A power purchase contract agreement is one which is entered into by two parties where one party is the seller of power and the other party is the buyer of power. This agreement comes into effect for the purpose of purchase and sale of power between the parties to the agreement. The agreement specifies all the terms and conditions under which the power is being sold and purchased.
The agreement has to include essential details such as names and addresses of the buyers and sellers of power, number of units of power, duration of supply of power, duration of the power purchase contract agreement etc. The agreement is a long term contract and therefore requires the seller of power to support the agreement in various documents such as permission and license to sell power, insurance, technical certificate for safety and so on. The agreement has to be duly signed by both the parties at the end in conformity of the terms and conditions specified.
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