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Physical Power Purchase Agreement Template for United States

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Key Requirements PROMPT example:

Physical Power Purchase Agreement

"Need a Physical Power Purchase Agreement for a 50MW solar facility in Texas, with delivery starting January 2025, including specific provisions for curtailment rights and environmental attributes trading."

Document background
Physical Power Purchase Agreements are fundamental instruments in the U.S. energy market, used when a power generator needs to establish a long-term arrangement for the physical delivery of electricity to a buyer. These agreements are particularly crucial for project financing and ensuring stable revenue streams for power generation facilities. The Physical Power Purchase Agreement includes detailed provisions for power delivery specifications, pricing mechanisms, operational requirements, and risk allocation, while ensuring compliance with both federal (FERC) regulations and state-specific energy laws. It's especially relevant for new generation facilities seeking project finance and established generators looking to secure long-term offtake arrangements.
Suggested Sections

1. Parties: Identification of buyer and seller, including full legal names and addresses

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

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase Obligations: Core obligations including capacity, energy amounts, and delivery points

5. Term and Termination: Duration of agreement and termination conditions

6. Price and Payment: Pricing structure, payment terms, and billing procedures

7. Delivery and Metering: Specifications for power delivery and measurement

Optional Sections

1. Credit Support: Financial security requirements - used when dealing with non-investment grade counterparties

2. Environmental Attributes: Treatment of renewable energy credits and other environmental benefits - used when dealing with renewable energy sources

3. Development Milestones: Construction and development timeline requirements - used when facility is not yet operational

Suggested Schedules

1. Facility Description: Technical specifications of the generating facility

2. Product Specifications: Detailed description of energy products and capacity

3. Pricing Schedule: Detailed pricing mechanisms and calculations

4. Operating Procedures: Detailed operational requirements and procedures

5. Form of Performance Security: Template for required security instruments

6. Interconnection Requirements: Technical requirements for grid connection

Authors

Alex Denne

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

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Industries

Federal Power Act (FPA): Primary federal law governing the wholesale transmission and sale of electric power, establishing FERC's regulatory authority over interstate electricity transactions

Public Utility Regulatory Policies Act (PURPA): Federal legislation that promotes energy conservation and greater use of domestic and renewable energy, requiring utilities to buy power from qualifying facilities

FERC Regulations: Federal Energy Regulatory Commission rules governing interstate electricity transmission, wholesale electricity sales, and market oversight

Energy Policy Act: Comprehensive energy legislation addressing energy production, efficiency standards, and market reforms in the United States

Clean Air Act: Federal law regulating air emissions and environmental standards that impact power generation facilities

National Environmental Policy Act (NEPA): Federal law requiring environmental impact assessments for major energy projects

State Public Utility Commission Regulations: State-specific rules governing utility operations, rates, and service requirements within state boundaries

State Energy Regulations: State-specific laws and renewable portfolio standards governing energy generation and distribution

State Environmental Protection Laws: State-level environmental regulations affecting power generation and transmission facilities

State Licensing Requirements: State-specific permits and licenses needed for power generation and sales

State Interconnection Requirements: Technical and operational standards for connecting power generation facilities to the grid at state level

RTO/ISO Requirements: Rules and protocols established by Regional Transmission Organizations or Independent System Operators for power market participation

Wholesale Electricity Market Rules: Regulations governing the operation of wholesale electricity markets and trading

Transmission and Interconnection Protocols: Technical standards and procedures for connecting to and utilizing the transmission system

Uniform Commercial Code (UCC): State-adopted standardized business laws governing commercial transactions, including energy sales

State Contract Law: General contract law principles and requirements specific to each state

Bankruptcy Laws: Federal and state regulations regarding bankruptcy that could affect long-term power purchase agreements

Securities Regulations: Federal and state laws governing securities if the PPA involves financial instruments or tradable securities

Tax Laws and Incentives: Federal and state tax regulations and incentives applicable to power generation and sales

Local Zoning and Permitting: Municipal and county-level requirements for facility siting, construction, and operation

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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