Renewable Energy Projects: Structuring REC Purchase and Sale Agreement, Interconnection Agreement

Negotiating Key Provisions, Navigating Regulatory Timelines and Requirements

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, October 13, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will examine key considerations for counsel advising on renewable energy projects prior to entering into renewable energy certificate (REC) purchase and sales agreements and interconnection agreements. The panel will discuss key components of each agreement and offer their perspectives and best practices for negotiating and structuring the agreements.

Description

RECs offer project developers an increasingly important revenue stream to support renewable energy facility project development especially as states increasingly mandate renewable portfolio standards (RPS) to implement clean energy objectives. Such RECs can be created and sold in voluntary markets or become a mandatory compliance tool in states with mandatory RPS programs. Either way, REC purchase and sale agreements form the transaction structure that allows REC sellers to disaggregate the sale of “renewable” attributes of electrons injected into the power grid as buyers of RECs enhance their generation mix with renewables.

Some states are increasingly encouraging the use of REC purchase and sale agreements to support renewables and clean power. Just recently, New York State became the first in the nation to define nuclear power generation as “zero-emission” and mandate that all load-serving entities in the state by special RECs, called Zero-Emission Credits or ZECs to support the greenhouse gas emission attributes of nuclear power plants. A ZEC purchase and sale agreement provides the framework for these transaction. Other states encourage REC purchase and sale agreements as well, often as an alternative to power purchase agreements.

When negotiating and structuring REC purchase and sale agreements, counsel should consider voluntary and mandatory REC programs that create markets for RECs, how RECs can be sold and to whom, parties’ termination rights, the buyer’s commitment to pay, and the applicable state regulatory structures and requirements for RECs, including the state’s use of alternative compliance payment mechanisms as an alternative to RECs. It is also important to understand the state’s long-term RPS outlook and how supply/demand economics impacts future market values for RECs.

As in any renewable energy project development, interconnection is also essential in the delivery of energy to the grid and the generation of RECs. When structuring interconnection agreements, counsel should keep in mind the implications of whether the project operator is the site owner or the customer and the complexities that arise for REC transactions depending on the answer. Counsel should also consider the circumstances under which the utility can disconnect the renewable energy project from the grid, and if disconnected, how the project can deliver to the end user. A related consideration is whether, when selling energy directly to a utility pursuant to the Public Utility Regulatory Policies Act, the utility also acquires associated RECs from the qualifying facility (QFs) automatically or, alternatively, if the project developer can sell RECs separately from the energy generated from such QFs.

Counsel must carefully negotiate key provisions in each agreement and evaluate considerations, including regulatory obligations, before advising clients on executing the documentation.

Listen as our authoritative panel of energy counsel discuss navigating the regulatory and transactional structures involved in REC purchase and sale agreements. The panel will offer strategies for effectively negotiating the agreements.

READ MORE

Outline

  1. REC purchase and sales agreements
    1. Key considerations
    2. Key provisions
    3. Regulatory requirements
  2. Interconnection agreements
    1. Key considerations
    2. Key provisions
    3. PURPA QF Issues
    4. Regulatory requirements
  3. Best practices for negotiating and structuring the agreements

Benefits

The panel will review these and other key issues:

  • What are the key provisions that should be addressed when structuring REC purchase and sales agreements? Interconnection agreements?
  • Recognizing important regulatory structures by state and the role of PURPA in such transactions.
  • What long-term considerations are there for parties and their counsel entering these agreements?
  • What strategies should counsel employ in drafting and negotiating both REC purchase and sales agreements and interconnection agreements?

Faculty

Humes, Stephen
Stephen J. Humes

Partner
Holland & Knight

Mr. Humes concentrates his practice in environmental, energy, public utility and infrastructure law. He advises clients...  |  Read More

Peters, Kristen
Kristen Thall Peters

Partner
Cooper White & Cooper

Ms. Peters has extensive knowledge and experience with renewable energy projects having aided her clients in...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$297

Download

$297