HomeMy WebLinkAboutStaff Report 1530City of Palo Alto (ID # 1530)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 4/11/2011
April 11, 2011 Page 1 of 4
(ID # 1530)
Council Priority: Environmental Sustainability
Summary Title: Western GeoPower Renewable Energy Purchase
Title: Adoption of a Resolution Approving Agreement to Terminate the Third
Phase Agreement for Western GeoPower Incorporated Renewable Energy Power
Purchase Agreement and Adoption of a Resolution Approving Third Phase
Agreement for Western GeoPower, Inc. Geothermal Project Renewable Energy
Power Purchase Agreement
From:City Manager
Lead Department: Utilities
Recommendation
Staff, the Utilities Advisory Commission (UAC) and the Finance Committee recommend that the
City Council:
1)Adopt a resolution, authorizing the City Manager or his designee to execute the Agreement
Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable
Energy Power Purchase Agreement; and
2)Adopt a resolution, authorizing the City Manager or his designee to execute the Third
Phase Agreement for Western GeoPower, Inc. Geothermal Project Renewable Energy
Power Purchase Agreement. Additionally, for this agreement, staff recommends the
Council waive the investment-grade credit rating requirement under Section 2.30.340(d) of
the Palo Alto Municipal Code, which is otherwise required for these energy contracts.
Executive Summary
Approval of the recommended agreements would terminate a defunct 2008 contract and
replace it with a new contract for the purchase of geothermal renewable energy for a term of
25 years at a price of $113 per megawatt-hour (MWh). The new project would allow Palo Alto
to receive energy to meet about 3% of electric loads and bring the City closer to the 33%
renewable portfolio target within the approved rate impact limit.
Background
In 2008, the Council approved entering into the Northern California Power Agency (NCPA) Third
Phase Agreement for Western GeoPower renewable energy power purchase at a price of
$98/MWh (CMR 141:08). However, the financial crisis of 2008 undermined project financing
April 11, 2011 Page 2 of 4
(ID # 1530)
and the project was delayed. Western GeoPower was later taken over by, and became a
subsidiary of, another company named Ram Power.
NCPA recently completed negotiations with Western GeoPower for a new power purchase
agreement for a 25-year term at a steady, non-escalating price of $113/MWh made available to
Palo Alto and other members through a new Third Phase Agreement.
Discussion
On February 2, 2011, staff presented a recommendation to the UAC to execute the Termination
Agreement and to wait before deciding whether to agree to the new $113/MWh price for the
Western GeoPower project. The UAC agreed with staff’s recommendation to execute the
Termination Agreement, but voted unanimously to recommend the City immediately execute a
new Third Phase Agreement for the Western GeoPower project at the $113/WMh price rather
than wait to join the project at a later date.
Staff initially recommended that the City wait to execute the new Third Phase Agreement until
additional analysis could be performed and for other planning work to be completed. However,
with the Council’s recent approval of the Long term Electricity Acquisition Plan (LEAP) on March
7, 2011 (Staff Report 1317), staff is now comfortable with the status of planning work and has
changed its recommendation to that of the UAC and Finance Committee in recommending
approval to participate in the Western GeoPower Third Phase Agreement for a 15% share of the
project’s output.
At its March 1, 2011 meeting, the Finance Committee members praised geothermal as a low
greenhouse gas (GHG) emitting generation source. Staff has done some research since the
meeting that estimates the GHG emissions expected from the project are significantly lower
than from fossil fueled generation. Preliminary estimates show that the geothermal project will
emit approximately 200 pounds of carbon dioxide equivalent (CO2e) per MWh, or about 80%
lower than an average natural gas fired generator. The emissions come from the release of
naturally occurring CO2 and methane in the underground steam that would power the plant.
The California Air Resources Board is adopting GHG cap-and-trade rules that deem that GHG
emissions from geothermal and landfill power plants are not counted and, therefore, are not
burdened with a GHG compliance obligation (meaning they would not have to buy allowances
for the emissions). However, the GHG emissions would be reported for record keeping
purposes.
Committee Review and Recommendation
On March 1, 2011, staff presented a recommendation to the Finance Committee to execute the
Termination Agreement and to wait before deciding whether to agree to the new $113/MWh
price for the Western GeoPower project. Staff also advised the Finance Committee of the
UAC’s recommendation to execute the Termination Agreement and enter into the new Third
Phase Agreement at the $113/MWh price at a participation level of up to 15% of the project.
April 11, 2011 Page 3 of 4
(ID # 1530)
The Finance Committee members generally expressed a preference for geothermal energy
projects over landfill-gas-to-energy projects. They also favored the contract’s flat price with no
built-in escalation rate and found the UAC arguments for moving forward now to be
compelling. Committee Chair Scharff saw the project as an exceptional opportunity and said
the flat price of $113/MWh should look good in years to come.
The Finance Committee voted unanimously (4-0) to recommend that Council approve execution
of both the Termination Agreement and the new Third Phase Agreement for up to a 15% share
of the Western GeoPower project. Notes from the Finance Committee meeting of March 1,
2011 are provided as Attachment G.
Timeline
NCPA plans to collect executed Third Phase Agreements from all participants by April 30, 2011
when final participation levels will be determined. Western GeoPower expects to complete
construction of the plant in 2013 and to be delivering power in late 2013 to start the 25-year
delivery period.
Resource Impact
Executing the Termination Agreement has no resource impact. Executing the Third Phase
Agreement would provide renewable electric energy with an expected cost of up to $95 Million
over 25 years. Without the Western GeoPower project, the committed renewable resources
have an upward rate impact of 0.23 cents/kWh. The Western GeoPower purchase adds another
0.13 cents/kWh for a combined retail rate impact of 0.36 cents/kWh, still well within the 0.5
cents/kWh rate impact limit.
Policy Implications
Adoption of this resolution is consistent with Council policy.
Environmental Review
Execution of these agreements 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.
Attachments:
·Attachment A: Resolution Terminating Third Phase Agreement for Western GeoPower
Incorporated Renewable energy Power Purchase Agreement (PDF)
·Attachment B: Resolution Approving Third Phase Agreement for Western GeoPower Inc.
Renewable Energy Power Purchase Agreement (PDF)
·Attachment C: Agreement Terminating the Third Phase Agreement for Western GeoPower
Incorporated Renewable Energy Power Purchase Agreement (DOC)
April 11, 2011 Page 4 of 4
(ID # 1530)
·Attachment D: Third Phase Agreement for Western GeoPower Inc. Renewable Energy
Power Purchase Agreement (DOC)
·Attachment E: Finance Committee Staff Report ID 1441 Agreements for Western GeoPower
Renewable Energy (PDF)
·Attachment F: Amended and Restated Renewable Energy Power Purchase Agreement
between NCPA and WGI 3_7_11 (DOC)
·Attachment G_Excerpted Finance Committee Minutes of March 1 2011 (PDF)
Prepared By:Tom Kabat, Manager
Department Head:Valerie Fong, Director
City Manager Approval: James Keene, City Manager
Not Yet Approved
1
110328 jb 0073505
Resolution No ____
Resolution of the Council of the City of Palo Alto Approving
Agreement Terminating the Third Phase Agreement for
Western GeoPower, Inc. Renewable Energy Power
Purchase Agreement
WHEREAS, the City of Palo Alto (the “City”), a municipal utility and a chartered
city and a member of the Northern California Power Agency (“NCPA”), and other NCPA
members entered into (a) a Power Purchase Agreement (the “PPA”) with Western GeoPower,
Inc. (“WGI”), for a term of twenty (20) years and at a price of $98.00 per megawatt-hour
(“$98/MWh”) and (b) a Third Phase Agreement for the Western GeoPower, Inc. Geysers
Geothermal Project Renewable Energy Power Purchase Agreement (the “TPA”), under which all
costs and benefits of the PPA are allocated to participating NCPA members; and
WHEREAS, WGI has subsequently been acquired by Ram Power Corp. (“Ram”)
and WGI is now a wholly owned subsidiary of Ram; and
WHEREAS, the geothermal power project contemplated by the PPA and the TPA
was not built due to the financial crisis of 2009’s impact on WGI’s ability to finance the project
at the cash flow provided by the $98/MWh PPA; and
WHEREAS, NCPA required the consent of participating members, including the City,
in order to terminate the PPA and the TPA and finance the geothermal project at the higher rate of
$113/MWh for interested participating NCPA members;
WHEREAS, the NCPA commission, on February 24, 2011, approved the termination
of the TPA as a condition precedent to the execution of a new power purchase agreement and a
new third phase agreement; and
WHEREAS, on March 24, 2011, the NCPA commission approved (a) the Renewable
Energy Power Purchase Agreement between NCPA and WGI (the “New PPA”) for a term of
twenty-five (25) years and a $113/MWh price and (b) the Third Phase Agreement for the WGI
Geysers Geothermal Project Renewable Energy Power Purchase Agreement (the “New TPA”),
under which all costs and benefits of the New PPA will be allocated to participating NCPA
members; and
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby approves the agreement which terminates the
Third Phase Agreement for Western GeoPower, Inc. Renewable Energy Power Purchase
Agreement and delegates to the City Manager the authority to sign the contract on behalf of the
City.
Not Yet Approved
2
110331 jb 0073505
SECTION 2. The Council finds that the adoption of this resolution does not meet
the definition of a project under Section 21065 of the California Environmental Quality Act and,
therefore, no environmental assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
______________________________ ______________________________
City Clerk Mayor
APPROVED AS TO FORM: ______________________________
City Manager
______________________________
Sr. Asst. City Attorney ______________________________
Director of Utilities
______________________________
Director of Administrative Services
Not Yet Approved
1
110323 jb 0073504
Resolution No ____
Resolution of the Council of the City of Palo Alto Approving
the Third Phase Agreement for the Western GeoPower, Inc.
Geysers Geothermal Project Renewable Energy Power
Purchase Agreement for the Acquisition of Up To Fifteen
Percent of the Project Output (Up To 5 Average Megawatts)
over Twenty-Five Years At An Estimated Cost Not To Exceed
$95 Million
WHEREAS, the City of Palo Alto (the “City”), a municipal utility and a chartered
city, is a member of the Northern California Power Agency (“NCPA”), and
WHEREAS, on March 7, 2011, 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 strategies is to pursue target levels of renewable
resource energy purchases equal to thirty-three percent (33%) of the City’s expected energy load
by 2015; and
WHEREAS, the City and other NCPA members desire to collectively enter into a
Power Purchase Agreement (the “PPA”) with Western GeoPower, Inc. (“WGI”) for a term of
twenty-five (25) years; and
WHEREAS, NCPA is authorized to execute a power purchase agreement with WGI
to purchase the entire expected Project output from the new WGI geothermal project (the
“Project”) located in the Geysers Geothermal Field, located in the Mayacamas mountains of
Sonoma County and Lake County in the State of California; and
WHEREAS, NCPA will purchase the Project output for $113.00 per megawatt-hour
(“$113/MWh”) on behalf of its members in accordance with the PPA; and
WHEREAS, NCPA’S Energy Risk and Counterparty Risk Management Regulations
require that, for power purchases and sales effected for delivery more than one week from the
date of execution of the purchase, competitive bids must be obtained; and
WHEREAS, the NCPA Commission granted an exception to standard procurement
policy, because the PPA is an eligible renewable resource at long-term competitive rates, and it
also has advantages due to its physical location adjacent to the NCPA Geothermal project site,
thereby giving it competitive, operational and economic advantages other than price; and
WHEREAS, the NCPA Commission, on March 24, 2011, approved the new PPA and
the Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project
Renewable Energy Power Purchase Agreement (the “new TPA”), which the new TPA allocates
all costs and benefits of the PPA to participating NCPA members; and
WHEREAS, the NCPA Commission authorized the General Manager to execute the
new PPA with WGI; and
Not Yet Approved
2
110331 jb 0073504
WHEREAS, the City desires to enter into the new TPA with NCPA in order to achieve
a portion its renewable energy goals, reduce reliance on fossil fuels and their associated fuel price
volatilities, and assist the State of California in meeting its renewable energy goals; and
WHEREAS, the City, desires to participate with a participation share percentage in the
new TPA of up to and not exceeding 15% with respect to the costs and benefits of the new PPA;
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby approves Third Phase Agreement for the Western
GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement and
delegates to the City Manager the authority to sign the contract on behalf of the City. The
Council further approves the City’s participation in the Third Phase Agreement for the purchase
of renewable energy of up to up to fifteen percent (15%) of the project output equaling
approximately five (5) average megawatts of energy, within an average procurement price cap of
$113 per megawatt-hour. The total cost of renewable energy purchases to be made in accordance
with the Third Phase Agreement will not exceed $95 million over the twenty-five year term.
SECTION 2. With respect to the Third Phase Agreement, the Council hereby waives
the application of the creditworthiness terms and conditions requirements of Palo Alto Municipal
Code section 2.30.340(c), which otherwise applies to the City’s purchases of energy, directly or
indirectly, through NCPA.
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
Not Yet Approved
3
110331 jb 0073504
SECTION 3. The Council finds that the adoption of this resolution does not meet
the definition of a project under Section 21065 of the California Environmental Quality Act and,
therefore, no environmental assessment is required. The County of Sonoma will be the lead
agency for purposes of compliance with the California Environmental Quality Act.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
______________________________ ______________________________
City Clerk Mayor
APPROVED AS TO FORM: ______________________________
City Manager
______________________________
Sr. Asst. City Attorney ______________________________
Director of Utilities
______________________________
Director of Administrative Services
ATTACHMENT C
AGREEMENT TERMINATING
THE THIRD PHASE AGREEMENT
FOR
WESTERN GEOPOWER INCORPORATED
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
THIS TERMINATION AGREEMENT (the “Agreement”) is entered into this ___ day of
_______, 2011 by and between the Northern California Power Agency, a joint powers agency of
the State of California (“NCPA”) and those of its Members who entered into the Third Phase
Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement
on May 6, 2008 (“Participants”)(collectively, the “Parties”).
RECITALS:
WHEREAS, on or about May 6, 2008, NCPA and the Participants executed the Third
Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase
Agreement (“Third Phase Agreement”);
WHEREAS, on May 16, 2008, NCPA executed a power purchase agreement (“PPA”)
with Western GeoPower Incorporated (“Western Geo”) to purchase the entire expected electric
output from a new Western Geo geothermal project (“Project”) located in the Geysers
Geothermal Field located in Sonoma and Lake Counties in the State of California;
WHEREAS, the purpose of the Third Phase Agreement was to provide the means
necessary for NCPA to be able to enter into the PPA on behalf of the Participants and to enable
and obligate the Participants to take delivery of and pay for such electricity as might be
generated by the Project;
WHEREAS, the price in the PPA for energy generated by the Project was $98 per
megawatt hour (“Project Price”);
WHEREAS, due to financial pressures, Western Geo was never able to build the Project,
and has stated that it is unable to provide energy to NCPA at the Project Price;
WHEREAS, Western Geo has proposed revising the PPA to reflect a change in the
Project Price to $113 per megawatt hour (“Amended Price”), and not all Participants wish to
participate in the Project for the Amended Price; and
WHEREAS, NCPA and the Participants have agreed to terminate the Third Phase
Agreement, and those Participants desiring that NCPA enter into an amended and restated PPA
(“Amended and Restated PPA”)with Western Geo for energy at the Amended Price will enter
into a new third phase agreement (“North Geysers Third Phase Agreement”)to cover any costs
and obligations associated with the Amended and Restated PPA on an ongoing basis.
1564960.4 2
NOW, THEREFORE, the Parties hereby agree as follows:
1.Termination of the Third Phase Agreement. The Third Phase Agreement, and all
rights and obligations of the Parties pursuant to the Third Phase Agreement, except such matters
as survive its termination, including without limitation Section 10.5 thereof (“Surviving
Obligations”), are hereby terminated effective as of the Effective Date.The Effective Date shall
be the Effective Date of the North Geysers Third Phase Agreement.
2.Mutual Release.Except as to the Surviving Obligations, which are not
waived or relinquished by the Parties, the Parties hereby release and discharge one another and
their successors and assigns, agents, employees and representatives from any and all obligations,
claims, actions and liabilities, whether past, present or future, of whatever character, known or
unknown, by reason of or existing in connection with the Third Phase Agreement (the “Settled
Obligations”). The Parties acknowledge that they have read and understand the terms of Section
1542 of the California Civil Code, which provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time
of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor.
The Parties hereby waive and relinquish all rights and benefits they, and each of them, may have
under Civil Code Section 1542 with respect to the Settled Obligations, and acknowledge that the
consequence of such waiver and relinquishment is that no Party may make a claim against
another Party for damages that may be discovered in the future with respect to the Settled
Obligations.
Initials:_________________
Participant Agency
4. Payment of Outstanding Costs by Participants. The Participants each agree to pay
or reimburse NCPA for any and all costs and expenses incurred to date under the Third Phase
Agreement, pursuant to each Participant’s Participation Percentages, as that term is defined in
the Third Phase Agreement.
5. Other Documents. Each Party shall cooperate fully in the execution of any and all
other documents and in the completion of any additional actions that may be necessary or
appropriate to give full force and effect to the terms and intent of this Agreement.
6.Amendment. This Agreement constitutes the entire agreement between the
Parties as to the subject matter hereof and may only be amended by a writing signed by all
Parties.
3
7.Invalidity. If any term, provision or application of this Agreement is held invalid
or unenforceable, the remainder of this Agreement and any application of the terms and
provisions shall not be affected thereby, but shall remain valid and enforceable.
8.Non-waiver.The waiver of any breach of any of the provisions of this Agreement
by either Party shall not constitute a continuing waiver or a waiver of any subsequent breach by
the other Party either of the same or of another provision of this Agreement.
9.Attorneys’Fees.Should any litigation, including arbitration proceedings, be
commenced between the Parties concerning this Agreement or the rights and duties of either of
the Parties in relation thereto, the party prevailing in such litigation or arbitration, in addition to
such other relief as may be granted in such proceeding, shall receive from the losing party a
reasonable sum as and for his attorney fees in the litigation or arbitration, the amount of which
shall be determined by the Court or the arbitrator.
10.Notices.Any notice required to be given pursuant to this Agreement, or desired
to be given in connection with this Agreement, shall be given in writing as provided in the Third
Phase Agreement.
11.Counterparts. This Agreement may be signed in counterparts and shall be
governed by and construed in accordance with the laws of the State of California.
12. Warranty of Authority. The Parties each hereby represent and warrant that
he/she/it has the authority to enter into this Agreement. Each signatory to this Agreement hereby
warrants that he/she is duly authorized to execute this Agreement on behalf of and as the lawful
act and deed of the entity for which he or she signs.
13.Governing Law/Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to principles of conflicts of
laws. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of
Placer County, California or in the Federal District Court for the Eastern District of California.
1564960.4 4
Executed at Placer County, California, on day and year first above set forth.
NORTHERN CALIFORNIA
POWER AGENCY
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF ALAMEDA
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF LOMPOC
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF PALO ALTO
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
PORT OF OAKLAND
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
5
BAY AREA RAPID TRANSIT AUTHORITY
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
TRUCKEE DONNER REPUBLIC UTILITY
DISTRICT
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF LODI
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF ROSEVILLE
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
SILICON VALLEY POWER
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
ATTACHMENT D
1
EXECUTION COPY
THIRD PHASE AGREEMENT
FOR
WESTERN GEOPOWER, INC. GEOTHERMAL PROJECT
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
DRAFT THIRD PHASE AGREEMENT
1563911.7 i
EXECUTION COPY
TABLE OF CONTENTS
Section………………………………………………………………………….…….Page
RECITALS..…......…………..……………………………………………1
1.Definitions…………………..……………………………………………2
2.Effectiveness of Agreement…………………………………………...8
3.Delivery of Electricity / Allocation of Resource Adequacy…………..
Capacity and Environmental Attributes…….…….………………….8
4.Cooperation and Further Assurances………….……………..….…….8
5.Payment Obligations, Security Account, Invoicing……….…….........9
6.Administration of Agreement………………………………………...13
7.Admission of New Participants………….…………………...……….14
8.Withdrawal of Participants……………………………………………15
9.Term and Termination………….……………………………………..15
10.Default and Remedies…...…………………………………………….16
11.Miscellaneous…………………………………………………………..20
EXHIBIT A RENEWABLE ENERGY POWER PURCHASE AGREEMENT
between NORTHERN CALIFORNIA POWER AGENCY and
WESTERN GEOPOWER INCORPORATED
EXHIBIT B PARTICIPATION PERCENTAGES
1563911.7 2
EXECUTION COPY
This Third Phase Agreement for the the Western GeoPower, Inc. Geysers Geothermal
Project Renewable Energy Power Purchase Agreement (this “Agreement”) is between the
Northern California Power Agency, a joint powers agency of the State of California (“NCPA”) and
those of its Members who execute this Agreement (“Participants”). NCPA and the Participants are
referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
A.WHEREAS, NCPA and the Participants are interested in purchasing additional
renewable electric capacity and energy for the benefit of the Participants’ customers;and
B.WHEREAS, on or about May 6, 2008, NCPA and certain of its members executed
the “Third Phase Agreement for Western Geopower Incorporated Renewable Energy Power
Purchase Agreement”("the Previous Third Phase Agreement"), by which which NCPA agreed, on
behalf of those members executing the Previous Third Phase Agreement, to enter into a power
purchase agreement (“PPA”) with Western GeoPower, Inc. (“Western GeoPower”)to purchase the
entire expected Project Output from a new WesternGeoPower geothermal project located in the
Geysers Geothermal Field in the Mayacamas Mountains of Sonoma and Lake Counties in the State
of California (“the Project”); and
C.WHEREAS, on May 16, 2008, in conformance with the Previous Third Phase
Agreement, NCPA executed a PPA with Western GeoPower to purchase the entire expected
Project Output at a price of $98 per megawatt hour; and
D.WHEREAS, due to certain financial conditions, WesternGeoPower was unable to
build the Project and has proposed that the price for energy be increased, which proposal is
acceptable to NCPA and to the Participants, who desire that NCPA enter into a revised PPA with
Western GeoPower; and
E.WHEREAS, the Previous Third Phase Agreement has been terminated by an
Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated
Renewable Energy Power Purchase Agreement, dated _____________, 2011; and
1563911.7 3
EXECUTION COPY
F.WHEREAS, on _____,2011 NCPA and Western GeoPower propose to enter into an
Amended and Restated Renewable Energy Power Purchase Agreement (“Amended PPA”)by
which NCPA would agree to purchase the entire expected Project Output of the Project from
Western GeoPower at a price of $113 per megawatt hour;and
G.WHEREAS, NCPA and the Participants wish to enter into this Agreement to
provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the
Participants pursuant to the Amended PPA and to enable and obligate the Participants to take
delivery of and pay for such electricity and to pay NCPA for the costs of undertaking the foregoing
activities;
H.WHEREAS, NCPA and its members have (or will have) entered into the Facilities
Agreement, dated September 22,1993, which provides for services which NCPA shall perform for
its members, and for the provisions to be contained in third phase agreements such as this
Agreement;
I.WHEREAS, NCPA and its members have (or will have) entered into the Scheduling
Coordination Program Agreement (“SCPA”), dated August 28, 2002, which provides for CAISO
scheduling services and cost allocations which NCPA shall perform for its members;
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and
covenants hereinafter set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree and intend to be legally bound, as
follows:
Section 1.Definitions.
1.1 Definitions.Whenever used in this Agreement (including the Recitals
hereto), the following terms shall have the following respective meanings:
1563911.7 4
EXECUTION COPY
1.1.1 “Agreement” means this Third Phase Agreement for North
Geysers Geothermal Project, including all Exhibits attached hereto, as the same may be amended
from time to time in accordance with the terms and conditions hereof.
1.1.2 “Amended PPA” means the Amended and Restated Renewable
Energy Power Purchase Agreement between NCPA and Western GeoPower, Inc., dated as of
______, attached hereto as Exhibit A.
1.1.3 “Annual Budget” means the budget for the ensuing Budget Year
adopted by the Commission, as it may be amended from time to time.
1.1.4 “Associate Member” means an associate member of NCPA
admitted to NCPA in accordance with Article IV, Section 7 of the Joint Powers Agreement.
1.1.5 “Budget Year” means the NCPA fiscal year; currently the twelve
month period beginning July 1 and ending on the next following June 30.
1.1.6 “Business Day” means any day except a Saturday, Sunday, or a
Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local
time.
1.1.7 “Capacity Attributes” means any current or future defined
characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or
specific as to the location or any other attribute of the Project, intended to value any aspect of the
capacity of the Project to produce Energy or ancillary services, including, but not limited to, any
accounting construct so that the full capacity of the Project may be counted toward a resource
adequacy requirement or any other measure by the CPUC, the CAISO, the FERC, or any other
entity invested with the authority under federal or state law, to require NCPA to procure, or to
procure at NCPA’s expense, Resource Adequacy Capacity or other such products.
1.1.8 “Claims” has the meaning set forth in Section 11.2.
1.1.9 “Commission”means the NCPA Commission.
1563911.7 5
EXECUTION COPY
1.1.10 “Constitutive Documents” means, with respect to NCPA, the
Amended and Restated Joint Powers Agreement and any resolutions or bylaws adopted
thereunder, and with respect to each Participant, the California Government Code and Public
Utilities Code,and other statutory provisions applicable to such Participant, any applicable
agreements, charters, contracts or other documents concerning the formation, operation or
decision making of such Participant, including, if applicable, its City Charter, and any codes,
ordinances, bylaws, and resolutions adopted by such Participant’s governing body.
1.1.11 “Defaulting Party” has the meaning set forth in Section 10.1.
1.1.12 “Effective Date” has the meaning set forth in the Section 9 of this
Agreement.
1.1.13 “Electric System” means, with respect to each Participant, all
properties and assets, real and personal, tangible and intangible, of the Participant now or
hereafter existing, used or pertaining to the generation, transmission, transformation, distribution
or sale of electric capacity and energy, or the utilization of such, including all additions, extensions,
expansions, improvements and betterments thereto and equipment thereof; provided, however,
that to the extent the Participant is not the sole owner of an asset or property or to the extent that
an asset or property is used in part for the above described purposes, only the Participant’s
ownership interest in such asset or property or only the part of the asset or property used for
electric purposes shall be considered to be part of its Electric System.
1.1.14 “Energy” means the electricity generated by the Generating Facility
pursuant to this Agreement, as expressed in units of KWh or MWh as measured at the meter(s), as
that term is defined in the PPA.
1.1.15 “Environmental Attributes" means any and all credits, benefits,
emissions reductions, offsets, and allowances, howsoever entitled, directly attributable to the
power purchase. 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),
1563911.7 6
EXECUTION COPY
methane (CH4) and other greenhouse gases (GHGs) that have been determined by the United
Nations Intergovernmental 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. Environmental Attributes do not
include: (1) any Energy, capacity, reliability or other power attributes; (2) production tax credits
associated with the construction or operation of the energy Projects and other financial incentives
in the form of credits, reductions, or allowances associated with the Project that are applicable to a
state or federal income taxation obligation;(3) fuel-related subsidies or "tipping fees" that may be
paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction
of particular pre-existing pollutants or the promotion of local environmental benefits; or (4)
emission reduction credits encumbered or used by the Unit(s) for compliance with local, state, or
federal operating and/or air quality permits.
1.1.16 “Event of Default” has the meaning set forth in Section 5.5.3 and
Section 10.1.
1.1.17 “Generating Facility” means Western GeoPowers, Inc.’s electricity
generating facility as more particularly described in Exhibit 2 [Description of Generating Facility]
of the Amended PPA, together with all materials, equipment systems, structures, features and
improvements necessary to produce electricity at such facility, specifically including the site, land
rights, mineral rights and interests in land.
1.1.18 “Joint Powers Agreement” means the Amended and Restated
Northern California Power Agency Joint Power Agreement dated January 1, 2008, establishing
NCPA, as the same may be amended from time to time.
1.1.19 “Member” means any Member of NCPA or Associate Member of
NCPA.
1.1.20 “MW” means megawatt.
1.1.21 “MWh” means megawatt hour.
1563911.7 7
EXECUTION COPY
1.1.22 “NCPA” has the meaning set forth in the preamble hereto.
1.1.23 “Participation Percentage” has the meaning, with respect to each
Participant, the percentage of the total capacity of the Project, and the Energy associated with such
capacity, to which such Participant is entitled pursuant to the terms of this Agreement. The Project
Participation Percentage for each Participant shall be in the percentage set forth in Exhibit B,
attached hereto and incorporated herein. Exhibit B shall be amended from time to time in
accordance with this Agreement.
1.1.24 “Project” refers to the Western Geopower project to develop,
finance, operate and maintain the Generating Facility which is the subject of the Amended PPA.
1.1.25 “Project Cost Allocation” means the Project Costs allocated to the
Participants in the Annual Budget.
1.1.26 “Project Costs” means any and all costs, directly or indirectly,
incurred by NCPA as a result of entering into the Amended PPA. Project costs include, but are not
limited to related legal fees and associated staff time, administrative and general overhead costs,
scheduling coordination costs, charges for transmission, transmission related costs and costs
associated with the Amended PPA or other NCPA associated Agreements, including the Facilities
Agreement and the SCPA or a successor agreement.
1.1.27 “Project Output” means all Energy generated pursuant to the
Amended PPA from the geothermal Project currently being developed by Western GeoPower in
conjunction with this Project,and related Environmental Attributes and Capacity Attributes;
1.1.28 “Participant” has the meaning set forth in the preamble hereto.
1.1.29 “Party” or “Parties” has the meaning set forth in the preamble
hereto; provided that “third parties” are entities that are not party to this Agreement.
1.1.30 “Resource Adequacy Capacity” is that capacity in MWs that has
been approved by each Participant as capacity available to ensure that adequate resources are
1563911.7 8
EXECUTION COPY
available to meet peak demand and operating and planning reserves for the purposes of local area
and system reliability.
1.1.31 “Revenues” means, with respect to each Participant, all income,
rents, rates, fees, charges, and other moneys derived by the Participant from the ownership or
operation of its Electric System, including, without limiting the generality of the foregoing, (a) all
income, rents, rates, fees, charges or other moneys derived from the sale, furnishing and supplying
of electric capacity and Energy and other services, facilities, and commodities sold, furnished, or
supplied through the facilities of its Electric System;(b) the earnings on and income derived from
the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use
of such earnings and income is limited by or pursuant to law to its Electric System;and (c) the
proceeds derived by the Participant, directly or indirectly, from the sale, lease or other disposition
of all or a part of the Electric System. The term “Revenues” shall not include:(i) customers’
deposits or any other deposits subject to refund until such deposits have become the property of
the Participant or (ii) contributions from customers for the payment of costs of construction of
facilities to serve them.
1.1.32 “Scheduling Protocols” means the applicable provisions of the
SCPA, or successor document and any other contractual or other arrangements between NCPA
and the relevant Participant concerning the scheduling, delivery and metering of the Amended
PPA.
1.1.33 “Security Account” means the account established by NCPA and
funded by the Participants in accordance with Section 5.3, the funds of which are available for use
by NCPA in accordance with the terms and conditions hereof.
1.1.34 “Term” has the meaning set forth in Section 9.
1.2 Rules of Interpretation. As used in this Agreement (including the Recitals
hereto), unless in any such case the context requires otherwise: the terms “herein,” “hereto,”
“herewith” and “hereof” are references to this Agreement taken as a whole and not to any
particular provision; the term “include,” “includes” or “including” shall mean “including, for
1563911.7 9
EXECUTION COPY
example and without limitation;” and references to a “Section,” “subsection,” “clause,” or
“Exhibit” shall mean a Section, subsection, clause or Exhibit of this Agreement, as the case may be.
All references to a given agreement, instrument or other document shall be a reference to that
agreement, instrument or other document as modified, amended, supplemented and restated
through the date as of which such reference is made, and reference to a law, regulation or
ordinance includes any amendment or modification thereof. A reference to a “person” includes
any individual, partnership, firm, company, corporation, joint venture, trust, association,
organization or other entity, in each case whether or not having a separate legal personality and
includes its successors and permitted assigns. The singular shall include the plural and the
masculine shall include the feminine, and vice versa.
Section 2.Effectiveness of Agreement.This Agreement shall be effective as to each
Participant as of the Effective Date upon execution by the Participant, as described in Section 9
below.
Section 3.Delivery of Electricity/Allocation of Resource Adequacy Capacity and
Environmental Attributes. By executing this Agreement, each Participant acknowledges and
agrees to be bound by the take-or-pay process contained in or referenced herein. Any electricity
delivered to NCPA under the PPA shall be delivered to each Participant in proportion to such
Participant’s Participation Percentage and each Participant shall accept and pay for its relevant
percentage of such Energy. To the extent Participant is unable to accept such deliveries in full,
NCPA shall dispose of such surplus in its discretion, in such a manner as to attempt to maximize
Participant value. Notwithstanding the above, NCPA may allocate capacity and Energy procured
through the Amended PPA among the Participants in such percentages as NCPA may, in its
reasonable discretion, determine are necessary, desirable, or appropriate, in order to accommodate
Participant Transfer Rights pursuant to Section 7, herein. Such Energy shall be scheduled for the
Participants in accordance with the Scheduling Protocols. Resource Adequacy Capacity and
Environmental Attributes obtained by NCPA as a result of performance under this Agreement
shall likewise be allocated to each Participant by its Participation Percentage.
1563911.7 10
EXECUTION COPY
3.1 Payments to Counterparty.NCPA shall pay all costs incurred hereunder
using operating funds or Security Account funds, paid to NCPA in accordance with Section 5, or
such other sources as may be agreed upon in writing by the Parties from time to time.
Section 4.Cooperation and Further Assurances.Each of the Parties agrees to provide such
information, execute and deliver any instruments and documents and to take such other actions as
may be necessary or reasonably requested by any other Party which are not inconsistent with the
provisions of this Agreement and which do not involve the assumption of obligations other than
those provided for in this Agreement, in order to give full effect to this Agreement and to carry out
the intent of this Agreement.
Section 5.Payment Obligations, Security Account, Invoicing.
5.1 Participant Payment Obligations.Each Participant agrees to pay to NCPA
each month its respective portion of the Project Costs. In addition, each Participant shall maintain
working capital in accordance with NCPA’s Annual Budget, and maintain its Security Account as
provided in this Agreement.
5.2 Calculation of and True-Up for Project Costs. NCPA will calculate interim
true-ups of monthly Project Costs periodically as appropriate and practicable throughout the year,
and upon Upon the conclusion of a Budget Year,NCPA shall compare each Participant’s payment
of estimated Project Costs with the actual Project Costs incurred on behalf of each Participant such
that overpayments will be credited to, and underpayments will debited to,the Participant’s
account in accordance with NCPA’s Annual Budget settlements.
5.3 Security Account.
5.3.1 Initial Amounts. NCPA shall notify each Participant three (3)
months prior to the expected initial delivery of Energy of the initial security amounts which
Participant shall be obligated to pay for under this Agreement. Each Participant shall ensure that
sufficient funds are on deposit in the Security Account equal to the highest (3) months of the
immediately following (12) months of estimated Project Costs; provided, however, that such
1563911.7 11
EXECUTION COPY
deposit may be satisfied, in whole or in part, either in cash,by posting an irrevocable standby letter
of credit or furnishing any other negotiable instrument satisfactory to NCPA’s General Manager,
exercising his or her reasonable discretion. Such Security Account will be separate and apart from
any other security account held by NCPA on behalf of a Participant.
5.3.2 Subsequent Deposits.Periodically, and at least quarterly, NCPA
shall review and revise its estimate of all costs for which each Participant shall be obligated to pay
for under this Agreement for the succeeding twelve (12) months. Following such review, NCPA
shall determine whether each Participant has a sufficient balance in the Security Account. To the
extent that any Participant’s balance in the Security Account is greater than one hundred and ten
percent (110%) of the amount required herein, NCPA shall credit such amount as soon as
practicable to the Participant’s next following invoice. To the extent that any Participant’s balance
in the Security Account is less than ninety percent (90%) of the amount required herein, NCPA
shall add such amount as soon as practicable to such Participant’s next invoice. Credits or
additions shall not be made to Participants who satisfy these Security Account requirements in
whole, through the use of a letter of credit, provided that the amount of the letter of credit shall be
adjusted in a like manner to assure an amount equal to the highest three (3) months of estimated
Project Costs.
5.3.3 Use of Security Account Funds.NCPA may use any and all funds
deposited into the Security Account to pay any costs it incurs hereunder, including making
payments to the counterparty under the Amended PPA. NCPA may use any and all funds
without regard to any individual Participant’s balance in the Security Account or proportionate
share of Project Costs and irrespective of whether NCPA has issued an invoice for such costs to the
Participants or whether a Participant has made timely payments of invoices. Should a Participant
have satisfied its Security Account requirements, in whole or in part, by posting a letter of credit,
NCPA may draw on such letter of credit to satisfy Participant’s obligations hereunder.
5.3.4 Emergency Additions.In the event that the funds are withdrawn
pursuant to section 5.3.3, or if the Security Account is insufficient to allow payment of an invoice,
demand, request for further assurances by third parties, or Claims,NCPA shall notify all
1563911.7 12
EXECUTION COPY
Participants and then prepare and send a special or emergency assessment to the Participants.
Each Participant shall pay to NCPA such assessment when and if assessed by NCPA within two
(2) Business Days of the invoice date of the assessment or consent to and direct NCPA to draw on
any existing letter of credit Participant has established for such purposes.
5.3.5 Accounting and Interest.NCPA shall maintain a detailed
accounting of each Participant’s deposits into and shares of withdrawals from the Security
Account. Interest earned on the Security Account shall be proportionately credited to the
Participants in accordance with their Security Account balances. Any losses in the Security
Account caused by early termination of investments shall be allocated among the Participants in
accordance with their proportionate Participation Percentages.
5.3.6 Return of Funds. On the termination of this Agreement with
respect to a Participant in accordance with this Agreement, the affected Participant or Participants
may apply to NCPA for the return of their share of Security Account funds ninety (90) days after
the effective date of such termination or withdrawal. NCPA shall, in its sole discretion, as
determined by the General Manager, estimate the then outstanding liabilities of the Participant(s),
including any estimated contingent liabilities and shall retain all such funds until all such liabilities
have been fully paid or otherwise satisfied in full. The balance of the Participant’s share of the
Security Account will be refunded to the Participant.
5.3.7 Default Relating to Security Account.In addition to any
other remedy available in this Agreement or at law or in equity, in the event of an Event of
Default relating to the Security Account, NCPA shall have those rights provided in Section
10.4.4 and the Participant agrees to take the actions specified in that section to cure such
Event of Default.
1563911.7 13
EXECUTION COPY
5.4 Invoicing.
5.4.1 Invoices.As part of NCPA’s regular, monthly, advance billing or
by separate special invoice, as required in the circumstances, NCPA will issue an invoice to each
Participant for its proportionate share of the Project Costs due (or any adjustments thereto) based
on Sections 5.1 and 5.2 above. Such invoices may include estimated costs and estimated settlement
and meter data. Each invoice shall include: (i) the total Project Costs attributable to the activities
under this Agreement for such month and the relevant Participant’s share thereof; (ii) the quantity
of Energy, Resource Adequacy Capacity and Environmental Attributes delivered to such
Participant (or an estimate thereof) and the unit price for such Energy; (iii) appropriate settlement
and meter data (or an estimate thereof); and (iv)any adjustments to prior invoices required based
on actual data received that was estimated in a previous invoice. NCPA may also invoice an
amount, if any, that NCPA has paid or reasonably expects to pay using funds available in the
Security Account; and amounts due from (or credited to) such Participant under Section 5.3.2.
5.4.2 Payment of Invoices.All invoices delivered by NCPA hereunder
are due and payable on the date indicated on such invoice;provided, however, that any amount
due on a day other than a Business Day may be paid on the following Business Day. NCPA may
apply a Participant’s share of the Security Account to the payment of all or any portion of an
invoice issued to such Participant, provided that application of such funds from the Security
Account shall not relieve the Participant from any late payment charges pursuant to Section 5.4.3.
To the extent that NCPA applies funds from the Security Account to pay an amount due under an
invoice, following receipt of payment of such invoice by the relevant Participant, NCPA shall
deposit the relevant portion of the payment into the Security Account and credit such deposit to
such Participant.
5.4.3 Late Payments.Any amount due and not paid by a Participant in
accordance with Section 5.4.2 shall bear interest computed on a daily basis until paid at the lesser
of (i) the per annum prime rate (or reference rate) of the Bank of America NT&SA then in effect,
plus two percent (2%) or (ii) the maximum rate permitted by law.
1563911.7 14
EXECUTION COPY
5.5 Settlement Data and Examination of Books and Records.
5.5.1 Settlement Data.NCPA will make metering and settlement data
available to the Participants. Procedures and formats for the provision of such data will be as
established by the Participants and NCPA from time to time.
5.5.2 Examination of Books and Records.Any Participant to this
Agreement shall have the right to examine the books and records created and maintained by
NCPA pursuant to this Agreement at any reasonable, mutually agreed upon time.
5.5.3 Revenue Covenant. Any failure of a Participant to meet its
obligations hereunder or to cure such failure in a timely manner shall constitute an Event of
Default and the Defaulting Party shall be subject to such remedies of NCPA as provided for herein.
Each Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric
department revenues only, its percentage share of the costs authorized by Participants in
accordance with this Agreement in connection with its participation in the Project. Each
Participant further agrees that it will fix the rates and charges for services provided by its electric
department, so that it will at all times have sufficient money in its department revenue funds to
meet this obligation; (ii) to make payments under this Agreement from the Revenues of, and as an
operating expense of, its Electric System; (iii) to make payments under this Agreement whether or
not there is an interruption in, interference with, or reduction or suspension of services provided
under this Agreement; such payments not being subject to any reduction, whether by offset or
otherwise, and regardless of whether any dispute exists provided such interruption, interference
or reduction in services is caused by forces constituting a force majeure1 and not reasonably
contemplated by the Parties; and (iv) to operate its Electric System in an efficient manner and to
maintain its facilities in good repair, condition and working order so that: (a) the Participant’s
obligations to make payments under this Agreement are not adversely affected or threatened; and
1 For the purposes of Section 5.5.3, a force majeure shall be defined as any natural disaster or uncontrollable
force not preventable by any human agency, such as, but not limited to, any storm, flood, or violent or
destructive natural force.
1563911.7 15
EXECUTION COPY
(b) NCPA’s bond rating and ability to negotiate and enter into a PPA are not adversely affected or
threatened.
Section 6.Administration of Agreement
6.1 General.The NCPA Commission has sole overall responsibility and
authority for the administration of this Agreement. Any acts, decisions or approvals taken, made
or sought by NCPA under this Agreement shall be taken, made or sought, as applicable, in
accordance with NCPA’s Constitutive Documents and Section 6.2.
6.2 Action by Participating Members.
(a)Forum. Whenever any action anticipated by this Agreement is
required to be taken by the Participants, such actions shall be taken at a regular or special meeting
of the NCPA Commission but shall be participated in only by those Commissioners, or their
designated alternates, who are Participants.
(b) Quorum. A quorum at NCPA Commission meetings for purposes of
acting upon matters relating to this Agreement shall consist of Commissioners, or their designated
alternates,representing at least two Participants having a combined majority interest based upon
Participation Percentages.
(c) Voting. Each Participant shall have the right to cast one vote with
respect to matters pertaining to this Agreement, including with respect to actions taken by NCPA
relating to the Amended PPA, with a majority vote of the Participating Members required for
action subject to the following exceptions:
(i)Upon request of any Participant representative, the voting on
an issue related to this Agreement shall be by Participation Percentage with a 65% or more
favorable vote necessary to carry the action. The 65% required by the preceding sentence shall be
reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but shall
not be reduced below a majority interest.
(ii)After any decision related to this Agreement is taken by the
affirmative vote of less than 65% of the Participation Percentage, the action may be reviewed and
1563911.7 16
EXECUTION COPY
revised if a Participant gives notice of intention to seek such review and revision to NCPA and
each of the other Participants within ten (10) days following the date on which such action was
taken. Upon receipt of such a request for reconsideration, NCPA shall agendize the matter for
reconsideration at the next regular meeting of the Commission or at a special meeting if the
circumstances so warrant. The action shall be upheld upon the affirmative vote by Participation
Percentage of not less than 65%. Any action taken upon reconsideration shall be final.The vote of
65% of the Participation Percentage required by the previous sentence may be reduced by the
amount that the Participation Percentage of any Participant exceeds 35%, but shall not be reduced
below a majority interest.
(iii) Participants agree to abide by the terms and conditions of
NCPA’s Facilities Agreement,as it may be amended from time-to-time. Any Participants who are
not currently signatories to the Facilities Agreement agree to become signatories within thirty (30)
days of the date of this Agreement.
Section 7.Admission of New Participants. Following the Effective Date of this Agreement,
no Member (“Additional Member”) may execute this Amended Agreement and become a
Participant unless one or more of the Participants (“Allocating Participants”) elect to allocate a
portion of its Participant Percentage to such Member. Upon agreement of the Allocating
Participant and the Additional Member, the Additional Member shall deliver to NCPA and each
other Participant the written agreement between the Additional Member and the Allocating
Participant(s) indicating the agreed upon change in Participation Percentage(s), a counterpart of
this Agreement executed by the Additional Member, evidence that such agreements have been
approved in accordance with its applicable Constitutive Documents and payment of such
Member’s share of the Security Account. Any reduction in any Allocating Participant’s share of
the Security Account shall be credited to the Allocating Participants in accordance with Section 5.3.
Upon receipt of all required documents, NCPA shall provide to all Participants an updated Exhibit
B reflecting the revised Participation Percentages.
Section 8.Withdrawal of Participants. No Participant may withdraw from this Agreement
after the Effective Date.
1563911.7 17
EXECUTION COPY
Section 9.Term and Termination.
9.1 This Agreement shall become effective on the Effective Date when it has been
executed and delivered to NCPA by Participants, the Participation Percentages of which, in the
aggregate, equal at least 65% participation in the Project. NCPA shall provide written notices to all
Participants,establishing the Effective Date. The remaining Participants listed in Exhibit B shall
have forty-five (45)days, following the notice of the Effective Date to execute and deliver
counterparts of this Agreement to NCPA. If any Participants listed on Exhibit B fail to execute and
deliver this Agreement or the Facilities Agreement within such forty-five (45)days, unless
otherwise agreed to by the Participants who have executed the Agreement, the Participating
Percentages of such member or members shall be allocated to those Participants in proportion to,
but not exceeding, their Participation Percentages.
9.2 This Agreement shall be coterminous with the Amended PPA contained in
Exhibit A.
9.3 This Agreement may be terminated by the Parties if NCPA successfully
exercises its right of first refusal to purchase the entire Western GeoPower Project as set forth in
Section 3.5(a)of the Amended PPA. In the event of termination pursuant to this Section 9.2, the
Participants shall pay to NCPA all previously unpaid costs and obligations incurred as of the date
of such termination. Following such termination, the Participants shall cooperate and act in good
faith to negotiate and agree upon the method of allocating among the Participants,in proportion to
their respective Participation Percentages the costs and benefits of the Amended PPA and any
financing agreements or commitments and any matters pertaining to the administration,
management, control, operation and maintenance of the Amended PPA, including, but not limited
to,re-subscribing the Project capacity with additional NCPA Members or non-Member
participants. NCPA shall reasonably cooperate with the Participants and other NCPA Members in
connection with implementing the foregoing,and the Participants shall indemnify NCPA for any
costs and obligations incurred in connection therewith, including reasonable attorneys' fees, fees
and expenses of other experts, including auditors and accountants and other reasonable and
necessary costs.
1563911.7 18
EXECUTION COPY
Section 10.Default and Remedies
10.1 Events of Default.An Event of Default under this Agreement shall exist
with respect to a Party (the “Defaulting Party”) upon the occurrence of any one or more of the
following:
(i) if any Party fails to make any payment or to provide assurances as
required of NCPA under this Agreement when due hereunder two (2) Business Days after receipt
of notice given by NCPA of such non-payment; or
(ii) the failure of the Defaulting Party to perform any other covenant or
obligation under this Agreement where such failure is not cured within ten (10) calendar days
following receipt of a notice from NCPA demanding cure (provided that this shall not apply to any
failure to make payments (which is covered by Section 10.1 (i)); or
(iii)if any representation or warranty of the Defaulting Party material to
the transactions contemplated hereby is or shall prove to have been incorrect in any material
respect when made and the Defaulting Party does not cure the facts underlying such incorrect
representation or warranty so that the representation or warranty becomes true and correct within
ten (10) calendar days of the date of receipt of notice from any other Party demanding cure; or
(iv)if a Participant is in default or in breach of any of its covenants
under any other agreement with NCPA and such default or breach is not cured within the time
period(s)specified in such agreement or, if not specified, within ten (10) calendar days of the date
of receipt of notice; or
(v) the failure of NCPA to perform any covenant or obligation under this
Agreement within ten (10) calendar days following the delivery of a notice to cure by any non-
defaulting Member.
10.2 Cure of an Event of Default.An Event of Default shall be deemed cured
only if such default shall be remedied within the time period specified in Section 10.1, above, as
may be applicable after written notice has been sent to the Defaulting Party from NCPA specifying
the default and demanding that the same be remedied;provided,that failure of a Party to provide
such notice shall not be deemed a waiver of such default.
1563911.7 19
EXECUTION COPY
10.3 Participation Rights Of Defaulting Party.Notwithstanding anything herein
to the contrary, upon the occurrence of an Event of Default and until such Event of Default is
cured, a Participant that is the Defaulting Party shall not have the right to participate under Section
6.2 on any matters with respect to this Agreement.
10.4 Remedies in the Event of Default.
10.4.1 Upon the occurrence of an Event of Default where a Participant is
the Defaulting Party, without limiting its other rights or remedies available under this Agreement,
at law or in equity, and without constituting or resulting in a waiver, release or estoppels of any
right, action or cause of action NCPA or a non-defaulting Participant may have against the
Participant, NCPA may:
(i) suspend the provision of goods and/or services under this
Agreement to such Defaulting Party, including the delivery of Energy and other attributes of the
Amended PPA until the Event of Default is cured; and
(ii) demand that the Defaulting Party provide further assurances to
compel the correction of the default, including mandating the collection of a surcharge to produce
Revenues to secure the cure of the Event of Default; and
(iii) terminate this Agreement as to the Defaulting Party on ten (10) days
prior written notice to the Defaulting Party and following approval of the non-defaulting
Participants.
10.4.2 Sale/Transfer of Participants Account Upon Default.Upon any
default of a Participant caused by the failure of such Participant to pay any sums due, and
provided that such default is not cured in a timely manner, then NCPA shall use its best efforts to
sell and transfer for the Defaulting Party’s account all or a portion of the Participant’s capacity
and/or Energy and/or Environmental Attributes for the remainder of the term of this Agreement.
Notwithstanding that all or any portion of the Participant’s capacity, energy or environmental
attributes may be so sold or transferred, the Participant shall remain liable for all of its obligations
hereunder.
1563911.7 20
EXECUTION COPY
10.4.3 Remedies of Participants.Upon the occurrence of an Event of
Default, and following the applicable cure periods, where NCPA is the Defaulting Party, the
Participant may, without limiting their other rights or remedies available under this Agreement, at
law or in equity, and without constituting or resulting in a waiver, release or estoppel of any right,
action or cause of action the Participants may have against NCPA, bring such action as may be
applicable to compel performance by NCPA.
10.4.4 Special Covenants Regarding Security Account.In the event that a
Participant’s balance of the Security Account is insufficient to cover all invoices for costs incurred
under this Agreement sent to such Participant, then, without limiting NCPA’s other rights or
remedies available under this Agreement, at law or in equity, such Participant shall cooperate in
good faith with NCPA and shall cure said default within thirty (30) days, on an emergency basis,
taking all such action as is necessary, including, but not limited to, raising rates and charges to its
customers to increase its Revenues to replenish its share of the Security Account as provided
herein, drawing on its cash-on-hand and lines of credit, obtaining further assurances by way of
credit support and letters of credit, and taking all such other action as will cure the default.
10.5 Effect of Termination or Suspension.
10.5.1 The suspension or termination of this Agreement will not
terminate, waive, or otherwise discharge any ongoing or undischarged contingent liabilities or
obligations arising from this Agreement until such obligations are satisfied in full, and all of the
costs incurred by NCPA in connection with such suspension or termination, including reasonable
attorneys' fees, the fees and expenses of other experts, including auditors and accountants, other
costs and expenses that NCPA is entitled to recover under this Agreement, and other reasonable
and necessary costs associated with any and all of the remedies, are paid in full.
10.5.2 Suspension by NCPA.If performance of all or any portion of this
Agreement is suspended by NCPA with respect to a Participant in accordance with Section
10.4.1(i), such Participant shall pay any and all costs and obligations incurred by NCPA as a result
of such suspension, including reasonable attorneys' fees, the fees and expenses of other experts,
1563911.7 21
EXECUTION COPY
including auditors and accountants, other reasonable and necessary costs associated with such
suspension and any portion of the Project Costs that were not recovered from such Participant as a
result of such suspension.
10.5.3 Termination by NCPA.If this Agreement is terminated by NCPA
with respect to a Participant in accordance with Section 10.4.1 (iii),such Participant shall pay any
and all costs and obligations incurred by NCPA as a result of such termination including
reasonable attorneys' fees, the fees and expenses of other experts, including auditors and
accountants, other reasonable and necessary costs associated with such termination and any
portion of the Project Costs that were not, or will not be, recovered from such Participant as a
result of such termination; provided, however, if NCPA terminates this Agreement with respect to
the last Participant, then this Agreement shall terminate.
10.5.4 Termination by Participants. This Agreement may be terminated
by unanimous consent of all of the Parties hereto. In that event,the Participants shall pay to NCPA
all previously unpaid costs and obligations incurred as of the date of such termination,and
following such termination, the Participants shall cooperate and act in good faith to negotiate and
agree upon the method of allocating among the Participants in proportion to their respective
Participation Percentages the costs and benefits of the Amended PPA and any financing
agreements or commitments and any matters pertaining to the administration, management,
control, operation and maintenance of the Amended PPA. NCPA shall reasonably cooperate with
the Participants in connection with implementing the foregoing and the Participants shall
indemnify NCPA for any costs and obligations incurred in connection therewith, including
reasonable attorneys' fees, fees and expenses of other experts, including auditors and accountants
and other reasonable and necessary costs. If the Parties are unable to reach agreement as to the
foregoing, then the Parties agree to submit the matter to mediation with a mutually agreed upon
mediator. If the Parties are still unable to reach agreement following mediation, then the matter
shall be submitted to binding arbitration subject to the rules of the American Arbitration
Association, the costs of such arbitration being borne proportionally among the Participants.
Section 11.Miscellaneous.
1563911.7 22
EXECUTION COPY
11.1 Confidentiality.The Participants and NCPA will keep confidential all
confidential or trade secret information made available to them in connection with this Agreement,
to the extent possible, consistent with applicable laws, including the California Public Records Act.
It shall be the responsibility of the holder of the claim of confidentiality or trade secret to defend at
its expense against any request that such information be disclosed. Confidential or trade secret
information shall be marked or expressly identified as such.
11.2 Indemnification and Hold Harmless.Subject to the provisions of Section
11.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its Members,
including their respective governing officials, officers, agents, and employees, from and against
any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature,
including reasonable attorneys’ fees and the costs of litigation, including experts (“Claims”), to the
extent caused by any acts, omissions,breach of contract, negligence (active or passive), gross
negligence, recklessness, or willful misconduct of a Participant, its governing officials, officers,
employees, subcontractors or agents, to the maximum extent permitted by law.
11.3 Several Liabilities.No Participant shall be liable under this Agreement for
the obligations of any other Participant, and each Participant shall be solely responsible and liable
for performance of its obligations under this Agreement, except as otherwise provided for herein,
and the obligation of each Participant under this Agreement is a several obligation and not a joint
obligation with those of the other Participants.Notwithstanding the foregoing, the Participants
acknowledge that any debts or obligations incurred under this Agreement shall be borne solely by
such Participants, and not by non-Participant Members of NCPA, pursuant to Article IV, Section
3(b) of the Joint Powers Agreement. It is intended that notwithstanding the provisions of the Joint
Powers Agreement and the general nature of the severability of liabilities in this Agreement, the
Participants acknowledge and agree that if there is a default by NCPA under the Amended PPA,
the Participants will be severally liable for their proportionate share of such default until NCPA is
able to fully recover from the defaulting Participant.
11.4 No Consequential Damages.FOR ANY BREACH OF ANY PROVISION OF
THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS
1563911.7 23
EXECUTION COPY
PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE
LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES
ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS EXPRESSLY
PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED TO ACTUAL
DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE HEREBY WAIVED. IN
NO EVENT SHALL NCPA OR ANY PARTICIPANT OR THEIR RESPECTIVE SUCCESSORS,
ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS, AGENTS,OR EMPLOYEES BE LIABLE
FOR ANY LOST PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE
OR INCIDENTAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE, LOSS OF GOODWILL,
LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NCPA AND EACH
PARTICIPANT EACH HEREBY WAIVES SUCH CLAIMS AND RELEASES EACH OTHER AND
EACH OF SUCH PERSONS FROM ANY SUCH LIABILITY.
The Parties acknowledge that California Civil Code section 1542 provides that: “A general release
does not extend to claims which the creditor does not know or suspect to exist in his or her favor at
the time of executing the release, which if known by him or her must have materially affected his
or her settlement with the debtor.” The Parties waive the provisions of section 1542, or other
similar provisions of law, and intend that the waiver and release provided by this section of this
Agreement shall be fully enforceable despite its reference to future or unknown claims.
11.5 Amendments.Except where this Agreement specifically provides
otherwise, this Agreement may be amended only by written instrument executed by the Parties
with the same formality as this Agreement.
11.6 Severability.In the event that any of the terms, covenants or conditions of
this Agreement or the application of any such term, covenant or condition, shall be held invalid as
to any person or circumstance by any court having jurisdiction, all other terms, covenants or
conditions of this Agreement and their application shall not be affected thereby, but shall remain
in force and effect unless the court holds that such provisions are not severable from all other
provisions of this Agreement.
1563911.7 24
EXECUTION COPY
11.7 Governing Law.This Agreement shall be interpreted, governed by, and
construed under the laws of the State of California.
11.8 Headings.All indices, titles, subject headings, section titles and similar
items are provided for the purpose of convenience and are not intended to be inclusive, definitive,
or affect the meaning of the contents of this Agreement or the scope thereof.
11.9 Notices.Any notice, demand or request required or authorized by this
Agreement to be given to any Party shall be in writing, and shall either be personally delivered to a
Participant and the Secretary of the Commission or transmitted to the Participant and the Secretary
of the Commission at the address shown on the signature pages hereof. The designation of such
address may be changed at any time by written notice given to the Secretary of the Commission
who shall thereupon give written notice of such change to each Participant.
11.10 Warranty of Authority.Each Participant, and NCPA, represents and
warrants that it has been duly authorized by all requisite approval and action to execute and
deliver this Agreement and that this Agreement is a binding, legal, and valid agreement
enforceable in accordance with its terms as to the Participant and as to NCPA. Upon execution of
this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of such
Participant, evidencing approval of and authority to enter into this Agreement, that such authority
was duly exercised in accordance with such Participant’s Constitutive Documents.
11.11 Counterparts.This Agreement may be executed in any number of
counterparts, and each executed counterpart shall have the same force and effect as an original
instrument and as if all the signatories to all of the counterparts had signed the same instrument.
Any signature page of this Agreement may be detached from any counterpart of this Agreement
without impairing the legal effect of any signatures thereon, and may be attached to another
counterpart of this Agreement identical in form hereto but having attached to it one or more
signature pages.
11.12 Assignment.Except as provided by Section 7,no Participant may assign or
otherwise transfer its interest in its Participation Percentage or any other rights and obligations
1563911.7 25
EXECUTION COPY
under this Agreement without the express written consent of NCPA, which shall not be
unreasonably withheld.
11.13 Participation Options.
11.13.1 Exercise of the Right of First Refusal. The Parties contemplate
that NCPA may exercise an option to purchase the underlying assets of the Amended PPA as per
the voting procedures of this Agreement outlined in Section 6. Participation in any such purchase
shall be in accordance with the then existing Participation Percentages, unless such Participation
Percentages are otherwise agreed upon by the Participants. At such time as NCPA exercises its
right of first refusal, this Agreement shall be amended to reflect the purchase of the underlying
assets and the Project. If any Participant elects not to participate in the purchase of the Project,
then this Agreement shall terminate as to such Participant, subject to the Participant not being a
Defaulting Party under any of its obligations of this Agreement.
11.13.2 Expansion Plant Output. If Participants elect to purchase
Expansion Plant Output, as that term is defined in the Amended PPA, pursuant to Section 3.5(b) of
the Amended PPA, each Participant shall deliver a notice to NCPA of its intent to participate in the
purchase of any Expansion Plant Output. Participation shall be in accordance with the then
existing Participation Percentages, unless such Participation Percentages are otherwise agreed
upon by the Participants. Notwithstanding the foregoing, Participants may elect not to participate
in the purchase of any Expansion Plant Output, in which case the Participation Percentages in
Exhibit B shall be revised to reflect the desired Participation Percentages in any Expansion Plant
Output. If the Participation Percentages cannot be revised to fully subscribe the Expansion Plant
Output, then NCPA shall reject the purchase of the Expansion Plant Output.
11.14 List of Exhibits.The Exhibits referenced herein shall be denoted as follows:
Exhibit A -AMENDED AND RESTATED RENEWABLE ENERGY POWER PURCHASE
AGREEMENT BETWEEN THE NORTHERN CALIFORNIA POWER AGENCY
AND WESTERN GEOPOWER INCORPORATED
Exhibit B -PARTICIPATION PERCENTAGES
1563911.7
EXECUTION PAGE
1563911.7
EXECUTION PAGE
IN WITNESS WHEREOF, each Participant has executed this Agreement with the approval of its
governing body, and NCPA has authorized this Agreement in accordance with the authorization
of its Commission.
NORTHERN CALIFORNIA
POWER AGENCY
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF LOMPOC
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF PALO ALTO
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF ROSEVILLE
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF SANTA CLARA
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
1563911.7
EXECUTION PAGE
PORT OF OAKLAND
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
1563911.7
EXECUTION PAGE
EXHIBIT A
RENEWABLE ENERGY POWER PURCHASE AGREEMENT BETWEEN NORTHERN
CALIFORNIA POWER AGENCY and WESTERN GEOPOWER INCORPORATED
[See attached]
1563911.7
EXECUTION PAGE
EXHIBIT B
PARTICIPATION PERCENTAGES
Participant Participation Percentage*Equivalent MW
Santa Clara 0.505 13.13
Roseville 0.269 6.99
Palo Alto 0.150 3.90
Lompoc 0.038 0.99
Port of Oakland 0.038**0.99
Total 1.000 26
*Participation Percentage is based on the project’s expected, long term capacity of
26 mw net.Based on preliminary geothermal reservoir forecasts and operation
plans, it is possible the project’s output will exceed the expected long term net
capacity for the first three years of the contract period by as much as 2 mw (28
mw maximum capacity).
** Port of Oakland does not want their project share to exceed 15,000 mwhrs in
any given year over the contract term. To the degree that the annual average
project capacity exceeds 45.0 mw net (45.0 mw x 0.038 participation percentage x
8760 hrs/yr = 14,980 mwhrs), any Port of Oakland share above 15,000 mwhrs
will be allocated to the other project participants based on their original project
participation percentage.
City of Palo Alto (ID # 1441)
Finance Committee Staff Report
Report Type:Meeting Date: 3/1/2011
March 01, 2011 Page 1 of 6
(ID # 1441)
Council Priority: Environmental Sustainability
Title: Agreements for Western GeoPower Renewable Energy
Subject: Utilities Advisory Commission Recommendation to City Council to
Adopt Two Resolutions: (1) Approving An Agreement Terminating the Third
Phase Agreement For Western GeoPower Incorporated Renewable Energy
Power Purchase Agreement, and (2) Approving a new Third Phase Agreement
For Western GeoPower Inc Renewable Energy Power Purchase Agreement for
the Acquisition of Up to 15 Percent of Project Energy over 25 Years at a Cost Not
to Exceed $95 Million
From:City Manager
Lead Department: Utilities
Recommendation
Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee
recommend that the City Council approve the Agreement Terminating the Third Phase
Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement
(Termination Agreement).
Additionally, the UAC recommends that the Finance Committee recommend that the City
Council approve a new Third Phase Agreement for Western GeoPower Inc. Renewable Energy
Power Purchase Agreement.
Executive Summary
The City signed an agreement in 2008 to receive renewable power from Western GeoPower, a
geothermal project in northern California, at a price of $98 per megawatt-hour (MWh). The
project would have provided enough renewable energy for up to 3% of the City’s energy supply
needs. However, at that price the project could not secure financing and staff and the UAC
recommend terminating this agreement. The project has been proposed again, but with a
$113/MWh price. The City could commit to this price now for the same amount of energy in
the original agreement as recommended by the UAC. Staff recommends that the City wait until
it has conducted a more thorough review of alternatives and can make a studied
recommendation on pursuing the project. Staff understands it could get a share of the project
at the $113/MWh price before the end of 2011 from the City of Santa Clara, which has said that
March 01, 2011 Page 2 of 6
(ID # 1441)
it would commit to more of the project now to move the project forward. However, at this
time, Santa Clara has not made any written commitment to offer the City a share of the project
in the future at the same price.
Background
On February 19, 2008, the Council adopted Resolution 8798, approving the Northern California
Power Agency (NCPA) Third Phase Agreement for Western GeoPower renewable energy power
purchase and the City’s participation in the agreement for the purchase of up to 5 average
megawatts of energy within an average procurement price cap of $98 per megawatt-hour
(MWh)(CMR 141:08). The original Third Phase Agreement was executed on May 28, 2008 by
NCPA. NCPA also executed an agreement with Western GeoPower, to purchase the energy
from Western GeoPower’s proposed geothermal project at a price of $98/MWh (equivalent to
9.8 cents per kilowatt-hour). This power would be passed through to participating members,
including Palo Alto, at NCPA’s cost.
The financial crisis of 2008 undermined project financing that Western GeoPower was seeking.
New financing available to Western GeoPower required a larger cash flow leading to their
request for a contract price of $117/MWh. Council approved an amended Third Phase
Agreement with the higher delivery price of $117/MWh on August 3, 2009 (CMR 347:09), but it
was not fully executed as Western GeoPower was shortly thereafter taken over by, and became
a subsidiary of, another company named Ram Power.
Since August 2009, NCPA attempted various negotiated solutions with the developer. Based on
information NCPA provided, staff considered the project an unsuccessful contracting effort and
moved on to meet the 33% Renewable Portfolio Standard (RPS) target by issuing a Request For
Proposals (RFP) in the fall of 2009 that ultimately resulted in two Power Purchase Agreements
(PPAs) with landfill-gas-to-energy projects (San Joaquin and Crazy Horse Canyon) approved by
Council in May 2010 (CMR: 226:10). Currently, qualifying renewable resources comprise about
19 percent of the City’s electric power needs. With three power projects under construction,
contracted qualifying renewable supplies are expected to supply about 27% of the City’s
electric power needs in 2013 if energy efficiency goals are achieved.
Discussion
In late 2010 and early 2011, NCPA negotiated again with Western GeoPower (in its new form as
a subsidiary of Ram Power) and is positioned to replace the original agreements that were to
provide renewable energy output from the project at $98/MWh with new agreements
providing the energy at $113/MWh. Ram Power stated that this price increase is required to
get the project financed and built. To replace the original $98/MWh contracts NCPA requests
participants of the original Third Phase Agreement to execute the attached Termination
Agreement and, if interested, execute a new Third Phase Agreement for $113/MWh power.
Executing the Termination Agreement clears the way for interested members to move ahead
with the new $113/MWh-priced agreements.
March 01, 2011 Page 3 of 6
(ID # 1441)
The City of Santa Clara’s municipal utility, Silicon Valley Power (SVP), plans to initially subscribe
to all unsubscribed shares of the new $113/MWh Third Phase Agreement and later amend the
agreement to allow Palo Alto, in particular, or others, to later participate in the project. SVP
has indicated its willingness to hold this option open until the end of calendar year 2011,
however there is no written agreement memorializing this understanding.
The City has the following options regarding the Western GeoPower project:
1.The City declines to execute the Termination Agreement.In this case, the City would not be
able to enter into the new Third Phase Agreement at the $113/MWh price.In addition, the
other participants may have difficulty executing the new Third Phase Agreement replacing
the one Palo Alto declined to terminate.
2.The City executes the Termination Agreement and:
a.declines to enter into the new Third Phase Agreement at the $113/MWh price at this
time. In this case, SVP has indicated that it would take up as much of the project share
as required for the project to go forward. SVP has verbally indicated that it would offer
Palo Alto a share of the project later in 2011 at the $113/MWh price; or
b.enter into the new Third Phase Agreement at the $113/MWh price. In the new Third
Phase Agreement, the City may specify an upper limit on its participation share. The
final participation level would be determined once all participants execute the new
Third Phase Agreement. For example, the City may define its participation as:
(1)“up to 15%” of the project output, which amounts to about 3.8 average
megawatts (MW), which is enough to meet about 3.3% of the City’s annual
electric needs. This is the maximum share of project output that the City agreed
to in the original $98/MWh agreement;
(2)“up to 10%” of the project output, which amounts to about 2.5 average
megawatts (MW), or enough to meet about 2.2% of the City’s annual electric
needs; or
(3)“up to 30%” of the project output, which amounts to about 7.5 average
megawatts (MW), or enough to meet about 6.6% of the City’s annual electric
needs.
The Termination Agreement has been reviewed by staff and the City Attorney’s office. The new
draft Third Phase Agreement has been reviewed by staff, but it has not yet been finalized by
NCPA.
Staff recommends option 2.a.: executing the Termination Agreement and deferring a final
decision to participate again until later in 2011. Taking this option will result in the termination
of the original $98/MWh-priced Third Phase Agreement in order to facilitate contracting efforts
between NCPA and its other interested members. Staff will work with SVP to be allowed to opt
in to the project sometime before the end of 2011. Later in 2011, after Council approval of the
Long-term Electric Acquisition Plan (LEAP) and further evaluation of this project, staff may
March 01, 2011 Page 4 of 6
(ID # 1441)
recommend that the Council participate in a share of the $113/MWh-priced Third Phase
Agreement for GeoPower output.
At its meeting in February 2011, the UAC reviewed staff’s recommendation and agreed that the
Council should execute the Termination Agreement. The UAC also voted unanimously to
recommend option 2.b.(1): immediately entering into the new Third Phase Agreement at the
$113/MWh price for a maximum share of up to 15% of the project.
Preliminary Evaluation of the Western GeoPower Project at a Flat $113/MWh price
Staff has not had time to thoroughly evaluate the attributes of the agreement and the new
price of $113/MWh. A preliminary evaluation of how a 15% share of the Western GeoPower
project would impact Palo Alto’s resource mix, renewable resource portfolio, rates and RPS
targets can be found in Attachment F.
Staff’s Recommendation
Since it has been about 16 months since the City tested the renewable market independently
with an RFP, staff cannot say with certainty that the price offered for the Western GeoPower
project is the best available. In addition, although the UAC and the Finance Committee
recommend the Council approve the proposed updated Long-term Electric Acquisition Plan
(LEAP), the Council has not yet considered LEAP so approving the project is not consistent with
Council direction from May 2010 to re-examine the policies and goals used in the alternate
energy program, including energy efficiency plans and resource acquisition policies and plans
prior to making any further recommendations on the acquisition of new renewable resources.
Staff has a verbal agreement with Silicon Valley Power (SVP) to allow City to participate in the
Western GeoPower project if the participation commitment is made by the end of 2011. This
will permit an in depth analysis by staff and time to complete a thorough review and
recommendation.
Commission Review and Recommendation
On February 2, 2011, staff presented a recommendation to the UAC to execute the Termination
Agreement and to wait before deciding whether to agree to the new $113/MWh price for the
Western GeoPower project.
The UAC agreed with staff’s recommendation to execute the Termination Agreement as a
necessary step to allow the project to go forward. In addition, the UAC was in favor of
immediately executing a new Third Phase Agreement for the Western GeoPower project at the
$113/WMh price rather than wait to join the project at a later date, after a more thorough
evaluation and completion of outstanding planning activities, specifically the LEAP and Utilities
Strategic Plan updates.
The reasons commissioners provided for recommending moving forward now with the new
Third Phase Agreement included the following: the $113/MWh price appears to be very
competitive as it is essentially the same price as the landfill gas contracts Council approved last
March 01, 2011 Page 5 of 6
(ID # 1441)
year, the Western GeoPower project does not have the environmental issues regarding landfill
operation that were raised when those landfill gas contracts were approved, the Western
GeoPower project would add diversity to the renewable resource portfolio, which now contains
only wind and landfill gas projects, the project was previously approved by Council and the
price change is reasonable given what we know about the prices of renewable energy projects,
the project would move the City closer to achieving its RPS goals, adding the project to the
portfolio still leaves room for additional energy efficiency or local project that may occur as a
result of a future feed-in tariff program, there is no need to take more time to evaluate the
merits of this project or to issue another request for proposals to determine if the price is
competitive.
After discussion, the commission voted unanimously (6-0) to recommend that the Council
execute the Termination Agreement and enter into the new Third Phase Agreement at the
$113/MWh price at a participation level of up to 15% of the project. The draft notes from the
UAC’s February 2, 2011 meeting are available as Attachment F.
Resource Impact
Executing the Termination Agreement has no resource impact.
Policy Implications
Adoption of the Resolution authorizing the Termination Agreement has no policy implications.
Environmental Review
Execution of these agreements 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.
Attachments:
·Attachment A: Resolution Terminating Third Phase Agreement for Western GeoPower Inc
Renewable Energy Power Purchase Agreement (DOC)
·Attachment B: Agreement Terminating the Third Phase Agreement for Western GeoPower
Incorporated Renewable Energy Power Purchase Agreement (DOC)
·Attachment C: Draft 2011 Third Phase Agreement for Western GeoPower Inc. Renewable
Energy Power Purchase Agreement (DOC)
·Attachment D: 2008 Third Phase Agreement for Western GeoPower Incorporated
Renewable Energy Power Purchase Agreement (DOC)
·Attachment E: Excerpted draft notes from the UAC's February 2, 2011 meeting (DOC)
·Attachment F: Preliminary Evaluation of the new Western GeoPower Project (DOC)
March 01, 2011 Page 6 of 6
(ID # 1441)
Prepared By:Tom Kabat, Manager
Department Head:Valerie Fong, Director
City Manager Approval: James Keene, City Manager
Not Yet Approved
1
110223 jb 0073505
Resolution No ____
Resolution of the Council of the City of Palo Alto Approving
Agreement Terminating the Third Phase Agreement for
Western GeoPower Incorporated Renewable Energy Power
Purchase Agreement
WHEREAS, the City of Palo Alto (the “City”), a municipal utility and a chartered
city, is a member of the Northern California Power Agency (“NCPA”), and the City and other
NCPA members have collectively entered into a both a Power Purchase Agreement (the “PPA”)
with Western GeoPower Incorporated (“WGI”) A fully owned subsidiary of Ram Power Corp
for a term of twenty (20) years and at a price of $98.00 per megawatt-hour (“$98/MWh”)and a
Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable
Energy Power Purchase Agreement (the “TPA”), which TPA allocates all costs and benefits of the
PPA to participating NCPA members;and
WHEREAS, the underlying project has not been built since the financial crisis of
2009 interfered with WGI’s ability to finance the project at the cash flow provided by the
$98/MWh PPA; and
WHEREAS, WGI has subsequently been taken over by Ram Power Corp and is now
a fully owned subsidiary of Ram Power Corp; and
WHEREAS, WGI and NCPA have negotiated a new replacement PPA with a 25
year term and a $113/MWh price that is attractive to several NCPA members and would be
financeable to build the eligible renewable resource; and
WHEREAS, the City desires to complete certain electric resource planning work
prior to making new PPA commitments; and
WHEREAS, The City of Santa Clara’s electric utility has offered to initially
subscribe to all available shares and to subsequently amend their participation if requested before
December 31, 2011 to allow Palo Alto to subscribe to an up to 15% share of the project at that
time if the City then desires; and
WHEREAS, The City of Santa Clara’s electric utility does not require the City to
subscribe to a share of the project at any time; and
WHEREAS, The NCPA Commission, on January xx, 2011, approved the Agreement
Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy
Power Purchase; and
WHEREAS, The NCPA Commission, on February xx, 2011, approved the Renewable
Energy Power Purchase Agreement between Northern California Power Agency and Western
GeoPower Incorporated; and
Not Yet Approved
2
110223 jb 0073505
WHEREAS, The NCPA Commission, on March xx, 2011, approved the Third Phase
Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy
Power Purchase Agreement (the “new TPA”), which new TPA allocates all costs and benefits of
the PPA to participating NCPA members; and
WHEREAS, The City’s cooperation in terminating the Third Phase Agreement for
Western GeoPower Incorporated Renewable Energy Power Purchase Agreement is needed to
facilitate the replacement of the prior un-financeable $98/MWh PPA with a new financeable
$113/MWh PPA for participating members not including Palo Alto at this time;
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby approves Agreement Terminating the Third Phase
Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement
and delegates to the City Manager the authority to sign the contract on behalf of the City.
SECTION 2. The Council finds that the adoption of this resolution does not meet
the definition of a project under Section 21065 of the California Environmental Quality Act and,
therefore, no environmental assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
____________________________________________________________
City Clerk Mayor
APPROVED AS TO FORM:______________________________
City Manager
______________________________
Sr. Asst. City Attorney ______________________________
Director of Utilities
______________________________
Director of Administrative Services
AGREEMENT TERMINATING
THE THIRD PHASE AGREEMENT
FOR
WESTERN GEOPOWER INCORPORATED
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
THIS TERMINATION AGREEMENT (the “Agreement”) is entered into this ___ day of
_______, 2011 by and between the Northern California Power Agency, a joint powers agency of
the State of California (“NCPA”) and those of its Members who entered into the Third Phase
Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement
on May 6, 2008 (“Participants”)(collectively, the “Parties”).
RECITALS:
WHEREAS, on or about May 6, 2008, NCPA and the Participants executed the Third
Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase
Agreement (“Third Phase Agreement”);
WHEREAS, on May 16, 2008, NCPA executed a power purchase agreement (“PPA”)
with Western GeoPower Incorporated (“Western Geo”) to purchase the entire expected electric
output from a new Western Geo geothermal project (“Project”) located in the Geysers
Geothermal Field located in Sonoma and Lake Counties in the State of California;
WHEREAS, the purpose of the Third Phase Agreement was to provide the means
necessary for NCPA to be able to enter into the PPA on behalf of the Participants and to enable
and obligate the Participants to take delivery of and pay for such electricity as might be
generated by the Project;
WHEREAS, the price in the PPA for energy generated by the Project was $98 per
megawatt hour (“Project Price”);
WHEREAS, due to financial pressures, Western Geo was never able to build the Project,
and has stated that it is unable to provide energy to NCPA at the Project Price;
WHEREAS, Western Geo has proposed revising the PPA to reflect a change in the
Project Price to $113 per megawatt hour (“Amended Price”), and not all Participants wish to
participate in the Project for the Amended Price; and
WHEREAS, NCPA and the Participants have agreed to terminate the Third Phase
Agreement, and those Participants desiring that NCPA enter into an amended and restated PPA
(“Amended and Restated PPA”)with Western Geo for energy at the Amended Price will enter
into a new third phase agreement (“North Geysers Third Phase Agreement”)to cover any costs
and obligations associated with the Amended and Restated PPA on an ongoing basis.
NOW, THEREFORE, the Parties hereby agree as follows:
1564960.4 2
1.Termination of the Third Phase Agreement. The Third Phase Agreement, and all
rights and obligations of the Parties pursuant to the Third Phase Agreement, except such matters
as survive its termination, including without limitation Section 10.5 thereof (“Surviving
Obligations”), are hereby terminated effective as of the Effective Date.The Effective Date shall
be the Effective Date of the North Geysers Third Phase Agreement.
2.Mutual Release.Except as to the Surviving Obligations, which are not
waived or relinquished by the Parties, the Parties hereby release and discharge one another and
their successors and assigns, agents, employees and representatives from any and all obligations,
claims, actions and liabilities, whether past, present or future, of whatever character, known or
unknown, by reason of or existing in connection with the Third Phase Agreement (the “Settled
Obligations”). The Parties acknowledge that they have read and understand the terms of Section
1542 of the California Civil Code, which provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time
of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor.
The Parties hereby waive and relinquish all rights and benefits they, and each of them, may have
under Civil Code Section 1542 with respect to the Settled Obligations, and acknowledge that the
consequence of such waiver and relinquishment is that no Party may make a claim against
another Party for damages that may be discovered in the future with respect to the Settled
Obligations.
Initials:_________________
Participant Agency
4. Payment of Outstanding Costs by Participants. The Participants each agree to pay
or reimburse NCPA for any and all costs and expenses incurred to date under the Third Phase
Agreement, pursuant to each Participant’s Participation Percentages, as that term is defined in
the Third Phase Agreement.
5. Other Documents. Each Party shall cooperate fully in the execution of any and all
other documents and in the completion of any additional actions that may be necessary or
appropriate to give full force and effect to the terms and intent of this Agreement.
6.Amendment. This Agreement constitutes the entire agreement between the
Parties as to the subject matter hereof and may only be amended by a writing signed by all
Parties.
7.Invalidity. If any term, provision or application of this Agreement is held invalid
3
or unenforceable, the remainder of this Agreement and any application of the terms and
provisions shall not be affected thereby, but shall remain valid and enforceable.
8.Non-waiver.The waiver of any breach of any of the provisions of this Agreement
by either Party shall not constitute a continuing waiver or a waiver of any subsequent breach by
the other Party either of the same or of another provision of this Agreement.
9.Attorneys’Fees.Should any litigation, including arbitration proceedings, be
commenced between the Parties concerning this Agreement or the rights and duties of either of
the Parties in relation thereto, the party prevailing in such litigation or arbitration, in addition to
such other relief as may be granted in such proceeding, shall receive from the losing party a
reasonable sum as and for his attorney fees in the litigation or arbitration, the amount of which
shall be determined by the Court or the arbitrator.
10.Notices.Any notice required to be given pursuant to this Agreement, or desired
to be given in connection with this Agreement, shall be given in writing as provided in the Third
Phase Agreement.
11.Counterparts. This Agreement may be signed in counterparts and shall be
governed by and construed in accordance with the laws of the State of California.
12. Warranty of Authority. The Parties each hereby represent and warrant that
he/she/it has the authority to enter into this Agreement. Each signatory to this Agreement hereby
warrants that he/she is duly authorized to execute this Agreement on behalf of and as the lawful
act and deed of the entity for which he or she signs.
13.Governing Law/Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to principles of conflicts of
laws. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of
Placer County, California or in the Federal District Court for the Eastern District of California.
1564960.4 4
Executed at Placer County, California, on day and year first above set forth.
NORTHERN CALIFORNIA
POWER AGENCY
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF ALAMEDA
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF LOMPOC
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF PALO ALTO
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
PORT OF OAKLAND
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
5
BAY AREA RAPID TRANSIT AUTHORITY
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
TRUCKEE DONNER REPUBLIC UTILITY
DISTRICT
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF LODI
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF ROSEVILLE
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
SILICON VALLEY POWER
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
1
THIRD PHASE AGREEMENT
FOR
WESTERN GEOPOWER, INC. GEOTHERMAL PROJECT
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
DRAFT THIRD PHASE AGREEMENT
1563911.2 i
TABLE OF CONTENTS
Section………………………………………………………………………….…….Page
RECITALS..…......…………..……………………………………………1
1.Definitions…………………..……………………………………………2
2.Effectiveness of Agreement…………………………………………...8
3.Delivery of Electricity / Allocation of Resource Adequacy…………..
Capacity and Environmental Attributes…….…….………………….8
4.Cooperation and Further Assurances………….……………..….…….8
5.Payment Obligations, Security Account, Invoicing……….…….........9
6.Administration of Agreement………………………………………...13
7.Admission of New Participants………….…………………...……….14
8.Withdrawal of Participants……………………………………………15
9.Term and Termination………….……………………………………..15
10.Default and Remedies…...…………………………………………….16
11.Miscellaneous…………………………………………………………..20
EXHIBIT A RENEWABLE ENERGY POWER PURCHASE AGREEMENT
between NORTHERN CALIFORNIA POWER AGENCY and
WESTERN GEOPOWER INCORPORATED
EXHIBIT B PARTICIPATION PERCENTAGES
DRAFT THIRD PHASE AGREEMENT
1563911.2 i
This Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project
Renewable Energy Power Purchase Agreement (this “Agreement”) is between the Northern
California Power Agency, a joint powers agency of the State of California (“NCPA”) and those of
its Members who execute this Agreement (“Participants”). NCPA and the Participants are
referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
A.WHEREAS, NCPA and the Participants are interested in purchasing additional
renewable electric capacity and energy for the benefit of the Participants’ customers;and
B.WHEREAS, on or about May 6, 2008, NCPA and certain of its members executed
the “Third Phase Agreement for Western Geopower Incorporated Renewable Energy Power
Purchase Agreement”("the Previous Third Phase Agreement"), by which which NCPA agreed, on
behalf of those members executing the Previous Third Phase Agreement, to enter into a power
purchase agreement (“PPA”) with Western GeoPower, Inc. (“Western GeoPower”)to purchase the
entire expected Project Output from a new WesternGeoPower geothermal project located in the
Geysers Geothermal Field in the Mayacamas Mountains of Sonoma and Lake Counties in the State
of California (“the Project”); and
C.WHEREAS, on May 16, 2008, in conformance with the Previous Third Phase
Agreement, NCPA executed a PPA with Western GeoPower to purchase the entire expected
Project Output at a price of $98 per megawatt hour; and
D.WHEREAS, due to certain financial conditions, WesternGeoPower was unable to
build the Project and has proposed that the price for energy be increased, which proposal is
acceptable to NCPA and to the Participants, who desire that NCPA enter into a revised PPA with
Western GeoPower; and
1563911.2 2
E.WHEREAS, the Previous Third Phase Agreement has been terminated by an
Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated
Renewable Energy Power Purchase Agreement, dated _____________, 2011; and
F.WHEREAS, on _____,2011 NCPA and Western GeoPower propose to entere into an
Amended and Restated Renewable Energy Power Purchase Agreement (“Amended PPA”)by
which NCPA would agree to purchase the entire expected Project Output of the Project from
Western GeoPower at a price of $113 per megawatt hour;and
G.WHEREAS, NCPA and the Participants wish to enter into this Agreement to
provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the
Participants pursuant to the Amended PPA and to enable and obligate the Participants to take
delivery of and pay for such electricity and to pay NCPA for the costs of undertaking the foregoing
activities;
H.WHEREAS, NCPA and its members have (or will have) entered into the Facilities
Agreement, dated September 22, 1993, which provides for services which NCPA shall perform for
its members, and for the provisions to be contained in third phase agreements such as this
Agreement;
I.WHEREAS, NCPA and its members have (or will have) entered into the Scheduling
Coordination Program Agreement (“SCPA”), dated August 28, 2002, which provides for CAISO
scheduling services and cost allocations which NCPA shall perform for its members;
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and
covenants hereinafter set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree and intend to be legally bound, as
follows:
Section 1.Definitions.
1.1 Definitions.Whenever used in this Agreement (including the Recitals
hereto), the following terms shall have the following respective meanings:
1563911.2 3
1.1.1 “Agreement” means this Third Phase Agreement for Western
GeoPower, Inc. Geothermal Project, including all Exhibits attached hereto, as the same may be
amended from time to time in accordance with the terms and conditions hereof.
1.1.2 “Amended PPA” means the Amended and Restated Renewable
Energy Power Purchase Agreement between NCPA and Western GeoPower, Inc., dated as of
______, attached hereto as Exhibit A.
1.1.3 “Annual Budget” means the budget for the ensuing Budget Year
adopted by the Commission, as it may be amended from time to time.
1.1.4 “Associate Member” means an associate member of NCPA
admitted to NCPA in accordance with Article IV, Section 7 of the Joint Powers Agreement.
1.1.5 “Budget Year” means the NCPA fiscal year; currently the twelve
month period beginning July 1 and ending on the next following June 30.
1.1.6 “Business Day” means any day except a Saturday, Sunday, or a
Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local
time.
1.1.7 “Capacity Attributes” means any current or future defined
characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or
specific as to the location or any other attribute of the Project, intended to value any aspect of the
capacity of the Project to produce Energy or ancillary services, including, but not limited to, any
accounting construct so that the full capacity of the Project may be counted toward a resource
adequacy requirement or any other measure by the CPUC, the CAISO, the FERC, or any other
entity invested with the authority under federal or state law, to require NCPA to procure, or to
procure at NCPA’s expense, Resource Adequacy Capacity or other such products.
1.1.8 “Claims” has the meaning set forth in Section 11.2.
1.1.9 “Commission”means the NCPA Commission.
1563911.2 4
1.1.10 “Constitutive Documents” means, with respect to NCPA, the
Amended and Restated Joint Powers Agreement and any resolutions or bylaws adopted
thereunder, and with respect to each Participant, the California Government Code and Public
Utilities Code,and other statutory provisions applicable to such Participant, any applicable
agreements, charters, contracts or other documents concerning the formation, operation or
decision making of such Participant, including, if applicable, its City Charter, and any codes,
ordinances, bylaws, and resolutions adopted by such Participant’s governing body.
1.1.11 “Defaulting Party” has the meaning set forth in Section 10.1.
1.1.12 “Effective Date” has the meaning set forth in the Section 9 of this
Agreement.
1.1.13 “Electric System” means, with respect to each Participant, all
properties and assets, real and personal, tangible and intangible, of the Participant now or
hereafter existing, used or pertaining to the generation, transmission, transformation, distribution
or sale of electric capacity and energy, or the utilization of such, including all additions, extensions,
expansions, improvements and betterments thereto and equipment thereof; provided, however,
that to the extent the Participant is not the sole owner of an asset or property or to the extent that
an asset or property is used in part for the above described purposes, only the Participant’s
ownership interest in such asset or property or only the part of the asset or property used for
electric purposes shall be considered to be part of its Electric System.
1.1.14 “Energy” means the electricity generated by the Generating Facility
pursuant to this Agreement, as expressed in units of KWh or MWh as measured at the meter(s), as
that term is defined the PPA.
1.1.15 “Environmental Attributes" means any and all credits, benefits,
emissions reductions, offsets, and allowances, howsoever entitled, directly attributable to the
power purchase. 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),
1563911.2 5
methane (CH4) and other greenhouse gases (GHGs) that have been determined by the United
Nations Intergovernmental 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. Environmental Attributes do not
include: (1) any Energy, capacity, reliability or other power attributes; (2) production tax credits
associated with the construction or operation of the energy Projects and other financial incentives
in the form of credits, reductions, or allowances associated with the Project that are applicable to a
state or federal income taxation obligation;(3) fuel-related subsidies or "tipping fees" that may be
paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction
of particular pre-existing pollutants or the promotion of local environmental benefits; or (4)
emission reduction credits encumbered or used by the Unit(s) for compliance with local, state, or
federal operating and/or air quality permits.
1.1.16 “Event of Default” has the meaning set forth in Section 5.5.3 and
Section 10.1.
1.1.17 “Generating Facility” means Western GeoPowers, Inc.’s electricity
generating facility as more particularly described in Exhibit 2 [Description of Generating Facility]
of the Amended PPA, together with all materials, equipment systems, structures, features and
improvements necessary to produce electricity at such facility, specifically including the site, land
rights, mineral rights and interests in land.
1.1.18 “Joint Powers Agreement” means the Amended and Restated
Northern California Power Agency Joint Power Agreement dated January 1, 2008, establishing
NCPA, as the same may be amended from time to time.
1.1.19 “Member” means any Member of NCPA or Associate Member of
NCPA.
1.1.20 “MW” means megawatt.
1.1.21 “MWh” means megawatt hour.
1563911.2 6
1.1.22 “NCPA” has the meaning set forth in the preamble hereto.
1.1.23 “Participation Percentage” has the meaning, with respect to each
Participant,the percentage of the total capacity of the Project, and the Energy associated with such
capacity, to which such Participant is entitled pursuant to the terms of this Agreement. The Project
Participation Percentage for each Participant shall be in the percentage set forth in Exhibit B,
attached hereto and incorporated herein. Exhibit B shall be amended from time to time in
accordance with this Agreement.
1.1.24 “Project” refers to the Western Geopower project to develop,
finance, operate and maintain the Generating Facility which is the subject of the Amended PPA.
1.1.25 “Project Cost Allocation” means the Project Costs allocated to the
Participants in the Annual Budget.
1.1.26 “Project Costs” means any and all costs, directly or indirectly,
incurred by NCPA as a result of entering into the Amended PPA. Project costs include, but are not
limited to related legal fees and associated staff time, administrative and general overhead costs,
scheduling coordination costs, charges for transmission, transmission related costs and costs
associated with the Amended PPA or other NCPA associated Agreements, including the Facilities
Agreement and the SCPA or a successor agreement.
1.1.27 “Project Output” means all Energy generated pursuant to the
Amended PPA from the geothermal Project currently being developed by Western GeoPower in
conjunction with this Project,and related Environmental Attributes and Capacity Attributes;
1.1.28 “Participant” has the meaning set forth in the preamble hereto.
1.1.29 “Party” or “Parties” has the meaning set forth in the preamble
hereto; provided that “third parties” are entities that are not party to this Agreement.
1.1.30 “Resource Adequacy Capacity” is that capacity in MWs that has
been approved by each Participant as capacity available to ensure that adequate resources are
1563911.2 7
available to meet peak demand and operating and planning reserves for the purposes of local area
and system reliability.
1.1.31 “Revenues” means, with respect to each Participant, all income,
rents, rates, fees, charges, and other moneys derived by the Participant from the ownership or
operation of its Electric System, including, without limiting the generality of the foregoing, (a) all
income, rents, rates, fees, charges or other moneys derived from the sale, furnishing and supplying
of electric capacity and Energy and other services, facilities, and commodities sold, furnished, or
supplied through the facilities of its Electric System;(b) the earnings on and income derived from
the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use
of such earnings and income is limited by or pursuant to law to its Electric System;and (c) the
proceeds derived by the Participant, directly or indirectly, from the sale, lease or other disposition
of all or a part of the Electric System. The term “Revenues” shall not include:(i) customers’
deposits or any other deposits subject to refund until such deposits have become the property of
the Participant or (ii) contributions from customers for the payment of costs of construction of
facilities to serve them.
1.1.32 “Scheduling Protocols” means the applicable provisions of the
SCPA, or successor document and any other contractual or other arrangements between NCPA
and the relevant Participant concerning the scheduling, delivery and metering of the Amended
PPA.
1.1.33 “Security Account” means the account established by NCPA and
funded by the Participants in accordance with Section 5.3, the funds of which are available for use
by NCPA in accordance with the terms and conditions hereof.
1.1.34 “Term” has the meaning set forth in Section 9.
1.2 Rules of Interpretation. As used in this Agreement (including the Recitals
hereto), unless in any such case the context requires otherwise: the terms “herein,” “hereto,”
“herewith” and “hereof” are references to this Agreement taken as a whole and not to any
particular provision; the term “include,” “includes” or “including” shall mean “including, for
1563911.2 8
example and without limitation;” and references to a “Section,” “subsection,” “clause,” or
“Exhibit” shall mean a Section, subsection, clause or Exhibit of this Agreement, as the case may be.
All references to a given agreement, instrument or other document shall be a reference to that
agreement, instrument or other document as modified, amended, supplemented and restated
through the date as of which such reference is made, and reference to a law, regulation or
ordinance includes any amendment or modification thereof. A reference to a “person” includes
any individual, partnership, firm, company, corporation, joint venture, trust, association,
organization or other entity, in each case whether or not having a separate legal personality and
includes its successors and permitted assigns. The singular shall include the plural and the
masculine shall include the feminine, and vice versa.
Section 2.Effectiveness of Agreement.This Agreement shall be effective as to each
Participant as of the Effective Date upon execution by the Participant, as described in Section 9
below.
Section 3.Delivery of Electricity/Allocation of Resource Adequacy Capacity and
Environmental Attributes. By executing this Agreement, each Participant acknowledges and
agrees to be bound by the take-or-pay process contained in or referenced herein. Any electricity
delivered to NCPA under the PPA shall be delivered to each Participant in proportion to such
Participant’s Participation Percentage and each Participant shall accept and pay for its relevant
percentage of such Energy. To the extent Participant is unable to accept such deliveries in full,
NCPA shall dispose of such surplus in its discretion, in such a manner as to attempt to maximize
Participant value. Notwithstanding the above, NCPA may allocate capacity and Energy procured
through the Amended PPA among the Participants in such percentages as NCPA may, in its
reasonable discretion,determine are necessary, desirable, or appropriate, in order to accommodate
Participant Transfer Rights pursuant to Section 7, herein. Such Energy shall be scheduled for the
Participants in accordance with the Scheduling Protocols. Resource Adequacy Capacity and
Environmental Attributes obtained by NCPA as a result of performance under this Agreement
shall likewise be allocated to each Participant by its Participation Percentage.
1563911.2 9
3.1 Payments to Counterparty.NCPA shall pay all costs incurred hereunder
using operating funds or Security Account funds, paid to NCPA in accordance with Section 5, or
such other sources as may be agreed upon in writing by the Parties from time to time.
Section 4.Cooperation and Further Assurances.Each of the Parties agrees to provide such
information, execute and deliver any instruments and documents and to take such other actions as
may be necessary or reasonably requested by any other Party which are not inconsistent with the
provisions of this Agreement and which do not involve the assumption of obligations other than
those provided for in this Agreement, in order to give full effect to this Agreement and to carry out
the intent of this Agreement.
Section 5.Payment Obligations, Security Account, Invoicing.
5.1 Participant Payment Obligations.Each Participant agrees to pay to NCPA
each month its respective portion of the Project Costs. In addition, each Participant shall maintain
working capital in accordance with NCPA’s Annual Budget, and maintain its Security Account as
provided in this Agreement.
5.2 Calculation of and True-Up for Project Costs.Upon the conclusion of a
Budget Year,NCPA shall compare each Participant’s payment of estimated Project Costs with the
actual Project Costs incurred on behalf of each Participant such that overpayments will be credited
to, and underpayments will debited to,the Participant’s account in accordance with NCPA’s
Annual Budget settlements.
5.3 Security Account.
5.3.1 Initial Amounts. NCPA shall notify each Participant three (3)
months prior to the expected initial delivery of Energy of the initial security amounts which
Participant shall be obligated to pay for under this Agreement. Each Participant shall ensure that
sufficient funds are on deposit in the Security Account equal to the highest (3) months of the
immediately following (12) months of estimated Project Costs; provided, however, that such
deposit may be satisfied, in whole or in part, either in cash,by posting an irrevocable standby letter
of credit or furnishing any other negotiable instrument satisfactory to NCPA’s General Manager,
1563911.2 10
exercising his or her reasonable discretion. Such Security Account will be seaprate and apart from
any other security account held by NCPA on behalf of a Participant.
5.3.2 Subsequent Deposits.Periodically, and at least quarterly, NCPA
shall review and revise its estimate of all costs for which each Participant shall be obligated to pay
for under this Agreement for the succeeding twelve (12) months. Following such review, NCPA
shall determine whether each Participant has a sufficient balance in the Security Account. To the
extent that any Participant’s balance in the Security Account is greater than one hundred and ten
percent (110%) of the amount required herein, NCPA shall credit such amount as soon as
practicable to the Participant’s next following invoice. To the extent that any Participant’s balance
in the Security Account is less than ninety percent (90%) of the amount required herein, NCPA
shall add such amount as soon as practicable to such Participant’s next invoice. Credits or
additions shall not be made to Participants who satisfy these Security Account requirements in
whole, through the use of a letter of credit, provided that the amount of the letter of credit shall be
adjusted in a like manner to assure an amount equal to the highest three (3) months of estimated
Project Costs.
5.3.3 Use of Security Account Funds.NCPA may use any and all funds
deposited into the Security Account to pay any costs it incurs hereunder, including making
payments to the counterparty under the Amended PPA. NCPA may use any and all funds
without regard to any individual Participant’s balance in the Security Account or proportionate
share of Project Costs and irrespective of whether NCPA has issued an invoice for such costs to the
Participants or whether a Participant has made timely payments of invoices. Should a Participant
have satisfied its Security Account requirements, in whole or in part, by posting a letter of credit,
NCPA may draw on such letter of credit to satisfy Participant’s obligations hereunder.
5.3.4 Emergency Additions.In the event that the funds are withdrawn
pursuant to section 5.3.3, or if the Security Account is insufficient to allow payment of an invoice,
demand, request for further assurances by third parties, or Claims,NCPA shall notify all
Participants and then prepare and send a special or emergency assessment to the Participants.
Each Participant shall pay to NCPA such assessment when and if assessed by NCPA within two
1563911.2 11
(2) Business Days of the invoice date of the assessment or consent to and direct NCPA to draw on
any existing letter of credit Participant has established for such purposes.
5.3.5 Accounting and Interest.NCPA shall maintain a detailed
accounting of each Participant’s deposits into and shares of withdrawals from the Security
Account. Interest earned on the Security Account shall be proportionately credited to the
Participants in accordance with their Security Account balances. Any losses in the Security
Account caused by early termination of investments shall be allocated among the Participants in
accordance with their proportionate Participation Percentages.
5.3.6 Return of Funds. On the termination of this Agreement with
respect to a Participant in accordance with this Agreement, the affected Participant or Participants
may apply to NCPA for the return of their share of Security Account funds ninety (90) days after
the effective date of such termination or withdrawal. NCPA shall, in its sole discretion, as
determined by the General Manager, estimate the then outstanding liabilities of the Participant(s),
including any estimated contingent liabilities and shall retain all such funds until all such liabilities
have been fully paid or otherwise satisfied in full. The balance of the Participant’s share of the
Security Account will be refunded to the Participant.
5.3.7 Default Relating to Security Account.In addition to any
other remedy available in this Agreementor in law or equity, in the event of an Event of
Default relating to the Security Account, NCPA shall have those rights provided in Section
10.4.4 and the Participant agrees to take the actions specified in that section to cause such
Event of Default.
5.4 Invoicing.
1563911.2 12
5.4.1 Invoices.As part of NCPA’s regular, monthly, advance billing or
by separate special invoice, as required in the circumstances, NCPA will issue an invoice to each
Participant for its proportionate share of the Project Costs due (or any adjustments thereto) based
on Sections 5.1 and 5.2 above. Such invoices may include estimated costs and estimated settlement
and meter data. Each invoice shall include: (i) the total Project Costs attributable to the activities
under this Agreement for such month and the relevant Participant’s share thereof; (ii) the quantity
of Energy, Resource Adequacy Capacity and Environmental Attributes delivered to such
Participant (or an estimate thereof) and the unit price for such Energy; (iii) appropriate settlement
and meter data (or an estimate thereof);and (iv)any adjustments to prior invoices required based
on actual data received that was estimated in a previous invoice. NCPA may also invoice an
amount, if any, that NCPA has paid or reasonably expects to pay using funds available in the
Security Account; and amounts due from (or credited to) such Participant under Section 5.3.2.
5.4.2 Payment of Invoices.All invoices delivered by NCPA hereunder
are due and payable on the date indicated on such invoice;provided, however, that any amount
due on a day other than a Business Day may be paid on the following Business Day. NCPA may
apply a Participant’s share of the Security Account to the payment of all or any portion of an
invoice issued to such Participant, provided that application of such funds from the Security
Account shall not relieve the Participant from any late payment charges pursuant to Section 5.4.3.
To the extent that NCPA applies funds from the Security Account to pay an amount due under an
invoice, following receipt of payment of such invoice by the relevant Participant, NCPA shall
deposit the relevant portion of the payment into the Security Account and credit such deposit to
such Participant.
5.4.3 Late Payments.Any amount due and not paid by a Participant in
accordance with Section 5.4.2 shall bear interest computed on a daily basis until paid at the lesser
of (i) the per annum prime rate (or reference rate) of the Bank of America NT&SA then in effect,
plus two percent (2%) or (ii) the maximum rate permitted by law.
5.5 Settlement Data and Examination of Books and Records.
1563911.2 13
5.5.1 Settlement Data.NCPA will make metering and settlement data
available to the Participants. Procedures and formats for the provision of such data will be as
established by the Participants and NCPA from time to time.
5.5.2 Examination of Books and Records.Any Participant to this
Agreement shall have the right to examine the books and records created and maintained by
NCPA pursuant to this Agreement at any reasonable, mutually agreed upon time.
5.5.3 Revenue Covenant. Any failure of a Participant to meet its
obligations hereunder or to cure such failure in a timely manner shall constitute an Event of
Default and the Defaulting Party shall be subject to such remedies of NCPA as provided for herein.
Each Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric
department revenues only, its percentage share of the costs authorized by Participants in
accordance with this Agreement in connection with its participation in the Project. Each
Participant further agrees that it will fix the rates and charges for services provided by its electric
department, so that it will at all times have sufficient money in its department revenue funds to
meet this obligation; (ii) to make payments under this Agreement from the Revenues of, and as an
operating expense of, its Electric System; (iii) to make payments under this Agreement whether or
not there is an interruption in, interference with, or reduction or suspension of services provided
under this Agreement; such payments not being subject to any reduction, whether by offset or
otherwise, and regardless of whether any dispute exists provided such interruption, interference
or reduction in services is caused by forces constituting a force majeure1 and not reasonably
contemplated by the Parties; and (iv) to operate its Electric System in an efficient manner and to
maintain its facilities in good repair, condition and working order so that: (a) the Participant’s
obligations to make payments under this Agreement are not adversely affected or threatened; and
(b) NCPA’s bond rating and ability to negotiate and enter into a PPA are not adversely affected or
threatened.
Section 6.Administration of Agreement
1 For the purposes of Section 5.5.3, a force majeure shall be defined as any natural disaster or uncontrollable
force not preventable by any human agency, such as, but not limited to, any storm, flood, or violent or
destructive natural force.
1563911.2 14
6.1 General.The NCPA Commission has sole overall responsibility and
authority for the administration of this Agreement. Any acts, decisions or approvals taken, made
or sought by NCPA under this Agreement shall be taken, made or sought, as applicable, in
accordance with NCPA’s Constitutive Documents and Section 6.2.
6.2 Action by Participating Members.
(a)Forum. Whenever any action anticipated by this Agreement is
required to be taken by the Participants, such actions shall be taken at a regular or special meeting
of the NCPA Commission but shall be participated in only by those Commissioners, or their
designated alternates, who are Participants.
(b) Quorum. A quorum at NCPA Commission meetings for purposes of
acting upon matters relating to this Agreement shall consist of Commissioners, or their designated
alternates,representing at least two Participants having a combined majority interest based upon
Participation Percentages.
(c) Voting. Each Participant shall have the right to cast one vote with
respect to matters pertaining to this Agreement, with a majority vote of the Participating Members
required for action subject to the following exceptions:
(i)Upon request of any Participant representative, the voting on
an issue related to this Agreement shall be by Participation Percentage with a 65% or more
favorable vote necessary to carry the action. The 65% required by the preceding sentence shall be
reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but shall
not be reduced below a majority interest.
(ii)After any decision related to this Agreement is taken by the
affirmative vote of less than 65% of the Participation Percentage, the action may be reviewed and
revised if a Participant gives notice of intention to seek such review and revision to NCPA and
each of the other Participants within ten (10) days following the date on which such action was
taken. Upon receipt of such a request for reconsideration, NCPA shall agendize the matter for
reconsideration at the next regular meeting of the Commission or at a special meeting if the
circumstances so warrant. The action shall be upheld upon the affirmative vote by Participation
Percentage of not less than 65%. Any action taken upon reconsideration shall be final.The vote of
1563911.2 15
65% of the Participation Percentage required by the previous sentence may be reduced by the
amount that the Participation Percentage of any Participant exceeds 35%, but shall not be reduced
below a majority interest.
(iii) Participants agree to abide by the terms and conditions of
NCPA’s Facilities Agreement,as it may be amended from time-to-time. Any Participants who are
not currently signatories to the Facilities Agreement agree to become signatories within thirty (30)
days of the date of this Agreement.
Section 7.Admission of New Participants. Following the Effective Date of this Agreement,
no Member (“Additional Member”) may execute this Amended Agreement and become a
Participant unless one or more of the Participants (“Allocating Participants”) elect to allocate a
portion of its Participant Percentage to such Member. Upon agreement of the Allocating
Participant and the Additional Member, the Additional Member shall deliver to NCPA and each
other Participant the written agreement between the Additional Member and the Allocating
Participant(s) indicating the agreed upon change in Participation Percentage(s), a counterpart of
this Agreement executed by the Additional Member, evidence that such agreements have been
approved in accordance with its applicable Constitutive Documents and payment of such
Member’s share of the Security Account. Any reduction in any Allocating Participant’s share of
the Security Account shall be credited to the Allocating Participants in accordance with Section 5.3.
Upon receipt of all required documents, NCPA shall provide to all Participants an updated Exhibit
B reflecting the revised Participation Percentages.
Section 8.Withdrawal of Participants. No Participant may withdraw from this Agreement
after the Effective Date.
Section 9.Term and Termination.
9.1 This Agreement shall become effective on the Effective Date when it has been
executed and delivered to NCPA by Participants, the Participation Percentages of which, in the
aggregate, equal at least 65% participation in the Project. NCPA shall provide written notices to all
Participants,establishing the Effective Date. The remaining Participants listed in Exhibit B shall
have forty-five (45)days, following the notice of the Effective Date to execute and deliver
1563911.2 16
counterparts of this Agreement to NCPA. If any Participants listed on Exhibit B fails to execute and
deliver this Agreement or the Facilities Agreement within such forty-five (45)days, unless
otherwise agreed to by the Participants who have executed the Agreement, the Participating
Percentages of such member or members shall be allocated to those Participants in proportion to,
but not exceeding, their Participation Percentages.
9.2 This Agreement shall be coterminous with the Amended PPA contained in
Exhibit A.
9.3 This Agreement may be terminated by the Parties if NCPA successfully
exercises its right of first refusal to purchase the entire Western GeoPower Project as set forth in
Section 3.5(a)of the Amended PPA. In the event of termination pursuant to this Section 9.2, the
Participants shall pay to NCPA all previously unpaid costs and obligations incurred as of the date
of such termination. Following such termination, the Participants shall cooperate and act in good
faith to negotiate and agree upon the method of allocating among the Participants,in proportion to
their respective Participation Percentages the costs and benefits of the Amended PPA and any
financing agreements or commitments and any matters pertaining to the administration,
management, control, operation and maintenance of the Amended PPA, including, but not limited
to,re-subscribing the Project capacity with additional NCPA Members or non-Member
participants. NCPA shall reasonably cooperate with the Participants and other NCPA Members in
connection with implementing the foregoing,and the Participants shall indemnify NCPA for any
costs and obligations incurred in connection therewith, including reasonable attorneys' fees, fees
and expenses of other experts, including auditors and accountants and other reasonable and
necessary costs.
Section 10.Default and Remedies
10.1 Events of Default.An Event of Default under this Agreement shall exist
with respect to a Party (the “Defaulting Party”) upon the occurrence of any one or more of the
following:
1563911.2 17
(i) if any Party fails to make any payment or to provide assurances as
required of NCPA under this Agreement when due hereunder two (2) Business Days after receipt
of notice given by NCPA of such non-payment; or
(ii) the failure of the Defaulting Party to perform any other covenant or
obligation under this Agreement where such failure is not cured within ten (10) calendar days
following receipt of a notice from NCPA demanding cure (provided that this shall not apply to any
failure to make payments (which is covered by Section 10.1 (i)); or
(iii)if any representation or warranty of the Defaulting Party material to
the transactions contemplated hereby is or shall prove to have been incorrect in any material
respect when made and the Defaulting Party does not cure the facts underlying such incorrect
representation or warranty so that the representation or warranty becomes true and correct within
ten (10) calendar days of the date of receipt of notice from any other Party demanding cure; or
(iv)if a Participant is in default or in breach of any of its covenants
under any other agreement with NCPA and such default or breach is not cured within the time
period(s)specified in such agreement or, if not specified, within ten (10) calendar days of the date
of receipt of notice; or
(v) the failure of NCPA to perform any covenant or obligation under this
Agreement within ten (10) calendar days following the delivery of a notice to cure by any non-
defaulting Member.
10.2 Cure of an Event of Default.An Event of Default shall be deemed cured
only if such default shall be remedied within the time period specified in Section 10.1, above, as
may be applicable after written notice has been sent to the Defaulting Party from NCPA specifying
the default and demanding that the same be remedied;provided,that failure of a Party to provide
such notice shall not be deemed a waiver of such default.
10.3 Participation Rights Of Defaulting Party.Notwithstanding anything herein
to the contrary, upon the occurrence of an Event of Default and until such Event of Default is
cured, a Participant that is the Defaulting Party shall not have the right to participate under Section
6.2 on any matters with respect to this Agreement.
10.4 Remedies in the Event of Default.
1563911.2 18
10.4.1 Upon the occurrence of an Event of Default where a Participant is
the Defaulting Party, without limiting its other rights or remedies available under this Agreement,
at law or in equity, and without constituting or resulting in a waiver, release or estoppels of any
right, action or cause of action NCPA or a non-defaulting Participant may have against the
Participant, NCPA may:
(i) suspend the provision of goods and/or services under this
Agreement to such Defaulting Party, including the delivery of Energy and other attributes of the
Amended PPA until the Event of Default is cured; and
(ii) demand that the Defaulting Party provide further assurances to
compel the correction of the default, including mandating the collection of a surcharge to produce
Revenues to secure the cure of the Event of Default; and
(iii)terminate this Agreement as to the Defaulting Party on ten (10) days
prior written notice to the Defaulting Party and following approval of the non-defaulting
Participants.
10.4.2 Sale/Transfer of Participants Account Upon Default.Upon any
default of a Participant caused by the failure of such Participant to pay any sums due, and
provided that such default is not cured in a timely manner, then NCPA shall use its best efforts to
sell and transfer for the Defaulting Party’s account all or a portion of the Participant’s capacity
and/or Energy and/or Environmental Attributes for the remainder of the term of this Agreement.
Notwithstanding that all or any portion of the Participant’s capacity, energy or environmental
attributes may be so sold or transferred, the Participant shall remain liable for all of its obligations
hereunder.
10.4.3 Remedies of Participants.Upon the occurrence of an Event of
Default, and following the applicable cure periods, where NCPA is the Defaulting Party, the
Participant may, without limiting their other rights or remedies available under this Agreement, at
law or in equity, and without constituting or resulting in a waiver, release or estoppel of any right,
1563911.2 19
action or cause of action the Participants may have against NCPA, bring such action as may be
applicable to compel performance by NCPA.
10.4.4 Special Covenants Regarding Security Account.In the event that a
Participant’s balance of the Security Account is insufficient to cover all invoices for costs incurred
under this Agreement sent to such Participant, then, without limiting NCPA’s other rights or
remedies available under this Agreement, at law or in equity, such Participant shall cooperate in
good faith with NCPA and shall cure said default within thirty (30) days, on an emergency basis,
taking all such action as is necessary, including, but not limited to, raising rates and charges to its
customers to increase its Revenues to replenish its share of the Security Account as provided
herein, drawing on its cash-on-hand and lines of credit, obtaining further assurances by way of
credit support and letters of credit, and taking all such other action as will cure the default.
10.5 Effect of Termination or Suspension.
10.5.1 The suspension or termination of this Agreement will not
terminate, waive, or otherwise discharge any ongoing or undischarged contingent liabilities or
obligations arising from this Agreement until such obligations are satisfied in full, and all of the
costs incurred by NCPA in connection with such suspension or termination, including reasonable
attorneys' fees, the fees and expenses of other experts, including auditors and accountants, other
costs and expenses that NCPA is entitled to recover under this Agreement, and other reasonable
and necessary costs associated with any and all of the remedies, are paid in full.
10.5.2 Suspension by NCPA.If performance of all or any portion of this
Agreement is suspended by NCPA with respect to a Participant in accordance with Section
10.4.1(i), such Participant shall pay any and all costs and obligations incurred by NCPA as a result
of such suspension, including reasonable attorneys' fees, the fees and expenses of other experts,
including auditors and accountants, other reasonable and necessary costs associated with such
suspension and any portion of the Project Costs that were not recovered from such Participant as a
result of such suspension.
1563911.2 20
10.5.3 Termination by NCPA.If this Agreement is terminated by NCPA
with respect to a Participant in accordance with Section 10.4.1 (iii),such Participant shall pay any
and all costs and obligations incurred by NCPA as a result of such termination including
reasonable attorneys' fees, the fees and expenses of other experts, including auditors and
accountants, other reasonable and necessary costs associated with such termination and any
portion of the Project Costs that were not, or will not be, recovered from such Participant as a
result of such termination; provided, however, if NCPA terminates this Agreement with respect to
the last Participant, then this Agreement shall terminate.
10.5.4 Termination by Participants. This Agreement may be terminated
by unanimous consent of all of the Parties hereto. In that event,the Participants shall pay to NCPA
all previously unpaid costs and obligations incurred as of the date of such termination,and
following such termination, the Participants shall cooperate and act in good faith to negotiate and
agree upon the method of allocating among the Participants in proportion to their respective
Participation Percentages the costs and benefits of the Amended PPA and any financing
agreements or commitments and any matters pertaining to the administration, management,
control, operation and maintenance of the Amended PPA. NCPA shall reasonably cooperate with
the Participants in connection with implementing the foregoing and the Participants shall
indemnify NCPA for any costs and obligations incurred in connection therewith, including
reasonable attorneys' fees, fees and expenses of other experts, including auditors and accountants
and other reasonable and necessary costs. If the Parties are unable to reach agreement as to the
foregoing, then the Parties agree to submit the matter to mediation with a mutually agreed upon
mediator. If the Parties are still unable to reach agreement following mediation, then the matter
shall be submitted to binding arbitration subject to the rules of the American Arbitration
Association, the costs of such arbitration being borne proportionally among the Participants.
Section 11.Miscellaneous.
11.1 Confidentiality.The Participants and NCPA will keep confidential all
confidential or trade secret information made available to them in connection with this Agreement,
to the extent possible, consistent with applicable laws, including the California Public Records Act.
1563911.2 21
It shall be the responsibility of the holder of the claim of confidentiality or trade secret to defend at
its expense against any request that such information be disclosed. Confidential or trade secret
information shall be marked or expressly identified as such.
11.2 Indemnification and Hold Harmless.Subject to the provisions of Section
11.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its Members,
including their respective governing officials, officers, agents, and employees, from and against
any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature,
including reasonable attorneys’ fees and the costs of litigation, including experts (“Claims”),to the
extent caused by any acts, omissions, breach of contract, negligence (active or passive), gross
negligence, recklessness, or willful misconduct of a Participant, its governing officials, officers,
employees, subcontractors or agents, to the maximum extent permitted by law.
11.3 Several Liabilities.No Participant shall be liable under this Agreement for
the obligations of any other Participant, and each Participant shall be solely responsible and liable
for performance of its obligations under this Agreement, except as otherwise provided for herein,
and the obligation of each Participant under this Agreement is a several obligation and not a joint
obligation with those of the other Participants.
11.4 No Consequential Damages.FOR ANY BREACH OF ANY PROVISION OF
THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS
PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE
LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES
ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS EXPRESSLY
PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED TO ACTUAL
DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE HEREBY WAIVED. IN
NO EVENT SHALL NCPA OR ANY PARTICIPANT OR THEIR RESPECTIVE SUCCESSORS,
ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS, AGENTS,OR EMPLOYEES BE LIABLE
FOR ANY LOST PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE
OR INCIDENTAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE, LOSS OF GOODWILL,
LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS
1563911.2 22
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NCPA AND EACH
PARTICIPANT EACH HEREBY WAIVES SUCH CLAIMS AND RELEASES EACH OTHER AND
EACH OF SUCH PERSONS FROM ANY SUCH LIABILITY.
The Parties acknowledge that California Civil Code section 1542 provides that: “A general release
does not extend to claims which the creditor does not know or suspect to exist in his or her favor at
the time of executing the release, which if known by him or her must have materially affected his
or her settlement with the debtor.” The Parties waive the provisions of section 1542, or other
similar provisions of law, and intend that the waiver and release provided by this section of this
Agreement shall be fully enforceable despite its reference to future or unknown claims.
11.5 Amendments.Except where this Agreement specifically provides
otherwise, this Agreement may be amended only by written instrument executed by the Parties
with the same formality as this Agreement.
11.6 Severability.In the event that any of the terms, covenants or conditions of
this Agreement or the application of any such term, covenant or condition, shall be held invalid as
to any person or circumstance by any court having jurisdiction, all other terms, covenants or
conditions of this Agreement and their application shall not be affected thereby, but shall remain
in force and effect unless the court holds that such provisions are not severable from all other
provisions of this Agreement.
11.7 Governing Law.This Agreement shall be interpreted, governed by, and
construed under the laws of the State of California.
11.8 Headings.All indices, titles, subject headings, section titles and similar
items are provided for the purpose of convenience and are not intended to be inclusive, definitive,
or affect the meaning of the contents of this Agreement or the scope thereof.
11.9 Notices.Any notice, demand or request required or authorized by this
Agreement to be given to any Party shall be in writing, and shall either be personally delivered to a
Participant and the Secretary of the Commission or transmitted to the Participant and the Secretary
of the Commission at the address shown on the signature pages hereof. The designation of such
1563911.2 23
address may be changed at any time by written notice given to the Secretary of the Commission
who shall thereupon give written notice of such change to each Participant.
11.10 Warranty of Authority.Each Participant, and NCPA, represents and
warrants that it has been duly authorized by all requisite approval and action to execute and
deliver this Agreement and that this Agreement is a binding, legal, and valid agreement
enforceable in accordance with its terms as to the Participant and as to NCPA. Upon execution of
this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of such
Participant, evidencing approval of and authority to enter into this Agreement, that such authority
was duly exercised in accordance with such Participant’s Constitutive Documents.
11.11 Counterparts.This Agreement may be executed in any number of
counterparts, and each executed counterpart shall have the same force and effect as an original
instrument and as if all the signatories to all of the counterparts had signed the same instrument.
Any signature page of this Agreement may be detached from any counterpart of this Agreement
without impairing the legal effect of any signatures thereon, and may be attached to another
counterpart of this Agreement identical in form hereto but having attached to it one or more
signature pages.
11.12 Assignment.Except as provided by Section 7,no Participant may assign or
otherwise transfer its interest in its Participation Percentage or any other rights and obligations
under this Agreement without the express written consent of NCPA, which shall not be
unreasonably withheld.
11.13 Exercise of the Right of First Refusal. The Parties contemplate that NCPA
may exercise an option to purchase the underlying assets of the Amended PPA as per the voting
procedures of this Agreement outlined in Section 6. Participation in any such purchase shall be in
accordance with the then existing Participation Percentages, unless such Participation Percentages
are otherwise agreed upon by the Participants. At such time as NCPA exercises its right of first
refusal, this Agreement shall be amended to reflect the purchase of the underlying assets and the
Project.
11.14 List of Exhibits.The Exhibits referenced herein shall be denoted as follows:
1563911.2 24
Exhibit A -AMENDED AND RESTATED RENEWABLE ENERGY POWER PURCHASE
AGREEMENT BETWEEN THE NORTHERN CALIFORNIA POWER AGENCY
AND WESTERN GEOPOWER INCORPORATED
Exhibit B -PARTICIPATION PERCENTAGES
1563911.2
IN WITNESS WHEREOF, each Participant has executed this Agreement with the approval of its
governing body, and NCPA has authorized this Agreement in accordance with the authorization
of its Commission.
NORTHERN CALIFORNIA
POWER AGENCY
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF LOMPOC
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF ROSEVILLE
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
CITY OF SANTA CLARA
By:
Title
Date:
Approved as to Legal Form
By:
Its: Attorney
Date:
1
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
THIRD PHASE AGREEMENT
FOR
WESTERN GEOPOWER INCORPORATED
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
2
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
TABLE OF CONTENTS
Section………………………………………………………………………….…….Page
RECITALS..…......…………..……………………………………………3
1.Definitions…………………..……………………………………………4
2.Effectiveness of Agreement…………………………………………...10
3.Delivery of Electricity / Allocation of Resource Adequacy…………..
Capacity and Environmental Attributes…….……………………….11
4.Cooperation and Further Assurances……………………….……….11
5.Payment Obligations, Security Account, Invoicing……..…….........12
6.Administration of Agreement………………………………………...16
7.Transfer of Rights by Participants…………………………...……….18
8.Withdrawal of Participants……………………………………………18
9.Term and Termination………….……………………………………..18
10.Default and Remedies…...…………………………………………….19
11.Miscellaneous…………………………………………………………..23
EXHIBIT A
EXHIBIT B
3
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
This Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power
Purchase Agreement is between the Northern California Power Agency, a joint powers agency
of the State of California (“NCPA”) and those of its Members who execute this Agreement
(“Participants”). NCPA and the Participants are referred to herein individually as a “Party”
and collectively as the “Parties”.
RECITALS
A.WHEREAS, NCPA and the Participants are interested in purchasing additional
renewable electric capacity and energy for the benefit of the Participants’ customers:
B.WHEREAS, The Participants desire that NCPA negotiate and enter into a
renewable energy power purchase agreement (PPA) with the Western GeoPower Incorporated
("Western GeoPower") for twenty (20) years;and
C.WHEREAS, NCPA has executed a .PPA with Western GeoPower to purchase the
entire expected Project Output from a new Western GeoPower geothermal project (“Project”)
located in the Geysers Geothermal Field located in Mayacamas Mountains of Sonoma and Lake
Counties in the State of California; and
D.WHEREAS, NCPA, on behalf of the Participants, will purchase the Project
output of for at a fixed price not to exceed ninety-eight dollars ($98.00) per megawatt hour for
the initial term of twenty (20) years; and
E.WHEREAS, NCPA and the Participants wish to enter into this Agreement to
provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the
Participants pursuant to the PPA and to enable and obligate the Participants to take delivery of
and pay for such electricity and to pay NCPA for the costs of undertaking the foregoing
activities; and
4
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
F.WHEREAS, NCPA and its members have (or will have) entered into the Facilities
Agreement,dated September 22, 1993,which provides for services which NCPA shall perform
for its members, and for the provisions to be contained in third phase agreements such as this
Agreement.
G.WHEREAS, NCPA and its members have (or will have) entered into the
Scheduling Coordination Program Agreement (“SCPA”),dated August 28, 2002, which
provides for CAISO scheduling services and cost allocations which NCPA shall perform for its
members.
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and
covenants hereinafter set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree and intend to be legally bound,
as follows:
Section 1.Definitions
1.1 Definitions.Whenever used in this Agreement (including the Recitals
hereto), the following terms shall have the following respective meanings:
1.1.1 “Agreement” means this NCPA Third Phase Agreement for
Western GeoPower Incorporated Renewable Energy Power Purchase Agreement, including all
Exhibits attached hereto, as the same may be amended from time to time in accordance with the
terms and conditions hereof.
1.1.2 “Annual Budget” means the budget for the ensuing Budget
Year adopted by the Commission, as it may be amended from time to time.
1.1.3 “Associate Member” means an associate member of NCPA
admitted to NCPA in accordance with Article IV, Section 7 of the Joint Powers Agreement.
5
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
1.1.4 “Budget Year” means the NCPA fiscal year; currently the twelve
month period beginning July 1 and ending on the next following June 30.
1.1.5 “Business Day” means any day except a Saturday, Sunday, or a
Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m.
local time.
1.1.6 "Capacity Attributes” means any current or future defined
characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or
specific as to the location or any other attribute of the Project, intended to value any aspect of
the capacity of the Project to produce Energy or ancillary services, including, but not limited to,
any accounting construct so that the full Contract Capacity of the Project may be counted
toward a Resource Adequacy Requirement or any other measure by the CPUC, the CAISO, the
FERC, or any other entity invested with the authority under federal or state law, to require
Buyer to procure, or to procure at Buyer’s expense, Resource Adequacy or other such products.
1.1.7 “Claims” has the meaning set forth in Section 11.2.
1.1.8 "Commission” means the NCPA Commission.
1.1.9 Not Applicable under this Agreement.
1.1.10 “Constitutive Documents” means, with respect to NCPA, the
Joint Powers Agreement and any resolutions or bylaws adopted thereunder, and with respect to
each Participant, the California Government Code and other statutory provisions applicable to
such Participant, any applicable agreements, charters, contracts or other documents concerning
the formation, operation or decision making of such Participant, including, if applicable, its City
Charter, and any codes, ordinances, bylaws, and resolutions adopted by such Participant’s
governing body.
1.1.11 Not applicable under this Agreement.
6
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
1.1.12 “Defaulting Party” has the meaning set forth in Section 9.1.
1.1.13 “Not applicable under this Agreement”
1.1.14 “Effective Date” has the meaning set forth in the Section 9 of this
Agreement.
1.1.15 “Electric System” means, with respect to each Participant except
the San Francisco Bay Area Rapid Transit District (“BART”), all properties and assets, real and
personal, tangible and intangible, of the Participant now or hereafter existing, used or
pertaining to the generation, transmission, transformation, distribution or sale of electric
capacity and energy, or the utilization of such, including all additions, extensions, expansions,
improvements and betterments thereto and equipment thereof; provided, however, that to the
extent the Participant is not the sole owner of an asset or property or to the extent that an asset
or property is used in part for the above described purposes, only the Participant’s ownership
interest in such asset or property or only the part of the asset or property used for electric
purposes shall be considered to be part of its Electric System.
1.1.16 “Environmental Attributes" means any and all credits, benefits,
emissions reductions, offsets, and allowances, howsoever entitled, directly attributable to the
power purchase. 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 Intergovernmental 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.
Environmental Attributes do not include: (1) any energy, capacity, reliability or other power
attributes; (2) production tax credits associated with the construction or operation of the energy
7
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
Projects and other financial incentives in the form of credits, reductions, or allowances
associated with the Project that are applicable to a state or federal income taxation obligation:
(3) fuel-related subsidies or "tipping fees" that may be paid to Seller to accept certain fuels, or
local subsidies received by the generator for the destruction of particular pre-existing pollutants
or the promotion of local environmental benefits; or (4) emission reduction credits encumbered
or used by the Unit(s) for compliance with local, state, or federal operating and/or air quality
permits.
1.1.17 “Event of Default” has the meaning set forth in Section 5.5.3 and
Section 10.1.
1.1.18 “Joint Powers Agreement” means that certain Northern
California Power Agency Joint Power Agreement first made July 19, 1968 and revised as of
April 1, 1973, establishing NCPA, as the same may be amended from time to time.
1.1.19 “Member” means any Member of NCPA or Associate Member
of NCPA.
1.1.20 “MW” means megawatt.
1.1.21 “MWh” means megawatt hour.
1.1.22 “NCPA” has the meaning set forth in the preamble hereto.
1.1.23 “Participation Percentage.” has the meaning, with respect to
each Project Participant, the percentage of the total capacity of the Project, and the energy
associated with such capacity, to which such Participant is entitled pursuant to the terms of this
Agreement. The Project Participation Percentage for each Project participant shall be in the
percentage set forth in Exhibit B,attached hereto and incorporated herein. Exhibit B,shall be
amended from time to time in accordance with this Agreement.
8
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
1.1.24 “Project Cost Allocation” means the Project Costs allocated to
the Participants in the Annual Budget.
1.1.25 “Project Costs” means any and all costs, directly or indirectly,
incurred by NCPA as a result of entering into the PPA. NCPA costs include, but are not limited
to related legal fees and associated staff time, administrative and general overhead costs,
charges for transmission, transmission related costs and costs associated with the .PPA or other
NCPA associated Agreements, including the Facilities Agreement and the SCPA.
1.1.26 “Project Output” means all energy generated from the
geothermal Project currently being developed by Western GeoPower in conjunction with this
Project, related Environmental Attributes and Capacity Attributes;
1.1.27 “Participant” has the meaning set forth in the preamble hereto.
(i)“Party” or “Parties” has the meaning set forth in the
preamble hereto; provided that “Third Parties” are entities that are not party to this
Agreement.
1.1.28 “PPA” means the Renewable Energy Power Purchase
Agreement attached hereto as Exhibit A.
1.1.29 Not applicable under this Agreement.
1.1.30 “Resource Adequacy Capacity” is that capacity in megawatts
that has been approved by each Participant.as capacity available to ensure that adequate
resources are available to meet peak demand and operating and planning reserves for the
purposes of local area and system reliability.
1.1.31 “Revenues” means, with respect to each Participant with the
exception of BART, all income, rents, rates, fees, charges, and other moneys derived by the
9
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
Participant from the ownership or operation of its Electric System, including, without limiting
the generality of the foregoing, (a) all income, rents, rates, fees, charges or other moneys derived
from the sale, furnishing and supplying of electric capacity and energy and other services,
facilities, and commodities sold, furnished, or supplied through the facilities of its Electric
System, (b) the earnings on and income derived from the investment of such income, rents,
rates, fees, charges or other moneys to the extent that the use of such earnings and income is
limited by or pursuant to law to its Electric System,and (c) the proceeds derived by the
Participant,directly or indirectly,from the sale, lease or other disposition of all or a part of the
Electric System, but the term “Revenues”shall not include (i) customers’ deposits or any other
deposits subject to refund until such deposits have become the property of the Participant or (ii)
contributions from customers for the payment of costs of construction of facilities to serve them.
In regards to BART, “Revenues”means, all income, rents, rates, fees, charges, grants, fares or
tariffs, subventions and other moneys derived by the Participant from its operation,including,
without limiting the generality of the foregoing, (i) the earnings on and income derived from
the investment of such income, rents, rates, fees, charges grants, fares or tariffs, subventions or
other moneys and (ii) the proceeds derived by the Participant,directly or indirectly,from the
sale, lease or other disposition of all or a part of its assets, but the term “Revenues”shall not
include any moneys derived from sources,the use of which is limited by law to expenditures
other than operating expenses.
1.1.32 “Scheduling Protocols” means the applicable provisions of the
.SCPA and any other contractual or other arrangements between NCPA and the relevant
Participant concerning the scheduling, delivery and metering of the PPA.
1.1.33 “Security Account” means the account established by NCPA
and funded by the Participants in accordance with Section 5.3, the funds of which are available
for use by NCPA in accordance with the terms and conditions hereof.
1.1.34 Not applicable under this Agreement.
10
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
1.1.35 “Term” has the meaning set forth in Section 9.
1.1.36 Not applicable under this Agreement.
1.1.37 Not applicable under this Agreement.
1.2 Rules of Interpretation. As used in this Agreement (including the Recitals
hereto), unless in any such case the context requires otherwise: the terms “herein,” “hereto,”
“herewith” and “hereof” are references to this Agreement taken as a whole and not to any
particular provision; the term “include,” “includes” or “including” shall mean “including, for
example and without limitation;” and references to a “Section,” “subsection,” “clause,” or
“Exhibit” shall mean a Section, subsection, clause or Exhibit of this Agreement, as the case may
be. All references to a given agreement, instrument or other document shall be a reference to
that agreement, instrument or other document as modified, amended, supplemented and
restated through the date as of which such reference is made, and reference to a law, regulation
or ordinance includes any amendment or modification thereof. A reference to a “person”
includes any individual, partnership, firm, company, corporation, joint venture, trust,
association, organization or other entity, in each case whether or not having a separate legal
personality and includes its successors and permitted assigns. The singular shall include the
plural and the masculine shall include the feminine, and vice versa.
Section 2.Effectiveness of Agreement This Agreement shall be effective as to each
Participant as of the Effective Date upon execution by the Participant, as described in Section 9
below.
Section 3.Delivery of Electricity / Allocation of Resource Adequacy Capacity and
Environmental Attributes.By executing this Agreement, each Participant acknowledges and
agrees to be bound by the take-or-pay process contained in or referenced herein. Any electricity
delivered to NCPA under the PPA .shall be delivered to each Participant in proportion to such
Participant’s Participation Percentage and each Participant shall accept and pay for its relevant
11
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
percentage of such electricity. To the extent Participant is unable to accept such deliveries in
full, NCPA shall dispose of such surplus in its discretion, in such a manner to maximize
Participant value. Notwithstanding the above, NCPA may allocate and pool capacity and
energy procured through the PPA among the Participants in such percentages as NCPA may, in
its reasonable discretion, determine are necessary, desirable, or appropriate. Such electricity
shall be scheduled for the Participants in accordance with the Scheduling Protocols. Resource
Adequacy Capacity and Environmental Attributes obtained by NCPA as a result of
performance under this Agreement shall likewise be allocated to each Participant by its
Participation Percentage.
3.1 Payments to Counterparty.NCPA shall pay all costs incurred hereunder
using operating funds or Security Account funds, paid to NCPA in accordance with Section 5,
or such other sources as may be agreed upon in writing by the Parties from time to time.
Section 4.Cooperation and Further Assurances Each of the Parties agrees to provide such
information, execute and deliver any instruments and documents and to take such other actions
as may be necessary or reasonably requested by any other Party which are not inconsistent with
the provisions of this Agreement and which do not involve the assumption of obligations other
than those provided for in this Agreement, in order to give full effect to this Agreement and to
carry out the intent of this Agreement. Further, the Parties agree to cooperate and act in good
faith in connection with obtaining any credit support required in order to procure electricity
from an Eligible Contract Purchase, including,with respect to negotiating and executing,any
agreements to implement any credit support arrangements.
Section 5.Payment Obligations, Security Account, Invoicing
5.1 Participant Payment Obligations.Each Participant agrees to pay to
NCPA each month its respective portion of the Project Costs. In addition, each Participant shall
maintain working capital in accordance with NCPA’s Annual Budget, and maintain its Security
Account as provided in this Agreement.
12
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
5.2 Calculation of and True-Up for Project Costs.Upon the conclusion of a
Budget Year NCPA shall compare each Participant’s payment of estimated Project Costs with
the actual Project Costs incurred on behalf of each Participant such that overpayments will be
credited to, and underpayments will debited to the Participant’s account in accordance with
NCPA’s Annual Budget settlements.
5.3 Security Account.
5.3.1 Initial Amounts. NCPA shall notify each Participant three
months prior to the expected initial delivery of power of the initial security amounts which
Participant shall be obligated to pay for under this Agreement. Each Participant shall ensure
that sufficient funds are on deposit in the Security Account equal to the highest (3) months of
the immediately following (12) months of estimated Project Costs ; provided,however,that
such deposit may be satisfied,in whole or part,either in cash or through a letter of credit
satisfactory to NCPA’s General Manager.
5.3.2 Subsequent Deposits.Periodically, and at least quarterly, NCPA
shall review and revise its estimate of all costs for which Participant shall be obligated to pay for
under this Agreement for the succeeding twelve (12)months. Following such review, NCPA
shall determine whether each Participant has a sufficient balance in the Security Account. To
the extent that any Participant’s balance in the Security Account is greater than one hundred
and ten percent (110%) of the amount required herein, NCPA shall credit such amount as soon
as practicable to the Participant’s next following invoice. To the extent that any Participant’s
balance in the Security Account is less than ninety percent (90%) of the amount required herein,
NCPA shall add such amount as soon as practicable to such Participant’s next invoice. Credits
or additions shall not be made to Participants who satisfy these Security Account requirements
in whole,through the use of a letter of credit, provided that the amount of the letter of credit
shall be adjusted in a like manner to assure an amount equal to the highest three (3) months of
estimated Project Costs.
13
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
5.3.3 Use of Security Account Funds.NCPA may use any and all
funds deposited into the Security Account to pay any costs it incurs hereunder, including
making payments to the counterparty under the PPA.NCPA may use any and all funds
without regard to any individual Participant’s balance in the Security Account or proportionate
share of Project Costs and irrespective of whether NCPA has issued an invoice for such costs to
the Participants or whether a Participant has made timely payments of invoices. Should
Participant have satisfied its Security Account requirements,in whole or in part,through a
letter of credit, NCPA may draw on such letter of credit to satisfy Participant’s obligations
hereunder.
5.3.4 Emergency Additions.In the event that the funds are
withdrawn pursuant to section 5.3.3, or if the Security Account is insufficient to allow payment
of an invoice, demand, request for further assurances by Third Parties, or Claims, NCPA shall
notify all Participants and then prepare and send a special or emergency assessment to the
Participants. Each Participant shall pay to NCPA such assessment when and if assessed by
NCPA within two (2) Business Days of the invoice date of the assessment or consent to and
direct NCPA to draw on any existing letter of credit Participant has established for such
purposes.
5.3.5 Accounting and Interest.NCPA shall maintain a detailed
accounting of each Participant’s deposits into and shares of withdrawals from the Security
Account. Interest earned on the Security Account shall be proportionately credited to the
Participants in accordance with their Security Account balances. Any losses in the Security
Account caused by early termination of investments shall be allocated among the Participants in
accordance with their proportionate Participation Percentages.
5.3.6 Return of Funds. On the termination of this Agreement with
respect to a Participant or a permitted withdrawal of a Participant in accordance with this
Agreement, the affected Participant or Participants may apply to NCPA for the return of their
14
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
share of Security Account funds ninety (90) days after the effective date of such termination or
withdrawal. NCPA shall, in its sole discretion, as determined by the General Manager, estimate
the then outstanding liabilities of the Participant(s), including any estimated contingent
liabilities and shall retain all such funds until all such liabilities have been fully paid or
otherwise satisfied in full. The balance of the Participant’s share of the Security Account will be
refunded to the Participant.
5.4 Invoicing.
5.4.1 Invoices.As part of NCPA’s regular, monthly, advance billing
or by separate special invoice, as required in the circumstances, NCPA will issue an invoice to
each Participant for its proportionate share of the Project Costs due (or any adjustments thereto)
based on Sections 5.1 and 5.2 above. Such invoices may include estimated costs and estimated
settlement and meter data. Each invoice shall include: (i) the total Project Costs attributable to
the activities under this Agreement for such month and the relevant Participant’s share thereof;
(ii) the quantity of electricity, Resource Adequacy Capacity and Environmental Attributes.
delivered to such Participant (or an estimate thereof) and the unit price for such electricity; (iii)
appropriate settlement and meter data (or an estimate thereof); (iv) including any adjustments
to prior invoices required based on actual data received that was estimated in a previous
invoice. In addition NCPA may invoice an amount, if any, that NCPA has paid or reasonably
expects to pay using funds available in the Security Account; and amounts due from (or
credited to) such Participant under Section 5.3.2.
5.4.2 Payment of Invoices.All invoices delivered by NCPA
hereunder are due and payable on the date indicated on such invoice, provided, however, that
any amount due on a day other than a Business Day may be paid on the following Business
Day. NCPA may apply a Participant’s share of the Security Account to the payment of all or
any portion of an invoice issued to such Participant, provided that application of such funds
from the Security Account shall not relieve the Participant from any late payment charges
15
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
pursuant to Section 5.4.3. To the extent that NCPA applies funds from the Security Account to
pay an amount due under an invoice, following receipt of payment of such invoice by the
relevant Participant, NCPA shall deposit the relevant portion of the payment into the Security
Account and credit such deposit to such Participant.
5.4.3 Late Payments.Any amount due and not paid by a Participant
in accordance with Section 5.4.2 shall bear interest computed on a daily basis until paid at the
lesser of (i) the per annum prime rate (or reference rate) of the Bank of America NT&SA then in
effect, plus two percent (2%) or (ii) the maximum rate permitted by law.
5.5 Settlement Data and Examination of Books and Records.
5.5.1 Settlement Data.NCPA will make metering and settlement data
available to the Participants. Procedures and formats for the provision of such data will be as
established by the Participants and NCPA from time to time.
5.5.2 Examination of Books and Records.Any Participant to this
Agreement shall have the right to examine the books and records created and maintained by
NCPA pursuant to this Agreement at any reasonable, mutually agreed upon time.
5.5.3 Revenue Covenant. Any failure of a Participant to meet its
obligations hereunder or to cure such failure in a timely manner shall constitute a Default and
the Defaulting Party shall be subject to such remedies of NCPA as provided for herein. Each
Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric
department revenues only or, in the case of BART, its tariffs, fees or other sources of revenue,
provided that such sources shall not include any sums derived from sources,the use of which is
limited by law to expenditures other than operating expenses, its percentage share of the costs
authorized by Participants in accordance with this Agreement in connection with its
participation in the Project. Each Participant further agrees that it will fix the rates and charges
for services provided by its electric department, or in the case of BART, its general revenues, so
16
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
that it will at all times have sufficient money in its department revenue funds to meet this
obligation; (ii) to make payments under this Agreement from the Revenues of, and as an
operating expense of,its Electric System, or in the case of BART, its general revenues; (iii) to
make payments under this Agreement whether or not there is an interruption in, interference
with, or reduction or suspension of services provided under this Agreement; such payments not
being subject to any reduction, whether by offset or otherwise, and regardless of whether any
dispute exists provided such interruption, interference or reduction in services is caused by
forces constituting an Act of God and not reasonably contemplated by the Parties; and (iv) to
operate its Electric System., or in the case of BART, its transit system, in an efficient manner and
to maintain its facilities in good repair, condition and working order so that: (a) the Participant’s
obligations to make payments under this Agreement are not adversely affected or threatened;
and (b) NCPA’s bond rating and ability to negotiate and enter into a .PPA are not adversely
affected or threatened.
Section 6. Administration of Agreement
6.1 General.The NCPA Commission has sole overall responsibility and
authority for the administration of this Agreement. Any acts, decisions or approvals taken,
made or sought by NCPA under this Agreement shall be taken, made or sought, as applicable,
in accordance with NCPA’s Constitutive Documents and Section 6.2.
6.2 Action by Participating Members.
(a)Forum: Whenever any action anticipated by this
Agreement is required to be taken by the Participating Members, such actions shall be taken at a
regular or special meeting of the NCPA Commission but shall be participated in only by those
Commissioners, or their designated alternates, who are Participants.
(b) Quorum:A quorum at NCPA Commission meetings for
purposes of acting upon matters relating to this Agreement shall consist of Commissioners, or
17
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
their designated alternates representing at least two Participants having a combined majority
interest based upon Participation Percentages.
(c) Voting:Each Participant shall have the right to cast one
vote with respect to matters pertaining to this Agreement, with a majority vote of the
Participating Members required for action subject to the following exceptions:
(i)Upon request of any Participant representative, the voting
on an issue related to this Agreement shall be by Participation Percentage with a 65% or more
favorable vote necessary to carry the action. The 65% required by the preceding sentence shall
be reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but
shall not be reduced below a majority interest.
(ii)After any decision related to this Agreement is taken by
the affirmative vote of less than 65% of the Program Participants, the action can be reviewed
and revised if a Participant gives notice of intention to seek such review and revision to NCPA
and each of the other Participants within ten (10) days following the date on which such action
was taken. Upon receipt of such a request for reconsideration, the Chair Person of the
Commission shall agendize the matter for reconsideration at the next regular meeting of the
Commission or at a special meeting if the circumstances so warrant. The action shall be upheld
upon the affirmative vote of authorized representatives the Participants. Any action taken upon
reconsideration shall be final.
Section 7.Transfer of Rights by Participants
7.1 A Participant has the right to make transfers, sales, assignments and
exchanges (collectively “transfers(s)”) its Participation Percentage and rights thereto. If a
Participant desires to transfer a portion or its entire share of the Project for a specific time
interval, or permanently, NPCA will,if requested by such Participant, use its best efforts to
transfer that portion of the Participant’s share of the Project.
18
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
7.2 Before NCPA may transfer an excess Project share pursuant to section 7.1
to any person or entity other than a Participant, it shall give all Participants the right to
purchase the share on the same terms and conditions. Before NCPA may transfer an excess
Project share pursuant to section 7.1 to any person or entity other than an NCPA member, it
shall give all NCPA members the right to purchase the share on the same terms and conditions.
Such right shall be exercised within thirty (30) days of receipt of notice of said right.
7.3 No transfer shall relieve a Participant of any of its obligations under this
Agreement except to the extent that NCPA receives payment of these obligations from a
transferee.
Section 8.Withdrawal of Participants. No Participant may withdraw from this
Agreement except as provided herein Refer Section 7 above for discussion. However, NCPA
will use its best efforts to assist any Participant that wishes to transfer all or any portion of its
rights pursuant to Section 7 above.
Section 9.Term and Termination. This Agreement shall become effective when it has
been executed and delivered to NCPA by Participants, the Participation Percentages of which,
in the aggregate, equal at least 65% participation in the Project. NCPA shall provide written
notices to all Participants establishing the “effective date”. The remaining Participants listed in
Exhibit B shall have 45 days, following the notice of the effective date to execute and deliver
counterparts of this Agreement to NCPA. If any Participants listed on Exhibit B fails to execute
and deliver this Agreement within such 45 days, unless otherwise agreed to by the Participants
who have executed the Agreement, the Participating Percentages of such member or members
shall be spread among those Participants in proportion to their Participation Percentages. This
Agreement shall be coterminous with the PPA contained in Exhibit A.
19
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
Section 10.Default and Remedies
10.1 Events of Default.An Event of Default under this Agreement shall exist
with respect to a Party (“Defaulting Party”) upon the occurrence of any one or more of the
following:
(i) if any Party fails to make any payment or to provide assurances as
required of NCPA under this Agreement when due hereunder two (2) Business Days after
receipt of notice given by NCPA of such non-payment; or
(ii) the failure of the Defaulting Party to perform any other covenant
or obligation under this Agreement where such failure is not cured within ten (10)days
following receipt of a notice from NCPA demanding cure (provided that this shall not apply to
any failure to make payments (which is covered by Section 10.1 (i)); or
(iii)if any representation or warranty of the Defaulting Party material
to the transactions contemplated hereby shall prove to have been incorrect in any material
respect when made and the Defaulting Party does not cure the facts underlying such incorrect
representation or warranty so that the representation or warranty becomes true and correct
within ten (10) calendar days of the date of receipt of notice from any other Party demanding
cure; or
(iv)if a Participant is in default or in breach of any of its covenants
under any other agreement with NCPA and such default or breach is not cured within the time
periods specified in such agreement; or
(v) the failure of NCPA to perform any covenant or obligation under
this Agreement following a ten (10) day notice to cure by any non-defaulting Member.
10.2 Cure of an Event of Default.An Event of Default shall be deemed cured
only if such default shall be remedied within the time period specified in Section 10.1, above, as
may be applicable after written notice has been sent to the Defaulting Party from NCPA
20
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
specifying the default and demanding that the same be remedied provided that failure of a
Party to provide such notice shall not be deemed a waiver of such default.
10.3 Participation Rights Of Defaulting Party.Notwithstanding anything
herein to the contrary, upon the occurrence of an Event of Default and until such Event of
Default is cured, the Participant that is the Defaulting Party shall not have the right to
participate under Section 6.2 on any matters with respect to this Agreement.
10.4 Remedies in the Event of Default.
10.4.1 Remedies of NCPA. Upon the occurrence of an Event of Default
where a Participant is the Defaulting Party, without limiting its other rights or remedies
available under this Agreement, at law or in equity, and without constituting or resulting in a
waiver, release or estoppels of any right, action or cause of action NCPA may have against the
Participant, NCPA may:
(i) suspend the provision of services under this Agreement to such
Defaulting Party, including the delivery of electricity and other attributes of the PPA until the
Event of Default is cured; and
(ii) demand that the Defaulting Party provide further assurances to
compel the correction of the default, including mandating the collection of a surcharge to
produce Revenues to secure the cure of the Event of Default; and
(iii) terminate this Agreement as to the Defaulting Party on ten (10)
days prior written notice to the Defaulting Party and following approval of the non-defaulting
Participants.
10.4.2 Sale/Transfer of Participants Account Upon Default.Upon any
default of a Participant caused by the failure of such Participant to pay any sums due, and
provided that such default is not cured in a timely manner,then NCPA shall use its best efforts
21
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
to sell and transfer for the defaulting Participant’s account all or a portion of the Participant’s
capacity and/or energy and/or Environmental Attributes for the remainder of the term of this
Agreement. Notwithstanding that all or any portion of the Participant’s capacity is so sold or
transferred, the Participant shall remain liable for all of its obligations hereunder unless released
therefrom by NCPA upon assumption by a transferee or assignee.
10.4.3 Remedies of Participants.Upon the occurrence of an Event of
Default, and following the applicable cure periods, where NCPA is the Defaulting Party, the
Participant may, without limiting their other rights or remedies available under this Agreement,
at law or in equity, and without constituting or resulting in a waiver, release or estoppel of any
right, action or cause of action the Participants may have against NCPA, terminate this
Agreement in whole, subject to the provisions of Section10.5.4.
10.4.4 Special Covenants Regarding Security Account.In the event
that a Participant’s balance of the Security Account is insufficient to cover all invoices for costs
incurred under this Agreement sent to such Participant, then, without limiting NCPA’s other
rights or remedies available under this Agreement, at law or in equity, such Participant shall
cooperate in good faith with NCPA and shall cure the default within thirty (30) days, on an
emergency basis, taking all such action as is necessary, including, but not limited to, raising
rates and charges to its customers to increase its Revenues to replenish its share of the Security
Account as provided herein, drawing on its cash-on-hand and lines of credit, obtaining further
assurances by way of credit support and letters of credit, and taking all such other action as will
cure the default.
10.5 Effect of Termination or Suspension.
10.5.1 The suspension or termination of this Agreement will not
terminate, waive, or otherwise discharge any ongoing or undischarged contingent liabilities or
obligations arising from this Agreement until such obligations are satisfied in full, and all of the
22
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
costs incurred by NCPA in connection with such suspension or termination, including
reasonable attorneys'fees, the fees and expenses of other experts, including auditors and
accountants, other costs and expenses that NCPA is entitled to recover under this Agreement,
and other reasonable and necessary costs associated with any and all of the remedies, are paid
in full.
10.5.2 Suspension by NCPA.If performance of all or any portion of
this Agreement is suspended by NCPA with respect to a Participant in accordance with Section
10.4.1(i), such Participant shall pay any and all costs and obligations incurred by NCPA as a
result of such suspension,including reasonable attorneys'fees, the fees and expenses of other
experts, including auditors and accountants, other reasonable and necessary costs associated
with such suspension and any portion of the Project Costs that were not recovered from such
Participant as a result of such suspension.
10.5.3 Termination by NCPA.If this Agreement is terminated by
NCPA with respect to a Participant in accordance with Section 10.4.1 (iii), (i) such Participant
shall pay any and all costs and obligations incurred by NCPA as a result of such termination
including reasonable attorneys'fees, the fees and expenses of other experts, including auditors
and accountants, other reasonable and necessary costs associated with such termination and
any portion of the Project Costs that were not, or will not be, recovered from such Participant as
a result of such termination; provided, however, if NCPA terminates this Agreement with
respect to the last Participant, then this Agreement shall terminate.
10.5.4 Termination by Participants.If this Agreement is terminated by
all Participants in accordance with Section 10.4.3, or by unanimous consent of all of the Parties
hereto, then the Participants shall pay to NCPA all previously unpaid costs and obligations
incurred as of the date of such termination,, and following such termination, the Participants
shall cooperate and act in good faith to negotiate and agree upon the method of allocating
among the Participants in proportion to their respective Participation Percentages the costs and
23
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
benefits of the PPA and any financing agreements or commitments and any matters pertaining
to the administration, management, control, operation and maintenance of the PPA. NCPA
shall reasonably cooperate with the Participants in connection with implementing the foregoing
and the Participants shall indemnify NCPA for any costs and obligations incurred in connection
therewith, including reasonable attorneys'fees, fees and expenses of other experts, including
auditors and accountants and other reasonable and necessary costs. If the Parties are unable to
reach agreement as to the foregoing, then the Parties agree to submit the matter to mediation
with a mutually agreed upon mediator. If the Parties are still unable to reach agreement
following mediation, then the matter shall be submitted to binding arbitration subject to the
rules of the American Arbitration Association, the costs of such arbitration being borne
proportionally among the Participants.
Section 11. Miscellaneous
11.1 Confidentiality.The Participants and NCPA will keep confidential all
confidential or trade secret information made available to them in connection with this
Agreement, to the extent possible, consistent with applicable laws, including the California
Public Records Act. It shall be the responsibility of the holder of the claim of confidentiality or
trade secret to defend at its expense against any request that such information be disclosed.
Confidential or trade secret information shall be marked or expressly identified as such.
11.2 Indemnification and Hold Harmless.Subject to the provisions of Section
11.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its Members,
including their respective governing officials, officers, agents, and employees, from and against
any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature,
including reasonable attorneys’ fees and the costs of litigation, including experts (“Claims”), to
the extent caused by any acts, omissions, breach of contract, negligence (active or passive), gross
negligence, recklessness, or willful misconduct of a Participant, its governing officials, officers,
employees, subcontractors or agents, to the maximum extent permitted by law.
24
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
11.3 Several Liabilities.No Participant shall be liable under this Agreement
for the obligations of any other Participant, and each Participant shall be solely responsible and
liable for performance of its obligations under this Agreement, except as otherwise provided for
herein, and the obligation of each Participant under this Agreement is a several obligation and
not a joint obligation with those of the other Participants.
11.4 No Consequential Damages.FOR ANY BREACH OF ANY PROVISION
OF THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES
IS PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY
SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES
OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS
EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE
LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES
ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY PARTICIPANT OR THEIR
RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS,
AGENTS, OR EMPLOYEES BE LIABLE FOR ANY LOST PROFITS, CONSEQUENTIAL,
SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE OR INCIDENTAL LOSSES OR DAMAGES,
INCLUDING LOSS OF USE, LOSS OF GOODWILL, LOST REVENUES, LOSS OF PROFIT OR
LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES, AND NCPA AND EACH PARTICIPANT EACH HEREBY WAIVES
SUCH CLAIMS AND RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM
ANY SUCH LIABILITY.
The Parties acknowledge that California Civil Code section 1542 provides that: “A general
release does not extend to claims which the creditor does not know or suspect to exist in his or
her favor at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.” The Parties waive the provisions of
section 1542, or other similar provisions of law, and intend that the waiver and release provided
25
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
by this section of this Agreement shall be fully enforceable despite its reference to future or
unknown claims.
11.5 Amendments.Except where this Agreement specifically provides
otherwise, this Agreement may be amended only by written instrument executed by the Parties
with the same formality as this Agreement.
11.6 Severability.In the event that any of the terms, covenants or conditions
of this Agreement or the application of any such term, covenant or condition, shall be held
invalid as to any person or circumstance by any court having jurisdiction, all other terms,
covenants or conditions of this Agreement and their application shall not be affected thereby,
but shall remain in force and effect unless the court holds that such provisions are not severable
from all other provisions of this Agreement.
11.7 Governing Law.This Agreement shall be interpreted, governed by, and
construed under the laws of the State of California.
11.8 Headings.All indices, titles, subject headings, section titles and similar
items are provided for the purpose of convenience and are not intended to be inclusive,
definitive, or affect the meaning of the contents of this Agreement or the scope thereof.
11.9 Notices.Any notice, demand or request required or authorized by this
Agreement to be given to any Party shall be in writing, and shall either be personally delivered
to a Participant and the Secretary of the Commission or transmitted to the Participant and the
Secretary of the Commission at the address shown on the signature pages hereof. The
designation of such address may be changed at any time by written notice given to the
Secretary of the Commission who shall thereupon give written notice of such change to each
Participant.
11.10 Warranty of Authority.Each Participant, and NCPA, represents and
warrants that it has been duly authorized by all requisite approval and action to execute and
26
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
deliver this Agreement and that this Agreement is a binding, legal, and valid agreement
enforceable in accordance with its terms as to the Participant and as to NCPA. Upon execution
of this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of
such Participant,evidencing approval of and authority to enter into this Agreement,that such
authority was duly exercised in accordance with such Participant’s Constitutive Documents.
11.11 Counterparts.This Agreement may be executed in any number of
counterparts, and each executed counterpart shall have the same force and effect as an original
instrument and as if all the signatories to all of the counterparts had signed the same
instrument. Any signature page of this Agreement may be detached from any counterpart of
this Agreement without impairing the legal effect of any signatures thereon, and may be
attached to another counterpart of this Agreement identical in form hereto but having attached
to it one or more signature pages.
11.12 Assignment.Except as provided by Section 7 no Participant may assign
or otherwise transfer its interest in its Participation Percentage or any other rights and
obligations under this Agreement without the express written consent of NCPA, which shall
not be unreasonably withheld.
11.13 Exercise of the Right of First Refusal. Participants shall abide by the
NCPA Facilities Agreement in the exercise of any options by NCPA to purchase the underlying
assets of the PPA as per the voting procedures of this Agreement outlined in Section 6.
Participation in any such purchase shall be in accordance with the then existing Participation
Percentages, unless such Participation Percentages are otherwise agreed upon by the
Participants.
11.14 List of Exhibits.The Exhibits referenced herein shall be denoted as
follows:
27
THIRD PHASE AGREEMENT
FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT
//GENSERV/18.23/WESTERNGEOPOWERIIIPHASE
Exhibit A -RENEWABLE ENERGY POWER PURCHASE AGREEMENT between
NORTHERN CALIFORNIA POWER AGENCY and WESTERN GEOPOWER
INCORPORATED
Exhibit B -PARTICIPATION PERCENTAGES
IN WITNESS WHEREOF, each Participant has executed this Agreement with the approval of its
governing body, and NCPA has authorized this Agreement in accordance with the authorization
of its Commission.
NORTHERN CALIFORNIA
POWER AGENCY
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: __________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
ALAMEDA POWER AND TELECOM
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: __________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
BAY AREA RAPID TRANSIT
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
CITY OF LODI
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: __________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
CITY OF LOMPOC
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
CITY OF PALO ALTO
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
PLUMAS-SIERRA RURAL
ELECTRIC COOPERATIVE
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
PORT OF OAKLAND
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
CITY OF ROSEVILLE
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
SILICON VALLEY POWER
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
TRUCKEE DONNER PUBLIC
UTILITY DISTRICT
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
CITY OF TURLOCK
[Address]
[City, State, Zip]
[Telephone]
[Facsimile]
_____________________________
By:__________________________
Title: ________________________
Date:
Approved as to form:
_____________________________
By:__________________________
Its: Attorney
Date:
ATTACHMENT E
DRAFT
Excerpt of:
UTILITIES ADVISORY COMMISSION MEETING
MINUTES OF FEBRUARY 2, 2011
ITEM 5: ACTION: Agreement Terminating the Third Phase Agreement for Western GeoPower
Incorporated Renewable Energy Power Purchase Agreement
Director Fong provided a brief summary of the report. Palo Alto signed up for the project with a
$98 per megawatt-hour ((MWh), but the project does not go forward due to financing difficulties.
The Northern California Power Agency (NCPA) has been able to negotiate an agreement for the
project, but at the higher price of $113/MWh. Fong indicated that staff feels that it cannot
recommend going forward with this project at $113/MWh at this time since it has not completed
some of the planning work requested by Council: LEAP, GULP, and the Strategic Plan. In addition,
the City of Santa Clara has offered to take on more of the project initially and has indicated a
willingness to let Palo Alto in to the project. First, Palo Alto needs to step aside to let participants,
including Santa Clara, proceed with the project. Therefore, staff’s recommendation is to terminate
the original $98/MWh contract so that participants can sign up for the available project at
$113/MWh.
Commissioner Foster asked for clarification that there is no reason to agree to execute the
$113/MWh contract now since Santa Clara will offer it to us later. Fong indicated that the first thing
to not be a roadblock is to execute the termination agreement. Then, Santa Clara has offered to
provide Palo Alto the opportunity to become a participant in the project if it can complete its
required planning tasks and approvals by the end of the year.
Commissioner Melton said that the geothermal source looked good in the past to us and still looks
good to us and noted that the feed-in tariffs can only supply half of our remaining RPS needs over
the next five years. He asked if staff was inclined to do the project. Senior Resource Originator
Tom Kabat indicated that the size of the project would fit nicely into the portfolio and could help
achieve the RPS goals. He anticipated that the City could release another request for proposals
for renewable power to verify that the $113/MWh was a competitive price. Commissioner Melton
said that the price seemed to be in the ballpark of what we’ve seen in the recent past.
Commissioner Keller agreed that we need to get out of the way now by terminating the existing
contract, but asked if there could be anything lost by waiting such as having the price move. She
asked about the term of the contract and if the plant was currently operational. Kabat stated that
the contract term was 25 years and that the plant is not yet operational, but there have been test
wells drilled. She asked if there was certainty that there is 25 years of a steam source. Kabat
indicated that he is not certain of the life of the steam source, but because the contract is a Power
Purchase Agreement, the City would only pay for actual generation produced.
ATTACHMENT E
Commissioner Foster stated that he supports terminating the original agreement and, in general, is
supportive of this renewable purchase. However, if the decision can be delayed, this is acceptable.
Commissioner Eglash indicated that he did not agree with the recommendation and disagreed with
the statement in the report that the price of $113/MWh was “reasonably competitive.” Instead, he
noted that we know that the price is very competitive as it is essentially the same price as the
landfill gas contracts Council approved last year. In addition, one of the issues with those landfill
gas contracts was the fact that we already had many such contracts in the portfolio and there was
a question of resource diversity. The Western GeoPower contract would add diversity to the
portfolio. Environmental issues regarding the operation of the landfills was also raised as another
concern and the Western GeoPower project would not have these concerns. For those reasons,
this contract is overwhelmingly compelling and we still have far enough to go to achieve the RPS
goals and enough uncertainty around the PV FIT that this would be a good decision.
Commissioner Eglash concluded that having too much renewable energy at $113/MWh is a happy
problem to have, it’s a terrific deal and he would support recommending it to the Council.
Commissioner Foster indicated that he was persuaded by Commissioner Foster’s arguments.
Commissioner Melton also indicated that he was supportive of the project at the $113/MWh and
advised against hesitating on the project. Commissioner Eglash could recommend option 2.b in
the report (execute the Termination Agreement and not enter into the new Third Phase Agreement
at the $113/MWh price at this time), while staff recommended 2.a. (execute the Termination
Agreement and enter into the new Third Phase Agreement at the $113/MWh price at this time).
Commissioner Keller asked for staff’s reaction to Commissioner Eglash’s proposal. Fong indicated
that staff does support option 2.b., but it has heard many times from the Council that it must have
LEAP and the Strategic Plan completed and approved before bringing any new renewable
resources for consideration. The new price does look attractive to staff and it has had discussions
with Santa Clara to allow the City to get the price if it is able to act by the end of the year.
Commissioner Eglash is sympathetic to staff’s position, but this is a case to treat as an exception
and that the burden to make the recommendation is on the Commission and not on staff. This is
one case where the staff and the Commission are under different pressures and may make
different recommendations to the Council. He itemized the reasons for the Commission to make a
recommendation to agree to the new contract now: 1) it is an attractive price; 2) it is well within the
scope of what we do; 3) the Finance Committee will be able to review the project’s merits even if
staff does not have the time to do its usual thorough review; and 4) the project is not a new project,
but a derivative of an earlier one which was approved. We would not be doing anyone at the City a
favor to take part of a year to more fully analyze and vet the project or to send out another request
for proposals. We already know the project is a good one with a reasonable price.
Fong indicated that there is no problem with staff taking a recommendation to the Finance
Commission that is different from the UAC’s recommendation. Commissioner Eglash indicated
that staff should explain that the reason for not agreeing with the UAC’s recommendation is based
on procedural concerns and not on disagreement with the merits of the project.
Regarding the choices on the participation level for the project, Commissioner Eglash indicated
that it would be best to stick with the level from the original agreement (up to 15% of the project
ATTACHMENT E
size), which would provide about 3% of the City’s annual electric needs. Thus, this would not be a
proposal for a new level.
ACTION: Commissioner Berry made a motion to execute the Termination Agreement and enter
into the new Third Phase Agreement at the $113/MWh price at a participation level of up to 15% of
the project. Commissioner Eglash seconded the motion. The motion carried unanimously by a
vote of 6 to 0, with Cook absent.
Preliminary Evaluation of the new Western GeoPower Project
Preliminary Evaluation of the Western GeoPower Project at a Flat $113/MWh price
The following sections discuss the City’s Renewable Portfolio Standard (RPS) goals, current
progress towards meeting the RPS goals, Council direction in August 2009 and May 2010,
integration of energy efficiency into the electric resource portfolio, and information regarding
the market prices for renewable energy.
Renewable Portfolio Standard Goals
The City’s current renewable portfolio standard (RPS) target as adopted by Council in March
2007 is to meet 33 percent of City loads with renewable resources by 2015. The target is to be
achieved while not exceeding the retail rate impact measure of 0.5¢/kWh (CMR:158:07).
As of February 2011 a proposed update of LEAP awaits final Council action. While staff, the
UAC and the Finance Committee (CMR: 426:10) have recommended some changes to the LEAP
Strategy related to RPS, the proposed LEAP RPS Strategy is similar to the existing LEAP RPS
Guideline in that it still has a target of meeting 33 percent of the City’s electric consumption
with renewable resources by 2015 within the 0.5¢/kWh rate impact limit.
Current Status of Renewable Resources in Electric Portfolio
Five Power Purchase Agreements (PPAs) for energy generated from new renewable resources
are currently delivering energy to Palo Alto. An additional three PPAs have been executed for
projects that are under construction. The resources for all eight existing PPAs are shown in
Table 1 below.
Table 1 –Existing Renewable Energy Contracts
Supplier Technology
Date Contract
Executed
Actual or
Estimated
Online Date
Annual
Energy
(GWh)
High Winds Iberdrola Wind Nov. 2004 Dec. 2004 51.8
Shiloh Iberdrola Wind Oct. 2005 June 2006 74.4
Santa Cruz Ameresco Landfill Gas Nov. 2004 Feb. 2006 11.2
Half Moon Bay Ameresco Landfill Gas Jan. 2005 Apr. 2009 40.8
Keller Canyon Ameresco Landfill Gas Aug. 2005 Aug. 2009 11.8
Subtotal –Operating 190.0
Johnson Canyon Ameresco Landfill Gas Aug. 2009 June 2012 11.2
Crazy Horse Ameresco Landfill Gas May 2010 Jan. 2013 32.0
San Joaquin Ameresco Landfill Gas May 2010 Jan. 2013 32.0
Subtotal –Under Construction 75.2
Total –All Executed Contracts 265.2
In addition, through its contract with the Western Area Power Administration, the City receives
hydroelectric energy that includes a small amount of energy from “small” hydroelectric projects
that qualify under the state’s standard for renewable energy. The City also receives a share of
the New Spicer Meadow qualifying small hydroelectric output as part of the Calaveras
Hydroelectric Project. If these supplies are included (as proposed in the LEAP update), they
would add about 1% towards the RPS goals of the portfolio in normal water years. Together,
when all of the committed facilities reach commercial operating status, these resources –plus
the output of the small hydro facilities –will provide about 27.5% of Palo Alto’s total energy
supply needs as shown in Figure 1 below:
Figure 1 –Palo Alto’s Renewable Resources
0
50
100
150
200
250
300
350200320042005200620072008200920102011201220132014201520162017201820192020Calendar Year
GWh per Year
Small Hydro
Short-term
Renewables
Crazy Horse
LFG
San Joaquin
LFG
Johnson
Canyon LFG
Keller Canyon
LFG
Half Moon Bay
LFG
Santa Cruz
LFG
Shiloh Wind
High Winds
2015 RPS
Goal: 33%
(331 GWh)Actual Projected
Note that the volumes in Figure 1 are actual deliveries through 2010 and estimated deliveries
after 2010. Energy deliveries from the wind energy contracts were lower than expected in 2009
due to a transmission line outage for an upgrade project.
“Green Premium” Calculation
To conform to the rate impact limitation of 0.5 ¢/kWh on average, staff compares the total cost
of the renewable resource to the wholesale market price of non-renewable energy at the time
that the contract is executed. The rate impacts from each renewable resource are added
together to determine if the new resource would drive the cumulative retail rate impact above
the 0.5 ¢/kWh upper limit. The limit is converted into an annual premium “budget”for
qualifying renewables. For example, for 2010, the annual premium is calculated by multiplying
the annual energy sales (approximately 1,000,000 MWh/year) by the premium (0.5 ¢/kWh, or
$5/MWh) to get a green premium budget of $5.0 million/year.
For each resource the levelized1 cost impact ($/year) is calculated based on the renewable
energy cost plus transmission charges, minus any system or local capacity value provided, and
minus the wholesale market price quote for non-renewable energy (or “brown power”) plus
transmission charges.
Table 2 below shows the amount of the green premium budget that has been used up with the
existing eight PPAs. As shown, the contracts that were executed in 2004 and 2005 were priced
very near the brown energy market price. Prices for the last three contracts were significantly
higher than the brown energy market price. As shown in Table 2, for the eight existing
renewable contracts, the total green premium that is expected to be paid annually once all
projects are generating (expected in 2013) is $2.31 million, which corresponds to a rate impact
of about 0.231 ¢/kWh. This means that there is still room (up to $2.69 million per year) to
acquire additional renewable energy to meet the 33% RPS goal within the 0.5 ¢/kWh rate
impact limit.
Table 2 –Green Premium for Existing Renewable Energy Contracts
Date Contract
Executed
Annual
Energy
(GWh)
Levelized
Project
Cost
($/MWh)
Adjusted *
Brown
Market Cost
($/MWh)
Green
Premium
($/MWh)
Green
Premium
($1000/yr)
High Winds Nov. 2004 51.8 57.60 55.0 2.56 132
Shiloh Wind Oct. 2005 74.4 62.95 69.5 (6.50)(484)
Santa Cruz Nov. 2004 11.2 62.32 59.3 2.97 33
Half Moon Bay Jan. 2005 40.8 58.97 67.5 (8.55)(349)
Keller Canyon Aug. 2005 11.8 70.88 83.9 (13.00)(154)
Johnson Canyon Aug. 2009 11.2 98.66 67.3 56.35 633
Crazy Horse May 2010 32.0 107.58 70.8 36.81 1,178
San Joaquin May 2010 32.0 118.08 76.8 41.26 1,321
Total -All Committed Contracts 265.2 2,310
*Brown Market Costs are levelized across the project’s contract period, and adjusted for
the comparison project’s monthly and daily delivery profile, local and system capacity
value, transmission costs and losses.
Note that the Brown Market Cost does not include any future cost for greenhouse gas (GHG)
emissions allowances. These costs could be imposed starting in 2014. The cost for these
1 Levelizing is a process of taking nominal cash flows, discounting them to present value, summing the present
values, and amortizing the present value into uniform annual payments like a mortgage. The discounting and the
amortizing are both performed with the user’s discount rate or time value of money.
allowances is highly uncertain at this time. As part of the Climate Protection Plan (CPP)
approved by the Council in December 2007, a GHG adder of $20 per metric ton, escalating by
5% per year, is to be incorporated in utility purchasing decisions. The impact of the $20/ton
GHG adder would be to add about $10/MWh onto the levelized brown energy market prices
shown in the Table 2. This would effectively lower the green premium attributed to renewable
energy projects.
Council Action in August 2009 and May 2010
In July 2009, when staff requested that the Finance Committee recommend that the Council
approve the PPA with Ameresco Johnson Canyon landfill (CMR: 305:09), the Finance Committee
discussed the rising cost of renewable energy and stated that these high prices should prompt a
review of the policies and guidelines related to the acquisition of renewable power and the
emphasis on efficiency improvements that could reduce electricity use.
In August 2009, the Council agreed with the Finance Committee’s recommendation and
directed staff to work with the UAC to re-evaluate the policies and plans related to the
acquisition of renewable energy and energy efficiency and report back to the Finance
Committee (CMR: 342:09).
In May 2010, when Council approved 20-year renewable energy PPAs with Ameresco San
Joaquin and Crazy Horse landfills (CMR: 226:10), it also directed staff to:
A.Return to the Finance Committee before making any further
recommendations on the acquisition of any new renewable energy
resources with a re-examination of the policies and goals that are being
used in the alternate energy program, including the energy efficiency
plans and the electric acquisition policies and plans; and
B.In its review, staff should provide information on the flexibility of the 33%
target date with the option of aligning it to the State mandated goal.
Following extensive review with the UAC, the Finance Committee recommended Council
approval of proposed updates to LEAP (CMR: 426:10) and the Gas Utility Long-term Plan (GULP)
(CMR: 432:10) in December 2010. The proposed LEAP guidelines include direction related to
the pursuit of renewable energy supplies and the evaluation and funding of energy efficiency.
Council is scheduled to consider the updated LEAP and GULP in March 2011.
2010 Ten-Year Electric Energy Efficiency (EE) Plan
In May 2010, the Council approved the 2010 Ten-Year Electric EE Plan (CMR: 218:10). The 2010
EE Plan doubled the energy savings goals that were in the 2007 EE Plan. Figure 2 below shows
the actual electric load since 1990 and the load forecast until 2020 without additional EE, with
the 2007 EE Plan goals and with the 2010 EE Plan goals. The load forecast includes the
expected increased load due to the construction of the Stanford Hospital expansion project.
Figure 2 –Electric Consumption Forecast and Planned Energy Efficiency
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1990 1995 2000 2005 2010 2015 2020
Annual Load (MWh)
Historic load + Forecast with 2010 EE plan goals
Forecast with 2007 EE Plan goals
Forecast with no additional EE Program
Historic and Projected Annual Electric Loads
Impact of Energy Efficiency Programs on Load Forecast
The citywide electric load in 2020 is projected to be about 1,087 GWh/year with no active
energy efficiency efforts. If the goals in the 2010 ten-year EE Plan are achieved, the 2020 load
is projected to be about 1,001 GWh/year, a load reduction of about 86 GWh/year. If the goals
in the 2010 EE Plan are achieved, a 33% RPS goal in 2020 would require about 330 GWh/year of
renewable energy. Therefore, meeting the 2010 EE Plan goals would reduce the amount of
renewable energy required to meet a 33% RPS goal in 2020 by 29 GWh/year. In addition,
meeting the 2010 EE Plan goals reduces the amount of other (non-renewable) power purchases
by 57 GWh/year.
The Market for Renewable Resources in California and the West
With the arrival of RPS goals for investor owned utilities (IOUs) and the likelihood of still higher
RPS goals as a result of pending state legislation, the developers of renewable power are bullish
on the pricing prospects for their products. Legislation under consideration that establishes
higher RPS targets, California in-state renewable quotas, carbon taxes, or carbon cap-and-trade
mechanisms drive the bullishness of renewable energy project developers.
In the meantime, the California Public Utilities Commission’s (CPUC) “Market Price Referent”
(MPR) has impacted renewable energy prices. The MPR is published by the CPUC periodically
and consists of prices above which renewable projects proposed to IOUs would face additional
CPUC scrutiny. Therefore, the MPR acts as a renewable energy price floor for Palo Alto, as
proposers know they can get at least the MPR if they offer the project to the IOUs. For 25-year
base load power contracts with delivery starting in 2013 the current levelized MPR is
$112.45/MWh.
The City seeks new renewable supplies through several activities. The most successful method
to date has been to issue RFPs for renewable power, the last of which was released in the fall of
2009. The City also participates in a joint effort with other members of the Northern California
Power Agency (NCPA), the NCPA Green Power Project (NGPP), which aims to attract larger
projects that can be shared among the members. The NGPP has negotiated and worked
toward contracts with several proposers, but no PPA has yet been executed in the six years
NGPP has sought renewable energy. Other projects are brought to the NCPA by project
developers for the consideration of the NCPA general membership; the Western GeoPower
project is one of those projects. In addition, staff plans to propose a local solar photovoltaic
(PV) feed-in tariff (FIT) for Council consideration in the spring or summer of 2011. At a February
2011 UAC study session on PV FITs, an industry advocate told the UAC that the City could meet
about 2.4% of its electric needs from PV FITs by 2015.
Palo Alto’s Renewable Resource Portfolio with the Western GeoPower Project
The City has made commitments to renewable resources projected to provide 27.4% of its
energy from qualified renewable resources by 2013. If a 15% share of the Western GeoPower
Project is added, Palo Alto’s renewable resources would increase to about 30.8% of total load in
2014, or about 2.2% short of the 33% RPS target. Figure 3 below illustrates the renewable
resources already in the portfolio plus a 15% share of the Western GeoPower project.
Figure 3 –Palo Alto’s Renewable Resources Plus the Western GeoPower Project
0
50
100
150
200
250
300
350
200
3
200
5
200
7
200
9
201
1
201
3
201
5
201
7
201
9
202
1
202
3
202
5
202
7
202
9
203
1
203
3
203
5
203
7
Calendar Year
GWh/yr
WesternGeoPower
Small Hydro
Crazy Horse
LFG
San Joaquin
LFG
JohnsonCanyon LFG
Short-term
Renewables
Keller Canyon
LFG
Half Moon BayLFG
Santa Cruz
LFG
Shiloh Wind
High Winds
2015 RPS Goal:
33% (331 GWh)
As shown in Figure 3, the terms for the existing resources expire at varying times over the next
25 years so that contract extensions or new resources will be needed to continue to meet the
RPS goals in the future.
Table 3 below shows a summary of the information for the current renewable PPAs and the
Western GeoPower project including the levelized price, adjusted brown market cost, and
green premium.
Table 3 –Summary of Current Renewable Energy Supplies and Western GeoPower
Delivery
Begins
Annual
Generation
(GWh)
Levelized
Price
($/MWh)
Adjusted
Brown
Market
Price
($/MWh)
Green
Premium
($/MWh)
Total
Annual
Green
Premium
($1000)
Small Hydro Before 2000 10.0 0
High Winds Dec 2004 51.8 57.60 55.0 2.56 132
Shiloh Wind Jan 2006 74.4 62.95 69.5 (6.50)(484)
Santa Cruz Feb 2006 11.2 62.32 59.3 2.97 33
Half Moon Bay Apr 2009 40.8 58.97 67.5 (8.55)(349)
Keller Canyon Aug 2009 11.8 70.88 83.9 (13.00)(154)
Johnson Canyon Oct 2011 11.2 98.66 67.3 56.35 633
Crazy Horse Jan 2013 32.0 107.58 70.8 36.81 1,178
San Joaquin Jan 2013 32.0 118.08 76.8 41.26 1,321
Total Committed Projects 275.2 Total Committed Green Premium 2,310
Western Geo 33.1 113.0 74.0 39.01 1,290
Total with Western GeoPower 308.3 Total Green Premium
with Western Geo 3,600
If the City agreed to the new Third Phase Agreement with Western GeoPower, renewable
energy would supply about 31% of the City’s electric energy usage by 2014. The retail rate
impact for this renewable power would amount to about 0.36 ¢/kWh, still within the 0.5 ¢/kWh
rate impact limit.
Resource Impact
The cost of renewable energy supplies under a new Western GeoPower agreement for a flat price
of $113/MWh for up to 15% of the project output is expected to be up to $95.0 million over the
25-year term of the agreement. The annual expected cost is up to $4.0 million. Approval of the
new Western GeoPower Third Phase Agreement would result in a retail rate impact from all
renewable resources, including Western GeoPower, estimated at up to 0.36¢/kWh, beginning no
earlier than 2013.
Staff’s Conclusion on the Western GeoPower Project After Preliminary Review
As shown in Table 3 above, the price for the Western GeoPower Project is similar to the price of
the last two contracts approved by Council in May 2010 for the Crazy Horse and San Joaquin
landfill-gas-to-energy projects. In addition, there continues to be strong market for renewable
resources due to the likelihood that state legislation mandating a 33% RPS goal will be signed
into law. The price is also close to the MPR; however, the MPR is due to be updated soon and
could possibly fall about 5-10 percent depending on certain factors, such as the price of natural
gas.
Since it has been about 16 months since the City tested the renewable market independently
with an RFP, staff cannot say with certainty that the price offered for the Western GeoPower
project is the best available. Waiting to commit to Western GeoPower would give the City time
to issue another Request for Proposals for renewable energy and get solid alternatives to
compete with the Western GeoPower option. In addition, although the UAC and the Finance
Committee recommend the Council approve the proposed updated LEAP, the Council has not
yet considered LEAP so approving the project is not completely consistent with the Council
direction from May 2010.
Finally, although the deadline for signing the new Third Phase Agreement is short,Silicon Valley
Power (SVP) has verbally agreed to let the City participate in the Third Phase Agreement later in
2011 to permit staff to conduct a more thorough review and provide a recommendation on
whether to enter into the new Third Phase Agreement.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
ATTACHMENT F
NCPA DRAFT 3/7/11
____________________________________________________________________________
AMENDED AND RESTATED
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
between
NORTHERN CALIFORNIA POWER AGENCY
And
WESTERN GEOPOWER, INC.
March ___,2011
________________________________________________________________________________
OHS WEST:261077640.9
i
OHS West:261077640.10
23768-8 LX0/LX0
TABLE OF CONTENTS
Page
AMENDED AND RESTATED RENEWABLE ENERGY POWER PURCHASE
AGREEMENT ...................................................................................................................1
ARTICLE 1.DEFINITIONS.....................................................................................................2
ARTICLE 2.TERM, TERMINATION AND SURVIVAL OF OBLIGATIONS...............13
2.1 Effective Date and Term....................................................................................13
2.2 Effect of Termination -Survival of Obligations .............................................14
ARTICLE 3.PURCHASE AND SALE..................................................................................14
3.1 Purchase and Sale of Output.............................................................................14
3.2 Delivery Point .....................................................................................................15
3.3 Environmental Attributes; Capacity Attributes and Compliance...............15
3.4 Tax Credits...........................................................................................................18
3.5 ROFO, Purchase and Related Rights ...............................................................18
ARTICLE 4.METERING........................................................................................................22
4.1 Metering Requirements .....................................................................................22
4.2 Meter Inaccuracies and Retroactive Adjustments .........................................23
4.3 Records and Audits............................................................................................23
ARTICLE 5.BILLING AND PAYMENT.............................................................................23
5.1 Billing....................................................................................................................24
5.2 Payment ...............................................................................................................24
5.3 Netting of Payments...........................................................................................25
5.4 Allocation of Taxes.............................................................................................25
ARTICLE 6.CREDIT REQUIREMENTS .............................................................................25
6.1 Financial Information.........................................................................................25
6.2 Guaranty Requirement ......................................................................................26
ARTICLE 7.SELLER’S ADDITIONAL OBLIGATIONS...................................................26
7.1 Construction, Operation and Maintenance of the Generating
Facility..................................................................................................................26
7.2 Milestones............................................................................................................27
7.3 Commercial Operation Performance Tests.....................................................28
7.4 Performance Guaranties....................................................................................29
7.5 Obligations to Schedule and Deliver ...............................................................29
7.6 Modifications to the Generating Facility.........................................................32
ARTICLE 8.FORCE MAJEURE............................................................................................32
8.1 Force Majeure Events.........................................................................................33
8.2 Conditions............................................................................................................34
8.3 Termination Due To Force Majeure Event......................................................34
ARTICLE 9.DEFAULT/REMEDIES/TERMINATION....................................................35
9.1 Events of Default Generally..............................................................................35
9.2 Additional Events of Default by Seller............................................................36
OHS WEST:261077640.9
ii
OHS West:261077640.10
23768-8 LX0/LX0
9.3 Remedies..............................................................................................................36
9.4 Indemnification
9.5 Project Viability Determination........................................................................38
ARTICLE 10.REPRESENTATIONS, WARRANTIES AND COVENANTS ....................39
10.1 Seller’s Representations, Warranties and Covenants....................................39
10.2 Buyer’s Representations, Warranties, and Covenants..................................40
ARTICLE 11.MISCELLANEOUS...........................................................................................41
11.1 Notices..................................................................................................................41
11.2 Dispute Resolution.............................................................................................41
11.3 Regulatory Compliance .....................................................................................42
11.4 No Dedication of Facilities ................................................................................43
11.5 Confidentiality ....................................................................................................43
11.6 Assignment and Reorganization......................................................................44
11.7 Waiver of Rights .................................................................................................45
11.8 Section Headings ................................................................................................45
11.9 No Third Party Beneficiary ...............................................................................45
11.10 Forward Contract ...............................................................................................46
11.11 Applicable Law...................................................................................................46
11.12 Venue ...................................................................................................................46
11.13 Nature of Relationship.......................................................................................46
11.14 Good Faith and Fair Dealing; Reasonableness...............................................46
11.15 Severability..........................................................................................................46
11.16 Counterparts........................................................................................................47
11.17 Cooperation.........................................................................................................47
11.18 Limitation of Liabilities......................................................................................47
11.19 Further Assurances.............................................................................................48
11.20 Time is of the Essence ........................................................................................48
11.21 Construction........................................................................................................48
11.22 Entire Agreement; Integration..........................................................................49
11.23 Exhibits ................................................................................................................49
Exhibit 1 [Reserved]
Exhibit 2 Description of Generating Facility
Exhibit 2.1 Leasehold Description
Exhibit 2.2 Map of Leasehold
Exhibit 2.3 Map of Delivery Point
Exhibit 2.4 Conceptual One-Line Diagram
Exhibit 3 Commercial Operation Performance Tests
Exhibit 4 Contract Price
Exhibit 5 [Reserved]
Exhibit 6 Expected Annual Contract Quantity Form
Exhibit 7 Milestones
Exhibit 8 Guaranty Agreement
OHS WEST:261077640.9
iii
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 9 [Reserved]
Exhibit 10 Operations Forecasts and Scheduling Protocols
Exhibit 11 Form of Attestation
Exhibit 12 Payment / Wire Instructions
Exhibit 13a Contacts, Buyer
Exhibit 13b Contacts, Seller
Exhibit 14 Example of Availability Shortfall Damages
Exhibit 15 Seller's Insurance Information
Exhibit 16 Agreement Modification Election Provisions
Exhibit 17 Notice of NCPA's Rights to PPA Output
Exhibit 18 Notice of NCPA's Rights to Purchase Steam
Exhibit 19 Purchase Option Transaction Terms
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
1
AMENDED AND RESTATED
RENEWABLE ENERGY POWER PURCHASE AGREEMENT
This Amended and Restated Renewable Energy Power Purchase Agreement, (the
“Agreement”) is made and effective as of March __, 2011 (“Effective Date”) by and
between the Northern California Power Agency, a joint powers agency established
pursuant to the laws of the State of California (“Buyer” or “NCPA”), and Western
GeoPower, Inc., a corporation organized and existing pursuant to the laws of the State
of California (“Seller”).
WHEREAS,Buyer and Seller entered into a Renewable Energy Power Purchase
Agreement on May 16, 2008 (“2008 PPA”), and, as a result of further negotiations and
changes in financing, desire to amend and restate the 2008 PPA; and
WHEREAS, after the execution of the 2008 PPA, the equity interests in Seller
were purchased by Ram Power, Corp. (“Ram Power”), and Seller is currently a wholly-
owned subsidiary of Ram Power; and
WHEREAS,this Amended and Restated Agreement is entered into by and
between the parties as of the Effective Date; and
WHEREAS,Seller intends to construct, own, and operate a geothermal-powered
generating facility, which qualifies as of the Effective Date as an eligible renewable
energy resource (“ERR”) under the State of California Renewable Portfolio Standard
Program (“RPS”), as codified at California Public Utilities Code Section 399.11, et seq.,
and desires to sell electricity produced by such Generating Facility together with all
Environmental Attributes and Capacity Attributes, each as defined below, exclusively
to Buyer pursuant to the terms and conditions set forth herein; and
WHEREAS,Buyer desires to be the exclusive purchaser of electricity generated
by Seller’s Generating Facility, as defined below, together with all Environmental
Attributes and Capacity Attributes pursuant to the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises hereof, and the covenants
and conditions contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Buyer and Seller, intending to
be legally bound, hereby agree as follows:
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
2
AGREEMENT
ARTICLE 1.DEFINITIONS
Unless otherwise required by the context in which any term appears, (i) initially-
capitalized terms used in this Agreement shall have the meanings specified in this
Article; (ii) terms defined in the singular shall include the plural and vice versa; (iii)
references to “Articles,” “Sections,” and “Exhibits” shall be to articles, sections, or
exhibits hereof; (iv) all references to a particular entity shall include a reference to such
entity’s successors and permitted assigns; (v) the words “herein,” “hereof,” and
“hereunder” shall refer to this Agreement as a whole and not to any particular section
or subsection hereof; (vi) all accounting terms not specifically defined herein shall be
construed in accordance with GAAP; (vii) references to this Agreement shall include all
appendices and Exhibits hereto, as the same may be amended, modified, supplemented,
or replaced from time to time; (viii) terms used in the masculine shall include the
feminine and neuter and vice versa; and (ix) the terms “include”, “including,” and other
variations thereof, when used in this Agreement, shall mean to include without
limitation.
1.1 “2008 PPA” has the meaning set forth in the recitals of this Agreement.
1.2 “Accepted Compliance Costs” has the meaning set forth in Section
3.3(g)(ii).
1.3 “Adjustment Period” means (i) the period of time when inaccurate
measurements were made by a defective Meter, if that period of time can
be determined to the mutual satisfaction of the Parties, or (ii) if the period
of time cannot be determined to the mutual satisfaction of the Parties, one-
half the period of time from the date of the last previous test of the Meter
to the date such Meter failure is discovered.
1.4 “Affiliates” means, with respect to any Person (other than an individual),
any other Person (other than an individual) that (a) directly or indirectly,
through one or more intermediaries, controls, or is controlled by such
Person or (b) is under common control with such Person. For this
purpose, “control” means the direct or indirect ownership of fifty percent
(50%) or more of the outstanding capital stock or other equity interests
having ordinary voting power.
1.5 “Agreement” has the meaning set forth in the preamble of this
Agreement.
1.6 “Assets” means all of Seller’s rights and interests in the following:
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
3
(a)the Generating Facility;
(b)any Expansion Plant;
(c)the Site and any facilities erected, installed or constructed on the
Site;
(d)the Leaseholds; and
(e)the geothermal resources and related rights to extract steam within
the terms and conditions of the Leaseholds.
1.7 “Availability Percentage” or “AP” means, for any given period, (1) the
aggregate Deemed Output for such period divided by (2) the aggregate
Contract Capacity for such period, expressed as follows:
AP for period n = 100% x Deemed Output (in MWhs) for period n
Contract Capacity (in MWhs) for period n
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
4
1.8 “Availability Shortfall Damages” has the meaning as set forth in Section
7.4.
1.9 “Balancing Authority Area” means the electric power system or successor
(or combination of electric power systems) under the operational control
of the CAISO or any other electric power system under the operational
control of another organization vested with authority comparable to that
of the CAISO.
1.10 “Business Day” means any day except a Saturday, Sunday, or a Federal
Reserve Bank holiday. A Business Day shall begin at 8:00 a.m. and end at
5:00 p.m. local time for the relevant Party’s principal place of business.
The relevant Party, in each instance unless otherwise specified, shall be
the Party from whom the notice, payment or delivery is being sent, or by
whom the notice, payment or delivery is received, as the context requires.
1.11 “Buyer” has the meaning set forth in the preamble of this Agreement.
1.12 “CAISO” means the California Independent System Operator.
1.13 “CAISO Tariff” means the duly authorized tariff, rules, protocols and
other requirements of the CAISO, as amended from time to time.
1.14 “Capacity Attributes” means any and all current or future defined
characteristics, certificates, tags, credits, ancillary service attributes, or
accounting constructs, howsoever entitled, including the rights and
privileges attached to any generating resource that satisfy any entity’s
resource adequacy obligations, (Resource Adequacy under the CAISO
Tariff), and any tracking or accounting associated with the foregoing,
attributed to or associated with the electricity generating capacity of the
Generating Facility, or any unit of electricity generating capacity of the
Generating Facility, during the Term.
1.15 “CEC” means the California Energy Commission.
1.16 “Commercial Operation” means that: (i) the Generating Facility has in all
material respects been constructed in accordance with Prudent Utility
Practice, all Permits, Requirements of Law, and the applicable
requirements and specifications set forth in Article 7 and Exhibit 2
[Description of Generating Facility], provided that the foregoing shall
exclude punch-list type items and other similar items that do not have any
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
5
material adverse effect on the ability of the Generating Facility to
commence and continue commercial operations safely and reliably; and
(ii) Seller has successfully completed the Commercial Operation
Performance Tests.
1.17 “Commercial Operation Date” means the date on which Commercial
Operation first occurs.
1.18 “Commercial Operation Performance Tests” means any tests required for
commercial operation under Seller’s Large Generator Interconnection
Agreement and as set forth in Exhibit 3 [Commercial Operation
Performance Tests].
1.19 “Compliance Actions” has the meaning set forth in Section 3.3(g)(ii).
1.20 “Compliance Expenditure Cap” has the meaning set forth in Section
3.3.(g)(i).
1.21 “Confidential Information” means information with respect to the
business of either Party provided by one Party to the other in accordance
with, or in furtherance of, this Agreement including the content of
documents, ideas, business methods, finances, prices, business plans,
financial development plans, manpower plans, customer lists or details,
computer systems, software, know-how, trade secrets or other matters
connected with such Party’s obligations hereunder; provided, however,
that “Confidential Information” shall not include information that (i) at
the time of disclosure or thereafter is generally available to, or known by,
the public other than as a result of a disclosure by the receiving Party or
its representatives in violation of this Agreement; (ii) was available to the
receiving Party on a non-confidential basis from a source other than the
disclosing Party; or (iii) was otherwise independently acquired or
developed by the receiving Party without violating its obligations
hereunder.
1.22 “Contract Capacity” means, for each month, Seller’s forecast of electricity
generation output in MWhs of the Generating Facility for such month, net
of all expected on-Site uses (e.g. parasitic loads) and any other known and
knowable impacts such as planned outages and line or transformation
losses to the Delivery Point. This forecast shall be delivered in writing to
NCPA at least ten (10) days prior to the beginning of each month in
accordance with Section 2.2 of Exhibit 10 [Operations Forecasts and
Scheduling Protocols].
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
6
1.23 “Contract Price” means the price in United States Dollars to be paid by
Buyer to Seller for the purchase of the Output, as specified in Exhibit 4
[Contract Price].
1.24 “Contractual Obligations” means, 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.
1.25 “Contract Year” means each year beginning on January 1st and ending on
December 31st of such year following the Commercial Operation Date;
provided, however, that the first Contract Year shall commence on the
Commercial Operation Date and end on the following December 31st, and
the last Contract Year shall end on the relevant anniversary of the
Commercial Operation Date as set forth in Section 2.1.
1.26 “Contract Year Period” shall mean a rolling period of three (3) Contract
Years.
1.27 “Damages” has the meaning set forth in Section 9.4.
1.28 “Deemed Output” means, for any given period, the aggregate Metered
Quantity plus the aggregate Lost Output for such period.
1.29 “Delay Liquidated Damages” means an amount equal to one dollar ($1.00)
per day.
1.30 “Delivery Point” means the point on the CAISO controlled grid at which
the Energy will be delivered by Seller and received by Buyer hereunder,
as specified in Exhibits 2 [Description of Generating Facility], Exhibit 2.3
[Map of Delivery Point] and Exhibit 2.4 [Conceptual One-Line Diagram],
and specified in Seller’s Interconnection Agreement as the “Point of
Interconnection”.
1.31 “Deviation Band” means a defined MW range, generally 3%, in which a
specific generation resource or the summation of a load/resource portfolio
may deviate from expected energy without incurring a penalty, which
may include but is not limited to the MSS Deviation Band or the
compliance range utilized to compute Uninstructed Deviation Penalties,
as defined in the CAISO Tariff.
1.32 “EA Agency” means 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
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
7
Markets Division of the United States Environmental Protection Agency,
the California Resources, Conservation and Development Commission,
the California Public Utilities Commission, and any successor agency
thereto.
1.33 “Effective Date” has the meaning set forth in the preamble of this
Agreement.
1.34 “Energy” means the electricity generated by the Generating Facility
pursuant to this Agreement, as expressed in units of kWh or MWh as
measured at the Meter(s).
1.35 “Environmental Attributes” means any and all credits, benefits, emissions
reductions, offsets, and allowances, howsoever entitled, attributable to the
generation from the Generating Facility or Expansion Plant(s), as the case
may be, and its displacement of conventional energy generation.
Environmental Attributes include: (i) 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; (ii) any avoided emissions of
carbon dioxide (CO2), methane (CH4) and other greenhouse gases that
have been determined by the United Nations Intergovernmental 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 (iii) the
reporting rights to these avoided emissions such as Green Tag Reporting
Rights.
Environmental Attributes do not include: (i) any Energy, capacity,
reliability or other power attributes from the Generating Facility or
Expansion Plant(s), (ii) Production Tax Credits or Investment Tax Credits
associated with the construction or operation of the Generating Facility, or
Expansion Plant(s), and other financial incentives in the form of grants,
credits, reductions, or allowances associated with the Generating Facility
or Expansion Plant(s) 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
Seller or the owners of the Site for the destruction of particular pre-
existing pollutants or the promotion of local environmental benefits, or
(iv) emission reduction credits or any other similar credits, offsets,
allowances or attributes encumbered, used or required by the Generating
Facility or Expansion Plant(s) for compliance with local, state, or federal
operating and/or air quality permits or other Requirements of Law,
including renewable energy credits.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
8
1.36 “Environmental Attributes Reporting Rights” means all rights to report
ownership of the Environmental Attributes to any Person, including
under Section 1605(b) of the Energy Policy Act of 1992.
1.37 “ERR” or “Eligible Renewable Energy Resource” is a resource that
qualifies under the State of California Renewable Portfolio Standard
Program, as codified at the California Public Utilities Code Sect 399.11 et
seq as an eligible renewable resource.
1.38 “ERR and RA Benefits” has the meaning set forth in Section 3.3(g)(iv).
1.39 “Event of Default” has the meaning set forth in Article 9.
1.40 “Excluded Transactions” has the meaning set forth in Section 3.5(a).
1.41 “Expansion Plant” means any expansion of the Generating Facility from
its nameplate rating capacity achieved through the addition of new or
additional generating equipment at the Site. Each such expansion of the
Generating Facility shall be deemed to be an Expansion Plant.
Notwithstanding the foregoing, production from the equipment and/or
resources defined in Exhibit 2 [Description of Generating Facility]shall be
exempt from the definition of Expansion Plant. “Expansion Plant Output”
means all capacity and associated Energy, and associated Environmental
Attributes and Capacity Attributes produced by Seller at any Expansion
Plant.
1.42 “Expected Annual Contract Quantity” means the amount of Energy that
Seller expects to deliver to Buyer hereunder in a given Contract Year other
than the first and last Contract Years (which may be partial years), as set
forth in Exhibit 6 [Expected Annual Contract Quantity Form], it being
acknowledged that such amounts are non-binding estimates.
1.43 “Force Majeure Event” has the meaning set forth in Section 8.1.
1.44 “GAAP” means Generally Accepted Accounting Principles in the United
States of America, or International Financial Reporting Standards (IFRS),
as the case may be.
1.45 “Generating Facility” means Seller’s Energy generating facility as more
particularly described in Exhibit 2 [Description of Generating Facility],
together with all materials, equipment systems, structures, features and
improvements necessary to produce electricity at such facility.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
9
1.46 “Governmental Authority” means any federal or state government, or
political subdivision thereof, including, any municipality, township or
county, or any entity or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including, any corporation or other entity owned or controlled by any of
the foregoing.
1.47 “Green Tag Reporting Rights” are the right of a Green Tag purchaser to
report the ownership of accumulated Green Tags in compliance 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 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 MWh basis and one Green Tag represents
the Environmental Attributes associated with one (1) MWh of Energy.
1.48 “Guarantor” means a Person that guarantees the obligations of Seller by
executing a Guaranty, which shall be Ram Power for purposes of this
Agreement, unless otherwise agreed to by the Parties.
1.49 “Guaranty” means a guaranty in the form attached hereto as Exhibit 8
[Guaranty Agreement].
1.50 “Interconnection” means the interconnection of the Generating Facility
with the Transmission System, including construction, installation,
operation and maintenance of all Interconnection Facilities.
1.51 “Interconnection Agreement” means an agreement between Seller and the
Transmission Provider pursuant to which Seller and the Transmission
Provider set forth the terms and conditions for Interconnection of the
Generating Facility to the Transmission System, as amended from time to
time.
1.52 “Interconnection Facilities” means all of the facilities installed for the
purpose of interconnecting the Generating Facility to the Transmission
System, including transformers and associated equipment, relay and
switching equipment and safety equipment.
1.53 “Interest Rate” means, for any date, the lesser of:(i) the per annum prime
lending rate (or reference rate) of interest of the Bank of America NT & SA
then in effect as may from time to time be published by the Bank of
America NT & SA (or if not published on such day on the most recent
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
10
preceding day on which published); or (ii) the maximum rate permitted
by applicable law.
1.54 “Investment Tax Credits” or “ITC” means investment tax credits under
Section 48 of the Internal Revenue Code, as amended from time-to-time
during the Term, or grants in lieu of tax credits.
1.55 “kWh” means 1,000 Watt-hours of electric Energy.
1.56 “Leaseholds” means the leasehold interests described in Exhibit 2.1
[Leasehold Description].
1.57 “Lender(s)” means any Person(s) providing money or extending credit
(including any lease financing) to Seller for: (i) the construction of the
Generating Facility; or (ii) the term or permanent financing of the
Generating Facility.
1.58 “Lost Output” means, for any given period, the total amount of energy
(expressed in KWhs or MWhs) in such period that the Generating Facility
would reasonably have been expected to deliver to the Delivery Point, but
failed to do so, to the extent such failure was caused by Force Majeure,
default or breach of this Agreement by Buyer, any curtailment or
reduction in deliveries ordered or caused by the CAISO or any other
Transmission Provider, or otherwise caused by Buyer in its capacity as
Scheduling Coordinator or otherwise.
1.59 “Metered Quantity” means the amount of Energy generated, delivered
and measured by Meters.
1.60 “Meters” means the physical metering devices, data processing
equipment and apparatus associated with the meters owned by Seller or
Transmission Provider or its designee, and used to determine the
quantities of Energy generated by the Generating Facility and to record
other related parameters required for the reporting of data to Seller in
accordance with the requirements of Article 4.
1.61 “Meter Service Agreement for CAISO Metered Entities” has the meaning
set forth in the CAISO Tariff.
1.62 “Milestones” means the events that are set forth in Exhibit 7 [Milestones].
1.63 “MW” means 1,000 Kilowatts of electric Energy.
1.64 “MWh” means 1,000 kWh of electric Energy.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
11
1.65 “Outage” means a physical state in which all or a portion of the
Generating Facility is unavailable to provide Energy to the Delivery Point,
including any derating or reduction in the capacity of the Generating
Facility, whether planned or unplanned.
1.66 “Output” means (i) the plant capacity and associated Energy, and (ii) all
Environmental Attributes and Capacity Attributes.
1.67 “Participating Generator Agreement” has the meaning set forth in the
CAISO Tariff.
1.68 “Party” or “Parties” refers to the Buyer and Seller, and their respective
successors and permitted assignees.
1.69 “Peak Months” means, collectively, the months of June, July, August and
September during each Contract Year.
1.70 “Permits” means, collectively, all federal, state or local authorizations,
certificates, permits, licenses and approvals required by any
Governmental Authority for the construction, ownership, operation and
maintenance of the Generating Facility.
1.71 “Person” means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity.
1.72 “Production Tax Credits” or “PTC” means production tax credits under
Section 45 of the Internal Revenue Code, as amended from time-to-time.
1.73 “Prudent Utility Practice” means those practices, methods and equipment,
as changed from time to time, that: (i) when engaged in, or employed, are
commonly used in the State of California in prudent electrical engineering
and operations to operate electricity equipment lawfully and with safety,
reliability, efficiency and expedition; or (ii) in the exercise of reasonable
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. 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
1.74 “Restricted Period” has the meaning set forth in Section 3.5(d).
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
12
1.75 “Requirements of Law” means, collectively, 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.
1.76 “ROFO” has the meaning set forth in Section 3.5(a).
1.77 “ROFO Negotiation Period” has the meaning set forth in Section 3.5(a).
1.78 “ROFO Notice” has the meaning set forth in Section 3.5(a).
1.79 “ROFO PSA” has the meaning set forth in Section 3.5(a).
1.80 “RPS” or “Renewable Portfolio Standard Program” has the meaning set
forth in the recitals of this Agreement.
1.81 “Schedule” or “Scheduling” means the actions of Seller, Buyer and/or
their designated representatives, including each Party’s Transmission
Providers, if applicable, of notifying, requesting and confirming to each
other, pursuant to the terms and conditions of the CAISO Tariff, the
quantity of Energy to be scheduled, and/or delivered on any given day or
days hereunder during the Term at the Delivery Point.
1.82 “Scheduling Coordinator” or “SC” means an entity certified by the CAISO
for the purposes of undertaking the responsibilities of a scheduling
coordinator specified by the CAISO Tariff.
1.83 “Seller” has the meaning set forth in the preamble of this Agreement.
1.84 “Site” means the real property on which the Generating Facility is to be
built and located, as more particularly described in Exhibit 2.2 [Map of
Leasehold], specifically including all land and mineral rights.
1.85 “Taxes” means any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property (including assessments, fees or other charges
based on the use or ownership of real property), personal property,
transactional, sales, use, transfer, registration, value added, alternative or
add on minimum, estimated tax, or other tax of any kind whatsoever, or
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
13
any liability for unclaimed property or escheatment under common law
principles, including any interest, penalty or addition thereto, whether
disputed or not, including any item for which liability arises as a
transferee or successor-in-interest.
1.86 “Term” has the meaning set forth in Section 2.1.
1.87 “Test Energy” means Energy generated by the Generating Facility prior to
the Commercial Operation Date.
1.88 “Transmission Provider” means any entity or entities responsible for the
Interconnection of the Generating Facility with a Balancing Authority
Area or transmitting Energy on behalf of Seller from the Generating
Facility to the Delivery Point, and on behalf of Buyer from the Delivery
Point.
1.89 “Transmission System” means the facilities used for the transmission of
electricity in interstate commerce, including any modifications or
upgrades made to such facilities, owned or operated by the Transmission
Provider.
1.90 “WREGIS” means the Western Renewable Energy Generation Information
System, or any successor renewable energy tracking system for
implementing California’s Renewables Portfolio Standard.
ARTICLE 2.TERM, TERMINATION AND SURVIVAL OF OBLIGATIONS
2.1 Effective Date and Term
(a)This Agreement shall become effective on the Effective Date and, shall
continue until the day before the twenty-fifth (25th) year anniversary of the Commercial
Operation Date, unless amended, extended or terminated pursuant to this Agreement
(“Term”).
(b)Notwithstanding any other provision of this Agreement to the contrary,
the Parties acknowledge and agree that (i) the Parties have executed and delivered this
Agreement prior to Buyer’s receipt of signed agreements between Buyer and certain of
its members authorizing Buyer to enter into this Agreement, (ii) following the date
hereof, Buyer shall undertake in good faith to obtain all such necessary agreements, (iii)
upon Buyer's obtaining and putting in place all such agreements (or Buyer's decision (in
its sole discretion) to waive the need to obtain such agreements), Buyer shall provide
written notice to Seller pursuant to Section 11.1 indicating that Buyer has obtained such
agreements or waived the need to do so, and (iv) if for any reason Buyer has failed to
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
14
provide such notice to Seller on or prior to April 30, 2011, then on May 1, 2011 (x) this
Agreement shall automatically (and without further action of the Parties) terminate,
and for all purposes shall be deemed null and void ab initio, (y) notwithstanding Section
2.2 or 3.5 or any other provision hereof, neither Party shall have any continuing rights,
remedies, obligations or liabilities hereunder and (z) the 2008 PPA shall automatically
(and without further action of the Parties) be reinstated, and shall be deemed effective
in the same manner and to the same extent as if this Agreement had never been
executed.
2.2 Effect of Termination -Survival of Obligations
(a)Upon expiration or termination of this Agreement, neither Party
shall have future or further rights nor obligations under this Agreement, except as
provided in Section 2.2(b) and 3.5 below.
(b)Survival of Obligations. The following rights, obligations or
provisions shall survive termination or expiration of this Agreement:
(i)obligations by one Party to the other for payment of any
amounts, or for performance of any duties, that have accrued or arose prior to, or have
directly resulted from, the expiration or termination of this Agreement;
(ii)indemnity obligations contained in Section 9.4, which shall
survive to the full extent of the statute of limitations period applicable to any third
party claim;
(iii)limitation of liability provisions contained in Section 11.18;
(iv)for a period of one (1) year after the expiration or
termination date, the right to dispute an invoice pursuant to Section 5.1(b); or
(v)the confidentiality obligations under Section 11.5.
ARTICLE 3.PURCHASE AND SALE
3.1 Purchase and Sale of Output
(a)In accordance with the terms and conditions hereof, commencing
on the Commercial Operation Date and continuing throughout the Term, Seller shall
sell all Output from the Generating Facility exclusively to Buyer and deliver all Energy
at the Delivery Point, and Buyer shall purchase and accept all Output from the
Generating Facility from Seller, including all Energy at the Delivery Point, and pay the
Contract Price as set forth in Exhibit 4 [Contract Price].
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
15
(b)Buyer shall purchase and receive Test Energy (and associated
Environmental Attributes) during the plant startup phase and otherwise prior to the
Commercial Operation Date. Buyer shall pay Seller One Hundred Dollars ($100) per
MWh for Test Energy delivered at the Delivery Point. In the event that, prior to the
Commercial Operation Date, the CAISO imposes any costs or penalties on Buyer for
failure to meet Buyer’s +/-3% Deviation Band for all of Buyer’s scheduled resources,
Seller agrees to compensate Buyer for the proportionate share of such costs or penalties
in amounts directly and reasonably attributable to Seller’s failure to deliver the Test
Energy in amounts that match Seller’s forecasts from the Generating Facility during
such period.
(c)Scheduled and Delivered Amounts.Following the Commercial
Operation Date, Seller shall use good faith efforts to ensure that the amounts generated
by the Generating Facility as measured by Meters match amounts forecasted by Seller in
accordance with Exhibit 10 [Operations Forecasts and Scheduling Protocols].
3.2 Delivery Point
(a)Allocation of Costs and Risks. Subject to Section 5.4, Seller shall be
responsible for any costs or charges imposed on or associated with the Output or the
delivery of the Output hereunder up to and at the Delivery Point. Buyer shall be
responsible for any costs or charges imposed on or associated with the Output, or its
receipt, after the Delivery Point.
(b)Title and Risk of Loss. Title to, and risk of loss related to, the
Output shall transfer from Seller to Buyer at the Delivery Point.
3.3 Environmental Attributes; Capacity Attributes and Compliance
(a)Generally. Throughout the Term, Seller shall transfer to Buyer, and
Buyer shall receive from Seller, all rights, titles and interest in and to the Environmental
Attributes and Capacity Attributes, if any, whether now existing or subsequently
generated or acquired (other than by direct purchase from a third party) by Seller, or
that hereafter come into existence, during the Term, as a component of the Output
purchased by Buyer from Seller hereunder. Subject to the Compliance Expenditure Cap
set forth in Section 3.3(g), Seller agrees to transfer and make such Environmental
Attributes and Capacity Attributes available to Buyer immediately to the fullest extent
allowed by applicable law upon Seller’s production or acquisition of the Environmental
Attributes and Capacity Attributes. Seller agrees that the Contract Price is the full
compensation for all Energy, Environmental Attributes, and Capacity Attributes.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
16
(b)No Assignment. Seller shall not assign, transfer, convey,
encumber, sell or otherwise dispose of any portion of the Environmental Attributes and
Capacity Attributes to any Person other than Buyer.
(c)RPS Compliance. Subject to the Compliance Expenditure Cap set
forth in Section 3.3(g), (1) before delivery of any Energy hereunder, Seller shall cause:
(A) the Generating Facility to be certified as an ERR by the appropriate entity having
jurisdiction for purposes of the RPS legislation; and (B) all Output delivered to Buyer
from the Generating Facility to qualify as output of an ERR for purposes of the RPS
legislation; (2) Seller shall ensure that the Generating Facility maintains ERR status
throughout the Term of this Agreement; and (3) Seller shall cooperate reasonably with
Buyer and provide such certifications or attestations to Buyer as are reasonably
necessary to verify that all Environmental Attributes attributable to the Energy have
been transferred to Buyer.
(d)Reporting Rights. During the Term, Seller shall not report to any
Person that the Environmental Attributes and Capacity Attributes granted hereunder to
Buyer belong to anyone other than Buyer, and Buyer may report under any program
that such attributes purchased hereunder belong to it.
(e)Attestation. Subject to the Compliance Expenditure Cap set forth in
Section 3.3(g): (1) Seller shall be responsible for complying, at its own expense, with
requests for information associated with WREGIS and/or another entity, if any, that
Buyer uses to verify its renewable energy purchases and that requires registration,
inspections, certification or other evidence of the capability of the Generating Facility to
produce Environmental Attributes or evidence of the quality and/or quantity of such
Environmental Attributes produced; (2)Seller shall document the production of
Environmental Attributes under this Agreement by delivering with each invoice to
Buyer an attestation for Environmental Attributes produced by the Generating Facility
and purchased by Buyer in the preceding calendar month; (3) on or before March 31st
of each year following a Contract Year, Seller shall document the transfer of
Environmental Attributes to Buyer under this Agreement by delivering to Buyer an
attestation for Environmental Attributes transferred under this Agreement in the
preceding Contract Year (the form of attestation is set forth as Exhibit 11 [Form of
Attestation]); and (4) Exhibit 11 [Form of Attestation]shall be updated or changed by
the 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.
(f)Documentation. Subject to the Compliance Expenditure Cap set
forth in Section 3.3(g), 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
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
17
Environmental Attributes specified in this Agreement to Buyer or its designees, as
Buyer may reasonably request. Upon notification by an 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.
(g)Compliance Expenditure Cap.
(i)Amount. Seller's required out-of-pocket costs and expenses,
in the aggregate, to take any and all actions and/or otherwise to comply with, effectuate
the use of, obtain, maintain and/or remain in compliance with any and all of the items
referenced in this Agreement as being subject to the Compliance Expenditure Cap, shall
to the extent of any and all such costs or expenses arising out of any change in any
applicable Requirements of Law following the Effective Date, be limited to a Four
Million Dollar ($4,000,000) cap in the aggregate over the entire Term of this Agreement.
Such expenditure cap is herein referred to as the “Compliance Expenditure Cap”.
(ii)Compliance Actions. Any actions required for Seller to
comply with its obligations, the cost of which are subject to the Compliance
Expenditure Cap, are herein referred to collectively as the “Compliance Actions”. If
Seller reasonably anticipates the need to incur out-of-pocket costs or expenses in excess
of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall
promptly provide notice to Buyer of such anticipated out-of-pocket costs or expenses.
Buyer will have ninety (90) days to evaluate such notice (during which time period
Seller is not obligated to take any Compliance Actions described in the notice) and shall,
within such time, either (i) agree to reimburse Seller for such costs or expenses that
exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted
Compliance Costs”), or (ii) waive Seller’s obligation to take such Compliance Actions.
If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall
take such Compliance Actions covered by the Accepted Compliance Costs as agreed
upon by the Parties and Buyer shall reimburse Seller on a current basis for Seller’s
actual costs and expenses to effect the Compliance Actions, not to exceed the Accepted
Compliance Costs.
(iii)Timing of Notices, Etc. So long as Seller carries out its
obligations under this Section 3.3(g) (including any obligation to deliver any notice
hereunder) in a reasonably timely manner using all commercially reasonable efforts,
Buyer hereby waives the consequences of, and Seller shall be excused from any delay in
performing, and from any breach of any covenant, representation or other provision
hereof, that is subject to the Compliance Expenditure Cap, during the pendency of the
procedures set forth in this Section 3.3(g) and the carrying out of Compliance Actions
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
18
or, if no Compliance Actions can reasonably be taken.
(iv)Certain Changes in Law. For purposes hereof, "ERR and RA
Attributes and Benefits" means, collectively, all Environmental Attributes, Capacity
Attributes, resource adequacy benefits, and ERR and RPS related requirements and
benefits. Notwithstanding anything to the contrary herein, the Parties acknowledge
that the Requirements of Law creating, establishing or recognizing ERR and RA
Attributes and Benefits may be expanded, changed or eliminated after the Effective
Date, and the Parties agree that, so long as Seller complies with its obligations above in
this Section 3.3(g) if Compliance Actions can reasonably be taken, in the event of any
such change in Requirements of Law after the Effective Date that eliminates or reduces
any ERR and RA Benefits and Attributes (including, without limitation, the potential
elimination of geothermal resources as qualifying for ERR status), Buyer's obligation to
receive and pay for Energy delivered hereunder at the Contract Price shall not be
excused or reduced.
3.4 Tax Credits
Buyer agrees and acknowledges that all PTCs, ITCs and other tax
credits/incentives in effect on or after the Effective Date shall be owned by Seller
and/or the owners of the Generating Facility or the Site.
3.5 ROFO, Purchase and Related Rights
Subject to the provisions of Exhibit 16 [Agreement Modification Election
Provisions]:
(a)Buyers Right of First Offer to Purchase Assets. If Seller decides to
sell any portion of the Assets (including, but not limited to the Generating Facility,
Expansion Plant, Leaseholds or any and all rights pertaining to the project) to any
creditworthy third party, then, prior to entering into any material negotiations to carry
out such a sale, Seller first shall provide notice of such proposed sale (“ROFO Notice”)
to Buyer pursuant to Section 11.1 of this Agreement and provide a right of first offer
(“ROFO”) to Buyer with respect to such proposed sale in accordance with the
provisions of this Section 3.5(a). Upon Buyer's receipt of a ROFO Notice, Buyer shall
have the right to negotiate in good faith with Seller for no more than ninety (90)days
following the date of the ROFO Notice (unless otherwise agreed to by Seller, and
hereinafter referred to as the “ROFO Negotiation Period”) the terms of a purchase and
sale agreement (“ROFO PSA”) for the sale or transfer of the subject Assets to Buyer.
Seller will provide in a timely manner information regarding the subject assets which is
reasonable or customary to allow Buyer to perform due diligence and to negotiate in
good faith for the purchase of such Assets during the ROFO Negotiation Period.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
19
Notwithstanding anything to the contrary contained herein, the ROFO provisions of
Sections 3.5(a) and (c) shall not in any event apply to any “Excluded Transactions”,
which shall include (i) the sale or transfer of any Assets in connection with any sale-
leaseback or other similar financing, refinancing or monetization related transaction
with respect to any Assets (including any transfer of any Site, Leaseholds or geothermal
resource rights in connection with which Seller monetizes the value thereof and enters
into a lease, steam supply or other similar agreement), (ii) any corporate reorganization,
merger, combination or similar transaction or transfer of assets or ownership interests
involving Seller or its Affiliates, provided that the Assets continue to be owned by an
entity the equity interests of which (excluding any equity interests owned by providers
of tax equity financing) are owned in majority part, directly or indirectly, by Ram
Power, Corp., (iii) any sale of Assets in the ordinary course of Seller’s business that does
not constitute a sale of all or substantially all of Seller’s Assets and which does not
adversely effect Seller’s ability to perform its obligations under this Agreement, and (iv)
any sale or transfer of any Assets as contemplated by Section 11.6(b). The provisions of
this Section 3.5(a) shall survive any early termination of this Agreement pursuant to
Section 9.3(A) (excluding only a termination arising out of a breach of this Agreement
by Buyer) or 9.5 for a period ending on the earlier of (i) the date that is five (5) years
following the date of such termination and (ii) the twenty fifth (25th) anniversary of the
Commercial Operation Date; provided that Buyer's rights under this Section 3.5(a) shall
automatically and forever expire and terminate if Seller ever provides Buyer an offer
notice pursuant to Section 3.5(e) and Buyer fails to accept such offer. None of Buyer’s
ROFO related rights under this Section 3.5(a) shall apply to, or be triggered by, any
exercise by or on behalf of any Lender of any rights or remedies of any Lender or
Lenders’ trustee under any security agreement, deed of trust or other security related
documents.
(b)Buyer’s Right to Purchase Expansion Output. Seller may in its sole
discretion determine, from time to time, during the Term to sell, develop, finance,
construct and/or operate an Expansion Plant. Each time such a determination is made,
Seller shall notify Buyer of such determination and shall offer in writing to sell the
Expansion Plant Output to Buyer at a contract price to be determined by the offer and
the acceptance. The offer shall include the price to be paid by Buyer for the Expansion
Plant Output, and the term of the proposed Power Purchase Agreement (“PPA”). The
PPA shall otherwise conform to the terms and conditions of this Agreement, mutatis
mutandis. If Buyer wishes to accept such offer to purchase all (or a portion) of the
Expansion Plant Output, Buyer shall so notify Seller within ninety (90) days of its
receipt of such offer. The Parties shall promptly thereafter enter into a definitive PPA
incorporating the terms of such offer. Until such an Expansion Plant PPA is executed,
Seller’s proposal accepted by Buyer (including any modifications agreed upon in
writing by both Parties), shall control all dealings between the Parties relating to the
Expansion Plant.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
20
(c)Seller’s Right to Sell to Third Parties. If (1) for any reason Buyer (a)
fails to reach agreement with Seller on the final terms of an applicable ROFO PSA
within ninety (90) days after receipt of Seller’s ROFO Notice, or (b) fails to obtain the
approval of such ROFO PSA from Buyer’s governing commission or board (and
provide a copy thereof to Seller) within one hundred twenty-five (125) days after receipt
of Seller’s ROFO Notice or (c) fails to obtain any necessary approval(s) of such ROFO
PSA from Buyer’s members (and provide a copy thereof to Seller), and actually execute
and deliver to Seller such ROFO PSA, within one hundred seventy (170) days after
receipt of Seller’s ROFO Notice; or (2) for any reason Buyer does not accept Seller’s offer
to sell Expansion Plant Output within ninety (90) days of Buyer’s receipt of Seller’s offer
therefor under Section 3.5(b), then and in any such case under preceding clauses (1) or
(2), as applicable, Seller shall be free to offer to sell such Assets, or 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 last offer to Buyer therefor. If Seller sells such Assets or
Expansion Plant Output to a third party, Seller shall promptly provide to Buyer a
written officer's certificate by which an officer of Seller certifies that the terms and
conditions of sale of such Assets or Expansion Plant Output to such third party, taken
as a whole, are at least as favorable to Seller as the price and other terms and conditions
set forth in Seller’s last offer to Buyer, and Seller shall provide Buyer a summary of the
relevant third party contract and any other supporting documentation necessary to
support such certification. Upon the sale of such Assets or Expansion Plant Output in
compliance with this Agreement, Buyer shall have no further rights to be offered or to
purchase such Assets or Expansion Plant Output. Buyer’s refusal to purchase specific
Assets or Expansion Plant Output from one Expansion Plant shall not affect Buyer’s
right to purchase other Assets the Seller subsequently wishes to sell, or Buyer’s right to
purchase the Expansion Plant Output from a later Expansion Plant under the terms of
this Agreement. Prior to the termination of this Agreement, Seller shall not sell Assets
nor provide Buyer’s Expansion Plant Output to any third party unless it can do so
without compromising in any material way its ability to provide the Output to Buyer
hereunder. The materiality of any such impact shall be determined by Buyer in its
reasonable discretion.
(d)New PPA Rights. If this Agreement is terminated prior to the
closing of the construction financing for the Generating Facility pursuant to Section
9.3(A) (excluding only a termination arising out of a breach of this Agreement by Buyer)
or 9.5, Seller may not sell, or enter into a contract to sell, any electric energy or other
Output (but excluding, for the avoidance of doubt, steam, which is the subject of Section
3.5(e)), generated by, associated with or attributable to a generating facility installed at
the Site to a party other than Buyer for a period of five (5) years following the date of
such termination (the “Restricted Period”); provided that Buyer's rights under this
Section 3.5(d) shall automatically and forever expire and terminate if Seller ever
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
21
provides Buyer an offer notice pursuant to Section 3.5(e) and Buyer fails to accept such
offer. This prohibition on contracting and sale will not apply if, before entering into
such contract or making a sale to a party other than Buyer, Seller provides Buyer with a
written offer to sell the electric energy or other Output to Buyer at the Contract Price
and on other terms and conditions materially similar to the terms and conditions
contained in this Agreement and Buyer fails to accept such offer within sixty (60) days
after Buyer’s receipt thereof. Seller may not sell or transfer the Site or any part thereof
during the Restricted Period so long as the limitations contained in this Section 3.5(d)
apply, unless the transferee agrees to be bound by the terms set forth in this
Section 3.5(d), pursuant to a written agreement in a form reasonably acceptable to
Buyer. Upon any termination of this Agreement in circumstances where Buyer’s rights
under this Section 3.5(d) are triggered, Seller shall deliver a Notice of Buyer’s Rights in
respect of the Site, in the form attached hereto as Exhibit 17 [Notice of NCPA's Rights to
PPA Output], that Buyer may record giving notice of Buyer’s rights under this
Section 3.5(d).
(e)Purchase Option Upon Steam Sale.
(1)Prior to the closing of the construction financing of the
Generating Facility, Seller may not sell, or enter into a contract to sell, any steam arising
out of any of the Leaseholds. Additionally, if this Agreement is terminated prior to the
closing of the construction financing for the Generating Facility pursuant to Section
9.3(A) (excluding only a termination arising out of a breach of this Agreement by Buyer)
or 9.5, then Seller may not sell, or enter into a contract to sell, any steam arising out of
any of the Leaseholds during the Restricted Period. This prohibition on contracting and
sale (i) shall not apply to Excluded Transactions and (ii) shall not apply if, before
entering into any such contract or making a sale of steam to a third party, Seller
provides Buyer with a written offer to sell all of Seller’s Assets to Buyer in accordance
with the provisions of this Section 3.5(e), and Buyer declines such offer or fails to accept
such offer within ninety (90) days after Buyer’s receipt thereof.
(2)If Buyer provides written notice to Seller accepting an offer
by Seller within ninety (90) days pursuant to Section 3.5(e)(1), then the purchase price
and other terms and conditions of the purchase and sale of Assets from Seller to Buyer
shall be as set forth on Exhibit 19 [Purchase Option Transaction Terms].
(3)Upon termination of this Agreement in circumstances where
Buyer’s rights under this Section 3.5(e) are triggered, Seller shall deliver a Notice of
Buyer’s Rights in respect of the Assets, in the form attached hereto as Exhibit 18 [Notice
of NCPA's Rights to Steam], that Buyer may record giving notice of Buyer’s rights
under this Section 3.5(e).
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
22
(f)Termination of Leaseholds. For so long as this Agreement is in
effect, Seller may not terminate, assign or significantly modify any Leasehold
agreements, if any such termination, assignment or modification would reasonably be
expected to have a material adverse effect on Seller’s ability to perform its obligations
hereunder, without the prior written consent of Buyer, which consent shall not be
unreasonably withheld or delayed.
(g)Acknowledgement. For the avoidance of doubt, the Parties
acknowledge and agree that Buyer's ROFO, option, purchase and other similar rights
set forth in this Section 3.5 or elsewhere herein that in any way relate to all or any
portion of Seller's Assets are intended to relate solely to Seller's Assets, and not to the
assets or other rights owned or held by any Affiliate of Seller or any other third party.
ARTICLE 4.METERING
4.1 Metering Requirements
(a)Meters. The transfer of Energy from Seller to Buyer shall be
measured by CAISO certified revenue quality Meters at the Delivery Point or corrected
to the Delivery Point. Such Meters shall be selected, provided, installed, owned,
maintained and operated, at Seller’s sole cost and expense, by Seller or its designee in
accordance with the CAISO Tariff. Seller shall exercise reasonable care in the
maintenance and operation of the Meters, 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.
(b)SCADA. Seller shall install and maintain all equipment and data
circuits necessary to determine and transmit real time supervisory control and data
acquisition (“SCADA”) system data and real time data from the Meters to the CAISO.
Seller shall provide to Buyer a copy of each certificate of compliance issued by CAISO,
if any.
(c)Access by Buyer. Buyer, at its discretion, shall be provided access
to all monitored SCADA points to be used for real time monitoring, supervisory control
and data acquisition. Buyer may further, at its sole cost and expense, install any
updates or upgrades to the Meters, as well as 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 such equipment
does not interfere with Seller’s Meters. Seller shall permit Buyer or Buyer’s
representative access to its Generating Facility for the purpose of installing and
maintaining such check meters.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
23
(d)ISO Requirements. Seller shall submit to the CAISO, or allow the
CAISO to retrieve, any meter data required by the CAISO related to the Generating
Facility and its Output in accordance with the CAISO Tariff.
4.2 Meter Inaccuracies and Retroactive Adjustments
If a Meter fails to register, or if the measurement made by a Meter is found upon
testing to be inaccurate by an amount exceeding plus or minus one percent (1%), an
adjustment shall be made correcting all measurements made by the inaccurate or
defective Meter during the Adjustment Period. If the Parties are unable to agree on the
amount of the adjustment to be applied to the Adjustment Period, the amount of the
adjustment shall be determined: (i) by correcting the error if the percentage of error is
ascertainable by calibration, tests or mathematical calculation, or (ii) if not so
ascertainable, by estimating on the basis of the deliveries under similar conditions
during periods when the Meter was registering accurately. Upon the determination of
the amount of any adjustment and upon acceptance of such adjustment by the CAISO,
if applicable, Buyer shall pay to Seller any additional amounts then due for deliveries of
Output during the Adjustment Period at such time as other payments are due for the
billing period in which the determination is made, or Buyer shall be entitled to a credit
against the next subsequent payments due for the deliveries of Output, whichever case
is applicable. The Parties agree to abide by protocols under the CAISO Tariff for
handling Meter inaccuracies.
4.3 Records and Audits
Seller and Buyer shall each keep complete and accurate records and all other
data required by each Party for the purposes of proper administration of this
Agreement, including such records as may be required by state or federal regulatory
authorities. To facilitate payment and verification, Seller and Buyer shall keep all books
and records necessary for billing and payments and grant the other Party reasonable
access to those records. Seller and Buyer, at their own expense, shall have the right to
audit and to examine the billing and operating records and data kept by the other Party
relating to the transactions under, and the administration of, this Agreement at any time
during normal business hours throughout the Term of this Agreement and for two (2)
years thereafter. All such records and data shall be maintained by each Party
throughout the Term of this Agreement and for a period of not less than two (2) years
following the termination hereof. All such audits and examinations shall be conducted
upon reasonable notice and during normal business hours.
ARTICLE 5.BILLING AND PAYMENT
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
24
5.1 Billing
(a)Seller shall provide to Buyer on or before the tenth (10th) day of
each month:
(i)An invoice based upon the Energy produced and delivered
to the Delivery Point as described in Exhibit 4 [Contract Price]in the previous calendar
month.
(ii)The corresponding attestation pursuant to Exhibit 11 [Form
of Attestation]. Such invoice shall be delivered as specified under Section 11.1.
(b)Disputes over Invoice. Should either Seller or Buyer determine at a
later date, but in no event later than one (1) year after the original invoice date, that the
invoice amount was incorrect, that Party shall promptly notify the other Party of the
error. In the event that an invoice or portion thereof, or any other claim or adjustment
arising hereunder, is disputed, payment of the undisputed portion of the invoice shall
be required to be made when due, with notice of the objection given to the other Party.
Payment of the disputed amount shall not be required until the dispute is resolved.
Upon resolution of the dispute, any required payment shall be made within thirty (30)
Business Days of such resolution along with interest accrued at the Interest Rate from,
and including, the due date to, but excluding the date paid. Inadvertent overpayments
by Buyer shall be returned upon request or deducted by Seller from subsequent
payments, with interest accrued at the Interest Rate from, and including, the date of
such overpayment to, but excluding the date repaid or deducted by, Seller. Any
dispute with respect to an invoice is waived unless the other Party is notified in
accordance with this Section 5.1(b) within one (1) year after the invoice is rendered or
any specific adjustment to the invoice is made. If an invoice is not rendered within one
(1) year after the close of the month during which performance occurred, the right to
payment for such performance is waived. Failure of Buyer or its agent to withhold any
payment amount from any invoice is not a waiver of Buyer’s right to challenge such
invoice.
5.2 Payment
(a)Subject to Section 5.1(b), all invoices under this Agreement shall be
due and payable on the twentieth (20th) day of the month in which the invoice was
received or the tenth (10th) day after receipt of the invoice which ever is later or, if such
day is not a Business Day, then on the next Business Day. Each Party shall make
payments by electronic funds transfer as set forth in Exhibit 12 [Payment/Wire
Instructions], or by other mutually agreeable method(s), to the account designated by
the other Party.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
25
(b)Late Payments and Interest Rate. Payments made after the due
date shall be considered late and shall bear interest on the unpaid balance at an annual
rate equal to two percent (2%) plus the Interest Rate. Interest shall be computed on the
basis of a three hundred sixty five (365) day year.
5.3 Netting of Payments
The Parties hereby agree that they shall discharge debts and payment obligations
due and owing to the other on the same date through netting, in which case all amounts
owed by each Party to the other for the purchase and sale of Output during the monthly
billing period under this Agreement, including any related damages, interest, and
payments or credits, shall be netted so that only the excess amount remaining due shall
be paid by the Party who owes it.
5.4 Allocation of Taxes
Seller shall pay or cause to be paid all Taxes on or with respect to the Output sold
and delivered hereunder arising prior to the Delivery Point. Buyer shall pay or cause to
be paid all Taxes on or with respect to the Output purchased and received hereunder
arising at and from the Delivery Point. In the event Seller is required by law or
regulation to remit or pay Taxes which are Buyer’s responsibility hereunder, Buyer
shall promptly reimburse Seller for such Taxes. If Buyer is required by law or
regulation to remit or pay Taxes which are Seller’s responsibility hereunder, Buyer may
deduct the amount of any such Taxes from the sums due to Seller under this
Agreement. Nothing shall obligate or cause a Party to pay or be liable to pay any Taxes
for which it is exempt under the law.
ARTICLE 6.CREDIT REQUIREMENTS
6.1 Financial Information
If requested by one Party, the other Party shall deliver: (i) within one hundred
and eighty (180) days following the end of each fiscal year, a copy of the other Party’s
annual report containing audited consolidated financial statements for such fiscal year,
and (ii) within sixty (60) days after the end of each of its first three (3) fiscal quarters of
each fiscal year, a copy of the other Party’s quarterly report containing unaudited
consolidated financial statements for such fiscal quarter. In all cases the statements
shall be for the most recent accounting period and prepared in accordance with GAAP;
provided, however, that should any such statements not be available on a timely basis
due to a delay in preparation or certification, such delay shall not be an Event of Default
so long as the other Party diligently pursues the preparation, certification and delivery
of the statements. In the event that such Party does not prepare audited financial
statements, such Party shall provide financial statements prepared in accordance with
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
26
GAAP demonstrating its financial condition in form and substance reasonably
acceptable to the other Party.
6.2 Guaranty Requirement
Seller shall provide Buyer with an executed Guaranty from Guarantor in the
form of Exhibit 8 [Guaranty Agreement]on or before the Effective Date. Any failure to
provide Buyer with a Guaranty shall be deemed an Event of Default under this
Agreement. Seller may at any time in its discretion substitute a letter of credit for the
Guaranty by delivering to Buyer an irrevocable, clean, standby letter of credit from a
bank having a credit rating of at least A-from S&P or A3 from Moody's, and otherwise
in a form and containing terms, reasonably acceptable to Buyer, in a face amount equal
to Guarantor's maximum liability under the Guaranty (depending on whether before or
after the Commercial Operation Date, as applicable), whereupon Buyer shall return the
Guaranty to Guarantor. For purposes of the foregoing, any such letter of credit shall be
deemed “clean” (as such term is used above) if, in order for Buyer to draw down
thereunder, Buyer shall be required only to present the original letter of credit to the
issuing bank and to execute and deliver to the issuing bank a certificate in a form to be
attached to the letter of credit whereby Buyer certifies that it is entitled to draw down
thereunder pursuant to the terms of this Agreement.
ARTICLE 7.SELLER’S ADDITIONAL OBLIGATIONS
During the Term of this Agreement, Seller hereby agrees to perform the
following obligations, in addition to any of Seller’s other obligations pursuant to this
Agreement:
7.1 Construction, Operation and Maintenance of the Generating Facility
(a)Generally. Seller shall develop, finance, construct, own, operate,
and maintain the Generating Facility in all material respects in accordance with this
Agreement, all Requirements of Law, Permits and Prudent Utility Practice.
(b)Compliance. Seller shall, in its own name and at its own expense,
in all material respects seek, obtain, maintain, comply with and, as necessary, renew
and modify from time to time, all Permits and other authorizations that are required by
any Requirements of Law or Governmental Authority as are necessary for Seller to
engage in the activities and obligations required by the Agreement, subject to the
Compliance Expenditure Cap set forth in Section 3.3(g) with respect to Seller’s
obligations set forth in Section 3.3.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
27
(c)Records. Seller shall in all material respects keep complete and
accurate operating and other records and all other data for the purposes of proper
administration of this Agreement as reasonably required by Buyer, including such
records as may be required by any Governmental Authority or Prudent Utility Practice.
(d)Disclosure. Subject to Section 11.5, Seller shall provide to Buyer
such information regarding the permitting, engineering, construction or operations of
the Generating Facility as Buyer may from time to time reasonably request, subject to
licensing or other restrictions of Seller or a third party with respect to confidentiality,
disclosure or use.
(e)Insurance. Seller shall obtain and maintain the policies of
insurance in amounts and with coverage as set forth in Exhibit 15 [Seller’s Insurance
Information].
7.2 Milestones
(a)Generally. Seller covenants that it will diligently pursue all
Milestones set forth in Exhibit 7 [Milestones], including the Commercial Operation
Date. The Parties agree that time is of the essence in connection with the completion of
the Generating Facility, and for achieving Commercial Operation, and that certain
Milestones for the development, financing and construction of the Generating Facility
must be achieved in a timely fashion or Buyer shall suffer damages. Seller shall achieve
the Milestones by the corresponding dates set forth in Exhibit 7 [Milestones].
(b)Monthly Reports. Starting on the Effective Date, Seller shall
provide to Buyer monthly progress reports concerning the progress towards completion
of the Milestones. In addition, within five (5) Business Days of the completion of each
Milestone, Seller shall provide a certification to Buyer (along with any supporting
documentation) demonstrating the satisfaction of such Milestone. Seller shall provide
to Buyer additional information concerning Seller’s progress towards, or confirmation
of, achievement of the Milestones, as Buyer may reasonably request from time to time.
(c)Notice of Failure To Achieve a Milestone. Upon becoming aware
that Seller will, or is reasonably likely to, fail to achieve one or more Milestone(s) by the
required date, for any reason including a Force Majeure Event, Seller shall so notify
Buyer in writing as soon as is reasonably practical. Such notice shall explain the cause
of the delay, provide an updated date for achievement of the Milestone(s), and describe
Seller’s plan for meeting such Milestone(s). Seller’s notice will also explain any impact
such delay may or will have on any other Milestone, and the measures to be taken to
mitigate such impact.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
28
(d)Failure To Achieve Milestone. In the event that Seller fails to meet
any Milestone by the applicable Milestone deadline as set forth in Exhibit 7
[Milestones], as such deadline may be extended as a result of a Force Majeure Event in
accordance with Section 7.2(e), Seller shall be obligated to pay (as its sole and exclusive
liability and obligation, but subject to the following sentence) and Buyer shall be
entitled to receive (as its sole and exclusive right and remedy, but subject to the
following sentence) Delay Liquidated Damages for each full day that Seller is late in
satisfying the Milestone for up to eighteen (18) months. After eighteen (18) months, if
Seller has not met such Milestone, such failure shall be deemed to be an Event of
Default under this Agreement, and, without limiting Buyer's rights that survive
termination of this Agreement under Section 3.5, Buyer shall have the right to terminate
this Agreement pursuant to Section 9.3(A).
(e)Force Majeure Event. In the event that a Force Majeure Event
causes any delay in the achievement of a Milestone, such Milestone’s deadline shall be
extended, together with any Force Majeure Event extensions for other Milestones, for a
period not to exceed, in the aggregate, 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) months. The extension provided for in this Section 7.2(e) shall
be the only effect of a Force Majeure Event on Seller’s obligations with respect to the
Milestones.
(f)Waiver of Right. Buyer may, at its discretion, grant waivers for
Seller’s failure to meet any of the Milestones, but in no way shall any such waiver
constitute a waiver of any future failures by Seller to meet other Milestones.
7.3 Commercial Operation Performance Tests
No later than fourteen (14) days prior to conducting its Commercial Operation
Performance Tests in accordance with Exhibit 3 [Commercial Operation Performance
Tests]Seller shall notify Buyer of the date on which it intends to conduct such tests.
Within seven (7) days of the successful completion of Seller’s Commercial Operation
Performance Tests, Seller shall provide to Buyer written notification of the Commercial
Operation Date, including any relevant data demonstrating that Commercial Operation
has occurred. Buyer has the right to be present during any Commercial Operation
Performance Test, and to receive all information, including meter and performance data
associated with such tests. Seller may change the date for such tests upon written notice
to Buyer, provided that Buyer has at least fourteen (14) days notice of the date of such
tests.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
29
7.4 Performance Guaranties
(a)Availability Percentage. Seller shall report to Buyer the
Availability Percentage for each month within fifteen (15) days following the end of
such month. At the end of each Contract Year (excluding the first and last Contract
Years, which are not full calendar years), Buyer shall calculate the overall Availability
Percentage for such Contract Year. If the Availability Percentage for any such Contract
Year is at or above 90%, irrespective of the fluctuations from month to month, there will
not be any Availability Shortfall Damages due from Seller to Buyer. In the event the
Availability Percentage is below 90% for any such Contract Year, Seller shall pay Buyer
Availability Shortfall Damages. The Availability Shortfall Damages shall be calculated
by comparing the Deemed Output against the Contract Capacity for each month in such
Contract Year. Only the months where the Availability Percentage was less than 90%
will be subject to the Availability Shortfall Damages. The Availability Shortfall
Damages for any such month shall be equal to (x) the difference between the Deemed
Output and Contract Capacity for such month (expressed in MWhs) multiplied by (y)
five dollars ($5) per MWh. The sum of the Availability Shortfall Damages for each
applicable month in such Contract Year is the amount Seller will be obligated to pay to
Buyer. Buyer shall send an invoice to Seller reflecting the amount due, and Seller shall
make the payment to Buyer within 30 days of the invoice date. An example of how the
Availability Shortfall Damages are to be calculated is set forth in the attached Exhibit 14
[Example of Availability Shortfall Damages].
(b)Limitations. The Parties recognize and agree that: (i) the actual
damages to Buyer for a failure by Seller to meet the Availability Percentage specified
above are difficult or inconvenient to determine; (ii) payment of amounts by Seller
pursuant to this Section 7.4 is an appropriate remedy, and shall be Seller’s sole and
exclusive liability and obligation and Buyer’s sole and exclusive right and remedy,
arising out of or relating to any shortfalls in Output or any failure to meet the
Availability Percentage specified above; and (iii) any such payment does not constitute
a forfeiture or penalty of any kind, but rather constitutes anticipated costs to Buyer
under the terms of this Agreement.
7.5 Obligations to Schedule and Deliver
(a)Scheduling Coordinator Activities.
(i)Annual Fee. Both Parties agree that for purposes of this
Agreement, Buyer shall act as Scheduling Coordinator for Seller, and commencing upon
the date of the initial synchronization of the Generating Facility, Seller shall pay to
Buyer an annual fee in the amount of Seventy Thousand Dollars ($70,000.00) per year
(pro-rated for partial years) for such services. Such fee shall be adjusted annually
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
30
commencing with the fee paid in the second Contract Year based on the change in the
Bureau of Labor Statistics Consumer Price Index published for the preceding twelve
(12) months. The amount of such fee allocable to each month (based on equal monthly
installments) shall be paid against an invoice from Buyer to Seller each month. The
Parties shall make reasonable efforts to comply with all applicable CAISO requirements
and the provisions of Exhibit 10 [Operations Forecasts and Scheduling Protocols].
(ii)Scheduling. While it is Scheduling Coordinator, Buyer shall
perform all duties of a Scheduling Coordinator under the CAISO Tariff for and on
behalf of Seller and the Generating Facility. Except as specifically set forth herein, Seller
shall owe no fees to Buyer for providing services as Scheduling Coordinator. At least
thirty (30) days prior to the initial synchronization of the Generating Facility to the
CAISO grid, Seller shall take all actions and execute and deliver to Buyer and the
CAISO all documents necessary to authorize or designate Buyer as Seller’s Scheduling
Coordinator effective as of initial synchronization. On and after initial synchronization
Seller shall not authorize or designate any other party to act as Seller’s Scheduling
Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling
Coordinator, and Seller shall not revoke Buyer’s authorization to act as Seller’s
Scheduling Coordinator unless Buyer fails to perform its duties as Scheduling
Coordinator or as otherwise agreed to by Buyer. Buyer (as Seller’s Scheduling
Coordinator) shall submit Schedules to the CAISO based on the final schedules and
forecasts developed in accordance with Exhibit 10 [Operations Forecasts and
Scheduling Protocols] and the applicable CAISO Tariff, protocols and Scheduling
practices for Energy on a day-ahead, hour-ahead, or real time basis. Buyer (as Seller’s
Scheduling Coordinator) shall submit Schedules and any updates to such Schedules to
the CAISO based on the most current forecast of Contract Capacity within the
applicable scheduling timelines established in the CAISO Tariff.
(iii)Notices. Buyer (as Seller’s Scheduling Coordinator) shall
provide Seller with access to a web based system through which Seller shall submit to
Buyer all notices and updates required under the CAISO Tariff regarding the
Generating Facility’s status, including, but not limited to, all outage requests, forced
outages, forced outage reports, clearance requests, or other items. This information
must be promptly provided by Seller to Buyer in order for Buyer to remain compliant
with North American Electric Reliability Corporation (NERC) and Western Electricity
Coordinating Council (WECC) reliability criteria. Buyer shall utilize the CAISO outage
reporting systems to report outages. Seller will cooperate with Buyer to provide such
notices and updates. If the web based system is not available, Seller shall promptly
submit such information to Buyer and the CAISO (in order of preference)
telephonically, by electronic mail,or facsimile transmission to the personnel designated
to receive such information.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
31
(iv)CAISO Costs and Revenues. Except as otherwise set forth in
Section 3.1(b) or this Section 7.5(a)(iv), Buyer (as Seller’s Scheduling Coordinator) shall
be responsible for all CAISO costs (including penalties, negative imbalance energy
costs, and other charges of any type) and shall be entitled to all CAISO revenues
(including credits, positive imbalance energy revenues, and other payments) as the
Scheduling Coordinator for the Generating Facility, including revenues associated with
CAISO dispatches, bid cost recovery, inter-SC trade credits, or other credits in respect of
the Energy Scheduled or delivered from the Generating Facility. Seller shall be
responsible for CAISO charges or penalties solely to the extent set forth in Section 3.1(b)
and this Section 7.5(a)(iv), in each case directly resulting from the Seller not notifying
Buyer (as Seller’s Scheduling Coordinator) of outages or other unavailability of
Generating Facility capacity in a timely manner (in accordance with the CAISO Tariff
with respect to notifying the CAISO, if applicable, and as set forth in Exhibit 10
[Operations Forecasts and Scheduling Protocols] with respect to notifying Buyer).
(v)General Scheduling Acknowledgements. The Parties
acknowledge and agree that:
(a)the Generating Facility is intended to be run as a
baseload, as-available facility, non-dispatchable and non-curtailable, except in
Emergencies within the meaning of the CAISO Tariff and as set forth in paragraph (c)
below;
(b)Buyer, acting as Seller’s Scheduling Coordinator, shall
be obligated to Schedule all Energy that Seller forecasts to be available, except as set
forth in paragraph (c) below;
(c)Buyer, as Seller’s Scheduling Coordinator, may make
economic bids on the Generating Facility's energy output in the CAISO administered
market, and Buyer may (within the operating limits of the Generating Facility, and
subject to Prudent Utility Practices) direct Seller to curtail the Generating Facility’s
energy output for any period during which prices in the CAISO administered market
are negative; provided that:
(i)Buyer shall be obligated to (A) pay Seller at the
Contract Price for any and all reductions in Output, (B) reimburse Seller on an after-tax
basis for the value of any and all lost PTCs or other tax benefits and (C) reimburse Seller
for any an all operating, maintenance, ramp-down, re-start and other costs or expenses
of any type incurred by Seller,in each case (A), (B) and (C) arising out of any reductions
in Output resulting from any such economic bidding or curtailment directions by
Buyer; and
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
32
(ii)all such reductions in Output resulting from
any such economic bidding or curtailment directions by Buyer shall be deemed to be
Lost Output hereunder
(d)except as expressly set forth herein, Buyer, as Seller’s
Scheduling Coordinator, shall be entitled to all CAISO revenues and payments, and
shall be responsible for all CAISO liabilities and penalties, in each case arising from or
related to Energy from the Generating Facility; and
(e)Buyer, as Seller’s Scheduling Coordinator, shall carry
out all of its Scheduling Coordinator duties and obligations in good faith and in a
reasonable and prudent manner.
(b)Agreement with Transmission Provider. Seller shall, at its own cost
and expense, negotiate and enter into an Interconnection Agreement and such other
agreements with the Transmission Provider as needed to enable Seller to transmit
Energy to the Delivery Point.
(c)Agreements with CAISO. Seller shall, at its own cost and expense,
negotiate and enter into any agreements with the CAISO required by the CAISO for
generators delivering power into the CAISO-controlled grid, including, but not limited
to, a Meter Service Agreement for CAISO Metered Entities and a Participating
Generator Agreement.
(d)Start-ups and Shut-downs. Seller shall coordinate all Generating
Facility start-ups and shut-downs, in whole or in part, with Buyer in accordance with
CAISO Tariff requirements and the reasonable protocols established by Buyer that are
not inconsistent with the CAISO Tariff and CAISO procedures, as specified in Exhibit 10
[Operations Forecasts and Scheduling Protocols].
7.6 Modifications to the Generating Facility
Seller shall obtain Buyer’s written consent, which shall not be unreasonably
withheld or delayed, prior to making any modifications to the Generating Facility that
are likely to adversely affect Seller’s or Buyer’s ability to perform its obligations under
this Agreement, including the delivery of the Expected Annual Contract Quantity and
meeting the Availability Percentage requirements of Section 7.4. Any such
modifications shall be conducted in accordance with Prudent Utility Practice and all
applicable laws and reliability criteria, as such may be amended from time to time.
ARTICLE 8.FORCE MAJEURE
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
33
8.1 Force Majeure Events
(a)Definition. “Force Majeure Event” shall mean any event beyond
the reasonable control of the Party affected that does not result from such Party’s
negligence or breach of this Agreement, that is not excluded under Section 8.1(b) and
that satisfies the requirements of Section 8.1(c), including, to the extent meeting the
foregoing requirements, the following events:
(i)acts of God such as storms, floods, lightning and
earthquakes;
(ii)sabotage or destruction by a third party of facilities and
equipment relating to the performance by the affected Party of its obligations under this
Agreement;
(iii)Transmission System or generating equipment failure;
(iv)war, riot, acts of a public enemy or other civil disturbance;
(v)strike, walkout, lockout or other significant labor dispute;
(vi)subject to the proviso to Section 7.5(a)(v)(c), curtailment of
the Generating Facility by the CAISO or any Transmission Provider; or
(vii)failures or delays by the Transmission Provider or the
CAISO in entering into, or performing under, all agreements with Seller contemplated
by this Agreement.
(b)Exclusion. Force Majeure Event does not include the following:
(i)economic hardship of either Party, including, but not limited
to, failure to obtain financing;
(ii)an Outage, except if caused directly by an event or
circumstance that meets the requirements set forth in this Section 8.1; and
(iii)failure or delay in the granting of Permits.
(c)Excuse. Subject to Section 8.2 below, and except as expressly set
forth herein, neither Party shall be considered in default under this Agreement for any
delay or failure in its performance under this Agreement (including any obligation to
deliver or accept Output) if such delay or failure is due to a Force Majeure Event, but
only to the extent that:
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
34
(i)such Force Majeure Event is not attributable to fault or
negligence on the part of that Party or its Affiliates;
(ii)such Force Majeure Event is caused by factors beyond that
Party’s (and its Affiliates’) reasonable control; and
(iii)despite taking all reasonable technical and commercial
precautions and measures to prevent, avoid, mitigate or overcome such event and the
consequences thereof, the Party affected has been unable to prevent, avoid, mitigate or
overcome such event or consequences.
8.2 Conditions
In addition to the conditions set forth in Section 8.1(a) above, a Party may rely on
a claim of a Force Majeure Event to excuse its performance only to the extent that such
Party:
(i)provides prompt notice of such Force Majeure Event to the
other Party, giving an estimate of its expected duration and the probable impact on the
performance of its obligations under this Agreement;
(ii)exercises all reasonable efforts to continue to perform its
obligations under this Agreement;
(iii)expeditiously takes action to correct or cure the event or
condition excusing performance so that the suspension of performance is no greater in
scope and no longer in duration than is dictated by the problem; provided, however,
that settlement of strikes or other labor disputes shall be completely within the sole
discretion of the Party affected by such strike or labor dispute;
(iv)exercises all reasonable efforts to mitigate or limit damages
to the other Party; and
(v)provides prompt notice to the other Party of the cessation of
the event or condition giving rise to its excuse from performance.
8.3 Termination Due To Force Majeure Event
In addition to and without limiting any other provisions of this Agreement, if a
Party is prevented from performing its material obligations under this Agreement for a
period of either (i) three hundred and sixty five (365) consecutive days or more, or (ii)
seven hundred and thirty (730) non-consecutive days or more (whether full or partial
days) over any Contract Year Period, the unaffected Party may terminate this
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
35
Agreement, without liability of either Party to the other, upon thirty (30) days written
notice at any time during the Force Majeure Event.
ARTICLE 9.DEFAULT/REMEDIES/TERMINATION
9.1 Events of Default Generally
An “Event of Default” shall mean, with respect to each Party, the occurrence of
any of the following:
(i)the failure to make, when due, any payment required
pursuant to this Agreement if such failure is not remedied within five (5) Business Days
after written notice;
(ii)any representation or warranty made by such Party herein is
false or misleading in any material respect when made or when deemed made or
repeated, if such breach is not remedied within thirty (30) days after written notice;
(iii)the failure to perform any material covenant or obligation
set forth in this Agreement (except to the extent constituting a separate Event of
Default, and except for the obligations set forth in Section 7.4, the exclusive remedies for
which are provided in such Section) if such failure is not remedied within thirty (30)
days after written notice (provided that if such failure is not capable of being remedied
within such period, then for such longer period as is reasonably needed to effect the
remedy, not to exceed one-hundred-eighty (180) days, so long as the failing Party
diligently pursues such remedy);
(iv)the initiation of an involuntary proceeding against such
Party under the bankruptcy or insolvency laws, which proceeding remains undismissed
for sixty (60) days, or in the event of the initiation by such Party of a voluntary
proceeding under the bankruptcy or insolvency laws, including, but not limited to the
making of a general assignment for the benefit of a Party’s creditors;
(v)such Party consolidates or amalgamates with, or merges
with or into, or transfers all or substantially all of its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or transfer, the resulting, surviving
or transferee entity fails to assume all the obligations of such Party under this
Agreement to which it or its predecessor was a party by operation of law or pursuant to
an agreement reasonably satisfactory to the other Party; or
(vi)with respect to Seller’s Guarantor:
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
36
1.if any representation or warranty made by Guarantor
in connection with this Agreement is false or misleading in any material respect when
made or when deemed made or repeated , if such breach is not remedied within thirty
(30) days after written notice;
2.the failure of Guarantor to make any payment
required and such failure is not remedied within seven (7) Business Days after written
notice or the failure of Guarantor to perform any other material covenant or obligation
in the Guaranty if such failure is not remedied within thirty (30) days after written
notice (provided that if such failure is not capable of being remedied within such
period, then for such longer period as is reasonably needed to effect the remedy, not to
exceed one-hundred-eighty (180) days, so long as the Guarantor diligently pursues such
remedy);
3.the initiation of an involuntary proceeding against
Guarantor under the bankruptcy or insolvency laws, which involuntary proceeding
remains undismissed for sixty (60) consecutive days, or in the event of the initiation by
Guarantor of a voluntary proceeding under the bankruptcy or insolvency laws;
4.the failure of Guarantor’s Guaranty to be in full force
and effect for purposes of this Agreement (other than in accordance with its terms)
prior to the satisfaction of all obligations of Seller without the written consent of Buyer;
or
5.if Guarantor repudiates, disaffirms, disclaims, or
rejects, in whole or in part, or challenges the validity of the Guaranty.
9.2 Additional Events of Default by Seller
In addition to the Events of Default in Sections 7.2 and 9.1 above, the following
shall each constitute an Event of Default by Seller:
(i)Seller Schedules and/or delivers to Buyer Energy or other
product from a resource other than the Generating Facility specified in this Agreement;
(ii)Seller sells or transfers Buyer’s share of the Output (or any
individual component thereof) to any Person other than Buyer (excluding during any
period of a Buyer default hereunder).
9.3 Remedies
A.Termination for Default
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
37
(a)Termination for Default. In the event the defaulting Party fails to
cure the Event of Default within the period for curative action under Sections 9.1 or 9.2,
as applicable, the non-defaulting Party may, for so long as such Event of Default
continues uncured, terminate the Agreement by notifying the defaulting Party in
writing of (i) the decision to terminate, and (ii) the effective date of the termination,
which shall be no less than ten (10) days nor more than sixty (60) days from such notice.
(b)Remedies. For all claims, causes of action and damages with
respect to an Event of Default, in addition to the right to termination under Section
9.3(A)(a), the non-defaulting Party shall be entitled to foreclose upon, or otherwise
employ, any security provided by the defaulting Party, and to recover actual damages
allowed by law unless otherwise limited by this Agreement. The termination of this
Agreement by a non-defaulting Party pursuant to Section 9.3(A)(a) shall not limit the
right of a non-defaulting Party to rights and remedies available at law, including claims
for breach of contract or failure to perform by the other Party and for direct damages
incurred by the non-defaulting Party as a result of the termination of this Agreement.
Nothing herein shall limit a Party’s rights to damages for any default or breach by the
other Party that does not constitute an Event of Default.
(c)Limitations. Except as otherwise specifically and expressly
provided in this Agreement, neither Party shall be liable to the other under this
Agreement for any indirect, special or consequential damages, including loss of use,
loss of revenues, loss of profit, interest charges, cost of capital or claims of its customers
or members to which service is made. Under no circumstances shall the non-defaulting
Party be required to make a termination payment or other payment in respect of any
damages to the defaulting Party (except for payments due under this Agreement for
performance prior to termination).
B.Buyer’s Right to Operate Plant upon Event of Default
(a)Following the Commercial Operation Date, if a Seller Event of
Default under Sections 9.1 or 9.2 occurs, then so long as Buyer has not terminated this
Agreement, Buyer or its designee may (upon prior notice to Seller), but shall not be
obligated to, step-in and assume operational control from Seller of the Generating
Facility; 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 commercially reasonable efforts to remedy
the Events of Default. In such circumstances, Buyer, its employees, contractors and
designees shall have the unrestricted right to enter the Generating Facility to the extent
necessary to operate the Generating Facility. Upon the exercise of this right, Buyer or
its designee shall at all times operate the Generating Facility using Prudent Utility
Practice and shall comply, to the extent commercially practicable, with the terms of this
Agreement. Notwithstanding the foregoing, Seller shall not be excused from any
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
38
obligation or remedy available to Buyer as a result of Buyer’s operation of, or election
not to operate, the Generating Facility. Buyer shall pay Seller the applicable Contract
Price for Output provided hereunder, less any costs incurred by Buyer to operate the
Generating Facility. Buyer shall indemnify and hold Seller harmless from any liability
to third parties arising out of Buyer’s failure to operate the Generating Facility using
Prudent Utility Practice. Upon Buyer’s satisfaction that Seller (or its Lenders or their
designees) have the ability to operate the Generating Facility in accordance with this
Agreement, Seller shall resume operational control. Buyer may exercise this right by
serving five (5) days written notice to Seller. This right to operate plant is cumulative
and is not exclusive of other rights and remedies in this Agreement.
9.4 Indemnification
Seller and Buyer agree to defend, indemnify, and hold each other, and their
respective officers, directors, employees and agents, harmless from and against all
claims, demands, losses, liabilities, and expenses (including reasonable attorneys' fees)
(collectively, “Damages”) for personal injury or death to persons and damage to each
other's physical property or facilities or the property of any other Person to the extent
arising out of, resulting from, or caused by the negligent or intentional and wrongful
acts, errors, or omissions of the indemnifying Party. This indemnification obligation
shall apply notwithstanding any negligent or intentional acts, errors or omissions of the
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 indemnitees’
negligent or intentional acts, errors or omissions caused the Damages. Neither Party
shall 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.
9.5 Project Viability Termination
(a)If at any time prior to the closing of the construction financing for
the Generating Facility, Seller determines for any reason that the continued
development and construction of the Generating Facility is not viable, for any reason in
Seller’s sole good faith judgment, then Seller may by written notice to Buyer terminate
this Agreement, whereupon Seller shall pay to Buyer, as a liquidated termination fee, an
amount equal to One Million Dollars ($1,000,000), which termination fee shall be Seller’s
sole and exclusive liability and obligation, and Buyer’s sole and exclusive right and
remedy, arising out of or relating to such termination; provided that the provisions of
Sections 3.5(a), (d) and (e) shall survive such termination in accordance with the terms
thereof.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
39
(b)If this Agreement is terminated pursuant to Section 9.5(a) above, in
addition to any rights granted by Section 9.5(a), Seller shall not terminate any
Leaseholds granted to Seller by a Seller Affiliate without the prior written consent of
Buyer (which consent shall not be unreasonably withheld or delayed) until the earlier of
(1) the end of the Restricted Period or (2) the date that Buyer no longer has any rights, if
any, in respect of such Leaseholds or the steam associated with such Leaseholds
pursuant to Sections 3.5(a), (d) or (e).
ARTICLE 10.REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Seller’s Representations, Warranties and Covenants
(a)Seller represents and warrants to Buyer that as of the Effective
Date:
(i)Seller is duly organized and validly existing as a corporation
under the laws of the State of California, and has the lawful power to engage in the
business it presently conducts and contemplates conducting in this 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 carry
out this Agreement and to perform its obligations hereunder; all such actions have been
duly authorized by all necessary proceedings on its part. As of the Commercial
Operation Date, (a) the Generating Facility will be a “qualifying small power
production facility” as that term is defined in Section 3(17)(C) of the Federal Power Act,
and will possess all of the exemptions from regulation provided in 18 C.F.R. Sections
292.601(c) and 292.602; or (b) Seller will have market-based rate authority, and will have
made all filings required in connection with this Agreement, under the Federal Power
Act;
(iii)this Agreement has been duly and validly executed and
delivered by Seller and, as of the Effective Date, constitutes a legal, valid and binding
obligation of Seller, 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
general principles of equity;
(iv)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
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
40
or the condition, financial or otherwise, of Seller, or to result in any impairment of
Seller’s ability to perform its obligations under this Agreement; and
(v)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 party or by
which it is bound or affected.
(b)Seller covenants to Buyer as follows:
(i)Subject to the Compliance Expenditure Cap in Section 3.3(g),
throughout the Term: (a) the Generating Facility will qualify and be certified by the
CEC as an ERR under the rules and requirements in effect as of the Effective Date; and
(b) the Output delivered to Buyer will qualify as output from an ERR under the
requirements of the RPS in effect as of the Effective Date;
(ii)Seller will deliver to Buyer at the Delivery Point the Output
free and clear of all liens, security interests, claims and encumbrances or any interest
therein, or thereto, by any Person; and
(iii)Seller holds and will hold throughout the Term, the rights to
all Environmental Attributes and Capacity Attributes, which it has conveyed and has
committed to convey to Buyer hereunder.
10.2 Buyer’s Representations, Warranties, and Covenants
Buyer represents and warrants to Seller that as of the Effective Date:
(i)Buyer is a joint powers agency established pursuant to the
laws of the State of California, and has all requisite corporate power and authority to
own, lease, and operate its properties and to carry on its business as is now being
conducted;
(ii)Buyer is duly qualified or licensed to do business as a joint
powers agency and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it makes
such qualification necessary, except where the failure to be so duly qualified or licensed
and in good standing would not have a material adverse effect;
(iii)Buyer has the legal power and authority to make and carry
out this Agreement and to perform its obligations hereunder and all such actions have
been duly authorized by all necessary proceedings on its part;
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
41
(iv)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;
(v)this Agreement has been duly and validly executed and
delivered by Buyer and, as of the Effective Date, 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
(vi)there are no actions, suits, proceedings or investigations
pending or, to the knowledge of Buyer, threatened in writing against Buyer, at law or in
equity before any Governmental Authority, which individually or in the aggregate are
reasonably likely to have a materially adverse effect on the business, properties or assets
or the condition, financial or otherwise, of Buyer, or to result in any impairment of
Buyer’s ability to perform its obligations under this Agreement.
ARTICLE 11.MISCELLANEOUS
11.1 Notices
All notices, requests, statements or payments under this Agreement shall be in
writing, unless otherwise specified herein, be deemed properly sent if delivered in
person or sent by facsimile, reliable overnight courier, or sent by registered or certified
mail, postage prepaid to the persons specified in Exhibit 13a and b [Contacts]. Notice
by facsimile or hand delivery shall be effective at the close of business on the day
actually received, if received during a Business Day, and otherwise shall be effective at
the close of the next Business Day. Notice by overnight United States mail or courier
shall be effective on the next Business Day after it was sent. A Party may change its
contact information by providing notice of same in accordance herewith.
11.2 Dispute Resolution
(a)Non-binding Arbitration or Mediation. Subject to Section 5.1(b),
any dispute under this Agreement between Seller and Buyer shall, at the request of any
Party, be referred to a senior representative of each of the Parties for resolution on an
informal basis as promptly as practicable. In the event the senior representatives are
unable to resolve the dispute, the matter may be submitted to non-binding arbitration
or mediation on such terms and conditions as the Parties may agree.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
42
(b)Litigation. In the event the Parties are unable to satisfactorily
resolve the Dispute within thirty (30) calendar days of such referral or such other period
as the Parties may mutually agree, subject to any extensions of time as may be mutually
agreed upon in writing, or any arbitration agreement, either Party may initiate litigation
in a court of law with jurisdiction located in Sonoma County, California, or the nearest
Federal court having jurisdiction over the matter, which shall be the exclusive venue to
litigate disputes.
(c)Remedies. Nothing in this Section 11.2 shall be construed to delay
the exercise of remedies pursuant to Section 9.3 pending the resolution of any dispute.
11.3 Regulatory Compliance
(a)Generally. Each Party shall at all times comply with all applicable
laws, ordinances, rules and regulations applicable to it. As applicable, each Party shall
give all required notices, shall procure and maintain all Permits necessary for
performance of this Agreement, and shall pay its respective charges and fees in
connection therewith. In the event of any change to the CAISO Tariff that materially
impacts either Party’s obligations or ability to perform under this Agreement, either
Party may request that the Parties engage in good faith negotiations to amend this
Agreement such that an equitable balance of benefits and burdens may be restored to
the Parties. In the event that the Parties are unable to agree upon any amendments to
this Agreement within sixty (60) days of the request for negotiations, either Party may
invoke the dispute resolution provisions of Section 11.2. Pending any resolution under
Section 11.2, the Parties shall continue to comply with the provisions of this Agreement.
(b)GHG Requirements. If, during any periods following the Effective
Date, Seller is or becomes obligated to obtain, purchase or procure any emission
allowances, credits, offsets or other rights representing the right to emit Greenhouse
Gases in connection with the ownership or operation of the Generating Facility, and if
in respect of any such period Buyer (in its capacity or status as an operating utility,
governmental entity, owner of generating assets, or otherwise) is provided, allocated or
otherwise becomes entitled to obtain any emission allowances, credits, offsets or other
rights representing the right to emit Greenhouse Gases (it being acknowledged, for the
avoidance of doubt, that the foregoing does not include any such allowances, credits,
offsets or other rights obtained by Buyer’s members, as distinct from those obtained
directly by Buyer), then Buyer shall make available to Seller without charge the amount
thereof, if any, that are directly allocable to the Generating Facility, in an amount equal
to the lesser of (1) the amount directly allocable to the Generating Facility or (2)the
amount required by Seller to continue operating the Generating Facility at the output
levels being delivered by Seller to Buyer hereunder. For purpose hereof, “Greenhouse
Gas” means emissions into the atmosphere of gases that are regulated by one or more
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
43
Governmental Authorities as a result of their contribution to the greenhouse effect
heating of the surface of the earth. Greenhouse gases currently include carbon dioxide
(CO2), nitrous oxide (N2O), methane (CH4), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs) and sulfur hexafluoride (SF6), and any other gas regulated on
the basis of its CO2-equivalent contribution to climate change or global warming.
Greenhouse gases may be defined, or expressed, in terms of a ton of CO2-equivalent, in
order to allow comparison between the different effects of gases on the environment.
11.4 No Dedication of Facilities
Any undertaking by one Party to the other under any provision of this
Agreement shall not constitute the dedication of the Generating Facility or any portion
thereof to the public or to any portion thereof.
11.5 Confidentiality
The Parties will safeguard Confidential Information against disclosure by
employing the same means to protect such Confidential Information as that Party uses
to protect its own non-public, confidential or proprietary information, and otherwise in
accordance with the provisions of this Section 11.5. Specifically, no receiving Party shall
itself, or permit its employees, consultants and/or agents to disclose to any person,
corporation or other entity the Confidential Information without the prior written
consent of the Party providing the Confidential Information, except a receiving Party
may distribute the Confidential Information to its board members, officers, employees,
agents, consultants, contractors, potential and actual investors and lenders and others
who have a need for such Confidential Information. In the event that any Party
receiving the Confidential Information becomes legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or similar
process, including under the California Public Records Act, Government Code Section
6250) to disclose any of the Confidential Information other than to comply with
applicable securities laws, the legally compelled Party shall give the other Party
providing the Confidential Information prompt prior written notice of such
requirement so that the providing Party may seek a protective order or other
appropriate remedy and/or waive compliance with the terms of this Agreement, at the
sole cost and expense of the providing Party. In the event that such protective order or
other remedy is not obtained, the providing Party waives compliance with the terms
hereof. Each Party acknowledges that the unauthorized disclosure of any Confidential
Information may cause irreparable harm and significant injury that may be difficult to
ascertain. Each Party therefore agrees that specific performance or injunctive relief, in
addition to other legal and equitable relief, are appropriate remedies for any actual or
threatened violation or breach of this Section 11.5, although neither Party shall be
entitled to any special, consequential, indirect or punitive damages as a result of a
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
44
breach of this Section 11.5, whether a claim is based in contract, tort or otherwise.The
Parties agree that the respondent in any action for an injunction, specific performance
decree or similar relief shall not allege or assert that the initiating Party has an adequate
remedy at law in respect to the relief sought in the proceeding, nor shall the respondent
seek the posting of a bond by the Party initiating the action. Notwithstanding the
foregoing, Buyer may, at any time, disclose any information (i) determined by its
attorney to be required by law to be disclosed by a public entity such as the Buyer, and
(ii) to those of its members that receive some or all of the Output, whether directly or
indirectly, from Buyer, but subject to the terms of this Section 11.5. The provisions of
this Section 11.5 shall survive for three (3) years after the termination of this Agreement.
11.6 Assignment and Reorganization
(a)Buyer. Buyer may without the consent of Seller (and without
relieving itself from liability hereunder) assign this Agreement or assign or delegate all
of its rights and obligations under this Agreement, if such assignment is made to: (i)
one or more of Buyer’s member municipal utilities; or (ii) where such assignment does
not occur by operation of law, any successor to Buyer provided such successor succeeds
to all or substantially all of Buyer’s assets and is a municipal utility or public utility
holding a certificate of public convenience and necessity granted by the California
Public Utilities Commission; provided that as a condition to any such assignment,
Buyer shall provide notice thereof to Seller, and Seller, Buyer and the third party
assignee shall enter into a written document confirming such assignment in a form
subject to the reasonable approval of all three parties.
(b)Seller.
(i)Seller may, upon notice to Buyer but without the consent of
Buyer (and without relieving itself from liability hereunder): pledge, encumber, or
assign this Agreement or the accounts, revenues or proceeds hereof as collateral
security in connection with any financing or other financial arrangements for the
Generating Facility. In connection with any such financing, the Parties shall cooperate
in good faith to enter into a consent to collateral assignment with the financing
provider(s) in a customary form reasonably requested by such financing provider(s). In
connection with any such pledge, encumbrance, or assignment, financing provider(s)
shall agree that upon any foreclosure or exercise of similar remedies upon the
Generating Facility or material assets thereof, the financing provider(s) shall (to the
extent they are able under applicable law) require that any transferee of the Generating
Facility or the material assets thereof assume and be bound by this Agreement.
(ii)The Parties acknowledge that at any time prior to the closing
of the construction financing of the Generating Facility, Seller shall have the right
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
45
without the consent of Buyer to undergo a corporate reorganization or similar
transaction in connection with which Seller shall be converted or reorganized into a
California or Delaware limited liability company. Seller shall provide notice of any
such transaction to Buyer and, at the request of Seller, Buyer shall execute such written
confirmation as Seller may reasonably request confirming Buyer’s knowledge and
acceptance of such transaction.
(c)Written Consent Needed. Except as stated above, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be assigned by
either Party, without the prior written consent of the other Party, which consent shall
not be unreasonably withheld or delayed. Any assignment of this Agreement in
violation of the foregoing shall be, at the option of the non-assigning Party, void.
(d)Binding on Parties. This Agreement and all of the provisions
hereof are binding upon, and inure to the benefit of, the Parties and their respective
successors and permitted assigns.
11.7 Waiver of Rights
Waivers of any rights hereunder must be in writing and shall not be implied
from performance or usage of trade. The failure of either Party to enforce or insist upon
compliance with or strict performance of any of the terms or conditions hereof, or to
take advantage of any of its rights hereunder, shall not constitute a waiver or
relinquishment of any such terms, conditions or rights, but the same shall be and
remain at all times in full force and effect.
11.8 Section Headings
All titles, subject headings, section titles and similar items are provided for the
purpose of reference and convenience and are not intended to be inclusive, definitive or
to affect the meaning of the contents or scope of the Agreement.
11.9 No Third Party Beneficiary
This Agreement shall not be construed to create rights in, or to grant remedies to,
any third party (other than a permitted successor or assignee bound to this Agreement)
as a beneficiary of this Agreement or any duty, obligation or undertaking established
herein.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
46
11.10 Forward Contract
The Parties acknowledge and agree that this Agreement and the transactions
contemplated by this Agreement constitute a “forward contract” within the meaning of
the United States Bankruptcy Code.
11.11 Applicable Law
This Agreement is made in the State of California and shall be interpreted and
governed by the laws of the State of California and/or the laws of the United States, as
applicable.
11.12 Venue
The Parties agree to the exclusive jurisdiction of the courts specified in Section
11.2(b) of this Agreement.
11.13 Nature of Relationship
The Agreement shall not be interpreted or 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. A Party 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.
11.14 Good Faith and Fair Dealing; Reasonableness
The Parties agree to act reasonably and in accordance with the principles of good
faith and fair dealing in the performance of this Agreement. Unless expressly provided
otherwise in this Agreement: (i) wherever the Agreement requires the consent,
approval or similar action by a 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, requirement, specification or similar action shall be reasonable.
11.15 Severability
Should any provision of this Agreement be or become void, illegal or
unenforceable, the validity or enforceability of the other provisions of this Agreement
shall not be affected and shall continue in full force and effect. The Parties will,
however, use their best endeavors to agree on the replacement of the void, illegal, or
unenforceable provision(s) with legally acceptable clauses that correspond as closely as
possible to the sense and purpose of the affected provision.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
47
11.16 Counterparts
This Agreement may be executed in two or more counterparts and by different
Parties on separate counterparts, all of which shall be considered one and the same
Agreement, and each of which shall be deemed an original.
11.17 Cooperation
The Parties agree to reasonably cooperate with each other in the implementation
and performance of the Agreement. Such duty to cooperate shall not require either
Party to act in a manner inconsistent with its rights under this Agreement.
11.18 Limitation of Liabilities
To the extent permitted by law, no Party’s directors, members of its governing
bodies, officers or employees shall be liable to any other party or parties for any loss or
damage to property, loss of earnings or revenues, personal injury, or any other direct,
indirect, or consequential damages or injury, or punitive damages, which may occur or
result from the performance or non-performance of this Agreement, including any
negligence arising hereunder. Any liability or damages faced by an officer or employee
of a federal agency or by that agency that would result from the operation of this
provision shall not be inconsistent with federal law. THERE IS NO WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND
ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT
THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS
AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF
ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF
DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES
SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY
SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER
REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED, UNLESS THE
PROVISION IN QUESTION PROVIDES THAT THE EXPRESS REMEDIES ARE IN
ADDITION TO OTHER REMEDIES THAT MAY BE AVAILABLE. IF NO REMEDY OR
MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S
LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY (WHICH
SHALL INCLUDE PTCs, AS APPLICABLE), SUCH DIRECT ACTUAL DAMAGES
SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR
DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN
PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS
OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR
CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. UNLESS
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
48
EXPRESSLY HEREIN PROVIDED, AND SUBJECT TO THE PROVISIONS OF
SECTION 9.4, IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS
HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE
WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO,
INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE
BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT
ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE
PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR
IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE
REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER
CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.
PRIOR TO THE COMMERCIAL OPERATION DATE, AND NOTWITHSTANDING
ANY OTHER PROVISION OF THIS AGREEMENT, EACH PARTY'S LIABILITY
ARISING UNDER OR RELATING TO THIS AGREEMENT, FROM ANY AND ALL
CAUSES (AND WHETHER SUCH LIABILITY IS BASED IN CONTRACT, TORT OR
OTHERWISE) SHALL BE LIMITED TO FIVE HUNDRED THOUSAND DOLLARS
($500,000), EXCEPT THAT SUCH LIMITATION SHALL NOT (A) APPLY IN CASES
WHERE A PARTY WILLFULLY BREACHES OR REPUDIATES THIS AGREEMENT,
(B) APPLY TO INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9.4, (C)
APPLY TO ANY TERMINATION BY SELLER UNDER SECTION 9.5 OR (D) LIMIT
THE RIGHTS EITHER PARTY MAY OTHERWISE HAVE HEREUNDER OR UNDER
APPLICABLE LAW TO SEEK AN INJUNCTION, SPECIFIC PERFORMANCE DECREE
OR SIMILAR EQUITABLE RELIEF.
11.19 Further Assurances
The Parties hereto agree to execute and deliver promptly, at the expense of the
Party requesting such action, any and all other and further instruments, documents and
information that a Party may request, and that are reasonably necessary, or appropriate,
to give full force and effect to the terms and intent of this Agreement.
11.20 Time is of the Essence
Time is of the essence to this Agreement and in the performance of all of the
covenants, obligations and conditions hereof.
11.21 Construction
The Parties acknowledge that this Agreement was jointly prepared by them, by
and through their respective legal counsel, and any uncertainty or ambiguity existing
herein shall not be interpreted against either Party on the basis that the Party drafted
the language, but otherwise shall be interpreted according to the application of the rules
on interpretation of contracts.
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
49
11.22 Entire Agreement; Integration
This Agreement, together with all exhibits attached hereto, constitutes the entire
agreement between the Parties as of the Effective Date, and as of the Effective Date is
intended to amend and restate and to supersede in the entirety, the 2008 PPA and any
and all other prior oral or written understandings. No amendment, addition to or
modification of any provision hereof shall be binding upon the Parties, and neither
Party shall be deemed to have waived 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.
11.23 Exhibits
This Agreement includes the following Exhibits:
Exhibit 1 [Reserved]
Exhibit 2 Description of Generating Facility
Exhibit 2.1 Leasehold Description
Exhibit 2.2 Map of Leasehold
Exhibit 2.3 Map of Delivery Point
Exhibit 2.4 Conceptual One-Line Diagram
Exhibit 3 Commercial Operation Performance Tests
Exhibit 4 Contract Price
Exhibit 5 [Reserved]
Exhibit 6 Expected Annual Contract Quantity Form
Exhibit 7 Milestones
Exhibit 8 Guaranty Agreement
Exhibit 9 [Reserved]
Exhibit 10 Operations Forecasts and Scheduling Protocols
Exhibit 11 Form of Attestation
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
50
Exhibit 12 Payment / Wire Instructions
Exhibit 13a Contacts, Buyer
Exhibit 13b Contacts, Seller
Exhibit 14 Example of Availability Shortfall Damages
Exhibit 15 Seller’s Insurance Information
Exhibit 16 Agreement Modification Election Provisions
Exhibit 17 Notice of NCPA's Rights to PPA Output
Exhibit 18 Notice of NCPA's Rights to Steam
Exhibit 19 Purchase Option Transaction Terms
OHS WEST:261077640.9
2011 Amended and Restated Power Purchase
Agreement
OHS West:261077640.10
23768-8 LX0/LX0
51
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the Effective Date first written.
BUYER:SELLER:
NORTHERN CALIFORNIA POWER WESTERN GEOPOWER, INC.
AGENCY
By:By:
Name:Name:
Title:Title:
Attest:
__________________________________________
Assistant Secretary of the Commission
Approved as to Form:
General Counsel
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 1
Exhibit 1
[RESERVED]
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2
Exhibit 2
DESCRIPTION OF GENERATING FACILITY
The Western GeoPower Unit #1 (“WGP 1”) is a geothermal, condensing steam turbine
generating facility consisting of the following key systems (collectively referred herein
as “Generating Facility”) to generate power to the electrical grid:
·Steam Gathering and Injection System
·Power Generation Facility
·Transmission Interconnection
·Associated leaseholds as shown in Exhibit 2.1 and 2.2
Steam Gathering and Injection System
The steam gathering system (SGS) will consist of steam production wells. The actual
number of production wells will depend on initial drilling results and expected
sustainable production well capacity. The production wells will be connected to the
power generating facility via a steam pipeline. The available condensed steam
generated in the power generating facility will be re-injected to the geothermal reservoir
through injection wells.
Power Generating Facility
The power generating facility (“PGF”) will consist of a dual flow, top exhausting
condensing steam turbine. The PGF will consist of the following key systems:
·Steam Turbine-Generator
o Fuji Dual Flow, Top Exhaust Condensing Steam Turbine
o Design and materials proven for geothermal service
o Fuji approximately 38.5MVA, TEWAC Generator
·Condensing System
o 100% Steam Bypass Capability
o Hybrid Non Condensable Gas Extraction (“NCG”) System, including
flexible capacity gas ejectors and liquid ring vacuum pumps
·Cooling System
o Counterflow, Film-fill Cooling Tower
o Vertical Can Type Circulating Water Pumps
·Auxiliary Cooling Water System
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2
o 2x100% Capacity Auxiliary Cooling Water Pumps for use in plant
cooling systems (oil coolers, generator coolers, NCG intercondensers,
etc)
·H2S Abatement System
o Abatement system for removing H2S in the Non-Condensable gas stream
and the steam condensate. The abatement system will be designed to
meet the requirements of the Northern Sonoma County Air Pollution
Control District regulations.
·Plant Support Systems
o Support systems, including fire protection, instrument air system, service
water system, chemical treatment systems, plant drains and HVAC.
·Plant Electrical and Controls System
o Generator Step-up Transformer, 13.8 kV : 115kV
o Station Transformer, 4.16 kV : 13.8 kV
o Auxiliary Transformer, 0.48 kV : 4.16 kV
o Plant Switchgear and MCC’s
o Metering and Relaying Equipment
o Plant Control System
Transmission Interconnection
The Generating Facility will interconnect with the CAISO controlled Geysers #3-
Cloverdale 115 kV Transmission Line as depicted in the map attached as Exhibit 2.3 and
in the diagram attached as Exhibit 2.4. This transmission line crosses the project
property and taps to the Cloverdale Substation to the west and the Geysers Unit 3, 4
Ring Bus to the northeast of the Site. The Generating Facility will utilize a Generator
Step-up Transformer to step up the 13.8 kV generator voltage to the 115 kV
transmission voltage.
PG&E has completed an Interconnection System Impact Study of the interconnection of
the Generating Facility to the Geysers #3-Cloverdale line. PG&E determined that the
interconnection will not cause any CAISO Normal or Category B overloads. PG&E
further concluded that the Generating Facility will not cause reactive power deficiencies
or impact the transmission system’s transient performance.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2.1
Exhibit 2.1
LEASEHOLD DESCRIPTION
Seller’s Generating Facility shall include the following leaseholds and property
descriptions, as well as any other properties or leases obtained by Seller in the future to
generate Energy. Prior to the execution of this Agreement, Seller shall have delivered to
Buyer evidence of its rights in the following Leaseholds.
Mayacamas Energy Property:
DESCRIPTION:
All that certain real property situated in the County of Sonoma, State of
California, described as follows:
PARCEL ONE:
Lots 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 14 and 16 of Section 14, Township 11 North,
8 Range 9 West, M.D.B.&M., according to the official plat thereof.
SAVING AND EXCEPTING THEREFROM, that portion of Lots 3, 4, and 16,
lying northerly of the center of Big Sulpher Creek.
ALSO, SAVING AND EXCEPTING THEREFROM, that portion thereof conveyed
to Frank Albert Dewey, et ux, by Deed dated September 2, 1950 and recorded
September 11, 1950 as Recorder's Serial No. D-22340, Sonoma County Records.
ALSO, SAVING AND EXCEPTING THEREFROM, the mining rights reserved by
Walter Wayne Woods, et al, in Deed to Frank Albert Dewey, et ux, dated September 2,
1950 and recorded September 11, 1950 as Recorder's Serial No. D-22340, Sonoma
County Records.
ALSO, SAVING AND EXCEPTING THEREFROM, that portion of Lots 9 and 14
conveyed to Daniel J. Nielsen, et ux, by Deed dated January 25, 1950 and recorded
February 1, 1950 as Recorder's Serial No. D-6082, Sonoma County Records.
ALSO, SAVING AND EXCEPTING THEREFROM, that portion thereof lying
within the bounds of the lands described in the Deed to Regan B. Kidd, et ux, dated
November 25, 1951 and recorded December 7, 1951 and Recorder's Serial No. D-55754,
Sonoma County Records.
ALSO SAVING AND EXCEPTING the West one-half of Lot 4, as granted to G.
William Filley, by Deed dated June 20, 1962 and recorded July 9, 1962 in Book 1900 of
Official Records at page 39, as Recorder's Serial No. G-99005, Sonoma County Records.
ALSO, EXCEPTING THEREFROM that portion thereof conveyed to Pacific Gas
and Electric Company, a California corporation recorded November 14, 1978 in Book
3482 of Official Records at page 825, Sonoma County Records, and by Instrument
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2.1
recorded November 14, 1978 in Book 3482 of Official records at page 833, Sonoma
County Records.
PARCEL TWO:
All that parcel of land located in Section 14, Township 11 North, Range 9 West,
M.D.B. & M., lying west of the centerline of the creek closest to the west boundary of the
Dewey property and south of the county road to Cloverdale, all as the location of these
landmarks existed on July 30, 1951 and as the above described parcel was granted to
Buckman Inc., a corporation by Deed dated July 30, 1951 and recorded August 7, 1951
as Recorder's Serial No. D-47201, Sonoma County Records.
PARCEL THREE:
The Southwest one-quarter of the Northeast one-quarter and the Southeast one-
quarter of the Northeast quarter of Section 15, in Township 11 North, Range 9 West,
M.D.B. & M., according to the official plat thereof.
SAVING AND EXCEPTING THEREFROM, all mineral rights in the Southeast
one-quarter of the Northeast one-quarter, as same were granted to C. William Filley, by
Deed dated June 20, 1962, and recorded July 9, 1962 in Book 1900 of Official Records at
page 39, as Recorder's Serial No. G-99005, Sonoma County Records.
PARCEL FOUR:
That portion of the East one-half of the Southwest one-quarter of the Southwest
quarter of Section 11, Township 11 North, Range 9 West, according to the official plat
thereof, lying southerly of Big Sulpher Creek.
Filley Leasehold:
DESCRIPTION:
All that certain real property situated in the County of Sonoma, State of
California, described as follows:
PARCEL ONE:
The Northeast one-quarter of the Northeast one-quarter of Section 15 Township
11 North, Range 9 West, M.D.B. & M.
PARCEL TWO:
All that portion lying South of the centerline of Big Sulphur Creek of the
Southeast one-quarter of the Southeast, one-quarter of Section 10, Township 11 North,
Range 9 West, M.D.B. & M.
PARCEL THREE:
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2.1
All that portion lying Southwesterly of the centerline of Big Sulphur Creek in the
West one-half of the Southwest one-quarter of the Southwest, one-quarter of Section 11
Township 11 North, Range 9 West, M.D.B. & M.
Together with all mineral rights in the Southeast one-quarter of the Northeast
One-quarter of Section 15, Township 11 North, Range 9 West M.D.B. & M.
Filley-Brown Leasehold:
DESCRIPTION:
All that real property situated in the Unincorporated Area, County of Sonoma,
State of California, described as follows:
The Southwest one-quarter of the Southeast one-quarter of Section 10 and the
Northwest one-quarter of the Northeast one-quarter of Section 15, Township 11 North,
Range 9 West, M.D.B. & M.,
EXCEPTING THEREFROM that portion of the Southwest one-quarter of the
Southeast one-quarter of Section 10, Township 11 North, M.D.B. & M., described as
follows:
Beginning at an iron stake set at the southeast corner of said Southwest one-
quarter of the Southeast one-quarter of Section 10, thence north 700 feet along the
easterly line of the Southwest one-quarter of the Southeast one-quarter of said section
10, to an iron stake; thence west 350 feet to a point; thence south 700 feet to a point in
the south line of said section 10; thence east 350 feet along said section line to the point
of beginning.
Abril Leasehold:
DESCRIPTION:
All that real property located in the County of Sonoma, State of California,
described as follows:
EXCLUDING THEREFROM any mineral rights owned by the Bureau of Land
Management and/or the United States Federal Government.
PARCEL ONE:
Lot 9 of Section 15 and Lot 19 of Section 14, all in Township 11 North, Range 9
West, M. D. M. & M., containing 30 acres.
APN: 141-010-004 portion
APN: 141-010-014 portion
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2.1
PARCEL TWO:
The Southwest quarter of Section 10, Township 11 North, Range 9 West, M. D. M.
& M., containing 72.73 acres.
APN: 117-190-014
EXCLUDING THEREFROM the real property described in that certain Geothermal
Lease and Agreement dated June 29, 1982, entered into by and between Annie Abril et
al, Lessor, and Union Oil Company of California, Lessee, a Memorandum of which was
recorded October 4, 1982, as instrument number 82053574, as amended between Lessor
and Lessee October 6, 1987, a Memorandum of which was recorded March 4, 1988, as
instrument number 88017757, Official Records of Sonoma County, CA.
PARCEL THREE:
Lots 1, 2 and 8, and the North 1/2 of the Northwest 1/4 of Section 15,
Township 11 North, Range 9 West, M. D. M. & M., containing 190 acres.
APN: 141-010-004 portion
APN: 117-150-001 portion
PARCEL FOUR:
Lot 7 and the South 1/2 of the Northwest 1/4 of Section 15, Township 11
North, Range 9 West, M. D. M. & M., containing 120 acres.
APN: 141-010-004 portion
APN: 117-150-001 portion
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2.2
Exhibit 2.2
MAP OF THE LEASEHOLD
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2.3
Exhibit 2.3
MAP OF DELIVERY POINT
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 2.4
Exhibit 2.4
Conceptual One-Line Diagram
112
112
132
172
122
162
152
142
142
152
176
X
20 MVA
29.8 MVA
132 MVA
40 MVA
14 MW
14 MW
66 MW
66 MW
66 MW
66 MW
38 MW
Calpine West
Geysers #5 and #6
Aidlin
Calpine West
Geysers #1 and #2 WESTERN GEOPOWER UNIT 1
Calpine west
Geysers #7 and #8
132 MVA
EAGAL ROCK
SUBSTATION
UKIAH SUBSTATION
CLOVERDALE
SUBSTATION
115 kV Bus
115 kV Bus
115 kV Bus
GEYSERS #3
SUBSTATION
Ukiah-Hopland-Cloverdale 115 kV Line
Mission Power
115 kV Tap
Geysers # 3-Cloverdale 115 kV Line
Generator
Loop Lines
Point of Interconnection
Geysers # 3-
Eagle Rock 115
kV Line
Geysers # 5-
Geysers # 3
115 kV Line
Geysers # 7-Eagle
Rock 115 kV Line
25/33/41
MVA
Load
HOPLAND
New Switching
Station
Western
PG&E
112
112
132
172
122
162
152
142
142
152
176
X
20 MVA
29.8 MVA
132 MVA
40 MVA
14 MW
14 MW
66 MW
66 MW
66 MW
66 MW
38 MW
Calpine West
Geysers #5 and #6
Aidlin
Calpine West
Geysers #1 and #2 WESTERN GEOPOWER UNIT 1
Calpine west
Geysers #7 and #8
132 MVA
EAGAL ROCK
SUBSTATION
UKIAH SUBSTATION
CLOVERDALE
SUBSTATION
115 kV Bus
115 kV Bus
115 kV Bus
GEYSERS #3
SUBSTATION
Ukiah-Hopland-Cloverdale 115 kV Line
Mission Power
115 kV Tap
Geysers # 3-Cloverdale 115 kV Line
Generator
Loop Lines
Point of Interconnection
Geysers # 3-
Eagle Rock 115
kV Line
Geysers # 5-
Geysers # 3
115 kV Line
Geysers # 7-Eagle
Rock 115 kV Line
25/33/41
MVA
Load
HOPLAND
New Switching
Station
Western
PG&E
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 3
Exhibit 3
COMMERCIAL OPERATION PERFORMANCE TESTS
Seller shall coordinate and schedule with Buyer a Generating Facility performance test
after completion of all equipment startup and commissioning activities. This performance
test may be performed before completing punch list items. Buyer shall be permitted to
witness the performance test, including access to and copies of control room logs, control
system display screens and instrumentation data for a reasonable period of time before,
during and after the performance test, and may also concurrently conduct a site inspection
of the Generating Facility, systems and equipment. Seller shall be responsible for and bear
the costs of any performance test. During the performance test, and otherwise prior to the
Commercial Operation Date, Buyer shall pay for Energy produced in accordance with
Agreement Section 3.1(b). Seller shall supply a written copy of the performance test
results to Buyer within five (5) business days following the conclusion of such test.
(a)Protocol. Seller shall provide Buyer with a written protocol describing the
performance test no later than fifteen (15) days prior to Seller’s commencement of the
performance test.
(b)Compliance. The performance test shall demonstrate the ability of the Generating
Facility to comply in all material respects with all material safety, system reliability,
environmental, and other Requirements of Law, this Agreement, and any related
agreements, including any interconnection agreements.
(c)Contract Capacity. The performance test shall demonstrate the ability of the
Generating Facility to reliably generate no less than twenty five (25) megawatts, net
capacity at corrected design conditions. The performance test shall consist of
uninterrupted operation of the Generating Facility for a period of no less than four (4)
hours.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 3
Exhibit 4
CONTRACT PRICE
Buyer shall pay Seller one hundred and thirteen dollars ($113.00) per MWh of Metered
Quantity in consideration for all Output delivered to Buyer, including all Energy,
Environmental Attributes and Capacity Attributes.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 5
Exhibit 5
[RESERVED]
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 6
Exhibit 6
EXPECTED ANNUAL CONTRACT QUANTITY FORM
GENERATING FACILITY
YEAR MW MWhs
(97.5%)
2013 28.0 39,967
2014 28.0 239,148
2015 27.0 230,607
2016 26.0 222,066
2017 26.0 222,066
2018 26.0 222,066
2019 26.0 222,066
2020 26.0 222,066
2021 26.0 222,066
2022 26.0 222,066
2023 26.0 222,066
2024 26.0 222,066
2025 26.0 222,066
2026 26.0 222,066
2027 26.0 222,066
2028 26.0 222,066
2029 26.0 222,066
2030 26.0 222,066
2031 26.0 222,066
2032 26.0 222,066
2033 26.0 222,066
2034 26.0 222,066
2035 26.0 222,066
2036 26.0 222,066
2037 26.0 222,066
2038 26.0 184,954
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 7
Exhibit 7
MILESTONES
Estimated Date for Completion
File CEC Certification and Verification
Application
Completed
Submit Interconnection Application Completed
File Permit Resource Management
Department (Use) Permit
Completed
Execute Construction Contract October 31, 2011
Order Major Equipment for Facility Steam Turbine Generator—October 31, 2011
Other Major Equipment—March 31, 2012
Receive Completed System Impact Study Completed
Begin Construction of Facility Plant Construction -April 30, 2012
Receive Conditional Use Permit Completed
Receive Completed Interconnection Facility
Study
Completed
Receive Amended Authority to Construct
from Sonoma Air Quality Management
District
October 31, 2011
Commercial Operation Date October 31, 2013
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 8
Exhibit 8
GUARANTY AGREEMENT
This Guaranty Agreement (the “Guaranty”) is made as of the Effective Date (as
defined below), by Ram Power, Corp.(“Guarantor”), a British Columbia corporation, in
favor of Northern California Power Agency (“Counterparty”).
WHEREAS, Counterparty is a party to the Amended and Restated Renewable
Energy Power Purchase Agreement (“Agreement”) between Counterparty and Western
GeoPower, Inc.(the “Company”), and the Company is a subsidiary of Guarantor; and
WHEREAS, as the parent of Company, Guarantor will receive substantial and
direct benefits from the transactions contemplated by the Agreement and has agreed to
enter into this Guaranty to provide assurance for the obligations of Company in
connection with the Agreement and to induce the Counterparty to enter into the
Agreement.
NOW, THEREFORE, in consideration of good and valuable consideration, the
adequacy, receipt and sufficiency of which are hereby acknowledged, the Guarantor
hereby agrees as follows:
1.Guaranty and Maximum Liability.
(a)Guaranty. The Guarantor hereby unconditionally, irrevocably and
absolutely guarantees any and all payment obligations of the Company under the
Agreement (which payment obligations are intended to include any and all cases
where Company owes any money to Counterparty under the Agreement, including,
without limitation, Company’s obligation to pay actual damages under Section 9.3
after an Event of Default by the Company, Company’s obligation to pay for a
termination under Section 9.5, Company’s obligation to pay Availability Shortfall
Damages, and Company’s obligation to pay Taxes and indemnities under the terms
and conditions of the Agreement),as such Agreement may be amended or modified
by agreement between Company and the Counterparty from time to time (the
“Guaranteed Obligations”). In addition, Guarantor shall reimburse Counterparty for
all sums paid to Counterparty by Company with respect to such Guaranteed
Obligations which Counterparty is subsequently required to return to Company or a
representative of Company’s creditors as a result of Company’s bankruptcy,
insolvency, reorganization, liquidation, receivership, or similar proceeding.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 8
(b)Maximum Liability. Notwithstanding any other provision of this Guaranty,
Guarantor’s maximum liability arising under or relating to this Guaranty, from and
in connection with any and all causes and claims hereunder or relating hereto (and
whether any such claims are based in contract, tort or otherwise) shall be limited to
(1) prior to the Commercial Operation Date under the Agreement, an amount equal
to One Million Dollars ($1,000,000), and (2) on and after the Commercial Operation
Date under the Agreement, an amount equal to One Million Five Hundred Thousand
Dollars ($1,500,000).
2.Guaranty Absolute.The liability of Guarantor under this Guaranty shall be absolute,
irrevocable and unconditional irrespective of:
(a)any defect or deficiency in the Agreement or any other documents executed
in connection with the Agreement;
(b)any modification, extension or waiver of any of the terms of the Agreement;
(c)any change in the time,manner, terms or place of payment of or in any other
term of, all or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from the Agreement or any other
agreement or instrument executed in connection therewith;
(d)any sale, exchange, release or non-perfection of any property standing as
security for the liabilities hereby guaranteed or any liabilities incurred
directly or indirectly hereunder or any setoff against any of said liabilities, or
any release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;
(e)except as to applicable statutes of limitation, failure, omission, delay, waiver
or refusal by the Counterparty to exercise, in whole or in part, any right or
remedy held by the Counterparty with respect to the Agreement or any
transaction under the Agreement;
(f)any change in the existence, structure or ownership of the Guarantor or
Company, or any bankruptcy, insolvency, reorganization, liquidation,
receivership, or similar proceeding affecting Company or its assets; or
(g)subject to Guarantor’s reservations in the last sentence of this Paragraph 2,
any dispute between Counterparty and the Company in connection with the
Guaranteed Obligations.
The obligations of the Guarantor hereunder are several and not joint with Company
or any other person, and are primary obligations for which the Guarantor is the
principal obligor. There are no conditions precedent to the enforcement of this
Guaranty, except as expressly contained herein. It shall not be necessary for the
Counterparty, in order to enforce obligations by the Guarantor under this Guaranty,
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 8
to exhaust its remedies against Company, any collateral pledged by Company, any
other guarantor, or any other person liable for the payment or performance of the
Guaranteed Obligations. This Guaranty is one of payment and not of collection and
shall apply regardless of whether recovery of all such Guaranteed Obligations may
be discharged, or uncollectible in any bankruptcy, insolvency, reorganization,
liquidation, receivership, or similar proceeding affecting Company or its assets. This
Guaranty is a continuing guaranty and shall apply to all present and future
transactions entered into under the Agreement.
Notwithstanding any other provision hereof, and without limiting Guarantor’s own
defenses and rights hereunder, Guarantor reserves to itself all rights, setoffs,
counterclaims and other defenses to which Company is or may be entitled to arising
from or out of the Agreements or otherwise, except as expressly limited herein and
except for defenses arising out of any lack of authority by Company to enter into the
Guaranteed Obligations or the bankruptcy, insolvency, reorganization, liquidation,
receivership, or similar proceeding affecting Company or its assets.
3.Waiver.Guarantor hereby waives:
(a)except for the acceptance required from Counterparty below, notice of
acceptance of this Guaranty, notice of the creation or existence of any of the
Guaranteed Obligations and notice of any action by the Counterparty in
reliance hereon or in connection herewith;
(b)notice of the entry into the Agreement between Company and the
Counterparty and notice of any amendments, supplements or modifications
thereto; or any waiver of consent under the Agreement, including waivers of
the payment and performance of the obligations thereunder;
(c)notice of any increase, reduction or rearrangement of Company’s obligations
under the Agreement or notice of any extension of time for the payment of
any sums due and payable to the Counterparty under the Agreement;
(d)except as expressly set forth herein, presentment, demand for payment,
notice of dishonor or nonpayment, protest and notice of protest or any other
notice of any other kind with respect to the Guaranteed Obligations; and
(e)any requirement that suit be brought against, or any other action by the
Counterparty be taken against, or any notice of default or other notice be
given to, or any demand be made on, Company or any other person, or that
any other action be taken or not taken as a condition to the Guarantor’s
liability for the Guaranteed Obligations under this Guaranty or as a
condition to the enforcement of this Guaranty against the Guarantor.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 8
4.Subrogation.The Guarantor shall be subrogated to all rights of the Counterparty
against Company in respect of any amounts paid by the Guarantor pursuant to the
Guaranty, provided that the Guarantor waives any rights it may acquire by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise
(including, without limitation, any statutory rights of subrogation under Section 509
of the Bankruptcy Code, 11 U.S.C. §509, or otherwise), reimbursement, exoneration,
contribution, indemnification, or any right to participate in any claim or remedy of
the Counterparty against Company or any collateral which the Counterparty now
has or acquires, until all of the Guaranteed Obligations shall have been irrevocably
paid to the Counterparty in full. If (a) the Guarantor shall perform and shall make
payment to the Counterparty of all or any part of the Guaranteed Obligations and (b)
all the Guaranteed Obligations shall have been paid in full, the Counterparty shall, at
the Guarantor’s request, execute and deliver to the Guarantor appropriate documents
necessary to evidence the transfer by subrogation to the Guarantor of any interest in
the Guaranteed Obligations resulting from such payment by the Guarantor.
5.Notices.All demands, notices and other communications provided for hereunder
shall, unless otherwise specifically provided herein, (a) be in writing addressed to the
party receiving the notice at the address set forth below or at such other address as
may be designated by written notice, from time to time, to the other party, and (b) be
effective upon delivery, when mailed by U.S. mail, registered or certified, return
receipt requested, postage prepaid, or personally delivered. Notices shall be sent to
the following addresses:
If to Counterparty:
NORTHERN CALIFORNIA POWER AGENCY
651 Commerce Dr.
Roseville, CA 95678
Attention: Treasurer/Controller and Assistant General Manager, Generation
Services
If to Guarantor:
Ram Power, Corp.
c/o Ram Power, Inc.
9460 Double R Blvd., Suite 200
Reno, Nevada 89521
Attention: General Counsel
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 8
6.Demand and Payment.Counterparty is not entitled to make demand upon
Guarantor until a default occurs in payment or performance of any Guaranteed
Obligations by Company to Counterparty. Any demand by the Counterparty for
payment or performance hereunder shall be in writing, reference this Guaranty,
reference the Guaranteed Obligations, and signed by a duly authorized
representative of the Counterparty and delivered to the Guarantor pursuant to
Paragraph 5 hereof. There are no other requirements of notice, presentment or
demand. The Guarantor shall pay or perform such Guaranteed Obligations within
ten (10) business days of receipt of such demand.
7.No Waiver; Remedies.Except as to applicable statutes of limitation, no failure on the
part of Counterparty to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
8.Term; Termination.This Guaranty shall continue in full force and effect from the
Effective Date until, and this Guaranty shall terminate upon, the earliest of (i) all
Guaranteed Obligations arising with respect to the Agreement have been fully
satisfied, (ii) the maximum amount under Section 1(b) hereof has been paid by the
Guarantor hereunder and (iii)the credit requirement obligations of the Company in
Section 6.2 of the Agreement are otherwise satisfied by a letter of credit as provided
therein.
9.Assignment; Successors and Assigns.The Guarantor shall not assign its rights
hereunder without the prior written consent of the Counterparty, and any
assignment without such prior written consent shall be null and void and of no force
or effect. This Guaranty shall be binding upon and inure to the benefit of the each
party hereto and their respective successors and permitted assigns.
10.Amendments, Etc.No amendment of this Guaranty shall be effective unless in
writing and signed by Guarantor and Counterparty. No waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor therefrom shall in any
event be effective unless such waiver shall be in writing and signed by Counterparty.
Any such waiver shall be effective only in the specific instance and for the specific
purpose for which it was given.
11.Caption.The captions in this Guaranty have been inserted for convenience only and
shall be given no substantive meaning or significance whatsoever in construing the
terms and provisions of this Guaranty.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 8
12.Representation and Warranties.
The Guarantor represents and warrants as follows as of the Effective Date:
(a)The Guarantor is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has full corporate
power to execute, deliver and perform this Guaranty.
(b)The execution, delivery and performance of this Guaranty have been and
remain duly authorized by all necessary corporate action and do not
contravene the Guarantor’s constitutional documents or any contractual
restriction binding on the Guarantor or its assets.
(c)This Guaranty constitutes the legal, valid and binding obligation of the
Guarantor enforceable against Guarantor in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditor’s rights
and to general equity principles.
13.[Intentionally Omitted]
14.GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA WITHOUT REGARD OR REFERENCE TO THE CONFLICT OF
LAWS PRINCIPLES OF ANY JURISDICTION. GUARANTOR HEREBY
CONSENTS TO THE JURISDICTION OF THE FEDERAL COURTS IN THE
EASTERN DISTRICT, CALIFORNIA IN CONNECTION WITH ANY DISPUTE
ARISING UNDER THIS GUARANTY. However, if any provision of this Guaranty
shall be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Guaranty.
15.Entire Agreement and Termination of Prior Guaranty. This Guaranty constitutes the
entire agreement and understanding between Guarantor and Counterparty with
respect to the Guaranteed Obligations and supersedes and replaces in its entirety any
and all guaranties previously issued by Guarantor to Counterparty with respect to
the Guaranteed Obligations, or any part of them.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 8
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its duly authorized representative effective as of this _____ day
of ___________, 2011 (“Effective Date”).
[Guarantor’s Name]
By:_______________________________________
Name:
Title:
ACCEPTED AND AGREED TO
THIS ______DAY OF __________, 2011
By: _____________________________
Name:
Title:
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 9
Exhibit 9
[RESERVED]
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 10
Exhibit 10
OPERATIONS FORECASTS
and
SCHEDULING PROTOCOLS
This section shall be updated as the CAISO modifies or amends reporting, scheduling, or
other rules/protocols.
1.Annual Operations Forecast
1.1.No later than September 10th of each Contract Year, Seller will provide an
Annual Operations Forecast detailing hourly expected generation and all
proposed planned outages for the next calendar year. The Annual Operations
Forecast for the first calendar year shall be provided no later than ninety (90)
days prior to the Commercial Operation Date.
1.2.Buyer may request modifications to the Annual Operations Forecast at any
time, and Seller shall use good faith efforts to accommodate Buyer’s requested
modifications.
1.3.Seller shall not conduct planned outages at times other than as set forth in its
Annual Operations Forecast, unless approved in advance by Seller, which
approval shall not be withheld or delayed unreasonably.
1.4.Seller shall not conduct planned outages during the Peak Months and
furthermore, shall coordinate the outages with NCPA.
2.Short Term Operations Forecasts
2.1.Quarterly Operations Forecast
2.1.1.Twenty (20) days prior to the beginning of each calendar quarter, Seller
shall provide a Quarterly Operations Forecast by hour of expected
generation and all proposed planned outages as approved by NCPA in
advance.
2.1.2.Quarterly Operations Forecast will also include any requested additions
or modifications to planned outages for the next twelve (12) months.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 10
2.1.3.Buyer will approve or require modifications to the proposed Quarterly
Operations Forecast within ten (10) calendar days of receipt of the
Quarterly Operations Forecast.
2.1.4.If required by Buyer, Seller will provide a modified Quarterly Operations
Forecast to Buyer no later than seven (7) calendar days after receipt of
required modifications from Buyer.
2.2.Monthly Update
2.2.1.No later than ten days prior to the first day of each month, Seller may
provide an electronic update, in a format specified by Buyer, to the
forecast for such month included in the most recent Quarterly Operations
Forecast. If for any month Seller does not provide any such update, then
the forecast for such month included in the most recent Quarterly
Operations Forecast shall be deemed to be the forecast for such month.
2.2.2.The monthly update and forecast shall include hourly expected
generation and all proposed planned Outages.
2.3.Weekly Update
2.3.1.No later than 14:00 each Wednesday prior to the following week (Sunday
through Saturday), Seller may provide an electronic update, in a format
specified by Buyer, to the Quarterly Operations Forecast for the next
seven (7) calendar days.
2.3.2.The Weekly Update shall include hourly expected generation and all
proposed planned Outages.
3.Outage Detail for Annual and Short Term Operations Forecasts
3.1.Outage information provided by Seller is to include, at a minimum, start and
stop time of Outage, capacity out of service (kWh), equipment out of service,
and reason for the Outage.
4.General Scheduling Protocols
4.1.Daily modifications to forecasts. Unless otherwise mutually agreed, Seller may
make changes to the weekly forecasts by providing such changes to Buyer prior to
08:00 two (2) Business Days before the active scheduling day.
4.1.1.Active scheduling day as determined by the WECC Prescheduling
calendar.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 10
4.1.2.Example: For power that is scheduled for generation or delivery on
Thursday, March 29, changes must be submitted to Buyer no later than
08:00 on Tuesday, March 27.
4.2.Hourly modifications to active schedules. Unless otherwise mutually agreed,
Seller may make changes to active schedules by providing such changes to Buyer
with a minimum of four (4) hours notice before the active hour to be changed.
Changes to active schedules are limited to two (2) changes per day, excluding
forced outages, unless otherwise agreed to between the parties. One request
for a schedule change, of one hour or multiple hours duration, constitutes one
schedule change. Such schedules changes will be made in accordance with
CAISO scheduling timelines, and the inability for Buyer to make such changes
due to CAISO rules does not constitute a breach by Buyer of this Agreement.
4.2.1.Example: For power that is scheduled for generation or delivery in hour ending 15:00 (for the period from 14:01 to 15:00), changes must
be submitted to Buyer no later than 10:00.
4.3.At Seller’s request, Buyer may modify generation and load schedules for
unforeseen circumstances in accordance with the above scheduling timeline
constraints.
4.4.In the absence of forecasts and schedules as required by this Agreement or this
Exhibit, Buyer shall utilize the most current information provided by Seller in the
development and submission of Schedules.
5.Additional Scheduling Protocols When NCPA is the Scheduling Coordinator
5.1.Seller is to notify NCPA of all planned or forced generation outages to ensure
compliance with CAISO Outage Coordination and Enforcement Protocols.
5.1.1.Outage information provided by Seller is to include, at a minimum, start and
stop time of Outage, capacity out of service (kW), equipment out of service,
and reason for the Outage.
5.1.2.Planned Outages not included in the Annual Operations Forecast, the
Quarterly Operations Forecast, or the Weekly Update, shall be provided by
Seller to Buyer at least four (4) business days prior to the start of the
requested outage.
5.2.Forced Outages
5.2.1.“Forced Outages” are any unplanned reductions in the capability of the
Generating Facility.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 10
5.2.2.Forced Outages shall be reported by Seller to NCPA within twenty (20)
minutes of such outages.
5.2.3.Notice by Seller to NCPA of a Forced Outage shall include the reason for the
outage (if known), expected duration of the outage, and the capacity
reduction.
5.2.4.Within forty-six (46) hours of a Forced Outage, a detailed verbal report shall
be provided by Seller to NCPA specifying the reason for the outage,
expected duration of such outage, capacity reduction, and actions taken to
mitigate such outage.
5.3.Commencement of an Outage –Seller shall not begin any planned Outage
without prior approval of NCPA and the CAISO.
5.4.Return to Service –Seller shall notify NCPA immediately whenever a generating
unit is returned to service.
6.Notices
6.1.All Scheduling notices and Schedules are to be submitted to Buyer by phone, fax,
email or other automated processes agreed to by the Buyer, to the following
persons:
6.1.1.For Day Ahead Schedule changes, inform the Buyer’s Pre-Scheduling
Contact listed in Exhibit 13a [Contacts, Buyer].
6.1.2.For Hourly Modifications, inform the Buyer’s Schedule Coordinator Contact
listed in Exhibit 13a [Contacts, Buyer].
6.1.3.For forced Outages, inform the Buyer’s Dispatcher Contact listed in Exhibit
13a [Contacts, Buyer].
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 10
7.Example Form Of Day-Ahead Schedule:
MM/DD/YY
Hour Ended Expected Capability
1 25 MW
2 25 MW
3 25 MW
4 25 MW
5 25 MW
6 25 MW
7 25 MW
8 25 MW
9 25 MW
10 25 MW
11 25 MW
12 25 MW
13 25 MW
14 25 MW
15 25 MW
16 25 MW
17 25 MW
18 25 MW
19 25 MW
20 25 MW
21 25 MW
22 25 MW
23 25 MW
24 25 MW
Expected Daily Temperatures (in Fahrenheit):
____ Low
____High
Contact Information:
Scheduling Coordinator:
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 11
Exhibit 11
FORM OF ATTESTATION
Environmental Attribute Attestation and Bill of Sale
Western GeoPower, Inc. (“Seller”) hereby sells, transfers and delivers to Northern
California Power Agency (“Buyer”) the Environmental Attributes and Environmental
Attributes Reporting Rights associated with the generation of the indicated Energy for
delivery to the grid (as such terms are defined in the Amended and Restated Renewable
Energy Power Purchase Agreement (“Agreement”) dated [Date], between Buyer and
Seller) arising from the generation for delivery to the grid of the energy by the Generating
Facility:
Generating Facility name and location:Western Geo Project (Sonoma County, California)
EIA ID #: _________CEC ID #:_________ISO Meter ID #:_________
Fuel Type: _________Capacity (MW):_________Operational Date:
_________
Dates MWhrs generated Dates MWhrs generated
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
in the amount of one Environmental Attribute for each megaWatt hour generated; and
Seller further attests, warrants and represents as follows:
i)to the best of its knowledge, the information provided herein is true and
correct;
ii)this transfer to Buyer is the one and only sale of the Environmental
Attributes and associated Environmental Attributes Reporting Rights
referenced herein;
iii)the Generating Facility generated and delivered to the grid the energy in the
amount indicated as undifferentiated energy; and (check one):
___ Seller owns the Generating Facility, or
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 11
___ to the best of Seller’s knowledge, each of the Environmental Attributes
associated with the generation of the indicated Energy for delivery to the
grid have been generated and sold by the Generating Facility.
This serves as a Bill of Sale, transferring from Seller to Buyer all of Seller’s right, title and
interest in and to the Environmental Attributes associated with the generation of the
Energy for delivery to the grid.
Seller:_____________________________
By _____________________________
Title _____________________________
Date: _____________________________
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 12
Exhibit 12
PAYMENT / WIRE INSTRUCTIONS
------------------------------------------------------------------------------------------
NORTHERN CALIFORNIA POWER AGENCY (Buyer)
WIRE INSTRUCTIONS
The following information is to be used when wiring funds for deposit to Buyer:
U.S. Bank
ABA# 121122676
For Deposit to:
Northern California Power Agency
Acct. No. 1-534-0216-2744
For information purposes, please fax a copy of the wire instructions to Buyer at (916) 781-
4255,Attention Treasurer-Controller.
The following information is to be used for all other statements or payments to Buyer by
mail:
NCPA
Attention: Treasurer-Controller
651 Commerce Drive
Roseville, CA 95678.
WESTERN GEOPOWER INC (Seller)
WIRE INSTRUCTIONS
The following information is to be used when wiring funds for deposit to Seller
[To Be Provided]
For information purposes, please fax a copy of the wire instructions to [Seller’s Name]at
[Seller’s phone number], Attention [Seller’s relevant contact person].
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 13a
Exhibit 13a
NCPA (BUYER) CONTACTS
1.Contract Management
Name Phone Email
Ken Speer 916-781-4201 Ken.Speer@ncpagen.com
2.Billing/Invoice Issues
Name Phone Email
Bob Caracristi 916-781-4224 bob.caracristi@ncpa.com
Mike Whitney 916-781-4205 mike.whitney@ncpa.com
3.NCPA Pre-Scheduling
Monthly, weekly and daily generation schedules are to be provided to NCPA Pre-
Scheduling contacts.
Name Phone Email
Kevin McMahan 916-786-0123 kevin.mcmahan@ncpa.com
916-781-4227
Norm Worthington 916-786-0124 norm.worthington@ncpa.com
Don Imamura 916-781-4240 don.imamura@ncpa.com
Ken Goeke 916-781-4290 ken.goeke@ncpa.com
Pre-Scheduling (FAX)916-781-4239
4.NCPA Schedule Coordination
All Hour Ahead or Real-Time Schedule changes are to be provided to NCPA
Scheduling Coordinator Contacts.
Name Phone Email
NCPA Scheduling Coordinator 916-781-4237 SC2@ncpa.com
(FAX) 916-781-4226
5.NCPA Dispatch/Outage Coordination
All Planned and/or Forced Outages of Generating Facilities are to be provided to
NCPA Dispatch/Outage Coordination.
Name Phone Email
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 13a
Tracy Bibb 916-781-4225 tracy.bibb@ncpa.com
(Supervisor of Dispatch Operations)
NCPA Dispatch 916-786-3518 Dispatch@ncpa.com
NCPA Scheduling Coordinator 916-781-4237 SC2@ncpa.com
NCPA Dispatch (FAX)916-781-4226
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 13b
Exhibit 13b
WESTERN GEOPOWER, INC.(SELLER) CONTACTS
1.Contract Management
Name Phone Email
2.Billing/Invoice Issues
Name Phone Email
3.Pre-Scheduling and Dispatch/Outage Coordination
Annual, Quarterly, Weekly and Daily generation schedules:
Name Phone Email
Pre-Scheduling (FAX)(to come)
4.Operator and Real Time Issues
All Planned and/or Forced Outages of generation facilities are to be provided to
NCPA Dispatch/Outage Coordination.
Name Phone Email
Tracy Bibb 916-781-4225 tracy.bibb@ncpa.com
(FAX)916-781-4226
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 14
Exhibit 14
Example of Availability Shortfall Damages
Period
"Contract
Capacity"
CC
"Metered
Quantity"
MQ
"Lost
Output"
LO
"Deemed
Output"
DO
“Availability
Percentage”
AP
"Availability
Shortfall
Damages"
ASD
Assessed
ASD
MQ+LO 100*(DO/CC)$5*(CC-DO)
January 18600 18600 0 18600 100 0
February 18600 7000 0 7000 37.6 58000 58000
Mar 18600 8260 2100 10360 55.7 41200 41200
Apr 9000 0 4500 4500 50.0 22500 22500
May 18600 9600 9000 18600 100 0 0
Jun 18600 18000 0 18000 96.8 3000 0 (AP•90%)
Jul 18600 10000 2000 12000 64.5 33000 33000
Aug 18600 11000 0 11000 59.1 38000 38000
Sep 9000 9000 0 9000 100.0 0 0
Oct 18600 9000 0 9000 48.4 48000 48000
Nov 18600 9000 0 9000 48.4 48000 48000
Dec 18600 9000 9600 18600 100.0 0 0
Total 204000 118460 27200 145660 71.7
Less than
90%
ASD due $288,700
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Exhibit 14
EXHIBIT 15
SELLER’S INSURANCE INFORMATION
Certificate of Insurance (Example)No.Dated:
This document supersedes any certificate previously issued under this number
This is to certify that the Policy(ies) of insurance listed below ("Policy" or "Policies") have been issued to the Named Insured identified
below for the policy period(s) indicated. This certificate issued as a matter of information only and confers no rights upon the Certificate
Holder named below other than those provided by the Policy(ies).
Notwithstanding any requirement, term or condition of any contract or any other document with respect to which this certificate may be
issued or may pertain, the insurance afforded by the Policy(ies) is subject to all the terms, conditions and exclusions of such Policy(ies).
This certificate does not amend, extend or alter the coverage afforded by the Policy(ies). Limits shown are intended to address contractual
obligations of the Named Insured.
Limits may have been reduced since Policy effective date(s) as a result of a clam or claims.
Certificate Holder:
To Whom It may Concern
Named Insured and Address:
This certificate is issued regarding: Western GeoPower, Inc.
Type(s) of Insurance Insurer(s)Policy
Number(s)
Effective/
Expiry Dates
Sums Insured or Limits of Liability
Each Occurrence (including
Tenants Legal Liability)
USD 1,000,000
Employers Liability USD 1,000,000
General Aggregate Limit USD 5,000,000
Medical Expense USD 25,000
Non-Owned Auto USD 1,000,000
Personal or Advertising
Injury Limit
USD 1,000,000
COMMERCIAL GENERAL
LIABILITY
·Each Occurrence (including
Tenants Legal Liability)
·Personal or Advertising
Injury Limit
·Products & Completed
Operations
·General Aggregate Limits
Products & Completed
Operations Aggregate
USD 1,000,000
AI/PI Aggregate Limit USD 9,000,000
Each Occurrence Limit USD 9,000,000
Excess Coverage other
Aggregate Limit
USD 9,000,000
Products Completed
Operations Aggregate
Limit
USD 9,000,000
UMBRELLA
·AI/PI Aggregate Limit
·Each Occurrence Limit
·Excess Coverage other
Aggregate Limit
·Products Completed
Operations Aggregate Limit
·Umbrella Coverages
Aggregate Limit
Umbrella Coverages
Aggregate Limit
USD 9,000,000
WORKERS COMPENSATION As Required by Law
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
EXHIBIT 16
Agreement Modification Election Provisions
1.Notwithstanding Section 3.5(e) or any other provision of the Agreement,
commencing on the Effective Date and for so long as Buyer’s purchase option described in
Section 3.5(e) remains in effect in accordance with the provisions of Section 3.5(e) (including
during the Restricted Period, if any), if Seller makes a Modification determination as described
below, then Seller shall have an obligation to send Buyer a Modification Determination Notice,
as described below, and with the consequences set forth below in this Exhibit 16.
2.The Parties acknowledge and agree that (a) the Site is located in a region of
significant geothermal resources and that there are a number of geothermal electrical generating
facilities owned by other third parties (“Third Party(ies)”) in the vicinity of the Site, (b) Seller
has concluded substantial permitting and related work, has drilled four proven production
wells and made significant investment with respect to the development of the Generating
Facility and (c) although Seller is entering into this Agreement with the full expectation of
completing the development and construction of the Generating Facility, prior to closing of the
construction financing of the Generating Facility it is possible that Seller may be approached by
a Third Party with a proposal that, taken as a whole (including environmental, financial and
other considerations), leads Seller to a determination that it is desirable to modify this
Agreement (a “Modification”) to enable Seller to provide steam from the Leaseholds at the Site
to another geothermal generating facility owned by a Third Party in the vicinity of the Site (an
“Other Facility”) for electrical energy and other Output from the Other Facility to be provided
to Buyer, all as an alternative to concluding the development and construction of the Generating
Facility.
3.If a Modification determination is made as described above, Seller shall provide
written notice thereof to Buyer (a “Modification Determination Notice”), indicating (a) the
identity and location of the Other Facility, (b) the Third Party owner of the Other Facility
(“Other Owner”), (c) a brief description of the manner in which Seller proposes to modify the
Agreement to carry out the Modification (including the details set forth in the next sentence)
and (d) such other details as may be relevant. The Modification Determination Notice shall
specify whether Seller recommends that the Modification be carried out in a manner under
which, either (1) the Agreement would be assigned to the Other Owner and amended to carry
out the Modification, in connection with which Seller would enter into a long-term steam sales
agreement with the Other Owner, or alternatively (2) Seller would itself enter into a
steam/energy tolling arrangement with the Other Owner (under which Seller would provide
steam to the Other Owner in return for delivery to Seller of Output), and the Agreement would
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
be amended between Seller and Buyer to allow for the resale by Seller to Buyer of such Output.
Notwithstanding the foregoing, and unless both Parties mutually agree in writing, no
Modification shall modify or change (i) the nature of the Output that is delivered to Buyer, (ii)
the Contract Price for Output delivered to Buyer, (iii) the Term during which Output is
delivered to Buyer, (iv) the expected Contract Capacity to be delivered to Buyer or (v) the
fundamental allocation of economic benefits and burdens as set forth in the Agreement,
including as to the Performance Guaranties in Section 7.4, the Compliance Expenditure Cap set
forth in Section 3.3(g) and Guaranty and credit related requirements set forth in Section 6.2.
4.If Seller delivers a Modification Determination Notice, the Parties promptly shall
commence good faith negotiations and shall execute and deliver mutually acceptable
documentation to carry out the Modification within one hundred twenty (120) days following
the date of the Modification Determination Notice, provided that neither Party shall be
obligated to enter into any arrangements, modifications or other agreements that such Party has
not approved in its sole discretion, acting reasonably and in good faith.
5.The provisions of this Exhibit 16 shall survive any termination of the Agreement
for the duration of the Restricted Period, it being the Parties’ intent that Seller shall have the
option and right to provide a Modification Determination Notice at any time within the period
described in Section 1 of this Exhibit 16 and, for the avoidance of doubt, the delivery of a
Modification Determination Notice shall not trigger Buyer’s ROFO rights under Section 3.5(a) or
purchase option rights under Section 3.5(e). At any time following Seller’s delivery of a
Modification Determination Notice, but prior to the Parties’ execution of final binding
documents carrying out the Modification, Seller may by written notice to Buyer rescind such
Modification Determination Notice.
OHS WEST:261077640.9 OHS West:261077640.10
23768-8 LX0/LX0
EXHIBIT 17
Notice of NCPA's Rights to PPA Output
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Northern California Power Agency
_______________________
_______________________
Attention: _____________________
APN: ______________________
(Space Above for Recorder’s Use Only)
NOTICE OF NCPA’s RIGHTS
NOTICE IS HEREBY GIVEN THAT Northern California Power Agency, a
joint powers agency established pursuant to the laws of the State of California
(“NCPA”), and Western GeoPower, Inc., a California corporation (“Seller”), have
entered into that certain Amended and Restated Renewable Energy Power Purchase
Agreement dated as of __________ (as amended, supplemented and revised from
time to time, the “Agreement”).
Pursuant to the Agreement, NCPA has a right of first offer to purchase all
electric energy, capacity and related environmental attributes from any geothermal
electrical generating facility constructed on that certain real property (the
“Property”) more particularly described on Exhibit A attached hereto and
incorporated herein by the reference.
NCPA’s rights shall terminate as set forth in the Agreement, but not later
than ____. This Notice shall terminate automatically on ____, unless earlier
terminated by NCPA by recording a notice of termination.
Reference is made to the Agreement for the terms and conditions of NCPA’s
rights. In the event of a conflict between the terms of this Notice and the terms of
the Agreement, the terms of the Agreement shall control.
[Signatures are on the following page]
OHS WEST:261077640.9 OHS West:261077640.10
23768-8 LX0/LX0
Western GeoPower, Inc.Northern California Power Agency
By:
Its:
Date:
By:
Its:
Date:
OHS WEST:261077640.9 OHS West:261077640.10
23768-8 LX0/LX0
EXHIBIT A
[Legal Description of Property]
OHS WEST:261077640.9 OHS West:261077640.10
23768-8 LX0/LX0
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)
COUNTY OF ______________)
On _______________________ 20____, before me,
____________________________________________________, Notary Public,
personally appeared __________________________________________________,who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that
by his/her/their signature(s) on the instrument, the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_____________________________________
[SEAL]
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)
COUNTY OF ______________)
On _______________________ 20____, before me,
____________________________________________________, Notary Public, personally appeared
__________________________________________________,who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_____________________________________
[SEAL]
OHS WEST:261077640.9 OHS West:261077640.10
23768-8 LX0/LX0
EXHIBIT 18
Notice of NCPA's Rights to Purchase Steam
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Northern California Power Agency
_______________________
_______________________
Attention: _____________________
APN: ______________________
(Space Above for Recorder’s Use Only)
NOTICE OF NCPA’s RIGHTS
NOTICE IS HEREBY GIVEN THAT Northern California Power Agency, a
joint powers agency established pursuant to the laws of the State of California
(“NCPA”), and Western GeoPower, Inc., a California corporation (“Seller”), have
entered into that certain Amended and Restated Renewable Energy Power Purchase
Agreement dated as of __________ (as amended, supplemented and revised from
time to time, the “Agreement”).
Pursuant to the Agreement, NCPA has a right of first offer to purchase all
steam derived from geothermal resources on that certain real property (the
“Property”) more particularly described on Exhibit A attached hereto and
incorporated herein by the reference.
NCPA’s rights shall terminate as set forth in the Agreement, but not later
than ____. This Notice shall terminate automatically on ____, unless earlier
terminated by NCPA by recording a notice of termination.
Reference is made to the Agreement for the terms and conditions of NCPA’s
rights. In the event of a conflict between the terms of this Notice and the terms of
the Agreement, the terms of the Agreement shall control.
[Signatures are on the following page]
OHS WEST:261077640.9 OHS West:261077640.10
23768-8 LX0/LX0
Western GeoPower, Inc.Northern California Power Agency
By:
Its:
Date:
By:
Its:
Date:
OHS WEST:261077640.9 OHS West:261077640.10
23768-8 LX0/LX0
EXHIBIT A
[Legal Description of Property]
OHS WEST:261077640.9 OHS West:261077640.10
23768-8 LX0/LX0
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)
COUNTY OF ______________)
On _______________________ 20____, before me,
____________________________________________________, Notary Public,
personally appeared __________________________________________________,who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that
by his/her/their signature(s) on the instrument, the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_____________________________________
[SEAL]
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)
COUNTY OF ______________)
On _______________________ 20____, before me,
____________________________________________________, Notary Public, personally appeared
__________________________________________________,who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_____________________________________
[SEAL]
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
EXHIBIT 19
Purchase Option Transaction Terms
1.Purpose. If Buyer accepts Seller’s offer to sell its Assets to Buyer under Section
3.5(e) by sending an election notice pursuant to Section 3.5(e) (an “Election Notice”), then this
Exhibit 19 shall govern the terms and conditions of the purchase and sale of such Assets from
Seller to Buyer (the “Transaction”).
2.Definitions. In addition to other terms defined in the Agreement, for purposes of
this Exhibit 19 the following terms have the following meanings:
“Appraiser(s)” has the meaning set forth in Section 4(b)(i) of this Exhibit.
“Closing” has the meaning set forth in Section 3(b) of this Exhibit.
“Election Notice” has the meaning set forth in Section 1 of this Exhibit.
“Fair Market Value” means the amount at which the Assets would change hands
between a willing buyer and a willing seller, taking into account all relevant factors and criteria,
including the actual and reasonably expected geothermal steam energy available as part of the
Assets, and assuming that (a) neither buyer nor seller is under compulsion to buy or sell and
both have reasonable knowledge of the relevant facts, (b) buyer takes the Assets unencumbered
by the Agreement, and (c) buyer has the ability and option of using the Assets to provide
geothermal steam to a renewable electrical generating facility owned by buyer or a third party
to produce renewable electrical energy and other characteristics of Output for sale at market
pricing no less than the pricing set forth in the Agreement. In determining Fair Market Value,
the Appraisers shall take into account and give proper weighting to the income capitalization
approach in addition to other valuation approaches.
“High Value” has the meaning set forth in Section 4(b)(v) of this Exhibit.
“Low Value” has the meaning set forth in Section 4(b)(v) of this Exhibit.
“Median Value” has the meaning set forth in Section 4(b)(v) of this Exhibit.
“Transaction” has the meaning set forth in Section 1 of this Exhibit.
3.General Terms of Transaction.
(a)As-Is, Where-Is. The Transaction purchase and sale shall be on an “as-is,”
“where-is” basis, with all faults, and all implied warranties (including for fitness,
merchantability or otherwise) shall be waived, excepting only that Seller shall provide
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
customary and reasonable representations and warranties as to the title to any personal and real
property included in the transaction.
(b)Closing. Seller and Buyer shall use commercially reasonable efforts to close
and consummate the Transaction (“Closing”) within one hundred and twenty (120) days after
Buyer’s delivery of an Election Notice. At the Closing, the Parties shall execute and deliver such
documents and instruments of transfer as may be reasonably necessary to effect the Closing.
(c)Purchase Price, Transaction Costs and Transfer Taxes. The purchase price
for the Assets shall be payable 100% in cash by wire transfer on the Closing date and shall be
equal to the Fair Market Value of the Assets. Seller and Buyer shall each bear their own costs
and expenses incurred in connection with the Transaction, including costs of legal counsel. The
Parties shall pro-rate as of the Closing date all applicable utilities, real estate and similar taxes, if
any. Buyer shall be responsible for payment of any applicable sales, transfer or similar taxes
payable in connection with the sale and transfer of the Assets.
(d)Consents. Seller shall use commercially reasonable efforts to obtain and
deliver to Buyer copies of all consents and approvals required for Seller’s sale and transfer to
Buyer of the Assets, if any.
4.Determination of Fair Market Value.
(a)Determination by Mutual Agreement. Upon delivery of an Election Notice,
the Parties shall promptly meet and confer in good faith to determine if they are able to reach
mutual agreement on the then current Fair Market Value.
(b)Determination by Appraisal.
(i)If for any reason the Parties fail to reach mutual agreement on the
Fair Market Value in accordance with Section 4(a) above on or before the date that is thirty (30)
days following the date of the Election Notice, then, within fifteen (15) days thereafter each
Party shall, by notice to the other Party, appoint an investment bank, appraisal company or
other appraiser, in any such case having experience in appraising assets similar to the Assets (an
“Appraiser”).
(ii)Within fifteen (15) days following the appointment of the two
Appraisers pursuant to clause (i) above, such Appraisers shall select a third Appraiser, and shall
promptly give notice of such selection to each Party. Such third Appraiser (a) shall be
independent of and not affiliated with either Party, including that such Appraiser and its
Affiliates shall not have any officers, directors or other principals who also are officers, directors
or principals of either Party or its Affiliates and (b) shall not have performed any material
advisory or other work for either Party during the two-year period prior to the appointment
date.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
(iii)Each Party shall reasonably cooperate to provide information to the
Appraisers so as to allow the Appraisers to deliver their written notices as provided in clause
(iv) below. Any written information provided by or on behalf of a Party to the third Appraiser
shall be copied to both Parties at the same time as provided to the third Appraiser. The third
Appraiser shall not disclose its final valuation of the Fair Market Value to the other Appraisers
or the Parties prior to the written submission of such amount as described in clause (iv) below.
(iv)On the date, and at the specific place and time, agreed by the Parties
and designated in a written notice delivered by the Parties to the Appraisers, each Appraiser
shall deliver a sealed envelope to each Party and to each other Appraiser including a statement
as to its valuation of the Fair Market Value. The date specified in such notice shall be a date
between one (1)and three (3)Business Days after the thirtieth (30th)day following the date on
which notice of the selection of the third Appraiser is delivered pursuant to clause (ii) above.
(v)The final Fair Market Value shall be equal to the weighted average of
the values determined by each of the three Appraisers, with (a) the value which is between the
highest and lowest values (the “Median Value”) given a weighting of 100, (b) the highest such
value (the “High Value”) given a weighting of 100 if such number is the same as the Median
Value, declining linearly to zero if such High Value is equal to 140% of the Median Value, and
zero if such High Value is greater than 140% of the Median Value, and (c) the lowest such value
(the “Low Value”) given a weighting of 100 if such value is the same as the Median Value,
declining linearly to zero if such value is equal to 60% of the Median Value, and zero if such
Low Value is less than 60% of the Median Value. If two of the values are the same, but different
than the third value, the Parties acknowledge that the outcome of the computation above will be
the same regardless of which of the two equal values is deemed the Median Value, and the
computation shall be done accordingly. If all three values are the same, the Parties
acknowledge that the Fair Market Value shall be equal to that value. If any Appraiser fails to
deliver written notice of its value, then the final valuation of the Fair Market Value shall be
equal to the average (mean) of the values determined by each of the other Appraisers which has
so delivered its written notice. An example of such weighted average calculation is attached as
Schedule 1 to this Exhibit 19.
(vi)Each Party shall be responsible for the fees and expenses of the
Appraiser selected by it, and the fees and expenses of the third Appraiser shall be borne by the
Parties equally. If either Party fails to appoint an Appraiser under clause (i), or if the two
Appraisers selected under clause (i) fail to select a third Appraiser in accordance with clause (ii),
then either Party may, by written notice to the American Arbitration Association (with a copy to
the other Party), request that the American Arbitration Association appoint such Appraiser.
The fees and expenses of the American Arbitration Association shall be borne equally by the
Parties.
OHS WEST:261077640.9
OHS West:261077640.10
23768-8 LX0/LX0
Schedule 1 to Exhibit 19
Example of Weighted Average Calculation
The following is an example of the weighted average calculation contemplated by Section
4(b)(v) of Exhibit 19.
Assume the three Appraisers provide the following three Fair Market Value appraisals:
Appraiser 1:$48,000,000
Appraiser 2:$60,000,000
Appraiser 3:$89,000,000
Appraiser 1 is the Low Value, Appraiser 2 is the Median Value, and Appraiser 3 is the High
Value.
Based on Section 4(b)(v), in calculating the weighted average of the three appraisals, the Median
Value is weighted at 100; the Low Value is weighted at 50, since the Low Value is 80% of the
Median Value, and therefore exactly half-way between the Median Value and 60% of the
Median Value; and the High Value is weighted at zero since the High Value exceeds 140% of the
Median Value. The weighted average calculation is as follows:
50 x $48,000,000 =$2,400,000,000
100 x $60,000,000 =$6,000,000,000
0 x $89,000,000 =$0
______________________
Totals:150 $8,400,000,000
$8,400,000,000 / 150 = $56,000,000
The weighted average of the three Appraisers’ values is $56,000,000, and this amount is
therefore the Fair Market Value of the Assets.
1606206.1
ATTACHMENT G
EXCERPTED DRAFT MINUTES
FINANCE COMMITTEE
Regular Meeting
March 1, 2011
4. Agreement with Western GeoPower Renewable Energy.
Senior Resource Originator, Tom Kabat spoke on the history of the Western
GeoPower Renewable Resource Contract decision. In 2008, the City and the
Northern California Power Agency (NCPA) signed a $98/mega watt hour (MWh)
third phase agreement. In 2009, Western GeoPower failed to finance the
$98/MWh project. In 2009, Palo Alto agreed on a $117/MWh contract with
Western GeoPower. In 2010, Western GeoPower was taken over and Palo Alto
moved on to look for other power sources. In 2011, NCPA renegotiated at
$113/MWh, but needed participants to terminate all non-starter 2008 third
phase agreements. Silicon Valley Power (SVP) said they would hold the City’s
place through 2011. He spoke on the recommendation, from Staff, taken to
the Utilities Advisory Commission (UAC). Staff and the UAC recommend that
Council approve the agreement terminating the third phase agreement with
Western GeoPower. Additionally, the UAC recommended that Council approve
the new third phase agreement with Western GeoPower. He spoke on the
reasons the UAC recommended that the City commit to the new agreement.
Staff continued the significant efforts, requested by Council, to reevaluate the
goals and plans for efficiency and renewables. Staff recommended taking
advantage of SVP’s verbal offer to amend the contract by December 2011. The
decision requested, this evening, was to terminate the non-starter 2008 third
phase agreement, and wait and decide later by taking advantage of SVP’s
verbal offer, or decide now by executing the new third phase agreement.
Utilities Advisory Commission Vice Chair, Jon Foster spoke on the UAC’s
recommendation to execute the new third phase agreement.
1
Council Member Schmid said the Market Price Referent was due to be updated,
and could possibly fall 5 to 10 percent.
Ms. Fong said the Market Price Referent was updated annually.
Council Member Schmid felt Western GeoPower added diversity to the City’s
portfolio. He inquired on the Market Price Referent.
Ms. Fong said the ceiling price, regulated by the California Public Utilities
Commission, was the reasonable price to pay for renewable power. The price
that jurisdictions bid on became the floor price.
Council Member Schmid inquired on the risk of not locking into the agreement.
Ms. Fong said the current price was locked between NCPA and the developer.
She said a market change would be irrelevant.
Council Member Schmid said another vendor may bring forward an alternative
contract. It was his belief this was why Staff recommended not locking into the
new agreement.
Ms. Fong said the price was fairly attractive. Staff recommended not signing
now because Staff had an obligation to return to Council with the Long Term
Electric Acquisition Plan (LEAP), Gas Utility Long Term Plan (GULP), strategic
plan, and other City policies.
Council Member Schmid inquired on Staff’s confidence level that the price would
remain the same.
Ms. Fong said Staff was very confident.
Council Member Yeh inquired whether SVP had a use for all of the energy
allocated to them.
Ms. Fong said SVP had oversubscribed on their original commitment, and was
willing sell a piece of their share to Palo Alto.
Council Member Yeh inquired whether the City had a right of first refusal under
the current $98/MWh agreement.
Ms. Fong said the project would never be developed at that price.
Council Member Yeh said some LEAP goals dealt with increased efficiency, and
2
Staff had doubled its efficiency goals. He inquired whether there would still be
an energy gap if the City met its seven percent reduction goal.
Mr. Kabat said yes.
Council Member Yeh said Council had been aggressive in efficiency goals. The
new agreement would diversify the City’s portfolio. His primary concern was on
buyer’s remorse.
Mr. Kabat said some analysis had been done on the natural gas component.
The natural gas component had shown a reduction, but Staff did not know
where the other components were heading. He spoke on a State Legislature
action that may target RPS standards at 33 percent.
Council Member Yeh inquired on the timing of the State’s Legislature.
Mr. Kabat said timing depended on the PUC’s cycle on investor-owned utilities.
Ms. Fong said the first step of action was to terminate the non-starter 2008
agreement. This was scheduled on the April 11, 2011 Council meeting.
Chair Scharff said Staff’s concern on signing the new agreement was based on
previous Council directions. He inquired whether Staff felt comfortable if the
Council moved forward with the UAC recommendation.
Ms. Fong said yes.
Chair Scharff inquired whether SVP could change their mind if the signing of the
new agreement was postponed.
Ms. Fong said SVP changing their mind was unlikely.
Chair Scharff inquired whether it would create more work for Staff if Council did
not move forward with the new agreement.
Ms. Fong said yes.
MOTION: Chair Scharff moved, seconded by Council Member Yeh, that the
Finance Committee recommend the City Council adopt two Resolutions, 1)
approving an agreement terminating the Third Phase Agreement for Western
GeoPower Incorporated Renewable Energy Power Purchase Agreement, and 2)
approving a new Third Phase Agreement for Western GeoPower Incorporated
3
4
Renewable Energy Power Purchase Agreement for the acquisition of up to 15
percent of project energy over 25 years at a cost not to exceed $95 Million.
Chair Scharff said he fully supported the UAC recommendation.
Council Member Shepherd said the State kept raising the bar on how much the
City needed to allocate toward renewables. Moving forward with the Motion
would secure this position.
Council Member Schmid inquired on the impact on rate payers.
Mr. Kabat overviewed the Summary of Current Energy Supplies and Western
GeoPower.
MOTION PASSED 4-0