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Home My WebLink About5L Community Solar Garden Report Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL WORK SESSION REPORT MEETING DATE: NOVEMBER 14, 2016 AGENDA #: 5L PREPARED BY: KATY GEHLER, PUBLIC WORKS/NATURAL RESOURCES DIRECTOR PRESENTED BY: KATY GEHLER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING CITY PARTICIPATION IN A COMMUNITY SOLAR GARDEN AND AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE THE SAME ON BEHALF OF THE CITY OF PRIOR LAKE DISCUSSION: Introduction The purpose of this agenda item is to seek approval from the city council to participate in A community solar garden program and authorize the mayor and city manager to execute a contract between the City of Prior Lake and SoCore Solar/ Edison Energy, LLC. The contract should provide a net cost savings to the city. History In 2013 the Minnesota Legislature enacted Statute § 216B.1691, subd. 2f that requires public utilities in the state to generate or procure electricity from solar sources so that by the end of 2020, at least 1.5% of the utility’s retail electricity sales in the state are produced from solar energy. At least 20% of this energy must be generated by facilities with a capacity of 20 kW or less: community solar gardens. A community solar garden is a local-scale solar energy system from which nearby electricity customers can purchase a subscription that reserves to them a fixed monthly share of the electricity generated by the project. To date, solar gardens have been most often constructed and owned by a third-party developer, rather than the electric utility directly. How it works:  A third-party developer builds a facility and sells subscriptions to Xcel customers based on a fixed amount of solar power that is no more than 120% of their average annual electrical use.  The city pays the solar company directly for the power they produce each month on the City’s behalf (The Subscription Rate).  The solar company sells the solar power to Xcel on the city’s behalf.  Xcel bills the city for the actual power used, but provides a credit for the solar power produced at the solar garden. The credit from Xcel is the Applicable Retail Rate (ARR) plus a fixed subsidy of $0.02/kWh. The credit is greater than the amount paid to the third party developer so that the city can expect to see a net savings through the solar garden subscription. 2 Current Circumstances SoCore/Edison Energy, LLC, a third-party developer, approached the city with the opportunity to subscribe to nearby solar installations. Prior Lake is eligible to participate in any of the Xcel Energy-sponsored community solar garden projects within Scott County or any county adjacent to it. SoCore has offered up to 1,000 kW of solar capacity to Prior Lake located at three of their facilities. SoCore/Edison Energy, LLC offers a range of subscription options based on rate structure and duration of the contract. The different options provide the city a range of possible savings from roughly $140,000 to $1,800,000 over the life of the subscription (15-25 years, depending on the plan chosen by the city). Staff has reviewed all of the options and is recommending a 25-year term with a fixed subscription rate. Historical electrical use for all Xcel city meters has been analyzed and the initial impacts of the Guaranteed Energy Savings Program have been considered. The following city facilities would make up 120% of the available solar capacity (1,000 kW of solar production = 1,332,000 kWh of electrical consumption): Facility Annual Electrical Use (kWh) Water Treatment Facility 1,182,214 City Hall 443,932 Total 1,626,146 Xcel requires a separate agreement for each solar facility and city account. SoCore/Edison Energy, LLC has drafted the subscription agreements which have been preliminarily reviewed by the City Attorney. The agreements incorporate fixed subscription rates for a 25-year period. Conclusion SoCore/Edison Energy, LLC has indicated that there are other interested subscribers for the available capacity. In order to ensure we take advantage of this capacity it is recommended that the City Council 3 approve the agreement contingent on the City Attorney’s final review and modifications. FINANCIAL IMPACT: The Following savings are estimated for the 25-year term of the contract assuming a fixed subscription rate and 3% annual increase in ARR or Xcel credit. Actual savings achieved will be based on the actual ARR which is adjusted annually. These savings would be reflected in each budget from which the energy costs are derived. YEAR SAVINGS YEAR SAVINGS Year 1 $7,545.55 Year 14 $75,317.55 Year 2 $12,148.63 Year 15 $81,326.21 Year 3 $16,844.02 Year 16 $87,463.49 Year 4 $21,634.12 Year 17 $93,732.71 Year 5 $26,521.39 Year 18 $100,137.24 Year 6 $31,508.37 Year 19 $106,680.54 Year 7 $36,597.64 Year 20 $113,366.17 Year 8 $41,791.84 Year 21 $120,197.76 Year 9 $47,093.69 Year 22 $127,179.05 Year 10 $52,505.98 Year 23 $134,313.85 Year 11 $58,031.55 Year 24 $141,606.08 Year 12 $63,673.33 Year 25 $149,059.75 Year 13 $69,434.31 TOTAL: $1,815,710.80 ISSUES: The Minnesota Public Utilities Commission requires the credits from Xcel be available through the term of the subscription contract once in place. The actual savings the city will see are subject to the ARR calculated annually by Xcel and the subscription rates. While there is some risk that the credit from Xcel may drop below the Subscription Rate paid to SoCore, historically the ARR has risen by roughly 3% per year. Also, the state-mandated $0.02/kWh subsidy provides a cushion of security such that the city is unlikely to see a net loss over the term of the subscription. There is a termination clause that would allow the City to withdraw from the program by reassigning the agreement (payments) or at the cost of the remaining payments. So-Core can withdraw from the agreement with no further obligations from the City. With a tax incentive program for solar developers in place over the last few years, there has been a significant increase in the number of solar projects. These incentives were originally set to expire in 2015 but have been extended five years. When this program expires there is no guarantee these subscription/credit programs will be available in the future. 4 Community Solar Gardens are relatively new in the state with over 400 sites in the construction phase and another 400+ in the development stage with 19 different electric utilities. As of August there were four gardens in operation within the Xcel territory therefore there is no real operational experience with the program. Currently there are 32 sites in development for which the city would be eligible to subscribe (in Scott or adjacent counties). Of these sites, 13 are still accepting subscriptions, with the remainder full. With little open land within the metro area and a greater density of potential subscribers, it is anticipated that subscriptions will fill quickly in counties adjacent to the metro. ALTERNATIVES: 1. Motion and second as part of the consent agenda to adopt a resolution approving participation in the community solar garden program and authorizing the Mayor and City Manager to execute the Solar Garden Agreement as approved by the city attorney with SoCore. 2. Motion and second to remove this item from the consent agenda for additional discussion. RECOMMENDED MOTION: Alternative #1 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 16-XXX A RESOLUTION APPROVING A SOLAR GARDEN SUBSCRIBER AGREEMENT WITH SOCORE AND AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE THE SAME Motion By: Second By: WHEREAS, In 2013 the Minnesota Legislature enacted Statute § 216B.1691, subd. 2f that requires public utilities in the state to generate or procure electricity from solar sources so that by the end of 2020, at least 1.5% of the utility’s retail electricity sales in the state are produced from solar energy; and WHEREAS, Community Solar Gardens have been used to meet this goal where a third-party developer builds a solar facaility and sells subscriptions to Xcel customers; and WHEREAS, In turn, Xcel provides the subscriber a credit on their bill for the amount of energy generated at the solar facility. This credit is the Applicable Retail Rate (ARR) plus $0.02/kWh for the REC; and WHEREAS, Generally the credit paid to the subscriber is greater than the subscription paid to the developer for a net savings to the subscriber; and WHEREAS, SoCore Solar/Edison Energy, LLC, a third-party developer, is building solar installations in which the City would be eligible to be a subscriber and has 1,000 kW to offer to the City of Prior Lake; and WHEREAS, The following city facilities would make up 120% of the available solar capacity: Facility Annual Electrical Use (kWh) Water Treatment Facility 1,182,214 City Hall 443,932 Total 1,626,146 ; and WHEREAS, SoCore has provided agreements for the sites as required by Xcel. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The subscription agreement is hereby approved contingent on final review, modification and approval of the City Attorney. 3. The Mayor and City Manager are hereby authorized to enter into A Solar Garden Subscriber Agreement with SoCore. C:\Users\aschroeder\Desktop\16-XXX Community Solar Garden.docx 2 4. Costs for the Subscription Agreement payments and credits from Xcel will be recored in the accounts cooresponding to the electrical use of the premises identified in the program. PASSED AND ADOPTED THIS 14th DAY OF NOVEMBER 2016 VOTE Hedberg Keeney McGuire Morton Thompson Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager SoCore draft dated 8-29-16 1 87749850.2 0065073-00005 SOLAR GARDEN SUBSCRIBER AGREEMENT This SOLAR GARDEN SUBSCRIBER AGREEMENT is entered into as of November 14, 2016 (the “Effective Date”) by and between: Subscriber: City of Prior Lake 4646 Dakota St SE Prior Lake, MN 55072 Attn: Katy Gehler, Public Works Director Telephone: 952-447-9870 Email: kgehler@cityofpriorlake.com and CSG Operator: SoCore Solar 2014 ProjectCo [__] LLC 225 West Hubbard Street, Suite 200 Chicago, Illinois 60654 Attn: General Counsel Telephone: (773) 913-4406 Email: smiriani@socoreenergy.com Subscriber and CSG Operator are referred to herein individually as a “Party” and collectively as the “Parties”. A. CSG Operator is a developer of photovoltaic solar electric generation systems and is engaged in the business of developing, installing, owning, operating, and maintaining such systems to produce electricity and intends to develop, operate and mainta in a photovoltaic generation facility qualified as a “Community Solar Garden” pursuan t to Minn. Stat. 216B.1641 to be located in the general vicinity of ____________________ in ___________ county, (the “System”) and has entered or will enter into a Standard Contract for Solar Rewards Community (“CSG Contract”) with the Northern States Power Company (“Distribution Company”). The capacity of the System shall be [___] Kw, AC (__________Kw, DC) (“System Capacity”). B. The energy produced by the System will be delivered by CSG Operator, via interconnection of the System to the electric grid, to Distribution Company, which will calculate the monetary value of the Energy received from the System per applicable utilit y tariff and convert that amount into credits (the Bill Credit Rate as defined in the CSG Contract) on the bills from Distribution Company to the subscribers of CSG Operator (“Bill Credits”). C. CSG Operator will, in accordance with the terms hereof, and through the administrative process established by the Distributio n Company in its Cogeneration and Small Power Production Tariff as approved by the Minnesota Public Utilities Commission (“MPUC”), allocate and sell the right to receive Bill Credits to its subscribers according to their respective Allocations (as defined below). D. Subscriber is a customer of Distribution Company (Account No. 5337556) and desires to purchase Bill Credits from CSG Operator generated by the System in proportion to its Allocation at the Bill Credit Price pursuant to the terms of this Solar Garden Subscriber Agreement (“Agreement”). NOW THEREFORE, in consideration of the foregoing and the mutual promises and covenants hereinafter set forth and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree and intend to be legally bound as follows: 1. Commercial Terms: Bill Credit Price: $0.02 plus 86.5% of the Net ARR per kWh or the Bill Credit Price Floor, whichever is higher Term: Twenty-five (25) years after the first day of the first month following the month in which the Commercial Operations Date occurs Estimated Commercial Operations Date: ___________, 20__ 2. The following documents, along with this Cover Page, shall be deemed to form the Agreement, each of which are incorporated herein by this reference as though set forth herein in their entire ty: Exhibit A General Terms and Conditions Exhibit B Solar*Rewards Community Subscriber Agency Agreement and Consent Form This Agreement may be executed by the Parties in one or more counterparts, all of which taken together, will constitute one a nd the same instrument. Any counterpart may be executed by facsimile signature or any image transmitted by electronic mail (such as a pdf file) and such facsimile signature or image shall be deemed an original. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized representatives as of the Effective Date. CSG Operator: SOCORE SOLAR 2014 PROJECTCO [__] LLC By:__________________________________ Name: _______________________________ Title: ________________________________ Subscriber: [__________________________________] By:__________________________________ Name: _______________________________ Title: ________________________________ 2 87749850.2 0065073-00005 Exhibit A General Terms and Conditions ARTICLE 1 DEFINITIONS AND INTERPRETATION 1.1 Definitions. The following terms, when used in the Agreement and initially capitalized, have the following meanings: “Allocation” has the meaning set forth in Section 2.1 “Agreement” means the Cover Page and all Exhibits, Appendices and Schedules attached thereto, including these General Terms and Conditions, each as modified from time to time in accordance with the terms of this Agreement. “ARR” means the Applicable Retail Rate for General Service, Enhanced - Solar Gardens greater than 250 KW (AC) set forth in the Distribution Company’s Tariff in any given Measurement Period. “Bill Credits” has the meaning set forth on the Cover Page. “Bill Credit Price” has the meaning set forth on the Cover Page. “Bill Credit Price Floor” means an amount equal to 85% of the Bill Credit Price paid at the beginning of the initial Measurement Period. “Business Day” shall mean any day other than Saturday, Sunday or any other day on which banking institutions in Minneapolis, Minnesota are required or authorized by applicable Law to be closed for business. “Code” shall mean the United States Internal Revenue Code of 1986, as amended from time to time, and any successor statute. “Commercial Operations Date” means, with respect to a System, the day identified by CSG Operator in a notice to Subscriber as the Commercial Operations Date of such System. “Confidential Information” has the meaning set forth in Section 9.1. “Construction Commencement Date” means the date on which CSG Operator begins construction on the System as set forth in a written notice to Subscriber. “Cover Page” means the first page of this Agreement. “CSG Contract” has the meaning set forth in Recital A. “CSG Operator” has the meaning set forth on the Cover Page. “CSG Statute” means Minn. Stat. §216B.1641, as may be amended, superseded or replaced from time to time. “Defaulting Party” has the meaning set forth in Section 6.1. “Dispute” has the meaning set forth in Section 10.1. “Distribution Company” has the meaning set forth on the Cover Page. “Distribution Company’s Tariff” means the Distribution Company’s Section 9 Cogeneration and Small Power Production Tariff, including the Standard Contract for Solar*Rewards Community as may be amended or replaced and as approved by the MPUC. “Effective Date” has the meaning set forth on the Cover Page. “Escalation Factor” has the meaning set forth on the Cover Page. “Estimated Commercial Operations Date” has the meaning set forth on the Cover Page. “Event of Default” has the meaning set forth in Section 6.1. “Force Majeure” means an event or circumstance beyond the reasonable control of and without the fault or negligence of the Part y claiming Force Majeure. It shall include failure or interruption of the production, delivery or acceptance of electricity due to an act of God; war (declared or undeclared); sabotage; riot; insurrection; civil unrest or disturbance; military or guerrilla action; terrorism or threat of terrorism; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out; explosion; fire; earthquake; abnormal weather condition; action of the elements; hurricane; flood; lightning; wind; drought; peril of the sea; the binding order of any governmental authority (provided that such order has been resisted in good faith by all reasonable legal means); the failure to act on the part of any governmental authority (provided that such action has been timely requested and diligently pursued); unavailability of fuel, electricity from the utility grid, equipment, supplies or products, but not to the extent that any such unavailability of any of the foregoing results from the failure of the Party claiming Force Majeure to have exercised reasonable diligence; and failure of equipment not utilized by or under the control of a Party. “Insolvency Proceeding” means any case, action or proceeding with respect to a person before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of its creditors generally or any substantial portion or its creditors. “kW” means kilowatt. “kWh” means kilowatt-hour. “Law” means any law, treaty, code, rule or regulation, or determination of an arbitrator, court or other governmental au thority exercising executive, legislative, judicial, regulatory or administrative functions, or any condition or restriction set forth in a governmental permit, certificate, or other authorization. “Measurement Period” means each twelve (12) month period beginning with the first month after the Commercial Operation Date. “MPUC” has the meaning set forth on the Cover Page. “Net ARR” means the ARR less $0.02. “Operating Period” means the period commencing on the Commercial Operations Date and ending on termination of this Agreement. “Party” has the meaning set forth on the Cover Page. “Renewable Energy Credits” or “RECs” are all attributes of an environmental or other nature that are created or otherwise arise from the System’s generation of energy using solar energy as a “green” or “renewable” electric generation resource, including any and all environmental air quality credits, emission reductions, off - sets, allowances or other benefits related to the generation of energy from the System that reduces, displaces or off-sets emissions resulting from fuel combustion at another location pursuant to any existing or future international, federal, state or local 3 87749850.2 0065073-00005 legislation or regulation or voluntary agreement, and the aggregate amount of credits, offsets or other benefits including any rights, attributes or credits arising from or eligible for consideration in the M-RETS program or any similar program pursuant to any international, federal, state or local legislation or regulation or voluntary agreement and any renewable energy certificates issued pursuant to any program, information system or tracking system associated with the renewable energy generated from the System. RECs do not include Tax Benefits. “Subscriber” has the meaning set forth on the Cover Page. “Subscriber Event of Default” means an Event of Default by Subscriber. “System” has the meaning set forth on the Cover Page. “System Financing” has the meaning set forth in Section 13.1. “System Lenders” means any individual or entity (i) providing money or extending credit (including any lease financing) to CSG Operator or any affiliate of CSG Operator in connection with the System for the construction, term or permanent financing of the System or (ii) acquiring a direct or indirect interest in CSG Operator or any affiliate of CSG Operator, the System, or the entity owning the System as a part of a transaction, including transactions to ensure that the System is owned at least in part by an individual or entity able to use the Tax Benefits associated with holding an ownership interest in the System (including any subsequent transferees of any such individual or entity). “System Owner” has the meaning set forth in Section 13.1. “Tax Benefits” means any and all new or existing federal, state or local tax credits, cash grants, production incentives or similar tax or cash benefits for which CSG Operator, System Owner or the System are eligible or which either receives, or any depreciation, expenses, credits, benefits or other federal, state or local tax treatment for which CSG Operator, System Owner or the System is eligible or that either receives. “Taxes” means any and all new or existing ad valorem, property, occupation, generation, privilege, sales, use, consumption, excise, transaction, and other taxes or similar charges, and any increases in the same, but “Taxes” does not include income taxes or other similar taxes based on income or net revenues. “Term” has the meaning set forth on the Cover Page. “Termination Payment” is, on the date of termination, the then present value of Subscriber’s Allocation and obligation to purchase Bill Credits during the remainder of the Term less System Owner’s expected receipt of Unsubscribed Energy revenue based upon (a) expected annual System energy deliveries for the remainder of the Term as set forth in Schedule 1 (pro rated for partial years), (b) (i) the then current Bill Credit Price (per the Escalation Factor) less (ii) the then current avoided cost rate of the Distribution Company according to the Distribution Company’s Tariff (with (i) and (ii) increased for each remaining year of the Term by the Escalation Factor), (c) the Allocation, and (d) an annual present value discount rate of 7%. “Unsubscribed Energy” has the meaning set forth in the CSG Contract. 1.2 Interpretation. Unless the context otherwise requires, the following general rules of construction shall apply to this Agreement: (a) terms stated in the singular shall include the plural and the masculine shall include the feminine and neuter, and vice versa; (b) the words “includes” or “including” shall mean “including with limitation”; (c) references to a Section, Exhibit, or Schedule shall mean a Section, Exhibit, or Schedule, as the case may be, of this Agreement; (d) a reference to an agreement or instrument shall be to the agreement or instrument as modified through the date of which the reference is made; (e) a reference to a Law is to the Law as amended, replaced or restated from time to time; (f) a reference to a “person” includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having a separate legal personality and (g) a reference to Subscriber or CSG Operator shall include their permitted assigns and successors. ARTICLE 2 PURCHASE AND SALE OF CREDITS 2.1 CSG Operator’s Commitment. CSG Operator shall construct and operate the System and deliver electric energy that is generated by the System to Distribution Company for the purpose of generating Bill Credits, shall allocate a portion of System Capacity to Subscriber consisting of ___ watts, DC equal to _____ percent (__%) of System Capacity (the “Allocation”). CSG Operator shall provide to Distribution Company the Allocation along with Subscriber’s data provided in the Subscriber Agency Agreement and Consent Form. 2.2 CSG Operator’s Conditions Precedent. CSG Operator’s obligations to construct and operate the System and to cause the Commercial Operations Date to occur are subject to CSG Operator's obtaining, on terms satisfactory to CSG Operator in its sole discretion: System Financing, CSG Contracts, interconnection agreements, procurement contracts, installation contracts, site leases, and all required federal, state and local governmental approvals. 2.3 Subscriber’s Purchase Obligations. The Operating Period shall commence upon CSG Operator’s written notice to Subscriber that the Commercial Operations Date has occurred. During the Operating Period, CSG Operator shall sell to Subscriber and Subscriber shall purchase from CSG Operator, the right to receive an amount of Bill Credits calculated on the basis of that portion of the total kilowatt hours delivered by the System to Distribution Company which corresponds to the Allocation. The Allocation shall be effective for each and every Distribution Company Production Month (as defined in the CSG Contract) during the Term. CSG Operator shall deliver to Distribution Company the aggregate kWh delivered in the Production Month along with the Subscriber’s Allocation for the purposes of applying Bill Credits to the Subscriber’s account pursuant to the Allocation. Thus, where x = kWh value of Subscriber’s Allocation, y = aggregate kWh delivered in a Production Month, and a = Allocation, x = y * a. 2.4 Unit Contingent Sale. CSG Operator’s obligation to sell and allocate Bill Credits to any particular Subscriber account is expressly subject to, and contingent on, the ability of the System to generate electricity or produce Bill Credits, whether the inability of the System is due to maintenance of the System, maintenance/repairs of the System location, the relocation of the System, a change in Law, a change in the Distribution Company’s Tariff, or otherwise, or for any reason Bill Credits can no longer be allocated to Buyer pursuant to the Distribution Company’s Tariff. Notwithstanding the foregoing, if the System is unable to generate electricity or produce Bill Credits for any reason for allocation to the Subscriber’s account, CSG Operator may, but shall be under no obligation to, on a prospective basis, enter into a separate Subscription Agreement to provide for the allocation of a similar amount of Bill Credits from another photovoltaic solar electric generation system within Distribution Company’s service territory, that meets all the other requirements of the Distribution Company’s Tariff. Further, if during the Term Subscriber requests to have the Bill Credits under this Agreement applied to a separate account it has with Distribution Company that 4 87749850.2 0065073-00005 meets all the qualifications of the CSG Statute and CSG Contract related to this System, as well as can utilize all the Bill Credits contemplated hereunder, CSG Operator shall use commercially reasonable efforts to accommodate such request, including entering into a new Subscription Agreement on substantially the same terms of this Agreement with Subscriber (or its affiliate if Subscriber guarantees all obligations of such affiliate) for such account, which would replace and terminate this Agreement. 2.5 Pricing. For each billing cycle as established by the Distribution Company, Subscriber shall pay CSG Operator an amount equal the product of (i) the number of kWh of electricity delivered to Distribution Company at the Distribution Company’s meter that resulted in Bill Credits actually credited to Subscriber’s accounts by Distribution Company as reflected on the invoice Subscriber receives from Distribution Company, multiplied by (ii) the Bill Credit Price. The Bill Credit Price will be adjusted on the first day of the month after any change to the ARR, pursuant to the formula provided on the Cover Page. In addition, to the extent Subscriber receives any payment from Distribution Company for Bill Credits not used by Subscriber, as provided for in Section 1.A. of the CSG Contract, to the extent Subscriber has not previously paid CSG Operator for such Bill Credits, Subscriber shall pay CSG Operator an amount equal to the Bill Credit Price for such Bill Credits. 2.6 Renewable Energy Credits. Subscriber’s purchase of Bill Credits produced by the System shall not include RECs or any other attributes of ownership of the System, all of which shall be retained by CSG Operator. ARTICLE 3 TAXES 3.1 Subscriber Obligations. Subscriber shall reimburse and pay for any documented taxes, fees or charges imposed or authorized by any governmental authority and paid or payable by CSG Operator due to CSG Operator’s sale and transfer to Subscriber of the rights to Bill Credits (other than taxes imposed upon CSG Operator or for which CSG Operator is responsible under Section 3.2, including, for the avoidance of doubt, any income or related taxes imposed on or assessed against CSG Operator). CSG Operator shall notify Subscriber in writing with a detailed statement of such amounts, if any, which shall be invoiced by CSG Operator and payable by Subscriber. To the extent Subscriber pays CSG Operator for such amounts, CSG Operator shall pay such amounts to the appropriate governmental authority and shall indemnify Subscriber for any failure to fulfill such obligation. Subscriber shall timely report, make filings for, and pay any and all sales, use, income, gross receipts, or other taxes, and any and all franchise fees or similar fees assessed against it due to its purchase of the rights to Bill Credits generated by the System. This Section 3.1 shall exclude the taxes specified in Section 3.2, all of which shall be the responsibility and obligation of CSG Operator. 3.2 CSG Operator Obligations. CSG Operator shall be responsible for all income, electricity generation or production, personal property or real property or other similar taxes and any and all franchise fees or similar fees assessed against it due to its ownership and/or operation of the System, including the generation and/or production of electricity thereby. In the event there is a tax imposed on the sale or transfer of electricity generated or produced by the System to Distribution Company it shall be the obligation of the Subscriber to pay such tax unless there is a similar tax imposed on the purchase of the rights to Bill Credits, in which case the tax imposed on the sale or transfer of electricity would be imposed on CSG Operator. ARTICLE 4 OPERATIONS 4.1 System Operations. Except as otherwise expressly provided in this Agreement, CSG Operator shall at its sole cost and expense (i) operate and maintain the System; (ii) perform all repairs on the System; and (iii) provide, or arrange for the provision of, all labor, material, and other supplies for the System. CSG Operator agrees to use good faith, commercially reasonable efforts to operate and maintain the System. ARTICLE 5 TERM 5.1 Term. This Agreement shall become effective on and as of the Effective Date and shall continue in effect until the end of the Term, unless terminated earlier pursuant to the terms hereof. ARTICLE 6 DEFAULT AND TERMINATION 6.1 Events of Default. An event of default under this Agreement (an “Event of Default”) shall be deemed to exist with respect to a Party (the “Defaulting Party”) upon the occurrence of any one or more of the following: 6.1.1. Subscriber Payment Defaults. If the Subscriber fails to pay any amount due and payable under this Agreement, other than an amount which is subject to a valid good faith dispute, within five (5) Business Days of receipt of notice given by CSG Operator of such non-payment. 6.1.2. Failure of Representations and Warranties. If any representation or warranty of the Defaulting Party shall prove at any time to have been incorrect in any material respect when made and shall remain material to the transactions contemplated hereby, if the Defaulting Party does not cure the facts underlying such incorrect representation or warranty so that the representation or warranty becomes true and correct within thirty (30) days of the date of receipt of notice from the other Party demanding cure or, provided if it cannot be reasonably cured within such thirty-day cure period specified above, the defaulting Party will have such additional time (not to exceed an additional thirty (30) days) provided that the Defaulting Party promptly commences and diligently pursues such cure and continues such cure to completion, and provided that such extended period of cure shall be allowed only so long as the failure to complete such cure does not materially adversely affect the other Party. 6.1.3. Insolvency. If the Defaulting Party (i) ceases or fails to be solvent, or generally fails to pay, or admits in writing its inability to pay, its debts as they come due, (ii) voluntarily ceases to conduct its business in the ordinary course, (iii) commences any Insolvency Proceeding with respect to itself, or (iv) takes any action to effectuate or authorize any of the forgoing; or in the event that (a) any involuntary Insolvency Proceeding is commenced or filed against the Defaulting Party, or a writ, judgment, warrant of attachment, execution or similar process is issued or levied against a substantial part of the Defaulting Party’s properties, and any such proceeding or petition shall not be dismissed, or such writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded within thirty (30) days after commencement, filing or levy; (b) the Defaulting Party admits the material allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non -U.S. law) is ordered in any Insolvency Proceeding; or (c) the Defaulting Party acquiesces in this appointment of a receiver, trustee, custodian, liquidator, mortgagee in possession (or agent therefore), or other similar person for itself or a substantial portion of its property or business. 5 87749850.2 0065073-00005 6.1.4. Other Defaults Generally. If the Defaulting Party fails to substantially perform any other material obligation under this Agreement other than those already covered in this Section 6.1, and does not cure such failure within thirty (30) days of the date of receipt of written notice from the other Party demanding cure; provided that such thirty (30) day period cure period shall be extended if and to the extent reasonably necessary to accomplish such cure (not to exceed an additional thirty (30) days), but only so long as the Defaulting Party diligently pursues such cure and continues such cure to completion, and provided that such extended period of cure shall be allowed only so long as the failure to complete such cure does not materially adversely affect the other Party; and provided further that this Section 6.1.4 shall not apply to any failure by Subscriber to make payments (which is covered by Section 6.1.1). 6.2 Remedies. 6.2.1. Generally. Upon the occurrence and during the continuation of an Event of Default, the Party not in default shall have the right to pursue any remedy under this Agreement or now or hereafter existing under applicable Law or in equity, including an action for damages, and including termination of this Agreement upon five (5) Business Days prior written notice to the Defaulting Party. Nothing herein, however, shall limit either Party’s right to collect damages upon the occurrence of a breach or default by the other Party that does not become an Event of Default. 6.2.2. Termination Matters. If CSG Operator terminates this Agreement as a result of a Subscriber Event of Default, or if Subscriber terminates this Agreement for any reason other than an Event of Default by CSG Operator, Subscriber shall pay to CSG Operator the Termination Payment (which shall not be less than zero). The foregoing shall not limit other remedies available to CSG Operator at law or in equity for a breach or default by Subscriber. THE AMOUNT OF THE TERMINATION PAYMENT SHALL BE PAID BY SUBSCRIBER AS LIQUIDATED DAMAGES. SUBSCRIBER AND CSG OPERATOR HEREBY ACKNOWLEDGE AND AGREE THAT THE TERMINATION PAYMENT CONSTITUTES LIQUIDATED DAMAGES AND CSG OPERATOR’S ACTUAL DAMAGES IN THE EVENT OF A BREACH OF THIS AGREEMENT BY SUBSCRIBER WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT SUCH AMOUNT OF THE TERMINATION PAYMENT IS THE PARTIES’ BEST AND MOST ACCURATE ESTIMATE OF THE DAMAGES CSG OPERATOR WOULD SUFFER IN THE EVENT THIS AGREEMENT IS TERMINATED DUE TO A SUBSCRIBER EVENT OF DEFAULT, AND THAT SUCH ESTIMATE IS REASONABLE UNDER THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT. SUBSCRIBER SHALL REMAIN LIABLE FOR OTHER INDEMNITY AND PAYMENT OBLIGATIONS UNDER THIS AGREEMENT. 6.3 Termination Prior to the Commercial Operations Date. 6.3.1. Termination by CSG Operator. CSG Operator may terminate this Agreement without cause by written notice to Subscriber any time prior to the Commercial Operations Date. 6.3.2. Termination by Either Party. Subject to an extension of the Estimated Commercial Operations Date pursuant t o Section 8.1, if the Operating Period has not commenced on or before the date that is six (6) months after the Estimated Commercial Operations Date, then either Party may terminate this Agreement by written notice to the other Party; provided that neither Party may terminate this Agreement pursuant to this Section 6.3.2 after CSG Operator has notified Subscriber of the Commercial Operations Date, notwithstanding that the Commercial Operations Date occurred after the date that is six (6) months after the Estimated Commercial Operations Date. Further, in the event the CSG Statute is terminated and there is no substantially similar replacement statute enacted which provides for Bill Credits or a substantially similar economic benefit for Subscriber, Operator or Subscriber shall be entitled to terminate this Agreement by written notice to the other Party, without any further obligation of either Party hereunder other than payment of any then outstanding amounts under this Agreement. 6.3.3. Effect of Termination. Upon a termination pursuant to this Section 6.3 neither Party shall have any further liability or obligation to the other Party hereunder. ARTICLE 7 BILLING, PAYMENT AND TAXES 7.1 Monthly Invoices and Payments for Bill Credits. Within five (5) Business Days following the first day of each month beginning the with the second calendar month following Commercial Operation Date, or other billing period as may be determined by CSG Operator, CSG Operator shall provide Subscriber with an invoice stating the amounts owing under this Agreement for the previous month for Bill Credits posted to subscriber account since the prior invoice. Subscriber shall pay the amount specified in each invoice to CSG Operator within fifteen (15) Business Days after the date of the invoice, but in no event later than the time required by the Minnesota Prompt Pay Statute (Minn. Stat. §471.425). Payments shall be made by either check or wire transfer to an account designated in writing by CSG Operator from time to time. For each of Subscriber’s budget years during the term of this Agreement, the Subscriber’s annual budget shall provide for sufficient funds to cover the anticipated cost of Bill Credits to be generated by the System during such budget year, with disbursement of such funds consistent with payment terms set forth in this Article 7. In there is an event that occurs such that funds are not adequately appropriated as contemplated in the immediately preceding sentence, Subscriber shall (i) be prohibited from entering into any other contract for the purchase of power, Bill Credits or any related energy purchases, and (ii) use its best efforts to re-appropriate the required funds to pay all amounts due under this Agreement. Annually, during the sixty (60) day period commencing at the end of each Measurement Period, CSG Operator and Subscriber will work together in good faith to reconcile as necessary the amount of Bill Credits applied by Distribution Company to the account of Subscriber, and the amount of Bill Credits invoiced by CSG Operator and paid for by Subscriber. In the event the Parties are not able to agree upon such reconciliation, they will follow the Dispute Resolution procedures of Article 10. 7.2 Late Payment Charges. Any amounts not paid on or before the date due hereunder shall accrue interest from the date due until the date actually paid at the lesser of (i) one and one half percent (1.5%) per month, or (ii) the maximum interest rate permitted by Law, including the Minnesota Prompt Payment Statute. ARTICLE 8 FORCE MAJEURE 8.1 Effect of Force Majeure. Except as otherwise expressly provided to the contrary in this Agreement, if either Party is rendered wholly or partly unable to perform its obligations under this Agreement because of Force Majeure, that Party shall be excused from whatever performance is affected by the Force Majeure to the extent so affected, provided that: 8.1.1. The Party affected by such Force Majeure, as soon as reasonably practical after obtaining knowledge of the occurrence of the claimed Force Majeure event, gives the other Party prompt oral 6 87749850.2 0065073-00005 notice, followed by a written notice, fully describing the particulars of the occurrence; 8.1.2. The suspension of performance is of no greater scope and of no longer duration than is required by the Force Majeure; and 8.1.3. The Party affected by such Force Majeure uses all reasonable efforts to mitigate or remedy its inability to perform as soon as reasonably possible. 8.2 Payment Obligations Not Excused. Notwithstanding anything in this Article to the contrary, no payment obligation shall be excused by such event of Force Majeure. ARTICLE 9 CONFIDENTIALITY 9.1 Confidential Information. This Agreement is governed by the Minnesota Government Data Practices Ace (Minn. Stat. § 13.01 et. Seq.) (“Act”), Consequently, all of the data created, collected, received, stored, used, maintained, or disseminated by or to the Subscriber under this Agreement is subject to the requirements of the Act. CSG Operator asserts that certain data that it will be providing to the Subscriber constitute either trade secret data or business data under the Act, including but not limited to the Bill Credit Price. The Parties acknowledge that the classification of any government data is governed by the Act and not by the understanding of either the Subscriber or the CSG Operator. Notwithstanding any other provision in this Agreement, the Subscriber’s obligation is to maintain and release the data in a manner that is consistent with the Act , and Subscriber will not be liable for any release or disclosure of data that is public under section 13.03 of the Act; provided, however, that Subscriber agrees to provide prompt written notice to the CSG Operator when Subscriber receives a request under the Act for data CSG Operator has designated as trade secret or business data and not disclose such information that CSG Operator promptly objects to in writing, until the later of (i) CSG Operator getting a judicial determination by a judicial officer, arbitrator, or administrative law judge on the nature of the data or (ii) the last day that, in Subscriber’s sole discretion, Subscriber must make such disclosure to avoid being at risk of a successful claim from the requester that Subscriber is in violation of the Act. Subscriber remains solely responsible for the initial determination of whether the requested data is public or private/nonpublic, but the parties acknowledge that any final determination by a judicial officer, arbitrator, or administrative law judge, or appellate review thereof, will control. If the Subscriber determines that some or all of the requested data is public under section 13.03 of the Act, Subscriber shall provide prompt written notice to CSG Operator prior to Subscriber’s disclosure of such data so that CSG Operator, its sole expense, shall have the opportunity to object to such disclosure in writing and seek a determination by a judicial officer, arbitrator, or administrative law judge that such data constitutes trade secret information or business data under the Act and therefor cannot be disclosed under the Act. In no event shall Subscriber be required by the CSG Operator under this Agreement to withhold or delay disclosure of public data contrary to requirements of the Act. Notwithstanding the notice and timing provisions in this section 9.1, Subscriber shall not be liable to CSG Operator for any failure to give notice or otherwise to timely respond to CSG Operator regarding a third party request for data. CSG Operator’s claims against the Subscriber shall be limited to private actions it may have, if any, for Subscriber’s failure to follow the Act. 9.2 Exceptions. The confidentiality restrictions contained in Section 9.1 shall not apply (i) to information already in the public domain or in the possession of the receiving Party at the time of disclosure; (ii) to information that enters the public domain through no breach hereof by the receiving Party; (iii) to the extent necessary to administer or enforce a Party’s rights or obligations under this Agreement; (iv) to the extent that information is required to be disclosed by applicable Law, including the Distribution Company’s Tariff; (v) to disclosures by a Party to its affiliates, agents, employees, attorneys and consultants, and to its prospective and actual lenders and investors provided that such third parties enter into appropriate confidentiality agreements with respect to the same; of vi) to disclosures made pursuant to the Subscriber Agency and Consent Form as set forth on Exhibit B . In the event of a required disclosure, the Party that is required to make such disclosure shall inform the other Party promptly and take such steps as are reasonably necessary to minimize the disclosure and protect the confidentiality of any Confidential Information. Additionally, either Party may disclose the existence and general purpose of this Agreement to third parties, and in the event of a request by a third party to see the Agreement, Subscriber agrees to promptly notify Operator of such request in order that Operator can make a claim that the price and certain other terms of the Agreement meet the definition of Trade Secret Information under Section 13.37 of the Minnesota Statutes, so that such information may be protected f rom disclosure. 9.3 Equitable Relief. The Parties acknowledge and agree that there can be no adequate remedy at law to compensate the Parties for a breach of this ARTICLE 9, and therefore, that upon any such breach or threat thereof, either Party shall be entitled to injunctive relief and other appropriate equitable relief (without the necessity of proving actual damages or the posting of any bond), in addition to whatever remedies may be available at law or in equity. ARTICLE 10 DISPUTE RESOLUTION 10.1 Notice of Dispute/Negotiated Resolution. In the event that there is any controversy, claim or dispute between the Parties hereto arising out of or related to this Agreement, or the breach hereof, that has not been resolved by informal discussions and negotiations (“Dispute”), either Party may, by written notice to the other, invoke the formal dispute resolution procedures set forth herein. The written notice invoking these procedures shall set forth in reasonable detail the nature, background and circumstances of the Dispute. During the twenty (20) Business Day period following said written notice, the Parties shall meet, confer and negotiate in good faith to resolve the Dispute. Either Party may, during said twenty (20) Business Day period, request the services of a professional mediator mutually acceptable to the Parties, and the other Party or parties to the Dispute shall cooperate with such request and the reasonable costs of such mediator shall be shared equally. 10.2 Generally. In the event that (i) the Party receiving the written notice of a Dispute set forth in Section 10.1 fails to respond within ten (10) Business Days or (ii) the Dispute cannot be settled or resolved amicably by the Parties during the twenty (20) Business Day period of good-faith negotiations provided for in Section 10.1, then either Party may submit said Dispute to any federal or state court located in Hennepin County Minnesota to the fullest extent permitted by Law. Each Party waives to the fullest extent permitted by Law any objection it may have to the laying of venue of any action or proceeding under this Agreement in any court described in this Section. 10.3 Interim Relief. Notwithstanding anything herein to the contrary, either Party may, without inconsistency with this Agreement, seek any interim or provisional relief, including but not limited to injunctive relief, that may be necessary to protect the rights or property of that Party in any court in Minneapolis, Minnesota, having jurisdiction over the Parties, or if no court in Minneapolis, 7 87749850.2 0065073-00005 Minnesota, has jurisdiction over the Parties, then in any court of competent jurisdiction. 10.4 Continuation of Performance. During the conduct of a Dispute, (i) the Parties shall continue to perform their respective obligations under this Agreement, and (ii) neither Party shall exercise any other remedies hereunder arising by virtue of the matters in Dispute; provided, however, that nothing in this Section shall be construed to prevent CSG Operator from suspending performance in the event that Subscriber has not paid amounts due and owing to CSG Operator under this Agreement. 10.5 Effect of Termination. No termination of this Agreement following an Event of Default shall relieve the Defaulting Party of its liability and obligations hereunder, and the non -defaulting Party may take whatever action at law or in equity may appear necessary or desirable to enforce performance and observance of any obligations under this Agreement. ARTICLE 11 COMPLIANCE WITH LAWS Both Parties shall comply with all applicable Laws as they relate to this Agreement and the performance by the Parties hereunder. ARTICLE 12 ASSIGNMENT 12.1 Generally. Subject to Section 12.2, this Agreement may not be assigned by either Party without the other Party’s written consent, which consent shall not be unreasonably withheld, delayed or conditioned. 12.2 Permitted Assignments. Notwithstanding Section 12.1, CSG Operator may, without Subscriber’s consent, but with written notice to Subscriber: (i) assign this Agreement to any subsidiary, affiliate or other special purpose company formed by CSG Operator for the purpose of developing, owning and/or financing the System or (ii) collaterally assign this Agreement as security to the System Lenders or the System Owner in accordance with ARTICLE 13; provided, however, that any assignment of this Agreement by CSG Operator pursuant to the foregoing subclause (ii) shall not release CSG Operator from its liabilities under this Agreement unless and until all right, tile and interest of CSG Operator under this Agreement has been voluntarily or involuntarily transferred or otherwise disposed o f at which time CSG Operator shall automatically be released and relieved from all liabilities and obligations under this Agreement, it being agreed that an assignment of this Agreement by CSG Operator pursuant to the foregoing subclause (i) shall release CSG Operator from its liabilities under this Agreement. Subject to the consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, either Party may assign this Agreement to any entity that acquires all or substantially all of the assets of the Party, provided that as conditions to any such assignment, such Party shall provide the other Party with written notice thereof, and the assignee entity shall execute and deliver to the other Party a document agreeing to be bound by this Agreement and assuming the assigning Party’s obligations hereunder. 12.3 Continued Effectiveness; Assignments in Violation. Subject to the forgoing prohibitions against assignment, the agreements, covenants, conditions and provisions containe d in this Agreement bind, apply to and inure to the benefit of the Parties their permitted heirs, successors and assigns. Any assignment in violation of this ARTICLE 12 shall be void and of no effect. ARTICLE 13 SYSTEM FINANCING 13.1 System Owner, System Lenders and Financing. The Parties acknowledge that CSG Operator may obtain construction and long - term financing or other credit support, either directly or through an affiliate, from System Lenders in connection with the development and ownership of the System (the “System Financing”), which financing may include the sale of the System to a third party (the “System Owner”). Both Parties agree in good faith to consider and to negotiate changes or additions to this Agreement that may be reasonably requested by the System Lenders in order to support the System Financing. The Parties also agree that, in accordance with this Section 13.1, CSG Operator may assign this Agreement to the System Owner and/or the System Lenders as collateral to support the System and CSG Operator’s obligations to the System Owner and/or the System Lenders, as applicable. In connection with any such assignment, Subscriber agrees to enter into an agreement directly with the System Owner and/or the System Lenders under which Subscriber shall consent to such assignment and will agree to other customary and reasonable provisions for the benefit of the System Owner and/or the System Lenders (including provisions under which the System Owner and/or the System Lenders or their designees (i) may assume the rights of CSG Operator under this Agreement; (ii) shall be entitled to receive copies of certain notices hereunder that Subscriber might provide to CSG Operator; (iii) shall have customary extended cure periods to cure any defaults by CSG Operator hereunder; and (iv) shall be provided other similar or related benefits or protections as reasonably requested by the System Owner and/or the System Lenders to support the System Financing. ARTICLE 14 LIMITATIONS OF LIABILITY 14.1 No Consequential Damages. NOTWITHSTANDING ANY OTHER PROVISION HEREOF, EXCEPT TO THE EXTENT THE DAMAGES IN SECTION 6.2.2 MAY BE SO CONSIDERED, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, STATUTORY LIABILITY, OR OTHERWISE, ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING ANY LOSS OF PROFITS, LOSS OF PRODUCTION, EARNINGS, REVENUE, USE, DATA, CONTRACT OR GOOD WILL, EVEN IN SITUATIONS WHERE A PARTY HAS KNOWLEDGE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NO LIABILITY RELATED TO THE TAX BENEFITS, RENEWABLE ENERGY CREDITS, INCLUDING, WITHOUT LIMITATION, ANY REBATE, AND NONE OF THE PAYMENTS FOR BILL CREDITS NOR ANY LIQUIDATED DAMAGES OR OTHER AMOUNT SPECIFIED AS PAYABLE BY SUBSCRIBER TO CSG OPERATOR UNDER THE TERMS OF THIS AGREEMENT UPON THE TERMINATION OF THIS AGREEMENT SHALL BE DEEMED CONSEQUENTIAL DAMAGES. 14.2 Parties’ Intent. 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, AND IRRESPECTIVE OF WHETHER ANY CLAIM HEREUNDER OR RELATING HERETO IS IN CONTRACT, TORT, STRICT LIABILITY, STATUTORY LIABILITY, OR OTHERWISE. ARTICLE 15 REPRESENTATIONS AND WARRANTIES 15.1 General. Each Party represents and warrants to the other the following: 15.1.1. Such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; the execution, delivery and performance by such Party of this 8 87749850.2 0065073-00005 Agreement have been duly authorized by all necessary corporate action, and do not and will not violate any Law; and this Agreement is valid obligation of such Party, enforceable against such Party in accordance with its terms. 15.1.2. Such Party has obtained all licenses, authorizations, consents and approvals required by any governmenta l authority and necessary for such Party to own its assets, carry on its business and to execute and deliver this Agreement; and such Party is in compliance with all Laws that relate to this Agreement in all material respects. 15.1.3. Other Agreements. Neither the execution and delivery of this Agreement by the such Party, nor the performance by such Party of any of its obligations under this Agreement, shall conflict with or result in a default under any of the terms or conditions of any agreement or obligation to which such Party is a party or by which such Party or its assets may be bound. 15.2 Subscriber. Subscriber represents, warrants, and covenants to CSG Operator: 15.2.1. Subscriber’s average annual energy consumption over the two year period prior to the Effective Date is __________ [delete if subscriber has provided an energy audit for a new property ]; 15.2.2. Subscriber shall not install or procure any other distributed generation resource(s), including other CSG subscriptions, serving Subscriber’s premises to which energy is delivered by Distribution Company under Account No(s). 5337556 (insert acct to which bill credits will be applied), which resource(s), when combined with the Allocation, may generate energy (including energy upon which the Credits are based) exceeding one hundred twenty percent (120%) of Subscriber’s average annual energy consumption over the twenty-four (24) months prior to such installment or procurement. 15.2.3. Within thirty (30) days of request by CSG Operator, which request shall be made not sooner th an the Construction Commencement Date of the System, Subscriber shall complete, execute, and deliver to CSG Operator the Subscriber Agency Agreement in the form attached hereto as Exhibit B. Upon execution, all of the information and statements of Subscri ber provided therein shall be accurate. 15.2.4. Subscriber understands and agrees it will have no interest in or entitlement to (a) benefits or derivatives of Unsubscribed Energy or RECs associated with the System (b) incentives under the MN Department of Commerce’s Made in Minnesota program and Distribution Company’s Solar Rewards program associated with the System; and (c) Tax Benefits associated with owning or operating the System. ARTICLE 16 MISCELLANEOUS 16.1 Notices. 16.1.1. Any notice, invoice, demand, offer or other written instrument required or permitted to be given pursuant to this Agreement shall be in writing signed by the Party giving such notice and shall be served personally, by reputable express courier service, or by e-mail followed with confirmation delivery of hard copy, in each case to the other Party at the address set forth on the Cover Page. All notices shall be effective upon receipt. 16.1.2. Each Party shall have the right to change the place to which notice shall be sent or delivered or to specify one address to which copies of notices may be sent, in either case by similar notice sent or delivered in like manner to the other Party. 16.2 Consents. Any consent that is provided for pursuant to this Agreement shall not be unreasonably withheld or delayed. 16.3 Headings. The titles or headings of the various sections, articles and paragraphs hereof are intended solely for convenience and ease of reference and are not intended, and are not to be deemed for any purpose, to modify or explain or place any interpretation or construction upon any of the provisions of this Agreement. 16.4 Governing Law. This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of Minnesota, excluding any choice of law rules that might direct the application of the laws of a different jurisdiction, irrespective of the places of execution or of the order in which signatures of the Parties are affixed or of the place of performance. 16.5 Integration. This Agreement, together with all Exhibits and Schedules hereto, embodies the entire agreement and understanding of the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements and understandings of the Parties, verbal or written, relating to the subject matter hereof. 16.6 Relationship of Parties. No provision of this Agreement shall be construed or represented as creating a partnership, trust, joint venture, fiduciary or any similar relationship between the Parties. No Party is authorized to act on behalf of the other Part y and none shall be considered the agent of the other. 16.7 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and legal benefit of Subscriber and CSG Operator, and their permitted successors and assigns, and no other person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement. 16.8 Amendments; Waivers. This Agreement may be modified only by a writing that is signed by both Parties. Any waiver of the provisions of this Agreement must be in writing and will not be implied by any usage of trade, course of dealing or course of performance. No failure of either Party to enforce any term of this Agreement will be deemed to be a waiver. No exercise of any right or remedy by Subscriber or CSG Operator constitutes a waiver of any other right or remedy contained or provided by Law. Any delay or failure of a Party to exercise, or any partial exercise of, its rights and remedies under this Agreement shall not operate to limit or otherwise affect such rights or remedies. Any waiver of performance hereunder shall be limited to the specific performance waived and shall not, unless otherwise expressly stated in writing, constitute a continuous waiver or a waiver of future performance. 16.9 Construction of Agreement. This Agreement is to be construed so as to effectuate the normal and reasonable expectations of a sophisticated buyer and seller of the products and services covered by this Agreement and shall not be construed either for or against either Party. No provision of this Agreement shall be construed or interpreted for or against either Party because such Party drafted, or caused its legal representative to draft, the provision. 16.10 Severability. If any term, covenant or condition in this Agreement shall, to any extent, be invalid or unenforceable in any respect under applicable Law, the remainder of this Agreement shall not be affected thereby, and each term, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent 9 87749850.2 0065073-00005 permitted by applicable Law and, if appropriate, such invalid or unenforceable provision shall be modified or replaced to give effect to the underlying intent of the Parties and to the intended econ omic benefits of the Parties. 16.11 Further Actions. Each Party shall do all necessary acts and make, execute, and deliver such written instruments as may from time to time be reasonably required to carry out the terms of this Agreement. Neither Party may take an action that would frustrate the other Party’s reasonable expectations concerning the benefits to be enjoyed hereunder. 16.12 Non-Dedication of Facilities. Nothing herein shall be construed as the dedication by either Party of its facilities or equipment to the public or any part thereof. Neither Party shall take any action that would subject the other Party, or other Party’s facilities or equipment, to the jurisdiction of any governmental agency. Neither Party shall assert in any proceeding before a court or regulatory body that the other Party is a public utility by virtue of such other Party’s performance under this Agreement. If CSG Operator is reasonably likely to become subject to regulation as a public utility, then the Parties shall use all reasonable efforts to restructure their relationship under this Agreement in a manner that preserves their relative economic interests while ensuring that CSG Operator does not become subject to any such regulation. If the Parties are unable to agree upon such restructuring, CSG Operator shall have the right to terminate this Agreement. 16.13 Survival. The provisions of Section 7.2 and ARTICLE 6, ARTICLE 9, ARTICLE 10, and ARTICLE 14 shall survive termination of this Agreement to the extent required for their full performance. 87749850.2 0065073-00005 Schedule 1 Expected Annual System Energy Deliveries Commercial Operations Date ____________ Year Expected Energy Deliveries 1 2 3 4 5 87749850.2 0065073-00005 11 EXHIBIT B Subscriber Agency Agreement and Consent Form 87749850.2 0065073-00005 12 Solar*Rewards Community Subscriber Agency Agreement and Consent Form The undersigned ("Subscriber") has a Subscription to the following Community Solar Garden : Community Solar Garden Name: Community Solar Garden Address: Community Solar Garden Operator: Community Solar Garden contact information for Subscriber questions and complaints: Address (if different from above): Telephone number: Email address: Web Site URL: Subscriber Name: City of Prior Lake Subscriber’s Account Number with Northern States Power Company: 55337556 Subscriber Service Address where receiving electrical service from Northern States Power Company: Premise: 304002382 (Meter 000010157727), 4646 Dakota St SE Premise: 304042426 (Meter 000061738780), 4692 Dakota St SE Premise: 302782826 (Meter 000011675605), 17073 Adelmann St SE Premise: 304165511 (Meter 000005147218), 16335 Itasca Ave SE 87749850.2 0065073-00005 13 By signing this Solar*Rewards Community Subscriber Agency Agreement and Consent Form, the Subscriber agrees to all of the following: 1. Assignment of Renewable Energy Credits ("RECs"), Energy and Capacity to Northern States Power Company, a Minnesota corporation. The Subscriber agrees that the Community Solar Garden Operator has authority to assign all energy produced and capacity associated with the photovoltaic energy system at the Community Solar Garden to Northern States Power Company, and the Subscriber agrees that all energy produced, and capacity associated with the photovoltaic energy system at the Community Solar Garden shall belong to Northern States Power Company. The Subscriber also agrees that the Community Solar Garden Operator has authority to assign all RECs associated with the photovoltaic energy system at the Community Solar Garden to Northern States Power Company, and that if the Community Solar Garden or a person or entity on its behalf has assigned the RECs to Northern States Power Company, then all RECs associated with the photovoltaic energy system at the Community Solar Garden shall belong to Northern States Power Company. 2. Tax Implications. The Community Solar Garden Operator has provided the Subscriber with a statement that Northern States Power Company makes no representations concerning the taxable consequences to the Subscriber with respect to its Bill Credits to the Subscriber or other tax issues relating to participation in the Community Solar Garden. 3. Northern States Power Company hereby discloses to the Subscriber that it recognizes that not all production risk factors, such as grid-failure events or atypically cloudy weather, are within the Community Solar Garden Operator's control. 4. Information Sharing. Participating in the Solar*Rewards Community Program will require sharing Subscriber's Account Information (name, account number, service address, telephone number, email address, web site URL, information on Subscriber participation in other distributed generation serving the premises of the Subscriber, Subscriber specific Bill Credit(s)) and Subscriber's Energy Use Data (the past, present and future electricity usage attributable to the Subscriber for the service address and account number identified for participation in the Community Solar Garden). The following outlines the type of information that will be shared, and how that information will be used. a. Subscriber's Account Information and Subscriber Energy Usage Data . The Subscriber authorizes Northern States Power Company to provide the Community Solar Garden Operator (and the Community Solar Garden Operator's designated subcontractors and agents) with the Subscriber's Account Information and Subscriber's Energy Usage Data as described in Section 4 above. This information is needed to allow the Community Solar Garden Operator determine the extent to which the Subscriber is entitled to participate in the Community Solar Garden, and to validate the amount of the Bill Credits to be provided by Northern States Power Company to the Subscriber. The current data privacy policies of Northern States Power Company applicable to its Solar*Rewards Community Program provided to the Subscriber by the Community Solar Garden Operator pursuant Section 3 above are attached as Exhibit 1 of this Solar*Rewards Community Subscriber Agency Agreement and Consent Form. These privacy policies include definitions of "Subscriber's Account Information" and "Subscriber's Energy Usage Data." b. Subscriber's Subscription Information: The Subscriber authorizes the Community Solar Garden Operator to provide information to Northern States Power Company identifying the Subscriber (with the Subscriber's name, service address, and account number) and detailing the Subscriber's proportional share in kilowatts of the Community Solar Garden and to provide additional updates of this information to Northern States Power Company as circumstances change. This information is needed to allow Northern States Power Company to properly apply Bill Credits for the photovoltaic energy generated by the Community Solar Garden. Also, this information is needed to allow Northern States Power Company to send to the Subscriber notices or other mailings pertaining to their involvement in the Solar*Rewards Community Program. The Community Solar Garden Operator shall not disclose Subscriber information in annual reports or other public documents absent explicit, informed consent from the Subscriber. The Community Solar Garden Operator will not release any Subscriber data to third 87749850.2 0065073-00005 14 parties except to fulfill the regulated purposes of the Solar*Rewards Community Program, to comply with a legal or regulatory requirement, or upon explicit, informed consent from the Subscriber. c. Aggregate Information. Aggregate information concerning production at the Community Solar Garden may be publicly disclosed to support regulatory oversight of the Solar*Rewards Community Program. This includes annual reports available to the public related to specific Community Solar Gardens, including but not limited to production from the Community Solar Gardens; size, location and the type of Community Solar Garden subscriber groups; reporting on known complaints and the resolution of these complaints; lessons learned and any potential changes to the Solar*Rewards Community Program; reporting on Bill Credits earned and paid; and reporting on the application process. Aggregated information will not identify individual Subscribers or provide Subscriber - Specific Account Information, Subscriber-Specific Energy Usage Data or Subscriber-specific Bill Credits unless a Subscriber provides explicit informed consent. Depending on the nature of the aggregated information, however, it may still be possible to infer the amount of production attributed to individual Subscribers to t he Community Solar Garden. The Subscriber agrees to the inclusion of its production information in the creation of the aggregated information. The Community Solar Garden Operator will not use aggregated information for purposes unrelated to the Solar*Rewards Community Program without first providing notice and obtaining further consent, unless the aggregated information is otherwise available as public information. The policies of Northern States Power Company related to sharing aggregated information are part of the data privacy policies contained in the attached Exhibit 1 of this Solar*Rewards Community Subscriber Agency Agreement and Consent Form and should be provided to the Subscriber by the Community Solar Garden Operator pursuant Section 3 above. d. Information Requests from the MPUC or the Department of Commerce . The Subscriber agrees that the Community Solar Garden Operator and Northern States Power Company are authorized to provide any information they possess related to the Subscriber or the Subsc riber's participation in the Community Solar Garden to the Minnesota Public Utilities Commission (MPUC), the Minnesota Department of Commerce, or the Minnesota Office of Attorney General. This information is needed to allow proper regulatory oversight of Northern States Power Company and of the Solar*Rewards Community Program. e. Liability Release. Northern States Power Company shall not be responsible for monitoring or taking any steps to ensure that the Community Solar Garden Operator maintains the confide ntiality of the Subscriber's Account Information, the Subscriber's Energy Usage or the Bill Credits received pertaining to the Subscriber's participation in the Community Solar Garden. However, Northern States Power Company shall remain liable for its own inappropriate release of Subscriber's Account Information and Subscriber's Energy Use Data. f. Duration of Consent. The Subscriber's consent to this information sharing shall be ongoing for the Term of the Contract between the Community Solar Garden Operato r and Northern States Power Company, or until the Subscriber no longer has a Subscription to the Community Solar Garden and the Community Solar Garden Operator notifies Northern States Power Company of this fact through the CSG Application System. Provided, however, the Subscriber's consent shall also apply thereafter to all such information of the Subscriber pertaining to that period of time during which the Subscriber had a Subscription to the Community Solar Garden. g. Modification. The above provisions addressing data privacy and in Exhibit 1 shall remain in place until and unless other requirements are adopted by the MPUC in its generic privacy proceeding, Docket No. E,G999/CI-12-1344, or other MPUC Order. Northern States Power Company shall file necessary revisions to its tariffs and contracts within thirty (30) days of such Order. Subscriber's Name: Subscriber's Signature: 87749850.2 0065073-00005 15 Date: 87749850.2 0065073-00005 Exhibit 1 to Solar*Rewards Community Subscriber Agency Agreement and Consent Form Data Privacy Policies of Northern States Power Company Pertaining to the Solar*Rewards Community Program The data privacy policies of Northern States Power Company pertaining to the Solar*Rewards Community Program are as follows and may be changed from time to time as filed in the Compa ny's tariff or as otherwise may be authorized by the Minnesota Public Utilities Commission ("MPUC"): Definitions Unless indicated otherwise, the same definition and meaning of terms in this document are the same as contained in the Standard Contract for Solar*Rewards Community. For ease of reference, here are some of the specific definitions: "Company" means Northern States Power Company, a Minnesota corporation, and its affiliates and agents. "Subscribed Energy" means electricity generated by the PV System attributable to the Subscribers' Subscriptions and delivered to the Company at the Production Meter on or after the Date of Commercial Operation. "Subscriber" means a retail customer of the Company who owns one or more Subscriptions of a community solar garden interconnected with the Company. "Subscriber's Account Information" consists of the Subscriber's name, account number, service address, telephone number, email address, web site URL, information on Subscriber participation in other distributed generation serving the premises of the Subscriber, and Subscriber specific Bill Credit(s). "Subscriber's Energy Usage Data" includes the past, present and future electricity usage attributable to the Subscriber for t he service address and account number identified for participation in the Community Solar Garden. Overview This section addresses how Subscriber's Account Information and Subscriber's Energy Usage Data will be collected, used and shared as part of participation in the Solar*Rewards Community Program. 1. How Subscriber's Account Information and Energy Usage Data Will Be Exchanged a. Subscriber Specific Information Once a Subscriber has executed a Subscriber Agency Agreement and Consent Form, an ongoing data exchange will occur between the Company and a Community Solar Garden Operator (and their designated subcontractors and agents): The Company will disclose the following Subscriber-specific information to the Community Solar Garden Operator: Subscriber's Account Information Subscriber's Energy Usage Data Bill credits The Community Solar Garden Operator will disclose to the Company the following Subscriber-specific information: Subscriber's Account Information Community Solar Garden Allocation for each Subscriber's Subscription stated in kW Production data related to the PV System Monthly Subscription Information b. Aggregated Subscriber Information 87749850.2 0065073-00005 Aggregated Subscriber information will be reported as part of Permitted Public Reporting, outlined in Section 2(b) below. To be considered "aggregated" the reported information must include information attributable to all Subscribers participating in a specific Solar*Rewards Community program site, which based on program requirements will contain a minimum of five Subscribe rs. Depending on the nature of the aggregated information, however, from this information alone or in combination with other publicly available information it may still be possible to infer the amount of production attributed to individual Subscribers to the Community Solar Garden. 2. How Subscriber's Information Will Be Used The following outlines how the Subscriber's Account Information and Subscriber Energy Usage Data will be used as part of the Solar*Rewards Community Program. a. Program Management As part of administering the Solar*Rewards Community program, the Solar Garden Operator and the Company may provide information related to the Subscriber and/or the Community Solar Garden to:  the MPUC  the Minnesota Department of Commerce  the Minnesota Office of Attorney General  Other governmental or private entities as required by law or regulation Account Information and Subscriber's Energy Usage Data to service providers, agents, or contracted agents who support the program on its behalf. The Company prohibits these service providers from using or disclosing the Subscriber's information except as necessary to perform these specific services or to comply with legal requirements. More information about the Company's gene ral privacy practices is explained in its Privacy Policy available on www.xcelenerqy.com . b. Permitted Public Reporting The Subscriber's Energy Usage Data of each participating Subscriber to a Community Solar Garden will be combined and reported in the aggregate by the Community Solar Garden Operator in its annual report on the Solar*Rewards Com munity program. The identity of specific Subscribers, the specific Subscriber's Account Information, Subscriber's Energy Usage Data and Subsc riber- specific Bill Credit will not be listed in the public annual report unless the Subscriber has provided the C ommunity Solar Garden Operator with prior written consent. Per the requirements of the MPUC, the Company will provide to the MPUC annual reports which will include information or data requested by the MPUC or Minnesota Department of Commerce, including the following:  Reporting on Solar*Rewards Community program costs, including an analysis of the deposit, application, participation and metering fees and further justification for these fees going forward;  Reporting on the Solar*Rewards Community Gardens, including but not limited to size, location and the type of Solar*Rewards Community subscriber groups;  Reporting on known complaints and the resolution of these complaints;  A copy of each contract signed with a Community Solar Garden Operator, if not previously filed;  Lessons learned and any potential changes to the program;  Report on bill credits earned and paid; and the  Application process c. Prohibited Reporting or Sharing Except as otherwise provided in this document, the Company will not disclose the Subscr iber's Account Information, Subscriber's Energy Usage Data or Subscriber-specific Bill Credits to a third party without first obtaining the Subscriber's written consent. Any requests by the Community Solar Garden Operator to the Company for information abo ut a Subscriber that is not Subscriber's Account Information or Subscriber's Energy Usage Data will require execution of a separate written consent by th e Subscriber. Notwithstanding the previous statement, the Company will not provide the Community Solar Garden Operator with the Subscriber's Social Security Number unless directed to do so by the MPUC or Minnesota Department of Commerce or compelled by law or regulation. 87749850.2 0065073-00005 3. Subscriber Data Access and Correction The following outlines what information is available to the Subscriber from the Company and the Community Solar Garden Operator, and methods of correcting any inaccuracies. a. Information Available from the Company Subscribers can contact the Company's call center to obtain information pertaining to their s pecific Bill Credit attributable to their participation in Solar*Rewards Community Program. The correction of any allocation of previously -applied Bill Credits among Subscribers or payments to the Community Solar Garden Operator for Unsubscribed Energy, pe rtaining to a particular month due to any inaccuracy reflected in such Monthly Subscription Information with regard to a Subscriber's Subscription in the PV System and the beneficial share of photovoltaic energy produced by the PV System, or the share of Unsubscribed Energy, shall be the full responsibility of the Community Solar Garden Operator, unless such inaccuracies are caused by the Company . Subscribers may also obtain from the Company the following information related to the Solar*Rewards Community Program without obtaining written consent from the Community Solar Garden Operator:  Site location  Operator name  Nameplate capacity  Production data related to the PV system  Bill Credit Rate and total amount of Bill Credits applied to the PV System  Any other information pertaining to the Subscriber's Subscription Other information regarding the Community Solar Garden Operator known to the Company will not be disclosed unless the Subscriber obtains prior explicit informed consent from the Community Solar Gard en Operator or unless directed to do so by the MPUC or Minnesota Department of Commerce or compelled by law or regulation. b. Information Available from the Community Solar Garden Operator Subscribers and prospective subscribers can contact the Community Sola r Garden Operator to obtain the following information:  Future costs and benefits of the Subscription, including: i. All nonrecurring (i.e., one-time) charges; ii. All recurring charges; iii. Terms and conditions of service; iv. Whether any charges may increase during the course of service, and if so, how much advance notice is provided to the Subscriber; v. Whether the Subscriber may be required to sign a term contract; vi. Terms and conditions for early termination; vii. Any penalties that the Community Solar Garden may charge to the Subscriber; viii. The process for unsubscribing and any associated costs; ix. An explanation of the Subscriber data the Community Solar Garden Operator will share with Northern States Power Company and that Northern States Power Company will share with the Community Solar Garden Operator; x. The data privacy policies of Northern States Power Company and of the Community Solar Garden Operator; xi. The method of providing notice to Subscribers when the Community Solar Garden is out of service, including notice of estimated length and loss of production; xii. Assurance that all installations, upgrades and repairs will be under direct supervision of a NABCEP- certified solar professional and that maintenance will be performed accordin g to industry standards, including the recommendations of the manufacturers of solar panels and other operational components; xiii. Allocation of unsubscribed production; and xiv. A statement that the Community Solar Garden Operator is solely responsible for resolving any disputes with Northern States Power Company or the Subscriber about the accuracy of the Community Solar Garden production and that Northern States Power Company is solely responsible for resolving any disputes with the Subscriber about the applicable rate used to determine the amount of the Bill Credit.  Copy of the contract with Northern States Power Company for the Solar*Rewards Community Program  Copy of the solar panel warranty  Description of the compensation to be paid for any underperfo rmance  Proof of insurance  Proof of a long-term maintenance plan 87749850.2 0065073-00005  Current production projections and a description of the methodology used to develop production projections  Community Solar Garden Operator contact information for questions and complaints  Demonstration to the Subscriber by the Community Solar Garden Operator that it has sufficient funds to operate and maintain the Solar*Rewards Community Program The Community Solar Garden Operator is solely responsible for the accuracy of the Subscriber's shar e of the Community Solar Garden production information forwarded to the Company, and should resolve with the Subscriber any dispute regarding th e accuracy of such information. Subscribers can submit comments to the Company on the accuracy and completeness of its annual report by contacting solarrewardscommunity@xcelenergy.com. 4. Data Retention The Company will retain the Subscriber's Account Information, Subscriber's Energy Usage Data and information on Bill Credits for as long as required under applicable law.