D0912042 Adopting Policies and Procedures for Purchase of Excess Electricity Under Assembly Bill 1613
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ATTACHMENT A

Standard Contract for Eligible CHP Facilities

POWER PURCHASE AND SALE AGREEMENT

between

[BUYER'S NAME]

and

[SELLER'S NAME]

(ID #[Number])

Standard Contract for Eligible CHP Facilities

TABLE OF CONTENTS

PREAMBLE 11

RECITALS 11

ARTICLE ONE: SPECIAL CONDITIONS 22

1.01 Term 22

1.02 Generating Facility 22

1.03 Delivery Point 33

1.04 Planned Outages 33

1.05 Power Product Prices 33

1.06 Credit and Collateral Requirements 33

1.07 Scheduling Coordinator 44

ARTICLE TWO: SELLER'S SATISFACTION OF OBLIGATIONS BEFORE THE TERM START DATE; TERMINATION 55

2.01 Seller's Satisfaction of Obligations before the Term Start Date 55

2.02 Termination Rights of the Parties 66

2.03 Rights and Obligations Surviving Termination 66

ARTICLE THREE: SELLER'S OBLIGATIONS 88

3.01 Conveyance of the Power Product and Related Products; Retained Benefits 88

3.02 Resource Adequacy Rulings 99

3.03 Site Control 1010

3.04 Permits 1010

3.05 Transmission 1111

3.06 CAISO Relationship 1111

3.07 Generating Facility Modifications 1111

3.08 Metering 1212

3.09 Telemetry System 1313

3.10 Provision of Information 1313

3.11 Progress Reporting 1414

3.12 Fuel Supply 1414

3.14 Operation and Record Keeping 1414

3.15 Power Product Curtailments at Transmission Provider's or CAISO's Request. 1616

3.16 Report of Lost Output 1616

3.18 Notice of Cessation or Termination of Service Agreements 1717

3.19 Buyer's Access Rights 1717

3.20 Seller Financial Information 1717

3.21 NERC Electric System Reliability Standards 2020

ARTICLE FOUR: BUYER'S OBLIGATIONS 2121

4.01 Obligation to Pay 2121

4.02 Payment Adjustments 2121

4.03 Payment Statement and Payment 2121

4.04 No Representation by Buyer 2424

4.05 Buyer's Responsibility 2424

ARTICLE FIVE: FORCE MAJEURE 2525

5.01 No Default for Force Majeure 2525

5.02 Requirements Applicable to the Claiming Party 2525

5.03 Termination 2525

ARTICLE SIX: EVENTS OF DEFAULT; REMEDIES 2626

6.01 Events of Default 2626

6.02 Early Termination 2929

6.03 Termination Payment 3030

ARTICLE SEVEN: LIMITATIONS OF LIABILITIES 3131

ARTICLE EIGHT: GOVERNMENTAL CHARGES 3333

8.01 Cooperation to Minimize Tax Liabilities 3333

8.02 Governmental Charges 3333

8.03 Providing Information to Taxing Governmental Authorities 3333

ARTICLE NINE: MISCELLANEOUS 3434

9.01 Representations and Warranties 3434

9.02 Additional Representations, Warranties, and Covenants by Seller 3434

9.03 Indemnity 3535

9.04 Assignment 3737

9.05 Consent to Collateral Assignment 3737

9.06 Governing Law and Jury Trial Waiver 4040

9.07 Notices 4040

9.08 General 4141

9.09 Confidentiality 4242

9.11 Nondedication 4545

9.12 Mobile Sierra 4646

9.13 Seller Ownership and Control of Generating Facility 4646

9.14 Simple Interest Payments 4646

9.15 Payments 4646

9.16 Provisional Relief 4646

ARTICLE TEN: DISPUTE RESOLUTION 4848

10.01 Dispute Resolution 4848

10.02 Mediation 4848

10.03 Arbitration 4848

SIGNATURES 5151

LIST OF EXHIBITS

A. Definitions

B. Generating Facility and Site Description

C. Monthly Contract Payment Calculation

D. Credit and Collateral Requirements

E. Scheduling Coordinator Services

F. Milestone Progress Reporting Form

G. Seller's Forecasting Submittal and Accuracy Requirements

H. CAISO Charges

I. Scheduling and Delivery Deviation Adjustments

J. Notice List

K. Form of Guaranty Agreement

L. Form of Letter of Credit

M. Seller's Milestone Schedule

N. Outage Schedule Submittal Requirements

POWER PURCHASE AND SALE AGREEMENT

between

[BUYER'S NAME]

and

[SELLER'S NAME]

(ID# [Number])

PREAMBLE

This Power Purchase and Sale Agreement by and between [Buyer's name], a California corporation ("Buyer"), and [Seller's name], a [Seller's form of business entity and state of registration] ("Seller"), together with the exhibits, attachments, and any applicable referenced collateral agreement between the Parties (collectively, this "Agreement"), is made, effective and binding as of [Date of execution] (the "Effective Date").

Buyer and Seller are sometimes referred to in this Agreement individually as a "Party" and jointly as the "Parties." Unless the context otherwise specifies or requires, initially capitalized terms used in this Agreement have the meanings set forth in Exhibit A.

RECITALS

A. On June 26, 2008, the CPUC opened Rulemaking 08-06-024 to implement the provisions of Assembly Bill 1613 (codified in California Public Utilities Code Section 2840 et. seq.), which establishes the Waste Heat and Carbon Emissions Reductions Act (the "Act").

B. Buyer is required to offer this Agreement to Seller in order to fulfill Buyer's obligations under the Act and Decision [___], and Seller desires to accept such offer and enter into this Agreement.

The Parties, intending to be legally bound, agree as follows:

ARTICLE 1. SPECIAL CONDITIONS

{Buyer Comment: If the Term is greater than or equal to five years, before executing this Agreement, Seller must provide to Buyer documentation evidencing its compliance with the Greenhouse Gas Emissions Performance Standard set forth in CPUC D.07-01-039 and in subsequent CPUC rulings implementing D.07-01-039, and with any subsequent CPUC-established precondition to the execution of this Agreement.}

1.01 Term. The term of this Agreement (the "Term") commences on [Date] (the "Term Start Date") and ends [Number of months] months after the Term Start Date (the "Term End Date").

1.02 Generating Facility.

1.03 Delivery Point. The delivery point is the point where Seller's facilities connect with facilities owned by Buyer (the "Delivery Point"). Seller shall convey to Buyer and Buyer shall accept all the As-Available Contract Capacity and associated electric energy from the Generating Facility at the Delivery Point. Title to and risk of loss related to the Power Product shall transfer from Seller to Buyer at the Delivery Point. Buyer shall pay any transmission or distribution costs to deliver the power from the Generating Facility's bus bar to the point of interconnection of the Generating Facility to the CAISO- Controlled Grid (Interconnection Point); Seller shall be responsible for interconnection costs, including necessary facility upgrades (consistent with Applicable Laws and the Interconnection Agreement), and line losses from the Delivery Point to the Interconnection Point.

1.04 Planned Outages.  All Planned Outages must be scheduled by Seller in accordance with the procedures set forth in Exhibit N.  Seller shall make reasonable efforts not to schedule a Planned Outage during the Peak Months.  Should it become necessary for Seller to schedule a Planned Outage during the Peak Months, Seller shall only schedule such Planned Outage during the non-peak hours of the Peak Months. In no event may Seller schedule or utilize a Planned Outage that is more than 12 non-peak hours per Peak Month.

1.05 Power Product Prices. The Monthly Contract Payment for the Power Product is set forth in Exhibit C.

1.06 Credit and Collateral Requirements.

1.07 Scheduling Coordinator. Buyer is the Scheduling Coordinator under this Agreement.

*** End of Article One ***

ARTICLE 2. SELLER'S SATISFACTION OF OBLIGATIONS BEFORE THE TERM START DATE; TERMINATION

2.01 Seller's Satisfaction of Obligations before the Term Start Date. Seller shall satisfy each of the following obligations before the Term Start Date:

2.02 Termination Rights of the Parties.

2.03 Rights and Obligations Surviving Termination. The rights and obligations of the Parties that are intended to survive a termination of this Agreement are all such rights and obligations that this Agreement expressly provides survive such termination as well as those rights and obligations arising from either Parties' covenants, agreements, representations or warranties applicable to, or to be performed, at, before or as a result of the termination of this Agreement, including:

*** End of Article Two ***

ARTICLE 3. SELLER'S OBLIGATIONS

3.01 Conveyance of the Power Product and Related Products; Retained Benefits.

3.02 Resource Adequacy Rulings. During the Term, Seller shall grant, pledge, assign and otherwise commit to Buyer the generating capacity of the Generating Facility associated with the Related Products in order for Buyer to use in meeting its resource adequacy obligations under any Resource Adequacy Ruling. Seller:

3.03 Greenhouse Gas (GHG) Emission Compliance Costs - Buyer shall be responsible for Direct GHG Compliance Costs attributable to the Generating Facility for GHG emissions associated with the Power Product. Buyer shall reimburse Seller for any Direct GHG Compliance Costs attributable to the Generating Facility for GHG emissions associated with the Power Product, within forty-five (45) days of Buyer's receipt from Seller of documentation, in form and substance acceptable to Buyer, establishing: (i) that Seller is actually liable for the Direct GHG Compliance Costs for emissions attributed to the Power Product during the services term of this contract; (ii) that Direct GHG Compliance Costs were imposed upon Seller by an authorized governmental authority with jurisdiction to impose the Direct GHG Compliance Costs where the Unit is located, or which otherwise has jurisdiction over Seller or the Unit.

3.04 Site Control.

3.05 Permits. Seller shall obtain and maintain any and all Permits necessary for the Operation of the Generating Facility and to deliver electric energy from the Generating Facility to the Delivery Point.

3.06 Transmission.

3.07 CAISO Relationship. Seller shall comply with the applicable requirements of the CAISO Tariff, including securing and maintaining in full force all of the CAISO agreements, certifications and approvals required in order for the Generating Facility to comply with the CAISO Tariff.

3.08 Generating Facility Modifications.

3.09 Metering.

3.10 Telemetry System. Seller is responsible for designing, furnishing, installing, maintaining and testing a real time Telemetry System in accordance with the CAISO Tariff.

3.11 Provision of Information.

3.12 Progress Reporting. If the Generating Facility is a New Eligible CHP Facility, Seller shall use commercially reasonable efforts to meet the Milestone Schedule and shall advise Buyer as soon as reasonably practicable of any problems or issues of which Seller is aware which may materially impact its ability to meet the Milestone Schedule. No later than the 10th day of each month until the Term Start Date, Seller shall, in accordance with Exhibit F, prepare and provide to Buyer a written report detailing Seller's progress toward meeting the Milestone Schedule. Seller shall include in such report a list of all letters, notices and Permits to or from any Governmental Authority (and the CAISO) applicable to Seller's effort to meet the Milestone Schedule, and shall provide any such documents as may be reasonably requested on Notice from Buyer.

3.13 Fuel Supply. Seller shall supply all fuel required for the Power Product and any testing of the Generating Facility.

3.14 Operation and Record Keeping. Seller shall:

3.15 Power Product Curtailments at Transmission Provider's or CAISO's Request.

3.16 Report of Lost Output. To the extent the conditions set forth in Sections 3.15(a) through (d) occur, Seller shall prepare and provide to Buyer, by the fifth (5th) Business Day following the end of each month during the Term, a lost output report. The lost output report shall identify the date, time, duration, cause and amount by which the Metered Energy was reduced below the Seller's Forecast due to:

3.17 Eligible CHP Facility Status.

3.18 Notice of Cessation or Termination of Service Agreements. Seller shall provide Notice to Buyer within one (1) Business Day if there is a termination of, or cessation of service under, any agreement required in order for the Generating Facility to:

3.19 Buyer's Access Rights. Upon providing at least five (5) Business Day advance Notice to Seller, or as set forth in any Applicable Law (whichever is later), Buyer has the right to examine the Site, the Generating Facility and the Operating records, provided that Buyer follows Seller's safety policies and procedures that Seller has communicated to Buyer, does not interfere with or hinder Seller's Operations, and agrees to escorted access to the Generating Facility during regular business hours for:

3.20 Seller Financial Information.

3.21 NERC Electric System Reliability Standards.

*** End of Article Three ***

ARTICLE 4. BUYER'S OBLIGATIONS

4.01 Obligation to Pay. For Seller's full compensation under this Agreement, during the Term, Buyer shall make a monthly payment (a "Monthly Contract Payment") calculated in accordance with Exhibit C.

4.02 Payment Adjustments.

4.03 Payment Statement and Payment.

4.04 No Representation by Buyer. Any review by Buyer of the design, engineering, construction, testing and Operation of the Generating Facility is solely for Buyer's information. Buyer makes no representation that:

4.05 Buyer's Responsibility. Buyer shall, at its sole cost, obtain and maintain all distribution, transmission and interconnection rights and agreements (including all Governmental Authority approvals) required to enable transmission and delivery of electric energy at and after the Delivery Point.

4.06 Buyer As Scheduling Coordinator. Buyer shall take all steps necessary to become the Scheduling Coordinator for the Generating Facility during the Term.

*** End of Article Four ***

ARTICLE 5. FORCE MAJEURE

5.01 No Default for Force Majeure. Neither Party will be in default in the performance of any of its obligations set forth in this Agreement, except for obligations to pay money, when and to the extent failure of performance is caused by Force Majeure.

5.02 Requirements Applicable to the Claiming Party. If a Party, because of Force Majeure, is rendered wholly or partly unable to perform its obligations when due under this Agreement, such Party (the "Claiming Party") shall be excused from whatever performance is affected by the Force Majeure to the extent so affected.

5.03 Termination. The non-Claiming Party may terminate this Agreement on Notice, which Notice will be effective five (5) Business Days after such Notice is provided, in the event of Force Majeure which materially interferes with the Claiming Party's ability to perform its obligations under this Agreement and which extends for more than three hundred and sixty-five (365) consecutive days, or for more than a total of three hundred and sixty-five (365) days in any consecutive 540-day period.

*** End of Article Five ***

ARTICLE 3. EVENTS OF DEFAULT; REMEDIES

3.01 Events of Default. An "Event of Default" means the occurrence of any of the following:

3.02 Early Termination. If an Event of Default has occurred there will be no opportunity to cure except as specified in Section 6.01 or pursuant to a Collateral Assignment Agreement agreed upon by Buyer, Seller and Lender in accordance with Section 9.05. The Party taking the default (the "Non-Defaulting Party") will have the right to:

3.03 Termination Payment. As soon as practicable after an Early Termination Date is declared, the Non-Defaulting Party shall provide Notice to the Defaulting Party of the sum of all amounts owed by the Defaulting Party under this Agreement, including Forward Settlement Amounts, less any amounts owed by the Non-Defaulting Party to the Defaulting Party under this Agreement (the "Termination Payment"). The Notice shall include a written statement, setting forth, in reasonable detail, the calculation of such Termination Payment together with appropriate supporting documentation. If the Generating Facility is a New Eligible CHP Facility, no Forward Settlement Amount is assessed for any Termination Payment due to Buyer as the Non-Defaulting Party by Seller as the Defaulting Party if this Agreement is terminated before the Term Start Date.

*** End of Article Six ***

ARTICLE 7. LIMITATIONS OF LIABILITIES

EXCEPT AS SET FORTH IN THIS ARTICLE SEVEN, THERE ARE NO WARRANTIES BY EITHER PARTY UNDER THIS AGREEMENT, INCLUDING ANY 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 IS THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR'S LIABILITY IS 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 FOR IN THIS AGREEMENT, THE OBLIGOR'S LIABILITY IS LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES IS THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.

THE VALUE OF ANY PRODUCTION TAX CREDITS DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER'S DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO MITIGATE AFTER USE OF REASONABLE EFFORTS) IF ANY, SHALL BE DEEMED DIRECT DAMAGES.

THE VALUE OF ANY INVESTMENT TAX CREDITS DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER'S DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO MITIGATE AFTER USE OF REASONABLE EFFORTS) IF ANY, SHALL BE DEEMED DIRECT DAMAGES.

UNLESS EXPRESSLY PROVIDED FOR IN THIS AGREEMENT, INCLUDING THE PROVISIONS OF SECTION 9.03, 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.

IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS IMPOSED IN THIS ARTICLE SEVEN 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 UNDER THIS AGREEMENT 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 UNDER THIS AGREEMENT CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

NOTHING IN THIS ARTICLE SEVEN PREVENTS, OR IS INTENDED TO PREVENT BUYER FROM PROCEEDING AGAINST OR EXERCISING ITS RIGHTS WITH RESPECT TO ANY SECURED INTEREST IN COLLATERAL.

*** End of Article Seven ***

ARTICLE 8. GOVERNMENTAL CHARGES

8.01 Cooperation to Minimize Tax Liabilities. Each Party shall use diligent efforts to implement the provisions of and to administer this Agreement in accordance with the intent of the Parties to minimize all taxes, so long as neither Party is materially adversely affected by such efforts.

8.02 Governmental Charges. Seller shall pay or cause to be paid all taxes imposed by any Governmental Authority on or with respect to the Generating Facility, Monthly Contract Payments made by Buyer to Seller, or the Power Product before the Delivery Point, including ad valorem taxes and other taxes attributable to the Generating Facility, the Site or land rights or interests in the Site or the Generating Facility ("Governmental Charges").

8.03 Providing Information to Taxing Governmental Authorities. To the extent required by Applicable Law and subject to Section 9.09(b), each Party shall provide information concerning the Generating Facility to any requesting taxing Governmental Authority.

*** End of Article Eight ***

ARTICLE 9. MISCELLANEOUS

9.01 Representations and Warranties. On the Effective Date, each Party represents, warrants, and covenants to the other Party that:

9.02 Additional Representations, Warranties, and Covenants by Seller. Seller represents, warrants and covenants to Buyer that:

9.03 Indemnity.

9.04 Assignment. Neither Party may assign this Agreement or its rights under this Agreement without the prior written consent of the other Party, which consent may not be unreasonably withheld or delayed. Any direct or indirect change of control of either Party (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of the other Party, which consent will not be unreasonably withheld. Notwithstanding anything to the contrary in this Section 9.04, Seller may, without the consent of Buyer (and without relieving itself from liability hereunder):

9.05 Consent to Collateral Assignment. Subject to the provisions of this Section 9.05, Seller has the right to assign this Agreement as collateral to a Lender for any financing or refinancing of the Generating Facility, including a Sale-Leaseback Transaction or Equity Investment and, in connection therewith, Buyer shall in good faith work with Seller and Lender to agree upon a consent to a collateral assignment of this Agreement or to a Sale-Leaseback Transaction or Equity Investment, as applicable ("Collateral Assignment Agreement").

9.06 Governing Law and Jury Trial Waiver. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER ARE GOVERNED BY AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. TO THE EXTENT ENFORCEABLE AT SUCH TIME, EACH PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.

9.07 Notices. All notices, requests, statements or payments shall be made as specified in Exhibit J. Notices (other than Forecasts and Scheduling requests) shall, unless otherwise specified in this Agreement, be in writing and may be delivered by hand delivery, first class United States mail, overnight courier service, electronic transmission or facsimile. Notices provided in accordance with this Section 9.07 are deemed given as follows:

9.08 General.

9.09 Confidentiality.

9.10 Insurance.

9.11 Nondedication. Notwithstanding any other provisions of this Agreement, neither Party dedicates any of the rights that are or may be derived from this Agreement or any part of its facilities involved in the performance of this Agreement to the public or to the service provided under this Agreement, and such service shall cease upon termination of this Agreement.

9.12 Mobile Sierra. Notwithstanding any provision of this Agreement, neither Party will seek, nor will they support any third party in seeking, to prospectively or retroactively revise the rates, terms, or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206, or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties.

9.13 Seller Ownership and Control of Generating Facility. Seller agrees, that, in accordance with FERC Order No. 697, upon request of Buyer, Seller shall submit a letter of concurrence in support of an affirmative statement by Buyer that the contractual arrangement set forth in this Agreement does not transfer "ownership or control of generation capacity" from Seller to Buyer as the term "ownership or control of generation capacity" is used in 18 CFR Section 35.42. Seller also agrees that it will not, in filings, if any, made subject to Order Nos. 652 and 697, claim that the contractual arrangement set forth in this Agreement conveys ownership or control of generation capacity from Seller to Buyer.

9.14 Simple Interest Payments. Except as specifically provided in this Agreement, any outstanding and past due amounts owing and unpaid by either Party under the terms of this Agreement shall be eligible to receive a Simple Interest Payment calculated using the Interest Rate for the number of days between the date due and the date paid.

9.15 Payments. Payments to be made under this Agreement shall be made, at Seller's option, by check or electronic wire funds transfer.

9.16 Provisional Relief. The Parties acknowledge and agree that irreparable damage would occur if certain provisions of this Agreement are not performed in accordance with the terms hereof, that money damages would not be a sufficient remedy for any breach of such provisions of this Agreement, and that the Parties shall be entitled, without the requirement of posting a bond or the other security, to seek a preliminary injunction, temporary restraining order, or other provisional relief as a remedy for a breach of Sections 3.01, 3.02, 3.03, 9.09 and Section 4(e) of Exhibit D in any court of competent jurisdiction, notwithstanding the obligation to submit all other disputes (including all Claims for monetary damages under this Agreement) to arbitration pursuant to Section 10.01. The Parties further acknowledge and agree that the results of such arbitration may be rendered ineffectual without such provisional relief.

*** End of Article Nine ***

ARTICLE 10. DISPUTE RESOLUTION

10.01 Dispute Resolution. Other than requests for provisional relief under Section 9.16, any and all disputes, Claims or controversies arising out of, relating to, concerning, or pertaining to the terms of this Agreement, or to either Party's performance or failure of performance under this Agreement ("Disputes"), which Disputes the Parties have been unable to resolve by informal methods, will first be submitted to mediation in accordance with the procedures described in Section 10.02, and if the Dispute is not resolved through mediation, then for final and binding arbitration in accordance with the procedures described in Section 10.03.

10.02 Mediation. Either Party may initiate mediation by providing Notice to the other Party of a written request for mediation, setting forth a description of the Dispute and the relief requested.

10.03 Arbitration. Either Party may initiate binding arbitration with respect to the matters first submitted to mediation in accordance with Section 10.02 by providing Notice of a demand for binding arbitration before a single, neutral arbitrator (the "Arbitrator") at any time following the unsuccessful conclusion of the mediation provided for in Section 10.02.

*** End of Article Ten ***

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized representatives as of the Effective Date.

[SELLER'S NAME],

a [Seller's business registration]

 

[BUYER'S NAME],

a California corporation

By:_____________________________

Name:________________________

Title:_________________________

 

By:_____________________________

Name:________________________

Title:_________________________

EXHIBIT A

Definitions

For purposes of this Agreement, the following terms and variations thereof have the meanings specified or referred to in this Exhibit A:

"Act" has the meaning set forth in Recital A.

"Affiliate" means, with respect to a Party, any Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with such Party. For purposes of this Agreement, "control" means the direct or indirect ownership of 50% or more of the outstanding capital stock or other equity interests having ordinary voting power.

"Agreement" has the meaning set forth in the Preamble.

"Ambient Conditions" means reductions in capacity due to that status of, or variations in, Site Host Load or ambient weather conditions.

"Applicable Laws" means all constitutions, treaties, laws, ordinances, rules, regulations, interpretations, permits, judgments, decrees, injunctions, writs and orders of any Governmental Authority or arbitrator that apply to either or both of the Parties, the Generating Facility or the terms of this Agreement.

"Arbitrator" has the meaning set forth in Article Ten.

"As-Available Contract Capacity" means the electric energy generating capacity that Seller provides on an as-available basis for the Power Product, as set forth in Section 1.02(c).

"Bankrupt" means with respect to any Person, such Person:

"Business Day" means any day except a Saturday, Sunday, the Friday after the United States Thanksgiving holiday, or a Federal Reserve Bank holiday that begins at 8:00 a.m. and ends at 5:00 p.m. local time for the Party sending a Notice or payment or performing a specified action.

"Buyer" has the meaning set forth in the Preamble.

"Buyer Energy Schedule" means the schedule of electric energy that Buyer submits to the CAISO for electric energy produced by the Generating Facility.

"Buyer Parent Energy Schedule" means the schedule of electric energy that Buyer submits to the CAISO for electric energy delivered to the CAISO for the CAISO Global Resource ID associated with the Generating Facility.

"Buyer Projected Energy Forecast" has the meaning set forth in Section 2(a) of Exhibit E.

"CAISO" means the California Independent System Operator Corporation or successor entity that dispatches certain generating units, supplies certain loads and controls the transmission facilities of entities that (a) own, operate and maintain transmission lines and associated facilities or have entitlements to use certain transmission lines and associated facilities, and (b) have transferred to the CAISO or its successor entity operational control of such facilities or entitlements.

"CAISO-Approved Meter" means any revenue quality, electric energy measurement meter furnished by Seller, that (a) is designed, manufactured and installed in accordance with the CAISO's metering requirements, or, to the extent that the CAISO's metering requirements do not apply, Prudent Electrical Practices, and (b) includes all of the associated metering transformers and related appurtenances that are required in order to measure the net electric energy output from the Generating Facility.

"CAISO-Approved Quantity" means the total quantity of electric energy that Buyer Schedules with the CAISO and the CAISO approves in its final schedule, which is published in accordance with the CAISO Tariff.

"CAISO Charges" means the debits, costs, fees, penalties, sanctions, interest or similar charges, including imbalance energy charges, that are directly assigned by the CAISO to the CAISO Global Resource ID for the Generating Facility for, or attributable to, Scheduling or deliveries from the Generating Facility under this Agreement.

"CAISO Charges Invoice" has the meaning set forth in Section 5 of Exhibit E.

"CAISO Controlled Grid" has the meaning set forth in the CAISO Tariff.

"CAISO Declared Over-Generation Condition" means a CAISO declared condition on the CAISO Controlled Grid where the sum of the desired generation output of all of Scheduling Coordinators in the Control Area, absent mitigation, would be greater than the system load.

"CAISO Forced Outage Report" means a complete copy of a forced outage report in a form reasonably acceptable to Buyer which includes detailed information regarding the event, including the affected Generating Unit, outage start date and time, estimation of outage duration, MW unavailable and summary of work to be performed.

"CAISO Global Resource ID" means the number or name assigned by the CAISO to the CAISO-Approved Meter.

"CAISO Revenues" means the credits, fees, payments, revenues, interest or similar benefits, including imbalance energy payments, that are directly assigned by the CAISO to the CAISO Global Resource ID for the Generating Facility for, or attributable to, Scheduling or deliveries from the Generating Facility under this Agreement.

"CAISO Station Power Protocol" means the CAISO protocol that the CAISO filed with the FERC in Docket ER05-849, including all revisions, amendments and successor protocols that would allow a generating facility to self-supply its Station Power (as defined in the CAISO Tariff) by any means other than permitted netting, when permitted netting allows netting of generator output with Station Power load that is electrically connected to the generator at the same time when the generator is on-line.

"CAISO Tariff" means the California Independent System Operator Corporation Operating Agreement and Tariff, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time to time and approved by the FERC.

"Capacity Attributes" means any and all current or future defined characteristics, certificates, tag, credits, ancillary service attributes, or accounting constructs, howsoever entitled, other than Resource Adequacy Benefits, attributed to or associated with the electricity generating capability of the Generating Facility.

"CEC" means the California Energy Commission, or any successor entity.

"Check Meter" means the Buyer revenue-quality meter section or meter(s), which Buyer may require at its discretion, as set forth in Section 3.08(b) and will include those devices normally supplied by Buyer or Seller under the applicable utility electric service requirements.

"CHP" means combined heat and power.

"Claiming Party" has the meaning set forth in Section 5.02.

"Claims" means all third party claims or actions, threatened or filed and, whether groundless, false, fraudulent or otherwise, that directly or indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys' fees and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed before or after the termination of this Agreement.

"Collateral Assignment Agreement" has the meaning set forth in Section 9.05.

"Confidential Information" means all oral or written communications exchanged between the Parties on or after the Effective Date relating to the implementation of this Agreement, including information related to Seller's compliance with operating and efficiency standards applicable to an Eligible CHP Facility. Confidential Information does not include (i) information which is in the public domain as of the Effective Date or which comes into the public domain after the Effective Date from a source other than from the other Party, (ii) information which either Party can demonstrate in writing was already known to such Party on a non-confidential basis before the Effective Date, (iii) information which comes to a Party from a bona fide third-party source not under an obligation of confidentiality, or (iv) information which is independently developed by a Party without use of or reference to Confidential Information or information containing Confidential Information.

"Control Area" means the electric power system (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.

"Costs" means, with respect to the Non-Defaulting Party, brokerage fees, commissions, legal expenses and other similar third party transaction costs and expenses reasonably incurred by such Party in entering into any new arrangement which replaces this Agreement.

"CPUC" means the California Public Utilities Commission, or any successor entity.

"Credit Rating" means with respect to any Person, on the relevant date of determination, the respective ratings then assigned to such Person's unsecured, senior long-term debt or deposit obligations (not supported by third party credit enhancement) by S&P or Moody's. If no rating is assigned to such Person's unsecured, senior long-term debt or deposit obligation by either S&P or Moody's, then "Credit Rating" shall mean the general corporate credit rating or long-term issuer rating assigned to the Person by S&P or Moody's, as the case may be.

"Cross Default Amount" is the amount set forth in Section 1.06(f).

"Daily Delay Liquidated Damages" has the meaning set forth in Section 4(c)(ii) of Exhibit D.

"Day-Ahead" has the meaning set forth in the CAISO Tariff.

"Defaulting Party" has the meaning set forth in Section 6.01(a).

"Delivery Point" has the meaning set forth in Section 1.03.

"Development Security" has the meaning set forth in Section 4(b)(i) of Exhibit D.

"Direct GHG Compliance Costs" mean any taxes, charges or fees imposed by an authorized governmental authority with jurisdiction over the Seller or the Generating Facility, and levied directly on a Generating Facility for GHG emissions attributable to its operations. Direct GHG Compliance Costs do not include emissions allowances freely allocated.

"Disclosure Order" has the meaning set forth in Section 9.09(b).

"Dispute" has the meaning set forth in Section 10.01.

"Early Termination Date" has the meaning set forth in Section 6.02(a).

"Effective Date" has the meaning set forth in the Preamble.

"Eligible CHP Facility" means a facility, as defined by Public Utilities Code Section 2840.2, subdivisions (a) and (b) that meet the guidelines established by the California Energy Commission pursuant to Public Utilities Code Section 2843.

"Emergency" means an actual or imminent condition or situation which:

"Equitable Defense" means any Bankruptcy or other laws affecting creditors' rights generally, and with regard to equitable remedies, the discretion of the court before which proceedings to obtain same may be pending.

"Equity Investment" means an acquisition by a Lender of an ownership interest, in the form of stock, membership or partnership interest, in Seller or the immediate parent of Seller under which Seller retains the right to act in all matters relating to the control and Operation of the Site and the Generating Facility for the Term, subject to Lender's rights to enforce its ownership interest in Seller or the immediate parent of Seller, as applicable, in the event of a default by Seller or the immediate parent of Seller under Lender's equity acquisition agreement or the partnership agreement, operating agreement, or other agreement governing the relationship between the equity owners of the Generating Facility.

"Event of Default" has the meaning set forth in Section 6.01.

"Existing Eligible CHP Facility" means an Eligible CHP Facility that first commenced Operation on or after January 1, 2008 but before the Effective Date.

"Expected Term Year Energy Production" means the Metered Energy quantity expected to be produced by the Generating Facility during each Term Year, as set forth in Section 1.02(d).

"Federal Funds Effective Rate" means the rate for that day opposite the caption "Federal Funds (effective)" as set forth in the weekly statistical release as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.

"FERC" means the Federal Energy Regulatory Commission, or any successor entity.

"Financial Incentives" means any and all financial incentives, benefits or credits associated with the Generating Facility, or the ownership or Operation thereof, or the electrical or thermal output of the Generating Facility, including any production or investment tax credits, real or personal property tax credits or sales or use tax credits, but not including any Green Attributes, Capacity Attributes or Resource Adequacy Benefits.

"Firm Operation Date" means the date that is six months after the Term Start Date.

"Force Majeure" means any event or circumstance to the extent beyond the control of, and not the result of the negligence of, or caused by, the Party seeking to have its performance obligation excused thereby, which by the exercise of due diligence such Party could not reasonably have been expected to avoid and which by exercise of due diligence it has been unable to overcome.
Force Majeure does not include: 

"Forced Outage" has the meaning set forth in the CAISO Tariff.

"Forecast" means the hourly forecast of (a) the total electric energy production of the Generating Facility (in MWh) when the Generating Facility is not PIRP-eligible net of the Site Host Load and Station Use, or (b) the available total generation capacity of the Generating Facility (in MW) when the Generating Facility is PIRP-eligible net of the Site Host Load and Station Use.

"Forward Settlement Amount" means the Non-Defaulting Party's Costs and Losses on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party's Gains exceed its Costs and Losses, then the Forward Settlement Amount shall be zero dollars. If the Non-Defaulting Party's Costs and Losses exceed its Gains, then the Forward Settlement Amount shall be an amount owing to the Defaulting Party. The Forward Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages.

"GAAP" means generally accepted accounting principles for financial reporting in the United States, consistently applied.

"Gains" means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), as of the Early Termination Date resulting from the termination of this Agreement, expressed in dollars and determined in a commercially reasonable manner.

"Generating Facility" means the Generating Unit(s) comprising Seller's power plant, as more particularly described in Section 1.02 and Exhibit B, including all other materials, equipment, systems, structures, features and improvements necessary to produce electric energy and thermal energy, excluding the Site, land rights and interests in land.

"Generating Unit" means one or more generating equipment combinations typically consisting of prime mover(s), electric generator(s), electric transformer(s), steam generator(s) and air emission control devices.

"Generation Operations Center" means the location of Buyer's real-time operations personnel.

"Generator Operator" means the Person that Operates the Generating Facility and performs the functions of supplying energy and interconnected operations services within the meaning of the NERC Registration Criteria.

"Generator Operator Obligations" means the obligations of a Generator Operator as set forth in all applicable NERC Reliability Standards.

"Generator Owner" means the Person that owns the Generating Facility and has registered with the NERC as the Person responsible for complying with all NERC Reliability Standards applicable to the owner of the Generating Facility.

"Generator Owner Obligations" means the obligations of a Generator Owner as set forth in all applicable NERC Reliability Standards.

"GHG EPS" means the Greenhouse Gas Emissions Performance Standard set forth in CPUC D.07-01-039 and in subsequent CPUC rulings implementing D.07-01-039, as well as revisions to these standards set forth in any subsequent CPUC-established precondition to the execution of this Agreement.

"Governmental Authority" means (a) any federal, state, local, municipal or other government, (b) any governmental, regulatory or administrative agency, commission, or other authority lawfully exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, or (c) any court or governmental tribunal.

"Governmental Charges" has the meaning as set forth in Section 8.02.

"Green Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Project, and its avoided emission of pollutants. Green Attributes include but are not limited to Renewable Energy Credits, as well as:

"Guarantor" means that certain guarantor of Seller set forth in Section 1.06(d).

"Guaranty Agreement" means a guaranty agreement substantially in the form of Exhibit K.

"Host Site" means the site at which the Site Host Load is consumed, including real property, facilities and equipment owned or operated by the Site Host or its Affiliates located at such site.

"Hour-Ahead Scheduling Deadline" means 30 minutes before the deadline established by the CAISO for the submission of schedules for the applicable hour.

"Incipient Event of Default" has the meaning set forth in Section 9.05(a).

"Interconnection Study or Interconnection Studies" means a study o studies prepared by or on behalf of the Transmission Provider or the CAISO to evaluate the impact of the interconnection of the Generating Facility to the Transmission Provider's electric system or the applicable Control Area operator's electric grid.

"Interest Rate" means an annual rate equal to the rate published in The Wall Street Journal as the "Prime Rate" (or, if more than one rate is published, the arithmetic mean of such rates) as of the date payment is due plus two percentage points; provided, however, that in no event shall the Interest Rate exceed the maximum interest rate permitted by Applicable Laws.

"JAMS" means the Judicial Arbitration and Mediation Services, Inc. or any successor entity.

"kW" means a kilowatt (1,000 watts) of electric capacity or power output.

"kWh" means a kilowatt-hour (1,000 watt-hours) of electric energy.

"Lease" means one or more agreements whereby Seller leases the Site(s) described in Section 1.02 and Exhibit B from a third party, the term of which lease begins on or before the Term Start Date and extends at least through the Term End Date.

"Lender" means any third-party institution or entity or successor in interest or assignee that either (i) purchases the Generating Facility and then leases it to Seller under a Sale-Leaseback Transaction, or (ii) provides development, bridge, construction, or permanent debt or tax equity financing or refinancing (including an Equity Investment) for the Generating Facility to Seller or credit support in connection with this Agreement.

"Letter of Credit" means an irrevocable, nontransferable standby letter of credit provided by Seller and issued by a U.S. commercial bank or a U.S. branch of a foreign bank with such bank having a Credit Rating of at least "A-" from S&P and "A3" from Moody's, substantially in the form of Exhibit L. All costs to establish and maintain the Letter of Credit shall be borne by Seller.

"Letter of Credit Default" means with respect to a Letter of Credit, the occurrence of any of the following events:

provided, however, that no Letter of Credit Default shall occur or be continuing in any event with respect to a Letter of Credit after the time such Letter of Credit is required to be canceled or returned to a Party in accordance with the terms of this Agreement.

"Losses" means, with respect to any Party, an amount equal to the present value of the economic loss to it if any (exclusive of Costs), as of the Early Termination Date, resulting from the termination of this Agreement, expressed in dollars and determined in a commercially reasonable manner.

"Market Price" means the real-time price for Uninstructed Imbalance Energy (as defined in the CAISO Tariff) or any successor price for short-term imbalance energy, as such price or successor price is defined in the CAISO Tariff, that would apply to the Generating Facility, which values are, as of the Effective Date, posted by the CAISO on its website. The values used in this Agreement will be those appearing on the CAISO website on the third Business Day of the calendar month following the month for which such prices are being applied.

"Mediator" has the meaning set forth in Section 10.02.

"Metered Energy" means the total electric energy, expressed in kWh, measured by any or all of the CAISO-Approved Meters or Check Meters, as applicable, at the Generating Facility for the specified Metering Interval.

"Metering Interval" means the smallest measurement time period over which data are recorded by the CAISO-Approved Meters or Check Meters.

"Milestone Schedule" means Seller's milestone schedule, the form of which is attached to this Agreement as Exhibit M.

"Monthly Contract Payment" has the meaning set forth in Section 4.01.

"Monthly Scheduling Fee" is described in Section 4(b) of Exhibit E.

"Moody's" means Moody's Investor Services, Inc.

"MW" means a megawatt (1,000,000 watts) of electric capacity or power output.

"MWh" means a megawatt-hour (1,000,000 watt-hours) of electric energy or power output.

"NERC" means the North American Electric Reliability Corporation, or any successor entity.

"NERC Registration Criteria" means the most recent NERC Statement of Compliance Registry Criteria, which is available on NERC's website.

"NERC Reliability Standards" means those reliability standards applicable to the Generating Facility, or to the Generator Owner or the Generator Operator with respect to the Generating Facility, that are adopted by the NERC and approved by the applicable regulatory authorities, which are available on NERC's website.

"NERC Standards Non-Compliance Penalties" means any and all monetary fines, penalties, damages, interest or assessments by the NERC, the CAISO, the WECC, a Governmental Authority or any Person acting at the direction of a Governmental Authority arising from or relating to a failure to perform the obligations of Generator Operator or Generator Owner as set forth in the NERC Reliability Standards.

"New Eligible CHP Facility" means an Eligible CHP Facility that commences Operation after the Effective Date.

"Non-Defaulting Party" has the meaning set forth in Section 6.02.

"Notice" means notices, requests, statements or payments provided in accordance with Section 9.07 and Exhibit J.

"Operate" means to provide (or the provision of) all the operation, engineering, purchasing, repair, supervision, training, inspection, testing, protection, use management, improvement, replacement, refurbishment, retirement, and maintenance activities associated with operating the Generating Facility in order to produce the Power Product in accordance with Prudent Electrical Practices.

"Outage" has the meaning set forth in the CAISO Tariff.

"Outage Schedule" has the meaning set forth in Section 2(a) of Exhibit N.

"Outage Schedule Submittal Requirements" describes the obligations of Seller to submit maintenance and planned outage schedules (as defined in the CAISO Tariff under WECC rules) to Buyer 24 months in advance, as set forth in Exhibit N.

"Parallel Operation" means the Generating Facility's electrical apparatus is connected to the Transmission Provider's system and the circuit breaker at the point of common coupling is closed. The Generating Facility may be producing electric energy or consuming electric energy at such time.

"Party or Parties" has the meaning set forth in the Preamble.

"Peak Months" means [___].

{Buyer Comment: For SCE and PG&E, the Peak Months are June, July, August and September. For SDG&E, the Peak Months are May, June, July, August and September.}

"Performance Assurance" means collateral (in the amount of the Performance Assurance Amount) for Seller's performance under this Agreement in the form of cash, Letter(s) of Credit, or other security acceptable to Buyer.

"Performance Assurance Amount" has the meaning set forth in Section 1.06(b).

"Permits" means all applications, approvals, authorizations, consents, filings, licenses, orders, permits or similar requirements imposed by any Governmental Authority, or the CAISO, in order to develop, construct, Operate, maintain, improve, refurbish or retire the Generating Facility or to Forecast or deliver the electric energy produced by the Generating Facility to Buyer.

"Person or Persons" means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity or a Governmental Authority.

"PIRP" (i.e., Participating Intermittent Resource Program) means the CAISO's intermittent resource program initially established pursuant to Amendment No. 42 of the CAISO Tariff in Docket No. ER02-922-000, or any successor program that Buyer determines accomplishes a similar purpose.

"Planned Outage" means a disconnection, separation or reduction in the capacity of the Generating Facility which is not the result of a Forced Outage.

"PNode" has the meaning set forth in the CAISO Tariff.

"Power Product" means (a) the As-Available Contract Capacity and (b) all electric energy produced by the Generating Facility, net of all Station Use and any and all of the Site Host Load.

"Power Rating" means the electrical power output value indicated on the generating equipment nameplate.

"Primary Fuel" means the fuel or combination of fuels that are provided for in the Permits applicable to the Generating Facility.

"Product" means the Power Product and the Related Products.

"Project" means the Generating Facility.

"Prudent Electrical Practices" means those practices, methods and acts that would be implemented and followed by prudent operators of electric generating facilities in the Western United States, similar to the Generating Facility, during the relevant time period, which practices, methods and acts, in the exercise of prudent and responsible professional judgment in the light of the facts known at the time a decision was made, could reasonably have been expected to accomplish the desired result consistent with good business practices, reliability and safety.

Prudent Electrical Practices includes, at a minimum, those professionally responsible practices, methods and acts described in the preceding sentence that comply with the manufacturer's warranties, restrictions in this Agreement, and the requirement of Governmental Authorities, WECC standards, the CAISO and Applicable Laws. Prudent Electrical Practices shall include taking reasonable steps to ensure that:

"PPT" means Prevailing Pacific Time, which is the Pacific Daylight time when California observes Daylight Savings Time and Pacific Standard Time otherwise.

"PURPA" means the Public Utility Regulatory Policies Act of 1978, Public Law, 95-617, as amended from time to time.

"Qualifying Facility" means an electric energy generating facility that complies with the qualifying facility definition established by PURPA and any FERC rules as amended from time to time (18 Code of Federal Regulations Part 292, Section 292.203 et seq.) implementing PURPA and is certified as a Qualifying Facility by the FERC.

"Real-Time Forced Outage" means a Forced Outage which occurs only after 5:00 p.m. PPT on the day before the Trading Day.

"Related Products" means (i) with respect to Resource Adequacy Benefits that portion of the Resource Adequacy Benefits that are in excess of those Resource Adequacy Benefits used by Seller or by a Site Host, both in connection with the Host Site, to meet a known and established, at the point in time when the Resource Adequacy Benefits are to be used, resource adequacy obligation under any Resource Adequacy Ruling, and (ii) any Green Attributes, Capacity Attributes and all other attributes associated with the electric energy or capacity of the Generating Facility (but not including any Financial Incentives) that are in excess of those Green Attributes, Capacity Attributes or other attributes used, or retained for future use, by Seller or a Site Host, both in connection with the Host Site, to meet a known and established, at the point in time when the relevant attribute(s) are to be used or retained, obligation under Applicable Law.

"Renewable Energy Credit" has the meaning set forth in Public Utilities Code Section 399.12(g), as may be amended from time to time or as further defined or supplemented by Applicable Law.

"Resource Adequacy Benefits" means the rights and privileges attached to the Generating Facility that satisfy any Person's resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and shall include any local, zonal or otherwise locational attributes associated with the Generating Facility.

"Resource Adequacy Rulings" means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-06-024, 06-07-031 and any subsequent CPUC ruling or decision, or any other resource adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable Governmental Authority, as such CPUC decisions, rulings, laws, rules or regulations may be amended or modified from time to time during the Term.

"Responsible Officer" means the chief financial officer, treasurer or any assistant treasurer of a Party or its Guarantor or any employee of a Party or its Guarantor designated by any of the foregoing officers.

"S&P" means the Standard & Poor's Rating Group.

"Sale-Leaseback Transaction" means a transaction in which Seller (i) sells the Generating Facility to a Lender providing tax equity financing to Seller and then (ii) leases the Generating Facility back from the Lender under an agreement authorizing Seller to act on behalf of the Lender in all matters relating to the control and Operation of the Site and the Generating Facility for the Term, subject to Lender's right to terminate the lease in the event of a default by Seller as set forth in the agreement between Seller and Lender.

"Schedule" means the action of the Scheduling Coordinator, or its designated representatives, of notifying, requesting, and confirming to the CAISO, the CAISO-Approved Quantity of electric energy.

"Scheduling Coordinator" means the Buyer as certified by the CAISO for the purposes of undertaking the functions specified in Exhibit E.

"Scheduling Fee" means the Monthly Scheduling Fee and the SC Set-Up Fee.

"SC Set-Up Fee" is described in Section 4(a) of Exhibit E.

"SC Replacement Date" has the meaning set forth in Section 7 of Exhibit E.

"SEC" means the United States Securities and Exchange Commission, or any successor entity.

"Security Interest" has the meaning set forth in Section 3 of Exhibit D.

"Seller" has the meaning set forth in the Preamble.

"Seller's Day-Ahead Forecast" means the most recently update Forecast submitted by 5:00 p.m. PPT on the day before the Trading Day.

"Seller's Energy Forecast" means Seller's most recently updated Forecast submitted in accordance with Exhibit G.

"Seller's Final Energy Forecast" means Seller's energy Forecast as may be updated for Forced Outages that occur after the Hour Ahead Scheduling Deadline, but not for Ambient Conditions.

"Settlement Interval" has meaning set forth in the CAISO Tariff.

"Simple Interest Payment" means a dollar amount calculated by multiplying the:

"Site" means the real property on which the Generating Facility is located, as further described in Section 1.02(b) and Exhibit B.

"Site Control" means that Seller (a) owns the Site, (b) is the lessee of the Site under a Lease, (c) is the holder of a right-of-way grant or similar instrument with respect to the Site, or (d) is managing partner or other Person authorized to act in all matters relating to the control and Operation of the Site and Generating Facility.

"Site Host" means the Person or Persons purchasing or otherwise using the Site Host Load or thermal energy output from the Generating Facility.

"Site Host Load" means the electric energy and capacity produced by or associated with the Generating Facility that serves electrical loads (that are not Station Use) of Seller or one or more third parties conducted pursuant to California Public Utilities Code Section 218(b).

"SLIC" means Scheduling and Logging system for the CAISO.

"Station Use" means electric energy produced by the Generating Facility that is:

"Telemetry System" means a system of electronic components that interconnects the CAISO and the Generating Facility in accordance with the CAISO's applicable requirements as set forth in Section 3.09.

"Term" has the meaning set forth in Section 1.01.

"Term End Date" has the meaning set forth in Section 1.01.

"Termination Payment" has the meaning set forth in Section 6.03.

"Term Start Date" has the meaning set forth in Section 1.01.

"Term Year" means a 12-month period beginning on the first day of the Term and each successive 12-month period thereafter.

"TOD Period" means the time of delivery period used to calculate the Monthly Contract Payment set forth in Exhibit C.

"Trading Day" means the day in which Day-Ahead trading occurs in accordance with the WECC Preschedule Calendar (as found on the WECC's website).

"Transmission Provider" means any Person responsible for the interconnection of the Generating Facility with the interconnecting utility's electrical system or the CAISO Controlled Grid or transmitting the Metered Energy on behalf of Seller from the Generating Facility to the Delivery Point.

"Uninstructed Deviation GMC Rate" means the administrative grid management charge applied by the CAISO to Uninstructed Deviations (as defined in the CAISO Tariff) using the absolute value for the Uninstructed Deviations by Settlement Interval.

"Uninstructed Deviation Penalty" means the penalty set forth in the CAISO Tariff.

"Web Client" has the meaning set forth in Section 2(a) of Exhibit N.

"WECC" means the Western Electricity Coordinating Council, the regional reliability council for the western United States, northwestern Mexico, and southwestern Canada, or any successor entity.

*** End of Exhibit A ***

EXHIBIT B

Generating Facility and Site Description

1. Generating Facility Description.

2. Site Description.

*** End of Exhibit B ***

EXHIBIT C

Monthly Contract Payment Calculation

1. Monthly Contract Payment

2. TOD Period Payment Calculation

3. Fixed Price Component

4. Variable Price Component Calculation

Variable O&M

5. Time of Delivery Periods and Allocation Factors.

6. Location Bonus.

*** End of Exhibit C***

EXHIBIT D

Credit and Collateral Requirements

1. Financial Information.

2. Performance Assurance.

3. First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller grants to Buyer a present and continuing first-priority security interest ("Security Interest") in, and lien on (and right to net against), and assignment of the Development Security (if applicable), Performance Assurance, any other cash collateral and cash equivalent collateral posted pursuant to Sections 2 and 4 of this Exhibit D and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take such action as Buyer reasonably requires in order to perfect Buyer's Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.

4. Development Security.

5. Interest Payments on Cash Deposits.

*** End of Exhibit D ***

EXHIBIT E

Scheduling Coordinator Services

2. Buyer's Scheduling Responsibilities. Pursuant to the CAISO Tariff, Buyer shall be responsible for the following:

3. Notices. As Scheduling Coordinator, Buyer shall submit all notices and updates required under the CAISO Tariff and Applicable Laws regarding each Generating Unit's or the Generating Facility's status, as applicable, to the CAISO, including all SLIC Outage requests, SLIC Forced Outages, or CAISO Forced Outage Reports.

4. Scheduling Fees. In accordance with Section 4.02, Buyer shall invoice to Seller and Seller shall pay to Buyer the following Scheduling Fees:

As-Available Contract Capacity (kW)

Monthly Scheduling Fee

Less than 10,000

$2,500

10,000 - 20,000

$5,000

*** End of Exhibit E ***

EXHIBIT F

Milestone Progress Reporting Form

1. Introduction. This Exhibit F is only applicable if the Generating Facility is a New Eligible CHP Facility. Seller shall prepare a written milestone progress report as set forth in Section 3.11 on its progress relative to the:

2. Format. The report must be sent via e-mail in the form of a single Adobe Acrobat file or facsimile to Buyer's Contract Administrator, as noted in Exhibit J, on the fifth Business Day of each month. Each such milestone progress report must include the following items:

*** End of Exhibit F ***

EXHIBIT G

Seller's Forecasting Submittal and Accuracy Requirements

1. General Requirements. The Parties shall abide by the Forecasting requirements and procedures described below and shall agree upon reasonable changes to these requirements and procedures from time to time as necessary to:

2. Seller's Forecasting Submittal Requirements for all Generating Facilities.

*** End of Exhibit G ***

EXHIBIT H

CAISO Charges

Buyer, as Scheduling Coordinator for the Generating Facility, shall pay all CAISO Charges and receive all CAISO Revenues; provided, however, if at any time after the Term Start Date:

1. The CAISO implements or has implemented any sanction or penalty related to Scheduling, outage reporting or generator Operation, and any such sanctions or penalties are imposed on the Generating Facility or to Buyer as Scheduling Coordinator for the Generating Facility due solely to the actions or inactions of Seller, then such sanctions or penalties will be Seller's responsibility;

2. Seller or any third party dispatches any portion of the As-Available Contract Capacity for the benefit of any party other than Buyer or a Site host in respect of the Host Site, then Seller shall indemnify, defend, and hold Buyer harmless against any CAISO Charges; or,

3. There is a CAISO or Transmission Provider declared Emergency and Seller fails to meet Seller's obligations associated with any CAISO or Transmission Provider instruction or request (as may be communicated by Buyer as Scheduling Coordinator), as the case may be, to: (a) curtail output, or (b) reschedule a Planned Outage set to occur during an Emergency, then, in each case, Seller shall indemnify, defend, and hold Buyer harmless against any CAISO Charges associated with the failure to respond to such Emergency.

4. If the Generating Facility is PIRP eligible and is not certified as a PIRP resource for any reason, then Seller shall indemnify, defend, and hold Buyer harmless against all CAISO Charges associated with the energy generated and delivered from the Generating Facility.

If any of Sections 1 through 4 of this Exhibit H apply and the Generating Facility is subject to an Uninstructed Deviation Penalty, Seller will not be required to pay the SDD Energy Adjustment and, instead, shall be responsible for all applicable Uninstructed Deviation Penalty charges for the Generating Facility.

*** End of Exhibit H ***

EXHIBIT I

Scheduling and Delivery Deviation Adjustments

If Buyer is Scheduling Coordinator for the Generating Facility, then Seller or Buyer, as the case may be, shall be responsible for the following SDD Adjustments with respect to the Generating Facility:

1. SDD Energy Adjustment. An Adjustment will be calculated for each Settlement Interval in a month if the Metered Energy is either (a) less than the Performance Tolerance Band Lower Limit in any Settlement Interval or (b) greater than the Performance Tolerance Band Upper Limit in any Settlement Interval. When the SDD Energy Adjustment is negative, Seller shall make a payment to Buyer and when the SDD Energy Adjustment is positive, Seller shall receive a credit from Buyer. The SDD Energy Adjustment is calculated as follows:

2. SDD Administrative Charge. Seller shall make a payment to Buyer (the "SDD Administrative Charge") for each Settlement Interval in a month if Metered Energy (i) exceeds the Performance Tolerance Band Upper Limit or (ii) is less than the Performance Tolerance Band Lower Limit, in any Settlement Interval. The SDD Administrative Charge is calculated as follows:

*** End of Exhibit I ***

EXHIBIT J

Notice List

[SELLER'S NAME]

[BUYER'S NAME]

All Notices are deemed provided in accordance with Section 9.07 if made to the address, facsimile numbers or e-mail addresses provided below:

All Notices are deemed provided in accordance with Section 9.07 if made to the address, facsimile numbers or e-mail addresses provided below:

Contract Sponsor:

Attn:

Street:

City:

Phone:

Facsimile:

E-mail:

 

Reference Numbers:

Duns:

Federal Tax ID Number:

 

Contract Administration:

Attn:

Phone:

Facsimile:

E-mail:

 

Forecasting:

Attn: Control Room

Phone:

Facsimile:

E-mail:

 

Day-Ahead Forecasting:

Phone:

Facsimile:

E-mail:

 

Real-Time Forecasting:

Phone:

Facsimile:

E-mail:

 

Payment Statements:

Attn:

Phone:

Facsimile:

E-mail:

 

CAISO Charges and CAISO Sanctions:

Attn:

Phone:

Facsimile:

E-mail:

 

Payments:

Attn:

Phone:

Facsimile:

E-mail:

 

Wire Transfer:

BNK:

ABA:

ACCT:

 

Credit and Collections:

Attn:

Phone:

Facsimile:

E-mail:

 

With additional Notices of an Event of Default or Potential Event of Default to:

Attn:

Phone:

Facsimile:

E-mail:

 

Guarantor:

Attn:

Phone:

Facsimile:

E-mail:

 

Lender:

Attn:

Phone:

Facsimile:

E-mail:

 

*** End of Exhibit J ***

[EXHIBIT K

Form of Guaranty Agreement

1. Guaranty. For valuable consideration, [Guarantor's legal name] , [legal status] ("Guarantor") guarantees payment to [Buyer's legal name] , a California corporation ("Beneficiary"), its successors and assigns, of all amounts owed to Beneficiary by [Seller's legal name] , [legal status] ("Principal") under that certain Power Purchase and Sale Agreement between Beneficiary and Principal dated [date] , as amended from time to time ("Agreement") (said amounts are hereinafter referred to as the "Obligations").

2. Guaranty Limit. Subject to Paragraph 13, the liability of Guarantor hereunder may not exceed $________ in the aggregate, which amount shall include all interest that has accrued on any amount owed hereunder.

3. Guaranty Absolute. Guarantor agrees that its obligations under this Guaranty are irrevocable, absolute, independent and unconditional and is not affected by any circumstance which constitutes a legal or equitable discharge of a guarantor. In furtherance of the foregoing and without limiting the generality thereof, Guarantor agrees as follows:

4. Termination; Reinstatement.

5. Bankruptcy; Post-Petition Interest.

6. Subrogation. Guarantor shall be subrogated to all rights of the Beneficiary against Principal with respect to any amounts paid by the Guarantor pursuant to the Guaranty, provided that Guarantor postpones the exercise of such rights until all Obligations have been irrevocably paid in full to the Beneficiary.

7. [Intentionally omitted.]

8. Waivers of Guarantor.

9. No Waiver of Rights by Beneficiary. No right or power of Beneficiary under this Guaranty shall be deemed to have been waived by any act or conduct on the part of Beneficiary, or by any neglect to exercise a right or power, or by any delay in doing so, and every right or power of Beneficiary hereunder shall continue in full force and effect until specifically waived or released in a written document executed by Beneficiary.

10. Assignment, Successors and Assigns. This Guaranty shall be binding upon Guarantor, its successors and assigns, and shall inure to the benefit of, and be enforceable by, the Beneficiary and its successors, assigns and creditors. The Beneficiary shall have the right to assign this Guaranty to any person or entity without the prior consent of the Guarantor; provided, however, that no such assignment shall be binding upon the Guarantor until it receives written notice of such assignment from the Beneficiary.

11. Representations of Guarantor. Guarantor represents and warrants that:

12. Financial Statements. If requested by Beneficiary, Guarantor shall deliver the following financial statements, which in all cases shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles:

13. Attorneys' Fees. In addition to the amounts for which payment is guaranteed hereunder, Guarantor agrees to pay reasonable attorneys' fees and all other costs and expenses incurred by Beneficiary in enforcing this Guaranty or in any action or proceeding arising out of or relating to this Guaranty. Any costs for which Guarantor becomes liable pursuant to this Paragraph 13 is not subject to, and does not count toward, the guaranty limit set forth in Paragraph 2 above.

14. Governing Law. This Guaranty is made under and shall be governed in all respects by the laws of the State of California, without regard to conflict of law principles. If any provision of this Guaranty is held invalid under the laws of California, this Guaranty shall be construed as though the invalid provision has been deleted, and the rights and obligations of the parties shall be construed accordingly.

15. Construction. All parties to this Guaranty are represented by legal counsel. The terms of this Guaranty and the language used in this Guaranty shall be deemed to be the terms and language chosen by the parties hereto to express their mutual intent. This Guaranty shall be construed without regard to any presumption or rule requiring construction against the party causing such instrument or any portion thereof to be drafted, or in favor of the party receiving a particular benefit under this Guaranty. No rule of strict construction will be applied against any party.

16. Amendment; Severability. Neither this Guaranty nor any of the terms hereof may be terminated, amended, supplemented or modified, except by an instrument in writing executed by an authorized representative of each of Guarantor and Beneficiary.

17. Third Party Rights. This Guaranty may not be construed to create any rights in any parties other than Guarantor and Beneficiary and their respective successors and permitted assigns.

18. Notices. Any demand for payment, notice, request, instruction, correspondence or other document to be given hereunder by any party to another shall be made by facsimile to the person and at the address for notices specified below.

Such notice shall be effective upon confirmation of the actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next Business Day after receipt if receipt is outside of the recipient's normal business hours. Either party may periodically change any address to which notice is to be given it by providing notice of such change as provided herein.

[signature page follows]

IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of ________, ____.

Title: ________________]1

*** End of Exhibit K ***

EXHIBIT L

Form of Letter of Credit

IRREVOCABLE NONTRANSFERABLE STANDBY

LETTER OF CREDIT

Reference Number:

Transaction Date:

BENEFICIARY:

_______________________

_______________________

_______________________

_______________________

Ladies and Gentlemen:

____________________________________ (the "Bank") establishes this Irrevocable Nontransferable Standby Letter of Credit ("Letter of Credit") in favor of _____________________________, a California corporation (the "Beneficiary"), for the account of ______________________, a ____________ corporation, also known as ID# ___ (the "Applicant"), for the amount of XXX AND XX/100 Dollars ($___________) (the "Available Amount"), effective immediately and expiring at 5:00 p.m., California time, on __________ (the "Expiration Date").

This Letter of Credit shall be of no further force or effect upon the close of business on ______________ or, if such day is not a Business Day (as hereinafter defined), on the next preceding Business Day.

For the purposes hereof, "Business Day" shall mean any day on which commercial banks are not authorized or required to close in California.

Subject to the terms and conditions herein, funds under this Letter of Credit are available to Beneficiary by presentation in compliance on or before 5:00 p.m. California time, on or before the Expiration Date of the following:

1. The original of this Letter of Credit and all amendments (or photocopy of the original for partial drawings); and

2. The Drawing Certificate issued in the form of Attachment A attached hereto and which forms an integral part hereof, duly completed and purportedly bearing the signature of an authorized representative of the Beneficiary.

Notwithstanding the foregoing, any drawing hereunder may be requested by transmitting the requisite documents as described above to the Bank by facsimile at ______________ or such other number as specified from time to time by the Bank.

The facsimile transmittal shall be deemed delivered when received. Drawings made by facsimile transmittal are deemed to be the operative instrument without the need of originally signed documents.

Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance;

provided that, the Available Amount shall be reduced by the amount of each such drawing.

This Letter of Credit is not transferable or assignable. Any purported transfer or assignment shall be void and of no force or effect.

Banking charges shall be the sole responsibility of the Applicant.

This Letter of Credit sets forth in full our obligations and such obligations may not in any way be modified, amended, amplified or limited by reference to any documents, instruments or agreements referred to herein, except only the attachment referred to herein; and any such reference may not be deemed to incorporate by reference any document, instrument or agreement except for such attachment.

The Bank engages with the Beneficiary that Beneficiary's drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Bank on or before the Expiration Date.

Except so far as otherwise stated, this Letter of Credit is subject to the International Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect (the "ISP"). As to matters not covered by the ISP, the laws of the State of California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.

ATTACHMENT A

Drawing Certificate

TO [ISSUING BANK NAME]

IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT

No. __________________

DRAWING CERTIFICATE

Bank

Bank Address

Subject: Irrevocable Non-transferable Standby Letter of Credit

The undersigned _____________________, an authorized representative of ___________________________ (the "Beneficiary"), certifies to [Issuing Bank Name] (the "Bank"), and _____________________ (the "Applicant"), with reference to Irrevocable Nontransferable Standby Letter of Credit No. {_______________}, dated _______________, (the "Letter of Credit"), issued by the Bank in favor of the Beneficiary, as follows as of the date hereof:

1. The Beneficiary is entitled to draw under the Letter of Credit an amount equal to
$ , for the following reason(s) [check applicable provision]:

2. Based upon the foregoing, the Beneficiary makes demand under the Letter of Credit for payment of U.S. DOLLARS AND ____/100ths (U.S.$ ), which amount does not exceed (i) the amount set forth in paragraph 1 above, and (ii) the Available Amount under the Letter of Credit as of the date hereof.

3. Funds paid pursuant to the provisions of the Letter of Credit shall be wire transferred to the Beneficiary in accordance with the following instructions:

Unless otherwise provided herein, capitalized terms which are used and not defined herein shall have the meaning given each such term in the Letter of Credit.

IN WITNESS WHEREOF, this Certificate has been duly executed and delivered on behalf of the Beneficiary by its authorized representative as of this ____ day of ________________, _____.

*** End of Exhibit L ***

EXHIBIT M

Seller's Milestone Schedule

No.

Target

Date

Milestones

     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

*** End of Exhibit M ***

EXHIBIT N

Outage Schedule Submittal Requirements

1. General Requirements.

2. Seller's Availability Forecasting Submittal Requirements for all Generating Facilities.

*** End of Exhibit N **

(END OF ATTACHMENT A)

1 Exhibit K proposed by PG&E, SCE and SDG&E.

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