Page 196 - Sustainable Cities and Communities Design Handbook

170 Sustainable Cities and Communities Design Handbook

utilize private sector design and construction firms to design and construct
the infrastructure facilities.
15. Comply with all applicable laws relating to public property and public
works projects, including the payment of prevailing wages.
Although not required by statute, it is suggested that governmental
agencies consider including a guarantee provision in the Power Purchase
Agreement whereby the energy provider will guarantee a minimum energy
output, which if not met, will result in a monetary penalty on behalf of the
power provider, such as requiring the energy provider to pay the difference
between what the governmental agency is required to pay the utility company
for the power shortage and what the agency would have been required to pay
the energy provider had the guaranteed energy output been delivered. An
example of such a provision is set forth below.
Guarantee. Power Provider shall provide a Cumulative Output Guarantee from
the Generating Facility commencing on the date of Commercial Operation and
continuing until the twentieth (20th) anniversary of the Commercial Operation
Date or achievement of the twentieth year cumulative output guarantee of
_____________kWh, whichever comes first. The guarantee is defined to be 90%
of the expected annual production from the Generating Facility to be measured
in kWh.
In order to control for variations in weather, the actual output will be compared
rd
to the Cumulative Output Guarantee on a cumulative basis on the third (3 ),
th
th
th
th
th
sixth (6 ) ninth (9 ), twelfth (12 ), fifteenth (15 ) and twentieth (20 ) year
during the cumulative output Guarantee Term. Actual production shall accrue to
the cumulative balance each year and be compared on the anniversary dates
noted above of the Commercial Operation Date to the aggregate cumulative
output guarantee for the years in that measurement period as indicated in the
table below. In the event that the Guaranteed Energy Output is not achieved as
described above during the term of this Agreement (the “Guaranteed Energy
Output Shortage”), and Purchaser is required to purchase replacement kWhac
from Southern California Edison, then Power Provider shall refund the differ-
ence between the amount Purchaser pays Southern California Edison for the
replacement power and the annual rate as specified in Exhibit __. The Southern
California Edison replacement power price is defined as the blended average
annual TOU-8 tariff for that portion of kWhac representing the Guaranteed
Energy Output Shortage. This guarantee shall immediately terminate if the
Generating Facility title is transferred to Purchaser.
Example of hypothetical shortfall payment calculation. In year 3, The govern-
mental agency consumes 7 million kWh of electricity and pays Southern
California Edison one million fifty thousand dollars for its total annual energy
use under the TOU-8 rate. Therefore the blended average annual TOU-8 rate is
equal to $0.15 per kWh ($1,050,000 / 7,000,000 kW h ¼ $0.15 per kWh). The