Renewable Energy Projects: Structuring Operations & Maintenance - - PowerPoint PPT Presentation

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Renewable Energy Projects: Structuring Operations & Maintenance - - PowerPoint PPT Presentation

Nov 16, 2022 458 likes •629 views

Presenting a live 90-minute webinar with interactive Q&A Renewable Energy Projects: Structuring Operations & Maintenance Agreements Negotiating Owner and Operator Obligations, Performance Remedies, Services, Termination, Indemnification,

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SLIDE 1

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Presenting a live 90-minute webinar with interactive Q&A

Renewable Energy Projects: Structuring Operations & Maintenance Agreements

Negotiating Owner and Operator Obligations, Performance Remedies, Services, Termination, Indemnification, Force Majeure, and Other Key Provisions

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific TUESDAY, MARCH 7, 2017

​ Rusty Brewer, Partner, Amis, Patel & Brewer, Washington, D.C. Brian C. Harms, Partner, Troutman Sanders, Atlanta

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SLIDE 3

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SLIDE 4

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Renewable Energy Projects:

STRUCTURING OPERATIONS & MAINTENANCE AGREEMENTS Brian Harms Partner Troutman Sanders LLP

March 7, 2017

Rusty Brewer Partner Amis, Patel & Brewer, LLP

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SLIDE 6
  • Unscheduled Maintenance
  • Performance Obligation and Guarantees
  • Warranties
  • Scope of Service/Change Order Relief
  • Termination and Limitation of Liability
  • I. O&

O&M M Agreement ement Str tructuring: cturing: Key Issues ues

6

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SLIDE 7
  • Services

– Scope of Services

  • Broad Scope Everything
  • Broad Scope with Carve Outs (owner tasks)
  • Defined Scope Particular Tasks (washes?)
  • Fixed Price Scope vs

vs Cost Plus Scope

  • Change Order Relief

– Unscheduled Maintenance Protection

  • Tension with performance obligations
  • Alerts, notification and impetus for physical remedy (tied to performance

remedies)

  • Spare Parts and Management
  • II. O&

O&M M Agreement eement Str tructur cturing: ing: Key y Pr Provisions isions

7

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SLIDE 8
  • Services

– Project Agreement/Permit/Compliance Obligations

  • Specific vs. Broad
  • PPA LD Protection (forecasting)
  • Change Order Relief
  • NERC Requirements

– Service Fee - $/DC Concept for Solar – Flow Through With Tax Equity and Debt Documents

  • Budgeting
  • Reporting Obligations
  • II. O&

O&M M Agreement eement Str tructur cturing: ing: Key y Pr Provisions isions

8

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SLIDE 9
  • Performance Obligations and Remedies

– Availability Guarantee

  • Level of Guarantee – Calculation for Actual vs Expected Availability and

Time Period for Calculation

  • Carve Outs from Guarantee (e.g. single point failure)
  • LD Calculations

– Performance Guarantee

  • Level of Guarantee – Calculation of Actual vs Expected Delivered Amounts

and Time Period for Calculations

  • Carve Outs from Guarantee (e.g. single point failure)
  • LD Calculation

– Standard for Performance of Services

  • Needs to Comply with Applicable Laws, Permits, and the Terms of all

Project Agreements (e.g., PPA, IA, Real Estate, Equipment Warranties)

  • What are the Remedies for Failure to Perform in Accordance with the

Standard

– Key Lender Concern

II. . O& O&M M Agreement eement Str tructur cturing: ing: Key y Pr Provisions isions

9

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SLIDE 10
  • Owner Obligations

– Access and Storage – Data and Remote Access – Permits/Project Agreements – Updates to Maintenance Specifications – Potential Division of Labor Issues (e.g. scheduling under a PPA based

  • n O&M forecasts)
  • Term and Termination

– Term – 5 Years/10 Years – Extensions? – LTSA Considerations – Termination

  • Event of Default
  • Termination for Convenience
  • Termination Damages/Closeout

II. . O& O&M M Agreement eement Str tructur cturing: ing: Key y Pr Provisions isions

10

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SLIDE 11
  • Warranties

– Oversight of Pass-Through Warranties (in and out cost issues) – Services Warranty – LTSA Warranty Obligations

  • Limitations on Liability

– Fixed Amount vs vs Amount Based on a Fee – Carve Outs (e.g. third party indemnity claims) – Key Lender Concern

  • Indemnification

– Typical Service Provider Indemnification – Fines and Penalties – Hazardous Materials – Interplay with Project Insurance

II. . O& O&M M Agreement eement Str tructur cturing: ing: Key y Pr Provisions isions

11

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SLIDE 12
  • Force Majeure, Change in Law and Change Order Relief

– Force Majeure

  • Definition and Carve Outs
  • Responses and Change Order Relief

– Change in Law

  • Definition and Carve Outs
  • Change Order Relief

– Change Orders

  • Mandatory Change Orders
  • Requested Change Orders
  • Potential Default Change Orders
  • Calculation of Amounts

II. . O& O&M M Agreement eement Str tructur cturing: ing: Key y Pr Provisions isions

12

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SLIDE 13
  • Insurance

– Owner – Property and Indemnification Coverage (typical terms) – Contractor – Indemnification Coverage (typical terms)

  • Intellectual Property and Data

– Contractor Access and Use – Licensing and SCADA System – IP Escrow

II. . O& O&M M Agreement eement Str tructur cturing: ing: Key y Pr Provisions isions

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SLIDE 14
  • Solar

– Capital Intensive and Operations Light – Limited Personnel at the Site; Operations Center Becomes the Key – Key is SCADA and Alert/Notification System – Where is the Site Plant Located and Know the Soiling and Other Potential Degradation Concerns (i.e. grid insulation with cold temperatures and maybe some snow melt in turn)

  • Wind

– More Labor Intensive than Solar (more stuff can go wrong with moving parts) – Key is Still SCADA and Alert/Notification System – Make Sure Your Guarantee is Air Tight

  • III. O&M Agreement Structuring: Strategies for

Monitoring and Management

14

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SLIDE 15
  • Portfolio Approach

– Can Help Get Decreased Cost Per Project – Helps Build a Relationship Quickly

  • Managing the O&M Provider

– Build Relationships – Not all that Different from any Commercial Arrangement

  • III. O&M Agreement Structuring: Strategies for

Monitoring and Management

15

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SLIDE 16

Contact Information

16

Brian an Harms ms Part rtner ner Trou

  • utman

tman Sander ders s LLP 404.88 .885.3682 5.3682 bria ian.harms@ n.harms@tro routm utmansa ansanders nders.com .com Rusty ty Brewer wer Part rtner ner Amis, s, Patel el & Brewer wer, , LLP LLP 202.60 .601.8502 1.8502 rust styb ybrewe rewer@ r@apb apb-le legal.com gal.com