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HomeMy WebLinkAbout2019-11-21; Historic Preservation Commission; ; PUBLIC HEARING - HISTORIC DESIGNATION OF THE ENCINA POWER STATION STACKMeeting Date: To: From: Staff Contact: Subject: HISTORIC PRESERVATION COMMISSION Nov. 21,2019 Historic Preservation Commission Suzanne Smithson, Deputy Library Director Dianna Galindo, Senior Office Specialist Dianna.galindo@carlsbadca.gov, 760-434-287 4 ITEM 5 Public Hearing -historic designation of the Encina Power Station stack Recommended Action It is recommended that the Historic Preservation Commission hold a public hearing and determine that the Encina Power Station (EPS) stack does not meet the criteria for designation as a historic landmark as prescribed by Carlsbad Municipal Code Section 22.06.030. Executive Summary On Jan. 14, 2014, the City Council and Carlsbad Municipal Water District (CMWD) Board of Directors approved a Settlement Agreement (Agreement) involving the City of Carlsbad, NRG and SDG&E, supporting NRG's construction of a new power plant, known as the Carlsbad Energy Center Project (CECP). In exchange, NRG agreed to shut down and demolish the existing Encina Power Station, including the stack, once the new CECP became operational. At the Jul. 8, 2019 Historic Preservation Commission (Commission) meeting, the commissioners heard public testimony from community member Mr. Jim Strickland regarding his interest in designating the EPS stack as a historic landmark. By proper motion and vote, the Commission moved to hold a discussion of the EPS stack at its Sept. 9, 2019 meeting, where following discussion, by proper motion and vote the Commission moved to take no action (5/0/0/0). On Oct. 7, 2019, Mr. Jim Strickland submitted a written request for historic landmark designation of the EPS stack. Carlsbad Municipal Code (CMC) Section 22.06.030 requires that a public hearing be held to review any application for designation of a site, landscape feature or improvement as a historic landmark. Discussion The Encina Power Station commenced operation in Carlsbad in 1954. On Nov. 20, 1973, the Carlsbad City Council approved SDG&E's plans to construct a single 400-foot stack to replace four smaller one hundred ninety foot stacks. The 400-foot stack was added in 1976. On Jan. 14, 2014, the City Council and Carlsbad Municipal Water District Board of Directors approved a Settlement Agreement (Exhibit 1) involving the City of Carlsbad, NRG and SDG&E. Per the Agreement, the city and CMWD agreed to support NRG's construction of a new 500 megawatt power plant intended to operate at peak demand times, known as the Carlsbad Energy Center Project. In exchange, NRG agreed to shut down the existing EPS on the date the new CECP became operational, which was Dec. 12, 2018. NRG also agreed to start the above- ground demolition and remediation of the EPS within one year following its shutdown date and to complete the demolition within two years. At the Jul. 8, 2019 Commission meeting, the commissioners heard public testimony from community member Mr. Jim Strickland regarding his interest in designating the EPS stack as a historic landmark. By proper motion and vote, the Commission moved to hold a discussion of the EPS stack at its Sept. 9, 2019 meeting. At the Sept. 9, 2019 Commission meeting, the commissioners heard testimony from four community members regarding the EPS stack. At that time, the Commission also considered a Sept. 4, 2019 memo from Deputy City Manager Gary Barberio (Exhibit 2) stating, "NRG has verbally indicated to city staff that they will not provide consent for a proposed historic landmark designation in light of its commitments in the Agreement." CMC Section 22.06 .030 (E) (Exhibit 3) states, "Without the property owner's consent to the proposed designation, a site shall not be designated a historic site or landmark." Following discussion, by proper motion and vote the commission moved to take no action (5/0/0/0). On Oct. 7, 2019, pursuant to CMC Section 22 .06.030, Mr. Jim Strickland submitted a written request for historic landmark designation of the EPS stack (Exhibit 4). Pursuant to CMC Section 22.06.030 (C), within 45 days of the date of the request, the Commission is required to hold a public hearing to review the landmark application. On Oct. 9, 2019, NRG sent a letter to City Manager Scott Chadwick expressing its opposition to the designation of the EPS stack as an historic site or landmark (Exhibit 5). On Nov. 12, 2019, the City Council received a presentation on the demolition schedule and associated activities for the EPS. In that presentation, NRG affirmed its commitment to fulfill the above ground demolition provisions of the Agreement, commencing work prior to Dec. 11, 2019. The City Council received the presentation and adopted two resolutions granting NRG a not-to-exceed, nine-month extension to the demolition completion deadline. Nov. 21, 2019 Public Hearing CMC Section 22.06.030 (C) requires the Commission to hold a public hearing within 45 days to review an application for designation of a site, landscape feature or improvement as a historic landmark. In order for the Commission to make a recommendation to the City Council in favor of a historic designation, the Commission must determine that "the resource warrants historic site or landmark designation and the property owner has consented to the same in writing .... Without the property owner's consent to the proposed designation, a site shall not be designated a historic site or landmark." (CMC Section 22.06.030 (E); emphasis added). In this case, the property owner, NRG, has specifically objected to any historic site or landmark designation by the city. (Exhibit 5). Based on NRG's written objection to the designation of the EPS stack being designated historic by the city, city staff is recommending that the Historic Preservation Commission deny the written request for historic landmark designation for the EPS stack for the following reason: As noted above, on Oct. 9, 2019, NRG sent a letter to City Manager Scott Chadwick expressing its opposition to the designation of the Encina stack as an historic site or landmark. As such, the written request for historic landmark designation of the EPS stack does not meet the criteria for designation as specified in CMC Section 22.06.030. Fiscal Analysis No fiscal impact at this time. Next Steps Following this public hearing, as the Historic Preservation Commission cannot designate a site as historic or landmark without the property owner's consent, the process shall terminate and the commission shall notify the property owner and applicant of such termination in writing within 10 days of the commission's determination. The minutes of the commission's public hearing and determination will be provided to the City Council (CMC Section 22.06.030.E). Environmental Evaluation (CEQA) Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. Public Notification This item was noticed in the San Diego Union Tribune on Sunday, Nov. 10, 2019. Legal ad and notification materials are available in the Office of the City Clerk. In addition, this staff report was noticed in accordance with the Ralph M. Brown Act and was available for viewing at least 72 hours prior to the posting of the agenda. Exhibits 1. Resolution 2014-010 Approving Agreement between City of Carlsbad and CMWD, Cabrillo Power LLC, Carlsbad Energy Center NRG and SDGE, for approval of amended Carlsbad Energy Center Project design and decommission and deconstruction of the Encina Power Station ( on file at the Office of the City Clerk and at Georgina Cole Library) 2. Memo from Deputy City Manager Gary Barberio 3. Carlsbad Municipal Code 22 .06.020 and 22 .06.030 4. Public Hearing Request from Jim Strickland a. Public Hearing Request b. PDF presentation 5. Letter from NRG opposing designation 6. Email from community member EXHIBIT 1 1 RESOLUTION NO. 2014-010 3 6 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA APPROVING AN AGREEMENT BETWEEN AND AMONG THE CITY OF CARLSBAD (CITY) AND THE CARLSBAD 4 MUNICIPAL WATER DISTRICT (CMWD), CABRILLO POWER I LLC AND CARLSBAD ENERGY CENTER LLC (COLLECTIVELY, NRG), AND 5 SAN DIEGO GAS & ELECTRIC (SDG&E), ADDRESSING CITY AND CMWD SUPPORT FOR A CHANGE IN THE PROPOSED TECHNOLOGY OF THE APPROVED CARLSBAD ENERGY CENTER PROJECT (CECP) 7 PLANT AND THE SUBMITTAL OF A PETITION TO AMEND (PTA) APPLICATION TO THE CALIFORNIA ENERGY COMMISSION (CEC) 8 FOR APPROVAL OF THIS TECHNOLOGY CHANGE, CONDITIONED UPON THE DECOMMISSIONING, DEMOLITION, REMOVAL AND ^ REMEDIATION OF THE CURRENT ENCINA POWER STATION (EPS) SITE, AS WELL AS OTHER CHANGES IN CECP PLANT DESIGN, ENERGY INFRASTRUCTURE AND PROPERTY CONSIDERATIONS 11 BENEFICIAL TO THE RESIDENTS OF CARLSBAD 10 23 24 25 26 27 28 WHEREAS, in May of 2012, the California Energy Commission approved NRG's 12 13 14 application for certification ofthe Carlsbad Energy Center Project (CECP). That approval was for 15 a 558 Megawatt combined cycle power plant located east of the existing Encina Power Station (EPS), between the railroad tracks and Interstate 5. As a part of that approval, 3 ofthe 5 boiler 17 units at the existing EPS would be decommissioned, with the remaining 2 boiler units 18 continuing to operate. Consequently, the decommissioning of the entire plant (all 5 units) and 19 2Q the demolition and removal of the exisfing EPS structures would not occur until an unspecified 21 and uncertain future date. The CECP is now fully permitted and could proceed to construction 22 and operation; and WHEREAS, the City participated as an intervener in the proceedings before the California Energy Commission (CEC) concerning the application for certification ofthe CECP and vigorously opposed the approval of said application; and /// 5 1 WHEREAS, during the pendency of said proceedings, the City took certain legislative actions concerning the construction of a new power plant in the Coastal Zone; and WHEREAS, the CEC acknowledged that the CECP would be inconsistent with said legislative actions, including the City's General Plan and related land use ordinances, regulations and standards, but overrode said inconsistencies and approved the application for 7 certificafion on the grounds that the CECP was required for public convenience and necessity 8 and there were not more prudent and feasible means of achieving public convenience and 9 necessity; and 10 WHEREAS, since October of 2012, the energy supply environment in Southern California 11 has dramatically changed. The San Onofre Nuclear Generation Station (SONGS) ceased 12 operation in January 2012, In June 2013, SDG&E and Southern California Edison determined 14 they would not recommence power generation at SONGS, The closure of SONGS has caused an 15 increased and accelerated need for power generation facilities in Southern California, The California Independent System Operator (CAISO) has determined that additional power 17 generation capacity is currently needed in the San Diego Region by 2018; and i; WHEREAS given the CAISO determination, SDG&E is interested in entering into a Power 2Q Purchase Agreement (PPA) with NRG, but only if NRG is willing to change the proposed 21 technology of the approved CECP from a "combined-cycle configuration" plant to a "peaker 22 configuration" plant and submit a Petition to Amend (PTA) application to the CEC for approval of this technology change, NRG is interested in submitting a PTA application, but only if the City would be supportive ofsuch an application; and /// 23 24 25 26 27 28 6. 1 WHEREAS on December 3, 2013, the City Council adopted Resolution No. 2013-288 directing "staff to negotiate with SDG&E and NRG in an attempt to reach a mutually beneficial agreement acceptable to all three parties, supporting a change in the proposed CECP technology conditioned upon the decommissioning, demolition, and remediation ofthe current Encina Power Stafion site, as well as other changes in energy infrastructure and property 3 4 5 6 7 considerations beneficial to the residents of Carlsbad"; and 8 WHEREAS, staff negotiated based on NRG's intention to submit a PTA application to the o CEC for an amendment to the existing approval of the CECP which would provide for a 10 redesigned electrical generating facility that would have a smaller environmental footprint, 11 lower profile and lower stack heights utilizing a "peaker configuration" and would facilitate 12 retirement and removal ofthe existing Encina Power Station; and 14 WHEREAS, the three parties reached an agreement on certain non-binding terms and 15 entered into a Memorandum of Understanding (MOU), dated December 20, 2013, The MOU 16 clarified the intentions and obligations ofthe three parties with respect to the negotiation of a 17 formal, binding Agreement and set forth the terms that would be included in an Agreement; 18 and 19 2Q WHEREAS, City staff, CMWD staff, NRG and SDG&E have drafted an Agreement 21 incorporating the terms from the MOU; and 22 WHEREAS, the Agreement will provide significant benefits to the City of Carlsbad as well 23 „ as increasing energy supplies to the region. Some of those benefits include: 24 • NRG will amend its CECP project, proposing a plant that is more 25 environmentally friendly, lower profile, utilizing "peaker configuration" technology, with the amount of power generation and hours of operafion capped. 26 27 28 -3- 7 1 • NRG will immediately begin the process to completely shut down and demolish the Encina Power Station structures at no cost to taxpayers and begin the process to remediate and redevelop the site, 3 • SDG&E will pursue the relocation its operations yard ("North Coast Service Center") at NRG's expense and transfer ownership ofthe service center property ^ (along with the Cannon Park site) from SDG&E to the City, freeing up the service ^ center land for more appropriate uses. If it is not possible to relocate the service center, NRG will pay the city $10 million. ^ NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, 24 25 26 27 28 California, as follows that: 1, The above recitations are true and correct. 7 8 9 10 2, That it is in the best interests of the City of Carlsbad to enter into the attached 11 agreement (Exhibit A) with the Carlsbad Municipal Water District, Cabrillo Power I LLC, 12 Carlsbad Energy Center LLC, and San Diego Gas & Electric, 13 3, That the Mayor is authorized to execute the attached agreement with the 14 Carlsbad Municipal Water District, Cabrillo Power I LLC, Carlsbad Energy Center LLC, and 1^ San Diego Gas & Electric. 17 4, That City staff shall review the City's prior legislative actions concerning the CECP 18 and shall recommend such changes, if any, as may be necessary to reflect the changed 19 circumstances, reduced environmental profile and significant community benefits 20 associated with the amendment, 21 22 5, That the Administrative Services Director is authorized to appropriate $200,000 23 from the General Fund to be utilized in the city's efforts in regards to the CECP and the implementation ofthe Agreement, /// -4- 1 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Carlsbad City 2 Council and Carlsbad Municipal Water District Board of Directors, held on the 14th day of 3 Januarv 2014, by the following vote: 4 " 5 6 7 NOES: None 8 ABSENT: Council Members Hall, Douglas 9 10 11 AYES: Council Members Packard, Wood, Blackburn. 12 MARK PACKARD, Mayor Pro Tem 13 ATTEST: 14 15 .. B^BARAENGLESONfCity Clerk 17 (SEAL). , 18 19 20 21 22 23 24 25 26 27 28 SETTLEMENT AGREEMENT DATED AS OF JANUARY 14,2014 BETWEEN AND AMONG THE CITY OF CARLSBAD, CARLSBAD MUNICIPAL WATER DISTRICT, CABRILLO POWER I LLC, CARLSBAD ENERGY CENTER LLC AND SAN DIEGO GAS & ELECTRIC COMPANY LIST OF EXHIBITS Exhibit A Legal Descripfion of the Encina Site Exhibit B Map of the Encina Site Exhibit C Area Map of the Encina Site Exhibit D Form of NRG Support Letter Exhibit E Form of City Support Letter Exhibit F Form of Assumption of Obligations Agreement Exhibit G Form of Amendment Exhibit H Form of Memorandum of Agreement Exhibit I Form of Fossil Fuel Deed Restriction Exhibit J Legal Description of North Coast Services Center Site Exhibit K Map of North Coast Services Center Site Exhibit L Legal Description of Parcel 11 Exhibit M Map of Parcel 11 Exhibit N Legal Description of Cannon Park Exhibit 0 Map of Cannon Park Exhibit P Legal Description of Agua Hedionda North Shore Bluff Parcel Exhibit Q Map of Agua Hedionda North Shore Bluff Parcel Exhibit R Form of Guaranty Exhibit S Map of Encina Redevelopment Site Exhibit T Map of CECP Site SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (this '^Agreement") is entered into as of January 14, 2014, by and among the City of Carisbad, a charter city, located in San Diego County (the "Citv"), and Carlsbad Municipal Water District ("CMWD"), Cabrillo Power I LLC and Carisbad Energy Center LLC (collectively, "NRG"), and San Diego Gas & Electric Company ("SDG&E"), The City, NRG and SDG&E are sometimes referred to in this Agreement collectively as the "Parties" and individually as a "Party", except that SDG&E is a Party solely for purposes of Article 5 and Article 12. Unless otherwise defined in this Agreement, inifially capitalized terms used in this Agreement shall have the meaning given them in Article 1 below. The Parties are entering into this Agreement to resolve long-standing disputes between the City and NRG regarding the Carisbad Energy Center Project ("CECP" or the "Project"), and to provide for the redevelopment of the site of the Encina Power Station. This Agreement, if and when it becomes effective according to its terms, provides for, among other things: (i) the retirement, decommissioning, demolition and removal of the Encina Power Station, (ii) the remediation and redevelopment of the Encina Redevelopment Site (as defined below), (iii) the permitting, constmction and development of the CECP, (iv) the relocation and constmction of the New Service Center (as defined below), and (v) other changes in energy infi-astmcture and property considerations beneficial to the residents of Carlsbad. RECITALS THIS AGREEMENT is made with reference to the following facts and circumstances: A. WHEREAS, NRG owns real property located in the City, in the County of San Diego, Califomia, bounded generally by Cannon Road to the south. Interstate 5 to the east, the Agua Hedionda Lagoon to the north, and Carlsbad Boulevard to the west (the "Encina Site"). A legal description of the Encina Site is attached to this Agreement as Exhibit A, and a map ofthe Encina Site is attached as Exhibit B. provided that in the event of any inconsistency between the map and the legal description, the legal description shall control. Also attached, as Exhibit C, is a map of the area in which the Encina Site is located; B. WHEREAS, at the Encina Site, NRG operates facilifies known as Units 1-5 (individually a "Unit" and collecfively the "Units," the "Encina Power Station" or the "Stafion") for the purpose of generating and selling electric power. The Encina Power Station is currently subject to a Resource Adequacy Agreement ("RA Agreement") and a Participating Generator Agreement ("Participafing Generator Agreement") with the Califomia Independent System Operator ("ISO"); C. WHEREAS, NRG filed an application for the constmction and development ofthe CECP with the Califomia Energy Commission (the "Commission") on or about September 2007 (Docket No. 07-AFC-06) (the "Application"): D. WHEREAS, the City conditionally opposed this Application; E. WHEREAS, from 2007 through 2012 the Commission processed this Application and, in May of 2012, issued its Order (Order No, 12-0531 -06) and Decision approving the constmction and development of the Project subject to the conditions stated therein; F. WHEREAS, the San Onofre Nuclear Generation Station ("SONGS") ceased operation January 2012 and in June 2013 Southem Califomia Edison determined that they would not recommence power generation at SONGS; G. WHEREAS, the early closure of SONGS has caused an increased and accelerated need for power generation facilities in Southem Califomia, and the ISO has determined that additional generating capacity is currently needed in the San Diego region; H. WHEREAS, NRG and SDG&E have represented to the City that they are interested in entering into a tolling or power purchase agreement ("Proposed PPA") for the Project but only if (i) SDG&E and NRG are able to come to mutually acceptable terms on the Proposed PPA and (ii) NRG amends its permits for the Project to allow a change in proposed technology ("Amendment), and NRG has represented that it would amend its permits only ifthe City would be supportive of such an Amendment; I. WHEREAS, the Amendment would request approval of a redesigned electrical generating facility that would have a smaller environmental footprint, lower profile, and lower stack heights, and would facilitate the retirement and removal of the Encina Power Station; J. WHEREAS, on December 3, 2013, the City adopted a resolufion that provides: "That the City Council does hereby direct staff to negotiate with SDG&E and NRG in an attempt to reach a mutually beneficial agreement acceptable to all three parties, supporting a change in the proposed CECP technology conditioned upon the decommissioning, demolition, and remediation of the current Encina Power Station site, as well as other changes in energy infi-astmcture and property considerations beneficial to the residents of Carlsbad."; K. WHEREAS, the City, NRG and SDG&E contemplate that SDG&E will relocate its North Coast Service Center provided that the cost of the proposed relocation and constmction of the New Service Center be done in a manner which is cost-neutral to SDG&E and its ratepayers; and L. WHEREAS, the Parties now wish to fully and finally resolve disputes involving the CECP and the Encina Power Station, by providing for, among other things: (i) the retirement, decommissioning, demolition, and removal of the Encina Power Stafion, (ii) the remediafion and redevelopment ofthe Encina Redevelopment Site (as defined below), (iii) the provisions ofthe Amendment and the constiucfion and development ofthe CECP, (iv) the relocafion and constmcfion ofthe New Service Center, and (v) other changes in energy infrastmctiire and property considerafions beneficial to the residents of Carisbad. AGREEMENT ACCORDINGLY, to settle long-standing disputes and in considerafion of the mutual covenants and agreements in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Parties agree to the following terms and conditions: ARTICLE 1 DEFINITIONS 1.1 Definitions (a) "Affiliate" means, with respect to a Person, any Person that directly or indirectly Controls, is Controlled by or is under Common Control with that Person. (b) "Agreement shall have the meaning set forth in the opening paragraph of this Agreement. (c) "Amendment" shall have the meaning set forth in Recital H and set forth in Exhibit G. (d) "Application" shall have the meaning set forth in Recital C. (e) "Assumption of Obligations" shall mean the agreement in recordable form attached as Exhibit F. (f) "Attorneys' Fees and Costs" means any and all reasonable attorneys' fees, costs, expenses and disbursements, including, but not limited to, expert witness fees and costs, travel time and associated costs, transcript preparation fees and costs, document copying, exhibit preparation, courier, postage, facsimile, long-distance and communications expenses, court costs and the costs and fees associated with any other legal, administrative or altemative dispute resolution proceeding, fees and costs associated with execution upon any judgment or order, and costs on appeal. (g) "CEQA" means the Califomia Environmental Quality Act, (h) "CECP" shall have the meaning set forth in the second opening paragraph of this Agreement. (i) "CECP Site" shall mean the approximately 30 acre site on which the newly constmcted CECP will be situated and which is identified in the map attached as Exhibit T. (j) "Qty" shall have the meaning set forth in the opening paragraph of this Agreement. (k) "City Support Letter" shall have the meaning set forth in Section 3.4(b)(i). (1) "CMWD" shall have the meaning set forth in the opening paragraph of this Agreement, (m) "Commission" shall have the meaning set forth Recital C. (n) "Control" means the power to direct the affairs or management of another Person, whether by contract, operation of law or otherwise, "Controlled bv" and "Controlling" have correlative meanings. "Common Control" means that two Persons are both Controlled by the same other Person. (o) "DOE" mean the United States Department of Energy. (p) "Effective Date" shall have the meaning set forth in Section 2.3(b), (q) "Electric Reliability Removal Conditions" means, for one or more Units of the Station, that: (i) NRG has not received an order or determination fi-om a federal, state or local govemmental agency or authority, including, but not limited to, the ISO, with jurisdiction requiring NRG to continue operating a Unit or Units at the Station or finding that a Unit or Units are necessary for reliability, thereby preventing the shutdown of one or more Units; and (ii) NRG has obtained any necessary approvals for the Shutdown, including fi-om the ISO, the Califomia State Water Resources Control Board, and the San Diego County Air Pollution Control District. (r) "Encina Power Stafion" shall have the meaning set forth in Recital B. (s) "Encina Redevelopment Site" shall mean the area comprising the Encina Site, excluding, however, the CECP Site, The Encina Redevelopment Site will be subject to future redevelopment and a map of the area is identified on Exhibit S, (t) "Encina Site" shall mean the entire approximately 95 acre site currently occupied by the Encina Power Station, exclusive of the SDG&E switchyard, and which is identified on Exhibits A, B, and C, (u) "EPC Contract Nofice to Proceed" shall have the meaning set forth in Section M(b}. (v) "Event of Defauh" shall have the meaning set forth in Article 7. (w) "Excluded Transfer" shall mean: (i) any Transfer to an Affiliate of NRG, provided that NRG Energy, Inc. confinues to guarantee performance of NRG's obligations under the Guaranty; (ii) any Transfer of an easement or license over a portion of the Site, that would not allow the Transferee to use that portion of the Site to generate electricity with equipment or machinery that is powered by the combustion of fossil fuels and which would not otherwise interfere with NRG's ability to perform its obligations under this Agreement; (iii) After demolition and removal of above-ground stmctures in satisfaction of Section 6.1, any Transfer of an interest, in addition to an easement or license, over a portion ofthe Site, provided that such Transfer would not allow the Transferee to use that portion ofthe Site to generate electricity with equipment or machinery that is powered by the combustion of fossil fiiels and which would not otherwise interfere with NRG's ability to perform its obligations under this Agreement; and (iv) any condemnation or exercise of eminent domain authority, whether whole or partial, by a govemmental authority or other entity with statutory authority under state law to exercise eminent domain authority. (x) "Existing Deed of Tmst" means any deed of tmst securing the Existing Secured Loan and encumbering the site. (y) "Existing Secured Loan" means the term loan and revolving credit facility under the credit agreement, dated as of July 1, 2011 as amended or modified from time to fime, among NRG Energy, Inc., as borrower, the several banks and other financial institufions or entities fi-om time to time parties to the credit agreement, Morgan Stanley Senior Funding, Inc. as syndication agents, and CitiCorp North America, as administrative agent and collateral agent, which loan is secured by the Exisfing Deed of Tmst. (z) "Exisfing Secured Loan Parties" means the several banks and other financial institufions or entities that are fi-om time to time parties to the existing secured loan, Morgan Stanley Senior Funding, Inc., as syndication agents, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and any of their successors and assigns, including any person receiving an interest in the site or the member interests of NRG fi-om any ofthe foregoing as a result of their exercise of any of their rights or remedies under the Existing Secured Loan. (aa) "Feasibilitv Studies" shall have the meaning set forth in Section 5.3(a). (bb) "FERC" means the Federal Energy Regulatory Commission or any successor. (cc) "Final Shutdown Date" means the eariier of (a) midnight of December 31,2017 or (b) the commercial operation date of CECP (as such term is defined under the facility's PPA), (dd) "Fossil Fuel Restricfion" shall have the meaning set forth in Section 3,5. (ee) "Guaranty" shall have the meaning set forth in Section 2.5. (ff) "Indemnified Parties" means the City (including, but not limited to, all of its respecfive boards, commissions, departments, agencies and other subdivisions), all Agents ofthe City, and their respecfive heirs, legal representafives, successors and assigns, and each of them. (gg) "Indemnify" means indemnify, protect, defend and hold harmless, (hh) "Independent Guaranty Amount" shall have the meaning set forth in Section 2.5(a). (ii) "lODs" shall have the meaning set forth in Secfion 2.4(b). (jj) "ISO" shall have the meaning set forth in Recital B. (kk) "ISO Tariff shall mean the tariff of the ISO, as it may be amended, supplemented, or replaced (in whole or in part) from time to time. (11) "Laws" shall mean all present and future applicable laws, ordinances, mles, regulations, permits, authorizations, orders and requirements, whether or not in the contemplation of the Parties, that may affect or be applicable to the Encina Site or any part ofthe Encina Site (including, without limitation, any subsurface area), or the use of the Encina Site and the buildings and improvements on or affixed to the Encina Site, including, without limitation, all consents or approvals required to be obtained fi-om, and all mles and regulations of, and all building and zoning laws of, all federal, state, county and municipal governments, and their departments, bureaus, agencies or commissions, authorities, board of officers, or any other body or bodies exercising similar funcfions, having or acquiring jurisdicfion ofthe Encina Site, and similarly the term "Law" shall be constmed to mean the same as the above in the singular as well as the plural. (mm) "Loss" or "Losses" when used with reference to any indemnity means any and all claims, demands, losses, liabilifies, damages (including foreseeable and unforeseeable consequenfial damages to the extent arising fi-om third party claims), liens, obligations, interest, injuries, penalties, fines, lawsuits and other proceedings, judgments and awards and costs and expenses (including, without limitation, reasonable Attomeys' Fees and Costs, and consultants' fees and costs) of whatever kind or nature, known or unknown, contingent or otherwise. (nn) "Memorandum of Agreement" shall have the meaning set forth in Section 2.2(a) of this Agreement. (oo) "New Service Center" shall refer to the new service center to be constmcted in connection with the North Coast Service Center as set forth in Section 5.1(b). (pp) "New Service Center Location" shall have the meaning as set forth in Section 5^. (qq) ''North Coast Service Center" shall refer to the existing facility that is owned by SDG&E and that is located at the current North Coast Service Center Site. (rr) "North Coast Service Center Site" shall refer to the current location ofthe North Coast Service Center located at the comer of Cannon Road and Carlsbad Boulevard. A legal description ofthe current property is attached hereto as Exhibit J, a map ofthe current property is attached hereto as Exhibit K. (ss) "North Coast Service Center Redevelopment Site" shall mean the area comprised of the North Coast Service Center Site, Cannon Park, and the Agua Hedionda North Shore Bluff Parcel. (tt) "NRG" shall have the meaning set forth in the opening paragraph of Agreement. (uu) "NRG Support Letter" shall have the meaning set forth in Section 3.4(a)(ii). (w) "NSC Cost Cap" shall have the meaning set forth in Section 5,4(a), (ww) "NSC Costs" shall have the meaning set forth in Section 5,4(a), (xx) "Official Records" means the official records of the City and of the County of San Diego, Califomia. (yy) "Party" or "Parties" shall have the meanings set forth in the opening paragraph of this Agreement. (zz) "Person" means any individual, partnership, corporation (including, but not limited to, any business tmst), limited liability company, joint stock company, tmst, unincorporated association, joint venture or any other entity or association, the United States, or other federal, state or local govemmental entity. (aaa) "Petition to Amend" shall have the meaning set forth in Section 6,1, (bbb) "Project" shall have the meaning set forth in the opening paragraph of this Agreement, (ecc) "Proposed PPA" shall have the meaning set forth in Recital H. (ddd) "Pmdent Utility Practices" means the practices, methods, standards and acts engaged in or approved by a significant portion of the applicable segment ofthe electric power generation industry pertaining to facilifies of the type, similar size and locafion to Encina Power Station that, in light of the facts that are known, or reasonably should have been known, at the time a decision was made, would have been expected to accomplish the desired result in a manner consistent with Laws, permits, codes, standards, equipment manufacturer's recommendations, reliability, safety, environmental protection, economy, and expedition. Pmdent Utility Practices are not limited to the optimum practice, method, standard or act to the exclusion of all others, but rather to those practices, methods, standards and acts generally acceptable or approved by a significant portion ofthe applicable segment ofthe electric power generation industry in the United States, (eee) "RA Agreement" shall have the meaning set forth in Recital B. (fff) "Relocation Guaranty Amount" shall have the meaning set forth in Section 2.5(c). (ggg) "SDG&E" shall have the meaning set forth in the opening paragraph of this Agreement. (hhh) "Shut Down" or "Shutdown" means the permanent and irrevocable cessation of electricity generation operations at the Encina Power Station in accordance with all applicable laws and regulations, such that the Encina Power Station may no longer be used to generate electricity or reactive power on any basis (including, but not limited to, any reliability-must-mn or other intermittent or emergency basis) or emit any hazardous materials in conjunction with the operation of any electrical generation facilities comprising the Encina Power Station. For purposes of this Agreement, "Shutdown" does not include any significant hazardous materials remediation activities on the Site. (iii) "Shut Down Guaranty Amount" shall have the meaning set forth in Section 2.5(b). (jjj) "Shutdown Obligafion" means the obligafion of NRG to Shut Down the Encina Power Station set forth in Section 3.1(a)(ii). (kkk) "SONGS" shall have the meaning set forth in Recital F. (Ill) "Stafion" shall have the meaning set forth in Recital B. (mmm) "Term" shall have the meaning set forth in Section 2.1. (nun) "Terminafion Nofice" shall have the meaning set forth in Secfion 5.6(a). (ooo) "Transfer" means sell, convey, assign, transfer, alienate or otherwise dispose of (directly or indirecfiy, by one or more transacfions, and by operafion of law or otherwise) (i) all or any material part of the ownership interest or rights in any portion ofthe Encina Site and/or this Agreement, or (ii) all or a Controlling portion of the member interests in NRG. Notwithstanding the generality of the foregoing, however, "Transfer" shall exclude (i) an Excluded Transfer and (ii) any encumbrance executed in connection with a financing undertaken by NRG for CECP. (ppp) "Transferee" means a Person to whom a Transfer is made. (qqq) "Unit" or "Units" shall have the meaning set forth in Recital B. ARTICLE 2 GENERAL TERMS 2.1 Term of Agreement The term of this Agreement (the "Term") shall commence on the Effective Date (as defined in Secfion 2.3(b)) and shall remain in effect unfil the Parties have fiilfilled all of their obligations under this Agreement, unless terminated earlier in writing in accordance with the terms and conditions of this Agreement. 2.2 Covenants Running with the Land (a) Recordation of Memorandum of Agreement. The City and NRG agree to execute, acknowledge, and cause a memorandum of this Agreement substantially in the form attached to this Agreement as Exhibit H (the "Memorandum of Agreement") to be recorded in the Official Records as soon as possible following the Effecfive Date in accordance with Califomia Civil Code Secfion 1468. (b) Binding on Successors. Upon recordafion of the Memorandum of Agreement as provided in Secfion 2.2(a) above, this Agreement shall consfitute covenants mnning with the Encina Site binding on all successors and assigns of NRG; provided, however, this Agreement, including the covenants on the part of NRG, shall not be binding on the Exisfing Secured Loan Parties or any of their successors or assigns. (c) Termination of Agreement. Upon any termination of this Agreement, the City shall, at NRG's written request, execute a notice of termination of the Agreement to be recorded in the Official Records, and this obligation of the City shall survive any such termination of this Agreement. 2.3 Agreement Approvals and Effective Date (a) NRG Approval. NRG has obtained all required approvals for it to enter into this Agreement. (b) City Approval. Once NRG has signed and delivered this Agreement to the City, the City shall timely submit this Agreement to the City Council for approval. Notwithstanding anything in this Agreement to the contrary, NRG understands and agrees that no officer or employee ofthe City has authority to bind the City to this Agreement unless and until the City Council shall have duly adopted a resolution in its sole and absolute discretion approving this Agreement. Therefore, any obligations of the Parties under this Agreement are contingent upon such approval, and this Agreement shall not be effective unless and until such approvals are obtained in accordance with the City's applicable ordinances and codes. If a City Council resolution approving this Agreement becomes effective, then the effective date of this Agreement (the "Effecfive Date") shall be the same date that such resolution becomes effective. Notwithstanding the foregoing, if a resolution approving this Agreement does not become effective by January 31, 2014, then this Agreement shall terminate and shall be of no force and effect unless the City acting through the City Attomey, and NRG, in their respective sole discretion, agree in writing to extend such date and such a resolution is duly enacted and becomes effective on or before such extended date. (c) SDG&E Approval. SDG&E may be required to obtain certain regulatory approvals in connection with its obligations under Article 5 of this Agreement, including from the Califomia Public Utilities Commission. To the extent such approvals are required, SDG&E will use reasonable efforts to obtain all such required approvals as soon as commercially practicable. The Parties agree that SDG&E's obligations under this Agreement are contingent on such approvals, if any. 10 2.4 Improvements (a) Easements. The City will provide a project description to NRG regarding easements for the Agua Hedionda Lift Station and the Vista-Carlsbad Interceptor Sewer Pipeline that coordinates with the Poseidon easement, NRG shall submit an application to the Commission within 60 days after receipt of project description and NRG will execute easements within 10 days of Commission approval, (b) PDP Land Transfers. Within 90 days of the Effective Date, NRG agrees to grant Irrevocable Offers of Dedications ("lODs") for the Hubbs Site Parcel, Bluff Area Parcel, South Power Plant Parcel, and Fishing Beach Parcel, as described in Planning Commission Resolution 6632, subject to reasonable restrictions and reservations necessary to ensure public safety and the continuity of power plant operations, 2.5 Guaranty (a) Independent Guaranty. NRG agrees to deliver to the City a Guaranty from NRG Energy, Inc. in the form of Exhibit R and in the amount of five million dollars ($5,000,000) (the "Independent Guaranty Amount") within ten (10) business days from the Effecfive Date. The City shall release this amount once all obligations under this Agreement have been satisfied to the City's safisfacfion; provided, however, that if the Commission does not issue a final decision approving the Amendment and NRG notifies the City in writing that it is ending further development of the CECP, and provided further that NRG does not have any outstanding liabilifies or obligafions to the City under this Agreement, the City's consent to such request to reduce this amount will not be unreasonably withheld. (b) Shut Down Obligation. Within ten (10) business days after the Final Shut Down Date, NRG will increase the amount of the Guaranty by twenty million dollars ($20,000,000) (the "Shut Down Guaranty Amount"), bringing the total amount of the Guaranty to twenty five million dollars ($25,000,000). Upon NRG's request, the City shall release the Shut Down Guaranty Amount following NRG's safisfacfion of all obligations under Section 6.1. Following NRG's commencement of demolition and removal of above ground stmctures, and provided that NRG does not have any outstanding liabilities or obligafions to the City under this Agreement at such time, NRG may request, and the City will reasonably consider, a proportionate reduction in the Shut Down Guaranty Amount upon the completion of certain key milestones, with such milestones and reductions to be established by NRG and the City at such time. (c) Relocation of North Coast Service Center. Within ten (10) business days after the EPC Contract Notice to Proceed is issued, NRG will increase the amount of the Guaranty by an additional amount of twenty two million five hundred thousand ($22,500,000) (the "Relocafion Guaranty Amount") for a total Guaranty amount of forty seven million and five hundred thousand dollars ($47,500,000). If the credit rating for Carisbad Energy Center is equal to or exceeds NRG Energy, Inc.'s credit rafing as of the Effecfive Date, with the consent of the City, which shall not be unreasonably withheld, NRG may elect to subsfitute a Guaranty from Carlsbad Energy Center LLC for the Relocation Guaranty Amount. Upon NRG's request, the City shall release the Relocation Guaranty Amount following NRG's satisfaction of all obligations under Article 5. At NRG's request, the City will reduce the Relocation Guaranty 11 Amount in proportion to NRG's payments made in accordance with Article 5; provided, that if NRG makes the ten million dollar ($10,000,000) payment under Section 5,6(b) following issuance ofthe Termination Notice, the City shall release the entire Relocation Guaranty Amount. ARTICLE 3 POWER STATION SHUTDOWN PROCESS 3.1 Agreement to Permanently Shut Down the Encina Power Station (a) Shutdown Obligation. (i) Within thirty (30) days of the Effective Date, NRG shall initiate measures to Shut Down Units 1-5 of the Encina Power Station. Such measures shall include, but not be limited to, amending the compliance plan for the Encina Power Station in connection with the State Water Resource Control Board's regulation addressing the use of once-through cooling by coastal power plants. (ii) Subject to the Electric Reliability Removal Conditions and provided that (x) the Califomia Public Utilities Commission has issued a final decision approving a power purchase agreement for CECP and (y) the Commission has issued a final decision approving the Amendment, NRG agrees to Shut Down the Encina Power Stafion no later than the Final Shutdown Date (the "Shutdown Obligation"). Notwithstanding the foregoing, if NRG issues a final nofice to proceed with constmcfion of CECP without having received Califomia Public Ufilifies Commission approval, such condifion shall be deemed satisfied. (iii) Subject to the provisions of Section 3.3, NRG will diligenfiy apply for and exercise its best efforts to obtain any regulatory approvals and permits needed to Shut Down Units 1-5 and to ensure that the Electric Reliability Removal Conditions are satisfied as soon as reasonably possible. NRG will not, direcfiy or indirecfiy, request that any regulatory agency with jurisdiction over the Shut Down of the Encina Power Station deny or delay the approvals needed for the Shut Down. Further, NRG will take no action which is cause for the regulatory agency to deny or delay any approvals or other matters needed to satisfy the Electric Reliability Removal Conditions. (iv) The Electric Reliability Removal Conditions are solely for the benefit of NRG. If some, but not all, of the Electric Reliability Removal Condifions are not safisfied for reasons other than an Event of Default by NRG or NRG's failure to timely obtain a needed approval for the Shut Down, then NRG, in its sole and absolute discrefion, may upon not less than ten (10) days' written nofice to the City describing in reasonable detail the unsatisfied condition(s) either: (x) suspend performance of its obligafion to Shut Down the applicable Unit or the Encina Power Station only until such condition is satisfied, or (y) waive the satisfaction of such conditions as NRG may set forth in its sole and absolute discretion in a written notice to the City. (v) Notwithstanding anything in this Agreement to the contrary, if the United States Department of Energy ("DOE"), ISO or other entity having jurisdiction over NRG 12 or the Encina Power Station orders or decrees it necessary for any Unit or Units to continue to operate past the Final Shutdown Date, then NRG shall be permitted to operate the applicable Unit or Units in accordance with such order or decree. Nothing in this subsection (v) shall relieve either Party from its support obligations under Section 3.4 or prevent either Party from challenging the effectiveness or legality of such order, provided, however, each Party shall provide the other Party copies of any such order and any legal challenges to such order. In the event NRG receives an order under this Section 3.1(a)(v), NRG and City shall comply with Section 3.4 until such time as the Unit or Units is/are released from such order. (vi) Notwithstanding any provision in this Agreement to the contrary, in the event that CECP becomes commercially operable and the Encina Power Station continues to operate, NRG will pay the City (on a monthly basis), a liquidated damages payment equal to $l/kW-mo. multiplied by the greater of (a) the generating capacity of the Unit or Units (in MW) remaining online past the Final Shutdown Date or (b) 300 MW. Ifthe Shutdown occurs during a portion of a calendar month, then the monthly payment shall be pro-rated based on the number of days during which the Unit or Units were operational and the number of days in that calendar month. Such liquidated damages shall continue until the Shutdown of the Encina Power Station. (b) Accelerated Shutdown. Nothing in this Agreement shall prohibit NRG from an accelerated Shutdown of a Unit or Units, whereby the Shutdown would occur in advance ofthe Final Shutdown Date. (c) Post-Shutdown Activities. Within ninety (90) days of the Shutdown ofthe Encina Power Station, NRG (i) shall ensure that the Encina Power Station facilities and improvements are in a secure, inoperable condition and do not pose a physical or environmental safety hazard to members of the public or visitors of the Encina Site, consistent with Pmdent Utility Practices and all applicable regulatory requirements and approvals; (ii) shall seek to terminate applicable permits and registrations that are no longer needed after the Shutdown of the Encina Power Station, (iii) shall request termination of the ISO Participating Generator Agreement and FERC market-based rate tariff as applicable to the Encina Power Station, and (iv) shall take appropriate actions in support of those requests, consistent with all applicable legal requirements. 3.2 Notices Regarding Electric Reliability Removal Conditions NRG shall promptly provide the City with copies of any and all notices, correspondence or other documents to or from the ISO, FERC or other agency relating to the Electric Reliability Removal Conditions; provided, however, that failure to provide copies ofsuch notices shall not constitute an event of default under Section 7.1, 3.3 Limitation on Future Contracts; No Actions to Prolong Need for Encina Power Station With the exception of any contractual arrangements required to be entered into in connection with Electric Reliability Removal Conditions, NRG represents, warrants and 13 covenants that its obligation to Shut Down the Encina Power Station under this Agreement shall not be limited by any existing contracts it has or may in the future have to operate any or all of the Units on the Encina Site, NRG further agrees not to take any actions that may prolong the need for the Encina Power Station to continue operating for electric reliability or any other purposes inconsistent with the terms and conditions of this Agreement; the City nonetheless acknowledges that NRG has the right, in its sole and absolute discretion so long as consistent with the terms and conditions of this Agreement, to continue to operate, maintain, repair, replace and improve the Encina Power Station, in accordance with all applicable laws, regulations, and permits, until the Final Shutdown Date; provided, however, that NRG may be required to operate, maintain and repair the Encina Power Station beyond the Final Shutdown Date if the Electric Reliability Removal Conditions have not been met. 3.4 Mutual Support for Shutdown Efforts and NRG's Regulatory Compliance Pending Shutdown (a) NRG's Support for Shutdown Efforts. (i) No later than fifteen (15) business days after approval of the Amendment by the Commission, NRG shall submit to the ISO a written notice of intent to retire the Encina Power Station as of Final Shutdown Date. (ii) Within five (5) business days of the City's request, NRG shall deliver a letter (the "NRG Support Letter"), in the fonn attached as Exhibit D, to other govemmental agencies or third parties. (b) City's Support of NRG's Regulatory Compliance Pending Shutdown. As long as there is not an Event of Default by NRG under this Agreement, for period beginning with the Effecfive Date and ending on the Final Shutdown Date, the City agrees to support any and all regulatory approvals required for the continued operafion of any of the Units before Shutdown, such support to consist of (i) within five (5) business days of NRG's request the City shall submit a letter from the City Attomey ("City Support Letter"), to the relevant governmental agency, in the form attached to this Agreement as Exhibit E, and (ii) upon reasonable prior nofice provided by NRG, the City shall participate in a reasonable number of meetings with the relevant govemmental agencies, provided that the City's participation under this subsection 3.4(b)(u) shall consist of verbally affirming City's support for the renewal or issuance of the relevant regulatory approval for the Encina Power Station, as stated in the City Support Letter, In the event of a dispute between the Parties regarding the City's compliance with its obligations under subsections 3.4(b)(i)-(ii), and before NRG delivers any Notice of Default under Article 7 for noncompliance with these obligations, both Parties shall, upon request of either Party, meet and confer in good faith to attempt to resolve such dispute over a period of ten (10) business days. Further, NRG shall not deliver a Notice of Default under Article 7 for City's alleged non-compliance with its obligations under Sections 3.4(b)(i)-(ii) before the expiration of the ten (10) business day period following delivery to the City of written notice of such dispute. 14 Any other actions by the City in support of NRG's regulatory compliance pending Shutdown in addition to the actions specified under this Secfion 3.4(b) shall be at the sole discretion ofthe City, Ifthe City decides to rescind its support on or after the Final Shutdown Date, then the City may, in its sole discretion, take such action as it deems appropriate to oppose or condition the continued operation of the Encina Power Station or any portion of the Encina Power Station, including, but not limited to, opposing the extension or renewal of any operating permits and/or the imposition by govemmental regulatory authorities of air and water quality mitigation measures or other operating requirements or limitations, 3.5 Fossil Fuel Deed Restriction NRG agrees to limit fossil fuel generation on the Encina Site to the generating capacity proposed in the current project description (e,g., six LMS 100s) to be proposed in the Petition to Amend and any black start equipment potentially required by the ISO. NRG agrees that no future modifications to the CECP shall be undertaken that exceed the environmental envelope, profile or footprint of CECP as presented in the Amendment. Within ten (10) business days after the Shut Down, NRG shall record a restrictive covenant for the benefit ofthe City in the Official Records, in the form attached to this Agreement as Exhibit I, which provides that no portion of the Encina Site, with the exception of the CECP Site, may be used to generate electricity with equipment or machinery that is powered by the combustion of fossil fuels (except the following used on the Encina Site: ancillary equipment or machinery; back-up generators; or distributed energy sources approved by the City in a redevelopment plan), all as more particulariy set forth in such exhibit (the "Fossil Fuel Restriction"). Except with respect to the Existing Secured Loan Parties as provided in Section 2.2 of this Agreement, the Fossil Fuel Restriction shall constitute covenants mnning with the land, binding on successors and assigns of NRG, In the event that an Existing Secured Loan Party, or its successor or assignee, takes ownership or possession of the Site and fails to assume NRG's obligations and rights under this Agreement under Section 2,2 of this Agreement, and the Agreement terminates after the Fossil Fuel Restriction has been recorded, then following any such termination the City shall, at the written request of NRG or the Existing Secured Loan Party (or its successor or assignee), execute and cause a quitclaim deed to be recorded in the Official Records evidencing the termination of the Fossil Fuel Restricfion; this obligation ofthe City shall survive any such termination of this Agreement. Notwithstanding the foregoing, and also as provided in Secfion 2.2 of this Agreement, the Parties understand and agree that, in the event of a refinancing of the Existing Secured Loan that provides for full repayment, NRG shall ensure - supported by written evidence reasonably safisfactory to the City - that this Agreement, including the Fossil Fuel Restriction, has priority over the deed of tmst securing the refinanced loan and, accordingly, that the Fossil Fuel Restricfion shall thereafter be binding on all successors and assigns of NRG without excepfion. ARTICLE 4 AMENDMENTS TO THE CECP PERMITS 4.1 City Support of CECP Permits Amendment Applications (a) Provided that NRG is not in default under any obligations to the City under the Agreement and in substantial compliance with the provisions of the Amendment agreed to by the 15 City, the City agrees not to oppose permits or authorities accommodafing the confinued operation of the Encina Power Station through the Final Shutdown Date. (b) The City shall support the Amendment; provided that the City has a reasonable and meaningful opportunity to review and comment on the Amendment prior to filing with the Commission to confirm that the Amendment is consistent with Exhibit G and the Amendment is filed with the Commission consistent with the provisions of Exhibit G. The City will issue the City Support letter, a form of which is set forth in Exhibit E, in connection with the Amendment and to govemment agencies as requested by NRG. Upon reasonable prior notice provided by NRG, the City shall also participate in a reasonable number of meetings with the relevant govemmental agencies, provided that the City's participation under this subsection shall consist of verbally affirming City's support for the Amendment. (c) As per the request of the City, NRG will incorporate a provision in the Pefition to Amend to be filed with the Commission in connection with the Amendment and in any power purchase agreement for CECP that CECP will not operate between the hours of midnight and 6 am, except to the extent reasonably required for reliability-related purposes or as otherwise required by the ISO Tariff A decision by the Commission declining to apply this limitation to the CECP shall not absolve the City of its support obligation set forth in Section 4.1(b), 4.2 Services for CECP (a) NRG agrees to work with the Carlsbad Fire Department in good faith to address those fire safety concems that were previously raised in connection with the Application in the Amendment and any other reasonable fire safety concems during the Amendment process. (b) NRG agrees to reimburse the City for costs incurred in accordance with actual services performed by the City as contemplated by currently adopted fee and permit schedules, including applicable and appropriate impact fees, which are not expected to exceed $1 MM. (c) The City, CMWD and NRG will work together to establish related services to CECP, including recycled water supply, potable water supply, sanitary sewer service and fire response. (d) The City will work with NRG to accommodate gas line service to CECP on the east side of the railroad tracks. ARTICLE 5 SDG&E PROVISIONS 5.1 Relocation of the North Coast Service Center (a) SDG&E has advised the City that with the early refirement of SONGS and future closures of plants that use once-through cooling technology, the SDG&E area will be deficient of electricity generafing capacity by 2018. SDG&E has requested that the City support the Amendment for the development of CECP as set forth in this Agreement 16 (b) In addition and subject to regulatory approvals and other conditions and agreements specified here, SDG&E has agreed to the relocafion of SDG&E's North Coast Service Center, currently located at the comer of Cannon Road and Carlsbad Boulevard ("North Coast Service Center Site"), with the North Coast Service Center Site and certain other properties to be transferred to the City upon completion and occupancy of the newly relocated North Coast Service Center ("New Service Center"). (c) The New Service Center is to be built at NRG's sole cost, subject to the NSC Cost Cap (defined below), and to SDG&E's specificafions and condifions. NRG will build the New Service Center, or will cause it to be built, in accordance with such specifications; provided, however, that the City, in its sole discretion, may elect to build the New Service Center, or to cause it to be built. The Parties acknowledge and agree that the cost of the relocation and the constmction ofthe New Service Center, and the stmcture of the transaction, will be at no cost to the City or to SDG&E, and in a manner that is cost-neutral to SDG&E and its ratepayers. (d) Ifthe City and SDG&E do not proceed with the proposed relocation of the New Service Center, then NRG shall make the payment to the City in accordance with Section 5.6(b) below. 5.2 Identification of Property for the New Service Center Location (a) The City and SDG&E will work together to identify a mutually acceptable altemative location for the New Service Center to be located ("New Service Center Location"). Currently SDG&E and the City may review: (i) the land currently owned by SDG&E north of Cannon Road known as Parcel 11 (a legal description of Parcel 11 is attached hereto as Exhibit L, a map of Parcel 11 is attached hereto as Exhibit M) or (ii) another site mutually acceptable to both the City and SDG&E, as determined by each in its respective and sole discretion, provided that such site shall be made available at no cost to SDG&E. The City shall cooperate on community outreach and education on the New Service Center Location. (b) In the event that SDG&E and the City cannot agree on a mutually acceptable New Service Center Location by March 1, 2016, then either the City or SDG&E may provide the Termination Notice as set forth in Section 5,6 below, 5.3 Feasibility Studies and Ongoing Coordination Regarding SDG&E Specifications and Conditions for the New Service Center (a) Within sixty (60) days after the Effective Date, SDG&E will meet with the City to identify and cause the environmental, land use, traffic and nodal analysis studies associated with studying the feasibility of the New Service Center ("Feasibility Studies") to be prepared, SDG&E shall pay for the Feasibility Studies subject to reimbursement for such studies as provided for below. (b) As soon as reasonably possible, but by no later than March 31 '\ 2015, SDG&E will provide all required specifications and conditions for the New Service Center to NRG and the City. In connection with this SDG&E will provide a budget and cost statement represenfing its budget for the NSC Costs (defined below), including, to the extent available, (i) any available budget or cost estimates for the constmction of the New Service Center; and (ii) a statement or 17 budget of all other costs for the relocation (including the Feasibility Studies) of the North Coast Service Center. Such budget will not exceed the NSC Cost Cap as provided in Section 5.4 and will be prepared such that the New Service Center can be reasonably and pmdently constmcted for an amount that will not exceed the NSC Cost Cap. 5.4 New Service Center Relocation and Construction Cost Cap: NRG Funding and Conditions (a) NRG agrees to fiind up to $22.5 million ($22,500,000) (the "NSC Cost Cap") toward the "all-in" cost of the relocation of the North Coast Service Center according to SDG&E's specificafions and condifions, including the cost of constmcfion, furniture, fixtures, equipment, IT infrastmcture, architectural, engineering and consulting costs, all relocation costs, reasonable confingencies and the reimbursements for the Feasibility Studies under Section 5.3(a) (collecfively, the "NSC Costs"). (b) NRG's obligafion to fiand the NSC Costs is condifioned upon NRG's issuance of a final notice to proceed under its engineering, procurement and constmction contract for CECP (the "EPC Contract Notice to Proceed"). (c) Upon NRG's issuance of the EPC Contract Notice to Proceed, NRG, SDG&E and the City shall meet within thirty (30) days of such final nofice to review the projected NSC Costs in relafion to the NSC Cost Cap and constmcfion of the New Service Center. (i) If the projected NSC Costs are less than or equal to the NSC Cost Cap, and a Termination Notice has not been issued under Section 5.6, NRG will build the New Service Center, or will cause it to be built, in accordance with SDG&E's specificafions and conditions; provided, however, that the City, in its sole discretion, may elect to build the New Service Center, or to cause it to be built. Subject to the NSC Cost Cap and the condifions and provisions stated herein, NRG agrees to fund the NSC Costs. Subject to the NSC Cost Cap, SDG&E will be reimbursed by NRG for costs associated with the Feasibility Studies and such reimbursement shall be made as agreed by NRG and SDG&E; provided, however, that any amounts reimbursed for Feasibility Studies will reduce the NSC Cost Cap on a doUar-for-dollar basis. (ii) If the projected NSC Costs exceed the NSC Cost Cap, SDG&E, NRG and the City shall meet in good faith to consider potential modifications to this Article 5, including, without reservation, changes to the New Service Center specifications and conditions, the NSC Cost Cap, or agreements to fund the costs in excess ofthe NSC Cost Cap; provided, however, that any subsequent modifications will be strictly subject to execution of future binding definitive agreements and obtaining any required regulatory approvals. 5.5 Conditions to SDG&E's Obligation to Relocate the North Coast Service Center SDG&E's Relocation of the North Coast Service Center is subject to the following conditions: (a) Identification of the New Service Center Location in accordance with Section 5.2. (b) SDG&E obtaining any required regulatory approvals with the understanding that SDG&E will diligently and in good faith seek all regulatory approvals needed for the relocation ofthe North Coast Service Center as contemplated in this Agreement. (c) A Private Letter Ruling, if necessary, satisfactory to SDG&E, issued by the Intemal Revenue Service confirming the tax treatment of the transactions oufiined herein. (d) Constmction of the New Service Center and tumover of the completed and operafional New Service Center to SDG&E. 5.6 Termination of Proposed Relocation of the North Coast Service Center; NRG Payment (a) Either the City or SDG&E may issue a notice terminating the obligations and agreement to relocate the North Coast Service Center (the "Termination Notice") under the following circumstances: (i) ifthe City and SDG&E cannot agree upon a mutually acceptable New Service Center Location; (ii) if constmction of the New Service Center does not commence before the third (3rd) anniversary of the commercial operation date for CECP; (iii) ifthe projected cost of relocation of the North Coast Service Center cannot be accomplished within the NSC Cost Cap, and SDG&E, NRG and the City are unable to agree upon subsequent modifications pursuant to Section 5.4(c)(u); or (iv) if SDG&E and the City joinfiy elect not to proceed with the relocation of the North Coast Service Center. (b) Within 30 days of receipt of the Termination Notice, NRG shall pay the City of Carisbad the sum of $10 million ($10,000,000); provided, however, that NRG will owe this amount only if CECP achieves commercial operation, in which case NRG shall make the payment within 30 days of commercial operation or the Termination Notice, whichever is later. Thus, ifthe New Service Center does not proceed and NRG does not fund the costs ofthe New Service Center, NRG shall be responsible for the payment as provided in this Section 5.6(b). (c) Notwithstanding any other provision in this Agreement, the City's issuance of a Termination Notice will not affect NRG's remaining obligations under this Agreement, except to the extent expressly set forth in this Article 5. 5.7 Transfer of SDG&E Property upon the Relocation of the North Coast Service Center 19 Upon the completion and occupancy of the New Service Center, SDG&E shall transfer (i) the existing North Coast Services Center Site and buildings, (ii) Cannon Park (a legal description of Cannon Park is attached hereto as Exhibit N, a map of Cannon Park is attached hereto as Exhibit O). and (iii) the Agua Hedionda North Shore Bluff Parcel (APN 206-070-16) (a legal description of the Agua Hedionda North Shore Bluff Parcel is attached hereto as Exhibit P, a map of the Agua Hedionda North Shore Bluff Parcel is attached hereto as Exhibit Q), to the City in fee simple, free and clear of all financial liabilities and financial liens, simultaneously with SDG&E receiving tifie to the New Service Center. SDG&E will be responsible for remediating preexisting environmental conditions to applicable industrial standards pursuant to applicable law. The City and SDG&E will determine if such remediation shall be conducted before or after the transfer of title. If the site is to be remediated prior to the transfer, SDG&E shall commence the remediation within sixty (60) days after occupancy of the New Service Center, shall proceed in a diligent and timely manner to remediate the site and shall then transfer the properties under this Section 5.7 upon completion of the remediation. If the remediation is to occur following the transfer, the City will provide at least one-hundred twenty (120) days notice that SDG&E is to commence remediation of the site and the remediation shall proceed in a diligent and timely manner to completion. 5.8 Long-Term Plan for Substation Improvements and Expansions The Parties acknowledge that SDG&E has recently undertaken certain improvements and upgrades of the Encina Power Station substation. The City has asked SDG&E to consider relocating the Encina Power Station substation away from the Encina Site. SDG&E has agreed that as part of a long-term plan, and contingent upon execution and regulatory approval of the Proposed PPA, and subject to any other required regulatory approvals, it will work in good faith with the City to identify and ultimately permit a site, such that any future material improvements or expansions to the transmission system, beyond those needed for the CECP, be made at the altemate site in lieu of the existing Encina Power Station. SDG&E will update the City at least annually on the status of the long-term plan as it relates to the identification and permitting of such a site. The City acknowledges and agrees that the substation design at the altemate site and any associated transmission design will be based on SDG&E design standards and specificafions. The altemate site will be subject to a feasibility review by SDG&E to ensure a constmctible site. Any design enhancements requested by the City that are not part of SDG&E's customary design standard and specificafions will be paid for by the City unless SDG&E and City otherwise agree, ARTICLE 6 REDEVELOPMENT PROCESS 6.1 Demolition and Removal of Above-Ground Structures (a) Provided that (i) the Califomia Public Ufilifies Commission has issued a final decision approving a power purchase agreement for CECP and (ii) the Commission has issued a final decision approving the Amendment, NRG agrees to fund at its sole cost the physical demolition and removal of the above-ground stmctures of the Encina Power Station in accordance with Laws and the milestones set forth below. Notwithstanding the foregoing, if NRG issues a final notice to proceed with constmction of CECP without having received 20 Califomia Public Utilities Commission approval, such condition shall be deemed satisfied. Details regarding the demolition and removal of the Encina Power Station will be incorporated into the petition to amend ("Petition to Amend") the Commission-issued license for CECP in which NRG seeks authority to constmct CECP as reflected in Exhibit G, and following the issuance of a decision by the Commission approving such Pefition to Amend, NRG will obtain all additional permits, if any, consistent with the schedule outlined below. (b) Provided that (i) the Califomia Public Utilities Commission has issued a final decision approving a power purchase agreement for CECP and (ii) the Commission has issued a final decision approving the Amendment, NRG shall commence physical demolition and removal ofthe above-ground stmctures of the Encina Power Station within one (1) year after Shut Down. NRG will also use good faith efforts to identify opportunities to begin and implement decommissioning prior to such date, including the removal of unused tanks. Notwithstanding the foregoing, if NRG issues a final notice to proceed with constmction of CECP without having received Califomia Public Utilities Commission approval, such condition shall be deemed satisfied. (c) Provided that (i) the Califomia Public Utilities Commission has issued a final decision approving a power purchase agreement for CECP and (ii) the Commission has issued a final decision approving the Amendment, NRG agrees to complete physical demolition and removal of the above-ground stmctures of the Encina Power Stafion within two (2) years of the commencement of demolition activities. Notwithstanding the foregoing, if NRG issues a final nofice to proceed with constmcfion of CECP without having received Califomia Public Utilifies Commission approval, such condition shall be deemed satisfied. 6.2 Redevelopment and Remediation (a) The City and NRG acknowledge that they have a mutual interest in the producfive reuse of the Encina Redevelopment Site. The City staff and NRG will work in good faith to address the redevelopment of the Encina Redevelopment Site in the pending General Plan update, (b) If the City takes fee title to the North Coast Service Center Site, as contemplated by Article 5 of this Agreement, the City and NRG work in good faith to consider a joint development strategy for the Encina Redevelopment Site and the North Coast Service Center Redevelopment Site, comprising basic principles to be identified in a subsequent binding agreement. (c) NRG shall present an initial proposed strategy for redevelopment of the Encina Redevelopment Site to City of Carlsbad staff within one-hundred eighty (180) days of the Effective Date of this Agreement. (d) With the exception of any remediation required under a Commission decision approving the Amendment or applicable law, remediation of the Encina Redevelopment Site shall be undertaken in conjunction with redevelopment of the Encina Redevelopment Site. (e) The City and NRG shall work in good faith to determine a mutually acceptable and appropriate alignment for the Coastal Rail Trail; provided, however, that failure to reach 21 agreement on the alignment for the Coastal Rail Trail shall not impact performance ofthe obligations established in this Agreement. ARTICLE 7 EVENTS OF DEFAULT 7.1 Defaults by NRG Each of the following shall constitute an "Event of Defauh" by NRG under this Agreement: (a) NRG fails to perform any of its obligations set forth in this Agreement, which failure is not a separate Event of Default, and which continues without cure for a period of thirty (30) days following the date the City provides written notice specifying the nature of such failure; provided, however, if a longer period of time than thirty (30) days is reasonably necessary to effect such cure, then no Event of Default shall exist as long as NRG commences such cure within such thirty (30) day period and then proceeds diligenfiy in the prosecution of such cure to completion. (b) NRG fails to perform its obligation to permanently Shut Down the Encina Power Station by the Final Shutdown Date (except solely as expressly provided in Section 3.1(a)). (c) NRG fails to (i) timely perform its obligations under Section 6.1, or (ii) fails to make payment under Section 5.6(b), provided such failure to pay is not cured within five business days. (d) Any representation made by NRG to the City contained in this Agreement proves to be false or misleading in any material respect at the time that such representation was made. (e) NRG files a petifion for relief, or an order for relief is entered against NRG in any case under applicable bankmptcy or insolvency law that is now or later in effect, whether for liquidation or reorganization, and this Agreement has been rejected or deemed rejected by the debtor in such case, (f) NRG attempts to Transfer this Agreement, any portion of the Encina Site, or both, to a Transferee without the prior written consent of the City. (g) A Transferee, not including an Existing Secured Loan Party, fails to execute an Assumption of Obligations and does not comply with the Shutdown Obligation. 7.2 Defaults by the City The following shall constitute an Event of Default by the City under this Agreement: (a) The City fails to perform any of its obligations set forth in this Agreement, which failure continues without cure for a period of thirty (30) days following the date NRG provides written notice specifying the nature of such failure; provided, however, if a longer period of time 22 than thirty (30) days is reasonably necessary to effect such cure, then no Event of Default shall exist as long as the City commences such cure within such thirty (30) day period and then proceeds diligently in the prosecution of such cure to completion. (b) Any representation made by the City to NRG contained in this Agreement proves to be false or misleading in any material respect at the time that such representation was made. ARTICLE 8 REMEDIES 8.1 Remedies of the City (a) Specific Performance. (i) If an Event of Default by NRG occurs, then the City shall have the right to bring an action for specific performance or other equitable relief, or any other remedy authorized by applicable law. (ii) In the event that a Transferee, with the exception of an Existing Secured Loan Party, fails to execute an Assumption of Obligations and does not comply with the Shutdown Obligation, the City shall have the right of specific performance against the Transferee to require it to comply with the Shutdown Obligation. (b) Suspension of Performance. Notwithstanding anything to the contrary in this Agreement, if at any time an Event of Default by NRG occurs before the Shutdown, then the City shall, in addition to its other remedies under this Section 8.1, have the right to suspend performance of its obligations under this Agreement until such Event of Default is cured by NRG. (c) NRG's Consent to Specific Performance and Waiver of Rights. (i) In any action by the City for specific performance or injuncfive relief under Article 3, Article 4, and Section 6.1 and Secfion 6.2 of this Agreement, NRG hereby consents to the City's right to seek specific performance of the Agreement. Further, NRG agrees that the City is fully entitled to seek a preliminary or permanent injunction to prevent further breach of the Agreement; to compel performance in aid of a decree of specific performance; or where the further breach may render specific performance meaningless or otherwise impair the City's ability to obtain performance of the Agreement. In connection with such requests for specific performance or injunctive relief, NRG acknowledges and agrees that: a. Specific performance may be compelled to compel performance of the following provisions of this Agreement: Article 3, Article 4, and Article 6; b. Monetary damages are not an adequate remedy at law for the breach of these provisions. Further and notwithstanding the liquidated damages provided for under Section 3.1 (a)(vi) and the fact that this liquidated damage provision is 23 damages do not constitutes an adequate remedy at law such as to deny entry of a decree of specific performance ofthe Agreement or either a preliminary or permanent injunction; c. The Agreement is fair and reasonable to NRG and the failure to specifically enforce the Agreement would effectively deny the City tiie rights bargained for under this Agreement; d. NRG's breach of the Agreement, as well as the continued or threatened breach of tiie Agreement, will cause great and irreparable injury to the City tiiat can only be remedied by specific performance of the Agreement and issuance of a preliminary and/or permanent injunction; e. Specific performance and issuance of a preliminary and/or permanent injunction cannot be denied based on tiie argument that there is a need for continuous supervision by the court or lack of mutuality or any other equitable defense or objection; f In connection with the request for a preliminary and/or permanent injunction which constitutes a mandatory injunction compelling NRG's performance under the Agreement, NRG acknowledges tiiat this extraordinary form of relief is appropriate and proper under the unique circumstances of this Agreement and that a mandatory injunction should issue if the City demonstrates that it will incur irreparable injury if performance is not compelled. NRG fiirther agrees that in the event of a mandatory injunction compelling performance tiiat such injunction shall not by stayed by any appeal of the injunctive order; g. NRG waives any other equitable defense to the entry ofthe injunction; h. NRG waives any requirement that the city post a bond or any other security in connection with such injunctive relief; and i. The remedies here shall be in addition to any and all other legal or equitable remedies that maybe available to the City under this agreement. Initials of NRG 8.2 Remedies of NRG (a) Specific Performance. If an Event of Defauh by the City occurs, then NRG shall have the right to bring an action for specific performance or other equitable relief, or any other remedy authorized by applicable law, subject to the limitation set fortii in Section 8.3. (b) Suspension of Performance. Notwithstanding anything to the contrary in this Agreement, if at any time an Event of Default by the City occurs before tiie Shutdown, then NRG shall, in addition to its other remedies under this Section 8.2. have the right to suspend 24 (a) Specific Performance. If an Event of Default by the City occurs, then NRG shall have the right to bring an action for specific performance or other equitable relief, or any other remedy authorized by applicable law, subject to the limitation set forth in Section 8.3. (b) Suspension of Performance. Notwithstanding anything to the contrary in this Agreement, if at any time an Event of Default by the City occurs before the Shutdown, then NRG shall, in addifion to its other remedies under this Secfion 8.2, have the right to suspend performance of its obligafions under this Agreement unfil such Event of Default is cured by the City. (c) Consent to Specific Performance and Waiver of Rights by the City. In any action by NRG for specific performance or injunctive relief under this Agreement, City hereby consents to NRG's right to seek specific performance of the Agreement. Further, City agrees that NRG is fully entitled to seek a preliminary or permanent injunction to prevent further breach of the Agreement; to compel perfonnance in aid of a decree of specific performance; or where the further breach may render specific performance meaningless or otherwise impair NRG's ability to obtain performance of the Agreement. In connection with such requests for specific performance or injuncfive relief. City acknowledges and agrees that: (i) Specific performance may be compelled to compel performance of the provisions of this Agreement; (ii) Monetary damages are not an adequate remedy at law for the breach of these provisions; (iii) The Agreement is fair and reasonable to City and the failure to specifically enforce the Agreement would effectively deny NRG the rights bargained for under this Agreement; (iv) City's breach of the Agreement, as well as the continued or threatened breach ofthe Agreement, will cause great and irreparable injury to NRG that can only be remedied by specific performance of the Agreement and issuance of a preliminary and/or permanent injunction; (v) Specific perfonnance and issuance of a preliminary and/or permanent injuncfion cannot be denied based on the argument that there is a need for continuous supervision by the court or lack of mutuality or any other equitable defense or objection; (vi) In connection with the request for a preliminary and/or pennanent injunction which constitutes a mandatory injunction compelling City's performance under the Agreement, City acknowledges that this extraordinary form of relief is appropriate and proper under the unique circumstances of this Agreement and that a mandatory injunction should issue if NRG demonstrates that it will incur irreparable injury if performance is not compelled. City further agrees that in the event of a mandatory injunction compelling performance that such injunction shall not by stayed by any appeal of the injunctive order; (vii) City waives any other equitable defense to the entry of the injunction; 25 (viii) City waives any requirement that NRG post a bond or any other security in connection with such injunctive relief; and (ix) The remedies here shall be in addition to any and all other legal or equitable remedies that maybe available to NRG under this agreement. Initials of City 8.3 Limitations of Liability (a) Direct Monetary Damages: No Consequential or Incidental Damages. The City and NRG agree that they may be held liable for any monetary or liquidated damages arising directly out of a breach of the obligations of this Agreement or any Event of Default. Notwithstanding this, neither the City nor NRG shall be liable for, and the City and NRG each waive any claim for, any incidental or consequential damages, arising out of any Event of Defauh on the part of NRG or the City. (b) No Individual Liability. NRG agrees that no member, commissioner, official, advisor, agent or employee of the City will be personally liable to NRG, or any successor in interest, due to an Event of Default by the City. The City agrees that no directors, officers, shareholders, members, employees, advisers or agents of NRG or of its Affiliates will be personally liable to the City, due to an Event of Default by NRG. 8.4 LIQUIDATED DAMAGES (a) m THE EVENT THAT CECP BECOMES COMMERCIALLY OPERABLE AND THE ENCINA POWER STATION CONTINUES TO OPERATE, NRG HAS AGREED TO MAKE THE LIQUIDATED DAMAGE PAYMENT AS PROVIDED BY SECTION 3.1(A) (VI). (b) NRG AND THE CITY HAVE AGREED TO THE DAMAGE PROVISION SET FORTH IN SECTION 3.1(A) (VI). NRG AND THE CITY ACKNOWLEDGE AND AGREE THAT THIS PROVISION APPLIES SOLELY TO CONTINUED OPERATION OF THE ENCINA POWER PLANT AS SET FORTH IN SECTION 3.1(A) (VI) AND FURTHER ACKNOWLEDGE THAT THIS PROVISION IS REASONABLE AT THE TIME OF THE AGREEMENT AS THAT TERM IS USED IN CALIFORNIA CIVIL CODE SECTION 1671. TO THE EXTENT NECESSARY TO SUPPORT THE STATEMENT THAT THIS PROVISION IS REASONABLE AT THE TIME OF THE AGREEMENT: (I) NRG ACKNOWLEDGES, AGREES AND UNDERSTANDS THAT THE CITY WOULD INCUR DAMAGES ES[ THE EVENT THAT ENCINA POWER STATION CONTINUED TO OPERATE AFTER THE DATE THAT CECP BECAME COMMERCLALLY OPERABLE BUT THAT THOSE DAMAGES AND COMPENSATION TO THE CITY WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAE^ IN PART DUE TO THE FACT THAT THE CONTINUED OPERATION HAS AN IMPACT ON THE CITY AND ITS RESIDENTS AND THE QUANTIFICATION OF THOSE POTENTIAL DAMAGES CANNOT BE DONE AT THIS TIME; (II) NRG ADMITS THAT THIS IS A REASONABLE PROVISION GIVEN THE DIFFICULTY OF QUANTIFYING THESE DAMAGES AND THE 26 AMOUNT OF REASONABLE COMPENSATION TO THE CITY IN THE EVENT THAT THE ENCESfA POWER PLANT CONTESIUES EVJ OPERATION. (c) THE LIQUIDATED DAMAGES SO IMPOSED ARE NOT E^^TENDED AS A FORFEITURE OR PENALTY WITHES! THE MEANES[G OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT ARE EXTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO THE CITY AS PROVIDED BY CALIFORNIA CIVIL CODE SECTIONS 1671(b). NRG AGREES, ACKNOWLEDGES AND REPRESENTS THAT THE LIQUIDATED DAMAGES SET FORTH HEREE^ ARE REASONABLE AT THE TIME OF THIS AGREEMENT AND ARE NOT A PENALTY OR FORFEITURE AND NRG IS ESTOPPED FROM ARGUE^G THAT THE LIQUIDATED DAMAGE PROVISION IS UNENFORCEABLE OR CONSTITUTES A PENALTY. (d) NOTWITHSTANDEVJG THE IMPOSITION AND PAYMENT OF SUCH LIQUIDATED DAMAGES, NRG ACKNOWLEDGES AND AGREES THAT THE CITY MAEMTAEMS ITS RIGHTS TO SEEK SPECIFIC PERFORMANCE OF THE AGREEMENT AS PROVIDED FOR IN SECTION 8.1(C), ACKNOWLEDGES THAT THE LIQUIDATED DAMAGES DO NOT CONSTITUTE AN ADEQUATE REMEDY AT LAW AND AGREES THAT SUCH LIQUIDATED DAMAGES DO NOT IMPAIR OR PREVENT THE CITY FROM SEEKING SPECIFIC PERFORMANCE OF ARTICLE 3 (OR ANY OTHER PROVISION OF THIS AGREEMENT) OR E^JJUNCTIVE RELIEF IN CONNECTION WITH THE ENFORCEMENT OF THIS AGREEMENT. Initials of NRG AT^d. Initials of City ARTICLE 9 INDEMNITY 9.1 Indemnification of the City Subject to the terms, conditions and limitations set forth below and to the extent permitted by law, NRG agrees to and shall Indemnify the Indemnified Parties from and against any and all Losses (including, without limitation, any judgments, settlements, consent decrees, stipulated judgments or other partial or complete terminations of any actions or proceedings that require any ofthe Indemnified Parties to take any action) imposed upon, incurred by or asserted against any ofthe Indemnified Parties in connection with the occurrence or existence of any of the following arising as a result of this Agreement: (i) any accident, injury to or death of any Person or loss or damage to property occurring on the Encina Site; (ii) any accident, injury to or death of any person or loss or damage to property occurring near or around the Encina Site and that shall be direcfiy or indirectiy caused by the negligent act or omission or willful misconduct of NRG or its agents, tenants or invitees; (iii) any development, constmction, operation, use, occupation, management, marketing, leasing, condition, financing or refinancing, sale or Transfer ofthe Encina Site; (iv) non-compliance with applicable Laws, including, but not limited to. Laws relating to hazardous materials, disabled access (including, without limitation, the 27 American with Disabilities Act) and unreinforced masonry buildings; (v) any third-party contracts entered into by or on behalf of NRG with respect to the Encina Site; (vi) any civil rights actions or other legal actions or suits initiated by any occupant or invitee of the Encina Site; and (vii) any claim that NRG and the City are joint venturers. Notwithstanding the foregoing, NRG shall not be required to Indemnify the Indemnified Parties against Losses if such Losses are caused by the negligence or willful misconduct of the City or the Agency or their respective directors, officers, employees, agents, successors and assigns, including the negligence or willful misconduct of the Indemnified Parties (or failing to act) or in the City's regulatory capacity in the exercise of its police powers. 9.2 Terms and Conditions The foregoing indemnity is subject to the following terms and conditions. (a) Immediate Obligation to Defend. NRG specifically acknowledges that it has an immediate and independent obligation to defend the Indemnified Parties from any claim that is actually or potentially within the scope of the indemnity provisions of Section 9.1, even if such claim is or may be groundless, fraudulent or false. Such obligation arises at the time such claim is tendered to NRG by an Indemnified Party and continues at all fimes after such tender. (b) Notice. The Indemnified Parties agree to give notice to NRG with respect to any suit or claim initiated against the Indemnified Parties, Such notice shall be given at the address for nofices of NRG set forth in this Agreement, and in no event later than the eariier of (i) ten (10) days after valid service of process as to any suit or (ii) fifteen (15) days after receiving written nofification ofthe filing of such suit or the assertion of such claim, which the City has reason to believe is likely to give rise to a claim for indemnity under this Article, If notice is not given to NRG in a timely manner as provided in this Article, then, except as provided below, NRG's liability shall terminate as to the matter for which such notice is not given, provided that failure to notify NRG shall not affect the rights of the Indemnified Parties or the obligafions of NRG under this Article unless NRG is materially prejudiced by such failure, and then only to the extent of such prejudice, (c) Defense. NRG shall, at its option but subject to the reasonable consent and approval ofthe Indemnified Parties, be entitled to control the defense, compromise or settlement of any such matter through counsel of NRG's own choice; provided, however, in all cases the Indemnified Parties shall be entitled to participate in such defense, compromise, or settlement at their respective expense. If NRG shall fail, however, in the Indemnified Party's reasonable judgment, within a reasonable time following notice from the Indemnified Parties alleging such failure, to take reasonable and appropriate action to defend, compromise or settle such suit or claim, the Indemnified Parties shall have the right promptly to hire counsel at NRG's sole expense to carry out such defense, compromise or settlement, which expense shall be immediately due and payable to the Indemnified Parties upon receipt by NRG of a properly detailed invoice; provided that NRG must consent in writing to any proposed compromise or settlement, which consent shall not be unreasonably withheld, (d) Insurance. The indemnity contained in Secfion 9.1 shall not be limited by any insurance carried by NRG. 28 (e) Survival. The indemnity contained in this Section shall survive any termination of this Agreement as to matters or Losses that arise during the term of this Agreement. (f) No Limitation on Other Obligations. The agreement to Indemnify set forth above is in addition to, and in no way shall be constmed to limit or replace, any other obligations or liabilities that NRG may have to the City under any other permits, approvals or agreements with the City, at common law or otherwise. (g) Limitation. NRG has no duty under Section 9.1 regarding any claim against any Indemnified Parties direcfiy related to the existence, interpretation and/or enforcement of this Agreement. ARTICLE 10 SETTLEMENT 10.1 Negotiated Settlement The discussions that have produced this Agreement have been conducted with the explicit understanding that they are privileged under Califomia Evidence Code section 1152 and Federal Rule of Evidence 408, and that such discussions shall be without prejudice to the position of any party and may not be used in any manner in any proceeding or otherwise, except as may be necessary to enforce this Agreement or as otherwise required by law. ARTICLE 11 RESERVED 11.1 Reserved ARTICLE 12 GENERAL 12.1 Notices Except as otherwise expressly provided in this Agreement, all notices, demands, approvals, consents and other formal communications between the Parties required or permitted under this Agreement shall be in writing and shall be deemed given and effective upon the date of receipt (i) if given by personal delivery on a business day (or the next business day if delivered personally on a day that is not a business day), (ii) if sent for next-business-day delivery (with all expenses prepaid) by a reliable ovemight delivery service, with receipt of delivery, or (iii) if mailed by United States registered or certified mail, first class postage prepaid, to the Party at their respective addresses for notice designated below. For convenience of the Parties, copies of notices may also be given by facsimile to the facsimile number set forth below or such other number as may be provided from time to time by notice given in the manner required under this Agreement; however, neither Party may give official or binding notice by 29 facsimile. The effective time of a nofice shall not be affected by the receipt, before receipt ofthe original, of a facsimile copy of the notice. (a) In the case of a notice or communicafion to the City: Celia A. Brewer, Esq. City Attomey for City of Carlsbad General Counsel for Carlsbad Municipal Water District 1200 Carlsbad Village Drive Carisbad, CA 92008 Celia.Brewer@carlsbadca.gov Stephen C. Hall, Esq. Troutman Sanders LLP 805 SW Broadway, Suite 1560 Portland, OR 97205 stephen.hall@troutmansanders.com Fletcher W. Paddison, Esq. Troutman Sanders LLP 11682 El Camino Real Suite 400 San Diego, CA 92130-2092 fletcher.paddison@troutmansanders.com (b) And in the case of a notice or communication sent to NRG or NRG: Sean Beatty West Region General Counsel NRG Energy, Inc. P.O. Box 192 Pittsburg, CA 94565 sean.beatty@nrgenergy. com (c) And in the case of a notice or communication sent to SDG&E: Diana Day Assistant General Counsel SDG&E 101 Ash Street, HQll SanDiego, CA 92101 dday@semprautilities,com Every notice given to a Party to this Agreement, under the terms of this Agreement, must state (or must be accompanied by a cover letter that states) substantially the following: 30 (i) the Section of this Agreement under which the notice is given and the action or response required, if any; (ii) if applicable, the period of time within which the recipient of the notice must respond; (iii) if approval is being requested, shall be clearly marked "Request for Approval under the Settlement Agreement"; (iv) if a notice of a disapproval or an objection that is subject to a reasonableness standard, shall specify with particularity the reasons for the disapproval or objection; and (v) if applicable, that the failure to object to the notice within the stated time period will be deemed to be the equivalent of the recipient's approval of or consent to the request for approval that is the subject matter of the notice. If a request for approval states a period of time for approval that is less than the time period provided for in this Agreement for such approval, the time period stated in this Agreement shall be the controlling time period. In no event shall a recipient's approval of or consent to the subject matter of a notice be deemed to have been given by its failure to object to such notice if such notice (or the accompanying cover letter) does not comply with the requirements of this Section. Any mailing address or facsimile number may be changed at any time by giving written notice ofsuch change in the manner provided above at least ten (10) days before the effective date of the change. 12.2 Relationship of Parties: No Joint Venture or Partnership The subject of this Agreement is an agreement for the Shutdown of the Encina Power Station and for a private development, with neither Party acting as the agent of the other Party in any respect. None of the provisions in this Agreement is intended to or shall be constmed or deemed to render the City or SDG&E a partner in NRG's business, or joint venturer or member in any development or joint enterprise with NRG, including, but not limited to, the development or reuse ofthe Encina Site. NRG shall Indemnify the City against any Losses relating to any claim of any such joint venture as provided in Section 9.1. Nothing in this Agreement is intended to or shall be constmed to create any principal-agent relationship between SDG&E, NRG and the City. Nothing in this Agreement is intended or shall be constmed as to create any obligation between SDG&E and NRG to enter into the Proposed PPA. 12.3 Conflict of Interest No member, official or employee of the City may have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to this Agreement that affects her or his personal interest or the interests of any corporation, partnership or association in which she or he is interested directly or indirecfiy. 31 12.4 Time of Performance (a) Expiration. All performance dates (including cure dates) expire at 5:00 p.m., Carlsbad, Califomia time, on the performance or cure date, unless otherwise provided in this Agreement. (b) Weekends and Holidays. A perfonnance date that falls on a Saturday, Sunday or City holiday (or official City fiirlough day) is deemed extended to the next City working day. (c) Days for Performance. All periods for performance specified in this Agreement in terms of days shall be calendar days, and not business days, unless otherwise expressly provided in this Agreement. (d) Time of the Essence. Time is of the essence for each and every provision of this Agreement. 12.5 Interpretation of Agreement (a) Words of Inclusion. The use of the terms "including," "such as" or words of similar import when following any general term, statement or matter shall not be constmed to limit such term, statement or matter to the specific items or matters set forth, whether or not language of non-limitation is used with reference to such items or matters. Rather, such terms shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such statement, term or matter. (b) No Presumption Against Drafter. This Agreement has been negofiated at arm's length and between Persons sophisticated and knowledgeable in the matters dealt with in this Agreement. In addition, experienced and knowledgeable legal counsel has represented each Party. Accordingly, this Agreement shall be interpreted to achieve the intents and purposes of the Parties, without any presumption against the Party responsible for drafting any part of this Agreement. (c) Costs and Expenses. The Party on which any obligafion is imposed in this Agreement shall be solely responsible for paying all costs and expenses incurred in the performance of such obligation, unless the provision imposing such obligation specifically provides to the contrary. (d) Agreement References. A reference to any provision, term or matter "in this Agreement," "herein" or "hereof," or words of similar import shall be deemed to refer to any and all provisions of this Agreement reasonably related in the context of such reference, unless such reference refers solely to a specific numbered or lettered Article, Section or paragraph of this Agreement or any specific subdivision of this Agreement. (e) Approvals and Consents. Unless this Agreement otherwise expressly provides, all approvals, consents or determinations to be made by or on behalf of the City under this Agreement shall be made by the City Attomey, or his or her designee. Unless otherwise provided in this Agreement, whenever approval, consent or safisfacfion is required of a Party under this Agreement, it shall not be unreasonably withheld or delayed. Except with respect to matters that 32 a Party is expressly entitled to determine in its sole and absolute discretion, the reasons for disapproval shall be stated in reasonable detail in writing. Approval by NRG or the City to or of any act or request by the other shall not be deemed to waive or render unnecessary approval to or of any similar or subsequent acts or requests. (f) Recitals. The Recitals in this Agreement are included for convenience of reference only and are not intended to create or imply covenants under this Agreement. In the event of any conflict or inconsistency between the Recitals and the terms and conditions of this Agreement, the terms and conditions of this Agreement shall control. (g) Captions. The captions preceding the articles and Sections of this Agreement have been inserted for convenience of reference only. Such captions shall not define or limit the scope or intent of any provision of this Agreement, (h) Exhibits. Whenever an "Exhibit" is referenced, it means an attachment to this Agreement unless otherwise specifically identified. All such Exhibits are incorporated in this Agreement by reference, 12.6 Successors and Assigns This Agreement is binding upon and will inure to the benefit of the successors and assigns ofthe City and NRG, except as expressly provided in this Agreement. 12.7 No Third Party Beneficiaries This Agreement is made and entered into for the sole protection and benefit of the Parties and their successors and assigns, except as expressly provided in this Agreement. 12.8 Counterparts This Agreement may be executed in counterparts and by facsimile or e-mailed signatures, each of which is deemed to be an original, and all such counterparts shall constitute one and the same instmment. 12.9 Entire Agreement This Agreement, including the attached Exhibits, constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all negotiations or previous conditions mentioned in or incidental to this Agreement (including, but not limited to, any term sheets relating to any of the subject matters of this Agreement). No parol evidence of any prior draft of this Agreement or any other agreement shall be permitted to contradict or vary the terms of this Agreement. 12.10 Governing Law 33 The laws ofthe State of Califomia shall govem the interpretation and enforcement of this Agreement. As part of the consideration for the City's entering into this Agreement, all Parties agree that all actions or proceedings arising directly or indirectly under this Agreement may, at the sole option of the City, be litigated in courts located within the State of Califomia, in the City of Carlsbad, County of San Diego, and the Parties expressly consent to the jurisdiction of any such local, state or federal court, and consents that any service of process in such action or proceeding may be made by personal service upon the Parties wherever the Parties may then be located, or by certified or registered mail directed to the Parties at the address set forth in this Agreement for the delivery of notices. 12.11 Extensions by the City Upon the request of NRG or SDG&E, the City Attomey or his or her designee may, by written instmment and in the City Attomey's sole and absolute discretion, extend the time for NRG's or SDG&E's performance of any term, covenant or condition of this Agreement or permit the curing of any default upon such terms and conditions as he or she determines appropriate, including but not limited to, the time within which NRG or SDG&E shall agree to such terms or conditions, provided, however, any such extension for more than thirty (30) days or the permissive curing of any particular material default will be subject to approval of the City Council by resolution and in no event will operate to release any of NRG's or SDG&E's obligations nor constitute a waiver of the City's rights regarding any other term, covenant or condition of this Agreement or any other default in, or breach by NRG or SDG&E of, this Agreement or otherwise affect compliance with the other dates for performance under this Agreement. 12.12 Further Assurances The Parties agree to execute and acknowledge such other and further documents as may be necessary or reasonably required to effectuate the terms of this Agreement. The City Attomey is authorized to execute on behalf of the City any closing or similar documents and any contracts, agreements, memoranda or similar documents with State, regional or local entities or other Persons that are necessary or proper to achieve the purposes and objectives of this Agreement and do not materially increase the obligations of the City under this Agreement, if the City Attomey determines that the document is necessary or proper, consistent with the purposes of this Agreement and in the City's best interests. The City Attomey's signature of any such document shall conclusively evidence such a determination by him or her. 12.13 Severability If any provision of this Agreement, or its application to any Person or circumstance, is held invalid by any court, the invalidity or inapplicability of such provision shall not affect any other provision of this Agreement or the application of such provision to any other Person or circumstance, and the remaining portions of this Agreement shall continue in full force and effect, unless enforcement of this Agreement as so modified by and in response to such invalidation would be grossly inequitable under all of the circumstances, or would fhistrate the fundamental purposes of this Agreement. 34 12.14 Amendments; Corrections of Technical Errors Neither this Agreement nor any of its terms may be terminated, amended or modified except by a written instmment executed by the Parties. Any material amendment of this Agreement shall be subject to approval of the City Council by resolufion. If by reason of inadvertence, and contrary to the intenfion of the Parties, errors are made in this Agreement in the legal descripfion or the reference to or within any Exhibit with respect to a legal description, in the boundaries of any parcel in any map or drawing that is an Exhibit, or in the typing of this Agreement or any of its Exhibits, the Parties by mutual agreement may correct such error by written memorandum executed by them without the necessity of amendment of this Agreement, The City Attomey may execute any such written memorandum on behalf of the City, 12.15 Representations, Warranties and Covenants (a) NRG Representation, Warranties and Covenants. NRG represents, warrants, and covenants to the City that as of the Effective Date, each of the following statements is accurate and complete: (i) Valid Existence; Good Standing. NRG represents that both Cabrillo Power I LLC and Carlsbad Energy Center LLC are Delaware limited liability companies duly organized, validly existing and in good standing under the laws of the State of Califomia, NRG represents that each entity has all requisite power and authority to own its property and conduct its business as presently conducted. (ii) Authority. NRG represents that each of Cabrillo Power I LLC and Carlsbad Energy Center LLC has all requisite power and authority to execute and deliver this Agreement and to carry out and perform all of its duties and obligations under this Agreement. Without limiting the foregoing, NRG has obtained any and all required approvals. NRG will provide as a condition of the City's obligations under this Agreement (x) written resolutions from Cabrillo Power I LLC and Carlsbad Energy Center LLC authorizing the execution of and performance their obligations under this Agreement and (y) a written resolution from NRG Energy, Inc., in its role at Guarantor, authorizing NRG Energy, Inc. to guarantee the prompt and complete performance of NRG's obligations under this Agreement, (iii) No Limitation on Ability to Perform. Neither limited liability company agreements, nor any other agreement or Law prohibits or materially limits or otherwise affects the right or power of NRG to enter into and perform all ofthe terms and covenants of this Agreement, Neither NRG nor any of its members are party to or bound by any contract, agreement, indenture, tmst agreement, note, obligation or other instmment that prohibits or materially limits or otherwise affects the same. Except as expressly stated in this Agreement, no consent, authorization or approval of, or other action by, and no notice to or filing with, any govemmental authority, regulatory body or any other Person is required for the due execufion, delivery and performance by NRG of this Agreement or any of the terms and covenants contained in this Agreement (or if required, any such consent, authorization or approval has been obtained, any such acfion has occurred, and any such notice has been given). There are no pending or threatened 35 suits or proceedings or undischarged judgments affecting NRG before any court, govemmental agency, or arbitrator that, if determined adversely to NRG, might materially adversely affect the enforceability of this Agreement or the ability of NRG to perform its obligations under this Agreement. (iv) Valid Execution. The execution and delivery of this Agreement (and the agreements contemplated in this Agreement) by NRG have been duly and validly authorized by all necessary action on the part of NRG. Upon its execution and delivery by all Parties and City Council approval under Section 2.3(b), this Agreement will be a legal, valid, binding and enforceable obligafion of NRG. (v) Business Licenses. To NRG's knowledge, NRG has obtained all licenses required to conduct business in City and it is not in default of any fees or taxes due to the City. (vi) Financial Matters. (1) NRG is not in default under, and has not received notice asserting that it is in default under, any agreement for borrowed money, (2) NRG has not filed a petition for relief under any chapter of the U.S. Bankmptcy Code and has no present intention to petition for relief under any chapter of the U.S. Bankmptcy Code, (3) to NRG's knowledge, no involuntary petition naming NRG as debtor has been filed under any chapter of the U.S. Bankmptcy Code, and (4) NRG has the financial wherewithal to perform all of its financial and other obligations under this Agreement. For purposes of the foregoing representations and warranties, whenever a statement is qualified by reference to NRG's knowledge or lack of knowledge, such reference is intended to refer to, and be limited to, matters within the actual knowledge of, or which should be discovered upon a reasonably diligent inquiry by, those officers of NRG who are most knowledgeable with NRG's business dealings with the Encina Site. (b) City Representations, Warranties, and Covenants. The City represents, warrants, and covenants to NRG that as of the Effective Date, each of the following statements is accurate and complete: (i) Authority. The City has all requisite power and authority to execute and deliver this Agreement and to carry out and perform all of its duties and obligations under this Agreement. (ii) Valid Execution. The execution and delivery of this Agreement (and the agreements contemplated in this Agreement) by the City have been duly and validly authorized by all necessary action on the part of the City. Upon its execution and delivery by all Parties and City Council approval under Section 2.3(b), this Agreement will be a legal, valid, binding and enforceable obligation of the City. The City has provided (or upon written request will provide) to NRG a written resolution of the City authorizing the execution of and performance by the City of its obligations under this Agreement. (iii) Defaults. The execution, delivery and performance of this Agreement do not and will not violate or result in a violation of, contravene or conflict with, or 36 constitute a default under (A) any agreement, document or instmment to which the City is a party or (B) any applicable law, statute, ordinance or regulation. For purposes ofthe foregoing representations and warranties, whenever a statement is qualified by reference to the City's knowledge or lack of knowledge, such reference is intended to refer to, and be limited to, matters within the actual knowledge of, or which should be discovered upon a reasonably diligent inquiry by employees of the City Attomey who are most knowledgeable with this Agreement, 12.16 Cooperation and Non-interference In cormection with this Agreement, the Parties shall reasonably cooperate with one another to achieve the objectives and purposes of this Agreement. In so doing, the Parties shall each refrain from doing anything that would render its performance under this Agreement impossible and each shall do everything that this Agreement contemplates that the Party shall do to accomplish the objectives and purposes of this Agreement. In all situations arising out of this Agreement, the Parties shall each attempt to avoid and minimize the damages resulting from the conduct ofthe other and shall take all reasonably necessary measures to achieve the provisions of this Agreement, 12.17 Attorneys' Fees and Costs NRG shall pay to City on demand any and all Attomeys' Fees and Costs incurred or paid by City in enforcing NRG's obligations under this Agreement. City shall pay to NRG on demand any and all Attorneys' Fees and Costs incurred or paid by NRG in enforcing City's obligations under this Agreement. 12.18 Transfer NRG acknowledges and agrees that during the term of the Agreement any Transfer of the Agreement, any portion of the Encina Site, or both, requires the prior written consent of the City, which will not be unreasonably withheld, conditioned, or delayed, provided that the Transferee (i) has the financial capability of perfonning NRG's obligafions under this Agreement, as reasonably determined by the City in its sole discretion; provided, however, that a Transferee with a credit rafing equal to or higher than NRG Energy, Inc. from a nationally-recognized credit rafing agency shall be deemed to meet this condifion, and (ii) enters into an Assumption of Obligafions Agreement set forth in Exhibit F. 12.19 Survival Notwithstanding anything to the contrary in this Agreement, the following provisions shall survive the expiration of the Term or any other termination of this Agreement: (i) any obligation that arises and was not safisfied before termination shall survive any termination of this Agreement except to the extent otherwise provided in this Agreement; (ii) the releases and indemnifies set forth in Article 9 and Article 10 of this Agreement shall continue as set forth in those articles, and (iii) and any provision expressly stated in this Agreement to survive in whole or in part following a termination of this Agreement. 37 12.20 Exhibits The attached Exhibits A-T are made a part of this Agreement. 38 IN WITNESS WHEREOF, the City of Carlsbad, Carlsbad Municipal Water District, Cabrillo Power I LLC, Carlsbad Energy Center LLC, and San Diego Gas & Electric Company have caused this Agreement to be executed on the date first written above. CABRILLO POWER I LLC By: Title: PRC-Cip 6 r CARLSBAD ENERGY CENTER LLC By: eta-- ' Title: P 6-N T CITY OF CARLSBAD AND CARLSBAD MUNICIPAL WATER DISTRICT By: Title: 1AU,LIOV fxo A/ei\A -City of Carlsbad Vice Preident - Carlsbad Municipal Water District Solely with respect to Article 5 and Article 12 SAN DIEGO GAS & ELECTRIC By: Title: n^J WITNESS WHEREOF, the City of Carisbad, Carisbad Municipal Water District, Cabrillo Power I LLC, Carlsbad Energy Center LLC, and San Diego Gas & Electric Company have caused this Agreement to be executed on the date first written above. CABRILLO POWER I LLC By: Titie: CARLSBAD ENERGY CENTER LLC By: Titie: CITY OF CARLSBAD AND CARLSBAD MUNICIPAL WATER DISTRICT By: Titie: Solely with respect to Article 5 and Article 12 SAN DIEGO GAS & ELECTRIC Titie: ^xhy^ ~v^< 39 Exhibit A – 1 EXHIBIT A Legal Description of the Encina Site [INSERTED ON THE FOLLOWING PAGE] Exhibit A – 2 Exhibit A – 3 Exhibit B – 1 EXHIBIT B Map of the Encina Site Exhibit C – 1 EXHIBIT C Area Map of the Encina Site Exhibit D – 1 EXHIBIT D Form of NRG Support Letter Re: Cabrillo Power I LLC’s Support of the Shutdown of the Encina Power Station Dear __________________: In response to longstanding concerns and disputes related to the operation of the Encina Power Station, Cabrillo Power I LLC (NRG) and the City of Carlsbad (City) have entered into a Settlement Agreement dated as of January 14, 2014, to permanently shut down the Encina Power Station on the earlier of the commercial operation of the Carlsbad Energy Center or December 31, 2017, provided that the Encina Power Station is no longer needed for electric reliability as set forth in the Settlement Agreement. NRG fully supports the shutdown of the Encina Power Station as soon as it is not needed for reliability. More particularly, NRG does not intend to operate the Encina Power Station after commercial operation of the Carlsbad Energy Center or December 31, 2017, whichever is earlier, and accordingly is committed to working with the California Independent System Operator and the City to achieve the permanent shutdown of the Encina Power Station by the earlier of those milestones. Very truly yours, CABRILLO POWER I LLC [signed by authorized officer or officers] Exhibit E – 1 EXHIBIT E Form of City Support Letter Re: City's Support of the Approvals Needed for Licensing and Operation of the Carlsbad Energy Center and Interim Operation of the Encina Power Station Dear __________________: Consistent with the terms of the Settlement Agreement dated as of January 14, 2014, among multiple parties, including Carlsbad Energy Center LLC, Cabrillo Power I LLC and the City of Carlsbad (City), I write this letter to indicate the support of the City for the issuance of the permit or license for the operation of the Carlsbad Energy Center. City further supports renewal of any permits or licenses necessary for the interim operation of the Encina Power Station. Under the Settlement Agreement, Cabrillo Power I LLC has agreed to shut down the Encina Power Station on the earlier of commercial operation of the Carlsbad Energy Center or December 31, 2017, provided it is released from reliability requirements by the California Independent System Operator (ISO). Accordingly, the City supports the renewal of the permits for the Encina Power Station until the earlier of commercial operation of the Carlsbad Energy Center or December 31, 2017. A representative of the City is authorized to meet in person with your agency to communicate the support referenced in this letter. Very truly yours, City Attorney City of Carlsbad Exhibit F – 1 EXHIBIT F Form of Assumption of Obligations Agreement RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: (Space above this line for Recorder’s use only) ASSUMPTION OF OBLIGATIONS AGREEMENT This Assumption of Obligations (this “Assumption”) dated as of ___________, 2014, is by Cabrillo Power I LLC and Carlsbad Energy Center LLC (collectively the “Assignor”), ____________________________________________, a ___________________________________ (the “Assignee”), and the City of Carlsbad, a charter city located in San Diego County (the “City”). Factual Background A. The Assignor owns real property located in the City, in the County of San Diego, California, bounded generally by Cannon Road to the south, Interstate 5 to the east, the Agua Hedionda Lagoon to the north, and Carlsbad Boulevard to the west (the “Site”). B. The Assignor and the City entered into that certain Settlement Agreement dated for reference purposes as of January 14, 2014 (the “Agreement”). Capitalized terms not defined in this Assumption have the meanings given them in the Agreement. C. The Assignor wishes to convey to the Assignee its entire right, title and interest in and to that portion of the Site, as more particularly described in Exhibit A attached to the Agreement (the “Transferred Property”) and its rights under the Agreement to the extent pertaining to the Transferred Property. In connection therewith, Assignee has agreed to assume [certain/all] of Assignor’s unfulfilled and/or continuing obligations under the Agreement, all as set forth in this Assignment. Exhibit F – 2 Agreement Therefore, the City, the Assignor and the Assignee agree as follows: (1) Reaffirmation of Obligations. The Assignor reaffirms all of its obligations under the Agreement (to the extent such obligations remain unfulfilled as of the date this instrument is executed), and the Assignor acknowledges that to its knowledge, [except for ________] the City is presently not in default of any of its obligations under the Agreement. The City reaffirms all of its obligations under the Agreement (to the extent such obligations remain unfulfilled as of the date this instrument is executed), and the City acknowledges that to its knowledge, [except for ________] the Assignor is presently not in default of any of its obligations under the Agreement. (2) Effective Date. Effective as of ___________ (the “Effective Date”) Assignor assigns to Assignee all of its right, title and interest in and to the Agreement [to the extent pertaining to the Transferred Property]. (3) Assumption. The Assignee assumes and agrees to faithfully perform for the benefit of the City all obligations of the Assignor under, and to be bound by all of the provisions of, the Agreement that remain unfulfilled as of the Effective Date; provided, however, the Assignee shall not assume the following obligations:___________________________________. Upon this Assumption becoming effective, the Assignor shall have no further obligations to the City, and the City shall have no further obligations to the Assignor, with respect to the obligations of the Assignor under the Agreement assumed by and the rights of the Owner under the Agreement assigned to the Assignee. (4) Representations and Warranties of Assignor. The Assignor represents and warrants to the City as follows: (A) No Event of Default on the part of Assignor, or to Assignor’s knowledge, no event or condition that, with notice or lapse of time or both, would constitute an Event of Default on the part of Assignor, exists under the Agreement. (B) The execution, delivery, and performance by the Assignor of this Assignment (x) will not contravene any legal requirements applicable to the Assignor or the Transferred Property, and (y) will not conflict with, breach or contravene any other agreement binding upon the Assignor or the Transferred Property. (5) Representations and Warranties of Assignee: The Assignee represents and warrants to the Agency and the City as follows: (A) The Assignee has reviewed the Agreement and is familiar with its terms and provisions. (B) The Assignee makes for itself all representations, agreements and warranties of the Assignor set forth in Section 12.15(a) of the Agreement, effective as of the date hereof [to the extent applicable to the Transferred Property], subject to the following modifications: ________________________________________. Exhibit F – 3 (C) The Assignee has obtained all consents in connection with its assumption of the obligations provided in this Assumption and for its acquisition of the Transferred Property that may be required by any agreement to which it is a party. Other than the consents so obtained, no consent to the acquisition of the Transferred Property is required under any agreement to which Assignee is a party. (D) The execution, delivery, and performance by the Assignee of this Assumption and any other documents required under this Assumption (x) will not contravene any legal requirements applicable to the Assignee, and (y) will not conflict with, breach or contravene any other agreement binding upon the Assignee. (E) To the knowledge of Assignee, there are no actions, suits or proceedings at law or in equity or by or before any governmental authority now pending against the Assignee, or threatened against or affecting the Assignee, in which there is a reasonable possibility of an adverse determination and that are reasonably likely individually or in the aggregate, if adversely determined, have a material adverse effect on the ability of the Assignee to perform such obligations under the Agreement as are being assumed by the Assignee. (6) Address for Notices. All notices to the Assignee shall be sent to the following addresses: Attention: ______________________________ Facsimile: ______________________________ Telephone: ______________________________ (7) No Prejudice. This Agreement shall not prejudice any rights or remedies of the City under the Agreement. (8) Integration. This Assumption contains the entire agreement of the parties with respect to the matters contemplated in this Assumption and supersedes all prior negotiations. (9) Modification. This Assumption may be amended or modified only in a writing signed by the parties. (10) Counterparts. This Assumption may be executed in any number of counterparts which together shall be deemed the same instrument. (11) Unenforceability. If any provision of this Assumption shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, then that portion shall be deemed severed and the remaining parts shall remain in full force as though the invalid, illegal, or unenforceable portion had not been a part of this Assumption. (12) Governing Law. The parties agree that this Assumption shall be construed and interpreted in accordance with the laws of the State of California. Exhibit F – 4 IN WITNESS WHEREOF, the Assignor, the Assignee and the City have caused this Agreement to be duly executed. ASSIGNOR: CABRILLO POWER I LLC AND CARLSBAD ENERGY CENTER LLC By: CITY: CITY OF CARLSBAD By: ASSIGNEE: By: Exhibit G – 1 EXHIBIT G Form of Amendment Carlsbad Energy Center Project Amendment In accordance with Section 4.1(b) of the Agreement, this Exhibit G sets forth certain provisions of NRG’s proposed Petition to Amend (defined below) and Amendment (defined below), which provisions are a material part of the City’s consideration for entering into the Agreement; provided, however, that the Commission’s failure to adopt the midnight to 6:00 a.m. operating limitation shall not absolve the City of its support obligation set forth in the Agreement. Unless otherwise defined in this Exhibit G, initially capitalized terms used in this Exhibit G shall have the meaning given them in Article I of the Agreement. In the event of any conflict or inconsistency between Exhibit G and the terms and conditions of the Agreement, the terms and conditions of the Agreement shall prevail. Carlsbad Energy Center LLC (“NRG”) intends to modify the Carlsbad Energy Center Project (“CECP”) to replace the currently licensed combined-cycle configuration with a peaker configuration. To accomplish this modification, NRG will submit a Petition to Amend (“PTA”) to the California Energy Commission (“Commission”) requesting that the Commission amend its May 2012 Final Decision in Docket 07-AFC-06 in which it granted the Application for Certification of the CECP (the “Final Decision” and such Commission amendment, the “Amendment”). The CECP PTA will demonstrate the extraordinary circumstances that have arisen, including those associated with the premature closure of the San Onofre Nuclear Generating Station, and that necessitate changes to the Final Decision. The PTA will also include certain NRG obligations from the Agreement relating to the Final Shutdown, decommissioning, demolition, and removal of the Encina Power Station, which are set forth below. The Project Description for the CECP PTA will address the following: 1. Site Preparation and Tank Farm Demolition. NRG will demolish the following existing facilities to enable construction of the amended CECP as well as creation of associated laydown areas: a. Aboveground Fuel Oil Storage Tanks 4-7 located east of the railroad tracks and west of Interstate 5. The footprint of the amended CECP will occupy the current location of Tanks 4-7. b. Aboveground Fuel Oil Storage Tanks 1 and 2 located west of the railroad tracks. The footprint of those tanks will be used for construction laydown. c. Site grading including removal of internal berms within the tank farm basin and preparation of ingress/egress routes. 2. Construction of Supporting Facilities. a. Industrial water supply interconnection from City supplied reclaim water source at Cannon Road, if available (preferred) or from Ocean Water Purification System (small desalination plant if needed). Exhibit G – 2 b. Ocean Water Purification System (if needed). c. Natural gas line interconnection from Cannon Road (preferred, if feasible; interconnect with existing infrastructure, if not) and gas metering and compression systems. d. Fire Prevention Systems and hydrants east of the railroad tracks; commission/test associated back up diesel power pump to support Fire Prevention Systems. e. Water and Aqueous Ammonia Storage Tanks. f. Administration Building/Control Room. g. Operations and Maintenance Building. h. Stormwater management systems. i. Industrial waste discharge interconnections. 3. Construction of no more than six General Electric LMS100s. a. Construction of no more than six General Electric LMS100s and supporting equipment (transformers, air cooled condensers, lubricating systems, selective catalytic reduction (“SCR”) for emissions control, etc). b. Construction of the LMS100s will be below grade to minimize the visual profile of the units, stacks, and associated equipment. c. Construction of black start, diesel powered generation equipment (anticipated to be 1-2 MWs) to be located on east side of railroad tracks (if needed by the ISO). d. Interconnect into the 138 and 230 kV switchyards located on west side of the railroad tracks and appurtenant to SDG&E utilities and structures supporting the transmission of electricity to and from the switchyards. e. Interconnect with constructed reclaimed or CECP desalination water supplies and natural gas supply, including associated gas metering and gas compression equipment. f. Conduct commissioning of units, including installation and testing of SCR and continuous emissions monitoring systems (“CEMS”) for the respective units. g. Conduct commissioning of black start unit (if needed by the ISO). 4. Environmental Characteristics. Environmental characteristics will include the following: a. Reduced criteria air pollutants compared to the permitted CECP. b. Reduced greenhouse gas emissions compared to the permitted CECP. c. Elimination of the use of ocean water for plant use (unless the City is not able to provide reclaimed water). d. Reduced noise levels compared to the permitted CECP. e. No operation between midnight and 6:00 am, except to the extent reasonably required for reliability-related purposes or as otherwise required by the ISO Tariff. f. Lower plant profile and visibility. Exhibit G – 3 g. Removal of all aboveground oil storage tanks (see 1 a and b). h. Demolition and removal of the Encina Power Station in a time certain unless required by the ISO or other agency for system reliability (see 5 below). i. Revised vegetation and screening plan developed in cooperation with the City j. Resolution of City fire safety concerns. k. Development of the Coastal Rail Trail in a manner agreed to with the City. 5. Final Shutdown Date, Shut Down, decommissioning, demolition and removal. The PTA and the Amendment will incorporate the following requirements from the Agreement relating to the Final Shutdown Date, Shut Down, decommissioning, demolition and removal of the Encina Power Station, all of which requirements are expressly subject to the terms and conditions of the Agreement: a. NRG will permanently Shut Down the Encina Power Station on the earlier of the commercial operation date of CECP or December 31, 2017 (i.e., the Final Shutdown Date). b. Within ninety (90) days of the Shutdown of the Encina Power Station, NRG shall ensure that the Encina Power Station facilities and improvements are in a secure, inoperable condition and do not pose a physical or environmental safety hazard to members of the public or visitors of the Encina Site, consistent with Prudent Utility Practices and all applicable regulatory requirements and approvals. c. NRG shall commence physical demolition and removal of the above-ground structures of the Encina Power Station within one (1) year after Shut Down. d. NRG and its contractor(s) will use commercially reasonable efforts to sequence the work to complete demolition and removal in the most timely and efficient manner, taking into consideration any hourly fieldwork restrictions/constraints at the site. The demolition scope of work will include the following: i. Demolition to existing grade of Encina Power Station power block building and stack, including removal of steam boilers and associated equipment and removal of the combustion turbine (e.g., the black start unit). Removal of buildings, structures, equipment, and remaining storage tanks at the Encina Power Station (i.e., administrative building, operations/maintenance/warehouse buildings, industrial wastewater management system, intake/discharge structures not otherwise assumed by Poseidon). ii. The overall project objective is to decontaminate and demolish the Site in a safe, cost-effective and environmentally safe manner, and in compliance with all applicable laws. iii. NRG’s contractor will prepare an updated hazardous materials survey. NRG’s contractor shall properly handle, manage or remove and dispose of Exhibit G – 4 all hazardous materials and wastes in accordance with all local, state and federal regulations. iv. NRG and its contractors will develop, implement and maintain a storm water pollution prevention and sediment and soil erosion control plan in accordance with all local, state and federal regulations. v. Site restoration activities after demolition: grading/backfilling to match existing surrounding grade. Surrounding grade may include existing concrete/asphalt surfaces. Clean, suitable fill material reused from the site or from offsite will be utilized to support back filling operation. vi. Site grading and drainage will match the current site contours. Existing stormwater management systems would be utilized west of the railroad tracks. Erosion controls shall be installed and maintained during demolition site activities. e. NRG agrees to complete physical demolition and removal of the above-ground structures of the Encina Power Station within two (2) years of the commencement of demolition activities. f. NRG agrees to limit fossil fuel generation on the Encina Site to the generating capacity proposed in the current project description (e.g., six LMS100s) proposed in the Amendment and any black start equipment potentially required by the ISO. g. NRG agrees that no future modifications to the CECP shall be undertaken that exceed the environmental envelope, profile or footprint of CECP as presented in the PTA and Amendment. Anticipated Amendment Approval Schedule Subject to processing and approval by applicable regulatory agencies (e.g., CEC, California Public Utilities Commission, San Diego County Air Pollution Control District, U.S. Environmental Protect Agency, San Diego Regional Water Quality Control Board), the following is the anticipated permitting/approval schedule for the Amendment: 1. March 2014 - File CECP PTA with the Commission. 2. March 2014 – File Air Permit Applications with San Diego County Air Pollution Control District (“SDAPCD”). 3. June 2014 – Commission Site Informational Work Shop and Initial Data Requests. 4. October 2014 – SDAPCD Preliminary Determination of Compliance. 5. December 2014 – Commission Preliminary Staff Assessment and Workshop. 6. April 2015 – Commission Final Staff Assessment Report. 7. June 2015 – Commission Evidentiary Hearings 8. August 2015 – Commission Presiding Member’s Proposed Decision on CECP PTA. 9. September 2015 – Commission Decision on CECP PTA. Exhibit H – 1 EXHIBIT H Form of Memorandum of Agreement RECORDING REQUESTED BY AND) WHEN RECORDED MAIL TO: ) ) City Clerk ) CITY OF CARLSBAD ) 1200 Carlsbad Village Drive ) Carlsbad, California 92008-1989 ) Space above this line for Recorder’s use Assessor’s Parcel Number CLICK HERE Project Number and Name CLICK HERE NOTICE OF RESTRICTION ON SALE OR CONVEYANCE OF REAL PROPERTY The real property located in the City of Carlsbad, County of San Diego, State of California which is described on Exhibit “A” attached hereto (the “Property”). Pursuant to Government Code Section 27281.5(a), Notice is hereby given that the owner of the Property as set forth below is hereby restricted from conveying, transferring or granting the Property to any other party, except as provided under the Settlement Agreement (described below) and this restriction is imposed by the City of Carlsbad on the Property. This Notice shall be recorded in the County Recorder’s Office for the County of San Diego which recordation is permitted pursuant to the provisions of Government Code Section 27281.5(a). Upon recordation, this Notice provides constructive notice of the restriction on the conveyance or transfer of the Property. This Notice is provided pursuant to that certain Settlement Agreement, Dated as of January 14, 2014, Between and Among the City of Carlsbad, Carlsbad Municipal Water District, Cabrillo Power I LLC, Carlsbad Energy Center LLC and San Diego Gas & Electric Company, approved by the City of Carlsbad pursuant to City Of Carlsbad Resolution No. 2014-010, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AN AGREEMENT BETWEEN AND AMONG THE CITY OF CARLSBAD (CITY) Exhibit H – 2 AND THE CARLSBAD MUNICIPAL WATER DISTRICT (CMWD), NRG ENERGY, INC. (NRG), AND SAN DIEGO GAS & ELECTRIC (SDG&E), ADDRESSING CITY AND CMWD SUPPORT FOR A CHANGE IN THE PROPOSED TECHNOLOGY OF THE APPROVED CARLSBAD ENERGY CENTER PROJECT (CECP) PLANT AND THE SUBMITTAL OF A PETITION TO AMEND (PTA) APPLICATION TO THE CALIFORNIA ENERGY COMMISSION (CEC) FOR APPROVAL OF THIS TECHNOLOGY CHANGE, CONDITIONED UPON THE DECOMMISSIONING, DEMOLITION, REMOVAL AND REMEDIATION OF THE CURRENT ENCINA POWER STATION (EPS) SITE, AS WELL AS OTHER CHANGES IN CECP PLANT DESIGN, ENERGY INFRASTRUCTURE AND PROPERTY CONSIDERATIONS BENEFICIAL TO THE RESIDENTS OF CARLSBAD, approved by the City of Carlsbad on January 14, 2014. A copy is on file at the City of Carlsbad Planning Division. OWNER: APPROVED AS TO FORM: Owner’s Name CITY OF CARLSBAD Signature DON NEU, City Planner Print name and title   Date Signature CELIA A. BREWER, City Attorney City Attorney Print name and title   By: Assistant City Attorney Date Date Exhibit H – 3 (Proper notarial acknowledgment of execution by Contractor must be attached.) (Chairman, president or vice-president and secretary, assistant secretary, CFO or assistant treasurer must sign for corporations. Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation.) (If signed by an individual partner, the partnership must attach a statement of partnership authorizing the partner to execute this instrument). Exhibit H – 2 Exhibit I – 1 EXHIBIT I Form of Fossil Fuel Deed Restriction RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: (Space above this line for Recorder’s use only) DECLARATION OF ENVIRONMENTAL RESTRICTION REGARDING USE This Declaration Of Environmental Restriction Regarding Use (this “Declaration”) is made as of __________________, _____, by NRG Cabrillo Power I LLC and Carlsbad Energy Center LLC (collectively “NRG”), in favor of the City of Carlsbad, a charter city, located in San Diego County (the “City”). NRG and the City are sometimes collectively referred to below as the “Parties.” Recitals THIS DECLARATION is made with reference to the following facts and circumstances: A. NRG owns real property located in the City, in the County of San Diego, California, bounded generally by Cannon Road to the south, Interstate 5 to the east, the Agua Hedionda Lagoon to the north, and Carlsbad Boulevard to the west (the “Site”). A legal description of the Site is attached to this Declaration as Exhibit A. If there is any conflict or inconsistency between the general description of the Site and the attached legal description, the attached legal description shall control. B. At the Site, NRG previously operated facilities known as Units 1-5 (individually a “Unit” and collectively the “Units,” the “Encina Power Station”) for the purpose of generating and selling electric power. C. On or about January 14, 2014, NRG and the City entered into a Settlement Agreement (the “Settlement Agreement”), under which the Parties agreed to resolve certain outstanding disputes. All capitalized terms in this Declaration not defined in this Declaration shall have the meaning given to them in the Settlement Agreement. Exhibit I – 2 D. Before the date of this Declaration, NRG permanently shut down the operation of the Encina Power Station in accordance with requirements and procedures described in the Settlement Agreement. The final shutdown date of the Encina Power Station was __________, 20__. E. In accordance with NRG’s obligations under into the Settlement Agreement, NRG now wishes to record this Declaration describing certain permanent restrictions on the use of the Site following the shutdown of the Plant. The Parties intend that this Declaration have priority over any mortgage, deed of trust or similar instrument now or later encumbering any or all of the Site. Agreement ACCORDINGLY, NRG, on behalf of itself and its successors and assigns, its and their licensees and invitees, and all persons claiming by and through them, covenants to and agrees with the City, for the benefit of the City and the City’s Property, as follows: 1. Restriction Regarding Use of Fossil Fuels. From and after the date this Declaration is recorded in the Official Records of San Diego County, California, and except solely for the limited purposes provided in section 2 below, the Site shall not be used for the generation of electricity by any plant, facility, machinery or other equipment that is powered by the combustion of Fossil Fuels. “Fossil Fuels” means petroleum or any petroleum product, coal or any coal-based product, natural gas, or other hydrocarbon- based fuel. The Parties intend that this restriction run with the Site in perpetuity. The purpose of this restriction is to protect human health and safety and the environment. 2. Exceptions. The restriction set forth in section 1 above shall not apply to: (i) the operation of the Carlsbad Energy Center Project (“CECP”) in the configuration described in Exhibit G to the Settlement Agreement which is located on the Site; provided that changes to the configuration of the CECP that do not exceed the environmental envelope, profile or footprint of CECP as reflected in Exhibit G are permitted; (ii) ancillary equipment or machinery; (iii) back-up generators; (iv) distributed energy sources approved by the City in a redevelopment plan; or (v) any Existing Secured Loan Party, as set forth in Section 2.2 of the Settlement Agreement. 3. Enforcement. The City may, in its sole discretion, rely on this Declaration to enforce any of its covenants or restrictions. The City, but not the general public, shall have all rights and remedies available at law or in equity to enforce the covenants and restrictions set forth in this Declaration. All rights and remedies available to the City under this Declaration or at law or in equity shall be cumulative and not alternative, and invocation of any such right or remedy shall not constitute a waiver or election of remedies with respect to any other available right or remedy. In the event of any breach of the covenants or restrictions by NRG under this Declaration, the City shall be entitled to recover all attorneys’ fees and costs in connection with City’s enforcement activities and actions. Exhibit I – 3 4. Notice and Cure Rights. Before taking enforcement actions under section 3 above, the City shall provide written notice to NRG of any actual or alleged violation of the covenants or restrictions set forth in this Declaration. Such notices shall be given to NRG at the address last furnished by NRG in writing to the City. NRG shall have a period of ten (10) days after receipt of such notice to cure such violation; provided, however, if the violation is not capable of cure within such ten (10) day period, NRG shall have such additional time as shall be reasonably required to complete a cure so long as NRG promptly undertakes action to commence the cure within the ten (10) day period and then diligently prosecutes the same to completion. The time in which NRG may cure is referred to in this Declaration as the “Cure Period,” and the City shall not exercise any legal or equitable remedies during the Cure Period so long as NRG is diligently pursuing such cure. Notwithstanding anything to the contrary in this section, in no event shall the Cure Period exceed six (6) months. 5. Covenants Running with the Land; Binding on Successors. This Declaration, including the covenants set forth above, constitute covenants running with the land in perpetuity and shall bind and burden NRG and any successor owner or occupier. 6. Constructive Notice and Acceptance. Every person or entity who now or later owns or acquires any right, title or interest in or to all or any portion of the Site is, and shall be, conclusively deemed to have consented to and agreed to every covenant, condition, restriction contained in this Declaration, whether or not any reference to this Declaration is contained in the instrument by which such person or entity acquired such interest. 7. Injunctive Relief. Notwithstanding anything to the contrary contained in this Declaration, and without limiting section 3 above, the City may seek and obtain injunctive relief in any court of competent jurisdiction to restrain NRG from any conduct in breach of this Declaration that causes or threatens to cause immediate and irreparable harm to the extent such equitable relief is otherwise available. 8. No Waiver. No waiver by the City (including, without limitation, any of its boards, commissions, officers, employees or agents) of any violation under this Declaration shall be effective or binding unless and to the extent expressly made in writing by the City, and no such waiver may be implied from any failure by the City to take action with respect to such violation. No express written waiver of any violation shall constitute a waiver of any subsequent violation in the performance of the same or any other provision of this Declaration. 9. Severability. Should any provision or portion of this Declaration be declared invalid or in conflict with any law, the validity of all remaining provisions shall remain unaffected and in full force and effect. 10. Governing Law; Venue. The laws of the State of California shall govern the interpretation and enforcement of this Declaration. As part of the consideration for the City’s entering into Settlement Agreement and this Declaration, NRG agrees that all actions or proceedings arising directly or indirectly under this Declaration may, at the sole option of the City, be litigated in courts located within the State of California, in the County of San Diego, and Exhibit I – 4 NRG expressly consents to the jurisdiction of any such local, state or federal court, and consents that any service of process in such action or proceeding may be made by personal service upon NRG wherever NRG may then be located, or by certified or registered mail directed to NRG at the address set forth in this Declaration for the delivery of notices. 11. Notices. Except as otherwise expressly provided in this Declaration, all notices, demands, approvals, consents and other formal communications between the Parties required or permitted under this Declaration shall be in writing and shall be deemed given and effective upon the date of receipt (i) if given by personal delivery on a business day (or the next business day if delivered personally on a day that is not a business day), (ii) if sent for next- business-day delivery (with all expenses prepaid) by a reliable overnight delivery service, with receipt of delivery, or (iii) if mailed by United States registered or certified mail, first class postage prepaid, to the Party at their respective addresses for notice designated below. For convenience of the Parties, copies of notices may also be given by facsimile to the facsimile number set forth below or such other number as may be provided from time to time by notice given in the manner required under this Declaration; however, neither Party may give official or binding notice by facsimile. The effective time of a notice shall not be affected by the receipt, before receipt of the original, of a telefacsimile copy of the notice. (a) In the case of a notice or communication by NRG to the City: Celia A. Brewer, Esq. City Attorney for City of Carlsbad General Counsel for Carlsbad Municipal Water District 1200 Carlsbad Village Drive Carlsbad, CA 92008 Celia.Brewer@carlsbadca.gov (b) And in the case of a notice or communication sent by the City to NRG: Sean Beatty West Region General Counsel NRG Energy, Inc. P.O. Box 192 Pittsburg, CA 94565 sean.beatty@nrgenergy.com Every notice given to a Party to this Declaration, under the terms of this Declaration, must state (or must be accompanied by a cover letter that states) substantially the following: the section of this Declaration under which the notice is given and the action or response required, if any; and if applicable, the period of time within which the recipient of the notice must respond. In no event shall a recipient’s approval of or consent to the subject matter of a notice be deemed to have been given by its failure to object to such notice if such notice (or the accompanying cover letter) does not comply with the requirements of this Section. Exhibit I – 5 Any mailing address or number may be changed at any time by giving written notice of such change in the manner provided above at least ten (10) days before the effective date of the change. IN WITNESS WHEREOF, NRG has duly executed this Declaration as of the date first written above. NRG ENERGY, INC. ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, INCLUDING CABRILLO POWER I LLC By:             Name: Title: Exhibit I – 6 EXHIBIT A TO DECLARATION OF ENVIRONMENTAL RESTRICTION REGARDING USE Legal Description of the Site [INSERTED ON THE FOLLOWING PAGE] Exhibit I – 7 Exhibit I – 8 Exhibit J – 1 EXHIBIT J Legal Description of North Coast Services Center Site [INSERTED ON NEXT PAGE] Exhibit J – 2 Exhibit K – 1 EXHIBIT K Map of North Coast Services Center Site Exhibit K – 2 Exhibit K – 3 Exhibit K – 4 Exhibit K – 5 Exhibit K – 6 Exhibit K – 7 Exhibit K – 8 Exhibit N – 1 EXHIBIT N Legal Description of Cannon Park [INSERTED ON NEXT PAGE] Exhibit N – 2 Exhibit O – 1 EXHIBIT O Map of Cannon Park Exhibit O – 2 Exhibit O – 3 Exhibit O – 4 Exhibit O – 5 Exhibit O – 6 Exhibit O – 7 Exhibit P – 1 EXHIBIT P Legal Description of Agua Hedionda North Shore Bluff Parcel [INSERTED ON NEXT PAGE] Exhibit P – 2 Exhibit Q – 1 EXHIBIT Q Map of Agua Hedionda North Shore Bluff Parcel Exhibit Q – 2 Exhibit Q – 3 Exhibit Q – 4 Exhibit Q – 5 Exhibit Q – 6 Exhibit Q – 7 Exhibit Q – 8 Exhibit Q – 9 Exhibit Q – 10 Exhibit R – 1 EXHIBIT R FORM OF GUARANTY Exhibit R – 2 Independent Guaranty Amount This Guaranty is executed and delivered as of this _____ day of --------------------, 2014 by NRG Energy, Inc., a Delaware corporation (“Guarantor”), in favor of the City of Carlsbad, a charter city, located in San Diego County (“City”), in connection with the performance by Cabrillo Power I LLC, a limited liability company, and Carlsbad Energy Center LLC, a limited liability company (collectively (“Owner”) of a Settlement Agreement dated January 14, 2014 between Owner and City (the “Settlement”). - RECITALS - A. WHEREAS, the Owner operates facilities known as Units 1-5 (individually a “Unit” and collectively the “Units,” the “Encina Power Station” or the “Station”) for the purpose of generating and selling electric power; B. WHEREAS, the Owner intends to build and operate new facilities known as the Carlsbad Energy Center Project (“CECP”) for the purpose of generating and selling electric power, and the City has historically opposed such project; C. WHEREAS, the Parties have entered the Settlement to fully and finally resolve disputes involving the CECP and the retirement and removal of the Encina Power Station, by providing for, among other things: (i) the retirement, decommissioning, and removal of the Encina Power Station, (ii) the remediation and redevelopment of the Encina Power Station site, (iii) the provisions of the Amendment and the construction and development of the CECP, (iv) the relocation and construction of the new North Coast Service Center, and (v) other changes in energy infrastructure and property considerations beneficial to the residents of Carlsbad. D. WHEREAS, Owner is controlled by Guarantor. Guarantor expects to derive material benefits from the performance of the Settlement by Owner and City. To induce City to enter into the Settlement and undertake the obligations as set out in the Settlement, Guarantor has agreed to guarantee the obligations of Owner as provided in this Guaranty. NOW, THEREFORE, in consideration of the foregoing, Guarantor agrees as follows: - AGREEMENT - 1. Guaranty. Subject to the provisions of this Guaranty, Guarantor hereby absolutely, irrevocably, unconditionally, and fully guarantees to City the due, prompt, and complete observance, performance, and discharge of each and every obligation, including without limitation obligations that are financial or that require specific performance, of Owner under the Settlement, whether incurred before or after the date of delivery of this Guaranty (the “Obligations”). This is a guaranty of payment, not of collection, and as such, City shall not be required to institute, pursue, or exhaust any remedies against Owner before instituting suit, obtaining judgment, and executing thereon against Guarantor under this Guaranty. 2. Rights of City. Guarantor hereby grants to City, in City’s discretion and without the need to notify or obtain any consent from Guarantor, and without termination, impairment, or any other effect upon Guarantor’s duties hereunder, the power and authority from time to time: Exhibit R – 3 (a) to renew, compromise, extend, accelerate, or otherwise change, substitute, supersede, or terminate the terms of performance of any of the Obligations, in each case in accordance with the Settlement; (b) to grant any indulgences, forbearances, and waivers, on one or more occasions, for any length of time, with respect to Owner’s performance of any of the Obligations; and (c) to accept collateral, further guaranties, and/or other security for the Obligations, and, if so accepted, then to impair, exhaust, exchange, enforce, waive, or release any such security. 3. Performance. If any of the Obligations are not performed according to the tenor thereof, and any applicable notice and cure period provided by the Settlement has expired (“Default”), Guarantor shall immediately upon receipt of written demand by City (a) perform or cause Owner to perform the Obligation in Default, and (b) pay, reimburse, and indemnify City against any liabilities, damages, and related costs (including attorneys’ fees) incurred by City as a result thereof up to but not to exceed a maximum cumulative amount of five million dollars ($5,000,000), all in such manner and at such times as City may reasonably direct. 4. Satisfaction. Satisfaction by Guarantor of any duty hereunder incident to a particular Default or the occurrence of any other Default shall not discharge Guarantor except with respect to the Default satisfied, it being the intent of Guarantor that this Guaranty be continuing until twenty (20) years after the execution date of this Guaranty or such time as all of the Obligations have irrevocably been discharged in full, whichever is sooner, at which time this Guaranty shall automatically terminate. If at any time the performance of any Obligation by Owner or Guarantor is rescinded or voided under the federal Bankruptcy Code or otherwise, then Guarantor’s duties hereunder shall continue and be deemed to have been automatically reinstated, restored, and continued with respect to that Obligation, as though the performance of that Obligation had never occurred, regardless of whether this Guaranty otherwise had terminated or would have been terminated following or as a result of that performance. 5. Notice of Acceptance. Guarantor waives and acknowledges notice of acceptance of this Guaranty by City. 6. Waivers by Guarantor. Guarantor hereby waives and agrees not to assert or take advantage of: (a) all set-offs, counterclaims, and, subject to Section 3 above, all presentments, demands for performance, notices of non-performance, protests, and notices of every kind that may be required by Applicable Laws; (b) any right to require City to proceed against Owner or any other person, or to require City first to exhaust any remedies against Owner or any other person, before proceeding against Guarantor hereunder; (c) any defense based upon an election of remedies by City; Exhibit R – 4 (d) any duty of City to protect or not impair any security for the Obligations; (e) the benefit of any laws limiting the liability of a surety; (f) any duty of City to disclose to Guarantor any facts concerning Owner, the Settlement, or any other circumstances, that would or allegedly would increase the risk to Guarantor under this Guaranty, whether now known or hereafter learned by City, it being understood that Guarantor is capable of and assumes the responsibility for being and remaining informed as to all such facts and circumstances; and (g) until all Obligations in Default have been fully paid and/or performed, any rights of subrogation, contribution, reimbursement, indemnification, or other rights of payment or recovery for any payment or performance by it hereunder. For the avoidance of doubt, if any amount is paid to Guarantor in violation of this provision, such amount shall be held by Guarantor for the benefit of, and promptly paid to, City. 7. Cumulative Remedies. The rights and remedies of City hereunder shall be cumulative and not alternative to any other rights, powers, and remedies that City may have at law, in equity, or under the Settlement. The obligations of Guarantor hereunder are independent of those of Owner and shall survive unaffected by the bankruptcy of Owner. City need not join Owner in any action against Guarantor to preserve its rights set forth herein. 8. Representations and Warranties. Guarantor represents and warrants to City as follows: (a) Guarantor is a corporation, duly organized, validly existing, and in good standing under the laws of the state of its incorporation. Owner is a direct or indirect wholly- owned subsidiary of Guarantor. Guarantor has all necessary corporate power and authority to execute and deliver this Guaranty and to perform its obligations hereunder. (b) The execution, delivery and performance of this Guaranty has been duly and validly authorized by all corporate proceedings of Guarantor and is not in violation of any law, judgment of court or government agency. This Guaranty has been duly and validly executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms. 9. Collection Costs. Guarantor hereby agrees to pay to City, upon demand, all reasonable attorneys’ fees and other expenses which City may expend or incur in enforcing the Obligations against Owner and/or enforcing this Guaranty against Guarantor, whether or not suit is filed, including, without limitation, all attorneys’ fees, and other expenses incurred by City in connection with any insolvency, bankruptcy, reorganization, arrangement, or other similar proceedings involving Owner that in any way affect the exercise by City of its rights and remedies hereunder. 10. Severability. Should any one or more provisions of this Guaranty be determined to be illegal or unenforceable, all other provisions nevertheless shall be effective. 11. Waiver or Amendment. No provision of this Guaranty or right of City hereunder can be waived, nor can Guarantor be released from Guarantor’s duties hereunder, except by a Exhibit R – 5 writing duly executed by City. This Guaranty may not be modified, amended, revised, revoked, terminated, changed, or varied in any way whatsoever except by the express terms of a writing duly executed by City. 12. Successors and Assigns. This Guaranty shall inure to the benefit of and bind the successors and assigns of City and Guarantor. 13. Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of California without regard to the principles of conflicts of law thereof. 14. Notices. All notices, requests, claims, demands, and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in the manner contemplated by the Settlement, addressed as follows: (a) if to City as provided in the Settlement (b) if to Guarantor: Sean Beatty West Region General Counsel NRG Energy, Inc. P.O. Box 192 Pittsburg, CA 94565 sean.beatty@nrgenergy.com or to such other address(es) as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above. IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered to City as of the day written above. NRG Energy, Inc. By: Name: Title: Exhibit R – 6 STATE OF By:_____________________________________ Name: Title: ) ) ss. COUNTY OF _____________________ ) The foregoing instrument was acknowledged before me this _____ day of _____________, 20__, by _____________________________, as _____________________ of _____________________. Witness my hand and official seal. My commission expires: ______________________________. Notary Public: _______________________________________ (S E A L) (space above reserved for recording information) Exhibit R – 7 Shut Down Guaranty Amount This Guaranty is executed and delivered as of this _____ day of _________, 20__ by NRG Energy, Inc., a Delaware corporation (“Guarantor”), in favor of the City of Carlsbad, a charter city, located in San Diego County (“City”), in connection with the performance by Cabrillo Power I LLC, a limited liability company, and Carlsbad Energy Center LLC, a limited liability company (collectively (“Owner”) of a Settlement Agreement dated January 14, 2014 between Owner and City (the “Settlement”). - RECITALS - A. WHEREAS, the Owner operates facilities known as Units 1-5 (individually a “Unit” and collectively the “Units,” the “Encina Power Station” or the “Station”) for the purpose of generating and selling electric power; B. WHEREAS, the Owner intends to build and operate new facilities known as the Carlsbad Energy Center Project (“CECP”) for the purpose of generating and selling electric power and the City has historically opposed such project; C. WHEREAS, the Parties have entered the Settlement to fully and finally resolve disputes involving the CECP and the retirement and removal of the Encina Power Station, by providing for, among other things: (i) the retirement, decommissioning, and removal of the Encina Power Station, (ii) the remediation and redevelopment of the Encina Power Station site, (iii) the provisions of the Amendment and the construction and development of the CECP, (iv) the relocation and construction of the new North Coast Service Center, and (v) other changes in energy infrastructure and property considerations beneficial to the residents of Carlsbad. D. WHEREAS, Owner is controlled by Guarantor. Guarantor expects to derive material benefits from the performance of the Settlement by Owner and City. To induce City to enter into the Settlement and undertake the obligations as set out in the Settlement, Guarantor has agreed to guarantee the obligations of Owner as provided in this Guaranty. NOW, THEREFORE, in consideration of the foregoing, Guarantor agrees as follows: - AGREEMENT - 1. Guaranty. Subject to the provisions of this Guaranty, Guarantor hereby absolutely, irrevocably, unconditionally, and fully guarantees to City the due, prompt, and complete observance, performance, and discharge of each and every obligation under Section 6.1 of the Settlement, including without limitation obligations that are financial or that require specific performance, of Owner, whether incurred before or after the date of delivery of this Guaranty (the “Obligations”). This is a guaranty of payment, not of collection, and as such, City shall not be required to institute, pursue, or exhaust any remedies against Owner before instituting suit, obtaining judgment, and executing thereon against Guarantor under this Guaranty. 2. Rights of City. Guarantor hereby grants to City, in City’s discretion and without the need to notify or obtain any consent from Guarantor, and without termination, impairment, or any other effect upon Guarantor’s duties hereunder, the power and authority from time to time: Exhibit R – 8 (a) to renew, compromise, extend, accelerate, or otherwise change, substitute, supersede, or terminate the terms of performance of any of the Obligations, in each case in accordance with the Settlement; (b) to grant any indulgences, forbearances, and waivers, on one or more occasions, for any length of time, with respect to Owner’s performance of any of the Obligations; and (c) to accept collateral, further guaranties, and/or other security for the Obligations, and, if so accepted, then to impair, exhaust, exchange, enforce, waive, or release any such security. 3. Performance. If any of the Obligations are not performed according to the tenor thereof, and any applicable notice and cure period provided by the Settlement has expired (“Default”), Guarantor shall immediately upon receipt of written demand by City (a) perform or cause Owner to perform the Obligation in Default, and (b) pay, reimburse, and indemnify City against any liabilities, damages, and related costs (including attorneys’ fees) incurred by City as a result thereof up to but not to exceed a maximum cumulative amount of twenty million dollars ($20,000,000), which is in addition to the Independent Guaranty Amount, all in such manner and at such times as City may reasonably direct. 4. Satisfaction. Satisfaction by Guarantor of any duty hereunder incident to a particular Default or the occurrence of any other Default shall not discharge Guarantor except with respect to the Default satisfied, it being the intent of Guarantor that this Guaranty be continuing until such time as all of the Obligations have irrevocably been discharged in full, at which time this Guaranty shall automatically terminate. If at any time the performance of any Obligation by Owner or Guarantor is rescinded or voided under the federal Bankruptcy Code or otherwise, then Guarantor’s duties hereunder shall continue and be deemed to have been automatically reinstated, restored, and continued with respect to that Obligation, as though the performance of that Obligation had never occurred, regardless of whether this Guaranty otherwise had terminated or would have been terminated following or as a result of that performance. 5. Notice of Acceptance. Guarantor waives and acknowledges notice of acceptance of this Guaranty by City. 6. Waivers by Guarantor. Guarantor hereby waives and agrees not to assert or take advantage of: (a) all set-offs, counterclaims, and, subject to Section 3 above, all presentments, demands for performance, notices of non-performance, protests, and notices of every kind that may be required by Applicable Laws; (b) any right to require City to proceed against Owner or any other person, or to require City first to exhaust any remedies against Owner or any other person, before proceeding against Guarantor hereunder; (c) any defense based upon an election of remedies by City; Exhibit R – 9 (d) any duty of City to protect or not impair any security for the Obligations; (e) the benefit of any laws limiting the liability of a surety; (f) any duty of City to disclose to Guarantor any facts concerning Owner, the Settlement, or any other circumstances, that would or allegedly would increase the risk to Guarantor under this Guaranty, whether now known or hereafter learned by City, it being understood that Guarantor is capable of and assumes the responsibility for being and remaining informed as to all such facts and circumstances; and (g) until all Obligations in Default have been fully paid and/or performed, any rights of subrogation, contribution, reimbursement, indemnification, or other rights of payment or recovery for any payment or performance by it hereunder. For the avoidance of doubt, if any amount is paid to Guarantor in violation of this provision, such amount shall be held by Guarantor for the benefit of, and promptly paid to, City. 7. Cumulative Remedies. The rights and remedies of City hereunder shall be cumulative and not alternative to any other rights, powers, and remedies that City may have at law, in equity, or under the Settlement. The obligations of Guarantor hereunder are independent of those of Owner and shall survive unaffected by the bankruptcy of Owner. City need not join Owner in any action against Guarantor to preserve its rights set forth herein. 8. Representations and Warranties. Guarantor represents and warrants to City as follows: (a) Guarantor is a corporation, duly organized, validly existing, and in good standing under the laws of the state of its incorporation. Owner is a direct or indirect wholly- owned subsidiary of Guarantor. Guarantor has all necessary corporate power and authority to execute and deliver this Guaranty and to perform its obligations hereunder. (b) The execution, delivery and performance of this Guaranty has been duly and validly authorized by all corporate proceedings of Guarantor and is not in violation of any law, judgment of court or government agency. This Guaranty has been duly and validly executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms. 9. Collection Costs. Guarantor hereby agrees to pay to City, upon demand, all reasonable attorneys’ fees and other expenses which City may expend or incur in enforcing the Obligations against Owner and/or enforcing this Guaranty against Guarantor, whether or not suit is filed, including, without limitation, all attorneys’ fees, and other expenses incurred by City in connection with any insolvency, bankruptcy, reorganization, arrangement, or other similar proceedings involving Owner that in any way affect the exercise by City of its rights and remedies hereunder. 10. Severability. Should any one or more provisions of this Guaranty be determined to be illegal or unenforceable, all other provisions nevertheless shall be effective. 11. Waiver or Amendment. No provision of this Guaranty or right of City hereunder can be waived, nor can Guarantor be released from Guarantor’s duties hereunder, except by a Exhibit R – 10 writing duly executed by City. This Guaranty may not be modified, amended, revised, revoked, terminated, changed, or varied in any way whatsoever except by the express terms of a writing duly executed by City. 12. Successors and Assigns. This Guaranty shall inure to the benefit of and bind the successors and assigns of City and Guarantor. 13. Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of California without regard to the principles of conflicts of law thereof. 14. Notices. All notices, requests, claims, demands, and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in the manner contemplated by the Settlement, addressed as follows: (a) if to City as provided in the Settlement (b) if to Guarantor: Sean Beatty West Region General Counsel NRG Energy, Inc. P.O. Box 192 Pittsburg, CA 94565 sean.beatty@nrgenergy.com or to such other address(es) as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above. IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered to City as of the day written above. NRG Energy, Inc. By: Name: Title: Exhibit R – 11 STATE OF By:_____________________________________ Name: Title: ) ) ss. COUNTY OF _____________________ ) The foregoing instrument was acknowledged before me this _____ day of _____________, 20__, by _____________________________, as _____________________ of _____________________. Witness my hand and official seal. My commission expires: ______________________________. Notary Public: _______________________________________ (S E A L) (space above reserved for recording information) Exhibit R – 12 Relocation Guaranty Amount This Guaranty is executed and delivered as of this _____ day of ___________, 20___ by NRG Energy, Inc., a Delaware corporation (“Guarantor”), in favor of the City of Carlsbad, a charter city, located in San Diego County (“City”), in connection with the performance by Cabrillo Power I LLC, a limited liability company, and Carlsbad Energy Center LLC, a limited liability company (collectively (“Owner”) of a Settlement Agreement dated January 14, 2014 between Owner and City (the “Settlement”). - RECITALS - A. WHEREAS, the Owner operates facilities known as Units 1-5 (individually a “Unit” and collectively the “Units,” the “Encina Power Station” or the “Station”) for the purpose of generating and selling electric power; B. WHEREAS, the Owner intends to build and operate new facilities known as the Carlsbad Energy Center Project (“CECP”) for the purpose of generating and selling electric power and the City has historically opposed such project; C. WHEREAS, the Parties have entered the Settlement to fully and finally resolve disputes involving the CECP and the retirement and removal of the Encina Power Station, by providing for, among other things: (i) the retirement, decommissioning, and removal of the Encina Power Station, (ii) the remediation and redevelopment of the Encina Power Station site, (iii) the provisions of the Amendment and the construction and development of the CECP, (iv) the relocation and construction of the new North Coast Service Center, and (v) other changes in energy infrastructure and property considerations beneficial to the residents of Carlsbad. D. WHEREAS, Owner is controlled by Guarantor. Guarantor expects to derive material benefits from the performance of the Settlement by Owner and City. To induce City to enter into the Settlement and undertake the obligations as set out in the Settlement, Guarantor has agreed to guarantee the obligations of Owner as provided in this Guaranty. NOW, THEREFORE, in consideration of the foregoing, Guarantor agrees as follows: - AGREEMENT - 1. Guaranty. Subject to the provisions of this Guaranty, Guarantor hereby absolutely, irrevocably, unconditionally, and fully guarantees to City the due, prompt, and complete observance, performance, and discharge of each and every obligation under Article 5 of the Settlement, including without limitation obligations that are financial or that require specific performance, of Owner, whether incurred before or after the date of delivery of this Guaranty (the “Obligations”). This is a guaranty of payment, not of collection, and as such, City shall not be required to institute, pursue, or exhaust any remedies against Owner before instituting suit, obtaining judgment, and executing thereon against Guarantor under this Guaranty. 2. Rights of City. Guarantor hereby grants to City, in City’s discretion and without the need to notify or obtain any consent from Guarantor, and without termination, impairment, or any other effect upon Guarantor’s duties hereunder, the power and authority from time to time: Exhibit R – 13 (a) to renew, compromise, extend, accelerate, or otherwise change, substitute, supersede, or terminate the terms of performance of any of the Obligations, in each case in accordance with the Settlement; (b) to grant any indulgences, forbearances, and waivers, on one or more occasions, for any length of time, with respect to Owner’s performance of any of the Obligations; and (c) to accept collateral, further guaranties, and/or other security for the Obligations, and, if so accepted, then to impair, exhaust, exchange, enforce, waive, or release any such security. 3. Performance. If any of the Obligations are not performed according to the tenor thereof, and any applicable notice and cure period provided by the Settlement has expired (“Default”), Guarantor shall immediately upon receipt of written demand by City (a) perform or cause Owner to perform the Obligation in Default, and (b) pay, reimburse, and indemnify City against any liabilities, damages, and related costs (including attorneys’ fees) incurred by City as a result thereof up to but not to exceed a maximum cumulative amount of twenty-two million five hundred thousand dollars ($22,500,000), all in such manner and at such times as City may reasonably direct; provided that such maximum cumulative amount shall be reduced in proportion to Owner’s payments made in accordance with Article 5. 4. Satisfaction. Satisfaction by Guarantor of any duty hereunder incident to a particular Default or the occurrence of any other Default shall not discharge Guarantor except with respect to the Default satisfied, it being the intent of Guarantor that this Guaranty be continuing until such time as all of the Obligations have irrevocably been discharged in full, at which time this Guaranty shall automatically terminate. If at any time the performance of any Obligation by Owner or Guarantor is rescinded or voided under the federal Bankruptcy Code or otherwise, then Guarantor’s duties hereunder shall continue and be deemed to have been automatically reinstated, restored, and continued with respect to that Obligation, as though the performance of that Obligation had never occurred, regardless of whether this Guaranty otherwise had terminated or would have been terminated following or as a result of that performance. 5. Notice of Acceptance. Guarantor waives and acknowledges notice of acceptance of this Guaranty by City. 6. Waivers by Guarantor. Guarantor hereby waives and agrees not to assert or take advantage of: (a) all set-offs, counterclaims, and, subject to Section 3 above, all presentments, demands for performance, notices of non-performance, protests, and notices of every kind that may be required by Applicable Laws; (b) any right to require City to proceed against Owner or any other person, or to require City first to exhaust any remedies against Owner or any other person, before proceeding against Guarantor hereunder; Exhibit R – 14 (c) any defense based upon an election of remedies by City; (d) any duty of City to protect or not impair any security for the Obligations; (e) the benefit of any laws limiting the liability of a surety; (f) any duty of City to disclose to Guarantor any facts concerning Owner, the Settlement, or any other circumstances, that would or allegedly would increase the risk to Guarantor under this Guaranty, whether now known or hereafter learned by City, it being understood that Guarantor is capable of and assumes the responsibility for being and remaining informed as to all such facts and circumstances; and (g) until all Obligations in Default have been fully paid and/or performed, any rights of subrogation, contribution, reimbursement, indemnification, or other rights of payment or recovery for any payment or performance by it hereunder. For the avoidance of doubt, if any amount is paid to Guarantor in violation of this provision, such amount shall be held by Guarantor for the benefit of, and promptly paid to, City. 7. Cumulative Remedies. The rights and remedies of City hereunder shall be cumulative and not alternative to any other rights, powers, and remedies that City may have at law, in equity, or under the Settlement. The obligations of Guarantor hereunder are independent of those of Owner and shall survive unaffected by the bankruptcy of Owner. City need not join Owner in any action against Guarantor to preserve its rights set forth herein. 8. Representations and Warranties. Guarantor represents and warrants to City as follows: (a) Guarantor is a corporation, duly organized, validly existing, and in good standing under the laws of the state of its incorporation. Owner is a direct or indirect wholly- owned subsidiary of Guarantor. Guarantor has all necessary corporate power and authority to execute and deliver this Guaranty and to perform its obligations hereunder. (b) The execution, delivery and performance of this Guaranty has been duly and validly authorized by all corporate proceedings of Guarantor and is not in violation of any law, judgment of court or government agency. This Guaranty has been duly and validly executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms. 9. Collection Costs. Guarantor hereby agrees to pay to City, upon demand, all reasonable attorneys’ fees and other expenses which City may expend or incur in enforcing the Obligations against Owner and/or enforcing this Guaranty against Guarantor, whether or not suit is filed, including, without limitation, all attorneys’ fees, and other expenses incurred by City in connection with any insolvency, bankruptcy, reorganization, arrangement, or other similar proceedings involving Owner that in any way affect the exercise by City of its rights and remedies hereunder. 10. Severability. Should any one or more provisions of this Guaranty be determined to be illegal or unenforceable, all other provisions nevertheless shall be effective. Exhibit R – 15 11. Waiver or Amendment. No provision of this Guaranty or right of City hereunder can be waived, nor can Guarantor be released from Guarantor’s duties hereunder, except by a writing duly executed by City. This Guaranty may not be modified, amended, revised, revoked, terminated, changed, or varied in any way whatsoever except by the express terms of a writing duly executed by City. 12. Successors and Assigns. This Guaranty shall inure to the benefit of and bind the successors and assigns of City and Guarantor. 13. Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of California without regard to the principles of conflicts of law thereof. 14. Notices. All notices, requests, claims, demands, and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in the manner contemplated by the Settlement, addressed as follows: (a) if to City as provided in the Settlement (b) if to Guarantor: Sean Beatty West Region General Counsel NRG Energy, Inc. P.O. Box 192 Pittsburg, CA 94565 sean.beatty@nrgenergy.com or to such other address(es) as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above. IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered to City as of the day written above. NRG Energy, Inc. By: Name: Title: Exhibit R – 16 STATE OF By:_____________________________________ Name: Title: ) ) ss. COUNTY OF _____________________ ) The foregoing instrument was acknowledged before me this _____ day of _____________, 20__, by _____________________________, as _____________________ of _____________________. Witness my hand and official seal. My commission expires: ______________________________. Notary Public: _______________________________________ (S E A L) (space above reserved for recording information) Exhibit S – 1 EXHIBIT S Map of Encina Redevelopment Site Exhibit T – 1 EXHIBIT T Map of CECP Site Memorandum Sept. 4, 2019 To: Heather Pizzuto, Library & Cultural Arts Director From: Gary T. Barberio, Deputy City Manager -Community Services {city of Carlsbad Re: NRG/SDG&E/City of Carlsbad Settlement Agreement -Encina Power Plant Property On January 14, 2014, the City Council approved a Settlement Agreement (Agreement) involving NRG, the owner of the Encina Power Plant and property, SDG&E, the region's current utility provider, and the City of Carlsbad. Amongst the numerous provisions included, the Agreement provided for the construction of a new S00MW "peaker" plant located between the railroad tracks and the 1-5, in exchange for the shutdown, decommissioning, and above-ground demolition of the existing Encina Power Plant. Since that time, allthree parties have relied upon the Agreement in conducting business going forward. It is important to note, that since 2014, the City Council has not provided any new direction to city staff regarding the property. It is also important to understand that the City of Carlsbad does not own the plant property, nor will the City acquire ownership of the plant property as a result of the Agreement. The Agreement does provide a schedule for the shutdown, decommissioning, and demolition of the above ground facilities for the Encina Power Plant, to include both the smokestack tower and plant buildings. Specifically, the Agreement states that concurrent with the start-up of the new "peaker" plant, which occurred on December 12, 2018, the Encina Power Plant shall shutdown (turn-off) and begin efforts to decommission the plant (disconnect power, gas, etc.). Secondly, within one year of the shut-down of the old plant (December 12, 2018), NRG must start the above-ground demolition of the plant and shall complete the demolition within two years of the commencement of demolition activities. The above-ground demolition shall include the both the smokestack tower and plant buildings. As is relates to a designation of the Encina Power Plant site as a historic landmark, Carlsbad Municipal Code section 22.06.030.E states that "Without the property owner's consent to the proposed designation, a site shall not be designated a historic site or landmark." NRG has verbally indicated to City staff that they will not provide consent for a proposed historic landmark designation in light of its commitments in the Agreement. Community Services 799 Pine Avenue, Suite 200, Carlsbad, CA 92008-2428, 760-434-2822 9/4/201 9 Carlsbad Municipal Code (Carlsbad, California) ,1 f lfrl Title 22 HISTORIC PRESERVATION Chapter 22.06 HISTORIC RESOURCES, MISTORIC LANDMARKS Al\!D HISTORIC DISTRICTS 22.06.010 Establishmef!t of historic resources inventory. The city shall establish and adopt a histo1:ic resources inventory. (Orel. NS-433 § 3, l 997; Ord. NS-14 J § 4, 1991 ; Ord. 9776 § J, 1985) 22.06.020 Criteria for historic resources inventory. A historic resource may be considered and approved by council for inclusion in the historic resomces inventory based on one or more of the follo\.viug: A. It exemplifies or reflects special elements of the city's cultural, social, economic, political, aesthetic, engineering or architectural histo1y; or B. It is identified with persons or events significant in local, state or national history; or C. It embodies distinctive characteristics of a style; type, period or method of construction, is a·valuable example of the use of indigenous materials or craftsmanship or is representative of a notable work of an acclaimed builder, designer or architect; or D. It is an archaeological, paleontological, botanical, geological, topographical, ecological or geograp!Jical site which has the potential of yielding information of scientific value; or E. It is a geographically definable area with a concentration of buildings, struchires, improvements, or objects linked historically through location, design, setting, materials, workmanship, feeling and/or association, in which the collective value of the improvements may be greater than the value of each individual improvement. (Ord, NS-433 § 3, 1997; Orel. NS-141 § 5, 1991; Orel. 9776 § J, 1985) 22.06.030 Historic site and landmark designation procedures. Historic sites and landmarks shall be established by the city council in the following mam1er: A. Any person, association, or agency may request the designation of a site, landscape feature, or improvement as a historic landmark by submitting a written request for such designation to the historic preservation conunission. The historic preservation commission, planning commission, design review board, or city council may also initiate such proceedings by motion. B. Any such request shall be filed with the development processing department upon prescribed forms and shall include the following data: 1. Name and address of property owner and assessor's parcel number and address of site; 2. Description of the proposed historic site or landmark, including special aesthetic, cultural, arc!Jaeological, paleontological, architectural, or engineering interest or value of a histoi'ic 11ah1re, including information about the arc!Jitecture, notable features, construction and other information indicating the historical significance of the site; 3. Sketches, photographs, or drawings; 4. Statement of condition of strnch1res; 5. Explanation of any !mown threats to the improvement of the site; 6. Additional information: a. Site plan in appropriate scale; b. Legal description of the property; c. Photographs, old and recent; www.qcode.us/codes/carlsbad/?view=desktop&topic=22-22 _ 06-22 _ 06 _ 030 1/3 d. iJ ; opr ,:wd us,:'.; c. l-:<'.x1sting zoning; f. Bibliography aud references; g. Chain of title, if3 vailable; C. Within 45 clays of the date of the request, the commission shall hold a public hearing to rev iew th e lancllilark application accorcltng to the criterin of Section 22.06.020. D. Notice of the public hearing shall be giv en as provided in Section 2 [_.54 .060(2) of this code. In addition, notice of the elate, place, time and purpose of the hearing shall be mailed, rett1rn receipt requested, to the. owne1· of the proposed landmark proJ)erty as slmwn on the last equalized asse,srnent roll at leitst 14 days prior to the elate of the public hearing. Failure to send notice by mai I to any property own.er when the address of such owner is not on tile latest equalized assessment role shall not invalidate any proceedings in con nectiou witb the proposed dcsignatio.n. E. After the public hearing, the commission shall by resolution make a report ancl recornrnclldation i:o the city council. lf the commission determines tbal the improvement does not meet landmark criteria, tl1e process shall terminate and the commission shall notify lhe property owner and applicant of such termination in writing within l0 days of the commission's determination. If the commission determines that the resource warrants historic site or landmark designation and the property owner has consented to same in writing, then the commission shall submit a written recommendation to the city council incorporating its reasons in support of the proposed designation. Without the property owner's consent to the p1:oposed designation, a site shall not be cles1gnated a histm:ic site or landmark. Permits shall be required to work on a designated historic landmark as specified in Chapter 22.08_ of this code. Permit fees shall be established by resolution oftlle city council. F. The city coun~il shall hold a public bearing on the proposed historic designation within 30 clays of tbe receipt of the recomrnenclation for the commission. G. At the conclusion of the public hearing on the proposed designation, the city council shall, by resolution, designate or conditionally designate, or disapprove the designation of the historic landmark. Written notice of the city council action shall be mailed to the property owner. (Ord . NS-433 § 3, 1997; Orel. 9835 § 2, 1987; Orel. 97'76 § 1, 1985) · 22,0~.040 Historic distl'ict designation pr~ce£!urE?s. Historic districts shall be established by the city council in the following manner: A. The prncedures for designating a historic district sha ll be the same .as for designating a historic landmark, except as otherwise provided in this section. B. Any application for designation of a historic district shall be filed \.Vith the planning division upon the prescribed form and shall i11clude the followiug data: I. Boundaries of the proposed district and a list of names and. addresses of property owners, assessor's parcel numbers and addresses of propertiys within the boundaries; 2. Description of the proposed historic district, including special aesthetic, cultural, architecl1.1ral, or engineering interest or value of a historical nature; 3. Sketches, photographs o.r drawings; 4.· Statement of condition of structures and improvements within the district; 5. Explanation of any known tlu·eats to any cultural resource within the district; 6. Other i.nformation requested by the planning division. C. If written consent of all of the owners of property within the proposed district to the proposed designation is not obtained at the time of the historic preservation commission heating, the vrocess shall terminate and the commission shall notify tile properly owners and applicant of such termination within 14 clays of the commission's determination. D. If the commission determines that the area warrants historic district designation, it shall submit a written recommendation to the city council incorporating its reasons i11 support of the proposed historic district designation, ww•N.qcode. us/codes/carlsbad/?view=d esklop&topic=22-22 _ 06-22_ 05 _ 030 2/3 9/4/2019 Carlsbad lvlunicipal Code (Carlsbad, California) within 1,1 clays of reac hing its dec ision. Such recomrnenclc1Lio11 shall illclude a rcporl co nlaining l-lH:: fo llowing inforrna lio n: I. A map showing the proposed bou11dc1ries of lbe histori c district iclen lifyi ng all slrnctlll'es within th e bouudmies; 2. An explanation of the significance of the proposed district and description of the cultmal resources within the proposed boundaries; 3. Recommendations as to appropriate permitted uses, special uses, height and area regulations, minimum dwelling size, floor area, sign regulations, parking regulations, aucl any other modification to ex is1ing development standard s necessary or appropriate to the preservation of th e proposed hi sto ric di stri ct. (Ord . NS- 433 § 3, 1997; Ord. 9776 § I, 1985) www.qcode.us/codes/carlsbad/?view=desktop&topic=22-22_ 06-22 _ 06 _ 030 3/3 October 7111 2019 Request for public hearing with the Historic Preservation Commission to review Historic Site and Landmark application. To: Historic Preservation Commission C/O Suzanne Sm ithson Deputy Li bra ry D irec tor Georgin a Co le Library 125 0 Carl sbad Village Drive Carl sbad, CA 92008 760-434-2876 suzanne.sm ithson@carlsbadca.gov From: James L. Strickland, 4747 Marina Drive #30, Carlsbad, CA 92008, Jim.Stricklandl @sbcglobal.net Bill Bowman, 6705 Corintia Street, Carlsbad CA, 92009, BBowmanokc@ gmail.com Per: Title 22 Historic Preservation Chapter 22.06 Historic Resources Historic Landmarks and Historic Districts 22.06.030 Historic site and landmark designation procedures. 1. Name and address of property owner and assessor's parcel number and address of site; Sean Beatty West Region General Counsel NRG Energy, Inc. P.O. Box 192 Pittsburg, CA 94565 sean. beatty@nrgenergy.com APN 7601665700 APN 2106104700 4600 Carlsbad Boulevard Carlsbad, CA 92008 2. Description of the proposed historic site or landmark, including special aesthetic, cultural, archaeological, paleontological, architectural, or engineering interest or value of a historic nature, including information about the architecture, notable features, construction and other information indicating the historical significance of the site; Encina Power Plant 400-foot Smoke Stack exclusive, not to include power plant structure. See Attachment A: PDF document titled "Old Encina Power Station Chimney* Preservation!" 3. Sketches, photographs, or drawings; See Attachment A 4. Statement of condition of structures; Structurally Sound 5. Explanation of any known threats to the improvement of the site; Impending and imminent demolition 6. Additional information: a. Site plan in appropriate scale; 1" I CJM~ 'SCA/I D=· ~=!!!!!!!!!t51)(J{J;;. ;;;;;;;;;;=2200{)!1!!· !l!lla!!!!l'!:Jii(}(J/)liiiiliiiiiiiiiiiiiiiiiiil.fOflO 025:104 1 ~ ,.1tNYU .ti MD II TJlltMJH 11 • ~ ~~A~ ttrC/;ilf; (j}MPNtr A~AJPI' ~ASH$111EET .S..-Al'A:;~ 1211.I M' (EX] w ~ {l{fl/W-«J' IUI ~ sma:r fl/llJWll1J H ~ 81: NCXrE t~~ t-n•N.t-fof4'◄~u•·••• '-!.',rc.~e_=~..,"6""""-'I ----===~.:-~~ '~~ I EXHIBIT '"B" Mlrf W:-2 .NN ~ ()()-If} iM-fJIHr b. Legal description of the property; LEGAL DESCRIPTION (Exceptions Not Noted) 'fJ1e ]rind referre1l to herein is situnted In the Smte ofCollfornin, County of Son Diego, Cily of Carlsbad, nud rlescdbed 2s follows: That portion of Lot "H" of Rancho Agua Hcdionda, in the City of Carlsbad, County of Son Diego, State of California, according Ill Partition Mop thereof No. 823, filed in the Office of the County Recorder of Son Diego County, November 16, 1896; being Parcel No. 4 of that cerlnin Certificate of Compliance recorded October 30,200 Ins file no. 2001--0789068 of Official Records, and more particularly dcscnbed as: Con1mencing nt the intersection of the caslerly Line of the 100.00 foot wide right-of-way of the Atchison Topeka and Santa Fe Rnilroad witl1 the northerly line of Canou Road (60.00 foct wide); thence loog said easterly line north 22°30' 13" west, 1564.78 foet to the TRUE POINT OF BEGINNING; thence continuing · along said easterly line north 22°30' 13" west, 1990.35 feet to tl1e beginnu1g of n non-tangent C\U'V~ concave to the nor1l1we.~t J1aving a rndins of 1005.37 feet, n radial to said beginning bears soutl1 85°54'14" east; tl1ence northeasterly 36.76 feet along said curve tluough n cenlrnl angle of 02°05'42"; thence non-tnngcnt to said curve nor0122°30' 13" west, 302.87 feet; thcuce leaving suid easterly liue norU, 61°25'37" cast, 14.19 .feet; thence norfo 30°30'37" east, 34.90 feel; !hence souU1 40°47 '43" eai~ 63,50 feet; thence south 69°10'23" cast, 38.00 feet; thence north 79' 19'37" east, 285.00 feet; tllence north 88°07'37" cast. 333.14 feet; thence north 81 °53 '37" cnst, 13.68 feet to the westerly right-of-way !kine of California State Higl1wny JU-SD-2B (1- 5); tlience along snid right-of-way line south 17°57'05" east, 204.93 feet; thence south 12°34' 11" east, 424.72 feet; tl1cnce south 22°07'51" east, 239.68 feet; thence souU122030'37" east, 1210.91 feet; thence leaving said right-of-way line south 67°37'25" west, 492.66 feel; thence south 62°25'13" west, 126.26 feel to the TRUE POINT OF BEGlNNING, . Together with tllat portion of said Lot H described as follows: Commencing at thcnmtbeasterly comer of!tecord of Survey No. 14621, in tbe City of Carlsbad, County of San Diegoi State of Califomb.1 recorded in. lhc Office of U1c Counly Recorde1· of Sand Diego Cow1ty, August 14, 1994 as file no. 1994-500086, said corner being on the westerly li11e of the right-of-way of tbc Atchison Topeka nnd Santa Fe Railroad; !hence along said westerly line and easterly line of~ccord of Survey 14621 soulh·28°•10' 19" east, 656.70 feet to the most southerly corner of said Rccora of Survey No. 14621; thence continuing south23°40' 19" cast, 275.00 feet to the TRUE POINT OF :BEGINNING; thence leaving s~id westel'ly lino south 56°25'30" west, 61.JO feel; thence south 04°59'18" west, 27.61 foe~ thence s01:ith 39°37'42" cast, 61.38 feet; thence soulh 77"21 '22" cast, 49.55 feet; thence south 26°45'53" cast, 232.92 feet; U1ance soulh 17°52' !9" east, 115,92 feet; thence south 02°16'37" east, 55.06 feet; thence s011th24°00'58" west, 44.47 feet; th~nce south 40°45' 14" west, 126.60 feet; ihence south 29°41 '50" west, 83.42.feet; the11cc south 27°27'35" wes~ 90.04 feet; thence souJh 35° 18'30" west, 212,59 feet; thence SO\lth 19°22'01" cast, 108.34 feet; thence south 30°56'56" east, 304.06 feet; thence soufu 14°30'21" west, 175.27 feet; tllencc soutl1 00°09'57' east, 123.11 feot; thence south 26°53'37" east, 119.99 feet; thence south 34°46'5I" west, 23.60 feet; fuence north 61 °27'21" west, 142.77 feet; tl1euce north 22°47'32" wcs~ 47.01 feet; thence south 67°12'28" west, 16.03 feet; thence south22'47'32" east, 22.23 feel; thence south 58°37'3I" west, 97.99 feel; thence somh 41 '35'28" west, 110.44 feet; thcncenortll 11°,1'1'52" west, 164.81 feet; thenc-0 north 05°57'51" we~t:, 202.95 foci; thence north 30°14 '20" west, 64.23 feet; thence north 64°31 '22" west, 293.59 feet to the easterly lin9 of the l 00.00 foot wide Carlsbad Boulevard; thence t1long said. easterly line of Carlsbad Bouk:vard south 24°07'36" east, 913.18 feet lo the. beginning ofu curve coacave soulhwcsterly hoving il radius of 4050.00 feet; thence fiouthcastcrly 348.89 feet nlong ,mid curve lhrougl1 a ccnlrol nnglc of 04°56'09''; thence south 19" l I '2711 e!l.lt, 1 S.63 feet to Ute bcgirming of n ourYe concave northen~terly h.'l.ving • radius of 5216.55 feet; Uience soul11castcrly 900.29 foct along ,aid curve through a central llugle of 09'SJ' 18"; thence le.wing snid eruncr!y line oiCs.rlsbnct Boulevnrd north 60°4J'42" east, 103.71 feet; thence norlh 71 °53'50" cast, 49.05 feet; thence north 83'29'46'' cast, 149.63 f<ct: ~,euce north 77°06'32" east, 80.00 feet; lhcnce north 68°28' 15" c.,s~ 121.97 feet; thence 11ortl1 6J"21 '54" ens!, 220.5 l feet; thence north 67°56'35" east, 167.57 feet; \hence north 76°27'03" C!ISt, 60.33 .feet; thence soutb 77°37'36" east, 172.85 feet; thence south 60°55'4 I' cas~ 66.3Q feot; foence smith 45°30'57" eu.t, 47.4l feet; thence soulh 82"40'44" cos~ 84.3 l feet; thence south 44"29'52" cnst, 52.55 fe<t to said wcste,Jyrighl-of-wny line of said /\tchison Topekn ond Snnln Felluitrond; theuoe nloug saicl westerly line nonh 22'30' 13" west, 2664.53 feet; thence 11orth 28°40'19" west, 835,14 feet to the TRUEPOJNTOFBEGlNNlNG. The n!Jove desclil>~J p1l(C!CI t)flnud cont.i1ina 95.08 nc.r~ mort: or less. Assessor's Parcel Numbers: 21 o.o lO•l3, nnd 210-010~13 (wit 1, other property). (End of Legal Description) c. Photographs, old and recent; See Attachment A d. Proposed use; Historic Landmark/ Visitor Serving Commercial for the benefit of the residents of Carlsbad e. Existing zoning; PU Public Utility Future zoning intent (publ ic record) VC Visitor Serving Commercial f. Bibliography and references; 1. Carlsbad Municipal Code 2. SETTLEMENT AGREEMENT DATED AS OF JANUARY 14, 20 14 BETWEEN AND AMONG THE CITY OF CARLSBAD, CARLSBAD MUNICIPAL WATER DISTRICT, CABRJLLO POWER I LLC, CARLSBAD ENERGY CENTER LLC AND SAN DlEGO GAS & ELECTRIC COMPANY 3. Attachment A: PDF document titled "Old Encina Power Station Chimney* Preservation!" g. Chain of title, if available; See County Property tax records Old Encina Power Station Chimney* Preservation! Page 1Jim.Strickland1@sbcglobal.net*Chimney only Encina Power Station From Wikipedia, the free encyclopedia The Encina Power Station (EPS)is a large natural gas and oil-fueled electricity generating plant located in Carlsbad,California, in San Diego County. Constructed in 1954, it is one of the major suppliers of electricity for the region as well as one of the region's oldest. The plant is owned by NRG Energy.[1] Location[edit] EPS sits on the southern shore of the outer segment of the Agua Hedionda Lagoon; once a stinking pool at low tide, it was opened to a continuous tidal flow to create a cooling system that was constructed along with the plant. Now home to blue herons, ibises, and a multitude of aquatic life, the lagoon is attached to the ocean and other waterways through rising tide levels and various small creeks. The lagoon serves as EPS' source for its once-through cooling and is also owned by NRG Energy. Title 22 HISTORIC PRESERVATION Page 2 https://sandiegohistory.org/journal/1956/july/light-2/ With no city government –and county government 35 miles away in San Diego –the Chamber quickly became the voice of the community. The agenda for a community dinner meeting in April of 1926 included discussion of the following topics… •Tree trimming by the electric company. •Distribution of Chamber membership signs. •Opening Kelly Slough to the ocean – because it smelled. •Building and painting of street signs. •Lobbying the U.S. Post Office Department for daily Rural Route service. •Producing a promotional pamphlet about the community. https://carlsbad.org/about/history/ Carlsbad Chamber History The Encina Power plant was responsible for the dredging of Agua Hedionda which created a new and improved eco system and the unique recreational opportunities. Page 22.02.020 Purpose and intent. It is the intent and purpose of this title to: A.Effect and accomplish the protection, enhancement and perpetuation of historic resources that represent or reflect elements of the city’s cultural, social, economic, political and architectural history; B.Safeguard the city’s historic heritage by encouraging preservation of its historic resources; C.Stabilize and improve property values; D.Foster civic pride in the character and accomplishments of the past; E.Protect and enhance the city’s historic attractions for residents, tourists and visitors and serve as a support and stimulus to business and industry; F.Strengthen the economy of the city; G.Promote the use of historic districts and landmarks for the education, pleasure and welfare of the people of the city. (Ord. NS-433 §2, 1997; Ord. 9776 §1, 1985) Carlsbad Municipal Code Title 22 HISTORIC PRESERVATION Page “A classic example of brutalist architecture.”c, brutalist architecture. Exposed concrete at its finest! Rumor has it, the concrete building and smoke stack will be decommissioned and demolished once the new power plant is built to the east of the existing site. Like the charger stadium in mission valley, these text book examples of mid-century modern design may be lost for all future generations because it he aesthetic doesn't align with current, contemporary buildings. This monolithic, industrial power plant is a staple to all San Diego residents traveling north or south on the 5 and erasing this from our collective memory would be a mistake. Preserve our architectural history!!' Jade D. San Diego, CA This thing is like literally unimaginably ugly and I just cant understand how it is not relocated. The City of Carlsbad is such a nice little place , but standing on the beach and turning around to see that was a joke. Most locals claim to like it ..but thats only because visitors hate it. • Mike T. •Oshawa, Canada Everyone has an opinion… Page Astrodome Revitalization Project[edit] After the failed plans of past years, the Astrodome Revitalization Project was proposed in September 2016. This plan would turn the dome into a massive underground parking garage. Specifically, the first step would raise the dome floor and use the space underneath that as parking, leaving the floor above for other uses. On September 27, 2016, the Harris County Commissioners approved the first part of the plan. This marked a major turning point for the dome, as some feared if the plan wasn't approved the building would be demolished.[37][38][39]On January 27, 2017, the Texas Historical Commission voted unanimously to designate the dome a State Antiquities Landmark.[40]Under the designation, the Astrodome may no longer be removed, altered, damaged, salvaged, or excavated without a permit from the commission.[41]The Harris County Commissioners voted to approve a $105 million renovation plan on February 13, 2018. https://en.wikipedia.org/wiki/Astrodome Example of Historic Preservation Page Agua Hedionda Lagoon -History For tens of thousands of years a complex of coastal wetlands extending from Santa Barbara to San Diego has been part of the Pacific Flyway, one of four continental routes where migratory water birds and shorebirds have taken wing from breeding grounds in northern latitudes to southern wintering grounds. The lagoons of North San Diego County estuarine complex are composed of vegetated salt marshes, unvegetated salt and mud flats, and subtidal waters. The southern portion of the complex extends southward from Oceanside to Ensenada has been inhabited by the first peoples of the New World for thousands of years. At the time of the first contact with the Spanish, the native population in San Diego County was estimated to be about 30,000, made up of five major tribes, the Luiseno, Cahuilla, Cupeno, Kumeyaay, and Diegueño. These peoples lived in semi-permanent villages, foraging for shellfish, seaweeds, as well as fishing, and hunting small game. When the Spaniards began establishing ranches, farms and missions, they brought non-native plants, horses, cattle, goats, sheep, pigs and chickens. These invasive plants and livestock began to degrade native ecosystem systems. Prior to Spanish colonization, the Agua Hedionda Lagoon was a healthy coastal estuary. Livestock runoff flowing into the lagoon’s eroded its long-standing circulation with the Pacific Ocean. The lagoon’s character changed and original Spanish name given to the lagoon, “San Simon Lipnica,” was changed to “Agua Hedionda,” which translates to stinking, pestilent waters. The lagoon has been transformed into a silty, shallow breeding ground for mosquitoes and mud flat. The once verdant marsh reeds and clear lagoon waters teeming with wildlife had become a stagnant pool, clogged with thick algal blooms. The wildlife fish and shellfish that native peoples had relied on for centuries were decimated and lands degraded to where native peoples no longer could continue their traditional way of life.Page Successive waves of land owners continued to transform the California’s southern coastal landscape, bringing more waves of new settlers, roads, and eventually the railroad in 1885. Soon the town of Carlsbad was founded in 1887, and grew from a Santé Fe Railroad whistle stop, to eventually become an attractive, seaside destination. In 1952 Carlsbad was incorporated as a city to avoid annexation by Oceanside. After Carlsbad’s corporation as a city, SDGE purchased the Agua Hedionda Lagoon and surrounding lands for the purpose of restoring the lagoon’s connection with the Pacific and using seawater to cool its electrical power generators that were being built to serve Carlsbad’s rapidly growing population. The lagoon’s was dredged in 1952, permanently reopening ocean circulation to supply cooling waters for SDGE’s Power Plant, built on the south side of the lagoon. Sand from littoral drift enters the lagoon at the rate of more than 100,000 cubic yards per year and has been removed at two-year intervals to maintain the cooling water basin of the outer lagoon. Agua Hedionda Lagoon, a shallow pool closed to the Pacific at low tide since early European settlement, was dredged and reopened to a continuous tidal flow to cool SDGE’s Encina Power Station, constructed in 1954. Lagoon health improved and the impaired body of water became home to Great Blue herons, Brown Pelicans, Ibises, Snowy Egrets, Western Grebes, Double-crested Cormorants, Ospreys, and many other species of birds, Coyote, Fox, Bobcats, Rabbits and other mammals, amphibians, lizards and snakes, Olympia Oysters, Rock Scallops, Clams, Cockles, Sea Stars, Sea Urchins and host marine invertebrates. Other wild visitors to the restored lagoon include Dolphins, Harbor Seals, Sea Lions and Sea Turtles. After Agua Hedionda Lagoon’s circulation was restored, scientists from San Diego State University, later joined by shellfish farmers, began growing shellfish in the lagoon. Since then billions of shellfish have been grown in the lagoon, filtering its waters, keeping the waters healthy and clear, allowing the lagoon’s Eelgrass beds to expand and its amazing diversity of wildlife to recover and flourish.Page History Shellfish aquaculture in the City of Carlsbad‘s Agua Hedionda Lagoon began as a California Sea Grant research project by San Diego State University in the 1960’s. Their research determined which shellfish species were best suited to grow in the lagoon, which, at the time had been reconnected with the Pacific Ocean. Their research concluded the lagoon was ideal for growing shellfish and that the lagoon’s long-term health would benefit from the biofiltration eco-services provided by millions of shellfish. Soon thereafter the scientists joined forces with shellfish farmers to establish the Carlsbad Aquafarm and start growing shellfish. Carlsbad Aquafarm is grateful for the support it receives from NRG Energy, which owns and operates the Encina Power Station and provides stewardship of the Agua Hedionda Lagoon. NRG has long recognized the ecological importance of the Carlsbad Aquafarm and its brand value to Carlsbad as a “Working Waterfront” and place people earn a living by sustainably working in harmony with the sea. Aquaculture research has continued for over 60 years and now includes the USC’s Wrigley Marine Labs (Selective breeding of Pacific Oysters for resiliency in a changing ocean ), San Diego State University, Aquaculture Training), UCSD, SIO and Southern California Coast Ocean Observatory (Ocean Acidification), California State University Fullerton (Living Shoreline Restoration with Native Oysters Eelgrass) and the UC Davis Bodega Marine Lab (Abalone Research and Population Restoration). Agua Hedionda Lagoon Commercial Aquaculture is celebrating its 50th Anniversary. However, harvesting shellfish in the area began over 13,500 years ago when the New World’s first people made their maiden journey down the west coast, fishing, and beachcombing for shellfish in the region’s coastal lagoon.Page October 3rd 1976 Tragically six lives were lost building this chimney. 22.02.040 Definitions. For the purpose of this chapter, the following words and phrases shall have the following meanings: “Historic landmark” means any property or improvement, manmade or natural, which has special historic, cultural, architectural, archeological, or community interest or value as part of the development, heritage or history of the city, the State of California, or the nation, and that has been designated as a historic landmark pursuant to this title. “Historic site” means any parcel or portion of real property which has special character or special historic, cultural, archeological, paleontological, architectural, community or aesthetic value. (Ord. NS-433 §2, 1997; Ord. NS-141 § 1, 1991; Ord. 9835 §1, 1987; Ord. 9776 §1, 1985) 22.06.030 …Without the property owner’s consent to the proposed designation, a site shall not be designated a historic site or landmark. Carlsbad Municipal Code Title 22 HISTORIC PRESERVATION Page Iconic Carlsbad landmark visible from aircraft, ships at sea, from Dana Point, La Jolla and Palomar mountain. Carlsbad, home sweet home Page (Visual Flight Rules) VFR waypoints provide VFR pilots with a supplementary tool to assist with position awareness while navigating visually in aircraft equipped with area navigation receivers. While this issue was taking shape on the northern end of town, another equally important and more immediate development was occurring along the ocean and Agua Hedionda Lagoon. In 1948, the San Diego Gas and Electric Company bought 110 acres along the Agua Hedionda Lagoon to construct a power plant. Development of the power plant would generate more than just electricity, it would produce a tremendous amount of tax money, funds that could be used to establish and maintain a city government. By the early 1950s the power plant represented a potential source of income to run a city. We also have an idea planted that incorporation and the formation of local government would solve many issues and problems. On January 1, 1952 an event that acted as a catalyst brought everything to a head. A devastating house fire occurred on New Years Day 1952 which underlined Carlsbad’s totally inadequate municipal services. http://www.carlsbadhistoricalsociety.com/ Built by America’s Greatest Generation Fiscal foundation for a new city Page The Encina power plant played a major role in the growth and prosperity of San Diego and Carlsbad. 1950 population 556,808 Page 22.02.050 Review of environmental documents. As part of the environmental review of development projects affecting historic structures, archeological or paleontological sites, as shown on the historic resources inventory or as identified in the environment study, the environment documents shall be referred to the historic preservation commission for review. The commission may review and comment upon the environment documents of the referral. The commission shall comment within the public review time limits established by the California Environmental Quality Act. (Ord. NS-433 §2, 1997; Ord. NS-141 §2, 1991; Ord. 9776 §1, 1985) CEQA? Agua Hedionda water skiing circa 1960… Page Page The property is envisioned to be zoned “VC” Visitor-serving commercial Page A contract was agreed upon for a multitude of conditions including NRG to demolish the above ground structures. Contracts commonly get modified and there a provisions for extending the time for “performance for any term covenant or condition…” Page SETTLEMENT AGREEMENT DATED AS OF JANUARY 14,2014 BETWEEN AND AMONG THE CITY OF CARLSBAD, CARLSBAD MUNICIPAL WATER DISTRICT, CABRILLO POWER I LLC, CARLSBAD ENERGY CENTER LLC AND SAN DIEGO GAS & ELECTRIC COMPANY SETTLEMENT AGREEMENT (this "Agreement") is entered into as of January 14,2014, THIS SETTLEMENT AGREEMENT by and among the City of Carisbad, a charter city, located in San Diego County (the "City"), and Carlsbad Municipal Water District ("CMWD"). Cabrillo Power I LLC and Carlsbad Energy Center LLC (collectively, "NRG"), and San Diego Gas & Electric Company ("SDG&E"). The City, NRG and SDG&E are sometimes referred to in this Agreement collecfively as the "Parties“ and individually as a "Party", except that SDG&E is a Party solely for purposes of Article 5 and Article 12. Unless otherwise defined in this Agreement, initially capitalized terms used in this Agreement shall have the meaning given them in Article 1 below. The Parties are entering into this Agreement to resolve long-standing disputes between the City and NRG regarding tiie Carlsbad Energy Center Project ("CECP" or the "Project"), and to provide for the redevelopment of the site of the Encina Power Station. This Agreement, if and when it becomes effective according to its terms, provides for, among other things: (i) the retirement, decommissioning, demolition and removal of the Encina Power Station, (ii) the remediation and redevelopment of the Encina Redevelopment Site (as defined below), (iii) the permitting, constmction and development of the CECP, (iv) the relocation and constmction of the New Service Center (as defined below), and (v) other changes in energy infrastmcture and property considerafions beneficial to the residents of Carlsbad.Page 12.11 Extensions by the City Upon the request of NRG or SDG&E, the City Attomey or his or her designee may, by written instmment and in the City Attomey's sole and absolute discretion, extend the time for NRG's or SDG&E's performance of any term, covenant or condition of this Agreement or permit the curing of any default upon such terms and conditions as he or she determines appropriate, including but not limited to, the time within which NRG or SDG&E shall agree to such terms or conditions, provided, however, any such extension for more than thirty (30) days or the permissive curing of any particular material default will be subject to approval of the City Council by resolution and in no event will operate to release any of NRG's or SDG&E’s obligations nor constitute a waiver of the City's rights regarding any other term, covenant or condition of this Agreement or any other default in, or breach by NRG or SDG&E of, this Agreement or otherwise affect comphance with the otiier dates for performance under this Agreement. Page Permanent New power plant SDG&E North Coast Service Center ?? Permanent Switching yard Permanent Sewer lift Station Permanent Desalinization plant NRG Encina Power plant Cannon park Major Industrial Site that will REMAIN a Major Industrial Site Page Power plant footprint Switching yard will remain Page Streamlined access to the site from I-5 Direct Access Ramp similar but “mirrored” to the West Direct Access Ramp, DAR, to and from HOV lanes and underground parking Traffic below grade / underground beneath railroad tracks directly to underground parking Carlsbad Boulevard Traffic underground / Covered as an open space Public oceanfront promenade! Sketch by Jim strickland 9/29/2019 https://www.google.com/maps/@33.1352252,-117.3373672,3a,75y,90t/data= !3m8!1e2!3m6!1sAF1QipP3jrsgC7-MFlPg0TEmvYYkKikLZumruAogiXeq!2e10!3 e12!6shttps:%2F%2Flh5.googleusercontent.com%2Fp%2FAF1QipP3jrsgC7- MFlPg0TEmvYYkKikLZumruAogiXeq%3Dw203-h152-k-no!7i4000!8i3000 Carlsbad Boulevard with traffic underground to create unbroken oceanfront access for public promenade Carlsbad Boulevard Traffic is underground / covered Newly created open space, public oceanfront promenade! 1)Request that the Historical Preservation Committee safeguard the city’s historic heritage, perpetuate our historic resources and advise the City Council to allow the Encina Power Plant Chimney to remain standing after the demolition of the Power Plant building. Page Public Art • Iconic Artwork • Wayfinding Artwork • Temporary Art • Points-of-Interest Artwork • Neighborhood Identity Artwork Page According to Gail Goldman, an art consultant hired by the City of Carlsbad to lead the master plan update, many successful public art projects sparked controversy at first, such as the iconic Gateway Arch in St. Louis. Over time, however, this monument was embraced by residents and became recognized as a symbol of elegance and strength worldwide.Page In all, the Arts & Culture Master Plan has 49 action items to support enhanced arts and culture in Carlsbad. The “top 10” ideas include: 1.Research the feasibility of a new arts venue. 10. Create a plan to market Carlsbad as a destination for cultural tourism. Page Chimney preservation has been accomplished before. Page Smokestack Art and The Loop Carrie Gartner February 15, 2018 Daily News :Photography By: Provided by Carrie Gartner Page At a recent conference in Winnipeg I had the pleasure of visiting The Forks, an area located at the junction of two large rivers. The Forks has served as a gathering place for thousands of years and it’s now an active community space with parks, museums, restaurants, and, despite months of sub- zero temperatures, lots of outdoor activity spaces. One Winnipeg artist, aware of how compelling the first glimpses of spring are to a snow-bound city, wants to install a cluster of crocuses blooming from the top of an unused smokestack. This public art project would add a touch of whimsy to the area and remind visitors that spring was on its way. Smokestacks dot our landscape, and while some still serve a purpose, many have long since been abandoned. Most are also far too expensive to dismantle. Not surprisingly, artists are beginning to take notice of these vertical canvasses. Some envision colorful additions to the stacks like purple crocuses, flying pigs, or pink hearts. Others take a more traditional approach and paint them as they would a mural with scenes that reflect the history of the town. Page Page In New York City, a candle flickers on the side of a 50-foot brick smokestack on the banks of the East River. Funded by a local company, this permanent exhibit is a video projection visible every evening. And in Finland, the Turku Power Station displays a playful series of numbers in bright neon. The “Fibonacci Chimney” isn’t only a striking landmark —it invites people to stop and puzzle out its meaning. We have a smokestack on the Business Loop too, and these artists inspire us to see it not as an unused eyesore, but as an opportunity for creativity and artistry. When Water and Light wound festive lights around our smokestack this past holiday season, we realized its potential. As part of our Loop Corridor Plan, we’re looking at ways to beautify the street, add public art, and create iconic landmarks. Instead of trying to create a landmark from scratch, why not simply embrace the most visible piece of architecture on the Business Loop?The smokestack at the city’s power plant has long served as a midtown landmark —maybe it’s time we all started exploring the artistic possibilities. https://columbiabusinesstimes.com/2018/02/15/smokestack-art-coming-loop/ Perhaps the most stunning are the ones that play with light and projection. Spartanburg, South Carolina—a historic mill town—lit up not one but two old smokestacks as part of a city-wide celebration of lights. The City of Spartanburg was one of four communities nationwide awarded $1 million for temporary public art installations as part of the Bloomberg Philanthropies Public Art Challenge.The smokestacks were wrapped in reflective fabric and flood lights were programmed to project changing patterns of color onto them. Page The artist Erwin Redl has chosen to treat the smokestacks here and in Northside as two synchronized, large scale canvases for high-powered multicolored lights that bath the surface of the worn bricks. For the artist, these artworks offer a new way of seeing old structures. Redl celebrates the spirit of innovation and imagination with these icons of Spartanburg’s textile past. https://seeingspartanburg.com/sites /glow/ Page Smokin’ Stacks: 10 Ways To Upcycle Industrial Chimneys Article by Steve, filed under Gadgets & Geekery in the Technology category Once soaring symbols of the Industrial Revolution and material progress, smokestacks later became the poster kids of environmental degradation. Today, legions of artists, urban planners and preservationists are seeking to change those carbon chugging chimneys from sooty to beauty. What say ye, is the deck stacked against the world’s towers of industrial power? Even the name “smokestack” reeks of throat-searing particulate clouds and eye- watering emissions. And yet, these chimneys symbolize society’s leap from rural to urban, from agricultural to technological. They are a part of Us – and along with Us, embody the potential for rehabilitation and redemption. https://weburbanist.com/2009/12/20/smokin-stacks- 10-ways-to-upcycle-industrial-chimneys/Page Chimney Stacks, Bagnolet, France Call it greenwashing if you like, but the twin 155-meter (510 ft) smokestacks at a suburban Paris heating plant certainly do look cleaner after artist Frederic Gracia gave them the trompe-l’oeil treatment. The largest faux water drops measure 1.1 meters (3.6 feet) in diameter and were painted on by Gracia himself.Page Page Email theartist@snyderartdesign.com for artwork inquiries. Safeguard the city’s cultural architectural heritage Page Page “What better way to raise awareness of the Shows than by turning our chimney into a glowstick?” It’s more than a landmark lit to amazing effect. A vintage tea party is being thrown inside, as well as hourly tours explaining the redevelopment of the imposing building, which has already won architectural awards after opening in December. “This year we have more venues taking part than ever before,” says Bill Griffiths, the leader of the Shows. “This is the first time that our logo has been projected onto a building on such a large scale. I’m sure that it will attract many visitors to a very exciting event.” Page Public Art Public art can serve as a key component of place-making, playing a significant role in defining the character of a community while contributing to the aesthetic quality of public spaces. These distinct visual elements whether permanent or temporary, kinetic or stationary, stand-alone or integrated into the architecture and landscaping can define a destination and gathering place, as well as serving as a wayfinding element. Public art can serve as a point of reference and landmark, welcoming and orienting residents and visitors to Carlsbad. It can reinforce primary gateways, streets, bikeways, traffic islands, medians, and neighborhood centers. It can strengthen critical linkages, including pedestrian passages to the beach, and enliven the pedestrian experience. Public art for streetscape and neighborhood improvement can take many forms including: • Iconic Artwork. Iconic artwork is significant, large-scale permanent artwork serving as defining landmarks at major gateways into Carlsbad, at civic centers, and on major boulevards and intersections. • Wayfinding Artwork. Wayfinding artwork is permanent artwork located in active vehicular and pedestrian intersections. It serves to connect key locations within Carlsbad’s core, enhance pedestrian circulation, and guide passage to and from the beach and other destinations. • Temporary Art. Temporary art installations are non-permanent artwork in a range of media and scale that are displayed for a limited amount of time. The artwork serves to enliven and refresh the pedestrian experience, enhance tourism and pique public awareness of the built and natural environments. Priority placement is in high-traffic pedestrian areas where first-time and repeat visitors can delight in a changing environment. • Points-of-Interest Artwork. Points of interest artwork at boulevards and special streets are individual or multiple artworks placed at select locations along the sidewalks, bikeways, and in open spaces along a heavily trafficked vehicular and pedestrian thoroughfare. The artworks serve as points of interest and visual respite along the corridors and to delineate and connect key places and neighborhoods. • Neighborhood Identity Artwork.Neighborhood identity artwork is permanent artwork located in neighborhood centers and parks where people congregate, interact, and engage in social activities. The artwork augments a sense of neighborhood identity and signals a community gathering place.Page "Don't throw the baby out with the bathwater" Page Duties of (Arts Commission) Advises the City Council on the implementation of the arts element of the Carlsbad General Plan. Duties include, but are not limited to: •Encouraging individuals and organizations that provide an educational experience in the arts for the citizens •Providing direction and support for continued development and presentation of a variety of arts in the city •Providing a forum for arts concerns and recommendations to the elected officials and their staff concerning arts issues •Reviewing and making recommendations upon all works of art to be acquired by the city, either by commission, purchase, gift or otherwise, and their proposed locations Source: Carlsbad Municipal Code, Chapter 2.18 Contact Us Richard Schultz Cultural Arts Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 760-602-2086 richard.schultz@carlsbadca.gov Page 1)Request that the Arts Commission embrace the most visible piece of architecture in Carlsbad, safeguard the city’s historic heritage and works of art and recommend the City Council to allow the Encina Power Plant Chimney to remain standing after the demolition of the Power Plant building, until the redevelopment approvals for the property are finalized. Page nrg~= By Email I ❖ -■ -:--I Mr. Scott Chadwick, City Manager City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 October 9, 2019 Re: Encina Power Station -Status of Stack Dear Mr. Chadwick: Ca brillo Power I LLC 804 Carn egie Center Prince ton, NJ 08540 Cabrillo Power I LLC is the owner of the now-retired power plant known as the Encina Power Station ("Encina") located at 4600 Carlsbad Boulevard in the City of Carlsbad ("City"). It has come to our attention that a member of the public is seeking to designate Encina's stack as an historic site or landmark pursuant to app li cable provisions of the City's ordinances, including Chapters 2.42, 22.02, of 22.06 of the City's Municipal Code. We note that Section 22.06.030.E of the City's Municipal Code states that a site shall not be designated an historic site or landmark without the property owner's consent to the proposed designation. By this letter, Cabrillo expresses its opposition to the designation of the Encin a stack as an historic site or landmark. Should you have any questions regarding the foregoing, please contact the undersigned at eric.leuze@nrg.com or 916.200.6187. cc (by email): Very truly yours, Eric Leuze Vice President Cabrillo Power I LLC Celia Brewer, Esq. -City Attorney, City of Carlsbad Heather Pizzuto -Director, Library & Cultural Arts, City of Carlsbad Gary Barberio, Deputy City Manager, City of Carlsbad Sean P. Beatty-NRG Dianna Galindo From: Sent: To: Cc: Subject: To Whom It May Concern : Carrie Lancon <Carrie.Lancon@eusd.net> Thursday, November 14, 2019 1 :29 PM Suzanne Smithson jim.strick1and1@sbcglobal.net Historic Encina Power Plant Chimney Tower Please consider my request to refrain from taking down the historic chimney tower. This landmark is us~d by pilots on approach, especially if we are flying in weather. It is a historical marker for our beloved City of Carlsbad, and I reference it with school children when we talk about local landmarks. It is impressive to see their faces light up in acknowledgement when I say, "You know that tall tower by the beach?" The majority of our students know it and can always understand my reference. Personally, I love to see it when I look west, from any point in North County.; If there is any way it can be saved, I would be most appreciative. Sincere thanks for your consideration, Carrie Lancon Principal Carrie Lancon Capri Elementary School 1