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Off-Site Physical PPA

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Cities in states with electric retail choice could register with FERC and gain the ability to trade power in organized wholesale markets. Some large companies have chosen to do this, such as Google and Apple. This process can be time-intensive and costly and is not usually recommended for cities.

Engage Your Electricity Provider

Physical PPAs, unlike virtual PPAs, require that the end user, or its retail electricity provider, take ownership of the generated electricity. Physically trading power requires power marketer status, for which an entity must file with the Federal Regulatory Commission (FERC). Some cities, like Philadelphia, already have energy departments or city-run utilities that have received permission from FERC to trade power in organized wholesale markets. If this is the case for your city, you may skip the rest of this section. If your city does not have legal authority to participate in the electric market, the preferred approach is to partner with a retail electricity provider to accept the power on your city’s behalf and incorporate it into your city’s energy supply. This type of transaction, known as a “sleeved PPA,” has been used by the City of Houston as well as the military base Fort Hood. Cities served by a community choice aggregation may, in some cases, also be able to work with their providers to have their renewable energy PPAs incorporated into their electricity service arrangements.

Engaging with your electricity provider early in the process may also reveal alternative solutions that are worth considering. Relatively recent programs, such as NRG’s Renewable Select and Constellation ’s CORe+, highlight retail electricity providers’ interest in creating new solutions to help customers meet their sustainability targets.

Outcome

  • An understanding of your market and how to manage RECs
  • A clear understanding of the key risks in physical PPAs
  • A team consisting of internal expert staff and appropriate external experts
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