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What does PUCT mean?  What does ISO stand for?  Who regulates PPAs? 

Whether you are new to renewable energy law or a well-versed veteran, a comprehensive list of renewable energy terms can be helpful.  We are here to help expand your renewable energy knowledge by providing a centralized list of commonly used industry terms.

ISO            ISO stands for Independent System Operator

What is an ISO? 

An ISO is an independent, federally regulated entity established to coordinate regional transmission of electricity in a non-discriminatory manner and ensure the safety and reliability of the electric system.

There are currently seven ISOs in the United States:

      1. California (CAISO)
      2. Midcontinent (MISO)
      3. New England (ISO-NE)
      4. New York (NYISO)
      5. Pennsylvania-New Jersey-Maryland Interconnection (PJM)
      6. Electric Reliability Council of Texas (ERCOT)
      7. Southwest Power Pool (SPP)

With FERC order 2000, FERC encouraged the creation of Regional Transmission Organizations (RTOs) which build upon the ISO concept.

Related terms: RTO, ERCOT, FERC, IRC

ITC            ITC stands for Investment Tax Credit

An investment tax credit is a federal tax incentive for commercial and residential renewable energy projects.

The ITC provides a tax credit based on a percentage of the total investment into a renewable energy project.  ITCs are important to the growth of the renewable energy industry.  Tax credits are usually reserved for the Seller in a PPA.

Related terms: Federal Production Tax Credit (PTC), PPA

MWh        MWh is an abbreviation for megawatthour

A MWh is a unit of energy for a specific period of time, for one hour.

You will commonly see a renewable energy project refer to a project MW, or megawatt. This is the measure of energy, at a moment in time, produced by the power project.

1 megawatthour (MWh) = one thousand (1,000) kilowatt-hours or one million (1,000,000) watt-hours.

Related terms: GWh, MW, GW, KW

PPA           PPA is an acronym for Power Purchase Agreement

What is a PPA?

A PPA is a long-term agreement, sometimes referred to as an electric power agreement, commonly used in the renewable energy industry. A PPA is a contract between a seller, typically a developer or owner of an energy project, and a buyer, typically a wholesale energy purchaser. The buyer agrees to purchase electric output from the seller for a predetermined period of time, typically 10-20 years.

A PPA is a contract with terms that specify delivery, duration, penalties, and termination.

The seller typically develops, owns and operates a renewable energy project. They are the power producer and commonly referred to as an IPP, Independent Power Producer. The seller is responsible for the operation and maintenance of the project for duration of the PPA, while receiving tax credits and income from the sale of the electricity.

The Buyer, also referred to as the offtaker, agrees to purchase the power produced from the project, at a predetermined wholesale rate, without upfront costs, for the duration of the PPA. Buyers are utility companies and private entities which may include schools, large corporations, and private equity groups.

PPAs are considered an essential element of project financing.

Related terms: Virtual PPAs (VPPAs), Independent Power Producer (IPP), Offtaker

PUCT        PUCT is an acronym for Public Utility Commission of Texas.

What does the PUCT do?

Created in 1975, PUCT is a Texas state agency that, according to PUCT’s website, regulates the state’s electric, telecommunication, and water and sewer utilities, implements respective legislation, and offers customer assistance in resolving consumer complaints.

The PUCT’s mission is to protect customers, foster competition, and promote high quality infrastructure.

The PUCT regulates ERCOT, and the Texas Railroad Commission regulates the PUCT.

Related terms: ERCOT

Informational Purposes Only

The information is provided for informational purposes only and is not legal advice, nor does reading anything that we author or post on our website constitute legal advice or create an attorney-client relationship. Additionally, we may periodically update the content of our website, but the content is not necessarily complete or up to date. Likewise, information posted on our website may not be applicable to all jurisdictions.

McCarn & Weir, P.C. is comprised of attorneys and professional staff highly experienced in transactions and litigation involving the Energy, Real Estate, Corporate, Banking and Finance industries.  Our firm has attorneys Board Certified in Oil, Gas and Mineral Law, Civil Trial Law, and Personal Injury Trial Law by the Texas Board of Legal Specialization, along with attorneys licensed in Texas, Oklahoma, New Mexico, North Dakota, California, the Northern District of Texas, and the United States Court of Appeals for the Fifth Circuit.  Our goal is to provide high quality and cost-effective legal services, while maintaining the flexibility to adapt to the ever-changing needs of the industries we represent.