Application No.: A.16-03-XXX Exhibit No.: SCE-01 Witnesses: G. Chinn

G. Flores M. Irwin J. Minnicucci R. Sekhon M. Sheriff G. Stern B. Tolentino M. Wallenrod

(U 338-E)

Testimony of Southern California Edison Company in Support of Its 2016 Energy Storage Procurement Plan

Before the

Public Utilities Commission of the State of California

Rosemead, California

March 1, 2016

SCE-01: Testimony of Southern California Edison In Support Of Its 2016 Energy Storage Procurement Plan

Table Of Contents

Section Page Witness

-i-

I.  INTRODUCTION .............................................................................................1 G. Stern 

A.  Overview of SCE’s Energy Storage Procurement Plan for 2016........................................................................................................1 

B.  Storage Procurement Final Decision Background .................................2 

II.  OVERVIEW OF SCE’S ENERGY STORAGE PORTFOLIO DEVELOPMENT FRAMEWORK ...................................................................4 

A.  After Accounting for SCE’s Existing Eligible Energy Storage and the Flexibility Across Grid Domains, SCE Has Already Met Its 2016 Procurement Cycle Target ..................................4 

B.  SCE Intends to Conduct a 2016 Energy Storage Solicitation ................5 

1.  At a Minimum, SCE Will Solicit Projects That Provide RA and Improve System Performance .........................5 

2.  SCE Also Intends to Solicit and Encourage Innovative Use Cases Across a Variety of End-Uses to Support Market Transformation ............................................7 

a)  Distribution Deferral ......................................................8 

b)  Microgrids: ...................................................................10 

c)  Community Storage .....................................................11 

C.  SCE Will Attempt to Use Storage to Fulfill System Needs Where the Needs Can Be Identified .....................................................11 

1.  Generation Need ......................................................................12 

a)  Generation Planning Process .......................................12 

2.  Distribution Need .....................................................................13 B. Tolentino 

3.  Transmission Need...................................................................13 G. Chinn 

a)  Transmission Planning Process....................................13 

SCE-01: Testimony of Southern California Edison In Support Of Its 2016 Energy Storage Procurement Plan

Table Of Contents (Continued)

Section Page Witness

-ii-

III.  EXISTING ELIGIBLE ENERGY STORAGE ...............................................15 

A.  SCE’s Energy Storage Procurement Targets .......................................15 G. Stern 

B.  Existing Procurement Approved in SCE’s 2014 Energy Storage Procurement Plan ....................................................................16 

C.  Additional Procurement Conducted During the 2014 Biennial Procurement Cycle ................................................................17 

1.  Distribution Energy Storage Integration 1 Pilot ......................18 M. Irwin 

a)  Purpose and Location ...................................................18 

b)  Procurement and Construction .....................................19 

c)  Status ............................................................................19 

2.  2013 LCR RFO ........................................................................20 G. Flores 

3.  2014 ES RFO ...........................................................................21 

D.  SCE Has Energy Storage Projects Planned or Under Consideration That Are Eligible to Count Towards Its 2016 Target ...................................................................................................22 M. Wallenrod 

1.  SGIP (Installed by 12/31/2017) ...............................................22 

a)  Background and Program Overview:...........................22 

b)  Program Forecast .........................................................23 

2.  PLS Program (Installed By 12/31/2017)..................................25 

a)  Background and Program Overview ............................25 

b)  Program Forecast .........................................................26 

E.  SCE’s Forecast of Biennial Procurement Is Adjusted for Existing Energy Storage and Flexibility in Counting Amongst Grid Domains .......................................................................27 G. Stern 

SCE-01: Testimony of Southern California Edison In Support Of Its 2016 Energy Storage Procurement Plan

Table Of Contents (Continued)

Section Page Witness

-iii-

IV.  PROPOSED PROCUREMENT DURING THE 2016 BIENNIAL PROCUREMENT CYCLE ..............................................................................29 

A.  2016 ES RFO .......................................................................................29 G. Flores 

1.  Products to be Solicited ...........................................................30 

2.  Solicitation Timeline ................................................................31 

3.  Solicitation Structure ...............................................................32 

4.  Commission Approval of Contracts .........................................32 

5.  Safety .......................................................................................32 

6.  Interconnection Studies ............................................................33 

7.  Draft 2016 ES RFO Documents ..............................................34 

B.  Valuation and Selection Process for 2016 ES RFO .............................35 R. Sekhon 

1.  SCE’s Specific Valuation and Selection Process.....................35 

a)  Step 1: Develop Price Forecasts .................................36 

b)  Step 2: Determine Cost Revenue Cash Flows ............................................................................36 

(1)  RA Benefit .......................................................36 

(2)  Contract Payment Cost ....................................37 

(3)  Debt Equivalents Cost......................................37 

(4)  Transmission and Distribution Upgrade Costs ..................................................37 

(5)  Credit and Collateral Adder Cost .....................37 

(6)  Innovative Use Cases Benefits and Costs .................................................................38 

c)  Step 3: Calculate Present Value and Add Up All Revenue Streams ..............................................38 

SCE-01: Testimony of Southern California Edison In Support Of Its 2016 Energy Storage Procurement Plan

Table Of Contents (Continued)

Section Page Witness

-iv-

d)  Step 4: Consider Qualitative Factors ..........................38 

(1)  Project Viability ...............................................38 

(2)  Project Diversity Leading to Market Transformation .................................................39 

(3)  Other ................................................................39 

e)  Step 5: Select Contracts ..............................................39 

2.  Joint IOU Consistent Evaluation Protocol ...............................40 

V.  PLANNED ENERGY STORAGE EXPECTED TO BE ELIGIBLE IN FUTURE PROCUREMENT CYCLES ...................................41 

A.  Other Procurement Opportunities ........................................................41 G. Flores 

1.  Renewables Portfolio Standard (“RPS”) RFP .........................41 

2.  PRP 2 RFO ...............................................................................41 

3.  Bilateral Contracts ...................................................................41 

a)  Contracts with Parties Precluded from RFO Participation .................................................................42 

b)  Insufficient Market Response ......................................42 

c)  Unique and/or Fleeting Opportunities .........................42 

B.  Utility-Owned Storage for Distribution Deferral .................................43 M. Irwin 

C.  DESI 2 Pilot .........................................................................................44 

D.  Distributed Optimized Storage Demonstration ....................................44 

VI.  SAFETY CONSIDERATIONS .......................................................................45 J. Minnicucci 

VII.  ENERGY STORAGE COST RECOVERY ....................................................47 M. Sheriff 

A.  Recovery of Independent Evaluator Costs ...........................................47 

B.  Third-Party Owned Storage Cost Recovery ........................................47 

C.  Customer-Side Programs Cost Recovery .............................................48 

SCE-01: Testimony of Southern California Edison In Support Of Its 2016 Energy Storage Procurement Plan

Table Of Contents (Continued)

Section Page Witness

-v-

D.  Departed Customer (Stranded) Cost Recovery ....................................48 

Appendix A Table with Details on 2016 Eligible Storage Resources ............................. G. Stern 

Appendix B RFO Documents .......................................................................................... G. Flores 

Appendix C Consistent Evaluation Protocol ................................................................... R. Sekhon 

Appendix D Witness Qualifications ................................................................................ 

SCE-01: Testimony of Southern California Edison In Support Of Its 2016 Energy Storage Procurement Plan

List Of Tables

Table Page

vi

Table I-1 SCE Biennial Procurement Targets .............................................................................................3 

Table III-2 SCE’s Energy Storage Procurement Targets (in MW) ............................................................15 

Table III-3 Existing SCE Storage Approved as Eligible in D.14-10-045..................................................17 

Table III-4 Additional Installed Storage ....................................................................................................18 

Table III-5 Summary of LCR RFO Energy Storage Selected Offers ........................................................21 

Table III-6 Summary of 2014 ES RFO Selected Offers ............................................................................22 

Table III-7 SGIP Committed and Pending AES Reservations as of December 31, 2015 .........................24 

Table III-8 PLS Storage Eligible for the 2016 Cycle ................................................................................27 

Table III-9 Summary of Eligible Procurement ..........................................................................................28 

Table IV-10 Solicitation Timeline .............................................................................................................31 

SCE-01: Testimony of Southern California Edison In Support Of Its 2016 Energy Storage Procurement Plan

List Of Figures

Figure Page

vii

Figure II-1 Energy Storage for Distribution Deferral .................................................................................9 

Figure III-2 SGIP Annual Forecast of AES Projects .................................................................................25 

Figure III-3 PLS Annual Forecast of Projects ...........................................................................................27 

1

I. 1

INTRODUCTION 2

A. Overview of SCE’s Energy Storage Procurement Plan for 2016 3

Pursuant to Decision (“D.”) 13-10-040, or the “Storage Decision,”1 Southern California 4

Edison Company (“SCE”) is filing an application (“Application”) requesting California Public 5

Utilities Commission (“Commission” or “CPUC”) approval of SCE’s 2016 Energy Storage 6

Procurement Plan and is concurrently serving this testimony in support of SCE’s Application. 7

As explained in SCE’s Application and in this testimony, SCE’s proposed 2016 Energy Storage 8

Procurement Plan is reasonable and consistent with the requirements and policy objectives of the 9

Storage Decision. 10

This testimony consists of seven chapters: 11

Chapter 1 provides an overview of SCE’s 2016 Energy Storage Procurement Plan 12

and the background leading to the Storage Decision and the filing of SCE’s 13

Application; 14

Chapter 2 describes SCE’s overall energy storage procurement framework and 15

discusses how SCE will identify energy storage need, as well as how SCE will 16

meet the Commission’s energy storage procurement requirement; 17

Chapter 3 identifies SCE’s existing and planned energy storage projects that SCE 18

believes are eligible to count towards SCE’s 2016 energy storage procurement 19

target; 20

Chapter 4 discusses the mechanisms by which SCE will procure additional energy 21

storage, including a 2016 Energy Storage Request for Offers (“ES RFO”); 22

Chapter 5 describes SCE’s planned energy storage procurement that is expected 23

to be eligible in future energy storage procurement cycles; 24

1 D.13-10-040, at 77 (Ordering Paragraph (“OP”) 4).

2

Chapter 6 describes SCE’s commitment and approach to safety issues arising out 1

of energy storage procurement; 2

Chapter 7 outlines SCE’s plan for cost recovery, including SCE’s plan to seek 3

authorization of costs for an Independent Evaluator and the Commission’s energy 4

storage program cost, as well as for future energy storage projects; and 5

SCE also attaches the following appendices to its testimony: 6

Appendix A Table with Details on All Existing Eligible Storage Resources 7

Appendix B RFO Documents 8

Appendix C Consistent Evaluation Protocol 9

Appendix D Witness Qualifications 10

SCE seeks prompt approval of SCE’s Application so that it can launch its 2016 ES RFO 11

by December 1, 2016. 12

B. Storage Procurement Final Decision Background 13

Assembly Bill (“AB”) 2514 (Stats. 2010, Ch. 469) required the Commission to determine 14

appropriate targets, if any, for each load-serving entity (“LSE”) to procure viable and cost-15

effective energy storage systems.2 Rulemaking (“R.”) 10-12-007, opened to implement AB 16

2514, culminated in the Storage Decision, which was adopted by the Commission on October 17, 17

2013. 18

The Storage Decision requires the three investor-owned utilities (“IOUs”) in California to 19

procure 1,325 megawatts (“MW”) of energy storage capacity by 2020.3 SCE’s share of the 20

1,325 MW target is 580 MW, which is divided into biennial procurement targets in 2014, 2016, 21

2018, and 2020 as reflected below.4 22

2 Cal. Pub. Util. Code § 2836 et seq.

3 D.13-10-040, at 2.

4 D.13-10-040, at 15.

3

Table I-1 SCE Biennial Procurement Targets

Cumulatively, SCE’s targets through the second biennial procurement cycle, beginning in 1

2016, are 115 MW of transmission connected storage, 70 MW of distribution-connected storage, 2

and 25 MW of customer-connected storage – a total of 210 MW of energy storage across the 3

three grid domains. 4

According to the Storage Decision, the Commission’s goal is to transform the energy 5

storage market to overcome the barriers that are hindering broader adoption of emerging storage 6

technologies.5 SCE shares the Commission’s goal and recognizes the key role that energy 7

storage will likely play in California’s energy future. Accordingly, SCE continues to pursue 8

reasonable and cost-effective energy storage solutions to help maintain system reliability, 9

integrate renewable resources, and reduce greenhouse gases (“GHG”).10

5 D.13-10-040, at 7.

Storage Grid Domain 2014 2016 2018 2020 Total

Transmission 50 65 85 110 310

Distribution 30 40 50 65 185

Customer 10 15 25 35 85

Total 90 120 160 210 580

4

II. 1

OVERVIEW OF SCE’S ENERGY STORAGE PORTFOLIO DEVELOPMENT 2

FRAMEWORK 3

A. After Accounting for SCE’s Existing Eligible Energy Storage and the Flexibility 4

Across Grid Domains, SCE Has Already Met Its 2016 Procurement Cycle Target 5

Pursuant to the Storage Decision,6 SCE’s target for the 2016 procurement cycle is 120 6

MW across the three grid domains, and its cumulative target (accounting for both 2014 and 2016 7

procurement cycles) is 210 MW across the three grid domains. 8

Currently, SCE’s planned and existing energy storage amounts to: 100 MW in the 9

transmission-connected domain, 32.3 MW in the distribution-connected domain, and 225.4 MW 10

in customer-connected domain,7 totaling in aggregate up to 357.7 MW. The new flexibility rules 11

recently adopted in the Track 1 Decision in R.15-03-0118 allow SCE to apply up to 85 MW of 12

customer-connected storage toward meeting the targets in the transmission and distribution 13

domains. Therefore, as further detailed in this testimony – and as depicted in Table III-9 – once 14

this flexibility provision is applied, SCE has already satisfied the procurement target for 2016. 15

Despite having met its 2016 procurement target, SCE intends to conduct a 2016 energy storage 16

solicitation to maintain momentum in transforming the energy storage market, as described 17

below. 18

6 D.13-10-040, Appendix A, at 2.

7 This number accounts for the new rule established in D.16-01-032 that credit for SGIP-funded energy storage projects installed by Direct Access (“DA”) and Community Choice Aggregation (“CCA”) customers should be split evenly between an unbundled customer’s IOU and the DA/CCA service provider. See D.16-01-032 at 2. SCE estimates that, of its 56 MW of forecasted customer-connected energy storage under SGIP, approximately 20% could be attributable to projects that will be installed by DA/CCA customers. Of that 20%, half of the MW should be credited to DA/CCA providers. SCE thus provides a very conservative estimate that 50 MW of the forecasted 56 MW of SGIP energy storage projects would be counted towards SCE’s customer-connected domain. See Section III.D.1.b of this testimony for additional details.

8 D.16-01-032 (the “Track 1 Decision”), at 32-33.

5

B. SCE Intends to Conduct a 2016 Energy Storage Solicitation 1

In 2016, SCE plans to conduct a targeted energy storage solicitation. Specifically, SCE 2

intends to solicit up to 20 MW of energy storage projects at desirable locations. SCE has 3

designed its pro forma ES contract and its ES RFO Participant Instructions to obtain Resource 4

Adequacy (“RA”) attributes from energy storage projects. SCE was very successful in acquiring 5

energy storage projects for this use-case application in the 2014 procurement cycle. 6

In addition to seeking projects that contribute specifically to RA, SCE is exploring 7

additional use cases to include in its 2016 solicitation, such as energy storage that can facilitate 8

distribution deferral, energy storage as a part of a micro-grid project, and energy storage that can 9

function as community storage. If SCE finds merit in adding such use-cases to its 2016 10

solicitation, SCE will modify, as appropriate, its pro forma ES contract and its ES RFO 11

Participant Instructions and review these modifications with its Procurement Review Group 12

(“PRG”) and the solicitation’s Independent Evaluator (“IE”). Additionally, for certain use-case 13

applications (e.g., distribution deferral), SCE may find it appropriate to open its solicitation to 14

additional distributed energy resource (“DER”) technologies to supplement energy storage 15

solutions, or determine the cost competitiveness of an energy storage solution, in meeting the 16

needs of the new use case(s). All of SCE’s procured energy storage projects will contribute to at 17

least one of the Commission’s three “operational requirements,” i.e., grid optimization, 18

renewables integration, and/or GHG reduction. 19

1. At a Minimum, SCE Will Solicit Projects That Provide RA and Improve 20

System Performance 21

SCE will solicit up to 20 MW of RA-eligible energy storage projects. SCE will also limit 22

each offer to 10 MW to allow for broader market participation and the potential to select multiple 23

projects. Energy storage projects that provide RA enhance system performance, and may 24

enhance local reliability. Facilities that are under contract for RA with an LSE are obligated by 25

the Must Offer Obligation to submit bids into the California Independent System Operator 26

(“CAISO”) markets and are incentivized to follow any dispatches as a result of awards. For 27

6

example, awards may take advantage of an energy storage project’s ability to: (1) provide fast-1

ramping, and/or (2) balance energy load by discharging during instances of high energy demand, 2

and charging during potential instances of high energy supply. 3

While energy storage can be sited widely throughout SCE’s service territory, when 4

energy storage is sited at preferred locations on the electric grid, it can provide additional value 5

by improving system performance. For example, system performance can be improved when 6

energy storage is located in high load areas, in which case, energy storage can act as local 7

generation by maintaining reliable service in constrained areas. For this reason, SCE intends to 8

target locations that will provide local RA value and improve system performance. Identification 9

of particular locations of value will be influenced by the system, transmission, and distribution 10

planning studies referenced in Section II.C. 11

SCE has identified a number of candidate substations as locations for demonstrating the 12

value that storage can provide in constrained areas. One such substation is Goleta, which is 13

located in the Moorpark sub-area of the Big Creek/Ventura local RA area. The Goleta substation 14

is served by two 230 kilovolt (“kV”) transmission lines from the Santa Clara substation. Both 15

lines are situated on the same set of transmission towers and are located in coastal terrain where 16

there is heightened risk of a common failure for both lines due to frequent fires and potential 17

landslides caused by heavy rainfall from El Nino conditions. Energy storage sited at Goleta 18

would be valuable in supporting local area reliability in the event of a loss of these two major 19

230 kV transmission lines serving Santa Barbara County. 20

Similarly, as part of the analysis performed in the 2015/2016 CAISO Transmission Plan, 21

constraints were identified on 230 kV lines emanating south from the Mesa substation in 2021. 22

One potential solution identified by the CAISO for addressing this constraint is siting additional 23

resources at the Laguna Bell substation. Energy storage sited at Laguna Bell could provide value 24

by addressing this contingency. 25

Two other substations where energy storage could provide value are the Johanna and 26

Santiago substations. These substations are located in the southwest sub-area of the Western LA 27

7

Basin – the location in SCE’s service territory that has been most impacted by the permanent 1

closure of the San Onofre Nuclear Generating Station (“SONGS”). Energy storage sited at 2

Johanna and Santiago could improve system performance and support SCE’s ongoing Preferred 3

Resources Pilot (“PRP”), which seeks to determine whether clean energy resources, including 4

energy storage, can be acquired and deployed to offset increasing customer demand for 5

electricity in the region. 6

As transmission and resource mitigations develop and are incorporated into annual 7

system planning studies, new issues may appear in the Western LA Basin, Moorpark or other 8

local areas. Siting of additional energy storage in these local areas may be beneficial. As the 9

launch date for the ES RFO approaches, SCE will update and provide bidders with information 10

on these areas and substations to which the energy storage will need to interconnect. This 11

information will reflect the most current information available regarding needs in local SCE 12

areas. 13

To the extent charging restrictions are necessary to prevent adverse impact on the local 14

areas due to storage charging during periods of high load, the interconnection agreement that the 15

developer will need to execute may include such restrictions. 16

2. SCE Also Intends to Solicit and Encourage Innovative Use Cases Across a 17

Variety of End-Uses to Support Market Transformation 18

In addition to soliciting projects intended to enhance local reliability, SCE also plans to 19

explore opportunities to procure energy storage for innovative use-case applications in its ES 20

RFO. For example, SCE is considering energy storage applications intended for end-uses such 21

as: (1) deferring distribution upgrades, (2) facilitating microgrid projects, and (3) facilitating 22

community storage projects. 23

Exploring these use cases aligns with the Commission’s and SCE’s common goal of 24

transforming the energy storage market. To the extent that SCE is able to clearly define specific 25

applications for these alternative use-cases and how to contract for them prior to launching its ES 26

8

RFO, SCE plans to include them in its solicitation in addition to energy storage resources that 1

provide RA. 2

If SCE is able to include these additional use-cases and products in its ES RFO, SCE will 3

modify, as appropriate, its pro forma contract(s) and ES RFO Participant Instructions prior to 4

launching the ES RFO to reflect the characteristics of these projects. If SCE adds additional 5

products and/or use-cases, SCE will consult with, and seek input from, the PRG and the IE. 6

Additionally, if SCE includes use-cases such as distribution deferral, which may be addressed by 7

energy storage or other DERs, SCE may determine that a broader solicitation of resource 8

technologies may be needed, which would include, but not be limited to, energy storage. As 9

such, the solicitation would allow for resources to compete against one another to meet the 10

specific targeted use-cases. Depending on which use-cases are solicited in its ES RFO, SCE may 11

request approval for contracts that have a different means of cost recovery treatment. The 12

additional use-cases that SCE is planning to explore are described below. 13

a) Distribution Deferral 14

Energy storage could play an important role in distribution deferral as an end-use 15

application. For example, if SCE were to discover through its distribution planning process that 16

certain constraints exist that could trigger potential distribution upgrades and investments on the 17

distribution system, and it appears that energy storage could provide performance attributes that 18

more cost-effectively alleviate these constraints, SCE may wish to consider utilizing storage as a 19

means to defer those upgrades and investments. 20

Figure II-1, below, depicts a scenario in which energy storage can be utilized to defer a 21

distribution upgrade. The red dotted line in the figure depicts the total capacity on a distribution 22

circuit. Without energy storage, the customer load on this circuit would exceed its available 23

capacity (represented by the blue line surpassing the red dotted line). This type of constraint 24

would typically require upgrades to the distribution circuit to accommodate the excess load (in 25

this example, a distribution upgrade would be illustrated by raising the red dotted line above the 26

highest point of the blue line). However, with the introduction of energy storage, customer load 27

9

can instead be managed in such a way that the load does not exceed the capacity of the line 1

through the controlled charging and discharging of the energy storage device (represented by the 2

orange line). As such, an energy storage device can manage the load on the line in a manner that 3

is consistent with the distribution circuit’s capacity so that load does not exceed capacity, and 4

distribution upgrades may be deferred to a later time. 5

Figure II-1 Energy Storage for Distribution Deferral

10

To the extent that SCE is able to identify specific distribution deferral applications for 1

energy storage, such as in the example described above, SCE may wish to include these 2

applications in its ES RFO. 3

b) Microgrids: 4

SCE is also exploring the role of energy storage in facilitating microgrid projects to 5

benefit both specific customers and grid reliability. For example, SCE is conceptually exploring 6

the use of microgrids as grid assets, such that they might serve: 7

(1) As integrated customer solutions for enhanced reliability and resiliency; 8

(2) The distribution system as distribution assets; and/or, 9

(3) Remote locations that are hard to reach, or are at the end of feeders where 10

maintaining reliability might be expensive with traditional transmission and 11

distribution (“T&D”) equipment. 12

According to Navigant Consulting’s “Microgrid Multi-Client Study,” microgrids have evolved 13

into a significant opportunity for the electric power industry, in large part due to the acceleration 14

of DER deployments, and particularly energy storage.9 15

As opportunities and markets for microgrids continue to grow, so too will opportunities 16

for energy storage in facilitating and supporting microgrids. For example, energy storage can 17

provide services such as resource optimization, resource integration for renewable energy (such 18

as solar and wind), and load management, which are integral to the reliable operation of 19

microgrids. Acknowledging the important role that energy storage can play in facilitating 20

microgrids, SCE intends to explore soliciting energy storage that can facilitate microgrid projects 21

in its ES RFO, to the extent that it is able to clearly identify and define use-case applications in 22

advance of launching the ES RFO. 23

9 See Microgrid Multi-Client Study, Navigant Consulting, November 30, 2015, at iv.

11

c) Community Storage 1

In the recent Assigned Commissioner and Assigned Administrative Law Judge’s Scoping 2

Memo and Ruling Seeking Party Comments in R.15-03-011,10 parties were asked to respond to 3

questions regarding community storage, including the status of existing pilot programs and 4

future projects, the current barriers to developing community storage, and policy options to be 5

considered. In SCE’s opening comments on Track 2 issues, SCE discussed several of its current 6

projects and pilot programs for community storage.11 Similar to distribution deferral and 7

microgrid applications, if it appears that there is a role for energy storage to play in future 8

community-based projects, SCE plans to solicit such end-uses for energy storage in its ES RFO. 9

C. SCE Will Attempt to Use Storage to Fulfill System Needs Where the Needs Can Be 10

Identified 11

The Commission, CAISO, and the California Energy Commission (“CEC”) coordinate 12

closely through various stakeholder proceedings to support grid reliability and system needs. 13

SCE actively participates in these proceedings. SCE also plans and operates a distribution grid 14

to deliver power from the CAISO-operated grid to end-use customers and manages distribution-15

level generation resources. As directed by AB 327, SCE filed a Distribution Resources Plan 16

(“DRP”) on July 1, 2015 to identify optimal locations for distributed energy resources. SCE will 17

leverage these processes to determine the best uses for energy storage, and will attempt to use 18

energy storage to fulfill system needs where such needs can be identified. 19

10 See Assigned Commissioner and Assigned Administrative Law Judge’s Scoping Memo and Ruling

Seeking Party Comments, January 5, 2016, at 9.

11 See Southern California Edison Company’s Opening Comments on Assigned Commissioner and Assigned Administrative Law Judge’s Scoping Memo and Ruling Seeking Party Comments, February 5, 2016, at 18-20, Appendix A.

12

1. Generation Need 1

a) Generation Planning Process 2

The Commission conducts an in-depth review of the electric system’s supply-side 3

resource addition requirements in its biennial Long Term Procurement Plan (“LTPP”) 4

proceedings. The Commission authorizes procurement of new resources for system and local 5

reliability purposes based on extensive analysis submitted by the CAISO and the utilities. Such 6

analysis is focused on the projected balance during a 10-year planning period between the load 7

that LSEs need to serve and the resources available in the electric system to serve that load. SCE 8

plans to consider energy storage among its options when it procures additional resources to fulfill 9

the Commission’s requirements to procure additional system and/or local reliability resources. 10

The most recent LTPP proceeding is the 2014 LTPP (R.13-12-010). In the 2014 LTPP, 11

which is near completion, the Commission has not identified a system-wide need. The 12

Commission did identify local capacity requirement needs, however, and authorized procurement 13

of resources to meet those needs.12 Details are included in Section III.C.2 related to the Local 14

Capacity Requirements (“LCR”) RFO that SCE conducted. 15

On February 11, 2016, the Commission also approved an Order Instituting Rulemaking 16

(“OIR”) to establish the 2016 LTPP proceeding and to develop an electricity Integrated Resource 17

Plan (“IRP”) framework in accordance with Senate Bill (“SB”) 350 (Stats. 2015, Ch. 547) and to 18

coordinate and refine LTPP requirements. The proceeding will consider unresolved issues from 19

the 2014 LTPP proceeding, address any system or local reliability needs that arise, and 20

implement SB 350’s mandate for the Commission to adopt a process for integrated resource 21

planning to ensure that LSEs meet GHG emissions reduction targets established by the 22

California Air Resources Board (“CARB”). Energy storage may play role in this process. 23

12 See D.13-02-015 and D.14-03-004.

13

2. Distribution Need 1

Each year, SCE reviews its distribution facilities through an annual planning process to 2

ensure that the system is able to provide reliable service to all customers. SCE forecasts peak 3

electrical demand using data on circuit and substation peak loading for all of SCE’s feeders and 4

substations. Using loading, voltage, and protection limits based on engineering and equipment 5

manufacturer data, SCE then determines the impact of peak demand on its facilities and 6

identifies facilities where demand is projected to exceed these limits. 7

SCE performs further analysis to determine potential solutions for each of the facilities 8

identified as overloaded. These solutions may be as simple as using switches on distribution 9

circuits to transfer loads from one area to another, or may require more complicated distribution 10

system upgrades. SCE shares the results of the distribution planning process and SCE’s 11

proposed solutions with the Commission in SCE’s General Rate Case (“GRC”) filings. 12

SCE is beginning to integrate DERs into its distribution planning, operations, and 13

investment processes. Through ongoing work in the DRP, SCE will be providing information to 14

customers and third parties that will help them identify optimal locations for DER deployment, 15

including areas that can potentially help defer a capital need. Later this year, SCE will begin a 16

“deferral pilot” that analyzes several capital load growth projects to determine if integration of 17

DERs, which may include energy storage, could result in deferral of the projects. 18

3. Transmission Need 19

a) Transmission Planning Process 20

Each year, the CAISO conducts its Transmission Planning Process (“TPP”)13 to identify 21

potential system limitations, as well as opportunities for system upgrades that improve reliability 22

and efficiency up to ten years into the future. The TPP identifies areas in the transmission 23

system that would experience reliability concerns, and then develops, selects, and initiates the 24

13 See CAISO’s TPP website available at:

http://www.caiso.com/planning/Pages/TransmissionPlanning/Default.aspx.

14

required mitigations to address those concerns each year. The TPP is a public process and 1

includes assessments for reliability, LCR, policy-driven needs, and economic planning. Any 2

party may submit mitigation options into the TPP for consideration to address a transmission 3

need. Once the CAISO Board finalizes the transmission plan, a solicitation process begins for 4

competitive transmission projects to select qualified sponsors to finance and construct approved 5

projects. While SCE participates as a stakeholder in the TPP and provides input into the process, 6

the CAISO ultimately determines which transmission projects will proceed. As SCE indicated 7

above, identification of particular locations of value for the RA-only portion of SCE’s 8

solicitation will be influenced by available planning studies, including the TPP. 9

15

III. 1

EXISTING ELIGIBLE ENERGY STORAGE 2

A. SCE’s Energy Storage Procurement Targets 3

SCE’s share of the 1,325 MW energy storage goal is 580 MW, which is divided into 4

biennial procurement targets by “grid domain”14 in 2014, 2016, 2018, and 2020 as shown in 5

Table III-2 below.15 6

Table III-2 SCE’s Energy Storage Procurement Targets (in MW)

As provided in the Storage Decision, up to 80 percent of the MW assigned to the 7

transmission and distribution grid domains can be shifted amongst the transmission and 8

distribution grid domains.16 Additionally, the Track 1 Decision determined that SCE may also 9

count up to 85 MW of customer domain procurement toward the transmission and distribution 10

domain targets, provided the customer domain target has been met.17 The IOUs may count 11

energy storage projects authorized in other Commission proceedings towards meeting the energy 12

storage procurement targets if the projects meet the Commission’s requirements, and the 13

Commission approves the projects.18 Additionally, the Storage Decision provides that utility-14

14 “Grid domain” refers to the point of interconnection – either customer-connected (i.e., “behind-the-

meter”), distribution-connected, or transmission-connected.

15 D.13-10-040, at 15.

16 D.13-10-040, Appendix A, at 3.

17 D.16-01-032, at 33, 63 (Conclusion of Law (“COL”) 21-22).

18 D.13-10-040, Appendix A, at 4.

Grid Domain 2014 2016 2018 2020 Total Transmission 50 65 85 110 310Distribution 30 40 50 65 185Customer 10 15 25 35 85

Total 90 120 160 210 580

16

owned storage projects may count once a specific procurement commitment is made by the IOU, 1

such as a purchase order for equipment or a contract for buildout.19 2

Given these counting rules, SCE has a number of existing projects that are eligible to 3

count towards its 2016 energy storage procurement target. In the following testimony, SCE 4

describes: (1) existing procurement determined to be eligible in SCE’s 2014 Energy Storage 5

Procurement Plan; (2) additional procurement undertaken during the 2014 biennial procurement 6

cycle; and (3) planned projects that are eligible to count towards SCE’s 2016 procurement target. 7

SCE’s customer-side energy storage programs, including the Permanent Load Shift (“PLS”) 8

program and the Self-Generation Incentive Program (“SGIP”), have many project applications 9

which are expected to be approved and installed by the time SCE files its next biennial storage 10

application (anticipated to be submitted on March 1, 2018). Given that customer-side program 11

forecasts are created on an annual basis and the amount of projects installed between the end of 12

the year (December 31, 2017) and the application filing date (March 1, 2018) is not expected to 13

be very large, SCE will only count projects installed by December 31, 2017 towards its 2016 14

target. In its 2018 application, SCE will update its energy storage procurement expectations to 15

account for any differences between the forecasts of energy storage to be installed and the actual 16

energy storage installed. 17

B. Existing Procurement Approved in SCE’s 2014 Energy Storage Procurement Plan 18

In SCE’s 2014 Energy Storage Procurement Plan, SCE identified a number of “existing 19

and planned” storage projects and requested these projects be counted toward the procurement 20

targets in the 2014 cycle.20 The Commission recognized these projects as eligible to count 21

toward the 2014 procurement targets in D.14-10-045.21 Table III-3 includes the MW of each 22

19 D.13-10-040, Appendix A, at 4.

20 SCE’s 2014 Energy Storage Procurement Plan. See Application (“A.”) 14-02-009, Testimony of Southern California Edison Company in Support of its 2014 Energy Storage Application, Exhibit SCE-01, February 28, 2014, at 14-25, Appendix A.

21 D.14-10-045, Attachment A.

17

project both as listed in SCE’s 2014 Energy Storage Procurement Plan, as well as the MW 1

actually installed as of December 1, 2015.22 2

Table III-3 Existing SCE Storage Approved as Eligible in D.14-10-045

C. Additional Procurement Conducted During the 2014 Biennial Procurement Cycle 3

In addition to the previously approved energy storage discussed in Section III.B above, 4

SCE procured additional energy storage during the 2014 cycle, including (1) an additional 5

22 SCE’s 2014 Energy Storage Procurement Plan also included 50 MW of planned storage to be

procured through the LCR RFO. SCE discusses the LCR RFO procurement in the following section.

Grid Domain Project MW in Plan

MW Actually Installed

Distribution Tehachapi Storage 8.00 8.00Distribution Irvine Smart Grid-Community Energy Storage 0.03 0.03

Distribution Irvine Smart Grid-Containerized Energy Storage 2.00 2.00

Customer Irvine Smart Grid-Residential ES Unit 0.06 0.06

Distribution Large Storage Test 2.00 2.00 Distribution Discovery Museum 0.10 0.10 Distribution Catalina Island 1.00 1.00 Distribution V2G-LA AFB 0.65 0.501

Customer Self-Generation Incentive Program 10.90 9.662 Customer Permanent Load Shifting 5.30 1.143 Customer Home Battery Pilot 0.08 0.004 Subtotal, Distribution 13.78 13.63 Subtotal, Customer 16.34 10.86 TOTAL 30.12 24.49

1 The V2G-LA AFB project is still in the testing phase. 2 The SGIP and PLS programs are customer incentive programs in which customers throughout the SCE

service territory may apply for incentives for their behind-the-meter storage projects that meet program eligibility requirements. The MW totals listed in SCE’s plan represented SCE’s forecast of installations to occur during the 2014 cycle (i.e., prior to March 1, 2016). The values listed in the “Actually Installed” column represent installations as of December 1, 2015. There are numerous other projects in progress in these programs that are expected to complete installation which SCE will apply toward future year targets. Consistent with D.16-01-032, going forward, SCE will only count 50% of the MW associated with SGIP projects installed by DA/CCA customers.

3 See footnote 1. 4 The Home Battery Pilot program was cancelled prior to launch.

18

storage demonstration pilot, (2) projects procured through the LCR RFO, and (3) projects 1

procured through the 2014 ES RFO. 2

1. Distribution Energy Storage Integration 1 Pilot 3

In its 2014 Energy Storage Procurement Plan, SCE provided details for the Distribution 4

Energy Storage Integration (“DESI”) 1 pilot project, but SCE did not seek approval for this 5

project to count as eligible toward the 2014 energy storage procurement target.23 However, 6

DESI 1 is now installed and operational, and is therefore included in SCE’s total energy storage 7

procurement. DESI 1 was approved in the 2012 and 2015 GRCs.24 The system is summarized 8

in Table III-4 and further described below. 9

Table III-4 Additional Installed Storage

DESI 1 is a 2,500 kVA, 2,400 kilowatt (“kW”), 3,900 kilowatt-hour (“kWh”), lithium-ion 10

battery energy storage system (“BESS”) connected to the Scarlet 12 kV distribution circuit out of 11

the Orange substation. DESI 1 is SCE’s first pilot production (non-research and development) 12

BESS, and is designed to support grid operations. 13

a) Purpose and Location 14

The Scarlet 12 kV distribution circuit serves various commercial and industrial customers 15

in the City of Orange. One customer, NOV (formerly National Oilwell Varco), manufactures 16

large drill bits for offshore oil platforms. Part of the manufacturing and delivery process 17

includes time-critical testing of the drill bits in one of several on-site test bays. During testing, 18

each drill bit can add several MW of load to the NOV service, typically during on peak periods. 19

23 SCE’s 2014 Energy Storage Procurement Plan. See A.14-02-009, Testimony of Southern California

Edison Company in Support of its 2014 Energy Storage Application, Exhibit SCE-01, February 28, 2014, Appendix A.

24 D.12-11-051, at 119; D.15-11-021, at 47-48.

Grid Domain Project MW Installed Distribution DESI 1 2.4TOTAL 2.4

19

These large increases in demand can potentially cause the Scarlet 12 kV distribution circuit to 1

reach or exceed its planned loading limit (“PLL”) during summertime peak load conditions. 2

Rather than pursue traditional methods of adding capacity to the circuit, SCE decided to 3

pilot its first production distribution BESS. The BESS has several operating modes, but is 4

primarily designed to monitor the Scarlet 12 kV distribution circuit phase current and discharge 5

as needed to prevent the current from exceeding the PLL. The customer provided an easement 6

for the BESS inside their existing fence line, and for interconnection facilities on the adjacent 7

parkway. 8

b) Procurement and Construction 9

DESI 1 was procured as a turn-key system, where the manufacturer was responsible for 10

providing a complete, integrated, operational BESS, as well as ongoing maintenance and 11

warranty services per SCE specifications. SCE was responsible for providing the 12

interconnection facilities, location, and site preparations necessary to receive the BESS. SCE 13

released a request for proposal in early 2014, and awarded a contract to NEC Energy Solutions in 14

July 2014. Construction of interconnection facilities and site preparations started in early 2015, 15

and the manufacturer completed system commissioning and associated tests in May 2015. NEC 16

Energy Solutions achieved substantial completion on May 22, 2015, when SCE took operational 17

control of the system. 18

c) Status 19

SCE has been conducting the local load limiting operation since July 15, 2015, to limit 20

the impact of customer activities on the distribution circuit. Under this operation, the system 21

charges daily at limited power during an off peak period, and then discharges as needed to 22

prevent the customer load from exceeding a specified threshold. SCE plans to install a meter in 23

2016 that measures the entire distribution circuit, so the BESS can discharge as needed to keep 24

the circuit from exceeding the PLL. Compared to previous research systems, DESI 1 has been 25

relatively reliable and has dispatched when needed to support grid operations. However, several 26

20

issues have been identified with the power conversion system (inverter), which the manufacturer 1

is addressing and SCE will consider in future energy storage design specifications. 2

2. 2013 LCR RFO 3

The 2012 LTPP Track 1 and 4 decisions, D.13-02-015 and D.14-03-004, ordered SCE to 4

file an application for approval of all contracts entered into as a result of SCE’s LCR RFO for 5

new capacity in the Western LA Basin. SCE filed the Western LA Basin application, 6

A.14-11-012, on November 21, 2014 to seek Commission approval of all Western LA Basin 7

contracts executed as a result of the LCR RFO – a total of 1,882.60 MW. 25 SCE executed a total 8

of 63 contracts, which included 23 energy storage contracts for approximately 261 MW. On 9

November 19, 2015, the Commission adopted D.15-11-041 approving 57 of the LCR RFO 10

contracts, including all 23 energy storage contracts. 11

As mentioned above, D.14-10-045 authorized SCE to apply 50 MW of expected energy 12

storage from its LCR RFO to its 2014 energy storage target as either transmission-, distribution-, 13

or customer-connected energy storage resources.26 SCE is requesting that the Commission apply 14

the remaining Commission-approved LCR energy storage procurement to its future energy 15

storage procurement targets in this 2016 Energy Storage Procurement Plan. A summary of the 16

LCR RFO selected offers is provided in Table III-5 below. 17

25 On November 26, 2014, SCE also filed A.14-11-016 requesting approval of contracts entered into as

a result of SCE’s LCR RFO for the Moorpark sub-area of the Ventura/Big Creek local capacity area. This application included a request for approval of one energy storage contract for 0.5 MW. However, SCE has not received a final decision on its Moorpark LCR application, and thus SCE does not yet count this energy storage project toward its goals.

26 D.14-10-045, at 20.

21

Table III-5 Summary of LCR RFO Energy Storage Selected Offers

3. 2014 ES RFO 1

D.14-10-045 authorized SCE to procure 16.3 MW or more of energy storage resources.27 2

To meet this need, SCE issued a 2014 ES RFO. D.14-10-045 ordered SCE to file an application 3

requesting approval of contracts from the 2014 ES RFO within one year of the December 1, 4

2014 launch date of the 2014 ES RFO.28 SCE filed its application, A.15-12-003, on December 1, 5

2015. Consistent with the authority granted in D.14-10-045, SCE sought approval of three 6

contracts, for a total of 16.3 MW, executed in SCE’s 2014 ES RFO. A summary of the 2014 ES 7

RFO selected offers is provided in Table III-6 below. 8

27 D.14-10-045, at 118 (OP 1).

28 D.14-10-045, at 119 (OP 1).

Grid Domain Product Category Total

Contracts

Quantity

Transmission Energy Storage In-front-of-Meter 1 100

Customer

ES Behind-the-Meter Permanent

Load Shifting (“PLS”) 16 25.6

ES Behind-the-Meter 6 135.0

Total Energy Storage 23 260.6 MW

22

Table III-6 Summary of 2014 ES RFO Selected Offers

D. SCE Has Energy Storage Projects Planned or Under Consideration That Are 1

Eligible to Count Towards Its 2016 Target 2

SCE currently has planned energy storage projects that are eligible to count toward its 3

2016 energy storage procurement target. These projects include energy storage procured through 4

the SGIP, and energy storage procured through the PLS program. 5

1. SGIP (Installed by 12/31/2017) 6

a) Background and Program Overview: 7

The Commission established the SGIP in D.01-03-073 pursuant to Public Utilities Code 8

Section 399.15(b).29 The SGIP provides financial incentives for qualified distributed generation 9

(“DG”) technologies that are installed on the customer side of the utility meter and that serve 10

some or all of a customer’s onsite electric load.30 Incentives offered under the SGIP vary based 11

on the technology and whether the DG technology uses renewable or non-renewable fuel. 12

29 Section 399.15(b) of the Public Utilities Code no longer addresses SGIP. The SGIP is now governed

by Public Utilities Code Sections 379.5 and 379.6.

30 At its inception, the SGIP funded solar photovoltaic (“PV”), wind turbines, fuel cells, microturbines, small gas turbines, internal combustion engines, and combined heat and power plants. AB 2778 removed all incentives for solar PV systems from the SGIP as of January 2007, and provided incentives for solar PV through the California Solar Initiative program.

Grid Domain

Counterparty Offer Type COD Term Storage MW

Distribution Stanton Energy

Reliability Center, LLC

RA Only 6/1/2020 10 1.3

Western Grid

Development, LLC

RA Only 1/1/2020 15 10.0

RA Only 1/1/2020 15 5.0

Total 16.3

23

In 2008, the Commission adopted D.08-11-044, which allowed advanced energy storage 1

(“AES”) systems that meet certain technical parameters and are coupled with eligible DG 2

technologies to receive incentives under the SGIP. In addition to AES systems coupled with 3

eligible SGIP technologies, the Commission granted eligibility to stand-alone AES systems to 4

participate in the SGIP in D.11-09-015. In D.14-12-033, the Commission extended a budget of 5

$28 million per year from 2015 through 2019 in upfront and performance-based incentives for 6

eligible behind-the-meter SGIP technologies in SCE’s service territory. 7

To date, there are 499 AES projects, both stand-alone and coupled with eligible DG 8

technologies that have received or applied for incentives under the SGIP. 9

b) Program Forecast 10

Based on current program applications, SCE is forecasting 56.1 MW of SGIP energy 11

storage to be installed by the end of 2017, and thus eligible to count for the 2016 energy storage 12

procurement cycle. Table III-7 shows the committed and pending reservations for AES 13

technologies that applied for SGIP incentives as of December 31, 2015. 14

Consistent with the new rule announced in the Track 1 Decision concerning credit for 15

SGIP projects installed by DA/CCA customers,31 Table III-7 includes an estimate of the projects 16

that may be installed by DA/CCA customers. Of the customer-connected energy storage projects 17

acquired through SGIP that are either planned or under construction, SCE conservatively 18

estimates that up to 20% of those projects could be installed by DA/CCA customers. Given the 19

50/50 split of credit for SGIP projects as required in the Track 1 Decision, approximately 10% of 20

the 56.1 MW forecast could be attributable to DA/CCA customers, or 5.61 MW. 32 For 21

31 D.16-01-032, at 64 (COL 29) (“For energy storage projects installed by customers of a CCA or ESP,

credit for the SGIP-funded energy storage projects should be split evenly between the unbundled customers’ IOU and the CCA/ESP.”)

32 (56.1*.2)*.5 = 5.61 MW. SCE interprets the Track 1 Decision’s new rules concerning SGIP counting to apply on a prospective basis, as the original Storage Decision allowed the IOUs to count 100% of SGIP projects towards their targets. Further, the Track 1 Decision clarified that “SGIP-funded projects will count towards an LSE’s target at the time the SGIP incentive payment process begins,

(Continued)

24

simplicity, SCE provides a conservative assumption that 50 MW of the 56 MW of projected 1

SGIP energy storage projects will count towards SCE’s customer-connected domain for energy 2

storage, with the remainder ultimately credited to the relevant LSE.33 3

Table III-7 SGIP Committed and Pending AES Reservations as of December 31, 2015

Additionally, SCE expects significant SGIP energy storage to be installed after 2017, and 4

thus to count toward later energy storage procurement targets. The SGIP currently has a 5

statutory sunset date of January 1, 2021, and thus SCE expects that interested customers will take 6

advantage of available incentives prior to this sunset date. 7

Continued from the previous page and that the credited amount will not change if a customer subsequently moves to unbundled or bundled service.” D.16-10-032, at 44.

33 For projects that are actually installed by a DA/CCA customer, SCE will confer with the relevant ESP/CCA at the time the incentive process is completed to ensure that credit for such projects is allocated appropriately.

Committed Reservation 49.4 MW

Pending Reservation 6.7 MW

Total Reservation 56.1 MWEst. Total Per New SGIP Counting ~50 MW

25

Figure III-2 SGIP Annual Forecast of AES Projects

2. PLS Program (Installed By 12/31/2017) 1

a) Background and Program Overview 2

In D.12-04-045, the Commission approved a PLS program budget for 2012-2014, and 3

directed the three IOUs to propose a statewide PLS program based on a standard offer with 4

common design and rules.34 SCE launched the PLS program in its service territory on July 22, 5

2013. On May 15, 2014, the Commission adopted D.14-05-025, which approved the Permanent 6

Load Shift – Thermal Energy Storage (“PLS-TES”) program funding for the 2015-2016 bridge 7

period. 8

The statewide PLS program is designed to help customers shift electricity use by offering 9

a one-time upfront incentive, based on the number of kW shifted,35 to offset initial investments 10

34 D.12-04-045, at 226 (OP 60, 62).

35 The incentive is based on designed and verified kW shifted (per feasibility study and post-installation inspection approval).

0

10

20

30

40

50

60

2015 2016 2017

MW

Pending Reservation Committed Reservation Installed

CommittedReservation, 49.4

Committed Reservation, 13.1

Installed, 43.0

Installed, 56.1

Pending Reservation, 6.7

26

in a thermal energy storage system. Customers are required to shift energy usage during the 1

summer peak hours as defined by each IOU. Providing an incentive to invest in a PLS 2

technology helps the utilities reduce the need for peak generation investments, reduces the 3

likelihood of shortages during peak periods, and lowers system costs overall by reducing the 4

need for peaking units. 5

Customers are able to reserve incentives for PLS projects on a first-come, first-served 6

basis, as long as funding is available. Resolution E-4586 adopted a standardized PLS incentive 7

level of $875/kW across the IOUs.36 8

b) Program Forecast 9

SCE’s PLS program is funded through the end of 2016. In SCE’s 2017 transition year 10

filing, SCE has requested that funds remaining from 2015-2016 be carried over to 2017. SCE 11

will not request additional funds until 2018. 12

For the purpose of tracking PLS projects that will count towards the 2016 energy storage 13

procurement target, SCE will include the projects with submitted applications and feasibility 14

studies that are currently under review, and projects forecasted to be installed before December 15

31, 2017. SCE has three projects totaling 3 MW which are close to completion and are expected 16

to be completed by the end of 2016. The feasibility studies for an additional three projects 17

totaling 1 MW are currently under review, and if approved, would likely be installed in 2017. As 18

shown in the table below, SCE intends to count 4 MW of PLS storage towards the 2016 energy 19

storage procurement cycle goals. 20

36 Resolution E-4586, at 7.

27

Table III-8 PLS Storage Eligible for the 2016 Cycle

Figure III-3

PLS Annual Forecast of Projects

E. SCE’s Forecast of Biennial Procurement Is Adjusted for Existing Energy Storage 1

and Flexibility in Counting Amongst Grid Domains 2

After considering the aforementioned existing and planned energy storage, as well as the 3

flexibility in counting energy storage amongst the three grid domains, SCE’s forecasted energy 4

storage procurement, in MW, are adjusted in Table III-9, below. (For each procurement 5

category, additional detail may be found in the Section of this testimony indicated in the 6

parentheses.) 7

Installation expected 2016 3 MW

Installation expected 2017 1 MW

Total 4 MW

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2015 2016 2017

MW

Pending Reservation Committed Reservation Installed

Installed1.14

Commited3.0

PendingReservation

1.0

28

Table III-9 Summary of Eligible Procurement

Procurement Category

Grid Domain

Previously Approved

(III.A)

Additional Procurement during 2014 cycle (III.B)

Planned or Under Construction (III.C)

TOTAL TOTAL

ELIGIBLE1

2016 CumulativeProcurement

Target

DESI 1 (III.B.1)

LCR RFO (III.B.2)

ES RFO (III.B.3)

SGIP (III.C.1)

PLS (III.C.2)

Transmission 0 0 100 0 0 0 100 100 115

Distribution 13.6 2.4 0 16.3 0 0 32.3 32.3 70

Customer 10.8 0 160.6 0 ~50 4 225.4 170 25

Total 24.4 2.4 260.6 16.3 ~50 4 357.7 302.3 210

1 This column considers the ceiling on customer procurement contained in the D.16-01-032.

29

IV. 1

PROPOSED PROCUREMENT DURING THE 2016 BIENNIAL PROCUREMENT 2

CYCLE 3

Although SCE does not have a procurement need for the 2016 biennial procurement 4

cycle, SCE will conduct an ES RFO to maintain momentum in transforming the energy storage 5

market. Section IV below describes SCE’s 2016 ES RFO, including the valuation and selection 6

process, minimum requirements for participation, and the RFO timeline. Because SCE also 7

intends to continue to pursue innovative use cases for energy storage, SCE requires flexibility to 8

make alterations to its RFO documents as necessary to accommodate those use cases. 9

Additionally, SCE will not limit its energy storage procurement efforts to the ES RFO, as 10

further described in Section V. There may be cost-competitive and market-transformative 11

energy storage opportunities outside of an energy storage-specific RFO. Specifically, SCE 12

intends to continue to solicit energy storage paired with renewable resources through its 13

Renewables Portfolio Standard RFPs, and conduct pilot programs to understand how preferred 14

resources and energy storage can be deployed to effectively meet reliability needs.37 SCE will 15

also consider potential bilateral contract opportunities and utility-owned energy storage, as 16

described in Sections V.A and V.B-V.D respectively. 17

A. 2016 ES RFO 18

As stated previously, SCE plans to launch an ES RFO in 2016 that will seek offers for: 19

(1) RA-only at specific locations; and potentially (2) innovative use cases such as distribution 20

deferral, microgrids, or community storage. The innovative use cases are still in development 21

37 For example, the PRP is a multiyear study designed to determine whether clean energy resources –

including solar, wind, energy storage, energy efficiency and energy conservation – can be acquired and deployed to offset the increasing customer demand for electricity in central Orange County. To assist in procuring resources for the PRP, SCE launched and closed a PRP RFO, and as of the date of the filing of this plan is in the midst of conducting a PRP RFO 2. More information on the PRP can be found at: https://www.sce.com/wps/portal/home/about-us/reliability/meeting-demand/our-preferred-resources-pilot.

30

and SCE will include more detail and specifics in its RFO documents should SCE determine a 1

way to procure for these use cases by the time of solicitation launch. Consequently, most of the 2

detail provided below about the ES RFO will focus on the RA product. 3

1. Products to be Solicited 4

At a minimum, the 2016 ES RFO will be open to any technology that meets the definition 5

of “energy storage” as provided in the Storage Decision. SCE will only solicit energy storage 6

owned and constructed by third parties in the 2016 ES RFO. SCE will not accept offers that 7

contemplate the purchase of the energy storage projects by SCE or request SCE to act as a 8

partner in the development of the energy storage project. 9

For the RA-only portion of the 2016 ES RFO, SCE will only be purchasing RA benefits 10

from the energy storage project. SCE will not be transacting for any other products (e.g., energy, 11

ancillary services, etc.). Consistent with the discussion in Section II.B.1, SCE is soliciting 12

projects in areas that will enhance grid performance. Thus, as part of the eligibility criteria, the 13

energy storage project must be interconnecting at preferred locations identified by SCE (at this 14

time, the Goleta substation, the Laguna Bell substation, the Johanna substation, or the Santiago 15

substation, or lower level substations that are electrically connected to these substations).38 SCE 16

plans to procure no more than 20 MW of RA39 capacity associated with energy storage projects 17

in the 2016 ES RFO. Offers will be limited to 10 MW, to allow for broader market participation 18

and the potential to select more than one offer. 19

As stated previously, SCE will also solicit energy storage for innovative use cases. The 20

product details and attributes for these use cases are in development and will be included in the 21

38 As transmission and resource mitigations develop and are incorporated into annual system planning

studies, new issues may appear in the Western LA Basin, Moorpark or other sub-local areas. Siting of additional energy storage in these areas may be beneficial. The 2016 ES RFO will reflect the most current information available regarding SCE’s needs.

39 Depending on the offers received and the development of any additional innovative use cases, SCE may opt not to select any RA-only offers in the 2016 ES RFO.

31

RFO documents should SCE determine a way to procure for these use cases by the time of 1

solicitation launch. 2

For a more in depth review of requirements for the RA product, please view the proposed 3

RFO Instructions in Appendix B.1. 4

2. Solicitation Timeline 5

The following is an estimated timeline for the 2016 ES RFO assuming that the 6

solicitation is for RA only. Should SCE determine a way to procure for additional innovative 7

use cases by the time of solicitation launch, this timeline may be extended. 8

Table IV-10 Solicitation Timeline

Event Day Date

RFO Launch - SCE posts RFO Instructions, pro forma agreements and other ES RFO

documents on the RFO website

Thursday December 1, 2016

RFO Conference - SCE hosts RFO Bidders Conference

Friday December 16, 2016, 1:00 pm Pacific Prevailing

Time NOI deadline - Sellers to submit non-binding

Notice of Intent to submit Offers Wednesday February 22, 2017, 5:00 pm

Pacific Prevailing Time Offer deadline - Sellers to submit Offers and

required documentation Wednesday March 15, 2017,

1:00 pm Pacific Prevailing Time

Selection Notification - Date SCE will advise all Sellers on the Selection status of their

Offers

Friday April 21, 2017

Negotiation deadline - SCE and short-listed Sellers complete negotiations of the Final

Agreements

Friday June 2, 2017

Final Agreement Execution - SCE and Sellers sign Final Agreements

Friday June 16, 2017

Application Filing - SCE submits Application for approval of Final Agreements to the CPUC

Friday August 4, 2017

32

3. Solicitation Structure 1

SCE will conduct the 2016 ES RFO as a “one round” solicitation – bidders will submit 2

pricing at the offer deadline.40 SCE will then evaluate and shortlist offers. SCE will enter into 3

contract negotiations with shortlisted bidders and will make final selection decisions based on 4

successful negotiation of a form of contract agreeable to both parties. 5

4. Commission Approval of Contracts 6

Consistent with the direction provided in D.16-01-032, 41 SCE will file an application for 7

approval of the contracts resulting from its 2016 ES RFO. 8

5. Safety 9

Consistent with SCE’s focus on safety,42 SCE’s pro forma RFO contract requires that 10

sellers provide SCE with a safety report from an independent engineer prior to commencing any 11

construction activities on project sites. The report must certify that seller has a written plan for 12

the safe construction and operation of the energy storage facilities in accordance with prudent 13

electrical practices. 14

Additionally, SCE’s pro forma contract provides that sellers shall operate the energy 15

storage facility in accordance with prudent electrical practices. As summarized below, the pro 16

forma contract includes many provisions related to safety: 17

a. Seller shall furnish and install all Protective Apparatus43 as SCE reasonably 18

determines to be necessary for proper and safe operation of the project in parallel with the 19

distribution system and/or CAISO Grid. 20

40 Given SCE’s relatively small procurement target, if SCE receives an overabundance of offers, it may

prescreen offers and only run a full evaluation of offers that pass the prescreen.

41 See D.16-01-032, at 62 (COL 8).

42 See Section VI for additional information on SCE’s safety efforts related to energy storage.

43 All capitalized terms set forth in (a)-(f) above have the same meaning provided in the pro forma contract.

33

b. SCE or the CAISO may require seller to demonstrate to SCE’s reasonable 1

satisfaction the correct calibration and operation of seller’s Protective Apparatus any time SCE 2

or the CAISO has reason to believe that said Protective Apparatus may impair the integrity of the 3

distribution system and/or CAISO Grid. 4

c. Seller shall maintain and make available to SCE and the CPUC, or any division 5

thereof, records including logbooks, demonstrating that the project is operated and maintained in 6

accordance with prudent electrical practices. 7

d. Seller is obligated to provide insurance for workers’ compensation, employer’s 8

liability, commercial general liability, commercial automobile liability, pollution liability, and 9

umbrella liability. 10

e. If applicable, seller shall be (i) responsible for complying with any North 11

American Electric Reliability Corporation (“NERC”) Reliability Standards, including 12

registration with NERC as the “Generator Operator” or other applicable category under the 13

NERC Reliability Standards and implementation of all applicable processes and procedures 14

required by the Federal Energy Regulatory Commission (“FERC”), NERC, the Western 15

Electricity Coordination Council (“WECC”), CAISO or other governmental authority for 16

compliance with the NERC Reliability Standards; and (ii) liable for all penalties assessed by 17

FERC, NERC (through WECC or otherwise) or other governmental authority for violations of 18

the NERC Reliability Standards by the project or seller, as “Generator Operator” or other 19

applicable category. 20

f. Seller is solely responsible for all environmental costs, which include costs 21

associated with the disposal and clean-up of hazardous substances introduced to the site, and the 22

decontamination or remediation, on or off the site of the project, necessitated by the introduction 23

of such hazardous substances on the site of the project. 24

6. Interconnection Studies 25

As in all of SCE’s solicitations, in the 2016 ES RFO, SCE will have an interest in 26

procuring viable projects that have a high probability of coming online in the expected 27

34

timeframe. Historically, a large part of ensuring viability has been requiring some form of 1

advanced interconnection status with an offer (i.e., an actual interconnection agreement, a 2

completed Independent Study Process System Impact Study, Fast Track Response Letter, or 3

Phase I/Phase II Queue Cluster interconnection study). For the 2016 ES RFO, SCE plans to 4

relax these requirements. Although SCE has suggested four transmission level substations for 5

project locations for the ES RFO (Goleta, Laguna Bell, Johanna and Santiago), there is a chance 6

these locations could change based on additional information received prior to actual launch of 7

the solicitation. As such, to require an advanced study just a few months after solicitation launch 8

may not be optimal – to do so may limit the pool of potential bidders to those who, by chance, 9

happen to have projects in the interconnection process at the preferred locations. 10

As the ES RFO will most likely launch in December of 2016, the RFO will require that, 11

at a minimum, projects enter the Queue Cluster Study process in April 2017 and demonstrate that 12

their application is deemed complete by the close of the RFO.44 Should there be any projects 13

that do have some advanced form of interconnection status (as mentioned above), those projects 14

will receive a qualitative viability benefit during the selection process. 15

SCE will host a bidders’ conference to discuss the ES RFO process, including the 16

interconnection process, with participants. Information on how to attend the conference will be 17

made available on the ES RFO website. 18

7. Draft 2016 ES RFO Documents 19

SCE has attached two draft ES RFO documents in Appendix B: 20

Appendix B1 Draft 2016 ES RFO Instructions 21

Appendix B2 Energy Storage RA Only Pro Forma Agreement 22

The Energy Storage RA Only Pro Forma Agreement is a copy of the agreement used for 23

SCE’s 2014 ES RFO, as updated by lessons learned during that RFO and from other RFOs. As 24

44 Annually, there is a one-month window in April for a project to enter the cluster process.

35

SCE learns more about contracting with energy storage projects, SCE will continue to adjust 1

these RFO documents, which will then be finalized before the 2016 ES RFO launch. 2

Additionally, to the extent that SCE is able to refine and develop its approach to contracting for 3

innovative use cases such as distribution deferral, microgrids, or community storage, SCE will 4

modify its RFO documents accordingly and include the modified forms in its 2016 ES RFO 5

launch. 6

B. Valuation and Selection Process for 2016 ES RFO 7

The Storage Decision allows each IOU to use its proprietary valuation and selection 8

process for determining winning offers in its energy storage RFOs.45 The Storage Decision also 9

directs the IOUs to utilize a “consistent evaluation protocol” (“CEP”) for the benchmarking and 10

reporting of storage offers across the IOUs, as discussed in more detail in Section IV.B.2 11

below.46 The IOU’s proprietary process will be used for offer selection, while the CEP will be 12

used only for benchmarking and reporting. Still, these different valuation processes consider 13

many of the same quantitative and qualitative attributes for determining the relative value of 14

different energy storage offers. 15

1. SCE’s Specific Valuation and Selection Process 16

SCE’s ES RFO evaluation, like SCE’s other RFO evaluations, involves five major steps: 17

(a) developing price forecasts and scenarios, (b) determining the revenue streams of benefits and 18

costs, (c) calculating present value and adding up all revenue streams, (d) considering qualitative 19

factors, and (e) selecting contracts. While the net present value (“NPV”) per storage MW is the 20

quantitative metric that determines the relative costs and benefits of the offers, the selection 21

process also carefully considers the qualitative characteristics of the offers. SCE’s process for 22

valuation and selection is detailed below. In the absence of a formal definition, SCE defines the 23

storage MW as the max continuous discharge over a length of time that is appropriate for the 24

45 D.13-10-040, at 63.

46 Id.

36

storage device’s primary application. For example, a 1.0 MW/1.0 MWh storage device being 1

primarily used as a system RA resource would have a different storage MW compared to that 2

same device being primarily used to shave 1 MW of circuit load for one hour. Since the 3

qualifying system RA capacity for a storage device is based off its maximum continuous 4

discharge over four hours as explained in Section IV.B.1.b.1, the storage MW for the system RA 5

use would be 0.25 MW.47 However, if that same 1 MW/1 MWh storage device is being used to 6

shave circuit load by 1 MW for one hour, its storage MW would be 1.0. 7

a) Step 1: Develop Price Forecasts 8

Since SCE is seeking in-front-of-the-meter RA-only offers, SCE will prepare a price 9

forecast for RA over a time horizon that is necessary to evaluate the offers. If it is determined 10

that other forecasts are required due to the inclusion of another use case, SCE will generate that 11

price forecast over the appropriate time horizon. 12

b) Step 2: Determine Cost Revenue Cash Flows 13

The quantitative components included in determining the value of RA-only offers include 14

both benefits and costs. The benefits include RA value. The costs include fixed contract costs, 15

debt equivalents, and transmission and distribution upgrade costs, among others. 16

(1) RA Benefit 17

Energy storage placed on the grid can have RA benefits provided the storage device 18

meets the Commission’s and the CAISO’s RA eligibility requirements and the device has been 19

found fully deliverable by the CAISO. The RA quantity is a monthly value prescribed in the 20

offeror’s contract. The resulting value is calculated by multiplying the quantity of qualifying RA 21

capacity by the forecasted capacity price. Since SCE is only seeking RA, the qualifying RA 22

capacity of energy storage resources shall be calculated in a similar manner as dispatchable 23

47 1 MWh of energy continuously dispatched over four consecutive hours results in 0.25 MW per hour.

37

resources. Energy storage systems that wish to qualify for RA must be able to dispatch their RA 1

capacity for at least four uninterrupted hours as prescribed in D.14-06-050.48 2

(2) Contract Payment Cost 3

The contract payment cost consists of a fixed payment stream, such as monthly capacity 4

payments. Fixed payment streams are calculated directly according to contractual obligations. 5

(3) Debt Equivalents Cost 6

Debt equivalents is the term used by credit rating agencies to describe the fixed financial 7

obligation resulting from long-term purchased power contracts. Pursuant to D.04-12-048, the 8

Commission permits IOUs to recognize in their valuation process the costs associated with the 9

effect debt equivalents have on the IOUs’ credit quality and cost of borrowing. Additionally, 10

D.08-11-008 authorized the IOUs to continue recognizing the balance sheet impact of debt 11

equivalents when valuing power purchase agreements. Accordingly, SCE considers debt 12

equivalents in its valuation process. 13

(4) Transmission and Distribution Upgrade Costs 14

Some projects do not have existing interconnections to the electric system. Others may 15

have existing interconnections that are insufficient for a proposed expansion of existing facilities. 16

For these projects, SCE includes the transmission and distribution system upgrade costs in its 17

valuation. Interconnection studies, discussed further in Section IV.A.6, will provide estimates 18

for the system upgrade costs. In the absence of an interconnection study, bidders can provide an 19

interconnection upgrade cost cap. 20

(5) Credit and Collateral Adder Cost 21

Offerors may seek to negotiate credit and collateral requirements that are different from 22

SCE’s pro forma requirements. In doing so, there is no longer cost neutrality, or a “level playing 23

48 D.14-06-050, Appendix B, at B-9.

38

field,” in terms of default exposure amounts across the offers. In these cases, SCE will calculate 1

a cost to the offer based on the incremental exposure created by the negotiated terms. 2

(6) Innovative Use Cases Benefits and Costs 3

If SCE solicits innovative use cases, SCE will determine the appropriate benefits and 4

costs for the use cases. SCE will also will determine how best to estimate the benefits and costs. 5

Benefits and costs prescribed to an innovative use case may include energy benefits, energy 6

costs, ancillary service benefits and distribution deferral benefits. SCE will only include cash 7

flows which can be reasonably estimated. 8

Any modifications made to the valuation methodology will be shared and vetted with the 9

IE and the PRG, consistent with other solicitations. 10

c) Step 3: Calculate Present Value and Add Up All Revenue Streams 11

All benefit and cost streams are netted and discounted by an annual discount factor to 12

yield a single NPV. SCE uses a standard 10% discount rate for its NPV calculations. 13

d) Step 4: Consider Qualitative Factors 14

In addition to the benefits and costs quantified during the valuation process, SCE assesses 15

non-quantifiable characteristics of the offers. SCE will consider qualitative characteristics such 16

as project viability and project diversity leading to market transformation in determining its final 17

selection of offers. 18

(1) Project Viability 19

AB 2514 requires that energy storage projects procured under the Commission’s 20

procurement targets are viable.49 SCE also prefers that its contracted projects are viable in order 21

to prevent unnecessary contract administration costs. Accordingly, project viability is an 22

important consideration in the valuation and selection of offers. In determining winning offers, 23

SCE will consider measures of viability including technological feasibility, developer 24

49 Cal. Pub. Util. Code § 2836(a)(1).

39

experience, and financing and interconnection progress. While SCE sets some minimum 1

viability requirements, SCE encourages developers to go beyond the minimums to demonstrate 2

that their projects will be successful. 3

(2) Project Diversity Leading to Market Transformation 4

As discussed above, SCE supports the Commission’s goal of energy storage market 5

transformation. To the extent possible, SCE will procure a mix of energy storage technologies 6

and/or use cases to help the system and promote the Commission’s goal. 7

(3) Other 8

Other benefits and costs provided by energy storage devices and other resources are not 9

accounted for in SCE’s quantitative valuation. For instance, SCE currently does not have a need 10

for black start services. Accordingly, SCE will not associate a quantitative benefit for that 11

capability. However, if two offers are otherwise quantitatively equal, the provision of back-up 12

black start may be a qualitative factor that makes one offer more favorable than the other. Other 13

potential qualitative benefits and costs will be similarly considered by SCE in determining the 14

final selection of offers. 15

e) Step 5: Select Contracts 16

SCE will list all offers in order of quantitative merit based on a NPV per storage MW 17

metric. Then, given the quantity of energy storage needed to meet SCE’s energy storage 18

procurement targets, SCE will review the highest value projects that fill those targets, as well as 19

projects that are on the margin. If, in SCE’s judgment, the qualitative comparisons discussed in 20

Section IV.B.1.d favor an alternative contract that is not necessarily valued highest by the 21

quantitative metric, then SCE may choose the alternative contract over the marginal alternatives. 22

As indicated in the RFO Instructions in Appendix B,50 all selections will be reviewed with an IE 23

and SCE’s PRG. 24

50 See Appendix B-1, Article 4.

40

In the event that SCE receives an overwhelming number of offers in relation to the target, 1

SCE may conduct a prescreen process to narrow the selection pool to a more manageable level. 2

The prescreen process will evaluate only quantitative aspects of the offers. SCE will create a 3

prescreen ranking based on the offers’ quantitative ranking and will choose the best offers from 4

the ranking, ensuring a manageable workload while maintaining a robust selection pool. 5

2. Joint IOU Consistent Evaluation Protocol 6

The Storage Decision directed the utilities to create a CEP to use for benchmarking and 7

reporting purposes across the IOUs.51 In a collaborative effort with Energy Division, the IOUs 8

developed the CEP. Since the Track 1 decision in R.15-03-011 declined to make any change to 9

the CEP, attached in Appendix C is the CEP which was refined during the last procurement cycle 10

and used to report on shortlisted energy storage offers from SCE’s 2013 LCR RFO and 2014 ES 11

RFO. 12

As stated in the Storage Decision, the CEP will not be used for the IOUs’ selection of 13

energy storage contracts; instead, the CEP will be used as a tool for the Commission to 14

understand and compare offers across different IOUs and end uses.5215

51 D.13-10-040, at 63.

52 Id.

41

V. 1

PLANNED ENERGY STORAGE EXPECTED TO BE ELIGIBLE IN FUTURE 2

PROCUREMENT CYCLES 3

A. Other Procurement Opportunities 4

1. Renewables Portfolio Standard (“RPS”) RFP 5

In SCE’s 2015 RPS solicitation, which launched February 1, 2016, SCE has stated that it 6

will accept combined renewable and energy storage projects. If SCE acquires any renewable 7

projects paired with energy storage through the RPS RFO, and the Commission approves those 8

projects, the projects would count towards the energy storage procurement targets. 9

2. PRP 2 RFO 10

The PRP is a multiyear study designed to determine whether clean energy resources – 11

including solar, wind, energy storage, energy efficiency and energy conservation – can be 12

acquired and deployed to offset the increasing customer demand for electricity in central Orange 13

County. The need to serve growing demand for electricity by locally sited preferred resources is 14

due in part to the closure of SONGS and the impending retirement of nearby ocean-cooled power 15

plants. Based on the pilot’s results, the need for new gas-powered power plants in the region 16

may be deferred or eliminated. 17

As of the date of the filing of this application, the PRP 2 RFO is currently ongoing with 18

contracts expected to be executed later in 2016, including potentially distribution-connected and 19

customer-side energy storage. If SCE acquires energy storage projects through the PRP 2 RFO, 20

and the Commission approves those projects, the projects would count towards SCE’s energy 21

storage procurement targets. 22

3. Bilateral Contracts 23

The Commission has indicated that it prefers RFOs to bilateral contracts as a means to 24

procure energy storage systems.53 SCE also prefers to use competitive solicitations over bilateral 25 53 D.13-10-040, at 56.

42

contracts whenever possible. However, in certain instances (described below), bilateral 1

contracting may be beneficial. SCE proposes to seek approval of individual bilateral contracts 2

through a Tier 3 Advice Letter, consistent with what is allowed for RPS contracts. Any bilateral 3

contracts approved by the Commission would count towards the energy storage procurement 4

targets. 5

a) Contracts with Parties Precluded from RFO Participation 6

Some contracts may not be able to come to SCE through an RFO. Federal government 7

agencies, for example, may not be able to participate in SCE’s solicitations for a variety of 8

reasons including indemnification issues, terms of agreements, and governing law. According to 9

the Federal Acquisition Regulation, “agencies shall acquire utility services by a bilateral written 10

contract. . . .”54 If agencies such as the Department of Defense seek energy storage contracts, 11

then bilateral contracts may be the most appropriate mechanism. It is possible that projects that 12

cannot come through an RFO will present unique and beneficial opportunities for energy storage 13

projects. Accordingly, SCE maintains the flexibility to use bilateral contracts should these 14

unusual circumstances arise. 15

b) Insufficient Market Response 16

If SCE does not find enough economically viable qualified bids or if SCE observes a 17

need for market power mitigation, SCE may consider signing bilateral contracts. 18

c) Unique and/or Fleeting Opportunities 19

On occasion, SCE encounters situations where a solicitation cannot realistically be relied 20

upon. An example of this may be an energy storage project for which certain permits or 21

applications are set to expire, or energy storage which is an addition to an existing facility that 22

has its own time constraints. In these cases, SCE may consider signing bilateral contracts. 23

54 Federal Acquisition Regulation, Part 41.201(b).

43

B. Utility-Owned Storage for Distribution Deferral 1

In the Storage Decision, the Commission acknowledged that, in some instances involving 2

distribution-connected storage, utility-owned storage may be allowable for reliability purposes 3

outside of a competitive solicitation.55 SCE has been evaluating the capabilities of energy 4

storage systems for such reliability purposes, including a potential use-case application that 5

results in deferring the need to build traditional infrastructure upgrades to the distribution system 6

while also potentially providing reliability services in the CAISO market. Efforts to date have 7

focused mostly on deploying energy storage as an integrated feature of SCE’s distribution 8

system, connected to a distribution circuit. The primary function of the energy storage device is 9

to maintain reliability of SCE’s distribution system in lieu of conventional infrastructure 10

upgrades. A secondary benefit is for the storage device to participate in the CAISO market, but 11

only when it is not needed by the distribution system for reliability reasons. 12

SCE has recently evaluated such energy storage deployment opportunities through its 13

annual Distribution Substation Planning process. For the specific use case referenced above, 14

SCE was able to identify five projects that are worth pursuing for distribution reliability 15

applications. SCE entered these five projects into the grid interconnection and connection 16

process in December 2015. Each project will be connected to a distribution circuit that could 17

operationally benefit from energy storage and if deployed, will result in the deferral of a 18

conventional infrastructure upgrade. These projects are at various stages of development and 19

will progress through deployment activities toward their identified need dates. SCE will include 20

the energy storage projects described above in its 2018 GRC filing, including any projects which 21

are expected to close to capital in 2016-2018. SCE will seek cost recovery of these projects in its 22

2018 GRC filing. If these projects come to fruition, SCE will seek the Commission’s approval to 23

55 D.13-10-040, at 56.

44

count them towards the storage procurement targets, consistent with the Commission’s directive 1

in the Storage Decision. 2

C. DESI 2 Pilot 3

DESI 2 is a planned distribution-connected BESS, similar to DESI 156 in power and 4

energy ratings. DESI 2 will be a pilot production (non-research and development) BESS. The 5

system was approved in the 2015 GRC.57 6

DESI 2 will incorporate advanced controls and lessons learned from DESI 1, as well as 7

be remotely controlled and monitored using SCE’s upcoming Grid Modernization Architecture 8

(“GMA”) network infrastructure pilot. The GMA will provide a unified Supervisory Control and 9

Data Acquisition system for grid operations and DERs, including energy storage. Currently, 10

SCE is considering several locations for the installation of DESI 2. 11

D. Distributed Optimized Storage Demonstration 12

The Distributed Optimized Storage (“DOS”) program scope includes the deployment of 13

two BESS that would be sited in a selected deployment area. Each system will be rated at 14

250 kW/250 kWh. The DOS program would further SCE’s understanding of the additional 15

value to local distribution circuits, optimization of multiple storage devices, and standards for 16

deploying BESS. Data and program information will be collected to perform a full analysis of 17

the economic, technical, and regulatory aspects for such installations and compare them to the 18

various value streams that such a system may provide. 19

The BESS for DOS will be purchased, and operated by SCE as part of the CEC Electric 20

Program Investment Charge program. Land acquisition, purchase of the BESS, site construction 21

and subsequent commissioning of the DOS program is expected to be completed by the end of 22

2016. 23

56 Described in Section III.C.1

57 D.15-11-021, at 47-48.

45

VI. 1

SAFETY CONSIDERATIONS 2

Energy storage systems are susceptible to “thermal runaway,” which is a potential safety 3

risk. Batteries are prone to being overcharged and over-discharged, potentially causing a thermal 4

runaway, which is a rapid uncontrolled increase in temperature that cannot be halted, even if the 5

system is stopped or disconnected. Thermal runaways caused by energy storage devices could 6

harm equipment connecting the device to the grid. This safety risk can be prevented by 7

implementing voltage safety monitoring and controls and fault detection mechanisms at both the 8

battery cell level and system level. SCE has implemented such safety monitoring and controls as 9

part of its utility energy storage deployments, such as the Irvine Smart Grid Demonstration and 10

the Tehachapi Storage Project. 11

With respect to utility procurement of third party energy storage resources, responsibility 12

of safe operations falls on the owner/operator of the facility. However, SCE includes provisions 13

in its contracts to require third-party sellers to engage in safe practices and comply with all 14

applicable laws, permit requirements and applicable California utility industry standards.58 15

SCE’s responsibility for the safety of third party energy storage systems is at the point of 16

interconnection to its distribution grid. 17

All energy storage systems (utility-owned and third party-owned) must adhere to Rule 21 18

or the Wholesale Distribution Access Tariff (“WDAT”), in order to interconnect. As mentioned 19

in SCE’s Distribution Resources Plan,59 the majority of safety standards and certifications60 have 20

been incorporated into Rule 21 and WDAT. Importantly, IEEE 1547, which is a suite of 21

58 See Section IV.A.5 and SCE’s Energy Storage RFO pro forma, Section 8.01(a) for additional details.

59 SCE Distribution Resources Plan. See A.15-07-002, Application of Southern California Edison Company for Approval of its Distribution Resources Plan, July 1, 2015, Attachment at 156.

60 Institute of Electrical and Electronics Engineers (“IEEE”), Underwriters Laboratories, and National Electric Code (“NEC”).

46

standards for DERs61 has been harmonized with Rule 21 and incorporated into the 1

WDAT. Whether interconnecting under Rule 21 or WDAT, both tariffs provide SCE the ability 2

to review energy storage equipment prior to installation, during pre- and post-commercial 3

operation testing. Further, both Rule 21 and WDAT require technical review by SCE engineers 4

and an Electrical Inspection Release from the appropriate local authority having jurisdiction to 5

verify that the work on the customer’s side of the meter meets requirements of the NEC and all 6

applicable local codes and ordinances. 7

Pursuant to D.16-01-032, SCE will be participating in a working group on energy storage 8

safety inspections.62 The purpose of the working group is to develop and refine a Commission 9

energy storage safety inspection protocol, defined as high-level guidelines, for Commission 10

Safety and Enforcement Division inspectors to use based on expertise from the IOUs, codes and 11

standards development organizations, energy storage developers, and other interested parties. 12

61 Defines the functional technical requirements for performance, operation, testing, safety and

maintenance of all types of DERs.

62 D.16-01-032, at 55.

47

VII. 1

ENERGY STORAGE COST RECOVERY 2

Depending on the ownership models and regulatory function for different energy storage 3

projects, SCE proposes to recover energy storage costs consistent with the framework adopted in 4

D.14-10-045.63 SCE proposes separate mechanisms for cost recovery of: (a) IE costs; (b) third-5

party-owned market services and reliability storage costs; (c) Commission program evaluation 6

costs; (d) customer-side storage program costs; and (e) departed customer costs. 7

A. Recovery of Independent Evaluator Costs 8

Pursuant to the Storage Decision, each IOU is to employ an IE to assess the 9

competitiveness and integrity of its energy storage solicitation and to prepare a post-solicitation 10

report.64 SCE will submit the IE’s report as part of its filing requesting approval of contracts 11

resulting from the solicitations. SCE will request to recover its IE costs associated with each 12

energy storage solicitation through its Energy Resource Recovery Account (“ERRA”) balancing 13

account consistent with D.14-10-045. 14

B. Third-Party Owned Storage Cost Recovery 15

Energy Storage procurement targets may be met by energy storage systems owned by a 16

load-serving entity, publicly-owned utility, customer-owned storage, third-party owned storage, 17

or joint ownership by two or more such entities. SCE proposes to record all third-party owned 18

generation/market-related storage costs in the ERRA balancing account, to be recovered in 19

generation rates from all bundled customers (or the CAM if appropriate). SCE will request cost 20

recovery through its next ERRA Forecast proceeding. 21

63 D.14-10-045, at 26-28, 40.

64 D.13-10-040, Appendix A, at 10-11 (“The IE report shall include, at a minimum, an evaluation of the fairness of the IOUs solicitation and bid selection process, an assessment of project-specific negotiations, an analysis of the RFO bids, bid evaluation process (including valuation tools), an analysis of the overall market, and whether the contracts merit Commission approval”).

48

Pursuant to the Commission-adopted process for reviewing all costs recorded in the 1

ERRA, third-party owned energy storage generation/market-related costs recorded in the ERRA 2

will be reviewed by the Commission in SCE’s annual ERRA review applications.65 This review 3

ensures that all entries to the account are stated correctly and are consistent with Commission 4

decisions. Commission review procedures should be limited to ensuring that all recorded costs 5

are associated with energy storage procurement activities as defined and adopted by the 6

Commission in this proceeding. 7

C. Customer-Side Programs Cost Recovery 8

Costs for SCE’s current customer-side incentive programs are recovered through 9

program-specific balancing accounts, for example the Self-Generation Program Incremental Cost 10

Memorandum Account (“SGPIC”) and the Demand Response Programs Balancing Account 11

(“DRPBA”). 12

D. Departed Customer (Stranded) Cost Recovery 13

SCE proposes that the Power Charge Indifference Adjustment (“PCIA”) mechanism that 14

is ultimately adopted by the Commission in A.15-12-003, SCE’s Application for Approval of 15

Contracts Resulting from its 2014 Energy Storage RFO, be used to quantify and recover any 16

above-market stranded costs of generation-function energy storage resources procured in the 17

2016 ES RFO from customers who subsequently depart IOU bundled customer service for other 18

options (e.g., Direct Access ESPs or Community Choice Aggregation).66 SCE continues to 19

request that the Commission extend the application of the PCIA for the full contract term of any 20

resource with a contract term longer than ten years.67 Any distribution or transmission-related 21

energy storage costs should continue to be shared by direct access customers through established 22

cost sharing mechanisms. 23

65 In addition, the IE and Program Evaluation costs would also be reviewed.

66 D.14-10-045, at 42

67 See, e.g., Application 15-12-003, Exhibit SCE-01 at 43.

Appendix A

Table with Details on 2016 Eligible Storage Resources

Appendix A. - SCE's 2016 Eligible Storage Projects

Project name Eligible biennial procurement cycle

Online date (expected or actual)

Project type Point of interconnection

Capacity (MW) Energy content (MWh)

Location (city)

Location (zip code)

Procurment proceeding

Procurement mechanism

Status of project

Expected operational life (years)

Primary application of project

Secondary application of project

Technology manufacturer

Project owner

Project operator

Operational requirements met (grid optimization, renewable integration, or GHG reduction)

Self-Generation Incentive Program (SGIP) (installed between 1/1/2016 - 12/31/2017)

2016 Between 1/1/2010 and 1/1/2018

Various Customer 56.10 112.20 various various D.11-12-030 SGIP application

various 10 years peak demand reduction

back-up power various various various grid optimization, GHG reduction

Permanent Load Shift (PLS) Program (installed between 1/1/2016-12/31/2017)

2016 Between 1/1/2016 and 1/1/2018

Various Customer 4.00 Information not collected from customers

various various D.12-04-045 PLS application various 20 years peak demand reduction

permanent load shift various various various grid optimization, GHG reduction

475127AES ESAlamitos, LLC

2016 1/1/2021 Lithium-ion battery

Tranmission 100.00 400.00 Long Beach, CA

90803 D.13-02-015 LCR RFO Under development

20 years Market function NA various AES ES Alamitos, LLC

AES ES Alamitos, LLC

grid optimization, renewable intergration, GHG reduction

431049Ice Bear SPV#1, LLC

2016 7/1/2016 Permanent Load Shift

Customer 1.92 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

20 years Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431052Ice Bear SPV#1, LLC

2016 10/1/2016 Permanent Load Shift

Customer 1.92 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

19.8 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431055 Ice Bear SPV#1, LLC

2016 1/1/2017 Permanent Load Shift

Customer 1.92 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

19.5 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431058 Ice Bear SPV#1, LLC

2016 4/1/2017 Permanent Load Shift

Customer 1.92 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

19.2 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431061Ice Bear SPV#1, LLC

2016 7/1/2017 Permanent Load Shift

Customer 1.92 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

19 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431064Ice Bear SPV#1, LLC

2016 10/1/2017 Permanent Load Shift

Customer 1.92 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

18.8 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431067 Ice Bear SPV#1, LLC

2016 1/1/2018 Permanent Load Shift

Customer 1.92 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

18.5 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431070Ice Bear SPV#1, LLC

2016 4/1/2018 Permanent Load Shift

Customer 1.92 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

18.2 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431145Ice Bear SPV#1, LLC

2016 1/1/2018 Permanent Load Shift

Customer 1.28 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

20 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

A-1

Appendix A. - SCE's 2016 Eligible Storage Projects

Project name Eligible biennial procurement cycle

Online date (expected or actual)

Project type Point of interconnection

Capacity (MW) Energy content (MWh)

Location (city)

Location (zip code)

Procurment proceeding

Procurement mechanism

Status of project

Expected operational life (years)

Primary application of project

Secondary application of project

Technology manufacturer

Project owner

Project operator

Operational requirements met (grid optimization, renewable integration, or GHG reduction)

431148Ice Bear SPV#1, LLC

2016 4/1/2018 Permanent Load Shift

Customer 1.28 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

19.8 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431151Ice Bear SPV#1, LLC

2016 7/1/2018 Permanent Load Shift

Customer 1.28 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

19.5 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431154Ice Bear SPV#1, LLC

2016 10/1/2018 Permanent Load Shift

Customer 1.28 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

19.2 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431157Ice Bear SPV#1, LLC

2016 1/1/2019 Permanent Load Shift

Customer 1.28 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

19 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431160Ice Bear SPV#1, LLC

2016 4/1/2019 Permanent Load Shift

Customer 1.28 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

18.8 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431163 Ice Bear SPV#1, LLC

2016 7/1/2019 Permanent Load Shift

Customer 1.28 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

18.5 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

431166Ice Bear SPV#1, LLC

2016 10/1/2019 Permanent Load Shift

Customer 1.28 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

18.2 Market function NA various Ice Bear SPV#1, LLC

Ice Bear SPV#1, LLC

grid optimization, renewable intergration, GHG reduction

467009Hybrid‐ElectricBuildingTechnologiesIrvine 1, LLC

2016 1/1/2017 BTM Battery Energy Storage

Customer 5.00 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

10.5 Market function NA various Hybrid‐ElectricBuildingTechnologiesIrvine 1, LLC

Hybrid‐ElectricBuildingTechnologiesIrvine 1, LLC

grid optimization, renewable intergration, GHG reduction

467022 Hybrid‐ElectricBuildingTechnologiesWest LosAngeles 1, LLC

2016 1/1/2018 BTM Battery Energy Storage

Customer 25.00 Various Various - connected to Western LA Basin substations

various D.13-02-015 LCR RFO Under development

25 Market function NA various Hybrid‐ElectricBuildingTechnologiesWest LosAngeles 1, LLC

Hybrid‐ElectricBuildingTechnologiesWest LosAngeles 1, LLC

grid optimization, renewable intergration, GHG reduction

467010Hybrid‐ElectricBuildingTechnologiesIrvine 2, LLC

2016 1/1/2017 BTM Battery Energy Storage

Customer 5.00 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

10.5 Market function NA various Hybrid‐ElectricBuildingTechnologiesIrvine 2, LLC

Hybrid‐ElectricBuildingTechnologiesIrvine 2, LLC

grid optimization, renewable intergration, GHG reduction

A-2

Appendix A. - SCE's 2016 Eligible Storage Projects

Project name Eligible biennial procurement cycle

Online date (expected or actual)

Project type Point of interconnection

Capacity (MW) Energy content (MWh)

Location (city)

Location (zip code)

Procurment proceeding

Procurement mechanism

Status of project

Expected operational life (years)

Primary application of project

Secondary application of project

Technology manufacturer

Project owner

Project operator

Operational requirements met (grid optimization, renewable integration, or GHG reduction)

467025Hybrid‐ElectricBuildingTechnologiesWest LosAngeles 2, LLC

2016 1/1/2018 BTM Battery Energy Storage

Customer 15.00 Various Various - connected to Western LA Basin substations

various D.13-02-015 LCR RFO Under development

10 Market function NA various Hybrid‐ElectricBuildingTechnologiesWest LosAngeles 2, LLC

Hybrid‐ElectricBuildingTechnologiesWest LosAngeles 2, LLC

grid optimization, renewable intergration, GHG reduction

402039Stem EnergySouthernCalifornia, LLC

2016 10/1/2016 BTM Battery Energy Storage

Customer 7.00 Various Various - connected to Johanna/Santiago substations

various D.13-02-015 LCR RFO Under development

10 Market function NA various Stem EnergySouthernCalifornia, LLC

Stem EnergySouthernCalifornia, LLC

grid optimization, renewable intergration, GHG reduction

402040Stem EnergySouthernCalifornia, LLC

2016 1/1/2018 BTM Battery Energy Storage

Customer 78.00 Various Various - connected to Western LA Basin substations

various D.13-02-015 LCR RFO Under development

8.8 Market function NA various Stem EnergySouthernCalifornia, LLC

Stem EnergySouthernCalifornia, LLC

grid optimization, renewable intergration, GHG reduction

Stanton Energy Reliability Center

2016 6/1/2020 Lithium-ion battery

Distribution 1.30 5.20 Stanton, CA 90680 D.14-10-045 2014 Energy Storage RFO

Under development

10 Market function NA various Stanton Energy Reliability Cemter, LLC

Stanton Energy Reliability Cemter, LLC

grid optimization, renewable intergration, GHG reduction

Santa Paula Energy Storage

2016 1/1/2020 Zinc hybrid cathode

Distribution 5.00 20.00 Santa Paula, CA

93060 D.14-10-045 2014 Energy Storage RFO

Under development

15 Market function NA various Western Grid Development, LLC

Western Grid Development, LLC

grid optimization, renewable intergration, GHG reduction

Santa Paula Energy Storage

2016 1/1/2020 Zinc hybrid cathode

Distribution 10.00 40.00 Santa Paula, CA

93060 D.14-10-045 2014 Energy Storage RFO

Under development

15 Market function NA various Western Grid Development, LLC

Western Grid Development, LLC

grid optimization, renewable intergration, GHG reduction

Distribution Energy Storage Integration ("DESI") 1

2016 7/1/2015 Lithium-ion battery

Distribution 2.40 3.90 Orange 92868 2012 General Rate Case (D.12-11-051)

RFI/RFP Operating expected life of 15 years

distribution system support

TBD NECES SCE SCE grid optimization

A-3

Appendix B

RFO Documents

2016 ENERGY STORAGE RFO

REQUEST FOR OFFERS

for

Energy Storage

RFO Participant Instructions

December 1, 2016

B-1

2016 Energy Storage RFO Instructions

Table of Contents i

TABLE OF CONTENTS

ARTICLE ONE.  GENERAL INFORMATION ............................................ 1 

1.01  Introduction ..................................................................................................... 1 1.02  Product Being Solicited ................................................................................... 2 1.03  Basic Terms and Conditions ............................................................................ 2 1.04  Qualification for Participation ......................................................................... 3 

ARTICLE TWO.  PROJECT LOCATION AND PRODUCT PRICE ......... 5 

2.01  ESR Facility Location and Interconnection ..................................................... 5 2.02  Existing ESR Facilities .................................................................................... 5 2.03  Product Price ................................................................................................. 5 

ARTICLE THREE.  ENERGY STORAGE RFO SCHEDULE AND OFFER SUBMITTAL PROCESS ................................................... 6 

3.01  RFO Schedule .................................................................................................. 6 3.02  RFO Process ................................................................................................... 7 3.03  The Pro Forma Agreement .............................................................................. 8 

ARTICLE FOUR.  ROLE OF INDEPENDENT EVALUATOR .................... 9 

4.01  Independent Evaluator (“IE”) .......................................................................... 9 

ARTICLE FIVE.  SHORT-LISTING............................................................. 10 

5.01  Minimum Requirements ................................................................................ 10 5.02  Notification of Selection for the SCE Short-List ........................................... 10 

ARTICLE SIX.  EVALUATION OF OFFERS .......................................... 11 

6.01  Proposal Evaluation Overview ...................................................................... 11 

ARTICLE SEVEN.  REGULATORY APPROVAL ......................................... 15 

7.01  CPUC and FERC Approvals .......................................................................... 15 7.02  Support for Regulatory Purposes ................................................................... 15 

ARTICLE EIGHT.  CONFIDENTIALITY, CONDUCT, AND SAFETY ..... 16 

8.01  Confidentiality .............................................................................................. 16 8.02  Conduct ......................................................................................................... 16 8.03  Safety ............................................................................................................. 16 

ARTICLE NINE.  WAIVERS AND RESERVATION OF RIGHTS .......... 17 

9.01  Termination of Energy Storage RFO ............................................................. 17 9.02  Release of SCE for any Delays ...................................................................... 17 9.03  Waived Claims .............................................................................................. 17 

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2016 Energy Storage RFO Instructions

Table of Contents ii

ARTICLE TEN.  COMMUNICATIONS ..................................................... 20 

ARTICLE ELEVEN.  SCE RIGHTS AND DOCUMENT CONFLICTS ......... 21 

11.01  SCE’s Rights ................................................................................................. 21 11.02  Document Conflicts ....................................................................................... 21 

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2016 Energy Storage RFO Instructions

List of Associated Documents iii

LIST OF ASSOCIATED DOCUMENTS

A. PRO FORMA ENERGY STORAGE RESOURCE ADEQUACY PURCHASE AGREEMENT

The above document can be located and downloaded from:

https://scees.accionpower.com

B-4

2016 Energy Storage RFO Instructions

Article ONE General Information Page 1

ARTICLE ONE. GENERAL INFORMATION

1.01 Introduction

[Note – for purposes of the 2016 Energy Storage Procurement Plan, these proposed RFO Instructions have been written to account for that portion of the solicitation that will deal with Resource Adequacy procurement at specific locations. Should SCE also procure energy storage for innovative use cases to support market transformation, these RFO Instructions will be modified.]

Southern California Edison (“SCE”) is issuing its 2016 Energy Storage RFO (the “RFO” or “Energy Storage RFO”) to solicit offers (“Offer” or “Offers”) from bidders (“Seller” or “Sellers”) to supply Product (as defined in the Pro Forma Agreement) from energy storage resources (“ESR” or “ESR Facility” or “ESR Facilities”) with the ultimate objective of executing purchase agreements (“Agreement” or “Agreements”) substantially the same as SCE’s Pro Forma Energy Storage Resource Adequacy Purchase Agreement (the “Pro Forma Agreement”). These Energy Storage RFO Instructions (“RFO Instructions”) provide the following information on the Energy Storage RFO:

(a) Describe the eligibility requirements for the Product for which SCE is soliciting;

(b) Set forth the requirements of each Offer submission, including waivers, representations, warranties and covenants deemed made for all purposes as part of the Offer submission;

(c) Describe the methods that SCE will use to evaluate each Offer;

(d) Document the rights that SCE reserves for itself with regard to the Energy Storage RFO; and

(e) Set forth a time frame for the Energy Storage RFO.

These RFO Instructions and all of its Associated Documents will be available on the RFO Website, which may be found here:

https://scees.accionpower.com 1

Capitalized terms used in the RFO Instructions, but not otherwise defined herein, have the meanings set forth in the Pro Forma Agreement.

1 All references to the RFO Website herein refer to this website location.

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2016 Energy Storage RFO Instructions

Article ONE General Information Page 2

1.02 Product Being Solicited

SCE is seeking to procure product from ESR Facilities (“Product”) meeting the California Public Utilities Commission (“CPUC”) definition of Energy Storage as adopted in D.13-10-040. The Product shall be as defined in the Final Agreement2 and will include all Resource Adequacy Benefits associated with, or attributable to the output of the ESR Facility throughout the Delivery Period of the Final Agreement whether such credits or other attributes exist at the time a Final Agreement is executed or are created later during the Delivery Period of the Final Agreement.

1.03 Basic Terms and Conditions

(a) SCE is soliciting energy storage Offers from ESR Facilities that are fully-deliverable whereby Seller shall convey to SCE all Resource Adequacy (“RA”) Benefits that are attributable to the ESR Facility as detailed in the Pro Forma Agreement while retaining all other operational benefits that are not associated with Resource Adequacy.

(b) Eligible ESR Facilities must be fully-deliverable transmission and distribution connected and located within the California Independent System Operator (“CAISO”)-control area. ESR Facilities providing incremental RA that are connected on the generation side of the meter must have an existing power purchase agreement with SCE and will be considered on a case-by-case basis.

(c) Sellers may submit multiple projects if each has been, or is being, studied for interconnection independently. SCE will not allow mutually-inclusive Offers (i.e., SCE will not accept “package” deals or any similar requirement by Seller that an individual Offer may only be selected by SCE if other specific Offers from Seller are also selected).

(d) Up to twenty (20) multiple Offers for the same ESR are eligible (e.g., flat vs. escalating pricing for the same ESR Facility; 10-year vs. 15-year term for the same ESR Facility; etc.). Each Offer will be mutually exclusive from other multiple Offers for the same ESR.

(e) SCE encourages Diverse Business Enterprises (“DBE”)3to participate in the Energy Storage RFO. To be considered as a DBE, Seller must provide a copy of a valid certificate from the CPUC that verifies DBE status of the firm and meet certain requirements. Information on SCE’s supplier diversity program can be found on the SCE website at this location:

www.sce.com/SD

2 Any Agreement executed by SCE and a Seller as a result of the Energy Storage RFO is a “Final Agreement.” 3 Diverse Business Enterprises means Women, Minority, Disabled Veteran (WMDV) and Lesbian, Gay, Bisexual and Transgender (LGBT) Business Enterprises as defined in CPUC General Order 156.

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2016 Energy Storage RFO Instructions

Article ONE General Information Page 3

(f) SCE will only consider Offers that are substantially complete and include all of the applicable information, representations, warranties, and covenants as set forth in these RFO Instructions.

(g) SCE prefers Sellers that are special purpose entities organized for the sole purpose of owning and operating the project and which remain special purpose entities for the Term of the Final Agreement. Notwithstanding the foregoing, SCE will consider the ownership structure of each Seller on an individual basis, whether the Seller is organized as a special purpose entity or otherwise, and reserves the right in its sole discretion to (i) require any Seller to become a special purpose entity as a condition of executing a Final Agreement; and (ii) accept an Offer from any Seller who is not organized as a special purpose entity.

(h) SCE affiliates are permitted to participate in this Energy Storage RFO. Seller must disclose whether or not it is an SCE affiliate.

1.04 Eligibility Criteria for Offers

(a) SCE will consider Offers to purchase Product from ESR Facilities with forecasted initial delivery dates to SCE on [TBD] or later. All resources must have a proposed commercial operation date (“COD”) of December 1, 2024 or earlier in order to be eligible to participate in the Energy Storage RFO.

(b) SCE will only consider Offers from Sellers for ESR Facilities located in front of the meter and interconnected within the CAISO control area. All Offers must be fully deliverable and qualify for RA Benefits to be eligible for this Energy Storage RFO.

(c) SCE is only soliciting Product from ESR Facilities which, by the Offer deadline, either (A) possess (1) a completed Phase I Interconnection Study, or (2) a signed interconnection agreement, or (3) an equivalent or better interconnection study, agreement, process, or exemption, or (B) have entered into the Queue Cluster [TBD] interconnection process and provided SCE with written confirmation of the eligible Queue Cluster [TBD] interconnection request SCE no later than [TBD]. Full deliverability interconnection is a requirement of this RFO. An ESR Facility with only a Fast Track response letter showing that the Facility has passed WDAT Fast Track Process screens, or only a System Impact Study showing that the ESR Facility has passed Independent Study screens is not eligible for participation. Further, the interconnection arrangements must support the ESR Facility’s forecasted COD. Should Seller’s interconnection arrangement indicate an interconnection date later than the ESR Facility’s forecasted COD, the Offer will not be given further consideration.

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2016 Energy Storage RFO Instructions

Article ONE General Information Page 4

(d) Sellers may propose any contract term but SCE has a preference for Offers that do not exceed a ten (10) year term. If Seller offers a contract term of more than twenty (20) years, Seller must also provide an Offer with a twenty (20) year contract term. All proposed contract terms must start on the first day of a month and end on the last day of a month.

(e) Distribution- and transmission-connected projects with a Contract Capacity of 1 MW and greater are eligible to participate in this Energy Storage RFO.

(f) Only ESR Facilities that have a discharge duration of four hours or more and full deliverability interconnection, which is the current requirement for RA, are eligible and will be credited with RA value in the valuation.

(g) Seller’s Offer must demonstrate Site Control over the entire contract term by the Offer deadline or the Offer will not be given further consideration.

(h) Any existing ESR must have a COD after January 1, 2010 and all ESRs must meet the definition of Energy Storage as defined in D.13-10-040.

(i) The ESR Facility must be based on commercialized technology (e.g., neither experimental, research, demonstration, nor development).

*** End of ARTICLE ONE ***

B-8

2016 Energy Storage RFO Instructions

Article TWO Project Location and Product Price Page 5

ARTICLE TWO. PROJECT LOCATION AND PRODUCT PRICE

2.01 ESR Facility Location and Interconnection

Seller’s ESR Facility must be located in the CAISO control area and either directly connected to the following transmission level substations or connected to a lower voltage level substation of the following transmission level substations:

Goleta Johanna Laguna Bell Santiago

2.02 Existing ESR Facilities

Sellers may submit Offers for an existing ESR Facility that meets the CPUC definition of Energy Storage in D.13-10-040 that began operation after January 1, 2010.

Seller must demonstrate to SCE’s reasonable satisfaction that Seller’s existing energy storage agreement will terminate, by its own terms, without further action of the parties thereto, prior to the date on which deliveries from the existing ESR will commence under Seller’s Offer.

2.03 Product Price

SCE intends to purchase the Product from those Sellers that have executed a Final Agreement at the Product Price, in $/kW-month, as defined in the Pro Forma Agreement and further outlined below.

The Product Price submitted by Seller as part of its Offer must:

(a) Conform with the Product Price requirements in the Pro Forma Agreement;

(b) Assume posting Delivery Date Security and Performance Assurance in the amount required by, and further defined in, the Pro Forma Agreement;

(c) If applicable, include awards, subsidies, tax credits, grants, etc.; and

(d) If applicable, assume the cost of any firm transmission rights to deliver the Product to the delivery point.

*** End of ARTICLE TWO ***

B-9

2016 Energy Storage RFO Instructions

Article THREE Energy Storage RFO Schedule and Offer Submittal Process Page 6

ARTICLE THREE. ENERGY STORAGE RFO SCHEDULE AND OFFER SUBMITTAL PROCESS

3.01 RFO Schedule

Dates Event

December 1, 2016 RFO Launch - SCE posts RFO Instructions, Pro

Forma Agreement and other RFO documents on the RFO Website

December 16, 2016, 1:00 pm Pacific Prevailing Time

RFO Conference - SCE hosts RFO Bidders Conference

February 22, 2017,

5:00 pm Pacific Prevailing Time

NOI deadline - Sellers submit non-binding Notice of Intent to submit Offers

March 15, 2017, 1:00 pm Pacific Prevailing Time

Offer deadline - Sellers submit Offers and required documentation

April 21, 2017 Selection notification - Date SCE will advise all

Sellers on the selection status of their Offers

June 2, 2017 Negotiation deadline - SCE and short-listed Sellers

complete negotiations of the Final Agreements

June 16, 2017 Final Agreement Execution - SCE and Sellers sign

Final Agreements

August 4, 2017 Application Filing - SCE submits Application for

approval of Final Agreements to the CPUC

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2016 Energy Storage RFO Instructions

Article THREE Energy Storage RFO Schedule and Offer Submittal Process Page 7

3.02 RFO Process

SCE intends to conduct the RFO in a single round. SCE will short-list Offers and then negotiate terms and conditions of the Pro Forma Agreement(s) with Sellers selected to the Short-List and execute Final Agreements with a subset of those Sellers.

(a) RFO Launch SCE will launch its 2016 Energy Storage RFO by posting notification on the RFO Website and sending a notification email to its RFO participants list and parties to the Energy Storage OIR proceeding (R.15-03-011).

(b) Bidders’ Conference SCE will host a bidders’ conference to discuss the Energy Storage RFO process with participants. Information on how to attend this conference will be made available on the RFO Website.

(c) Non-binding Notice of Intent to Offer Sellers should provide a non-binding Notice of Intent to Offer (“NOI”) by the date and time identified in the RFO Schedule in Section 3.01. The form and instructions for submittal will be provided on the RFO Website.

(d) Offer Submission SCE will only consider Offers that are submitted as of the Offer deadline, contain all information requested in the Offer Form and contain each of the required items in the RFO Offer documents. These items include, but are not limited to, a complete Offer Workbook that includes a complete description of the proposed ESR project and any Offer options, a signed confidentiality agreement, a signed Consent of Release of Interconnection Related Information, Seller’s financial information (annual report, 10-K, 10-Q, audited financial statements) for the most recent (3) three year period, Seller’s company organizational chart, and Seller’s information and experience letter. Additionally, SCE encourages Seller to provide the status of any environmental and permitting developments, if available, including the status of Seller’s application for certification from the CEC or application for permit from the local Air Pollution Control District (e.g. SCAQMD). The Offer Form and required documents, including the Required Documents Matrix, will be posted on the RFO Website.

(e) Short-List SCE will create a Short-List of Sellers based upon the Offers received. After notification of Sellers on the Short-List, negotiations can begin to finalize an Agreement that is mutually agreeable to both parties. The Short-List process is subject to minimum requirements and notification requirements as set forth in Article 5.

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2016 Energy Storage RFO Instructions

Article THREE Energy Storage RFO Schedule and Offer Submittal Process Page 8

(f) Negotiation of Short-Listed Offers For a fixed period of time (as outlined in the Energy Storage RFO Schedule), SCE will negotiate with all Sellers whose Offers have been selected to the Short-List.

(g) Final Section SCE will make final selections and may execute Final Agreements with selected Offers. SCE, in its sole discretion, reserves the right to execute Final Agreements with as many Sellers as SCE chooses including the right to not enter into any Final Agreements.

3.03 The Pro Forma Agreement4

SCE’s Pro Forma Agreement for market-facing ESRs in front of the meter is structured under the assumption that:

(a) Seller’s Offer is based upon the green-field development of a new ESR Facility or an existing ESR with a COD after January 1, 2010;

(b) The ESR Facility’s first point of interconnection will be with the CAISO; and

(c) The Seller or a third party contracted with the Seller will be the Scheduling Coordinator of the ESR, and all CAISO energy and ancillary service revenues and all operational costs will be for the Seller’s account.

*** End of ARTICLE THREE ***

4 Attached as Associated Document A.

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2016 Energy Storage RFO Instructions

Article Four Role of Independent Evaluator Page 9

ARTICLE FOUR. ROLE OF INDPENDENT EVALUATOR

4.01 Independent Evaluator (“IE”)

CPUC Decision 08-11-008, Ordering Paragraph No. 2, requires an IE for all competitive solicitations that involve affiliate transactions, utility-owned or utility-turnkey offers, and for all solicitations that seek products two years or greater in duration, regardless of who participates.

In compliance with this requirement, SCE has retained [TBD] as the IE for SCE’s 2016 Energy Storage RFO. [TBD] is currently in SCE’s pre-qualified pool of IEs and has prior experience overseeing the negotiation and evaluation of energy storage in California. SCE sought and obtained the CPUC’s Energy Division approval to use [TBD] as the IE for the Energy Storage RFO.

The IE will ensure that the solicitation process is fair to all qualified bidders, and also that no SCE affiliate has an undue advantage over non-affiliates in the solicitation. The IE will be required to make a determination as to whether SCE’s final selection was fair and free from anti-competitive behavior, and was not unfairly influenced by its affiliate relationships. The IE must report its findings to SCE’s Procurement Review Group (“PRG”) and the Energy Division, and may testify in CPUC proceedings, as required or requested by SCE or the CPUC. Upon completion of the bid process to a solicitation, the IE must also complete the CPUC’s Independent Evaluator Report Template, with updates based on completion of the solicitation itself, for review by the CPUC and SCE’s PRG.

The IE is expected to make recommendations to SCE for improvements to SCE’s solicitation process that the IE may have identified during the course of the solicitation activity. The IE, however, does not have the authority to mandate SCE to make any changes to its RFO process. SCE, not the IE, will conduct and administer the RFO solicitation and evaluation process. In addition, the IE may not negotiate with any bidder or counterparty on SCE’s behalf, serve as a single point of contact between SCE and bidders or counterparties, nor make binding decisions on behalf of SCE.

The following is the contact information for the IE:

Email: [TBD]

Phone: [TBD]

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2016 Energy Storage RFO Instructions

Article FIVE Short-Listing Page 10

ARTICLE FIVE. SHORT-LISTING

5.01 Minimum Requirements

Sellers are required to follow all of the instructions contained in these RFO Instructions and subsequent amendments or revisions in order to be eligible to compete in the solicitation process.

5.02 Notification of Selection for the SCE Short-List

(a) If SCE notifies Seller that its Offer has been selected for SCE’s Short-List and Seller would like to continue in the solicitation process, Seller shall submit to SCE a redline to the Pro Forma Agreement showing changes Seller wishes to negotiate with SCE. The Pro Forma Agreement is located on the RFO Website. Sellers are reminded that a finite amount of time is allotted for the negotiation of the Final Agreement as outlined in the RFO Schedule.

(b) If Seller’s Offer has been selected for SCE’s Short-List and Seller does not wish to continue in the 2016 solicitation process, SCE requests that Seller withdraw its Offer from this Energy Storage RFO in writing within ten (10) business days after the Short-List notification from SCE.

(c) If a Seller’s Offer has not been selected for SCE’s Short-List, SCE will notify Seller on the date that SCE notifies all Sellers selected for the Short-List of their selection.

*** End of ARTICLE FIVE ***

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2016 Energy Storage RFO Instructions

Article SIX Evaluation of Offers Page 11

ARTICLE SIX. EVALUATION OF OFFERS

6.01 Proposal Evaluation Overview SCE’s Energy Storage RFO evaluation, like SCE’s other evaluations in requests for offers, involves five major steps: (a) developing price forecasts and scenarios, (b) determining the revenue streams of benefits and costs, (c) calculating present value and adding up all revenue streams, (d) considering qualitative factors, and (e) selecting Offers. While the net present value (“NPV”) per Storage MW (defined below) is the quantitative metric that determines the relative costs and benefits of the Offers, the selection process also carefully considers the qualitative characteristics of the Offers. SCE’s process for valuation and selection is detailed below. In the absence of a formal definition, SCE defines the “Storage MW” as the maximum continuous discharge over a length of time that is appropriate for the ESR’s primary application. For example, a 1.0 MW/1.0 MWh ESR used primarily as a system RA resource would have a different Storage MW compared to that same ESR used primarily to shave 1MW of circuit load for 1 hour. Since the qualifying system RA capacity for an ESR is based off its maximum continuous discharge over 4 hours, the Storage MW for the system RA use would be 0.25 MW . However, if that same 1MW/1MWh ESR is being used to shave circuit load by 1MW for 1 hour, its Storage MW would be 1.0. (a) Step 1: Develop Price Forecasts and Scenarios

Since SCE is seeking in-front-of-the-meter RA Offers in this RFO, SCE will prepare a price forecast for RA over a time horizon that is necessary to evaluate the Offers. .

(b) Step 2: Determine Revenue Streams

The quantitative components included in determining the value of RA Offers include both benefits and costs. The benefits include RA value and grid upgrade deferral value, if applicable. The costs include fixed contract costs, debt equivalents, and transmission and distribution upgrade costs, among others.

(i) Resource Adequacy Benefit Storage placed on the grid can have RA benefits provided the ESR meets the CPUC’s and the CAISO’s RA eligibility requirements and the ESR has been found fully deliverable by the CAISO. The RA quantity is a monthly value prescribed in the Offer. The resulting value is calculated by multiplying the quantity of qualifying RA capacity by the forecasted capacity price. Since SCE is only seeking RA, the qualifying RA capacity of a storage resources shall be calculated in a similar manner as dispatchable resources. Potential

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2016 Energy Storage RFO Instructions

Article SIX Evaluation of Offers Page 12

Sellers of ESRs that wish to qualify for RA must be able to dispatch their RA capacity for at least four uninterrupted hours as prescribed in CPUC D.14-06-050.

(ii) Contract Payment Cost The contract payment cost consist of a fixed payment stream, such as monthly capacity payments. Fixed payment streams are calculated directly according to contractual obligations.

(iii) Debt Equivalents Cost Debt equivalents is the term used by credit rating agencies to describe the fixed financial obligation resulting from long-term purchased power contracts. Pursuant to D.04-12-048, the CPUC permits utilities to recognize costs associated with the effect debt equivalence has on the utilities’ credit quality and cost of borrowing in their valuation process. Additionally, D.08-11-008 authorized the IOUs to continue recognizing the balance sheet impact of debt equivalence when valuing purchase agreements. Accordingly, SCE considers debt equivalents in its valuation process.

(iv) Transmission and Distribution Upgrade Costs Some projects do not have existing interconnections to the electric system. Others may have existing interconnections that are insufficient for a proposed expansion of existing facilities. For these projects, SCE includes the reimbursable transmission and distribution system upgrade cost cap (“Cost Cap”) specified in each Offer in its valuation. The Cost Cap must be submitted with the completed Offer and may differ from the transmission and distribution system upgrades costs provided in the interconnection studies.

(v) Credit and Collateral Adder Cost Counterparties may seek to negotiate credit and collateral requirements that are different from SCE’s pro forma requirements. In doing so, there is no longer cost neutrality, or a “level playing field,” in terms of default exposure amounts across the Offers. In these cases, SCE will calculate a cost to the Offer based on the incremental exposure created by the negotiated terms. Note that it is SCE’s intention and recent practice to maintain consistency in all finalized agreements with its pro forma agreements’ collateral posting requirements, thereby eliminating any need for this cost adder in the evaluation process.

(c) Step 3: Present Value and Sum All Revenue Streams

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2016 Energy Storage RFO Instructions

Article SIX Evaluation of Offers Page 13

All benefit and cost streams are netted and discounted by an annual discount factor to yield a single NPV. SCE uses a standard 10% discount rate for its NPV calculations.

(d) Step 4: Consider Qualitative Factors

In addition to the benefits and costs quantified during the valuation process, SCE assesses non-quantifiable characteristics of the Offers. SCE will consider qualitative characteristics such as project viability and project diversity leading to market transformation in determining its Short-List of Offers.

(e) Step 5: Select Offers

SCE will list all Offers in order of quantitative merit based on a NPV per Storage MW metric. Then, given the quantity of ESRs needed to meet SCE’s procurement targets, SCE will review the highest-value projects that fill those targets as well as projects that are on the margin. If, in SCE’s judgment, the qualitative comparisons favor an alternative Offer that is not necessarily valued highest by the quantitative metric, then SCE may choose the alternative Offer over the marginal alternatives. All selections will be reviewed with an Independent Evaluator and SCE’s Procurement Review Group. In the event that the SCE receives an overwhelming number of Offers in relation to the target, SCE may conduct a prescreen process to narrow the selection pool to a more manageable level. The prescreen process will evaluate only quantitative aspects of the Offers. SCE will create a prescreen ranking based on the Offers’ quantitative ranking and will choose the best Offers from the ranking ensuring a manageable workload while maintaining a robust selection pool.

*** End of ARTICLE SIX ***

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2016 Energy Storage RFO Instructions

Article SIX Evaluation of Offers Page 14

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2016 Energy Storage RFO Instructions

Article SEVEN Regulatory Approval Page 15

ARTICLE SEVEN. REGULATORY APPROVAL

7.01 CPUC and FERC Approvals

The Delivery Period under the Pro Forma Agreement may not commence until Final CPUC Approval of the Final Agreement has been obtained.

In the event a transaction occurs between SCE and any of its Affiliates, such Final Agreement may also require Federal Energy Regulatory Commission (“FERC”) approval. In such case, the Delivery Period under the relevant Final Agreement may not commence until approval by both the CPUC and FERC is obtained.

7.02 Support for Regulatory Purposes

SCE may request that Seller provide updates of any information requested in this Energy Storage RFO for purposes of filing applications or advice letters with the CPUC and, if applicable, FERC for approval of any Final Agreement.

*** End of ARTICLE SEVEN ***

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2016 Energy Storage RFO Instructions

Article EIGHT Confidentiality, Conduct, and Safety Page 16

ARTICLE EIGHT. CONFIDENTIALITY, CONDUCT, AND SAFETY

8.01 Confidentiality

Sellers are required to enter into a Confidentiality Agreement with SCE when Offers are submitted in the form set forth in the RFO launch documents.

8.02 Conduct

It is expected that the Parties will act in good faith in their dealings with each other with respect to this Energy Storage RFO.

8.03 Safety

Seller must develop a written plan for the safe construction and operation of the ESR Facility as set forth in the Pro Forma Agreement.

*** End of ARTICLE EIGHT ***

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2016 Energy Storage RFO Instructions

Article NINE Waivers and Reservation of Rights Page 17

ARTICLE NINE. WAIVERS AND RESERVATION OF RIGHTS

9.01 Termination of Energy Storage RFO

SCE reserves the right at any time to modify any dates specified in this Energy Storage RFO or abandon this Energy Storage RFO without notice, without assigning any reasons, and without liability of Edison International, SCE or any of their subsidiaries, affiliates or representatives to any Seller.

SCE will not be deemed to have accepted any Offer, and will not be bound by any term thereof, unless and until authorized representatives of SCE and Seller execute a Final Agreement and, if appropriate, related collateral and other required agreements.

In the event that SCE terminates this Energy Storage RFO, Seller shall be responsible for any expenses incurred by Seller as a result of this Energy Storage RFO.

9.02 Release of SCE for any Delays

Seller acknowledges that except for SCE’s obligation to submit a fully executed Final Agreement to the CPUC for approval, Seller bears sole responsibility for submitting all applications and obtaining all permits, leases or mortgages, and interconnection, financing and other agreements necessary for Seller to perform under a Final Agreement.

Seller further acknowledges and agrees that SCE shall have no liability for the:

(a) Time required to complete any studies, obtain any required permits for ESR Facility operation, or enter into any agreements discussed or contemplated under this Energy Storage RFO (including without limitation interconnection studies, leases, mortgages, financing or permits);

(b) Time required to perform construction for network upgrades necessary to meet the expected Initial Delivery Date or the Initial Delivery Deadline in the Final Agreement;

(c) Time to construct the ESR Facility; or

(d) Time required to acquire any environmental permits to construct or operate, including acquisition of any emission credits required by law or regulation.

9.03 Waived Claims

By submitting an Offer, Seller knowingly, voluntarily, and completely waives any rights under statute, regulation, state or federal constitution or common law to assert any claim, complaint or other challenge in any regulatory, judicial or other forum, including without limitation, the CPUC (except as expressly provided below), the FERC, the Superior Court of the State of California (“State Court”) or any United

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2016 Energy Storage RFO Instructions

Article NINE Waivers and Reservation of Rights Page 18

States District Court (“Federal Court”) concerning or related in any way to the Energy Storage RFO or these RFO Instructions, including all exhibits, attachments, and appendices thereto (“Waived Claims”). Seller further expressly acknowledges and consents that if it asserts any Waived Claim at the CPUC, FERC, State Court or Federal Court, or otherwise in any forum, to the extent that Seller’s Offer has not already been disqualified, SCE is entitled to automatically disqualify this Offer from further consideration in the Energy Storage RFO or otherwise, and further, SCE may elect to terminate the Energy Storage RFO.

By submitting an Offer, Seller further agrees that the sole forum in which Seller may assert any challenge with respect to the conduct or results of the Energy Storage RFO is at the CPUC. Seller further agrees that: (1) the sole means of challenging the conduct or results of the Energy Storage RFO is a complaint filed under Article 3, Complaints and Commission Investigations, of Title 20, Public Utilities and Energy, of the California Code of Regulations, (2) the sole basis for any such protest shall be that SCE allegedly failed in a material respect to conduct the Energy Storage RFO in accordance with these RFO Instructions; and (3) the exclusive remedy available to Seller in the case of such a protest shall be an order of the CPUC that SCE again conduct any portion of the Energy Storage RFO that the CPUC determines was not previously conducted in accordance with these RFO Instructions (including any Associated Documents). Seller expressly waives any and all other remedies, including, without limitation, compensatory and/or exemplary damages, restitution, injunctive relief, interest, costs and/or attorneys’ fees. Unless SCE elects to do otherwise in its sole discretion, during the pendency of such a protest the Energy Storage RFO and any related regulatory proceedings related to the Energy Storage RFO will continue as if the protest had not been filed, unless the CPUC issues an order suspending the Energy Storage RFO or SCE has elected to terminate the Energy Storage RFO.

Seller further acknowledges and agrees that if Seller asserts any Waived Claim, SCE shall be entitled to seek immediate dismissal of Seller’s claim, complaint or other challenge, with prejudice, by filing a motion to dismiss (or similar procedural device) supported by the language in this Article Nine and that Seller will not challenge or oppose such a request for dismissal. Seller further acknowledges and agrees that if it asserts any Waived Claim, and if SCE successfully has that claim dismissed or transferred to the CPUC, Seller shall pay SCE’s full costs and expenses incurred in seeking such dismissal or transfer, including reasonable attorneys’ fees.

Seller agrees to indemnify, defend and hold harmless SCE from any and all claims by any other Seller asserted in response to the assertion of any Waived Claim by Seller or as a result of a Seller’s protest to a filing at the CPUC resulting from the Energy Storage RFO.

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2016 Energy Storage RFO Instructions

Article NINE Waivers and Reservation of Rights Page 19

Except as expressly provided in these RFO Instructions, nothing in the RFO Instructions, including Seller’s waiver of any Waived Claims as set forth above, shall in any way limit or otherwise affect the rights and remedies of SCE.

*** End of ARTICLE NINE ***

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2016 Energy Storage RFO Instructions

Article TEN Communications Page 20

ARTICLE TEN. COMMUNICATIONS

10.01 For purposes of this Energy Storage RFO, “Communications” means the exchange of any material information by electronic, written, oral or other means other than as expressly provided for herein.

All Communications concerning this Energy Storage RFO, including Communications concerning the preparation of Offers or other submissions to SCE related to the Energy Storage RFO, should be submitted to SCE pursuant to instructions on the RFO Website.

SCE may, in its sole discretion, decline to respond to any correspondence or other inquiry without liability or responsibility.

*** End of ARTICLE TEN ***

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2016 Energy Storage RFO Instructions

Article ELEVEN SCE Rights and Document Conflicts Page 21

ARTICLE ELEVEN. SCE RIGHTS AND DOCUMENT CONFLICTS

11.01 SCE’s Rights

SCE may, at its sole discretion, enter into Final Agreements with one or more entities submitting Offers that will provide the best value to SCE’s customers considering a variety of factors as discussed below.

SCE reserves the right to reject any Offer at any time on the grounds that it does not conform to the terms and conditions of these RFO Instructions.

SCE also retains the right, in its sole judgment, to:

(a) Modify these RFO Instructions, and any of the Associated Documents, as it deems necessary;

(b) Condition SCE’s acceptance of any selected Offer on a Seller’s agreement to modifications thereto including any modifications that may be recommended by SCE’s PRG as initially established in D.02-08-071 of the CPUC; and

(c) Determine what is or is not “reasonable,” as this term is used within these RFO Instructions.

11.02 Document Conflicts

In the event of any conflict between terms contained in these RFO Instructions, the Pro Forma Agreement or the Offer Form, the conflict will be resolved by the following priority of documents:

(a) The Pro Forma Agreement;

(b) These RFO Instructions; and

(c) The Offer Form.

Notwithstanding the foregoing, if a Final Agreement is executed between SCE and Seller, it will have precedence over the documents listed above.

*** End of ARTICLE ELEVEN ***

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Confidential Information

2016 ENERGY STORAGE RFO PRO FORMA

ENERGY STORAGE RESOURCE ADEQUACY PURCHASE AGREEMENT

between

SOUTHERN CALIFORNIA EDISON COMPANY

and

[SELLER]

[Date]

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Energy Storage Resource Adequacy Purchase Agreement

Table of Contents

RECITALS .............................................................................................................1 

ARTICLE ONE ......................................................................................................2 

PURCHASE AND SALE OF PRODUCT ...........................................................2 1.01  Purchase and Sale of Product. ..........................................2 1.02  Storage Units. ....................................................................3 1.03  Delivery Points. .................................................................3 

ARTICLE TWO.....................................................................................................3 

TERM; CONDITIONS PRECEDENT AND DELIVERY PERIOD ...............3 2.01.  Term. ..................................................................................3 2.02.  Approval Date; Termination Related to Failure to Timely

Obtain Regulatory Approval. ............................................3 2.03.  Expected Initial Delivery Date. .........................................4 2.04.  Delivery Period. ................................................................4 2.05.  Early Initial Delivery Date. ...............................................5 2.06.  Delayed Initial Delivery Date Due to Force Majeure. ......6 2.07.  No Liability of SCE. ...........................................................6 2.08.  Seller’s Queue Position. ....................................................6 

ARTICLE THREE ................................................................................................6 

EVENTS OF DEFAULT; REMEDIES; TERMINATION ...............................6 3.01.  Events of Default. ..............................................................6 3.02.  Seller Events of Default. ....................................................7 3.03.  Early Termination Date. ....................................................9 3.04.  Calculation of Termination Payment. ...............................9 3.05.  Notice of Termination Payment. ......................................10 3.06.  Limitation on Seller’s Ability to Make or Agree to Third

Party Sales from the Project after Early Termination Date. ................................................................................11 

3.07.  Effect of Termination. ......................................................11 

ARTICLE FOUR .................................................................................................11 

TRANSMISSION .................................................................................................11 4.01.  Interconnection Studies. ..................................................11 4.02.  Termination Rights of SCE. .............................................12 4.03.  Acknowledgment. .............................................................13 

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Energy Storage Resource Adequacy Purchase Agreement

Table Of Contents

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ARTICLE FIVE ...................................................................................................13 

DESIGN AND CONSTRUCTION OF STORAGE UNITS .............................13 5.01.   Seller’s Obligations. ........................................................13 5.02.  Changes in Operational Characteristics. ........................14 5.03.  EPC Contractor. ..............................................................14 

ARTICLE SIX ......................................................................................................14 

CONSTRUCTION PERIOD AND MILESTONES .........................................14 6.01.  Milestone Schedule. .........................................................14 6.02.  Provision of Information. ................................................15 6.03.  Inspection Rights. ............................................................15 

ARTICLE SEVEN ...............................................................................................16 

COMMISSIONING AND TESTING ................................................................16 7.01.  RA Capacity Qualification Testing. .................................16 7.02.  CAISO Certification. .......................................................17 

ARTICLE EIGHT ...............................................................................................18 

SELLER’S OPERATION, MAINTENANCE AND REPAIR OBLIGATIONS .............................................................................................18 

8.01.  Seller’s Operation Obligations. .......................................18 8.02.  Seller’s Maintenance and Repair Obligations. ...............18 

ARTICLE NINE ..................................................................................................20 

PRODUCT DELIVERY OBLIGATIONS ........................................................20 9.01.   Product. ...........................................................................20 9.02.   Adjustments to Product Provided. ...................................20 9.03.  Delivery of Product. ........................................................20 9.04.  Indemnities for Failure to Deliver Expected Contract

Quantity. ..........................................................................21 9.05.  Buyer’s Re-Sale of Product. ............................................21 9.06.  Post-Showing Replacement Capacity. .............................22 

ARTICLE TEN ....................................................................................................22 

COMPENSATION AND ADJUSTMENTS TO MONTHLY CAPACITY PAYMENT .....................................................................................................22 

10.01.  Monthly Capacity Payment. ............................................22 10.02.  Allocation of Other Payments and Costs. ........................23 

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Energy Storage Resource Adequacy Purchase Agreement

Table Of Contents

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ARTICLE ELEVEN ............................................................................................23 

PAYMENT AND BILLING................................................................................23 11.01.  Billing Period. .................................................................24 11.02.  Timeliness of Payment. ....................................................24 11.03.  Disputes and Adjustments of Invoices. ............................24 11.04.  Netting Rights. .................................................................25 

ARTICLE TWELVE ...........................................................................................25 

CREDIT AND COLLATERAL .........................................................................25 12.01.  Financial Information. ....................................................25 12.02.  Seller’s Credit Requirements. ..........................................26 12.03.  Administration of Performance Assurance. ....................27 12.04.  First Priority Security Interest. .......................................28 12.05.  Uniform Commercial Code Waiver. ................................29 

ARTICLE THIRTEEN .......................................................................................29 

COLLATERAL ASSIGNMENT AND CONSOLIDATION ..........................29 13.01.  Consent to Collateral Assignment. ..................................29 

ARTICLE FOURTEEN ......................................................................................32 

GOVERNMENTAL AND ENVIRONMENTAL CHARGES ........................32 14.01.  Indemnification. ...............................................................32 

ARTICLE FIFTEEN ...........................................................................................32 

FORCE MAJEURE .............................................................................................32 15.01.  No Default for Force Majeure. ........................................32 15.02.  Force Majeure Claim. .....................................................33 

ARTICLE SIXTEEN ...........................................................................................33 

REPRESENTATIONS, WARRANTIES AND COVENANTS .......................33 16.01.  Representations and Warranties of Both Parties. ...........33 16.02.  Representations, Warranties and Covenants of Seller. ...34 16.03.  Seller’s Affirmative Covenants. .......................................35 16.04.  Seller’s Negative Covenants. ...........................................37 

ARTICLE SEVENTEEN ....................................................................................38 

LIMITATIONS ....................................................................................................38 17.01.  Limitation of Remedies, Liability and Damages. ............38 

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Energy Storage Resource Adequacy Purchase Agreement

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17.02.  No Representation by SCE. .............................................39 

ARTICLE EIGHTEEN .......................................................................................39 

RECORDS ............................................................................................................39 18.01.  Performance under this Agreement. ................................39 18.02.  Other Regulatory and Governmental Requirements. ......39 18.03.  Audit Rights. ....................................................................40 

ARTICLE NINETEEN .......................................................................................40 

DISPUTES ............................................................................................................40 19.01.  Dispute Resolution. ..........................................................40 19.02.  Mediation. ........................................................................40 19.03.  Arbitration. ......................................................................41 19.04.  Provisional Relief. ...........................................................43 19.05.  Waiver of Jury Trial. .......................................................44 19.06.  Consolidation of Matters. ................................................44 

ARTICLE TWENTY...........................................................................................44 

INDEMNIFICATION .........................................................................................44 20.01.  SCE’s Indemnification Obligations. ................................44 20.02.  Seller’s Indemnification Obligations. ..............................45 20.03.  Indemnification Claims. ..................................................46 20.04.  Survival. ...........................................................................46 

ARTICLE TWENTY-ONE.................................................................................46 

CONFIDENTIALITY/REGULATORY DISCLOSURE.................................46 21.01.  Confidentiality Obligation. ..............................................46 21.02.  Permitted Disclosures. ....................................................47 21.03.  Duty to Seek Protection. ..................................................48 21.04.  Ownership and Return of Information. ...........................48 

ARTICLE TWENTY-TWO ...............................................................................48 

MISCELLANEOUS ............................................................................................48 22.01.  General. ...........................................................................48 22.02.  Notices. ............................................................................49 22.03.  Governing Law; Venue. ...................................................50 22.04.   Amendment. .....................................................................50 22.05.   Assignment. ......................................................................50 22.06.  Waiver. .............................................................................50 22.07.   Obligations Surviving Termination. ................................51 

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Energy Storage Resource Adequacy Purchase Agreement

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22.08.  Further Assurances. ........................................................51 22.09.  No Agency. .......................................................................51 22.10.  No Third Party Beneficiaries. ..........................................51 22.11.  Independent Contractors. ................................................51 22.12.   Severability. .....................................................................51 22.13.  Forward Contract. ...........................................................52 22.14.  Mobile Sierra. ..................................................................52 22.15.  Insurance. ........................................................................52 22.16.  NERC Standards Compliance Penalties. ........................55 22.17.  Multiple Originals. ..........................................................55 

APPENDIX A .........................................................................................................1 

APPENDIX 1.02 ...................................................................................................18 

APPENDIX 1.03 ...................................................................................................19 

APPENDIX 1.03(A) .............................................................................................20 

APPENDIX 6.01(A) .............................................................................................21 

APPENDIX 6.01(B)..............................................................................................23 

APPENDIX 10.02 .................................................................................................24 

APPENDIX 12.03(B)............................................................................................25

APPENDIX 13.01 ..................................................................................................... 

APPENDIX 16.03(H) ...........................................................................................31

 

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ENERGY STORAGE RESOURCE ADEQUACY PURCHASE AGREEMENT

between

SOUTHERN CALIFORNIA EDISON COMPANY

and

[SELLER]

This Energy Storage Resource Adequacy Purchase Agreement, together with the appendices attached hereto (as amended, restated, extended, renewed, modified or supplemented from time to time, collectively, the “Agreement”) is made and entered into as of this [____] day of [Month], [Year] (“Effective Date”) by SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation (“SCE” or “Buyer”), and [SELLER], a [Seller’s business registration] (“[Seller’s Shortname]” or “Seller”). SCE and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties”. All capitalized terms used in this Agreement are used with the meanings ascribed to them in Appendix A to this Agreement.

RECITALS

This Agreement is made with reference to the following facts, among others:

A. SCE is an investor-owned electric utility serving customers in central and southern California.

B. Seller wishes to sell and deliver exclusively to SCE, and SCE wishes to purchase, the Product under the conditions set forth in this Agreement.

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AGREEMENT

NOW, THEREFORE, in consideration of these recitals and the agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows.

ARTICLE ONE PURCHASE AND SALE OF PRODUCT

1.01 Purchase and Sale of Product.

During the Delivery Period, Seller shall deliver and sell, and SCE shall purchase and receive and have the exclusive right to the Product, subject to the terms and conditions of this Agreement. Moreover, during the Delivery Period Seller shall not substitute or purchase any Product from any other energy storage resource or from the market for delivery hereunder.

(a) Resource Adequacy Benefits. During the Delivery Period, Seller grants, pledges, assigns and otherwise commits to SCE all of the Product which may be used to meet RA Compliance Obligations under any Resource Adequacy Rulings. Seller represents, warrants and covenants to SCE that Seller (i) has not used, granted, pledged, assigned, sold or otherwise committed, and (ii) will not use, grant, pledge, assign, sell or otherwise commit any Product to meet the RA Compliance Obligations of, or confer Resource Adequacy Benefits upon, any entity other than SCE during the Delivery Period, except to the extent such benefits are conferred on another entity pursuant to an order of the CPUC or at the direction of SCE. Notwithstanding anything to the contrary in this Agreement, the Parties shall take all actions that may be necessary to effect the use of the Resource Adequacy Benefits of the Project in accordance with the preceding sentence throughout the Delivery Period, including, without limitation, (i) amending this Agreement and complying with all current and future Tariff provisions and decisions of the CPUC and/or any other Governmental Authority, including all Resource Adequacy Rulings that address Resource Adequacy Benefits and RA Compliance Obligations, including all performance obligations and penalties related thereto, (ii) ensuring that the Project is certified by the CAISO as being fully deliverable as of the Initial Delivery Date for the purposes of counting all of the Product towards RA Compliance Showings; and (iii) executing all documents and instruments, but excluding, in each case, any action which is inconsistent with any Applicable Law or any permit applicable to the Project; provided, however, that no such action shall require Seller to modify the Project, except to the extent set forth in Article Eight.

(b) Ownership. Seller shall maintain ownership of and demonstrable exclusive rights to the Project throughout the Term.

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(c) Exclusive Rights. During the Delivery Period, SCE shall have exclusive rights to the Product and all benefits derived therefrom, including the exclusive right to use, market or sell the Product and the right to all revenues generated from the use, sale or marketing of the Product.

1.02 Storage Units.

(a) CAISO Certification Test Results. Seller shall provide all CAISO Certification test results for each Storage Unit within three (3) Business Days of Seller’s receipt for any initial or subsequent test throughout the Term.

(b) Location of Site. [Project Address], as further described in Appendix 1.03.

1.03 Delivery Points.

(a) Energy Delivery Point. The Energy Delivery Point shall be the [description], as specified in Appendix 1.03(A).

(b) Point of Interconnection. The “Point of Interconnection” is [insert name and location], as specified in Appendix 1.03(A).

(c) Interconnection Queue Position. [Number(s) to be inserted]

ARTICLE TWO TERM; CONDITIONS PRECEDENT AND DELIVERY PERIOD

2.01. Term.

The “Term” of this Agreement shall commence upon the Effective Date, and shall continue until the expiration of the Delivery Period.

2.02. Approval Date; Termination Related to Failure to Timely Obtain Regulatory Approval.

The “Approval Date” is the date that all the following conditions are satisfied:

(a) Final CPUC Approval. Final CPUC Approval shall have been obtained. SCE shall seek Final CPUC Approval expeditiously and in good faith. As requested by SCE, Seller shall use commercially reasonable efforts to support SCE in obtaining Final CPUC Approval. SCE has no obligation to seek rehearing or to appeal a CPUC decision which fails to approve this Agreement or which contains findings required for Final CPUC Approval with conditions or modifications unacceptable to SCE.

(b) Delivery of Documents. Seller shall have delivered to SCE all documents and information required under this Agreement to be delivered prior to the Approval Date.

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Either Party has the right to terminate this Agreement on Notice, which will be effective five (5) Business Days after such Notice is given, if Final CPUC Approval has not been obtained or waived by SCE in its sole discretion within three hundred sixty-five (365) days after SCE files its request for Final CPUC Approval and a Notice of termination is given on or before the three hundred ninety-fifth (395th) day after SCE files the request for Final CPUC Approval.

If either Party exercises its termination right pursuant to this Section 2.02, no Termination Payment will be due or owing by either Party and Seller will be entitled to a return of any Delivery Date Security provided to SCE.

2.03. Expected Initial Delivery Date.

Subject to adjustment made under Section 2.06, the Expected Initial Delivery Date for the Project is [Date].

2.04. Delivery Period.

The “Delivery Period” shall commence at 12:01 a.m. on the date that the Project achieves its Initial Delivery Date, and shall continue until the earlier of: (i) midnight on the date that is [number of years] years after the Expected Initial Delivery Date, (ii) an Early Termination Date designated in accordance with Section 3.03, or (iii) the date this Agreement is otherwise terminated in accordance with its terms.

The “Initial Delivery Date” shall be the first day of the first full month after all the following conditions have been satisfied for the Project:

(a) Seller has completed, to SCE’s satisfaction, Seller’s obligations set forth in Sections 5.01(a) through 5.01(f), inclusive, in order to bring the Project into full operation as contemplated by this Agreement;

(b) Each Storage Unit has achieved Commercial Operation;

(c) Seller has received its Market-Based Rate Authority to sell the Product to SCE under the terms of this Agreement, operate the Project, sell Energy from the Project, and has received all other approvals and authorizations required for Seller to perform its obligations under this Agreement;

(d) Seller has executed a Participating Generator Agreement, Meter Service Agreement For CAISO Metered Entities, and any other forms or agreements required by the CAISO with respect to the Project (and delivered true and complete copies of all such forms and agreements to SCE);

(e) Seller has entered into and complied in all material respects with all obligations under all interconnection agreements required to enable parallel operation of the Project with the PTO’s electric system and CAISO Grid;

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(f) Seller has deposited with SCE the applicable Performance Assurance pursuant to Section 12.02(c)(i);

(g) Seller has executed and delivered to SCE all other documents or instruments required under Article Twelve;

(h) SCE shall have obtained or waived Final CPUC Approval;

(i) [Intentionally Omitted];

(j) Seller has delivered to SCE all insurance documents required under Section 22.15;

(k) Seller has obtained CAISO Certification for each Storage Unit;

(l) Seller has taken all actions necessary to ensure that the Project is fully deliverable, as determined by the CAISO, such that Seller is able to deliver Product in an amount equal to the Contract Capacity for RA Compliance Obligations, and Seller has delivered to SCE a certification or other documentation from the CAISO that evidences that the Project is fully deliverable for the purposes of counting towards RA Compliance Obligations; and

(m) Seller has obtained a Unit NQC for each Storage Unit and the Unit NQC for each such Storage Unit is not less than 75% of the Predicted SU Capacity for such Storage Unit; and

(n) Seller has obtained a Unit EFC for each Storage Unit and the Unit EFC for each such Storage Unit is not less than 75% of the Predicted SU Flexible Capacity for such Storage Unit.

The Parties agree that, in order for Seller to obtain an Initial Delivery Date, the Parties may have to perform certain of their Delivery Period obligations in advance of that Initial Delivery Date, including without limitation providing Outage Schedules and Supply Plans in advance of the Initial Delivery Date. The Parties shall cooperate with each other in order for SCE to be able to utilize the Product beginning on the Initial Delivery Date and Seller agrees to cause each Storage Unit’s SC to cooperate in order to achieve the same.

Notwithstanding any other provision in this Agreement, the Initial Delivery Date may not occur prior to the Expected Initial Delivery Date, and the Initial Delivery Date may not be later than [Insert date that is three hundred sixty-five (365) days after the Expected Initial Delivery Date] (the “Initial Delivery Deadline”).

2.05. Early Initial Delivery Date.

If the Project (or any portion thereof) reaches Commercial Operation prior to its Expected Initial Delivery Date, Seller may dispatch and sell the output of such Storage Unit(s) to third parties prior to its Expected Initial Delivery Date, provided that Seller may not sell

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any Resource Adequacy Benefits with respect to the Delivery Period. Seller shall have the right to all revenues generated from such sale, and will be responsible for any costs, charges, fees, fines, or penalties associated with such sale. Once the Project reaches its Initial Delivery Date, then Seller shall not provide, convey or market the Product or any Resource Adequacy Benefits associated with the Project, in each case associated with the Delivery Period, to any third party.

2.06. Delayed Initial Delivery Date Due to Force Majeure.

Subject to Section 3.02(f) and Seller’s compliance with its obligations as the Claiming Party under Section 15.02, if Seller has not satisfied the conditions set forth in Section 2.04 for the Initial Delivery Date of the Project by the Expected Initial Delivery Date due to Force Majeure, then the Expected Initial Delivery Date will be extended on a day-for-day basis for the duration of the Force Majeure.

2.07. No Liability of SCE.

SCE shall have no liability to Seller, regardless of cause (including any act or omission of SCE, including as buyer under this Agreement or as a PTO) for (a) any delay or failure by Seller to achieve the Initial Delivery Date by the Expected Initial Delivery Date, (b) any costs or damages incurred by Seller as a result thereof or any reduction in Seller’s Monthly Capacity Payments for any Storage Unit resulting from any delay in achieving the Initial Delivery Date by the Expected Initial Delivery Date, or (c) a reduction in the Term or the Delivery Period.

2.08. Seller’s Queue Position.

Seller must not withdraw the Interconnection Queue Position identified in Section 1.03(c) or assign or transfer that Interconnection Queue Position to any entity or for the benefit of any other agreement other than this Agreement without SCE’s prior written consent.

ARTICLE THREE EVENTS OF DEFAULT; REMEDIES; TERMINATION

3.01. Events of Default.

An “Event of Default” shall mean, with respect to either Party (a “Defaulting Party”), the occurrence of any of the following:

(a) The failure to make, when due, any payment required to be made to the other Party pursuant to this Agreement, if such failure is not remedied within three (3) Business Days after written Notice of such failure is given by the Non-Defaulting Party;

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(b) Any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated if the representation or warranty is continuing in nature;

(c) The failure to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default and except for any failure to obtain all Required Permits on or before the Required Permit Date), if such failure is not remedied within five (5) Business Days of receipt of Notice; or

(d) Such Party becomes Bankrupt.

3.02. Seller Events of Default.

An “Event of Default” shall mean, with respect to Seller (as the “Defaulting Party”), the occurrence of any of the following:

(a) Seller fails to comply with any of its affirmative covenants under Sections 16.02 and 16.03 or its negative covenants under Section 16.04, unless such failure to comply is cured within a period specifically provided elsewhere in this Agreement applicable to such failure to comply;

(b) Seller consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity without SCE’s written consent, which consent may be granted or withheld in SCE’s sole discretion;

(c) Seller fails to comply with its obligations under Article Twelve, including failing to post or maintain the Delivery Date Security or applicable Performance Assurance, within three (3) Business Days after SCE provides Notice of the failure;

(d) Seller makes any material misrepresentation or omission in any report, including any status report, or the Milestone Schedule (including the log, records and reports required under Sections 8.01(b), 8.01(c), 8.01(d), 16.03(h) and 16.03(i), Appendix 6.01(A), and Appendix 6.01(B)) required to be made or furnished by Seller pursuant to this Agreement;

(e) Seller sells, assigns, or otherwise transfers, or commits to sell, assign, or otherwise transfer, the Product, or any portion thereof, to any party other than SCE during the Delivery Period;

(f) Seller fails to achieve the Initial Delivery Date for the Project by the Initial Delivery Deadline, whether due to Force Majeure or otherwise;

(g) A termination of, or cessation of service under, any agreement necessary for Seller to (i) interconnect the Project to the PTO’s electric system, (ii) transmit the electric energy on the PTO’s electric system, (iii) comply with the Tariff; provided, if termination of, or cessation of service under, any such agreement is

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not due to the fault of Seller, Seller shall have ten (10) days from such termination or cessation to cure such default;

(h) The stock or equity ownership interests in Seller or assets of Seller are directly or indirectly pledged or assigned, or caused or permitted to be pledged or assigned, as collateral to any party other than Lender, without SCE’s prior written consent, which consent may be granted or withheld in SCE’s reasonable discretion;

(i) Seller fails to maintain its PGA or MSA during the Delivery Period and such failure is not cured within ten (10) days of termination of the PGA or MSA, as applicable;

(j) By the Required Permit Date, Seller fails to obtain all of the Required Permits, regardless of whether all applicable appeal periods for such approvals or permits have not expired;

(k) Seller fails to comply with any of its obligations under Sections 8.02(b), 8.02(c), or 8.02(f);

(l) Seller fails to comply with any of its obligations under Sections 8.02(d);

(m) Subject to the terms of a Collateral Assignment Agreement, which shall control in the event of any conflict or inconsistency with this Section 3.02 (m), the occurrence and continuation of an event of default of Seller under one or more agreements or instruments relating to indebtedness for borrowed money, in the aggregate amount of not less than [$______] [amount to be determined by SCE] which results in the indebtedness having been declared immediately due and payable;

(n) Except as permitted under the Collateral Assignment Agreement, if applicable, , Seller does not own or otherwise have control of the Project;

(o) Seller intentionally or knowingly delivers, or attempts to deliver Resource Adequacy Benefits for sale under this Agreement that are not associated with the Project;

(p) Seller removes from the Site equipment upon which the Contract Capacity has been based, except for the purposes of replacement, refurbishment, repair or maintenance, and the equipment is not returned within five (5) Business Days after Notice from SCE;

(q) Seller fails to take any actions necessary to dedicate, convey or effectuate the use of any and all Resource Adequacy Benefits as specified under Section 1.01(a); and

(r) Seller violates SCE’s Storage Unit Removal Right by marketing, providing, or conveying the Product from the affected Storage Units.

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3.03. Early Termination Date.

If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (the “Non-Defaulting Party”) shall have the right, by delivery of Notice to the Defaulting Party, to (a) designate a day, no earlier than the day such Notice is effective and no later than twenty (20) days after such Notice is effective, as an “Early Termination Date,” and to terminate this Agreement as of the Early Termination Date, (b) accelerate all amounts owing between the Parties under this Agreement, (c) withhold any payments due to the Defaulting Party under this Agreement, and (d) suspend performance pending termination of this Agreement. The Non-Defaulting Party shall also have the right to pursue any other remedies available at law or in equity, including, where appropriate, specific performance or injunctive relief to the extent permitted under Article Nineteen.

3.04. Calculation of Termination Payment.

If an Early Termination Date has been declared, the Non-Defaulting Party shall calculate, in a commercially reasonable manner, the “Termination Payment” in accordance with this Section 3.04.

(a) Termination Payment Prior to Initial Delivery Date. If the Early Termination Date occurs before the Initial Delivery Date, then the Termination Payment shall be calculated in accordance with this Section 3.04(a).

(i) If Seller is the Defaulting Party, then the Termination Payment shall be owed to SCE and shall be equal to the entire Delivery Date Security amount. SCE shall be entitled to immediately retain for its own benefit those funds held as Delivery Date Security, and any amount of Delivery Date Security that Seller has not yet posted with SCE will be immediately due and payable by Seller to SCE. There will be no amounts owed to Seller. The Parties agree that SCE’s damages in the event of an Early Termination Date prior to the Initial Delivery Date caused by Seller’s default would be difficult or impossible to determine and that the damages set forth in this Section 3.04(a)(i) are a reasonable approximation of SCE’s harm or loss.

(ii) If SCE is the Defaulting Party, then the Termination Payment shall be owed to Seller and shall equal the sum of the actual, documented and verifiable costs incurred by Seller between the Effective Date and the Early Termination Date in connection with the Project, less the fair market value (determined in a commercially reasonable manner) of (A) all the Seller’s assets individually, or (B) the entire Project, whichever is greater, regardless of whether or not any Seller asset or the entire Project is actually sold or disposed of. There will be no amount owed to SCE. The Parties agree that Seller’s damages in the event of an Early Termination Date prior to the Initial Delivery Date caused by SCE’s default would be

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difficult or impossible to determine and that the damages set forth in this Section 3.04(a)(ii) are a reasonable approximation of Seller’s harm or loss.

(b) Termination Payment After The Initial Delivery Date Occurs. If the Early Termination Date occurs after the Initial Delivery Date, then the Termination Payment shall be calculated in accordance with this Section 3.04(b). The Termination Payment shall equal the sum of all amounts owed by the Defaulting Party to the Non-Defaulting Party under this Agreement, including a Forward Settlement Amount (if any), less any amounts owed by the Non-Defaulting Party to the Defaulting Party determined as of the Early Termination Date.

In addition, if SCE is the Non-Defaulting Party and SCE reasonably expects to incur monetary penalties or fines from the CPUC or the CAISO (or any other Governmental Authority having jurisdiction) because SCE will not be able to include the Product in any applicable RA Compliance Showing as a result of Seller’s Event of Default, then SCE may, in good faith, estimate the amount of those penalties or fines and include this estimate in its determination of the Termination Payment, subject to accounting to Seller when those penalties or fines are finally ascertained. SCE shall use commercially reasonable efforts to minimize such fines and penalties; provided, in no event will SCE be required to use or change the utilization of its owned or controlled assets or market positions to minimize the fines and penalties. The rights and obligations with respect to determining and paying any Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Agreement and shall continue until after those penalties or fines are finally ascertained.

3.05. Notice of Termination Payment.

As soon as practicable after an Early Termination Date is declared, the Non-Defaulting Party shall provide Notice to the Defaulting Party of the Termination Payment. The Notice must include a written statement setting forth, in reasonable detail, the calculation of such Termination Payment, together with appropriate supporting documentation.

If the Termination Payment is owed to the Non-Defaulting Party, then the Defaulting Party shall pay such amount to the Non-Defaulting Party within five (5) Business Days after the Notice is provided. If the Termination Payment is owed to the Defaulting Party, then the Non-Defaulting Party shall pay such amount to the Defaulting Party within thirty (30) days after the Notice is provided.

The Parties shall negotiate in good faith to resolve any disputes regarding the calculation of the Termination Payment. Any Disputes which the Parties are unable to resolve through negotiation may be submitted for resolution through mediation and arbitration as provided in Article Nineteen.

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3.06. Limitation on Seller’s Ability to Make or Agree to Third Party Sales from the Project after Early Termination Date.

If the Agreement is terminated by SCE prior to the Initial Delivery Date due to Seller’s Event of Default, neither Seller nor Seller's Affiliates may sell, market or deliver any Product or Resource Adequacy Benefits associated with or attributable to any Storage Unit or the Project to a party other than SCE for a period of two (2) years following the Early Termination Date due to Seller’s Event of Default, unless prior to selling, marketing or delivering such Product, or entering into the agreement to sell, market or deliver such Product to a party other than SCE, Seller or Seller’s Affiliates provides SCE with a written offer to sell the Resource Adequacy Benefits and Product to SCE which provides SCE the right to select in its sole discretion to purchase such Resource Adequacy Benefits and Product on either the terms and conditions materially similar to the terms and conditions contained in this Agreement or the terms and conditions to which the third party agreed, and SCE fails to accept such offer within forty-five (45) days of SCE’s receipt thereof. Neither Seller nor Seller’s Affiliates may sell or transfer the Project, or any part thereof, or land rights or interests in the Site (including the Interconnection Queue Position) so long as the limitations contained in this Section 3.06 apply, unless the transferee agrees to be bound by the terms set forth in this Section 3.06 pursuant to a written agreement approved by SCE.

Seller shall indemnify and hold SCE harmless from all benefits lost and other damages sustained by SCE as a result of any breach by Seller of its covenants contained within this Section 3.06.

3.07. Effect of Termination.

Termination of this Agreement shall not operate to discharge any liability which has been incurred by either Party prior to the effective date of such termination.

ARTICLE FOUR TRANSMISSION

4.01. Interconnection Studies.

Seller represents and warrants that, as of the Effective Date, Seller has provided SCE with true and correct, up-to-date copies of all of the Interconnection Studies to enable delivery of the Storage Unit(s)’ output to the Point of Interconnection pursuant to Applicable Law and to enable Seller to provide the Product to Buyer. Seller shall be responsible for all fees and costs associated with the following: (a) Obtaining all Interconnection Studies;

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(b) Maintaining, complying with and performing Seller’s obligations under all agreements associated with the Interconnection Facilities throughout the Delivery Period;

(c) Funding for any Network Upgrades associated with or attributable to the Project (any refund of such fees and costs will be consistent with the Tariff);

(d) Any Interconnection Facilities that are installed for the purpose of interconnecting the Project with existing transmission or distribution systems; and

(e) All costs (including interconnection costs and transmission losses) arising from, relating to or associated with any interconnection agreement under which Energy from the Project is transmitted to the CAISO Grid.

4.02. Termination Rights of SCE.

SCE has the right to terminate this Agreement on Notice, which will be effective five (5) Business Days after such Notice is given to Seller, on or before the date that is sixty (60) days after Seller provides to SCE the results of any Interconnection Study or the interconnection agreement tendered to Seller by the PTO if:

(a) Such Interconnection Study or agreement as of the date of the termination Notice, estimates, includes, specifies or reflects that the maximum total cost of transmission upgrades or new transmission facilities to SCE, that are, or may become, reimbursable by SCE, the CAISO or any PTO under the jurisdiction of the CAISO, including costs reimbursed by SCE, or any PTO under the jurisdiction of the CAISO, to Seller (“Aggregate Network Upgrade Costs”), may in the aggregate exceed [dollar amount text] dollars ($[Number]) (“Network Upgrades Cap”), irrespective of any subsequent amendments of such Interconnection Study or agreement or any contingencies or assumptions upon which such Interconnection Study or agreement is based. {SCE Note: Monetary threshold to be based upon transmission-related costs allocated to the Project that SCE would incur as estimated in the most recent Interconnection Study.}

If SCE exercises its termination right pursuant to this Section 4.02, no Termination Payment will be due or owing by either Party and Seller will be entitled to a return of any Delivery Date Security provided to SCE.

The Parties agree and acknowledge that there may be an Interconnection Study and interconnection agreement for charging electric energy to the Project, and a separate Interconnection Study and interconnection agreement for discharging electric energy from the Project. In the event that there are two separate studies and agreements for charging and discharging electric energy, the Parties agree that for purposes of Section 4.02(a), the Aggregate Network Upgrade Costs shall reflect the aggregate maximum cost estimates for the total cost of transmission upgrades or new transmission facilities that are, or may become, reimbursable by SCE, or any PTO under the jurisdiction of the CAISO, including costs reimbursed by SCE, or any PTO under the jurisdiction of the

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CAISO, to Seller as set forth in the Interconnection Study and/or interconnection agreement, as applicable, for both charging and discharging electric energy.

4.03. Acknowledgment.

Seller acknowledges and agrees that nothing in this Article Four is intended to abrogate, amend or modify the terms of any other agreement between it and SCE, including without limitation, the interconnection agreement, and that no breach under such other agreement shall excuse a Party’s nonperformance under this Agreement, unless the breach of such other agreement is also an Event of Default under this Agreement.

ARTICLE FIVE DESIGN AND CONSTRUCTION OF STORAGE UNITS

[Subject to change based on technology]

5.01. Seller’s Obligations.

At no cost to SCE, Seller shall: (a) Design and construct, or refurbish the Project as required for Seller to perform its

obligations under this Agreement;

(b) Within [number] [#] days prior to the Expected Initial Delivery Date, Seller shall file all applications or other appropriate requests to acquire and maintain all permits, licenses, certifications and approvals necessary for the construction or refurbishment, operation and maintenance of the Project (the “Required Permits”), including permits to construct from the applicable Air Pollution Control District, or a Facility and Site Certification from the California Energy Commission (pursuant to California Public Resources Code Sections 25500-25543), as applicable, and obtain all Required Permits on or before [Date] (the “Required Permit Date”);

(c) To the extent required pursuant to Applicable Laws, complete all environmental impact assessments or studies conducted by or for Governmental Authorities pursuant to regulatory programs approved and certified under the California Environmental Quality Act, or environmental impact statements or studies conducted pursuant to the National Environmental Policy Act including obtaining public review and certification of any final documents relating to any environmental impact assessment or studies;

(d) As required to achieve Commercial Operation for each Storage Unit, furnish and install all Protective Apparatus as SCE reasonably determines to be necessary for proper and safe operation of the Project in parallel with the PTO’s electric system or CAISO Grid;

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(e) Pay all costs related to acquiring rights of way and upgrades to transportation facilities and construction of facilities required to interconnect each Storage Unit to the natural gas transportation system, if applicable, consistent with all standards and provisions set forth by the FERC, CPUC, California Department of Transportation or any other applicable Governmental Authority and the interconnecting gas transportation owner, or other utility services described in Section 6.03(c);

(f) Provide to SCE, prior to commencement of any construction activities on the Site, a report from an independent engineer (acceptable to both SCE and Seller) certifying that Seller has a written plan for the safe construction and operation of the Project in accordance with Prudent Electrical Practices; and

(g) Throughout the Delivery Period, maintain all permits, licenses, certifications and approvals necessary for the operation and maintenance of the Project.

5.02. Changes in Operational Characteristics.

Seller shall provide to SCE, Notice of any changes in the operational characteristics of the Project for SCE’s review as far in advance as practicable, but in no event less than thirty (30) days before the changes are to be made. Seller acknowledges that provision of Notice under this Section 5.02 is for SCE’s information only and that by receiving such Notice, SCE makes no representation as to the economic or technical feasibility, operational capacity or reliability of any changes in the operational characteristics of the Project.

5.03. EPC Contractor.

Seller shall provide SCE with Notice of the name and address of Seller’s EPC Contractor on the later of the Effective Date or the first (1st) Business Day after Seller enters into a contract with an EPC Contractor. If Seller does not have an EPC Contractor selected by the Approval Date, Seller shall provide SCE with a shortlist of candidates by the Approval Date.

ARTICLE SIX CONSTRUCTION PERIOD AND MILESTONES

6.01. Milestone Schedule.

In order to meet the Expected Initial Delivery Date, Seller shall use reasonable efforts during the construction period to meet the various Project related milestones set forth in Appendix 6.01(A) (“Milestone Schedule”) and avoid or minimize any delays in meeting such Milestone Schedule. No later than the tenth (10th) day of each month while the Project has not yet met its Initial Delivery Date, or within five (5) days of SCE’s request, Seller shall deliver to SCE a monthly progress report, substantially in the form set forth in

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Appendix 6.01(B) (“Construction Report”), describing its progress in relation to the Milestone Schedule, including projected time to completion of any milestones, for each Storage Unit and the Project. Seller shall include in any Construction Report a list of all letters, notices, applications, approvals, authorizations and filings referring or relating to Required Permits, and shall provide any such documents as may be reasonably requested by SCE. In addition, Seller shall advise SCE, as soon as reasonably practicable, of any problems or issues of which Seller is aware which could materially impact its ability to meet the Milestone Schedule.

6.02. Provision of Information.

During the Term, Seller shall promptly provide SCE copies of:

(a) Within ten (10) Business Days of receipt thereof, any Interconnection Study or the interconnection agreement tendered to Seller by the PTO;

(b) All agreements with providers of engineering, procurement, or construction services for the Project and all amendments thereto, including any EPC Contract (which may be redacted by Seller to eliminate any portions reasonably believed by Seller to contain confidential information);

(c) Any reports, studies, or assessments done for Seller by an independent engineer; and

(d) No later than twenty (20) days after each semi-annual period ending on June 30th and December 31st, a report listing all Diverse Business Enterprises that supplied goods or services to Seller during such period, including any certifications or other documentation of such Diverse Business Enterprises’ status as such and the aggregate amount paid to Diverse Business Enterprises during such period.

(i) SCE has the right to disclose to the CPUC all such information provided by Seller pursuant to this Section 6.02(d).

(ii) Seller shall make reasonable efforts to accommodate requests by the CPUC (or by SCE in response to a request by the CPUC) to audit Seller in order to verify data provided by Seller pursuant to this Section 6.02(d).

6.03. Inspection Rights.

SCE shall have the right at any time during the Term to enter onto the Site during normal business hours on any Business Day to inspect the Project and otherwise inspect or audit Seller’s EPC Contracts and its books and records in order to verify Seller’s compliance with the Milestone Schedule and other obligations under this Agreement. Seller shall, or shall cause its EPC Contractors to, provide SCE with access to the Site and all applicable documents and records in order to permit SCE to determine whether:

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(a) Seller has obtained and maintained all Required Permits, and that such Required Permits do not contain Permit Requirements that might restrict SCE’s ability to obtain the benefits of the Product;

(b) All contracts described in Section 6.02(a) and 6.02(b) have been entered into and become effective on a timely basis and Seller is not in default thereunder; and

(c) All contracts or other arrangements necessary to interconnect the Project (including transmission arrangements as contemplated in Article Four, electrical, gas, water supply and waste disposal) have been entered into and become effective on a timely basis pursuant to the Milestone Schedule and Seller is not in default thereunder.

ARTICLE SEVEN

COMMISSIONING AND TESTING 7.01. RA Capacity Qualification Testing.

(a) Initial and Periodic Testing.

(i) Initial Delivery Date Testing. Prior to the Initial Delivery Date, Seller shall, or shall cause each Storage Unit’s SC to, schedule and complete, at Seller’s cost, all RA Capacity Qualification Tests for each Storage Unit and provide all information required by CAISO, the CPUC or any other applicable Governmental Authority pursuant to any Applicable Laws, including without limitation the Tariff, in order for each Storage Unit to obtain a Unit NQC and Unit EFC. Seller shall use commercially reasonable efforts to undertake such activities in sufficient time to achieve the Initial Delivery Date by the Expected Initial Delivery Date.

(ii) Seller Periodic Testing. During the Delivery Period Seller (A) may itself

elect to schedule and complete RA Capacity Qualification Tests at any time and (B) shall schedule and complete any RA Capacity Qualification Tests required by CAISO, the CPUC or any other applicable Governmental Authority pursuant to any Applicable Laws.

(iii) SCE Periodic Testing. Once per Contract Year after the initial Contract

Year, upon SCE’s request, Seller shall, or shall cause each Storage Unit’s SC to, schedule and complete, at Seller’s cost, an RA Capacity Qualification Test for each Storage Unit and provide all information required by CAISO, the CPUC or any other applicable Governmental Authority pursuant to any Applicable Laws, including without limitation the Tariff, in order for each Storage Unit to obtain an updated Unit NQC and Unit EFC. In connection with such a request SCE may request that Seller shall cause each Storage Unit’s SC to propose to the CAISO that the Unit NQC or Unit EFC for any Storage Unit be changed. Seller agrees

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that in such a case Seller shall, or shall cause each Storage Unit’s SC to, take all actions required under the Tariff to obtain a new Unit NQC and Unit EFC for such Storage Units, including providing any documentation necessary to justify and support such request in accordance with the Tariff.

(b) Testing Costs. Seller is responsible for all costs associated with all RA Capacity

Qualification Tests conducted pursuant to this Article Seven and all costs associated with providing any information required to be provided under this Article Seven.

(c) Testing Notification and Attendance. Seller shall provide SCE with at least seven

(7) Business Days’ Notice of Seller’s proposed dates for all RA Capacity Qualification Tests, including any RA Capacity Qualification Tests required by CAISO, the CPUC or any other applicable Governmental Authority pursuant to any Applicable Laws. SCE shall be entitled to have at least one (1) representative from SCE and one (1) independent third party witness present to witness each RA Capacity Qualification Test and such persons shall be allowed unrestricted access to the area from where the plant is being controlled (e.g., plant control room), and unrestricted access to inspect the instrumentation necessary for test data acquisition prior to commencement of any test. SCE shall be responsible for all costs, expenses and fees payable or reimbursable to the SCE representative and the third party, if any.

(d) Testing Results Notification. Seller shall provide all RA Capacity Qualification

Tests results for each Storage Unit within three (3) Business Days of Seller’s receipt for any such test throughout the Term. Within fifteen (15) Business Days after the completion of any RA Capacity Qualification Test, Seller shall prepare and submit to SCE a written report of such test. At a minimum, the report shall include: (i) a record of any unusual or abnormal conditions or events that occurred during such test and any actions taken in response thereto, and (ii) the measured data.

(e) Updated Unit NQC or Unit EFC. Seller shall notify SCE within three (3)

Business Days after it, or the Storage Unit’s SC, receives notice from the CAISO, or Seller or the Storage Unit’s SC becomes aware, that the Unit NQC or Unit EFC of any Storage Unit has changed, regardless of whether there is an increase or decrease in any such Unit NQC or Unit EFC.

7.02. CAISO Certification.

Pursuant to Section 2.04(k), Seller is required to obtain CAISO Certification for each Storage Unit; provided, nothing in this Agreement, including the appendices hereto, shall be amended to reflect the outcome of any CAISO Certification.

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ARTICLE EIGHT SELLER’S OPERATION, MAINTENANCE AND REPAIR OBLIGATIONS

[Subject to change based on technology]

8.01. Seller’s Operation Obligations.

(a) Seller shall operate the Project in accordance with Prudent Electrical Practices, Applicable Laws, Permit Requirements and applicable California utility industry standards, including the standards established by the California Electricity Generation Facilities Standards Committee pursuant to Public Utilities Code Section 761.3 and enforced by the CPUC, and CAISO mandated standards (collectively, “Industry Standards”).

(b) Seller shall maintain all records applicable to each Storage Unit, including, without limitation, a daily log of maintenance performed, outages, changes in operating status, inspections and any other significant events related to the operation of each Storage Unit. Information maintained pursuant to this Section 8.01(b) shall be provided to SCE, within fifteen (15) days of SCE's request.

(c) Seller shall maintain and provide to SCE, within fifteen (15) days of SCE’s request, accurate records with respect to all RA Capacity Qualification Tests, including the outcomes of such tests.

(d) Seller shall maintain and make available to SCE and the CPUC, or any division thereof, records including logbooks, demonstrating that the Project is operated and maintained in accordance with Prudent Electrical Practices, Applicable Laws, Permit Requirements and Industry Standards, including CPUC General Order GO 167. Seller shall comply with all reporting requirements and permit on-site audits, investigations, tests and inspections permitted or required under any Applicable Laws, Permit Requirements, or Industry Standards.

(e) SCE or the CAISO may require Seller, at Seller’s expense, to demonstrate to SCE’s reasonable satisfaction the correct calibration and operation of Seller’s Protective Apparatus any time SCE or the CAISO has reason to believe that said Protective Apparatus may impair the integrity of the PTO’s electric system or CAISO Grid.

8.02. Seller’s Maintenance and Repair Obligations.

(a) Seller shall inspect, maintain and repair the Project in accordance with applicable Industry Standards. Seller shall maintain, and deliver to SCE upon request, maintenance and repair records of each Storage Unit.

(b) Subject to Section 8.02(c), Seller shall promptly make all necessary repairs to the Project and take all actions necessary in order to provide the Product to SCE in accordance with the terms of this Agreement.

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(c) In the event that the currently effective Unit NQC of any single Storage Unit is at any time, less than or equal to seventy-five percent (75%) of the applicable SU Capacity for such Storage Unit or the currently effective Unit EFC of any single Storage Unit is at any time, less than or equal to seventy-five percent (75%) of the applicable SU Flexible Capacity for such Storage Unit, then, in each such case, Seller shall repair such Storage Unit in accordance with Prudent Electrical Practices and the procedure set forth in this Section 8.02. Within fourteen (14) days of any such failure, Seller shall complete a Successful Repair or present to SCE a description of the reason for the failure and a plan and schedule for completing a Successful Repair (the “Repair Plan”).

(d) If SCE and Seller disagree about the Repair Plan, SCE may, at its expense, hire an independent third party engineering firm reasonably acceptable to Seller (the “Independent Engineer”, or “IE”), to perform an on-site assessment of the situation and make recommendations for completing a Successful Repair. Upon two (2) Business Days’ Notice by SCE, Seller shall grant the IE and SCE personnel access to the Storage Unit(s) and all relevant information including log books, maintenance records and reports, and other applicable materials. If, after seven (7) days of the delivery to Seller of the IE’s engineering report, Seller fails, in any material respect to meet the IE’s recommendations (as such recommendations may be updated from time to time by the IE) for the Successful Repair, or make sufficient progress in effecting same, in each case as determined and reported by the IE, consistent with Industry Standards, SCE shall have the right in its sole discretion to (i) exercise its Storage Unit Removal Right; or (ii) declare an Event of Default pursuant to Section 3.02(l).

(e) If an Event of Default pursuant to Section 3.02(k) has occurred, then SCE shall have the right in its sole discretion to (i) exercise its Storage Unit Removal Right; or (ii) declare an Event of Default pursuant to Section 3.02(k).

(f) Seller shall not allow (i) the Unit NQC of any Storage Unit to fall below seventy-five percent (75%) of the applicable SU Capacity for such Storage Unit on average for a period of six (6) months (or such longer cure period identified as reasonable under the circumstances in the written report of an IE engaged by SCE) due to Force Majeure if the IE has determined in its written report that Seller should reasonably have been able to achieve a Successful Repair of the Storage Unit prior to the expiration of such six (6) month period (or longer cure period identified in the IE’s written report), or (ii) the Unit EFC of any Storage Unit to fall below seventy-five percent (75%) of the applicable SU Flexible Capacity for such Storage Unit on average for a period of six (6) months (or such longer cure period identified as reasonable under the circumstances in the written report of an IE engaged by SCE) due to Force Majeure if the IE has determined in its written report that Seller should reasonably have been able to achieve a Successful Repair of the Storage Unit prior to the expiration of such six (6) month period (or longer cure period identified in the IE’s written report).

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ARTICLE NINE PRODUCT DELIVERY OBLIGATIONS

9.01. Product.

Seller shall provide Buyer with the Product each day of each Showing Month that is part of the Delivery Period.

9.02. Adjustments to Product Provided.

(a) Planned Outages: Seller’s obligation to deliver the Product for each day of each Showing Month may be reduced by the amount of any Planned Outages which exist with respect to any portion of any Storage Unit during the applicable Showing Month for the applicable days of such Planned Outages. Seller shall notify, no later than fifteen (15) Business Days before the relevant deadlines for the corresponding RA Compliance Showings applicable to that Showing Month, of the amount of Product (in MWs) from the Storage Units that Buyer is permitted to include in Buyer’s RA Compliance Showings applicable to that month as a result of such Planned Outage.

(b) Reductions in Unit NQC: Subject to Section 8.02, Seller’s obligation to deliver

the Product for each Showing Month may also be reduced in the event any of the Storage Units experiences a reduction in Unit NQC after the Initial Delivery Date as determined by the CAISO.

9.03. Delivery of Product.

Seller shall provide Buyer with the Expected Contract Quantity for each day of each Showing Month consistent with the following: (a) Seller shall, on a timely basis, submit, or cause the Storage Unit’s SC to submit,

Supply Plans in accordance with the Tariff, and any other decisions or orders of the CPUC associated with providing the Product under this Agreement, to identify and confirm the Expected Contract Quantity provided to Buyer for each day of each Showing Month so that the total amount of Expected Contract Quantity identified and confirmed for each day of such Showing Month equals the Expected Contract Quantity for such day of such Showing Month.

(b) Seller shall or shall cause the Storage Unit’s SC to (i) submit written notification to Buyer, no later than fifteen (15) Business Days before the applicable RA Compliance Showing deadlines for each Showing Month, that Buyer will be credited with the Expected Contract Quantity for each day of such Showing Month in the Storage Unit’s SC Supply Plan so that the credited Expected Contract Quantity for each day of the Showing Month equals the Expected Contract Quantity for such day of such Showing Month.

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9.04. Indemnities for Failure to Deliver Expected Contract Quantity.

Seller agrees to indemnify, defend and hold harmless Buyer from any penalties, fines or costs assessed against Buyer by the CPUC or the CAISO, resulting from any of the following: (a) Seller’s failure to provide any portion of the Expected Contract Quantity for any

portion of the Delivery Period; (b) Seller’s failure to provide notice of the non-availability of any portion of the

Expected Contract Quantity for any portion of the Delivery Period as required under Section 9.03;

(c) A Storage Unit’s SC’s failure to timely submit Supply Plans that identify Buyer’s

right to the Expected Contract Quantity purchased hereunder for each day of the Delivery Period; or

(d) A Storage Unit SC’s failure to submit accurate Supply Plans that identify Buyer’s

right to the Expected Contract Quantity purchased hereunder for each day of the Delivery Period.

With respect to the foregoing, the Parties shall use commercially reasonable efforts to minimize such penalties, fines and costs; provided, that in no event shall Buyer be required to use or change its utilization of its owned or controlled assets or market positions to minimize these penalties and fines. If Seller fails to pay the foregoing penalties, fines or costs, or fails to reimburse Buyer for those penalties, fines or costs, then Buyer may offset those penalties, fines or costs against any future amounts it may owe to Seller under this Agreement.

9.05. Buyer’s Re-Sale of Product.

Buyer may re-sell all or a portion of the Product and any associated rights, in each case, acquired under this Agreement. In the event Buyer re-sells all or a portion of the Product and any associated rights acquired under this Agreement (“Resold Product”) Seller agrees, and agrees to cause the Storage Unit’s SC, to follow Buyer’s instructions and the Tariff with respect to providing such Resold Product to subsequent purchasers of such Resold Product. Seller further agrees, and agrees to cause the Storage Unit’s SC, to take all commercially reasonable actions and execute any and all documents or instruments reasonably necessary to allow such subsequent purchasers to use such Resold Product. Seller acknowledges and agrees that with respect to any Resold Product, if Buyer incurs any liability to any purchaser of such Resold Product due to the failure of Seller or the Storage Unit’s SC to comply with the terms of this Agreement, and Seller would have had liability to Buyer under this Agreement for such failure had Buyer not sold the Resold Product to a subsequent purchaser, then Seller shall be liable to Buyer under this Agreement, including without limitation, pursuant to Section 9.04, for the amounts it would have been liable to Buyer for had such Resold Product not been sold to a subsequent purchaser.

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9.06. Post-Showing Replacement Capacity.

In the event CAISO determines, in accordance with the Tariff, that any portion of the Expected Contract Quantity for any portion of a Showing Month which was shown by Buyer in its RA Compliance Showings requires outage replacement in accordance with Section 40.7 of the Tariff (“Shortfall Capacity”), Seller’s Monthly Capacity Payment will be reduced in accordance with Section 10.01 below and, neither Seller, nor the Storage Unit’s SC (unless the Storage Unit’s SC is Buyer), shall have the right to provide Buyer with RA Replacement Capacity with respect to such Shortfall Capacity.

ARTICLE TEN COMPENSATION AND ADJUSTMENTS TO MONTHLY CAPACITY PAYMENT

10.01. Monthly Capacity Payment.

Compensation to Seller shall be calculated in accordance with this Section 10.01 based on the fixed price per unit of the Product received by the Seller on a monthly basis, which shall be referred to as the Monthly Capacity Payment. SCE shall pay the Monthly Capacity Payment to Seller in accordance with Article Eleven for each Showing Month of the Delivery Period. The Monthly Capacity Payment is calculated as set forth below:

a) “Monthly Capacity Payment” = (A x B x 1,000)

where: A = applicable Monthly Capacity Price for that Showing Month

B = ∑

C = Expected Contract Quantity provided by Seller to SCE pursuant to and consistent with Section 9.03 for the applicable day of the Showing Month, provided that, solely for purposes of calculating this item “C”, the amount of Product (in MWs) provided on any particular day of any Showing Month may not exceed the IDD Capacity during such day

D = Aggregate megawatts of Shortfall Capacity associated with the applicable day of the Showing Month

i = Each day of Showing Month

n = number of days in the Showing Month

The Monthly Capacity Payment calculation shall be rounded to two decimal places.

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10.02. Allocation of Other Payments and Costs.

(a) Seller shall retain any revenues it may receive from and pay all costs charged by the CAISO or any other third party with respect to the Storage Units for (i) start-up, shutdown, and minimum load costs, (ii) capacity revenue for ancillary services, (iii) energy sales, (iv) any revenues for black start or reactive power services, (v) RMR Contracts for the Storage Units, (vi) the Capacity Procurement Mechanism, or its successor, associated with the Storage Units, (vii) RUC Availability Payments, or its successor, and (viii) sales of any other products other than the Product sold to SCE hereunder.

(b) In accordance with Article Eleven of this Agreement, all such Seller, or a Storage Unit’s SC, owner, or operator revenues described in this Section 10.02, but received by Buyer shall be remitted to Seller.

(c) If a centralized capacity market develops within the CAISO region, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product for each day of each Showing Month provided to Buyer pursuant to this Agreement for re-sale in such market, and retain and receive any and all related revenues.

(d) Seller agrees that the Project and each Storage Unit is subject to the terms of the Availability Standards, Non-Availability Charges, and Availability Incentive Payments as contemplated under Section 40.9 of the Tariff. Furthermore, the Parties agree that any Availability Incentive Payments are for the benefit of the Seller and for Seller’s account and that any Non-Availability Charges are the responsibility of the Seller and for Seller’s account.

(e) If (a) a Storage Unit is designated as a Resource Adequacy Resource and (b) the Tariff or other Applicable Law requires that, during periods that a Storage Unit is on a Planned Outage, the SC for a Resource Adequacy Resource is required to (i) replace the Storage Unit with a resource that is not a Resource Adequacy Resource or (ii) face the imposition of a charge, cost, sanction and/or penalty for failing to replace that Storage Unit, then Seller is responsible for (x) replacing the Storage Unit with a resource that is not a Resource Adequacy Resource, and (y) any and all charges, costs, sanctions and/or penalties for failing to replace all or a portion of the Storage Unit. Seller agrees that SCE is not required to take any action, or use or change its utilization of its owned or controlled assets or market positions, to allow Seller to replace the Storage Unit with a resource that is not a Resource Adequacy Resource and that SCE shall have no liability for any of the obligations described in this Section 10.02(e).

ARTICLE ELEVEN PAYMENT AND BILLING

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11.01. Billing Period.

The calendar month shall be the standard period for all payments under this Agreement (other than Termination Payments). On or before the last Business Day of the month following the applicable month for which payment obligations are calculated, each Party will render to the other Party an invoice for the payment obligations, if any, incurred hereunder during suchmonth, provided that the Monthly Capacity Payment related to a Showing Month will not be deemed to be incurred until such Showing Month has concluded, (the “Obligation Month”), together with all supporting documentation and calculations reasonably necessary to evidence all amounts charged thereunder. An invoice can only be adjusted or amended after it was originally rendered within the time frames set forth in Section 11.03, below. If an invoice is not rendered within twenty-four (24) months after the close of the Obligation Month, the right to any payment for that Obligation Month under this Agreement is waived.

11.02. Timeliness of Payment.

All invoices under this Agreement shall be due and payable in accordance with each Party’s invoice instructions on or before the later of the twentieth (20th) day of the month in which the owing Party receives the invoice, or the tenth (10th) day after the owing Party’s receipt of the invoice, or, if such day is not a Business Day, then on the next Business Day. Each Party will make payments by Automated Clearing House (ACH) or similar method, or by other mutually agreeable methods, to the account designated by the other Party. Any amounts not paid by the due date, including amounts in dispute pursuant to Section 11.03, will be deemed delinquent 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.

11.03. Disputes and Adjustments of Invoices.

A Party may adjust any invoice rendered by it for an Obligation Month to correct any arithmetic or computational error or to include additional charges or claims within twelve (12) months after the close of such Obligation Month. A receiving Party may, in good faith, dispute the correctness of any invoice or of any adjustment to any invoice previously rendered to it by providing Notice to the other Party within the later of (i) twelve (12) months of the date of receipt of such invoice or adjusted invoice, or (ii) twelve (12) months after the close of the Obligation Month. Failure to provide such Notice within the time frames set forth in the preceding sentence waives the dispute with respect to such invoice. A Party disputing all or any part of an invoice or an adjustment to an invoice previously rendered to it shall pay the undisputed portion of the invoice when due, but shall have the option, in its sole discretion, to withhold payment of the disputed amount; provided, such Party must provide Notice to the other Party of the basis for and amount of the disputed portion of the invoice that has not been paid. The disputed portion of the invoice must be paid within two (2) Business Days of resolution of the dispute, along with interest accrued at the Interest Rate from and including the original due date of the invoice to but excluding the date the disputed portion of the invoice is paid in full. Inadvertent overpayments shall be returned upon request or

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deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment but excluding the date repaid or deducted by the Party receiving such overpayment.

11.04. Netting Rights.

SCE reserves the right to net amounts that would otherwise be due to Seller under this Agreement against payment of any amounts owed to SCE by Seller arising out of, or related to, this Agreement, any other SCE agreement, tariff, obligation or liability. Nothing in this Section 11.04 limits SCE’s rights under applicable tariffs, other agreements or Applicable Law.

ARTICLE TWELVE CREDIT AND COLLATERAL

12.01. Financial Information.

If requested by one Party, the other Party shall deliver the following financial statements, which in all cases must be for the most recent accounting period and prepared in accordance with GAAP, IFRS or Successor:

(a) Within one hundred twenty (120) days following the end of each fiscal year, a copy of its annual report containing audited consolidated financial statements (income statement, balance sheet, statement of cash flows and statement of retained earnings and all accompanying notes) for such fiscal year, setting forth in each case, in comparative form, the figures for the previous year; and

(b) Within sixty (60) days after the end of each of its first three fiscal quarters of each fiscal year, a copy of its quarterly report containing consolidated financial statements (income statement, balance sheet, statement of cash flows and statement of retained earnings and all accompanying notes) for such fiscal quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case, in comparative form, the figures for the previous year.

In all cases the statements shall be for the most recent accounting period and prepared in accordance with GAAP, IFRS, or Successor. In each case, the financial statements specified above must be certified in accordance with all Applicable Laws and regulations, including all applicable SEC rules and regulations, if such Party is an SEC reporting company, or certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year end audit adjustments) if such Party is not an SEC reporting company.

If a Party’s financial statements are publicly available electronically on the website of that Party or the SEC, then the Party shall be deemed to have met the delivery requirements of this Section 12.01. Should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an

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Event of Default so long as the producing Party diligently pursues the preparation, certification and delivery of the statements.

12.02. Seller’s Credit Requirements.

(a) Credit Requirement After Effective Date. Seller shall post and thereafter maintain delivery date security collateral (“Delivery Date Security”) equal to forty-five dollars ($45) for each kilowatt of the total Predicted Capacity. Seller shall post the Delivery Date Security in accordance with the following terms and conditions:

(i) Seller shall post one-half of the Delivery Date Security within five (5) Business Days following the Effective Date, with the remainder to be posted within five (5) Business Days after Final CPUC Approval is obtained or waived by SCE in its sole discretion;

(ii) The Delivery Date Security shall be held by SCE as collateral security for Seller’s obligation to meet the Expected Initial Delivery Date;

(iii) The Delivery Date Security must be in the form of either a cash deposit with SCE or a Letter of Credit;

(iv) If Seller provides the Delivery Date Security by means of a Letter of Credit, such Letter of Credit must be provided substantially in the form of Appendix 12.03(B).

(b) Return of Delivery Date Security. Within five (5) Business Days following the Initial Delivery Date, or upon termination of this Agreement pursuant to Section 2.02 or Section 4.02, SCE shall return to Seller the Delivery Date Security. If Seller achieves an Initial Delivery Date for the Project by the Expected Initial Delivery Date, SCE shall return to Seller the entire amount of the Delivery Date Security held by SCE.

(c) Credit Requirements During Delivery Period.

(i) During the Delivery Period, Seller shall post and maintain Performance Assurance to SCE in an amount equal to [sixty-five dollars ($65) for each kilowatt of the total Contract Capacity when Term is greater than 15 years, fifty dollars ($50) for each kilowatt of the total Contract Capacity when Term is greater than 10 years but less than or equal to15 years, thirty-five ($35) for each kilowatt of Contract Capacity when Term is less than or equal to 10 years]

(ii) Seller shall post such Performance Assurance in accordance with the following terms and conditions:

(A) Performance Assurance must be in the form of either a cash deposit or a Letter of Credit;

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(B) Performance Assurance shall be posted to SCE and maintained at all times during the Term and thereafter until such time as Seller has satisfied all monetary obligations which survive any termination of this Agreement; and

(C) If Seller provides Performance Assurance by means of a Letter of Credit, such Letter of Credit must be provided substantially in the form of Appendix 12.03(B).

(iii) Notwithstanding any other provision in this Agreement, SCE is not required to provide Performance Assurance to Seller.

12.03. Administration of Performance Assurance.

(a) Letter of Credit. Performance Assurance provided in the form of a Letter of Credit shall be substantially in the form set forth in Appendix 12.03(B), issued by a Qualified Institution acceptable to SCE and subject to the following provisions:

(i) Each Letter of Credit shall be maintained for the benefit of SCE. Seller shall:

(A) renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit;

(B) if the Qualified Institution that issued an outstanding Letter of Credit has indicated its intent not to renew such Letter of Credit, provide a substitute Letter of Credit or alternative Performance Assurance acceptable to SCE at least twenty (20) Business Days prior to the expiration of the outstanding Letter of Credit; and

(C) if the Qualified Institution issuing a Letter of Credit fails to honor SCE’s properly documented request to draw on an outstanding Letter of Credit, provide a substitute Letter of Credit or alternative Performance Assurance acceptable to SCE, in its sole discretion, within one (1) Business Days after such refusal;

provided, if Seller fails to perform in accordance with (A), (B), or (C) above, Seller shall be deemed to have failed to meet its obligation to provide Performance Assurance or Delivery Date Security.

(ii) Upon the occurrence of a Letter of Credit Default, Seller shall provide to SCE either a substitute Letter of Credit or alternative Performance Assurance acceptable to SCE, in each case on or before the first (1st) Business Day after the occurrence thereof (or the fifth (5th) Business Day after the occurrence thereof if only clause (a) under the definition of Letter of Credit Default applies).

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(iii) Upon, or at any time after SCE has determined that Seller has forfeited all of its Delivery Date Security, then SCE may draw on any undrawn portion of any outstanding Letter of Credit. Cash proceeds received by SCE from drawing upon the Letter of Credit shall be for the account of SCE.

(iv) Upon, or at any time after, the occurrence and continuation of an Event of Default by Seller, then SCE may draw on the entire undrawn portion of any outstanding Letter of Credit upon submission to the Qualified Institution issuing such Letter of Credit of one or more certificates specifying that such Event of Default has occurred and is continuing. Cash proceeds received by SCE from drawing upon the Letter of Credit shall be deemed Performance Assurance as security for Seller’s obligations to SCE under this Agreement and SCE shall have the rights and remedies set forth in Section 12.04 with respect to such cash proceeds. Notwithstanding SCE’s receipt of cash proceeds of a drawing under the Letter of Credit, Seller shall remain liable (A) for any failure to provide sufficient Performance Assurance and (B) for any amounts owing to SCE and remaining unpaid after the application of the amounts so drawn by SCE.

(v) In all cases all costs associated with a Letter of Credit, including, without limitation, the costs and expenses of establishing, renewing, substituting, canceling, amending and increasing the amount of a Letter of Credit, shall be borne by Seller.

12.04. First Priority Security Interest.

To secure Seller’s performance of its obligations under this Agreement, and until released as provided herein, Seller hereby grants to SCE a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right of setoff against), and assignment of the Performance Assurance, and any and all proceeds resulting therefrom or the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of SCE, and Seller agrees to take such action as SCE reasonably requires in order to perfect SCE’s Security Interest in, and lien on (and right of setoff against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after the occurrence or deemed occurrence and during the continuation of an Event of Default or an Early Termination Date, SCE may do any one or more of the following:

(a) exercise any of its rights and remedies with respect to all Performance Assurance, including any such rights and remedies under law then in effect;

(b) exercise any of its rights of setoff against any and all property of Seller in SCE’s possession;

(c) draw on any outstanding Letter of Credit issued for its benefit; and

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(d) liquidate all Performance Assurance then held by or for the benefit of SCE free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.

SCE shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remaining liable for any amounts owing to SCE after such application), subject to SCE’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full.

12.05. Uniform Commercial Code Waiver.

This Agreement sets forth the entirety of the agreement of the Parties regarding credit, collateral, financial assurances and adequate assurances. Except as expressly set forth in this Agreement, including, but not limited to, those provisions set forth in Article Twelve and Article Three, neither Party:

(a) has or will have any obligation to post margin, provide letters of credit, pay deposits, make any other prepayments or provide any other financial assurances, in any form whatsoever, or

(b) will have reasonable grounds for insecurity with respect to the creditworthiness of a Party that is complying with the relevant provisions of Article Twelve and Article Three of this Agreement; and all implied rights relating to financial assurances arising from Section 2-609 of the Uniform Commercial Code or case law applying similar doctrines, are hereby waived.

ARTICLE THIRTEEN

COLLATERAL ASSIGNMENT AND CONSOLIDATION

13.01. Consent to Collateral Assignment.

In connection with any financing or refinancing of the Project by Seller, Buyer shall in good faith work with Seller and Lender to agree upon a consent to a collateral assignment of this Agreement (“Collateral Assignment Agreement”) substantially in the form of Appendix 13.05. Requests for a Collateral Assignment Agreement must be received by SCE at least forty-five (45) days in advance of the anticipated closing date for the transaction in question.

13.02 Consolidation of Seller’s Financial Statements.

(a) Buyer shall determine, through consultation with its internal accountants and review with their independent registered public accounting firm, whether Buyer is required to consolidate Seller’s financial statements with Buyer’s financial statements for financial accounting purposes under Accounting Standards Codification (ASC) 810/Accounting Standards Update 2009-17, “Consolidation of Variable Interest Entities” (ASC 810), or future guidance issued by accounting

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profession governance bodies or the SEC that affects Buyer accounting treatment for this Agreement (the “Financial Consolidation Requirement”).

(b) If the Financial Consolidation Requirement is applicable, then: (i) Within 20 days following the end of each calendar year (for each year that

such treatment is required), Seller shall deliver to Buyer unaudited financial statements and related footnotes of Seller as of the end of the year. It is permissible for Seller to use accruals and prior months’ estimates with true-up to actual activity, in subsequent periods, when preparing the unaudited financial statements. The annual financial statements should include quarter-to-date and yearly information. Buyer shall provide to Seller a checklist before the end of each year listing the items which Buyer believes are material to Buyer and required for this purpose, and Seller shall provide the information on the checklist, subject to the availability of data from Seller’s records. It is permissible for Seller to use accruals and prior months’ estimates with true-up to actual activity, in subsequent periods, when preparing the information on the checklist. If audited financial statements are prepared for Seller for the year, Seller shall provide such statements to Buyer within five Business Days after those statements are issued.

(ii) Within 15 days following the end of each fiscal quarter (for each quarter that such treatment is required), Seller shall deliver to Buyer unaudited financial statements and related footnotes of Seller as of the end of the quarterly period. The financial statements should include quarter-to-date and year-to-date information. Buyer shall provide to Seller a checklist before the end of each quarter listing items which Buyer believes are material to Buyer and required for this purpose, and Seller shall provide the information on the checklist, subject to the availability of data from Seller’s records. It is permissible for Seller to use accruals and prior months’ estimates with true-up to actual activity, in subsequent periods, when preparing the unaudited financial statements.

(iii) If Seller regularly prepares its financial data in accordance with GAAP,

IFRS, or Successor, the financial information provided to Buyer shall be prepared in accordance with such principles. If Seller is not a SEC registrant and does not regularly prepare its financial data in accordance with GAAP, IFRS or Successor, the information provided to Buyer shall be prepared in a format consistent with Seller’s regularly applied accounting principles, e.g., the format that Seller uses to provide financial data to its auditor.

(c) If the Financial Consolidation Requirement is applicable, then promptly upon

Notice from Buyer, Seller shall allow Buyer’s independent registered public accounting firm such access to Seller’s records and personnel, as reasonably

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required so that Buyer’s independent registered public accounting firm can conduct financial statement audits in accordance with the standards of the Public Company Accounting Oversight Board (United States), as well as internal control audits in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, as applicable. All expenses for the foregoing work of SCE’s independent registered public accounting firm shall be borne by Buyer. If Buyer’s independent registered public accounting firm during or as a result of the audits permitted in this Section 13.02(c) determines a material weakness or significant deficiency, as defined by GAAP, IFRS or Successor, as applicable, exists in Seller’s internal controls over financial reporting, then within 90 days of Seller’s receipt of Notice from Buyer, Seller shall remediate any such material weakness or significant deficiency; provided, however, that Seller has the right to challenge the appropriateness of any determination of material weakness or significant deficiency. Seller’s true up to actual activity for yearly or quarterly information as provided herein shall not be evidence of material weakness or significant deficiency.

(d) Buyer shall treat Seller’s financial statements and other financial information provided under the terms of this Section 13.02 in strict confidence and, accordingly: (i) Shall utilize such Seller financial information only for purposes of

preparing, reviewing or certifying Buyer’s or any Buyer parent company financial statements, for making regulatory, tax or other filings required by law in which Buyer is required to demonstrate or certify its or any parent company’s financial condition or to obtain credit ratings;

(ii) Shall make such Seller financial information available only to its officers,

directors, employees or auditors who are responsible for preparing, reviewing or certifying Buyer’s or any Buyer parent company financial statements, to the SEC and the Public Company Accounting Oversight Board (United States) in connection with any oversight of Buyer’s or any Buyer parent company financial statement and to those Persons who are entitled to receive confidential information as identified in Article Twenty One; and

(iii) Buyer shall ensure that its internal auditors and independent registered

public accounting firm (1) treat as confidential any information disclosed to them by Buyer pursuant to this Section 13.02, (2) use such information solely for purposes of conducting the audits described in this Section 13.02, and (3) disclose any information received only to personnel responsible for conducting the audits.

(e) If the Financial Consolidation Requirement is applicable, then, within two

Business Days following the occurrence of any event affecting Seller which Seller understands, during the Term, would require Buyer to disclose such event in a

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Form 8-K filing with the SEC, Seller shall provide to Buyer a Notice describing such event in sufficient detail to permit Buyer to make a Form 8-K filing.

(f) If, after consultation and review, the Parties do not agree on issues raised by Section 13.02(a), then such dispute shall be subject to review by another independent audit firm not associated with either Party’s respective independent registered public accounting firm, reasonably acceptable to both Parties. This third independent audit firm will render its recommendation on whether consolidation by Buyer is required. Based on this recommendation, Seller and Buyer shall mutually agree on how to resolve the dispute. If Seller fails to provide the data consistent with the mutually agreed upon resolution, Buyer may declare an Event of Default pursuant to Section 3.01. If the independent audit firm associated with Buyer still determines, after review by the third party independent audit firm, that Buyer must consolidate, then Seller shall provide the financial information necessary to permit consolidation to Buyer; provided, however, that in addition to the protections in Section 13.02(d), such information shall be password protected and available only to those specific officers, directors, employees and auditors who are preparing and certifying the consolidated financial statements and not for any other purpose.

ARTICLE FOURTEEN GOVERNMENTAL AND ENVIRONMENTAL CHARGES

14.01. Indemnification.

Seller is solely responsible for all Environmental Costs, all GHG Charges, Seller’s AB 32 Compliance Obligation, and all other costs associated with the implementation and regulation of Greenhouse Gas emissions (whether in accordance with AB 32 or any other federal, state or local legislation to offset or reduce any Greenhouse Gas emissions implemented and regulated by an authorized Governmental Authority) with respect to the Project and/or Seller. Seller shall indemnify, defend and hold SCE harmless from and against all liabilities, damages, claims, losses, costs and/or expenses (including, without limitation, attorneys’ fees) incurred by or brought against SCE in connection with such Environmental Costs, GHG Charges, AB 32 Compliance Obligation, and other such costs.

ARTICLE FIFTEEN FORCE MAJEURE

15.01. No Default for Force Majeure.

Subject to Section 8.02(f), neither Party will be considered to be in default in the performance of any of its obligations set forth in this Agreement (except for obligations to pay money) when and to the extent failure of performance is caused by Force Majeure;

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provided, a failure to make payments when due that accrued prior to the Force Majeure event shall not be excused.

15.02. Force Majeure Claim.

Subject to Section 8.02(f), if, because of a Force Majeure, either Party is unable to perform its obligations under this Agreement, such Party shall be excused from whatever performance is affected by the Force Majeure only to the extent so affected; provided:

(a) the Claiming Party, no more than five (5) Business Days after the initial occurrence of the claimed Force Majeure, gives the other Party Notice describing the particulars of the occurrence;

(b) the Claiming Party, within five (5) Business Days, of providing Notice of the occurrence of the Force Majeure, provides evidence reasonably sufficient to establish that the occurrence constitutes a Force Majeure as defined in this Agreement;

(c) the suspension of performance is of no greater scope and of no longer duration than is required by the Force Majeure; and

(d) as soon as Claiming Party is able to resume performance of its obligations under this Agreement, it shall do so and shall promptly give the other Party Notice of this resumption.

ARTICLE SIXTEEN REPRESENTATIONS, WARRANTIES AND COVENANTS

16.01. Representations and Warranties of Both Parties.

As of the Effective Date and the Approval Date, each Party represents and warrants to the other Party that:

(a) It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;

(b) Except as provided in Section 2.02 and Article Five, it has all regulatory authorizations necessary for it to legally perform its obligations under this Agreement;

(c) The execution, delivery and performance of this Agreement are within its power, have been duly authorized by all necessary action (other than regulatory approval as set forth in Section 2.02 and Article Five) 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 Laws applicable to it;

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(d) This Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms, subject to any Equitable Defenses;

(e) It is not Bankrupt and there are not proceedings pending or being contemplated by it or, to its knowledge, threatened against it which could result in it becoming Bankrupt;

(f) There is not pending or, to its knowledge, threatened against it any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement;

(g) No Event of Default with respect to it has occurred and is continuing and no such Event of Default would occur as a result of its entering into or performing its obligations under this Agreement;

(h) It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions, and risks of this Agreement;

(i) It is a “forward contract merchant” within the meaning of the United States Bankruptcy Code; and

(j) It has entered into this Agreement in connection with the conduct of its business and it has the capacity or ability to make or take delivery of all Product, as applicable, under this Agreement.

16.02. Representations, Warranties and Covenants of Seller.

Seller represents, warrants and covenants to SCE that: (a) As of the Effective Date, Seller has Site Control and covenants that it will

maintain Site Control for the remainder of the Term.

(b) As of the Effective Date and the Approval Date, to the best of Seller’s knowledge, each specification and description of each Storage Unit and the Project and the Product in Article One (and related appendices) is true and correct. Seller covenants that, throughout the Term, Seller will promptly provide SCE with Notice of any change in any of the specifications or descriptions set forth in Article One (and related appendices).

(c) The Project is a New Resource.

(d) Throughout the Delivery Period:

(i) Seller owns or has the exclusive right to the Product, and shall furnish

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Buyer, CAISO, CPUC and each applicable Governmental Authority with such evidence as may reasonably be requested to demonstrate such ownership or exclusive right.

(ii) No portion of the Product has been committed by Seller to any third party in order to satisfy RA Compliance Obligations or analogous obligations in any CAISO or non-CAISO markets, other than pursuant to an RMR Contract between the CAISO and Seller.

(iii) (i) Seller shall, and shall cause each Storage Unit’s SC to promptly (and in any event within one (1) Business Day of the time Seller or such SC receives notification from the CAISO) notify Buyer in the event the CAISO designates any portion of the Project as CPM Capacity and (ii) in the event the CAISO makes such a designation Seller shall, and shall cause each Storage Unit’s SC to not accept any such designation by the CAISO unless and until Buyer has agreed to accept such designation.

(iv) Each Storage Unit is connected to the CAISO Grid, is within the CAISO Control Area, and is under the control of CAISO.

(v) Seller shall, and each Storage Unit’s SC, owner and operator is obligated to, comply with Applicable Laws, including the Tariff, relating to the Product.

(vi) Buyer shall have no liability for the failure of Seller or the failure of any Storage Unit’s SC, owner, or operator to comply with such Tariff provisions, including any penalties, charges or fines imposed on Seller or any Storage Unit’s SC, owner, or operator for such noncompliance.

(vii) Seller has notified the SC of each Storage Unit that Seller has transferred the Product to Buyer, with respect to each day of each Showing Month, and that such SC is obligated to deliver the Supply Plans in accordance with the Tariff and this Agreement.

(viii) Seller has notified the SC of each Storage Unit that Seller is obligated to cause each Storage Unit’s SC to provide to the Buyer, at least fifteen (15) Business Days before the relevant deadlines for each RA Compliance Showing, the applicable Expected Contract Quantity of such Storage Unit for each day of such Showing Month, including the amount of Flexible Capacity and Inflexible Capacity, that is to be submitted in the Supply Plan associated with this Agreement for the applicable period.

(ix) Seller has notified each Storage Unit’s SC that Buyer is entitled to the revenues set forth in Section 10.02, and such SC is obligated to promptly deliver those revenues to Buyer, along with appropriate documentation supporting the amount of those revenues.

16.03. Seller’s Affirmative Covenants.

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(a) Seller shall maintain and preserve its existence as a [insert applicable corporate incorporation information] formed under the laws of the State of [XX] and all material rights, privileges and franchises necessary or desirable to enable it to perform its obligations under this Agreement.

(b) Seller shall, from time to time as requested by SCE, execute, acknowledge, record, register, deliver and/or file all such notices, statements, instruments and other documents as may be necessary or advisable to render fully valid and enforceable under all Applicable Laws the rights, liens and priorities of SCE with respect to its Security Interest furnished pursuant to this Agreement.

(c) Seller shall ensure that no less than twenty percent (20%) of Seller’s aggregate costs to complete the initial development, engineering, procurement and construction of the Project are funded by equity contributions to Seller. The amount funded by equity contributions shall not be less than [TBD]. The foregoing shall not impose any obligations that survive the Initial Delivery Date, provided that if SCE determines after the Initial Delivery Date that Seller breached this obligation with respect to any time prior to the Initial Delivery Date, SCE retains all rights under this Agreement, including, without limitation under Article Three, with respect to such occurrence.

(d) Seller shall obtain, maintain and remain in compliance with all permits, agreements (including interconnection agreements) and rights (including transmission rights) necessary to operate the Project and provide the Product to SCE in accordance with this Agreement.

(e) Seller shall deliver to SCE the Product free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto by any person.

(f) Seller shall provide and execute all documents and instruments reasonably necessary (including documents amending this Agreement and documents reflecting compliance with all applicable Tariff provisions and applicable decisions of the CPUC and/or any other Governmental Authority that address performance obligations and penalties related to the Product hereunder) and take all commercially reasonable actions necessary, in each case to effect the use of the Resource Adequacy Benefits of the Project in accordance with Section 1.01(a) through the Delivery Period.

(g) Seller shall maintain the Project as fully deliverable for the purposes of counting the Product, in an amount equal to the Contract Capacity, towards RA Compliance Obligations.

(h) Fifteen (15) months prior to the Expected Initial Delivery Date, and thereafter no later than January 1, April 1, July 1 and October 1 of each calendar year during the Term, Seller shall submit to SCE each Storage Unit’s proposed schedule of Planned Outages (“Outage Schedule”), covering every day of the following twenty-four

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months that is within the Delivery Period. Seller shall submit the Outage Schedule in substantially the form set forth in Appendix 16.03(H). Within twenty (20) Business Days after its receipt of an Outage Schedule, SCE shall notify Seller in writing of any reasonable request for changes to the Outage Schedule, and Seller shall, if consistent with Prudent Electrical Practices, accommodate SCE’s requests regarding the timing of any Planned Outage; provided that the CAISO agrees to such changed timing. Seller will communicate to SCE all changes to a Planned Outage and estimated time of return of each Storage Unit as soon as practicable after the condition causing the change becomes known to Seller. Seller shall, and Seller shall cause each Storage Unit’s SC to, notify Buyer within five (5) Business Days of any change to the Outage Schedule.

(i) Seller shall (i) provide all information needed for the Product to be shown on Supply Plans and RA Compliance Showings and to be used to satisfy RA Compliance Obligations, including, without limitation providing information with respect to the amount of Flexible Capacity and Inflexible Capacity available to be included in any applicable Supply Plan and RA Compliance Showing and (ii) provide any information requested by SCE related to the Project that is required to be provided to the CAISO or CPUC in order for SCE to comply with the Tariff or other Applicable Laws.

16.04. Seller’s Negative Covenants.

(a) Seller shall not issue any Disqualified Stock, other than Disqualified Stock issued, in connection with the funding of the development, construction, operation, reconstruction, restoration or refinancing of the Project.

(b) Except for (i) liens for the benefit of Lender, and (ii) liens cured or removed within thirty (30) days after their incurrence, Seller shall not create, incur, assume or suffer to be created by it or any subcontractor, employee, laborer, materialman, other supplier of goods or services or any other person, any lien on Seller’s interest in the Site, the Project, or any part thereof or interest therein. Seller shall pay or discharge, or shall cause its contractors to promptly pay and discharge, and discharge of record, any such lien for labor, materials, supplies or other obligations upon Seller’s interest in the Site, the Project, or any part thereof or interest therein, unless Seller is disputing any such lien in good faith and only for so long as it does not create an imminent risk of a sale or transfer of the Site, the Project or a material part thereof or interest therein. Seller shall promptly notify SCE of any attachment or imposition of any lien against Seller’s interest in the Site, the Project, or any part thereof or interest therein.

(c) Seller shall not hold any material assets, become liable for any material obligations or engage in any material business activities other than directly associated with the development, construction and operation of the Project.

(d) Seller shall not own, form or acquire, or otherwise conduct any of its activities through, any direct or indirect subsidiary.

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(e) During any period during which a Seller is a Defaulting Party, Seller shall (i) not declare or pay any dividend, or make any other distribution or payment, on account of any equity interest in Seller, or (ii) otherwise make any distribution or equivalent payment to any Affiliate of Seller.

(f) Seller shall not directly or indirectly pledge or assign, or cause or permit the pledge or assignment of, the Required Permits as collateral to any party other than to Lender or Lender’s agent without SCE’s prior written consent, which consent may be granted or withheld in SCE’s sole discretion.

(g) Seller shall not directly or indirectly pledge or assign, or cause or permit the pledge or assignment of, any ownership interest in Seller if such pledge or assignment would have a material adverse effect on the Project or on Seller’s ability to perform its obligations under this Agreement. Seller shall provide SCE with written Notice of any direct or indirect pledge or assignment of any ownership interest in Seller at least ten (10) Business Days prior to such pledge or assignment.

ARTICLE SEVENTEEN LIMITATIONS

17.01. Limitation of Remedies, Liability and Damages.

EXCEPT AS SET FORTH HEREIN, THERE ARE NO WARRANTIES BY EITHER PARTY UNDER THIS AGREEMENT, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF.

FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES WILL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY WILL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED, UNLESS THE PROVISION IN QUESTION PROVIDES THAT THE EXPRESS REMEDIES ARE IN ADDITION TO OTHER REMEDIES THAT MAY BE AVAILABLE.

SUBJECT TO SECTION 19.04, IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY WILL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES WILL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.

UNLESS EXPRESSLY PROVIDED IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE PROVISIONS OF ARTICLE TWENTY (INDEMNITY), NEITHER PARTY WILL BE LIABLE FOR CONSEQUENTIAL,

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INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE.

IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE.

TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS. NOTHING IN THIS ARTICLE PREVENTS, OR IS INTENDED TO PREVENT SCE FROM PROCEEDING AGAINST OR EXERCISING ITS RIGHTS WITH RESPECT TO ANY DELIVERY DATE SECURITY OR PERFORMANCE ASSURANCE.

17.02. No Representation by SCE.

Any review by SCE of the Project, including the design, construction or refurbishment, operation or maintenance of the Project, or otherwise, is solely for SCE’s information. By making such review, SCE makes no representation as to the economic and technical feasibility, operational capability, or reliability of the Project, and Seller shall in no way represent to any third party that any such review by SCE of the Project, including, but not limited to, any review of the design, construction or renovation, operation, or maintenance of the Project by SCE, constitutes any such representation by SCE. Seller is solely responsible for the economic and technical feasibility, operational capability, and reliability of the Project.

ARTICLE EIGHTEEN

RECORDS 18.01. Performance under this Agreement.

Each Party and its Representatives shall maintain records and supporting documentation relating to this Agreement, the Project, and the performance of the Parties hereunder in accordance with, and for the applicable time periods required by, all Applicable Laws, but in no event less than four (4) years after final payment is made under this Agreement.

18.02. Other Regulatory and Governmental Requirements.

At SCE’s request, Seller shall maintain and deliver to SCE copies of records and supporting documentation with respect to the Project that Seller is not already required to maintain or deliver under this Agreement, in order to comply with all Applicable Laws.

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18.03. Audit Rights.

SCE shall have the right, at its sole expense and during normal working hours, to audit the documents, records or data of Seller to the extent reasonably necessary to verify the accuracy of any statement, claim, charge or calculation made pursuant to this Agreement. Seller shall have the right, at its sole expense, to hire an independent third party reasonably acceptable to SCE to audit the documents, records or data of SCE related to this Agreement during normal working hours to the extent reasonably necessary to verify the accuracy of any statement, claim, charge or calculation made pursuant to this Agreement. Such independent third party must sign a confidentiality agreement in substance reasonably acceptable to SCE before examining SCE’s documents, records or data. Each Party shall promptly comply with any reasonable request by the other Party under this Section 18.03 and provide copies of documents, records or data to the requesting Party. The rights and obligations under this Section 18.03 shall survive the termination of this Agreement for a period of two (2) years.

ARTICLE NINETEEN DISPUTES

19.01. Dispute Resolution.

Other than requests for provisional relief under Section 19.04, any and all Disputes which the Parties have been unable to resolve by informal methods after undertaking a good faith effort to do so, must first be submitted to mediation under the procedures described in Section 19.02 below, and if the matter is not resolved through mediation, then for final and binding arbitration under the procedures described in Section 19.03 below.

The Parties waive any right to a jury and agree that there will be no interlocutory appellate relief (such as writs) available. Any Dispute resolution process pursuant to this Article Nineteen shall be commenced within one (1) year of the date of the occurrence of the facts giving rise to the Dispute, without regard to the date such facts are discovered; provided, if the facts giving rise to the Dispute were not reasonably capable of being discovered at the time of their occurrence, then such one (1) year period shall commence on the earliest date that such facts were reasonably capable of being discovered. If the Dispute resolution process pursuant to Article Nineteen with respect to a Dispute is not commenced within such one (1) year time period, such Dispute shall be barred, without regard to any other limitations period set forth by law or statute.

19.02. Mediation.

Either Party may initiate mediation by providing Notice to the other Party of a written request for mediation, setting forth a description of the Dispute and the relief requested.

The Parties will cooperate with one another in selecting the mediator (“Mediator”) from the panel of neutrals from Judicial Arbitration and Mediation Services, Inc. (“JAMS”), its successor, or any other mutually acceptable non-JAMS Mediator, and in scheduling the time and place of the mediation.

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Such selection and scheduling will be completed within forty-five (45) days after Notice of the request for mediation.

Unless otherwise agreed to by the Parties, the mediation will not be scheduled for a date that is greater than one hundred twenty (120) days from the date of Notice of the request for mediation.

The Parties covenant that they will participate in the mediation in good faith, and that they will share equally in its costs (other than each Party’s individual attorneys’ fees and costs related to the Party’s participation in the mediation, which fees and costs will be borne by such Party).

All offers, promises, conduct and statements, whether oral or written, made in connection with or during the mediation by either of the Parties, their agents, representatives, employees, experts and attorneys, and by the Mediator or any of the Mediator’s agents, representatives and employees, will not be subject to discovery and will be confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding between or involving the Parties, or either of them, provided, evidence that is otherwise admissible or discoverable will not be rendered inadmissible or non-discoverable as a result of its use in the mediation.

19.03. Arbitration.

Either Party may initiate binding arbitration with respect to the matters first submitted to mediation by providing Notice of a demand for binding arbitration before a single, neutral arbitrator (the “Arbitrator”) within sixty (60) days following the unsuccessful conclusion of the mediation provided for in Section 19.02, above. If Notice of arbitration is not provided by either Party within sixty (60) days following the unsuccessful conclusion of the mediation provided for in Section 19.02 above, the Dispute resolution process shall be deemed complete and further resolution of such Dispute shall be barred, without regard to any other limitations period set forth by law or statute.

The Parties will cooperate with one another in selecting the Arbitrator within sixty (60) days after Notice of the demand for arbitration and will further cooperate in scheduling the arbitration to commence no later than one hundred eighty (180) days from the date of Notice of the demand.

If, notwithstanding their good faith efforts, the Parties are unable to agree upon a mutually-acceptable Arbitrator, the Arbitrator will be appointed as provided for in California Code of Civil Procedure Section 1281.6.

To be qualified as an Arbitrator, each candidate must be a retired judge of a trial court of any state or federal court, or retired justice of any appellate or supreme court.

Unless otherwise agreed to by the Parties, the individual acting as the Mediator will be disqualified from serving as the Arbitrator in the dispute, although the Arbitrator may be another member of the JAMS panel of neutrals or such other panel of neutrals from which the Parties have agreed to select the Mediator.

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Upon Notice of a Party’s demand for binding arbitration, such Dispute submitted to arbitration, including the determination of the scope or applicability of this agreement to arbitrate, will be determined by binding arbitration before the Arbitrator, in accordance with the laws of the State of California, without regard to principles of conflicts of laws.

Except as provided for herein, the arbitration will be conducted by the Arbitrator in accordance with the rules and procedures for arbitration of complex business disputes for the organization with which the Arbitrator is associated.

Absent the existence of such rules and procedures, the arbitration will be conducted in accordance with the California Arbitration Act, California Code of Civil Procedure Section 1280 et seq. and California procedural law (including the Code of Civil Procedure, Civil Code, Evidence Code and Rules of Court, but excluding local rules).

Notwithstanding the rules and procedures that would otherwise apply to the arbitration, and unless the Parties agree to a different arrangement, the place of the arbitration will be in Los Angeles County, California.

Also notwithstanding the rules and procedures that would otherwise apply to the arbitration, and unless the Parties agree to a different arrangement, discovery will be limited as follows:

(a) Before discovery commences, the Parties shall exchange an initial disclosure of all documents and percipient witnesses which they intend to rely upon or use at any arbitration proceeding (except for documents and witnesses to be used solely for impeachment);

(b) The initial disclosure will occur within thirty (30) days after the initial conference with the Arbitrator or at such time as the Arbitrator may order;

(c) Discovery may commence at any time after the Parties’ initial disclosure;

(d) The Parties will not be permitted to propound any interrogatories or requests for admissions;

(e) Discovery will be limited to twenty-five (25) document requests (with no subparts), three (3) lay witness depositions, and three (3) expert witness depositions (unless the Arbitrator holds otherwise following a showing by the Party seeking the additional documents or depositions that the documents or depositions are critical for a fair resolution of the Dispute or that a Party has improperly withheld documents);

(f) Each Party is allowed a maximum of three (3) expert witnesses, excluding rebuttal experts;

(g) Within sixty (60) days after the initial disclosure, or at such other time as the Arbitrator may order, the Parties shall exchange a list of all experts upon which they intend to rely at the arbitration proceeding;

(h) Within thirty (30) days after the initial expert disclosure, the Parties may designate a maximum of two (2) rebuttal experts;

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(i) Unless the Parties agree otherwise, all direct testimony will be in form of affidavits or declarations under penalty of perjury; and

(j) Each Party shall make available for cross examination at the arbitration hearing its witnesses whose direct testimony has been so submitted.

Subject to Section 17.01, the Arbitrator will have the authority to grant any form of equitable or legal relief a Party might recover in a court action. The Parties acknowledge and agree that irreparable damage would occur if certain provisions of this Agreement are not performed in accordance with the terms of the Agreement, that money damages would not be a sufficient remedy for any breach of these provisions of this Agreement, and that the Parties shall be entitled, without the requirement of posting a bond or other security, to specific performance and injunctive or other equitable relief as a remedy for a breach of Section 1.01, 3.06, 9.01, 9.03, 16.02(a), 16.03(f) and 16.03(i), and Article Twenty-One of this Agreement.

Judgment on the award may be entered in any court having jurisdiction.

The Arbitrator must, in any award, allocate all of the costs of the binding arbitration (other than each Party’s individual attorneys’ fees and costs related to the Party’s participation in the arbitration, which fees and costs will be borne by such Party), including the fees of the Arbitrator and any expert witnesses, against the Party who did not prevail.

Until such award is made, however, the Parties will share equally in paying the costs of the arbitration.

At the conclusion of the arbitration hearing, the Arbitrator shall prepare in writing and provide to each Party a decision setting forth factual findings, legal analysis, and the reasons on which the Arbitrator’s decision is based. The Arbitrator shall also have the authority to resolve claims or issues in advance of the arbitration hearing that would be appropriate for a California superior court judge to resolve in advance of trial. The Arbitrator shall not have the power to commit errors of law or fact, or to commit any abuse of discretion, that would constitute reversible error had the decision been rendered by a California superior court. The Arbitrator’s decision may be vacated or corrected on appeal to a California court of competent jurisdiction for such error. Unless otherwise agreed to by the Parties, all proceedings before the Arbitrator shall be reported and transcribed by a certified court reporter, with each Party bearing one-half of the court reporter’s fees.

19.04. Provisional Relief.

The Parties acknowledge and agree that irreparable damage would occur if certain provisions of this Agreement are not performed in accordance with the terms of this Agreement, that money damages would not be a sufficient remedy for any breach of these provisions of this Agreement, and that the Parties shall be entitled, without the requirement of posting a bond or other security, to seek a preliminary injunction, temporary restraining order, or other provisional relief as a remedy for a breach of

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Section 1.01, 3.06, 9.01, 9.03, 16.02(a), 16.03(f) or 16.03(i) or Article Twenty-One of this Agreement in any court of competent jurisdiction, notwithstanding the obligation to submit all other Disputes (including all claims for monetary damages under this Agreement) to arbitration pursuant to this Article Nineteen. The Parties further acknowledge and agree that the results of the arbitration may be rendered ineffectual without the provisional relief.

Such a request for provisional relief does not waive a Party’s right to seek other remedies for the breach of the provisions specified above in accordance with Article Nineteen, notwithstanding any prohibition against claim-splitting or other similar doctrine. The other remedies that may be sought include specific performance and injunctive or other equitable relief, plus any other remedy specified in this Agreement for the breach of the provision, or if the Agreement does not specify a remedy for the breach, all other remedies available at law or equity to the Parties for the breach.

19.05. Waiver of Jury Trial.

THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING UNDER THIS AGREEMENT.

19.06. Consolidation of Matters.

The Parties shall make diligent good faith efforts to consolidate any provisional relief, mediation, arbitration or other dispute resolution proceedings arising pursuant to this Article Nineteen that arise from or relate to the same act, omission or issue.

ARTICLE TWENTY INDEMNIFICATION

20.01. SCE’s Indemnification Obligations.

In addition to any other indemnification obligations SCE may have elsewhere in this Agreement, which are hereby incorporated in this Section 20.01, SCE releases, and shall indemnify, defend and hold harmless Seller, and Seller’s directors, officers, employees, agents, assigns, and successors in interest, from and against any and all loss, liability, damage, claim, cost, charge, demand, fine, penalty or expense of any kind or nature (including any direct, damage, claim, cost, charge, demand, or expense, and attorneys’ fees (including cost of in-house counsel) and other costs of litigation, arbitration and mediation, and in the case of third-party claims only, indirect and consequential loss or damage of such third-party), arising out of or in connection with any breach made by SCE of its representations and warranties in Section 16.01. This indemnity applies notwithstanding Seller’s active or passive negligence. However, Seller will not be indemnified hereunder for its loss, liability, damage, claim, cost, charge, demand or expense to the extent caused by its gross negligence or willful misconduct.

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20.02. Seller’s Indemnification Obligations.

In addition to any other indemnification obligations Seller may have elsewhere in this Agreement, which are hereby incorporated in this Section 20.02, Seller releases, and shall indemnify, defend and hold harmless SCE, and SCE’s directors, officers, employees, agents, assigns, and successors in interest, from and against any and all loss, liability, damage, claim, cost, charge, demand, penalty, fine or expense of any kind or nature (including any direct, damage, claim, cost, charge, demand, or expense, and attorneys’ fees (including cost of in-house counsel) and other costs of litigation, arbitration or mediation, and in the case of third-party claims only, indirect or consequential loss or damage of such third-party), arising out of or in connection with:

(a) any breach made by Seller of its representations, warranties or covenants in Article Sixteen;

(b) Seller’s failure to fulfill its obligations regarding the Product as set forth in Section 1.01(a) and Article Nine;

(c) Penalties assessed by FERC, NERC (through WECC or otherwise) or any other Governmental Authority for violations of the NERC Reliability Standards by the Project or Seller, as Generator Operator or other applicable category against SCE;

(d) injury or death to persons, including SCE employees, and physical damage to property, including SCE property, where the damage arises out of, is related to, or is in connection with, Seller’s construction, ownership or operation of the Project, or obligations or performance under this Agreement; or

(e) injury or death to any person or damage to any property, including the personnel or property of SCE, to the extent that SCE would have been protected had Seller complied with all of the provisions of Section 22.15; provided, the inclusion of this subsection (e) is not intended to create any express or implied right in Seller to elect not to provide the insurance required under Section 22.15.

This indemnity applies notwithstanding SCE’s active or passive negligence. However, SCE will not be indemnified under Section 20.02(a) - (d) for its loss, liability, damage, claim, cost, charge, demand or expense to the extent caused by SCE’s gross negligence or willful misconduct.

Seller agrees to indemnify SCE for any monetary penalties or fines assessed against SCE by the CPUC or the CAISO or any other entity having jurisdiction, resulting from Seller’s willful or negligent failure to provide SCE with the full amount of Resource Adequacy Benefits associated with the Contract Capacity for the Project (in accordance with then current resource adequacy counting rules) for purposes of use toward meeting SCE’s RA Compliance Obligations. The Parties shall use commercially reasonable efforts to minimize such fines and penalties; provided, in no event will SCE be required to use or change its utilization of its owned or controlled assets or market positions to minimize the fines and penalties.

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20.03. Indemnification Claims.

All claims for indemnification by a Party entitled to be indemnified under this Agreement (an “Indemnified Party”) by the other Party (the “Indemnitor”) will be asserted and resolved as follows:

(a) If a claim or demand for which an Indemnified Party may claim indemnity is asserted against or sought to be collected from an Indemnified Party by a third party, the Indemnified Party shall as promptly as practicable give Notice to the Indemnitor; provided, failure to provide this Notice will relieve Indemnitor only to the extent that the failure actually prejudices Indemnitor.

(b) Indemnitor will have the right to control the defense and settlement of any claims in a manner not adverse to Indemnified Party but cannot admit any liability or enter into any settlement without Indemnified Party’s approval.

(c) Indemnified Party may employ counsel at its own expense with respect to any claims or demands asserted or sought to be collected against it; provided, if counsel is employed due to a conflict of interest or because Indemnitor does not assume control of the defense, Indemnitor will bear the expense of this counsel.

20.04. Survival.

All indemnity rights shall survive the termination of this Agreement.

ARTICLE TWENTY-ONE CONFIDENTIALITY/REGULATORY DISCLOSURE

21.01. Confidentiality Obligation.

Except as otherwise expressly agreed in writing by the other Party, and except as otherwise agreed in Sections 21.02 and 21.03, each receiving Party shall, and shall cause its Representatives to, (a) keep strictly confidential and take reasonable precautions to protect against the disclosure of all Confidential Information, and (b) use all Confidential Information solely for the purposes of performing its obligations under this Agreement and not for any other purpose; provided, a Party may disclose Confidential Information to those of its Representatives who need to know such information for the purposes of performing the receiving Party’s obligations under this Agreement if, but only if, prior to being given access to Confidential Information, such Representatives are informed of the confidentiality thereof and the requirements of this Agreement and are obligated to comply with the requirements of this Agreement and, in the case of Representatives of Seller engaged wholly or in part in the purchase and sale of electrical power or natural gas, only if such Representatives are directly engaged in performing Seller’s obligations under this Agreement. Each Party will be responsible for any breach of this Agreement by its Representatives.

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21.02. Permitted Disclosures.

(a) Buyer and Seller may disclose Confidential Information to the Independent Evaluator. SCE and the Independent Evaluator may disclose Confidential Information to duly authorized regulatory and governmental agencies or entities, including the FERC, CPUC and all divisions thereof, and the CAISO, SCE’s Procurement Review Group, a group of non-market participants including members of the CPUC, other governmental agencies and consumer groups established by the CPUC in Decision 02-08-071, and CAM. Neither SCE nor the Independent Evaluator shall have any liability whatsoever to Seller in the event of any unauthorized use or disclosure by a regulatory or governmental agency or entity including without limitation the FERC, the CPUC and all divisions thereof, the PRG, CAM, or the CAISO of any Confidential Information or other information disclosed to any of them by SCE or the Independent Evaluator.

(b) SCE and the Independent Evaluator may also disclose Confidential Information to any Governmental Authority or to any third party to the extent necessary to comply with any Applicable Laws, and any applicable regulation, decision, rule, subpoena or order of the CPUC, CEC, FERC, any administrative agency, legislative body or other tribunal (other than those entities set forth in Section 21.02(c)), any exchange, Control Area or CAISO rule, or any discovery or data request of a party to any proceeding pending before any of the foregoing.

(c) The Parties may disclose Confidential Information to the extent necessary to comply with any subpoena or order of court or judicial entity having jurisdiction over the disclosing Party (other than those entities set forth in Section 21.02(b)), or in connection with a discovery or data request of a party to any proceeding before any of the foregoing.

(d) Buyer may disclose the Product or any applicable portion of the Product,

including any amounts of Flexible Capacity and Inflexible Capacity, under this Agreement to any Governmental Authority, the CPUC, the CAISO in order to support its RA Compliance Showings, if applicable, and Seller may disclose the transfer of the Product and the applicable Expected Contract Quantity and any amounts of Flexible Capacity and Inflexible Capacity for each day of each Showing Month under this Agreement to the SC of each Storage Unit in order for such SC to timely submit accurate Supply Plans; provided, that each disclosing Party shall use reasonable efforts to limit, to the extent possible, the ability of any such applicable Governmental Authority, CAISO, or SC to further disclose such information. In addition, in the event Buyer resells all or any portion of the Product to another party or the Product is to be provided to another party in accordance with Section 1.01(a), Buyer shall be permitted to disclose to the other party to such transaction all such information necessary to effect such transaction.

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21.03. Duty to Seek Protection.

(a) In connection with requests or orders to produce Confidential Information protected by this Agreement in the circumstances provided in Section 21.02(c) (by deposition, interrogatories, requests for information or documents, subpoena, order or similar legal process) each Party (i) will promptly notify the other Party of the existence, terms, and circumstances of such requirement(s) so that such other Party may seek an appropriate protective order or waive compliance with the provisions of this Agreement, and (ii) will, and will cause its Representatives to, cooperate fully with such other Party in seeking to limit or prevent such disclosure of such Confidential Information.

(b) If a Party or its Representatives are, in the written opinion of its legal counsel, and notwithstanding compliance with Section 21.03(a) compelled to make disclosure in response to a requirement described in Section 21.03(a) or stand liable for contempt or suffer other penalty, the compelled person may disclose only that portion of the Confidential Information protected by this Agreement which it is legally required to disclose and will exercise its best efforts to obtain reliable assurance that confidential treatment will be accorded to the disclosed Confidential Information protected by this Agreement.

21.04. Ownership and Return of Information.

All Confidential Information shall be and remain the property of the Party providing it. Nothing in this Agreement shall be construed as granting any rights in or to Confidential Information to the Party or Representatives receiving it, except the right of use in accordance with the terms of this Agreement. Notwithstanding the foregoing, the Parties shall have the right to retain copies of Confidential Information, subject to the confidentiality obligations in this Article Twenty-One.

ARTICLE TWENTY-TWO MISCELLANEOUS

22.01. General.

This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof. The term “including” when used in this Agreement shall be by way of example only and shall not be considered in any way to be in limitation. All references to time shall be in PPT unless stated otherwise. The headings used herein are for convenience and reference purposes only. This Agreement shall be binding on each Party’s successors and permitted assigns. Each Party agrees if one Party seeks to amend any applicable wholesale power sales tariff during the term of this Agreement without the prior written consent of the other Party, such amendment will not in any way affect either Party’s

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obligations under the Agreement. Each Party further agrees that it will not assert, or defend itself, on the basis that any applicable tariff is inconsistent with this Agreement.

22.02. Notices.

Unless otherwise provided in this Agreement, any notice or request (“Notice”) shall be in writing to the address provided below and delivered by hand delivery, United States mail, overnight courier service, or facsimile. Notice by facsimile or hand delivery shall be effective at the close of business on the day received, if the entire document was received during business hours on a Business Day, and otherwise shall be effective at the close of business on the next Business Day after it was sent or personally delivered. Notice by overnight courier service shall be effective on the next Business Day after the postmarked date. Notice by United States mail shall be effective on the third (3rd) Business Day after it was sent. A Party may change its address by providing Notice of same to the other Party in accordance with this Section 22.02.

Seller: SCE:

All Notices:[To be completed] All Notices:

Street: Street: 2244 Walnut Grove Ave., G.O.1, Quad 1C

City: Zip: City: Rosemead, CA Zip: 91770

Attn: Phone: Facsimile: Duns: Federal Tax ID Number:

Attn: Contract Administration Phone: (626) 302-3126 Facsimile: (626) 302-8168 Duns: 006908818 Federal Tax ID Number: 95-1240335

Invoices: Attn: Phone: Facsimile:

Invoices: Attn: Power Procurement - Finance Phone: (626) 302-3277 Facsimile: (626) 302-3276 Email: PPFDPowerSettle@sce.com

Payments: Attn: Phone: Facsimile:

ACH Routing Information: Financial Institution: [___________] Branch: [___________] Address: [___________] City, State & Zip: [___________] Routing Number: [___________] Account Number: [___________]

Payments: Attn: Accounts Receivable - Power Procurement Southern California Edison Company PO Box 800 Rosemead, CA 91770 Phone: (626) 302-9371 Facsimile: (626) 302-9392

ACH Routing Information: Financial Institution: [___________] Branch: [___________] Address: [___________] City, State & Zip: [___________] Routing Number: [___________] Account Number: [___________]

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Wire Transfer: BNK: JPMorganChase Bank ABA: 021000021 ACCT: 323-394434

Credit and Collections: Attn: Phone: Facsimile:

Credit and Collections: Attn: Manager of Credit and Collateral Phone: (626) 302-3672 Facsimile: (626) 302-2517

Email: scecollateral@sce.com

With additional Notices of an Event of Default or Potential Event of Default to:

Attn: Phone: Facsimile:

With additional Notices of an Event of Default or Potential Event of Default to:

Southern California Edison Company 2244 Walnut Grove Ave., G.O.1, Quad 1C Rosemead, CA 91770 Attn: Manager of Energy Contracts Phone: (626) 302-3312 Facsimile: (626) 302-8168

22.03. Governing Law; Venue.

THIS AGREEMENT SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS THAT MIGHT APPLY THE LAWS OF A DIFFERENT JURISDICTION. THE PARTIES HEREBY CONSENT TO CONDUCT ALL DISPUTE RESOLUTION, JUDICIAL ACTIONS OR PROCEEDINGS ARISING DIRECTLY, INDIRECTLY OR OTHERWISE IN CONJUNCTION WITH, OUT OF, RELATED TO OR ARISING FROM THIS AGREEMENT IN THE CITY OF LOS ANGELES, CALIFORNIA.

22.04. Amendment.

This Agreement can only be amended by a writing signed by both Parties.

22.05. Assignment.

Neither Party shall assign, transfer, delegate, mortgage, hypothecate, pledge or encumber its rights, title or interest in this Agreement without the prior written consent of the other Party, which consent may be withheld in the exercise of its sole discretion; provided, Seller may collaterally assign this Agreement in accordance with Article Thirteen.

22.06. Waiver.

None of the provisions of this Agreement shall be considered waived by either Party unless the Party against whom such waiver is claimed gives the waiver in writing. The failure of either Party to insist in any one instance upon strict performance of any the provisions of this Agreement or to take advantage of any of its rights hereunder shall not be construed as a waiver of any such provisions or the relinquishment of such rights for

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the future, but the same shall continue and remain in full force and effect. Waiver by either Party of any default of the other Party shall not be deemed a waiver of any other default.

22.07. Obligations Surviving Termination.

Except as may be provided or limited by this Agreement, the obligations which by their nature are intended to survive termination of this Agreement, including representations, warranties, covenants and rights and obligations with respect to audits, indemnification, payment and settlement, confidentiality, remedies, limitation of liabilities, posting of Performance Assurance and Delivery Date Security, dispute resolution, and limitations on third party sales, shall so survive.

22.08. Further Assurances.

If either Party determines in its reasonable discretion that any further instruments, assurances or other things are necessary to carry out the terms of this Agreement, the other Party shall execute and deliver all such instruments and assurances and do all things reasonably necessary to carry out the terms of this Agreement.

22.09. No Agency.

Except as otherwise provided explicitly herein, in performing their respective obligations under this Agreement, neither Party is acting, or is authorized to act, as the other Party’s agent.

22.10. No Third Party Beneficiaries.

This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound by this Agreement).

22.11. Independent Contractors.

The Parties are independent contractors. Nothing contained herein shall be deemed to create an association, joint venture, partnership or principal/agent relationship between the Parties or to impose any partnership obligation or liability on either Party in anyway.

22.12. Severability.

If any term, Section, provision or other part of this Agreement, or the application of any term, Section, provision or other part of this Agreement, is held to be invalid, illegal or void by a court or regulatory agency of proper jurisdiction, all other terms, Sections, provisions or other parts of this Agreement shall not be affected thereby but shall remain in force and effect unless such court or regulatory agency holds that the provisions are not separable from all other provisions of this Agreement.

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22.13. Forward Contract.

The Parties acknowledge and agree that this Agreement constitutes a “forward contract” and that they are each “forward contract merchants” within the meaning of the United States Bankruptcy Code.

22.14. Mobile Sierra.

Absent the agreement of all Parties to the proposed change, the standard of review for changes to any rate, charge, classification, term or condition of this Agreement, whether proposed by a Party (to the extent that any waiver below is unenforceable or ineffective as to such Party), a non-party or FERC acting sua sponte, shall be the ‘public interest’ standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956), and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish 554 U.S. 527 (2008). Notwithstanding any provision of Agreement, and absent the prior written agreement of the Parties, each Party, to the fullest extent permitted by Applicable Laws, for itself and its respective successors and assigns, hereby also expressly and irrevocably waives any rights it can or may have, now or in the future, whether under Sections 205, 206, or 306 of the Federal Power Act or otherwise, to seek to obtain from FERC by any means, directly or indirectly (through complaint, investigation, supporting a third party seeking to obtain or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC changing any Section of this Agreement specifying any rate or other material economic terms and conditions agreed to by the Parties.

22.15. Insurance.

Throughout the Term and for such additional periods as may be specified below, Seller shall, at its own expense, provide and maintain in effect the insurance policies and minimum limits of coverage specified below, and such additional coverage as may be required by Applicable Law, with insurance companies which are authorized to do business in the state in which the services are to be performed and which have an A.M. Best’s Insurance Rating of not less than A-:VII. The minimum insurance requirements specified herein do not in any way limit or relieve Seller of any obligation assumed elsewhere in this Agreement, including, but not limited to, Seller’s defense and indemnity obligations.

(a) Workers’ Compensation Insurance with the statutory limits required by the state

having jurisdiction over Seller’s employees;

(b) Employer’s Liability Insurance with limits of not less than:

(i) Bodily injury by accident – One Million dollars ($1,000,000) each accident

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(ii) Bodily injury by disease – One Million dollars ($1,000,000) policy limit

(iii) Bodily injury by disease – One Million dollars ($1,000,000) each employee

(c) Commercial General Liability Insurance (which, except with the prior written consent of SCE and subject to Sections 22.15(c)(i) and (ii) below, shall be written on an “occurrence,” not a “claims-made” basis), covering all operations by or on behalf of Seller arising out of or connected with this Agreement, including coverage for bodily injury, property damage, personal and advertising injury, products/completed operations, and contractual liability. Such insurance shall bear a combined single limit per occurrence and annual aggregate of not less than [TBD (or) $1,000,000, per occurrence and $2,000,000 annual aggregate], exclusive of defense costs, for all coverages. Such insurance shall contain standard cross-liability and severability of interest provisions and no explosion, collapse, or underground exclusions.

If Seller elects, with SCE’s written concurrence, to use a “claims made” form of Commercial General Liability Insurance, then the following additional requirements apply:

(i) The retroactive date of the policy must be prior to the Effective Date; and

(ii) Either the coverage must be maintained for a period of not less than three (3) years after the Agreement terminates, or the policy must provide for a supplemental extended reporting period of not less than three (3) years after this Agreement terminates.

(d) Commercial Automobile Liability Insurance covering bodily injury and property damage with a combined single limit of not less than One Million dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired automobiles in the performance of the Agreement.

(e) Pollution Liability Insurance, (which, except with the prior written consent of SCE and subject to Sections 22.15(e)(i) and (ii) below, shall be written on an “occurrence,” not a “claims-made” basis) with limits of not less than [TBD (or) $5,000,000, per occurrence or each claim and in the annual aggregate], covering losses involving hazardous material(s) and caused by pollution incidents or conditions that arise from the Project, including but not limited to, coverage for bodily injury, sickness, disease, mental anguish or shock sustained by any person, including death, property damage including the resulting loss of use thereof, clean-up costs, and the loss of use of tangible property that has not been physically damaged or destroyed, and defense costs.

If Seller elects, with SCE’s written concurrence, to use a “claims made” form of Pollution Liability Insurance, then the following additional requirements apply:

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(i) The retroactive date of the policy must be prior to the Effective Date; and

(ii) Either the coverage must be maintained for a period of not less than three (3) years after this Agreement terminates, or the policy must provide for a supplemental extended reporting period of not less than three (3) years after this Agreement terminates.

(f) Umbrella/Excess Liability Insurance, written on an “occurrence,” not a “claims-made” basis, providing coverage excess of the underlying Employer’s Liability, Commercial General Liability, Pollution Liability Insurance, and Commercial Automobile Liability insurance, on terms at least as broad as the underlying coverage, with limits of not less than [TBD (or) $10,000,000, per occurrence and in the annual aggregate] per occurrence and in the annual aggregate. The insurance requirements of this Section 22.15 can be provided by any combination of Seller’s primary and excess liability policies.

(g) SCE as Insured. The insurance required in Section 22.15 shall apply as primary insurance to, without a right of contribution from, any other insurance maintained by or afforded to SCE, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents, and employees, regardless of any conflicting provision in Seller's policies to the contrary. To the extent permitted by law, Seller and its insurers shall be required to waive all rights of recovery from or subrogation against SCE, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents, employees and insurers. The Commercial General Liability, Pollution Liability and Umbrella/Excess Liability insurance required above shall name SCE, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents and employees, as additional insureds for liability arising out of Seller’s obligations under this Agreement.

(h) Certificates of Insurance. At the time this Agreement is executed, or within a reasonable time thereafter, and within a reasonable time after coverage is renewed or replaced, Seller shall furnish to SCE certificates of insurance evidencing the coverage required above, written on forms and with deductibles reasonably acceptable to SCE. All deductibles, co-insurance and self-insured retentions applicable to the insurance above shall be paid by Seller. All certificates of insurance shall note that the insurers issuing coverage shall endeavor to provide SCE with at least thirty (30) days’ prior written notice in the event of cancellation of coverage. SCE’s receipt of certificates that do not comply with the requirements stated herein, or Seller’s failure to provide certificates, shall not limit or relieve Seller of the duties and responsibility of maintaining insurance in compliance with the requirements in this Section 22.15 and shall not constitute a waiver of any of the requirements in this Section 22.15.

(i) Failure to Comply. If Seller fails to comply with any of the provisions of this Section 22.15, Seller, among other things and without restricting SCE’s remedies under the law or otherwise, shall, at its own cost and expense, act as an insurer and provide insurance in accordance with the terms and conditions above. With

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respect to the required Commercial General Liability, Pollution Liability, Umbrella/Excess Liability and Commercial Automobile Liability insurance, Seller shall provide a current, full and complete defense to SCE, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents, employees, assigns, and successors in interest, in response to a third party claim in the same manner that an insurer would have, had the insurance been maintained in accordance with the terms and conditions set forth above.

22.16. NERC Standards Compliance Penalties.

During the Delivery Period, Seller shall be (i) responsible for complying with any NERC Reliability Standards applicable to the Project, including registration with NERC as the Generator Operator for the Project or other applicable category under the NERC Reliability Standards and implementation of all applicable processes and procedures required by FERC, NERC, WECC, CAISO or other Governmental Authority for compliance with the NERC Reliability Standards; and (ii) liable for all penalties assessed by FERC, NERC (through WECC or otherwise) or other Governmental Authority for violations of the NERC Reliability Standards by the Project or Seller, as Generator Operator or other applicable category.

22.17. Multiple Originals.

This Agreement may be executed in multiple counterparts, each of which shall be deemed an original of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by facsimile transmission or by other electronic means shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by facsimile or by other electronic means shall be deemed to be their original signatures for all purposes. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any of the signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto by having attached to it one or more signature pages.

22.18 Entire Agreement.

This Agreement, when fully executed, constitutes the entire agreement by and between the Parties as to the subject matter hereof, and supersedes all prior understandings, agreements or representations by or between the Parties, written or oral, to the extent they have related in any way to the subject matter hereof. Each Party represents that, in entering into this Agreement, it has not relied upon any promise, inducement, representation, warranty, agreement or other statement not set forth in this Agreement.

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[Remainder of this page intentionally left blank]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.

[SELLER’S NAME], a [Seller’s jurisdiction of organization and type of organization].

SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation.

By: ________________________________ [Name] [Title]

By: _______________________________ [Name] [Title]

Date: ___________________________ Date: ___________________________

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APPENDIX A

DEFINITIONS

“AB 32” means the California Global Warming Act of 2006, Assembly Bill 32 (2006) and the regulations promulgated thereunder (including, without limitation, the GHG Regulations) by any authorized Governmental Authority.

“AB 32 Compliance Obligation” has the meaning set forth for “Compliance Obligation” in the GHG Regulations as it relates to Seller.

“ACH” means the electronic funds transfer system operated by the National Automated Clearing House, or any successor entity.

“Affiliate” means, with respect to a Party, any entity that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with such Party. For this purpose, “control” means the direct or indirect ownership of fifty percent (50%) or more of the outstanding capital stock or other equity interests having ordinary voting power.

“Aggregate Network Upgrade Costs” has the meaning set forth in Section 4.02(a).

“Agreement” has the meaning set forth in the preamble.

“Air Pollution Control District” means a district as defined by Section 39025 of the California Health and Safety Code, Division 26, Air Resources.

“Applicable Laws” means all constitutions, treaties, laws, ordinances, rules, regulations, interpretations, permits, judgments, decrees, injunctions, writs and orders of any Governmental Authority that apply to either or both of the Parties, the Project or the terms of this Agreement, including, without limitation, the Tariff.

“Approval Date” has the meaning set forth in Section 2.02.

“Arbitrator” has the meaning set forth in Section 19.03.

“Availability Incentive Payments” has the meaning set forth in the Tariff.

“Availability Standards” has the meaning set forth in the Tariff.

“Bankrupt” means with respect to any entity, such entity (i) files a petition or otherwise commences, authorizes, or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it, (ii) makes an assignment or any general arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced), (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (v) is generally unable to pay its debts as they fall due.

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“Business Day” means any day except a Saturday, Sunday, the Friday immediately following the U.S. Thanksgiving holiday, or a Federal Reserve Bank holiday.

“Buyer” has the meaning set forth in the preamble.

“CAISO” means the California Independent System Operator, a state chartered, nonprofit, public benefit corporation that controls certain transmission facilities of all participating transmission owners and dispatches certain electric generation units and loads, or any successor entity performing the same functions.

“CAISO Certification” means the certification and testing requirements for a storage unit set forth in the Tariff, including certification and testing for all ancillary services, PMAX, and PMIN associated with such storage units.

“CAISO Grid” means the system of transmission lines and associated facilities of the participating transmission owners that have been placed under the CAISO’s operational control.

“California Energy Commission” or “CEC” means the State Energy Resources Conservation and Development Commission as defined and used in Section 25104 in the California Public Resources Code, Division 15, Energy Conservation and Development (Sections 25000, et seq).

“CAM” means the advisory Cost Allocation Mechanism Group established by the CPUC in Decision 07-12-052.

“Capacity Attributes” means, with respect to a Storage Unit, any and all of the following, in each case which are attributed to or associated with such Storage Unit at any time throughout the Delivery Period:

(a) resource adequacy attributes, as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward RAR;

(b) resource adequacy attributes or other locational attributes for the Storage Unit related to a Local Capacity Area, as may be identified from time to time by the CPUC, CAISO or other Governmental Authority having jurisdiction, associated with the physical location or point of electrical interconnection of the Storage Unit within the CAISO Control Area, that can be counted toward a Local RAR;

(c) flexible capacity resource adequacy attributes for the Storage Unit, including, without limitation, the amount of the currently effective Unit EFC of such Storage Unit and MWs and capacity attributes associated with the current Unit EFC, in each case as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward Flexible RAR; and

(d) any other current or future defined characteristics, certificates, tags, credits, or accounting constructs, howsoever entitled, including any accounting construct counted toward any RA Compliance Obligations.

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“Capacity Procurement Mechanism” has the meaning set forth in the Tariff.

“Claiming Party” means the Party claiming a Force Majeure under Article Fifteen.

“Collateral Assignment Agreement” has the meaning set forth in Section 13.01.

“Commercial Operation” has the meaning set forth in the Tariff.

“Confidential Information” means any and all written or recorded or oral information, data, analyses, documents, and materials furnished or made available by a Party or its Representatives to the other Party or its Representatives in connection with this Agreement, including any and all analyses, compilations, studies, documents, or other material prepared by the receiving Party or its Representatives to the extent containing or based upon such information, data, analyses, documents, and materials, and the terms and conditions and other facts with respect to this Agreement. Confidential Information does not include information, data, analyses, documents, or materials that (i) are when furnished or thereafter become available to the public other than as a result of a disclosure by the receiving Party or its Representatives, (ii) are already in the possession of or become available to the receiving Party or its Representatives on a nonconfidential basis from a source other than the disclosing Party or its Representatives; provided, to the best knowledge of the receiving Party or its Representatives, as the case may be, such source is not and was not bound by an obligation of confidentiality to the disclosing Party or its Representatives, or (iii) the receiving Party or its Representatives can demonstrate that the information has been independently developed without a violation of this Agreement.

“Construction Report” has the meaning set forth in Section 6.01.

“Contract Capacity” means, (a) from the Effective Date until the Initial Delivery Date, the Predicted Capacity, and (b) on the Initial Delivery Date and thereafter, the IDD Capacity, provided that for purposes of this definition of “Contract Capacity”, the IDD Capacity may not exceed the Predicted Capacity.

“Contract Year” means the months within each calendar year during the Delivery Period. The initial Contract Year would be from the Initial Delivery Date until December 31st of such year. The second Contract Year would be from January 1st through December 31st of the year immediately following the initial Contract Year. The final Contract Year will be January 1st of the last year during which the Delivery Period occurs, through the last day of the Delivery Period.

“Control Area” means the electric power system (or combination of electric power systems) under the operational control of the CAISO or any other electric power system under the operational control of another organization vested with authority comparable to that of the CAISO.

“Costs” means with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third party transaction costs and expenses reasonably incurred by the Non-Defaulting Party either in terminating any arrangement pursuant to which it has hedged its obligations under the Agreement or entering into new arrangements which replace the Product. With respect to SCE, Costs shall be based on replacing the Product with product from new energy storage

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capacity with similar attributes, including with respect to credit towards SCE’s procurement requirements under CPUC Decision 13-10-040.

“CPM Capacity” has the meaning set forth in the Tariff.

“CPUC” means the California Public Utilities Commission or any successor thereto.

“CPUC Filing Guide” is the annual document issued by the CPUC which sets forth the guidelines, requirements and instructions for LSE’s to demonstrate compliance with the CPUC’s resource adequacy program.

“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by the Ratings Agencies.

“Defaulting Party” has the meaning set forth in Sections 3.01 and 3.02.

“Delivery Date Security” has the meaning set forth in Section 12.02(a).

“Delivery Period” has the meaning set forth in Section 2.04.

“Dispute” means any and all disputes, claims or controversies arising out of, relating to, concerning or pertaining to the terms of this Agreement, or to either Party’s performance or failure of performance under this Agreement.

“Disqualified Stock” means any capital stock that, by its terms (or by the term of any security instrument into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the capital stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the capital stock, in whole or in part, on or prior to the date that is ninety-one (91) days after the last day of the Term.

“Diverse Business Enterprise” means a women, minority, disabled veteran, lesbian, gay, bisexual and /or transgender business enterprise (WMDVLGBTBE), as more particularly set forth in CPUC General Order 156.

“Early Termination Date” has the meaning set forth in Section 3.03.

“Effective Date” has the meaning set forth in the preamble.

“Emission Reduction Credits” or “ERC” means emission reductions that have been authorized by a local air pollution control district pursuant to California Division 26 Air Resources; Health and Safety Code Sections 40709 and 40709.5, whereby a district has established a system by which all reductions in the emission of air contaminants that are to be used to offset certain future increases in the emission of air contaminants shall be banked prior to use to offset future increases in emissions.

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“Energy” means all electrical energy produced, flowing or supplied by a Storage Unit or the Project, as applicable, measured in kilowatt-hours or multiples units thereof. Energy shall include without limitation, all electrical energy products that may be developed or evolve from time to time during the Term.

“Energy Delivery Point” means the point set forth in Section 1.03(a).

“Environmental Costs” means costs incurred in connection with acquiring and maintaining all environmental permits and licenses for the Project, and the Project’s compliance with all applicable environmental laws, rules and regulations, including capital costs for pollution mitigation or installation of emissions control equipment required to permit or license the Project, all operating and maintenance costs for operation of pollution mitigation or control equipment, costs of permit maintenance fees and emission fees as applicable, and the costs of all Emission Reduction Credits or Marketable Emission Trading Credits required by any applicable environmental laws, rules, regulations, and permits to operate, and costs associated with the disposal and clean-up of hazardous substances introduced to the Site, and the decontamination or remediation, on or off the Site, necessitated by the introduction of such hazardous substances on the Site.

“EPC Contract” means Seller’s engineering, procurement and construction contract with the EPC Contractor.

“EPC Contractor” means the entity chosen by Seller to perform the engineering, procurement and construction activities for the Project.

“Equitable Defenses” means any bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and with regard to equitable remedies, the discretion of the court before which proceedings to obtain same may be pending.

“Event of Default” has the meaning set forth in Sections 3.01 and 3.02.

“Expected Contract Quantity” means, with respect to any particular day of any Showing Month of the Delivery Period, the Product (in MWs) for such day of such Showing Month, less any reductions to the amount of Product (in MWs) that must be provided for such day as specified in Section 9.02.

“Expected Initial Delivery Date” is the date set forth in Section 2.03.

“FERC” means the Federal Energy Regulatory Commission, or any division thereof.

“Final CPUC Approval” means a decision of the CPUC that (i) is final and no longer subject to appeal, which approves the Agreement in full and in the form presented on terms and conditions acceptable to SCE in its sole discretion, including without limitation terms and conditions related to cost recovery and cost allocation of amounts paid to Seller under the Agreement, (ii) does not contain conditions or modifications unacceptable to SCE, in SCE’s sole discretion, and (iii) finds that any procurement pursuant to this Agreement satisfies the requirement to procure resources under CPUC Decision 13-10-040.

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“Financial Consolidation Requirement” has the meaning set forth in Section 13.02(a).

“Fitch” means Fitch Ratings Ltd. or its successor.

“Flexible Capacity” means, with respect to any particular Showing Month of the Delivery Period, the number of MWs of Product which are eligible to satisfy Flexible RAR.

“Flexible RAR” means the flexible capacity requirements established for LSEs or other Persons by the CPUC pursuant to the Resource Adequacy Rulings, the CAISO pursuant to the Tariff, or by any other Governmental Authority having jurisdiction.

“Force Majeure” means any event or circumstance to the extent beyond the control of, and not the result of the negligence of, or caused by, the Party seeking to have its performance obligation excused thereby, which by the exercise of due diligence such Party could not reasonably have been expected to avoid and which by exercise of due diligence it has been unable to overcome including, but not limited to (but only to the extent that the following examples satisfy such definition): (a) acts of God such as droughts, floods, earthquakes, (b) adverse geological or underground conditions that could not have been discovered through a reasonably prudent geophysical site survey, (c) war (declared or undeclared), riots, insurrection, rebellion, acts of the public enemy, acts of terrorism and sabotage, blockades, and embargoes, and (d) industry-wide or general (i.e. not directed specifically at or by the party claiming Force Majeure) strikes, lockouts or other labor disputes. Force Majeure shall not include (i) a failure of performance of any other entity, including any entity providing electric transmission service or natural gas transportation to the Project, except to the extent that such failure was caused by an event that would otherwise qualify as a Force Majeure event, (ii) failure to timely apply for or obtain permits including required Marketable Emission Trading Credits, or (iii) breakage or malfunction of equipment (except to the extent that such failure was caused by an event that would otherwise qualify as a Force Majeure).

“Forward Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other.

If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Forward Settlement Amount shall be an amount owing to the Non-Defaulting Party.

If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Forward Settlement Amount shall be Zero dollars ($0).

The Forward Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages.

“Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to such Party, if any (exclusive of Costs), resulting from the termination of the Agreement, determined in a commercially reasonable manner, as described below. With respect to SCE, Gains shall be based on replacing the Product with product from new energy storage capacity with similar attributes, including with respect to credit towards SCE’s procurement requirements under the CPUC Decision 13-10-040.

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Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NYMEX), all of which should be calculated for the remaining Term of this Agreement.

Only if the Non-Defaulting Party is unable, after using commercially reasonable efforts, to obtain third party information to determine the gain of economic benefits, then the Non-Defaulting Party may use information available to it internally suitable for this purpose in accordance with prudent industry practices.

“GAAP” means United States generally accepted accounting principles as in effect from time to time, consistently applied.

“Generator Operator” means the entity that operates generating unit(s) and performs the functions of supplying energy and interconnected operations services and the other functions of a generator operator as described in NERC’s Statement of Compliance Registry Criteria located on the NERC website.

“Generator Owner” means an entity that owns the Project and has registered with NERC as the entity responsible for complying with those NERC Reliability Standards applicable to owners of generating units as set forth in the NERC Reliability Standards.

“GHG Charge” means any taxes, charges or fees imposed on the Project or Seller by a Governmental Authority for Greenhouse Gas emitted by and attributable to the Project during the Term.

“GHG Regulations” means Subchapter 10 Climate Change, Article 5, Sections 95800 to 96022, Title 17, California Code of Regulations, as amended or supplemented from time to time.

“Governmental Authority” means any federal, state, local, municipal, or other governmental, executive, administrative, judicial or regulatory entity or agency, the CAISO or any other transmission authority, in each case having or asserting jurisdiction over a Party, any Storage Unit, the Project or this Agreement.

“Greenhouse Gas” or “GHG” has the meaning set forth in the GHG Regulations or in any other Applicable Law.

“IDD Capacity” means the aggregate sum of actual Unit NQCs (in MWs), as of the Initial Delivery Date, for each of the Storage Units that are part of the Project, provided that the IDD Capacity may not exceed the Predicted Capacity.

“IFRS” means the International Financial Reporting Standards as in effect from time to time.

“Indemnified Party” has the meaning set forth in Section 20.03.

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“Indemnitor” has the meaning set forth in Section 20.03.

“Independent Engineer” or “IE” has the meaning set forth in Section 8.02(d).

“Independent Evaluator” has the meaning set forth in CPUC Decision 04-12-048.

“Industry Standards” has the meaning set forth in Section 8.01(a).

“Inflexible Capacity” means, with respect to any particular Showing Month of the Delivery Period, the number of MWs of Product which are not eligible to satisfy Flexible RAR. Inflexible Capacity is also known as ‘generic capacity’.

“Initial Delivery Date” has the meaning set forth in Section 2.04.

“Initial Delivery Deadline” has the meaning set forth in Section 2.04.

“Interconnection Facilities” means all apparatus installed between a Storage Unit and the Point of Interconnection on the PTO’s electrical system, other participating transmission owner’s system, or the CAISO Grid, to interconnect the Project to make available to SCE the Product and energy and other related products to the CAISO Control Area, including connection, Tie-Line, transformation, switching, metering, communications, control, and safety equipment, such as equipment required to protect (a) the PTO’s electric system (or other participating transmission owner’s system to which the PTO’s electric system is connected, including the CAISO Grid) and SCE’s customers from faults occurring at the Storage Unit(s), and (b) the Storage Unit(s) from faults occurring on the PTO’s electric system or on other participating transmission owner’s system to which the PTO’s electric system is connected.

“Interconnection Queue Position” is the order of Seller’s valid request for interconnection relative to all other valid interconnection requests, as specified in Section 1.03(c).

“Interconnection Study” or “Interconnection Studies” means any of the studies defined in the Tariff or any PTO’s tariff that reflect methodology and costs to interconnect the Project to the PTO’s electric grid.

“Interest Rate” means, for any date, the lesser of (a) the per annum rate of interest equal to the bank prime lending rate as may from time to time be published by the Federal Reserve in their H.15 Statistical Release, Selected Interest Rates (daily) or any successor publication as published by the Board of Governors of the Federal Reserve System, on such date (or if not published on such day on the most recent preceding day on which published), plus two percent (2%), and (b) the maximum rate permitted by Applicable Law.

“JAMS” has the meaning set forth in Section 19.02.

“kW” means kilowatt or kilowatts.

“kWh” means kilowatt-hours.

“Lender” means any and all financial institutions that provide to Seller any development, bridge,

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construction, permanent debt, tax equity, Performance Assurance, or other form of financing or refinancing, or other credit support, relating to the Project.

“Letter of Credit” means an irrevocable, nontransferable standby letter of credit issued by a Qualified Institution, which letter of credit shall be substantially in the form of Appendix 12.03(B) and reasonably acceptable to SCE. All Letter of Credit costs shall be borne by Seller.

“Letter of Credit Default” means with respect to a Letter of Credit, the occurrence of any of the following events: (a) the issuer of such Letter of Credit fails to be a Qualified Institution; (b) the issuer of such Letter of Credit fails to comply with or perform its obligations under such Letter of Credit; (c) the issuer of such Letter of Credit disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Letter of Credit; (d) such Letter of Credit fails or ceases to be in full force and effect at any time; or (e) the issuer of such Letter of Credit becomes Bankrupt; provided, no Letter of Credit Default shall occur or be continuing in any event with respect to a Letter of Credit after the time such Letter of Credit is required to be canceled or returned to a Party in accordance with the terms of this Agreement.

“Local Capacity Area” has the meaning set forth in the Tariff.

“Local RAR” means the local resource adequacy requirements established for LSEs and other Persons by the CPUC pursuant to the Resource Adequacy Rulings, the CAISO pursuant to the Tariff, or by any other Governmental Authority having jurisdiction. Local RAR may also be known as local area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulatory proceedings or legislative actions.

“Losses” means with respect to either Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from the termination of the Agreement, determined in a commercially reasonable manner, as described below. With respect to SCE, Losses shall be based on replacing the Product with product from new energy storage capacity with similar attributes, including with respect to credit towards SCE’s procurement requirements under the CPUC Decision 13-10-040.

Factors used in determining economic loss to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NYMEX), all of which should be calculated for the remaining Term of this Agreement.

Only if the Non-Defaulting Party is unable, after using commercially reasonable efforts, to obtain third party information to determine the loss of economic benefits, then the Non-Defaulting Party may use information available to it internally suitable for these purposes in accordance with prudent industry practices.

“LSE” has the meaning set forth in the Tariff.

“Market-Based Rate Authority” means authority granted by FERC to charge market-based rates for electrical power pursuant to Section 205 of the Federal Power Act, 16 U.S.C. § 824d.

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“Marketable Emission Trading Credits” means without limitation, emissions trading credits or units pursuant to the requirements of California Division 26 Air Resources; Health & Safety Code Section 39616 and Section 40440.2 for market based incentive programs such as the South Coast Air Quality Management District’s Regional Clean Air Incentives Market, also known as RECLAIM, and allowances of sulfur dioxide trading credits as required under Title IV of the Federal Clean Air Act (42 U.S.C. § 7651b.(a) to (f)).

“Mediator” has the meaning set forth in Section 19.02.

“Meter Service Agreement For CAISO Metered Entities” or “MSA” has the meaning set forth in the Tariff.

“Milestone Schedule” means the completed schedule in the form of Appendix 6.01(A), setting forth Seller’s engineering, permit, procurement, contract, financing and construction milestones.

“Monthly Capacity Payment” has the meaning set forth in Section 10.01.

“Monthly Capacity Price” means, for any Showing Month, the “Monthly Capacity Price” applicable to such Showing Month set forth in Appendix 10.02, which such price applies to all Storage Units.

“Moody’s” means Moody’s Investor Services, Inc. or its successor.

“MW” means megawatt or megawatts.

“NERC” means the North American Electric Reliability Council, or any successor thereto.

“NERC Reliability Standards” means those reliability standards applicable to the Storage Facility, or to the Generator Owner or the Generator Operator with respect to the Storage Facility, that are adopted by NERC and approved by the applicable regulatory authorities and available on the NERC website.

“Net Qualifying Capacity” has the meaning set forth in the Tariff.

“Network Upgrades” means all apparatus, modifications, and upgrades to the PTO’s electric system, CAISO Grid or, if applicable, participating transmission owner’s system that are required at or beyond the Point of Interconnection to accommodate the Project’s output.

“Network Upgrades Cap” has the meaning set forth in Section 4.02(a).

“New Resource” means that the Project was installed and first became operational after January 1, 2010 as provided in the CPUC Decision 13-10-040.

“Non-Availability Charges” has the meaning set forth in the Tariff.

“Non-Defaulting Party” has the meaning set forth in Section 3.03.

“Notice” has the meaning set forth in Section 22.02.

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“NYMEX” means the New York Mercantile Exchange.

“Obligation Month” has the meaning set forth in Section 11.01.

“Outage Schedule” has the meaning set forth in Section 16.03(h).

“Participating Generator Agreement” or “PGA” has the meaning set forth in the Tariff.

“Participating Transmission Owner” or “PTO” means any entity or entities responsible for the interconnection of the Project with a Control Area or transmitting the Energy on behalf of Seller from the Project to the Point of Interconnection.

“Party” or “Parties” has the meaning set in the preamble.

“Performance Assurance” means collateral, including Delivery Date Security, in the form of cash or a Letter of Credit.

“Permit Requirements” means any requirement or limitation imposed as a condition of a permit or other authorization relating to construction or operation of the Project or related facilities, including limitations on any pollutant emissions levels, limitations on fuel combustion or heat input throughput, limitations on operational levels or operational time, limitations on any specified operating constraint, requirements for acquisition and provision of any Emission Reduction Credits or Marketable Emission Trading Credits, or any other operational restriction or specification related to compliance with any Applicable Laws.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Planned Outage” means, an Approved Maintenance Outage (as defined in the Tariff), but does not include a RA Maintenance Outage With Replacement (as defined in the Tariff), a Short-Notice Opportunity RA Maintenance Outage (as defined in the Tariff) or an Off-Peak Opportunity RA Maintenance Outage (as defined in the Tariff).

“PMAX” or “Pmax” means the applicable CAISO-certified maximum operating level of a Storage Unit.

“PMIN” or “Pmin” means the applicable CAISO-certified minimum operating level of a Storage Unit.

“Point of Interconnection” has the meaning set forth in Section 1.03(b).

“PPT” means Pacific Daylight Time when California observes Daylight Savings Time and Pacific Standard Time otherwise.

“Predicted Capacity” means the aggregate sum of the expected Unit NQCs for each of the Storage Units that are part of the Project, as set forth in Appendix 1.02.

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“Predicted SU Capacity” means the expected Unit NQC for any particular Storage Unit as set forth for such Storage Unit in Appendix 1.02.

“Predicted SU Flexible Capacity” means the expected Unit EFC for any particular Storage Unit as set forth for such Storage Unit in Appendix 1.02.

“Procurement Review Group” or “PRG” has the meaning set forth in Section 21.02(a).

“Product” means all Capacity Attributes associated with the Project, provided that:

(a) Product does not include any right to the energy or ancillary services from the Project;

(b) Product does not include revenues specified in Section 10.02(a);

(c) any change by the CAISO, CPUC or other Governmental Authority that defines new or re-defines existing Local Capacity Areas that results in a decrease or increase in the amount of Capacity Attributes related to a Local Capacity Area provided hereunder will not result in a change in payments made pursuant to this Agreement;

(d) any change by the CAISO, CPUC or other Governmental Authority that defines new or re-defines existing Flexible RAR, Capacity Attributes related to Flexible RAR, or attributes of the Project related to Flexible RAR, that results in a decrease or increase in the amount of Capacity Attributes related to Flexible RAR provided hereunder will not result in a change in payments made pursuant to this Agreement;

(e) the Parties agree that if the CAISO, CPUC or other Governmental Authority defines new or re-defines existing Local Capacity Areas whereby the Project subsequently qualifies for a Local Capacity Area, the Product shall include all Capacity Attributes related to such Local Capacity Area; and

(f) the Parties agree that if the CAISO, CPUC or other Governmental Authority defines new or re-defines existing Flexible RAR, Capacity Attributes related to Flexible RAR, or attributes of any Storage Unit related to Flexible RAR whereby any Storage Unit, or a portion of any Storage Unit which did not previously qualify to satisfy Flexible RAR, subsequently qualifies to satisfy Flexible RAR, the Product shall include all Capacity Attributes of all Storage Units related to Flexible RAR, including any Capacity Attributes related to Flexible RAR with respect to any portion of the Storage Units which previously were not able to satisfy Flexible RAR.

“Project” means the Storage Units and the Interconnection Facilities (owned by Seller or Seller’s Affiliates), up to the Point of Interconnection, together with all materials, equipment systems, structures, features and improvements necessary to produce electric energy at the facility, excluding the Site, land rights and interests in land and as more fully described in Appendix 1.02.

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“Protective Apparatus” means control devices (such as meters, relays, power circuit breakers and synchronizers) specified in the agreements associated with the Interconnection Facilities for the Project.

“Prudent Electrical Practices” means those practices, methods and acts that would be implemented and followed by prudent operators of electric energy storage facilities in the Western United States, similar to the Project, during the relevant time period, which practices, methods and acts, in the exercise of prudent and responsible professional judgment in the light of the facts known or that should reasonably have been known at the time the decision was made, could reasonably have been expected to accomplish the desired result consistent with good business practices, reliability and safety.

Prudent Electrical Practices shall include, at a minimum, those professionally responsible practices, methods and acts described in the preceding sentence that comply with manufacturers’ warranties, restrictions in this Agreement, and the requirements of Governmental Authorities, WECC standards, the CAISO and Applicable Laws.

Prudent Electrical Practices also includes taking reasonable steps to ensure that:

(a) Equipment, materials, resources, and supplies, including spare parts inventories, are available to meet the needs of the Project;

(b) Sufficient operating personnel are available at all times and are adequately experienced and trained and licensed as necessary to operate the Storage Units properly and efficiently, and are capable of responding to reasonably foreseeable emergency conditions at the Project and Transmission Emergencies whether caused by events on or off the Site;

(c) Preventive, routine, and non-routine maintenance and repairs are performed on a basis that ensures reliable, long term and safe operation of the Project, and are performed by knowledgeable, trained, and experienced personnel utilizing proper equipment and tools;

(d) Appropriate monitoring and testing are performed to ensure equipment is functioning as designed;

(e) Equipment is not operated in a reckless manner, in violation of manufacturer’s guidelines or in a manner unsafe to workers, the general public, or the PTO’s electric system or contrary to environmental laws, permits or regulations or without regard to defined limitations such as, flood conditions, safety inspection requirements, operating voltage, current, volt ampere reactive (VAR) loading, frequency, rotational speed, polarity, synchronization, and control system limits; and

(f) Equipment and components are designed and manufactured to meet or exceed the standard of durability that is generally used for electric energy storage facilities operating in the Western United States and will function properly over the full range of ambient temperature and weather conditions reasonably expected to occur at the Site and under both normal and emergency conditions.

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“Qualified Institution” means either (A) a commercial bank or financial institution (that is not an Affiliate of Seller) organized under the laws of the United States or a political subdivision thereof or (B) a U.S. branch office of a foreign bank, and, with respect to both entities identified in clause (A) and (B), (i) (a) a Credit Ratings of at least “A-” by S&P, “A-” by Fitch and “A3” by Moody’s, if such entity is rated by the Ratings Agencies; (b) if such entity is rated by only two of the three Ratings Agencies, a Credit Rating from two of the three Ratings Agencies of at least ”A-” by S&P, if such entity is rated by S&P, “A-” by Fitch, if such entity is rated by Fitch, and “A3” by Moody’s, if such entity is rated by Moody’s; or (c) a Credit Rating of at least ”A-” by S&P or “A3” by Moody’s, or “A-” by Fitch if such entity is rated by only one Ratings Agency, and (ii) having shareholder equity (determined in accordance with GAAP, IFRS, or Successor) of at least $1,000,000,000.00 (ONE BILLION AND 00/100 DOLLARS). “RA Capacity Qualification Tests” means any and all tests, certifications or performance evaluations required by CAISO, the CPUC or any other applicable Governmental Authority pursuant to any Applicable Laws, including without limitation the Tariff, in order for a Storage Unit to obtain, maintain or update a Unit NQC and Unit EFC, including without limitation, testing for PMAX. “RA Compliance Obligations” means the RAR, Local RAR and Flexible RAR. “RA Compliance Showings” means the (a) Local RAR compliance or advisory showings (or similar or successor showings), (b) RAR compliance or advisory showings (or similar or successor showings), and (c) Flexible RAR compliance or advisory showings (or similar successor showings), in each case, an LSE or other Person is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings, to the CAISO pursuant to the Tariff, or to any Governmental Authority having jurisdiction. “RAR” means the resource adequacy requirements established for LSEs and other Persons by the CPUC pursuant to the Resource Adequacy Rulings, the CAISO pursuant to the Tariff, or by any other Governmental Authority having jurisdiction. “RA Replacement Capacity” has the meaning set forth in the Tariff. “Ratings Agency” shall mean any of S&P, Moody’s and Fitch, and any other rating agency agreed by the Parties (collectively the “Ratings Agencies”).

“Repair Plan” has the meaning set forth in Section 8.02(c).

“Representatives” means the officers, directors, employees, legal counsel, accountants, lenders, advisors, or ratings agencies and other agents of a Party utilized in connection with this Agreement and, in the case of SCE, includes the Independent Evaluator.

“Required Permits” has the meaning set forth in Section 5.01(b).

“Required Permit Date” means the date set forth in Section 5.01(b).

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“Resold Product” has the meaning set forth in Section 9.05.

“Resource Adequacy Benefits” means the rights and privileges attached to any Storage resource that satisfy any entity’s RA Compliance Obligations under any Resource Adequacy Rulings, including, without limitation, the Product.

“Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, and any other existing or subsequent decisions, resolutions, or rulings related to resource adequacy, including, without limitation, the CPUC Filing Guide, in each case as may be amended from time to time by the CPUC, and any other resource adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable Governmental Authority, as such decisions, rulings, laws, rules or regulations may be amended or modified from time to time during the Term.

“Resource Adequacy Resource” has the meaning set forth in the Tariff.

“Responsible Officer” means the chief financial officer, treasurer or any assistant treasurer of a Party or any employee of a Party designated by any of the foregoing.

“RMR Contract” has the meaning set forth in the Tariff.

“RUC Availability Payments” has the meaning set forth in the Tariff.

“S&P” means Standard & Poor’s Financial Services LLC or its successor.

“SC” has the meaning set forth in the Tariff.

“SCE” has the meaning set forth in the preamble.

“SEC” means the United States Securities and Exchange Commission.

“Security Interest” has the meaning set forth in Section 12.04.

“Seller” has the meaning set forth in the preamble.

“Shortfall Capacity” has the meaning set forth in Section 9.06.

“Showing Month” shall be the calendar month of the Delivery Period that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the Tariff. For illustrative purposes only, pursuant to the Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.

“Site” means the real property on which the Project is, or will be located, as further described in Section 1.02(b) and Appendix 1.03.

“Site Certification” means the “California Energy Commission Power Facility and Site Certification” set forth in Section 5.01(b).

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“Site Control” means that Seller owns the Site and the Project or has demonstrable contractual rights to, or is the managing general partner of any partnership (or comparable manager of any other person) who owns or has demonstrable contractual rights to, with explicit authority to act in all matters relating to, the control and operation of, the Site and the Project.

“Storage Facility” has the meaning set forth in the Tariff.

“Storage Unit” or “Storage Units” means the Storage unit or units specified in Appendix 1.02.

“Storage Unit Removal Right” means, with respect to any Storage Unit that is subject to 8.02(d)(i) or 8.02(e)(i), SCE’s right to designate such affected Storage Unit(s) for removal from this Agreement. Upon Notice of such designation: (i) SCE shall have no obligation to compensate Seller for Product from such Storage Unit(s), (ii) IDD Capacity, Predicted Capacity, Project, Product and Appendices 1.02, 1.03, 10.02, and any other information specific to such Storage Unit(s), shall automatically be amended to reflect the removal of such Storage Unit(s), (iii) Seller shall not be permitted to market, dispatch, provide, or convey Product from such Storage Units for SCE or any other third party, (iv) SCE shall calculate, and Seller shall be obligated to pay, a Termination Payment attributable to and associated with the Product from such Storage Unit(s) with SCE being considered the Non-Defaulting Party in all circumstances, and (v) notwithstanding clause (iv), this Agreement will otherwise remain in full force and effect.

“SU Capacity” means the actual Unit NQC, as of the Initial Delivery Date, for any particular Storage Unit.

“SU Flexible Capacity” means that actual Unit EFC, as of the Initial Delivery Date, for any particular Storage Unit.

“Successful Repair” means that, immediately upon completion of the repairs to a particular Storage Unit, Seller conducts an RA Capacity Qualification Test, at Seller’s expense, and obtains (a) a Unit NQC for the applicable Storage Unit equal to or greater than ninety-eight percent (98%) of SU Capacity for such Storage Unit and (b) a Unit EFC for the applicable Storage Unit equal to or greater than ninety-eight (98%) of the SU Flexible Capacity for such Storage Unit. “Successor” means with respect to GAAP or IFRS, any successor thereto.

“Supply Plan” has the meaning set forth in the Tariff.

“Tariff” means the tariff and protocol provisions, including any current CAISO-published “Operating Procedures” and “Business Practice Manuals,” as amended or supplemented from time to time, of the CAISO.

“Term” has the meaning set forth in Section 2.01.

“Termination Payment” has the meaning set forth in Section 3.04.

“Tie-Line” means the transmission or distribution line between the Energy Delivery Point and the Point of Interconnection as more fully described in Appendix 1.03(A).

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“Transmission Emergency” means:

(a) An actual or imminent condition or situation which jeopardizes the integrity of PTO’s electric system or the integrity of any other systems to which the PTO’s electric system is connected, as determined by the PTO in its reasonable discretion, or any condition so defined and declared by the CAISO; or

(b) An emergency condition as defined under an interconnection agreement and any abnormal interconnection or system condition that requires automatic or immediate manual action to prevent or limit loss of load or generation supply, that could adversely affect the reliability of the PTO’s electric system or generation supply, that could adversely affect the reliability of any interconnected system, or that could otherwise pose a threat to public safety.

“United States Bankruptcy Code” means 11 U.S.C. §101 et seq., as amended, and any successor statute.

“Unit EFC” means the effective flexible capacity (in MWs) of the applicable Storage Unit pursuant to the counting conventions set forth in the Resource Adequacy Rulings and Tariff, which such flexible capacity may be used to satisfy Flexible RAR.

“Unit NQC” means the Net Qualifying Capacity set by the CAISO for the applicable Storage Unit.

“WECC” means the Western Electricity Coordinating Council, or any successor thereto.

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APPENDIX 1.02 DESCRIPTION OF STORAGE UNIT

Project Storage Unit Predicted Capacity Predicted SU Capacity Predicted SU Flexible Capacity Site Address [ # Street Name, City, CA, zip code] Existing Zone [SP15, NP15, ZP26] Storage Unit Technology Primary Storage Fuel Type Electricity Configuration Rated Power Capacity (MW) Inverter Limit (MW) CAISO Resource ID TBD Air Pollution Control District California Air Resources Board ID # TBD Resource Category for RA Counting 4 Local area reliability region Deliverability restrictions None Interconnection Queue Number Interconnection Voltage (kV) A-Bank Substation

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APPENDIX 1.03 LOCATION OF SITE

1. Site Legal Description

{SCE Comment: Seller must provide a legal description of the site, including APN number.}

2. Site Map

{SCE Comment: Seller must provide a map of the area where the project is located. The map should indicate major highways and/or landmarks near the project as well as other roadways important to locate the site. The map should also include a latitude and longitude for the site.}

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APPENDIX 1.03(A) ELECTRICAL SINGLE LINE DIAGRAM

SCE Comment: Seller must provide an electrical single line diagram that depicts all of the major electrical equipment that is part of the site. This includes inverters, transformers, meters, breakers, etc. Include ratings when possible. This drawing must also show the Point of Interconnection and the Energy Delivery Point.}

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APPENDIX 6.01(A) MILESTONE SCHEDULE

[SCE Note: Appendix is subject to modification, including for technology specific differences]

PROJECT SCHEDULE - Seller has provided dates for development, construction, commissioning, and testing of the Project, showing all significant elements and milestones, as applicable, such as permitting, procurement, financing, engineering, acceptance testing, Seller’s proposed Expected Initial Delivery Date, and proposed Delivery Period.

[SCE Comment: This list is illustrative only. Seller to insert project specific list]

Line Projected

Completion Date

Milestone

1 Front End Engineering / Permits / Agreements 2 Submit Applicable Participating Transmission Owner

Interconnection Application 3 File a CEC Certification and Verification Application 4 Receive a Completed Interconnection System Impact Study (or

equivalent) 5 Receive a Completed Interconnection Facilities Study (or

equivalent) 6 Finalize Labor Agreement Negotiations 7 Execute a Participating Transmission Owner Interconnection

Agreement 8 Receive FERC Acceptance of Interconnection Agreement and

Transmission Agreement(s) 9 Receive CEC Certification and Verification or APCD permit if

applicable 10 Obtain Control Of All Lands and Rights-Of-Way Comprising

The Site 11 Receive CEC Full Notice To Proceed 12 Receive All Other Required Permits 13 Financing 14 Verify That Seller’s Bank Has Received All Required Due

Diligence Information 15 Complete Bank Financing 16 Engineering 17 Execute EPC Contract 18 Begin Existing Site Re-Engineering 19 Begin New Storage Unit Engineering Design 20 Lump Sum Estimate Preparation 21 Complete Existing Site Re-Engineering

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Line Projected

Completion Date

Milestone

22 Complete New Storage Unit Engineering Design 23 Construction – Initial Site Work 24 Begin Civil Tasks - CTG’s 25 Begin Mechanical Tasks - U/G Piping 26 Begin Electrical Tasks - U/G Electrical 27 Construction 28 Begin Construction of the Project - Erect Equipment 29 Civil Tasks - Balance of Plant 30 Mechanical Tasks - A/G Piping 31 Electrical Tasks - A/G Electrical 32 Erect Storage Units 33 Commission Storage Units 34 Complete Construction of the Project 35 Commissioning 36 Begin Start-Up Activities - BOP Systems 37 Achieve Initial Operation 38 Demonstrate Contract Capacity 39 Expected Initial Delivery Date

Line Projected

Completion Date

Milestone

1 Front End Engineering / Permits / Agreements 2 Submit Applicable Participating Transmission Owner

Interconnection Application 3 File a CEC Certification and Verification Application 4 Receive a Completed Interconnection System Impact Study (or

equivalent) 5 Receive a Completed Interconnection Facilities Study (or

equivalent)

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APPENDIX 6.01(B) CONSTRUCTION REPORT

[SCE Note: Appendix is subject to modification for technology specific differences]

MONTHLY PROJECT PROGRESS REPORT

From the Effective Date of this Agreement and continuing until the Initial Delivery Date, Seller will provide a monthly Project progress report containing, at a minimum, the information listed below.

1. An executive summary; 2. Project bar chart schedule (including current status of all events); 3. Assessment of percent construction complete and percent change from immediately

previous report; 4. Description of general work status (including short passages as applicable) on:

a. Engineering; b. Procurement; c. Permitting (include status of any required regulatory determinations for approval of

Federal New Source Review permitting exemptions, expedited permitting processes, and status of acquisition of required ERCs and other emission credits in terms of impact on the Project’s permitting schedule, over-all Project schedule, and ability of Project to meet Initial Delivery Date);

d. Major construction activities in the prior month; e. Testing; f. Electrical interconnection status; g. Fuel gas interconnection status; and h. Any other required interconnections.

5. Forecast activities for next month; and 6. Potential issues affecting the Project.

Seller must notify SCE’s contract manager for the Agreement in writing of its receipt of any additional documents, which fall into the categories, listed (in a – f) below, and make such documents available to SCE within two (2) Business Days of such receipt:

a. All material written commitments regarding construction work at the Project that could

impact the completion schedule or Initial Delivery Date; b. Executed work orders for construction of the Project; c. Construction agreements; d. Letters of intent; e. Precedent agreements; and f. Engineering assessments of the Project or any Storage Unit.

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APPENDIX 10.02

DELIVERY PERIOD AND MONTHLY CAPACITY PAYMENT

Excel Appendices

(See attached.)

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APPENDIX 12.03(B) LETTER OF CREDIT FORM

IRREVOCABLE NON-TRANSFERABLE STANDBY

LETTER OF CREDIT

Reference Number:

Transaction Date:

BENEFICIARY:

Southern California Edison Company

2244 Walnut Grove Avenue

Risk Control GO#1, Quad 1D

Rosemead, CA 91770

Ladies and Gentlemen:

(the “Bank”) hereby establishes this Irrevocable Non-transferable Standby Letter of Credit (“Letter of Credit”) in favor of Southern California Edison Company, a California corporation (the “Beneficiary”), for the account of ______________________, a ____________ [limited liability company/corporation], also known as RAP ID# ___ (the “Applicant”), for the amount of XXX AND XX/100 Dollars ($ ) (the “Available Amount”), effective immediately.

This Letter of Credit shall be of no further force or effect at 5:00 p.m., California time, on ____[Date]_____ or, if such day is not a Business Day (as hereinafter defined), on the next Business Day (as may be extended pursuant to the terms of this Letter of Credit, the “Expiration Date”).

For the purposes hereof, “Business Day” shall mean any day on which commercial banks are not authorized or required to close in Los Angeles, California.

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It is a condition of this Letter of Credit that it shall be deemed automatically extended without amendment for a one year period (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter) beginning on the present Expiration Date hereof and upon each anniversary of such date (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter), unless at least sixty (60) days prior to any such Expiration Date, Bank has sent Beneficiary written notice, at the address provided below, that Bank elects not to permit this Letter of Credit to be so extended, and will expire on its then-current Expiration Date. No presentation made under this Letter of Credit after such Expiration Date will be honored.

Subject to the terms and conditions herein, funds under this Letter of Credit are available to Beneficiary by valid presentation on or before 5:00 p.m. California time, on or before the Expiration Date of the following:

1. A copy of this Letter of Credit and all amendments; and

2. A copy of the Drawing Certificate in the form of Attachment A attached hereto and which forms an integral part hereof, duly completed and purportedly bearing the signature of an authorized representative of the Beneficiary.

Any full or partial drawing hereunder may be requested by transmitting copies of the requisite documents as described above to the Bank by facsimile at _[facsimile number for draws]___ or such other number as specified from time-to-time by the Bank.

The facsimile transmittal shall be deemed delivered when received. Drawings made by facsimile transmittal are deemed to be the operative instrument without the need of originally signed documents.

Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided, the Available Amount shall be reduced by the amount of each such drawing.

This Letter of Credit is not transferable or assignable. Any purported transfer or assignment shall be void and of no force or effect.

All correspondence and any drawings (other than those made by facsimile) hereunder are to be directed to [Bank address/contact].

All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: Southern California Edison Company, Manager of Credit Risk and Collateral, 2244 Walnut Grove Avenue, GO1 Quad 1D, Rosemead, California 91770. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.

Banking charges shall be the sole responsibility of the Applicant.

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This Letter of Credit sets forth in full our obligations and such obligations shall not in any way be modified, amended, amplified or limited by reference to any documents, instruments or agreements referred to herein, except only the attachment referred to herein; and any such reference shall not be deemed to incorporate by reference any document, instrument or agreement except for such attachment. Except in the case of an increase in the Available Amount, this Letter of Credit may not be amended or modified without the Beneficiary’s prior written consent.

The Bank engages with the Beneficiary that Beneficiary’s drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Bank on or before the Expiration Date.

Except so far as otherwise stated, this Letter of Credit is subject to the International Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the laws of the State of California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.

AUTHORIZED SIGNATURE for Bank

(Name)

Title:

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ATTACHMENT A Drawing Certificate

TO [ISSUING BANK NAME]

IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT

No.

DRAWING CERTIFICATE

Bank

Bank Address

Subject: Irrevocable Non-transferable Standby Letter of Credit

Reference Number:

The undersigned , an authorized representative of Southern California Edison Company (the “Beneficiary”), hereby certifies to [Issuing Bank Name] (the “Bank”), and _____________________ (the “Applicant”), with reference to Irrevocable Non-transferable Standby Letter of Credit No. { }, dated , (the “Letter of Credit”), issued by the Bank in favor of the Beneficiary, as follows as of the date hereof:

1. The Beneficiary is entitled to draw under the Letter of Credit an amount equal to $ , for the following reason(s) [check applicable provision]:

[ ]A. An Event of Default, as defined in that certain Energy Storage Resource Adequacy Purchase Agreement between Applicant and Beneficiary, dated as of [Date of Execution] (as may be amended from time to time, the “Agreement”), with respect to the Applicant has occurred and is continuing.

[ ]B. An Early Termination Date (as defined in the Agreement) has occurred or been designated as a result of an Event of Default (as defined in the Agreement) with respect to the Applicant for which there exist any unsatisfied payment obligations.

[ ]C. The Letter of Credit will expire in fewer than twenty (20) Business Days (as defined in the Agreement) from the date hereof, and Applicant has not provided Beneficiary alternative Performance Assurance (as defined in the Agreement) acceptable to Beneficiary.

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[ ]D. The Bank or Applicant has heretofore has indicated its intent to the Beneficiary of the Bank’s or Applicant’s intent not to renew the Letter of Credit following the present Expiration Date thereof, and Applicant has failed to provide the Beneficiary with a replacement letter of credit satisfactory to Beneficiary in its sole discretion within twenty (20) days following the date of the Notice such intent.

[ ]E. The Beneficiary has not been paid any or all of the Applicant’s payment obligations now due and payable under the Agreement.

[ ]F. The Beneficiary is entitled to retain the entire Delivery Date Security (as defined

in the Agreement): (i) because the Initial Delivery Date (as defined in the Agreement) has not occurred on or before the Initial Delivery Deadline (as defined in the Agreement); or (ii) because the Agreement has been terminated due to an Event of Default by Applicant before the Initial Delivery Date.

2. Based upon the foregoing, the Beneficiary hereby makes demand under the Letter of Credit for payment of U.S. DOLLARS AND ____/100ths (U.S.$ ), which amount does not exceed (i) the amount set forth in paragraph 1 above, and (ii) the Available Amount under the Letter of Credit as of the date hereof.

3. Funds paid pursuant to the provisions of the Letter of Credit shall be wire transferred to the Beneficiary in accordance with the following instructions:

Unless otherwise provided herein, capitalized terms which are used and not defined herein shall have the meaning given each such term in the Letter of Credit.

IN WITNESS WHEREOF, this Drawing Certificate has been duly executed and delivered on behalf of the Beneficiary by its authorized representative as of this ____ day of , _____.

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Beneficiary: SOUTHERN CALIFORNIA EDISON COMPANY

By:

Name:

Title:

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APPENDIX 13.01

FORM OF CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT

This Consent to Collateral Assignment Agreement (this “Consent”) is entered into among (i) Southern California Edison Company, a California corporation (“SCE”), (ii) [Name of Seller], a [Legal Status of Seller] (the “Project Company”), and (iii) [Name of Collateral Agent], a [Legal Status of Collateral Agent], as Collateral Agent for the secured parties under the Financing Documents referred to below (such secured parties together with their successors permitted under this Consent in such capacity, the “Secured Parties”, and, such agent, together with its successors in such capacity, the “Collateral Agent”). SCE, Project Company and Collateral Agent are hereinafter sometimes referred to individually as a “Party” and jointly as the “Parties”. Capitalized terms used but not otherwise defined in this Consent shall have the meanings ascribed to them in the Resource Adequacy Purchase Agreement (as defined below).

RECITALS

The Parties enter into this Consent with reference to the following facts: A. Project Company and SCE have entered into that certain Resource Adequacy Purchase

Agreement, dated as of [Date] [List all amendments as contemplated by Section 3.4] (“Resource Adequacy Purchase Agreement”), pursuant to which Project Company will develop, construct, commission, test and operate the Storage Units (the “Project”) and sell the Product to SCE, and SCE will purchase the Product from Project Company;

B. As collateral for Project Company’s obligations under the Resource Adequacy Purchase Agreement, Project Company has agreed to provide to SCE certain collateral, which may include Performance Assurance and Security Interests and other collateral described in the Resource Adequacy Purchase Agreement (collectively, the “RA Agreement Collateral”);

C. Project Company has entered into that certain [Insert description of financing arrangements with Lender], dated as of [Date], among Project Company, the Lenders party thereto and the Collateral Agent (the “Financing Agreement”), pursuant to which, among other things, the Lenders have extended commitments to make loans to Project Company;

D. As collateral security for Project Company’s obligations under the Financing Agreement and related agreements (collectively, the “Financing Documents”), Project Company has, among other things, assigned all of its right, title and interest in, to and under the Resource Adequacy Purchase Agreement and Project’s Company’s owners have pledged their ownership interest in Project Company (collectively, the “Assigned Interest”) to the Collateral Agent pursuant to the Financing Documents; and

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E. It is a requirement under the Financing Agreement and the Resource Adequacy Purchase Agreement that SCE and the other Parties hereto shall have executed and delivered this Consent.

AGREEMENT

In consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereto hereby agree as follows:

SECTION 1. CONSENT TO ASSIGNMENT, ETC.

1.1 Consent and Agreement.

SCE hereby acknowledges:

(a) notice of and consents to the assignment as collateral security to Collateral Agent, for the benefit of the Secured Parties, of the Assigned Interest; and

(b) the right (but not the obligation) of Collateral Agent in the exercise of its rights and remedies under the Financing Documents, to make all demands, give all notices, take all actions and exercise all rights of Project Company permitted under the Resource Adequacy Purchase Agreement (subject to SCE’s rights and defenses under the Resource Adequacy Purchase Agreement and the terms of this Consent) and accepts any such exercise; provided, however, that, insofar as the Collateral Agent exercises any such rights under the Resource Adequacy Purchase Agreement or makes any claims with respect to payments or other obligations under the Resource Adequacy Purchase Agreement, the terms and conditions of the Resource Adequacy Purchase Agreement applicable to such exercise of rights or claims shall apply to Collateral Agent to the same extent as to Project Company.

1.2 Project Company’s Acknowledgement.

Each of Project Company and Collateral Agent hereby acknowledges and agrees that SCE is authorized to act in accordance with Collateral Agent’s instructions, and that SCE shall bear no liability to Project Company or Collateral Agent in connection therewith, including any liability for failing to act in accordance with Project Company’s instructions.

1.3 Right to Cure.

If Project Company defaults in the performance of any of its obligations under the Resource Adequacy Purchase Agreement, or upon the occurrence or non-occurrence of any event or condition under the Resource Adequacy Purchase Agreement which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable SCE to terminate or suspend its performance under the Resource Adequacy

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Purchase Agreement [or foreclose on its Junior Lien] (a “Resource Adequacy Purchase Agreement Default”), SCE will not terminate or suspend its performance under the Resource Adequacy Purchase Agreement until it first gives written notice of such Resource Adequacy Purchase Agreement Default to Collateral Agent and affords Collateral Agent the right to cure such Resource Adequacy Purchase Agreement Default within the applicable cure period under the Resource Adequacy Purchase Agreement, which cure period shall run concurrently with that afforded Project Company under the Resource Adequacy Purchase Agreement. In addition, if Collateral Agent gives SCE written notice prior to the expiration of the applicable cure period under the Resource Adequacy Purchase Agreement of Collateral Agent’s intention to cure such Resource Adequacy Purchase Agreement Default (which notice shall include a reasonable description of the time during which it anticipates to cure such Resource Adequacy Purchase Agreement Default) and is diligently proceeding to cure such Resource Adequacy Purchase Agreement Default, notwithstanding the applicable cure period under the Resource Adequacy Purchase Agreement, Collateral Agent shall have a period of sixty (60) days (or, if such Resource Adequacy Purchase Agreement Default is for failure by the Project Company to pay an amount to SCE which is due and payable under the Resource Adequacy Purchase Agreement other than to provide RA Agreement Collateral, thirty (30) days, or, if such Resource Adequacy Purchase Agreement Default is for failure by Project Company to provide RA Agreement Collateral, [__ (__)] Business Days) from the Collateral Agent’s receipt of the notice of such Resource Adequacy Purchase Agreement Default from SCE to cure such Resource Adequacy Purchase Agreement Default; provided, however, that (a) if possession of the Project is necessary to cure any such non-monetary Resource Adequacy Purchase Agreement Default and Collateral Agent has commenced foreclosure proceedings within sixty (60) days after notice of the Resource Adequacy Purchase Agreement Default and is diligently pursuing such foreclosure proceedings, Collateral Agent will be allowed a reasonable time, not to exceed one hundred eighty (180) days after the notice of the Resource Adequacy Purchase Agreement Default, to complete such proceedings and cure such Resource Adequacy Purchase Agreement Default, and (b) if Collateral Agent is prohibited from curing any such Resource Adequacy Purchase Agreement Default by any process, stay or injunction issued by any Governmental Authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving Project Company, then the time periods specified herein for curing a Resource Adequacy Purchase Agreement Default shall be extended for the period of such prohibition, so long as Collateral Agent has diligently pursued removal of such process, stay or injunction. Collateral Agent shall provide SCE with reports concerning the status of efforts to cure a Resource Adequacy Purchase Agreement Default upon SCE’s reasonable request.

1.4 Substitute Owner.

Subject to Section 1.7, the Parties agree that if Collateral Agent notifies (such notice, a “Financing Document Default Notice”) SCE that an event of default has occurred and is continuing under the Financing Documents (a “Financing Document Event of Default”) then, upon a judicial foreclosure sale, non-judicial foreclosure sale, deed in lieu of foreclosure or other transfer following a Financing Document Event of Default,

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Collateral Agent (or its designee) shall be substituted for Project Company (the “Substitute Owner”) under the Resource Adequacy Purchase Agreement, and, subject to Sections 1.7(b) and 1.7(c) below, SCE and Substitute Owner will recognize each other as counterparties under the Resource Adequacy Purchase Agreement and will continue to perform their respective obligations (including those obligations accruing to SCE and the Project Company prior to the existence of the Substitute Owner) under the Resource Adequacy Purchase Agreement in favor of each other in accordance with the terms thereof; provided, however, that before SCE is required to recognize the Substitute Owner, the Substitute Owner must have demonstrated to SCE’s reasonable satisfaction that the Substitute Owner has financial qualifications and operating experience [TBD] (a “Permitted Transferee”). For purposes of the foregoing, SCE shall be entitled to assume that any such purported exercise of rights by Collateral Agent that results in substitution of a Substitute Owner under the Resource Adequacy Purchase Agreement is in accordance with the Financing Documents without independent investigation thereof but shall have the right to require that the Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same.

1.5 Replacement Agreements.

Subject to Section 1.7, if the Resource Adequacy Purchase Agreement is terminated, rejected or otherwise invalidated as a result of any bankruptcy, insolvency, reorganization or similar proceeding affecting Project Company, its owner(s) or guarantor(s), and if Collateral Agent or its designee directly or indirectly takes possession of, or title to, the Project (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) (“Replacement Owner”), SCE shall, and Collateral Agent shall cause Replacement Owner to, enter into a new agreement with one another for the balance of the obligations under the Resource Adequacy Purchase Agreement remaining to be performed having terms substantially the same as the terms of the Resource Adequacy Purchase Agreement with respect to the remaining Term (“Replacement Resource Adequacy Purchase Agreement”); provided, that before SCE is required to enter into a Replacement Resource Adequacy Purchase Agreement, the Replacement Owner must have demonstrated to SCE’s reasonable satisfaction that the Replacement Owner satisfies the requirements of a Permitted Transferee. For purposes of the foregoing, SCE is entitled to assume that any such purported exercise of rights by Collateral Agent that results in a Replacement Owner is in accordance with the Financing Documents without independent investigation thereof but shall have the right to require that the Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same. Notwithstanding the execution and delivery of a Replacement Resource Adequacy Purchase Agreement, to the extent SCE is, or was otherwise prior to its termination as described in this Section 1.5, entitled under the Resource Adequacy Purchase Agreement, SCE may suspend performance of its obligations under such Replacement Resource Adequacy Purchase Agreement, unless and until all Resource Adequacy Purchase Agreement Defaults of Project Company under the Resource Adequacy Purchase Agreement or Replacement Resource Adequacy Purchase Agreement have been cured.

1.6 Transfer.

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Subject to Section 1.7, a Substitute Owner or a Replacement Owner may assign all of its interest in the Project and the Resource Adequacy Purchase Agreement and a Replacement Resource Adequacy Purchase Agreement to a natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority or other entity (a “Person”) to which the Project is transferred; provided, however, that the proposed transferee shall have demonstrated to SCE’s reasonable satisfaction that such proposed transferee satisfies the requirements of a Permitted Transferee.

1.7 Assumption of Obligations.

(a) Transferee.

Any transferee under Section 1.6 shall expressly assume in a writing reasonably satisfactory to SCE all of the obligations of Project Company, Substitute Owner or Replacement Owner under the Resource Adequacy Purchase Agreement or Replacement Resource Adequacy Purchase Agreement, as applicable, including posting and collateral assignment of the RA Agreement Collateral. Upon such assignment and the cure of any outstanding Resource Adequacy Purchase Agreement Default, and payment of all other amounts due and payable to SCE in respect of the Resource Adequacy Purchase Agreement or such Replacement Resource Adequacy Purchase Agreement, the transferor shall be released from any further liability under the Resource Adequacy Purchase Agreement or Replacement Resource Adequacy Purchase Agreement, as applicable.

(b) Substitute Owner.

Subject to Section 1.7(c), any Substitute Owner pursuant to Section 1.4 shall be required to perform Project Company’s obligations under the Resource Adequacy Purchase Agreement, including posting and collateral assignment of the RA Agreement Collateral; provided, however, that the obligations of such Substitute Owner shall be no more than those of Project Company under the Resource Adequacy Purchase Agreement.

(c) No Liability.

SCE acknowledges and agrees that neither Collateral Agent nor any Secured Party shall have any liability or obligation under the Resource Adequacy Purchase Agreement as a result of this Consent (except to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner) nor shall Collateral Agent or any other Secured Party be obligated or required to (i) perform any of Project Company’s obligations under the Resource Adequacy Purchase Agreement, except as provided in Sections 1.7(a) and 1.7(b) and to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner, or (ii) take any action to collect or enforce any claim for payment assigned under the Financing Documents. If Collateral Agent becomes a Substitute Owner pursuant to Section 1.4 or enters into a Replacement Resource Adequacy

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Purchase Agreement, Collateral Agent shall not have any personal liability to SCE under the Resource Adequacy Purchase Agreement or Replacement Resource Adequacy Purchase Agreement and the sole recourse of SCE in seeking enforcement of such obligations against Collateral Agent shall be to the aggregate interest of the Secured Parties in the Project; provided, however, that such limited recourse shall not limit SCE’s right to seek equitable or injunctive relief against Collateral Agent, or SCE’s rights with respect to any offset rights expressly allowed under the Resource Adequacy Purchase Agreement, a Replacement Resource Adequacy Purchase Agreement or the RA Agreement Collateral.

1.8 Delivery of Notices.

SCE shall deliver to Collateral Agent, concurrently with the delivery thereof to Project Company, a copy of each notice, request or demand given by SCE to Project Company pursuant to the Resource Adequacy Purchase Agreement relating to (a) a Resource Adequacy Purchase Agreement Default by Project Company under the Resource Adequacy Purchase Agreement, (b) any claim regarding Force Majeure by SCE under the Resource Adequacy Purchase Agreement, (c) any notice of dispute under the Resource Adequacy Purchase Agreement, (d) any notice of intent to terminate or any termination notice, and (e) any matter that would require the consent of Collateral Agent pursuant to Section 1.11 or any other provision of this Consent. Collateral Agent acknowledges that delivery of such notice, request and demand shall satisfy SCE’s obligation to give Collateral Agent a notice of Resource Adequacy Purchase Agreement Default under Section 1.3. Collateral Agent shall deliver to SCE, concurrently with delivery thereof to Project Company, a copy of each notice, request or demand given by Collateral Agent to Project Company pursuant to the Financing Documents relating to a default by Project Company under the Financing Documents.

1.9 Confirmations.

SCE will, as and when reasonably requested by Collateral Agent from time to time, confirm in writing matters relating to the Resource Adequacy Purchase Agreement (including the performance of same by Project Company); provided, however, that such confirmation may be limited to matters of which SCE is aware as of the time the confirmation is given and such confirmations shall be without prejudice to any rights of SCE under the Resource Adequacy Purchase Agreement as between SCE and Project Company.

1.10 Exclusivity of Dealings.

Except as provided in Sections 1.3, 1.4, 1.8, 1.9 and 2.1, unless and until SCE receives a Financing Document Default Notice, SCE shall deal exclusively with Project Company in connection with the performance of SCE’s obligations under the Resource Adequacy Purchase Agreement. From and after such time as SCE receives a Financing Document Default Notice and until a Substitute Owner is substituted for Project Company pursuant to Section 1.4, a Replacement Resource Adequacy Purchase Agreement is entered into or

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the Resource Adequacy Purchase Agreement is transferred to a Person to whom the Project is transferred pursuant to Section 1.6, SCE shall, until Collateral Agent confirms to SCE in writing that all obligations under the Financing Documents are no longer outstanding, deal exclusively with Collateral Agent in connection with the performance of SCE’s obligations under the Resource Adequacy Purchase Agreement, and SCE may irrevocably rely on instructions provided by Collateral Agent in accordance therewith to the exclusion of those provided by any other Person.

1.11 No Amendments.

To the extent permitted by applicable law, SCE agrees that it will not, without the prior written consent of Collateral Agent (not to be unreasonably withheld, delayed or conditioned) (a) enter into any material supplement, restatement, novation, extension, amendment or modification of the Resource Adequacy Purchase Agreement (b) terminate or suspend its performance under the Resource Adequacy Purchase Agreement (except in accordance with Section 1.3) or (c) consent to or accept any termination or cancellation of the Resource Adequacy Purchase Agreement by Project Company.

SECTION 2. PAYMENTS UNDER THE RESOURCE ADEQUACY PURCHASE AGREEMENT

2.1 Payments.

Unless and until SCE receives written notice to the contrary from Collateral Agent, SCE will make all payments to be made by it to Project Company under or by reason of the Resource Adequacy Purchase Agreement directly to Project Company. SCE, Project Company, and Collateral Agent acknowledge that SCE will be deemed to be in compliance with the payment terms of the Resource Adequacy Purchase Agreement to the extent that SCE makes payments in accordance with Collateral Agent’s instructions.

2.2 No Offset, Etc.

All payments required to be made by SCE under the Resource Adequacy Purchase Agreement shall be made without any offset, recoupment, abatement, withholding, reduction or defense whatsoever, other than that expressly allowed by the terms of the Resource Adequacy Purchase Agreement.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF SCE

SCE makes the following representations and warranties as of the date hereof in favor of Collateral Agent:

3.1 Organization.

SCE is a corporation duly organized and validly existing under the laws of the state of its incorporation, and is duly qualified, authorized to do business and in good standing in every jurisdiction in which it owns or leases real property or in which the nature of its

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business requires it to be so qualified, except where the failure to so qualify would not have a material adverse effect on its financial condition, its ability to own its properties or its ability to transact its business. SCE has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the Resource Adequacy Purchase Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.

3.2 Authorization.

The execution, delivery and performance by SCE of this Consent and the Resource Adequacy Purchase Agreement have been duly authorized by all necessary corporate or other action on the part of SCE and do not require any approval or consent of any holder (or any trustee for any holder) of any indebtedness or other obligation of SCE which, if not obtained, will prevent SCE from performing its obligations hereunder or under the Resource Adequacy Purchase Agreement except approvals or consents which have previously been obtained and which are in full force and effect.

3.3 Execution and Delivery; Binding Agreements.

Each of this Consent and the Resource Adequacy Purchase Agreement is in full force and effect, have been duly executed and delivered on behalf of SCE by the appropriate officers of SCE, and constitute the legal, valid and binding obligation of SCE, enforceable against SCE in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).

3.4 No Default or Amendment.

Except as set forth in Schedule A attached hereto: (a) Neither SCE nor, to SCE’s actual knowledge, Project Company, is in default of any of its obligations under the Resource Adequacy Purchase Agreement; (b) SCE and, to SCE’s actual knowledge, Project Company, has complied with all conditions precedent to the effectiveness of its obligations under the Resource Adequacy Purchase Agreement; (c) to SCE’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either SCE or Project Company to terminate or suspend its obligations under the Resource Adequacy Purchase Agreement; and (d) the Resource Adequacy Purchase Agreement has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.

3.5 No Previous Assignments.

SCE has no notice of, and has not consented to, any previous assignment by Project Company of all or any part of its rights under the Resource Adequacy Purchase Agreement, except as previously disclosed in writing and consented to by SCE.

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SECTION 4. REPRESENTATIONS AND WARRANTIES OF PROJECT COMPANY

Project Company makes the following representations and warranties as of the date hereof in favor of the Collateral Agent and SCE:

4.1 Organization.

Project Company is a [Legal Status of Seller] duly organized and validly existing under the laws of the state of its organization, and is duly qualified, authorized to do business and in good standing in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where the failure to so qualify would not have a material adverse effect on its financial condition, its ability to own its properties or its ability to transact its business. Project Company has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the Resource Adequacy Purchase Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.

4.2 Authorization.

The execution, delivery and performance of this Consent by Project Company, and Project Company’s assignment of its right, title and interest in, to and under the Resource Adequacy Purchase Agreement to the Collateral Agent pursuant to the Financing Documents, have been duly authorized by all necessary corporate or other action on the part of Project Company.

4.3 Execution and Delivery; Binding Agreement.

This Consent is in full force and effect, has been duly executed and delivered on behalf of Project Company by the appropriate officers of Project Company, and constitutes the legal, valid and binding obligation of Project Company, enforceable against Project Company in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).

4.4 No Default or Amendment.

Except as set forth in Schedule B attached hereto: (a) neither Project Company nor, to Project Company’s actual knowledge, SCE, is in default of any of its obligations thereunder; (b) Project Company and, to Project Company’s actual knowledge, SCE, has complied with all conditions precedent to the effectiveness of its obligations under the Resource Adequacy Purchase Agreement; (c) to Project Company’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either SCE or Project Company to terminate or suspend its obligations under the Resource Adequacy Purchase Agreement; and (d) the Resource Adequacy Purchase Agreement has not been amended,

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modified or supplemented in any manner except as set forth herein and in the recitals hereto.

4.5 No Previous Assignments.

Project Company has not previously assigned all or any part of its rights under the Resource Adequacy Purchase Agreement.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF COLLATERAL AGENT

Collateral Agent makes the following representations and warranties as of the date hereof in favor of SCE and Project Company:

5.1 Authorization.

The execution, delivery and performance of this Consent by Collateral Agent have been duly authorized by all necessary corporate or other action on the part of Collateral Agent and Secured Parties.

5.2 Execution and Delivery; Binding Agreement.

This Consent is in full force and effect, has been duly executed and delivered on behalf of Collateral Agent by the appropriate officers of Collateral Agent, and constitutes the legal, valid and binding obligation of Collateral Agent as Collateral Agent for the Secured Parties, enforceable against Collateral Agent (and the Secured Parties to the extent applicable) in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).

SECTION 6. MISCELLANEOUS

6.1 Notices.

All notices and other communications hereunder shall be in writing, shall be deemed given upon receipt thereof by the Party or Parties to whom such notice is addressed, shall refer on their face to the Resource Adequacy Purchase Agreement (although failure to so refer shall not render any such notice or communication ineffective), shall be sent by first class mail, by personal delivery or by a nationally recognized courier service, and shall be directed (a) if to SCE or Project Company, in accordance with [Notice Section of the Resource Adequacy Purchase Agreement] of the Resource Adequacy Purchase Agreement, (b) if to Collateral Agent, to [Collateral Agent Name], [Collateral Agent Address], Attn: [Collateral Agent Contact Information], Telephone: [___], Fax: [___], and (c) to such other address or addressee as any such Party may designate by notice given pursuant hereto.

6.2 Governing Law; Submission to Jurisdiction.

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(a) THIS CONSENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THIS CONSENT AND ALL MATTERS ARISING OUT OF THIS CONSENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, THE LAW OF THE STATE OF CALIFORNIA WITHOUT REGARD TO ANY CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION. [This Section will be modified, if necessary, to match the Governing Law Section of the Resource Adequacy Purchase Agreement.]

(b) All disputes, claims or controversies arising out of, relating to, concerning or pertaining to the terms of this Consent shall be governed by the dispute resolution provisions of the Resource Adequacy Purchase Agreement. Subject to the foregoing, any legal action or proceeding with respect to this Consent and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of California or of the United States of America for the Central District of California, and, by execution and delivery of this Consent, each Party hereby accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof. Each Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its notice address provided pursuant to Section 6.1 hereof. Each Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Consent brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law.

6.3 Headings Descriptive.

The headings of the several sections and subsections of this Consent are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Consent.

6.4 Severability.

In case any provision in or obligation under this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

6.5 Amendment, Waiver.

Neither this Consent nor any of the terms hereof may (a) be terminated, amended, supplemented or modified, except by an instrument in writing signed by SCE, Project

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Company and Collateral Agent or (b) waived, except by an instrument in writing signed by the waiving Party.

6.6 Termination.

Each Party’s obligations hereunder are absolute and unconditional, and no Party has any right, and shall have no right, to terminate this Consent or to be released, relieved or discharged from any obligation or liability hereunder until SCE has been notified by Collateral Agent that all of the obligations under the Financing Documents shall have been satisfied in full (other than contingent indemnification obligations) or, with respect to the Resource Adequacy Purchase Agreement or any Replacement Resource Adequacy Purchase Agreement, its obligations under such Resource Adequacy Purchase Agreement or Replacement Resource Adequacy Purchase Agreement have been fully performed.

6.7 Successors and Assigns.

This Consent shall be binding upon each Party and its successors and assigns permitted under and in accordance with this Consent, and shall inure to the benefit of the other Parties and their respective successors and assignee permitted under and in accordance with this Consent. Each reference to a Person herein shall include such Person’s successors and assigns permitted under and in accordance with this Consent.

6.8 Further Assurances.

SCE hereby agrees to execute and deliver all such instruments and take all such action as may be necessary to effectuate fully the purposes of this Consent.

6.9 Waiver of Trial by Jury.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT OR ANY MATTER ARISING HEREUNDER. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

6.10 Entire Agreement.

This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Consent and any such agreement, document or instrument, the terms, conditions and provisions of this Consent shall prevail.

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6.11 Effective Date. This Consent shall be deemed effective as of the date upon which the last Party executes this Consent.

6.12 Counterparts; Electronic Signatures. This Consent may be executed in one or more counterparts, each of which will be deemed to be an original of this Consent and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Consent and of signature pages by facsimile transmission, Portable Document Format (i.e., PDF), or by other electronic means shall constitute effective execution and delivery of this Consent as to the Parties and may be used in lieu of the original Consent for all purposes.

[Remainder of Page Left Intentionally Blank.]

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IN WITNESS WHEREOF, the Parties hereto have caused this Consent to be duly executed and delivered by their duly authorized officers on the dates indicated below their respective signatures.

[NAME OF PROJECT COMPANY],

[Legal Status of Project Company].

SOUTHERN CALIFORNIA EDISON

COMPANY,

a California corporation.

By:

________________________________

[Name]

[Title]

Date: ___________________________

By:

_______________________________

[Name]

[Title]

Date: ___________________________

[NAME OF COLLATERAL AGENT],

[Legal Status of Collateral Agent].

By:

________________________________

[Name]

[Title]

Date: ___________________________

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SCHEDULE A

[Describe any disclosures relevant to representations and warranties made in Section 3.4]

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SCHEDULE B

[Describe any disclosures relevant to representations and warranties made in Section 4.4]

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APPENDIX 16.03(H) OUTAGE SCHEDULE REPORT

Actual Outage Schedule reports submitted under this Agreement should be provided in Excel.

DATE OF UPDATE RESOURCE NAME

Replicate for each Storage Unit Planned Outages Start Date HE End Date HE MW Available

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Appendix C

Consistent Evaluation Protocol

i

CONSISTENT EVALUATION PROTOCOL (CEP) FOR ENERGY STORAGE BENCHMARKING AND GENERAL REPORTING PURPOSES

February 28, 2014; Revised December 1, 2014

TABLE OF CONTENTS

A. Background and Scope ........................................................................................ 1

1. Background ..................................................................................................... 1

2. Scope .............................................................................................................. 1

B. Presentation Format for CEP and Confidentiality ................................................. 3

1. Presentation Format for CEP .......................................................................... 3

2. Confidentiality .................................................................................................. 3

C. Standardized Planning Assumptions .................................................................... 4

D. Descriptive Information Included in the CEP Spreadsheet ................................... 6

E. Quantitative Information Included in the CEP Spreadsheet .................................. 6

1. Net Market Value Overview ............................................................................. 6

2. Capacity / Resource Adequacy Value ............................................................. 8

3. Energy Value ................................................................................................... 8

4. Ancillary Services Value .................................................................................. 8

5. Distribution Investment Deferral Value ............................................................ 8

6. Fixed Capacity Payments and Fixed O&M Cost ............................................. 8

7. Charging Costs and Variable O&M Cost ......................................................... 8

8. Network Upgrade Cost .................................................................................... 9

9. GHG Compliance Cost .................................................................................... 9

10. Debt Equivalence Cost .................................................................................... 9

11. Market Participation Costs .............................................................................. 9

F. Qualitative Information Included in the CEP Spreadsheet .................................. 10

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CONSISTENT EVALUATION PROTOCOL (CEP) FOR ENERGY

STORAGE BENCHMARKING AND GENERAL REPORTING

PURPOSES

A. Background and Scope

1. Background

The Decision Adopting Energy Storage Procurement Framework and

Design Program (“the Decision”) requires the Investor Owned Utilities

(“IOUs”) to confer with Energy Division Staff to develop a consistent

evaluation protocol to be used for benchmarking and general reporting

purposes.1 Accordingly, Pacific Gas & Electric, San Diego Gas & Electric,

and Southern California Edison worked with the Energy Division to create

this “Consistent Evaluation Protocol” (“CEP”) document.

In Appendix A of the Decision, Section (3)(d), the CEP is described

further as the following.

“An evaluation protocol consistent across the IOUs that includes a consistent set of assumptions and methods for valuing storage benefits, such as market services and avoided costs, and estimating project costs that allow adjustments for utility-specific factors (such as location, portfolio, cost of capital, etc.) and utility-specific modeling tools based outputs affecting valuation as appropriate to provide a consistent basis for comparison across utilities, bids, and use cases.”

The CEP includes both quantitative and qualitative information. The

CEP is not meant to directly correlate to IOU specific evaluation or

shortlisting criteria. Therefore, the outcome under the CEP will differ from

the outcome under the IOU specific evaluation protocol.

2. Scope

Nothing in the CEP is to be construed or implied as restricting or

invalidating the assumptions, models, tools, and analysis each IOU might

choose to value, rank, or shortlist the physical and financial merits of offers

or bids from the IOUs’ energy storage solicitations (Offers) that might be

received to comply and fulfill each IOU’s energy storage needs at the

transmission, distribution, and customer levels.

1 D.13-10-040, at 63.

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As stated in the Decision, the CEP is only for “benchmarking and

general reporting purposes” and is not a replacement for the IOUs’

individual, proprietary, evaluation protocols to be used to evaluate the cost

and benefits or other quantitative or qualitative aspects of Offers resulting

from IOU energy storage solicitations.

The CEP is focused on the methodology to determine Net Market Value

(NMV). For the CEP to yield consistent numerical results across the IOUs

for reporting purposes, publicly available information will be used as a

substitute for the confidential, commercially-sensitive inputs the IOUs will

use in evaluation of actual commercial Offers from market participants.

Beyond NMV, each IOU will have specific qualitative and quantitative

elements that will be used to evaluate and select energy storage projects.

Those IOU-specific qualitative and quantitative elements are not included in

the CEP and will not be limited by the CEP. The Decision clarifies this intent

as follows.

“We agree with parties that any actual finding of cost-effectiveness should only be done in a utility application for approval of storage contracts or rate-based additions, where there is a specific project and actual project inputs... As such, we shall allow the IOUs to propose their own methodology to evaluate the cost and benefits of bids.[emphasis added]”

The CEP shall not be implemented into a model. To complete the

CPUC’s benchmarking and reporting goals, each IOU will evaluate the

quantitative and qualitative elements of short-listed energy storage projects

through its respective models, albeit using publicly available input

assumptions needed to calculate NMV.2 Given that the purpose of the CEP

is to provide a succinct comparison tool for storage Offers, it is not possible

to capture every cost and benefit of storage Offers in the CEP. The scope of

the CEP includes all three of the storage domains defined in the Decision—

transmission, distribution and customer—in either a quantitative or

qualitative form.

2 Described in Section C below.

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B. Presentation Format for CEP and Confidentiality

1. Presentation Format for CEP

The presentation format for Offers under the CEP will be an electronic

spreadsheet, an example of which is included as Attachment 1 of this

document (the Spreadsheet).3 The Spreadsheet will include prescribed

column headings for information describing the Offers. Per the Decision,

this information will be based on a, “consistent set of assumptions and

methods for valuing storage benefits” as described herein. For each of the

Offers, the Spreadsheet will include:

Descriptive information about the Offers and their proposed

projects, as described in Section D below.

Quantitative information consisting of an NMV calculation,

inputs to NMV, and the benefit and cost components used to

calculate NMV, as described in section Section E below.

Qualitative information consisting of an indication of which

energy storage ‘end uses’4 might exist for each of the Offers, as

described in section Section F below.

The Spreadsheet will not include all evaluation rating or ranking

elements or criteria that may be considered in utilities’ evaluations of Offers.

For example, the Spreadsheet does not capture information on (1) Location,

(2) Portfolio Need, (3) Contract Length, (4) Project Viability, (5) Supplier

Diversity, (6) Credit Status including Counterparty Concentration, (7)

Number of Proposed Modifications to the Power Purchase Agreement

(“PPA”) and (8) the Offer’s consistency with and contribution to California’s

goals for the energy storage program.

2. Confidentiality

Information provided to the California Public Utilities Commission (“the

Commission”) via its staff is confidential under California Public Utilities

Code Section 583 and confidentiality requirements contained in D.06-06-066

and D.13-10-040. However, such information may be shared with the

3 This document and its attached spreadsheet constitute the CEP in its entirety.

4 As identified in the Decision Adopting Proposed Framework for Analyzing Energy Storage Needs (D.12-08-016), August 6, 2012, at 23.

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California Independent System Operator (“CAISO”), each IOU’s

Procurement Review Group (“PRG”), or any other regulatory agencies under

the appropriate confidentiality protection, without destroying the

confidentiality protection afforded by the Commission.

C. Standardized Planning Assumptions

The calculation of NMV requires assumptions for several inputs, including,

but not limited to,

Forecast hourly energy prices,

Forecast capacity prices,

Forecast ancillary services value,5

Forecast monthly natural gas prices,

Discount rate,

System loss factors, and

Forecast greenhouse gas (GHG) costs.

For any calculations under CEP, publicly available information will be used.

One of the Commission’s consultants, Energy and Environmental Economics

(E3)6 produced an avoided cost calculator, which provides some public

information. This avoided cost calculator includes a publicly available forecast of

natural gas prices using the 2011 Market Price Referent (MPR) methodology

and a public forecast of GHG prices using the 2009 MPR methodology.7 In

addition, E3’s avoided cost calculator also includes public price forecasts for

energy and capacity, system loss factors for each IOU, and discount rates for

each IOU.8 The most recent avoided cost calculator is named

“DERAvoidedCostModel_v3.9_2011 v4d.xlsm” and is available on E3’s

5 In the absence of a publicly available forecast of ancillary services prices, the CEP will use

surrogate prices for ancillary services based on agreed upon monthly percentages of energy prices.

6 For background, note that E3 also produced the Commission’s Market Price Referent (MPR) model.

7 The MPR models are available at http://www.ethree.com/public_projects/cpuc3.php

8 E3’s describes the source of inputs—e.g., discount rate, system losses and GHG costs—and calculation methodology of outputs—e.g., energy, capacity and natural gas prices—for the publicly available information in its avoided cost calculator in two documents at http://www.ethree.com/public_projects/cpucdr.php The names of the two documents are: “Revised DG Cost Effectiveness Framework Avoided Cost Methodology Description” and “Avoided Cost Methodology Description”.

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website.9 The aforementioned information from E3’s avoided cost calculator will

be included in the CEP as input assumptions.

9 http://www.ethree.com/public_projects/cpuc5.php

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D. Descriptive Information Included in the CEP Spreadsheet

The CEP Spreadsheet will include descriptive information about the Offers

as listed in Table 1.

Table 1 Descriptive Information Included in the CEP Spreadsheet

IOU (PGE / SCE / SDGE)

Commercial Operation Date

Self-discharge in Stand-by (MW/hour)

Name of Shortlisted Project

Term (Years)

Ramp rate – charge/discharge, up/down (MW/hour)

Interconnection Voltage (kV)

Max Capacity – Charge/Discharge at grid connection point (MW)

AGC (yes/no)

Interconnection Level (Transmission / Distribution)

Min Capacity – Charge/Discharge at grid connection point (MW)

Regulation at zero -- up/down (yes/no)

Local Capacity Area Qualifying RA Capacity (MW)

Contract Cost ($)

Zone (NP / ZP / SP)

Duration of max sustainable discharge rate (Hours)

Variable O&M for discharging ($/MWh)

Status (New / Existing)

Efficiency at max capacity (%)

Fixed O&M ($/kW-year)

Product (Dispatchable / RA)

Max daily switches – charge/discharge (# charges per day)

Energy Storage Technology

Max cycles per lifetime (# cycles)

E. Quantitative Information Included in the CEP Spreadsheet

1. Net Market Value Overview

For the CEP, the Offers will be evaluated in terms of dollars per kilowatt

($/kW). NMV is the net present value (NPV) of future benefits minus future

costs for the projects resulting from the Offers. The benefits will include the

items listed in Table 2, levelized in $/kW. Costs will be defined as the direct

and indirect, fixed and variable costs of a given project over its term. Costs

will include the items listed in Table 2, levelized in $/kW. The CEP

Spreadsheet will include quantitative information about the Offers as listed in

Table 2 below.

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Table 2 Quantitative Information Included in the CEP Spreadsheet

Market Benefits

(Levelized $/kW)

Market Costs

(Levelized $/kW)

Capacity / Resource Adequacy Value

Fixed Capacity Payments and Fixed O&M Cost

Energy Value Charging Costs and Variable O&M Cost

Ancillary Services Value Network Upgrade Cost (paid by CAISO consumers)

Distribution Investment Deferral Value (if applicable to project)

GHG Compliance Cost (if applicable to project)

Debt Equivalency Cost

Market Participation Costs

NMV is calculated for each Offer with the following formula based on

publicly available information:

NMV = (C + E + AR + DD) – (F + V + N + GHG + DE + MPC)

Where:

C = Capacity / Resource Adequacy Value

E = Energy Value

AR = Ancillary Services Market Value

DD = Distribution Investment Deferral Value

F = Fixed Capacity Payments and Fixed O&M Cost

V = Charging Costs and Variable O&M Cost

N = Network Upgrade Cost

GHG = GHG Compliance Cost (if applicable to project)

DE = Debt Equivalency Cost

MPC = Market Participation Costs

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2. Capacity / Resource Adequacy Value

The value of capacity / resource adequacy (RA) associated with each Offer

will be determined based on the projected monthly qualifying RA capacity and

publicly available forecast capacity prices.

3. Energy Value

The market value of energy deliveries is based on the hourly generation

profile of each Offer considering operating characteristics and limitations, such

as delivery date, delivery term and delivery location and operational constraints.

The market value of the energy will be based on the publicly available forecast

energy prices. The quantity of energy delivered will be an output of each IOU’s

dispatch modeling tool. System loss factors both at the transmission and

distribution level depending on the interconnection will be used to incorporate

losses specific for each IOU.

4. Ancillary Services Value

Ancillary Services (AS) value will be assessed based on the ancillary service

capability of each Offer. In the absence of a publicly available forecast of AS

prices, the CEP will use surrogate prices for ancillary services based on agreed

upon monthly percentages of hourly energy prices.10 AS values will be

determined by each IOU’s dispatch modeling tool using the surrogate AS prices.

An energy storage device can generally operate in either the AS market or the

real time energy market but not both.

5. Distribution Investment Deferral Value

For Offers that provide a distribution investment deferral value, as calculated

by each IOU using its own criteria, the resultant value will be shown for

benchmarking and reporting purposes.

6. Fixed Capacity Payments and Fixed O&M Cost

The fixed payments for the project will be provided in the Offers.

7. Charging Costs and Variable O&M Cost

Charging costs for energy storage includes the cost of electricity to charge

the project. The source of Variable Operations and Maintenance (O&M), station

10 Before utilities submit their completed CEP Spreadsheets including information on their shortlisted

Offers, the IOUs will work with the Energy Division to determine the appropriate AS price forecast to be used in the CEP valuation.

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use and other variable costs will be provided in the Offers. The amount of

charging used by an energy storage project will be determined by each IOU’s

dispatch modeling tool.

8. Network Upgrade Cost

Transmission or distribution network-related costs will be part of the Offer’s

NMV. The IOUs may obtain and use results from Participants’ interconnection

studies, if available. Otherwise each IOU will develop and use its own estimate

for transmission and distribution network upgrade costs.

Each Offer will include in its bid price the estimated cost of all the facilities

needed to interconnect the project to the first point of interconnection with the

transmission system grid. These facilities are referred to as direct assignment

facilities, or “gen-ties”. Because these costs are in the bid price, they are not

included in the calculation of the transmission adder.

Network upgrades include all facilities that: (i) enable the project to be fully

deliverable for RA counting purposes (upgrades after the point where a project's

electricity first interconnects with and enters the subject utility's transmission

grid); and (ii) transmit or deliver the full amount of power from the Project.

Network upgrades include (a) transmission lines, (b) transformer banks, (c)

special protection systems, (d) substation breakers, (e) capacitors, and (f) other

equipment needed to transfer power to the consumer.

9. GHG Compliance Cost

For any energy storage project that includes technology that generates GHG

emissions, a GHG compliance cost will be calculated and included in the NMV.

10. Debt Equivalence Cost

Long-term procurement contracts held by IOUs are treated by credit rating

agencies as equivalent to long-term debt. This “debt equivalence” increases an

IOUs borrowing costs.

11. Market Participation Costs

For example, in order to arbitrage the day-ahead and RT market, the

storage device must overcome the difference between the day-ahead and RT

Grid Management Charge (“GMC”) cost.

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F. Qualitative Information Included in the CEP Spreadsheet

To incorporate some qualitative value that cannot be captured in the

quantitative metrics, the CEP Spreadsheet also includes a grid of twenty ‘end

uses’ as identified in the Decision Adopting Proposed Framework for Analyzing

Energy Storage Needs11 and listed in Table 3, below. For each offer, the utility

will identify which end uses are associated with that offer. For each offer every

end use will be scored with a “0,” “1,” or “2.” On this scale, “2” will mean “primary

function” for an offer; “1” will mean “secondary function” for an offer; and “0” will

mean “function not present” for an offer.

Table 3 End Uses Included in the CEP Spreadsheet

1. Ancillary Services: frequency regulation

8. Intermittent resource integration: wind (ramp/voltage support)

15. Distribution peak capacity support (upgrade deferral)

2. Ancillary services: spin / non-spin / replacement reserves

9. Intermittent resource integration: photovoltaic (time shift, voltage sag, rapid demand support)

16. Distribution operation (voltage / VAR support)

3. Ancillary services: ramp 10. Supply firming 17. Outage mitigation: micro-grid

4. Black start 11. Peak shaving 18. Time-of-use (TOU) energy cost management

5. Real time energy balancing

12. Transmission peak capacity support (upgrade deferral)

19. Power quality

6. Energy price arbitrage 13. Transmission operation (short duration performance, inertia, system reliability)

20. Back-up power

7. Resource Adequacy 14. Transmission congestion relief

Note: the benefit of all end uses is not simply a sum of the benefits for each

end use. In some cases, allocating some portion of an energy storage project to

one end use limits the ability of that portion of the energy storage project to

satisfy any other end use. For example, since the same megawatt of capacity

cannot provide both regulation up and spinning reserve at the same time, it

11 Decision Adopting Proposed Framework for Analyzing Energy Storage Needs (D.12-08-016),

August 6, 2012, at 23.

C-11

11

cannot receive value for both of those end uses at the same time. However, in

other cases, storage benefits can come from several sources. The benefits for

any given megawatt of storage capacity (or fraction thereof) in any given hour,

could come from multiple sources specified in the CAISO tariff (such as

Resource Adequacy capacity, energy, and ancillary services) or from other

sources, such as distribution or customer end uses. Further, different portions of

capacity of the same storage project may receive value from different sources.

For example, a 10 megawatt project could get value for 5 megawatts of

regulation up and 5 megawatts of spinning reserve at the same time.

C-12

Attachment 1 to the Consistent Evaluation Protocol: "CEP Spreadsheet" CONFIDENTIAL INFORMATION. Data provided to the CPUC herein is confidential under California Public Utilities Code Section 583, D.06-06-066, and D.13-10-040. The Consistent Evaluation Protocol (CEP) is for energy storage benchmarking and general reporting purposes, per D.13-10-040.

1 2 3 4 5 6 7 8 9 10 11 12Descriptive Items

IOU (PGE / SCE / SDGE) Name of Shortlisted Project Interconnection Voltage (kV) Interconnection Level (Transmission / Distribution) Local Capacity Area Zone (NP / ZP / SP) Status (New / Existing) Product (Dispatchable / RA) Energy Storage Technology Commercial Operation Date Term (Years) Max Capacity (MW) Min Capacity (MW) Qualifying RA Capacity (MW) Duration of Max Sustainable Discharge Rate (Hours) Efficiency at Max Capacity (%) Max Daily Switches -- Charge / Discharge (# Charges) Max Cycles per Lifetime (# Cycles) Self-Discharge in Stand-by (MW / Hour) Ramp Rate -- Charge / Discharge, Up / Down (MW / Hour) AGC (Yes / No) Regulation at Zero (Yes/No) Contract Cost ($) Variable O&M for Discharging ($/MWh) Fixed O&M ($/kW-Year)

Quantitative Items* Levelized Capacity RA Value ($/kW) Levelized Energy Value ($/kW) Levelized Ancillary Services Value ($/kW) Distribution Investment Deferral Value - if applicable ($/kW) Levelized Capacity Payments and Fixed O&M Cost ($/kW) Levelized Charging Costs and VOM Cost ($/kW) Levelized Network Upgrade Cost ($/kW) Levelized GHG Compliance Cost (if applicable) ($/kW) Levelized Debt Equivalency Cost ($/kW) Levelized Market Participation Costs ($/kW)

NPV (CEP Assumptions) Levelized Net Market Value $/kW

NPV (Proprietary IOU

Assumptions) Levelized Net Market Value $/kW

Applicable End Uses ("2" = primary function; "1" = secondary function; "0" = function not present) Ancillary Services: Frequency Regulation Ancillary Services: Spin / Non-Spin / Replacement Reservces Ancillary Services: Ramp Black Start Real Time Energy Balancing Energy Price Arbitrage Resource Adequacy Intermittent Resource Integration: Wind (Ramp / Voltage Support) Intermittent Resource Integration: PV (Time Shift, Voltage Sag, Rapid Demand Support) Supply Firming Peak Shaving Transmission Peak Capacity Support (Upgrade Deferral) Transmission Operation (Short Duration Performance, Inertia, System Reliability) Transmission Congestion Relief Distribution Peak Capacity Support (Upgrade Deferral) Distribution Operation (Voltage / VAR Support) Outage Mitigation: Micro-Grid Time-of-Use (TOU) Energy Cost Management Power Quality Back-Up Power

*With the exception of "NPV (Proprietary IOU Assumptions)" all of the Quantiative Items are calculated using standardized planning assumptions, as discussed in the Section C of the CEP.

Customer

ISO / Market

Generation

Market Benefits (CEP

Assumptions)

Market Costs (CEP

Assumptions)

Transmission / Distribution

C-13

Appendix D

Witness Qualifications

D-1

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF GARRY L. CHINN 3

Q. Please state your name and business address for the record. 4

A. My name is Garry L. Chinn, and my business address is 3 Innovation Way, Pomona, 5

California 91768. 6

Q. Briefly describe your present responsibilities at the Southern California Edison Company. 7

A. I am a Manager of the Transmission & Interconnection Planning Group within 8

Transmission and Distribution (“T&D”). In this position, I am responsible for managing 9

a group of power system engineers in assessing the electric system and developing 10

transmission facilities to ensure the performance of SCE’s bulk power system is in 11

compliance with NERC Reliability Standards. 12

Q. Briefly describe your educational and professional background. 13

A. In 1991, I received a Bachelor of Science degree in electrical & electronic engineering 14

from California State University, Sacramento. I also earned a Master of Science degree 15

in electrical engineering from the University of Southern California in 1994. I became a 16

registered professional electrical engineer with the State of California in 1995. Since 17

1991, I have held positions related to the planning of the transmission system with the 18

Los Angeles Department of Water & Power, Metropolitan Water District of Southern 19

California and SCE. I have over ten years of service with SCE, all with the Transmission 20

& Interconnection Planning Group. 21

Q. What is the purpose of your testimony in this proceeding? 22

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01, 23

entitled Testimony of Southern California Edison Company in Support of Its 2016 Energy 24

Storage Procurement Plan as identified in the Table of Contents thereto. 25

D-2

Q. Was this material prepared by you or under your supervision? 1

A. Yes, it was. 2

Q. Insofar as this material is factual in nature, do you believe it to be correct? 3

A. Yes, I do. 4

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 5

judgment? 6

A. Yes, it does. 7

Q. Does this conclude your qualifications and prepared testimony? 8

A. Yes, it does. 9

D-3

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF GUS FLORES 3

Q. Please state your name and business address for the record. 4

A. My name is Gus Flores, and my business address is 2244 Walnut Grove Avenue, 5

Rosemead, California 91770. 6

Q. Briefly describe your present responsibilities at the Southern California Edison Company. 7

A. I am the Principal Manager of Contract Origination in the Power Supply organization. 8

My responsibilities include running competitive solicitations for conventional and 9

renewable power products, combined heat and power, energy storage, transmission, 10

emissions products, and resource adequacy. I am also responsible for negotiating 11

bilateral contracts as well as master agreements that establish trading relationships 12

between SCE and our counterparties. 13

Q. Briefly describe your educational and professional background. 14

A. I received a Bachelor of Science degree in Mathematics/Economics from the University 15

of California, Los Angeles and a Master of Business Administration degree from the 16

University of Southern California. I joined SCE in 2002 and have held several staff and 17

management roles including senior energy trader, originator, and Principal Manager of 18

the Power, Gas, and Emissions trading groups. Prior to joining SCE I was employed by 19

Constellation NewEnergy between 1998 and 2002 where I held various positions 20

focusing on developing and pricing products to offer retail customers in the newly 21

deregulated California market. 22

Q. What is the purpose of your testimony in this proceeding? 23

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01, 24

titled Testimony of Southern California Edison Company in Support of Its 2016 Energy 25

Storage Procurement Plan, as identified in the Table of Contents thereto. 26

D-4

Q. Was this material prepared by you or under your supervision? 1

A. Yes, it was. 2

Q. Insofar as this material is factual in nature, do you believe it to be correct? 3

A. Yes, I do. 4

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 5

judgment? 6

A. Yes, it does. 7

Q. Does this conclude your qualifications and prepared testimony? 8

A. Yes, it does. 9

D-5

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF MARK E. IRWIN 3

Q. Please state your name and business address for the record. 4

A. My name is Mark E. Irwin, and my business address is 2244 Walnut Grove Avenue, 5

Rosemead, California 91770. 6

Q. Briefly describe your present responsibilities at the Southern California Edison Company. 7

A. I currently lead the energy storage research, development and demonstration activities of 8

the company in the Advanced Technology department, the project management of all of 9

Advanced Technology’s research, development and demonstration projects and the 10

deployment of utility owned energy storage projects. 11

Q. Briefly describe your educational and professional background. 12

A. I received a Bachelor of Science degree in Business with an emphasis in Accounting 13

from the University of Southern California and a Masters of Business Administration 14

majoring in Finance from the Wharton School at the University of Pennsylvania. My 15

professional experience includes 9 years at Southern California Edison with 5 years in 16

Advanced Technology and 4 years leading renewable contract origination. I also have 16 17

years of experience in the unregulated power generation business with roles in business 18

development and asset management. 19

Q. What is the purpose of your testimony in this proceeding? 20

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01, 21

entitled Testimony of Southern California Edison in Support of its 2016 Energy Storage 22

Procurement Plan, as identified in the Table of Contents thereto. 23

Q. Was this material prepared by you or under your supervision? 24

A. Yes, it was. 25

Q. Insofar as this material is factual in nature, do you believe it to be correct? 26

A. Yes, I do. 27

D-6

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 1

judgment? 2

A. Yes, it does. 3

Q. Does this conclude your qualifications and prepared testimony? 4

A. Yes, it does. 5

D-7

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF JOHN M. MINNICUCCI 3

Q. Please state your name and business address for the record. 4

A. My name is John M. Minnicucci, and my business address is 14799 Chestnut Street, 5

Westminster, California 92683. 6

Q. Briefly describe your present responsibilities at Southern California Edison Company. 7

A. I am a Senior Manager in Regulatory Affairs, responsible for regulatory activities 8

associated with Advanced Technology, safety and security. I have held this position 9

since March of 2013 and have worked for SCE since June of 1993. 10

Q. Briefly describe your educational and professional background. 11

A. I hold a Master of Business Administration degree from California State Polytechnic 12

University, Pomona and a Bachelor of Science degree in Business, with an emphasis in 13

Accounting, from California State University, Long Beach. Prior to my current role, I 14

worked for eight years as a senior manager and senior project manager in SCE’s 15

Transmission and Distribution Organizational Unit (“T&D”), responsible for smart grid 16

regulatory and legislative activities, budgeting and technology portfolio management. I 17

previously held positions in Regulatory Compliance and Audit Services, where I was 18

responsible for developing, implementing, and managing a number of processes and 19

controls related to Affiliate Transaction Rulemaking/Investigation; the compliance 20

strategy for the Edison Carrier Solutions telecommunications division; and Research, 21

Development and Demonstration activities. 22

Q. What is the purpose of your testimony in this proceeding? 23

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01, 24

entitled Testimony of Southern California Edison Company in Support of Its 2016 Energy 25

Storage Procurement Plan as identified in the Table of Contents thereto. 26

D-8

Q. Was the material prepared by you or under your supervision? 1

A. Yes, it was. 2

Q. Insofar as this material is factual in nature, do you believe it to be correct? 3

A. Yes, I do. 4

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 5

judgment? 6

A. Yes, it does. 7

Q. Does this conclude your qualifications and prepared testimony? 8

A. Yes, it does. 9

10

D-9

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF RANBIR SEKHON 3

Q. Please state your name and business address for the record. 4

A. My name is Ranbir Sekhon, and my business address is 2244 Walnut Grove Avenue, 5

Rosemead, California 91770. 6

Q. Briefly describe your present responsibilities at the Southern California Edison Company. 7

A. I am Director of the Portfolio Planning & Analysis department of Southern California 8

Edison’s (“SCE’s”) Power Supply organization. 9

Q. Briefly describe your educational and professional background. 10

A. I graduated from Queen Mary College, University of London in May of 1998 with a 11

Bachelor of Science Degree in Mathematics and Computing with First Class Honors. 12

Prior to joining SCE I worked briefly for ABN Amro in their corporate finance 13

department and for nine years as a Management Consultant for PA Consulting Group. 14

During my time with PA I reached the rank of Principal Consultant and was responsible 15

for managing teams of consultants on various consulting projects. Six of my nine years 16

with PA was spent working with global energy sector clients on engagements ranging 17

from Energy Transaction and Risk Management (“ETRM”) systems implementation to 18

Business Process and Quantitative Model development. I joined SCE as Manager of 19

Portfolio Planning & Management in August 2007 and have held various roles 20

responsible for monthly risk and resource adequacy reporting to CPUC, analytical model 21

development, managing all valuation processes related to renewable, alternative and 22

conventional procurement and developing analytical models to support SCEs hedging 23

program. I have previously testified before the commission. 24

25

D-10

Q. What is the purpose of your testimony in this proceeding? 1

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01, 2

entitled Testimony of Southern California Edison Company in Support of Its 2016 Energy 3

Storage Procurement Plan as identified in the Table of Contents thereto. 4

Q. Was this material prepared by you or under your supervision? 5

A. Yes, it was. 6

Q. Insofar as this material is factual in nature, do you believe it to be correct? 7

A. Yes, I do. 8

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 9

judgment? 10

A. Yes, it does. 11

Q. Does this conclude your qualifications and prepared testimony? 12

A. Yes, it does. 13

D-11

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF MATTHEW D. SHERIFF 3

Q. Please state your name and business address for the record. 4

A. My name is Matthew David Sheriff, and my business address is 2244 Walnut Grove 5

Avenue, Rosemead, California 91770. 6

Q. Briefly describe your present responsibilities at the Southern California Edison Company 7

(“SCE”). 8

A. I am currently Senior Project Manager in SCE’s CPUC Revenue Requirements and 9

Tariffs Department. As such, I am primarily responsible for preparation of SCE’s 10

Consolidated Revenue Requirements showing and forecasting SCE’s system average 11

rate. 12

Q. Briefly describe your educational and professional background. 13

A. I graduated from the University of Maryland Baltimore County in May of 1995 with a 14

Bachelor of Arts Degree in Political Science. For the next seven years I worked at 15

several venture-backed new media startups in marketing and business development roles. 16

In August of 2002, I returned to graduate school to earn a Master of Business 17

Administration (“MBA”) from the University of Southern California. Shortly after 18

graduation, I worked for Raytheon Inc. as a senior financial analyst responsible for 19

balance sheet and cash flow forecasting. In April of 2007, I began to work for Southern 20

California Edison Company as Senior Financial Analyst in the Financial Planning and 21

Analysis group of the Treasurer’s department. In this role as a financial subject matter 22

expert, I prepared cost-effectiveness analysis in support of applications before the CPUC, 23

including SmartConnect®, the SONGS High Pressure Turbine, and the sale of SCE’s 24

interest in Four Corners. I was promoted to senior project manager while in this 25

department. I started in my current position in January of 2014. I have previously 26

testified before the California Public Utilities Commission. 27

D-12

Q. What is the purpose of your testimony in this proceeding? 1

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01, 2

entitled Testimony in Support of SCE's 2016 Energy Storage Procurement Plan 3

Application, as identified in the Table of Contents thereto. 4

Q. Was this material prepared by you or under your supervision? 5

A. Yes, it was. 6

Q. Insofar as this material is factual in nature, do you believe it to be correct? 7

A. Yes, I do. 8

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 9

judgment? 10

A. Yes, it does. 11

Q. Does this conclude your qualifications and prepared testimony? 12

A. Yes, it does. 13

D-13

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF GARY A. STERN 3

Q. Please state your name and business address for the record. 4

A. My name is Gary A. Stern. I am employed by Southern California Edison Company 5

(“SCE”). My business address is 2244 Walnut Grove Avenue, Rosemead, California 6

91770. 7

Q. Briefly describe your present responsibilities at SCE. 8

A. I am the Director of Energy Policy in SCE’s Regulatory Affairs organization. In this 9

position, I am responsible for, amongst other things, regulatory policy and case 10

management for proceedings with the California Public Utilities Commission. I also 11

have a group that does strategic planning and projects for SCE. I have previously 12

testified before the CPUC and FERC on many occasions, in various proceedings. 13

Q. Briefly describe your educational and professional background. 14

A. I received a Bachelor of Arts degree in Mathematics and Economics in 1979 from the 15

University of California at San Diego. I received a Master of Arts degree in Economics 16

in 1981 and a Doctorate in Economics in 1984, both from the University of California at 17

San Diego. 18

From 1981 to 1984, I worked as an econometrician on the research staff of 19

Quantitative Economic Research, Inc. I joined SCE in 1984 as a Market Analyst. In 20

1985, I began working in Generation Planning where I analyzed demand and supply 21

options. I worked on a wide variety of projects as an analyst, supervisor, and manager in 22

System Planning. In 1996, I transferred to the Treasurer’s Department where I worked 23

on industry restructuring. In February of 1998, I transferred to Regulatory Policies and 24

Affairs and also in 1998 became the Director of Market Monitoring and Analysis in 25

SCE’s Regulatory Policy and Affairs. In March 2006, I became the Director of Market 26

D-14

Strategy and Resource Planning. In March of 2013 I became the Director of Energy 1

Policy, which is the position I hold today. 2

Q. What is the purpose of your testimony in this proceeding? 3

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01, 4

entitled Testimony of Southern California Edison Company in Support of Its 2016 Energy 5

Storage Procurement Plan as identified in the Table of Contents thereto. 6

Q. Was this material prepared by you or under your supervision? 7

A. Yes, it was. 8

Q. Insofar as this material is factual in nature, do you believe it to be correct? 9

A. Yes, I do. 10

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 11

judgment? 12

A. Yes, it does. 13

Q. Does this conclude your qualifications and prepared testimony? 14

A. Yes, it does. 15

16

D-15

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF BRANDON TOLENTINO 3

Q. Please state your name and business address for the record. 4

A. My name is Brandon Tolentino, and my business address is 1241 S. Grand Ave., Santa 5

Ana, CA 92705. 6

Q. Briefly describe your present responsibilities at the Southern California Edison Company 7

(“SCE”). 8

A. I am an Engineering Manager in the Integrated Grid Strategy and Engagement group 9

within the Electric System Planning and Modernization Department. I currently manage 10

a group that oversees activities related to providing technical support to regulatory 11

activities such as the Distribution Resources Plan (“DRP”) and the General Rate Case 12

(“GRC”) and supporting the licensing of capital projects within Electric System Planning 13

& Modernization. 14

Q. Briefly describe your educational and professional background. 15

A. I received my Bachelor’s Degree in Electrical Engineering from California Polytechnic 16

State University, San Luis Obispo and I am a registered Professional Engineer in the 17

State of California. I started my career at Pacific Gas & Electric Company in 2002 18

focusing on Distribution System Planning. I continued in that capacity until 2008, when I 19

began working at SCE in the Distribution Engineering group, where I have worked in 20

various engineering and manager positions focused on Distribution System Planning and 21

Operations Support. 22

Q. What is the purpose of your testimony in this proceeding? 23

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01, 24

entitled Testimony of Southern California Edison Company in Support of Its 2016 Energy 25

Storage Procurement Plan as identified in the Table of Contents thereto. 26

D-16

Q. Was this material prepared by you or under your supervision? 1

A. Yes, it was. 2

Q. Insofar as this material is factual in nature, do you believe it to be correct? 3

A. Yes, I do. 4

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 5

judgment? 6

A. Yes, it does. 7

Q. Does this conclude your qualifications and prepared testimony? 8

A. Yes, it does. 9

10

D-17

SOUTHERN CALIFORNIA EDISON COMPANY 1

QUALIFICATIONS AND PREPARED TESTIMONY 2

OF MARK WALLENROD 3

Q. Please state your name and business address for the record. 4

A. My name is Mark Wallenrod, and my business address is 1515 Walnut Grove Avenue, 5

Rosemead, California 91770. 6

Q. Briefly describe your present responsibilities at the Southern California Edison Company. 7

A. I am currently the Director of Demand Side Management (“DSM”) Program 8

Management in SCE’s Customer Service organization. In this capacity, I am responsible 9

for managing SCE’s portfolio of energy efficiency, demand response, and income 10

qualified programs. 11

Q. Briefly describe your educational and professional background. 12

A. I received a Master of Science degree in Energy Management and Policy from the 13

University of Pennsylvania in Philadelphia, PA. In fulfillment of this degree, I completed 14

coursework at the Wharton School, Moore School of Engineering, and School of Public 15

and Urban Policy. I received a Bachelor of Science degree from Dickinson College in 16

Carlisle, PA. I have been with SCE for 30 years and have worked in various analytical, 17

supervisory, and management positions in the Regulatory Policy and Affairs, Research, 18

and Customer Service Departments. I have previously testified before the California 19

Public Utilities Commission. 20

Q. What is the purpose of your testimony in this proceeding? 21

A. The purpose of my testimony in this proceeding is to sponsor portions of Exhibit SCE-01 22

entitled Testimony of Southern California Edison in Support of its 2016 Energy Storage 23

Procurement Plan, as identified in the Table of Contents thereto. 24

Q. Was this material prepared by you or under your supervision? 25

A. Yes, it was. 26

D-18

Q. Insofar as this material is factual in nature, do you believe it to be correct? 1

A. Yes, I do. 2

Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best 3

judgment? 4

A. Yes, it does. 5

Q. Does this conclude your qualifications and prepared testimony? 6

A. Yes, it does. 7