This Working with Electric Utility Contracts for Non-Lawyers training course is a wide-ranging programme that anticipates the development of a new power generation facility. At the heart of such a project is a project company, often set up as a special purpose vehicle, to design, finance, construct, maintain, and operate a new electricity generation plant.
The focus of this training course is the preparation, negotiation and drafting of five important agreements – and in particular the Power Purchase Agreement.
These are the five legal agreements that we will be examining:
- The Power Purchase Agreement (usually referred to as a PPA) between the power generator project company selling, and the off-taker buying, the electrical power. The off-taker is usually a public utility that may also be involved in distributing the power to users.
- The Plant Construction agreement (typically an EPC contract) between the power generator and the construction company that has contracted to build the power plant.
- The Fuel Supply Agreement, between the power generator and the supplier of the fuel (coal, oil, gas, wood or some other fuel) which will be burned to create the power (where the plant will be a thermal plant).
- The Implementation Agreement, between the host government and the power generator, granting rights to the power generator to develop, construct and operate with the support of the host government.
- The Land Lease agreement between the host government as lessor and the power generator as lessee, granting the power generator a lease of the site where the power plant will be constructed.
We will be referring to these collectively as “the Five Agreements”.
This Energy Training Centre training course has been created for commercial people working in the power sector without a legal background, to assist them in their Electricity Utility Contracts preparation, negotiation and development work. It will highlight why effective Electricity Utility Contracts are important and teach participants how to create a well-written, clear, and effective Electricity Utility Contract.
By the end of this Working with Electric Utility Contracts for Non-Lawyers training course, the participants will be able to:
- Understand the fundamentals of electricity utility contracts and how they fit together
- Negotiate and structure electricity utility contracts
- Mitigate the common risks in electricity utility contracts
- Manage stakeholder relationships
This Energy Training Centre training course is an immersive programme about electricity utility contracts that encourages participation from attendees. The instructor will deploy a full range of lively and interactive training methods, including exercises, negotiation sessions, role plays, case studies, and group discussions.
Each topic will be underpinned by a presentation that highlights key issues to focus on. The learning experience will be supported by a reference manual containing contract templates, checklists, and examples of best practice. Using role-play techniques, participants will negotiate several contract elements and receive personal feedback on their efforts.
We will review and analyse model contracts, including examples that attendees may wish to share with their colleagues.
By enrolling their staff on this training course, companies will better equip them to prepare, negotiate and draft five important agreements – and in particular Power Purchase Agreements (PPA). The training assumes no prior contract preparation skills and will help:
- Understanding of why well-negotiated Electricity Utility Contracts are important
- Better negotiation and drafting of such agreements
- Improvement of the allocation and management of risks associated with Electricity Utility Contracts
- Application of important business skills, such as the skill of contract preparation
- Negotiation of alternative wording for terms and conditions
- Communication of relevant ideas between different stakeholders
Participants attending this training seminar will come away from the training:
- Enlightened about how Electricity Utility Contracts work
- Stimulated by an engaging learning experience that tests their knowledge and abilities
- Informed about how to prepare and develop PPAs
- Enriched by their ability to deploy new negotiation skills
- Progressed in their career choices in contract development
- Enthused to put their newly developed capabilities into practice on the job
This Working with Electric Utility Contracts for Non-Lawyers training course is suitable to a wide range of professionals but will greatly benefit:
- Staff with a commercial role but without a legal background to:
- Prepare, negotiate, and draft new electricity utility contracts
- Analyse and improve terms and conditions in existing agreements, supplier contracts, joint venture agreements, and other related legal documents necessary for electricity utility operations
- Commercial contracts managers and officers
- Consultants
- Corporate and project finance personnel
- Economists
- Accountants
- Engineers
- Any other employee who assists or is involved in preparing electricity utility contractual documentation.
Day One: Introduction to the Energy Industry and the Role of the Five Agreements
- Introduction, objectives, and scope
- Profile of the project – The primary and secondary actors
- The Power Purchase Agreement - PPA
- Project structures & business models
- Special Purchase Vehicle (SPV) - Purpose and role
- Role of the regulator
- What is the “deal” behind the PPA?
- What is the relationship that the PPA is seeking to create?
- Who does what, when and how?
- When does payment occur?
- What happens if things go wrong?
Day Two: Power Purchase Agreement Fundamentals
- Dispatchable and Non-Dispatchable Technologies
- Term and Extension
- Contracted Capacity & Energy
- Testing, Commissioning and Commercial Operations Commencement
- Tariffs – Capacity and energy charges, and other tariff mechanisms
- PPA Financing - “Bankability” and Lenders’ expectations
- Model PPAs and templates to consider
Day Three: The Plant Construction Agreement – Unpicking an EPC Contract
- EPC – the Engineering, Procurement & Construction model
- Construction & development obligations
- Construction phase risks
- Default and liability clauses
- Exclusion and limitation of liability
- Indemnity and insurance clauses
- Bonds and guarantees
- Liquidated damages for delay or under-performance
- Warranties and representations
- Force Majeure
- Claims and dispute resolution
Day Four: Fuel Supply, Implementation and Land Lease Agreements
- Principle obligations under each of the agreements
- Take or pay obligations
- Managing variations and other changes
- Transfer of ownership, assignment and novation
- Maintenance obligations
- Term and extension
- Operation phase risks
- Dealing with political risk
- Sovereign risk
Day Five: Negotiation of the Five Agreements
- Set a framework for negotiation of the agreements
- Balance the needs of the parties
- Key clauses to negotiate in a PPA
- Crafting an agile negotiation strategy
- Know your BATNA
- Focus on interests or positions
- Using preliminary commercial agreements to make progress with the PPA
- NDAs / Letters of intent / Heads of terms / Memorandum of Understanding - MoU
- Skills needed for effective negotiating
