CAPACITY STORAGE AGREEMENT
between
PACIFIC GAS AND ELECTRIC COMPANY
(as “Buyer”)
and
______
(as “Seller”)
{00157767.DOCX;1}
DRAFT PG&E Capacity Storage Agreement Form; October, 2016
CAPACITY STORAGE AGREEMENT
TABLE OF CONTENTS
PURPOSE 1
ARTICLE ONE: TERM 1
1.1 Term 1
1.2 Binding Nature 1
1.3 CPUC Approval 2
ARTICLE TWO: CONDITIONS PRECEDENT TO INITIAL DELIVERY DATE 2
2.1 Conditions Precedent to the Initial Delivery Date 2
2.2 Confirmation of Initial Delivery Date 3
2.3 Deadline for the Initial Delivery Date 3
2.4 Expected Initial Delivery Date Cure Period and Delay Damages 3
ARTICLE THREE: TRANSACTION 4
3.1 Product 4
3.2 Purchase and Sale Obligation 4
3.3 Project Modifications 5
3.4 Information Sharing and Shared Learning 5
3.5 Certification of Product 5
3.6 Delivery of Product: Buyer Compliance Showings 5
ARTICLE FOUR: INTERCONNECTION & OPERATIONS 6
4.1 Interconnection Agreement 6
4.2 Operations 6
4.3 Metering 6
4.4 Scheduling 6
4.5 Charging Energy Obligations 7
4.6 Supplier Diversity 7
4.7 Standards of Care 7
ARTICLE FIVE: SELLER’S FAILURE TO DELIVER 7
5.1 Alternate Capacity for Supply Plan 7
5.2 Post-Showing Shortfall Prior to Showing Month 7
ARTICLE SIX: COMPENSATION 8
6.1 Monthly Payment 8
6.2 Capacity Payment 8
6.3 Variable Settlement 8
6.4 Energy Settlement 9
6.3 Spin Ancillary Services Settlement 9
6.3 Regulation Ancillary Services Settlement 9
6.7 Allocation of CAISO Payments and Costs 10
ARTICLE SEVEN: EVENTS OF DEFAULT; REMEDIES 10
7.1 Events of Default 10
7.2 Early Termination 12
7.3 Rights And Remedies Are Cumulative 12
7.4 Waiver 12
ARTICLE EIGHT: FORCE MAJEURE 13
8.1 Force Majeure 13
ARTICLE NINE: PAYMENT AND NETTING 14
9.1 Billing and Payment 14
9.2 Netting 14
9.3 Payment 14
9.4 Disputes and Adjustments of Invoices 14
ARTICLE TEN: CREDIT AND COLLATERAL REQUIREMENTS 15
10.1 Buyer Financial Information 15
10.2 Seller Financial Information 15
10.3 Grant of Security Interest/Remedies 15
10.4 Performance Assurance 15
10.5 Letter of Credit 17
ARTICLE ELEVEN: SAFETY 18
11.1 Safety 18
11.2 Project Safety Plan 18
11.3 Reporting Serious Incidents 19
11.4 Remediation 19
ARTICLE TWELVE: GOVERNMENTAL CHARGES 19
12.1 Cooperation 19
12.2 Governmental Charges 20
ARTICLE THIRTEEN: LIMITATIONS 20
13.1 Limitation of Remedies, Liability and Damages 20
ARTICLE FOURTEEN: REPRESENTATIONS; WARRANTIES; COVENANTS 20
14.1 Representations and Warranties of Both Parties 20
14.2 General Covenants 21
14.3 Covenants of Seller 22
ARTICLE FIFTEEN: INDEMNITIES AND INSURANCE 22
15.1 Indemnity by Seller 22
15.2 No Indemnity by Buyer 23
15.3 Notice of Claim 23
15.4 Defense of Third Party Claims 23
15.5 Subrogation of Rights 24
15.6 Rights and Remedies are Cumulative 24
15.7 Insurance 24
ARTICLE SIXTEEN: RECORDS AND AUDIT RIGHTS 26
16.1 Operations Logs 26
16.2 Records and Audit 26
16.3 General Audit Right 27
16.4 Data Request Cooperation 27
16.5 Access Rights 27
ARTICLE SEVENTEEN: ASSIGNMENT 27
17.1 General Assignment 27
17.2 Assignment to Financing Providers 28
17.3 Assignment in Connection with a Change in Control 28
17.4 Unauthorized Assignment 28
ARTICLE EIGHTEEN: DISPUTE RESOLUTION 28
18.1 Intent of the Parties 28
18.2 Management Negotiations 28
18.3 Mediation 29
18.4 Arbitration 29
ARTICLE NINETEEN: CONFIDENTIALITY 30
19.1 Confidential Information 30
19.2 Permitted Disclosures 30
19.3 Remedies 30
19.4 Exceptions 31
19.5 Other Confidential Information 31
ARTICLE TWENTY: GENERAL PROVISIONS 31
20.1 General 31
20.2 Severability 31
20.3 Counterparts 31
20.4 Mobile Sierra 32
20.5 Interpretation 32
20.6 Recordings 33
20.7 Authorized Representatives 33
20.8 No Dedication 33
20.9 Governing Law 33
20.10 Separation of Functions 33
ARTICLE TWENTY-ONE: NOTICES 34
21.1 Notices 34
SIGNATURES 34
APPENDICES
The following appendices are incorporated into and made a part of this Agreement by reference.
Appendix I - General Definitions I-1
Appendix II - Description of Project & Units II-1
Appendix III –Operational Characteristics III-1
Appendix IV – Initial Delivery Date Confirmation Letter IV-1
Appendix V – Supplier Diversity Program V-1
Appendix VI – Attestations & Certifications VI
Appendix VI-A – Certification for Commercial Operation VI-A - 1
Appendix VI-B –Project Modification Certification VI-B - 1
Appendix VI-C – Engineer Attestation VI-C - 1
Appendix VI-D ¬ Seller Attestation VI-D - 1
Appendix VII – Form of Letter of Credit VII-1
Appendix VIII - Form of Consent to Assignment VIII-1
Appendix IX – Milestones IX-1
Appendix X – Notices X-1
Appendix XI – Project Safety Plan Documents XII-1
{00157767.DOCX;1} iii
DRAFT PG&E Capacity Storage Agreement Form; October, 2016
CAPACITY STORAGE AGREEMENT
This Capacity Storage Agreement is made by and between Pacific Gas and Electric Company, a California corporation (“PG&E”, and as further defined herein, “Buyer”) and______a ______company (“Seller”) as of the Execution Date. Seller and Buyer are referred to individually as “Party” or collectively as “Parties”. Therefore, Buyer and Seller hereby agree to the following:
PURPOSE
I. Buyer is mandated by the California Public Utilities Commission to meet certain energy storage megawatt procurement targets pursuant to the Energy Storage Decision .
II. The purpose of this Agreement is to facilitate Buyer’s purchase of a Resource Adequacy energy storage product. Energy storage facilities associated with this Agreement shall be located in front of the retail meter. The Agreement includes a Variable Settlement, which is based on market prices for energy and ancillary services. The Variable Settlement is netted out of Buyer’s monthly payment to Seller.
ARTICLE ONE: TERM
1.1 Term.
(a) The “Term” of this Agreement shall commence upon the Execution Date and shall continue until the expiration of the Delivery Term, provided that this Agreement shall thereafter remain in effect until the Parties have fulfilled all obligations arising under this Agreement, including any compensation for the Product, Termination Payment, indemnification payments or other damages, are paid in full (whether directly or indirectly, such as through set-off or netting) and the Performance Assurance is released and/or returned as applicable. All provisions relating to invoicing, payment, delivery, settlement of other liabilities incurred pursuant to this Agreement and dispute resolution survive for the period necessary to effectuate the rights of the Party benefited by such provision except as otherwise specified herein. Notwithstanding anything to the contrary in this Agreement, (i) all rights under Sections 15.1 through 15.6 (Indemnities) and any other indemnity rights survive the end of the Term for an additional twelve (12) months after; (ii) all rights and obligations under Article Nineteen (Confidentiality) survive the end of the Term for an additional two (2) years; and (iii) all provisions relating to limitations of liability survive without limit.
(b) The “Delivery Term” is the period commencing on the Initial Delivery Date and continuing for a period of ______(__) Contract Years from the Initial Delivery Date unless earlier terminated in accordance with the terms and conditions of this Agreement.
(c) The “Expected Initial Delivery Date” is ______, 20__.
(d) The “Initial Delivery Date” is the first day of the first Showing Month for which Product is delivered. The Initial Delivery Date may not occur until satisfaction of the CPUC Approval Condition Precedent and the Conditions Precedent
1.2 Binding Nature.
(a) Upon Execution Date. Upon the provision that Seller has provided and Buyer has received and accepted the Project Safety Plan Documents, this Agreement shall be effective and binding as of the Execution Date, but only to the extent required to give full effect to, and enforce, the rights and obligations of the Parties under:
(i) Articles One, Two, Eight, and Eleven through Twenty-One;
(ii) Sections 3.2(b), 3.3, and 3.4;
(iii) Sections 7.1(a)(i) – (iii) and (v); 7.2 - 7.4; and
(iv) Sections 10.3 – 10.5.
(b) Upon Effective Date. This Agreement shall be in full force and effect, enforceable and binding in all respects, upon occurrence of the date on which the CPUC Approval Condition Precedent has been obtained or waived in writing by both Parties (“Effective Date”). Unless otherwise specified, all obligations of the Parties are binding throughout the Delivery Term.
1.3 CPUC Approval Delayed. CPUC Approval must be obtained on or before three hundred sixty five (365) days from the date on which Buyer files this Agreement with the CPUC seeking CPUC Approval (“CPUC Approval Condition Precedent”). If CPUC Approval has not been obtained by this date, then either Party may terminate this Agreement effective upon Notice to the other Party, unless the need for such CPUC Approval has been waived in writing by both Parties. Within ten (10) Business Days of such termination, Buyer shall return the Project Development Security. Following the return of the Project Development Security, neither Party shall have any obligation or liability to the other by reason of such termination.
ARTICLE TWO: CONDITIONS PRECEDENT TO INITIAL DELIVERY DATE
2.1 Conditions Precedent to the Initial Delivery Date. Seller shall provide Buyer with Notice of the expected occurrence of the Initial Delivery Date no later than ninety (90) days prior to the Initial Delivery Date. Seller shall take all actions and obtain all approvals necessary to meet the obligations of this Agreement and to deliver the Product at the Contract Quantities to Buyer pursuant to the terms of this Agreement, which include those obligations set forth below in Sections 2.1(a) – (i) (collectively the “Conditions Precedent”), which must be satisfied at least seventy-five (75) days before the Initial Delivery Date or such deadline as set forth below. The Conditions Precedent are as follows:
(a) At Seller’s expense, Seller shall have secured all CAISO and Governmental Approvals as are necessary for the safe and lawful operation and maintenance of the Project and to enable Seller to deliver the Product at the Contract Quantities to Buyer.
(b) At Seller’s expense, Seller or Contractor shall have (i) constructed or caused to be constructed the Project as of the Initial Delivery Date to enable (i) Seller to satisfy the obligations of the Seller herein and (ii) the Project to provide Product at the Contract Quantities.
(c) Seller shall have provided to Buyer a certification of Seller and a Licensed Professional Engineer, substantially in the form attached hereto as Appendix VI-A, demonstrating satisfactory completion of the Project at the Site and that the Commercial Operation Date has occurred.
(d) Seller shall have provided to Buyer documentation reasonably acceptable to Buyer that the Project successfully completed all applicable testing and registration procedures required by CAISO to Bid into the CAISO Markets.
(e) At Seller’s expense, Seller shall have executed any necessary Interconnection Agreement and installed any necessary metering to deliver Product in accordance with the CAISO Tariff and any applicable tariffs of the Utility Distribution Company and the Participating Transmission Owner.
(f) Seller shall have posted collateral as required by Section 10.4(a)(ii).
(g) As of the Initial Delivery Date, no Seller’s Event of Default shall have occurred and remain uncured.
(h) Seller shall have submitted for Buyer’s review an updated Project Safety Plan, which must demonstrate Seller’s compliance with the Safety Requirements following the Initial Delivery Date.
(i) Seller shall have obtained both an NQC and an EFC for the Project in an amount no less than the Contract Quantities and in accordance with CAISO Tariff and CPUC requirements, verifiable by Buyer.
2.2 Confirmation of Initial Delivery Date. Once each of the Conditions Precedent to the Initial Delivery Date has been satisfied or waived, the Parties shall execute and exchange on the Initial Delivery Date the “Initial Delivery Date Confirmation Letter” attached as Appendix IV.
2.3 Deadline for the Initial Delivery Date.
(a) The Initial Delivery Date may not occur prior to the Expected Initial Delivery Date, and the Initial Delivery Date may not be later than one hundred eighty (180) days beyond the Expected Initial Delivery Date (“IDD Cure Period”).
(b) The Parties agree that, in order for Seller to obtain an Initial Delivery Date, the Parties may have to perform certain of their Delivery Term obligations in advance of the Initial Delivery Date, including without limitation providing Supply Plans in advance of the Initial Delivery Date. The Parties shall cooperate with each other in order for Buyer to be able to utilize the Product beginning on the Initial Delivery Date and Seller agrees to cause the Project’s SC to cooperate in order to achieve the same.
2.4 Expected Initial Delivery Date Cure Period and Delay Damages.
(a) Delay Damages. If Seller has not achieved the Initial Delivery Date as of the Expected Initial Delivery Date for reasons other than a Force Majeure extension, or Plan Extension as set forth in Section 11.2(a)(i), then for every day beginning with the day after the Expected Initial Delivery Date through and including the date on which the Initial Delivery Date occurs, Seller shall pay to Buyer liquidated damages in the amount of three-hundred and twenty-five dollars per MW per day ($325.00/MW per day) multiplied by the Payment Quantity; all or any portion of such damages are “Delay Damages”. If Delay Damages are due, then Buyer shall provide Notice to Seller of the amounts due and Buyer may draw such amounts due from the Project Development Security, provided that if the Project Development Security is not adequate to compensate Buyer for Delay Damages, Buyer shall invoice Seller for the amount still owed to Buyer on a monthly basis during the period of the delay. Each Party agrees that (i) the damages that Buyer would incur due to Seller’s delay in achieving the Expected Initial Delivery Date would be difficult or impossible to predict with certainty and (ii) the Delay Damages are an appropriate approximation of such damages.
(b) Force Majeure or Plan Extension Delays. If Seller has not achieved the Initial Delivery Date as of the Expected Initial Delivery Date because of a Force Majeure event or Plan Extension, Seller is not responsible for paying Delay Damages for the period extending to the first day following a day-for-day extension of the same duration as the Force Majeure event or Plan Extension.
ARTICLE THREE: TRANSACTION
3.1 Product. Seller shall provide Buyer all Capacity Attributes produced by or associated with the Project (“Product”) at the Contract Quantities exclusively from the Project. Product does not confer to Buyer any right to dispatch or receive Energy or Ancillary Services from the Project.
3.2 Purchase and Sale Obligation.
(a) Contract Quantities. During the Delivery Term and prior to the Delivery Term in accordance with 2.3 (b), Seller grants, pledges, assigns and otherwise commits and shall deliver to Buyer for its exclusive use, Product in the amounts listed below (“Contract Quantities”) pursuant to the terms and conditions contained herein to enable Buyer to apply such Product toward its Compliance Obligations. Buyer shall pay Seller for Product at the Contract Quantities based on the amount (“Payment Quantity”) and fixed price per unit listed below (“Contract Price”), and in accordance with Articles Six and Nine.