Finalize Pre-COD Details

Even after the PPA contract is signed, there are several key areas you should focus on to ensure that the process continues as smoothly as possible until the project reaches its commercial operation date (COD). These areas include:

• Communication and reputation management

• Accounting and invoice transparency

• REC treatment and management

• Progress monitoring

Communication and reputation management

For corporate buyers, renewable energy deals usually signify progress towards sustainability or emissions goals. As these goals often are public and the company’s progress toward them is monitored, message discipline and coordination between the buyer and developer is essential. Mishaps and misunderstanding around when and what information should be made public have happened before. Three steps can help you avoid them:

• Work internally - work with your marketing team to determine your branding and messaging needs. These could include emphasis on your energy consumption and offset (overall and regionally), additionality claims, or other social/environmental benefits from the project.

• Be upfront - be explicit and upfront about these messaging needs with your developer. If you have strict internal requirements around those needs or you have not worked with the developer before, you may want to consider including them in the contract.

• Work together - once you and the developer are clear on the needs, put your communication team in touch with theirs and work together to develop a communication plan and timeline.

Accounting and invoice transparency

Issues around accounting and invoice transparency often go unnoticed until they became a major inconvenience. As developers typically have worked with utilities in the past and have different levels of experience with corporate buyers, invoices can be opaque and difficult to understand. They may contain a significant amount of information that most corporate buyers would not find useful or relevant. However, you can take several steps to avoid receiving such invoices:

• Develop understanding - develop an internal understanding for what information you need. You might want to divide that into two categories - information needed on a regular basis and information you would like to access. The former is a short summary of the most relevant data while the latter involves access to a more comprehensive transaction data set for review.

• Work with treasury - ensure that your company’s treasury department understands and agrees with the information you are requesting. This avoids any misunderstanding down the road.

• Share the template - share an overview or example template of this information with the developer, highlighting in it the level of detail you would like to see. If you would like access to a more comprehensive transaction data set for your reference, mention this to the developer as well. The example template should be included in the contract.

• Work with accounting - ensure that your company’s internal accounting processes are ready for COD. In particular, it is important to ensure that the PPA credits/debits are received/paid by the correct cost centers.

REC treatment and management

The REC system in North America is complicated, leaving corporate buyers in the dark on how to best manage them. Several steps can ease this process:

• Dealing with RECs - determine what you would like to do with your RECs. They can either be “retired,” which allows you to claim their environmental attributes or they can be sold or “arbitraged,” in which case they can become another revenue stream.

• Retiring your RECs - if you would like to “retire” your RECs, consider discussing this with your developer. Many buyers delegate the REC retirement process to their counterparty.

• Selling your RECs - if you would like to “arbitrage” or sell your RECs, consider working with a broker or another third party. This is especially useful if you would like your RECs to be continually traded and become a constant revenue stream.

• Check the contract - for either option, ensure that you understand how RECs are being handled under your contract and what, if anything, your company is responsible for doing once the project begins generating RECs.

Progress Monitoring

Schedule regular meetings with the developer during the construction period to discuss progress and identify possible delays. Be sure you understand any deadlines and cure periods in your contract.