Download 7/26/11 American Renewable Energy 255 Old New Brunswick Rd

7/26/11
American Renewable Energy
255 Old New Brunswick Rd
Piscataway NJ 08854
Centennial School District
433 Centennial Rd
Warminster, PA 18974
Solar Photovoltaic Power Purchase Agreement Letter of Intent
Dear William Gretton,
On behalf of American Renewable Energy (“Contractor”), I would like to thank you for
selecting us to develop a solar photovoltaic facility (“Facility”) at the Log College Middle
School, Willow Dale Elementary School and William Tennent High School(“Host”)
property in Warminster, PA for the purpose of generating and selling electricity to Host under
a long term solar Power Purchase Agreement (“PPA”). The Contractor will be working with
American Renewable Energy as an advisor to introduce the best-fit PPA development entity
(Developer) to finance, own and operate your solar photovoltaic facility. American
Renewable Energy may evaluate several Developers before introducing the best-fit
Developer. This letter of intent serves to demonstrate the Host’s earnest interest and
willingness to engage in PPA development discussions with Developers.
Attachment A to this Letter of Intent (LOI) highlights the proposed key terms of a PPA
between Developer and Host.
By signatures affixed to this letter, Developer and Host agree to the following:
1.
Developer and Host will pursue in good faith and expend the necessary resources and
time to negotiate a definitive PPA which, subject to mutual agreement through negotiation,
will be generally based on the attached PPA Term Sheet and will include additional
provisions customarily addressed in power purchase agreements.
2.
Developer and Host will pursue negotiations promptly and diligently so as to enable the
Facility to qualify for investment tax credit (or U.S. Treasury Grant in lieu of tax credit) under
the Internal Revenue Code.
3.
Developer will perform a title search of Host property as part of the due diligence
associated with permanent financing of the Facility, and Company and Developer will
establish a plan to resolve any title related issues which would otherwise present a barrier to
the closing of permanent Facility financing.
4.
Developer will likely form new a special purpose limited liability Company (LLC) which
will serve as the counterparty to the PPA with Host.
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5.
Host will provide financial information necessary for Developer’s lender to complete a
credit review as part of the due diligence associated with permanent financing of the Facility.
6.
Host will provide site related information as requested by Developer to confirm project
feasibility, complete incentive application paperwork, and related activities in a timely
fashion.
7.
For a period of 3 months commencing on the date Host countersigns this letter, Host
will negotiate exclusively with the PPA Developers introduced by American Renewable
Energy for the provision of services relating to a solar photovoltaic Facility at Host site.
8.
Other than as appropriate to satisfy public disclosure requirements or as otherwise
mutually agreed, Host and each Developer shall not disclose any information received from
the other to any person other than advisors, investors, or lenders involved in the negotiation
of a contract for financing the Facility.
9.
Host and Developer and their advisors will also not use any information received from
the other except in connection with evaluation of a possible agreement between the parties.
Host and Developer will keep this letter and the fact of their negotiations confidential and will
require confidentiality from any outside parties with whom they may consult. This
confidentiality provision between the parties shall remain in effect for one year from the date
of this letter.
10. Each party will be responsible to pay for its own costs in connection with the items
agreed to above, including costs of consultants, accountants, and attorneys.
Neither party is obligated to enter into a PPA. Any obligations other than those explicitly
agreed to herein will arise only in accordance with, and are subject to, a definitive PPA, if
such an agreement is mutually executed by Host and Developer. If satisfactory, please
return a signed copy of this letter.
We look forward to working with you.
Sincerely,
AGREED TO AND ACCEPTED:
American Renewable Energy
Centennial School District
By:
John Coonan
By:
___________________________
Its:
Vice-President Commercial
Its:
___________________________
Date: ___________________________
Date: ___________________________
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Attachment A Solar Photovoltaic Facility Letter of Intent Basic Terms and Conditions
This Attachment A outlines key terms under which the Developer proposes to enter into a
solar power purchase agreement (PPA) with Host to supply electricity from a photovoltaic
(PV) system owned by Developer and installed on the property owned by Host.
These terms and conditions are subject to credit review and review of the suitability of the
Host site by Developer and its lenders. PPA pricing is subject to securing applicable state
and/or utility level incentives.
Key PPA Terms:
Provider: Special Purpose Limited Liability Company owned by Developer.
Host: Centennial School District
Facility: mounted photovoltaic system, including interconnections required to deliver
electricity to Host, installed on the Host’s property at Tennent High School, Log College
Middle School and Willow Dale Elementary School.
Term: Fifteen (15) years.
Year 1 PPA Price:
Annual Price Escalator: 3% per year
Incentives, RECs, and non energy attributes: Developer is entitled to all available
financial incentives, solar renewable energy credits (SRECs) and other environmental
attributes associated with the electricity generated by the Facility.
Insurance, Operation and Maintenance: Developer will insure the facility as personal
property and provide all operations and maintenance necessary.
Facility Buyout. Exact buyout terms to be negotiated in good faith. After six years (but not
before), Host may purchase the Facility at the greater of buyout value (which shall be set
forth in a set schedule) or fair market value of the equipment determined at the time the
buy-out right is exercised.
Miscellaneous. The PPA shall contain other usual and customary provisions for power
purchase and sale agreements, including access, representation and warrantees, force
majeure, default, indemnities, limitation of liability and exclusion of consequential
damages, invoicing and payment disputes, audit rights, confidentiality, insurance,
cooperation, governing law, assignment and other miscellaneous terms.
Additional Terms. Developer will work with Host to support renewable energy awareness in
its community through solar-focused events, curricular materials, internships and grants.
Developer will work in conjunction with Host’s team to position Host as a “green leader” in
local and national media.
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