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Home My WebLink About2021-09-30; Clean Energy Alliance JPA; ; Approve Assignment of a Portfolio Category 1 Long-Term Renewable Energy Agreement with Shell Energy North America from Solana Beach to Clean Energy AllianceSeptember 30, 2021 Long-Term Renewable Agreement Page 2 of2 term renewable requirement also has transitioned to CEA. This assignment ensures that there is sufficient long-term renewable energy being supplied for former SEA customers, and CEA does not find itself short of meeting the requirement. FISCAL IMPACT Funds for the long-term renewal power purchase agreement will come from revenue generated from CEA customers and costs are within the assumed costs in the CEA pro form a that was used to set CEA rates. ATTACHMENTS Shell Energy North America Transaction Confirmation Dated April 5, 2021 DocuS gn Enve ope ID: 63E8041 A E075 4BAA 922C F90E58DDDFE6 Item 5 Attachment ~ Shell Energy North America (US), L.P. City of Solana Beach ( d/b/a Solana Energy Alliance Shell Energy North America (US), L.P. Contract ID: Contract ID: Deal Maker: Greg Wade Deal Maker: Vince Velasquez Phone:858-720-2431 Phone: 858-320-1507 E-Mail: gwade@cosb.org Email: vince.velasquez@shell.com TRANSACTION CONFIRMATION Resource Contingent Bundled Renewable Energy ("PCCl") Resale This Transaction Confirmation (this "Confirmation") is entered into this 5th day of April, 2021 ("Effective Date"), by and between City of Solana Beach (d/b/a Solana Energy Alliance ("Solana Beach" or "Buyer") and Shell Energy North America (US), L.P. ("Shell Energy" or "Seller"), each referred to herein individually as a"~" and collectively as the "Parties", regarding the purchase and sale of the Product (as defined below) under the terms and conditions herein. Capitalized terms used in this Confirmation and not defined herein have the meaning assigned thereto in the Master Agreement (each as defined below). The Master Agreement and this Confirmation shall be collectively referred to herein as the "Agreement." Seller: Buyer: Master Agreement: Product: Environmental Attributes: Project: Shell Energy Solana Beach This Confirmation shall be governed by the terms and conditions of the EEi Master Agreement, dated effective April 5, 2021, (as amended from time to time, the "Master Agreement"). Te1ms not defined in this Confirmation shall have the meaning set forth in the Master Agreement. As used herein, "Product" shall consist of energy produced hourly by the Projects that is simultaneously bundled with the associated Renewable Energy Credits ("RECs") generated therefrom, which qualifies as Portfolio Content Category 1 ("PCCl ") (as further defined below), and which also qualifies for the California Renewable Portfolio Standard ("RPS"). The only Environmental Attributes conveyed under this Confirmation as part of the Product are Program Attributes under the Applicable Program, which for purposes of this Confirmation is the California Renewables Portfolio Standard (as defined in the Definitions section hereof). The Parties agree that the Product will be sourced only from the specific Projects identified in Exhibit A with no substitutions. As used herein "Project" shall mean the generating facilities listed in Exhibit A attached hereto and incorporated herein, each of which is: (i) certified as an ERR for the California RPS and registered with WREGIS, and (ii) from which Seller is entitled, pursuant to its agreements, to the output of the Energy and associated RECs, and such output is used to source the Product delivered hereunder during the Delivery Term (each, a "Project" and collectively, the "Projects"). In addition, each Project either: (i) has a first point of interconnection with a California balancing authority; or (ii) has its first point of interconnection with distribution facilities used to serve end users within a California balancing authority area; or (iii) the generation from the Project is scheduled into a California balancing authority without substituting electricity from any other source, provided that, if another source provides real-time ancillary services required to maintain an hourly or subhourly import schedule into the California balancing authority only the fraction of the schedule actually generated by the Project from which the electricity is procured may count toward this Product; or (iv) the generation from the Project is scheduled into a California balancing authority pursuant to a I DocuS gn Enve ope ID: 63E8041A E075 4BAA 922C F90E58DDDFE6 Contract Quantify: Delivery 2021 Year Quantity (MWh) Contract Price: Delive1y Tenn: Delive1y Point: Scheduling: REC Transfer: Settlements and Payment: Supporting Data: Co111plia11ce -- dynamic transfer agreement between the balancing authority where the Generating Facility is located and the Califomia balancing authority into which the generation is scheduled. Additional resource(/>) that qualify as ERRs may be added to Exhibit. A prior to generation of Energy and associated RECs by Seller at Seller's discretion from time to time with three (3) Business Days' prior written notice, and provided such resource meets the RPS compliance requirements for PCCl and the California Long Tenn Contracting Requirements. Per the Table below: 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 ----1--1---1--1----1-----1-- [Total: MWh The price for each MWh of Energy delivered at the Delivery Point (the "Energy Price") shall be determined in accordance with the procedures and mies of the California ISO. The price for each REC delivered to Buyer (the "REC Price") is per REC. Together, the Energy Price and the REC Price constitute the "Contract Price". ConunencingApril 5, 2021, through December 31 , 2034; provided that the Energy associated with all 2021 Product shall be generated and delivered in April 2021. The RECs attributable to the Energy generated during the Delivery Tem1 but created after the Delivery Term shall be transferred to and paid for by Buyer in accordance with the terms of this Confim1atiou. CAISO or California balancing authority Seller will perform all scheduling and tagging requirements as 'may be applicable to the Transaction contemplated herew1der. These services will be performed consistent with all applicable California ISO and WECC Scheduling Protocols. Subject to receipt of Buyer's payment in accordance with di.is Confirmation, Seller will transfer the RECs purchased and sold hereunder to Buyer's WREGIS accow1t 110 later than May 1st of the year following the year in wli..ich the Energy to which such RECs are attributable was generated. Seller shall deliver the Product transferring the RECs, with associated NERC e-Tags (if any) through WREGIS, to Buyer's (or Buyer's Designee's) designated WREGIS account(s). California ISO shall pay Seller directly the Energy Price for the Energy portion of the Product in accordance with the California. ISO .requirements and procedures and Buyer shall not be required to pay any additional amount to Seller in respect of such Energy or the Energy Price. Seller shall invoice Buyer for the REC Price once the RECs associated with the delivered Energy portion of the Product are available in Seller's WREGIS account for transfer to Buyer. Buyer shall pay tl1e REC Price to Seller 110 later than fen (10) Business Days following receipt of Seller's invoice. Seller shall have 110 obligation to deliver the REC portion of the Product until it receives tl1e REC Price. Seller shall transfer the RECs to Buyer's (or Buyer's Desiguee's) designated WREGIS account(s ), within five (5) Business Days following receipt of full payment of the. REC Price. Because Buyer is required to prepay for t11e Product pursuant to this provision, Section 6.9 of the Master Agreement is not applicable to tli..is Transaction. In the event that tl1e Product being transferred from Seller to Buyer originates from a Project(s) from outside of the state of California, Seller shall provide Buyer a reconciliation consisting of hourly meter data, tag data and associated calculations, lesser of each by hour, for each vintage month ofRECs delivered to Buyer under tli..is Coufinnation. 2 DocuS gn Enve ope ID: 63E8041 A E075 48AA 922C F90E58DDDFE6 With RPS: Change in Law Provisions: Seller represents and warrants to Buyer that the purchase and sale of Product pursuant to this Confirmation is a resale and meets the following additional requirements: (i) The original upstream third-party contract(s) meets the criteria of California Public Utilities Code Section 399.16(b)(l); (ii) this Confirmation transfers only Energy and RECs that have not yet been generated prior to the effective date of this Confomation; (iii) in connection with the transfer of the Energy and associated RECs that comprise the Product purchased and sold under this Confirmation, the Energy transferred by this Confirmation is transferred to Buyer in real-time via sale by Seller to, and purchase by Buyer from, the California ISO; and (iv) if applicable, the California Renewables Portfolio Standard-eligible energy is scheduled from one or more eligible renewable energy resources that are not interconnected to a California balancing authority into a California balancing authority without substituting electricity from another source, and the original hourly or subhourly schedule is maintained. In the event that: (i) the RPS program is superseded by any successor or substantially similar renewable portfolio standard, including without limitation a federal renewable portfolio standard or substantially similar program (each of the foregoing, a "Successor Program"), or (ii) the PCCl Product is superseded by any successor or substantially similar product, or the like (the foregoing a "Successor PCCl Product"), and the Successor Program and/or Successor PCCl Product permits the transfer of the PCCl Product that is substantially equivalent to the PCCl Product purchased before the change described in (i) or (ii) above, then such PCCl Product sold and transferred hereunder from Seller to Buyer shall be deemed "Successor Product". The Parties will in good faith amend the terms of this Confirmation solely to comply with the requirements for delivery of such Successor Product to Buyer under such Successor Program and/or Successor PCCl Product in order to effect the intent of this Confirmation; provided, however, that Seller will take commercially reasonable actions to meet the qualifications of the Successor PCCl Product, but will not be required to incur any costs in excess ofan aggregate amount equal to $250,000.00 (the "Compliance Cap") in order to comply with the Successor Program and the Successor PCCl Product, collectively. If, after Seller has taken commercially reasonable efforts up to the Compliance Cap, the product generated by the Project is unable to qualify under Successor Program and/or Successor PCCl Product, then either Seller or Buyer shall have the right but not the obligation to incur costs above the Compliance Cap to qualify for the Successor Program or Successor PCC 1 Product. If after the foregoing, the product generated by the Project is unable to qualify as Successor PCCl Product, then either Party shall have the right to tenninate this Confomation within sixty (60) days of such event. So long as no Event of Default shall have occurred and be continuing, neither Party shall be liable to the other Party for any damages or costs for such early termination. In the event that the qualifications or requirements of the RPS program, PCCl or the California Long Term Contracting Requirements change, Seller shall take commercially reasonable actions to meet the amended qualifications or requirements of the RPS program, PCCl or the California Long Term Contracting but will not be required to incur any costs in excess of the Compliance Cap to comply with the RPS program, PCCl or the California Long Term Contracting Requirements, collectively. If, after Seller has taken commercially reasonable efforts up to the Compliance Cap, the product generated by the Project is unable to qualify under the RPS Program, PCCl and/or the California Long Term Contracting Requirements, then either Seller or Buyer shall have the right but not the obligation to incur costs above the Compliance Cap to qualify for the RPS program, PCCl or the California Long Term Contracting Requirements. If after the foregoing, the product generated by the Project is unable to qualify for the RPS program, PCC 1 or the California Long Term Contracting Requirements, then either Party has the right to terminate the Confirmation within thirty (30) days of such event. So long as no Event of Default shall have occurred and be continuing, neither Party shall be liable to the other Party for any damages or costs for such early termination. SPECIAL PROVISIONS: 3 Dacus gn Enve ope ID: 63E8041 A E075 4BM 922C F90E58DDDFE6 A. Non-Modifiable Standard Terms and Conditions (1) Eligibility. Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource ("ERR") as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project's output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6, Non-Modifiable. (Source: D.07-11-025, Attachment A.) D.08-04- 009] (2) Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. [STC 17, Non-Modifiable. (Source: D.07-11-025, Attachment A) D.08-04-009] (3) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the renewable e~ergy credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08- 028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1, Non-modifiable. D.11-01-025] (4) Tracking ofRECs in WREGIS. Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System will be taken prior to the first delivery under the contract. [STC REC-2, Non-modifiable. D.11-01-025] B. Additional Terms and Conditions (1) Seller Representations and Warranties. Seller represents and warrants: (a) Except for years 2021-2024 of the Delivery Term, The Product supplied to Buyer under this Confirmation will be sourced solely from Projects, as defined above, including any additional resources added after the Effective Date, that are under contract with Seller for a term of ten (10) years or more in length, as measured from the date that the Project is added to Exhibit A; (b) Seller has the right to sell the Product from the Projects; ( c) Seller has not sold the Product, or the REC associated with the Product, to be transferred to Buyer to any other third party; (d) the Energy component of the Product produced by a Project and purchased by Seller for resale to Buyer hereunder is not being sold by Seller back to the Project or Project owner; (e) The Energy and RECs to be purchased and sold pursuant to this Confirmation are not committed to another party; (f) the Product is free and clear of all liens or other encumbrances; (g) Seller will deliver to Buyer all Energy and associated RECs generated by the Project pursuant to this Confirmation in compliance with the California Long Term Contracting Requirements; and (h) the Product meets the requirements set forth in PUC Code 399.16(b)(l)(A) and the RPS compliance requirements for Portfolio Content Category I in a manner consistent with Section 3203(a) of the Enforcement Procedures for the Renewables Portfolio Standard for Local Publicly Owned Electric Utilities (CEC-300-2013-002-CMF), as adopted by the California Energy Commission effective April 12, 2016, and Seller will cooperate and work with Buyer, the CEC, and/or the CPUC to provide any documentation required by the CPUC or CEC to support the Product's classification as a Portfolio Content Category 1 or compliance with the California Long Term Contracting Requirements. (2) Buyer Representations and Wa1rnnties. Buyer represents and warrants that Buyer has taken all necessary steps to establish a WREGIS account to receive the RECs to be transferred from Seller to Buyer prior to the first delivery under this Confirmation. (3) Mutual Representations and Warranties. The Parties agree this Confirmation constitutes a sale of a nonfinancial commodity for deferred shipment or delivery that the Parties intend to be physically settled and is excluded from the te1m "swap" as defined in the 4 DocuS gn Enve ope ID: 63E8041A E075 4BAA 922C F90E58DDDFE6 Commodity Exchange Act under 7 U.S.C § la (47) and related ruies. During the Delivery Period, each Party represents and warrants to the other that: it is an "eligible commercial entity" and an "eligible contract participant" within the meaning of United States Commodity Exchange Act §§la (47) and la (18), respectively, and this Transaction has been subject to individual negotiations by the Parties. (4) Data Privacy. The Parties may provide each other with information related to an identified or identifiable individual ("Personal Data"), the processing and transfer of which will be done in accordance with applicable data protection law. (5) Assignment. Provided that Buyer is not subject to an Event of Default, Seller agrees that Buyer shall have the right upon prior written notice to Seller to assign this Transaction to Clean Energy Alliance, a California joint powers authority ("CEA"), subject only to a written acknowledgement from CEA that CEA is assuming all obligations under this Transaction and that the Transaction will be governed by the EEI Master Agreement currently in place between Seller and CEA, dated as of March 16, 2021 (the "CEA Master Agreement"), including the lockbox arrangement under the Master Agreement. C. Amendments to the Master Agreement Confidentiality. Section 10.11, Confidentiality, of the Master Agreeml!nt is amended for purposes of this Confirmation by inserting after the word "proceeding" prior to the semicolon the following: "or to Deliver RECs pursuant to the requirements ofWREGIS". D. FERC Standard of Review; Mobile-Sierra Waiver (A) Absent the agreement of all Parties to the proposed change, the standard of review for changes to any rate, charge, classification, term or condition of this Agreement, whether proposed by a Party (to the extent that any waiver in subsection (B) below is unenforceable or ineffective as to such Party), a non-party or FERC acting sua sponte, shall solely be the "public interest" application of the ''just and reasonable" standard ofreview set f01th in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008), and NRG Power Marketing LLC v. Maine Public Utility Commission, 558 U.S. 527 (2010). (B) In addition, and notwithstanding the foregoing subsection (A), to the fullest extent permitted by applicable law, each Party, for itself and its successors and assigns, hereby expressly and irrevocably waives any rights it can or may have, now or in the future, whether under §§ 205 and/or 206 of the Federal Power Act or otherwise, to seek to obtain from FERC by any means, directly or indirectly (through complaint, investigation or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC changing any section of this Agreement specifying the rate, charge, classification, or other term or condition agreed to by the Parties, it being the express intent of the Parties that, to the fullest extent permitted by applicable law, neither Party shall unilaterally seek to obtain from FERC any relief changing the rate, charge, classification, or other term or condition of this Agreement, notwithstanding any subsequent changes in applicable law or market conditions that may occur. In the event it were to be determined that applicable law precludes the Parties from waiving their rights to seek changes from FERC to their market-based power sales contracts (including entering into covenants not to do so) then this subsection (B) shall not apply, provided that, consistent with the foregoing subsection (A), neither Party shall seek any such changes except solely under the "public interest" application of the ''just and reasonable" standard of review and otherwise as set forth in the foregoing section (A). ' E. Definitions/Interpretations For purposes of this Confirmation, the following definitions shall apply: "California Long Term Contracting Requirements" means the long-term contracting requirement set forth in the Clean Energy and Pollution Reduction Act of2015 (SB 350), California Public Utilities Code section 399.13(b ), and CPUC Decision 17-06-026 and CPUC Decision 18-05-026, as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. "California Renewables Portfolio Standard" means the renewable energy program and policies, codified in California Public Utilities Code Sections 399.11 through 399.32 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. "CEC" means the California Energy Commission or its regulatory successor. "CPUC" means the California Public Utilities Commission or its regulatory successor. "FERC'' means the Federal Energy Regulatory Commission or its regulat01y successor. 5 Dacus gn Enve ope ID: 63E8041A E075 4BAA 922C F90E58DDDFE6 No. Name of Facility I 2 3 4 5 6 7 8 No. Name of Facility I 2 3 4 I EXHIBIT A Eligible Renewable Resources 2021-2024 Fuel Source Location _ ...... 2025-2034 (Long Term Projects) Fuel Source Location -- 7 CECID WREGISID _ ..... -- -'-_ ..... _ ..... _ ..... -I--- -'--- CECID WREGISID _ ..... -1--_ ..... --