Understanding PURPA Rights In Power Purchase Agreements

Law360, New York (August 28, 2015, 11:18 AM EDT) -- After many years of waning significance, the Public Utility Regulatory Policies Act of 1978 (PURPA) has reignited as a useful tool for renewable energy and cogeneration project developers. Before negotiating a power purchase agreement of any type, developers, lenders and investors should consider and understand their rights under PURPA, both to identify attractive opportunities, but also to avoid inadvertently waiving rights they may have under PURPA that may provide useful leverage.

As originally implemented, PURPA permitted a qualifying facility (QF) to sell its output to an electric utility at the utility's "avoided cost." During the 1980s, when many utilities were forecasting...

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