First Solar, Inc. Kingbird Solar Project Power Purchase Agreement

Pasadena Water & Power

First Solar, Inc.Kingbird Solar Project

Power Purchase Agreement

City Council – Agenda Item 13September 9, 2013


Project & Contract Overview

• 20 MW (AC) single-axis tracking solar PV

• To be located on 324 acres in Rosamond, CA

> Site includes Kingbird B (another 20 MW project – output purchased by SCPPA)

• Guaranteed commercial operation by January 2016 (Fiscal Year 2016)

• Add approx. 5.5% RPS

• PWP to pay for all energy “as available”> ~60,000 MWh/year (1st year) > Expected output degradation

~0.5% per year 2

• Price = $68.50/MWh through term of contract

• Includes Resource Adequacy capacity

• Option to Purchase• 20 year term with option to

extend by 5 years


3

Project Benefits

• RPS Category 1 resource relatively close to Pasadena

• Feasible to operate and maintain if purchased


4

Project Benefits

• Portfolio Fit>Project size is a good match for PWP

requirements 20 MW x 33% Capacity Factor

>PV production is variable, but generally aligns well with PWP demand


5

Project Benefits

• Viability> Several initial milestones already achieved

Site control, interconnection studies, CEC pre-certification, CEQA;

> Experienced project developer (First Solar, Inc.) with several utility scale projects already operating/under construction

> Solar PV is a proven technology


6

Project Benefits

• Value>Renewable energy, environmental attributes

and system resource adequacy.

>Facility purchase option at the 10th, 14th, or 18th contract year, or in the event of a default under the power purchase agreement.

>Price is competitive with other offers for similar renewable products.


7

Risks

• Some risks Include:> Project

development/construction failure or delay

> Counterparty credit/default> Resource underperformance> Comparative price risk

Future or alternative resources may have lower prices

• Contractual provisions attempt to mitigate many risks, e.g.:> Performance security> Liquidated damages> Guaranteed energy production

• Although there is risk that future resources may have lower prices, this contract is also a hedge against future price increases and volatility


8

Price Comparison

Resource Name/TypeContract

Execution

Contract Energy Price1 by Calendar Year ($/MWh)

2014 2015 2016 2017 2020 2025

Proposed Kingbird Solar 2013 - - $68.50 $68.50 $68.50 $68.50

Silverado Solar (+ $5.10/MWh for RA, if available)

2012 - $77.34* $78.50* $79.68* $83.32* $89.76*

WM Biomethane 2011 $94.92 $94.92 $94.92 $94.92 $94.92 -

Sequent Biomethane 2011 $94.92 $94.92 $94.92 $94.92 $94.92 -

EDF Biomethane 2011 $98.00 $98.00 $98.00 $98.00 $98.00 -

Milford Wind 2009 $70.94 $72.19 $73.45 $74.74 $78.73 $85.86

Ormat Geothermal Phase 2 2008 $82.01 $83.24 $84.49 $85.76 $89.67 $96.60

Chiquita Canyon LFG 2006 $65.25 $65.25 $65.25 $65.25 $65.25 $65.25

Ormat Geothermal Phase 1 2005 $64.77 $65.74 $66.73 $67.73 $70.83 $76.30

Iberdrola Renewables 2003 $53.50 $53.50 $53.50 $53.50 $53.50 -

2013 Market Forecast (Brown Power) $43.99* $46,.19* $48.50* $50.92* $58.95* $75.23*

Renewable Energy Contracts Price Comparison

[1] Contract prices exclude costs of transmission, losses, and integration fees[price with * does not include RA capacity; all others do]


Renewable Portfolio

9

Calendar Year 2015 2016 2020 2025

Azusa Hydro 5 5 5 5

Iberdrola High Winds 14 14 14 -

Minnesota Methane LFG 42 42 - -

Ormat Geothermal 16 16 16 16

Milford Wind Phase 1 11 11 11 11

Chiquita Canyon LFG 37 37 37 37

EDF Biomethane 13 13 14 -

Sequent Biomethane 29 30 38 -

Waste ManagementBiomethane

41 41 41 -

Silverado Solar 32 32 32 32

Proposed Kingbird Solar - 60 58 57

Total Renewable Supply 240 301 266 158

Retail Sales 1161 1168 1196 1196

%Renewable 21.3% 25.8% 22.2% 13.2%

Current Renewable Energy Portfolio Summary (GWh)

[1] A gigawatt-hour (“GWh”) is equal o 1,000 megawatt-hours (“MWh”)


Impact for a Typical Customer Using 500 KWh/Month

CURRENT(without Kingbird)

FUTURE(2016 onward with Kingbird)*

10

Note: Current total bill includes all existing renewable contracts

TOTAL $87.20 TOTAL $87.72*Assumes other charges in the electric bill remain the same as current bill


11

Fiscal Impact - Cumulative

Before Kingbird:• Cumulative net impact

of all existing renewable contracts in the energy portfolio:> Approximately $7.3

million per year> Approximately 0.62

cents per kWh

After Kingbird:• Cumulative net impact

of all renewable contracts in the energy portfolio:> Approximately $8.5

million per year> Approximately 0.73

cents per kWh starting in January 2016

Cumulative net impact will increase by approximately:• $1.2 million per year• 0.11 cents per kWh

• $0.52/month for a 500 kWh average customer


12

Thank You ~ Questions?

Back Up Slides


13

Appendix – RPS Portfolio After Kingbird

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+GWh GWh GWh GWh GWh GWh GWh GWh GWh GWh

Estimated PWP Electric Sales (Load) 1,140.3 1,140.1 1,129.7 1,133.4 1,128.5 1,120.8 1,110.1 1,099.5 1,088.8 1,078.2SBX1-2 Mandatory RPS Procurement Requirement (%) 20% 20% 25% 27% 29% 31% 33%SBX1-2 Mandatory RPS Requirement for PWP (GWh) 226.7 225.7 280.2 299.7 318.8 337.5 355.8

22.3% 18.3% 21.3% 21.7% 18.3% 18.6% 18.9% 19.3%PWP SBX1-2 RPS Already Met w/Current Contracts (GWh) 207.5 240.8 243.7 202.7 204.2 205.7 207.8

Portfolio Content Category 0 (GWh) 169.1 125.9 126.1 126.1 126.1 126.3 83.9 83.9 83.9 84.133.3 99.9 167.0 81.4 114.8 117.4 118.9 120.4 121.9 123.70.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

14.7 25.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0RPS Contracts Under Negotiation (GWh) 0.0 14.7 87.6 87.2 86.8 86.4 86.0

0.0 14.7 87.6 87.2 86.8 86.4 86.00.0 0.0 0.0 0.0 0.0 0.0 0.00.0 0.0 0.0 0.0 0.0 0.0 0.0

Future SBX1-2 Minimum Purchase Requirements (GWh) 19.2 0.0 0.0 9.8 27.8 45.5 62.00.0 0.0 0.0 0.0 0.0 0.0 0.04.1 0.0 0.0 0.0 4.3 20.1 34.8

15.1 0.0 0.0 9.8 23.5 25.4 27.2Total SBX1-2 RPS Procurement GWh 226.7 255.5 331.2 299.7 318.8 337.5 355.8

Portfolio Content Category 0 (GWh) 126.1 126.1 126.3 83.9 83.9 83.9 84.181.4 129.5 204.9 206.1 207.2 208.2 209.74.1 0.0 0.0 0.0 4.3 20.1 34.8

15.1 0.0 0.0 9.8 23.5 25.4 27.2SBX1-2 RPS Procurement Limits

65.4 64.8 100.0 161.9 176.2 190.3 203.814.7 25.5 25.0 15.1 14.9 23.1 21.6 23.5 25.4 27.2

682.0

0.00.00.0

Portfolio Content Category 2 (GWh)Portfolio Content Category 3 (GWh)

Portfolio Content Category 1 (GWh)

761.5

0.0

Portfolio Content Category 1 (GWh)Portfolio Content Category 2 (GWh)Portfolio Content Category 3 (GWh)

0.0Portfolio Content Category 1 (GWh) 0.0Portfolio Content Category 2 (GWh)

20%

Pasadena Water and PowerSBX1-2 Mandatory RPS Procurement Plan (by Calendar Year)

Compliance Period 1 Compliance Period 2 Compliance Period 3

PWP SBX1-2 RPS Already Met w/Current Contracts (% of Load)

Portfolio Content Category 1 Minimum (GWh) ≥Portfolio Content Category 3 Maximum (GWh) ≤

130.5

300.20.0

40.3

Portfolio Content Category 1 (GWh)Portfolio Content Category 2 (GWh)

421.0

Portfolio Content Category 3 (GWh)

0.0Portfolio Content Category 3 (GWh) 0.0

761.5

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+GWh GWh GWh GWh GWh GWh GWh GWh GWh GWh

Estimated PWP Electric Sales (Load) 1,140.3 1,140.1 1,129.7 1,133.4 1,128.5 1,120.8 1,110.1 1,099.5 1,088.8 1,078.2Procurement Plan to Meet PWP Voluntary RPS Target (%) 24.5% 24.6% 25.9% 26.0% 27.5% 30.0% 32.5% 35.0% 37.5% 40.0%Pasadena Voluntary RPS Target (GWh) 279.7 280.8 293.1 294.7 310.3 336.2 361.0 385.0 408.8 431.4

24.5% 22.4% 20.9% 18.3% 21.3% 21.7% 18.3% 18.6% 18.9% 19.3%PWP Voluntary RPS Already Met w/Current Contracts (GWh) 279.7 255.7 236.0 207.5 240.8 243.7 202.7 204.2 205.7 207.8

Required Future SBX1-2 Procurement (GWh) 0.0 0.0 0.0 19.2 0.0 0.0 9.8 27.8 45.5 62.0Additional Future Purchases for PWP Voluntary RPS (GWh) 0.0 25.0 57.1 68.0 69.5 92.5 148.5 153.0 157.6 161.5

Total Voluntary RPS Procurement GWh 279.7 280.8 293.1 294.7 310.3 336.2 361.0 385.0 408.8 431.4

PWP Voluntary RPS Already Met w/Current Contracts (% of Load)

Pasadena Water and PowerPasadena Voluntary RPS Procurement Plan (by Calendar Year)

Compliance Period 1 Compliance Period 2 Compliance Period 3


14

Selection Process

• Project was offered July 24, 2013 into, and selected as part of, the open SCPPA Request for Proposal process.

• Determined by PWP to be one of the “best fit/least cost” resources from among almost 300 offers.

• Also determined to be exempt from Pasadena’s competitive bidding rules as a contract for professional or unique services, and as a contract potentially relating to the acquisition of real property (includes a purchase option).


15

First Solar Experience

Project LocationProject Size

in MW (AC)

Power Purchase Agreement (PPA)

Third Party Owner/Purchaser

Blythe Blythe, CA 21 SCE NRG Energy, Inc

Copper Mountain 1 Boulder City, NV 58 PG&E Sempra USG&P

Cimarron Colfax County, NM 21 Tri-StateSouthern Company & Turner Renewable

Energy

Silver State North Primm, NV 50 NV Energy Enbridge, Inc

Roadrunner Santa Teresa Santa Teresa, NM 20 El Paso Electric NRG Energy

Sarnia Sarnia, Ontario, Canada 80 Ontario Power Authority Enbridge

SOME COMPLETED FIRST SOLAR FACILITIES


16

First Solar Experience (cont.)

SOME FIRST SOLAR FACILITIES UNDER CONSTRUCTION

Project LocationProject Size

in MW (AC)

Power Purchase Agreement (PPA)

Third Party Owner/

Purchaser

Expected Substantial Completion

Topaz San Luis Obispo, CA 550 PG&E MidAmerican 2014/2015

Desert Sunlight Desert Center, CA 550 PG&E/SCENextEra/GE/

Sumitomo2014/2015

Agua Caliente Yuma County, AZ 290 PG&ENRG/

MidAmerican2014

AV Solar Ranch One Los Angeles County, CA 230 PG&E Exelon 2013

Imperial Energy Center South

Imperial County, CA 130 SDG&E Tenaska 2013

Copper Mountain 2 Boulder City, NV 58 PG&E Sempra USG&P 2015[2]

PNM2 NM 22 UOG PNM 2013Walpole Ontario, Canada 20 OPA GE/Alterra 2013Belmont Ontario, Canada 20 OPA GE/Alterra 2013

Amherstburg 1 Ontario, Canada 10 OPA GE/Alterra 2013DEWA UAE 13 DEWA DEWA 2013

Campo Verde Imperial County, CA 139 SDG&E N/A 2013

Macho Springs Deming, NM 50 El Paso Electric N/A 2014Maryland Solar Maryland 20 FE Solutions N/A 2013

Lost Hills Kern County, CA 32 PG&E N/A 2015/2016

StatelineSan Bernadino County,

CA300 SCE N/A 2016

Silver State South Clark County, NV 250 SCE N/A 2016

AGL[6] Australia 159 AGL N/A 2015

Cuyama San Joaquin Valley, CA 40 PG&E N/A 2015/2016

Documents

First Solar, Inc. Kingbird Solar Project Power Purchase Agreement