Florida Public Service Commission native order document 02740-2023

12 printed pages contain little extracted OCR body text; searchable legal-body completeness has not been established for those pages.

OCR transcription for search; preserved printed pages are authoritative

FILED 4/18/2023 DOCUMENT NO. 02740-2023 FPSC - COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Petition for approval of purchased power agreement between Tampa Electric Company and Pasco County.
= DOCKET NO. 20220186-EI ORDER NO. PSC-2023-0132-PAA-EI ISSUED: April 18, 2023
The following Commissioners participated in the disposition of this matter:
ANDREW GILES FAY, Chairman ART GRAHAM GARY F. CLARK MIKE LA ROSA GABRIELLA PASSIDOMO
NOTICE OF PROPOSED AGENCY ACTION ORDER APPROVING PURCHASED POWER AGREEMENT
BY THE COMMISSION:
NOTICE is hereby given by the Florida Public Service Commission that the action discussed herein is preliminary in nature and will become final unless a person whose interests are substantially affected files a petition for a formal proceeding, pursuant to Rule 25-22.029, Florida Administrative Code (F.A.C.).
Background
On November 4, 2022, Tampa Electric Company (TECO or Company) filed a petition requesting approval of a negotiated purchased power agreement (PPA) for the purchase of firm capacity and energy with Pasco County, Florida (Pasco). A copy of the PPA is attached (Attachment A). The PPA is based on Pasco's Waste-to-Energy Facility (WTE Facility) located in Spring Hill, Florida, which is an existing 31 megawatt (MW) Qualifying Facility (QF). The WTE Facility is located in the territory of Duke Energy Florida, LLC (DEF), and would require access to DEF's transmission capacity to deliver the electricity to TECO. Pasco is proposing to initially sell 21 MW, with the option to sell 25 MW, of firm capacity and energy to TECO for a ten-year period from January 1, 2025, through December 31, 2034.
We have jurisdiction over this matter pursuant to Sections 366.051, 366.81, and 366.91, Florida Statutes (F.S.).
Decision
Pasco proposes to sell 21 MW from its WTE facility (with an option to increase up to 25 MW when planned facility upgrades are completed) of firm capacity and energy at a 92 percent monthly availability to TECO for a term from January 1, 2025, through December 31, 2034. The date of planned facility upgrades are not known at this time. The facility will use municipal solid

ORDER NO. PSC-2023-0132-PAA-EI
DOCKET NO. 20220186-EI
PAGE 2
waste as its primary fuel, a source of renewable energy pursuant to Section 366.91(2)(e), F.S.
The price structure in the contract has no capacity payment, but an “all-in” confidential dollars
per megawatt-hour (MWh) energy rate payment. The initial rate is fixed for the first 5 years and
steps up to a higher energy price in years 6-10.
The contract has two notable features relating to transmission and renewable energy
credits (RECs). Regarding transmission, as the Pasco WTE Facility is interconnected and located
within DEF’s service territory, it will require use of a portion of DEF’s transmission capacity to
deliver energy to a delivery point with TECO. Traditionally, a QF such as Pasco would request
this service and pay DEF for the transmission service pursuant to Rule 25-17.0889, F.A.C.
However, Section 5 of the PPA makes TECO responsible for requesting and securing the
required transmission service from DEF and for paying all costs including potential transmission
studies, system upgrades if needed, and transmission capacity fees based on DEF’s Open Access
Transmission Tariff (OATT). TECO’s monthly payments to Pasco would be reduced by the
amount of the transmission expenses incurred below the negotiated cost cap. In essence, such
treatment would assign the cost of transmission service to Pasco, consistent with Rule 25-
17.0889, F.A.C. However, any transmission expenses above the cost cap, including transmission
studies and system upgrades, would be paid by TECO and potentially recovered through the Fuel
and Purchased Power Cost Recovery Clause (Fuel Clause).
The other notable feature relates to RECs. RECs are tradeable renewable energy credits,
which can be certified to represent the production of energy from a renewable power source
typically in increments of 1 MWh. An entity can purchase a REC in order to retire it to either
meet a regulatory requirement (such as a state or federal renewable portfolio standard) or to
otherwise claim the environmental aspects of the energy produced. TECO will receive the RECs
associated with the energy purchased through the contract at no cost, with some caveats. These
caveats include two main components: (1) if federal or state legislation establish a value for
RECs, TECO would be required to pay the larger of these two values to Pasco; and (2) if Pasco
is able to find a third party buyer, TECO would be required to sell them to the third party and
provide the proceeds to Pasco or purchase the RECs themselves, in a de facto right of first
refusal arrangement. In the latter scenario, REC payments would also be applied to the
transmission cost cap, potentially reducing amounts paid by TECO.
Rule 25-17.0832(3), F.A.C., states that in reviewing negotiated firm capacity and energy
contracts for the purpose of cost recovery, we shall consider factors relating to the contract that
would impact the utility's customers, including: need for power by purchasing utility and/or
Florida utilities statewide, the cost-effectiveness of the contract, security provisions for early
payments, and performance guarantees associated with the facility. These factors are evaluated
below.
Need for Power
Based on TECO’s 2022 Ten-Year Site Plan (TYSP), the next planned capacity addition
that could be avoided is a natural gas-fired reciprocating engine, rated at 18.7 MW with an in-
service date of January 1, 2028. Therefore, the PPA’s firm capacity of 21 MW could defer the
construction of the future generation unit for the duration of the PPA. As TECO is projected to

ORDER NO. PSC-2023-0132-PAA-EI
DOCKET NO. 20220186-EI
PAGE 3
rely upon natural gas for up to 85 percent of its energy during the contract period, according to
its 2022 TYSP, the PPA would improve the Company’s fuel diversity by increasing the
contribution of renewable resources. Therefore, we find that the proposed negotiated contract
will enhance TECO's system reliability and increase TECO’s fuel diversity.
Cost-Effectiveness
Rule 	25-17.0832(3)(b), 	F.A.C., 	states 	in 	part 	that 	we 	shall 	consider 	whether 	the
cumulative present worth of payments to a QF are no greater than the cumulative present worth
of the purchasing utility's avoided cost of capacity and energy. In its petition, TECO stated that
the estimated benefits of the PPA ranged from $4.3 million to $11.4 million on a net present
value (NPV) basis. The reason for the savings are primarily reduced fuel, with other avoided
costs including deferred generation capital, fixed O&M, and deferred natural gas transport. The
break-even point for the cost-effectiveness of the PPA occurs in the first year of the contract for
both the low and high savings range. The range is dependent upon when or if the facility
upgrades from 21 MW to 25 MW, and the analysis includes the impact of system benefits from
the avoided capacity and fuel, versus the costs of the PPA energy payments and DEF
transmission costs. In response to Staff’s First Data Request, TECO stated that the cost-
effectiveness was based on the Company’s 2021 TYSP, not the 2022 TYSP which was filed
April 1, 2022, well before the filing of TECO’s petition. As a result, our staff requested a revised
analysis using the Company’s 2022 TYSP and the most recent available fuel forecasts.1 In
response to Staff’s Data Request, TECO provided that the cost-effectiveness now ranged from
$1.2 million to $9.0 million on a NPV basis. The reason for the savings for this range is the same
as the previous range. The break-even point occurs in the first year for the 21 MW scenario and
the third year for the 25 MW scenario. Table 1 summarizes the cost-effectiveness scenarios we
reviewed for the PPA.
Table 0
PPA Savings Scenarios
Scenario Savings ($million)
High (21 MW) 	Low (25 MW)
Petition: 2021 TYSP and Fuel Forecast 	$11.4 	$4.3
Revised: 2022 TYSP and 01/23 Fuel Forecast 	$9.0 	$1.2
Source: TECO’s Response to Staff’s First Data Request.2
Economic Risks
Because the PPA includes fixed energy rate payments, the rates are not allowed to float
with changes to TECO’s system fuel costs. This allocates all the risk of fuel price fluctuations
from the Pasco WTE Facility to TECO’s ratepayers. For example, if fuel costs do not escalate as
quickly as projected in the cost-effectiveness analyses, it may result in a loss to customers.
Conversely, if fuel costs escalate faster, customers would see an increased benefit. Regardless,
TECO would remain obligated to pay the contracted rate and may seek to recover the costs from
the ratepayers through the Fuel Clause, subject to our review.
1 TECO’s revised analysis uses the same fuel forecast from the Company’s midcourse correction filed on January
23, 2023.
2 Document No. 00828-2023, filed on February 2, 2023 in Docket No. 20220186-EI.

ORDER NO. PSC-2023-0132-PAA-EI
DOCKET NO. 20220186-EI
PAGE 4
In a previous docket, we have expressed concerns regarding fixed price contracts.3 In
Docket No. 20110090-EQ, we noted in our approval of a Progress Energy Florida, Inc. (PEF)
PPA that also featured fixed energy rates for the duration of the contract, that:
While the company does not make a return on purchased power, it is responsible
for protecting the ratepayers during negotiations with renewable power providers
and should include terms and conditions that minimize risk to the company’s
general body of ratepayers. By using fixed prices for all components of the
contract, risks associated with fuel price fluctuations are shifted to the ratepayers,
and 	away 	from 	the 	renewable 	generator. 	PEF 	should 	strive 	in 	its 	future
negotiations to be diligent in protecting its ratepayers from undue or excessive
risk. Notwithstanding the benefits of a negotiated purchase power agreement, in
negotiating future contracts and to protect the ratepayers, utilities and companies
should strive to adhere to Rule 25-17.250, F.A.C., in that only a portion of the
base 	energy 	costs 	associated 	with 	the 	avoided 	unit 	shall 	be 	fixed, 	and
prospectively, utilities should strive not to established a “100 percent fixed” or a
majority fixed base energy cost.
An example of this risk posed to ratepayers is highlighted in the revised analysis
requested by our staff, with TECO noting a decrease in its fuel projections as part of its
midcourse correction. Changes in forecasts, including fuel savings and other factors such as
transmission rates and deferred capacity, reduced the NPV benefit as shown in Table 1.
The proposed PPA also exposes ratepayers to a new form of risk associated with
transmission costs. The typical PPA assumes all transmission costs are carried by the QF. For
example, in TECO’s Standard Offer Contract, the QF is solely responsible for all cost to provide
transmission to the point of interconnection with TECO. 4 As discussed above, the PPA assigns
the cost of securing transmission service to TECO. The costs are then passed along to Pasco up
to the negotiated cost cap. Based on the analysis provided by TECO, transmission costs above
the cost cap are projected to be incurred by TECO no earlier than in year 4 of the 10-year
contract, with transmission costs higher if Pasco is able to deliver at a higher output (up to 25
MW pursuant to the PPA). TECO describes the transmission cost risk as having decreased
between filing its petition and the revised analysis requested by staff, as DEF’s transmission cost
forecast was lower than used in the petition’s analysis. However, the transmission cost above the
negotiated cost cap remains a risk to ratepayers.
While the contract is projected to be cost-effective based on the assumed transmission
cost risks in TECO’s analysis, if the PPA is approved this cost could be passed on to the
ratepayers since the costs are incurred by TECO as part of the PPA. In response to Staff’s
Second Data Request, Questions Nos. 7 through 9, TECO stated that it would not seek recovery
3 See Order No. PSC-11-0439-PAA-EQ, issued October 11, 2011, in Docket No. 20110090-EQ, In re: Petition for
Approving Negotiated Power Purchase Agreement between Progress Energy Florida, Inc. and U.S. Ecogen Polk,
LLC.
4 See Order No. PSC-2022-0247-PAA-EQ, issued June 9, 2022, in Docket No. 20220070-EQ, In re: Petition for
Approval of revisions to standard offer contract and rate schedule COG-2, by Tampa Electric Company.

ORDER NO. PSC-2023-0132-PAA-EI
DOCKET NO. 20220186-EI
PAGE 5
for costs for transmission studies, upgrades and associated administrative costs with arranging
transmission services.5 This still leaves ratepayers potentially liable for any transmission costs
associated with DEF’s OATT above the cost cap. To be consistent with Rule 25-17.0889,
F.A.C., and to prevent adding any transmission risks to ratepayers, we find that all costs
associated with transmission services above the cost cap shall not be eligible for cost recovery.
Renewable Energy Credits
Based on the proposed PPA, TECO will receive RECs when purchasing power through
the contract at no cost to TECO, except under certain circumstances. If a monetary value is
established by a state or federal government entity, the higher of the established governmental
monetary values will be used as a basis of payment to Pasco. If no governmental monetary value
is established, then Pasco has the option to market the RECs to a third party buyer. However, if
Pasco is successful in finding a third party buyer, TECO has a de facto right of first refusal.
Under this scenario, TECO would either pay the market price or sell the RECs to a third party
buyer, and turn the proceeds over to Pasco. At this time, there is no federal or state legislation
requiring the purchase of RECs. Our approval of the PPA shall not be considered as approval of
any future REC purchases pursuant to the PPA. TECO shall be required to demonstrate the need
for their purchase if it seeks cost recovery in the future.
Security and Performance Guarantees
Security in this contract includes provisions to ensure repayment of firm capacity and
energy payments in the event that the qualifying facility fails to deliver firm capacity and energy
pursuant to the terms and conditions of the contract. Rule 25-17.0832(3)(c), F.A.C., requires us
to consider if such security is adequate for the contract. The QF is an existing facility which
eliminates 	the 	risk 	of 	early 	“all-in” 	energy 	(which 	includes 	capacity) 	payments 	due 	to
construction delays. However, the contract begins in year 2025 and the avoided unit is scheduled
for 2028 implementation. If the QF defaults during this time period, the contract includes a
termination payment table for determining compensation to TECO.
Performance guarantees, as included in this contract, detail how a QF is to operate and
require financial penalties or other remedies should it fail to do so within the contract's terms and
conditions. Rule 25-17.0832(3)(d), F.A.C., requires us to consider whether the utility's ratepayers
will be protected by the contract's terms. We have reviewed the performance guarantees
contained in the negotiated contract and find that they are adequate. These protections include a
lower energy rate payment if Pasco WTE facility does not provide a monthly energy availability
of at least 92 percent at TECO-DEF service territory boundary. Also, if the Pasco WTE Facility
has an availability less than 70 percent for any 6-months in a calendar year during the contract,
this failure will be considered a default which means TECO can recover costs of obtaining
replacement power from Pasco.
5 Document No. 01713-2023, filed on March 2, 2023 in Docket No. 20220186-EI.

ORDER NO.PSC -2023-0132-PAA- El
DOCKET NO. 20220186-EI
PAG E6
Conclusion
Ba se d on TECO 's most rece nt planning assumptions, th e fi xed-price purchased power
agr ee me nt is projec ted to provide TECO's customers N PV bene fit s th at range fr om $ 1.2 to $9 .0
million over a ten-year 	period. 	Howe ve r, 	in 	order 	to 	minimize ri sks 	to 	ratepayers, 	a ll
transmission costs above the nego ti a ted cost ca p co nt a in ed in the agreement are not appro ve d fo r
cost recovery. Add iti onally, 	future costs assoc ia ted w ith 	RECs are not approved 	for cost
recovery at thi s time a nd are su bject to o ur rev iew if requested.
Based on the forego in g, it is
ORDERED by th e Flo rid a Publ ic Serv ice Co mmi ssion that the fi xed energy priced
agreement between Tam pa Elec tri c Co mp any an d Pasco Count y, a ttached hereto as Atta c hm e nt
A, is hereby approved. However, in o rd er to minimize ri sks to ra tepayers, a ll trans mi ss ion costs
above the ne gotiated trans mi ss ion cost cap co nt a in ed in th e agree ment a re not approved for cost
recovery a nd future costs associated with ren ewa bl e energy credi ts are not approved fo r cost
recovery at this tim e, subject to o ur rev iew if requeste d. It is further
ORDER.ED th at the provisions of this Order, iss ued as proposed agency action, sha ll
become final and effec ti ve up on th e issua nc e of a Cons umm at in g Order unl ess an appro pri ate
petition, in the for m p rov ided by Rul e 28 -1 06.20 I, Flo rid a Adm ini strative Cod e, is received by
the Co mm ission Clerk, 2540 Shumard Oak Bo ul eva rd , Ta ll ahassee, Flo rid a 32399-0850, by the
close of bus ine ss on the date set fo rth in th e ''Notice of Further Proceedings" a tt ach ed hereto. It
is further
MRT
ORDERED that in th e eve nt thi s Order becomes fin al, this docket sha ll be closed.
By ORDER of the Florida Pub li c Service Com mi ss ion this 18t h day of April, 2023.
Co mm iss io
Flor id a Public Service Co mmi ssion
2540 S hum ard Oak Bo ul eva rd
Tal lahassee, Florida 32399
(850) 4 13-6770
www. fl o rid apsc.com
Copies furni shed: 	A copy of thi s doc um e nt is
prov id ed to the parti es of reco rd at th e ti me of
iss uan ce a nd , if appli cable, interested pe rso ns.

ORDER NO. PSC-2023-0132-PAA-EI
DOCKET NO. 20220186-EI
PAGE 7
NOTICE OF FURTHER PROCEEDINGS OR JUDICIAL REVIEW
The Florida Public Service Commission is required by Section 120.569(1), Florida
Statutes, to notify parties of any administrative hearing that is available under Section 120.57,
Florida Statutes, as well as the procedures and time limits that apply. This notice should not be
construed to mean all requests for an administrative hearing will be granted or result in the relief
sought.
Mediation may be available on a case-by-case basis. If mediation is conducted, it does
not affect a substantially interested person's right to a hearing.
The action proposed herein is preliminary in nature. Any person whose substantial
interests are affected by the action proposed by this order may file a petition for a formal
proceeding, in the form provided by Rule 28-106.201, Florida Administrative Code. This petition
must 	be 	received 	by 	the 	Office 	of 	Commission 	Clerk, 	2540 	Shumard 	Oak 	Boulevard,
Tallahassee, Florida 32399-0850, by the close of business on May 9, 2023.
In the absence of such a petition, this order shall become final and effective upon the
issuance of a Consummating Order.
Any objection or protest filed in this/these docket(s) before the issuance date of this order
is considered abandoned unless it satisfies the foregoing conditions and is renewed within the
specified protest period.

Attachment A Page 1 of 41
ORDER NO. PSC-2023-0132-PAA-EI DOCKET NO. 20220186-EI
PAGE 8
Execution Version
CONTRACT FOR THE PURCHASE OF CONTRACTED CAPACITY AND ASSOCIATED ENERGY
This Contract for the Purchase of Contracted Capacity and Associated Energy from a small Qualifying Facility ("Contract") is made and entered into this day of
2022, by and between Pasco County, a political subdivision of the state of Florida and the owner and/or operator of a Facility, as defined below, by and through its Board of County Commissioners, hereinafter referred to as the "Capacity and Energy Provider" or "CEP" and Tampa Electric Company, a private utility corporation organized under the laws of the State of Florida (hereinafter referred to as the "Company"). The CEP and the Company are also identified hereinafter individually, as a "Party" and collectively, as the "Parties".
WITNESSETH:
WHEREAS, the CEP is the owner and/or operator of a Facility; and
WHEREAS, the CEP desires to sell Contracted Capacity and Associated Energy, as those terms are defined below; and
WHEREAS, the Company desires to purchase Contracted Capacity and Associated Energy from the Facility; and
WHEREAS, the CEP has signed an Interconnection Agreement with the Transmission Service Provider that serves the CEP's Facility, as defined below; and
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth herein and other good and valuable considerations, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
1. Definitions:
(a) Alternate REC Market: "Alternate REC Market" shall have the meaning set forth in Section 12.
(b) Alternate REC Market Price Change: "Alternate REC Market Price Change" shall have the meaning set forth in Section 12.
(c) Associated Energy: "Associated Energy" shall mean the energy generated at the Facility, as defined below, by the generating source designated to supply Contracted Capacity and which is delivered to the Company at the Delivery Point, as defined below.
(d) Availability Adjustment: "Availability Adjustment" shall have the meaning set forth in Section 7(a).
(e) Availability Guarantee: "Availability Guarantee" shall have the meaning set forth in Section 7(a).

ORDER NO. PSC-2023-0132-PAA-EI DOCKET NO. 20220186-EI PAGE 9
Attachment A Page 2 of 41
(f) Available Schedule: "Available Schedule" shall have the meaning set forth in Section 11.
(g) Capacity and Energy Provider or CEP: "Capacity and Energy Provider" or "CEP" shall have the meaning set forth in the preamble.
(h) CEP Event of Default: "CEP Event of Default" shall have the meaning set forth in Section 13(a).
(i) CEP Termination Payment: "CEP Termination Payment" has the meaning set forth in Section 13(c)(iii).
(i) Company: "Company" has the meaning set forth in the preamble.
(k) Company Event of Default: "Company Event of Default" shall have the meaning set forth in Section 13(b).
(!) Company Termination Payment: "Company Termination Payment" has the meaning set forth in Section 13(c)(ii).
(m) Contract: "Contract" shall have the meaning set forth in the preamble.
(n) Contract Price: "Contract Price" shall have the meaning set forth in Exhibit 1.
(0) Contract Year: "Contract Year" shall mean any calendar year during the Term and with respect to the first and last "Contract Year" such partial calendar year.
(p) Contracted Capacity: "Contracted Capacity" shall mean twenty-one (21) megawatts that the CEP commits to reserve, make available and supply to the Company from its Facility on a firm, first call, subordinate-to-no-other- entity-or-party, must-take basis, and for which the Company commits to pay the CEP. Such amount shall be a twenty-one (21) MW block of capacity from the Facility as of January 1, 2025, which may be increased up to twenty-five (25) MW upon written notice by the CEP that the Facility has increased its capacity and such increased capacity can be shown to the satisfaction of Company (in which case the Contracted Capacity in this Contract shall be 25 MW after such notice and acceptance); provided that such increase shall be contingent on the availability of transmission capacity as identified in Section 5 herein.
(q) Delivery Point: "Delivery Point" shall mean the point on the Company's transmission system at the interface with the Transmission Service Provider's transmission system at which the CEP shall deliver Contracted Capacity and Associated Energy via the Transmission Service Provider pursuant to a Transmission Service Agreement that shall be secured by Company as provided herein.
-2-

ORDER NO. PSC-2023-0132-PAA-EI DOCKET NO. 20220186-EI PAGE 10
Attachment A Page 3 of 41
(r) Delivery Period: "Delivery Period" shall have the meaning in Section 2.
(s) Designated Avoided Unit: "Designated Avoided Unit" shall mean the generating unit identified in the Appendix C, with effective date July 8, 2021, to the Company's Retail Tariff Schedule COG-2 as the Company's avoided unit, selected by CEP as the unit CEP wishes to help avoid, or defer, the cost of which is incorporated in both the pricing under this negotiated agreement and the termination payment amounts set forth in Exhibit II.
(t) Eastern Prevailing Time: "Eastern Prevailing Time" or "EPT" shall mean the time in effect in the Eastern Time Zone of the United States of America, whether Eastern Standard Time or Eastern Daylight Time.
(u) Environmental Attributes: means the beneficial environmental attributes related to the Contracted Capacity and Associated Energy that would provide value or benefit, but will not create liability or detriment, which would include the beneficial attributes from (i) any and all fuel-related, emissions-related, air quality-related or other environmental-related aspects,
claims, characteristics, benefits, credits, including RECs, reductions, offsets, savings, allowances, efficiencies, certificates, tags, attributes, demand reductions or similar products or rights (including all of those relating to greenhouse gases and all green certificates, green tags, renewable certificates and renewable energy credits, CO2 credits, emissions reduction credits and all those that otherwise arise or result from the generation of energy from the Facility, and all those arising or resulting from the existence of the Facility) (1) howsoever titled and whether known or unknown, (2) whether existing as of the execution date or at any time during the Term, and (3) whether such Environmental Attributes have been certified or verified under any renewable standard, including all those that could qualify or do qualify for application toward compliance with any local, state, federal green pricing program, renewable energy program, carbon reduction or greenhouse gas reduction initiative, electricity savings program, or other environmental program, incentive, mandate or objective, in each case whether voluntary or mandatory, and (ii) any environmental benefit Company otherwise would have realized from or related to the Contracted Capacity and Associated Energy if Company rather than CEP had constructed, owned or operated the Facility. Environmental Attributes do not include production, energy, or investment tax credits.
(v) Facility: "Facility" shall mean the Pasco Solid Waste Resource Recovery Facility located in Pasco County, Florida, with the current physical address of 14230 Hays Road, Spring Hill, Florida.
(w) Federal Change in EA Law: "Federal Change in EA Law" shall have the meaning set forth in Section 12.
-3-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 4 of 41
PAGE 11

(x) Federal Change in EA Law Price Change: “Federal Change in EA Law
Price Change” shall have the meaning set forth in Section 12.

(y) FERC: “FERC” shall mean the_Federal Energy Regulatory Commission or
any similar or successor governmental body exercising the same or
equivalent jurisdiction.

(z) FIN 46R: “FIN 46R” shall have the meaning set forth in Section 14(q).

(aa) Florida Change in EA Law: “Florida Change in EA Law” shall have the
meaning set forth in Section 12.

(bb) Florida Change in EA Law Price Change: “Florida Change in EA Law Price
Change” shall have the meaning set forth in Section 12.

(cc) Force Majeure: Force Majeure shall have the meaning set forth in Section

14(d).

(dd) FPSC: “FPSC” shall mean the Florida Public Service Cammission or any
similar or successor governmental body exercising the same or equivalent
jurisdiction.

(ee) Interconnection Agreement: “Interconnection Agreement’ shall mean the
agreement and associated documents by and among CEP and the
Transmission Service Provider (which as of the date of this Contract is Duke
Energy Florida) governing the terms and conditions of the interconnection of
the Facility by which capacity and energy will be delivered during the Term
of this Contract from the Facility fo the Transmission Service Provider at the
Interconnection Point, which subsequently through Third-Party Transmission
Services, allows for receipt of Contracted Capacity and Associated Energy
by Company.

(ff) = Interconnection Point: “Interconnection Point’ shall mean the plant busbar
connection to the high side of the Facility’s step-up transformer(s) where
capacity and energy shall be delivered to the Transmission Service Provider
that serves the Facility, from which the CEP will transmit through Third-Party
Transmission Services Contracted Capacity and Associated Energy to
Company. The Interconnection Point shall be specified in detail in the
Interconnection Agreement.

(gg) Interest Rate: “Interest Rate” shail mean, for any date, the lesser of (a) the
per annum rate of interest equal to the prime lending rate as may from time
to time be published in The Wall Street Journal under “Money Rates” on such
day (or if not published on such day on the most recent preceding day on
which published), plus two percent (2%) and (b) the maximum rate permitted
by applicable law.

(hh) MW: “MW shall mean megawatt.

-4.

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 5 of 41
PAGE 12

(ii) MWh: “MWh” shall mean megawatt hours.

(i) Non-Dispatched Capacity: “Non-Dispatched Capacity” shall mean the
amount of Contracted Capacity that the Company cannot receive during any
given hour, due to an emergency condition, including interruptions on the
Company’s transmission system; any events or circumstances necessitating
the maintenance of the reliability and integrity of any part of the Company's
system; events or circumstances necessitating the prevention of the
endangerment of life or property; events or circumstances necessitating the
prevention of significant disruption of electric service to the Company's
customers; or requests by the state’s reliability coordinator or bulk power
system baiancing agent in efforts to maintain electric grid stability.

(kk) Non-Dispatched Energy: “Non-Dispatched Energy” shall mean the energy
associated with Non-Dispatched Capacity and which the Company declines
to accept during any given hour, due to the reasons stated in the definition
of Non-Dispatched Capacity.

(Il) Non-Planned Maintenance Months: “Non-Planned Maintenance Months”
shall have the meaning set forth in Section 10(c).

(mm) Party or Parties: “Party” or “Parties” shall have the meaning set forth in the
preamble.

(nn) Price Changes: “Price Changes” shall have ithe meaning set forth in Section
12.

(oo) Pasco Transmission Cost Cap: “Pasco Transmission Cost Cap’ shall have
the meaning set forth in Exhibit Ill.

(pp) Performance Security: “Performance Security” shall have the meaning set
forth in Section 8.

(qq) Planned Maintenance: “Planned Maintenance” shall mean any scheduled
or planned maintenance of the Facility, and the production of Associated
Energy from the Facility, that would lead to an outage of the Facility and shall
be scheduled in accordance with Section 10.

(rr) Product: “Product” shall mean the Contracted Capacity, Associated Energy,
any other ancillary services required for delivery, and Environmental
Attributes associated with the Contracted Capacity and Associated Energy
purchased hereunder.

(ss) Qualifying Facility: “Qualifying Facility” shall mean a cogeneration facility,
or small power production facility, that satisfies the definition of, and qualifies
as, a Qualifying Facility in accordance with the provisions of Subpart B of
Subchapter K, Part 292 of Chapter |, Title 18, Code of Federal Regulations
(C.F.R.), promulgated by the FERC, as the same may be amended from time

5.

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 6 of 41
PAGE 13

to time, and must be “new capacity” pursuant to the Public Utilities
Regulatory Policies Act of 1978 (PURPA), construction of which began on or
after November 9, 1978.

(it) REC Trading Costs: “REC Trading Costs” shall have the meaning set forth
in Section 12.

(uu) Renewable Energy Credits or RECs: “Renewable Energy Credits” or
“RECs” means any and all credits, including any emissions reduction credits,
such as CO2 emission reduction credits, for renewable energy that could
qualify or does qualify for application toward compliance with any local, state,
federal or international renewable energy portfolio standard, green pricing
program or other renewable energy or environmental mandate or objective
at any time during the Term.

(vv) Renewable Generating Facility: “Renewable Generating Facility’ shall
mean a generating facility that satisfies the definition of, and qualifies as, a
renewable generating facility in accordance with the provisions of Section
366.91, Florida Statutes, and Rule 25-17.210 (1), F.A.C.

(ww) Replacement Cost: “Replacement Cost” means (a) with respect to
Company, the costs incurred by Company, acting in a commercially
reasonable manner, to purchase at the Delivery Point a replacement for the
Product over the remainder of the Delivery Period, plus the costs incurred by
Company in purchasing such substitute Product and any additional
transmission charges reasonably incurred at the Delivery Point or any other
Company transmission system interface; provided, that if no replacement is
obtained, then the termination payment amount set forth an Exhibit II for such
Contract Year will be utilized for this calculation; and also including the full
cost of the Third-Party Transmission Services Company has reserved for the
remainder of the Delivery Period; and (b) with respect to CEP, the costs
incurred by CEP, acting in a commercially reasonable manner, to sell at the
Delivery Point the Product over the remainder of the Delivery Period, plus
ihe costs incurred by CEP in entering into an arrangement with a substitute
purchaser and any additional transmission charges reasonably incurred at
the Interconnection Point or any other Transmission System Provider
transmission system interface (above the Pasco Transmission Cost Cap);
provided, if no replacement is obtained, then the Transmission Service
Provider “as-available” energy price will be utilized for this calculation. In
either event, the Party making the determination will provide reasonable
evidence to the other Party of the Replacement Cost determined hereunder.
In the event the Transmission Service Provider “as-available” energy price is
utilized, the calculation shall be the net present value for all future years.

(xx) Sales Price: “Sales Price” means the price at which CEP, acting in a

commercially reasonable manner, resells from the Facility Contracted
Capacity and Associated Energy not received by Company; provided, if no

«6.

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 7 of 41
PAGE 14

replacement is obtained, then the Transmission Service Provider “as-
available” energy price will be utilized for this calculation. In any event, CEP
shall provide reasonable evidence of the Sales Price as so determined
hereunder.

(yy) SEC: “SEC” shall have the meaning set forth in Section 14(q).
(zz) Term: “Term” shall have the meaning set forth in Section 2.

(aaa) Third-Party Transmission Services: “Third-Party Transmission Services”
shall mean the firm transmission service(s) and ancillary services required to
deliver Contracted Capacity and Associated Energy from the Facility
(Interconnection Point) to the Gompany’s transmission system (Delivery
Point).

(bbb) Transmission Service Agreement: “Transmission Service Agreement”
shall mean the contract by which Company shall obtain Third-Party
Transmission Services from Transmission Service Provider to transmit
Associated Energy from the Facility to the Company’s transmission system
at the Delivery Point.

{ccc) Transmission Service Provider: “Transmission Service Provider’ means
the owner of the transmission system related to the Facility (and
interconnection provider under the Interconnection Agreement) and
counterparty to the Transmission Service Agreement, which as of the date
of this Contract is Duke Energy Florida, but would include any successor
thereto by name change, operation or law or otherwise permitted.

(ddd) TSP Disconnect Event: “TSP Disconnect Event” shall mean any event in
which the Transmission Service Provider requires CEP to disconnect the
Facility from its transmission system.

2. Term: This Contract shall commence immediately upon its execution by the Parties
and shall terminate at 12:00 A.M. on January 1, 2035 (“Term”). The delivery of
Contracted Capacity and Associated Energy shall be from 12:00 A.M. January 1,
2025, through 11:59 P.M. December 31, 2034 (“Delivery Period”). The beginning
of the Term and effectiveness of this Contract is subject to Company receiving
unconditional approval from the FPSC, FERC and any other governmental entity
necessary to approve this Contract and that pursuant to any such approvals
Company shall not be disallowed from, and shail have full allowance for, recovering
all costs associated with this Contract and the payments by Company hereunder.

3. Company’s Capacity and Energy Purchase Commitment: The Company agrees
to purchase all Contracted Capacity and Associated Energy, excluding Non-
Dispatched Energy, generated at the Facility and provided to the Company at the
Delivery Point by the CEP pursuant to this Contract, excluding the amount of
capacity and energy consumed by the Facility’s station service equipment (such as
generator auxiliaries, emissions control and monitoring equipment, fuel handling

ae

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 8 of 41
PAGE 15

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 9 of 41
PAGE 16

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 10 of 41

PAGE 17

of the purchase statement shall be required to be made when due, with
notice of the objection given to the other Party. Any purchase statement
dispute or purchase statement adjustment shail be in writing and shall state
the basis for the dispute or adjustment. Payment of the disputed amount
shall not be required until the dispute is resolved. Upon resolution of the
dispute, any required payment shall be made within two (2) business days
of such resolution along with interest accrued at the Interest Rate from and
including the due date to but excluding the date paid. {nadvertent
overpayments shall be returned upon request or deducted by the Party
receiving such overpayment from subsequent payments, with interest
accrued at the Interest Rate from and including the date of such overpayment
to but excluding the date repaid or deducted by the Party receiving such
overpayment. Any dispute with respect to a purchase statement is waived
unless the other Party is notified in accordance with this Section 6(c) within
twelve (12) months after the purchase statement is rendered or any specific
adjustment to the purchase statement is made.

(d) The Parties hereby agree that they shall discharge mutual debts and
payment obligations due and owing to each other on the same date through
netting, in which case all amounts owed by each Party to the other Party for
the purchase and sale of the Product during the monthly billing period under
this Contract, interest, and payments or credits, shall be netted so that only
the excess amount remaining due shall be paid by the Party who owes it.

(e) If no mutual debts or payment obligations exist and only one Party owes a
debt or obligation to the other during the monthly billing period, including, but
not limited to, interest, and payments or credits, that Party shall pay such
sum in full when due.

(f) With respect to CEP, the Parties agree to recognize that this Section 6 is
subject to Florida’s Prompt Payment Act (Florida Statutes Sections 218.70-
218.80) and allows CEP, for all purposes of this Section 6, forty-five (45)
days after receipt of any purchase statement, as applicable, to make
payment, including interest.

Availability:

(a) _ Availability Guarantee and Availability Adjustment: During the Delivery
Period, CEP guarantees that the Facility shall be 97.0% available during the
months of January, February, June, July, August, September, October and
December and 92.0% available during the months of March, April, May and
November (“Availability Guarantee’). During the Delivery Period, the
(‘Availability Adjustment’) shall be calculated for each month and rounded
to the nearest 0.1% as follows:

AA = (AG — AED/EED) * 2 * AEP

-10-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A

DOCKET NO. 20220186-EI Page 11 of 41
PAGE 18

WHERE:

AA Availability Adjustment

AG
AED
EED

Availability Guarantee applicable to such month

Actual Energy Delivered from the Facility to the Delivery Point
the maximum Expected Energy Delivered, calculated as
Contracted Capacity multiplied by the total hours in the applicable
month (less any Non-Dispatched Energy in such month and less
any MWh not produced due to Planned Maintenance or Force
Majeure)

Associated Energy Payment, which is the unadjusted Contract
Price

AEP

The Availability Adjustment multiplied by the applicable Associated Energy
will be included as a reduction in the purchase statement from Company to
CEP as set forth in Section 6. If the above calculation leads to a negative
number, then the Availability Adjustment shall be zero. Illustrative examples
of these calculations are set forth on Exhibit |.

(b) At any time during the term of this Contract that CEP is unable to deliver
energy from the Facility, and such event is not due to Planned Maintenance
or Force Majeure, CEP, in its discretion, may deliver replacement energy to
Company from a third-party source as a replacement for the Product
contemplated under this Contract; provided, however in such instance, the
replacement energy must be generated by a Renewable Generating Facility.
In this event, CEP shall be responsible for: (i) arranging delivery from such
third-party source to the Delivery Point; and (ii) all associated transmission
charges, line losses, service charges, and other applicable fees and costs
necessary for the delivery of all or any of the replacement energy from the
third-party source. Delivered third-party energy must include the identical
Environmental Attributes as energy provided from the Facility, and Company
must receive ownership of the identical Environmental Attributes the same
as if Company had received the Associated Energy from the Facility. For
clarity, transmission costs incurred by CEP to deliver replacement energy to
the Delivery Point do not accumulate as costs towards the Pasco
Transmission Cost Cap.

8. Performance Security Guarantees: The Parties require certain security
guarantees from each other to ensure performance under this Contract in order to
protect their respective interests in the event the other Party fails to comply with the
Terms in this Contract, which shall be in form and substance as described herein,
In any Contract Year, if (i) with respect te Company, Company does not maintain a
minimum Moody's senior unsecured investment credit rating of Baa3 and a

= Te

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 12 of 41
PAGE 19

-]2-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 13 of 41
PAGE 20

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 14 of 41
PAGE 21

-14.

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 15 of 41
PAGE 22

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 16 of 41
PAGE 23

applicable vintage year applicable to such RECs. if no buyer is found within
the applicable two-year sale period for a given REC vintage, CEP will no
longer market such RECs from such vintage year.

(b) For 2033 and 2034 vintage RECs, CEP shall have the right to seek to find a
buyer (i) for 2033 vintage RECs as of January 1, 2034 and (ii) for 2034
vintage RECs at the close of each month that the RECs are generated
through November 30, 2034 vintage RECs. If any 2033 or 2034 vintage
RECs remain unsold as of the end of the Term, Company has the right to
either purchase the RECs at the average price at which CEP sold RECs in
the Alternate REC Market over the previous twenty-four (24) months or
transfer the ownership of those remaining unsold 2033 and 2034 vintage
REGs to the CEP.

For all vintage years (i.e., 2025 through 2034), if CEP finds a buyer for the
Environmental Attributes, CEP shall present the volume and price for Company’s
review. Company will have the option to either (i) pay that price in full to CEP and
retain the RECs or (ii) transfer the volume of RECs to CEP to allow CEP to monetize
the RECs with the buyer.

Illustrative examples of these calculations are set forth on Exhibit |.
13. Default:

(a) The CEP shall be in default (“CEP Event of Default’) under this Contract if
it:

(i) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); or

(ii) becomes insolvent or is unable to pay its debts or fails or admits
in writing its inability generally to pay its debts as they become
due; or

(iil) | makes a general assignment, arrangement or composition with
or for the benefit of its creditors; or

(iv) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under
any bankruptcy or insolvency law or other similar law affecting
creditors’ rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (a)
results in a judgment of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding-up or
liquidation or (b) is not dismissed, discharged, stayed or
restrained in each case within thirty (30) days of the institution or
presentation thereof, or

-16-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 17 of 41
PAGE 24

(v) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for all or
substantially all its assets; or

(vi) has a secured party take possession of all or substantially all its
assets or has a distress, execution, attachment, sequestration or
other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within thirty (30) days
thereafter:

(vii) fails to perform in accordance with Section 8;

(viii) fails to achieve an availability of seventy percent (70%) for any
six (6) months in a given Contract Year.

(ix) fails to comply with Section 14(f) in connection with an attempted
assignment of this Contract.

(x) fails to pay Company any undisputed amount payable by CEP to
Company pursuant to this Contract by the due date (including
with respect to failure to meet the Availability Guarantee) and
CEP fails to cure such failure to pay within forty-five (45) days
after receipt of written demand from Company.

(xi) | made any representation, warranty, or covenant hereunder that
proves to be incorrect in any material respect when made, unless
the CEP promptly commences and diligently pursues action to
cause such representation, warranty, or covenant to become
true in all material respects and does so within thirty (30) days
after written notice thereof has been given to CEP by Company
(uniess such cure is not capable of being effected within such
thirty (30) day period, in which case CEP will have an additional!
thirty (30) day period in which to perform such cure) and such
cure removes any material adverse effect on Company of such
representation, warranty, or covenant having been incorrect.

(xii) fails fo perform or comply with any other material term or
condition of this Contract, other than those listed above, which
failure continues for thirty (30) days after written notice from
Company.

(b) |The Company shall be in default (‘Company Event of Default”) under this
Contract if it:

| z.-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 18 of 41
PAGE 25

(i) fails to pay CEP any undisputed amount payable by Company to
CEP pursuant to this Contract by the due date and Company fails
to cure such failure to pay within forty-five (45) days after receipt
of written demand from CEP.

(ii) fails to perform or comply with any other material term or
condition of this Contract, other than as provided in Section
13(b)(i) above which failure continues for thirty (30) days after
written notice from CEP.

(c) Default Remedy:

(1) lf Company has the right to terminate this Contract due to a CEP Event
of Default, the foliowing shall apply:

(i) lf CEP defaults pursuant to Section 13(a)(viii) of this Contract,
after receipt of such notice of termination from Company, CEP
shall have the right to an additional cure period of three (3)
consecutive months (including the month in which the notice is
given) following such notice to cause the Facility to meet at least
seventy percent (70%) availability over such three (3) month
period; provided, if CEP fails to achieve such result, CEP shall
have an additional ninety (90) days to secure a replacement of
the Product to be delivered pursuant to the terms of this Contract
at the Delivery Point for the remainder of the Delivery Period. The
terms and conditions of such replacement Product shall be the
same as provided herein and subject to the approval of
Company.

(ii) If CEP does not choose or fails to cure pursuant to subsection (i)
above, Company will be entitled to immediately terminate this
Contract and recover from CEP all amounts then owed by CEP
to Company under this Contract and recover from CEP the
Company's Replacement Cost less the value of this Contract to
Company over the remainder of the Delivery Period (determined
ina commercially reasonable manner) (“Company Termination
Payment’). Any purchase statement that includes such
Company Termination Payment shall include a written statement
explaining in reasonable detail the calculation of such amount.

(iii) If CEP terminates this Contract due to a Company Event of
Default, CEP will be entitled to recover fram Company all
amounts then owed by Company to CEP under this Contract and
recover from Company the positive difference, if any, between
the value of this Contract to CEP over the remainder of the
Delivery Period (determined in a commercially reasonable
manner) and the CEP Replacement Cost (the “CEP

-18-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 19 of 41
PAGE 26

Termination Payment’). Any purchase statement that includes
such CEP Termination Payment shall include a written statement
explaining in reasonable detail the calculation of such amount.

14. General Provisions:

(a) Permits: The CEP hereby agrees to seek to obtain any and all governmental
permits, certifications, or other authority the CEP is required to obtain as a
prerequisite to engaging in the activities provided for in this Contract. The
Company hereby agrees to seek to obtain any and all governmental permits,
certifications or other authority the Company is required to obtain as a
prerequisite to engaging in the activities described in this Contract.

{b) Indemnification: The Company and the CEP shall each be responsible for
its own facilities in ensuring adequate safeguards for other Company
customers, the Company and CEP personnel and equipment, and for the
protection of its own generating system. To the extent permitted by law, the
Company and the CEP shall each indemnify and save the other harmless
from any and all claims, demands, costs, or expense for loss, damage, or
injury fo persons or property of the other caused by, arising out of, or resulting
from:

(i) any act or omission by a Party or that Party’s contractors, agents,
servants and employees in connection with the installation or
operation of that Party’s generation system or the operation
thereof in connection with the other Party’s system; and

(ii) any defect in, failure of, or fault related to a Party’s generation
system; and

(iil) the negligence of a Party or negligence of that Party’s
contractors, agents, servanis and employees.

(c) Insurance: On or before the Effective Date, the CEP shall deliver to the
Company proof of all insurance CEP maintains on the Facility per its
operating agreements, which insurance shall be adequate for the operation
and maintenance of the Facility. If reasonably requested after the Effective
Date, CEP shall deliver such proof of insurance as soon as reasonably
practicable. CEP shall pay all premiums and other charges due on said
policies and keep its policies in full force and effect during the Term.

(d) Force Majeure: If either Party shall be unable, by reason of Force Majeure,
to carry out its obligations under this Contract, either wholly or in part, the
Party so failing shall give written notice and full particulars of such cause or
causes to the other Party as soon as possible after the occurrence of any
such cause; and such obligations shall be suspended during the continuance
of such hindrance, which, however, shall be remedied with all possible
dispatch. The term (“Force Majeure”) shall be taken to mean all acts of God,

-19-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 20 of 41
PAGE 27

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 21 of 41
PAGE 28

part of the CEP, does not require any approval, except as has
been heretofore obtained, of the Board of County
Commissioners, of the CEP or any consent of or approval from
any trustee, lessor or holder of any indebtedness or other
obligation of the CEP, except for such as have been duly
obtained, and does not contravene or constitute a default under
any law, or any agreement, judgment, injunction, order, decree
or other instrument binding upon the CEP, or subject the Facility
or any component part thereof to any lien other than as
contemplated or permitted by this Contract.

(iii) Compliance with Laws: The CEP has knowledge of all laws
and business practices that must be followed in performing its
obligations under this Contract. The CEP is in compliance with
all laws, except to the extent that failure to comply therewith
would not, in the aggregate, have a material adverse effect on
the CEP or the Company. By entering into this Contract, the CEP
represents and warrants that Facility is a Qualifying Facility and
a Renewable Generating Facility and confirms such
representation and warranty with the signature of the CEP’s
authorized representative on this Contract.

CEP warrants and covenants that with respect to its contractual
obligations hereunder and performance thereof, it will not claim
immunity on the grounds of sovereignty or similar grounds with
respect to itself or its revenues or assets from (a) suit, (b}
jurisdiction of court, (c) relief by way of injunction, order for
specific performance or recovery of property, (d) attachment of
assets, or (e) execution or enforcement of any judgment.

In addition, CEP warrants continuing throughout the term of this
Contract as follows: (i) entry into and performance of this
Contract by CEP are for a proper public purpose within the
meaning of any applicable law, (ii) the term of this Contract does
not extend beyond any applicable limitation imposed by any
applicable law, and (iii) CEP’s obligations to make payments
hereunder are unsubordinated obligations and such payments
are otherwise not subject to any prior claim under any and all
bond ordinances or indentures to which it is a party, the Act and
all other relevant constitutional, organic or other governing
documents and applicable law and are available without
limitation or deduction to satisfy all CEP’s obligations hereunder.

(iv) Governmental Approvals: Except as expressly contemplated
herein, neither the execution and delivery by the CEP of this
Contract, nor the consummation by the CEP of any of the
transactions contemplated thereby, requires the consent or

2].

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 22 of 41
PAGE 29

approval of, the giving of notice to, the registration with, the
recording or filing of any document with, or the taking of any other
action in respect of governmental authority, except in respect of
permits (a) which have already been obtained and are in full
force and effect or (b) are not yet required (and with respect to
which the CEP has no reason to believe that the same will not
be readily obtainable in the ordinary course of business upon due
application therefore).

(v) No Proceedings: There are no actions, suits, proceedings or
investigations pending or, to the knowledge of the CEP,
threatened against it at law or in equity before any court or
tribunal of the United States or any other jurisdiction which
individually or in the aggregate could result in any materially
adverse effect on the CEP’s business, properties, or assets or its
condition, financial or otherwise, or in any impairment of its ability
to perform its obligations under this Contract. The CEP has no
knowledge of a violation or default with respect to any law which
could result in any such materially adverse effect or impairment.
CEP is not bankrupt and there are no proceedings pending or
being contemplated by it or, to its knowledge, threatened against
it which would result in it being or becoming bankrupt.

(f) Assignment: The Company and the CEP shall have the right to assign its
benefits under this Contract, but the CEP shall not have the right to assign
its obligations and duties without the Company’s prior written consent and
such consent shall not be unreasonably withheld.

(g) Disclaimer: In executing this Contract, the Company does not, nor should it
be construed, to extend its credit or financial support for the benefit of any
third parties lending money to or having other transactions with the CEP or
any assignee of this Contract.

(h) Notification: For purposes of making any and all non-emergency oral and
written notices, payments or the like required under the provisions of this
Contract, the Parties designate the following to be notified or to whom
payment shall be sent until such time as either Party furnishes the other Party
written instructions changing such designate.

For the CEP:

Pasco County Solid Waste Director
14230 Hayes Road

Spring Hill, FL 34610

with a copy to:

Pasco County Attorney

~22=

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 23 of 41
PAGE 30

8731 Citizens Drive, Suite 340
New Port Richey, FL 34654

For the Company:

Tampa Electric Company

Attention: Director, Origination & Trading
P.O. Box 111

Tampa, Florida 33601

with a copy to:

Tampa Electric Company

Attention: Associate General Counsel
P.O. Box 111

Tampa, Florida 33601

(i) Governing Law and Jurisdiction: This Contract shall be governed by and
construed and enforced in accordance with the laws, rules, and regulations
of the State of Florida and the Company's Tariff as may be modified,
changed, or amended from time to time. Any action brought under this
Contract or with respect to any claim arising from the subject matter thereof
shall be brought and heard in a state court of competent jurisdiction at the
West Pasco Judicial Center in New Port Richey, Pasco County, Florida. If
the claim(s) that form the basis for any such action must be adjudicated in
federal court, then venue for that action shall be in the United States District
Court for the Middle District of Florida, Tampa Division.

(j) Waiver of Jury Trial: Each party waives, to the fullest extent permitted by
applicable law, any and all rights it may have to a trial by jury in respect of
any suit, action or proceeding relating to this Contract or any credit support
document. Each party (i) certifies that no representative, agent or attorney of
the other party or any credit support provider has represented, expressly or
otherwise, that such other party would not, in the event of such a suit, action
or proceeding, seek to enforce the foregoing waiver and (ii} acknowledges
that it and the other party have been induced to enter into this Contract and
provide for any credit support document, as applicable, by, among other
things, the mutual waivers and certifications in this Section.

{k) Severability: If any part of this Contract, for any reason, be declared invalid,
or unenforceable by a court or public authority of appropriate jurisdiction,
then such decision shall not affect the validity of the remainder of this
Contract, which remainder shall remain in force and effect as if this Contract
had been executed without the invalid or unenforceable portion and provided,
further, that if any such event occurs, the Parties shall use their best efforts

-23-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 24 of 41
PAGE 31

to reform this Contract in order to give effect to the original intention of the
Parties.

() Complete Contract and Amendments: All previous communications or
agreements between the Parties, whether verbal or written, with reference to
the subject matter of this Contract are hereby abrogated. No amendment or
modification to this Contract shall be binding unless it shall be set forth in
writing and duly executed by both Parties to this Contract.

(m) Survival of Contract: This Contract, as it may be amended from time to
time, shall be binding and inure to the benefit of the Parties’ respective
successors-in-interest and legal representatives.

(n}) Record Retention: The CEP agrees to retain for a period of five (5) years
from the date of termination hereof all records relating to the performance of
its obligations hereunder, and to cause all CEP entities to retain for the same
period all such records.

(0) No Waiver: No waiver of any of the terms and conditions of this Contract
shall be effective unless in writing and signed by the Party against whom
such waiver is sought to be enforced. Any waiver of the terms hereof shall
be effective only in the specific instance and for the specific purpose given.
The failure of a Party to insist, in any instance, on the strict performance of
any of the terms and conditions hereof shall not be construed as a waiver of
such Party’s right in the future to insist on such strict performance.

(p) Set-off: The Company may at any time, but shall be under no obligation to,
set off any and all sums due from the CEP against sums due to the CEP
hereunder.

(q) Assistance With the Company FIN 46R Compliance: Accounting rules set
forth in Financial Accounting Standards Board Interpretation No. 46 (Revised
December 2003) (“FIN 46R”), as well as future amendments and
interpretations of those rules, may require the Company to evaluate whether
the CEP must be consolidated, as a variable interest entity (as defined in FIN
46R), in the financial statements of the Company. The CEP agrees to fully
cooperate with the Company and make available to the Company all financial
data and other information, as deemed necessary by the Company, to
perform that evaluation on a timely basis at inception of this Contract and
periodically as required by FIN 46R. If the result of the evaluation under FIN
46R indicates that the CEP must be consolidated in the financial statements
of the Company, the CEP agrees to provide financial statements, together
with other required information, as determined by the Company, for inclusion
in disclosures contained in the footnotes to the financial statements and in
the Company's required filings with the Securities and Exchange
Commission (“SEC”). The CEP shall provide this information to the Company
in a timeframe consistent with the Company’s earnings release and SEC

24.

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 25 of 41
PAGE 32

filing schedules, to be determined at the Company's discretion. The CEP also
agrees to fully cooperate with the Company and the Company’s independent
auditors in completing an assessment of the CEP’s internal controls as
required by the Sarbanes-Oxley Act of 2002 and in performing any audit
procedures necessary for the independent auditors to issue their opinion on
the consolidated financial statements of the Company.

(r) To the extent allowed by law, neither Party shall disclose the price terms of
this Contract to a third party (other than the Party’s employees, lenders,
counsel, accountanis or advisors who have a need to know such information
and have agreed to keep such terms confidential) except in order to comply
with any applicable law, regulation, or any exchange, control area or
independent system operator rule or in connection with any court or
regulatory proceeding; provided, however, each Party shall, to the extent
practicable and legal, use reasonable efforts to prevent or limit the
disclosure. Any Party who receives a request for production of documents
related to the price terms of this Contract shall provide notice to the other
Party at least ten (10) days prior to producing the information unless
production of the documents is required in less than ten (10) days, in which
case the Party from whom production is sought shall provide notice to the
other Party as soon as is reasonably possible following the Party’s receipt of
a request for production of documents. The purpose of this notice
requirement is to afford each Party an adequate opportunity to undertake
steps necessary to protect the confidentiality of the information as provided
under Florida Statutes. The Party opposing disclosure shall bear all costs in
any proceedings seeking to protect the confidentiality of the
information. Such opposing Party shall also indemnify the other Party for
any fines or third-party costs awarded by the court to be paid by the other
Party as a result of the opposing Party's opposition to disclosure.

-25-

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 26 of 41
PAGE 33

IN WITNESS WHEREOF, a duly authorized officer of CEP and the Company have
executed this Contract the day and year first above written.

Attest: Pasco County, Florida
By:

Nikki Alvarez-Sowles, Esq. Kathryn Starkey, Chairman

Pasco County Clerk and Comptroller Pasco County Commission

TAMPA ELECTRIC COMPANY

By:

Name:

Title:

By:

Name:

Title:

[signature page to Contract]

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 27 of 41
PAGE 34

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 28 of 41
PAGE 35

Exhibit | +2

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 29 of 41
PAGE 36

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 30 of 41
PAGE 37

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 31 of 41
PAGE 38

ORDER NO. PSC-2023-0132-PAA-EI DOCKET NO. 20220186-EI PAGE 39
Attachment A Page 32 of 41
1
Exhibit 1 - 6

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 33 of 41
PAGE 40

Exhibit |— 7

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 34 of 41
PAGE 41

|
|

=— = 8 oem = jf
“Tit.

B= — = 8 | ome = §

Exhibit |- 8

ORDER NO. PSC-2023-0132-PAA-EI DOCKET NO. 20220186-EI PAGE 42
Attachment A Page 35 of 41
I
I
Exhibit [ - 9

ORDER NO. PSC-2023-0132-PAA-EI DOCKET NO. 20220186-EI PAGE 43
Attachment A Page 36 of 41
Exhibit 1 - 10

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 37 of 41
PAGE 44

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 38 of 41
PAGE 45

ae

Exhibit | — 12

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 39 of 41
PAGE 46

ce
mm oo fue

i

Exhibit | -— 13

ORDER NO. PSC-2023-0132-PAA-EI
DOCKET NO. 20220186-EI

PAGE 47

EXHIBIT II

TERMINATION PAYMENT TABLE*

Exhibit If — 4

Attachment A
Page 40 of 41

ORDER NO. PSC-2023-0132-PAA-EI Attachment A
DOCKET NO. 20220186-EI Page 41 of 41
PAGE 48

EXHIBIT Ili

Pasco Transmission Cost Cap

Exhibit tll — 1