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Home My WebLink AboutSun Valley Energy Inc., Agreement, 07.19.2022AGREEMENT THIS AGREEMENT is made and entered into as of this may of. 1 , 2022, between the City of Fresno, a California municipal corporation (CITY), and S t n Valley Energy Inc., a Georgia S-Corporation (CONTRACTOR). RECITALS WHEREAS, the California Air Resources Board (GARB) issued a call for credits to be pledged for sale in the Low Carbon Fuel Standard (LCFS) credit clearance market (CCM); WHEREAS, the CITY pledged 5,513 LCFS credits; WHEREAS, the CARB Executive Officer has determined that the CCM will occur in 2022 to allow the five reporting entities the additional opportunity to meet their obligation; WHEREAS, the CONTRACTOR has sought to meet its obligations by purchasing LCFS credits from the CITY; WHEREAS, the parties seek an agreement to sell LCFS credits to the CONTRACTOR; and WHEREAS, this agreement is to be used by CARB to transfer credits from the CITY to the CONTRACTOR as described herein. AGREEMENT NOW, THEREFORE, in consideration of the above recitals which are contractual in nature, the mutual promises herein contained, and for other good and valuable consideration hereby acknowledged, the parties agree as follows: CITY and CONTRACTOR mutually agree that the CITY shall sell to the CONTRACTOR 779 CA LCFS credits at $110 per credit, for a total lump sum payment of $85,690 to the CITY. 2. CITY and CONTRACTOR mutually agree that this agreement is subject to the successful sales transaction and credit review. In the event the CONTRACTOR is unable to pay the lump sum of $85,690 to the CITY, the CITY reserves the right to reclaim the 779 CA LCFS credits. In the event CARB denies the credit transaction, both parties shall be held harmless and this agreement shall become null and void. IN WITNESS WHEREOF, the parties have executed this agreement at Fresno, California, the day and year first above written. City of Fresno, a Calif icipal corporation Joe Vdr-of;Transportation , Direc Fresno Area Express Transportation Department ATTEST: Todd Stermer City Clerk BY: APPROVED AS TO FORM: Rina M. Gonzales City Attorney By: 1 �� v auline Brickey Da e Deputy City Attorne Addresses: CITY: City of Fresno Attention: Linda Taylor, Administrative Manager 2223 G Street Fresno, CA 93706-1675 Attachments: 1. Karbone Confirmation Notice 2. CARB CCM Notice 2 Sun Valley Energy Inc., S-Corporation By. Name: Al1tn /\14e.1, Title: By. 1rC Name: L V'* Title'. (CFO/Secretary/Treasurer) Contractor: Sun Valley Energy Inc dr Karbone KARBONE INC. CONFIRMATION NOTICE 675 Third Avenue, 30th Floor New York, NY 10017 DATE: June 14th, 2022 ATTN: Allen Nivens FROM: Karbone Inc Sun Valley Energy, Inc. PHONE: 781-389-0851 REF NO: CALCFS-1017-1011 FAX: 646-219-7168 On behalf of Karbone Inc, we are pleased to confirm the following Credit Clearance Market California Low Carbon Fuel Standard (LCFS) credit transaction. BUYER: Sun Valley Energy, Inc. PO Box 105 Gainesville, GA 30503 ATTN: Allen Nivens EMAIL: anivens@sunvalleyenergy.net CC: mnivens@sunvallyenergy.net PHONE: 770-540-3935 SELLER: City of Fresno Department of Transportation 2223 G Street Fresno, CA 93706 ATTN: Orie Rubalcava EMAIL: Orie.Rubalcava@fresno.gov PHONE: 559-621-1537 PRODUCT: Credit Clearance Market CA LCFS Credits DESCRIPTION AND TRANSACTION STRUCTURE: Volume 779 Price $110 / Credit PAYMENT: Payment will be made according to schedule outlined in mutually agreed and fully executed Purchase and Sale Agreement (PSA). DELIVERY: Immediate Delivery according to schedule outlined in mutually agreed and fully executed Purchase and Sale Agreement (PSA). OTHER TERMS: This transaction is subject to mutual contract and credit review COMMISSION: $0.25 per credit, ie. $194.75, payable upon successful completion of PSA. INVOICES: Invoices to be sent attention to: mnivens@sunvallyenergy.net CONTACT: Ryan Melia, 781389 0851 // ryan.melia@karbone.com The parties agree that Karbone's sole function with respect to the transaction is the introduction of the parties and that each is responsible for evaluating the merits of the transaction and the counterparty. Karbone assumes no responsibility for the performance of the transaction or for the financial condition of any party. Please verify for accuracy the details of this transaction and kindly bring to Karbone's attention any errors as soon as possible. 2021 LCFS Compliance Information and Credit Clearance Market Information LCFS Compliance Reporting for 2021 The Low Carbon Fuel Standard (LCFS) achieved 99 percent compliance for the 2021 data year. A total of 497 entities reported under the LCFS program during 2021. Out of those 497 entities, 60 generated deficits. The entities reporting high -carbon fuels generated 18,848,688 deficits during this period. A total of 20,197,339 credits were generated in the program over the same time period. Summary of 2021 LCFS Compliance Reporting Total number of entities in 2021 under LCFS program Total number of entities generating deficits during 2021 Total number of deficit generating entities that met their 2021 compliance obligation 497 60 55 As reported in the 04 2021 Quarterly Data Summary, cumulatively through 2021, the LCFS program has generated 97.7 million credits and 88.3 million deficits, for a net of about 9.4 million credits banked in the program. Credit Clearance Market There were five parties that did not retire sufficient credits for 2021. Name of the Regulated Party Number of CCM Deficits Ag Environmental Products LLC 4 American Biodiesel, Inc. dba Community Fuels 510 Biodico Westside, LLC 206 Mutual Propane 127 Sun Valley Energy, Inc. 779 The LCFS includes a provision for holding a Credit Clearance Market (CCM) that provides additional compliance flexibility to regulated entities who have not met their previous year-end obligation. On April 4, 2022, the California Air Resources Board (CARB) issued a call for credits to be pledged for sale in the CCM. The following parties pledged a total of 24,467 credits for sale in the 2021 CCM: Name of the Regulated Party Number of CCM Credits City of Fresno Department of Transportation 5,513 City of Fullerton 500 City of Lodi Electric Utility 1,379 EVmatch, Inc. 5 Foothill Transit 695 Imperial Irrigation District 3,623 Long Beach Public Transportation 2,749 Neste US, Inc. 10,000 3 San Francisco Estuary Institute The EO has determined that the CCM will occur in 2022 to allow the five reporting entities the additional opportunity to meet its obligation. The CCM will be operational from June 1 to July 31, 2022. During this period, this regulated party must acquire credits pledged into the CCM from the parties listed above. The maximum price set for credits to be sold in the 2021 CCM is $239.18 per credit. Regulated parties that have pledged credits to sell into the CCM cannot reject an offer to purchase pledged credits at the maximum price but may accept an offer to purchase at a lower price if they prefer to do so. If you have any questions regarding this document, please contact Cheryl Laskowski, Transportation Fuels Branch Chief at (916) 621-9068 or via email Cheryl. Laskowski(c-)-arb. ca.gov. Program Background The LCFS, a regulation to reduce the carbon intensity of fuels sold in California 20 percent by 2030, is one of the measures adopted by CARB, pursuant to Health and Safety Code Sections 38500-38599 (AB 32) to reduce California's greenhouse gas emissions. It is designed to help clean the air, protect the environment, and drive the development of clean, low -carbon fuels. The Credit Clearance Market provision increases market certainty regarding maximum compliance costs, strengthens incentives to invest in and produce low -carbon fuels, and reduces the probability of credit shortfalls and price spikes. For more information see the LCFS Credit Clearance Market webpage.