Power Purchase Agreement (PPA)
Produces a commercially balanced, regulation-aware agreement for the sale and purchase of electric energy between a generator and an offtaker.
Quick Start
Gather before drafting:
- Parties — legal names, jurisdictions, signatory authority, guarantors.
- Project — facility type, location, capacity (MW), technology, COD targets, interconnection status.
- Delivery — delivery point, ISO/RTO or utility territory, scheduling/dispatch model.
- Commercial — term length, pricing model, escalators, payment cycle, taxes.
- Attributes — REC/carbon ownership, transfer mechanics, certification requirements.
- Risk — curtailment allocation, force majeure, change-in-law, credit support, insurance.
- Operations — metering standards, testing cadence, data interfaces.
- Finance — lender requirements, step-in rights, consent rights (if project-financed).
Drafting Skeleton
1. Parties; Recitals
2. Definitions and Interpretation
3. Term; Conditions Precedent
4. Sale and Purchase; Delivery; Scheduling
5. Pricing; Invoicing; Taxes
6. Metering; Measurement; Data
7. Environmental Attributes
8. Representations and Warranties
9. Covenants; Reporting; Compliance
10. Performance Standards; Liquidated Damages
11. Events of Default; Remedies
12. Force Majeure
13. Insurance; Credit Support
14. Termination; Consequences
15. Dispute Resolution; Governing Law
16. Miscellaneous
Exhibits A–E
Core Workflow
1. Key Definitions
Define these precisely — they drive pricing, performance, and defaults:
| Term |
Define |
| Contract Capacity |
MW/kW, net of parasitic load |
| Delivered Energy |
kWh/MWh measured at delivery point |
| Net Output |
Adjustments for losses/auxiliary load |
| Commercial Operation Date |
Objective tests and certification criteria |
| Force Majeure |
Scope, exclusions, duration caps |
| Availability |
Calculation formula and exclusions |
| REC/Environmental Attributes |
Registry, certification, transfer mechanics |
2. Conditions Precedent
Set deadlines for each; specify consequence of non-satisfaction:
- Permits/licenses obtained and in force
- Interconnection agreement executed
- Construction milestones met; COD evidence delivered
- Insurance with required endorsements in place
- Credit support posted and accepted
- Regulatory approvals (if applicable)
3. Pricing Model
Select one and fully specify:
| Model |
Key Inputs |
| Fixed energy price |
$/MWh, escalator, start date |
| Indexed price |
Index, reset frequency, floor/ceiling |
| Time-of-delivery |
Peak/off-peak bands, seasonal tables |
| Capacity + energy |
Capacity payment, availability test |
| Pay-as-produced |
Output-based with curtailment rules |
4. Metering and Data
- Accuracy requirement (e.g., ±0.5%)
- Calibration frequency and standards
- Data delivery method and timing
- Dispute process and true-up timeline
- Loss factor allocation between POI and delivery point
5. Performance and Liquidated Damages
| Metric |
Measurement |
Remedy |
| Availability (% annual) |
Defined formula |
LDs per shortfall |
| Energy guarantee (MWh/period) |
Net Delivered |
LDs or make-whole |
| COD delay (days late) |
Milestone dates |
LDs per day |
LDs must be a reasonable pre-estimate of loss, not a penalty.
6. Default and Remedy Framework
- Cure periods by type: payment (short), non-monetary (longer), insolvency (none)
- Termination rights and effective-date mechanics
- Damages: cover costs, replacement power, termination payment calculation
- Lender step-in/cure rights (only if finance structure requires)
7. Exhibits (minimum set)
- A — Facility description, POI, single-line diagram
- B — Pricing tables, escalation schedule, example invoices
- C — Metering specs, testing protocol, data format
- D — Form notices, designated recipients
- E — Credit support forms (LOC/guarantee)
Pitfalls and Checks
- [VERIFY] jurisdiction-specific regulatory approvals, ISO/RTO tariffs, and interconnection rules before finalizing.
- Align REC/carbon transfer language with registry requirements and buyer compliance targets.
- Keep curtailment rights symmetrical or clearly allocated — avoid implied take-or-pay conflicts.
- Tie COD, availability, and performance tests to objective, auditable criteria.
- Ensure delivery point definitions are consistent across main body and exhibits.
- Match confidentiality/announcement clauses to financing and regulatory disclosure obligations.
1---2name: power-purchase-agreement3description: Drafts U.S. power purchase agreements (PPAs) between generators and offtakers covering delivery, pricing, metering, performance guarantees, RECs/carbon attributes, credit support, defaults, and remedies. Triggers on "PPA", "power purchase agreement", "offtaker", "generator", "REC", "net output", "renewable energy offtake", "energy supply agreement", or "energy payment".4---5
6# Power Purchase Agreement (PPA)
7
8Produces a commercially balanced, regulation-aware agreement for the sale and purchase of electric energy between a generator and an offtaker.
9
10## Quick Start
11
12Gather before drafting:
13
141. **Parties** — legal names, jurisdictions, signatory authority, guarantors.
152. **Project** — facility type, location, capacity (MW), technology, COD targets, interconnection status.
163. **Delivery** — delivery point, ISO/RTO or utility territory, scheduling/dispatch model.
174. **Commercial** — term length, pricing model, escalators, payment cycle, taxes.
185. **Attributes** — REC/carbon ownership, transfer mechanics, certification requirements.
196. **Risk** — curtailment allocation, force majeure, change-in-law, credit support, insurance.
207. **Operations** — metering standards, testing cadence, data interfaces.
218. **Finance** — lender requirements, step-in rights, consent rights (if project-financed).
22
23## Drafting Skeleton
24
25```text
261. Parties; Recitals
272. Definitions and Interpretation
283. Term; Conditions Precedent
294. Sale and Purchase; Delivery; Scheduling
305. Pricing; Invoicing; Taxes
316. Metering; Measurement; Data
327. Environmental Attributes
338. Representations and Warranties
349. Covenants; Reporting; Compliance
3510. Performance Standards; Liquidated Damages
3611. Events of Default; Remedies
3712. Force Majeure
3813. Insurance; Credit Support
3914. Termination; Consequences
4015. Dispute Resolution; Governing Law
4116. Miscellaneous
42Exhibits A–E
43```
44
45## Core Workflow
46
47### 1. Key Definitions
48
49Define these precisely — they drive pricing, performance, and defaults:
50
51| Term | Define |
52|---|---|
53| Contract Capacity | MW/kW, net of parasitic load |
54| Delivered Energy | kWh/MWh measured at delivery point |
55| Net Output | Adjustments for losses/auxiliary load |
56| Commercial Operation Date | Objective tests and certification criteria |
57| Force Majeure | Scope, exclusions, duration caps |
58| Availability | Calculation formula and exclusions |
59| REC/Environmental Attributes | Registry, certification, transfer mechanics |
60
61### 2. Conditions Precedent
62
63Set deadlines for each; specify consequence of non-satisfaction:
64
65- Permits/licenses obtained and in force
66- Interconnection agreement executed
67- Construction milestones met; COD evidence delivered
68- Insurance with required endorsements in place
69- Credit support posted and accepted
70- Regulatory approvals (if applicable)
71
72### 3. Pricing Model
73
74Select one and fully specify:
75
76| Model | Key Inputs |
77|---|---|
78| Fixed energy price | $/MWh, escalator, start date |
79| Indexed price | Index, reset frequency, floor/ceiling |
80| Time-of-delivery | Peak/off-peak bands, seasonal tables |
81| Capacity + energy | Capacity payment, availability test |
82| Pay-as-produced | Output-based with curtailment rules |
83
84### 4. Metering and Data
85
86- Accuracy requirement (e.g., ±0.5%)
87- Calibration frequency and standards
88- Data delivery method and timing
89- Dispute process and true-up timeline
90- Loss factor allocation between POI and delivery point
91
92### 5. Performance and Liquidated Damages
93
94| Metric | Measurement | Remedy |
95|---|---|---|
96| Availability (% annual) | Defined formula | LDs per shortfall |
97| Energy guarantee (MWh/period) | Net Delivered | LDs or make-whole |
98| COD delay (days late) | Milestone dates | LDs per day |
99
100LDs must be a reasonable pre-estimate of loss, not a penalty.
101
102### 6. Default and Remedy Framework
103
104- Cure periods by type: payment (short), non-monetary (longer), insolvency (none)
105- Termination rights and effective-date mechanics
106- Damages: cover costs, replacement power, termination payment calculation
107- Lender step-in/cure rights (only if finance structure requires)
108
109### 7. Exhibits (minimum set)
110
111- **A** — Facility description, POI, single-line diagram
112- **B** — Pricing tables, escalation schedule, example invoices
113- **C** — Metering specs, testing protocol, data format
114- **D** — Form notices, designated recipients
115- **E** — Credit support forms (LOC/guarantee)
116
117## Pitfalls and Checks
118
119- **[VERIFY]** jurisdiction-specific regulatory approvals, ISO/RTO tariffs, and interconnection rules before finalizing.
120- Align REC/carbon transfer language with registry requirements and buyer compliance targets.
121- Keep curtailment rights symmetrical or clearly allocated — avoid implied take-or-pay conflicts.
122- Tie COD, availability, and performance tests to objective, auditable criteria.
123- Ensure delivery point definitions are consistent across main body and exhibits.
124- Match confidentiality/announcement clauses to financing and regulatory disclosure obligations.
CaseMark