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W A T E R E N E R G Y L f I L RIVERSIDE PUBLIC UTILITIES L3W& Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: September 21, 2812 ITEM NO: 7 SUBJECT: POWER PURCHASE AGREEMENT BETWEEN AP NORTH LAKE SOLAR L.P. AND RIVERSIDE PUBLIC UTILITIES ISSUES; That the Board of Public Utilities consider approval of the Power Purchase Agreement ("PPA') between AP North Lake Solar, L.P. ("North Lake") and the City of Riverside for up to 20 MW of renewable solar photovoltaic energy and Renewable Energy Credits from the Diamond Valley Lake Solar Photovoltaic ("PV") project in Hemet, California . RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the 25-year Power Purchase Agreement between AP North Lake Solar L.P. and the City of Riverside to provide renewable solar photovoltaic energy and Renewable Energy Credits from the Diamond Valley Lake Solar PV project in Hemet, California; 2. Authorize the City Manager, or his designee, to execute the Power Purchase Agreement t; 3. Authorize the City Manager, or his designee, to execute any future amendments to the Power Purchase Agreement for additional procurement of renewable solar photovoltaic energy and Renewable Energy Credits under terms and conditions substantially similar or superior to this Power Purchase Agreement; 4. Authorize the Public Utilities General Manager, or his designee, to execute any documents necessary to administer the Power Purchase Agreement that are consistent with the established policies by the City Council; and 5. Authorize the City Manager, or his designee, to terminate the Power Purchase Agreement in accord with the Power Purchase Agreement if the project is no longer viable or the annual performance standard is not met. BACKGROUND: In 2082, California Senate Bill 1878 ("SB 1078") required utilities to adopt a Renewables Standard. Investor Owned Utilities ("IOUs") were required to adopt specified goals of renewable resource procurement, while governing bodies of municipally-owned utilities such as Riverside Public Utilities ("RPU") were permitted to adopt their own goals that recognized the intent of the legislation. IOUs were required to procure 20% of their retail customer needs using renewable resources by 2817. California Senate Bill 187, enacted in 2006, accelerated the renewable procurement goal for IOUs to 20% by 2010.