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This heavily discounted purchase price will be a charitable contribution or charity sale for investors who will receive an additional tax benefit from the donation. This proposal also includes an estimate of solar capacity credits available from Xcel Energy for system's in its service territory that are greater than 100 kilowatts in DC capacity. Sundial has been the local leader in negotiating these capacity credit agreements with Xcel, which add an average of 5.3 cents per kilowatt-hour to the value of energy production. No revenue has been assumed from the sale of Renewable Energy Certificate (REC) or other environmental attributes associated with the solar project or its operation. The City shall be entitled to these RECs and all other environmental attributes, which may have a value in the future. The proposed PPA represents a maximum and the development team is willing to negotiate an initial PPA price with the City that best meets its needs. A higher PPA rate and higher rate of annual escalation will assure that the solar project is debt -free at the time of its sale to the City and will generate a higher donation value to the initial owners of the solar project. A lower PPA price will amortize construction debt over a longer period and deliver more immediate energy savings to members but may result in some remaining construction debt at the time of the gift. The PPA rate proposed here will amortize all of the debt needed to complete the project over the first five years of operation. A. PPA TERMS and STRUCTURES The Project Structure includes integration of OEC financing and the charitable donation of the facility after five years to the City. It also includes a solar capacity credit from Xcel, which will appear as a "solar credit" on monthly utility bill statements received by the City. The buyout at five percent of the system's FMV is an estimate that may be 10 percent higher or lower. 20 -year term (with donation after Year 5) Guaranteed Year 1 production: 460,893 kWh with 0.3% annual degradation 9 cents/kWh with 3.5% annual escalator Actual amount of solar credit paid to Sundial for first five years Sundial pays all O & M expenses for the first five years of the PPA PPA Schedule (per kWh of delivered AC power) Energy Value Solar Credit Year 1 $41,479. $24,427. Year 2 $41,354. 24,354. Year 3 $41,230. 24,281. Year $41,107. 24,208. Year 5 $40,983 24,135. Year 6 Donation to City 12,750.