Power Purchase Agreement Legislation

The beste strømavtale or best power agreement could be in short term or long term range from simple set rates agreements to very flexible agreements which are designed to take full advantage of opportunities in markets that are volatile. Such agreements or contracts can be customized to fulfill the distinctive necessities of your project.

Power Purchase Agreement – What Is It?

PPAs or Power Purchase Agreements are indentures or contracts between a power provider and the purchaser that are utilized to fund and carry out installations for renewable energy. Usually, power providers are proprietors of independent and self-regulating electricity systems or generators. These power agreements help out in projects that are utility scale by making certain that revenue streams are steady and long-term which are decisive to funding renewable energy ventures. Also, PPAs that are tendered by third-party solar providers have been an impelling cause behind the expansion of solar power on rooftops in numerous states. PPAs are quite appealing to many states since they make possible the provision of probable, lesser energy cost, plus certificates in renewable energy and tax credits devoid of the huge upfront charges.

PPA Legislation

The Federal Energy Regulatory Commission usually regulates PPAs, however states also play a role in the process of regulation by means of agency rule-making as well as legislative action. Even though a majority of states have laws concerning PPAs, there are states that have passed considerable legislation to give permission to, standardize, and regulate these agreements.

In terms of authorization to operate and carry out third-party solar PPAs, it is typically is contained in the description of an electric utility in state and case regulations or laws. Moreover, authorization has been formed by decisions of the public utility commission or in incentive program rules of the state.

  • Most statute provides the public utility commission the authority and control to direct or permit local utility enterprises to go into PPAs with independent generators that meet the qualification. This is to support PPAs and help reach the Renewable Portfolio Standard of a state or permit third-party providers of rooftop solar to operate. Such instances are present in Hawaii, Oregon, Connecticut and Rhode Island.
  • The second kind of state legislation tackles the timespan or duration of PPAs since one of the major stumbling blocks for a successful PPA negotiation are the agreements and leases that are long-term. Both Michigan and Washington have passed legislation necessitating approval by the commission for utilities going into PPAs longer than the allocated timespan.
  • The third kind of PPA legislation focuses on concerns regarding interconnection by instructing utilities to make possible direct electricity transmission from third-party generators to individual clients.