1. When a PPA Dispute Raises Federal Issues
FERC jurisdiction depends on the transaction and the parties, not simply on the existence of a PPA. The Federal Power Act covers interstate transmission and wholesale electricity sales within its statutory jurisdiction, subject to limits and exemptions.
Wholesale Sales and FERC Jurisdiction
Sections 205 and 206 of the Federal Power Act regulate rates and practices for jurisdictional sales and transmission by public utilities. A dispute involving a FERC tariff or market-based rate authorization can raise federal regulatory questions alongside contractual claims.
Contract Claims Remain a Separate Inquiry
A delivery or payment default does not become a federal cause of action merely because the project operates in the energy sector. Governing law and dispute-resolution provisions remain central to breach, damages, and contract interpretation. A breach of contract suit can therefore follow a different legal track from a FERC proceeding.
2. Force Majeure and Interconnection Delays
Grid disruption or project delay does not automatically excuse performance. The PPA determines how force majeure, notice, causation, cure rights, and milestone extensions affect contractual obligations.
Force Majeure in Power Purchase Agreements
A party relying on force majeure must start with the clause and the law governing the agreement. Grid failures, supply interruptions, and governmental action can have different consequences depending on the contractual definition, notice requirements, and connection to nonperformance.
Federal Interconnection Requirements
Interconnection presents a federal issue when a project falls within FERC-jurisdictional transmission arrangements. FERC Order Nos. 2023 and 2023-A revised generator interconnection procedures, while project agreements determine how delay affects commercial operation and performance obligations. Energy and infrastructure projects can therefore involve both regulatory and contractual documents.
3. Federal Energy Incentives and PPA Economics
Changes in federal tax incentives can alter project economics without automatically changing contractual rights. A resulting dispute depends on how the PPA allocates tax, change-in-law, pricing, and termination risk.
Sections 45Y and 48E under Current Federal Law
Sections 45Y and 48E provide federal clean electricity production and investment credits, but legislation enacted in 2025 changed eligibility for certain projects. Current law also imposes prohibited foreign entity restrictions that can affect eligibility, making project timing, ownership, sourcing, and technology relevant to the federal tax analysis.
REC Claims Require a Separate Analysis
Renewable energy credits are not a single federal program. REC ownership, delivery, replacement, or clawback issues depend on the applicable program and contract, so a federal tax-credit change does not itself establish a REC repayment or termination right.
4. Curtailment, Output, and Wholesale Rate Disputes
Generation shortfalls can result from curtailment, grid conditions, or project performance. The source matters because a PPA can assign different payment and delivery consequences to each event.
Contractual Allocation of Curtailment Risk
A PPA may distinguish grid-directed curtailment from a seller’s failure to deliver available energy. Metering data, dispatch records, invoices, and operating communications can show whether a shortfall triggers deemed-generation provisions, true-ups, damages, or another contractual mechanism.
FERC-Regulated Rates and Contract Remedies
A claim involving a jurisdictional wholesale rate requires review of the applicable FERC tariff or rate authorization. A contractual remedy cannot simply be assumed to override a federally regulated rate, so the regulatory and contractual theories require separate analysis.
5. Credit Support, Default, and Termination
Financial distress can create a dispute before an energy-delivery default occurs. Credit thresholds, collateral provisions, letters of credit, cure periods, and termination clauses determine the contractual response to a credit event.
Security and Cure Rights
A downgrade does not create the same remedy under every PPA. An agreement may require additional collateral or replacement security and may condition termination on notice and expiration of a cure period.
Termination Payments and Remedies
PPA breach remedies can include damages or contractual termination payments when the agreement and governing law permit them. Specific performance depends on equitable requirements, while contract reformation requires a separate legal basis rather than serving as an ordinary breach remedy.
6. Federal Proceedings and Related PPA Litigation
A PPA dispute can involve a FERC proceeding, court litigation, arbitration, or more than one forum. The proper route depends on the regulatory issue, jurisdiction, dispute-resolution clause, and requested relief.
Building the Regulatory and Contract Record
The record can include the PPA, amendments, tariffs, FERC filings, interconnection documents, notices, dispatch data, invoices, and credit-support records. Related civil litigation can address contractual claims while a federal regulatory issue follows its applicable process.
Assignment and Project Ownership Changes
A project sale does not automatically transfer every PPA obligation or federal authorization. Assignment clauses, consent requirements, assumed liabilities, transaction structure, and applicable federal approval requirements require separate review.
16 Apr, 2026
