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104-23 - Puget Sound Energy - ContractDocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A PUGETSOUND ENERGY Conservation Agreement No.rogram: Pay for Performance Project No.: P_1377771 CONSERVATION GRANT AGREEMENT This AGREEMENT is made this 13th day of November , 2023 , by and between PUGET SOUND ENERGY ("PSE") and CITY OF PORT ORCHARD ("Participant"). RECITALS A. Under PSE's Electric Schedule 253, Gas Schedule 253, Electric Schedule 83, and Gas Schedule 183 as currently in effect and on file with the Washington Utilities and Transportation Commission (collectively, "Tariffs"), PSE offers grants for certain conservation measures installed or implemented at facilities that receive electric or natural gas service from PSE. B. Participant intends to install or implement conservation measures and is requesting a grant from PSE. AGREEMENTS PSE and Participant agree as follows: PROJECT PREMISES/METER LOCATION ADDRESS: 216 PROSPECT ST PORT ORCHARD WA 98366 - CITY OF PORT ORCHARD - CITY HALL — PAY FOR PERFORMANCE (Please note: meter location/address may differ from the site mailing address). Participant will install or implement the conservation measures listed in paragraph 2 ("Conservation Measures") at the above located facilities (the "Premises"). Participant represents either (a) that it is the owner or otherwise has the lawful authority to make the statements herein on behalf of the owner of the Premises, or (b) that it is the lawful tenant of the Premises and that it has obtained written authorization from the owner of the Premises. That written authorization from the owner to the tenant shall be provided to PSE. 2• Conservation Measures. Participant represents that it will purchase equipment or materials or has entered or will enter into an agreement with one or more contractors (the "Contractor") for the purchase and installation or implementation at the Premises of the Conservation Measures which may be detailed in Attachment C: Attachment to Conservation Grant, at the following costs: Conservation Measures Measure Life Total Cost' Eligible GrantZ 1. PFP: Base Incentive - Year 1 19 $161,714.00 $70,310.00 2. PFP: Base Incentive - Year 2 19 $40,429.00 $17,578.00 3. PFP: Performance Incentive - Year 2 1 $17,968.00 $7,812.00 4. PFP: Base Incentive - Year 3 19 $40,429.00 $17,578.00 5. PFP: Performance Incentive - Year 3 1 $17,968.00 $7,812.00 4386 4/13 Page 1 of 3 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A PUGET SOUND ENERGY Conservation Program: Agreement No.: Project No.: Pay for Performance 1 P_1377771 6. PFP: Base Incentive - Year 4 19 $40,429.00 $17,578.00 7. PFP: Performance Incentive - Year 4 1 $17,968.00 $7,812.00 8. PFP: Base Incentive - Year 5 19 $40,429.00 $17,578.00 9. PFP: Performance Incentive - Year 5 1 $17,968.00 $7,812.00 TOTAL (includes sales tax) $395,302.00 $171,870.00 ' Participant represents that the total cost of the Conservation Measures is the net amount of its obligation with respect thereto. 2 The grant amount may be reduced at PSE's sole discretion in the event of project cost reductions or additional energy savings benefiting Participant. See Section 3. 3. Grant. Upon the execution by both parties and PSE's receipt of this Conservation Grant Agreement within 90 days of the agreement date, PSE agrees to grant the Participant, after installation by Participant of the Conservation Measures, an amount equal to the eligible Conservation grant ("the Grant") set forth in Attachment C. The parties agree that the Conservation Measures in Attachment C must be installed within 12 months (but not to exceed 15 months) and the Grant paid within 64 months of the signing of this Conservation Grant Agreement. If for any reason the installed cost of the Conservation Measures is less than the amount shown above and on Attachment C, PSE may decrease pro rata the amount of the Grant. Grant paid to Participant may, at PSE's sole discretion, be reduced to reflect such benefits. Participant shall be responsible for paying any amount in excess of the amount of the Grant. 4. Separate Contract. Participant acknowledges and agrees that PSE is not, and shall not be deemed to be, a party to any purchase, installation, implementation, or service contract relating to Conservation Measures, which shall be installed or implemented pursuant to a contract between Participant and its Contractor(s). Participant expressly acknowledges that PSE's involvement with respect to any aspect of the Conservation Measures is limited to the furnishing of the Grant. PSE HAS NOT MADE AND DOES NOT MAKE (AND PARTICIPANT ACKNOWLEDGES THAT PSE DOES NOT MAKE) ANY IMPLIED OR EXPRESS WARRANTY (INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS) REPRESENTATION, OR PROMISE WITH RESPECT TO EITHER (A) THE CONSERVATION MEASURES, (B) ANY MATERIALS AND LABOR REQUIRED FOR OR USED IN THE INSTALLATION OR IMPLEMENTATION OF THE CONSERVATION MEASURES, OR (C) THE INSTALLATION OR IMPLEMENTATION OF THE CONSERVATION MEASURES. 5. Final Cost Documentation, Access & Inspection: Participant agrees to promptly provide PSE, upon request, and for a period no shorter than the longest applicable measure life: (1) documentation verifying equipment purchased and/or work performed in connection with the Conservation Measures installed; (2) reasonable access to and inspection of the Facility and Conservation Measures installed therein before, during and/or after implementation; and (3) reasonable access to, inspection and use of energy usage data related to the Conservation Measures including release of utility bills and Facility energy consumption information following implementation. 6. Release. Participant releases PSE from any and all claims, losses, harm, costs, liabilities, damages and expenses directly or indirectly resulting from or in connection with (a) the Conservation Measures, (b) any materials and labor required for or used in the installation or implementation of the Conservation Measures, (c) the installation or implementation of the Conservation Measures, or (d) the identification, handling and disposal of any associated hazardous waste materials. 7. Disclaimer. PSE conducts energy analyses at the request of its customers to determine the extent to which conservation measures are cost—effective. Any estimate of energy savings made by PSE in connection with any 4386 4/13 Page 2 of 3 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A PUGETSOUND ENERGY Conservation Agreement No.rogram: Pay for Performance Project No.: P_1377771 such analyses is solely for the purpose of determining the cost—effectiveness of the particular conservation measures and not to be used for any other purpose. PSE has not and does not make any promise, warranty or representation with respect to any savings in energy consumption from Conservation Measures. Termination. (a) Participant agrees to provide deliverables (specified in Attachment C) for this multi -year grant agreement and understands that failure to provide such deliverables by the deadline set forth in Attachment C may result, at PSE's sole discretion, in the Participant's forfeiture of any remaining grant incentive funds detailed in Paragraph 2 of this Agreement. (b) In the event a Participant's contribution to PSE's recovery of energy efficiency program costs is affected by all or a portion of Participant's electric and/or gas delivery service being provided by a party other than PSE, then Participant agrees to and shall refund to PSE an amount equal to the ratio of the unused Measure Life of the measure(s) to the total Measure Life of such Conservation Measure(s) multiplied by the dollar amount of the Grant with respect to such Conservation Measure(s), payable within ninety (90) days of notice to Participant by PSE of such obligation. (c) This Conservation Grant Agreement may be reviewed annually to determine the cost-effectiveness and assess continuance. Either party may terminate this agreement with 30 days' notice to the other parties. 9. Incorporation of tariffs by reference. This Agreement and the Attachment To Conservation Grant are subject to the terms of the Tariffs, incorporated herein by reference. Specific terms and conditions from one or more conservation schedules from similar filed tariffs may also apply, as determined by PSE at its sole discretion, based on various criteria. A complete list of conservation schedules is available at: ht(gs:llwww.pse.com/en/"pages/rates/electric-tari,�fs-and-rules 10. Publications. Except as may be required by law, neither party to this Agreement shall, without the prior written consent of the other, make any news release or public announcement or place any advertisement stating that PSE and Participant have contracted for the products or services specified in this Agreement or have entered into any business relationship. Participant may not use any PSE trademark or service mark in any promotional materials without PSE's prior review of such usage and written approval of it, at PSE's sole discretion. 11. Entire Agreement. This Agreement and its attachments set forth the entire agreement between the parties and supersede any and all prior agreements with respect to the Conservation Measures. No change, amendment or modification of any provision of this Agreement shall be valid unless set forth in writing and signed by both parties. PUGET SOUND ENERGY Name: Leslie Wright Title: Mgr. Business Energy Management PARTICIPANT CITY OF P�RT ORd HARD ocuSigne y: fob P4aAA&SWA, By. . 6499F9F58471l Print Name: Rob Putaansuu Title: Mayor Federal Tax I.D. No.: 91-6001487 4386 4/13 Page 3 of 3 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A PUGET SOUND ENERGY Conservation Agreement No.:gram: Project No.: ATTACHMENT C TO CONSERVATION GRANT Conservation Measure(s) shall consist of the following: Base Year Capital Projects Pay for Performance 1 P_1377771 The PFP Program Application list of capital savings opportunities table provides a list of capital projects submitted by PARTICIPANT on 08/26/2022. Bidding closed in May 2023 and construction commenced in Sept 2023. These projects are to be completed in the first 12 months, not to exceed 15 months, of the 5 year grant term. If all projects are completed in less than 12 months, and the required documentation has been submitted to PSE, the Year 1 Base Incentive can be made before the end of the first year. Incentive Specifications PSE will provide incentives on an annual basis in accordance with the proposed capital projects. In order to receive the incentive, PARTICIPANT shall provide all deliverables required in Participant Requirements. The incentives will be as follows: 1) Base Incentives: The Base Incentives are calculated using proposed 1st year savings from the Estimated Project Savings in Attachment A. The total Base Incentive rate is not to exceed $0.45/kWh. PARTICIPANT may receive an incentive for between 0-50% of the Base Year 1 incentive. PARTICIPANT has agreed to 50%. This payment may be received after completing the projects & submitting required documentation, even if they are completed in less than 1 year. The remaining 50% has been used to calculate a $0.05625/kWh rate to be paid annually for the rest of the contract discounted based on achieved saving. 2) Performance Incentives: The performance incentive will be calculated after each of the 4 performance years. A performance incentive rate equal to $0.05/kWh will be paid for annual savings achieved beyond the projected Base Year Projects savings total. The above specifications are solely for the purpose of defining energy -related components of Conservation Measure(s) for which the Grant is offered. Puget Sound Energy is not responsible for ensuring the health, safety, comfort, or well-being of workers or facility occupants or the suitability of equipment selected for the intended application. It is the responsibility of the grant Participant and the Participant's hired designers, contractors, consultants to ensure compliance of the Conservation Measure(s) with Participant's needs and all applicable codes and standards. The following shall be submitted by Participant prior to Grant payment: Completed Request for Taxpayer I.D. Number ("W-9"). ® Copies of invoicing (no purchase orders, quotes, or estimates) for all expenses, including but not limited to equipment, materials, and labor associated with installation of Conservation Measure(s). 60114/13 Page 1 of 7 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A PUGET SOUND ENERGY Conservation Agreement No.:gram: Project No.: ATTACHMENT C TO CONSERVATION GRANT Conservation Measure(s) shall be verified as follows prior to Grant payment: Participant Requirements By participating in the P413 program, the PARTICIPANT agrees to: Pay for Performance 1 P_1377771 1) Establish a primary contact: PARTICIPANT must designate a primary contact for communicating with PSE over the course of the program. If the primary contact changes at any time, PARTIPANT agrees to notify PSE of a new contact. PARTICIPANT designates Denis Ryan of City of Port Orchard Public Works department. 2) Complete Quarterly Reporting: PARTICIPANT must complete and submit Quarterly Reporting for the building(s) identified in the Grant Agreement. The reports must note any significant action that impacted energy usage including: a. Capital projects status b. 0&M changes (schedules, set points, etc.) c. Behavioral campaigns d. Changes in occupied hours e. Changes in occupancy f. Changes in site square footage Quarterly Reports are due 9/31, 12/30, 3/29, and 6/31 of each year of the grant. The final project costs for any addition capital measures are due by 06/31 of each year of the grant. PARTICIPANT has up to 60 calendar days from the due date to submit the deliverable requirement or within a time period determined by PSE. If PARTICIPANT does not provide the deliverables, PSE may terminate the contract and all services. A sample Quarterly Report Template is provided in Attachment D. Baseline The prior 12 month's consumption is generally the fixed baseline. The baseline period for this grant agreement is proposed to be electric billing cycle ending 8/24/2022-7/25/2023 + electric equivalent of gas billing cycle ending 4/6/2022-3/7/2023. 60114/13 Page 2 of 7 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A PUGET SOUND ENERGY Conservation Agreement No.:gram: Project No.: ATTACHMENT C TO CONSERVATION GRANT Pay for Performance 1 P_1377771 The combined equivalent electric consumption of PSE/CNG supplied energy during the baseline period was 492,702 kWh. The Base Year projects represent a 56% savings over baseline. PSE Savings Calculations PSE will calculate the savings of the performance period against the baseline period on an annual basis for PARTICIPANT. The baseline period consumption will be adjusted to the independent variables that impact consumption, which may include weather, occupancy hours, production units, etc. PSE will also deduct the deemed savings from any capital measures implemented by customer that have already been incentivized through other rebate programs. PSE has identified the likely independent variables as HDD and CDD, but reserves the right to change the independent variables used. PARTICIPANT shall submit any information that would support adjustments to the baseline. This may include changes to the building area, changes in occupancy, significant addition of plug loads (greater than 1% of annual consumption), etc. If intended energy savings are not being achieved by Conservation Measure(s) because specified equipment efficiency parameters or performance parameters defined above are not used, Participant shall be required to correct such deficiencies prior to Grant payment. Failure to comply with specified equipment efficiency or performance parameters may result in forfeiture or reduction of Grant payment. IAL 60114/13 Page 3 of 7 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A Conservation Program: Pay for Performance Agreement No.: 1 Project No.: P_1377771 ATTACHMENT D - QUARTERLY REPORT TEMPLATE Building Name: Person Completing this Form: Building Area (ft2): Current EUI (kBTU/ft2): ENERGY STAR Score: Electric Meter: Annual kWH: Last EUI: Gas Meter: Date: Annual Therms: Target EUI: CAPITAL PROJECTS STATUS Project Name Start Date Completion Date Status/Progress Notes Occupancy schedule for Day Occupancy schedule for Day the next 3 months (or see attachment) Start Stop Notes 6011 4/13 Page 4 of 7 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A PUGET SOUND ENERGY Conservation Program: Pay for Performance Agreement No.: 1 Project No.: P_1377771 ATTACHMENT D - QUARTERLY REPORT TEMPLATE 1 Does the HVAC schedule align with system Look at the controls schedule (if available) for all ❑ ❑ settings? major HVAC systems. Look at the interval data for Do the HVAC zone setpoints align with a typical week. 2 Look at the control system for typical system ❑ ❑ system settings? setpoints. 3 Are upcoming holidays, breaks, and events Look at the controls schedule for all major HVAC ❑ ❑ scheduled? systems. Look at the interval data for past holidays/events to confirm scheduling is working Are economizers functioning? properly. ❑ ❑ 4 Look at major HVAC systems to confirm that outside air dampers are open above minimum setpoint and mechanical cooling is disabled when outside air temperature is less than the cooling setpoint. 5 Are all major pieces of equipment operating Look at the control system or electrical panels to ❑ ❑ in automatic mode (rather than manual, confirm equipment is operating in automatic hand, off, etc)? Does your interior lighting schedule match mode. Look at the lighting control system. 6 ❑ ❑ occupancy? 7 Does your exterior lighting match non- Look at the lighting control system, time clock, or ❑ ❑ daylight hours? How have you engaged with occupants other lighting controls. Consider reminders, posters, stickers, newsletters, 8 ❑ ❑ and/or implemented behavioral campaigns? websites, meetings, etc. 6011 4/13 Page 5 of 7 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A s PUGET SOUND ENERGY Conservation Program: Pay for Performance Agreement No.: 1 Project No.: P_1377771 ATTACHMENT D - QUARTERLY REPORT TEMPLATE 9 Have any major changes (occupancy, staffing, production, building area, additional plug loads, etc) occurred at your building? 10 Have you started, completed, or plan on completing any capital projects? If so, when? 11 Have there been any changes (positive or negative) in your monthly billing data? 12 Do your system settings align with interval data? 1 2 3 4 Look at your monthly bill data (adjusted for weather or other variables, if possible) and make comments regarding trends. Look at the interval data for a typical week and holidays/events. ❑ I❑ FEEn ❑ I ❑ uVE 6011 4/13 Page 6 of 7 DocuSign Envelope ID: DA9326A6-62A5-40DB-80D6-5CDBC069280A ' PUGET SOUND ENERGY Conservation Agreement No. Program: Pay for PerformancI Project No.: P_1377771 ATTACHMENT E - EXAMPLE SAVINGS & INCENTIVES CALCULATIONS The following table demonstrates how savings may be claimed for a sample portfolio: Table 3: Example Savings & Incentives for 15% Projected Capital Savings, Taking 50% of the Base Incentive at the end of Year 1 ($0.30/kWh) Year Adjusted Baseline Usage (kWh) Yearly Usage (kWh) Yearly Savings (kWh) Base Incentive Base Rate ($/kWh) Incentive ($) Performance Incentive @ $0.05/kWh ($) 1 1,000,000 850,000 150,000 $0.15/kWh $22,500 N/A 2 1,000,000 900,000 100,000 $0.0375/kWh $3,750 $0 3 1,000,000 800,000 200,000 $0.0375/kWh $5,625 $2,500 4 1,000,000 790,000 210,000 $0.0375/kWh $5,625 $3,000 5 1,000,000 800,000 200,000 $0.0375/kWh $5,625 $2,500 Total $43,125 $8,000 Table 1 Definitions • Adjusted Baseline Usage — The baseline usage adjusted based on current independent variables (weather, occupancy hours, building area, production units, etc) that impact consumption. • Yearly Usage —The usage of the site during the year's reporting period. • Yearly Savings —The Adjusted Baseline Usage minus the Yearly Usage. • Base Incentive Rate — The capital incentive rate per year. Not to exceed $0.30/kWh (or $5.00/therm) total. In Year 1, not to exceed $0.15/kWh (or $2.50/therm). In Years 2-5, it is the remaining $/kWh (or therm) divided by 4. • Base Incentive — The Yearly Savings multiplied by the Base Incentive Rate. Note that this number can't be negative. • Performance Incentive — Any yearly savings greater than the Year 1 Projected Capital Savings amount, multiplied by $0.05/kWh (or $0.50/therm). Note that this number can't be negative. 60114/13 Page 7 of 7