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: >-4 Drafts U.S. power purchase agreements (PPAs) between generators and offtakers5 covering delivery, pricing, metering, performance guarantees, RECs/carbon6 attributes, credit support, defaults, and remedies. Triggers on "PPA", "power7 purchase agreement", "offtaker", "generator", "REC", "net output",8 "renewable energy offtake", "energy supply agreement", or "energy payment".9tags:10 - agreement11 - drafting12 - regulatory13---1415# Power Purchase Agreement (PPA)1617Produces a commercially balanced, regulation-aware agreement for the sale and purchase of electric energy between a generator and an offtaker.1819## Quick Start2021Gather before drafting:22231. **Parties** — legal names, jurisdictions, signatory authority, guarantors.242. **Project** — facility type, location, capacity (MW), technology, COD targets, interconnection status.253. **Delivery** — delivery point, ISO/RTO or utility territory, scheduling/dispatch model.264. **Commercial** — term length, pricing model, escalators, payment cycle, taxes.275. **Attributes** — REC/carbon ownership, transfer mechanics, certification requirements.286. **Risk** — curtailment allocation, force majeure, change-in-law, credit support, insurance.297. **Operations** — metering standards, testing cadence, data interfaces.308. **Finance** — lender requirements, step-in rights, consent rights (if project-financed).3132## Drafting Skeleton3334```text351. Parties; Recitals362. Definitions and Interpretation373. Term; Conditions Precedent384. Sale and Purchase; Delivery; Scheduling395. Pricing; Invoicing; Taxes406. Metering; Measurement; Data417. Environmental Attributes428. Representations and Warranties439. Covenants; Reporting; Compliance4410. Performance Standards; Liquidated Damages4511. Events of Default; Remedies4612. Force Majeure4713. Insurance; Credit Support4814. Termination; Consequences4915. Dispute Resolution; Governing Law5016. Miscellaneous51Exhibits A–E52```5354## Core Workflow5556### 1. Key Definitions5758Define these precisely — they drive pricing, performance, and defaults:5960| Term | Define |61|---|---|62| Contract Capacity | MW/kW, net of parasitic load |63| Delivered Energy | kWh/MWh measured at delivery point |64| Net Output | Adjustments for losses/auxiliary load |65| Commercial Operation Date | Objective tests and certification criteria |66| Force Majeure | Scope, exclusions, duration caps |67| Availability | Calculation formula and exclusions |68| REC/Environmental Attributes | Registry, certification, transfer mechanics |6970### 2. Conditions Precedent7172Set deadlines for each; specify consequence of non-satisfaction:7374- Permits/licenses obtained and in force75- Interconnection agreement executed76- Construction milestones met; COD evidence delivered77- Insurance with required endorsements in place78- Credit support posted and accepted79- Regulatory approvals (if applicable)8081### 3. Pricing Model8283Select one and fully specify:8485| Model | Key Inputs |86|---|---|87| Fixed energy price | $/MWh, escalator, start date |88| Indexed price | Index, reset frequency, floor/ceiling |89| Time-of-delivery | Peak/off-peak bands, seasonal tables |90| Capacity + energy | Capacity payment, availability test |91| Pay-as-produced | Output-based with curtailment rules |9293### 4. Metering and Data9495- Accuracy requirement (e.g., ±0.5%)96- Calibration frequency and standards97- Data delivery method and timing98- Dispute process and true-up timeline99- Loss factor allocation between POI and delivery point100101### 5. Performance and Liquidated Damages102103| Metric | Measurement | Remedy |104|---|---|---|105| Availability (% annual) | Defined formula | LDs per shortfall |106| Energy guarantee (MWh/period) | Net Delivered | LDs or make-whole |107| COD delay (days late) | Milestone dates | LDs per day |108109LDs must be a reasonable pre-estimate of loss, not a penalty.110111### 6. Default and Remedy Framework112113- Cure periods by type: payment (short), non-monetary (longer), insolvency (none)114- Termination rights and effective-date mechanics115- Damages: cover costs, replacement power, termination payment calculation116- Lender step-in/cure rights (only if finance structure requires)117118### 7. Exhibits (minimum set)119120- **A** — Facility description, POI, single-line diagram121- **B** — Pricing tables, escalation schedule, example invoices122- **C** — Metering specs, testing protocol, data format123- **D** — Form notices, designated recipients124- **E** — Credit support forms (LOC/guarantee)125126## Pitfalls and Checks127128- **[VERIFY]** jurisdiction-specific regulatory approvals, ISO/RTO tariffs, and interconnection rules before finalizing.129- Align REC/carbon transfer language with registry requirements and buyer compliance targets.130- Keep curtailment rights symmetrical or clearly allocated — avoid implied take-or-pay conflicts.131- Tie COD, availability, and performance tests to objective, auditable criteria.132- Ensure delivery point definitions are consistent across main body and exhibits.133- Match confidentiality/announcement clauses to financing and regulatory disclosure obligations.
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