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HomeMy WebLinkAboutCentral Valley Project Corporation (CVP Corp) 2011-03-16 �".�t�..- 1�,�`� c� 3 i� � I CENTRAL VALLEY PROJECT CORPORATION MEMBERSHIP AGREEMENT This Membership Agreement(this "Agreement") is made and entered into effective as of Ma h i 6 , 201 1 between the Central Valley Project Corporation, a California nonprofit corporation ("CVP Corp"), and each undersigned participant, collectively referred to as "Participants" and individually as a"Participant." The CVP Corp and any of tlle Participants individually are called"Party" and collectively are called "Parties." Whereas, the CVP Corp is formed for the benefit of, and to carry out the purposes of, the Participants by helping the Participants achieve cost savings and efficiencies; and Whereas, the CVP Corp can benefit the Participants by facilitating CVP customer involvement in activities associated with the Western Area Power Administration ("Western") and others; and Whereas, the CVP Corp was also formed to act as a funding agent for those CVP customers that voluntarily requested that service; and Whereas, the Participants through the CVP Corp will provide review, funding, and oversight for selected activities and projects on a case by case basis for those items requiring funding; and Whereas, the CVP Corp has entered into a contract with Western to act as payment agent for certain Participants; and Whereas, each undersigned Participant agrees to become a member and may choose which activities, services, and/or projects it would like to participate in as offered by the CVP Corp; and Whereas, each Participant is willing to fund a proportionate share of the funding commitment for each activity, service, and/or projects that the Participant has agreed to participate in as delineated in the applicable Exhibit. Now, therefore, in consideration of the terms, conditions and obligations of the CVP Corp and the Participants in this Agreement, the Parties agree as follows: a) Exhibits Made Part of AgreemenY. Each activity, service and/or project offered by the CVP Corp shall be delineated in an Exhibit, which shall become a part of this Agreement during the term fixed by its provisions. Exhibit(s) existing under this Agreement may change during the term hereof, provided, however, that each Exhibit attached hereto shall be in force and effect in accordance with its terms until respectively superseded by a subsequent exhibit, as allowed by the terms of the exhibit. DOCSSC 1:3246252 b) Funding Commitment: Each undersigned Participant hereby agrees to fund a pro-rata share of the total funding commitment for each activity, service or project in which the Participant agrees to participate as delineated in the applicable Exhibit. Each Participant further agrees to fund a pro-rata share of the CVP Corp's start-up and administrative costs as determined by the CVP Corp Board of Directors annually. A Participant may withdraw from funding the activity designated in an Exhibit in accordance with the withdrawal terms contained in the Exhibit but only after all of the obligations it has committed to fund to date have been satisfied. c) Deposit and Use of Funds: The Participant hereby appoints CVP Corp and CVP Corp hereby accepts appointment as payment agent for the Participant for purposes of accepting funds provided by the Participant to satisfy the funding commitments in each Exhibit(s) designated by the Participant and disbursing those funds as required by each Exhibit. Each Participant shall deposit its pro-rata share of the funding commitment with the CVP Corp, acting on behalf of and as an agent for all of the Participants, in payments as described in the Exhibit(s). The CVP Corp will deposit, hold and maintain an accounting for the funds received from the Participants and use such funds only for the purposes of satisfying the funding commitment of the Participant. In the event the Participants' funds are received prior to the time they are to be disbursed pursuant to the Exhibit, such funds shall be invested pursuant to investment policies established by the CVP Corp Board of Directors and net earnings from such investment shall be retained for the benefit of the Participant. If any funds remain after commitments for any period have been satisfied in full, the remaining funds shall be returned to the Participants in proportion to the amount contributed by each Participant. Participant acknowledges and agrees that CVP Corp may engage third parties for the financial management of all funds received and that such funds may be commingled with those of other Participants and third parties. d) Investment Earnings. The CVP Corp will invest funds paid to the CVP Corp by the Participants, and will track the interest and/or earnings applicable to each Participant; any net earnings will be credited to each Participant in proportion to the individual Participant's amount of funds retained and being managed by the CVP Corp. Periodic reports will be provided at least annually to each participant showing the total amount of payments made to the CVP Corp, including the amount of payments made by the CVP Corp on behalf of the Participant and the net earnings credited to the Participant. e) Obligation for Payment of Pro-Rata Share. Each Participant shall pay its funding commitment to the CVP Corp in payments as stated in the applicable Exhibits. The CVP Corp intends to request funds from the Participant at such times and in such amounts as necessary to meet the obligations contained in the Exhibit(s). If a Participant fails to make a payment within the time period DOCSSC I:324625.2 listed in the Exhibit the Participant will be considered to be in default as to that Exhibit. � Right of Set-off. If a Participant defaults as to its obligations under any Exhibit, the CVP Corp shall have the right to utilize any excess funds credited to that Participant under any other Exhibit(s), including the Participant's share of interest or earnings, in order to satisfy the Participant's outstanding obligations. g) Resolution of Disputes. The Parties will use good faith efforts to settle all disputes arising under, or in relation to, this Agreement. Should any dispute remain unresolved for a period of twenty (20) days, such dispute shall be forwarded to the Board of Directors for resolution. The Board of Directors shall meet within thirty (30) days to discuss and attempt to reach a resolution of the dispute. If a Participant fails to meet all of its obligations, it will be excluded from participating in the CVP Corp's activities, services and/or projects until its outstanding obligations are satisfied or otherwise resolved. The Participant's obligations under this Agreement shall remain until satisfied, unless otherwise modified by procedures to resolve any outstanding disputes, or settled by legal proceedings, with any and all accrued interest due as a result of late payments to the CVP Corp. No Participant shall be liable under this Agreement for the obligations of any other Participant. h) Budgets and Billing Procedures. Budgets and billing procedures will be delineated in the applicable Exhibit. i) Board of Directors. The Board of Directors will make decisions concerning the administration of the CVP Corp's rights and obligations under this agreement. j) Term of the Agreement; Termination. This Agreement shall become effective upon execution by the CVP Corp and upon the signature of a sufficient number of Participants as determined by the CVP Corp Board of Directors and, unless earlier terminated, shall remain in effect until December 31, 2024. This Agreement may be terminated by CVP Corp (i) if the CVP Corp Board of Directors determines that CVP Corp's activities, services and/or projects are not effective and efficient; provided, however, that such termination will not be effective until CVP Corp shall have received written notice from Western that all current obligations of the CVP Corp under the CVP Corp/Western Agreement have been completed and provided further that CVP Corp shall have provided a one hundred twenty (120) day written notice to all Participants prior to such termination or(ii) sixty (60) days following a default under of this Agreement or any Exhibit by the Participant which remains uncured for sixty (60) days provided that CVP Corp shall have provided a one hundred twenty (120) day written notice to such Participant prior to such termination. Any Participant may terminate its individual DOCSSC 1:3246252 participation in the Agreement by providing a one hundred twenty (120) day written notice to the CVP Corp; provided, however, that such termination by the Participant shall not be effective until all the Participant's outstanding obligations are met as delineated in the Exhibit(s). k) Miscellaneous Provisions. a) Limitation of Liability. In no event shall any party hereto be liable for any special, incidental, indirect ar consequential (including loss of profit) or punitive damages in connection with this agreement, whether based on breach of contract, breach of warranty, strict liability in tort or any other cause of action. b) Attorneys' Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. c) Entire Agreement. This Agreement, including the Exhibits hereto, constitutes the entire agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof. d) Assignment. Neither a Participant nor the CVP Corp may assign this Agreement without prior written consent of the Participant and the CVP Corp. e) Amendment; Waiver of Breach. Any term of this Agreement may be amended or waived only with the written consent of the Participant and the CVP Corp. No waiver of any term or breach of any of the provisions contained in this Agreement or any Exhibit shall be construed to be a waiver of any subsequent breach of the same or of any other provision of this Agreement. � Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws. g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. DOCSSCI 3246252 h) Successors and Assigns. Subject to the provision of the Agreement, all of the terms, covenants and conditions of this Agreement shall inure to the benefit of and shall bind the parties hereto and their permitted successors and assigns. i) Separate Entities. The CVP Corp and each Participant are separate entities, and nothing in this Agreement shall be construed to create or imply any partnership or joint venture among the entities or any of them, or to create any rights or liabilities of any entity hereto for rights or liabilities of any other entity hereto, except to the extent otherwise expressly provided herein or in any other agreement between the entities. j) Severability. If any clause, sentence,paragraph, or part of this Agreement should for any reason be finally adjudged by any court of competent jurisdiction to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remainder of the Agreement but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which the judgment is rendered. If such judgment modifies or holds invalid any material terms or conditions of the Agreement in such a manner that either the CVP Corp or any Participant(s) is required to incur new or different obligations not expressly provided herein or forego benefits which it was otherwise entitled to, these entities shall in good faith renegotiate the terms and conditions affected by the judgment so as to restore the original balance of benefits and burdens contemplated by the entities as of the effective date of this Agreement. Such renegotiated terms and conditions shall be in the form of an amendment to the Agreement that shall be effective upon execution by the CVP Corp or any Participant(s). The original Agreement shall remain in full force and effect, as modified by said judgment, until the negotiation process for the amendment is complete. DOCSSC I:32462�.2 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. CVP Corp ) / By� C l� James H:P e t Chair, Bo rd of Directors Participant By: �_—� Name: ._.)�MF� ��f�-m ��.��e-� Title: �'`�� �� � DOCSSC 1:32462�2 PARTICIPANT EXHIBIT C CONTRACT FOR DISPLACEMENT OF BASE RESOURCE 1. This Participant Exhibit C to be effective under, and as part of, the CVP Corporation Membership Agreement (Agreement), shall become effective on March i� , 20�, and shall remain in effect until either superseded by another Participant Exhibit C, terminated in accordance with Section 4 of this exhibit, or termination of Contract 09-SNR-01256 (Displacement Contract). 2. The purpose of the Displacement Program is to preserve the value and benefit of the First Preference Power (FPP) and Base Resource (BR) allocations, create efficiencies amongst Central Valley Project (CVP) customers, and minimize delivery costs among the Non-Direct Connect Customers (NDCC) and the Direct Connect Customers (DCC). The CVP Corporation (CVP Corp) has agreed to be the Displacement Program Administrator of a base resource displacement program as more fully described in the Displacement Contract between DCCs, NDCCs and the Western Area Power Administration (Western). This Participant Exhibit C will establish the obligation of NDCCs and DCCs to pay for the costs of the program incurred by CVP Corp in performing its administrative responsibilities. 3. EXPLANATORY RECITALS: 3.1 Consistent with Western's 2004 Power Marketing Plan, Western provides FPP to First Preference Customers under a full requirements contract and provides a percentage of the Base Resource (BR) to CVP customers under a BR contract. FPP and BR customers that are not directly connected to Western's transmission system shall be referred to as NDCCs. FPP and BR customers that are directly connected to Western's transmission system shall be referred to as DCCs. 3.2 The Federal Energy Regulatory Commission (FERC) conditionally approved the California lndependent System Operator's (CAISO) proposed Integrated Balancing Authority Area (IBAA) proposal on September 19, 2008. The CAISO implemented the IBAA proposal simultaneously with the start-up of its Market Redesign and Technology Upgrade (MRTU). 3.3 Under IBAA, imports from the Sacramento Municipal Utility District (SMUD)/Western and Turlock Irrigation District (TID) BAs into the CAISO BA are priced differently than exports from the CAISO BA into the SMUD/Western and TID BAs and therefore implementation of IBAA could result in adverse financial impacts to both the NDCCs and the DCCs. The NDCCs and DCCs believe that the CAISO's MRTU pricing proposal may expose them to increased financial exposure, unreasonable congestion and loss charges, and unpredictable pricing outcomes. The NDCCs and DCCs further believe the IBAA pricing proposal may have the effect of causing sales to the CAISO from the SMUD/Western and TID BAs to be uneconomic in certain circumstances to the ultimate detriment of the NDCC and DCC ratepayers. 3.4 The loads that the NDCCs are serving with power received under their FPP and BR contracts incur charges from the CAISO for imports from the SMUD/Western and TID BAs. 3.5 At times the DCCs export resources out of the CAISO BA into the SMUD/Western and TID BAs, resulting in DCCs incurring charges from the CAISO. 3.6 The NDCCs and the DCCs seek to create a Displacement Program under which the NDCCs FPP or BR can be scheduled to the DCCs in the SMUD/Western and TID BAs, and the DCCs in turn can schedule an equal amount of energy in quality, quantity, and timing to the NDCCs from resources scheduled from or through the CAISO BA. 3.7 In consideration of the CAISO's IBAA program, Western is offering the Displacement Program as a means to continue to fulfill the intent of the 2004 Power Marketing Plan. 3.8 Western is willing to facilitate a Displacement Program of FPP and BR with the NDCCs and the DCCs. 3.9 Although the Western Displacement Contract documents the terms and conditions for a Displacement Program for FPP and BR, it does not preclude the future inclusion of Project Use Energy (PUE) under the Displacement Program when Western and the Bureau of Reclamation have deemed it appropriate for PUE to be included. The terms and conditions for the inclusion of PUE would be determined at that time. 3.10 The Displacement Program principles, scheduling and settlement processes to be used in the Displacement Program are delineated in the Displacement Contract. 3.11 This exhibit establishes the repayment mechanisms necessary to pay for the services required to enable the Displacement Program. The CVP Corp will have a contract with the Displacement Scheduling Aggregator who will be responsible for scheduling the displaced BR energy between DCCs and NDCCs on an hourly basis, calculating the savings statements, and preparing corresponding financial reports which will be used as input for invoicing. Another CVP Corp contract will be with a Scheduling Coordinator which will schedule the trades between the DCCs and NDCCs to the CAISO. A third contract for a Billing Agent is required to collect and make payments to and from the participants as calculated by the Displacement Scheduling Aggregator and collect fees from the participants to pay for the service contracts required to enable the displacement transactions. The fees collected under this Exhibit C will be used to pay for these and other services as required to implement the Displacement Program. 4. EFFECTIVE DATE AND TERM OF CONTRACT: 4.1 This Exhibit C shall become effective on the first day Western designates the Displacement Program to be effective and shall remain in effect until midnight of December 31, 2024, subject to prior termination as otherwise provided for herein. 4.2 Western's consent is required before any BR, FPP, or PUE customer can participate in the Displacement Program. 4.3 At any time during the term of this Exhibit C, any participant may terminate its participation under this Exhibit C for any reason upon twenty eight (28) calendar days advance written notice to the CVP Corp and Western that it intends to terminate its participation in the Displacement Program. Such termination shall be effective no earlier than the first day of the calendar month that falls at least 28 calendar days after such notification is provided. After a DCC or NDCC has terminated its participation in the Displacement Program, Western will modify Exhibit A of Contract 09-SNR-01256 as appropriate to remove such NDCC or DCC. 4.4 The term of this Participant Exhibit C shall be coincident with the term of Contract 09-SNR-01256. This Exhibit C will remain in effect as long as there is at least one NDCC and one DCC, unless terminated earlier by Western in accordance with the Displacement Contract. 4.5 All obligations incurred hereunder by any individual DCC or NDCC shall be preserved until satisfied. If the Displacement Scheduling Aggregator has made a commitment for information technology or other services beyond the date when the Displacement Program is terminated, the DCCs and NDCCs will be responsible for those costs in accordance with the CVP Corp/Displacement Scheduling Aggregator contract. Similarly, any CAISO costs incurred by the Scheduling Coordinator and billed after the termination date along with the associated costs incurred by the Billing Agent to finalize the payment of costs will be the responsibility of the DCCs and NDCCs. 5. DEFINITION OF TERMS: Unless defined in Section 5 of this Exhibit C or defined elsewhere in this exhibit, all terms used in this exhibit with initial capitalization shall have the same meaning as those contained in the Master Definitions Supplement of the CAISO Tariff. In addition, as used herein, the following terms whether singular or plural, or used with or without initial capitalization, shall have the following meanings: 5.1 "Administrative Base Fee" means the fee collected by CVP Corp from the DCCs and NDCCs for covering ongoing administrative costs of the Displacement Program. 5.2 "Administrative Startup Fee Premium" means the fee collected by CVP Corp for covering the startup costs of the Displacement Program 5.3 "Base Resource" means CVP and Washoe Project power output, as determined by Western to be available for marketing, after (1) meeting the requirements of Project Use and First Preference Customers, and (2) any other adjustments required for maintenance, regulation, reserves, transformation losses, and ancillary services. For the purpose of this exhibit BR shall also include energy from the Hourly Exchange Program. 5.4 "Billing Agent" means the entity required to collect and make payments to and from the participants as calculated by the Displacement Scheduling Aggregator and collect fees from the participants to make payments for the service contracts required to enable the displacement transactions. 5.5 "CAISO" means the California lndependent System Operator Corporation or its successor. 5.6 "Displacement Account" means the CVP Corp account that is used to deposit and withdraw money to settle the transactions of the Displacement Program. 5.7 "Displacement Contract" means the agreement between Western and NDCCs and DCCs executed to establish the Displacement Program. 5.8 "Displacement Energy" means energy transactions under the Displacement Contract. 5.9 "Displacement Program" means the program developed by Western, the NDCCs and DCCs and documented in the Displacement Contract to provide for the displacement of BR, FPP and PUE. 5.10 "Displacement Scheduling Aggregator" means the entity that has contracted with the Displacement Program Administrator to perform the duties related to determining allocation of costs and benefits among the DCCs and NDCCs to the Displacement Program. 5.11 "First Preference Customer" means a customer or preference-qualified entity located within Trinity, Calaveras, or Tuolumne Counties, California, as specified under the Trinity River Division Act (69 Stat. 719) and the New Melones provisions of the Flood Control Act of 1962 (76 Stat. 1173, 1191-1192). 5.12 "First Preference Power" means capacity and energy available under a First Preference Customer entitlement, which is the sum of 1) CVP generation, including energy exchanges with other entities; and 2) purchases made to meet the combined Project Use and First Preference Customer loads. 5.13 "Hourly Exchange Program" means the program in which all BR energy in excess of a CVP customer's load is retained by Western and offered by Western for sale to other CVP customers. 5.14 "Marketing Plan" means Western's 2004 Power Marketing Plan for the Sierra Nevada Region. 5.15 "Prefunding Entity" means any entity or Participant that pre-funds the startup costs of the Displacement Program 5.16 "Project Use Energy" means the power used to operate CVP and Washoe Project facilities in accordance with authorized purposes and pursuant to Reclamation Law. 5.1.7 "Scheduling Coordinator" means the entity that will schedule the trades between the DCCs and NDCCs to the CAISO. 6. PAYMENT OBLIGATIONS: 6.1 NDCCs and DCCs agree that they will be responsible for all costs allocated to them under the Displacement Program. 6.1.1 Under the terms of this Exhibit, the NDCCs and DCCs will reimburse the CVP Corp for all costs of administrating the Displacement Program. 6.1.2 The CVP Corp will be responsible for determining and settling the collection and payment of Displacement Program savings between the DCCs and the NDCCs. The settlements and shared savings methodology procedures are documented in Exhibit B of the Displacement Contract as may be modified in accordance with the procedures in that contract. 6.1.3 The CVP Corp will be responsible for determining the value of failed Inter-SC trades and billing or paying the DCC or NDCC for the failed trade. 6.1.4 The monthly CAISO invoice for costs incurred as a result of each DCC's and NDCC's participation in the Displacement Program will be passed through from the Scheduling Coordinator to CVP Corp and the CVP Corp will pay the monthly invoice to the CAISO. As part of the Displacement Scheduling Aggregator's monthly duties under the Displacement Program, the Displacement Scheduling Aggregator will identify each DCC's and NDCC's share of the monthly CAISO costs and will provide that breakdown to the CVP Corp. The CVP Corp's Billing Agent will include these CAISO charges on each DCC's and NDCC's monthly invoice for payment by each DCC and NDCC. 6.2 The CVP Corp has established and will maintain an account called the Displacement Account which will be utilized to collect receipts and make payments for the sharing of savings between DCCs and NDCCs, to make payments for certain costs incurred to administer the program, and to earn interest on the account balances. 6.3 The CVP Corp administrative costs will be recovered from DCCs and NDCCs by an Administrative Base Fee assessed on each MWh of Displacement Energy transacted by each DCC and each NDCC. Administrative costs include, but are not limited to, the costs associated with the contract for the Displacement Scheduling Aggregator, Displacement Program Scheduling Coordinator, and the Displacement Program Billing Agent. 6.3.1 The Administrative Base Fee will be determined by CVP Corp based upon the timing and size of expected payments for administrative costs and a projection of expected collection of Administrative Base Fees from DCCs and NDCCs. 6.3.2 The Administrative Base Fee, as it may be changed from time to time, is set forth in Attachment B. The CVP Corp will coordinate the development of any revised Administrative Base Fee with the DCCs and NDCCs. 6.4 The CVP Corp will receive end-of-month reporting on all displacement transactions from the Displacement Scheduling Aggregator and based on that reporting, the CVP Corp will either bill or pay each DCC and NDCC as appropriate to ensure that the DCCs and NDCCs share the savings of the previous month's displacement transactions. 6.5 The bills will be sent in electronic format to the DCC or NDCC and will be due by the date specified on the bill, which will normally be 15 days. DCCs and NDCCs shall make payment to the CVP Corp's Billing Agent. If a payment is late, it will accrue an interest penafty of one percent per month. Bills will be issued based on the CAISO's preliminary billing statements and trued-up when the CAISO issues the final bill. 6.6 The revenue collected from DCCs and NDCCs who owe for displacement savings will be sent to DCCs and NDCCs that are to receive the displacement savings as soon as possible after the revenue has been collected. 6.7 The CVP Corp is acting solely as an agent for all parties to the Displacement Program to distribute payments related to the Displacement Program savings, and to collect administrative costs. Should a DCC or NDCC not make a timely payment to the CVP Corp associated with their payment obligations under the Displacement Program, the CVP Corp will withhold payments owed to the other DCGs or NDCCs pro rata based upon the amounts owed. 6.8 Startup costs for the administration related to the Displacement Program will be prefunded by Prefunding Entities at the levels shown in Attachment A. The CVP Corp will send a bill to the Prefunding Entity when the funds are needed. The Prefunding Entity contributions will be paid back to the Prefunding Entities through collection of an Administrative Startup Fee Premium on each MWh of Displacement Energy transacted by each DCC and each NDCC. The premium amount is set forth in Attachment B. 6.8.1 Once CVP Corp has collected sufficient funds through the Administrative Startup Fee Premium to pay back the Prefunding Entity contributions without interest, the Administrative Startup Fee Premium will be terminated. For the sake of ease of administration, the Administrative Startup Fee will be kept in place for whole calendar months. 6.8.2 Once the Administrative Startup Fee Premium has been terminated, the CVP Corp will begin rebating the Administrative Startup Fee Premium to those Prefunding Entities who paid the Administrative Startup Fee Premium as soon as sufficient fees have been collected. The rebate will be at a rate equal to one half of the Administrative Startup Fee Premium, and will be credited to ongoing transactions of those Prefunding Entities having paid the Administrative Startup Fee Premium, until each such Prefunding Entity has had their total Administrative Startup Fee Premium contributions returned, without interest. 6.9 Western requires a 90 day advance fund for CAISO costs associated with the Displacement Program scheduling coordinator services in case of a payment default by the CVP Corp. This has been estimated to be $3,400 per DCC and NDCC. The CVP Corp will bill each DCC and NDCC $3,400 upon signature of this exhibit, which will be payable within 10 days of signature. The CVP Corp will then provide these dollars to Western to be put into Western's non-interest bearing trust account. Once Western has received the scheduling coordinator reserve funds, the DCC or NDCC can utilize the Displacement Program. Western will not require Federal entities, whether DCCs or NDCCs, to advance fund monies. In addition, for those non-Federal DCC's and NDCC's that Western will be executing the Displacement Program contracts on behalf of, which are identified in Exhibit A to the Displacement Contract, since Western already has advance funding established on behalf of these customers, they will not be required to advance an additional $3,400 required under this section. The City of Redding and the Eastside Power Authority also have existing trust accounts established with Western and will not be required to advance an additional $3,400 required under this section. If Western revises the 90 day advance amount based on actual charges incurred with the CAISO, the CVP Corp will pass that adjustment on to the DCC or NDCC. 6.10 Western will return the DCCs and NDCCs advance fund amount to the CVP Corp and the CVP Corp will return it to the DCC or NDCC when they terminate their participation in the Displacement Program, unless the DCC or NDCC is in default. If the DCC or NDCC is in default the CVP Corp can use the advance fund to help cure the default. 6.11 If a DCC or NDCC wants data from the Displacement Aggregator that is not needed by the other DCCs or NDCCs, the DCC or NDCC may contract directly with the Displacement Aggregator for the additional service. The cost will be the responsibility of that DCC or NDCC. 6.12 If a DCC or NDCC causes Displacement Program costs to the CVP Corp from actions that are the sole responsibility of that entity, those costs will be allocated directly to that entity. 6.13 The CVP Corp may utilize a portion of the interest that accrues in the Displacement Account to pay for its costs. If the CVP Corp administrative and overhead expenses are greater than the accrued interest earnings, the CVP Corp may authorize the collection of monthly or annual fees to be paid by the DCCs and NDCCs. Any interest remaining after CVP Corp expenses have been paid is available for payment of the Displacement Program administrative costs. 6.14 It is recognized that the CVP Corp will have full use of the funds in the Displacement Account; however, such use of funds will be limited to the implementation of the Displacement Program. Funds in the Displacement Account will only be invested in US Treasury or US Agency securities or money market funds that invest only in such securities. 6.15 If a DCC or NDCC withdraws from the Displacement Program, it will not be entitled to any refund from revenue that may exist in the Displacement Account as a result of the fees assessed per MWh to pay the costs of the Displacement Program. If the Displacement Program is terminated, any remaining funds after payment of all obligations of the Displacement Program will be distributed to the NDCCs and DCCs by the CVP Corp based upon the percentage of Displacement Energy (MWh) transactions of each DCC and NDCC over the 12 months immediately preceding the Displacement Program termination. 6.16 The CVP Corp will provide the DCCs and NDCCs a monthly report developed by the Displacement Scheduling Aggregator regarding the transactions that occurred. If there is a discrepancy between the Displacement Scheduling Aggregator report and that of the DCC or NDCC, the parties will meet to reconcile the numbers. 6.17 Any DCC or NDCC may audit the accounting of the Displacement Program at the participant's own expense. 6.18 Western may be required to provide legal representation and/or pay for any costs (including judgments) related to legal or regulatory proceedings related to the Displacement Program. The DCCs and NDCCs participating in the Displacement Program during the time frame associated with any legal or regulatory proceeding agree that they will pay Western its legal fees and costs (including any judgment against Western) in accordance with the terms and conditions set forth in the Displacement Contract. CVP Corp shall have no obligation to collect these fees from DCCs and NDCCs, nor shall CVP Corp have any responsibility to pay these fees to Western. However, as it relates to legal representation and fees associated with Western's perFormance as the CVP Corp's Scheduling Coordinator under Section 7 in Exhibit C to Contract 03-SNR- 00583, CVP Corp is responsible for these costs. The CVP Corp will bill each DCC and NDCC under this Exhibit C to the CVP Corporation Membership Agreement, and each DCC and NDCC will be responsible for their appropriate share of these costs under this Exhibit C. 7.0 DEFAULT AND SUSPENSION PROVISIONS: 7.1 The failure of a DCC or NDCC to perform any of its payment obligations under this Exhibit C shall constitute a default. If CVP Corp determines the DCC or NDCC to be in default, the CVP Corp shall notify the DCC or NDCC in writing. If the DCC or NDCC has not cured such default within seven (7) calendar days, the CVP Corp may suspend service under this Exhibit C. 7.2 If the DCC or NDCC has not cured a default within thirty (30) calendar days (from the date of default), the CVP Corp shall have the right to terminate this Exhibit C with the DCC or NDCC and assess damages to the DCC or NDCC. 7.3 Should a DCC or NDCC fail to place the required Inter-SC trades associated with its participation in Displacement Program transactions, CVP Corp may suspend the DCC or NDCC from Displacement Program transactions on a temporary basis, until such DCC or NDCC can demonstrate that it can resume Displacement Program transactions and be successful in entering the required Inter-SC trades. 7.4 Notwithstanding any suspension that CVP Corp may impose on any DCC or NDCC in accordance with Section 7.3, for any DCC or NDCC failure to place the proper Inter-SC trade(s) which results in a financial obligation to CVP Corp due to the failed Inter-SC trade(s), such DCC or NDCC shall pay CVP Corp the settlement amount for the failed Inter-SC trade(s) in advance of the regular Displacement Program billing cycle and within ten (10) calendar days of receiving notice from CVP Corp for the settlement amount owning. The responsibility for any costs incurred as a result of a DCC's or NDCC's scheduling coordinator failure to submit the necessary information will be the financial responsibility of that DCC or NDCC. Should such DCC or NDCC not make payment for such settlement amount owing related to the failed Inter-SC trades within the specified time, CVP Corp may suspend further Displacement Program transactions for such DCC or NDCC until such DCC or NDCC has paid CVP Corp for the obligations associated with such failed Inter-SC trade(s). 7.5 As Displacement Program Administrator, CVP Corp is acting solely as an agent for all DCCs and NDCCs to the Displacement Program and by signature herein, each DCC or NDCC waives any claim, right and cause of action against CVP Corp for the default of contractors providing services to the CVP Corp on behalf of each individual DCC or NDCC. PARTICIPANT � By: �-� Title: � �� Address: . �4-P � ���,,,�.�,n.�,�--, C�-e-- ��� C�' �/����- CENTRAL VALLEY P$20JECT CORPORATION , By: ,:� �� �- Title: Chairman Address: 651 Commerce Drive Roseville, Ca 95678 ATTACHMENT A (Prefunding Entities and Estimated Contributions) Entity Amount CVP Corp $65,000 SMUD $25,000 NCPA $25,000 Attachment B (CVP Corp Displacement Program Service Fee) Administrative Administrative Date Effective Base Fee Startup Fee Premium July 1, 2010 $0.95/MWh $0.00/MWh