The POWER Interview: Negotiating the Details of Power Project Contracts

Darrell Proctor

Thu, November 27, 2025 astatine 9:38 AM CST 6 min read

Negotiating contracts is simply a process that requires mentation and communication, arsenic each parties enactment toward a mutually beneficial relationship. It's peculiarly existent for electrical utilities, groups with aggregate stakeholders successful their projects. That includes the utilities themselves, their shareholders oregon different investors, and of people their customers. Laura Fraher, spouse astatine Barclay Damon, precocious provided POWER with penetration into the process. Fraser is co-chair of Barclay Damon’s Power & Energy Construction Practice Area and has extended acquisition drafting, negotiating, and providing strategical proposal regarding operation contracts for large-scale projects, including commercial, residential, and engineering, procurement, and operation (EPC) contracts for powerfulness works and concern installation projects. POWER: What are the assorted types/structures for contracts successful this country (examples could see powerfulness acquisition agreements, mergers and acquisitions, etc.)?Fraher: As it relates to construction, the declaration exemplary astir typically employed for ample powerfulness projects is the EPC Contract. This declaration exemplary fundamentally establishes a 'one-stop shop' for the proprietor entity, with a azygous EPC contractor afloat liable for the implicit scope of engineering (design of full powerfulness plant), procurement (purchase, installation, and show of each equipment), and operation (construction of the plant) of the full project. Traditionally, astir EPC contracts are lump- sum contracts. [caption id="attachment_245725" align="alignleft" width="269"]

Laura Fraher[/caption] An alternate transportation exemplary we are seeing much of lately, peculiarly successful the discourse of precise large, analyzable projects, is the EPC Manager (EPCM model). In this scenario, the proprietor entity enters into an EPCM declaration with a operation manager, who typically is afloat liable for the implicit scope of engineering, but alternatively than performing the procurement and operation phases, alternatively acts arsenic operation manager for those phases portion the proprietor entity separately contracts with operation contractor(s) and/or supplier(s) for procurement and construction. An alternate pricing exemplary we are seeing much of lately successful the EPC discourse is the Guaranteed Maximum Price (GMP) exemplary successful spot of the lump sum EPC contract. This is simply a cost-reimbursable, not-to-exceed exemplary and typically includes an open-book process with required supporting documentation. For the ongoing carnal needs of the works aft operation is complete, Operations and attraction (O&M) oregon Long-Term Services Agreements (LTSA) are typically used. POWER: What are the astir important factors (legal and otherwise) for electrical utilities and/or powerfulness generators to see erstwhile negotiating contracts (whether for powerfulness supply, construction, etc.)?Fraher: The declaration is your cardinal instrumentality for mitigating hazard and minimizing the imaginable for disputes during the operation of a powerfulness project, and truthful the astir important happening to support successful caput erstwhile negotiating contracts is the value of clarity and specificity of language. Thus, it is mostly preferable to code and resoluteness immoderate imaginable ambiguities during the declaration negotiation, including by discussing however the declaration connection would use to factual hypothetical scenarios that are apt to occur, alternatively than to judge perchance ambiguous connection and trust connected your quality to transportation a information finder that your mentation of that connection is close if a quality arises later.