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Direct Power Purchase Agreement Template for United States

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Key Requirements PROMPT example:

Direct Power Purchase Agreement

"Need a Direct Power Purchase Agreement for our new 50MW solar facility in Texas, selling power to a major tech company's data center, with delivery starting March 2025 and including provisions for renewable energy credits."

Document background
Direct Power Purchase Agreements (PPAs) have become increasingly important in the U.S. energy market as organizations seek to secure reliable, often renewable power supplies while managing costs and meeting sustainability goals. These agreements are particularly relevant when a power consumer wants to purchase electricity directly from a generator rather than through a utility. The agreement must comply with both federal regulations and state-specific requirements, which can vary significantly by jurisdiction. A Direct Power Purchase Agreement typically includes detailed provisions for power delivery, pricing mechanisms, performance guarantees, and risk allocation between parties.
Suggested Sections

1. Parties: Identification and details of the power seller and buyer

2. Background: Context of the agreement and high-level description of the transaction

3. Definitions: Key terms used throughout the agreement including technical, commercial, and legal definitions

4. Sale and Purchase Obligations: Core commercial terms including quantity, price, and delivery obligations

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

6. Payment Terms: Billing, invoicing, and payment procedures

7. Performance Security: Credit support and security requirements

8. Force Majeure: Events excusing performance and related procedures

9. Default and Remedies: Events of default and available remedies

10. Representations and Warranties: Standard and specific representations by both parties

11. Governing Law and Dispute Resolution: Choice of law and dispute resolution procedures

Optional Sections

1. Environmental Attributes: Treatment of renewable energy credits and other environmental benefits - used for renewable energy projects

2. Capacity Rights: Allocation of capacity rights and related products - used when capacity markets are relevant

3. Development Milestones: Project development timeline and requirements - used for new build projects

4. Interconnection: Grid connection requirements and responsibilities - used for physical PPAs

5. Curtailment: Terms governing reduction in generation output - used for variable renewable resources

Suggested Schedules

1. Schedule A - Facility Description: Technical details of the generating facility including location, technology, and capacity

2. Schedule B - Product Price Schedule: Detailed pricing terms, including any escalators or adjustments

3. Schedule C - Expected Energy Production: Projected generation profile and any performance guarantees

4. Schedule D - Form of Performance Security: Template for letters of credit or other security instruments

5. Schedule E - Operating Procedures: Detailed protocols for day-to-day operations and communications

6. Schedule F - Metering Requirements: Technical specifications for metering and measurement

7. Schedule G - Insurance Requirements: Required insurance coverage and limits

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 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 transmission and wholesale sale of electricity in interstate commerce. Essential for understanding regulatory jurisdiction and compliance requirements.

Public Utility Regulatory Policies Act (PURPA): Federal law that requires utilities to buy power from qualifying facilities. Important for understanding the relationship between independent power producers and utilities.

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

Clean Air Act: Federal environmental legislation that may impact power generation facilities and environmental compliance requirements in the PPA.

Investment Tax Credit (ITC) and Production Tax Credit (PTC): Federal tax incentives for renewable energy projects that may affect project economics and contract structuring.

SEC Requirements: Securities and Exchange Commission regulations that may apply if the PPA involves public companies or certain financial structures.

State PUC Regulations: State Public Utility Commission rules governing utility operations, rates, and power procurement within the state.

State Renewable Portfolio Standards: State-specific requirements for renewable energy procurement that may influence PPA terms and conditions.

State Net Metering Laws: State regulations governing how excess power is credited and compensated, particularly relevant for distributed generation projects.

State Environmental Regulations: State-specific environmental requirements that may affect project development and operation.

State Corporate Procurement Rules: State-specific regulations governing how corporations can purchase power directly from generators.

State Licensing Requirements: State-specific licensing and permit requirements for power generators and sellers.

RTO/ISO Requirements: Regional Transmission Organization or Independent System Operator rules governing grid operations and market participation.

Local Zoning Regulations: Municipal and county requirements affecting project siting and development.

Grid Interconnection Requirements: Technical and operational requirements for connecting the power generation facility to the grid.

Uniform Commercial Code (UCC): State-adopted standardized business laws affecting commercial transactions and contracts.

Antitrust Laws: Federal and state competition laws that may affect power purchase agreements and market participation.

Energy Market Rules: Specific regulations governing energy trading, scheduling, and settlement in wholesale power markets.

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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