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HomeMy WebLinkAbout13708RESOLUTION NO. 13708 A RESOLUTION APPROVING TWO (2) SOLAR PRODUCTION AGREEMENTS BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND CEC SOLAR, A LIMITED LIABILITY COMPANY, SUCH AGREEMENTS DESIGNATED AS “BHE 2- CEC SOLAR #1118, LLC” AND “BHE 3 – CEC SOLAR #1117”, RELATING TO SOLAR ENERGY GENERATION INSTALLATIONS AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID AGREEMENTS BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Solar Production Agreements designated as (a) “BHE 2-CEC Solar #1118, LLC” and (b) “BHE 3-CEC Solar #1117, LLC”, both dated June 26, 2017 between Pueblo, a Municipal Corporation and CEC Solar LLC, a Colorado limited liability company, relating to Solar Energy Generation Installations, copies of which are attached hereto (“Agreements”), having been approved as to form by the City Attorney, are hereby approved. The City Manager is authorized to execute and deliver the Agreements in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 2. The officers and staff of the City are directed and authorized to perform any and all acts consistent with the intent of this Resolution and the attached Agreements which are necessary and desirable to effectuate the transactions described therein. SECTION 3. This Resolution shall become effective immediately upon final passage. INTRODUCED June 26, 2017 BY: Ed Brown City Clerk’s Office Item # M-3 Background Paper for Proposed Resolution COUNCIL MEETING DATE: June 26, 2017 TO: President Stephen G. Nawrocki and Members of City Council VIA: Gina Dutcher, City Clerk FROM: Sam Azad, City Manager SUBJECT: A RESOLUTION APPROVING TWO (2) SOLAR PRODUCTION AGREEMENTS BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND CEC SOLAR, A LIMITED LIABILITY COMPANY, SUCH AGREEMENTS DESIGNATED AS “BHE 2- CEC SOLAR #1118, LLC” AND “BHE 3 – LLC SOLAR #1117, RELATING TO SOLAR ENERGY GENERATION INSTALLATIONS AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID AGREEMENTS SUMMARY: Attached is a proposed Resolution approving and authorizing the City Manager to sign two (2) Agreements (CEC Solar #1117 and CEC Solar #1118) with CEC Solar, LLC, a Colorado limited liability company. PREVIOUS COUNCIL ACTION: None. BACKGROUND: See attached Memorandum dated June 26, 2017 from William H. McEwan, special utilities counsel FINANCIAL IMPLICATIONS: Electricity savings are likely; City can terminate Agreements early under non-appropriation clause (Section 7.6). BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Not applicable to this Resolution. ALTERNATIVES: If this Resolution is not approved, the City may forego an opportunity to obtain lower cost electrical energy service. Receipt of renewable energy credits pursuant to the said Agreements will further the Council’s objective of increasing participation in renewable energy activities. RECOMMENDATION: Approve the Resolution Attachments: ; McEwan memorandum of 6/26/17; TD Consulting, LLC Report to CityProposed Resolution and Solar Production Agreements SOLAR PRODUCTION AGREEMENT (Colorado Local Governmental Units) This Solar Production Agreement(the"Agreement") is entered into as of June 26 , 2017 (the "Effective Date") and is by and between CEC SOLAR#1117, LLC, as seller(the "Seller"), and City of Pueblo as buyer(the"Buyer"). In this Agreement, Seller and Buyer are sometimes referred to individually as a"Party" and collectively as the"Parties." Whereas, Buyer is a Colorado municipality, county, school district, special district or other political subdivision; and Whereas, Seller has offered to provide to Buyer under this Agreement a means of procuring low-cost electrical energy as utility cost-savings measures under C.R.S. 29-12.5-101 et seq; and Whereas, pursuant to this Agreement, Buyer can purchase an interest in a solar energy generation installation, and obtain utility credits from the sale of the solar energy generated by such facility so as to decrease Buyer's utility costs; and Whereas, the solar energy generation installation covered under this Agreement is referred to as"BHE 3" and it is located in Ordway Colorado; and Whereas, the Board has received the analysis and recommendations concerning such utility cost-savings measure from a person experienced in the design and implementation of utility cost-savings measure; and Whereas, the Board has found pursuant to C.R.S. 29-12.5-103 that the amount of money the Buyer would spend on such utility cost-savings measure is not likely to exceed the amount of money the Buyer would save in energy costs over the term of this Agreement; and Whereas, the Board has found that the obligations entered into by the Buyer under this Agreement shall not cause the total outstanding indebtedness incurred by the Buyer under C.R.S. 29-12.4-103 to exceed the applicable limit set forth in C.R.S. 29-12.5-103(2)(b). Now therefore, in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the Parties hereby mutually agree as follows: 1. Definitions. Under this Agreement, the following terms are defined as follows: "Affiliate" means any person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by or partnered with, or is under common control with the person or entity specified. "Board' means the governing body of the above referenced Buyer. "Buyer's Allocation" means the Buyer's Production Capacity expressed as a percentage of the entire nameplate capacity of the Solar Energy Facility. "Buyer's Production Capacity" means the amount of Production Capacity purchased under this Agreement, as referenced in Section 2 and Appendix A below. "Buyer's Solar Interest' means the Buyer's Production Capacity and the Buyer's Solar Output, and excludes any Environmental Attributes or Tax Incentives. "Buyer's Solar Output' means the Solar Output of the Solar Energy Facility, multiplied by the Buyer's Allocation. 1 "Commercial Operations Date" means the date on which the Solar Energy Facility generates electric energy on a commercial basis, and the interconnection to the utility's electric grid has been authorized and is functioning with the Utility. Such date shall be specified by Seller either in Attachment A to this Agreement, or by a separate notice provided to Buyer pursuant to Section 6 of this Agreement. "Environmental Attributes" means any credit, benefit, reduction, offset, financial incentive, and other beneficial allowance that is in effect as of the Effective Date or may come into effect in the future, including, to the extent applicable and without limitation, (i) all environmental and renewable energy attributes and credits of any kind and nature resulting from or associated with the Solar Energy Facility, its production capacity and/or electricity generation, (ii) government financial incentives, (iii) greenhouse gas offsets under the Regional Greenhouse Gas Initiative, (iv) renewable energy credits or renewable energy certificates (each referred to as"RECs") or any similar certificates or credits under the laws of any jurisdiction, including but not limited to Solar RECs, and (v) other allowances howsoever named or referred to, with respect to any and all fuel, emissions, air quality, or other environmental characteristics, resulting from the use of solar energy generation or the avoidance of the emission of any gas, chemical or other substance into the air, soil or water attributable to the Solar Energy Facility, its production capacity and/or electricity generation. "Facility Meter" means a revenue-grade meter maintained by Seller at the Solar Energy Facility and used to measure the electricity delivered by the Solar Energy Facility to such meter. "Force Majeure" or"Force Majeure Event"means any event or circumstance not within the reasonable control of the affected Party which precludes that Party from carrying out, in whole or in part, its obligations under this Agreement, including, but not limited to, Acts of God,hurricanes or tornados, fires, epidemics, landslides, earthquakes, floods, other natural catastrophes, strikes, lock outs or other industrial disturbances. A Party may not assert an event of Force Majeure to excuse it from performing due to any governmental act, failure to act, or order, where it was reasonably within such Party's power to prevent such act, failure to act, or order. Notwithstanding the contrary, economic hardship or unavailability of funds shall not constitute a Force Majeure Event of either Party, and any such discretionary acts, failures to act or orders of any kind by Buyer may not be asserted as an event of Force Majeure by Buyer. "Interconnection Agreement" shall mean the interconnection service agreement(s) entered into with the Utility, which authorizes the interconnection of the Solar Energy Facility to the Utility grid. "Interconnection Point' means the point at which the Utility takes delivery of generated electrical output from the Solar Energy Facility. "kWh"means kilowatt hour. "Production Capacity" means the nameplate of the entire Solar Energy Facility, as listed in Appendix A hereto. "Production Month" means a monthly period during which electricity is delivered from the Solar Energy Facility to the Interconnection Point, occurring after the Commercial Operations Date and before the end of the Term. "Program" means the Utility's Community Solar Gardens Service Program whereby customers may sell generated electricity to the Utility pursuant to the terms and conditions of the Utility's Colorado PUC No. 7 Tariff, Schedule SRCS, as amended from time to time with the Colorado Public Utilities Commission (the"CPUC"), or such other power purchase agreement, tariff and/or other agreement(s) selected by Seller from time to time for sale of Buyer's Solar Output. "Solar Bill Credit" means the bill credit calculated by the Utility pursuant to the terms and conditions of the Program. 2 "Solar Energy Facility' shall mean the photoelectric solar generation facility described in Appendix A. "Solar Output' means the total amount of electricity generated by the Solar Energy Facility and delivered to the Utility at the Interconnection Point from the Commercial Operations Date until the end of the Term, expressed in terms of kilowatt hours ("kWh") on a monthly or other basis. "Tax Incentives" means any tax credits, incentives or depreciation allowances established under any federal or state law, including without limitation investment tax credits (including any grants or payments in lieu thereof) and any tax deductions or other benefits under the Internal Revenue Code or applicable federal, state, or local law available as a result of the ownership and operation of the Solar Energy Facility or the output generated by the Solar Energy Facility(including, without limitation,tax credits(including any grants or payments in lieu thereof) and accelerated, bonus or other depreciation. "Term" shall have the meaning set forth in Section 6. "Utility" means Black Hills Energy. "Utility Account' means Buyer's account with the Utility for utility services at the Utility Service Location. "Utility Service Location" means the premises at which Buyer receives utility services from the Utility under the Utility Account. 2. Buyer's Production Capacity and Buyer's Solar Output. Under this Agreement, the Buyer purchases the Buyer's Production Capacity and the Buyer's Solar Output associated therewith (collectively referred to as"Buyer's Solar Interest"). The Buyer's Production Capacity purchased under this Agreement is from particular solar panels (the"Selected Solar Panels") located in the Solar Energy Facility. The Selected Solar Panels shall represent a nameplate capacity equal to 31.31% of the total nameplate capacity of the Solar Energy Facility, rounded to the nearest full panel. Within 30 days of the Commercial Operations Date, CEC shall notify Buyer of the serial number, nameplate capacity and other identifying information for each of the Selected Solar Panels. Buyer acknowledges that the Utility limits the amount of Production Capacity available to Buyer under this Agreement, as more fully set forth in Section 4 hereto. 3. Sale of Buyer's Solar Output to Utility. The Utility currently offers the Program whereby customers can sell generated electricity to the Utility pursuant to the terms of the Program. Seller agrees to assist Buyer with such sale as detailed more fully in this Section 3 below. 3.1. Delivery of Buyer's Solar Output. In connection with the Program, beginning upon the Commercial Operations Date and continuing monthly until the end of the Term, Seller hereby agrees to deliver the Buyer's Solar Output to the Utility at the Interconnection Point, and to provide to the Utility the information requested by the Utility (the"Bill Credit Information")to calculate the Solar Bill Credits payable to the Buyer under the Program based upon the delivery of the Buyer's Solar Output for such month to the Utility. 3.2. Bill Credit Information. Bill Credit Information includes, but is not limited to the Buyer's name, address, the Buyer's Utility Service Location, the Utility Account numbers associated with the Utility Service Location, the nameplate capacity of the Selected Solar Panels, and the Buyer's Solar Output. Seller agrees to be, and Buyer hereby appoints Seller, as Buyer's exclusive representative for submitting Bill Credit Information to the Utility, with full power and authority to supply to the Utility such information as may be required by the Utility under the Program. This authorization does not restrict Buyer from communicating with, instructing or directing the Utility with respect to other matters pertaining to electric service at the Utility Service Location, or asking the Utility questions regarding Buyer's participation in the Program. In addition, Buyer hereby authorizes the Utility to release to Seller the consumption and other account information of Buyer to help Seller to carry out the terms of this Agreement and the Program, and agrees to 3 execute any documents that either Seller or the Utility may request to permit the release of such information. 3.3. Sale of Buyer's Solar Output. Buyer hereby appoints Seller, as Buyer's exclusive representative ith full power and authority to deliver, assign, transfer, and sell all of Buyer's Solar Output in connection with the Program, and to enter into, administer, and enforce on Buyer's behalf any agreements related to such delivery, assignment, transfer and sale. For this purpose, Buyer hereby waives, relinquishes, and quitclaims any right, claim, and interest in the Solar Output and associated Environmental Attributes, and agrees to execute any additional documents and instruments needed by Seller to effect or evidence the transfer of the Solar Output to the Utility. 4. Program Limits and Other Acknowledgments Regarding Program. In connection with this Agreement, Buyer acknowledges that: 4.1. The Program imposes a limit(listed as the Program Limit in Appendix C)which restricts the total photoelectric generating capacity which Buyer may have under the Program, whether purchased under this Agreement or otherwise, and Buyer agrees that Seller is not obligated to request, and that the Utility is not obligated to make, any payment or Solar Bill Credit to the extent Buyer's photoelectric generating capacity exceeds those limitations. Buyer acknowledges that the limitations set forth in Appendix C are derived from the Program, and that this Agreement will be deemed automatically amended to incorporate any changes to corresponding provisions in the Program. 4.2. Solar Bill Credits are calculated solely by the Utility under the Program, and are subject to Program terms and conditions. Buyer acknowledges and agrees that Seller's sole obligation regarding payments to Buyer is to request and use commercially reasonable efforts to require Utility to make Solar Bill Credits. 4.3. The duration, terms and conditions of the Program, including the rate used to determine Solar Bill Credits, are subject to the sole and exclusive control of Utility and/or the CPUC, and that Seller has not made any representations or warranties with respect to the expected duration of the Program or the amounts to be provided by Utility as Solar Bill Credits. 4.4. Buyer must be and remain a customer of the Utility for electric service throughout the Term of this Agreement, and be in conformance with the requirements of this Agreement and the Utility. 5. Environmental Attributes and Tax Incentives Excluded. Buyer acknowledges and agrees that Buyer's Solar Interest does not include any Environmental Attributes or Tax Incentives associated with the Solar Energy Facility, and Buyer agrees that Buyer will not claim the Environmental Attributes or Tax Incentives associated with the Solar Energy Facility and will promptly execute any additional documents and/or authorizations as Seller may request to assist any Seller in retaining, or in delivering to the Utility or to another third party, such Environmental Attributes and/or Tax Incentives, as determined by Seller. 6. Commercial Operations Date, and Term. If the Commercial Operation Date is not known by the Effective Date of this Agreement, Seller will provide Buyer with notice of the Commercial Operation Date once known. The Term of this Agreement begins upon the Effective Date, and ends 20 years after the Commercial Operations Date unless this Agreement in terminated earlier in accordance with its terms and conditions, in which case the Term shall end upon such early termination. The period from the Commercial Operations Date until the 20th anniversary thereof is referred to herein as the "Scheduled Term". 7. Payment to Seller. 7.1. Buyer acknowledges that in order to bill on a more timely basis, the measurement of the electricity produced by the Solar Energy Facility shall be based upon Seller's meter readings at the Facility Meter. 4 7.2. In this regard, Buyer shall make monthly payments to Seller under this Agreement in an amount (the"Monthly Payment Amount") equal to (i)the Buyer's Allocation of the amount of electricity delivered by the Solar Energy Facility to the Facility Meter during a Production Month, multiplied by(ii)the price per kWh in effect during the year in which the Production Month occurs as set forth in the Appendix B Price List. 7.3. The Monthly Payment Amount shall be due by the sixtieth (60th) day after the end of the Production Month. Seller shall provide Buyer with an invoice showing the Monthly Payment Amount within thirty(30) days following the end of the Production Month. 7.4. The Monthly Payment Amount does not include taxes. The term "taxes" includes any federal, state, and local ad valorem, property, occupation, generation, privilege, sales, use, consumption, excise, or transaction tax, and other taxes, regulatory fees, surcharges, or other similar charges, which shall be Buyer's responsibility, but does not include any income taxes imposed on Seller's revenues due to the sale of Buyer's Solar Interest to Buyer under this Agreement, which income taxes are solely Seller's responsibility. 7.5. Any payment due Buyer under this Agreement but not paid when due shall bear interest from the due date until paid at the rate of 1.5% percent per month, or the highest rate allowed by law, whichever is lower. 7.6. City's Right to Terminate Agreement Early;Appropriations. Notwithstanding Section 12 hereof, the parties understand and acknowledge that City is subject to Article X, §20 of the Colorado Constitution ("TABOR"). The parties do not intend to violate the terms and requirements of TABOR by the execution of this Contract. It is understood and agreed that this Contract does not create a multi-fiscal year direct or indirect debt or obligation within the meaning of TABOR and, therefore, notwithstanding anything in this Contract to the contrary, all payment obligations of City are expressly dependent and conditioned upon the continuing availability of funds beyond the term of City's current fiscal period ending upon the next succeeding December 31. Financial obligations of City payable after the current fiscal year are contingent upon funds for that purpose being appropriated, budgeted, and otherwise made available in accordance with the rules, regulations, and resolutions of City, and other applicable law. Upon the failure to appropriate such funds, this Contract shall be terminated. 8. Operations and Maintenance of the Solar Enemy Facility. Beginning on the Commercial Operations Date through the end of the Term, Seller will be responsible for the operation and maintenance of the Solar Energy Facility, as follows: 8.1. Operations and Maintenance Services. Seller will operate the Solar Energy Facility, and provide customary maintenance services designed to keep the Solar Energy Facility in good working condition. Seller will use qualified personnel to perform such services in accordance with industry standards, and will pay such persons reasonable compensation for performing such services. Seller will initially appoint or have appointed Energy Equipment Limited as property manager to operate and maintain the Solar Energy Facility. 9. Change of Utility Service Location. 9.1. Providing Advance Notice. Buyer agrees to provide Seller with ninety(90) days advance notice of any change which may cause Buyer to not be the Utility's customer for the Utility Service Location. 9.2. New Location Within Utility Service Territory. Buyer agrees that if Buyer shall cease to be Utility's customer at the Utility Service Location and within thirty(30) days thereof move to a • new location within the service territory of Utility, that Buyer will take all steps and provide all information required by Utility under the Program to substitute Buyer's new service location as the Utility Service Location under this Agreement, and this Agreement shall continue in effect. Buyer acknowledges that if the Utility Service Location or any new service location exceeds the 5 Program Limit set forth in Schedule C or otherwise does not comply with the Utility's requirements, Buyer's ability to participate in the Program may cease or be limited in accordance with Program requirements. 9.3. Other Termination of Utility Service. If Buyer ceases to be a Utility customer for electric service at the Utility Service Location and does not comply with Section 9.2 within the time period set forth in therein, then Buyer will continue to pay Seller the Monthly Payment Amount until end of the Scheduled Term; provided however, that if the Seller finds a substitute buyer for Buyer's Solar Output, which buyer is satisfactory to Seller in Seller's sole discretion, including without limitation such buyer's creditworthiness, then Buyer shall not be responsible to pay Seller for Monthly Payment Amounts which correspond to Production Months occurring from and after the date Seller and such substitute buyer shall enter into a Solar Production Agreement in regard to Buyer's Solar Output, In the event that this Agreement is terminated by Buyer prior to the end of the Selected Term,the amount due under this Section 9.3 shall be accelerated as of the date of such termination. 10. Seller's General Agreements. 10.1. In connection with this Agreement, Seller agrees that Seller at all times shall perform Seller's obligations under the Program, and that Seller will exercise commercially reasonable efforts to maintain the Program in effect for the Term of this Agreement. 10.2. Seller shall notify Buyer in writing whenever the Solar Bill Credit amount approved by the Colorado PUC for Black Hills Energy is modified. Such notice may take the form of an email containing an attachment with the appropriate Black Hills Community Solar Garden Service tariff that shows the table entitled"(year) CSG Fixed Bill Credit". 11. Buyer's General Agreements. In connection with this Agreement, Buyer agrees that: 11.1. Buyer will provide to Utility all applications, documentation and information required by Utility and otherwise to qualify Buyer to participate in the Program. 11.2. Buyer has not transferred, assigned or sold any interest in the Solar Energy Facility, or in the Production Capacity, Solar Output, Environmental Attributes or Tax Incentives to any other person or entity, and will not do so during the Term of this Agreement. Buyer has not provided to any other person or entity any of the authority granted to Seller under this Agreement and will not do so during the Term of this Agreement. 11.3. Buyer has not granted or placed or allowed others to place any liens, security interests, or other encumbrances on the Selected Solar Panels, Buyer's Production Capacity, Solar Output, Environmental Attributes or Buyer's Solar Interest, and will not do so during the Term of this Agreement. 11.4. Buyer understands that the Buyer's Production Capacity and Solar Output will vary from time to time based upon solar availability, weather, seasonality, degradation and other conditions, and that the Expected Annual Production of the Selected Solar Panels is an estimate of solar panel capability under ideal conditions, which may not occur. 11.5. Buyer understands that Seller has not guaranteed or made any representations or warranties that the operation of the Solar Energy Facility will be uninterrupted or error free, or any minimum Solar Output or Solar Bill Credits shall be obtained. 11.6. Buyer agrees to keep its Utility account for the Utility Service Location in active status, and to pay on a current basis such amounts as may be due the Utility in connection with such account. Buyer shall make no claim against Seller or Seller's affiliates or assigns for amounts which may be payable to Buyer from the Utility under the Program or in connection with this Agreement. 12. Events of Early Termination. 6 12.1. Material Events. The Term of this Agreement shall be subject to early termination by Seller based upon any of the following events ("Material Events" ), (a) At such time as the Utility ceases to offer the Program or a comparable substitute. (b) In the event that the Commercial Operations Date has not occurred for the Facility within one year of the Effective Date hereof. 12.2. Termination for Material Event. From and after the occurrence of any Material Event, Seller shall have the right, but not the obligation, to either Party may terminate this Agreement on the basis of such Material Event, and any such termination shall be effective upon the date which Seller provides, in accordance with Section 16, written notice of such termination to Buyer. The Parties agree that neither the occurrence of a Material Event nor Seller's termination of this Agreement in accordance with this Section for a Material Event shall be considered to be a default or breach under this Agreement. 13. Events of Default; Termination for Default 13.1. Buyer Default. Each of the following events will constitute a default on the part of Buyer(a "Buyer Default"): (a) Except as otherwise expressly permitted of Buyer in this Agreement, Buyer terminates this Agreement before the end of the Term. (b) Buyer fail to pay any amount due under this Agreement when due, and such failure continues for an additional ten (10) days after such amount is due. (c) Buyer breaches any warranty or representation of Buyer set forth in this Agreement, or fails to perform any material obligation of this Agreement (other than failure to pay), and such breach or failure is not cured by Buyer within thirty(30) days after Buyer receives written notice of such breach or failure from Seller, or, if such breach of failure is not capable of cure within such thirty(30) day period, then Buyer(i)fails to begin such cure within ten (10) days of such written notice or(ii)to complete the cure of such breach or failure with sixty(60)days of such written notice using diligent efforts. (d) Buyer institutes or consents to any proceeding in bankruptcy pertaining to Buyer or its property; or fails to obtain the dismissal of any such proceeding within thirty days of filing; or a receiver, trustee or similar official is appointed for Buyer or a substantially all of Buyer's property or assets; or such property or assets become subject to attachment, execution or other judicial seizure; or Buyer is adjudicated to be insolvent. (e) Buyer attempts to claim any RECs, Environmental Attributes or Tax Incentives in connection with the Solar Energy Facility or Buyer's Solar Interest. 13.2. Seller Default. Each of the following events will constitute a default on the part of Seller(a "Seller Default") provided there is no concurrent Buyer Default: (a) Seller breaches any warranty or representation of Buyer set forth in this Agreement, or fails to perform any material obligation of this Agreement, and such breach or failure is not cured by Seller within thirty(30) days after Seller receives written notice of such breach or failure from Buyer, or, if such breach of failure is not capable of cure within such thirty(30) day period, then Seller(i)fails to begin such cure within ten (10) days of such written notice or(ii)to complete the cure of such breach or failure with sixty(60) days of such written notice using diligent efforts. 7 13.3. Buyer's Remedies in Case of Seller's Default. If a Seller Default occurs and is continuing after the expiration of the cure period applicable thereto, then, Buyer may terminate this Agreement by written notice to Seller without further obligation other than to pay the Monthly Payment for all Production Months (or partial Production Months) occurring prior to the date of such written notice from Buyer. 13.4. Seller's Remedies in Case of Buyer's Default. If a Buyer Default occurs and is continuing after the expiration of the cure period applicable thereto, Seller shall be entitled to terminate this Agreement for breach, and/or to seek such remedies as are available to Company at law or in equity including specific performance. 14. Force Maieure. Except as specifically provided herein, if by reason of Force Majeure, a Party is unable to carry out, either in whole or in part, any of its obligations herein contained, such Party(the "Affected Party") shall not be deemed to be in default during the continuation of such inability, provided that: (i)the Affected Party, within two (2)weeks after being affected by the Force Majeure event, gives the other Party hereto written notice describing the particulars of the occurrence and the anticipated period of delay; (ii)the suspension of performance be of no greater scope and of no longer duration than is required by the Force Majeure event; (iii) no obligations of the Party which were to be performed prior to the Force Majeure event shall be excused as a result of the occurrence thereof; and (iv)the Affected Party shall use commercially reasonable efforts to remedy with all reasonable dispatch the cause or causes preventing it from carrying out its obligations. 15. Assignment. 15.1. Assignment by Buyer. Buyer may not assign this Agreement or Buyer's Solar Interest without Seller's prior written consent, which shall not be unreasonably withheld. 15.2. Assignment by Seller. Seller may assign this Agreement, or any of its rights, duties, or obligations under this Agreement, to another entity or individual, including any Affiliate, whether by contract, change of control, operation of law or otherwise, without Buyer's consent. 15.3. Collateral Assignment. (a) General. Seller shall be entitled to collaterally assign, pledge, grant security interests in, or otherwise encumber its rights and interests in this Agreement to one or more entities providing financing (hereinafter"Lender")without further consent of Buyer. Buyer agrees to reasonably cooperate with Seller and its Lender in connection with such financing, and to provide such information and acknowledgements as Seller or its Lender may reasonably request within ten (10) days of any such request therefor. (b) Notices to Lenders. From time to time, Seller or its Lender may provide Buyer with written notice of any Lender to which interests have been granted pursuant to Section 15.3(a) above. As a precondition to exercising any rights or remedies related to any default by Seller under this Agreement, Buyer shall give written notice of the default to Lender at the same time it delivers notice of default to Seller, including the specifics of any such default. Lender shall have the same amount of time to cure the default under this Agreement as is given to Seller hereunder, and the same right as Seller to cure any default. The cure period for Lender shall begin to run upon the date Lender receives such written notice from Buyer. Failure of Buyer to provide Lender with such notice shall not diminish Buyer's rights against Seller, but shall preserve all rights of Lender to cure any default. (c) Right to Cure Defaults; Substitution. To prevent termination of this Agreement, the Lender shall have the right, but not the obligation, at any time to perform any act necessary to cure any default and to prevent the termination of this Agreement. In the event of an uncured default by Seller, or in the event of a termination of this agreement by operation of law or otherwise, Lender shall have the right, but not the obligation, to substitute itself for Seller under this Agreement, or(ii)to require Buyer enter into a new agreement with Lender substantially 8 identical to this Agreement for a period equal to the duration of the Scheduled Term of this Agreement. 16. Notices. In the event that any notice or other communication is required or permitted to be given hereunder, such notice or communications will be in writing and may be delivered in person or sent by certified mail, overnight courier or transmitted by facsimile to the address of the addressee as specified below. Except as otherwise provided, all such notices or other communications will be deemed to have been duly given and received upon receipt. To Seller: CEC SOLAR#111, LLC 361 Centennial Pkwy Suite 300 Louisville CO 80027 Attn: Manager Fax No.: 970-692-2592 To Buyer: As set forth in Appendix A. 17. Reporting and Marketing. Buyer authorizes Seller and Seller's Affiliates to use Buyer's name and the nameplate capacity allocated to Buyer hereunder(such information referenced herein as Buyer's "Customer Information")for reporting purposes, such as official reporting to governmental authorities, the Utility, public utility commissions and similar organizations, and in marketing materials that Seller or Seller's Affiliates generate or distribute. Seller agrees that following written notice from Buyer to opt out of Seller's marketing program, Seller will no longer identify Buyer by name in Seller's marketing materials. Under no circumstances, except as required by law and as otherwise provided in this Agreement, will Seller release or otherwise publish any information collected from Buyer other than the above Customer Information. 18. Applicability of Open Records Act. The parties acknowledge and agree (a)that Buyer is required to comply with the Colorado Open Records Act, and (b)that the terms of this Agreement contain and constitute confidential and privileged market information and trade secrets of Company, which if disclosed to Company's competitors could harm the Company. The Customer agrees to not disclose the terms hereof to any other entity or person, except as may be required under the Open Records Act or other requirements of law. Customer will advise Company of any request for the foregoing information under the Open Records Act. 19. Governmental Immunity. Buyers and its officers, attorneys and employees, are relying on, and do not waive or intend to waive by any provision of this Agreement, the monetary limitations or any other rights, immunities, and protections provided by the Colorado Governmental Immunity Act, C.R.S. § 24-10-101, et seq., as amended, or otherwise available to Customer and its officers, attorneys or employees, as applicable hereto. 20. Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes any other agreement or understanding, written or oral. 21. Additional Agreements. 21.1. Authority. Each Party represents and warrants that it has full authority to execute and deliver this Agreement and to perform their obligations under this Agreement, and that the person whose signature appears on the Agreement is duly authorized to enter into this Agreement on behalf of that Party. 21.2. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. The counterparts of this Agreement and the schedules and exhibits hereto, may be executed and delivered by facsimile or other electronic signature by any of the Parties to any other Party and 9 the receiving Party may rely on the receipt of such document so executed and delivered by facsimile or other electronic means as if the original had been received. 21.3. Modification and Waiver. This Agreement may not be amended, changed, modified, or altered unless such amendment, change, modification, or alteration is in writing and signed by all of the Parties to this Agreement or their respective successor(s) in interest. This Agreement inures to the benefit of and is binding upon the Parties and each of their respective successors and permitted assigns. 21.4. Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and shall be construed, enforced and performed in accordance with the laws of the State of Colorado without regard to principles of conflicts of law. 21.5. Survival. In the event of expiration or earlier termination of this Agreement, the following sections shall survive: Sections 3.2, 3.3, 4, 5, 7, 15, 16, 17, 18, 19, and 21. 21.6. Severability. Should any terms of this Agreement be declared void or unenforceable by any arbitrator or court of competent jurisdiction, such terms will be amended to achieve as nearly as possible the same economic effect for the parties as the original terms and the remainder of the Agreement will remain in full force and effect. 21.7. Service Contract. This Agreement is a service contract pursuant to Section 7701(e)(3) of the Internal Revenue Code. 21.8. No Partnership. Nothing contained in this Agreement will constitute either party to this Agreement as a joint venturer, employee, or partner of the other, or render either party to this Agreement liable for any debts, obligations, acts, omissions, representations, or contracts of the other, including without limitation Buyer's obligations to the Utility for electric service. IN WITNESS WHEREOF, each Party has caused this Agreement to be duly executed by its authorized representative as of the date of last signature provided below. SELLER BUYER CEC SOLAR •17, LLC City of Pueblo, CO ill AMP Name:Tom Sweeney / Name: Sam Azad Title: President Title: City Manager ll Date: /2-4//' Date: t'� Attested By: ity Clerk List of Exhibits to Agreement Appendix A—Solar Energy Facility Appendix B— Price List Appendix C—Program Limits 10 11 Appendix A Buyer and Facility Information Commercial Operations Date: TBD Effective Date: TBD Buyer's Allocation: 31.31% Estimated initial annual amount of Buyer's Solar Output("Estimated Initial Annual Production"): 1,308,322kWh Buyer's Production Capacity: 620.352kW Facility Location: 6634 Hwy 71, Ordway, CO 81063 Facility Name: BHE3 Facility Company Name: CEC SOLAR#1117, LLC Initial Meter#for Crediting: VAROIUS Below 1999 S PUEBLO BLVD,T-S 6162195543 EL17434713 783 5,136 4301 WALKINGSTICK 2000489506 EL09897008 770 125,300 1948 LAKEVIEW AVE,PUMP 5326695259 EL10111011 770 1,307 2281 LAKESHORE DR,PUMP 5326695259 EL10247616 770 65 3406 THATCHER AVE,*** 035595 7102672225 EL12325363 711 115,320 3406 THATCHER AVE 7102672225 EL10253496 711 76,880 MINERAL PALACE,SWIM POOL 4143087894 EL10109061 711 54,440 CITY PK,POOL 3492066095 EL10111026 711 47,811 WALKNG STCK GC C 3784312527 EL09855761 711 40,195 MINERAL PALACE,GRNHSE 9101236419 EL09855882 711 35,640 MAINTENANCE,BLDG 1892594158 EL10111024 711 35,040 PAVILLION CITY 5174752429 EL10018128 711 32,112 BESSEMER SWIM PO 2973025679 EL09944835 711 29,400 609 E 6TH ST 5814625865 EL12020171 711 29,021 3001 PALMER AVE,SPKLRS 1596784949 EL12780303 711 25,300 CITY CENTER UNION,FOUNTAIN 216566679 EL10150835 711 22,250 4301 WALKING STICK DR 314623209 EL09802338 711 21,507 CITY PK 3492066095 EL10111025 711 10,800 SISTER CITY PLAZA,FOUNTAIN 216566679 EL10150835 711 10,614 TRAIN CITY PK 447936245 EL10150835 711 10,080 TRAIN CITY PK 447936245 EL10150835 711 10,080 28TH&29TH ELIZ 1585604537 EL17539355 711 7,100 MINERAL PALACE 1567057090 EL10068176 711 6,920 713 CENTRAL AVE,BATH HOUSE 7534003662 EL12068462 711 5,307 609 N ERIE AVE,EL CENTRO 6697496416 EL09855791 711 3,600 BESSEMER BALLFIE,LIGHTS 1096002358 EL09944838 711 2,960 CITY PK,BALLFIEL 4665974964 EL10150821 711 2,760 12 CITY PK,BALLFIEL,*** 076147 9738157031 EL10150832 711 2,640 2700 E 13TH ST 9395631747 EL10247661 711 2,572 2708 E 13TH ST 9395631747 EL10151059 711 1,730 BRADFORD PK 6697496416 EL13225287 711 900 ROTARY,PAVILLION 447936245 EL10150835 711 771 130 CENTRAL MAIN ST 9476962911 EL08765367 710 71,120 DOG PARK RESTROOMS 3492066095 EL09874973 710 32,103 MINERAL PALACE 1766415587 EL10068174 710 31,013 MINERAL PALACE,RSTRM 1766415587 EL12174622 710 30,175 CITY PARK GOLF 78476408 EL10020924 710 26,876 3406 THATCHER AVE 1243731818 EL09854288 710 24,740 132 W B ST 4227432880 EL18487251 710 21,920 19TH &SANTA FE 8513443596 EL10095325 710 21,333 CITY PK,***073894 1338299063 EL10071801 710 20,647 3400 NUCKOLLS AVE 7239265895 EL18140787 710 19,912 CITY PK,***053375 4328825585 EL10019085 710 18,755 3900 THATCHER AVE,RSTRM 3282719864 EL19356873 710 18,401 3900 THATCHER AVE,RSTRM 3282719864 EL09955891 710 18,401 MITCHELL PK,POOL 1656176073 EL10095349 710 16,322 2800 W 18TH ST,SPKLERS 8902723799 EL10110934 710 14,546 MINERAL PALACE,BANDSHELL 529384706 EL10021412 710 13,902 1300 E 12TH ST, POOL 1870676098 EL08766955 710 13,609 MIN PAL LAKE CLA 2163187088 EL10247511 710 13,366 MINERAL PALACE,PUMP 1378514584 EL11246472 710 13,203 CITY PK,***034354 3976261895 EL10019087 710 11,795 1915 W 24TH ST,RSTR MS 1802728952 EL09798778 710 11,205 E END LAKE BY 8650883417 EL11435371 710 10,433 100 E ABRIENDO AVE,STAT&LITES 5443141390 NA 710 9,538 BRADFORD PK,SLAB 7193306292 EL10321583 710 7,567 GOLF COURSE 2184542794 EL092568 710 7,131 2700 VINEWOOD LN 2207804609 EL10120019 710 5,498 CITY PK,*** 073037 9681094205 EL10019472 710 4,746 CITY PK,BLDG TENNI 6874707164 EL18393749 710 4,662 PLAZA VERDE PK 9894532824 EL18964370 710 4,115 840 S PUEBLO BLVD,GATEKEEPER 6162195543 EL15969787 710 3,656 KINGSROYAL& DONNINGTO 2013267517 EL09975834 710 3,000 604 E EVANS AVE,BALLFIELD 810551121 EL09848420 710 2,733 3900 W THATCHER AVE 3282719864 EL09855701 710 2,600 13 Utility Service Location: Various Buyer's Name(s): City of Pueblo Email: Fax: Tel: 14 Appendix B Price List The following is the Price List referenced in Section 7.2 of the Agreement: PPA Payment Year Rate 1 $0.1159 2 $0.1182 3 $0.1206 4 $0.1230 5 $0.1255 6 $0.1280 7 $0.1305 8 $0.1332 9 $0.1358 10 $0.1385 11 $0.1413 12 $0.1441 13 $0.1470 14 $0.1500 15 $0.1530 16 $0.1560 17 $0.1591 18 $0.1623 19 $0.1656 20 $0.1689 Buyer acknowledges that the foregoing Price List sets forth a fixed price per kWh for each of the years listed above, and includes a [2.0%] annual escalator. Buyer further acknowledges that the foregoing Price List is intended to fix the price paid by Buyer per kWh in connection with the Monthly Payment Amounts under this Agreement. Seller does not warranty or represent that the foregoing Price List will bear any particular relationship, either now or in the future, to the rates which may be (i) payable by Buyer to the Utility for electricity from time to time, or(ii) used by the Utility to calculate Solar Bill Credits from time to time. 15 Buyer has undertaken an independent evaluation of the Price List, and has determined that the Price List is reasonable for purposes of calculating the Monthly Payment Amounts under this Agreement, and agrees that Buyer shall not assert, and hereby waives, claims challenging the validity or use of the Price List in connection with the Monthly Payment Amounts due from Buyer under this Agreement. This provision in no way waives the City's right to terminate the agreement as provided pursuant to section 7.6 of the Agreement. 16 Appendix C Program Limit The Program Limit under this Agreement is equal to 120% of Buyer's Maximum average annual electric power consumption at the Utility Service Location. Buyer agrees that the Estimated Initial Annual Production as set forth in Appendix A shall not exceed the Program Limit. In addition, Buyer acknowledges that the benefit Buyer receives from Buyer's Solar Interest can be reduced if Buyer's Utility Service Location is eligible for solar energy credits or net-metering based upon solar electricity generating equipment other than Buyer's Solar Interest in the Solar Energy Facility. In this regard, the Program Limit shall apply based upon the Buyer's Production Capacity plus the capacity of such other solar electricity generating equipment, taken together. 17 SOLAR PRODUCTION AGREEMENT (Colorado Local Governmental Units) This Solar Production Agreement(the"Agreement") is entered into as of June 26 , 2017 (the "Effective Date") and is by and between CEC SOLAR#1118, LLC, as seller(the"Seller"), and City of Pueblo as buyer(the"Buyer"). In this Agreement, Seller and Buyer are sometimes referred to individually as a"Party" and collectively as the"Parties." Whereas, Buyer is a Colorado municipality, county, school district, special district or other political subdivision; and Whereas, Seller has offered to provide to Buyer under this Agreement a means of procuring low-cost electrical energy as utility cost-savings measures under C.R.S. 29-12.5-101 et seq; and Whereas, pursuant to this Agreement, Buyer can purchase an interest in a solar energy generation installation, and obtain utility credits from the sale of the solar energy generated by such facility so as to decrease Buyer's utility costs; and Whereas, the solar energy generation installation covered under this Agreement is referred to as"BHE 2" and it is located in Rocky Ford, Colorado; and Whereas, the Board has received the analysis and recommendations concerning such utility cost-savings measure from a person experienced in the design and implementation of utility cost-savings measure; and Whereas, the Board has found pursuant to C.R.S. 29-12.5-103 that the amount of money the Buyer would spend on such utility cost-savings measure is not likely to exceed the amount of money the Buyer would save in energy costs over the term of this Agreement; and Whereas, the Board has found that the obligations entered into by the Buyer under this Agreement shall not cause the total outstanding indebtedness incurred by the Buyer under C.R.S. 29-12.4-103 to exceed the applicable limit set forth in C.R.S. 29-12.5-103(2)(b). Now therefore, in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the Parties hereby mutually agree as follows: 1. Definitions. Under this Agreement, the following terms are defined as follows: "Affiliate" means any person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by or partnered with, or is under common control with the person or entity specified. "Board' means the governing body of the above referenced Buyer. "Buyer's Allocation" means the Buyer's Production Capacity expressed as a percentage of the entire nameplate capacity of the Solar Energy Facility. "Buyer's Production Capacity" means the amount of Production Capacity purchased under this Agreement, as referenced in Section 2 and Appendix A below. "Buyer's Solar Interest" means the Buyer's Production Capacity and the Buyer's Solar Output, and excludes any Environmental Attributes or Tax Incentives. "Buyer's Solar Output' means the Solar Output of the Solar Energy Facility, multiplied by the Buyer's Allocation. 1 • "Commercial Operations Date" means the date on which the Solar Energy Facility generates electric energy on a commercial basis, and the interconnection to the utility's electric grid has been authorized and is functioning with the Utility. Such date shall be specified by Seller either in Attachment A to this Agreement, or by a separate notice provided to Buyer pursuant to Section 6 of this Agreement. "Environmental Attributes" means any credit, benefit, reduction, offset, financial incentive, and other beneficial allowance that is in effect as of the Effective Date or may come into effect in the future, including, to the extent applicable and without limitation, (i) all environmental and renewable energy attributes and credits of any kind and nature resulting from or associated with the Solar Energy Facility, its production capacity and/or electricity generation, (ii)government financial incentives, (iii) greenhouse gas offsets under the Regional Greenhouse Gas Initiative, (iv) renewable energy credits or renewable energy certificates (each referred to as"RECs") or any similar certificates or credits under the laws of any jurisdiction, including but not limited to Solar RECs, and (v) other allowances howsoever named or referred to, with respect to any and all fuel, emissions, air quality, or other environmental characteristics, resulting from the use of solar energy generation or the avoidance of the emission of any gas, chemical or other substance into the air, soil or water attributable to the Solar Energy Facility, its production capacity and/or electricity generation. "Facility Meter" means a revenue-grade meter maintained by Seller at the Solar Energy Facility and used to measure the electricity delivered by the Solar Energy Facility to such meter. "Force Majeure" or"Force Majeure Event" means any event or circumstance not within the reasonable control of the affected Party which precludes that Party from carrying out, in whole or in part, its obligations under this Agreement, including, but not limited to, Acts of God, hurricanes or tornados, fires, epidemics, landslides, earthquakes, floods, other natural catastrophes, strikes, lock outs or other industrial disturbances. A Party may not assert an event of Force Majeure to excuse it from performing due to any governmental act, failure to act, or order, where it was reasonably within such Party's power to prevent such act, failure to act, or order. Notwithstanding the contrary, economic hardship or unavailability of funds shall not constitute a Force Majeure Event of either Party, and any such discretionary acts, failures to act or orders of any kind by Buyer may not be asserted as an event of Force Majeure by Buyer. "Interconnection Agreement" shall mean the interconnection service agreement(s) entered into with the Utility, which authorizes the interconnection of the Solar Energy Facility to the Utility grid. "Interconnection Point" means the point at which the Utility takes delivery of generated electrical output from the Solar Energy Facility. "kWh"means kilowatt hour. "Production Capacity" means the nameplate of the entire Solar Energy Facility, as listed in Appendix A hereto. "Production Month" means a monthly period during which electricity is delivered from the Solar Energy Facility to the Interconnection Point, occurring after the Commercial Operations Date and before the end of the Term. "Program" means the Utility's Community Solar Gardens Service Program whereby customers may sell generated electricity to the Utility pursuant to the terms and conditions of the Utility's Colorado PUC No. 7 Tariff, Schedule SRCS, as amended from time to time with the Colorado Public Utilities Commission (the"CPUC"), or such other power purchase agreement, tariff and/or other agreement(s) selected by Seller from time to time for sale of Buyer's Solar Output. "Solar Bill Credit" means the bill credit calculated by the Utility pursuant to the terms and conditions of the Program. 2 "Solar Energy Facility' shall mean the photoelectric solar generation facility described in Appendix A. "Solar Output' means the total amount of electricity generated by the Solar Energy Facility and delivered to the Utility at the Interconnection Point from the Commercial Operations Date until the end of the Term, expressed in terms of kilowatt hours ("kWh") on a monthly or other basis. "Tax Incentives" means any tax credits, incentives or depreciation allowances established under any federal or state law, including without limitation investment tax credits(including any grants or payments in lieu thereof)and any tax deductions or other benefits under the Internal Revenue Code or applicable federal, state, or local law available as a result of the ownership and operation of the Solar Energy Facility or the output generated by the Solar Energy Facility(including, without limitation,tax credits(including any grants or payments in lieu thereof)and accelerated, bonus or other depreciation. "Term"shall have the meaning set forth in Section 6. "Utility" means Black Hills Energy. "Utility Account" means Buyer's account with the Utility for utility services at the Utility Service Location. "Utility Service Location" means the premises at which Buyer receives utility services from the Utility under the Utility Account. 2. Buyer's Production Capacity and Buyer's Solar Output. Under this Agreement, the Buyer purchases the Buyer's Production Capacity and the Buyer's Solar Output associated therewith (collectively referred to as"Buyer's Solar Interest"). The Buyer's Production Capacity purchased under this Agreement is from particular solar panels (the"Selected Solar Panels") located in the Solar Energy Facility. The Selected Solar Panels shall represent a nameplate capacity equal to 23.64% of the total nameplate capacity of the Solar Energy Facility, rounded to the nearest full panel. Within 30 days of the Commercial Operations Date, CEC shall notify Buyer of the serial number, nameplate capacity and other identifying information for each of the Selected Solar Panels. Buyer acknowledges that the Utility limits the amount of Production Capacity available to Buyer under this Agreement, as more fully set forth in Section 4 hereto. 3. Sale of Buyer's Solar Output to Utility. The Utility currently offers the Program whereby customers can sell generated electricity to the Utility pursuant to the terms of the Program. Seller agrees to assist Buyer with such sale as detailed more fully in this Section 3 below. 3.1. Delivery of Buyer's Solar Output. In connection with the Program, beginning upon the Commercial Operations Date and continuing monthly until the end of the Term, Seller hereby agrees to deliver the Buyer's Solar Output to the Utility at the Interconnection Point, and to provide to the Utility the information requested by the Utility(the"Bill Credit Information")to calculate the Solar Bill Credits payable to the Buyer under the Program based upon the delivery of the Buyer's Solar Output for such month to the Utility. 3.2. Bill Credit Information. Bill Credit Information includes, but is not limited to the Buyer's name, address, the Buyer's Utility Service Location, the Utility Account numbers associated with the Utility Service Location, the nameplate capacity of the Selected Solar Panels, and the Buyer's Solar Output. Seller agrees to be, and Buyer hereby appoints Seller, as Buyer's exclusive representative for submitting Bill Credit Information to the Utility, with full power and authority to supply to the Utility such information as may be required by the Utility under the Program. This authorization does not restrict Buyer from communicating with, instructing or directing the Utility with respect to other matters pertaining to electric service at the Utility Service Location, or asking the Utility questions regarding Buyer's participation in the Program. In addition, Buyer hereby authorizes the Utility to release to Seller the consumption and other account information of Buyer to help Seller to carry out the terms of this Agreement and the Program, and agrees to 3 execute any documents that either Seller or the Utility may request to permit the release of such information. 3.3. Sale of Buyer's Solar Output. Buyer hereby appoints Seller, as Buyer's exclusive representative with full power and authority to deliver, assign, transfer, and sell all of Buyer's Solar Output in connection with the Program, and to enter into, administer, and enforce on Buyer's behalf any agreements related to such delivery, assignment, transfer and sale. For this purpose, Buyer hereby waives, relinquishes, and quitclaims any right, claim, and interest in the Solar Output and associated Environmental Attributes, and agrees to execute any additional documents and instruments needed by Seller to effect or evidence the transfer of the Solar Output to the Utility. 4. Program Limits and Other Acknowledgments Regarding Program. In connection with this Agreement, Buyer acknowledges that: 4.1. The Program imposes a limit(listed as the Program Limit in Appendix C)which restricts the total photoelectric generating capacity which Buyer may have under the Program, whether purchased under this Agreement or otherwise, and Buyer agrees that Seller is not obligated to request, and that the Utility is not obligated to make, any payment or Solar Bill Credit to the extent Buyer's photoelectric generating capacity exceeds those limitations. Buyer acknowledges that the limitations set forth in Appendix C are derived from the Program, and that this Agreement will be deemed automatically amended to incorporate any changes to corresponding provisions in the Program. 4.2. Solar Bill Credits are calculated solely by the Utility under the Program, and are subject to Program terms and conditions. Buyer acknowledges and agrees that Seller's sole obligation regarding payments to Buyer is to request and use commercially reasonable efforts to require Utility to make Solar Bill Credits. 4.3. The duration, terms and conditions of the Program, including the rate used to determine Solar Bill Credits, are subject to the sole and exclusive control of Utility and/or the CPUC, and that Seller has not made any representations or warranties with respect to the expected duration of the Program or the amounts to be provided by Utility as Solar Bill Credits. 4.4. Buyer must be and remain a customer of the Utility for electric service throughout the Term of this Agreement, and be in conformance with the requirements of this Agreement and the Utility. 5. Environmental Attributes and Tax Incentives Excluded. Buyer acknowledges and agrees that Buyer's Solar Interest does not include any Environmental Attributes or Tax Incentives associated with the Solar Energy Facility, and Buyer agrees that Buyer will not claim the Environmental Attributes or Tax Incentives associated with the Solar Energy Facility and will promptly execute any additional documents and/or authorizations as Seller may request to assist any Seller in retaining, or in delivering to the Utility or to another third party, such Environmental Attributes and/or Tax Incentives, as determined by Seller. 6. Commercial Operations Date, and Term. If the Commercial Operation Date is not known by the Effective Date of this Agreement, Seller will provide Buyer with notice of the Commercial Operation Date once known. The Term of this Agreement begins upon the Effective Date, and ends 20 years after the Commercial Operations Date unless this Agreement in terminated earlier in accordance with its terms and conditions, in which case the Term shall end upon such early termination. The period from the Commercial Operations Date until the 20th anniversary thereof is referred to herein as the "Scheduled Term". 7. Payment to Seller. 7.1. Buyer acknowledges that in order to bill on a more timely basis, the measurement of the electricity produced by the Solar Energy Facility shall be based upon Seller's meter readings at the Facility Meter. 4 7.2. In this regard, Buyer shall make monthly payments to Seller under this Agreement in an amount (the"Monthly Payment Amount") equal to (i)the Buyer's Allocation of the amount of electricity delivered by the Solar Energy Facility to the Facility Meter during a Production Month, multiplied by(ii)the price per kWh in effect during the year in which the Production Month occurs as set forth in the Appendix B Price List. 7.3. The Monthly Payment Amount shall be due by the sixtieth (60th) day after the end of the Production Month. Seller shall provide Buyer with an invoice showing the Monthly Payment Amount within thirty(30) days following the end of the Production Month. 7.4. The Monthly Payment Amount does not include taxes. The term "taxes" includes any federal, state, and local ad valorem, property, occupation, generation, privilege, sales, use, consumption, excise, or transaction tax, and other taxes, regulatory fees, surcharges, or other similar charges, which shall be Buyer's responsibility, but does not include any income taxes imposed on Seller's revenues due to the sale of Buyer's Solar Interest to Buyer under this Agreement, which income taxes are solely Seller's responsibility. 7.5. Any payment due Buyer under this Agreement but not paid when due shall bear interest from the due date until paid at the rate of 1.5% percent per month, or the highest rate allowed by law, whichever is lower. 7.6. City's Right to Terminate Agreement Early; Appropriations. Notwithstanding Section 12 hereof, the parties understand and acknowledge that City is subject to Article X, §20 of the Colorado Constitution ("TABOR"). The parties do not intend to violate the terms and requirements of TABOR by the execution of this Contract. It is understood and agreed that this Contract does not create a multi-fiscal year direct or indirect debt or obligation within the meaning of TABOR and, therefore, notwithstanding anything in this Contract to the contrary, all payment obligations of City are expressly dependent and conditioned upon the continuing availability of funds beyond the term of City's current fiscal period ending upon the next succeeding December 31. Financial obligations of City payable after the current fiscal year are contingent upon funds for that purpose being appropriated, budgeted, and otherwise made available in accordance with the rules, regulations, and resolutions of City, and other applicable law. Upon the failure to appropriate such funds, this Contract shall be terminated. 8. Operations and Maintenance of the Solar Energy Facility. Beginning on the Commercial Operations Date through the end of the Term, Seller will be responsible for the operation and maintenance of the Solar Energy Facility, as follows: 8.1. Operations and Maintenance Services. Seller will operate the Solar Energy Facility, and provide customary maintenance services designed to keep the Solar Energy Facility in good working condition. Seller will use qualified personnel to perform such services in accordance with industry standards, and will pay such persons reasonable compensation for performing such services. Seller will initially appoint or have appointed Energy Equipment Limited as property manager to operate and maintain the Solar Energy Facility. 9. Change of Utility Service Location. 9.1. Providing Advance Notice. Buyer agrees to provide Seller with ninety(90) days advance notice of any change which may cause Buyer to not be the Utility's customer for the Utility Service Location. 9.2. New Location Within Utility Service Territory. Buyer agrees that if Buyer shall cease to be Utility's customer at the Utility Service Location and within thirty(30) days thereof move to a new location within the service territory of Utility, that Buyer will take all steps and provide all information required by Utility under the Program to substitute Buyer's new service location as the Utility Service Location under this Agreement, and this Agreement shall continue in effect. Buyer acknowledges that if the Utility Service Location or any new service location exceeds the 5 Program Limit set forth in Schedule C or otherwise does not comply with the Utility's requirements, Buyer's ability to participate in the Program may cease or be limited in accordance with Program requirements. 9.3. Other Termination of Utility Service. If Buyer ceases to be a Utility customer for electric service at the Utility Service Location and does not comply with Section 9.2 within the time period set forth in therein, then Buyer will continue to pay Seller the Monthly Payment Amount until end of the Scheduled Term; provided however, that if the Seller finds a substitute buyer for Buyer's Solar Output, which buyer is satisfactory to Seller in Seller's sole discretion, including without limitation such buyer's creditworthiness, then Buyer shall not be responsible to pay Seller for Monthly Payment Amounts which correspond to Production Months occurring from and after the date Seller and such substitute buyer shall enter into a Solar Production Agreement in regard to Buyer's Solar Output, In the event that this Agreement is terminated by Buyer prior to the end of the Selected Term, the amount due under this Section 9.3 shall be accelerated as of the date of such termination. 10. Seller's General Agreements. 10.1. In connection with this Agreement, Seller agrees that Seller at all times shall perform Seller's obligations under the Program, and that Seller will exercise commercially reasonable efforts to maintain the Program in effect for the Term of this Agreement. 10.2. Seller shall notify Buyer in writing whenever the Solar Bill Credit amount approved by the Colorado PUC for Black Hills Energy is modified. Such notice may take the form of an email containing an attachment with the appropriate Black Hills Community Solar Garden Service tariff that shows the table entitled "(year) CSG Fixed Bill Credit". 11. Buyer's General Agreements. In connection with this Agreement, Buyer agrees that: 11.1. Buyer will provide to Utility all applications, documentation and information required by Utility and otherwise to qualify Buyer to participate in the Program. 11.2. Buyer has not transferred, assigned or sold any interest in the Solar Energy Facility, or in the Production Capacity, Solar Output, Environmental Attributes or Tax Incentives to any other person or entity, and will not do so during the Term of this Agreement. Buyer has not provided to any other person or entity any of the authority granted to Seller under this Agreement and will not do so during the Term of this Agreement. 11.3. Buyer has not granted or placed or allowed others to place any liens, security interests, or other encumbrances on the Selected Solar Panels, Buyer's Production Capacity, Solar Output, Environmental Attributes or Buyer's Solar Interest, and will not do so during the Term of this Agreement. 11.4. Buyer understands that the Buyer's Production Capacity and Solar Output will vary from time to time based upon solar availability, weather, seasonality, degradation and other conditions, and that the Expected Annual Production of the Selected Solar Panels is an estimate of solar panel capability under ideal conditions, which may not occur. 11.5. Buyer understands that Seller has not guaranteed or made any representations or warranties that the operation of the Solar Energy Facility will be uninterrupted or error free, or any minimum Solar Output or Solar Bill Credits shall be obtained. 11.6. Buyer agrees to keep its Utility account for the Utility Service Location in active status, and to pay on a current basis such amounts as may be due the Utility in connection with such account. 6 Buyer shall make no claim against Seller or Seller's affiliates or assigns for amounts which may be payable to Buyer from the Utility under the Program or in connection with this Agreement. 12. Events of Early Termination. 12.1. Material Events. The Term of this Agreement shall be subject to early termination by Seller based upon any of the following events ("Material Events"), (a) At such time as the Utility ceases to offer the Program or a comparable substitute. (b) In the event that the Commercial Operations Date has not occurred for the Facility within one year of the Effective Date hereof. 12.2. Termination for Material Event. From and after the occurrence of any Material Event, Seller shall have the right, but not the obligation, to either Party may terminate this Agreement on the basis of such Material Event, and any such termination shall be effective upon the date which Seller provides, in accordance with Section 16, written notice of such termination to Buyer. The Parties agree that neither the occurrence of a Material Event nor Seller's termination of this Agreement in accordance with this Section for a Material Event shall be considered to be a default or breach under this Agreement. 13. Events of Default; Termination for Default 13.1. Buyer Default. Each of the following events will constitute a default on the part of Buyer(a "Buyer Default"): (a) Except as otherwise expressly permitted of Buyer in this Agreement, Buyer terminates this Agreement before the end of the Term. (b) Buyer fail to pay any amount due under this Agreement when due, and such failure continues for an additional ten (10) days after such amount is due. (c) Buyer breaches any warranty or representation of Buyer set forth in this Agreement, or fails to perform any material obligation of this Agreement (other than failure to pay), and such breach or failure is not cured by Buyer within thirty(30) days after Buyer receives written notice of such breach or failure from Seller, or, if such breach of failure is not capable of cure within such thirty(30) day period, then Buyer(i) fails to begin such cure within ten (10) days of such written notice or(ii)to complete the cure of such breach or failure with sixty(60) days of such written notice using diligent efforts. (d) Buyer institutes or consents to any proceeding in bankruptcy pertaining to Buyer or its property; or fails to obtain the dismissal of any such proceeding within thirty days of filing; or a receiver, trustee or similar official is appointed for Buyer or a substantially all of Buyer's property or assets; or such property or assets become subject to attachment, execution or other judicial seizure; or Buyer is adjudicated to be insolvent. (e) Buyer attempts to claim any RECs, Environmental Attributes or Tax Incentives in connection with the Solar Energy Facility or Buyer's Solar Interest. 13.2. Seller Default. Each of the following events will constitute a default on the part of Seller(a "Seller Default") provided there is no concurrent Buyer Default: (a) Seller breaches any warranty or representation of Buyer set forth in this Agreement, or fails to perform any material obligation of this Agreement, and such breach or failure is not cured by Seller within thirty(30) days after Seller receives written notice of such breach or failure from Buyer, or, if such breach of failure is not capable of cure within such thirty(30) day period, then Seller(i)fails to begin such cure within ten (10) days of such written 7 notice or(ii)to complete the cure of such breach or failure with sixty(60) days of such written notice using diligent efforts. 13.3. Buyer's Remedies in Case of Seller's Default. If a Seller Default occurs and is continuing after the expiration of the cure period applicable thereto, then, Buyer may terminate this Agreement by written notice to Seller without further obligation other than to pay the Monthly Payment for all Production Months (or partial Production Months) occurring prior to the date of such written notice from Buyer. 13.4. Seller's Remedies in Case of Buyer's Default. If a Buyer Default occurs and is continuing after the expiration of the cure period applicable thereto, Seller shall be entitled to terminate this Agreement for breach, and/or to seek such remedies as are available to Company at law or in equity including specific performance. 14. Force Majeure. Except as specifically provided herein, if by reason of Force Majeure, a Party is unable to carry out, either in whole or in part, any of its obligations herein contained, such Party(the "Affected Party") shall not be deemed to be in default during the continuation of such inability, provided that: (i)the Affected Party, within two (2)weeks after being affected by the Force Majeure event, gives the other Party hereto written notice describing the particulars of the occurrence and the anticipated period of delay; (ii)the suspension of performance be of no greater scope and of no longer duration than is required by the Force Majeure event; (iii) no obligations of the Party which were to be performed prior to the Force Majeure event shall be excused as a result of the occurrence thereof; and (iv)the Affected Party shall use commercially reasonable efforts to remedy with all reasonable dispatch the cause or causes preventing it from carrying out its obligations. 15. Assignment. 15.1. Assignment by Buyer. Buyer may not assign this Agreement or Buyer's Solar Interest without Seller's prior written consent, which shall not be unreasonably withheld. 15.2. Assignment by Seller. Seller may assign this Agreement, or any of its rights, duties, or obligations under this Agreement, to another entity or individual, including any Affiliate, whether by contract, change of control, operation of law or otherwise, without Buyer's consent. 15.3. Collateral Assignment. (a) General. Seller shall be entitled to collaterally assign, pledge, grant security interests in, or otherwise encumber its rights and interests in this Agreement to one or more entities providing financing (hereinafter"Lender")without further consent of Buyer. Buyer agrees to reasonably cooperate with Seller and its Lender in connection with such financing, and to provide such information and acknowledgements as Seller or its Lender may reasonably request within ten (10) days of any such request therefor. (b) Notices to Lenders. From time to time, Seller or its Lender may provide Buyer with written notice of any Lender to which interests have been granted pursuant to Section 15.3(a) above. As a precondition to exercising any rights or remedies related to any default by Seller under this Agreement, Buyer shall give written notice of the default to Lender at the same time it delivers notice of default to Seller, including the specifics of any such default. Lender shall have the same amount of time to cure the default under this Agreement as is given to Seller hereunder, and the same right as Seller to cure any default. The cure period for Lender shall begin to run upon the date Lender receives such written notice from Buyer. Failure of Buyer to provide Lender with such notice shall not diminish Buyer's rights against Seller, but shall preserve all rights of Lender to cure any default. (c) Right to Cure Defaults; Substitution. To prevent termination of this Agreement, the Lender shall have the right, but not the obligation, at any time to perform any act necessary to cure any default and to prevent the termination of this Agreement. In the event of an uncured default by 8 Seller, or in the event of a termination of this agreement by operation of law or otherwise, Lender shall have the right, but not the obligation, to substitute itself for Seller under this Agreement, or(ii)to require Buyer enter into a new agreement with Lender substantially identical to this Agreement for a period equal to the duration of the Scheduled Term of this Agreement. 16. Notices. In the event that any notice or other communication is required or permitted to be given hereunder, such notice or communications will be in writing and may be delivered in person or sent by certified mail, overnight courier or transmitted by facsimile to the address of the addressee as specified below. Except as otherwise provided, all such notices or other communications will be deemed to have been duly given and received upon receipt. To Seller: CEC SOLAR#1118, LLC 20981 HWY 50 ROCKY FORD, CO 81067 Attn: Manager Fax No.: 970-692-2592 To Buyer: As set forth in Appendix A. 17. Reporting and Marketing. Buyer authorizes Seller and Seller's Affiliates to use Buyer's name and the nameplate capacity allocated to Buyer hereunder(such information referenced herein as Buyer's "Customer Information")for reporting purposes, such as official reporting to governmental authorities, the Utility, public utility commissions and similar organizations, and in marketing materials that Seller or Seller's Affiliates generate or distribute. Seller agrees that following written notice from Buyer to opt out of Seller's marketing program, Seller will no longer identify Buyer by name in Seller's marketing materials. Under no circumstances, except as required by law and as otherwise provided in this Agreement, will Seller release or otherwise publish any information collected from Buyer other than the above Customer Information. 18. Applicability of Open Records Act. The parties acknowledge and agree (a)that Buyer is required to comply with the Colorado Open Records Act, and (b)that the terms of this Agreement contain and constitute confidential and privileged market information and trade secrets of Company, which if disclosed to Company's competitors could harm the Company. The Customer agrees to not disclose the terms hereof to any other entity or person, except as may be required under the Open Records Act or other requirements of law. Customer will advise Company of any request for the foregoing information under the Open Records Act. 19. Governmental Immunity. Buyers and its officers, attorneys and employees, are relying on, and do not waive or intend to waive by any provision of this Agreement, the monetary limitations or any other rights, immunities, and protections provided by the Colorado Governmental Immunity Act, C.R.S. § 24-10-101, et seq., as amended, or otherwise available to Customer and its officers, attorneys or employees, as applicable hereto. 20. Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes any other agreement or understanding,written or oral. 21. Additional Agreements. 21.1. Authority. Each Party represents and warrants that it has full authority to execute and deliver this Agreement and to perform their obligations under this Agreement, and that the person whose signature appears on the Agreement is duly authorized to enter into this Agreement on behalf of that Party. 21.2. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. The 9 counterparts of this Agreement and the schedules and exhibits hereto, may be executed and delivered by facsimile or other electronic signature by any of the Parties to any other Party and the receiving Party may rely on the receipt of such document so executed and delivered by facsimile or other electronic means as if the original had been received. 21.3. Modification and Waiver. This Agreement may not be amended, changed, modified, or altered unless such amendment, change, modification, or alteration is in writing and signed by all of the Parties to this Agreement or their respective successor(s) in interest. This Agreement inures to the benefit of and is binding upon the Parties and each of their respective successors and permitted assigns. 21.4. Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and shall be construed, enforced and performed in accordance with the laws of the State of Colorado without regard to principles of conflicts of law. 21.5. Survival. In the event of expiration or earlier termination of this Agreement, the following sections shall survive: Sections 3.2, 3.3, 4, 5, 7, 15, 16, 17, 18, 19, and 21. 21.6. Severability. Should any terms of this Agreement be declared void or unenforceable by any arbitrator or court of competent jurisdiction, such terms will be amended to achieve as nearly as possible the same economic effect for the parties as the original terms and the remainder of the Agreement will remain in full force and effect. 21.7. Service Contract. This Agreement is a service contract pursuant to Section 7701(e)(3) of the Internal Revenue Code. 21.8. No Partnership. Nothing contained in this Agreement will constitute either party to this Agreement as a joint venturer, employee, or partner of the other, or render either party to this Agreement liable for any debts, obligations, acts, omissions, representations, or contracts of the other, including without limitation Buyer's obligations to the Utility for electric service. IN WITNESS WHEREOF, each Party has caused this Agreement to be duly executed by its authorized representative as of the date of last signature provided below. SELLER BUYER CEC SOLAR#1118, LLC City of Pueblo, CO By: By: I Name: Tom Swee y Name: Sam Azad Title: President Title: City Manager Date: 6/21/?- Date: C • aci " v i Attested By: ty Clerk List of Exhibits to Agreement Appendix A—Solar Energy Facility Appendix B—Price List 10 Appendix C—Program Limits 11 Appendix A Buyer and Facility Information Commercial Operations Date: 11/12/17 Effective Date: TBD Buyer's Allocation: 23.648% Estimated initial annual amount of Buyer's Solar Output("Estimated Initial Annual Production"): 241.312kWh Buyer's Production Capacity: 114.42 kW Facility Location: 20981 HWY 50, ROCKY FORD, CO 81067 Facility Name: BHE 2 Facility Company Name: CEC SOLAR#1118, LLC Email: TBD Fax: 970-692-2592 Tel: 800-646-0323 Utility Service Location: TBD Initial Meter#for Crediting: Various TBD Premise Account Number Meter Class Usage (kWh) 120% kW CITY PK,PUMP HSE 9579392651 EL13587351 711 201,100 241,320 114.42 Buyer's Name(s): City of Pueblo, CO 12 Appendix B Price List The following is the Price List referenced in Section 7.2 of the Agreement: PPA Payment Year Rate 1 $0.1211 2 $0.1235 3 $0.1259 4 $0.1285 5 $0.1310 6 $0.1336 7 $0.1363 8 $0.1390 9 $0.1418 10 $0.1447 11 $0.1476 12 $0.1505 13 $0.1535 14 $0.1566 15 $0.1597 16 $0.1629 17 $0.1662 18 $0.1695 19 $0.1729 20 $0.1763 Buyer acknowledges that the foregoing Price List sets forth a fixed price per kWh for each of the years listed above, and includes a [2.0%)annual escalator. Buyer further acknowledges that the foregoing Price List is intended to fix the price paid by Buyer per kWh in connection with the Monthly Payment Amounts under this Agreement. Seller does not warranty or represent that the foregoing Price List will bear any particular relationship, either now or in the future, to the rates which may be(i) payable by Buyer to the Utility for electricity from time to time, or(ii) used by the Utility to calculate Solar Bill Credits from time to time. Buyer has undertaken an independent evaluation of the Price List, and has determined that the Price List is reasonable for purposes of calculating the Monthly Payment Amounts under this Agreement, and agrees that Buyer shall not assert, and hereby waives, claims challenging the validity or use of the Price List in connection with the Monthly Payment Amounts due from Buyer under this Agreement. This 13 provision in no way waives the City's right to terminate the agreement as provided pursuant to section 7.6 of the Agreement. 14 Appendix C Program Limit The Program Limit under this Agreement is equal to 120% of Buyer's Maximum average annual electric power consumption at the Utility Service Location. Buyer agrees that the Estimated Initial Annual Production as set forth in Appendix A shall not exceed the Program Limit. In addition, Buyer acknowledges that the benefit Buyer receives from Buyer's Solar Interest can be reduced if Buyer's Utility Service Location is eligible for solar energy credits or net-metering based upon solar electricity generating equipment other than Buyer's Solar Interest in the Solar Energy Facility. In this regard, the Program Limit shall apply based upon the Buyer's Production Capacity plus the capacity of such other solar electricity generating equipment, taken together. 15