Power Purchase Agreementfrom a Utility Perspective

Marilynn SemroSeattle City Light

May 11, 2005

Are Geothermal Projects Different than Other Resources?

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In the beginningMinimum Information RequirementsPlan for an Agreement = MOULong-term PPAWhere do we go from here

Agenda

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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

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Min Information RequirementsProject description including generation type,

location, size, expected annual energy, on-line date, term, cost, inclusion of environmental attributes

Status of leases, permits, environmental reviewShape of energy Transmission

Interconnection point Status of transmission service reservations or studies

Project scheduleProject ownership, financing, developer experience

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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

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Plan for Agreement = MOUcont’d

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

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Long-Term PPA

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Definitions MeteringTerm & Termination Defaults & RemediesDeliveries ConfidentialityPrice InsuranceScheduling, Operations

Force Majeure

Guarantees DisputesTransmission NoticesBilling, Audits & Credit

“Boiler Plate”

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Where Do We Go From Here?

Approval Implementation and Resource/Contract Management

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Questions

?

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