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HomeMy WebLinkAboutAgenda Report - August 3, 2011 C-0610 AGENDA ITEM C 0 CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: Adopt Resolution Approving the Northern California PowerAgency Market Purchase Program Agreement, Authorizing Execution by the City Manager with Administration by the Electric Utility Director, and Appointing the City Manager and Electric Utility Director as the Designated Representatives for Lodi MEETING DATE: August 3,201 1 PREPARED BY: Electric Utility Director RECOMMENDED ACTION: Adopt a resolution approving the Northern California PowerAgency Market Purchase Program Agreement, authorizing execution by the City Manager with administration by the Electric Utility Director, and appointing the City Manager and Electric Utility Director as the Designated Representatives for Lodi. BACKGROUND INFORMATION: The Northern California PowerAgency (NCPA) Commission approved a Market Purchase Program (MPP) Agreement at its July 2007 meeting. The MPP has provided participating NCPA members with services to secure short-term (less than five years) power purchase contracts from the market using NCPA staff and their power purchase agreements. At the inception of the MPP, Lodi made the decision not to participate in the MPP due to its high cost and security deposit requirements. Over the years Lodi has contracted with NCPA for subsets of the MPP services, such as the $40,832 letter of agreement approved by Resolution No. 2008-113 in June 2008. This letter of agreement excluded risk management services, including counterparty credit evaluation and monitoring, and required Lodi to negotiate, execute and maintain its own power purchase agreements. Since the implementation of the MPP, much start-up work has been completed and the current budget for the MPP has dropped from $203,400 for Fiscal Year 2007/08 to $58,275 for Fiscal Year 2011/12. Since 2007, the requirement to maintain Lodi's existing power supply contracts, to assess counterparty risk and complete credit analysis has become increasingly burdensome as the electric utility industry has continued to become more complex. In April 2011, the Lodi City Council adopted Resolution No. 2011-63 authorizing Lodi to participate in the NCPA Gas Purchase Program. Lodi will benefit by having the full range of NCPA services to provide coordination for both gas and power purchases. Purchases underthe MPP will be made using industry standard contracts including the Western Systems Power Pool Agreement (WSPP Agreement) or the Edison Electric Institute Master Power Purchase and Sale Agreement (EEI Master Agreement), with such modifications as have previously been approved by the NCPA Commission. Purchases are restricted to a maximum time period of five years. radt Bartlam, City Manager Adopt Resolution Approving the Northern California PowerAgency Market Purchase Program Agreement, Authorizing Execution by the City Managerwith Administration by the Electric Utility Director, and Appointing the City Manager and Electric Utility Director as the Designated Representativesfor Lodi August 3,201 1 Page 2 of 2 The MPP requires the appointment of "Designated Representatives"who are authorized to execute purchase confirmations and to approve modificationsto the standard as necessarywith the City Attorney's attestation for each transaction. It is recommended that both the City Manager and the Electric Utility Director be appointed as Lodi's Designated Representatives. The MPP requires each participantto pay a fixed $900/month plus a variable charge to cover the remaining portion of the MPP budget based on the purchases made through the MPP. Due to the large drop in the MPP budget it is expected that the majority of the costs will be covered by the $900 per month charge to each participant and that there will be little or no variable charge. The MPP allows all NCPA Members to sign up for the MPP without any actions being taken by eitherthe other MPP participants or the NCPA Commission. The MPP does grant the right to the existing MPP participantsto require new MPP participants to pay a contribution to the development costs of the MPP previously paid by the existing MPP participants. The existing MPP participants have determined that this one time charge for Lodi to join the MPP is $10,000. This recommendation has been reviewed and agreed to by the Risk Oversight Committee. FISCAL IMPACT: Monthly fixed cost of $900/month plus a variable charge estimated to be less than $0.3/MWh for energy purchased through MPP. In addition, there will be a one-time charge of $10,000. FUNDING AVAILABLE: Included in the FY 2011/12 Budget Account No. 160642.8201. Jordan vers Deputy City Manager/Internal Servi es Director .I✓"� 1. '' , f l~ Eli e .+ irkley i l Electric Utility Director PREPARED BY: Matt Foskett, Rates& Resources Manager EAK/MF/Ist NCPA MARKET PURCHASE PROGRAM AGREEMENT NCPA NL, R T PURCHASE PROGRAMAGREEMENT EXECUTION COPY This NCPA MARKET PURCHASE PROGRAM AGREEMENT ("the Agreement") is made effective as of August 1,2007 ("the Effective Date"), by and among the Northern CaliforniaPower Agency, ajoint powers agency of the Statecf California("NCPA")and those of its Members who executethis Agreement ("Participants") NCPA and the Participants are referred to herein individually as a "Party" and collectivelyas the "Parties". RECITALS A. NCPA and the Participants are interested in purchasing additional electric capacity and energy for the benefit of the Participants' customers. B. The Participants, through these purchases, seek to reduce the proportion of their customers' electric supply needs that would otherwise have to be obtained m a potentially volatile spot market, thereby assuring greater rate and budget stability. 2 NCPA MARKETPURCHASEPROGRAMAGREEMENT EXECUTIONCOPY C. The Participants desire that NCPA negotiate and enter into term agreements to purchase electric energy and capacity from creditworthy market suppliers that simultaneously allow Participants to diversify their counterparty risk by subscribing to a more diverse portfolio cf power purchase contracts than if each individually selected a single energy supplier. D. The Participants further desire to enable and obligate NCPA to conduct the foregoing activities, and deliver electricity from these market purchases to the Participants, and to enable and obligate the Participants to take delivery of and pay for such electricity and to pay NCPA for the costs of undertaking the foregoing activities. NOW THEREFORE, in consideration of the foregoing, and the mutual promises and covenants hereinafter set forth, and other good and valuable consideration,the receipt and sufficiencyof which are hereby acknowledged, the Parties agree and intend to be legallybound as follows: Section 1. Definitions 1.1 Definitions. Whenever used in this Agreement (including the Recitals hereto), the following terms shall have the following respective meanings: 3 NCPA MARKET PURCHASEPROGRAMAGREEMENT EXECUTIONCOPY Section7.3.I 1.1.1 "AdjusdngParticipant" has the rneaning set forth in 1.1.2 "Agreement" means tlus NCPA Market Purchase Program Agreement, including all Exhibits attached hereto, as the same may be amended from time to time in accordancewith the terms and conditions hereof. in Section7.2. 1.1.3 "AllocatingParticipant" has the meaning set forth 1.1.4 "Annual Budget" rrzons the budget for the ensuing I. •sem v, . • rr a• • - f• 7 •11 •- -O - .oTa I • - . OWN NTCPA a *nitibed to NTCP'A in woe with Article IV, Section 7 cf the Joint Powers Agreement. 1.1.6 "Business Day" means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at5:00 p.m. local time. 4 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTION COPY 1.1.7 "Budget Year" means the NCPA fiscal year; currently the twelve month period beginning July 1 and ending on the next followingJune 30. 1.1.8 "Claims" has the meaning set forth in Section 10.2. 1.1.9 "Commission" means the NCPA Commission. 1.1.10 "Commodity Costs" means the cost billed to NCPA by a Third Party seller for electric energy and/or capacity obtained through a Power Purchase Agreement that qualifies as an Eligible Contract Purchase under this Agreement. 1.1.11 "Constitutive Documents" means, with respect to NCPA, the Joint Powers Agreement and any resolutions or bylaws adopted thereunder, and with respect to each Participant, the California Government Code and other statutory provisions applicable to such Participant, any applicable agreements, charters, contracts or other documents concerning the formation, operation or decision making cf such Participant, including, if applicable, its City Charter, and any codes, ordinances, bylaws, and resolutions adopted by such Participant's governingbody. 5 NCPA UD R=PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY 1.1.12 "Contract Price" means, with respect to any Eligible Contract Purchase under this Agreement, the price per megawatt -hour and/or price per megawatt listed in the applicable TransactionConfirmation. Section9.1 1.1.13 "Defaulting Party" has the meaning set forth in 1.1.14 "Designated Representatives" means with respect to NCPA, its General Counsel and General Manager; and with respect to each Participant, Its Counsel and Utility Director (or other employee designated by resolution of the Participant's governing body). preamble hereto. 1.1.15 "Effective Date" has the meaning set forth in the 1.1.16 "Electric System" means, with respect to each Participant except the San Francisco Bay Area Rapid Transit District ("BART") , all properties and assets, real and personal, tangible and intangible, of the Participant now or hereafter existing, used or pertaining to the generation, transmission, transformation, distribution or sale of electric capacity and energy, or the utilization of such, including all additions, extensions, expansions, improvements and betterments thereto and equipment thereof, provided, in NCPA MARKET PURCHASE PRO GUM AGREEMENT EXECUTION COPY however, that to the extent the Participant is not the sole owner cf an asset or property or to the extent that an asset or property is used in part for the above described purposes, only the Participant's ownership interest in such asset or property or only the part of the asset or property used for electric purposes shall be considered to be part of its Electric System. 1.1.17 "Eligible Contract Purchase" means a market purchase of electric energy or capacity from a Third Party that satisfies the Procurement Conditions and has been approved by each Party as an Eligible Contract Purchase in accordancewith Section3 of this Agreement. 1.1.18 "Environmental Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, directly attributable to the market purchase. Environmental Attributes include but are not limited to: (l)any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4) and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change to contribute to the actual or potential threat of altering the Earth's climate by trapping heat in the atmosphere; and (3)the reporting rights to these NCPA MARKETPURCHASEPROGRAM AGREEMENT EXECUTIONCOPY avoided emissions such as Green Tag Reporting Rights. Environmental Attributes do not include: (1)any energy, capacity, reliability or other power attributes; (2) production ta,,, credits associated with the construction or operation of the energy projects and other financial incentives in the form of credits, reductions, or allowances associated with the project that are applicable to a state or federal income taxation obligation: (3) fuel -related subsidies or "tipping fees" that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits; or (4) emission reduction credits encumbered or used by the Unit(s) for compliance with local, state, or federal operatingand/or air qualitypermits. 1.1.19 "Evut cf D�atatt' has the ming set forth in Secdcaz5.5.3and SectionR 1. 1.1.20 "Joint Powers Agreement" means that certain Northern Califomia Power Agency Joint Power Agreement fust made July 19, 1968 and revised as cf April 1, 1973, establishing NCPA, as the same may be amended from time to time. 1.1.21 "Maxim= Contract Price" meatis the applicable 1 a m ceiling pmm fig capaci ty and/or energy at the time an Eligible C ltraa 8 NCPA TKARKET PURCHASEPROGRAMAGREEMENT EXECUTIONCOPY Purchase is consummated; currently, the CAISO Bid Cap for its real-time imbalance energy market as approved by the Federal Energy Regulatory Commission. 1.1.22 "Member" means any Member of NCPA or AssociateMember cf NCPA. 1.1.23 " MW means megawatt. 1. 1.24 "MWh" means megawatt hour. 1.1.25 "MPP" means the NCPA Market Purchase Program, consisting of all Eligible Contract Purchases hereunder and all Participants hereto as program Participants. 1.1.26 "MPP Costs" are all those fixed and variable costs (each including administrative and general overhead costs), other than Transaction Specific Costs and Commodity Costs associated with the MPP Program. "Fixed MPP Costs" are those costs deemed to be incurred by NCPA regardless of whether NCPA transacts with Third Parties under this Agreement, including start-up costs and attorney fees. "Variable MPP Costs" are those costs that are common to all Participants under this Agreement but are expected to NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY vary with the size and scope Of the purchase program established under this Agreement, including NCPA staff time. 1.1.27 "MPP Cost Allocation" means the MPP Costs allocatedto the Participants in the Annual Budget. hereto. 1.1.28 "NCPA has the meaning set forth in the preamble 1.1.29 "Net Short Position" means the amount cf energy in megawatt hours by which a Participant's forecasted monthly load exceeds its resources as detailed in NCPAs Monthly Load -Resource Balance Summary and the ten-year Load Resource Balance provided as part of the Annual Budget. For months in which a Participant's resources exceed its forecasted load its Net Short Position shall be deemed to be zero. A Participant's annual Net Short Position for each Budget Year will be computed as the sum cf each month's Net Short Position. preamble hereto. 1.1.30 "Participant" has the meaning set forth in the 10 NCPA MARKETPURCHASEPROGRAMAGREEMENT EXECUTIONCOPY Participant's written and properly executed confirmation of a transaction to acquire an Eligible ContractPurchase, in the form cf Exhibit A. 1.1.32 "Party" a "Parties" has the meaning set forth in the preamble hereto; provided that "Third Parties" are entities that are not party 1.1.33 " PPA cr Power Purchase Agreement nxnm an agreement f a the purchase and delivery cf electric energy or ctyentered into by NCPA with Thud Parties. The PPA shall in the foam cif the VvSPP Agreement or the = Master Power Purchase & Sale Agreement, with such modifications as have been approvedby the Conm issicn, provided that, in any particular insta , such agreemerrts may be modified in the discretion cf the NC PA General Manager and 1ITCPA Geral Counsel, after consultationwith the Project Participants, where such modifications are reasonably required in order to consummate the PPA. 1. 1.34 "Procur&' and other fo= of such verb, including Procurement, Procuring, and Procured, means acquiring electricity through Eligible ContractPurchases with third parties. 11 NCPA Mr1RKET PURCHASEPROGRAMAGREEMENT EXECUTION COPY forth in Section 3.1. 1.1.35 "Procurement Conditions" has the meaning set 1.1.36 "Resource Adequacy Capacity" is that capacity in megawatts that has been approved by each Participant, acting as a Local RegulatoryAuthority, as capacity availableto ensure that adequate resources are available to meet peak demand and operating and planning reserves for the purposes of local area and system reliability. 1.1.37 "Revenues" means, with respect to each Participant with the exception of BART, all income, rents, rates, fees, charges, and other moneys derivedby the Participantfrom the ownership or operation cf its Electric System, including, without limiting the generality of the foregoing, (a) all income, rents, rates, fees, charges or other moneys derived from the sale, furnishing and supplying of electric capacity and energy and other services, facilities, and commodities sold, furnished, or supplied through the facilities of its Electric System, (b)the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or pursuant to law to its Electric System and (c)the proceeds derivedby the Participant directly or indirectly from the sale, lease or other dispositioncf all or a part of the Electric System, but the 12 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY term Revenues shall not include (i) customers' deposits or any other deposits subjectto refund until such deposits have become the property of the Participant or (ii) contributions from customers for the payment of costs of construction of facilities to serve them. In regards to BART, Revenues means, all income, rents, rates, fees, charges, grants, fares or tariffs, subventions and other moneys derived by the Participant from its operation including, without limiting the generality of the foregoing, (i) the earnings on and income derived from the investment of such income, rents, rates, fees, charges grants, fares or tariffs, subventions or other moneys and (ii) the proceeds derived by the Participant directly or indirectly from the sale, lease or other dispositionaf all or a part of its assets, but the term Revenues shall not include any moneys derived from sources the use of which is limited by law to expenditures other than operating expenses. 1.1.38 "Scheduling Protocols" means the applicable provisions cf the Scheduling Coordinator Program Agreement and any other contractual or other arrangements between NCPA and the relevant Participant concerning the scheduling, delivery and metering of the Eligible Contract Purchase as approved by the Parties. 1.1.39 "Security Account" means the account established by NCPA and funded by the Participants in accordance with Section 5.3, the 13 NCPA MARKETPURCHASEPROGRAMAGREEMENT EXF=ONCOPY funds of which are available for use by NCPA in accordance with the terms and conditionshereof. 1.1.40 "SubscriptionPercentage" means that proportion of an Eligible Contract Purchase that a Participant subscribes to in writing in accordancewith the terms of this Agreement. 1.1.41 "Tenn" has the meaning set forth in Section8. 1.1.42 "Transaction Confirmation" has the meaning given to it in the PPA used to procure energy and/or capacity for an Eligible Contract Purchase. 1.1.43 "frareactiurSpecific Costs" means any and all costs, except for Commodity Costs, arising after executionof an Eligible Contract Purchase and directly or indirectly incurred by NCPA as a result of entering into a specific transaction to acquire an Eligible Contract Purchase. Transaction - Specific Costs include, but are not limited to termination payments, or counterparty requests for assurances,related legal fees and associated staff time. forth in Section7.3.1. 1.1.44 "Withdrawing Participant" has the meaning set 14 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY 1.2 Rules of Interpretation. As used in this Agreement (including the Recitals hereto), unless in any such case the context requires otherwise: the terms "herein," "hereto," "herewith and "hereof are references to this Agreement taken as a whole and not to any particular provision; the term " include," " includes" or " including" shall mean " including, for example and without limitation;" and references to a "Secticai�" "subsecticr," "clause," or as the casemay be: All refrences to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented and restated through the date as cf which such reference is made, and reference to a law, regulation or ordinance includes any amendment or modification thereof. A reference to a "person" includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having a separate legal personality and includes its successors and permitted assigns. The singular shall include the plural and the masculine shall include the feminine, and vice versa. Section 2. Effectiveness of Agreement Prior to December 31, 2007, this Agreement shall be effective as to each Participant as of the Effective Date upon 15 NCPA MA=T PURCHASE P RO GU M AGREEMENT EXECUTIONCOPY execution by the Participant, whereupon the procurement period shall commence and survive through the term of this Agreement. After December 31, 2007 this Agreement shall be effective as to each Participant in accordance with Section 7.2 below. Section 3. Procurement Process 3.1 Reauest for Proposals and PPAIs)_. All Procurement activities undertaken pursuant to this Agreement shall be through the use of a Request for Proposals substantially in the form ctf Exhibit B attached hereto. NCPA represents that the following conditions will be observed when undertaking its Procurement activities. ("Procurement Conditions"): (i) Each market purchase shall be an Eligible Contract Purchase, consummated in accordancewith the NCPA Energy Risk Management Policy; (ii) Participants may only subscribe to Eligible Contract Purchases in the amount of their forecast Net Short Position, or to the extent that a subscriptionprovides Participant with Resource Adequacy Capacity; (iii) The period of time for which NCPA is obligated to accept and pay for electricityunder an Eligible Contract Purchase shall be less than five (5) years; 16 NCPA MARKET PURCHASEPROGRAM AGREEMENT EXECUTION COPY (iv) The Contract Price for purchasing energy in a Eligible Contract Purchase shall not exceed the Maximum ContractPrice; (v)The PPA(s) utilized to procure Eligible ContractPurchases may, in any given instance, be modified in the discretion of the NCPA General Manager and NCPA General Counsel, after consultation with the Project Participants, to include additional terms and conditions approved by the Parties' Designated Representatives or to delete previously approved Commission modifications to the form of the PPAs, where such modifications are reasonably required in order to consummate the PPA; (vi)Any Environmental Attributes or Resource Adequacy Capacity associated with an Eligible ContractPurchase will be procured by NCPA for the proportionatebenefitcf the Participants. 3.2 Participant Approval cf Procurement Process and an Elizible Contract Purchase. By executing this Agreement, each Participant acknowledges and agrees to be bound by the procurement process contained in or referenced by a Request for Proposals issued pursuant hereto. By and through their Designated Representatives' execution of a Participant Purchase Confirmation substantially in the form cf Exhibit A hereto, each Participant acknowledges and approves cf the terms cf the corresponding PPA for subscription to an Eligible 17 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY Contract Purchase, and agrees to pay for its share of the power or capacity purchased thereby. 3.3 NCPA Approval of Procurement Process and an Eligible Contract Purchase. By executing this Agreement, NCPA acknowledges and agrees to be bound by the procurement process contained in or referenced by the Request for Proposals, and by the execution of a Participant Purchase Confirmation hereunder, substantially in the form of Exhibit A hereto, NCPA approves of the terms cf the PPA for the Procurement of an Eligible Contact Purchase. 3.4 Delivery of Electricity / Allocation of Resource Adeauacv Capacity and Environmental Attributes. Any electricity delivered to NCPA from an Eligible Contract Purchase shallbe delivered to each Participant in proportion to such Participant's Subscription Percentage and each Participant shall accept and pay for its relevant percentage of such electricity. To the extent Participant is unable to accept such deliveries in full, NCPA shall dispose cf such surplus in its discretion, in such a manner to maximize Participant value. Notwithstanding the above, NCPA may allocate and pool capacity and energy -procured through any particular Eligible Contract Purchase among the Participants in such percentages as NCPA may, m its reasonable discretion, determine are necessary, desirable, or 18 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY appropriate. Such electricity shall be scheduled for the Participants in accordance with the Scheduling Protocols. Resource Adequacy Capacity and Environmental Attributes obtained by NCPA as a result of performance under this Agreement shall likewise be allocated to the Participants by their SubscriptionPercentage. 3.5 Payments to Counterparties. NCPA shall pay all costs incurred hereunder using operating or SecurityAccount funds, paid to NCPA in accordance with Section 5, or such other sources as may be agreed upon in writing by the Parties from time to time. 3.6 Removal of Eligible Contract Purchases from MPP. Any Eligible Contract Purchase that delivers electricity to NCPA under a PPA shall be automatically removed from the MPP on the date its Transaction Confirmation terminates or expires. Any other Eligible Contract Purchase shall continue to be included in the MPP until such time as NCPA approves removing it from the MPP and approves the subsequent use cf such Eligible Contract Purchase, including whether such Eligible Contract Purchase should be sold or otherwise disposed cf by any means including assignment, book -out or offsetting transaction, or termination. Any proceeds or costs associated with removing an Eligible Contract Purchase from the MPP shall be allocated among the 19 NCPA N ARKETPURCHASEPROGRAMAGREEMENT EXECUTIONCOPY Participants in accordance with the Subscription Percentages unless otherwise agreed upon in writing by the Participants. Section 4, Cooueration and Further Assurances Each of the Parties agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by any other Party which are not inconsistent with the provisions cf this Agreement and which do not involve the assumption of obligations other than those provided for in this Agreement, in order to give fdU effect to this Agreement and to carry out the intent of this Agreement. Further, the Parties agree to cooperate and act in good faith in connectionwith obtaining any credit support required in order to procure electricity from an Eligible Contract Purchase, including with respect to negotiating and executing any agreements to implement any credit support arrangements. Section 5. Payment Obligations, Security Account. Invoicing 5.1 Participant Payment Obligations. Each Participant agrees pay to NCPA each month the sum of (a), (b), and (c) as follows: (a) Fixed MPP Costs of $900 for each month Participant is a party to this Agreement, and one - twelfth of the Variable MPP Costs as determined below in Section 5.2, plus (b) Transaction Specific Costs for each Eligible Contract Purchase Participant 20 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY subscribes to, plus (c) Commodity Costs. In addition, each Participant shall maintain working capital in accordance with NCPAs Annual Budget, and maintain its SecurityAccount as provided in this Agreement. 5.2 Calculation of and True -UD for Variable MPP Costs. Participants payment obligations for Variable MPP Costs under section 5.1 shall be calculated as follows. For each Budget Year NCPA shall estimate the total Variable MPP Costs to be incurred under this Agreement and this total will be divided by the Participants' total Net Short Position to determine the estimated Variable MPP Unit Cost on a per megawatt -hour basis. The Variable MPP Unit Cost will then be multiplied by the total monthly energy subscribed to by each Participant to determine the amount owed by each Participant for Variable MPP Costs under section 5.1 (a) above. Upon the conclusioncf a Budget Year NCPA shall compare each Participant's payment cf estimated Variable MPP Costs with the actual Variable MPP Costs incurred on behalf of Participant such that overpayments will be credited to, and underpayments will debited to Participants account in accordancewith NCPA's Annual Budget settlements. 5.3 Securitv Account. 5.3.1 Initial Amounts. Prior to subscribing to an Eligible Contract Purchase a Participant shall insure that sufficient funds are on deposit 21 NCPA MARKRTPURCHASE PROGRAM AGREEMENT EXECUTIONCOPY in the Security Account equal to the highest (3) months of the immediately following (12) months of estimated Commodity Costs for all Eligible Contract Purchases Participant has or will subscribe to; provided however that such deposit may be satisfied in whole or part either in cash or through a letter of credit satisfactoryto NCPA's General Manager. 5.3.2 Subsequent Deposits. Periodically, and at least quarterly, NCPA shall review and revise its estimate cf all costs for which Participant shallbe obligated to pay for under this Agreement for the succeeding 12 months. Following such review, NCPA shall determine whether each Participant has a sufficientbalance in the Security Account. To the extent that any Participant's balance in the Security Account is greater than one hundred and ten percent (110%) of the amount required herein, NCPA shall credit such amount as soon as practicable to the Participant's next following invoice. To the extent that any Participant's balance in the Security Account is less than ninety percent (90%) of the amount required herein, NCPA shall add such amount as soon as practicable to such Participant's next invoice. Credits or additions shall not be made to Participants who satisfy these Security Account requirements in whole through the use of a letter of credit, provided that the amount of the letter 0 NCPA MARKETPURCHASEPROGRAM AGREEMENT EXECUTIONCOPY cf credit shall be adjusted in a like manner to assure an amount equal to the highest three (3)months of estimated Commodity Costs. 5.3.3 Use of SecurityAccount Funds. NCPA may use any and all funds deposited into the Security Account to pay any costs it incurs hereunder, including making payments to counterparties under any Power Purchase Agreement or for termination payments, requests for assurances by Third Parties, credit support, and related expenses under a Power Purchase Agreement, without regard to any individual Participant's balance in the Security Account or proportionate share of MPP Costs and irrespective of whether NCPA has issued an invoice for such costs to the Participants or whether a Participant has made timely payments of invoices. Should Participant have satisfied its SecurityAccount requirements in whole or part through a letter of credit, NCPA may draw on such letter cf credit to satisfy Participant's obligations hereunder. 5.3.4 Emergency Additions. In the event that the funds are withdrawn pursuant to section 5.3.3, or if the SecurityAccount is insufficient to allow payment of an invoice, demand, request for further assurances by Third Parties, or Claims, NCPA shall notify all Participants and then prepare and send a special or emergency assessmentto the Participants. Each Participant shall pay 23 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY to NCPA such assessment when and if assessed by NCPA within two (2) Business Days of the invoice date of the assessment or consent to and direct NCPA to draw on any existing Letter cf Credit Participant has established for suchpurposes. 5.3.5 Accounting and Interest. NCPA shall maintain a detailed accounting of each Participant's deposits into and shares of withdrawals from the Security Account. Interest earned on the Security Account shall be proportionately credited to the Participants in accordance with their Security Account Balances. Any losses in the Security Account caused by early termination of investments shall be allocated among the Participants in accordancewith their proportionate SubscriptionPercentages. 5.3.6 Return of Funds. On the termination of this Agreement with respect to a Participant or a permitted withdrawal of a Participant in accordance with this Agreement, the affected Participant or Participantsmay apply to NCPA for the return of their share of SecurityAccount funds ninety (90) days after the effective date cf such termination or withdrawal. NCPA shall, in its sole discretion, as determined by the General Manager, estimate the then outstanding liabilities of the Participant(s), including any estimated contingent liabilities and shall retain all such funds until all such 24 NCPA NMP=PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY liabilities have been fully paid or otherwise satisfied in full. The balance of the Participant's share of the SecurityAccount will be refunded to the Participant. 5.4 Invoicins. 5.4.1 Invoices. As part of NCPA's regular, monthly, advance billing or by separate special invoice, as required in the circumstances, NCPA will issue an invoice to each Participant for its proportionate share of the Commodity Costs, MPP Costs and Transactions Specific Costs due (or any adjustments thereto) based on Sections 5.1 and 5.2 above. Such invoices may include estimated costs and estimated settlement and meter data. Each invoice shall include: (i)the total Transaction Specific and Commodity Costs attributable to Procurement activitiesunder this Agreement for such month and the relevant Participant's share thereof, (ii) the total MPP Costs attributable to program services for such month and the relevant Participant's share thereof, (iii) the quantity of electricity, Resource Adequacy Capacity and Environmental Attributes, by Eligible Contract Purchase, delivered to such Participant (or an estimate thereof) and the unit price for such electricity; (iv) appropriate settlement and meter data (or an estimate thereof); (v) any adjustments to prior invoices required based on actual data received that was estimated in a previous invoice; (vi) notice of the amount, if any, that NCPA has paid or expects to pay 25 NCPA MARKE.TPURCHASEPROGRAMAGREEMENT EXECUTION COPY using funds available in the Security Account; and (vii) amounts due from (or credited to) such Participant under Section 5.3.2. 5.4.2 Payment of Invoices. All invoices delivered by NCPA hereunder are due and payable on the date indicated on such invoice, but in any event no later than thirty (30) days following receipt thereof, provided, however, that any amount due on a day other than a Business Day may be paid on the following Business Day. NCPA may apply a Participant's share of the Security Account to the payment cf all or any portion of an invoice issued to such Participant, provided that application of such funds from the Security Account shall not relieve the Participant from any late payment charges pursuant to Section 5.4.3. To the extent that NCPA applies funds from the Security Account to pay an amount due under an invoice, followingreceipt of payment of such invoice by the relevant Participant, NCPA shall deposit the relevant portion of the payment into the Security Account and credit such deposit to such Participant. 5.4.3 Late Payments. Any amount due and not paid by a Participant in accordance with Section 5.4.2 shall bear interest computed on a daily basis until paid at the lesser cf (i)the per annum prime rate (or reference 26 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY rate) of the Bank of America NT&SA then in effect, plus two percent (2%) or (ii) the maximum rate permitted by law. 5.5 SettlementData and Examinationof Books andRecords. 5.5.1 Settlement Data. NCPA will make metering and settlement data available to the Participants. Procedures and formats for the provision of such data will be as establishedby the Participants and NCPA from time to time. 5.5.2 Examination of Books and Records. Any Participant to this Agreement shall have the right to examine the books and records created and maintained by NCPA pursuant to this Agreement at any reasonable, mutually agreedupon time. 5.5.3 Revenue Covenant. Any failure of a Participant to meet its obligations hereunder or to cure such failure in a timely manner shall constitute an Event of Default and the Defaulting Party shall be subject to such remedies cf NCPA as provided for herein. Each Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric department revenues only or, in the case of BART, its tariffs, fees or other sources cf revenue provided that such sources shall not include any sums derived from sources the 27 NCPA MAFUTSETPURCHASE PROGRAMAGREEMENT EXECUTION COPY use of which is limited by law to expenditures other than operating expenses, its percentage share cf the costs authorized by Participants in accordance with this Agreement in connection with its participation in the Project. Each Participant further agrees that it will fix the rates and charges for services provided by its electric department, or in the case of BART, its general revenues, so that it will at all times have sufficient money in its department revenue funds to meet this obligation; (H) to make payments under this Agreement from the Revenues of, and as an operating expense of, its Electric System, or in the case of BART, of its general revenues; (iii)to make payments under this Agreement whether or not there is an interruption in, interference with, or reduction or suspension of servicesprovided under this Agreement; suchpayments not being subjectto any reduction, whetherby offset or otherwise, and regardless cf whether any dispute exists provided such interruption, interference or reduction in services is caused by forces constituting an Act cf God and not reasonably contemplated by the Parties; and (iv) to operate its Electric System and the business in connection therewith in an efficient manner and at reasonable cost and to maintain its Electric System in good repair, working order, and condition. Section 6. Administration of Agreement 28 NCPA MARKET PURCHASE PROGUMAGREEMENT EXECUTIONCOPY 6.1 General. The NCPA Commission has sole overall responsibility and authority for the administration of this Agreement. Any acts, decisions or approvals taken, made or sought by NCPA under this Agreement shall be taken, made or sought, as applicable, in accordance with NCPA's Constitutive Documents and Section6.2. 6.2 Actionbv Participating.Members. (a) Forum: Whenever any action anticipatedby this Agreement is required to be taken by the Participating Members, such actions shall be taken at a regular or special meeting of the NCPA Commission but shall be participated in only by those Commissioners, or their designated alternates, who are Participants. (b)Quorum; A quorum at NCPA Commission meetings for purposes of acting upon matters relating to this Agreement shall consist of Commissioners, or their designated alternates representing majority interest in a Eligible ContractPurchase based upon Subscription Percentages. (c) VotinL7: Each Participant shall have the right to cast one vote with respect to matters pertaining to this Agreement, with a majority vote of the Participating Members required for action subjectto the following exceptions: 29 NCPA N ARKETPURCHASEPROGRAMAGREEMENT EXECUTIONCOPY L Upon request of any Participant representative, the voting on an issue related to a specific Eligible Contract Purchase shall be by SubscriptionPercentage with a 65% or more favorablevote necessary to carry the action. ii. After any decision related to this Agreement, other than for a specific Eligible Contract Purchase, is taken by the affirmative vote of less than 65% of the Program Participants, the action can be reviewed and revised if a Participant gives notice of intention to seek such review and revision to NCPA and each of the other Participants within ten (10) days following the date on which such action was taken. Upon receipt of such a request for reconsideration, the Chairman of the Commission shall agendize the matter for reconsideration at the next regular meeting of the Commission or at a special meeting if the circumstances so warrant. The action shall be upheld upon the affirmativevote of authorized representatives the Participants. Any actiontaken upon reconsideration shallbe final. 30 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY Section 7. Subscripi Percentages; Admission and Withdrawal of Participants 7.1 SubscriptionPercentag_es. The Subscription Percentages of each Participant shall be maintained in NCPA's deal capture system and summary reports therefrom will be provided to Participantsupon request. 7.2 Admission of New Participants. Following the Effective Date cf this Agreement, a Member may execute this Agreement and become a Participant provided that the new Participant: 1) reimburses existing Participants for a proportionate share of the applicable costs identified during NCPA's Annual Budget process and any MPP Costs incurred to establish and administer this MPP Program as determined by existing Participants, and 2) satisfies all Security Account requirements under this Agreement. A new Participant shall not be entitled to any electric Resource Adequacy Capacity, or Environmental Attributes, or energy from Eligible Contract Purchases consummated prior to the date it becomes a Participant uniess one or more of the existing Participants ("Allocating Participants") elect to allocate a portion of its Participant Percentage to such Member. Upon an agreement thereof and affirmativevote thereon by all Participants, NCPA shallprepare and distribute to each Participant the written agreement between the Member and the Allocating 31 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTION COPY Participants) indicating the agreed upon change in the Subscription Percentage(s) for the designated Eligible Contract Purchase(s), a counterpart of this Agreement executedby the Member, and a report from NCPA's deal capture system reflecting the revised Subscription Percentages. Any reduction in any Allocating Participant's share of the Security Account shall be credited to the Allocating Participants in accordance with Section 5.3.2. 7.3 Withdrawal dParticinants. 7.3.1 Requirements and Process. A Participant may voluntarily withdraw from this Agreement ("Withdrawing Participant") by providing two (2) year's advance written notice to NCPA and the other Participants. Upon the mutual agreement of two or more Participants, the Withdrawing Participant may assign some or all cf its Subscription Percentage share of its Eligible Contract Purchases to another Participant "Adjusting Participant") to assume the Withdrawing Participant's Subscription Percentage only if such withdrawal and assignment does not violate of any applicable credit support conditions. The Withdrawing Participant shall provide to NCPA the applicable assignment agreement between the Withdrawing Participant and the AdjustingParticipant(s) regarding any such assignments and NCPA shall reflect 32 NCPX MARKET PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY the change in its deal capture system recording the new allocation of Subscription Percentages. 7.3.2 Associated Costs. A Withdrawing Participant shall reimburse NCPA for any and all costs resulting from withdrawal, including but not limited to the legal, accounting, and administrative costs of winding up and assuring the complete satisfaction and discharge cf the Withdrawing Participant's obligations. 7.3.3 No Effect on Prior Liabilities. Withdrawal by any Participant will not terminate any ongoing or un -discharged contingent liabilities or obligations resulting from this Agreement until they are assigned to an Adjusting Participant, or are otherwise satisfied in full, or such Withdrawing Participant has provided a mechanism reasonably acceptable to NCPA and the remaining Participants, for the satisfactionin B11 thereof. Section 8. Term and Termination The term ("Term") of this Agreement shall commence on the Effective Date, continue for five (5) years, and shall be extended for one (1)year on each anniversary of this Agreement as to each Participant that has not withdrawn in accordance with Section 7.3 or otherwise voluntarily or involuntarily had their participation in this Agreement terminated. 33 NCPA MARKET PURCHASEPROGRAMAGREEMENT EXECUTION COPY Section 9. Default and Remedies 9.1 Events of Default. An Event of Default under this Agreement shall exist with respect to a Party ("Defaulting Party") upon the occurrenceof any one or more of the following: (i)if any Party fails to make any payment or to provide assurances as required of NCPA under a PPA when due hereunder two (2) Business Days after receipt of notice given by NCPA of such non-payment; or (ii) the failure of the Defaulting Party to perform any other covenant or obligation under this Agreement where such failure is not cured within ten (10) calendar days following receipt of a notice from NCPA demanding cure (provided that this shall not apply to any failure to make payments (whichis coveredby Section9.1 (i))pr (iii) if any representation or warranty of the Defaulting Party material to the transactions contemplated hereby shall prove to have been incorrect in any material respect when made and the Defaulting Party does not cure the facts underlying such incorrect representation or warranty so that the representation or warranty becomes true and correct within ten (10) calendar days of the date of receipt of notice from any other Party demanding cure; or 34 NCPA MARKETPURCHASEPROGRAMAGREEMENT EXECUTION COPY (iv) if a Participant is in default or in breach of any of its covenants under any other agreement with NCPA and such default or breach is not cured within the time periods specified in such agreement; or (v) the failure of NCPA to perform any covenant or obligation under this Agreement following a ten (10) calendar day notice to cure by any non -defaulting Member. 9.2 Cure of an Event of Default. An Event aP Default shall be deemed cured only if such default shall be remedied within the time period specified in Section9.1, above, as may be applicable after written notice has been sent to the Defaulting Party from NCPA specifying the default and demanding that the same be remedied provided that failure of a Party to provide such notice shall not be deemed a waiver of such default. 9.3 Participation Rizhts Of Defaulting Party. Notwithstanding anything herein to the contrary, upon the occurrence of an Event of Default and until such Event of Default is cured, the Participant that is the Defaulting Party shall not have the right to participate under Section 6.2 on any matters with respect to this Agreement. 35 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY 9.4 Remedies in the Event of Default. 9.4.1 Remedies of NCPA. Upon the occurrence of an Event of Default where a Participant is the Defaulting Party, without limiting its other rights or remedies availableunder this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppel of any right, action or cause of action NCPA may have against the Participant, NCPA may: (i) suspend the provision of services under this Agreement to such Defaulting Party, including the delivery of electricity and other attributes of any Eligible Contract Purchases until the Event of Default is cured; and (ii) demand that the Defaulting Party provide further assurances to compel the correction of the default, including mandating the collection of a surcharge to produce Revenues to secure the cure of the Event cf Default; and (iii) terminate this Agreement as to the Defaulting Party on ten (10) calendar days prior written notice to the Defaulting Party and following approval cf the non -defaulting Participants. 9.4.2 Sale/Transfer of Participants Account Upon Default. Upon any default of a Participant caused by the failure of such Participant to pay 36 NCPA MARKET PURCHASE PR O GU M AGREEMENT EXECUTIONCOPY any sums due, and provided that such default is not cured in a timely manner then NCPA shall use its best efforts to sell and transfer for the defaulting Participant's account all or a portion of the Participant's capacity and/or energy and/or Environmental Attributes for the remainder of the term of this Agreement. Notwithstanding that all or any portion of the Participant's capacity is so sold or transferred, the Participant shall remain liable for all of its obligations hereunder unless released therefrom by NCPA upon assumption by a transferee or assignee. 9.4.3 Remedies of Participants. Upon the occurrence of an Event of Default, and following the applicable cure periods, where NCPA is the Defaulting Party, the Participant may, without limiting their other rights or remedies available under this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppel of any right, action or cause of action the Participants may have against NCPA, terminate this Agreement in whole, subjectto the provisions cf Section9.5.4. 9.4.4 Special Covenants Regarding Security Account. In the event that a Participant's balance of the Security Account is insufficient to cover all invoices for costs incurred under this Agreement sent to such Participant, then, without limiting NCPA's other rights or remedies available 37 NCPA M PJCET PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY under this Agreement, at law or inequity, such Participant shall cooperate in good faith with NCPA and shall cure the default as rapidly as possible, on an emergencybasis, taking all such action as is necessary, including,but not limited to, raising rates and charges to its customers to increase its Revenues to replenish its share of the Security Account as provided herein, drawing on its cash -on - hand and lines cf credit, obtaining further assurances by way of credit support and letters of credit, and taking all such other action as will cure the default with all due haste. 9.5 Effect of Termination or Suspension. 9.5.1 Generally. The suspension or termination of this Agreement will not terminate, waive, or otherwise discharge any ongoing or undischarged contingent liabilities or obligations arising from this Agreement until such obligations are satisfied in full, and all of the costs incurred by NCPA in connection with such suspension or termination, including reasonable attorney fees, the fees and expenses of other experts, including auditors and accountants, other costs and expenses that NCPA is entitled to recover under this Agreement, and other reasonable and necessary costs associated with any and all cf the remedies, are paid in full. 38 NCPA MARKETPURCHASE PROGRAM AGREEMENT EXECUTIONCOPY 9.5.2 Suspensionby NCPA. if performance of all or any portion of this Agreement is suspendedby NCPA with respect to a Participant in accordance with Section 9.4.1(i), such Participant shall pay any and all costs incurred by NCPA as a result of such suspension including reasonable attorney fees, the fees and expenses of other experts, including auditors and accountants, other reasonable and necessary costs associated with such suspension and any portion of the MPP Costs that were not recovered from such Participant as a result of such suspension. 9.5.3 Termination by NCPA. if this Agreement is terminated by NCPA with respect to a Participant in accordance with Section 9.4.1 (iii),(i) such Participant shall pay any and all costs incurred by NCPA as a result of such termination including reasonable attorney fees, the fees and expenses of other experts, including auditors and accountants, other reasonable and necessary costs associated with such termination and any portion of the MPP Costs that were not, or will not be, recovered from such Participant as a result of such termination; provided, however, if NCPA terminates this Agreement with respect to the last Participant, then this Agreement shall terminate. 39 NCPA INTzU KET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY 9.5.4 Termination by Participants. If this Agreement is terminated by all Participants in accordancewith Section 9.4.3, or by unanimous consent of all of the Parties hereto, then the Participants shall pay to NCPA all previously unpaid MPP Costs incurred as of the date of such termination, and following such termination, the Participants shall cooperate and act in good faith to negotiate and agree upon the method of allocating among the Participants in proportion to their respective SubscriptionPercentages the costs and benefits of the Eligible Contract Purchases, all PPAs then in effect, and any financing agreements or commitments and any matters pertaining to the administration, management, control, operation and maintenance of the Eligible Contract Purchases. NCPA shall reasonably cooperate with the Participants m connection with implementing the foregoing and the Participants shall indemnify NCPA for any costs incurred in connection therewith, including reasonable attorney fees, fees and expenses cf other experts, including auditors and accountants and other reasonable and necessary costs. If the parties are unable to reach agreement as to the foregoing, then the parties agree to submit the matter to mediation with a mutually agreedupon mediator. If the parties are stillunable to reach agreement following mediation, then the matter shall be submitted to binding arbitration subject to the rules of the American Arbitration Association, the costs of such arbitration being borne proportionally among the Participants. 40 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY Section 10. Miscellaneous 10.1 Confidentiality. The Participants and NCPA will keep confidential all confidential or trade secret informationmade available to them in connection with this Agreement, to the extent possible, consistent with applicable laws, including the California Public Records Act. It shall be the responsibility of the holder of the claim of confidentiality or trade secret to defend at its expense against any request that such information be disclosed. Confidential or trade secret information shall be marked or expressly identified as such. 10.2 Indemnification and Hold Harmless. Subject to the provisions of Section 10.4,each Participant agrees to indemnify, defend and hold harmless NCPA and its Members, including their respective governing officials, officers, agents, and employees, from and against any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature, including reasonable attorneys' fees and the costs of litigation, including experts ("Claims"), to the extent caused by any acts, omissions, breach of contract, negligence (active or passive), gross negligence, recklessness, or willful misconduct cf a Participant, its governing officials, officers, employees, subcontractorsor agents, to the maximum extentpermitted by law. 41 NCPAiY1ARKET PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY 10.3 Several Liabilities. No Participant shall be liable under tlus Agreement for the obligations of any other Participant, and each Participant shall be solely responsible and liable for performance cf its obligations under this Agreement, except as otherwise provided for herein, and the obligation cf each Participant under this Agreement is a several obligation and not a joint obligationwith those cf the other Participants. 10.4 No Conseauential Damages FOR ANY BREACH OF ANY PROVISION OF THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY PARTICIPANT OR THEIR RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS, AGENTS, OR EMPLOYEES BE LIABLE FOR ANY LOST PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE OR INCIDENTAL LOSSES OR 42 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTION COPY DAMAGES, INCLUDING LOSS OF USE, LOSS OF GOODWILL, LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NCPA AND EACH PARTICIPANT EACH HEREBY WAIVES SUCH CLAIMS AND RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM ANY SUCH LIABILITY. The Parties acknowledge that CaliforniaCivil Code section 1542provides that: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time cf executingthe release, which if known by him or her must have materially affectedhis or her settlement with the debtor." The Parties waive the provisions of section 1542,or other similar provisions of law, and intend that the waiver and releaseprovided by this section of this Agreement shall be fully enforceable despite its reference to future or unknown claims. 10.5 Amendments. Except where this Agreement specifically provides otherwise, this Agreement maybe amended only by written instrument executedby the Parties with the same formality as this Agreement. 10.6 Severability. In the event that any cf the terms, covenants or conditions of this Agreement or the application of any such term, covenant or 43 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECLMONCOPY condition, shall be held invalid as to any person or circumstance by any court having jurisdiction, all other terms, covenants or conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effectunless the court holds that such provisions are not severable from all other provisions of this Agreement. 10.7 Governing Law. This Agreement shall be interpreted, governedby, and construed under the laws of the State of California. 10.8 Headinas. All indices, titles, subject headings, section titles and similar items are provided for the purpose of convenience and are not intended to be inclusive, definitive, or affect the meaning of the contents of this Agreement or the scope thereof. 10.9 Notices Any notice, demand or request required or authorized by this Agreement to be given to any party shall be in writing, and shall either be personally delivered to a Participant's Designated Representative and the Secretary of the Commission or transmitted to the Participant and the Secretaryof the Commission at the address shown on the signature pages hereof. The designation of such address may be changed at any time by written notice given to the Secretary of the Commission who shall thereupon give written notice of such change to each Participant. 44 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTION COPY 10. 10 Warrantv of Authority. Each Participant, and NCPA, represents and warrants that it has been duly authorized by all requisite approval and action to execute and deliver this Agreement and that this Agreement is a binding, legal, and valid agreement enforceable in accordance with its terms as to the Participant and as to NCPA. Upon execution of this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of such Participant evidencing approval of and authority to enter into this Agreement and an opinion of legal counsel that such authority was duly exercised in accordance with such Participant's ConstitutiveDocuments. 10.11 Counterparts, This Agreement may be executed in any number cf counterparts, and each executed counterpart shall have the same force and effect as an original instrument and as if all the signatories to all cf the counterparts had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more signature pages. 10.12 Assignment. Except as provided by Section 7 no Participant may assign or otherwise transfer their interest in their Participant's Percentage or 45 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTION COPY any other rights and obligations under this Agreement without the express written consent cf NCPA. 10.13 List of Exhibits. The Exhibits referenced herein shall be denoted as follows: Exhibit A - Participant Purchase Confirmation Exhibit B—AttachmentI- Form of Request for Proposals Exhibit B — Attachment H — Preferred Terms to EEI Form of Power Purchase Agreement .tl NCPA MARKET PURCHASEPROGRAM AGREEMENT EXECUTIONCOPY IN WITNESS WHEREOF, each Participant has executed this Agreement with the approval of its governing body, and NCPA has authorized this Agreement in accordance with the authorization of its Commission. NORTHERN CALIFORNIA CITY OF ALAMEDA POWER AGENCY [Address] 00 C ZS'(QAI( [City, State, Zip]QosV%LA.,-- G4. qiYvZb [Telephone] Otto-'tQ$1-3b3b [Facsimile] X24�t A,-5 By: Title: Date: 4 Approved as to form: By: Zile- Its: iAIts: Attorney- Date: ttorne i_Date: [Address] [City, State, Zip] [Telephone] [Facsimile] By: Title: Date: Approved as to form: Its: Attorney Date: 47 NCPA MARKET PURCHASEPROGRAmAGREEMENT EXECUTION COPY CITY OF BIGGS [Address] [City, State, Zip] [Telephone] [Facsimile] By: �e�4 c2, • C'a.r►' Title: CA!, Date: Ste+°.► Approved as fo By: Its: Attornev Date: R— l?, CITY OF IAEALDSBURG [Address] [City, State, Zip] [Telephone] [Facsimile] CITY OF GRIDLEY [Address] [City, State, Zip] [Telephone] Facsimile] By: Title: Date: Approved as to form: By: Its: Attornev Date: CITY OF LODI [Address] [City, State, Zip] [Telephone] Facsimile] By: By: Title: Title: Date: Date: Approved as to form: Approved as to form: By: By: Its: Attornev Its: Attornev Date: Date: y \U �, -�O 1 48 NCPA NL=T PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY CITY OF BIGGS CITY OF GRIDLEY [Address] [Address] 685 Kentucky Sr. [City, State,Zip] [City, State, Zip] Gridley, CA - 95948 [Telephone] [Telephone] (530) 846-5695 [Facsimile] [Facsimile] (530) 846-3829 i7 By: By: Title: Ti : May.. Date: ate: 9 7/2007 Approved as to form: AnnraGAd as to f By: B Its: Attornev Its: Attorney V Date: Date: CITY OF BEALDSBURG CITY OF LODI [Address] [Address] [City, State,Zip] [City, State, Zip] [Telephone] [Telephone] [Facsimile] [Facsimile] Title: Date: Approved as to form: Its: Attorney Date: By:_ Title: Date: Approved as to form: By: Its: Attorney Date: 48 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTION COPY MY OF BIGGS [Address] [City, State,Zip] [Telephone] [Facsimile] Title: Date: Approved as to form: Its: Attorney Date: CITY OF BEALDSBURG [Address] [City, State,Zip] [Telephone] Approved as to form: m By:f;��i��/ Its: Attornev Date: `7-.QO - o CITY OF GRIDLEY [Address] [City, State, Zip] [Telephone] Facsimile] Title: Date: Approved as to form: Its: Attornev Date: CITY OF LODI [Address] [City, State, Zip] [Telephone] Facsimile] By: Title: Date: Approved as to form: Its: Attornev Date: 48 NCPA 1VLU=T PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY CITY OF LOMPOC [Address] [City, State,Zip] [Telephone] [Facsim' 69�1 By 4+r kMee Title: dcyq Whit-owEm t Date: Sh 4Q01 Approved as to forjn: By: Its: Attornev Date: , /Z -0-7 PLUMAS-SIERRA RURAL ELECTRIC COOPERATIVE [Address] [Wy,State,Zip] [Telephone] [Facsimile] By:_ Title: Date: Approved as to form: By: Its: Attornev Date: CITY OF PALO ALTO [Address] [City, State, Zip] [Telephone] [Facsimile] By: Title: Date: Approved as to form: By: Its: Attornev Date: BART [Address] [City, State, Zip] [Telephone] [Facsimile] Title: Date: Approved as to form: By: Its: Attornev Date: 49 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTION COPY TRUCKEE DONNER PUBLIC UTILITY DISTRICT [Address] [City, State, Zip] [Telephone] [Facsimile] By: Title: Date: Approved as to form: By: Its: Attornev Date: [GAVA67Lei :.4/\DI [Address] [City, State, Zip] [Telephone] [Facsimile] Approved as to form: B P. A tAr'7R' Its: Attorney Date: 4 __ 2 1----027 50 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTION COPY Exhibit A-1 Participant Purchase Confirmation PARTICIPANT PURCHASE CONFIRMATION The undersigned Participant hereby subscribesto the followingEligible Contract Purchase and agrees to purchase electriccapacity and energy from NCPA pursuant to the Power Purchase Agreement (PPA)designated below, supplemented and modified as follows: (a) (b) (C) (d) (e) M (g) (h) (i) 0) (k) (1) (m) Seller: Purchaser: Northern California Power Agency (NCPA) Period of Delivery: From Schedule (Days and Hours): Maximum DeliveryRate: Delivery Point(s): Type cfProduct: Contract QuantityMaximum Energy: MWhrs. ContractPrice: SeeAttachmentA-1 TransmissionPath for the Transaction: Form of Power Purchase Agreement: Special Terms and Exceptions: SeeAttachment A 1 SecurityAccountAmount Required Transfer from GOR Pay by Other (specify) Except to the extent herein provided for, no amendment or modification to the Agreement shall be enforceable unless reduced to writing and executed by both Parties. Those persons executing this Participant Purchase Confirmation and the Parties hereby warrant that they are authorized to do so. Member Utility Director Date Approved as to Legal Form Its Counsel Date Date NCPA General Manager Date Approved as to Legal Form Its Counsel 51 NCPA MARKET PURCHASEPROGRAMAGREEMENT EXECUTION COPY ExhibitA-1 ParticipantPurchase Confirmation ADDITIONAL TRANSACTION-SPECIFICTERMS (Attach Seller's completed Attachment Ito the RFP and applicable PPA) 52 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY Exhibit B -Attachment I Form cf Request for Proposals L r AL I" W—A NORTHERN CALIFORNIA POWERAGENCY REQUEST for PROPOSALS For POWER SUPPLY INTRODUCTION The Northern CaliforniaPower Agency (NCPA)is seekingproposals from power suppliers(Seller)for Emn capacity and energy. The bid due date and time is 8:00 am PPT. Bids are to be made on the attached Excel spreadsheet denoted as ATTACHMENTI. LBACKGROUND NCPA is anonprofit Californiajoint powers agency established in 1968. Its Members are: the cities of Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, Ukiah, the Port of Oakland, the San Francisco Bay Area Rapid Transit District, the TruckeeDonner Public Utility District, and the Turlock Irrigation District; and Associate Members: Placer County Water Agency, and the Plumas-Sierra Rural Electric Cooperative. These entities and electricutilities servenearly 700,000 electric consumers in Central and Northern California. 53 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY Exhibit B -Attachment I Form of Request for Proposals As a CAISO Schedule Coordinator, NCPA is able to arrange for physical power deliveries to its Members through the ISO Grid. In addition, NCPAs members hold additional transmission -related rights through other pre-existing contracts. In Fiscal Year 2004-05, NCPA operating utilities met a combinedpeak demand of 1,824 megawatts (MW) and supplied 9,400 gigawatt-hours(GWh) of energy. To meet these loads, NCPA operatingutilities own and operate 238 MW of geothermal generation located in the Geysers region of California, 436 MW of hydroelectric facilities, 994 MW of gas-firedgenerators located in seven Members' service areas, 134MW cf miscellaneous small projects, numerous existingpower supply contracts and 596 MW cf firm Western Area Power Administration (Western) contracts for capacity and associated energy. Each of NCPAs Members has the exclusive authority to set retail rates sufficient to cover power purchase obligations. Power purchase contracts between NCPA and third parties are not subjectto prudence review by state regulatory agencies and may be enforced in accordancewith their terms, which are recognized in CaliforniaCourts. The CalifomiaPublic Utilities Commissionis without any jurisdiction over the power purchase contracts of suchNCPA Members. Contracts to be executed as a result cf this RFP are intended as binding legal agreements enforceablein the California courts. Each NCPA Member', participating in this RFP, operates its own electric system as an enterprise and special fund. Each NCPA Member' is obligated to establish and collect fees and charges for electricityfurnished through its electric system sufficientto pay any and all amountspayable from electric system revenues, which include amounts of capacity or energy, or both, furnished pursuant to an Agreement entered as a result of this RFP. In addition, per agreement with 1 BART is a local government agencyproviding public transit servicesin the San Franciscobay area. BART currently purchases federal preference power that is delivered to BART under specialterms and conditions establishedby the legislature and codified in Public Utilities Code (P.U.C.) section 701.8. This legislationhas been amended, in 1998 and most recently in 2004 through enactment of SB 1201. SB 1201 requires electric utilities, including in particular PG&E, to deliver electricity purchased by BART from local publicly owned utilities, such as NCPA, on the same terms and conditions as BART has historicallypurchased and had delivered federal preferencepower. 2 With respect BART, all income, rents, rates, fees, charges, grants, fares or tariffs, subventions and other moneys derived by BART from its operation including,without limiting the generality of the foregoing, (i)the earnings on and income derived from the investment of such income, rents, rates, fees, charges grants, fares or tariffs, subventions or other moneys and (ii)the proceeds derived by BART directly or indirectly from the sale, lease or other disposition of all or apart of its assets, but the term Revenues shall not include any moneys derived from sources the use of which is limited by law to expenditures other than operating expenses. 54 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY Exhibit B -Attachment I Form of Request for Proposals NCPA, each Member, participating in this RFP, has funds on deposit in its SecurityAccount equalto the highest (3)months of the immediately following (12)months for its share of the requested purchase amounts in this RFP. Fees and charges for electricityfamished through eachNCPA Member's electric system are not taxes and are thus not subj ectto California tax and voter limitation provisions such as Propositions 13, 62, and 218. 2. THE ELECTRIC SYSTEMS NCPA will be the purchaser and is making the purchase to meet the needs of its Member Utilities. As of January 1,2005,NCPA Member Utilities were allocated a share of the output of the Central Valley Project by the WesternArea Power Administration. Member Utilitieshave varying ownership shares in the NCPA Projects, and purchase the balance of their energy needs through bilateral contracts and/or from other NCPA Members. NCPA will deliver the power to the Utilities over the PG&E transmission system, which is operated by the Californialndependent System Operator (CAISO). NCPA operates as aMetered Sub-systemunderthe CAISOTariff and NCPAs Metered Sub-systemAggregator Agreement (MSSA)with CAISO. NCPA is the Scheduling Coordinator for the MSSA. Final firm prices (`Bids")are to be submitted by e-mailto the persons identified below, using ATTACHMENT I, no later than 8:00 am PPT on ---,20—. The prices are to be guaranteed for 2 hours while the NCPA evaluates. The successful Sellerwill be notified by 10:00 am PPT. The selectionof the successful bidder will be based upon a myriad of criteria including price, qualifications and contractual terms. Thomas S.W. Lee, P.E. 180Cirby Way Roseville, CA 95678 Fax: (916) 783-7693 55 NCPA MARKET PURCHASE PROGRAMAGREEMENT EXECUTIONCOPY Exhibit B -Attachment I Form of Request for Proposals Email: tom.lee,ancua.com 4, PRODUCT DESCRIPTION: This request is for a Californialndependent System Operator (CAISO)Firm Transaction. The CAISO Firm Transactionis a product under which the Seller shall sell and the Buyer shall purchase a quantity of energy equal to the hourly quantity without Ancillary Services (as defined in the CAISO Tariff) that is or will be scheduled as a Schedule Coordinator to Schedule Coordinatortransaction pursuant to the applicable tiff and protocol provisions of the CAISO, as amended from time to time, for which the only excuse for failure to deliver or receive is an "Uncontrollable Force" (as defined in the CAISO Tariff) called by the CAISO in accordancewith the terms of its Tariff. a. Product: NCPA is requesting proposals for the followingproducts: Product 1A —HLH (HeavyLoad Hour) is defined as energy delivered from hours ending (Fp 0700- 2200 Monday -Saturday, excludingNERC holidays, PPT, Product 1B —LLH (LightLoad Hour) is defined as energy delivered from hours ending (BE) 0100- 0600 and 2300-2400Monday-Saturday, all day Sunday and NERC holidays, PPT, b. Quantity: Monthly quantities for eachproduct are summarized in ATTACHMENT I. The CAISO Firm Transactiontable indicates the total need for each month. NCPA will also consider meeting aportion d its total need with monthly Cull Optionsfor Product IA and Product IB. c. Point cf Delivery: The point of delivery is NP15. In the event the present NP15 zone is modified, the new deliverypoint shallbe the zone most closely resembling the current NP15 zone as agreed by the Supplier and NCPA. NCPA will consider alternative deliverypoints suggestedby the successful Seller if economicbenefits to its Members can be demonstrated. 56 NCPA MARKET PURCHASE P R O G UMAGREEMENT EXECUTIONCOPY Exhibit B - Attachment I Form of Request for Proposals d. Scheduling: Schedulingwill be performed by NCPA, or its successor. Power deliveries shallbe scheduled with the CAISO, or its successor, as a Schedule Coordinator to Schedule Coordinator transaction. Scheduling timelines shall be consistentwith the CAISO tariffs, protocols, operating procedures and schedulingpractices.Al ldaily firm energy deliveries will be pre -scheduled no later than 10:00 am PPT cf the day prior to the delivery date or, if necessary in the solejudgment of NCPA, at such time as required to meet CAISO requirements. e. StartDate: 20_ at 0000 hours f. End Date: _, 20_ at 2400 hours g. Price Provision: Fixed prices for the products specifiedin Section4.a above. Use the spreadsheetform provided in ATTACHMENTI to submit prices. 5. GENERAL CONTRACT TERMS AND ELIGIBLE PROPOSALS The NCPA strongly prefers to use the attached form cf EEI Master Power Purchase and Sale Agreement (SeeAttachment 11 hereto), but may in its sole discretion consider proposals under the currently effective WSPP Agreement for transactions with duration cf quarter or less. Due to recent changes in the WSPP Agreement, as approved by theFederal Energy Regulatory Comm ission,proposals referencing prior Master ConfirmationsAgreements under the WSPPAgreement between Proposer and NCPA will not be considered as Eligible Proposalsfor the purposes of thisXFP. 6. ADDITIONAL INFORMATION NCPA's June 30,2003 audited financial statements can be found at httv://www.ncna.com/admin accounting financehtml Externalratings forNCPA ProjectBonds maybe found at the following locations: • Moody's Investor Service:httm lwww.moodvs.com/cost/default.asn 57 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTION COPY Exhibit B -Attachment I Form of Request for Proposals Fitch Ratings:hM2://www.fitchibca.com/corporatel_index.cfin For a copy of Fitch Ratings August 18,2004 rating action or any other credit related information, please email Doug Odom at doug:,odom(nna.com. Any questions regarding this RFP should be submitted to Tom Lee (916) 781- 4220. NCPA is not bound to purchase any energy from any proposal submitted pursuant to this RFP. No binding commitment shall arise on the part cf NCPA or Selleruntil and unless the parties sign a definitive agreement. NCPA shall have the right, upon its sole and absolute discretion,to reject any quote or proposal with or without cause. 58 NCPA MARKET PURCHASE PROGRAM AGREEMENT EXECUTIONCOPY Exhibit B -Attachment I Form of Request for Proposals Attachment I Requested Monthly Quantities and Supplier's Price Quote Form Please use the attached Excel spreadsheetto completeyour bid. Email the completed bid form to: Thomas Iee at: tom.lee8iicpa.com. RFP Issue Date: Response Deadline: , 5:OOpm Pacific Prevailing Time (PPT) 59 NCPA MARKET PURCHASEPROGRAMAGREEMENT EXECUTIONCOPY Exhibit -Attachment II Preferred Terms to EEI Form of Power Purchase Agreement MASTER POWER PURCHASEAND SALE AGREEMENT (EEI Version 21, modified4/25/00) COVER SHEET This Master Power Purchase and Sale Agreement ("MasterAgreement') is made as cf the following date: __�_--/2007 ("Effective Date"). TheMaster Agreement, together with the exhibits, schedules, annexes and any written supplements hereto, the Party A Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (includingany confirmations accepted in accordancewith Section2.3 hereto) shall be referred to asthe "Agreement." The Parties to this MasterAgreement are the following: Name: ("_ " or "PartyA) Name:Northem California Power Agency ("Counterparty" or "Pa B") All Notices: All Notices: Attn: Attn: General Manager Address Northern California Power Agency Phone: 180Cirby Way Facsimile: Roseville, CA 95678 Duns Phone: 916-781-781-3636 Federal Tax ID Number: Facsimile:916-781-4254 Duns: 08-290-0564 Federal Tax ID Number: 94-2550072 With additionalNotices of an Event of Default With additionalNotices of an Event of Default or Potential Event of Default to: or Potential Event of Default to: Attn: Attn: ContractAdministration Phone: Northern California Power Agency Facsimile: Phone: 916-781-4296 Facsimile: 916-781-4252 Confirmations: Confirmations: Attn: Power ConfirmationDepartment Attn: Power Confirmations Phone: Phone: 916-781-4205/4224 Facsimile: Facsimile: 916-781-4255 Invoices: Invoices: Attn: Attn: Accounts Payable Phone: Northern CaliforniaPower Agency Facsimile: 180Cirby Way Roseville, CA 95678 Phone: 916-781-4211/4230/4232 Facsimile: 916-781-4255 EXECUTIONCOPY Exhibit B -Attachment 11 Preferred Terms to MI Form of Power Purchase Agreement Scheduling: Scheduling: Attn: Attn: ChieMspatcher/Scheduler Phone: Northern California Power Agency Facsimile: 180Cirby Way Phone: Roseville, CA 95678 Facsimile: Phone: 916-781-4237/3636 Facsimile: 916-781-4226 Payments: Payments: Attn: Attn: Treasurer -Controller Phone: Northern California Power Agency Facsimile: 180Cirby Way E-mail Roseville, CA 95678 Phone: 916-781-4210/ 4230/ 4232 Facsimile: 916-7814255 Wine Transfer: Wire Transfer: BNK Depositto Northern California Power Agency ABA: BNK U.S. Bank ACCT: ABA. 121122676 ACCT; 1-534-0216-2744 Attn: CyndyHusebye U.S. Bank 555 SW Oak Street, Suite 400 Portland, OR 97204 Phone: 877-295-2509 Facsimile: 877-324-1680 Credit and Collections: Credit Attn: Attn: Credit Phone: Northern California Power Agency Facsimile: 180Cirby Way Roseville, CA 95678 Phone: 916-781-4221/4224 Facsimile: 916-781-4255 Collections Attn: Accounts Receivable Northern California Power Agency 180Cirby Way Roseville, CA 95678 Phone: 916-781-4211/4230/4232 Facsimile: 916-7814255 With additional Notices of an Event of With additionalNotices of an Event of Default or Potential Event of Default to: Default or Potential Event of Default to: Attn: Attn: General Counsel: Northern California Power Agency Phone: Phone: 916 556-1531 Facsimile: Facsimile: 9165561516 EXECUTIONCOPY Exhibit B - AttachmentH Preferred Terms to M Form of Power Purchase Agreement The Partieshereby agree that the General Terms and Conditions are incorporatedherein, as selected, modified and amended by the following specificprovisions,as provided for in such General Terms and Conditions: Party ATariff FERC Electric Fate Schedule No. dated MM/ DD/YY, Docket Number: ER##- ###-### Party A shallprovide to Party B a copy of its current Tariff and any and all amendments with its bid in response to Party A§ request for proposals and in any eventno later than thirty (30) Days before the executionof this Agreement. Party B Tariff: N/A ARTICLE ONE GENERAL DEFINITIONS Section1.12,line 4: delete "issues"and replace with "issuer". Section 1.50: delete "24and replace with "2.5" Section 1.5 ldelete that part of the first sentencefollowingthe words "provided, however," and replace the deletion with: "in no event shall suchprice include any ratcheted demand charges,but will includepenalties under any transmissionor interconnection arrangementin a tariff cf the transmissionprovider that is utilized by Buyer, nor shall Buyer be required to utilize or change its utilization of its owned or controlled assets or marketpositions to minimize Seller's liability, although it may utilize either of those options at its own choice at a cost up to the cost the Buyer would incur if it did not run such assets." ARTICLE TWO TRANSACTIONTERMSAND CONDITIONS x Optionalprovision in Section2.4. If not checked, inapplicable. ARTICLE FOUR REMEDIES FOR FAILURE TO DELVER/RECEIVE Accelerated Payment cf Damages. If not checked, inapplicable. Section4.3 is added to Article Four, as follows: "4.3Consequencecf Failineto Deliver/Receive. Notwithstanding, and in addition to the remedies provided pursuant to, Sections 4, 1, 4.2 and 5.7, if Seller or Buyer fails to schedule,deliver or receive all or part cf the Product pursuant to a Transactionfor a period of three (3) of more consecutive days, and such failure is not excusedunder the terms of the Product, by Force Maj eure, by the other Party's failure to perform or by agreementcf the Parties, then upon one (I)Business Day's prior written notice, and for so long as the non-performing Parry fails to perform, the performing Parry shall have the right to suspend its performance under such Transaction. In the event the performing Party suspends performancepursuant to this Section4.3, it shall not be obligated to resume performance until it has received notice from the non-performing Parry at least one (l)Business Day prior to the date upon which the non-performing Parry intends to resume its performance; provided that, if the performing Party has entered into a replacement contractwith a term cf 31 days or less, the performingParty may resumeperformance at the end of the term cf suchreplacement contract. Remedies availableunder this provisionto the performingParty are in additionto, not in re lacemento% other remedies s ecifiedin this Agreement." EXECUTIONCOPY Exhibit B —Attachment II Preferred Terms to EEI Form of Power Purchase Agreement ARTICLE FIVE EVENTS OF DEFAULT REMEDIES y Cross Defaultprovision of Section 5.1 (g) shall apply for both Party A and Parry B. Cross Default amount for Party A shallbe $ , and for Party B shall be $ Section5.1(c), line 4 after "theexclusiveremedy for which" add ", until the number of failuresto deliver/receive reaches the number set forth in Section5.1(i) or Section 5.10),". Section5.1(g), lines 3 and 10: after "such Party" add "or any Affiliate of such Party" Section5.1(i), Section5.1G) ,Section5.1(k) and Section5.1(I) are added to Section5. 1, as follows: during any consecutive 90 -day period, five(5)ormore "SellerFailures" (asthat 0) term is used in Section 4.1)have occurred under any and all Transactions, regarding which the Sellershallbe deemed to be the DefaultingParty and Buyer shall alsobe entitled to its remedies under Section4.1; during any consecutive 90 -day period, five (5)or more "BuyerFailures" (as that (i} term is used in Section 4.2) have occurred under any or all Transactions, regarding which the Buyer shallbe deemed to be the Defaulting Parry and Seller shall also be entitled to its remedies under Section4.2; a representation or warranty with respect to the Defaulting Parry's financial (k) statements (consolidated or unconsolidated balance sheet, income statement and statement of cash flow) or position that is false or materially misleading. revocation by the Federal Energy Regulatory Commission of Party A5 (I) authorizationto make sales at market-based rates. Section5.2, line 3: after "the right" add", but not the obligation"; line 14, add after the second sentence,the following: "A calculation shall be deemed made in a commerciallyreasonable manner if the Non -Defaulting Party has secured at least one competitiveprice quote, in writing, from a third party energy seller, supplier or marketer. No SettlementAmount shallbe due orpayableto the Defaulting Party for any Terminated Transaction. If the Non-DefaultingParty's aggregate Gains exceed its aggregateLosses and Costs, if any, resulting from the termination of this Agreement, the SettlementAmount shall be zero, notwithstanding any provision of this Agreement to the contrary." Section5.3,line 6 after "Non-DefaultingParty" add "plus, at the option of the Non - Defaulting Party, any cash or other form of security then available to the Defaulting Party pursuant to Article Eight."; line 10, after last sentence, add "No Termination Payment shall be due or payable to the Defaulting Party for any Terminated Transaction" EXECUTION COPY Exhibit B -Attachment ll Preferred Terms to EEI Form of Power Purchase Agreement Section5.6 Closeout Setoff Option A (Applicableif no other selectionis made.) Option B - Affiliates shall have the meaning set forth in the Agreement unless otherwise specified as follows: Option B is amended as set forth in Article 10 below. In line 2, after "DefaultingParty" add "otherwise". In line 8, add anew sentence: "At the Non -Defaulting Party's election, any and all obligations owing by or to an Affiliate cf a Party shallbe treated as if such obligationswere owed by or to the Party itself for purposes of setoff.." — Option C (No Setoff) ARTICLE SIX PAYMENTAND NETTING Section6.8, line 3: Delete "mayby agreement cf the Parties" and replace with "shall". ARTICLE EIGHT CREDIT AND COLLATERAL RE UIREMENTS 8.1 Partv A Credit Protection" (a) Financial Information cf Party B: OptionA Option B Specify: Audited financial statements for Northern CaliforniaPower Agency Option C In8.1(a), (OptionA) line 2: delete "120days" and replace with "180 days". In 8,1(a), (Option B) line 1:delete "120days" and replace with "180 days" (b) Credit Assurances by Party B: X Not Applicable Applicable Exhibit B -Attachment 11 Preferred Terms to EEI Form cf Power Purchase Agreement (c) Collateral Threshold for Party 13- -L Not Applicable — Applicable Party B Independent Amount: N/A Party B Rounding Amount: N/A Party B Minimum Transfer Amount: N/A (d) Downgrade Event: — Not Applicable X Applicable Lf applicable, complete the following: XL It shall be a Downgrade Event for Party B only if (i) Party B s underlying rating, determined without reference to third party credit enhancement, on its utility revenue bond ("Debt")by S&P, Moody's, and Fitch is respectively below BBB- or Baa3, and Party B fails to maintain ninety (90) Days of Cash on Hand. For purposes of this Agreement, "Days of Cash on Hand" means, with respect to Party B, the required SecurityAccount under NCPA's MPP Agreement with its members, and (ii)Party B no longer has the legal right to demand that its members adjust electric rates as necessary to fully recover the total costs Party B's is obligate for hereunder Suarantor for Party B, Section 8.1 (e): N/A Suarantee Amount: N / A 3.2Party B Credit Protection: (a) Financial Information of Party A — Option A — Option B x Option CSpecify: Party A shall deliverwithin 120days followingthe end of each fiscalyear, a copy of the audited consolidated financial statement for such fiscalyear, if such financial statement is not available on "EDGAR. (b) Credit Assurances by Party A: Not Applicable Applicable Collateral Threshold for Party A: — Not Applicable X Applicable Exhibit B -Attachment H Preferred Terms to EEI Form of Power Purchase Agreement If applicable,completethe following: Party A CollateralThreshold: means with respect to Party A, at any time the amount specified in the table below under the relevant heading opposite the lower of the Credit Ratings at that time assigned by Standard k Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. ("S&P") or Moody's Investors Service, Inc. ("Moody's"); provided, that (a) if Party A is no longer rated by one of S&P or Moody's, the Threshold with respect to Party A will be zero, and (b)if an Event of Default or Potential Event of Default with respect to Party A has occurred and is continuing, the Threshold with respect to such party shall be zero. S&P Rating Moody's Rating Threshold A- or above A3 or above $ BBB+ Baal $ BBB Baal $ BBB- Baa3 $ _• Below BBB- (or rating Below Baa3 (or rating $ 0 (zero) suspended or withdrawn suspended or withdrawn by both S&P and by bothS&P and Moody's) Moody's) Flirty A IndependentAmount: $0 Flirty A RoundingAmount: $ Rwty A Minimum Transfer Amount: (d) DowngradeEvent: — Not Applicable X Applicable If applicable,completethe following: X It shall be a DowngradeEvent for Party A2& if the Credit Rating of Party A falls below BBB- from S&P or Baa3 from Moody's or if Flirty A ceasesto be rated by eitherS&P or Moody's. (e) Guarantorfor qty A: GuaranteeAmount: EXECUTION COPY Exhibit B - Attachment II Preferred Terms to EQ Form of Power Purchase Agreement ARTICLE TEN MISCELLANEOUS Confidentiality Applicable If not checked, inapplicable. Section 10. 1, line 2: delete "upon (thirty) 30 days' prior written notice" and replace with "whichtermination shallbe effectiveimmediately upon receipt cf writtennotice thereof'. Section 10.2 (ix) is deleted in its entirety Section 10.4,1ine I:after "EachParty" add "tothe extentpermittedby applicablelaw" Section 10.6, line 4: delete"New York" and replacewith "California."; Line 5, delete second sentence and replace with "Withrespect to any proceeding in connection with any claim, counterclaim, demand, caused action,dispute and controversy arising out cf or relatingto this Agreement,the Parties hereby consentto the exclusive jurisdiction dthe federal courts sittingin the EasternDistrictcf the Stated California.; provided, however, that if the federal courts sittingin the Eastern District of the Stated' California refusejurisdiction, the Parties agreeto the exclusivejurisdictionc£ the state courts sittingin the County d Sacramento, S tated California." Section10.8, line 4 after "withSection 2.3)" add "PartyBs bid solicitation -related documents, includingbut not limitedto information, statements,records, and reports provided by Party A to Party B in connectionwith suchsolicitation,"; line 18:delete6tn sentence; line 30: delete last sentence and replace with "The indemnityprovisions d this Agreement shall survivethe terminationcf this Agreement for the period dthe applicable statute of limitations. The auditprovisions dthis Agreementshall survive the terminationdthis Agreementfor aperiod dtwelve (12)months." EXECUTIONCOPY Exhibit -Attachment II Preferred Terms to EEI Form of Power Purchase Agreement EXECUTION COPY Section 10.10is replaced in its entirety, as follows: "10.10 Forward Contract. The Parties acknowledgeand agree that this Agreement is a "forward contract" within the meaning of the United States Bankruptcy Code as amendedby the Bankruptcy Code Amendments of 2005; that all Transactionshereunder constitute"forward contracts," and that each believes that it is a "forward contractmerchant"under statutoryand decisional law in effect as of the Effective Date." Section10.12is addedto Article 10,as follows: 10. 12LL Agency. In performing their respective obligations hereunder, neither Party is acting, or is authorized to act, as agent of the other Party." Section 10.13 is added to Article 10, as follows: 10.13Dismte Resolution. In the event of any controversyor claim,whether based in contract, tort, or otherwise, arising out of or based upon, or relatingto this Agreement or the scope, breach, termination or validity of each of them (a "Dispute"), the Parties will resolve such Dispute i n the followingmanner: (a) The Parties will attempt in good faith to resolve the Dispute promptly by negotiations between duly authorized representativesof the Parties who have authority to settle the Dispute. When a Party believes there is a Dispute, that Party will give the other Party written notice describingtheDispute with reasonableparticularity. Within thirty (30) Days after receipt of suchnotice, the receivingParty will submit a written response to the other Party. (b) If the Dispute is not resolved within forty-five (45)Days cf the date of the response givenpursuant to Section 10.13.1, or such additionaltime, if any, that the Parties mutually agreeto in writing, the Parties shall try in good faithto settlethe Disputeby mediation. The form of mediation and the mediator(s) selectedto resolve the Dispute shallbe acceptabletoboth Parties. (c) If the Dispute is not resolved through mediationwithinninety (90) Days afterthe firstmeeting of the Parties andmediator(s), or suchadditional time, if any, that the Partiesmutually agreeto in writing, either Party shallbe free to pursue any and all legal actions and remedies w it may deem necessary. EXECUTION COPY Exhibit B - AttachmentII Preferred Terms to EEI Form of Power Purchase Agreement SCHEDULE M Parry A is a Governmental Entity or Public Power System X Parry B is a Governmental Entity, Schedule M Applicable X Add Section3.6. If not checked, inapplicable. Add Section 8.4. If not checked, inapplicable. A., pertaining to the definitions in Article One, is amended, in part, as follows: "Act" is amended in its entirety, as follows: ""Act" means applicable California and local laws, including but not limited to the California Constitution, the California Government Code, the California Public Utilities Code, the Joint Powers Agreement of the Northern California Power Agency under which Parry B was created, organized and authorized to enter into this Master Agreement and each Transaction hereunder." "Special Fund" line 5: Add a second sentence, as follows: "For purposes of this ScheduleK Party A acknowledges that Parry Bs Security Account under its Market Purchase Program Agreement (a copy of which has been provided to Parry A) meets the definition of "SpecialFund." C., pertaining to the representations and warranties to Section 10.2, is amended, as follows: Line 7: after "without limitation" add "and to the extent applicable,". D., pertaining to Section3.4, is amended, as follows: Line 8: after "Agreement" add "to the extent the same are not required under the NCPA Joint Powers Agreement". D., pertaining to Section3.5, is amended, to read as follows: 3.5 No Immunity Claim. Governmental Entity or Public Power System warrants and covenants that with respect to its contractual obligations hereunder and performance thereof, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself from (a) suit, other than with respect to claims required to be timely filed pursuant to California law (GovernmentCode section 810 etseq.); (b)jurisdiction of any court in which suit may legallybe brought against it under the law of California: (c) relief which may legally be sought against it by way cf injunction, order for specific performance or recovery of property; (d)to the extent legally permissible, attachment cf assets, or (e)to the extent legallypermissible, execution or enforcement of anyjudgment. Exhibit B -Attachment II Preferred Terms to EEI Form of Power Purchase Agreement E., pertaining to the addition of Section3.6, is amended, as follows: Lines 8 - 12shallbe amended in its entirety, as follows: "anybreach ef clause(ii)herein shallbe deemedto have arisenduring a fiscal period cf GovernmentEntity or Public Power Systemfor which such budgetary approval or certificationof its obligations under this Master Agreement is required to be in effect and an Event of Default shallbe deemed to have occurred for purposescf Section5.1 under which Governmental Entity or Public Power System shallbe treated as the DefaultingParty." G, pertaining to Section 10.6,doesnot apply. EXECUTIONCOPY Exhibit B -Attachment 11 Preferred Terms to EII Form of Power Purchase Agreement SCHEDULEP PRODUCTSAND RELATED DEFINITIONS The followingdefined terms are added to ScheduleP: " CAISO means the Californialndependent SystemOperator, or its successor. "CAISO Tariff' means the Federal Energy Regulatory Commission -approved baiffcf CAISO, including all CAISOprotocols, as the samemay be amended from time to time. "CAISOEnergy" means a Transactionin which the Sellershall sell and the Buyer shallpurchase a quantity of Energy equal to the hourly quantity, without Ancillary Services (as defined in the CAISO Tariff)that is or will be scheduled as a schedule coordinator-to-schedulecoordinatortransactionpursuantto the CAISO Tariff, for which the only excuse for failureto deliver or receive is an "UncontrollableForce" (as defined in the CAISOTariff) called by the CAISO in accordancewith the CAISO Tariff. "NP15 Zone Delivery Point" means the NP 15 Zone; provided, however, if the Californialndependent SystemOperator or its successor (" CAISO") implementstrading hubs under a locational marginal pricing design during the Delivery Period, the Delivery Point shallbe the ExistingZone GenerationNP 15TradingHub ("NP15 EZ Gen Hub"), as suchtrading hub is contemplatedby the CAISO in its filingmade to the FERC dated March 15,2005("ComprehensiveDesignProposal for Inter -Scheduling CoordinatorTradesUnder the CalifornialndependentSystemOperatorCorporation's Market Redesign and Technology Upgrade, DocketNo. ER02-1656-025"); provided further, if the NP 15 EZ Gen Hub (under any name) is not established as part cf amarket redesignthat is implementedduring the DeliveryPeriod, the Parties agreeto promptly work together in good faithto designate an alternateDeliveryPointto reasonably approximatethe characteristicscf the NP-15Zone. EXECUTIONCOPY Exhibit B -Attachment II Preferred Terms to EEI Form cf Power Purchase Agreement EXHIBIT A MASTER P O W R PURCHASEAND SALEAGREEMENT CONFIRMATION LETTER After"— Firm (LD)", add, as follows: — Firm Power SpecifyUnit(s) qualifyingas Network Resources for the Buyer: By - Name: Ply A: Party B: Northern California Power Agency Approval by General Manager: By - Name: By - Title: Name: James Pope Date: Title: General Manager Date: Party B: Northern California Power Agency Approved as to Form: Name: MichaelDean Title: General Counsel Date: DISCLAIMER This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (`BEI") and National Energy Marketers Association ("NEM") member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting therefrom. Bti providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial obj ectiveswill be achieved and their legal interests are adequately protected. EXECUTIONCOPY RESOLUTION NO. 2011-122 A RESOLUTION CF THE LODI CITY COUNCIL APPROVING THE NORTHERN CALIFORNIA POWERAGENCY MARKET PURCHASE PROGRAM AGREEMENT AND AUTHORIZING EXECUTION BY THE CITY MANAGERWITH ADMINISTRATION BYTHE ELECTRIC UTILITY DIRECTOR AND APPOINTING THE CITY MANAGER AND ELECTRIC UTILITY DIRECTORAS THE DESIGNATED REPRESENTATIVE FOR LODI WHEREAS, Lodi, as a municipal electric utility, is a member of the Northern California Power Agency (NCPA) and has the need to purchase electric energy or capacity to meet its future electric power needs; and WHEREAS, NCPA is willing to undertake the purchase of electric energy and capacity for its members pursuant to its Market Purchase Program Agreement (MPPA) up to a period of five years; and WHEREAS, utilizing the MPPA, NCPA will enter into power purchase agreements for the benefit of participating members, which agreements shall be in the form of the Western Systems Power Pool Agreement (WSPP Agreement) or the Edison Electric Institute Master Power Purchase and Sale Agreement (EEI Master Agreement), with such modifications as have previously been approved by the NCPA Commission, and which modifications have been reviewed and are concurred in by the City; and WHEREAS, it is recognized that the market for electric energy or capacity may not support the modifications to the WSPP Agreement or EEI MasterAgreement or may only support such modifications with unacceptably high prices, or may require other additional or contradictory modifications; and WHEREAS, requests for proposal for the purchase of electric energy or capacity must be responded to within a very short time frame; and WHEREAS, the MPPA provides that, following the issuance of a request for proposals for power or capacity, the execution of a Participant Purchase Confirmation by the Designated Representatives of an NCPA member participating in the MPPA will be deemed the subscription by that NCPA member to the purchase of power or capacity upon the terms negotiated, whether or not such modifications have been made to the WSPP Agreement or EEI Master Agreement; and WHEREAS, maintenance of an adequate, cost effective supply of electric energy or capacity is a matter of critical importance, directly affecting the public health, safety, and welfare. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve the NCPA Market Purchase Program Agreement, which is on file in the office of the City Clerk, and is incorporated into this resolution by reference, and hereby authorizes execution by the City Manager with administration by the Electric Utility Director; and BE IT FURTHER RESOLVED that the City Manager or the Electric Utility Director is authorized to execute such amendments and supplements to the same as the City's Manager or Electric Utility Director determines, with the attestation of the City Attorney, to be necessary or appropriate from time -to -time hereafter to cure any ambiguity or eliminate superfluous provisions or to correct or supplement any defective provision of the same. BE IT FURTHER RESOLVED that the City Manager and the City's Electric Utility Director are hereby declared the "Designated Representatives" of the City pursuant to the MPPA. Such Designated Representatives are hereby authorized to execute Participant Purchase Confirmations for either or both electric energy and capacity and to accede to or agree to amendments to either the WSPP Agreement or the EEI Master Agreement with the attestation of the City Attorney, provided that such Participant Purchase Confirmations are entered into in conformance with the MPPA. The obligations entered into by such officers on behalf of the City shall be valid and binding, and the City agrees to pay for such obligations in accordance with the MPPA as fully and as if each such Participant Purchase Confirmation and transaction were directly presented to and individually approved by it. Dated: August 3, 2011 hereby certify that Resolution No. 2011-122 was passed and adopted by the City Council of the City of Lodi in a regular meeting held August 3, 2011, by the following vote: AYES: COUNCIL MEMBERS — Hansen, Katzakian, Nakanishi, and Mayor Johnson NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Mounce ABSTAIN: COUNCIL MEMBERS — None l� 4 2011-122