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SR 05-23-2023 5F City Council Report City Council Meeting: May 23, 2023 Agenda Item: 5.F 1 of 4 To: Mayor and City Council From: Edward F King, Director, Department of Transportation, Transit Maintenance Subject: Approval of Second Modification to Contract with Clean Energy Corporation for Increased Funding for Purchase of Renewable Liquid Natural Gas Recommended Action Staff recommends that the City Council: 1. Adopt a finding of categorical exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines 2. Authorize the City Manager to negotiate and execute a second modification to agreement #11155 in the amount of $5,899,994 with Clean Energy Corporation to provide Renewable Natural Gas fuel for the Santa Monica Department of Transportation. This will result in an amended agreement with a new total amount not to exceed $11,771,926, with future year funding contingent on Council budget approval, with the original five-year term of the agreement remaining unchanged. Summary The Department of Transportation (DOT) supports the City of Santa Monica’s sustainability goals through the purchase of zero-emission transit buses and by purchasing the lowest carbon intensity fuel available for its fleet of existing natural gas buses. DOT’s Big Blue Bus currently has 177 buses powered by Renewable Natural Gas (RLNG) harvested from land-fill methane. Because natural gas is a widely traded commodity, its price can be volatile. The purchase price of DOT’s RLNG fuel is based on the SoCal Border Index price for natural gas and varies monthly. The price of natural gas purchased for use in DOT transit buses has increased since the award of its current contract for fuel purchases resulting in higher-than-expected expenditures. As such, contract purchasing authority will be exhausted by the end of fiscal year 2023. To provide sufficient funding for transit bus fuel purchases through the remaining contract 5.F Packet Pg. 401 2 of 4 period, staff recommends modifying the existing five-year agreement with Clean Energy to increase the total amount by $5,899,994 for a total not-to-exceed amount of $11,771,926. Discussion On May 11, 2021, Council awarded bid #4404 to Clean Energy and authorized a contract to provide RLNG fuel to Big Blue Bus for a five-year period with a total amount not to exceed $5,871,932. The current contract expires on June 30, 2026, and fuel purchases to date have exhausted purchasing authority. Staff is currently working to execute a first modification of DOT’s contract for fuel purchases to exercise the contingency approved by Council at its May 11, 2021 meeting. This will provide sufficient funding for fuel purchases through the end of fiscal year 2023. Fuel expenditures have exceeded staff expectations due to large fluctuations in the cost of natural gas. DOT’s fuel price under its fuel purchases contract is based on the SoCal Border Index natural gas price with added charges to convert the fuel to a liquid form, a delivery fee, and a discount based on Low Carbon Fuel Standards credits received from the State of California. The SoCal Border Index (Index) is broadly representative of natural gas pricing in the Southern California region and is influenced by the broader natural gas market. At the time of the contract award, this index price had averaged $2.5604/Metric Million British Thermal Unit (MMBtu) over the preceding two fiscal years. Based on the bid pricing, staff had expected fuel costs to fall by 38% over the previous contract pricing provided there were no large fluctuations in the Index price. The Index price of natural gas began to increase substantially after the award of DOT’s fuel contract resulting in higher-than-anticipated fuel pricing. The average Index price of natural gas was $5.9900/MMBtu the first year of contract #11155 and $11.9640/MMBtu in the current contract period representing a 134% and 367% increase over our estimated pricing of $2.5604/MMBtu. These price changes have been observed in the broader natural gas market and are driven by national and global factors, including winter storms and war in Ukraine, creating increased demand for natural gas and disrupting supplies. Staff expect expenditures to decrease in Fiscal Years ending 2025 5.F Packet Pg. 402 3 of 4 and 2026 due to increases in SMDOT’s fleet of zero-emission transit buses. These reductions are included in this modification request. This second modification would provide sufficient funding for fuel purchases through the remainder of contract #11155. Environmental Review The contract modification for the purchase of renewable fuels is categorically exempt pursuant to Section 15301 (Class 1 Existing Facilities) of the CEQA State Guidelines. Section 15301 exempt projects that consists of the operation, repair, maintenance, leasing, licensing, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use. The contract modification would not result in any modifications to existing fueling facilities or BBB fleet. Fueling facilities for the BBB fleet currently exist and the contract modification would not expand or materially change existing fueling operations. Therefore, the project is categorically exempt as set forth in Section 15301 of the CEQA State Guidelines. Past Council Actions Meeting Date Description 05/11/2021 (attachment A) Award Bid #4404 and Enter into Agreement with Clean Energy Fuels Corporation for purchase of Renewable Liquid Natural Gas. Financial Impacts and Budget Actions Staff seeks authority to approve funding from the Big Blue Bus Fund to increase the amount of its contract #11155 with Clean Energy for the purchase of RNLG fuel for its transit bus fleet. Funding will be included in the FY 2023-25 Biennial Budget for Council approval. Future year funding is contingent on Council budget approval. Contract Modification Request Agreement # Current Authorized Amount FY 2023-24 Budget Request Amount Future Years Amount Dept/CIP Account # Total Requested Contract Amount 11155 $5,871,932 $1,927,131 $3,972,863 60600013.521841 $11,771,926 5.F Packet Pg. 403 4 of 4 Prepared By: David Nanjo, Administrative Analyst Approved Forwarded to Council Attachments: A. CSA 11155 - Staff Report B. Clean Energy CSA 11155 - Oaks C. Clean_Energy_Contract__11155 5.F Packet Pg. 404 City Council Report City Council Meeting: May 11, 2021 Agenda Item: 3.B 1 of 4 To: Mayor and City Council From: Edward F King, Director, Department of Transportation, Transit Maintenance Subject: Award Bid #4404 and Enter into Agreement with Clean Energy Fuels Corporation for Purchase of Renewable Liquid Natural Gas Recommended Action Staff recommends that the City Council: 1. Award Bid #4404 to Clean Energy Corporation to provide Renewable Natural Gas fuel for the Santa Monica Department of Transportation. 2. Authorize the City Manager to negotiate and execute an agreement with Clean Energy Fuels Corporation, in an amount not to exceed $5,871,932 over a five- year period, which includes a 15% contingency and a 2.5% annual cost escalator, with future year funding contingent on Council budget approval. Executive Summary The Santa Monica Department of Transportation (SaMoDoT) is committed to the City of Santa Monica’s sustainability goals through the purchase of zero-emission transit buses and the purchase of the lowest carbon intensity fuel available for its fleet of existing natural gas buses. SaMoDoT’s Big Blue Bus currently has 177 buses powered by clean-burning Renewable Natural Gas (RLNG) harvested and produced in California in its Big Blue Bus (BBB) fleet. Staff recommends the award of Bid #4404 to Clean Energy Fuels Corporation (Clean Energy) and to negotiate and execute an agreement with Clean Energy for the purchase and delivery of Renewable Bio-Liquid Natural Gas for a five-year period in the amount not to exceed of $1,000,005 for the first year with the total five-year contract amount not to exceed $5,871,932 including a 15% contingency and a 2.5% annual cost escalator. Discussion Big Blue Bus has begun transitioning its fleet of transit buses to zero-emission vehicles but will continue to operate natural gas buses for a ten-year period at minimum. BBB currently operates 177 natural gas-powered transit buses fueled by Renewable Bio- 5.F.a Packet Pg. 405 Attachment: CSA 11155 - Staff Report (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) 2 of 4 Liquid Natural Gas (RLNG). This fuel is 100% domestically produced and is derived from harvested landfill methane. The use of RLNG significantly reduces harmful greenhouse gas emissions and further reduces the City’s emissions of harmful pollutants. The measure of emissions reduction involves calculating the Low Carbon Fuel Standard (LCFS) credits and greenhouse gas emissions. LCFS promotes the use of greenhouse gas-reducing transportation fuels such as liquid biofuels, renewable natural gas, electricity, and hydrogen through a fuel- neutral declining carbon intensity standard, which is administered by the California Air Resources Board. Carbon Intensity (CI) is a measure of the greenhouse gas (GHG) emissions associated with the production, distribution, and consumption of transportation fuels. In order to achieve the GHG reductions at the lowest cost and in the most consumer-responsive manner, the LCFS uses a market-based credit trading system to allow providers to choose how they reduce emissions while responding to consumer demand. The award of Bid #4404 to Clean Energy would enable the continued use of RLNG to power the City’s fleet of natural gas transit buses and other City vehicles. It also provides the City a share of the LCFS credits from the producer, Clean Energy, as a fixed discount on a per-gallon basis. Clean Energy has provided this service since 2011 with exceptional service meeting all City specifications. The Environmental Protection Agency sets the Carbon Intensity for each fuel type. The RLNG that BBB uses to power its fleet of natural gas buses has a CI value of 44.31 grams of carbon dioxide equivalent per megajoule (gCO2e/MJ) compared to 95.00 for fossil natural gas resulting in an estimated GHG emissions reduction of 11,945 metric tons. Staff recommends the continued use of RLNG as fuel in its fleet of transit buses to minimize BBB’s emissions during its transition to zero-emission buses. Renewable Bio-Liquefied Natural Gas is non-fracked methane harvested from organic waste in landfills. The process of harvesting and processing RLNG provides a product that has fewer impurities than conventional natural gas and is a cleaner burning fuel 5.F.a Packet Pg. 406 Attachment: CSA 11155 - Staff Report (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) 3 of 4 source. Historically, this gas has been burned off into the atmosphere, but can now be harvested for use as fuel. The gas is collected from landfills and put through a filtration and refining process that removes impurities that are found in conventional natural gas creating a cleaner burning fuel. Operating transit buses on this waste-to-energy source contributes to BBB’s commitment to protecting the environment by using the cleanest transportation fuels available. Vendor/Consultant Selection Bidder Recommendation Best Bidder Clean Energy Fuels Evaluation Criteria price, carbon intensity of fuel, quality of fuel provided, capacity to provide sufficient quantity of fuel in a timely manner, compliance with City specification and scope of work Municipal Code SMMC 2.24.180 Submittals Received Clean Energy $5,796,855 Element Markets No Bid Applied LNG Technologies, LLC No Bid Bid Data Date Posted Posted On Advertised in (City Charter & SMMC) Vendors Downloaded Date Publicly Opened 2/3/2021 City’s online vendor portal Santa Monica Daily Press 11 2/23/2021 Best Bidder Justification Bids were evaluated based on the criteria in SMMC 2.24.180 including price, experience, ability to deliver fuel timely and in quantities required, quality of fuel in both purity and carbon intensity, and ability to comply with City specifications. Clean Energy can provide Renewable Liquefied Natural Gas (RLNG) that meets all City requirements for Methane purity and delivery temperature. Clean Energy’s bid also provides revenue sharing from LCFS credits on a fixed basis that will lower transit bus fuel costs while minimizing any impacts of volatility in the LCFS credit market. Because Clean Energy is the incumbent bidder, staff compared the pricing in its bid submittal to the City’s current contract for RLNG and found the bid price to be lower than the City’s current contract price. Additionally, all other bidders provided a no-bid response. No-bid responses were submitted by bidders who reviewed the bid specifications, but chose not to submit a bid. One bidder cited unacceptable contract terms and the other did not state the reason for 5.F.a Packet Pg. 407 Attachment: CSA 11155 - Staff Report (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) 4 of 4 submitting a no-bid response. Based on the price, ability to provide RLNG fuel that meets the City’s specifications, ability to provide a share of LCFS credit revenue, and positive history with the bidder’s services, Clean Energy is recommended as the best bidder. Financial Impacts and Budget Actions Staff seeks authority to approve funding from the BBB enterprise fund to award a contract with Clean Energy Fuels to provide Renewable Liquefied Natural Gas fuel for the City’s fleet of transit buses. Contract/Agreement Request FY 2021-22 Budget Department/CIP Account # Total Contract Amount Request Amount $924,928 60600013.521841 $5,871,932 Prepared By: David Nanjo, Administrative Analyst Approved Forwarded to Council 5.F.a Packet Pg. 408 Attachment: CSA 11155 - Staff Report (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) CITY OF SANTA MONICA OAKS INITIATIVE NOTICE NOTICE TO APPLICANTS, BIDDERS, PROPOSERS AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS, OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA Santa Monica’s voters adopted a City Charter amendment commonly known as the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and information about the Initiative’s requirements. You mayobtain a full copy of the Initiative’s text from the City Clerk. This information is required by City Charter Article XXII—Taxpayer Protection. It prohibits a public official from receiving, and a person or entity from conferring, specified personal benefits or campaign advantages from a person or entity after the official votes, or otherwise takes official action, to award a “public benefit”to that person or entity. The prohibition applies within and outside of the geographical boundaries of Santa Monica. All persons or entities applying or receiving public benefits from the City of Santa Monica shall provide the names of trustees, directors, partners, and officers, and names of persons with more than a 10% equity, participation or revenue interest. An exception exists for persons serving in those capacities as volunteers, without compensation, for organizations exempt from income taxes under Section 501(c)(3), (4), or (6), of the Internal Revenue Code. However, this exception does not apply if the organization is a political committee or controls political committees. Examples of a “public benefit” include public contracts to provide goods or services worth more than $25,000 or a land use approval worth more than $25,000 over a 12-month period. In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.”If the “public benefit”is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Therefore, if you are seeking a “public benefit”covered by the Oaks Initiative, you must supply that information on the Oaks Initiative Disclosure Form. This information must be updated and supplied every 12 months. 5.F.b Packet Pg. 409 Attachment: Clean Energy CSA 11155 - Oaks (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) CITY OF SANTA MONICA OAKS INITIATIVE DISCLOSURE FORM In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Public benefits include: 1. Personal services contracts in excess of $25,000 over any 12-month period; 2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period; 3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period; 4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period; 5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000; 6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or 7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period. Name(s) of persons or entities receiving public benefit: Name(s) of trustees, directors, partners, and officers: Name(s) of persons with more than a 10% equity, participation, or revenue interest: Prepared by: ____________________________Title: __________________________ Signature: ______________________________________ Date: ________________ Email: ____________________________________ Phone: ____________________ FOR CITY USE ONLY: Bid/PO/Contract # ____________________________ Permit # ___________________________ Clean Energy (949) 437-1000 Chad Lindholm Senior Vice President February 6, 2023 chad.lindholm@cleanenergyfuels.com Andrew J. Littlefair, Mitchell W. Pratt, Robert M. Vreeland, Barclay F. Corbus None 5.F.b Packet Pg. 410 Attachment: Clean Energy CSA 11155 - Oaks (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 1 - Contract No. 11155 (CCS) PURCHASE AGREEMENT FOR RENEWABLE LIQUEFIED NATURAL GAS PRODUCT This Purchase Agreement for Renewable Liquefied Natural Gas Product (“Agreement”), entered into as of _________________(“Execution Date”), by and between the CITY OF SANTA MONICA, a municipal corporation (“City”), and CLEAN ENERGY, (“Clean Energy”), is made with reference to the following: RECITALS: A. The City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of the City. B. CLEAN ENERGY is qualified to do business, and is doing business, in the State of California. CLEAN ENERGY represents it has the background, knowledge, experience, and expertise necessary to provide the services set forth in this Contract. C. The City and CLEAN ENERGY desire to enter into an agreement for CLEAN ENERGY to provide contractual services to the City as set forth herein, upon the terms and conditions set forth below. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: TERMS AND CONDITIONS 1. Term. The term of this Agreement shall commence on the Execution Date and shall remain in effect for five years, unless sooner terminated as set forth in this Agreement. 2. Purchase and Sale of Product. Clean Energy shall sell to the City, and the City shall buy from Vendor, on an “as needed” basis the Product as set forth in the Product Specifications of the Scope of Services attached as Exhibit “A” and Clean Energy’s bid proposal attached as exhibit “D.” Clean Energy shall procure Product, at its sole discretion, from a variety of source locations (the “Production Location”) provided that any Product delivered meets the Product Specifications as described in Exhibit A of this Agreement. In the event that Clean Energy cannot provide Product at any time during this Agreement for any reason, Clean Energy shall notify City within 24 hours of the City’s placing of an order that Clean Energy cannot supply. In such event, City shall have the right at its discretion, to procure Product from another supplier until Clean Energy can begin providing Product again. 3. Delivery and Storage Site. At no cost to Clean Energy, City shall furnish an accessible, secure facility satisfactory for delivery and storage of Product at 1660 Seventh Street, Santa Monica, CA 90401 (the “Consuming Location”), including all foundations, lighting, extended fill lines, pipelines, and other equipment necessary for the safe distribution of Product from the Consuming Location. City shall maintain all DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 7/1/2021 5.F.c Packet Pg. 411 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 2 - of the foregoing in good repair and safe operating condition, provide all utility service required for power and lighting, and obtain all licenses and permits required in connection with operations at the Consuming Location. 4. Equipment. It is expressly understood by both parties that all equipment contained at the Consuming Location is sole property and responsibility of the City. 5. Deliveries. 5.1 Clean Energy and the City shall agree upon the times for delivery of Product at the Consuming Location. 5.2 Deliveries requested by the City during a City strike or other labor disturbances shall be at the City’s sole risk and Clean Energy, in its sole discretion, can refuse to make deliveries during a strike or other labor disturbance if Clean Energy determines that such a delivery could pose a risk or harm or danger to Clean Energy or any of its employees or agents. If Clean Energy is unable to deliver Product to the Consuming Location due to a City strike or other labor disturbance, City shall pay actual mileage and labor expenses that Clean Energy incurs for any failed delivery attempt. Clean Energy shall provide all supporting documentation to confirm the actual mileage and labor expenses incurred. 5.3 The normal maximum volume of Product that can be delivered to the Consuming Location in one delivery vehicle is 10,000 gallons. For all deliveries, Clean Energy shall measure the Product at the United States or State of California Department of Transportation weigh station scale nearest to the Consuming Location. Clean Energy shall supply to the City any certificates that result from weighing the Product. Billings for all deliveries will be made in RLNG gallons based on the actual weight delivered. 6. Warranty and Product Specifications. Unless Clean Energy receives written approval from City to adhere to different Product Specifications, the Product delivered under this Agreement shall have a minimum methane number of 75 MN and meet the Product Specifications outlined in Exhibit A. 7. City Services. The City agrees to: 7.1 Make available to CLEAN ENERGY any currently existing documents, data or information required for the performance of the Services. 7.2 Designate a representative authorized to act on behalf of City. 7.3 Promptly examine and render findings on all documents submitted for staff review by CLEAN ENERGY. 8. Compensation. The City will compensate CLEAN ENERGY for the Services performed in an amount not to exceed $5,106,027, as set forth in Exhibit B. 9. Invoices. CLEAN ENERGY will invoice the City for the Services in accordance with Exhibit B and the City will pay any undisputed amount within 30 days of receipt. DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 412 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 3 - 10. Notices. All notices, demands, requests or approvals to be given under this Agreement, must be in writing and will be deemed served when delivered personally, by email, or on the third business day after deposit in the United States mail, postage prepaid, registered or certified, addressed as follows: 10.1 All notices, demands, requests or approvals to the City: Big Blue Bus Maintenance division City of Santa Monica 1660 7th Street Santa Monica, California 90401 Attention: David Nanjo, Administrative Analyst Re: Contract No. 11155 with a copy to: Santa Monica City Attorney’s Office 1685 Main Street, Third Floor Santa Monica, California 90401 Attention: City Attorney Re: Contract No. 11155 10.2 All notices, demands, requests or approvals to CLEAN ENERGY: CLEAN ENERGY 4675 MacArthur Court Newport Beach, CA 92660 Attention: Chad Lindholm, VP, Sales With a copy to: Associate General Counsel Re: Contract No. 11155 11. Independent Parties. Both parties to this Agreement will be acting in an independent capacity and not as agents, employees, partners, or joint venturers of one another. Neither the City nor its officers or employees will have any control over the conduct of CLEAN ENERGY or any of CLEAN ENERGY’s agents, employees, or subconsultants, except as otherwise provided in this Agreement. 12. Allocation of Responsibility. 12.1 In addition to the remedies set forth in Exhibit A and under applicable law, a remedy for any unexcused failure on the part of Clean Energy to deliver Product to the City as required hereunder, whether or not such failure was caused, in whole or in part, by any negligence, shall be to obtain from Clean Energy, at no charge, the quantity of Product equal to the quantity that Clean Energy initially failed to deliver. DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 413 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 4 - 12.2 In addition to the remedies set forth in Exhibit A and under applicable law, a remedy for any unexcused failure to act on the part of Clean Energy whereby Product of a purity less than that stated herein is delivered (unless written approval for a deviance from the stated purity is obtained from the City prior to delivery), whether or not such failure or act was, in whole or in part, negligent, or could be the basis of a claim on the grounds of strict liability, shall be to receive a refund of the aggregate price of the non-conforming Product, or the replacement thereof with Product meeting the required level of purity at no additional charge to the City. 12.3 The City acknowledges that it has (i) full knowledge of the hazards associated with the storage, distribution, and use of Product and the City hereby assumes all responsibility for warning its personnel and any third parties on the Consuming Location of such hazards; (ii) full knowledge that the RLNG provided hereunder will not be stenched or odorized by Clean Energy and that odorization is not required for delivery of the RLNG under this Agreement; and (iii) has read and understands the provisions f this Agreement, including the provisions of this Section. The City shall be responsible for odorizing the Product after delivery in order to comply with any odor standards contained in the applicable regulations. 12.4 It is the responsibility of the City to comply with applicable reporting obligations under the Emergency Planning and Community Right-to-Know Act of 1986 (SRA Title III) and any other applicable statutes and regulations concerning the storage, handling or use of RLNG Product or resulting from the presence of Product supplied under this Agreement. Further, it is the responsibility for the City to warn and protect its employees and others exposed to the hazards posed by the City’s storage and use of Product. By execution of this Agreement, the City acknowledges having on file at the Consuming Location a Materials Safety Data Sheet which describes the Product. 12.5 As between Clean Energy and the City, the City shall be deemed to be in control and possession of any product upon delivery to the Consuming Location. 12.6 The City shall ensure that, prior to taking delivery, all City operators or agent(s) of the City operating equipment on behalf of the City (or third parties retained by the City) shall have been provided appropriate personal protective equipment, including, but not limited to, flame retardant clothing fully covering the arms, legs, and torso, sturdy leather work shoes (not athletic type), apron, hard hat, gloves, splash proof safety goggles and facial shield. Clean Energy reserves the right to deny delivery to the City or any other person observed not using appropriate personal protective equipment but has no obligation to ensure that appropriate personal protective equipment is used. 12.7 The City shall ensure that any employees of the City that accept delivery of Product have received instruction in safe and effective loading procedures prior to taking delivery of Product. The City shall provide extensive training to any DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 414 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 5 - employees that work with the Product regarding the hazards of handling Product and the precautions to take to safety load the Product. 13. Integrated Contract. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties. Any preliminary negotiations and agreements of any kind or nature are merged into this Agreement. No oral agreement or implied covenant may be held to vary the provisions of this Agreement. This Agreement may be modified only by written agreement signed by City and CLEAN ENERGY and approved as to form by the City Attorney. 14. Force Majeure. In the event that Clean Energy is prevented from performing its obligations under this Agreement by circumstances beyond its control, including, without limitation, fire, floods, earthquakes, storms, wind, or other natural calamities or acts of God, explosions, war, acts of terrorism, sabotage, public disorders, strikes or other labor disputes or actions by governmental authorities, interruption or inability to produce Product caused by equipment failure or loss of utility service at any Clean Energy facility or the interruption or cessation of delivery of Product to Clean Energy by any supplier of Product to Clean Energy (any of which is hereinafter referred to as a “Force Majeure”), then Clean Energy shall be excused from its obligations under this Agreement during the period of a Force Majeure (“Force Majeure Period”). If Clean Energy claims Force Majeure, Clean Energy shall notify the City in writing within twenty-four (24) hours after it learns of the existence of a Force Majeure and shall similarly notify the City no later than twenty-four (24) hours after the Force Majeure has terminated. To the extent within its control, Clean Energy shall use commercially reasonable efforts to correct whatever event or circumstances may have caused the Force Majeure. After Clean Energy notifies the City of Force Majeure Period, the City shall have the right to obtain Product from other suppliers until the Force Majeure Period has ended. If the City must obtain Product from other suppliers during any such Force Majeure Period, Clean Energy agrees to be responsible for any increase in the cost of obtaining such Product from other suppliers compared to the Price payable to Clean Energy under this Agreement. Clean Energy shall reimburse the City the cost differential withing fifteen (15) days of receipt of documentation from the City which supports such increase in Product costs. 15. Insurance. Prior to commencing work, CLEAN ENERGY must procure, maintain and pay for insurance against claims for injuries to persons or damage to property that may arise from or in connection with the performance of the Services by CLEAN ENERGY or CLEAN ENERGY’s agents, representatives, employees or subconsultants for the duration of this Agreement. CLEAN ENERGY must obtain insurance that, at a minimum, meets the requirements for insurance set forth in Exhibit C, Insurance Requirements and Verifications. 16. No Violation of Other Agreements. The City hereby represents and agrees that neither (i) the City entering into this Agreement nor (ii) the City carrying out the DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 415 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 6 - provision of this Agreement will violate any other agreement (oral, written or other) to which the City is a party or by which the City is bound. 17. Captions and Heading. The captions and paragraph headings used in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of this Agreement or any of the provisions hereof. 18. Defense and Indemnification. 18.1 CLEAN ENERGY agrees to defend, indemnify, protect, and hold harmless the City, its agents, officers, boards and commissions, and employees (collectively, “City”) from and against any and all liability, claims, demands, damages, or costs, including but not limited to attorney’s fees, or payments for injury to any person or property (collectively, “Losses”) caused or claimed to be caused by the act, errors, and/or omissions of CLEAN ENERGY, or CLEAN ENERGY’s employees, agents, officers, and subconsultants. CLEAN ENERGY’s responsibilities under this Section 10.1 include liability arising from, connected with, caused by, or claimed to be caused by the active or passive negligent acts or omissions of the City, which may be in combination with the acts or omissions of CLEAN ENERGY, its employees, agents or officers, or subconsultants; provided, however, that CLEAN ENERGY’s duty to defend, indemnify, protect and hold harmless shall not include any Losses arising from the sole negligence or willful misconduct of the City. Notwithstanding CLEAN ENERGY’s obligation to defend City hereunder, City has the right to conduct its own defense and seek reimbursement for reasonable costs of defense from CLEAN ENERGY, if City chooses to do so. 18.2 Enforcement Costs. CLEAN ENERGY agrees to pay any and all costs the City incurs enforcing the indemnity, defense and hold harmless provisions set forth in Section 18.1. 19. Prohibition Against Transfers. 19.1 CLEAN ENERGY may not assign, hypothecate, or transfer this Agreement or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any attempt to do so without the City’s consent will be null and void, and any assignee, hypothecatee or transferee acquires no right or interest by reason of such attempted assignment, hypothecation or transfer. 19.2 The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of CLEAN ENERGY or of any general partner or joint venturer or syndicate member of CLEAN ENERGY, if a partnership or joint venture or syndicate exists, which results in changing the control of CLEAN ENERGY, will be construed as an assignment of this Agreement. Control means 50% or more of the voting power of the corporation. DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 416 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 7 - 20. Permits and Licenses. CLEAN ENERGY, at its sole expense, must obtain and maintain during the term of this Agreement all required business and professional permits, licenses and certificates. 21. Waiver. A waiver of any breach of this Agreement may not be deemed a waiver of any subsequent breach of the same or any other term, covenant, or condition of this Agreement. 22. Default and Termination. 22.1 If CLEAN ENERGY fails or refuses to perform any of the provisions of this Agreement, and if the default is not cured within a period of five days after the City’s written notice of default specifying the nature of the default, City may immediately terminate this Agreement by written notice to CLEAN ENERGY. 22.2 The City has the option, at its sole discretion and without cause, of terminating this Agreement by giving ten days’ written notice to CLEAN ENERGY. Upon termination of this Agreement, City will pay CLEAN ENERGY any compensation earned and unpaid up to the effective date of termination. 23. Compliance with Law. CLEAN ENERGY must comply with all laws of the State of California and the United States, and all ordinances, rules and regulations enacted or issued by City. 24. Discrimination. CLEAN ENERGY may not discriminate in the provision of services hereunder because of race, color, religion, national origin, ancestry, sex, age, sexual orientation, marital status, AIDS or disability. 25. Nuisance. CLEAN ENERGY may not maintain, commit, or permit the maintenance or commission of any nuisance in connection with the performance of services under this Agreement. 26. Records. 26.1 CLEAN ENERGY must maintain complete and accurate records with respect to costs, expenses, receipts and other such information required by the City for any services provided where compensation is on the basis of hourly rates, subconsultant costs, or other direct costs. CLEAN ENERGY must keep the records, together with supporting documents, separate from other documents and records and maintain them for a period of three years after receipt of final payment. 26.2 CLEAN ENERGY must maintain records in sufficient detail to permit an evaluation of the Services and in accordance with generally accepted accounting principles. CLEAN ENERGY must clearly identify all records and make them readily accessible to the City. At the City’s request, CLEAN ENERGY must provide records in an electronic format and, if necessary, access to any proprietary software to view such electronic records. DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 417 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 8 - 26.3 CLEAN ENERGY must allow the City to have free access to CLEAN ENERGY’s books and records and to inspect all work, data, documents, proceedings and activities related to this Agreement. The City has the right to examine or audit CLEAN ENERGY’s records, and CLEAN ENERGY agrees to cooperate with any examination or audit of its records. If a City audit discloses an error of 5% or more in information reported by CLEAN ENERGY, CLEAN ENERGY agrees to pay the cost of the City’s audit computed on the basis of two times the direct payroll of the audit staff completing the audit and audit report. 27. Work Product; Reports. 27.1 Any work product prepared or caused to be prepared by CLEAN ENERGY or any subconsultant for this Agreement will be the exclusive property of City. No work product given to or prepared by CLEAN ENERGY or any subconsultant pursuant to this Agreement may be made available to any individual or organization by CLEAN ENERGY without prior written approval by City. 27.2 At the City’s request, CLEAN ENERGY must furnish reports concerning the status of the Services. 28. Standard of Care. CLEAN ENERGY agrees to provide all Services, including services performed by any subconsultant, in a manner consistent with the level of care and skill ordinarily exercised by members of CLEAN ENERGY’s profession currently practicing in the same locality under similar conditions. 29. Subconsultants. 29.1 If CLEAN ENERGY proposes to have any subconsultant perform any part of the Services, CLEAN ENERGY must submit a request for approval in writing (email to suffice), describing the scope of work to be subcontracted and the name of the proposed subconsultant. The City will grant or deny the request, such granting of the request not to be unreasonably withheld or denied. 29.2 CLEAN ENERGY will be responsible for the quality of any subconsultant’s work. Every subcontract or agreement of any kind entered into between CLEAN ENERGY and any subconsultant (or between any subconsultant and others) after the Execution Date must contain the following provision: This agreement is consistent with all terms and conditions of the Agreement No. 11155 (CCS) entered into between the City of Santa Monica and CLEAN ENERGY on^^____________________. 30. Governing Law. The laws of the State of California, without regard to any choice of law provisions, will govern this Agreement. 31. Venue and Jurisdiction. The City and CLEAN ENERGY agree that the Services will take place in Los Angeles County. Any litigation arising out of this Agreement may DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 7/1/2021 5.F.c Packet Pg. 418 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) - 9 - only be brought in either the United States District Court, Central District of California, or the Superior Court of California, County of Los Angeles, West District, as appropriate. The parties agree that venue exists in either court, and each party expressly waives any right to transfer to another venue. The parties further agree that either court will have personal jurisdiction over the parties to this Agreement. 32. Survival of Provisions and Obligations. Any provision of this Agreement, which by its nature must be exercised after termination of this Agreement, will survive termination and remain effective for a reasonable time. Any obligation that accrued prior to termination of this Agreement will survive termination of this Agreement. 33. Exhibits. The following exhibits are incorporated by reference into this Contract as though fully set forth herein. Exhibit A Scope of Services Exhibit B Budget Exhibit C Insurance Requirements Exhibit D Clean Energy Bid In witness whereof, the parties have caused this Agreement to be executed the day and year first above written. ATTEST: ______________________________ DENISE ANDERSON-WARREN City Clerk APPROVED AS TO FORM: ______________________________ LANE DILG City Attorney CITY OF SANTA MONICA, a municipal corporation By: ______________________________ RICK COLE City Manager CLEAN ENERGY Corporation #VENDOR By: ________________________________ DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 Interim City Attorney 6/30/2021 George S. Cardona Chief Operating Officer & Corp. Secretary Mitchell W. Pratt CLEAN ENERGY 7/1/2021 7/1/2021 John Jalili Interim City Manager Nikima Newsome Assistant City Clerk 7/6/2021 5.F.c Packet Pg. 419 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) Exhibit A Scope of Services 1. CITY FACILITIES AND VEHICLES The City’s RLNG/RCNG fueling station is located at 1620 6th Street, Santa Monica, CA 90401. The station is used to dispense both RLNG and RCNG to transit coaches as well as medium and light duty vehicles. The operation of the station is 24/7, and also has a RCNG 2-hose dispenser located at the corner of Olympic and 5th Avenue. The City’s station is comprised of the following major components: two horizontal 30,000 gallon storage vessels; two single function RLNG pumps; two RLNG conditioning heat exchangers; one dedicated RLNG offloading pump module; two RLNG dispensers; two dispenser control units; two RL/CNG pumps; six RCNG storage tubes (12,000 scf capacity each @ 5,000 psi); two RL/CNG pump control panels; one natural gas odorizer; two RL/CNG ambient air heat exchangers; two single hose transit type dispensers; two dual hose RCNG dispensers; one flame & combustible gas detection system; and an EAM Fuel Focus fuel management card reading system. Currently, the Big Blue Bus operates 76 RLNG powered transit coaches, and 124 RCNG powered transit coaches for a total of 200 transit coaches powered by RNG. In addition, the RLNG supplies the RCNG fueling station for the City’s service vehicles. 2. DELIVERY REQUIREMENTS AND PRODUCT SPECIFICATIONS A. DELIVERY REQUIREMENTS All RLNG fuel deliveries shall meet minimum product specifications set forth in Section B, below. DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 420 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) Contractor shall provide a steady and consistent supply of RLNG to the City of Santa Monica’s Big Blue Bus. The quantity is approximately 310,000 gallons per month. The City currently anticipates 6 deliveries per week, with 24 hours’ notice from order to delivery. The City reserves the right to increase or decrease deliveries based on operational needs. All deliveries shall be made to the City’s fueling station located at 1620 6th Street, Santa Monica, CA 90401. The City shall contact Clean Energy to schedule (at least 24 hours in advance) and receive deliveries as frequently as needed and in sufficient quantities such that fuel is available seven (7) days per week, 365 days a year (including all holidays). All deliveries shall be made between the hours of 6am and 10am. Any deviation from this time window must be approved in advance by the Big Blue Bus Transit Maintenance Officer or designee. All orders must be pre-approved by the City. The City if responsible for monitoring the RLNG tank levels and contacting Clean Energy to schedule deliveries as needed. The successful bidder(s) may be required to install a remote monitoring system to track RLNG tank levels at the property and is responsible for scheduling and making deliveries based on the new monitoring system if installed. If the City requests Clean Energy install such system, City shall compensate Clean Energy for procurement and installation of the remote monitoring system through an amendment to this Agreement with mutually agreed upon price. Further, notwithstanding anything to the contrary, Clean Energy shall own and retain title to, and all intellectual property rights to, such system during the term and will remove such system upon the termination or expiration of this Agreement. The Big Blue Bus has two 30,000 gallon tanks and a minimum 40,000 gallons of RLNG fuel must be maintained at all times. If bidder is unable to meet this requirement, notification shall be given immediately and shall include the reasons for any possible delays and the steps being taken to remedy any such problems. Contractor, its agents or employees, must notify the Big Blue Bus Transit Maintenance Manager or designee upon delivery of RLNG fuel, as all fuel deliveries to the Big Blue Bus bulk storage tanks must be approved and signed for by the Big Blue Bus Transit Maintenance Manager or designee. Contractor shall weigh RLNG deliveries at the nearest approved weighing location to the property and use the weigh ticket as a means to calculate the amount of RLNG delivered. Upon delivery of the RLNG fuel to the City of Santa Monica, Contractor shall submit to the Big Blue Bus, along with the bill of lading (which must include weights) or other accompanying documentations, before/after pressure and fuel gauge reading taken from the delivery truck and Big Blue Bus storage tanks. RLNG delivered to the property shall have a head pressure no greater than 15 psi saturated. If head pressure exceeds 15 psi saturated, the fuel delivery shall be rejected and DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 421 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) not be allowed to offload. Trailer tanks may not be vented down prior to, during, or after offloading RLNG fuel into the onsite vessels. In the event trailer tanks have to be vented prior to offloading, the venting may not take place within Santa Monica city limits. All RLNG tanker trucks making deliveries shall be properly certified by the State of California including but not limited to Vehicle Tank Measurement Certificates, and in accordance with Federal Department of Transportation regulations, policies, and procedures. The City reserves the right to request copies of such certificates. If requested, Contractor shall provide copies of requested certificates within three (3) days after notification is received. All drivers making deliveries of RLNG fuel to the City of Santa Monica shall have Hazardous Materials Endorsements on their Commercial Driver’s license, and such other Endorsements as may be required by relevant laws and/or regulations. Contractor shall provide vapor return to the tanker from the RLNG storage tanks. Minimum amount of vapor shall be released after vessel loading is completed. This amount shall not be more than the full liquid amount within the transfer hose. B. PRODUCT SPECIFICATIONS The RLNG sold and delivered to the City shall have a minimum methane number of 75MN, which is the minimum as outlined by Cummins Westport on their ‘Fuel Quality Calculator’ website currently maintained at https://www.cumminswestport.com/fuel- quality-calculator. The City of Santa Monica reserves the right to periodically request a written laboratory report (within five days of request), at contractor’s expense, containing the specifications of the RLNG contained in the contractor’s bulk storage tank from which Big Blue Bus’s supply is drawn. 3. QUALIFICATIONS A. Minimum Requirements 1) Bidders shall provide written proof of ability to furnish and deliver RLNG produced from biogas generated from landfills, municipal wastewater treatment facility digesters, agricultural digesters, or separated municipal solid waste digesters. Bidders shall identify the location and type of biogas generation or capture facility or facilities, the amount of RLNG produced per day at each facility, and the location of each liquefaction facility, including miles from liquefaction plant to drop point at BBB. In order to maintain the lowest carbon footprint possible, vendors with liquefaction plants in closest proximity to the City will receive preference. Bidders shall provide a current RLNG fuel supply and delivery contract with another public agency. DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 422 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) 2) Bidders shall provide a carbon intensity value for the proposed RLNG pathway(s) using a methodology approved by the California Air Resources Board (“CARB”) under the Low Carbon Fuel Standard program. Bidders shall submit with bids unredacted versions of any pending or approved application(s) to generate LCFS or RIN credits under the pathway or pathways proposed to supply the City of Santa Monica. In addition, Bidders shall estimate the operational greenhouse gas emissions from a typical delivery vehicle traveling a round- trip from the liquefaction facility to the delivery point. The lowest possible greenhouse gas intensity is preferred. 3) Bidders shall provide a minimum guaranteed biomass or biogenic content for the supplied RLNG (biogas mass as a percentage of total mass) AND/OR a supplier-specific emission rate for the biogas calculated in accordance with The Climate Registry's General Reporting Protocol or The World Resources Institute's GHG Protocol. 4) Bidders shall provide full documentation for any and all credits or certificates generated as a result of this contract under the California Air Resources Board's Low-Carbon Fuel Standard (LCFS) program, the US EPA's Renewable Fuel Program, or applicable credits from any successor program designed to reduce the carbon intensity of transportation fuels. Bidders shall propose a revenue share of applicable credits sold through arms-length transactions. Bidders who offer the greatest share of applicable credits will receive preference. 5) Bidders shall provide the emission factors (kg CO2 per gallon or gallon-equivalent or standard cubic foot; grams CH4 and grams NO2 per mile driven) of proposed RLNG. The emission factor data of point of liquefaction to point of delivery in Santa Monica, will be used in the evaluation of the bid with lower emission factors receiving preference. Bidders shall provide an analysis of the potential greenhouse gas emissions reduction compared to use of virgin natural gas; the estimated quantity of 310,000 gallons/month may be used. Bidders may provide any additional documentation that will support reporting of greenhouse gas emissions per the Climate Registry’s Local Government Protocol. 6) Notwithstanding anything to the contrary in this Agreement, City is not entitled to any payment for LCFS Credits or RINs that may be generated by or attributed to the RLNG supplied by Clean Energy other than the discount per RLNG Gallon as described in Exhibit B. City shall provide Clean Energy with reasonable cooperation with respect to the requirements for the generation of RINs under the EPA renewable fuels standard and LCFS Credits under the California Air Resources Board Low Carbon Fuel Standard. This reasonable cooperation shall include providing Clean Energy with signed and notarized affidavits at any time reasonably requested by Clean Energy, which certify that all RLNG supplied by Clean Energy under this Agreement was sold as a vehicle fuel. “Low Carbon Fuel Standard Credits” or “LCFS Credits” shall mean credits generated and traded under DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 423 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) the California Air Resources Board Low Carbon Fuel Standard. “Renewable Identification Number” or “RIN” is a number generated to represent a volume of renewable fuel as set forth in Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program, 75 Fed. Reg. 16484 (March 26, 2010) (codified at 40 C.F.R. § 80.1425 (2011); 40 C.F.R. § 80.1426 (2012).). For all RLNG supplied to City under this Agreement, Clean Energy shall retain the rights to any: (a) environmental attributes and credits (including, without limitation, VETC (if available and allowed)) associated with the reduction in or avoidance of Greenhouse Gas emissions with respect to the sale or use of the fuel; and (b) emission reduction credits, LCFS Credits, any renewable fuel incentives, including but not limited to RINs generated under the EPA RFS, verified emission reductions, voluntary emission reductions, offsets, allowances, voluntary carbon units, avoided compliance costs, emission rights and authorizations and CO2 reduction and sequestration. “VETC” means federal or state tax credits associated with the collection, production, transfer, sale or use of LNG and/or LCNG fuel allowed under Internal Revenue Code Sections 6426 and 6427. 7) Bidders must be able to provide RLNG that has a saturation pressure of no greater than 15 PSI. Bidders shall include in bid response Bidder’s experience with delivering RLNG with less than 15 PSI of head pressure to transit agencies in California. Bidders shall provide a current client list of transit clients that they provide RLNG that has less than 15 PSI of head pressure. Failure to provide a transit client list with reference names and contact information shall disqualify bid. 8) Bidders shall include a description of the Bidder’s background and experience in supplying RLNG fuel to other transit customers. Contractor must a minimum of three years in providing RLNG to California municipal or transit agencies. 9) Bidders shall provide the City with proof of compliance, upon request, of relevant local, state, and federal laws/regulations. The successful Bidder shall also notify the City of any changes, amendments, and modifications in relevant regulations, laws, statues and policies. In addition, the successful Bidder shall meet all required codes and regulations, as exampled by federal, state, city, and fire codes as they pertain to the transport, delivery and dispensing of RLNG fuel throughout the term of any contract awarded pursuant to this Notice Inviting Bids. 10) Bidders shall submit with bid a full analysis of their responsibilities under AB32 as a result of their RLNG delivery to BBB. Bidders shall also submit a description of who bears the AB32 compliance obligations, and any associated costs (if any), under AB32 based on delivery of RLNG. The City prefers the highest amount of LCFS credits with the lowest price and the closest proximity to the City. Failure to supply detailed analysis and DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 424 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) description of who bears the AB32 compliance obligations shall result in disqualification of bid. 11) Bidder shall include in their bid written detail how they shall provide RLNG fuel should their primary source of RLNG fuel become unavailable. Within this detail, provide the names of primary and secondary sources of RLNG fuel as designated City of Santa Monica fuel sources. It is understood that a Force Majeure shall only occur if both of these sources of supply cannot provide RLNG fuel. B. Restrictions 1) No subcontracting, farming-out, or trading services will be allowed on this contract unless specifically approved in writing and in advance by Big Blue Bus. 4. COST The Contractor shall be responsible to provide as part of this Notice Inviting Bids: • The price of RLNG fuel per RLNG gallon delivered to the station. • Percentage of LCFS credits shared with the City of Santa Monica. o The City of Santa Monica is requesting pricing for both fixed and variable LCFS sharing where a variable model would be based on the LCFS credit price for each month and a fixed model would be fixed to a contracted amount. • A cost breakdown of the RLNG price including freight and weighing charges, and any charges for delivery delay. Bidders shall use the monthly adjusted Natural Gas Price Index based upon the So. Cal Border price. • Bidders may also bid the fuel supply commodity as a fixed price for two years. • Pricing shall be based on an estimated annual usage of 310,000 LNG Gallons/Year. 5. TERM The term of this contract will be for a five year period, to be exercised in the City’s sole discretion. 6. REPORTING Contractor shall provide quarterly reports to the City of the RLNG fuel delivered and the GHG emissions reductions resulting from the fuel use. DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 425 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) Contractor to provide monthly reports of RLNG chemical makeup. RLNG delivered to the City shall meet the Product Specifications described in the Exhibit A Scope of Services. 7. LIQUIDATED DAMAGES Contractor shall provide a steady and consistent supply of RLNG to the City of Santa Monica’s Big Blue Bus with typically 6 deliveries per week, with twenty-four (24) hours’ notice from order to delivery. Failure to deliver RLNG to the City within twenty-four (24) hours of a delivery request that causes Santa Monica’s Big Blue Bus to miss the day’s pull out requirement shall result in liquidated damages being assessed in the amount of $300 per bus per day. Estimated associated costs include, but are not limited to, loss in revenue, loss of goodwill, required community outreach, loss and or repairs to fuel system(s) attributed to not providing fuel, damages to the fuel system caused by delivery of fuel, costs associated in seeking a secondary fuel source including staff time and additional fuel costs. These damages shall be deducted from any monies due, or which may thereafter become due, to Contractor under this Contract on a per day, per bus basis. For the avoidance of any doubt, liquidated damages shall not be assessed against Clean Energy if the failure to deliver RLNG is based on a Force Majeure event affecting Clean Energy. 8. HISTORICAL PURCHASE QUANTITIES DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 426 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) Exhibit B Budget Contract Period Contract Amount Contract Year 1 $ 869,569 Contract Year 2 $ 944,782 Contract Year 3 $ 1,020,593 Contract Year 4 $ 1,097,016 Contract Year 5 $ 1,174,067 Total Contract Amount $ 5,106,027 Clean Energy shall invoice the City after each delivery. Sales Tax in this table is an estimated for reference purposes only. Clean Energy shall charge the City the actual applicable sales tax, as determined by the selling price, for fuel sold or used under this agreement. Cost description Unit of Measure Cost - Yr. 1 Cost - Yr. 2 Cost - Yr. 3 Cost - Yr. 4 Cost - Yr. 5 SoCal Monthly Index - July 2020 $/Mmbtu $ 1.73 $ 1.73 $ 1.73 $ 1.73 $ 1.73 RLNG Gallon Conversion 12.1Mmbtu/Gallon 12.10 12.10 12.10 12.10 12.10 Price per RLNG Gallon $/RLNG Gallon $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 Liquefaction Cost $/RLNG Gallon $ 0.255 $ 0.261 $ 0.268 $ 0.275 $ 0.281 Markup/Discount $/RLNG Gallon $ - $ - $ - $ - $ - Delivery Fee $/RLNG Gallon $ 0.185 $ 0.190 $ 0.194 $ 0.199 $ 0.204 Total Cost before taxes $/RLNG Gallon $ 0.58 $ 0.59 $ 0.61 $ 0.62 $ 0.63 Sales Tax - $/RLNG Gallon $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 After Tax Unit Price $/RLNG Gallon $ 0.62 $ 0.64 $ 0.65 $ 0.66 $ 0.67 LCFS Credit - Fixed $/RLNG Gallon $ (0.200) $ (0.175) $ (0.150) $ (0.125) $ (0.100) Total Unit Cost after Revenue Sharing $/RLNG Gallon $ 0.42 $ 0.46 $ 0.50 $ 0.53 $ 0.57 DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 427 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) Exhibit C Insurance Requirements Contractual Services Agreement Insurance Requirements Contractor shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors. Minimum Scope and Limits of Insurance Coverage shall be at least as broad as: 1. Commercial General Liability (CGL): Coverage at least as broad as Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal and advertising injury, with limits of no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (Insurance Services Office Form CG 25 04) or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: Insurance Services Office Form CA 00 01 covering Code 1 (any auto), or if Contractor has no owned autos, Code 8 (hired) and Code 9 (non-owned), with limits of no less than $1,000,000 per accident for bodily injury and property damage. 3. Workers’ Compensation: Workers’ Compensation insurance as required by the State of California, with Statutory Limits and Employers’ Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease (see footnote #1). If the Contractor maintains broader coverage or higher limits than the minimums shown above, the City of Santa Monica requires and shall be entitled to the broader coverage or higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Santa Monica. Other Insurance Provisions 1. The insurance policies are to contain, or be endorsed to contain, the following provisions: a. Additional Insured Status: The City of Santa Monica, its officers, officials, employees and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 428 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) behalf of Contractor including materials, parts, or equipment furnished in connection with such work or operations. CGL coverage can be provided in the form of an endorsement to the Contractor’s insurance (at least as broad as Insurance Services Office Form CG 20 10 11 85). b. Primary Coverage: For any claims related to this Agreement, the Contractor’s insurance shall be primary coverage as least as broad as Insurance Services Office Form CG 20 01 04 13 as respects the City of Santa Monica, its officers, officials, employees and volunteers. Any insurance or self-insurance maintained by the City of Santa Monica, its officers, officials, employees or volunteers shall be in excess of the Contractor’s insurance and shall not contribute with it. c. Notice of Cancellation: Each insurance policy required herein shall state that coverage shall not be cancelled except after notice has been given to the City of Santa Monica. d. Waiver of Subrogation: Contractor hereby grants to the City of Santa Monica a waiver of any right of subrogation which any insurer of said Contractor may acquire against the City of Santa Monica by virtue of payment of any loss. Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City of Santa Monica has received a waiver of subrogation endorsement from the insurer. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City of Santa Monica for all work performed by the Contractor, its employees, agents and subcontractors. Self-Insured Retentions Self-insured retentions must be declared to and approved by the City of Santa Monica. The City of Santa Monica may require the Contractor to purchase coverage with a lower retention or provide satisfactory proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the name insured or the City of Santa Monica. Acceptability of Insurers Insurance is to be placed with insurers authorized to conduct business in California with a current A.M. Best rating of no less than A:VII, unless otherwise acceptable to the City of Santa Monica. Verification of Coverage DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 429 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas) Contractor shall furnish the City of Santa Monica with original certificates and amendatory endorsements (or copies of the applicable policy language effecting coverage provided by this clause). All certificates and endorsements are to be received and approved by the City of Santa Monica before work commences. However, failure to obtain required documents prior to the work beginning shall not waive the Contractor’s obligation to provide them. The City of Santa Monica reserves the right to require complete, certified copies of all required insurance policies, including the endorsements required herein, at any time. Failure to Maintain Insurance Coverage If Contractor, for any reason, fails to maintain insurance coverage which is required pursuant to this Agreement, the same shall be deemed a material breach of contract. The City of Santa Monica, at its sole option, may terminate this Agreement and obtain damages from the Contractor resulting from said breach. Subcontractors Contractor shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein. All exceptions must be approved in writing by the Risk Manager. Footnotes # 1: Workers’ Compensation insurance coverage is not required if the Contractor does not have employees. The Contractor must, however, execute the City’s Workers’ Compensation Coverage Exemption Declaration Form. DocuSign Envelope ID: 8C7FE0F3-BB13-4C65-92B7-5CC5CA3A6951 5.F.c Packet Pg. 430 Attachment: Clean_Energy_Contract__11155 (5711 : Approve Increased Funding for Purchase of Renewable Liquid Natural Gas)