The Physical Power Purchase Agreement (PPA) is a fundamental contract type in the Canadian energy sector, used when a power generator agrees to physically deliver electricity to a purchaser. This document is essential for any direct power supply arrangement in Canada, whether for renewable or conventional power sources. It provides a comprehensive framework for the physical delivery of electricity, including specific terms for pricing, delivery points, metering, and operational requirements. The agreement must comply with both federal and provincial regulations, as electricity falls under provincial jurisdiction in Canada while still being subject to certain federal oversights. This document type is particularly relevant in contexts where large industrial or commercial consumers seek to secure their power supply directly from generators, or where renewable energy projects are being developed with specific off-takers. The PPA addresses critical aspects such as grid connection requirements, provincial market rules, environmental attributes, and where applicable, Indigenous rights considerations.
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1. Parties: Identification of the power generator (seller) and purchaser, including full legal names and addresses
2. Background: Context of the agreement, including facility description, location, and purpose of the agreement
3. Definitions: Comprehensive definitions of technical, commercial, and legal terms used throughout the agreement
4. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of electricity, including minimum and maximum quantities
5. Term and Termination: Duration of the agreement, conditions for renewal, and termination rights
6. Price and Payment: Pricing structure, payment terms, invoicing requirements, and dispute procedures
7. Delivery Point and Title Transfer: Specification of the delivery point and transfer of title/risk
8. Metering and Measurement: Requirements for measuring delivered electricity and maintaining metering equipment
9. Operating Requirements: Technical and operational standards, maintenance requirements, and scheduling procedures
10. Force Majeure: Definition and procedures for force majeure events
11. Representations and Warranties: Standard and specific warranties from both parties
12. Insurance and Liability: Insurance requirements and limitation of liability provisions
13. Default and Remedies: Events of default and available remedies
14. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law
15. Confidentiality: Protection of confidential information
16. General Provisions: Standard boilerplate provisions including notices, amendments, and assignment
1. Environmental Attributes: Section dealing with renewable energy credits and environmental attributes - include for renewable energy facilities
2. Indigenous Rights and Consultation: Required when project affects First Nations lands or rights
3. Interconnection Requirements: Detailed interconnection terms if not covered in a separate agreement
4. Carbon Credits and Environmental Benefits: Allocation of carbon credits and other environmental benefits - relevant for clean energy projects
5. Capacity Rights: Terms regarding capacity rights and ancillary services if applicable
6. Development and Construction: Include if the facility is not yet operational
7. Performance Security: Requirements for performance bonds or other security if required by either party
1. Facility Description: Detailed technical specifications of the generating facility
2. Pricing Schedule: Detailed pricing mechanisms, calculations, and adjustments
3. Operating Procedures: Detailed procedures for day-to-day operations and communications
4. Metering Specifications: Technical requirements for metering equipment and procedures
5. Form of Generation Forecast: Template for generation forecasts and reporting
6. Performance Standards: Detailed performance requirements and testing procedures
7. Form of Guarantees: Templates for any required performance guarantees
8. Interconnection Details: Technical specifications for grid interconnection
9. Contact Information: List of key contacts and authorized representatives
10. Insurance Requirements: Detailed insurance specifications and requirements
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