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Home My WebLink About2020-11-19; Clean Energy Alliance JPA; ; Approve Increase in Promissory Note with Calpine Energy SolutionsClean Energy Alliance JOINT POWERS AUTHORITY Staff Report DATE: November 19, 2020 •TO: Clean Energy Alliance Board of Directors FROM: Barbara Boswell, Interim Chief Executive Officer ITEM 7: Approve Increase in Promissory Note with Calpine Energy Solutions RECOMMENDATION: Authorize increase in promissory note with Calpine Energy Solutions from $400,000 to the maximum $650,000 to provide funds for the Financial Security Requirement and Resource Adequacy collateral requirements. BACKGROUND AND DISCUSSION: At its August 20, 2020 meeting, the Clean Energy Alliance (CEA) Board authorized executing a $400,000 promissory note with Calpine Energy Solutions for a portion of a loan provided for in the agreement between CEA and Calpine. The agreement provided up to $650,000 in available funds. The initial funding included anticipated administrative costs related to start up. Since that time additional costs have been identified that were not anticipated in the initial promissory note. • These include the updated Financial Security Requirement and cash collateral deposits required as part of the resource adequacy procurements. Increasing the promissory note from $400,000 to $650,000 provides the funding necessary for these unanticipated costs. FISCAL IMPACT The $650,000 loan from Calpine is to be repaid beginning within three months of serving customers and fully repaid within twelve months. The loan is a debt of Clean Energy Alliance, and there is not recourse to the Member Agencies. ATTACHMENTS: None DocuSign Envelope ID: 44889588-8CFC-48B0-AFE6-4CDCO2FA0007 PROMISSORY NOTE 2 FOR VALUE RECEIVED, the undersigned, the CLEAN ENERGY ALLIANCE (the "Borrower"). hereby unconditionally promises to pay to the order of CALPINE ENERGY SOLUTIONS, LLC ("Calpine") the unpaid principal amount of each Advance (as defined in the Agreement referred to below) up to an aggregate maximum of $250,000, made by Calpine to the Borrower on the Maturity Date and on such other dates and in such other amounts as set forth in the Agreement between the Clean Energy Alliance and Calpine Energy Solutions, LLC, dated June 1,2020 (the "Agreement") and this Promissory Note 2. All payments of principal of the outstanding amounts of each Advance evidenced by this Promissory Note 2 shall be made in the manner specified in the Agreement and this Promissory Note 2. This Promissory Note 2 is in addition to the initial Promissory Note executed on September 16, 2020 in an amount of $400,000. The total of the initial Promissory Note of $400,000 and this Promissory Note 2 $250,000 is the total aggregate maximum loan amount of $650,000 made available in the Agreement between Clean Energy Alliance and Calpine Energy Solutions, dated June 1, 2020. Borrower hereby further promises to pay interest in like money and funds on the daily outstanding balance of each Advance for the period commencing on the date each Advance is deposited in Borrower's account until repaid in full, at the rate of 1 Month LIBOR plus two percent (2%) per annum not to exceed five percent (5%). The interest rate applied to each Advance shall be calculated using the posted LIBOR rate available on the date that each Advance is wired from Contractor's account to Borrower's account. Each Advance including interest shall be repaid by Borrower in twelve (12) equal monthly installments beginning ninety (90) days after the Power Start Date. Full reimbursement shall be made on or before fifteen (15) months after the Power Start Date which is the Maturity Date. The Parties agree that Advances shall be made on an "as needed" basis and Borrower shall provide reasonable documentation detailing the purpose for which each Advance Is drawn, as a precondition to the Advance being issued by Calpine. All payments of principal of and interest under this Promissory Note 2 shall be made by the Borrower not later than 2:00 pm (Pacific Prevailing Time) on the date when due to Calpine at its office located at 401 West A St., Suite 500, San Diego, CA 92101 (or such other address as Calpine may designate in writing to the Borrower) in lawful money of the United States of America, in immediately available funds without setoff', deduction or counterclaim and free and clear of any present or future taxes, levies, imposts, duties, fees, assessments or other charges. Calpine is authorized to make notations of all Advances made to the Borrower by Calpine and all repayments of the outstanding principal amounts and accrued interest on such Advances on the schedule attached to and made part of this Promissory Note. Such notations, if made, will be conclusive and binding absent manifest error. This Promissory Note 2 is the Note referred to in the Agreement (as amended, restated, supplemented or otherwise modified from time to time) between the Borrower and Calpine. The provisions of this Promissory Note 2 supersede the provisions of the form of Promissory Note attached as Exhibit C to the Agreement in addition to all principal and accrued interest on this Promissory Note 2, the Borrower agrees CLEAN ENERGY ALLIANCE DocuSigned by: r 15Adiara. 66SWIli, By: 01104113E80851488.. By: Ordd, kidA, CALPINE ENERGY SOLUTIONS DecuSIgned by: I-611 IJI-4LIILJOI4L.M... DocuSign Envelope ID: 44889588-8CFC-48B0-AFE6-4CDCO2FA0007 to pay (a) all costs and expenses incurred by all of the holders of this Promissory Note 2 in collecting this Promissory Note 2, whether through probate, reorganization, bankruptcy or other proceedings and (b) attorney' s fees when and if this Promissory Note 2 is placed in the hands of an attorney for collection. Presentment, demand, protest and notices of any kind with respect to this Promissory Note 2 are hereby expressly waived by the Borrower. Notwithstanding any other provision of this Promissory Note 2, in the event that any change in any applicable law or regulation or in the interpretation thereof by any Governmental Authority shall make it unlawful for Calpine to honor its obligation to make, issue or maintain any Advance hereunder, then Calpine shall promptly notify Borrower thereof and Calpine' s obligation to make such Advance, or to continue the Advance, shall be suspended until such time as Calpine may again lawfully make and maintain the Advance and, on the date specified by Calpine in light of legal requirements applicable to Calpine, the Advance shall become payable at an interest rate per annum established in the Agreement and this Prom issory Note 2. THIS PROMISSORY NOTE 2 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS PROMISSORY NOTE 2 SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA. Barbara Boswell Drake wel ch Name: Name: "Fitle: Interim chi Title: ef Executive Officer sr. vice President 12/2/2020 12/3/2020 Date: Date: APPROVED AS TO FORM artioni Sitfatkiadt. nC721309C014r493... Gregory Stepanicich Clean Energy Alliance General Counsel (.--- DocuSigned by: (----DocuSigned by: Otwq, nisFet7C.711CRA4q7 Date of Borrowing Principal Amount Interest Rate Payment Date DocuSign Envelope ID: 44889588-8CFC-48B0-AFE6-4CDCO2FA0007 Schedule to Promissory Note 2 of the CLEAN ENERGY ALLIANCE Dated November 30, 2020 B-1