U.S. corporations increasingly look to manage their carbon footprints, and energy costs, by entering into clean energy power purchase agreements (PPAs). The contracts offer a tailwind to renewable energy developers, but can challenge traditional utility-customer relationships.

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Ninety-five percent of the world’s largest 250 companies by revenue issue sustainability reports that disclose their environmental and social impact. On the energy front, this often translates into companies setting goals for clean energy use, with Google, Microsoft and Wal-Mart having set 100% clean energy targets for parts of their businesses.

As companies look to aggressively reduce their carbon footprint, some are taking the step of making direct investments in clean energy projects through contracts known as wind and solar Power Purchase Agreements (PPAs), under which they buy electricity directly from clean energy generators. Such deals ensure that clean energy purchases pass the additionality test, yet can disrupt traditional utility-customer relationships.

Energy legal and regulatory expert Ken Kulak provides insights into corporate America’s efforts to clean up its electricity supply, even as the bulk of America’s electric generation continues to be powered by fossil fuels.

Ken Kulak is Partner with the Morgan Lewis law firm in Philadelphia, and a Senior Fellow with the Kleinman Center for Energy Policy.

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