Electricity Tolling Agreement Sample

Although such toll agreements, including provisions that give buyers control over generation, are increasingly common in Osprey`s power purchase activities and do not have an independent justification for the transaction. [3] In fact, the toll agreement is expected to expedite FERC`s approval for the transaction by allowing Duke to prove that it “already controlled” Osprey, so that “if Duke is allowed to directly acquire Osprey, no further damage could arise.” [4] Toll agreements are a common feature of the energy sector. Through these agreements, a buyer supplies fuel to an electric generator and, in exchange, the generator will return electricity to the buyer. Although commonly used, the United States recently found that such a toll agreement, when entered into between companies considering merging, was contrary to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. § 18a (HSR Act), resulting in the imposition of significant financial penalties on the buyer. The course “Electric Utility Contract” gives participants a better understanding of the intricacies of creating and interpreting different terms and conditions, talks about integrating multiple documents to avoid legal pitfalls and gives an overview of electricity capture contracts (PPAs) and will try to find some of the “legal” or “Boilerplate” provisions usually present in contracts, to demystify. A toll contract is a contract for the lease of a power plant by its owners. These agreements give the tenant the opportunity to convert one physical product (fuel) into another (electricity). This chapter explains how to determine the economic value of a power plant. The main objective is to provide information and insight into the fundamental structure, language and interpretation of contracts, to identify common themes, purposes and provisions in legal agreements and to make suggestions on how a non-lawyer can help develop and work with better legal documents. This case highlights the importance of consulting with experienced HSR consultants before acquiring voting shares, non-company interests or assets.

Although toll agreements of the type in question are becoming more frequent in the energy sector, parties that have or may have an interest in acquiring the other contracting party must be careful not to take economic ownership of the offeree company before fulfilling the reporting obligations under the HSR Act if notification of the HSR was necessary. . . .