Battery Energy Storage Tolling Agreement

BATTERY ENERGY STORAGE TOLLING AGREEMENT

This Battery Energy Storage Tolling Agreement ("Agreement") is entered into as of _________________ ("Effective Date"), by and between:

Owner/Seller:
[OWNER NAME], a [STATE] [ENTITY TYPE] ("Owner"), and

Offtaker/Buyer:
[OFFTAKER NAME], a [STATE] [ENTITY TYPE] ("Offtaker").

Collectively referred to as the "Parties."

RECITALS

WHEREAS, Owner owns, or will develop and own, a battery energy storage system located at [PROJECT LOCATION] (the "Project"); and

WHEREAS, Offtaker desires to procure exclusive economic dispatch and operational rights over the Project's energy output and services, in exchange for a structured capacity payment and variable cost reimbursement; and

WHEREAS, the Parties wish to establish a long-term commercial relationship to optimize dispatch, maximize value realization, and align operational performance with Offtaker's portfolio requirements; and

WHEREAS, the Project is expected to be eligible for federal investment tax credit under Internal Revenue Code § 48E and may be subject to energy storage regulations under FERC Order 841 and Order 2222;

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein, the Parties agree as follows:

1. DEFINITIONS

"Availability Factor" means the percentage of time the Project is available for dispatch, calculated as: (Total Contract Capacity - Hours Unavailable due to forced outages) / (Total hours in Billing Period × Contract Capacity), excluding excused outages.

"Augmentation" means physical addition of battery modules or inverter capacity to restore or enhance Project performance.

"Battery Energy Storage System (BESS)" means the integrated assembly of battery modules, inverters, power conditioning, control systems, safety systems, and related equipment capable of storing electrical energy and delivering stored energy to the grid.

"Contract Capacity" means [__] MW of three-hour nameplate discharge capacity.

"Cycling Limits" means a maximum of [__] full depth-of-discharge (DoD) equivalent cycles per twelve-month period, as measured against warranty-rated cycles.

"Depth of Discharge (DoD)" means the percentage of the battery's total energy capacity discharged in a single cycle, where 100% DoD equals discharge from full charge to minimum operating State of Charge.

"Dispatch Right" means Offtaker's exclusive economic right to direct charging and discharging of the Project consistent with operating parameters and applicable ISO/RTO rules.

"Energy Capacity" means [__] MWh of usable energy (three-hour continuous discharge at Contract Capacity).

"Energy Margin" means market-based revenues from energy sales and ancillary services retained by Offtaker, net of any ISO/RTO capacity payments credited to Offtaker's settlement account.

"Force Majeure Event" means acts of God, civil unrest, pandemic, grid operator direction, and other events beyond Parties' reasonable control.

"Interconnection Agreement" means the executed interconnection service agreement between Owner and the applicable ISO/RTO or utility, attached as Exhibit C.

"Merchant Tail" means the period following the scheduled Term expiration during which Offtaker's dispatch obligation ceases and Project operates merchant (at Owner's sole risk).

"Operating Parameters" means the technical specifications limiting Project operation, including charge/discharge rates, DoD, temperature, and cycling constraints, attached as Exhibit B.

"Project" means the battery storage facility, including all associated equipment, controls, real property, and interconnection facilities located at [PROJECT LOCATION] and interconnected at [INTERCONNECTION POINT].

"Round Trip Efficiency" means the ratio of electrical energy discharged to electrical energy charged in a full cycle, expressed as a percentage.

"Warranty Period" means [__] years from Commercial Operation Date.

"Warranty Round Trips" means [__] equivalent full depth-of-discharge cycles guaranteed by equipment manufacturer during the Warranty Period.

2. DESCRIPTION OF PROJECT

2.1 Physical Specifications

The Project shall consist of:

• Nameplate Capacity: [__] MW
• Energy Capacity: [__] MWh (three-hour profile)
• Location: [STREET ADDRESS, CITY, STATE, ZIP]
• Interconnection Point: [TRANSMISSION/DISTRIBUTION POINT OF INTERCONNECTION]
• Technology: Lithium-ion battery (manufacturer: [__]; chemistryVariant: [LFP/NCA/NMC]; inverter: [__])
• Expected Commercial Operation Date (COD): [__/__/____]

2.2 Project Configuration

The BESS shall be configured to operate continuously at Contract Capacity for a three-hour duration from full charge to minimum usable State of Charge, with a round-trip efficiency target of [__]% under standard test conditions.

3. TERM

3.1 Initial Term

This Agreement shall commence on the Effective Date and continue for a period of [10-20] years ("Initial Term") unless earlier terminated. The Initial Term shall be extended by [__] one-year periods (each a "Renewal Term") unless either Party provides written notice of non-renewal at least 180 days prior to expiration.

3.2 Merchant Tail

Upon expiration of the Initial Term and all Renewal Terms, Offtaker's exclusive dispatch right shall terminate. Owner may operate the Project as a merchant facility or enter into alternative commercial arrangements at its sole discretion. Offtaker shall have no further dispatch obligations or capacity payment obligations.

4. COMMERCIAL OPERATION DATE (COD) OBLIGATIONS

4.1 Milestone Schedule

Owner shall achieve the milestones set forth in Exhibit D, including:

• ☐ Land control / power purchase agreement executed
• ☐ Interconnection agreement executed
• ☐ Equipment procurement completed
• ☐ Construction start
• ☐ Construction completion
• ☐ Performance testing
• ☐ Commercial Operation Date

4.2 Liquidated Damages for Late COD

If Owner fails to achieve COD by [__/__/____] plus [__] days (the "Final COD Date"), Owner shall pay Offtaker liquidated damages of $[__] per day of delay, not to exceed $[__] in aggregate, provided Offtaker gives 30-day written notice and opportunity to cure.

Liquidated damages shall not apply if delay results from: (i) Force Majeure; (ii) changes in law; (iii) Offtaker-caused delays; or (iv) utility/ISO delays in granting interconnection approval.

4.3 Performance Testing and Commissioning

Owner shall conduct performance testing consistent with Exhibit F (Performance Test Protocol), demonstrating:

• Minimum Round Trip Efficiency of [__]%
• Contract Capacity sustained discharge for 3 hours
• Correct integration with ISO/RTO dispatch
• Battery management system functionality
• Safety systems operational

Offtaker shall have the right to witness testing and may withhold acceptance if testing fails to meet specifications. Owner shall remedy any deficiencies at Owner's expense within [__] days.

5. DISPATCH RIGHTS

5.1 Exclusive Economic Dispatch

Offtaker shall have the exclusive right to direct all charging and discharging operations of the Project within the Operating Parameters, with the objective of:

• Maximizing economic revenue (energy and ancillary services)
• Maintaining battery health and warranty compliance
• Supporting ISO/RTO grid reliability services
• Capturing price arbitrage opportunities

Owner shall not dispatch the Project independent of Offtaker except as required by grid operator emergency directives.

5.2 Dispatch Instructions

Offtaker shall provide charging and discharging setpoints to Owner's Project operations team on an [hourly/15-minute] basis consistent with applicable ISO/RTO dispatch intervals. Owner shall follow Offtaker dispatch instructions promptly, subject to Operating Parameters and equipment safety constraints.

5.3 Integration with ISO/RTO Bidding

Owner shall ensure that the Project remains registered in the applicable ISO/RTO and registered to a Meter Data Administrator. Offtaker shall be listed as the commercial operator and shall have authority to submit bids on behalf of the Project to the ISO/RTO, subject to Owner's technical approval.

5.4 Bilateral Scheduling and Settlement

Owner shall cooperate with Offtaker in executing bilateral scheduling for transmission service (Day-ahead and Real-time), with the understanding that:

• Offtaker controls the economic dispatch and shall receive/pay settlement revenues/costs
• Owner is responsible for transmission interconnection service costs (if allocated under Interconnection Agreement)
• Both Parties shall allocate CAISO/ISO/RTO charges per the Interconnection Agreement

6. OPERATING PARAMETERS

6.1 Technical Limits

The Project shall operate within the following parameters, attached in detail as Exhibit B:

6.2 Round Trip Efficiency Curve

Round trip efficiency shall degrade over time per the degradation curve provided by the equipment manufacturer. Owner shall provide updated efficiency curves quarterly and shall replace degraded components at Owner's expense if efficiency falls below [__]% without Augmentation.

6.3 Temperature Derating

When ambient temperature falls below [__]°F or exceeds [__]°F, the Project may operate at reduced capacity per the manufacturer's derating schedule. Offtaker and Owner shall jointly manage dispatch during such conditions to minimize efficiency loss.

7. PAYMENTS

7.1 Capacity Payment

Offtaker shall pay Owner a monthly capacity payment of $[__]/kW-month × [__] MW (="Monthly Capacity Payment"), payable on the [__] day of each month, provided the Project achieves the Availability Factor target specified in Section 8.1.

Conditions:

• Capacity Payment is due only after COD and continues through the Term.
• Payment is made regardless of actual dispatch or market conditions.
• Capacity Payment is exclusive of any ISO/RTO capacity market revenues credited to Offtaker's settlement account.

7.2 Variable O&M Reimbursement

Offtaker shall reimburse Owner for variable operation and maintenance costs on a per-MWh-throughput basis:

$[__]/MWh discharged, payable monthly within 15 days of billing, based on actual MWh delivered to the grid.

Variable costs include: inverter servicing, cooling system maintenance, minor repairs, and management labor (non-capitalized).

7.3 Energy Margin Retention by Offtaker

Offtaker retains all market-based revenues from:

• Real-time and day-ahead energy market sales (LMP-based)
• Ancillary services (frequency regulation, voltage support)
• Capacity payments from ISO/RTO capacity auctions (if applicable)

Net of:

• Transmission service charges (allocated under Interconnection Agreement)
• ISO/RTO settlement charges and uplift
• Losses and curtailment

7.4 Availability Make-Whole

If the Project fails to meet the Availability Factor target (Section 8), Offtaker may reduce the Monthly Capacity Payment by a liquidated damages amount calculated as:

Shortfall % × Monthly Capacity Payment

Example: If Availability Factor target is 95% but Project achieves 90%, the 5% shortfall triggers a 5% reduction to Capacity Payment for that month.

7.5 Payment Terms

All payments shall be due within 15 days of invoice. Late payments accrue interest at [__]% per annum or the maximum lawful rate, whichever is lower.

8. AVAILABILITY GUARANTEE

8.1 Availability Factor Target

Owner shall maintain an Availability Factor of no less than [95]% measured on a rolling 12-month basis. If Availability falls below this target, Capacity Payment shall be reduced per Section 7.4.

8.2 Excused Outages

Availability calculation shall exclude time when the Project is unavailable due to:

• ☐ Scheduled preventative maintenance (not to exceed [__] hours per quarter, with [15]-day advance notice)
• ☐ ISO/RTO-directed curtailment or emergency shutdown
• ☐ Force Majeure Events
• ☐ Offtaker-requested outages (software updates, dispatch system changes)
• ☐ Utility transmission outages beyond Owner's control

8.3 Unexcused Outages and Cure

Forced outages exceeding [24] consecutive hours due to Owner's negligence or equipment failure shall count against Availability. Owner shall have a [15]-day cure period to remedy the outage. If not cured, liquidated damages apply per Section 7.4.

8.4 Monitoring and Reporting

Owner shall provide Offtaker with daily availability and performance data, including:

• Outage duration and reason
• MWh discharged and charged
• Estimated efficiency
• Battery health metrics (temperature, cell voltage imbalance)

Data shall be provided via [SCADA system / API / daily email] within [24] hours of close of business.

9. PERFORMANCE GUARANTEES

9.1 Round Trip Efficiency

Owner guarantees a minimum Round Trip Efficiency of:

• Year 1-3: [__]%
• Year 4-5: [__]%
• Year 6-10: [__]%
• Post-Year 10: [__]%

If efficiency falls below these thresholds, Owner shall implement Augmentation (battery replacement or module addition) at Owner's expense within [90] days of notice.

9.2 Capacity Retention Warranty

Owner (backed by equipment manufacturer warranty) guarantees that the Project shall retain a minimum of:

• [__]% of original Contract Capacity at end of Year 5
• [__]% of original Contract Capacity at end of Year 10
• [__]% of original Contract Capacity at end of Year 15 (if applicable)

Degradation shall be measured against baseline testing conducted at COD.

9.3 Augmentation Plan

If the Project cannot meet efficiency or capacity guarantees, Owner shall implement Augmentation, including:

• Procurement of replacement battery modules from qualified suppliers
• Installation and integration by experienced contractors
• Performance retesting per Section 4.3
• All costs borne by Owner; no reduction in Capacity Payment

Owner shall complete Augmentation within [180] days of notice.

10. MAINTENANCE AND OPERATIONS

10.1 Scheduled Maintenance

Owner shall conduct preventative maintenance on a [quarterly/biannual] schedule, including:

• ☐ Battery management system diagnostics
• ☐ Inverter thermal imaging
• ☐ HVAC system inspection
• ☐ Fire suppression system testing (per NFPA 855)
• ☐ Electrical connectors and bus-bar inspection

Owner shall provide a detailed maintenance schedule to Offtaker at least [30] days in advance and shall minimize dispatch impacts.

10.2 Unscheduled Outages

If an equipment failure or emergency requires an unscheduled outage:

• Owner shall notify Offtaker within [2] hours
• Owner shall mobilize service personnel and commence repairs immediately
• Owner shall provide updates every [24] hours until restoration
• Owner shall restore the Project to service within [72] hours (or justify delay)

Emergency repairs that exceed $[__] in estimated cost require Offtaker's prior approval.

10.3 Operations Team

Owner shall maintain a trained, on-call operations team available [24/7] to respond to dispatch directives and equipment issues. Owner shall designate [__] primary and [__] backup operators with direct communication channels to Offtaker.

11. INTERCONNECTION AND TRANSMISSION

11.1 Interconnection Agreement

Owner shall execute and maintain an Interconnection Agreement with the applicable ISO/RTO or utility distribution company (Exhibit C). Owner shall be solely responsible for:

• Completing all required interconnection studies
• Funding and constructing utility-required System Upgrades
• Obtaining network transmission service
• Maintaining annual interconnection fees

11.2 System Upgrades

If the utility or ISO requires infrastructure upgrades (substation enhancements, transmission reinforcement, protection systems) as a condition of Project interconnection, Owner shall:

• Bear all costs of required upgrades
• Manage design and construction
• Ensure compliance with IEEE 1547 (Distributed Energy Resource Interconnection Standards)
• Provide evidence of upgrade completion at least [30] days prior to COD

11.3 Transmission Service

Owner shall procure firm transmission service for the full Contract Capacity. Costs of transmission service (e.g., FERC Schedule 7 under OASIS) shall be allocated [___]% to Owner and [___]% to Offtaker per the Interconnection Agreement.

12. REGULATORY COMPLIANCE

12.1 FERC Order 841 and Wholesale Market Participation

Owner shall ensure that the Project is registered in the applicable ISO/RTO in accordance with FERC Order 841 (Participation of Electric Storage Resources in Wholesale Electric Markets), including:

• ☐ Registration as a storage resource in the energy and ancillary services markets
• ☐ Submittal of technical specifications and operating parameters
• ☐ Compliance with ISO/RTO-specific tariffs for storage operations

Offtaker shall have direct access to the storage resource registration account and may update operating parameters subject to Owner's technical approval.

12.2 FERC Order 2222 and DER Aggregation

If the Project participates in an aggregation or virtual power plant (VPP), both Parties shall comply with FERC Order 2222 requirements for distributed energy resource market participation.

12.3 Interconnection Standards

The Project shall be designed and tested to meet IEEE 1547 interconnection standards, including:

• ☐ Anti-islanding protection
• ☐ Frequency and voltage ride-through capability
• ☐ Soft-start or ramp rate limiting (as required)
• ☐ Protective relay coordination

Owner shall provide evidence of IEEE 1547 compliance testing at least [30] days prior to COD.

12.4 Fire Safety (NFPA 855)

Owner shall design, construct, and operate the Project in compliance with NFPA 855 (Standard on the Installation of Stationary, Non-Spillable Battery Energy Storage Systems), including:

• ☐ Fire suppression system (automatic and manual)
• ☐ Thermal runaway detection and venting
• ☐ Electrical isolation and overcurrent protection
• ☐ Regular fire suppression maintenance per NFPA 855, Annex D

Owner shall obtain annual fire safety certifications from a qualified third party and provide copies to Offtaker.

12.5 State Siting and Permitting

Owner shall obtain all required state and local permits, including:

• ☐ Construction permits and zoning approval
• ☐ Environmental permits (if required)
• ☐ Certificate of Public Convenience and Necessity (if applicable by state law)
• ☐ Water and stormwater management permits

Owner shall maintain all permits current throughout the Term.

12.6 Environmental, Health, and Safety (EHS)

Owner shall:

• ☐ Maintain spill prevention control and countermeasure (SPCC) plans if required by state/EPA
• ☐ Properly label and store hazardous materials (coolant, electrolyte if accessible)
• ☐ Conduct annual EHS audits and provide reports to Offtaker
• ☐ Comply with local air quality rules (no operational emissions)

13. INSURANCE

13.1 Types of Coverage

Owner shall maintain the following insurance throughout the Term:

13.2 Beneficiaries and Waiver

Owner shall name Offtaker as additional insured on liability policies. All policies shall waive subrogation rights against Offtaker. Certificates of insurance shall be provided within [15] days of policy inception and [30] days prior to any expiration.

13.3 Self-Insurance

Owner may self-insure up to [__]% of coverage limits if Owner maintains a minimum net worth of $[__] Million and demonstrates financial capacity to pay claims. Offtaker shall approve self-insurance limits in writing.

14. TAX CREDITS AND INCENTIVES

14.1 IRA Investment Tax Credit (Section 48E)

Owner is responsible for claiming the federal Clean Electricity Investment Credit under 26 U.S.C. § 48E, which currently provides a [30]% investment tax credit on qualified battery storage assets placed in service after 2022.

Owner shall:

• ☐ Ensure the Project qualifies as a "Qualified Battery Storage Facility" per IRS guidance
• ☐ Obtain required domestic content certifications (battery cell/module sourcing)
• ☐ Comply with wage and apprenticeship requirements (if applicable to the credit amount)
• ☐ Report credit claim on Form 6765 or via direct pay election under § 6418

14.2 Transferability under Section 6418 (2022+)

If Owner is unable to utilize the investment tax credit directly (e.g., insufficient tax liability), Owner may elect to transfer the credit to an unrelated party under § 6418 (Direct Payment / Credit Transfer Election). Owner shall consult with tax counsel regarding transferability and any payment to Offtaker.

14.3 Production Tax Credit vs. Investment Tax Credit Election

For Projects paired with solar or wind generation (if applicable), Owner shall elect either the Production Tax Credit (PTC) under § 45 or the Investment Tax Credit (ITC) under § 48E, but not both. Election shall be made by the tax return filing deadline and communicated to Offtaker in writing.

14.4 State and Local Incentives

Owner may claim applicable state and local incentives (e.g., state investment credits, rebates, accelerated depreciation). Offtaker shall not be entitled to any state/local credits; all credits benefit Owner. Owner shall disclose the existence and value of known state incentives to Offtaker.

14.5 Negative Tax Adjustments

If the IRS challenges the Project's qualification for the credit or imposes any disallowance, Owner shall be responsible for all resulting tax liability and penalties. Owner shall defend any IRS audit at Owner's expense and shall reimburse Offtaker for any resulting increase in Offtaker's tax liability.

15. FORCE MAJEURE

15.1 Force Majeure Events

Neither Party shall be in default of this Agreement if and to the extent a failure to perform results from:

• ☐ Acts of God (earthquake, hurricane, tornado, extreme weather)
• ☐ Pandemic or epidemic (including government-mandated facility closures)
• ☐ Civil unrest, war, terrorism, or government action
• ☐ Grid operator emergency directives or load shedding orders
• ☐ Utility transmission/distribution failure lasting more than [72] hours
• ☐ Supplier failure or material shortage due to events outside the Parties' control
• ☐ Extreme market conditions (e.g., negative pricing that prevents dispatch)

15.2 Notice and Mitigation

The Party experiencing a Force Majeure Event shall:

• Notify the other Party within [24] hours with written detail
• Provide daily updates on restoration progress
• Use reasonable efforts to mitigate impact and resume performance
• Not be excused from payment obligations except as explicitly provided below

15.3 Suspension of Obligations

During a Force Majeure Event:

• Owner's Availability guarantees shall be suspended
• Capacity Payment shall be reduced [__]% if Project is offline for more than [7] consecutive days
• Performance guarantees shall not apply

If a Force Majeure Event prevents COD for more than [180] days, either Party may terminate this Agreement upon written notice.

16. CHANGE IN LAW

16.1 Regulatory Changes

If a Change in Law (i.e., new statute, regulation, or court order material to Project operation) occurs after COD that:

• Materially increases Owner's operating costs by more than [10]%
• Materially restricts Project dispatch (e.g., new cycling limits)
• Requires significant capital expenditure for compliance

Then the Parties shall negotiate in good faith to adjust Capacity Payment or Operating Parameters to allocate the cost impact.

16.2 Tax Law Changes

If IRS guidance or tax law changes affect the tax credit eligibility or value of the Project (e.g., domestic content rules), Owner shall notify Offtaker within [30] days. If the credit value falls by more than [__]%, the Parties shall discuss cost allocation.

16.3 FERC and ISO/RTO Changes

If FERC Order 841 is materially amended or ISO/RTO tariffs materially change operational requirements, the Parties shall convene within [30] days to address impacts and necessary modifications to Operating Parameters or payment terms.

17. DEFAULT AND REMEDIES

17.1 Material Defaults

A material default occurs if either Party:

• Fails to make a payment due under this Agreement and does not cure within [15] days of written notice
• Materially breaches an operational obligation (e.g., Offtaker fails to follow dispatch protocol for [7] consecutive days)
• Fails to maintain insurance or performance guarantee
• Becomes insolvent or subject to bankruptcy proceedings

17.2 Cure Period

Upon written notice of default, the defaulting Party shall have [15] days (or [30] days for non-payment defaults) to cure. If cure is not reasonably possible within [15] days, the defaulting Party may propose a cure plan with milestone dates acceptable to the other Party.

17.3 Remedies

If default is not cured, the non-defaulting Party may:

• Withhold or suspend performance (e.g., Offtaker suspends dispatch; Owner suspends maintenance)
• Seek specific performance or injunctive relief
• Exercise termination rights per Section 18
• Recover reasonable attorneys' fees and costs

Liquidated damages (Section 4.2, 8.4) are in addition to other remedies, not exclusive.

18. TERMINATION

18.1 Termination for Cause

Either Party may terminate this Agreement if:

• The other Party remains in material default for [30] days after written notice and opportunity to cure
• A Force Majeure Event prevents performance for more than [180] consecutive days
• The other Party becomes insolvent or enters bankruptcy

Termination shall be effective upon written notice specifying the default.

18.2 Termination for Convenience

[OPTION A - No Convenience Termination:] Neither Party may terminate this Agreement for convenience during the Initial Term.

[OPTION B - With Penalty:] Either Party may terminate upon [24] months' written notice, provided the terminating Party pays the other Party a termination fee of $[__] (or [__]% of average annual Capacity Payment).

18.3 Effect of Termination

Upon termination:

• ☐ Offtaker's dispatch rights cease immediately
• ☐ Capacity Payments terminate as of the effective termination date
• ☐ Owner may operate the Project merchant or enter alternative arrangements
• ☐ Offtaker shall return or destroy all proprietary information within [15] days
• ☐ Each Party shall pay accrued amounts due through termination date within [30] days

18.4 Decommissioning

Owner remains responsible for ultimate decommissioning and removal of the Project consistent with applicable law. If Owner defaults on decommissioning obligations, Offtaker may perform decommissioning at Owner's expense and offset costs against any residual value claims.

19. ASSIGNMENT

19.1 Restrictions

Neither Party may assign, sell, pledge, or encumber this Agreement (or the Project) without the prior written consent of the other Party, not to be unreasonably withheld, conditioned, or delayed.

Permitted assignments include:

• Assignment to an affiliate or successor entity with equivalent creditworthiness
• Assignment to a lender or financial partner (with notice)
• Assignment in connection with a change of control or merger (subject to assumption of obligations)

19.2 Assumption of Obligations

Any permitted assignee shall assume in writing all obligations of the assigning Party. The original Party shall remain liable to the other Party unless the other Party consents to release.

19.3 Project Sale

If Owner sells the Project to a third party, the new owner shall assume all obligations under this Agreement and shall provide evidence of compliance with Performance Guarantees (Sections 9.1-9.2). If the new owner does not assume, the transaction shall not proceed without Offtaker's written consent.

20. DISPUTE RESOLUTION

20.1 Informal Resolution

Any dispute arising from this Agreement shall first be addressed through good-faith negotiation between [__] (Owner representative) and [__] (Offtaker representative) within [30] days of written notice of dispute.

20.2 Mediation

If negotiation fails, either Party may request non-binding mediation under [JAMS / AAA] Commercial Mediation Rules. The mediator shall be jointly selected and costs shall be shared equally.

20.3 Arbitration

If mediation does not resolve the dispute within [60] days, either Party may initiate binding arbitration under the American Arbitration Association (AAA) Commercial Arbitration Rules:

• ☐ One arbitrator (if dispute value < $[__]) or three arbitrators (if > $[__])
• ☐ Seat of arbitration: [CITY, STATE]
• ☐ Governing law: [STATE] law
• ☐ Arbitrator authority to award attorney fees, costs, and interest

20.4 FERC Jurisdiction

Notwithstanding arbitration, either Party may pursue claims arising under Federal Power Act or FERC orders before the Federal Energy Regulatory Commission. FERC's jurisdiction is not waived by this Agreement.

21. MISCELLANEOUS

21.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of [STATE], without regard to conflict of law principles.

21.2 Notices

All notices shall be in writing and delivered by: (i) personal delivery; (ii) overnight courier (FedEx, UPS); (iii) certified mail, return receipt; or (iv) email with read receipt.

Owner Notices:
[OWNER NAME]
[ADDRESS]
Attn: [__]
Email: [__]

Offtaker Notices:
[OFFTAKER NAME]
[ADDRESS]
Attn: [__]
Email: [__]

Notices are effective upon receipt.

21.3 Entire Agreement

This Agreement and Exhibits constitute the entire agreement between the Parties and supersede all prior understandings, whether written or oral. Amendments or waivers must be in writing signed by authorized representatives of both Parties.

21.4 Severability

If any provision is found invalid or unenforceable, such provision shall be severed and the remainder of the Agreement shall remain in full force and effect.

21.5 Counterparts and Electronic Signatures

This Agreement may be executed in one or more counterparts, each an original and all together constituting one instrument. Electronic signatures (DocuSign, Adobe Sign) have the same effect as original signatures.

21.6 Confidentiality

Each Party shall treat the other's confidential information (pricing, technical specifications, financial performance) as confidential and shall not disclose without the other Party's written consent, except as required by law or to professional advisors bound by confidentiality.

21.7 Public Announcements

Neither Party shall issue press releases or public statements regarding this Agreement without the other Party's prior written approval, except as required by securities law or regulatory proceedings.

SIGNATURE BLOCKS

OWNER/SELLER:

[OWNER NAME], by and through its duly authorized representative:

Signature: ___________________________________

Print Name: _________________________________

Title: ________________________________________

Date: ________________

Federal Tax ID: ______________________________

OFFTAKER/BUYER:

[OFFTAKER NAME], by and through its duly authorized representative:

Signature: ___________________________________

Print Name: _________________________________

Title: ________________________________________

Date: ________________

Federal Tax ID: ______________________________

EXHIBITS

Exhibit A: Detailed Project Description (site plan, equipment specifications, COD schedule)

Exhibit B: Operating Parameters (charge/discharge rates, temperature limits, cycling constraints, efficiency curve)

Exhibit C: Interconnection Agreement (executed ISO/RTO or utility interconnection service agreement)

Exhibit D: Milestone Schedule (land control, interconnection, construction, testing, COD)

Exhibit E: Capacity Payment Schedule (monthly payment amount; adjustment mechanisms)

Exhibit F: Availability Factor Calculation Methodology (definitions of excused/unexcused outages; data sources)

Exhibit G: Performance Test Protocol (efficiency testing, capacity verification, safety system validation)

Exhibit H: Insurance Requirements (certificates of insurance; proof of additional insured naming)

Exhibit I: ITC/Tax Credit Representations (domestic content, wage/apprenticeship compliance, transferability election)

Exhibit J: Change of Law Adjustment Procedure (cost impact analysis; negotiation protocol)

SOURCES AND REFERENCES

• Federal Energy Regulatory Commission (FERC) Order 841, "Participation of Electric Storage Resources in Wholesale Electric Markets," 18 CFR Part 35 (2020)
• FERC Order 2222, "Participation of Distributed Energy Resource Aggregations in Markets Operated by Regional Transmission Organizations and Independent System Operators," 18 CFR Parts 35 and 300 (2020)
• 26 U.S.C. § 48E (Clean Electricity Investment Credit) and IRS Notice 2023-38 (guidance on battery storage)
• 26 U.S.C. § 6418 (Direct Payment and Credit Transfer Provisions) / Form 3115 (direct pay election mechanism)
• National Fire Protection Association (NFPA) 855, Standard on the Installation of Stationary, Non-Spillable Battery Energy Storage Systems (2020)
• IEEE 1547-2018, IEEE Standard for Interconnection and Interoperability of Distributed Energy Resources with Associated Electric Power Systems Interfaces
• American Arbitration Association (AAA) Commercial Arbitration Rules & Mediation Procedures
• Model Energy Storage Procurement Frameworks, National Renewable Energy Laboratory (NREL), Golden, CO
• Interstate Renewable Energy Council (IREC), Model Interconnection Procedures for Distributed Generation, 6th Edition

CONFIDENTIAL LEGAL TEMPLATE
This template is intended for use by licensed attorneys only. Parties must obtain independent legal, tax, and engineering counsel before execution.