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An Energy Purchase Agreement (EPA) is a long-term contract between an energy producer and a buyer that sets the terms for selling and buying power. These agreements typically cover everything from pricing and delivery schedules to performance standards and payment terms. Common in renewable energy projects, EPAs help solar farms and wind facilities secure reliable revenue while giving buyers predictable energy costs.

EPAs play a crucial role in making clean energy projects financially viable in the U.S. market. They usually run for 10-25 years and must comply with state utility regulations and Federal Energy Regulatory Commission requirements. Large companies often use these agreements to meet their sustainability goals and lock in power prices, while utilities rely on them to add renewable capacity to their generation mix.

Consider an Energy Purchase Agreement when your organization needs reliable, long-term power supply at predictable prices. This contract makes sense for renewable energy projects, particularly when developing solar installations or wind farms that require guaranteed revenue streams to secure financing. It's especially valuable for businesses looking to meet sustainability targets while managing energy costs.

Energy Purchase Agreements work well for companies consuming large amounts of electricity, utilities seeking to diversify their power sources, and developers building new generation facilities. The agreement becomes essential when you need to demonstrate stable future income to lenders, or when your organization aims to lock in energy rates for 10+ years while complying with state renewable portfolio standards.

• Power Purchase Contract: Traditional agreement for direct physical delivery of electricity between generator and buyer
• Power Purchase Agreement Solar: Specialized contract for solar installations, often including site access and equipment maintenance terms
• Corporate PPA: Designed for large businesses buying renewable energy directly from generators
• Virtual PPA: Financial contract settling differences between agreed price and market rates, without physical power delivery
• Virtual Power Purchase Agreement: Comprehensive financial agreement for renewable energy credits and price hedging

• Energy Producers: Solar farms, wind facilities, and other power generators who sell electricity and need guaranteed revenue streams
• Corporate Buyers: Large companies and industrial facilities seeking to secure long-term power supplies and meet sustainability goals
• Utilities: Power companies purchasing electricity to distribute to customers or meet renewable portfolio requirements
• Legal Teams: In-house counsel and energy lawyers who draft and negotiate terms, ensuring regulatory compliance
• Financial Institutions: Banks and investors who require these agreements as part of project financing packages
• Project Developers: Companies building renewable energy facilities who need contracts to secure funding and begin construction

• Project Details: Gather specifics about power generation capacity, delivery points, and operational schedules
• Price Structure: Determine pricing mechanisms, including base rates, escalators, and any performance bonuses
• Term Length: Define contract duration and any extension options based on project financing needs
• Performance Standards: Establish minimum generation requirements and availability guarantees
• Regulatory Review: Check state utility commission requirements and FERC regulations
• Credit Requirements: Assess financial security needs and payment terms for both parties
• Risk Allocation: Define force majeure events and remedies for non-performance
• Documentation: Compile permits, interconnection agreements, and facility specifications

• Parties and Definitions: Legal names, roles, and key terms used throughout the agreement
• Energy Specifications: Detailed description of power type, quantity, and delivery requirements
• Pricing Terms: Payment structure, rates, adjustments, and billing procedures
• Performance Standards: Output guarantees, availability requirements, and quality metrics
• Term and Termination: Contract duration, renewal options, and early termination conditions
• Force Majeure: Events excusing non-performance and notification requirements
• Metering and Records: Measurement protocols and documentation requirements
• Regulatory Compliance: FERC requirements and state-specific utility regulations
• Dispute Resolution: Arbitration procedures and governing law provisions

An Energy Purchase Agreement differs significantly from an Asset Purchase Agreement in several key ways, though both involve significant financial commitments. While Energy Purchase Agreements focus on ongoing power supply relationships, Asset Purchase Agreements deal with one-time transfers of physical assets or equipment.

• Duration: Energy Purchase Agreements typically span 10-25 years with continuous obligations, while Asset Purchase Agreements conclude after the asset transfer
• Payment Structure: EPAs involve recurring payments based on energy delivery, versus a single payment for asset transfers
• Regulatory Oversight: EPAs require compliance with utility regulations and FERC requirements, while Asset Purchase Agreements follow general commercial law
• Performance Requirements: EPAs include ongoing delivery and quality standards, unlike Asset Purchase Agreements which focus on condition at transfer
• Risk Allocation: EPAs distribute operational risks over time, while Asset Purchase Agreements primarily address transfer and ownership risks