1
EXHIBIT 10.93
SECOND AMENDMENT TO
MASTER ENERGY EFFICIENCY SERVICES AGREEMENT
BETWEEN
CITY OF SAN DIEGO, CALIFORNIA
AND
ONSITE ENERGY CORPORATION
Phase 2
CAB and Central Power Facilities with Optional World Trade Center Cooling Tower
Mechanical and Lighting Efficiency Project
This Second Amendment to Master Energy Efficiency Services Agreement (this
"Amendment") is made as of May ___, 2001, by and between Onsite Energy
Corporation ("Onsite") and the City of San Diego, California ("Customer")
(collectively, the "Parties") (capitalized terms used herein, unless otherwise
defined, shall have the meanings ascribed thereto in the Master ESA, defined
below), with reference to the following:
A. Onsite and Customer entered into that certain Master Energy Efficiency
Services Agreement dated as of November 22, 1999 (the "Master ESA"), whereby
Onsite agreed to provide to Customer, or arrange for the provision of, certain
ECMs at Customer's facilities (the "Project").
B. Pursuant to the terms of the Master ESA, the Parties agreed to amend
the Master ESA to implement the various phases of the Project. The Parties now
desire to amend the Master ESA to implement Phase 2 of the Project. The Master
ESA and this Amendment collectively shall be referred to herein as the
"Agreement."
NOW, THEREFORE, for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Parties agree as follows:
1. PHASE 2 - SCOPE OF SERVICES: For Phase 2 only and subject to the
provisions of this Amendment, the ECMs set forth on Exhibit 1 attached hereto
and incorporated herein are to be installed, and the Work described in Exhibit 1
performed, at Customer's facilities listed on Exhibit 2 attached hereto and
incorporated herein, which Customer owns (the "Facilities"). Comfort Levels (if
applicable) for Phase 2 shall be determined during the Design/Review Phase. In
accordance with the terms and conditions of the Master ESA, Onsite hereby
assigns to Customer all manufacturers' warranties for all ECMs installed under
this Amendment. The scope of the Work set forth in Exhibit 1 may be modified by
Onsite and Customer in connection with the design reviews of the Work by Onsite
and Customer consistent with the financial parameters of the Phase, all as set
forth in Section II of the Master ESA. The financial parameters of Phase 2 are
set forth in the proforma attached hereto as Exhibit 8; provided, however, that
the Parties understand and agree that, notwithstanding anything to the contrary
in Section II of the Master ESA, the proforma attached hereto as Exhibit 8 is
for the scope of the Work set forth in Exhibit 1 and thus the proforma may be
modified by the Parties as they modify and finalize the scope of the Work for
Phase 2. Additionally, the Total Capital Cost set forth in Section 4 below is
for the scope of the Work set forth in Exhibit 1, and the Total Capital Cost of
Phase 2 will be modified and finalized by the Parties in connection with the
design reviews so long as the Total Capital Cost shall not exceed the
not-to-exceed amount of the Total Capital Cost set forth in Section 4 (unless
otherwise agreed by the Parties).
2. PHASE 2 - OPERATION AND ADMINISTRATIVE SERVICES: For Phase 2 only,
Onsite will provide the operation and administrative services as set forth in
Master ESA.
Page 1 of 5
2
3. PHASE 2 - MEASUREMENT AND VERIFICATION: For Phase 2 only, in exchange
for the M&V Fee set forth in Section 7 (which is included as part of the Fixed
Payment), Onsite will provide the measurement and verification ("M&V") services
as set forth on Exhibit 3 attached hereto and incorporated herein, in accordance
with the plan set forth in Exhibit 3, and shall prepare and submit the SPC
Documentation and the Energy Savings reports pursuant to Section IX of the
Master ESA. On an annual basis, within ninety (90) days after the end of each
Phase Period, Onsite will reconcile its actual costs of performing the M&V
services pursuant to this Amendment, including but not limited to all direct
third party costs and Onsite labor at Onsite's billing rates. If, on a
cumulative basis throughout the term of this Amendment (the Phase Term) the M&V
Fee paid by Customer is in excess of Onsite's reconciled costs, Onsite will
promptly pay to Customer the difference. Customer shall not have the ability to
offset succeeding payments pursuant to this Amendment for any such difference.
4. PHASE 2 - CAPITAL COSTS:
Energy efficiency retrofit includes:
- Audit for Phase 2 - Project Management
- Applications/Design Engineering - Utility Rebate/SPC/Incentive
- Subcontract costs Payment Coordination
(including labor and material) (as applicable)
TOTAL CAPITAL COST (NOT-TO-EXCEED) $2,635,829
Onsite will provide a breakdown of the Total Capital Cost on a per building
basis upon completion of the Design/Review Phase set forth in Exhibit 1.
As described in Section 1 above, the scope of the Work to be performed on Phase
2 will be finalized by the Parties during the design reviews. Accordingly, the
Total Capital Cost set forth above is based on the current scope of the Work set
forth on Exhibit 1, and the Parties understand and agree that the actual amount
of the Total Capital Cost of Phase 2 will be finalized and agreed to by the
Parties during the design reviews; provided, however, that the Total Capital
Cost for Phase 2 shall not exceed the not-to-exceed amount of the Total Capital
Cost set forth above, unless otherwise agreed by the parties.
The Phase Term of Phase 2 is eighty-four (84) months after the Phase
Commencement Date for Phase 2.
5. PHASE 2 - ESTIMATED ENERGY SAVINGS: $337,193/YEAR
Estimated Energy Savings numbers are based upon the stipulated
facility usage set forth on Exhibit 4 and utility rates set forth below:
ENERGY RATE SCHEDULES
CAB and Central Power Facilities $0.1040 per kWh.*
Page 2 of 5
3
* The above energy rates are stipulated to increase at the rate of three and
one-half percent (3.5%) annually beginning in the fourth Phase Period (that is,
three (3) years after Substantial Completion) and continuing through the end of
the Phase Term.
Guaranteed Energy Savings factor per the Master ESA: $337,193 X 90%
6. PHASE 2 - GUARANTEED ENERGY SAVINGS: $303,474/YEAR
7. PHASE 2 - FIXED PAYMENT (INCLUDING M&V FEE):
$343,376.20/YEAR FOR FIRST YEAR
$375,549.20/YEAR FOR NEXT SIX (6) YEARS (UNLESS OTHERWISE PROVIDED
IN EXHIBIT 5)
a. Payment of Fixed Payment. Notwithstanding anything to the
contrary in the Master ESA (including but not limited to in Schedule C to the
Master ESA), the Fixed Payment shall be payable in annual installments during
each Phase Period. For Phase 2 only, as set forth on Exhibit 5 attached hereto
and incorporated herein, Customer shall pay to Onsite the Fixed Payment for a
period of seven (7) years via (i) one (1) annual payment of Three Hundred
Forty-Three Thousand Three Hundred Seventy-Six and 20/100 Dollars ($343,376.20);
and then (ii) six (6) annual payments of Three Hundred Seventy-Five Thousand
Five Hundred Forty-Nine and 20/100 Dollars ($375,549.20) each. Unless otherwise
provided in Exhibit 5, of each annual payment of the Fixed Payment for all Phase
Periods after the first Phase Period, Three Hundred Forty-Three Thousand Three
Hundred Seventy-Six and 20/100 Dollars ($343,376.20) is attributable to the
Total Capital Cost of the Phase, and Thirty-Two Thousand One Hundred
Seventy-Three Dollars ($32,173) is the M&V Fee and compensation for the Energy
Savings guarantee. The first annual installment of the Fixed Payment is due
within thirty (30) days of the Phase Commencement Date (unless otherwise agreed
by the Parties), and each annual payment thereafter is due and payable by
Customer on the same day of the same month of each following year.
b. Lump Sum Payments. In addition to the Fixed Payment, Customer
shall pay to Onsite lump sum payments of (i) Two Hundred Forty Thousand Dollars
($240,000) on or before January 1, 2002; and (ii) One Hundred Twenty Thousand
Dollars ($120,000) on or before July 1, 2002. Customer may make these payments
by endorsing the applicable checks for the RFP Incentive Payments (as defined in
Section 9 below) other than the First RFP Payment (as defined in Section 9
below) to Onsite, or by directing SDG&E to pay the RFP Incentive Payments
directly to Onsite on Customer's behalf.
8. PHASE 2 - DISBURSEMENT AUTHORIZATIONS; PAYMENT OF FIRST RFP PAYMENT:
For Phase 2 only, upon each request of Onsite in accordance with the
Construction Draw Schedule attached hereto as Exhibit 6 (as the same may be
adjusted by the Parties as performance of the Work on Phase 2 progresses),
Customer agrees to execute a Disbursement Authorization (substantially in the
form attached hereto as Exhibit 7 and incorporated herein or as attached to the
Escrow Agreement attached hereto as Exhibit 9, as the financing source may
require) (each an "Authorization"), thereby authorizing the advance of funds by
the financing source on Phase 2 to Onsite for the benefit of Customer. Customer
acknowledges that all of the funds to be advanced by such financing source under
this Amendment will be deposited in an escrow account. Because the financing
source has advised both Onsite and Customer that Customer must be a party to any
escrow agreement required to establish the escrow account, upon Onsite's request
Customer agrees to execute and deliver to the financing source an Escrow
Agreement substantially similar to
Page 3 of 5
4
the form attached hereto as Exhibit 9. Additionally, Customer shall pay to
Onsite the First RFP Payment (as defined in Section 9 below) either promptly
upon receipt of the same by Customer by endorsing the applicable check therefor
to Onsite, or by directing SDG&E to make the payment directly to Onsite on
Customer's behalf.
9. PHASE 2 - CUSTOMER INCENTIVE PAYMENT: See Exhibit 5 attached hereto
and incorporated herein. As of the date of this Amendment, the Customer
Incentive Payment is estimated to be as set forth on Exhibit 5 attached hereto
and incorporated herein. As set forth in the Master ESA, the Customer Incentive
Payment shall be one hundred percent (100%) of the Incentive Payments,
calculated and payable as set forth in Section VII of the Master ESA; provided,
however, that notwithstanding the foregoing, in the event the RFP Incentive
Payments (as defined below) actually received by Customer are less than Six
Hundred Thousand Dollars ($600,000), Customer hereby agrees that it shall pay or
cause to be paid to Onsite an amount of the Customer Incentive Payment equal to
such shortfall or difference, and further agrees that Incentive Payments and
Customer Incentive Payment for purposes of this sentence shall mean payments
under the SPC Program only (that is, excluding the RFP Incentive Payments).
Notwithstanding anything to the contrary in the Master ESA, (i) the Parties
agree that SPC Program shall be defined to include any utility incentive
program, including the SPC Program as defined in the Master ESA; (ii) except as
otherwise specified in this Section 9, Incentive Payments shall be defined as
and include payments under the SPC Program and the RFP Incentive Payments (as
defined below); and (iii) the Incentive Payments under the SPC Program that is
applicable to a portion of the ECMs (the pumping system) to be installed under
Phase 2 are payable as follows: (a) sixty percent (60%) of the aggregate of such
Incentive Payments is due approximately upon completion of Phase 2 and submittal
to and, if required, approval by SDG&E of the required SPC Documentation; and
(b) forty percent (40%) of the aggregate of such Incentive Payments is due
approximately at the end of the first year after completion of Phase 2 and
submittal and/or approval of the SPC Documentation, if required.
Additionally, under a proposal submitted by Customer and accepted by SDG&E in
response to SDG&E's 2001 Energy Efficiency Programs Request for Proposals for
Nonresidential Peak Load Reduction released on or about February 26, 2001, SDG&E
has agreed to pay to Customer the sum of Six Hundred Thousand Dollars ($600,000)
in incentive payments for the remaining portion of the ECMs (mechanical and
lighting) to be installed under Phase 2 (the "RFP Incentive Payments"), the
first forty percent (40%) of which is due approximately upon the start of
implementation of the Phase (the "First RFP Payment") and is to be paid by
Customer to Onsite in accordance with Section 8 above.
The Parties understand and agree that because the scope of the Work is subject
to modification during the Design/Review Phase set forth in Exhibit 1, and thus
the Total Capital Cost of the Phase also is subject to modification and
finalization during the Design/Review Phase, the Parties will cooperate with
each other to modify any provisions of or Exhibits to this Amendment that may
require modification or revision in connection with or as a result of the
finalization of the scope of the Work and Total Capital Cost.
Page 4 of 5
5
Except as otherwise amended herein, all other terms and conditions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties have caused their duly authorized officers and
agents to execute this Amendment as of the date first set forth above.
Onsite:
ONSITE ENERGY CORPORATION
Date: May ___, 2001 By:
--------------------------------------
Xxxxxxx X. Xxxxxxxx, President and CEO
Customer:
CITY OF SAN DIEGO, CALIFORNIA
Date: May ___, 2001 By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Attachments:
Exhibit 1 -- ECMs to be Installed (Scope of Work)
Exhibit 2 -- List of Facilities
Exhibit 3 -- Monitoring and Verification Plan
Exhibit 4 -- Stipulated Facility and Equipment Usage
Exhibit 5 -- Fixed Payment and Guaranteed Energy Savings/Customer Incentive
Payment
Exhibit 6 -- Construction Draw Schedule
Exhibit 7 -- Form of Disbursement Authorization
Exhibit 8 -- Proforma for Phase 2
Exhibit 9 -- Form of Escrow Agreement
Page 5 of 5
