Evaluating the Benefits & Challenges of Power Purchase Agreements
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Evaluating the Benefits & Challenges of Power Purchase Agreements
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A Power Purchase Agreement, or PPA, is a contract allowing an electric utility to purchase power from a nonutility electricity generator for a predetermined price and period of time. These contracts can help cooperatives increase reliability by having more resources available to meet load demands. However, the decision to enter into a PPA should be made carefully. Travis Million, CEO of Golden Valley Electric Association, discussed how economics, reliability, rates and weaknesses in infrastructure can all affect whether a specific PPA is a good fit for a local cooperative.
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