Power Purchase Agreement from a Utility Perspective

1
Power Purchase Agreementfrom a Utility
Perspective
Are Geothermal Projects Different than Other
Resources?

• Marilynn Semro
• Seattle City Light
• May 11, 2005

2
Agenda

• In the beginning
• Minimum Information Requirements
• Plan for an Agreement MOU
• Long-term PPA
• Where do we go from here

Seattle City Light
3
In the beginning

• There are hurdles
• Integrated Resource Plan
• Request for Proposals (RFP)
• Memorandum of Understanding (MOU)
• Letter of Intent (LOI) or
• Purchase and Sale Agreement (PPA)
• Or maybe in lieu of an RFP
• If the utility provides for cost-effective
  renewable opportunities they will accept
  unsolicited proposals

Seattle City Light
4
Min Information Requirements

• Project description including generation type,
  location, size, expected annual energy, on-line
  date, term, cost, inclusion of environmental
  attributes
• Status of leases, permits, environmental review
• Shape of energy
• Transmission
• Interconnection point
• Status of transmission service reservations or
  studies
• Project schedule
• Project ownership, financing, developer
  experience

Seattle City Light
5
Plan for Agreement MOU

• Typically includes
• Resource Description
• Amount Associated Environmental Attributes
• Term, Extensions
• Price
• Point of Interconnection
• Boiler Plate
• E.g. Assignment, Good Faith, Confidentiality,
  Conditions Subsequent, Nature of the MOU,
  Governing Law Venue

Seattle City Light
6
Plan for Agreement MOUcontd

• Other Provisions
• Milestones for Resource Development
• Obtaining exploratory drilling permits
• Commence exploratory drilling
• Report of sufficiency documenting quality and
  quantity of the resource for economic development
• All required permits and regulatory approvals
  including EIS
• Construction financing
• On-line date
• Defines party responsible and timeline for
  securing transmission
• Termination provisions for failure to meet
  milestones
• Output guaranty

Seattle City Light
7
Long-Term PPA
Definitions Metering
Term Termination Defaults Remedies
Deliveries Confidentiality
Price Insurance
Scheduling, Operations Force Majeure
Guarantees Disputes
Transmission Notices
Billing, Audits Credit Boiler Plate
Seattle City Light
8
Where Do We Go From Here?

• Approval
• Implementation and Resource/Contract Management

Seattle City Light
9
Questions

• ?

Seattle City Light