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Heat Purchase Agreement

Heat Purchase Agreement Template for United States

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Heat Purchase Agreement

"I need a Heat Purchase Agreement for a new district heating facility supplying heat to a commercial office complex in Boston, with a 15-year term starting March 2025 and minimum supply temperature of 85��C."

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What is a Heat Purchase Agreement?

The Heat Purchase Agreement (HPA) is a specialized contract used when one party generates thermal energy and another party commits to purchasing it over a long-term period. This agreement type has become increasingly important in the United States with the growth of district heating systems, industrial heat recovery projects, and renewable thermal energy installations. The HPA defines critical elements including heat quantity, quality, availability, pricing, and technical requirements while ensuring compliance with both federal and state regulatory frameworks. It's particularly crucial for projects involving significant capital investment in heat generation facilities.

What sections should be included in a Heat Purchase Agreement?

1. Parties: Identification and details of the heat supplier and purchaser

2. Background: Context of the agreement, facility description, and purpose

3. Definitions: Key terms used throughout the agreement including technical specifications and regulatory references

4. Supply Obligations: Quantity, quality, and reliability requirements for heat supply

5. Pricing and Payment Terms: Heat rate structure, billing cycles, payment conditions, and price adjustment mechanisms

6. Term and Termination: Duration of agreement, renewal options, and termination circumstances

7. Operating Requirements: Technical specifications, operational standards, and maintenance obligations

8. Force Majeure: Circumstances beyond parties' control affecting performance and resulting obligations

9. Representations and Warranties: Legal assurances and commitments from both parties

10. Dispute Resolution: Procedures for resolving disputes between parties

What sections are optional to include in a Heat Purchase Agreement?

1. Carbon Credits: Allocation of environmental attributes and carbon credits between parties

2. Construction Provisions: Requirements and timeline for facility construction when not yet operational

3. Interconnection Requirements: Technical specifications and responsibilities for connecting to purchaser's system

4. Government Approvals: Required permits, licenses, and regulatory compliance obligations

5. Performance Testing: Procedures for testing and verifying facility performance

What schedules should be included in a Heat Purchase Agreement?

1. Schedule A - Technical Specifications: Detailed technical requirements for heat supply including temperature, pressure, and quality parameters

2. Schedule B - Pricing Schedule: Detailed pricing formulas, adjustment mechanisms, and examples of calculations

3. Schedule C - Operating Procedures: Detailed procedures for day-to-day operations, maintenance, and emergency protocols

4. Schedule D - Measurement and Verification Protocol: Procedures for measuring and verifying heat delivery and consumption

5. Schedule E - Site Layout: Technical drawings, facility location details, and interconnection points

6. Schedule F - Performance Standards: Detailed performance requirements, testing procedures, and remedies for non-compliance

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
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Industries

PURPA: Public Utility Regulatory Policies Act - Federal legislation governing relationships between utilities and independent power producers, including provisions for cogeneration and small power production facilities

FERC Regulations: Federal Energy Regulatory Commission regulations providing oversight of interstate energy transmission, market rules, and rate regulations

Clean Air Act: Federal legislation establishing emissions standards and environmental compliance obligations for energy production facilities

NEPA: National Environmental Policy Act requiring environmental impact assessments and federal permitting requirements for energy projects

State PUC Regulations: State Public Utility Commission regulations covering state-specific utility rules, rate setting, pricing rules, and interconnection requirements

State Environmental Protection Laws: State-specific legislation governing emissions standards, environmental permits, and compliance requirements for heat production facilities

State Energy Efficiency Standards: State-level requirements for heat production efficiency and conservation requirements

State RPS: State Renewable Portfolio Standards establishing requirements for renewable energy sources, including incentives and compliance obligations

Local Zoning Laws: Municipal and local regulations governing facility siting, land use, and operational permits

Building Codes: Local and state building codes and safety standards applicable to heat production facilities

Insurance Requirements: Mandatory insurance coverage and liability protection requirements for heat production facilities

Industry Standards: Technical standards such as ASHRAE guidelines for heating systems and equipment specifications

Antitrust Regulations: Federal and state antitrust laws governing market competition and pricing in energy markets

UCC Article 2: Uniform Commercial Code Article 2 governing sales contracts and general contract law principles applicable to heat purchase agreements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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