Negotiating A PPA

The presentation will address the necessary steps and requirements in preparing for and negotiating a viable power purchase agreement (‘PPA’). The presentation will examine the key issues in the PPA from the perspectives of the developer, counsel and utility company. Whether the utility is considering solar, wind, biomass, renewable natural gas or other forms of distributed energy, the key legal agreement between the parties is the PPA, which forms the foundation of the agreement for the developer to provide energy and the utility to procure that power.

These are agreements that often last 15 to 25 years and need to provide a clear recitation of the parties’ legal obligations, but also provide a measure of flexibility to account for likely changes to the regulations, environment and parties over that timeframe. The utility and its leadership team negotiating PPAs must understand the key terms geared to different renewable energy sources as well as responding to changes in the law and market pressures. We will discuss these key terms, adapting the PPA to each type of renewable energy, as well as strategies for effectively negotiating the agreement.

Course Outline :

Should the utility issue and RFP?

Who owns the equipment

Who constructs the plant and how long will it take?

How is the equipment maintained and is it removed at the end of the term?

What happens if there is damage or other casualty event?

How does insurance respond to distributed energy systems/

What key provisions are required to facilitate financing for the developer?

What primary protections should the utility insist upon?

What approaches can parties use to allocate risks and benefits in the long-term contract?

What are the features of different types of renewable energy that must be considered when negotiating the PPA?

OTHER KEY ISSUES TO BE DISCUSSED