Fillable Printable Sample Power Purchase Agreement - Federal Energy Management Program
Fillable Printable Sample Power Purchase Agreement - Federal Energy Management Program
Sample Power Purchase Agreement - Federal Energy Management Program
Program Name or Ancillary Texteere.energy.gov
Power Purchase Agreements
Chandra Shah, NREL
303-384-7557
chandra.shah@nrel.gov
February 2011 revised
2 | Federal Energy Management Programeere.energy.gov
Overview
• Customer-sited power purchase agreement (PPA) definition
• Project process
• Project examples
• Utility Renewable Energy Services Contract (URESC)
• Enhanced use lease (EUL)
• PPA support, resources and key points
3 | Federal Energy Management Programeere.energy.gov
•Private entity purchases, installs, owns, operates and maintains customer-sited
renewable equipment
•Site purchases electricity through power purchase agreement (PPA)
•Pros
–Renewable developer (or partner) eligible for tax incentives, accelerated depreciation
–No agency up-front capital required
–Renewable developer provides O&M
–Minimal risk to government
–Known long term electricity price for portion of site load
–On-site projects are encouraged for meeting federal renewable goal and are eligible for
double bonus
•Good alternative to purchasing renewable energy certificates (RECs)
–Can help with energy security goals
•Cons
–Transaction costs
–Fairly limited federal sector experience
Customer-Sited
Power Purchase Agreement
4 | Federal Energy Management Programeere.energy.gov
Utility
(or other for
REC sale)
Federal Agency
Renewable
Developer
REC Payment
R
E
C
s
Power Payment($)
Electricity (MWh)
(and Possible In-
Kind Consideration
or Lease Payment)
Federal
tax and
other
incentives
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Excess
Electricity
(if any)
Utility or other
Excess Electricity
Purchaser
Power
Payment ($)
DLA
Energy
1
,
Western
2
or
Other
Contracting
Agent
Western: IA
DLA: MOA or Support
Agreement
PPA
PPA Diagram
1
Formerly Defense Energy Support Center (DESC)
2
Western = Western Area Power Administration
5 | Federal Energy Management Programeere.energy.gov
Contracts/Agreements Associated
with PPA Projects
•
PPA: Federal agency, DLA Energy (formerly DESC) or Western Area Power
Administration (Western), and Renewable Developer
•
Land Use Agreement: Federal agency and Renewable Developer
•
Interconnection/Net Metering Agreement: Utility and Renewable Developer
(and/or federal agency)
Possible Additional Agreements
•
Interagency Agreement (IA): Western and federal agency
•
Support Agreement or MOA: DLA Energy and federal agency
•
REC Contract: Renewable Developer and Utility (or other REC purchaser)
•
Excess Electricity Contract: Developer and Power Purchaser
6 | Federal Energy Management Programeere.energy.gov
•Step 1: Go/No Go Considerations
•Step 2a: Gather utility bill information/research incentives and local market
•Step 2b: Renewable screening/feasibility study/business case analysis
•Step 3a: Form team and develop a plan
•Step 3b: Select contracting methodology
•Step 3c: Address key issues
•Step 3d: High level approval
•Step 4: Procurement
•Step 5: Project construction, publicity and operation
*These are guidelines only. Steps may be done concurrently or in a different order. It is assumed
that the renewable project(s) has been selected and that evaluation of contracting options has already
occurred with selection of the PPA option.
Contact FEMP for assistance.
PPA Project Process Guidelines*
7 | Federal Energy Management Programeere.energy.gov
•PPA legality and Public Utility Commission oversight
– Is the PPA model legal in the state?
See //www.dsireusa.org/summarymaps/index.cfm?ee=1&RE=1
– Does your utility allow PPAs (especially important for public utilities that
have their own governing structure)?
– Is the renewable developer subject to Commission oversight?
– Are there Commission approval requirements (for REC sale or other)?
– 40 USC 591: Electricity purchases must abide by state law
•Who owns the land and/or building(s)? Is there a management
company involved?
– Who pays the utility bill?
– If your agency does not own the land/buildings, do you have the owners
approval?
– Who will sign the contract(s)?
•Future site plans – is there any chance of building/site shut-down?
Step 1: Go/No Go Considerations
8 | Federal Energy Management Programeere.energy.gov
3
rd
-Party Solar PV Power Purchase Agreements (PPAs)
www.dsireusa.org / January 2011
Apparently disallowed by state or otherwise restricted by legal barriers
Status unclear or unknown
Authorized by state or otherwise currently in use
Puerto Rico
At least 19
states + PR
authorize or
allow 3
rd
-party
solar PV PPAs
Note: This map is intended to serve as an unofficial guide; it does not constitute legal advice. Seek qualified legal expertise before making binding
financial decisions related to a 3rd-party PPA. See following slide for authority references.
UT: limited to
certain sectors
AZ: limited to
certain sectors
PPA Policies
9 | Federal Energy Management Programeere.energy.gov
Authority/References for 3
rd
-Party Solar PPAs
•Arizona: ACC Decision 71795, Docket E-20690A-09-0346
•California: Cal. Pub. Util. Code§218, §2868
•Colorado: S.B. 09-051; PUC Decision C09-0990
•Connecticut: Connecticut Clean Energy Fund
•Delaware: S.B. 266 and S.B. 267 (2010)
•Hawaii: PUC Order 20633
•Illinois: 220 ILCS 5/16-102; 83 Ill. Adm. Code, Part 465
•Massachusetts: 220 CMR 18.00
•Maryland: H.B. 1057 (2009)
•Michigan: 2008 Public Act 286; PSC Order Docket U-15787
•New Jersey: N.J. Stat. 48:3-51; N.J.A.C.
§
14:8-4.1 et seq.
•New Mexico: H.B. 181 and S.B. 190 (2010)
(effective 1/1/2011)
•Nevada: S.B. 395 (2009); PUC Orders 07-06024 and 07-06027
•New York: NYCLS 2.13
•Ohio: PUC Order 06-653-EL-ORD
•Oregon: PUC Order, Docket 08-388
•Pennsylvania: PUC Order, Docket M-00051865
•Puerto Rico: No policy reference available; based on news reports and articles
•Utah: H.B. 0145 (2010
) (effective 3/31/2010, and limited to installations at public buildings, schools or 501(c)(3) non-profits)
•Virginia: VA Code§56-232 and 20VAC5-315-20
Note: Authorization for 3
rd
-party solar PV PPAs usually lies in the definition of a “utility” in state statutes, regulations or case law; in state
regulatory commission decisions or orders; and/or in rules and guidelines for state incentive programs. This information is provided as a
public service and does not constitute legal advice. Seek qualified legal expertise before making binding financial decisions related to a
3rd-party PPA.
These slides will be updated quarterly. Please send comments to Amanda Vanega at amanda_vanega@ncsu.edu.
DSIRE acknowledges IREC and Keyes & Fox, LLP, for their support in creating and maintaining this resource.
10 | Federal Energy Management Programeere.energy.gov
•Gather utility bills and other applicable information such as sub-
meter data, utility tariff information (peak/non-peak, TOU, seasonal
rates; demand charge), competitive electric supply contract
information (if applicable), etc.
– Will the project impact rates?
– Are there applicable standby charges or other pertinent utility policies
that will impact the utility bill?
•Compare energy usage information to renewable generation (project
will be simpler if the site will use all of the electricity)
•Research renewable energy certificate (REC) markets, applicable
incentives (rebates, tax incentives, etc) and renewable policies (net
metering, feed-in tariff, community solar, etc.)
– See //www.dsireusa.org/
•Renewable screening, feasibility study and/or business case
analysis
Step 2: Gather information
11 | Federal Energy Management Programeere.energy.gov
RPS Policies with Solar/DG Provisions
RPS Policies with Solar/ DG Provisions
Renewable portfolio standard with solar / distributed generation (DG) provision
Renewable portfolio goal with solar / distributed generation provision
www.dsireusa.org / February 2011
Solar water heating counts toward solar provision
WA: double credit for DG
NV: 1.5% solar x 2025;
2.4 - 2.45 multiplier for PV
UT:
2.4 multiplier
for solar-electric
AZ: 4.5% DG x 2025
NM: 4% solar-electric x 2020
0.6% DG x 2020
TX:
double credit for non-wind
(non-wind goal: 500 MW)
CO: 3.0% DG x 2020
1.5% customer-sited x 2020
MO:
0.3% solar-
electric x 2021
MI:
triple credit for solar-
electric
OH:
0
.
5% solar-
electric x 2025
NC: 0.2% solar
x 2018
MD: 2% solar-electric x 2022
DC: 0.4% solar x 2020
NY: 0.4788% customer-
sited x 2015
DE:
3.5% PV x 2026;
triple credit for PV
NH:
0.3% solar-
electric x 2014
NJ: 5,316 GWh solar-
electric x 2026
PA:
0.5% PV x 2021
MA: 400 MW PV x 2020
OR: 20 MW solar PV x 2020;
double credit for PV
IL: 1.5% PV
x 2025
WV:
various
multipliers
16 states
+
DC have an RPS
with solar/DG
provisions
DC
