The Board of Selectmen will have the option presented to them at next Tuesday’s meeting for the town to enter into a power purchase agreement (PPA) with respect to a solar PV installation located in Freetown.
Copies of Energy Manager Andrew Seaman’s explanation and the proposed contract are attached below. It saves the town $27,000 per year.
Net Metering Credit Sales Agreement (NMCSA) Brief to the Selectmen
Net metering is a process where electricity generated by a renewable energy facility that is not used on-site is sent back to the grid (essentially spinning the meter backwards). A solar farm in Freetown is slated to come online in early 2017 that will generate 8 million kWh of solar electricity. This electricity will be sent to Eversource and, in return, Eversource will issue one net metering credit per kWh generated to the owner of the facility. This credit carries cash value but needs to be liquidated in order for the owner of the facility to make money. To encourage the purchase of these credits, they are offered at a discount to the Buyer. In this Agreement, the Town of Medfield will be credited with 1,200,000 credits to their Eversource bill and, in exchange, the Town will pay the seller the cost of 960,000 credits, resulting in an immediate 20% savings on our electric bill. Assuming a very low value of of $0.1125 cents per credit, this results in a bill credit of $135,000 while the Town pays the Seller $108,000, resulting in a savings of $27,000 in the first year alone.
The contract is structured so that the price we pay for the credits are tied to the Eversource net meter rate tariff. This ensures that as long as the net meter credit price never goes below $0.09 the Town will still realize savings every year.
POWER PURCHASE AGREEMENT
This Power Purchase Agreement is made and entered into as of May 10, 2016 (the “Effective Date”), by and between MARIE’S WAY SOLAR 1, LLC, a Delaware limited liability company for itself and any and all assignees permitted hereunder (“Seller”) and the Town of [¤], Massachusetts, a municipal corporation and political subdivision of the Commonwealth of Massachusetts (“Buyer”). Seller and Buyer may be referred to herein collectively as the “Parties” and individually as a “Party.”
A. Seller proposes to finance, install, own, operate and maintain one or more solar photovoltaic facilities with an aggregate generating capacity of approximately 5.354 MW DC (hereinafter defined collectively as the “Facility”) at the Property (as defined in Exhibit A) served by the LDC System (hereinafter defined);.
B. The Parties intend that, pursuant to the Net Metering Rules (as defined below), the will qualify as a Net Metering Facility of a Municipality of Other Governmental Entity (as defined below) and will generate Net Metering Credits (as defined below)).
C. Subject to the terms and conditions of this Agreement, Seller desires to deliver to Buyer, and Buyer desires to accept from Seller delivery of, the Buyer Allocation Percentage (as defined below) of the Electricity generated by the Facility during the Term, to be allocated by Buyer to the Target Buyer Accounts (as defined below) with the result that Buyer and such Target Buyer Accounts receive all the Net Metering Credits (as defined below) corresponding thereto.
D. The Parties acknowledge that Buyer is not responsible to pay for all such Net Metering Credits, but shall instead pay only for the percentage of such Net Metering Credits that are allocated to the Target Buyer Accounts, with the remaining percentage of credits allocated or caused to be allocated by Seller to certain other qualified purchasers, all as set forth in greater detail below.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and other good and valuable consideration the sufficiency and receipt of which are acknowledged by the Parties, and intending to be legally bound hereby, each Party hereby agrees as follows:
Article I. DEFINED TERMS
Section 1.01 Defined Terms. As used in this Agreement, the following terms, when used in this Agreement and initially capitalized, shall have the following meanings:
“Actual Facilities Output” has the meaning set forth in Section 4.08(a).
“Affiliate” means, with respect to any Person, such Person’s general partner or manager, or any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person.
“Agreement” means this Power Purchase Agreement, including all Exhibits and attachments hereto.
“Applicable Legal Requirements” means any law, act, rule, regulation, requirement, standard, order, by-law, ordinance, regulation, judgment, decree, or injunction of or by any Governmental Authority, and all licenses, permits, and other governmental approvals and consents, which are applicable to the Facility, Property, Facilities, Electricity, Net Metering Credits and a Party’s rights and obligations hereunder, including, without limitation, the construction, operation, maintenance and ownership of the Facility, as well as the selling and purchasing of electricity, and the accrual of associated Net Metering Credits therefrom.
“Bankrupt” means, with respect to a Party: (i) a Party against which a bankruptcy, receivership or other insolvency proceeding is instituted and not dismissed, stayed or vacated within sixty (60) days thereafter; or (ii) a Party that has made a general assignment for the benefit of creditors, become insolvent, or has voluntarily instituted bankruptcy, reorganization, liquidation or receivership proceedings, or (iii) a Party, or the persons that own all of the ownership interests of a Party, is insolvent.
“Billing Cycle” means the monthly billing cycle established by the LDC for the Host Customer Account.
“Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday.
“Buyer” has the meaning set forth in the introductory paragraph of this Agreement.
“Buyer Allocation Percentage” has the meaning set forth in Exhibit C of this Agreement.
“Change in Law” has the meaning set forth in Article XVII of this Agreement.
“Commercial Operation” means that the Facility is ready for regular, daily operation, has been interconnected to the LDC system, has been accepted by the LDC (to the extent required), and is capable of producing Electricity at full or substantially full capacity, has been installed in accordance with Applicable Legal Requirements, and qualifies as a Net Metering Facility of a Municipality or Other Governmental Entity under the Net Metering Rules.
“Commercial Operation Date” means the first day on which the Facility achieves Commercial Operation, as certified in writing by Seller to Buyer in. a notice of Commercial Operation Date pursuant to Section 3.02.
“Construction Commencement Date” means the date on which Seller has obtained a building permit for the Facility and commenced actual construction activities on the Property for the installation of the Facility, provided that in no event shall such date be later than required by 225 CMR 14.00 in order for the Facility to qualify for SREC II.
“Contract Year” means a 365-day period commencing on the Commercial Operation Date and each anniversary thereafter.
“Customer Interconnection Acknowledgement Agreement” shall have the meaning set forth in Section 7.05(b) of this Agreement.
“Delivered Quantity” shall have the meaning set forth in Section 4.03 of this Agreement.
“Delivery Point” for the Facility means the LDC Metering Device.
“Designated Third Party” has the meaning set forth in Section 16.02(a).
“DPU” means the Massachusetts Department of Public Utilities or its successors.
“Early Termination Date” has the meaning set forth in Section 2.03.
“Effective Date” is the date first set forth in the introductory paragraph of this Agreement.
“Electricity” means the actual and verifiable amount of electricity generated by the Facility and delivered to Buyer at the Delivery Point, as metered in whole kilowatt-hours (kWh) at the LDC Metering Device, and that conforms to Applicable Legal Requirements and the applicable LDC and authoritative regulatory body standards.
“Electricity Price” has the meaning set forth in Exhibit B attached hereto.
“Environmental Attributes” means any credit, benefit, reduction, offset, financial incentive, tax credit and other beneficial allowance that is in effect as of the Effective Date or may come into effect in the future, including, to the extent applicable and without limitation, (i) all environmental and renewable energy attributes and credits of any kind and nature resulting from or associated with the Facility and/or its electricity generation, (ii) government financial incentives, (iii) greenhouse gas offsets under the Regional Greenhouse Gas Initiative, (iv) renewable energy certificates or any similar certificates or credits under the laws of the Commonwealth of Massachusetts or any other jurisdiction, (v) tax credits, incentives or depreciation allowances established under any federal or state law, and (vi) other allowances howsoever named or referred to, with respect to any and all fuel, emissions, air quality, or other environmental characteristics, resulting from the use of solar energy generation or the avoidance of the emission of any gas, chemical or other substance into the air, soil or water attributable to the Facility and/or its electricity generation. Environmental Attributes do not include Net Metering Credits corresponding to the Electricity generated by the Facility.
“Estimated Annual Production” means the Estimated Annual Production for the applicable year of the Term as set forth in Exhibit D.
“Event of Default” has the meaning set forth in Article 10.
“Facility” have the meaning set forth in the Recital. For avoidance of doubt, except as otherwise expressly provided herein, the term “Facility” as used in this Agreement shall correspond with the term “Unit” as used in the Net Metering Rules.
“Force Majeure” means any event or circumstance that prevents a Party from performing its obligations under this Agreement, which event or circumstance (i) is not within the reasonable control, and is not the result of the fault or negligence, of the Party and (ii) by the exercise of reasonable due diligence, the Party is unable to overcome or avoid or cause to be avoided. Subject to the foregoing, Force Majeure may include but is not limited to the following acts or events: natural phenomena, such as storms, hurricanes, floods, lightning and earthquakes; explosions or fires arising from lightning or other causes unrelated to the acts or omissions of the Party claiming Force Majeure; acts of war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, terrorist acts, or rebellion; strikes or labor disputes except strikes and labor disputes involving employees of a Party; and acts, failures to act or orders of any kind of any Governmental Authorities acting in their regulatory or judicial capacity.
“Governmental Authority” means any court of competent jurisdiction, the United States of America, the Commonwealth of Massachusetts, and any political or municipal subdivision thereof, and any governmental entity, and any agency, department, commission, board, bureau, or instrumentality of any of them. For purposes of this Agreement, the LDC and any independent electric system operator shall be deemed to be Governmental Authorities.
“Governmental Charges” means all applicable federal, state and local taxes, governmental charges, emission allowance, costs, duties, tariffs, levies, leases, fees, permits, assessments, adders or surcharges (including public purposes charges and low income bill payment assistance charges, and reliability contribution (or similar) charges as referenced in G.L. c. 164, § 139), imposed or authorized by a Governmental Authority, LDC, or other similar entity, on or with respect to the Facility, Property, Electricity, Net Metering Credits or this Agreement.
“Host Customer” shall have the meaning given this term in the Net Metering Rules and, for the Facilities, shall be a Municipality or Other Governmental Entity. Buyer shall not be Host Customer for the Facilities.
“Host Customer Account” means the “customer account” established by the LDC for the Host Customer of the Facility.
“Interconnection Obligations” shall have the meaning set forth in Section 3.03.
“Interest Rate” means the lesser of (i) a fluctuating interest rate per annum equal to the sum of (A) the Prime Rate as stated in the “Bonds, Rates & Yields” section of The Wall Street Journal on the Effective Date and thereafter on the first day of every calendar month, plus (B) two (2) percentage points; provided that in the event that such rate is no longer published in The Wall Street Journal or such publication is no longer published, the Interest Rate shall be set using a comparable index or interest rate reasonably acceptable to both Seller and Buyer; or (ii) the maximum rate permitted by applicable law. The Interest Rate hereunder shall change on the first day of every calendar month. Interest shall be calculated daily on the basis of a year of three hundred sixty five (365) days and the actual number of days for which such interest is due.
“Invoice” shall have the meaning set forth in Section 4.04.
“KWh” means kilowatt-hour.
“LDC” means Eversource or its successors.
“LDC Metering Device” means, with respect to the Facility, the LDC meter furnished and installed by the LDC for the purpose of measuring the Electricity delivered by the LDC to the Host Customer and delivered by the Host Customer to the LDC.
“LDC System” means the electric distribution system operated and maintained by the LDC.
“Market Net Metering Credits” has the meaning set forth in G.L. c. 164, § 138.
“Minimum Output Requirement” has the meaning provided in Section 4.08(a).
“Net Metering” shall have the meaning set forth in the Net Metering Rules.
“Net Metering Credit” means the applicable monetary value of an excess kilowatt-hour of electricity, determined in accordance with the Net Metering Rules, generated by a Solar Net Metering Facility of a Municipality or Other Governmental Entity, as defined in accordance with the Net Metering Rules. For avoidance of doubt, a Market Net Metering Credit is not and shall not be deemed a Net Metering Credit.
“Net Metering Credit Rate” with respect to a particular Billing Cycle, means the dollar value of a Net Metering Credit accruable to the Target Buyer Accounts for that Billing Cycle.
“Net Metering Facility” and “Net Metering Facility of a Municipality or Other Governmental Entity” shall have the meanings set forth in the Net Metering Rules.
“Net Metering Program Cancellation” means a change in Applicable Legal Requirements that results in (a) the inability of the Facility or the Host Customer Account to generate Net Metering Credits for the benefit of Buyer, or (b) the ineligibility of Buyer to receive, use or have allocated to its Buyer Allocation Percentage such Net Metering Credits.
“Net Metering Rules” means, collectively and as amended from time to time, the Massachusetts net metering statute, MGL c. 164, §§ 13 8 – 140, the Massachusetts net metering regulations, 220 CMR 18, orders issued by DPU relating to Net Metering (including, without limitation, DPU 11-10-A (May 7, 2012) and the appendices thereto) and the associated net metering tariff of the LDC.
“Outside Commercial Operation Date” means March 31, 2017, provided that such period of time shall be extended for a period of time concurrent with the periods of time required, through no fault of Seller, for (i) the LDC’ s completion of any required LDC System upgrades or resolution of any other delays caused by the LDC, including, without limitation, the LDC’s failure to comply with its interconnection tariff (“LDC Delay”), and (ii) the resolution of any challenge to any permit or approval relating to the Facility, provided that, in either event, any extension to the Outside Commercial Operation Date shall not exceed ninety (90) calendar days unless, in the case of a LDC Delay, the Facility is substantially complete on or before the expiration of such period, provided, however, that even in such event, such date shal1 not exceed 180 calendar days.
“Outside Construction Commencement Date” means September 1, 2016, provided that such period of time shall be extended for a period of time concurrent with the periods of time required, through no fault of Seller, for (i) the LDC’s completion of any required LDC System upgrades or resolution of any other delays caused, through no fault of Seller, by the LDC, including, without limitation, the LDC’s failure to comply with its interconnection tariff, and (ii) the resolution of any challenge to any permit or approval relating to the Facility, provided that, in either event, any extension to the Outside Construction Commencement Date shall not exceed ninety (90) calendar days.
“Person” means an individual, general or limited partnership, corporation, municipal corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority, limited liability company, or any other entity of whatever nature.
“Property” shall have the meaning set forth in the Recitals.
“Prudent Industry Practices” means the practices, methods, acts, and standards of care, skill, safety and diligence commonly employed or engaged in by experienced and prudent professionals, acting with reasonable care, in the solar e1ectric generation industry in the financing, permitting, design, construction, operation and maintenance of generating equipment similar in size and technology to the Facility, and that are compliant with Applicable Legal Requirements.
“Public Cap Allocation” means an assurance that a Host Customer will receive Net Metering Services (as defined in the Net Metering Rules) for the Facilities within the Public Cap (as defined in the Net Metering Rules) upon the Host Customer’s receipt of notice of authorization to interconnect from the LDC.
“Purchased Quantity” shall have the meaning set forth in Section 4.03 of this Agreement.
“Schedule Z” shall have the meaning set forth in Section 7.05(a)(i) of this Agreement.
“Seller” shall have the meaning set forth in the introductory paragraph of this Agreement.
“Target Buyer Accounts” shall have the meaning set forth in Section 7.05(a)(i).
“Seller Metering Device” means, with respect to the Facility, any and all revenue quality meters installed by Seller at or before the Delivery Point needed for the registration, recording, and transmission of information regarding the amount of Electricity generated by the Facility.
“Term” shall have the meaning set forth in Section 2.01.
“Termination Date” means the earlier to occur of (i) the last day of the Term, (ii) the Early Termination Date, (iii) the date of termination of this Agreement as the result of an Event of Default, (iv) the date of termination as the result of Force Majeure pursuant to Section 9.02, and (v) the date of termination for any other reason permitted by this Agreement.
“Third Party Allocation Percentage” has the meaning set forth in Section 7.05(a)(ii) of this Agreement.
“Value of Net Metering Credits” shall have the meaning set forth in Exhibit E.
Article II. TERM; CONDITIONS PRECEDENT; EARLY TERMINATION
Section 2.01 Term. The term of this Agreement (including any extensions, the “Term”) shall commence as of the Effective Date and, unless terminated earlier pursuant to the terms of this Agreement, shall remain in effect until the twentieth (20th) anniversary of the Commercial Operation Date. Provided that this Agreement has not been earlier terminated pursuant to the provisions herein, either Party may request to extend the Term of this Agreement for up to two (2) additional consecutive terms of five (5) years upon the expiration of the then Term by giving the other Party at least two hundred seventy (270) days prior written notice of its desire to extend the Term. The terms and conditions of this Agreement, including without limitation, the Electricity Price, shall continue to apply during any such additional term of five (5) years.
Section 2.02 Conditions Precedent. Subject to the other terms of this Agreement, the commencement of the obligation of Seller to sell Electricity to Buyer under the provisions of this Agreement is subject to the fulfillment of each of the following conditions precedent except, as to the conditions stated in subparagraphs (b) and (c) only, to the extent waived by Seller, though such waiver will not affect any right of Buyer to terminate the Agreement under Section 2.03, or any of Seller’s obligations under this Agreement, including, but not limited to, the obligations set forth in Section 3.01, below:
(a) Seller shall have obtained all permits and approvals required for the construction and operation of the Facility;
(b) Buyer shall have delivered a copy of the executed Schedule Z and Customer Interconnection Acknowledgment Agreement;
(c) the Facilities shall have been interconnected with the LDC in accordance with the requirements of the interconnection service agreement, the Net Metering Rules and Applicable Legal Requirements; and
(d) the Facility shall have achieved Commercial Operation.
Section 2.03 Early Termination. This Agreement may be terminated prior to the expiration of the Term (the “Early Termination Date”):
(a) by Seller, at any time prior to the Commercial Operation Date, upon notice to Buyer, in the event that any of the conditions precedent set forth in Section 2.02 has not been satisfied, provided that the lack of satisfaction of any such condition is not the result of Seller’s failure to exercise commercially reasonable efforts and diligence in connection with any such condition;
(b) by Buyer, upon twenty (20) days’ notice to Seller, in the event that the Construction Commencement Date has not occurred by the Outside Construction Commencement Date, provided that Buyer may not exercise its right to terminate under this Section 2.03(c) after the earlier of (i) the Construction Commencement Date or (ii) the date on which Seller notifies Buyer in writing that closing of financing for construction of the System has occurred (provided, in such event, that the Construction Commencement Date occurs within thirty (30) days following such closing, failing which Buyer may terminate the Agreement), provided further that, if the Construction Commencement Date will not occur by the Outside Construction Commencement Date, Seller shall provide written notice of such fact as soon as practicable before the Outside Construction Commencement Date;
(c) by Buyer, upon twenty (20) days’ notice to Seller, in the event that the Commercial Operation Date for the Facility has not occurred by the Outside Commercial Operation Date, provided that Buyer may not exercise its right to terminate under this Section 2.03(d) after the Commercial Operation Date, provided further that, if the Construction Commencement Date will not occur by the Outside Construction Commencement Date, Seller shall provide written notice of such fact as soon as practicable before the Outside Construction Commencement Date;
(d) by either Party in accordance with the terms of this Agreement, including, but not limited to, Section 9.02.
Upon early termination of this Agreement in accordance with this Section 2.03, each Party shall discharge by performance all obligations due to the other Party that arose prior to the Early Termination Date, and the Parties shall have no further obligations hereunder except those which survive expiration or termination of this Agreement in accordance with the terms hereof.
Article III. DEVELOPMENT OF FACILITY
Section 3.01 Development of Facility by Seller. Seller shall undertake all diligent and commercially reasonable, good faith efforts to obtain and maintain required financing and all permits and approvals of any Governmental Authority for the Facility. Using such efforts, Seller shall design, construct, maintain and operate the Facility in accordance with Applicable Legal Requirements, Prudent Industry Practices, and applicable manufacturers’ warranties and instructions, and in a manner such that the Facility qualifies as a Net Metering Facility of a Municipality or Other Governmental Entity under the Net Metering Rules. Seller shall further design and install the Solar Energy Facility such that it will qualify, as of the Commercial Operations Date, for the LDC’s Rate 33 class of service. Seller represents and warrants that it shall operate and maintain the Facility such that it does not consume a quantity of electricity from the LDC that will cause the Facility to no longer qualify for such rate.
Section 3.02 Notice of Commercial Operation. Subject to the provisions of this Agreement, Seller shall promptly notify and represent to Buyer, in writing, when the Facility has achieved Commercial Operation. Seller shall, in the notice of Commercial Operation, certify to Buyer the Commercial Operation Date.
Section 3.03 Interconnection Requirements. Seller shall be responsible for all costs, fees, charges and obligations of every kind and nature required to connect the Facility to the LDC System, including, but not limited to, fees associated with system upgrades and operation and maintenance carrying charges, the cost to install the Seller Metering Devices and LDC Metering Device, and the cost to insure the Facility (“Interconnection Obligations”). In no event will Buyer be responsible for any Interconnection Obligations, but Buyer shall be responsible for cooperating with Seller in connection with the filing the Schedule Z with the LDC.
Section 3.04 Cooperation Regarding Authorizations. Seller will prepare, tile and manage applications for all permits, approvals, registrations and other related matters with the LDC and any Governmental Authority, including the submission of applications described in this Agreement and, to the extent necessary, Seller will do so on behalf of Buyer. Buyer agrees to reasonably cooperate with Seller in preparing such applications and securing such permits, approvals and registrations, including, without limitation, timely executing and delivering all documentation required from Buyer relating thereto. Where allowed by law and if necessary, and subject to Applicable Legal Requirements, Buyer may designate Seller as its agent in obtaining all permits, approvals, registrations and additional authorizations required of Buyer in connection with this Agreement and the transactions contemplated hereby.
Section 3.05 Title. Except as otherwise set forth in this Agreement, as between the Parties during the Term of this Agreement, all ownership of and title to the Facility and all Environmental Attributes shall be and remain with the Seller.
Article IV. DELIVERY; PURCHASE AND SALE; GOVERNMENTAL CHARGES
Section 4.01 Delivery of Electricity. Commencing on the Commercial Operation Date and continuing throughout the remainder of the Term, Seller shall make available, deliver, and sell to Buyer, and Buyer shall purchase, the Purchased Quantity, subject to the other provisions of this Agreement, including, but not limited to, Sections 4.03 and 4.07, below. Seller represents and warrants that the Purchased Quantity shall be delivered to the LDC free and clear of any claims, liens, security interests, and encumbrances of any kind.
Section 4.02 Price for Electricity. The purchase price of each kilowatt-hour of Electricity shall be calculated in accordance with Section 4.03 and Exhibit B.
Section 4.03 Invoicing and Payment. During each monthly Billing Cycle, Seller shall provide Buyer with an invoice (the “Invoice”) reporting the kWhs of Electricity generated during the prior Billing Cycle (the “Delivered Quantity”) and charging the Buyer for payment of an amount equal to the Delivered Quantity multiplied by the Buyer Allocation Percentage (the “Purchased Quantity”) multiplied by the Electricity Price (all as set forth on Exhibit B). Except to the extent permitted by Section 4.04, Buyer will remit payment of the amount of each Invoice to Seller or its designee by check or electronic funds transfer (or other means agreeable to both Parties) within thirty (30) days following Buyer’s receipt of each such Invoice. Any amounts required to be paid but not paid by the due date will be deemed late and will accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full. For avoidance of doubt, notwithstanding anything to the contrary in this Agreement, Buyer shall not be liable to Seller (or any other person or entity) for any portion of the Delivered Quantity in excess of the Buyer Allocation Percentage, nor for payment for the same; for the failure of any third party purchaser of electricity or Net Metering Credits to make payments due to Seller; or for any Electricity, or for payment for the same, that is generated by the Facility if the Facility does not qualify as a Net Metering Facility of a Municipality or Other Governmental Entity; or for any Electricity, of for payment of the same, for which Net Metering Credits have not been furnished to Buyer by the LDC.
Section 4.04 Invoice Disputes. In the event of a good faith dispute regarding any Invoice, Buyer shall pay the undisputed amount of such Invoice and shall seek to resolve the dispute in accordance with the dispute resolution procedures set forth in Article 14. Upon resolution of the dispute, any required refund or additional payment shall be made within thirty (30) days of such resolution along with interest accrued at the Interest Rate from and including the date of the original payment (with respect to a refund) or original due date (with respect to an additional payment). Any dispute by Buyer with respect to an Invoice or an adjustment thereof is waived unless, within six (6) months after the invoice is rendered or such adjustment is made, Buyer notifies Seller of such dispute and states the basis for such dispute, unless Buyer neither knew nor had reason to know of the dispute, in which event such 6-month period shall be extended to two years. Upon Buyer’s request with respect to an Invoice, Seller, within ten (10) days, shall provide Buyer with all information reasonably requested by Buyer and information otherwise necessary to permit Buyer to replicate Seller’s computation of the invoiced amount, and to verify the Purchased Quantity.
Section 4.05 Invoices from LDC. Buyer and Seller shall exercise reasonable efforts to make arrangements for the LDC to provide Seller with direct electronic access to all LDC invoices and account information with respect to the LDC account(s) of Buyer as a customer of record for the Target Buyer Accounts. In the event that it is not possible to provide such access, then Buyer shall provide Seller with a copy of each invoice that it receives from the LDC for such Target Buyer Accounts within ten (10) Business Days of receipt (or, if later, as soon as may be practicable for Buyer). Upon receipt of such LDC invoice, Seller shall cause the next Invoice issued to Buyer to reflect a credit to Buyer for any fixed monthly customer charge on the LDC invoice for any Electricity previously paid for by Buyer for which Net Metering Credits have not been credited to Buyer by the LDC, as well as any charges on the LDC invoice arising from the Facilities’ use of electricity delivered to the LDC Metering Device by the LDC, and for any and all other charges and expenses imposed by the LDC on Buyer. The Parties acknowledge and agree that, notwithstanding anything to the contrary in this Agreement, there will be a single LDC Metering Device for the Facility.
Section 4.06 Governmental Charges. Seller shall pay all Governmental Charges. Both Parties shall use reasonable efforts to administer this Agreement and implement its provisions so as to minimize Governmental Charges. In the event any of the sales of Electricity hereunder are to be exempted from or not subject to one or more Governmental Charges, either Party shall, promptly upon the other Party’s request therefore, provide the requesting Party with all necessary documentation to evidence such exemption or exclusion.
Section 4.07 Title and Risk of Loss of Electricity. Title to the Electricity will pass from Seller to Buyer at the applicable Delivery Point. Risk of 1oss of the Purchased Quantity shall, notwithstanding anything to the contrary in this Agreement, pass to Buyer upon the crediting of Net Metering Credits (constituting the Purchased Quantity) to the Target Buyer Accounts by the LDC. As between Seller and Buyer, risk of loss of the Electricity (and corresponding Net Metering Credits) in excess of the Purchased Quantity shall at all times remain with Seller.
Section 4.08 Estimated Annual Production Make Whole Provision.
(a) The Estimated Annual Production for each Contract Year of the Term is set as forth in Exhibit D. Buyer acknowledges that it must retain a primary source of power from the LDC and that Seller is a Seller only of Electricity for the purpose of generating Net Metering Credits. Beginning on the Commercial Operation Date, the Facilities shall produce not less than 85% of the applicable Estimated Annual Production (the “Minimum Output Requirement”) during the Term, measured on a rolling, three-year, cumulative basis, unless, and then only to the extent that, the failure to satisfy the Minimum Output Requirement is due, through no fault of Seller, to (a) general utility outage or any failure of any electrical grid, (b) a Force Majeure event, or (c) the negligent acts or negligent omissions of Buyer. Subject to the preceding sentence, if as of any anniversary of the Commercial Operation Date, beginning on the third anniversary of such date, the actual output of the Facilities for the prior three years (the “Actual Facilities Output”) does not equal or exceed the Minimum Output Requirement for such three-year period, in its next invoice Seller shall credit Buyer an amount equal to the product of (i) the positive difference, if any, of the average Value of Net Metering Credits generated by the Facilities during such three-year period minus the applicable Electricity Price hereunder, multiplied by (ii) the difference between the Actual Facilities Output for such three-year period and the Minimum Output Requirement for such three-year period, multiplied by (iii) the Buyer Allocation Percentage. For the avoidance of all doubt, provided that Seller credits Buyer pursuant to the procedure set forth in this Section 4.08(a), in the event that the Actual Facilities Output does not equal or exceed the Minimum Output Requirement such shortfall shall not constitute an Event of Default by Seller.
(b) Notwithstanding the foregoing provisions of Section 4.08(a), should the Actual Facilities Output not equal or exceed the Guaranteed Annual Production for any such three-year period as aforesaid, Seller shall not be obligated to provide Buyer with the credit referenced in Section 4.08(a) in the event the Delivered Quantity actually delivered to Buyer and allocated to Buyer’s accounts in and for such three-year period is in an amount not less than the Minimum Output Requirement for each such year multiplied by the Buyer Allocation Percentage.
Section 4.09 Records and Audits. Each Party will keep, for a period of not less than two (2) years after the expiration or termination of this Agreement records sufficient to permit verification of the accuracy of billing statements, invoices, charges, computations and payments for all transactions hereunder. During such period each Party may, at its sole cost and expense, and upon reasonable notice to the other Party, examine the other Party’s records pertaining to transactions hereunder during such other Party’s normal business hours. Before discarding any records, Seller shall notify Buyer in writing of its intent to do so no later than ninety (90) days before discarding, and Buyer may, if it chooses, elect to make copies of any such records at Buyer’s cost.
Article V. TITLE TO ENVIRONMENTAL ATTRIBUTES AND CAPACITY
Other than the Net Metering Credits that accrue to the Target Buyer’s Accounts under the Net Metering Rules, Environmental Attributes and any rights or credits relating to the generating capacity of the Facility shall remain the property of Seller and may be used, sold, transferred, pledged, collaterally assigned, retired or otherwise disposed of by Seller in its sole discretion and for its sole benefit. Subject to Applicable Legal Requirements and the other terms of this Agreement, Buyer shall, upon Seller’s reasonable request, take such reasonable actions as are reasonably necessary from time to time in order for Seller to claim the benefits of all Environmental Attributes and capacity rights or credits other than the Net Metering Credits. (In the event such actions will result in Buyer’s incurring material costs (including reasonable attorneys’ fees), Buyer may so notify Seller and, if Seller does not withdraw its request, Seller shall promptly reimburse Buyer for such costs.) Seller shall not make any public statements inconsistent with the fact that Buyer is not purchasing any Environmental Attributes or capacity rights or credits other than the Net Metering Credits.
Article VI. METERING DEVICES; LDC BILLING ADJUSTMENTS
Section 6.01 Metering Equipment. The Parties acknowledge that Seller shall arrange and pay for the LDC to furnish and install the LDC Metering Device. On behalf of Buyer as the LDC’s customer of record, Seller shall be responsible for arranging compliance with, and paying for, any LDC customer requirements relating to the LDC Metering Device. In addition, Seller shall install, own, operate, and maintain one or more Seller Metering Device at Seller’s sole cost and expense.
Section 6.02 Meter Accuracy. Buyer may at any time, with reasonable advance notice to Seller, exercise its rights as the LDC’s customer of record to seek testing of the accuracy of the LDC Metering Device. In addition, on behalf of Buyer as the LDC’s customer of record, Seller may on its own initiative with reasonable advance notice to Buyer, and shall upon the request of Buyer, exercise Buyer’s LDC customer rights to arrange for testing of the accuracy of the LDC Metering Device. The Party requesting such testing shall pay all costs imposed by the LDC for any such testing. In the event the LDC Metering Device is owned or maintained by Seller, Seller shall, at its own cost, test such device no less than once annually and promptly provide the results of such tests to Buyer. Buyer may, in addition to such annual testing but not more than once annually, request that Seller test the LDC Metering Device, and if any such annual or Buyer-requested testing reveals that such device is inaccurate by less than 2%, Buyer shall pay the reasonable costs for such Buyer-requested testing. Regardless of whether Buyer has requested any test, in the event the results of any testing reveals that the LDC Metering Device is inaccurate by more than 2%, Seller shall pay any and all costs to correct or, if and as appropriate, replace the LDC Metering Device.
Section 6.03 Billing Adjustments. In the event of a discrepancy between the data generated by the LDC Metering Device and the quantity of Net Metering Credits reflected on Buyer’s invoices from the LDC, Seller shall, upon its own initiative or upon request of Buyer and at Seller’s cost and expense, exercise and cause Host Customer to exercise diligent and commercially reasonable efforts to investigate and remedy the discrepancy in consultation with the LDC. In the event such investigation results in an increase in the Net Metering Credits credited to Buyer by the LDC, Buyer shall pay for the Electricity corresponding to those credits at the Electricity Price then in effect without interest, and in the event of a decrease in the quantity of Net Metering Credits credited to Buyer by the LDC, Seller shall provide a credit on Buyer’s next invoice for the excess Electricity paid for by Buyer but for which Net Metering Credits were not credited to Buyer by the LDC.
Article VII. REPRESENTATIONS AND WARRANTIES; COVENANTS; ACKNOWLEDGEMENTS
Section 7.01 Representations and Warranties. Subject, as to Buyer, to Section 2.01, each Party represents and warrants to the other Party that:
(a) the execution, delivery and performance of this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any Applicable Legal Requirements;
(b) this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; subject to any bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and with regard to equitable remedies, the discretion of the applicable court;
(c) All such persons as are required to be signatories to or otherwise execute this Agreement on its behalf under all Applicable Legal Requirements have executed and are authorized to execute this Agreement in accordance with such Applicable Legal Requirements;
(d) It is acting for its own account, and has made its own independent decision to enter into this Agreement, and is not relying upon the advice or recommendations of the other Party in so doing;
(e) It is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Agreement; and
(f) It understands that the other Party is not acting as a fiduciary for or an adviser to it or its Affiliates.
Section 7.02 Additional Representations and Warranties.
(a) Net Metering Facility of a Municipality. Seller represents and warrants to Buyer that it shall develop the Facility in a manner that will qualify the Facility as a Net Metering Facility of a Municipality or Other Governmental Entity.
(b) Public Cap Allocation; Host Customer/Off-Taker Status. Seller represents and warrants to Buyer that, as of the Effective Date, it has obtained a Cap Allocation under the Public Cap from the Massachusetts System of Assurance of Net Metering Eligibility; the Host Customer of the Facilities is a Municipality or Other Governmental Entity under 220 CMR 18; as of the Effective Date, it has received a Statement of Qualifications from the DOER and the Facility will qualify for SREC II pursuant to 225 CMR 14.00; and it has the contractual rights necessary to cause, and will cause, Host Customer to take such actions and provide such cooperation and assistance as are reasonably necessary to permit Seller to comply with Seller’s obligations under this Agreement.
Section 7.03 Forward Contract; Bankruptcy Code. The Parties acknowledge and agree that Seller intends that this Agreement and the transactions contemplated hereunder be deemed a “forward contract” within the meaning of the United States Bankruptcy Code, and that Seller be deemed a “forward contract merchant” within the meaning of the United States Bankruptcy Code.
Section 7.04 No Advice. The Parties acknowledge and agree that Seller is not acting as a consultant or advisor to Buyer for any purpose and that Buyer is making its own decision to enter into this Agreement based solely on its own analysis and the advice of its own advisors.
Section 7.05 Covenants.
(a) Net Metering.
(i) Target Buyer Accounts. Seller shall prepare any such documents, including the LDC’s net metering service application for execution by the Host Customer of the Facilities (the “Schedule Z”), and Buyer shall reasonably cooperate with Seller’s preparation of such documents, including, without limitation, by providing information on Buyer’s accounts with the LDC that are to receive allocations of Net Metering Credits pursuant to this Agreement and the Net Metering Rules, as such accounts are identified in Exhibit C attached hereto (the “Target Buyer Accounts”).
(ii) Allocation of Net Metering Credits. At Seller’s reasonable request, Buyer shall promptly take any action and execute any documents that are necessary so that, of the aggregate Net Metering Credits corresponding to the Electricity generated by the Facilities, a percentage of such credits equal to the Buyer Allocation Percentage (as specified in Exhibit C) are allocated to the Target Buyer Accounts. Buyer acknowledges and agrees that it shall not allocate any Net Metering Credits generated by any other source to the Target Buyer Accounts if such allocation would materially affect Buyer’s ability to comply with its obligations under this Agreement. Seller acknowledges and agrees that it shall not, and shall not direct Host Customer, to allocate all or any part of the Net Metering Credits corresponding to the Electricity to any individual or entity that is not a Municipality or Other Governmental Entity under 220 CMR 18. Seller shall be responsible for managing and coordinating the filing and amending of the Schedule Z during the term of this Agreement, and shall, upon request of Buyer but subject to the requirements of the LDC, cause Host Customer to amend the Schedule Z to change the Target Buyer Accounts or the percentage of Purchased Quantity allocated to such accounts.
(iii) Net Metering Facility of a Governmental Entity. Buyer and Seller acknowledge that the Facility will be comprised solely of a Net Metering Facility of a Municipality or Other Governmental Entity, and agree not to take any action inconsistent with such regulatory status of the Facility (including, without limitation, terminating the Schedule Z or amending the Schedule Z in a manner inconsistent with such status, or in the case of Seller, directing Buyer to include in a Schedule Z the allocation of Net Metering Credits to persons or entities that do not qualify as a Municipality or Other Governmental Entity under the Net Metering Rules) except insofar as such action is expressly authorized hereunder. For avoidance of doubt, the Parties acknowledge that, pursuant to the current Net Metering Rules, in order to obtain and preserve such status; no Schedule Z for a Net Metering Facility of a Municipality or Other Governmental Entity may allocate Net Metering Credits to the account of any individual or of any entity that is not a city, town, federal agency or department, state agency or department, or any entity that is not approved by DPU as an “Other Governmental Entity.”
(iv) Cooperation on Assurance of Net Metering Eligibility. Buyer and Seller agree to promptly provide such information and reasonable assistance to the other as may be necessary to allow the Parties to avail themselves of any system established by DPU and/or the LDC to provide certain assurances that the Facility will be an eligible Net Metering Facility of a Municipality or Other Governmental Entity once the Facility commences Commercial Operation.
(v) Consolidated Billing of Electricity Charges. In order to ensure Buyer’s ability to maximize savings resulting from allocation of Net Metering Credits to the Target Buyer Accounts, Buyer shall exercise reasonable efforts to arrange for the charges for its electricity purchases from competitive electricity suppliers (if any) to be billed through its LDC invoices.
(b) Customer Interconnection Acknowledgement. In order to fulfill the LDC’s requirements for interconnecting to the LDC distribution grid an energy generating facility that is owned by one party but is located behind the LDC utility meter of another party, Seller shall cause the Host Customer to enter into the customer interconnection acknowledgement agreement with the LDC as may be required by the LDC (the “Customer Interconnection Acknowledgement Agreement”).
(c) Data Access; Customer Advocacy. Buyer shall take such reasonable actions and execute any documents that are necessary to designate (and, as necessary, re-designate) Seller to LDC as an authorized recipient of the energy billing and usage data with respect to the LDC Metering Device serving the Facilities. In addition, Buyer shall take such reasonable actions and execute any documents that are necessary, and otherwise reasonably cooperate with Seller, so as to permit Seller, at Seller’s cost, to advocate with the LDC and/or the DPU with respect to Buyer’s rights as the LDC customer of record, including, without limitation, for the purpose of ensuring timely and accurate recording of Net Metering Credits generated in connection with the Facilities.
(d) Uniform Procurement Act Exemption Filings. Buyer shall comply with the provisions of G.L. c. 30B, § l (b)(33). Buyer shall, upon request, deliver to Seller a complete copy of such filings.
(e) No Resale of Electricity. The Electricity purchased by Buyer from Seller under this Agreement shall not be resold to any other Person, nor shall such Electricity be assigned or otherwise transferred to any other Person (other than to the LDC pursuant to the Net Metering Rules), without prior approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed. For avoidance of doubt, this Section 7.05(e) shall not prohibit Buyer from transferring Net Metering Credits purchased by Buyer hereunder to other Municipalities or Other Governmental Entities, subject to Buyer’s other obligations under this Agreement.
(f) No Right to Enter or Use Property. Buyer shall not have, nor shall it assert, any right under this Agreement to enter upon or use the Property or the Facilities in any manner, provided, however, that Buyer shall, upon reasonable prior notice, be provided access to the Facilities from time to time during normal business hours and, subject to Seller’s reasonable site health and safety requirements, for any reasonable purpose related to this Agreement.
(g) Seller Not Intended as Utility. The Parties acknowledge that it is their intent that Seller not be deemed an electric utility or public service company or similar entity that has a duty to provide service, or is otherwise subject to rate regulation, nor shall Seller be deemed to be a “utility” as such term is used in Section 366 of the United States Bankruptcy Code.
Article VIII. [INTENTIONALLY OMITTED]
Article IX. FORCE MAJEURE
Section 9.01 Performance Excused by Force Majeure. To the extent either Party is prevented by Force Majeure from carrying out, in whole or part, its obligations under this Agreement and the Party gives written notice and details of the Force Majeure to the other Party as soon as possible (and in any event within five (5) Business Days after the earlier of the date on which the Party becomes aware of the Force Majeure event or the date on which the Force Majeure first prevents performance by the Party), then the Party will be excused from the performance of such obligations under this Agreement (other than the obligation to make payments then due or becoming due with respect to performance prior to the Force Majeure). The affected Party will use diligent and commercially reasonable efforts to eliminate or avoid the Force Majeure and resume performing its obligations. During the period in which, and to the extent that, obligations of a Party are excused by Force Majeure, the other Party will not be required to perform or resume performance of its obligations to the affected Party corresponding to the obligations of Seller excused by Force Majeure.
Section 9.02 Termination Due to Force Majeure. In the event of a Force Majeure that prevents, in whole or in material part, the performance of Seller for a period of one hundred eighty (180) calendar days or longer, either Party may, upon thirty (30) days’ notice to the other Party, terminate this Agreement, whereupon the Parties shall each discharge by performance all obligations due to the other Party that arose prior to the termination date and the Parties shall have no further obligations hereunder except those which by their terms survive expiration or termination of this Agreement.
Article X. EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. An “Event of Default” means, with respect to a Party (a “Defaulting Party”), the occurrence of any of the following:
(a) such Party’s failure to make, when due, any payment required under this Agreement if such failure is not remedied within fifteen (15) days after receipt of written notice of such failure, which shall include copies of the invoices previously issued by the requesting Party reflecting the amounts due;
(b) such Party’s failure to comply with any material provision of this Agreement if such failure is not remedied within sixty (60) days after written notice and demand by the non-defaulting Party to cure the same, or such longer period (not to exceed one hundred eighty (180) days) as may be reasonably required to cure, provided that the defaulting Party has promptly commenced a cure and diligently continues to prosecute such cure until such failure is fully cured; or
(c) such Party becomes Bankrupt.
Section 10.02 Remedies for Event of Default. If at any time an Event of Default with respect to a Defaulting Party has occurred and is continuing, the non-defaulting Party, without limiting any rights or remedies available to it under this Agreement or applicable law, but subject to the provisions of Article 16 with respect to a Seller Event of Default, shall have the right to (i) terminate this Agreement, upon thirty (30) days’ written notice to the Defaulting Party, (ii) withhold any payments due to the Defaulting Party under this Agreement, (iii) suspend performance due to the Defaulting Party under this Agreement, and (iv) exercise all other rights and remedies available at law or in equity to the non-defaulting Party, including recovery of all reasonably foreseeable damages, subject to such limitations on such recovery as required by law, including, but not limited to, the requirement that the non-defaulting Party prove its damages with reasonable certainty and mitigate its damages in accordance with law, and as set forth herein. Each Party agrees that it has a duty to exercise commercially reasonable efforts to mitigate damages that it may incur as a result of the other Party’s default under this Agreement. Without limiting the foregoing, if Seller is the non-defaulting Party, Seller shall have the right and obligation to exercise all diligent, commercially reasonable efforts to sell electricity, Net Metering Credits and Environmental Attributes produced by the Facilities to Persons other than Buyer in order to mitigate any damages suffered by Seller as a result of Buyer’s default.
Section 10.03 Remedies Cumulative. The rights and remedies contained in this Article 10 are cumulative with the other tights and remedies available under this Agreement or at law or in equity, subject, however, to such limitations on relief or the recovery of damages as are required by law.
Section 10.04 Unpaid Obligations. The non-defaulting Party shall be under no obligation to prioritize the order with respect to which it exercises any one or more rights and remedies available under this Agreement, unless a priority is required by a Party’s obligation to mitigate its damages. Notwithstanding anything to the contrary herein, the Defaulting Party shall in all events remain liable to the non- defaulting Party for any amount payable by the Defaulting Party in respect of any of its obligations remaining outstanding after any such exercise of rights or remedies.
Article XI. CERTAIN RIGHTS AND OBLIGATIONS FOLLOWING TERMINATION OR EXPIRATION
Section 11.01 General. Following a termination of this Agreement by either Party that is not occasioned by the other Party’s default, the Parties shall each discharge by performance all obligations due to the other Party that arose prior to the termination date, and the Parties shall have no further obligations hereunder except those which by their terms survive expiration or termination of this Agreement.
Section 11.02 LDC and Regulatory Matters. Upon the termination or expiration of this Agreement for any reason, Buyer shall promptly take such reasonable actions and execute such documents that are necessary to terminate as soon as practicable the allocation of Net Metering Credits to the Target Buyer Accounts. To the extent that the LDC does not permit termination of allocation of Net Metering Credits to the Target Buyer Accounts (as modified from time to time) as of the effective date of termination or expiration of this Agreement and instead requires termination of such allocation as of a later date not to exceed ninety (90) days following such termination or expiration, if and only if any termination of the Agreement is not the result of a Seller Event of Default, Buyer’s purchase and payment obligations hereunder shall survive with respect to Electricity delivered by Seller to the Delivery Point and corresponding with Net Metering Credits allocated to the Target Buyer Accounts, subject in any event to Sections 4.05, 4.06 and 12.1 and to Applicable Legal Requirements, provided that if, during such period, the Net Metering Credit Rate is less than the Electricity Price, Buyer shall not be required to pay more than the Net Metering Credit Rate for each Net Metering Credit generated by the Facilities during such period.
Article XII. INDEMNIFICATION
Section 12.01 Indemnity. In addition to and not in limitation of any other rights and remedies available to Buyer, Seller shall indemnify, defend and hold harmless Buyer and its officers, employees, agents, representatives and independent contractors, from and against all claims, damages, liabilities, losses, costs and expenses, including reasonable attorneys’ fees (collectively, “Losses”), arising out of the design, construction, permitting, operation, maintenance, repair or removal of the Facility and the LDC Metering Device, including, but not limited to, any claims of the LDC for any costs, expenses, liabilities or damages arising from the Facility and/or the Facilities, and/or Losses arising out of any other activities at the Property, and/or Losses arising out of the sale or allocation of any of the Third Party Allocation Percentage of Net Metering Credits. Seller further agrees, if requested by the indemnified party, to investigate, handle, respond to, and defend any such claim, demand, or suit at its own expense arising under this Article XII. Should any indemnified party elect to have Seller defend any such claim against the indemnified party, Seller shall, subject to Applicable Legal Requirements, have full, reasonable control of such defense, in its reasonable discretion, and shall keep the indemnified party and its counsel reasonably informed of the defense of such claim and no such claim shall be settled without the approval of the indemnified party, which approval shall not be unreasonably withheld. Notwithstanding the foregoing, the indemnity provided under this Article XII shall not extend to Losses to the extent of the Losses that are attributable to the gross negligence or willful misconduct of an indemnified party.
Section 12.02 Claim Procedure. If the indemnified party seeks indemnification pursuant to this Article XII, it shall notify Seller of the existence of a claim, or potential claim, as soon as practicable after learning of such claim, or potential claim, describing with reasonable particularity the circumstances giving rise to such claim, provided that any good faith failure to provide notice as soon as practicable shall not relieve Seller of its obligations hereunder except to the extent that Seller can reasonably demonstrate that such failure has materially and irreparably prejudiced Seller. If any indemnified party elects to have Seller assume defense and indemnification of such claim, Seller may assert any defenses which are or would otherwise be available to the indemnified party.
Article XIII. LIMITATIONS
Section 13.01 Limitation of Liability.
(a) No Third Party Beneficiaries. Buyer and Seller agree that this Agreement is not intended for the benefit of any third party (other than Designated Third Parties).
(b) Limitations on Damages. Except as expressly provided in this Agreement, it is specifically agreed and understood that neither Party will be responsible to the other for any punitive damages.
Section 13.02 Limitation on Warranties. Except as expressly provided in this Agreement, each Party hereby disclaims any and all representations, warranties and guarantees, express or implied, including warranties of merchantability and fitness for a particular purpose. Without limiting the foregoing, Seller does not warrant or guarantee the amount of Electricity to be generated by the Facility.
Article XIV. GOVERNING LAW; DISPUTE RESOLUTION
Section 14.01 Governing Law. This Agreement shall be construed under and governed by the laws and in the Courts of the Commonwealth of Massachusetts, without regard to its rules regarding choice of laws. Seller consents to accept service of process by certified mail at its address listed in Article 18 of this Agreement (as such address may be modified from to time pursuant to Article 18).
Section 14.02 Dispute Resolution.
(a) The Parties agree to use reasonable efforts to resolve any dispute(s) that may arise regarding this Agreement, provided that nothing in this Section 14.02 shall prevent a Party from terminating this Agreement as expressly permitted in this Agreement. Unless otherwise expressly provided for in this Agreement, the dispute resolution procedures of this Section 14.02 shall be the exclusive mechanism to resolve disputes arising under this Agreement between the Parties.
(b) Any dispute that arises under or with respect to this Agreement shall in the first instance be the subject of informal negotiations between the Manager of Seller and the Town Administrator of Buyer (or the individuals then serving as chief executives of the Parties), who shall use their respective good faith efforts to resolve such dispute. The dispute shall be considered to have arisen when one Party sends the other a written notice that identifies with particularity the nature, and the acts(s) or omission(s) forming the basis of, the dispute. The period for informal negotiations shall not exceed fourteen (14) calendar days from a Party’s receipt of said notice, unless it is modified by written agreement of the Parties.
(c) In the event that the Parties cannot resolve a dispute by informal negotiations, the Parties involved in the dispute agree to submit the dispute to non-binding mediation. Within fourteen (14) days following the expiration of the time period for informal negotiations, the Parties involved in the dispute shall propose and agree upon a neutral and otherwise qualified mediator. The period within which the mediation shall be completed shall not exceed thirty (30) days from the time the dispute arises, unless such time period is modified by written agreement of the Parties involved in the dispute, and the mediation shall be conducted in accordance with procedures mutually agreed to by the Parties. The Parties shall not be required to mediate a dispute for more than a single day of mediation, unless they otherwise agree in writing. The decision to continue mediation shall be in the sole discretion of each Party involved in the dispute. The mediation shall occur in Spencer or Boston, Massachusetts, unless otherwise agreed in writing by the Parties. The Parties will bear their own costs of the mediation. The mediator’s fees shall be shared equally by all Parties involved in the dispute;
(d) In the event that the Parties cannot resolve a dispute by informal negotiations or mediation, sole venue for judicial enforcement shall be the Superior Court for [¤] County, Massachusetts. Each Party consents to such venue and expressly waives any objections to venue or forum it might otherwise be able to raise.
(e) Notwithstanding anything to the contrary herein, either Party may at any time initiate proceedings to seek equitable relief to prevent perceived irreparable harm.
Article XV. ASSIGNMENT; BINDING EFFECT
Section 15.01 General Prohibition on Pledge or Assignment. Except as provided in this Agreement, neither Party may pledge or assign its rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably conditioned, withheld or delayed.
Section 15.02 Permitted Assignments by Seller. Notwithstanding anything to the contrary herein, Seller may assign all (but not a portion) of its rights and obligations hereunder to (i) an Affiliate of Seller, or (ii) to the purchaser of substantially all of the assets of Seller, or (iii) to an entity that acquires the Facility or, prior to the Construction Commencement Date, the development rights thereto. In the event of any such assignment, Seller shall provide advance written notice to Buyer of the existence of such assignment, together with the name and address of the assignee, and documentation establishing that the assignee has assumed (or as of the closing of such transaction will assume) all or a portion of Seller’s rights and obligations under this Agreement. In addition, notwithstanding the receipt and/or review by Buyer of the documentation aforesaid, by making any such assignment, Seller shall be deemed to have represented and warranted to Buyer that, to the best of Seller’s knowledge based upon commercially reasonable inquiry, the assignee has the experience and financial ability to fulfill all obligations of Seller under the Agreement. Buyer agrees to promptly execute any document reasonably requested of Seller in acknowledgement of such assignment and in consent thereto in accordance with the provisions hereof, subject to any review by legal counsel. Subject to Seller’s aforesaid representation and warranty and liabilities arising prior to the assignment, Seller shall have no further liability to Buyer arising under this Agreement after the effective date of the assignment.
Section 15.03 Successors and Assigns. Subject to the foregoing limitations, the provisions of this Agreement shall bind, apply to and inure to the benefit of, the Parties and their permitted heirs, successors and assigns.
Article XVI. FINANCING AND RELATED MATTERS
Section 16.01 Special Seller Assignment Rights. Notwithstanding any contrary provisions contained in this Agreement, including, without limitation, Article 15, Buyer specifically agrees, without any further request for prior consent but with advance written notice to Buyer, to permit Seller to assign, transfer or pledge its rights under this Agreements as collateral for the purpose of obtaining financing or refinancing in connection with the Facility, and to sign any agreements reasonably requested of Seller or its lenders to acknowledge and evidence such agreement, provided that any such assignment shall not relieve Seller of its obligations under this Agreement.
Section 16.02 Designated Third Party Rights.
(a) Notice to Designated Third Party. Buyer agrees to give copies of any notice provided to Seller by Buyer under Section 10.01 (Events of Default) to any assignee or transferee permitted pursuant to Section 16.01 of which it has received written notice pursuant to Article 18 (each, a “Designated Third Party”), provided that, notwithstanding anything to the contrary in this Agreement, at any given point during the Term, Buyer shall not be required to provide notice to more than one Designated Third Party at more than one address.
(b) Exercise of Seller Rights. Any Designated Third Party, as collateral assignee and if allowed pursuant to its contractual arrangements with Seller, shall have the right, subject to the terms of the Agreement, in the place of Seller, to exercise any and all rights and remedies of Seller under this Agreement. Such Designated Third Party shall also be entitled to exercise all rights and remedies of secured parties generally with respect to this Agreement, subject to the terms of the Agreement.
(c) Performance of Seller Obligations. A Designated Third Party shall have the right, but not the obligation, to pay all sums due under this Agreement and to perform any other act, duty or obligation required of Seller hereunder or cause to be cured any default of Seller hereunder in the time and manner provided by and subject to the terms of this Agreement. Unless such party has succeeded to Seller’s interests or otherwise assumed any of Seller’s obligations under this Agreement, nothing herein requires the Designated Third Party to cure any default of Seller under this Agreement or to perform any act, duty or obligation of Seller under this Agreement, but Buyer hereby gives such party the option to do so, provided any such cure, act, duty or obligation is performed in accordance with this the terms of this Agreement.
(d) Exercise of Remedies. Upon the exercise of secured party remedies, including any sale of one or more of the Facilities by a Designated Third Party, whether by judicial proceeding or under any power of sale contained therein, or any conveyance from Seller to the Designated Third Party (or any assignee of the Designated Third Party) in lieu thereof, the Designated Third Party shall give notice to Buyer of the transferee or assignee of this Agreement, and shall cure all defaults of Seller outstanding as of the date of such transfer or assignment. By making such transfer or assignment, the Designated Third Party shall be deemed to have made the representation and warranty set forth in Section 15.02 regarding the experience and financial ability of the transferee or assignee. Any such exercise of secured party remedies shall not constitute a default under this Agreement, unless the act of exercising such remedy itself constitutes an Event of Default under Article 10 of this Agreement, provided, however, that the exercise of such remedies shall not itself serve as a cure of any default of Seller.
(e) Third Party Beneficiary. Buyer agrees and acknowledges that each Designated Third Party is a third party beneficiary of the provisions of this Article 16.
Section 16.03 Cooperation Regarding Financing. Buyer agrees that it shall reasonably cooperate with Seller and its financing parties in connection with any financing or refinancing of all or a portion of the Facilities. In furtherance of the foregoing, as Seller or its financing parties request from time to time, Buyer agrees, subject to the other provisions of this Agreement, to (i) execute any consents to assignment or acknowledgements (including, without limitation, an acknowledgment for the benefit of one or more particular Designated Third Parties or prospective Designated Third Parties of the accommodations set forth in this Article 16), (ii) negotiate and deliver such reasonable estoppel certificates as an existing or prospective Designated Third Party may reasonably require, and (iii) furnish such reasonable information as Seller and its financing parties may reasonably request. Seller shall pay all costs incurred by Buyer in providing such cooperation, including reasonable attorneys’ fees incurred by Buyer.
Section 16.04 Right to Cure.
(a) Buyer will not exercise any right to terminate or suspend this Agreement unless it shall have given the Designated Third Party a copy of its written notice to Seller of its intent to terminate or suspend this Agreement, to the extent required by this Agreement, specifying the condition giving rise to such right, and the Designated Third Party shall not have caused to be cured the condition giving rise to the right of termination or suspension within thirty (30) days after such notice (or if longer, the periods provided for in this Agreement); provided that if such Seller default reasonably cannot be cured by the Designated Third Party within such period and such party has so informed Buyer in writing within such period, and promptly commenced and continuously and diligently pursues cure of such default within such period, such period for cure will be extended for a reasonable period of time under the circumstances, such period not to exceed an additional thirty (30) days. The Parties’ respective obligations will otherwise remain in effect during any cure period.
(b) If, pursuant to an exercise of remedies by a Designated Third Party, such party or its assignee (including any purchaser or transferee) shall acquire control of the Facilities and this Agreement and shall, within the time periods described in the preceding subsection, cure all defaults under this Agreement existing as of the date of such change in control in the manner required by this Agreement, then such person or entity shall no longer be in default under this Agreement, and this Agreement shall continue in full force and effect.
Article XVII. NET METERING PROGRAM CANCELLATION
In the event of a Net Metering Program Cancellation, then, upon a Party’s receipt of notice of such change from the other Party the Parties shall promptly and in good faith endeavor for a period of up to ninety (90) days to negotiate such amendments to or restatements of this Agreement as may be necessary to achieve the allocation of economic benefits and risk as originally intended by the Parties in this Agreement. If at the end of such ninety (90) day period the Parties are unable to do so, either Party shall have the right to terminate this Agreement. Upon termination of this Agreement pursuant to this Article XVII (i) neither Party shall have any obligation or financial liability to the other Party as a result of such termination; provided that Buyer has paid Seller for any and all of the Purchased Quantity delivered to the Delivery Point prior to the date of such termination, and (ii) Seller shall be permitted to sell, free and clear of any claim by Buyer, any Net Energy contemplated under this Agreement to any third party.
Article XVIII. NOTICES
All notices, demands, requests, consents or other communications required or permitted to be given or made under this Agreement shall be in writing and
if to Seller to: MARIE’S WAY SOLAR 1, LLC, 360 22nd Street, Suite 600, Oakland, CA 94612 Attention: Chief Financial Officer
if to Buyer to: [¤]
if to a Designated Third Party, to the address and contact person of which Buyer has been given written notice pursuant to this Article 18. Notices hereunder shall be deemed properly served (i) by hand delivery, on the day and at the time on which delivered to the intended recipient at the address set forth in this Agreement; (ii) if sent by mail, on the third Business Day after the day on which deposited in the United States certified or registered mail, postage prepaid, return receipt requested, addressed to the intended recipient at its address set forth in this Agreement; or (iii) if by overnight Federal Express or other reputable overnight express mail service, on the next Business Day after delivery to such express mail service, addressed to the intended recipient at its address set forth in this Agreement. Notices may also be sent by electronic mail message and shall be deemed properly served when the sending Party receives a confirmation that the message has been completely transmitted without error (out-of-office auto-responses shall not comply), provided that messages transmitted on any day that is not a Business Day, or after 5:00 p.m. local time (at the location of the receiving Party) on a Business Day, shall be deemed given on the next Business Day following the day on which the sending Party receives a confirmation that the message has been completely transmitted without error. Any Party may change its address and contact person for the purposes of this Article 18 by giving notice thereof in the manner required herein.
Article XIX. MISCELLANEOUS
Section 19.01 Survival. Notwithstanding any provision contained herein, the provisions of Sections 4.06 and 4.09, and Articles 5, 10, 11, 12, 13, 14, 16, 18, and 19 shall survive the termination or expiration of this Agreement.
Section 19.02 Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings between the Parties relating to the subject matter hereof. This Agreement may only be amended or modified by a written instrument signed by both Parties hereto.
Section 19.03 Expenses. Each Party hereto shall pay all expenses incurred by it in connection with its negotiating this Agreement, including without limitation, all attorneys’ fees and expenses.
Section 19.04 Relationship of Parties. Seller will perform all services under this Agreement as an independent contractor. Nothing herein contained shall be deemed to constitute any Party a partner, agent or legal representative of the other Party or to create a joint venture, partnership, agency or any relationship between the Parties. The obligations of Seller and Buyer hereunder are individual and neither collective nor joint in nature.
Section 19.05 Waiver. No waiver by any Patty hereto of any one or more defaults by any other Party in the performance of any provision of this Agreement shall operate or be construed as a waiver of any future default, whether of like or different character. No failure on the part of any Party hereto to complain of any action or non-action on the part of any other Party, no matter how long the same may continue, shall be deemed to be a waiver of any right hereunder by the Party so failing. A waiver of any of the provisions of this Agreement shall only be effective if made in writing and signed by the Party who is making such waiver.
Section 19.06 Cooperation. Subject to Applicable Legal Requirements, each Party acknowledges that this Agreement may require approval or review by third parties and agrees that it shall use commercially reasonable efforts to cooperate in seeking to secure such approval or review. The Parties further acknowledge that the performance of each Party’s obligations under this Agreement may often require the reasonable assistance and reasonable cooperation of the other Party. Each Party therefore agrees, in addition to those provisions in this Agreement specifically providing for assistance from one Party to the other, that it will during the Term reasonably cooperate with the other Party and provide reasonable assistance to the other Party to help the other Party perform its obligations hereunder.
Section 19.07 Severability. If any section, sentence, clause, or other portion of this Agreement is for any reason held invalid or unconstitutional by any court, federal or state agency of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision, and such holding shall not affect the validity of the remaining portions hereof.
Section 19.08 Joint Work Product. This Contract shall be considered the joint work product of the Parties hereto, and shall not be construed against either Party by reason thereof.
Section 19.09 Headings. The headings of Articles and Sections of this Agreement are for convenience of reference only and are not intended to restrict, affect or be of any weight in the interpretation or construction of the provisions of such Articles or Sections.
Section 19.10 Good Faith. All rights, duties and obligations established by this Agreement shall be exercised.in good faith and in a commercially reasonable manner.
Section 19.11 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute a single Agreement
Section 19.12 Additional Matters. Notwithstanding anything to the contrary in this Agreement:
(a) Buyer shall not be required to execute documents or instruments subsequent to the execution of the Agreement which will materially or unreasonably increase Buyer’s risk or obligations under the Agreement, or result in the waiver of any of Buyer’s rights or remedies under the Agreement or at law or in equity, or require Buyer to give an opinion, or require Buyer to make a statement of fact of which Buyer does not have actual knowledge.
(b) Any requirement that Buyer reasonably cooperate or assist Seller shall not require Buyer lo interfere with or influence the independent regulatory, licensing, taxing, permitting or judicial functions of any official, department, board, committee, body or commission of Buyer.
(c) The Agreement shall be subject to Applicable Legal Requirements.
(d) (d)Buyer does not waive any of the rights, remedies, defenses and immunities afforded Buyer, as a municipality, under G.L. c. 258, all of which rights, remedies, defenses and immunities Buyer hereby reserves.
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IN WITNESS WHEREOF. The parties hereto have caused this Agreement to be executed by their duly authorized representatives under seal as of the date first above written.
MARIE’S WAY SOLAR 1, LLC,
TOWN OF [¤]
By its Board of Selectmen
Property is located at 0 Maries Way (identified by the Freetown Assessor’s Office as 0 Chace Road) in Freetown, Bristol County, Massachusetts. The Subject Property includes one irregular shaped parcel, identified by the Freetown, Massachusetts Assessor’s Office as Map 228, Parcel 8.02, totaling approximately 25.2 acres. The Subject Property is located in the northwest quadrant of the intersection of Marie’s Way and Chace Road. Figure 1 – Location Map depicts the location of the Subject Property on a street map of Freetown, Massachusetts.
Figure 1-Location Map
The Location[s] at the Property where Electricity is to be delivered from a Facility and received under this Agreement shall be the LDC Metering Device on such Property behind which the Facility is located.
(e) “Buyer Allocation Percentage” means [xxx]%
(f) “Payment”: During each Billing Cycle, Buyer shall pay Seller an amount equal to the product of (i) the NMC Price (as determined by the immediately following (c)) for such Billing Cycle, and (ii) the Purchased Quantity (in kWh).
(g) The “NMC Price” shall be an amount equal to the greater of (i) 80% of the then current Net Metering Credit Value, and (ii) the Net Metering Credit Floor.
(h) “Net Metering Credit Floor” means $0.09/kWh.
BUYER ALLOCATION PERCENTAGE; TARGET BUYER ACCOUNT INFORMATION
Buyer Allocation Percentage
The “Buyer Allocation Percentage” shall be [¤] percent ([¤]%), provided, however, that if the Actual kW DC (as defined in Exhibit D) is more than or less than the Final Design Size (as defined in Exhibit D), then the Buyer Allocation Percentage shall be decreased or increased, respectively, by the Parties such that Buyer will purchase a percentage of Net Metering Credits corresponding to approximately [¤] kWh (DC) annually of the Electricity generated by the Facility, and the Parties shall amend this Agreement to reflect such decrease or increase.
Target Buyer Account Information
LDC electricity accounts of Buyer to which Buyer desires to allocate Net Metering Credits
Upon Seller’s written request, Buyer shall, with the cooperation of Seller, provide Seller with the following information regarding each such account:
LDC customer name
Account billing address
LDC account number
Annual LDC electricity charges
Annual kWh usage
Percentage of Buyer Allocation Percentage to be allocated to such account
Estimated Annual Output
ESTIMATED ANNUAL PRODUCTION
[The Estimated Annual Production shown below is a preliminary determination and is under site design and engineering review by Syncarpha. This review will be completed promptly and final, confirmed Estimated Annual Production schedules will be provided, site by site.]
Estimated Annual Production commencing on the Commercial Operation Date with respect to System under the Agreement shall be as follows:
The Parties acknowledge that the Estimated Annual Production set forth above is based on the final design size for the Facility as existing prior to the Construction Commencement Date as follows: 5.354 MW DC (the “Final Design Size”). The Parties therefor agree that in order to have the Estimated Annual Production accurately reflect the size of the installed Facility, the Seller shall deliver to the Buyer a written report setting forth the Actual kW DC (defined below) as of the Commercial Operation Date (which report shall be accompanied by Seller’s inspection reports and test reports containing reasonable detail as to the basis for such determination). The Buyer shall review the report and either approve such report in writing or provide comments and suggested revisions to the report within thirty (30) days after receipt of the report. Seller shall contact Buyer following delivery of such report to discuss the report and Buyer’s right to provide comments and suggested revisions. In the event the Buyer provides comments and suggested revisions to the report as aforesaid, Seller shall in good faith incorporate such of the comments and suggested revisions as are deemed reasonable and accurate to Seller and reissue the report setting forth the Actual kW DC to the Buyer. Thereafter, the Buyer and the Seller shall confer in good faith until both Parties are in agreement on the Actual kW DC. Accordingly, “Actual kW DC” means the kW DC of the Facility as of the Commercial Operation Date, as reasonably determined by the Seller and accepted by the Buyer in accordance with this paragraph. Upon agreement on the Actual kW DC, the Estimated Annual Production set forth above shall be adjusted in direct proportion to the percentage of change between the Final Design Size and the Actual kW DC. For example, if the Actual kW DC is 5% less than the Final Design Size listed above, the Guaranteed KWh and the Estimated Annual Production set forth above shall be reduced by 5%. Notwithstanding the foregoing, Buyer shall not be required to purchase under this Agreement a quantity of Electricity that exceeds approximately 850,000 kWhs annually.
VALUE OF NET METERING CREDITS
Value of Net Metering Credits
The Facility is expected to qualify for Eversource’s Rate 33 class of service, which applies to “small commercial and industrial customers with average usage less than 10,000 kWh per month or 200 kW of demand.”
Seller represents that the following table provides the Rate Components and Pricing determinative of the Value of Net Metering Credits, as calculated in accordance with the Tariff and Net Metering Rules, in effect as of April 18, 2016.
Subject to the terms of the Agreement, future calculations of the Value of Net Metering Credits shall be determined with reference to the Rate Components and Pricing set forth in the following table, as each may be modified from time to time during the Term in accordance with the Net Metering Rules and applicable Tariff in effect as of the date of any such calculation:
“Rate Components” “Pricing”
First 2,000 kWh
Excess of 2,000 kWh 5.582 cents/kWh
Transmission Charge 2.560 cents/kWh
Transition Charge 1.080 cents/kWh
Basic Service – Generation 10.610 cents/kWh
Total Value of a Net Metering Credit (first 2,000 kWh/month) 19.832 cents/kWh
Total Value of a Net Metering Credit (excess of 2,000 kWh/month) 16.905 cents/kWh
* The distribution charge component of the Net Metering Credit is calculated based on the first 2,300 kWh of Output each month at the first distribution tranche rate above (currently 5.582 cents/kWh) and all Output over and above 2,000 kWh is calculated based on the second distribution tranche rate above (currently 2.655 cents/kWh).
[Source: https://www.eversource.com/Content/docs/default-source/rates-tariffs/ema-south-shore-rates.pdf?sfvrsn=6 (as of [4/18/2016]) and https://www.eversource.com/Content/ema-c/residential/my-account/my-bill/basic-service (as of [4/18/2016])]