Members of a procurement group may choose to sign formal governance documents — such as a memorandum of understanding (MOU), participant agreement, or cost-sharing agreement — that codify the partnership and establish the group’s governance structure. Initial governance documents can clarify who will play key roles, how the ongoing procurement will be managed, how the group will communicate with each other and the press, and how decisions will be made.
Creating formal governance documents at the initial stage of forming a group may require a small investment of time and capacity; however, doing so can provide valuable additional certainty to participants before they commit more resources. For example, deal champions may find it useful to present governance documents in early pitch sessions to senior leadership within their local governments. This may not only help secure buy-in from key decision makers for the deal overall, but also speed the process of authorizing these initial partnership agreements. If groups choose not to create formal governance documents they should, at a minimum, record any agreements made regarding governance structures and decision-making rights within meeting notes and share them with all partners.
There are several types of governance documents that a group might want to consider:
A document that details how costs will be shared across group members. Past aggregation groups have split costs evenly, apportioned costs based on buyers’ total load or desired amount of renewable electricity, or a combination.
MOU or participant agreement to guide the RFP process:
A document that buyers sign before issuing an RFP that includes how the RFP will be managed and evaluated, the responsibilities of each buyer, non-disclosure and confidentiality terms, and any dispute resolution processes.
MOU or participant agreement once contracts are signed:
A document that includes the mechanics of contract administration and how buyers will work together throughout the duration of the PPA contract.