environmental@lists.imla.org

Health and Environment Section of IMLA

View all threads

municipal power purchase agreement

AK
Amanda Karras
Mon, Jan 22, 2024 6:27 PM

A member is trying to connect with someone who has worked on a municipal power purchase agreement (perhaps solar or microgrid related) in other jurisdictions. Specifically, they are trying to understand how governments are able to deal with the proposed termination fees proposed by the energy provider in a multiyear contract -- e.g., they enter into a 20 year agreement with a solar vendor to purchase power, and decide after year 7 we want to terminate the agreement. Standard practice is to pay the vendor a termination fee to recoup the unrealized costs that would have been paid back over the rest of the (now terminated) agreement. But because of anti-deficiency law, they are required to certify/book the termination costs at the execution of the contract (in year 1) which are extremely high. They are trying to understand if other jurisdictions either (1) have special funds to certify these types of termination payments; or (2) pass legislation that exempts these contracts from this requirement. If you have experience with this and are willing to talk to the member, please email me at akarras@imla.orgmailto:akarras@imla.org and I will put you in touch.

Thanks,

Amanda

[logo]https://imla.org/

[facebook icon]https://www.facebook.com/InternationalMunicipalLawyersAssociation/[twitter icon]https://twitter.com/imlalegal[linkedin icon]https://www.linkedin.com/company/international-municipal-lawyers-association-inc./
Amanda Karras (she/her)
Executive Director / General Counsel
International Municipal Lawyers Association
P: (202) 466-5424 x7116
D: (202) 742-1018
51 Monroe St. Suite 404 Rockville, MD, 20850
Plan Ahead! See IMLA's upcoming eventshttps://imla.org/events/, calls and programming.
Check out our On-Demand webinar libraryhttps://netforum.avectra.com/eweb/shopping/shopping.aspx?site=imla&webcode=shopping&cart=0&shopsearchCat=Merchandise&productCat=Webinar with 100+ webinars at your fingertips!

A member is trying to connect with someone who has worked on a municipal power purchase agreement (perhaps solar or microgrid related) in other jurisdictions. Specifically, they are trying to understand how governments are able to deal with the proposed termination fees proposed by the energy provider in a multiyear contract -- e.g., they enter into a 20 year agreement with a solar vendor to purchase power, and decide after year 7 we want to terminate the agreement. Standard practice is to pay the vendor a termination fee to recoup the unrealized costs that would have been paid back over the rest of the (now terminated) agreement. But because of anti-deficiency law, they are required to certify/book the termination costs at the execution of the contract (in year 1) which are extremely high. They are trying to understand if other jurisdictions either (1) have special funds to certify these types of termination payments; or (2) pass legislation that exempts these contracts from this requirement. If you have experience with this and are willing to talk to the member, please email me at akarras@imla.org<mailto:akarras@imla.org> and I will put you in touch. Thanks, Amanda [logo]<https://imla.org/> [facebook icon]<https://www.facebook.com/InternationalMunicipalLawyersAssociation/>[twitter icon]<https://twitter.com/imlalegal>[linkedin icon]<https://www.linkedin.com/company/international-municipal-lawyers-association-inc./> Amanda Karras (she/her) Executive Director / General Counsel International Municipal Lawyers Association P: (202) 466-5424 x7116 D: (202) 742-1018 51 Monroe St. Suite 404 Rockville, MD, 20850 Plan Ahead! See IMLA's upcoming events<https://imla.org/events/>, calls and programming. Check out our On-Demand webinar library<https://netforum.avectra.com/eweb/shopping/shopping.aspx?site=imla&webcode=shopping&cart=0&shopsearchCat=Merchandise&productCat=Webinar> with 100+ webinars at your fingertips!