Disclaimer: this should be used as a starting point for legal discussions but should not be construed as legal advice and does not address all issues that may arise with respect to entering into a PPA in any particular jurisdiction.

A preliminary legal review is an important step to help local governments determine which strategies to pursue and can inform specific considerations that may need to be aligned with partners. As such, it is important for deal champions within local governments to consult with their legal and accounting teams—and possibly the procurement department as well—early in the process to identify any relevant requirements or constraints. Aggregation partners may find it useful to pool their legal and accounting knowledge in order to identify common issues and solutions.

Deal teams should not feel that they need to have all the answers at this stage, but there are several common issues that they should be prepared to address during these internal conversations. For example, physical PPAs and virtual PPAs have different legal considerations. Whether cities can enter into physical PPAs or virtual PPAs, along with how those contracts can be structured, is determined by state and local regulations. Local governments should start the legal process by evaluating these local regulations, reviewing what other cities in their state have done in the past, and determining if there are barriers to working with certain kinds of partners.

• More broadly, local governments should at a minimum include the following items in their legal review process:
• Are there any state or local prohibitions to entering into either type of PPA?
• Are there any requirements for or restrictions around entering into long-term contracts and competitive bidding?
• Do you need to pass an authorizing ordinance or resolution, and when in the process does it need to occur?
• Are there any legal barriers to working with corporations or public institutions?