice provision in Section 4. l(g) concerning Outages
or with its obligations as outlined in the previous sentence, Seller shal! be
who!ly responsible for all imbalances, deviations, or any other ISO charges or
penalties associated with such Outage or ISQ tariff obligation. Buyer may,
jointly with Alameda, replace NCPA as Scheduling Coordinator for the Plant.
if NCPA ceases to be Scheduling Coordinator for the Plant and Buyer and
Alameda are unable, upon fore-teen days notice from Seller, to appoint jointly a
replacement Scheduling Coordinator, Se!ler shall have the right to appoint a
replacement Scheduling Coordinator on their behalf, and Buyer and Alameda
shall enter into all reasonable and appropriate agreements with such
replacement Scheduling Coordinator at their own cost.
5.2 Taxes
Buyer shall pay and be fully responsible for any sales, use, gross receipts,
utility or other taxes, assessments or fees, if any, incuned or imposed on the
sale or transfer of Energy from Seller to Buyer under this Agreement. Buyer
shall not be responsible for any taxes measured on the net income of Seller or
ad valorem taxes paid by Seller or Butte associated with the Site or the
Landfill.
SANFRAN 90103 (2K)29
5.3 Notification of Transmission Outa~
Buyer will exercise reasonable efforts to provide Seller with as much advance
notice as practicable of any Outage on the LDC System or other transmission
or delivery facilities which may adversely affect the delivery of Energy to
Buyer.
ART][CLE VI
FORCE MAJEURE
6.1 Force Maieure Events
It is understood that at times unavoidable delays or interruptions in delivery or
performance may result from Force Majeure Events. The performance of each
Party under this Agreement may be subject to interruptions or reductions due
to a Force Majeure Event. Both Parties shall in good faith use such effort as is
reasonable under all the circumstances known to that Party affected by the
Force Majeure Event at the time to remove or remedy the cause(s) and mitigate
the inability to perform. However, the obligation, to use such reasonable
efforts shall not be interpreted to require r~solution of labor disputes by
acceding to demands of the opposition when such course is inadvisable in the
discretion of the Patty having such difficulty.
6.2 Remedial Action
Subject to the limitation on extensions of Milestones set forth in Section
4.3(e), a Party shall not be liable to the other Party if the Party is prevented
from performing its obligations hereunder due to a Force Majeure Event. The
Party rendered unable to fulfill an obligation by reason of a Force Majeure
Event shall take al! action necessary to remove such inability with all due
speed and diligence. The nonperfonning Party shall be prompt and diligent in
attempting to remove the cause of its failure to perform, and nothing herein
shall be construed as permitting that Party to continue to fail to perform after
said cause has been removed. Notwithstanding the foregoing, the existence of
a Force Majeure Event sha!l not excuse any Party from its obligations to make
payment of amounts due hereunder.
30SANFRAN 90103 (2K)
6°3 Notice
!n the event of any delay or nonperformance resulting from a Force Majeure
Event, the Party suffering the Force Majeure Event shall, as soon as
practicable under the circumstances, notify the other Party in writing of the
nature, cause, date of commencement thereof and the anticipated extent of any
delay or inte~uption in performance.
6.4 "~""~_’___’a erm~,~atm~ Due To Fm c_e__M_~eure Event
Subject to Section 4.3(e), if a Party is prevented fronl perfomaing its material
obligations under this Agreement for a period of twelve (!2) consecutive
months or longer,, the unaffected Pa~ty may terminate this Agreement, without
liability of either Patty to the other, upon thirty (30) days written notice at any
time duritag the Force Majeure Event.
DEFAULT/REM[ED~[E S/TERMINATiON
7.1 Events of Default by. 13u___ykE
The following shall each constitute an "Event of Default" by Buyer:
(a) Buyer breaches any material obligation (other than one covered by
Section 7. l(b) or (c) of this Agreement) and fails to cure such breach within
thirty (30) days after written notification of breach by Seller or such longer
period as may be necessary to cure such breach as long as Buyer is exercising
diligent efforts to cure such default.
(b) Buyer fails to make an3, payment due under this Agreement within thirty
(30) days after written notice that such payl-ne~at is due.
(c) The initiation of an involuntary proceeding against Buyer under the
bankruptcy or insolvency laws, which involuntary proceeding remains
undismissed for sixty (60) consecutive days, or in the event of the initiation by
Buyer of a volur~tary proceeding under the bankruptcy or insolvency laws.
SANFRAN 90103 (2K/
31
7.2 Events of Default _~ Seller
(1) The following shall each constitute an "Event of Default" by the Seller
if Seller does not cure within the time set forth in clause (2), below:
(a) Seller breaches any material obligation (other than ones covered by
Sections 7.2(b), (c), (d), (e) or (f) 0f this Agreement or for which a remedy is
specified).
(b) Seller fails to make any payment due under this Agreement within thirty
(30) days after written notice that such payment is due.
(c) The initiation of an involuntary proceeding against Seller under the
bankruptcy or insolvency laws, which involuntary proceeding remains
undismissed for sixty (60) consecutive days, or in the event of the initiation by
Seller of a voluntary proceeding under the bankruptcy or insolvency laws.
(d) Seller sells or transfers Buyer’s share of the Output (or any individual
component thereof) or Expansion Plant Output (or any individual component
thereof) or the right to Buyer’s share of the Output (or any individual
component thereof) or Expansion Plant Output (or any individual component
thereof), to the extent that such Expansion Plaint Output is purchased by Buyer,
to any Person other than Buyer.
(e) Seller fails to comply with the terms of Buyer’s right of first refusal as
described in Section 2.5 of this Agreement.
(f) Subject to Section 7.4(c), Seller fails, for any reason other than an
unauthorized act or omission by Buyer, to achieve the Con~nercial Operation
Date by the applicable Milestone deadline as set forth in Section 4.3(b)(v), as
such deadline may be extended as a result of a Force Majeure Event in
accordance with Section 4.3(e).
(2) Time for Cure. Nothing described in Section 7.2(1)(a) above shall
constitute an Event of Default if Seller cures the event, failure or circumstance
within (30) days. after written notification by Buyer or such !onger period as
may be necessary to cure as long as Seller is exercising diligent efforts to cure.
32SANFRAN 90103 (2K)
7.3 Termination for Default
(a) In-the event th6 defaulting Party fails to cure the Event of Default within
the period for curative action under Sections 7.1 or 7.2, as applicable, the non-
defaulting Party may terminate the Agreement by notifying the defaulting
Party in writing of (i) the decision to terminate and (ii) the effective date of the
termination.
(b) Upon termination of the Agreement by Buyer pursuant to Section 7.3(a)
due to an Event of Default by Seller, (i) Buyer shall have no future or further
obligation to purchase the Output of the Plant or to make any payment
whatsoever under this Agreement, except for payments for obligations arising
or accruing prior to the effective date of termination, and (ii) Seller shall, if
Buyer has paid in full for emission offsets pursuant to Section 4.3(j), either (A)
reimburse Buyer pro rata for any unused such offsets paid for by Buyer or (B)
transfer to Buyer title to any unused such offsets paid for by Buyer. Uioon
termination of the Agreement by Seller pursuant to Section 7.3(a) due to an
Event of Default by Buyer, Se!ler shall have no future or further obligation to
deliver the Output of the Plant to Buyer or to satisfy any other obligation of
this Agreement, except for payments or other obligations arising or accruing
prior to the effective date of temaination. After the effective date of
termination, the Agreement shall not be construed to provide any residual
value to either Party or any successor or any o, ther Person, for rights to, use of
or benefits from the Plant to any Person.
(c) Default by Alameda under the Alameda Agreement shall not be
construed as a default by Buyer, and shall not give rise to any liability
hereunder or to the termination provisions set forth above with respect to
Buyer.
7.4 Damages
(a) For all claims, causes of action al~d damages the Parties shal! be entitled
to the recovery of actua! damages allowed by law unless otherwise limited by
the Agreement. Neither the enumeration of Events of Default in Sections 7.1
and 7.2, nor the termination of this Agreement by a non-defaulting Party
pursuant to Section 7.3(a), shall limit the right of a non-defaulting Party to
rights and remedies available at law, ir~cluding, but not limited to, claims for
breach of contract or failure to perform by the other Party and for direct
33
SANFRAN 90103 (2K)
damages incurred by the non-defaulting Party as a result of the termination of
this Agreement.
(b) Except as otherwise specifica!ly and expressly provided in the
Agreement, neither Party shall be liable to the other Party under this
Agreement for any indirect, special or consequential damages, including but
not limited to loss of use, loss of revenues, loss of profit, interest charges, cost
of capital or claims of its c~astomers or members to which service is made.
Except as set forth in Section 4. l(k) and except to the extent Seller violates its
undertaking not to provide or sell rights to part or all of the Output to a party
other than Buyer, Seller shall l~Ot be liable to Buyer for failure to provide any
specific amount of Output hereunder.
(c) In the event that Seller fails to meet the Con~nercial Operation Date by
the appiicable Milestone deadline as set forth in Section 4.3(b)(v), as such
deadline may be exter~ded as a result of a Force Majeure Event in accordance
with Section 4.3(e), Seller shall be liable for liquidated damages in the amount,
per month, equal to the Monthly LD Amount for each full month (with parts of
a month _pro rated) that Seller is late in satisfying the Milestone. So long as
Seller is paying such liquidated damages on a monthly basis, up to twelve (12)
months, Buyer shall not be permitted to terminate this Agreement. If after
twelve (12) months following the relevant Milestone deadline Seller has failed
to achieve Corranercial Operation, or if for any reason Seller fails to pay, or
discontinues paying, the monthly liquidated damages provide for above, Buyer
may terminate this Agreement by written notice to Seller. This twelve (12)
month period shall not be extended as a result of a Force Majeure Event.
Upon such termination, Seller shall pay Buyer, within thirty (30) days of the
termination notice, a lump sum equal to the LD Amount. No other damages or
remedy shall be available to Buyer on the basis of such failure to meet the
Milestone set forth in Section 4.3(b)(v) or tem~ination 0fthis Agreement based
on failure to achieve Commercial Operation within twelve (12) months of that
Milestone deadline.
(d) The Parties agree that the liquidated damages set forth in Sections
4.3(h) and 7.4(c) are reasonable and represent a fair and genuine estimate of
the damages Buyer will suffer upon the failure of Seller to achieve
Commercial Operation by the agreed upola date(s). The Parties acknowledge
that it would be impracticable or extremely difficult to fix Buyer’s actual
damages, and therefore have deemed the liquidated damages set forth above to
34SANFRAN 90103 (2K)
be the amount of damage sustained by Buyer upon such a failure. The Parties
further agree that payment of such amount shall be as liquidated damages and
not as a penalty, and is therefore not subject to avoidance under California
Civil Code section 1671.
7.5 Indemr~ificat~on
Seller and Buyer agree to defend, indemr~.ify, and hold each other, and their
respective officers, directors, employees and agents, harmless from and against
al! claims, demands, losses, liabilities, and expenses (including reasonable
attorneys’ fees) (collectively "Damages") for personal inju~ 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 Patty. This indemnification obligation shall apply
notwithstanding any negligent or intentiona! acts, errors or omissions oFthe
indemnitees but the indemnifying Party’s liability to pay Damages to the
indemnified Party shall be reduced in proportion to the percentage by which
the inderm~itees’ negligent or intentional acts, errors or omissions caused the
Damages. Neither Party sha!l be indemnified for its Damages resulting from
its sole negligence or willful misconduct. These indemnity provisions shall
not be construed to relieve any insurer of its obligation to pay claims
consistent with the provisions of a valid insurance policy.
7°6 Buyer’s R~ht to Operate
If Seller (i) fails to naaintain the Availability Threshold for a period of nine (9)
months in any twelve (!2) month period, or (ii) fails to generate Energy for
sixty (60) consecutive days, then Buyer or its designee may, but shall not be
obligated to, step-in and assume operational control from Seller of the Plant;
provided that Buyer shall not be permitted to step-in and take control so long
as Seller or any of Seller’s Lenders are using comznercially reasonable effo~s
to remedy the failures described in (i) or (ii) above. Buyer, its employees,
contractors and designees shall have the unrestricted right to enter the Plant to
the extent necessary to operate the Plant. Upon the exercise of this right,
Buyer or its designee shall at all times operate the Plant using Prudent Utility
Practice and shall comply, to the extent commercially practicable, with the
tenns of this Agreement and the terms of the Alameda Agreement°
Notwithstanding the foregoing, Seller shall not be excused from a~_y obligation
SANFRAN 90 [03 {2K)
35
or remedy available to Buyer as a result of Buyer’s operation of, or election
not to operate, the Plant.. Buyer shall pay Seller the applicable rate for Output
provided herem~der,-less any costs incurred by Buyer to operate the Plant.
Prior to assuming operational control, Buyer shall consult with Alameda. In
the event that Alameda has, and desires to exercise, the right to step-in and
assmne operational control of the Plant under the Alameda Agreement, Buyer
shall not exercise its rights hereunder without Alameda’s written consent.
Buyer and Alameda may exercise their step-in rights jointly. Buyer shall
ir~demnify and hold Seller harmless from any liability to third parties
(including Alameda) arising out of Buyer’s failure to operate the Plant using
Prudent Utility Practice. Upon Buyer’s satisfaction that Seller has the ability
to operate the Plant in accordance with this Agreement, Seller shall resume
operational control.
Should Seller’s Lender(s) refuse to finance the Plant, or materially condition
such financing, solely as a result of this Section 7.6, and Seller gives Buyer
written notice of such refusal to finance, Buyer shall have the following
options: (1) terminate this Agreement without liability of one .Party to the
other; (2) renegotiate this Section 7.6 with Seller and Lender(s) in a manner
mutually acceptable; (3) delete this Section 7.6 in its entirety (which deletion
will not require Seller’s additional consent); or (4) arrange for financing for
the Plant under materially equivalent terms and conditions as the Lender(s)
were prepared to provide but for this Section~7.6. if Buyer fails to elect and
complete one of these options within sixty (60) days of written notice from
Seller, SeIler shall have the right to terminate this Agreement without liability
of one party to the other. If Alameda elects to terminate the Alameda
Agreement under Section 7.6 of the Alameda Agreement, Seller shall offer in
writing to Buyer Alameda’s Percentage Share. If Buyer fails to accept
Alameda’s Percentage Share in writing within sixty (60) days, Seller may
terminate this Agreement without liability of one Party to the other.
ARTICLE
REPRESENTATIONS AND WARRANT][ES
8.1 Sell]er’s Representations and Warramies
36SANFRAN 90103 !2K1
Seller represents and wal~ants to Buyer that as of the date of execution of this
Agreement:
(i)Seller is duly organized and validly existing as a limited liability
company under the laws of Delaware, and has the lawful power to
engage in the business it presently conducts and contemplates
conducting in this Agreement and Seller is duly qualified in each
jurisdiction wherein the nature of the business transacted by it makes
such qualification necessary;
(ii)Seller has the legal power and authority to make and cant 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 date of execution hereof, (a) the Plant shall on the Commercial
Operation Date be a "qualifying small power production facility" as that
tern~ is defined in Section 3(17)(C) of the Federa! Power Act, and will
possess all of the exemptions from regulation provided in 18 CFR
Sections 292.601(c) and 292.602; and (b) this Agreement is not required
to be filed with FERC and no approval (except with respect to
"qualifying small power production facility" status) with respect to this
Agreement is required from FERC. In the event that the Plant is not a
"qualifying small power production facility" on the Commercial
Operation Date or any date therea.fter~ Seller shall make appropriate
filings under the Federal Power Act within sixty (60) days so as to
comply with applicable law, subject at all times to the provisions of
Article iX of this Agreement;
(iii)The execution, delivery and performance of this Agreement by Seller
will not conflict with its governing documents, any applicable laws, or
any covenant, agreement, understanding, decree or order to which Seller
is a parU or by which it is bound or affected;
(iv)This Agreement has been duly and validly executed and delivered by
Seller and, as of the date first set forth herein, constitutes a legal, valid
and binding obligation of Seller, enforceable in accordance with its
terms against Seller, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally or by genera!
principles of equity; and
37SANFRAN 90103 (2K)
(v)There are no actions, suits, proceedings or investigations pending or, to
the knowledge-of Seller, threatened in writing against Seller, 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, financi!l or otherwise,
of Seller, or to result in any impairment of Seller’s ability to perfon3a its
obligations under this Agreement.
8°2 ~resentations and Warranties
Buyer represents and warrants to Seller that as of the date of execution of this
Agreement:
(i)Buyer is The City Of Palo Alto, a chartered city and municipal
corporation, duly organized and validly existing, and has the lawful
power to engage in the business it presently conducts and contemplates
conducting in this Agreement and Buyer is duly qualified in each
jurisdiction wherein the nature of the business transacted by it makes
such qualification necessary;
(ii)
(iii)
Buyer has the legal power and authority to make and carry out this
Agreement and to perform its obligation~ hereunder and all such actions
have been duly authorized by ail necessary proceedings on its part;
The execution, delivery and performance of this Agreement by Buyer
will not conflict with its governing documents, any applicable laws or
any covenant, agreement, understanding, decree or order to which Buyer
is a party or by which it is bound or affected;
(iv)This Agreement has been duly and validly executed and delivered by
Buyer and, as of the first date set forth herein, constitutes a legal, valid
and binding obligation of Buyer, enforceable in accordance with its
terms against Buyer, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally or by general
principles of equity; and
38
SANFRAN 90103 (2K)
(v)There are no actions, suits, proceedings or investigations pending or, to
the knowledge of Buyer, threatened in writing against Buyer, at law or
ii~ equity befoi~e any Govel_-nmental Authority, which individually or in
the aggregate are reasonably likely to have a materially adverse effect
on the business, prope~ies 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.
ARTICLE IX
NO CHANGE TO RATES, TERMS OR CONDITIONS
No change may be made to the rates, terms or conditions of this Agreement at
the request of any Party, or by FERC acting sua sponte on behalf of any Party, except
as required by FERC in the public interest. To that end and to the extent any 5uch
rights exist, each Party waives any and all rights to seek changes to the rates, terms
and conditions contained in this Agreement pursuant to sections 205 or 206 of the
Federal Power Act or othe~-,vise. The terms of this Agreement shall be interpreted as
being fixed and subject only to the "public interest" standard of review, consistent
with the interpretation by the Federal Energy Regulatory Commission of United Gas
Pipe Line Co. v. Mobile Gax Svcs., 350 U.S. 332 (1956), and F.P.C. v. Sierra Pac.
Power Co., 350 U.S. 348 (1956), as of the date of execution of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1
The rights and obligations of this Agreement may not be assigned by either
Party without the prior written consent of the other Party, which consent shall
not be unreasonably withheld or delayed. Notwithstandi~_g the foregoing,
Seiler may use subcontractors without Buyer’s consent to comply with the
terms of this Agreement provided that notwithstanding the use of said
subcontractors, Seller shall remain responsible for all its obligations under this
Agreement. Buyer may furthe~-Tnore use any agent it so designates for
scheduling and billing purposes, so long as Buyer remains responsible for a!l
SANFRAN 90103 (2K)39
of its obligations under this Agreement. Any purported assignment of this
Agreement in the absence of the required consent, except as provided in 10.2,
shall be -void.
10.2 Firiancin_g
NotWithstanding Section 10.1, Seller may, without the consent of Buyer,
collaterally assign its rights under this Agreement to Lenders as collateral
security in connection with any financing of the purchase or operation of the
Plant, provided that such Lender(s) or its designee agree(s) in writing that
upon assuming any of Seller’s prospective rights under this Agreement, such
Lender also shall be bound by all of Seller’s prospective obligations under this
Agreement. Notwithstanding any such assignment, Seller’s obligations under
this Agreement shall continue in their entirety in full force and effect and
Seller shall remain fully liable for all of its obligations under or relating to this
Agreement. Each such collateral assigmnent and any purchaser or transferee
shall be subject to Buyer’s rights and defenses hereunder and under applicable
law. Seller shall provide prior written notice to Buyer at least seven (7) days
prior to any such co!lateral assignment.
In order to facilitate the obtaining of financing of the Plant, Buyer sha11
execute, upon request, a corrm~ercially reasonable consent to assignment, with
respect to a collateral assignment hereof to Lenders in connection with the
documentation of the financing or refinancing for the Plant. Any assignment
in violation of this Agreement shall be void, ab initio. Buyer shall consider in
good faith any amendments to this Agreement proposed by Seller which relate
to financing of the Plant or other amendments requested by Seller in order to
receive or maintain financing from Lenders.
I0.3 Notices
Any notice, demand, request, or communication required or authorized by this
Agreement shall be delivered either by hand, facsimile, overnight courier or
mailed by certified mail, return receipt requested with postage prepaid, to :
SANFRAN 90103 (2K) 40
The City of Palo Alto
250 Hamilton :Avenue, Seventh Floor
Palo Alto, CA 94301
Attention: City Clerk
Telecopier: (650) 329-2646
on behalf of Buyer;
with a copy to:
The City of Palo Alto
250 Hamilton A-/enue, Eighth Floor
Palo Alto, CA 94301
Attention: Senior Assistant City Attorney / Utilities
Telecopier: (650) 329-2646
and to:
The City of Pa.lo Alto
250 Hamilton Avenue, Third Floor
Pa!o Alto, CA 94301
Attention: Director of Utilities
Telecopier: (650) 321-0651
and to:
Northern CaliforniaPower Agency
651 Col~aerce Drive
Rosevitle, CA 95678
Attention: Power Contracts Administrator
Telecopier:
and to:
(916) 781-4255
SANFRAN 90103 (2K)
41
Ameresco Butte County LLC
c/o Ameresco, Inc.
111 Speen Street, Suite 410
Framingham, MA 01701
Attention: General Counsel
Telecopier: (508) 661-2201
Telephone: (508) 661-2200
with a copy to:
Ameresco Butte County LLC
c/o Ameresco, Inc.
111 Speen Street, Suite 410
Framingham, MA 01701
Attention: Vice President, Renewable Energy
Telecopier: (508) 661-2201
Telephone: (508) 661-2200
on behalf of Seller.
The designation and titles of the person~to be notified or the address of
such person may be changed, at any time by written notice delivered in the
manner set forth in this Section 10.3. Any such notice, demand, request, or
cowmmnication shall be deemed received (i) if delivered by hand by a Party or
sent by facsimile or (ii) upon receipt by the receiving Party if sent by courier
or U.S. mail.
10.4 Captions
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,
defi13itive or to affect the meaning of the contents or scope of the Agreement.
10.5 No TMrd Partv_Beneficiar}!
No provision of the Agreement is intended to, nor shall it in any way, inure to
the benefit of any customer, property owner or any other third party, including
42SANFRAN 90103 (2K)
Alameda, so as to constitute any such Person a third-pa~y beneficiary under
the Agreement, or of any one or more of the terms hereof, or otherwise give
rise to any cause of a~tion in any Person not a Party hereto.
t0o6 No Dedication
No undertaking by one Party to the other under any provision of the
Agreement shall constitute the dedication of that Party’s system or any portion
thereof to the other Party or to the public or affect Seller as an independent
entity and not a public utility.
10.7 Entire &greement" [~:e ration
This Agreement, together with all Appendices attached hereto, constitutes the
entire agreement between the Parties and supersedes any and a!l prior oral or
written understandings. No amendment, addition to or modification ofany
provision hereof shall be binding upon the Parties, and neither Party shall be
deemed to have waived any provision or any remedy available to it, unless
such amendment, addition, modification or waiver is in writing and signed by
a duly authorized officer or representative of the Parties.
10o8 ~licab[.e Law
1
The 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.
10.9 Venue
The Parties hereby submit to the exc!usive juriadiction 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 reuse
jurisdiction, the Parties agree to the exclusive jurisdiction of the state courts
sitting in the County of San Francisco, State of California.
Nature of Relationshit2
The duties, obligations and liabilities of the Parties are imended to be severa!
and not joint or collective. The Agreement shall not be interpreted or
43
SANFRAN 90103 (2K)
construed 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.
Seller and Buyer shall not have any right, power or authority 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.
10.11 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 perfolwnance of this Agreement. Unless
expressly provided otherwise in this Agreement, (i) wherever the Agreement
requires the consent, approval or similar action by a Party, such consent,
approval or similar action shall not be unreasonably withheld or delayed, and
(ii) wherever the Agreement gives a Party a right to determine, require, specify
or take similar action with respect to matters, such determination, requirel~ent,
specification or similar action shal! be reasonable.
10.12 Severabilit~L
Should any provision of the Agreement be or become void, illegal or
unenforceable, the validity or enforceability of the other provisions of the
Agreement shall not be affected and shall continue in full force and effect. The
Parties wi!l, however, use their best endeavors to agree on the replacement of
the void, il!egal, or unenforceable provision(s) with legally acceptable clauses
which correspond as closely as possible to the sense and purpose of the
affected provision.
10.13 Confidentiality
All information disclosed by Seller, including without limitation all
engineering documents, designs, specifications and financial information, shall
be kept confidential and shall not be disclosed to any third patty except as
provided in this Section 10.13. Buyer acknowledges Seller’s request to hold
all information regarding this Agreement confidential. Buyer shall disclose
such information to third parties only to the extent required by California law
(including, without limitation, the California Constitution, the California
Public Records Act and the Brown Act). Notwithstanding the foregoing,
either Party may disclose this Agreement to Butte or its representatives, the
44SANFR.AN 90103
Northern California Power Agency or its representatives, or to Lenders or
potential Lenders or their representatives; provided that prior to such
disclosure, the recipient shall agree in writing to keep the material confidential
under terms no less stringent than as set forth in this Section 10.13. Buyer also
shall be permitted to disclose this Agreement and related information to the
City Council of Palo Alto and/or the City Council and/or Public Utilities
Board of Alameda for the express pu~ose of obtaining approval to execute
this Agreement; provided that in connection with such disclosure Buyer shail
only disclose such information to the extent required by California law
(including, without limitation, the California Constitution, the California
Public Records Act and the Brown Act). Each Party shall be bound by its
obligations of confidentiality hereunder for a period of two (2) years from
expiration or any earlier termination of this Agreement. Notwithstanding
anything to the contrary in this Section 10.13, nothing shall restrict any Party
from using or disclosing confidential information in any manner it chooses
which (i) is or becomes generally available to the public other than as a result
of a disclosure directly or indirectly by the disclosing Party or its
representative; (ii) was within the using or disclosing Party’s possession prior
to it being furnished hereunder, provided that such information is not subject
to another confidentiality agreement with, or other contractual, legal or
fiduciary obligation of confidentiality to, any other party with respect to such
infon>~ation; (iii) is rightfully obtained by a Party from third parties autl-~orized
to make such disclosure without restriction; ,r (iv) is legally required to be
disclosed by judicial or other governmental action as detem~ined by such
Party’s attorney acting in good faith (including, but not limited to, the
California Constitution, the California Public Records Act and the Brown
Act), provided that prompt notice of said judicial or other governmental action
shall have been given to the non-disclosing Party and that the non-disclosing
Party shall, at its sole cost and expense, be afforded the opportunity (consistent
with the legal obligations of the disc!osing Party) to exhaust al! reasonable
legal remedies to maintain the confidential information in confidence.
10.14 Cooperat~or~
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 the Agreement.
45
SANFRAN 90103 {2K)
This Agreement may-be executed in two or more counterparts and by different
Parties on separate counterparts, a!l of which shall be considered one and the
same agreement and each of, which shall be deemed an original.
[signature page follmvs]
46SANFRAN 90103
~N WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed as of the day-and year first above written.
AMERESCO BUTTE COUNTY LLC
By Ame, re.S~co, Inc., its ~ole n~mber.,/,’~:,~ .( ,, ,-;
Name:Michael T. Bakas
Title:Vice President
CITY OF PALO ALTO
APPROVAL BY ADMINISTRATIVE SERVICES
DIRECTOR
By:
Name: Lalo Perez
Title: Administrative Services Director
Date:
CITY OF PALO ALTO
APPROVAL BY CITY MANAGER
By:
Name: James Keene
Title: City Manager
Date:
THE C~TY OF PALO ALTO
APPROVAL AS TO FORM:
By:.
Name:
Title:
Date:
Grant Kolling
Senior Assistant City Attorney
CITY OF PALO ALTO
APPROVAL BY UTILITIES DIRECTOR
By:
Name: Valerie O. Fong
Title: Utilities Director
Date:
CITY OF PALO ALTO
APPROVAL BY MAYOR:
By:
Name: Larry Klein
Title:Mayor
Date:
47
SANFRAN 90103 (2K)
COMMONWEALTH OF MASSACHUSETTS )
_)ss
COUNTY OF MIDDLESEX )
;,..?-i-L-~,
On this / {./ day of :Z before me,; the:i?ndersi_g.~._n~ed notary
, as the t/i..~ ~@~)/~:-"~i.,ii ofpublic, personal:l~p,eared ~:~
Ameresco, Inc., a Dela ¢¢are corporation, the d~ole member @’Ai~aere~’co t~tte County
LLC, a Delaware limited liability co,mpany, ~proved to me through satisfactory
evidence of identification, which was U~~. l,:.~..~ i’., {,~.,,"-~,.~:--~ ’ , to be the person whose
name is signed on the preceding document, and acknowledged ~o lne~hat he signed¯¯¯/the preceding document voluntarily for ~ts stated purpose a=
of Ameresco, Inc., a Delaware corporation, the sole member of Ameresco Butte
My Commission expires _
County LLC, a Delaware limited liability company.
,
Notary Public
48
SANFRAN 90103 (2Kl
APPENDIX A
SITE DRAWINGS
Seller shall provide to Buyer fin!l Site Drawings prior to the Commercial
Operation Date.
49
SAN FR:\N 90103 (2K)
APPENDIX B
FORM OF ATTESTATION
¯ -Ameresco Butte County LLC
Environmental Attribute Attestation and Bill of Sale
Ameresco Butte County LLC ("Ameresco") hereby sells, transfers and delivers to
("Customer")
the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation of
the indicated energy for delivery to the grid (as such term(s) are defined in the
(identify contract) (the "Contract’) dated ,20
between Ameresco and Customer) arising from the generation for delivery to the grid of the energy by the
Facility described below:
Facility name and location:Fuel Type:
Capacity (MW):__Operational Date:
(for facility that has added renewable capacity, show operational date and amom~t of new capacity)
As applicable: CEC Reg. no. __ . Energy Admin. ID no. __ Q.F. ID no. __
Dates MWhrs generated
20
in the amount of one Environmental Attribute or its equivalent for each megawatt hour generated; and Ameresco
fi.~rther attests, warrants and represents as follows:
i)to the best of its knowledge, the information provided herein is true and conect;
ii)its sale to Customer is its one and only sale of the Environmental Attributes and associated
Environmental Attribute Reporting Rights referenced herein;
iii)the Facility generated and delivered to the grid the energy in the amount indicated as undifferentiated
energy; and
[check one:]
__ iv) Ameresco owns the Facility.
__ iv) to the best of Ameresco’s knowledge, each of the Environmental Attributes and Environmental
Attribute Reporting Rights associated with the generation of the indicated energyfor delivery to the
grid have been generated and sold by the Facility.
This serves as a bill of sale, transferring from Ameresco to Customer all of Ameresco’s right, title and interest in
and to the Environmental Attributes and Environmental A~qbute Reporting Rights associated with the generation
of the energy for delivery to the grid.
Contact Person:tel: 1-508-661-2200; fax: 1-508-661-2201
WITNESS MY HAND,
AMERESCO BUTTE COUNTY LLC
By: Ameresco, Inc., its sole member
By
Its
Date:
5O
SANFRAN 90103/2 K)
APPENDIX C
INSUP,~NCE COVERAGES
At its own expense, Seller shall secure and maintain during the Term the
following insurance with the coverage amounts indicated for occurrences
during and arising out of Seller’s performar~ce of this Agreement. Such
insurance shall be placed with responsible and reputable insurance companies
in compliance with Requirements of Law applicable to Seller.
Workers’ Compensation/Emplo-ger’s Liability. Seller shall
maintain Workers’ Compensation Insurance and Employer’s
Liability Insurance which comply with Requirements of Law
applicable to Seller.
Automobile Liability. Seller shall maintain Automobile Liability
Insurance in compliance with Requirements of Law applicable to
Seller, including coverage for owned, non-owned and hired
automobiles for both bodily inj~.ry (includilag death) and property
damage, including automobile liability contractual endorsement
and uninsured/underinsured motorist protection endorsements.
Third Party. Liability_. Seller shatl m~intain third party liability
insurance in compliance with Requirements of Law applicable to
Seller on a project-specific basis covering against, legal
responsibility to others as a result of bodily injury, property
damage and personal injury arising from the operation and
maintenance of the Plant. Such policy shall be written with a
limit of liability not less than $10,000,000 and a deductible not to
exceed $10,000. Such liability may be in any combination of
primary and excess/umbrella. Coverage shall include, but not be
limited to, premises/operations, explosion, collapse, underground
hazards, broad form property damage and personal injury
liability. Such coverage shall not contain exclusions for punitive
or exemplary damages.
51
SANFRAN 90103 (2K)
APPENDIX D
SCHEDULING PROTOCOLS
o
o
o
o
Prior to three (3) workdays before the end of a month, Seller is to
provide to NCPA and Buyer a monthly forecast of loads and!or
generation for the following month. At a minimum, monthly forecasts
wil! be hourly kilowatt (kW) values by weekday, Saturday, and
Sunday/Holiday.
No later than 14:00 each Thursday, Seller is to provide a forecast of
loads and/or generation for the following week to the extent different
from the monthly forecast in Paragraph 1. Weekly forecasts will be
hourly kW values for each hour of the week.
Daily modifications to forecasts. Unless otherwise mutually agreed,
Seller may make changes to the Weekly forecast by providing such
changes to NCPA prior to 08:00 two (2) workdays before the active
scheduling day.
a. Example: For power that is scheduled for generation or delivery on
Thursday, March 29, changes must be submitted to NCPA no later
than 08:00 on Tuesday, March 27.
Hourly modifications to active schedules. Unless otherwise mutually
agreed, Seller may make changes to active schedules by providing such
changes to NCPA with a minimum of 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.
a. Example: For power that is scheduled for generation or delivery in
ho-or ending 15:00 (for the period from 14:01 to 15:00), changes
must be submitted to NCPA no later than 11:00.
NCPA is to be notified of all planned or forced generation outages.
At Seller’s request, NCPA will modify generation and load schedules for
unforeseen circumstances in accordance with the above scheduling
timeline constraints and NCPA Schedule Coordination Agreement.
52SANFRAN 90103 (2K)
A!I notices and schednles are to be submitted to NCPA by phone, fax or
email to the following persons: Chief Dispatcher/Scheduler.
In the absel~_ce of forecasts and schedules as noted above, NCPA will
utilize the most current information provided by Seller in the deve!opment
and submission of schedules.
SANFRAN 90103 (2K)
53
EXAMPLE FORM OF DAY-AHEAD SCHEDULE
For: June___~ 2908
Hour Ended:Expected Capab~
l
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
.22
23
24
E~t~ected~eratures~.F_F
Low
__ High
Coutact
Informat~or~:
Scheduling
Coordinaor:
Facility:
CITY:
SANFRAN 90103 (2K)
APPENDIX E
PERFORMANCE TEST
The Seller shall coordinate and schedule, with Buyer and Alameda, a Performance
Test after completion of a!l equipment sta~up and cowm~issioning activities. This
performance test may be performed before completing punch list items. Buyer and
Alameda shall be permitted to witness the Perf0nnance 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
Performance Test, and may also concurrently conduct a site inspection of the
Landfill and Plant and associated facilities, systems and equipment. Seller shall
supply a written copy of the Performance Test results to both Buyer and Alameda
within five (5) business days fol!owing the conclusion of the test.
The Performance Test shall continue for one hundred twenty (120) consecutive
hours (the "Test Period") to demonstrate the following:
1) Net Generator Output: The power output for each generator shatl be recorded
for the Test Period to verify the net initial capacities. This Performance Test sha!l
be performed for all engine/generators simultaneously and will be considered
successful if the average net output for the Test Period is equal to eighty percent
(80%) of the net Initial Capacity designated ia this Agreement. All power
measurements shall be based on a power factor of 0.90.
2) Compliance: The Performar~ce Test shall also demonstrate the ability of the
Plant to comply with all material safety, system reliability, environmental, and
other requirements of its permits, this Agreement, any interconnection agreements,
and the LFG Agreement.
SANFRAN 9010312K~55
APPENDIX F
SELLER.’S SAMPLE QUARTERLY FINANCIAL STATEMENT
Balance Sheets
December 31, 2006 and 2007
ASSETS
Current assets:
Cash and cash equivalents
Restricted cash
Accounts receivable
Prepaid and other current assets
Total current assets
Other assets:
Project assets, net
Due from member
Debit issuance costs, net
Total other assets
LIABILITY AND MEMBER’S EQUITY
Current liabiiities:
Current portion of long-term debt
Accounts payable
Accrued expenses
Total current liabilities
Long-term liabilities:
Long-term debt, less current portion
Deferred tax liabilities
Total long-term liabilities
Member’s equity
Statements of Operations
Years Ended December 31, 2006 and 2007
Revenues:
Electricity Sales
Costs of revenue:
Operation and maintenance
Depreciation of project assets
Gross profit (loss)
Operating expenses:
Selling, general and administrative
Operating income (loss)
Interest and other financing costs
Income (loss) before tax benefit (provision)
Income tax benefit (provision)
Net income (loss)
Statements of Cash FIows
Years Ended December 31, 2006 and 2007
Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization
Amortization of deferred issuance costs
Deferred taxes
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable
Prepaid expenses
Accounts payable
Due to (from) member
Net cash provided by operating activities
Cash flows from investing activities:
Accounts payable relating to construction activity
Accrued expenses relating to construction activity
Purchase of project assets
Net cash used in investing activities
Cash flows from financing activities:
Increase in restricted cash
Capital contributions
Distributions to member
Proceeds from debt issuance¯Debt issuance costs
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supp~ementa! disclosure of cash flow information:
Cash paid during the year for:
Interest
Income taxes
Supplemental disclosure of noncash transactions:
Accrued purchases of project assets
SANFRAN 90103 (2K)