Guaranteed COD to Outside Date: Fox Run Burns $11.49 Million Before the Buyer Can Walk
Fox Run Solar misses its Guaranteed PPA COD.
That does not mean the PPA disappears.
It means the project enters a new contractual zone.
Use the same daily economics from Part 2.
Before PPA delay damages, Fox Run is already burning approximately:
Construction interest $34.5k/day
Owner / IE / insurance / site $10.0k/day
Lost operating contribution $20.0k/day
----------
Non-PPA delay burn $64.5k/day
Now give the PPA an illustrative delay ladder:
Guaranteed COD Day 0
Days 1–30 PPA delay damages $25k/day
Day 31 damages step up $50k/day
PPA outside / termination date Day 120
Keep the EPC package from Part 2:
EPC delay LD rate $30k/day
EPC delay LD cap $1.5m
Covered LD-bearing days 50 days
And add a financing date:
Construction-loan maturity Day 90
Fox Run now has four economically different delay zones.
Zone 1 — days 1 to 30: both remedy clocks are running
During the first 30 days:
Sponsor non-PPA burn $64.5k/day
PPA delay damages $25.0k/day
----------
Gross sponsor burn $89.5k/day
If every day is contractor-responsible under the EPC:
EPC LD recovery $30.0k/day
Residual:
$89.5k - $30k
= $59.5k/day
Over 30 days:
Gross sponsor cost
= 30 × $89.5k
= $2.685m
EPC recovery
= 30 × $30k
= $0.900m
Residual
= $1.785m
Fox Run is late.
The PPA is still alive.
The EPC contractor is still paying under the teaching assumptions.
This is the best delay zone the sponsor is going to get.
Zone 2 — days 31 to 50: PPA damages step up before the EPC cap is exhausted
On Day 31, assume PPA delay damages double:
$25k/day → $50k/day
Sponsor daily burn becomes:
Non-PPA burn $64.5k
PPA damages $50.0k
------
Total $114.5k/day
EPC LDs remain:
$30k/day
for another 20 days before the $1.5 million cap is fully used.
Zone 2 economics:
Gross sponsor cost
= 20 × $114.5k
= $2.290m
EPC recovery
= 20 × $30k
= $0.600m
Residual
= $1.690m
Cumulative through Day 50:
Gross sponsor cost $4.975m
Total EPC LD recovery (1.500m)
-------
Residual $3.475m
At Day 50 the automatic EPC delay-LD protection is exhausted.
The project is not complete.
The PPA is not terminable yet under our teaching dates.
A new risk zone starts.
Zone 3 — days 51 to 90: the EPC LD cap is gone but the project is still contractually alive
Days 51–90 are 40 days.
Fox Run still pays:
$114.5k/day
under the same assumptions.
The EPC daily LD recovery is now:
$0/day
because the $1.5 million cap has been exhausted.
Zone 3 cost:
40 × $114.5k
= $4.580m
Cumulative residual through Day 90:
Prior residual $3.475m
Zone 3 residual 4.580m
-------
Cumulative residual $8.055m
Day 90 is also the illustrative construction-loan maturity.
The delay problem has now crossed from:
project is late
into:
project is late and its construction financing needs an amendment, extension or repayment solution.
That is why the debt maturity belongs on the same date ladder as the PPA and EPC.
Zone 4 — days 91 to 120: financing is past maturity and the PPA buyer still cannot terminate yet
Assume Fox Run obtains whatever financing forbearance or extension is necessary to remain alive after Day 90.
Do not assume that extension is free.
For the simple teaching calculation, leave incremental amendment fees out and continue using the existing $114.5k/day burn.
Thirty more days to the PPA outside date cost:
30 × $114.5k
= $3.435m
Cumulative residual at Day 120:
Day 1–50 residual $3.475m
Day 51–90 residual 4.580m
Day 91–120 residual 3.435m
-------
Residual at PPA outside date $11.490m
The EPC paid its full $1.5 million delay-LD cap.
Fox Run still has nearly $11.5 million of uncovered teaching-case delay economics.
And only now does the PPA buyer's termination right become available under the illustrative contract.
A guaranteed date is usually the start of pain, not the end of the contract
That is the useful mental model.
Fox Run's date ladder is:
Day 0 Guaranteed COD
↓
Days 1–30 PPA delay damages
↓
Day 31 PPA damages step up
↓
Day 50 EPC LD cap exhausted
↓
Day 90 construction maturity
↓
Day 120 PPA outside / termination date
Calling all of this:
the COD longstop
hides the economics.
Each date changes a different right.
The PPA outside date is the buyer's option, not the sponsor's solution
At Day 120, assume the PPA gives the buyer a right to terminate because COD has not occurred.
That protects the buyer from waiting indefinitely.
It does not cure Fox Run.
The sponsor can now own:
- a nearly completed project;
- outstanding construction debt;
- no operating revenue;
- an exhausted EPC delay-LD cap;
- site and equipment obligations;
- tax-equity consequences;
- hedge consequences; and
- a PPA that the buyer is entitled to terminate.
The outside date is therefore best modeled as:
Buyer termination option becomes exercisable
not:
Project delay problem ends
The sponsor's negotiating leverage has changed dramatically.
A lender cure period can sit after the buyer's termination trigger
Financed PPAs commonly interact with lender direct-agreement or lender-protection mechanics.
A buyer may have a termination right against the project company and still be required to:
- notify the lender;
- allow the project company its cure period;
- give the lender additional cure time;
- permit step-in; or
- recognize a replacement owner or operator
under the applicable agreements.
Use an illustrative direct-agreement overlay:
PPA outside date Day 120
Buyer termination notice Day 120
Additional lender cure / step-in 30 days
Earliest effective termination Day 150
The actual contract can be completely different.
The point is:
termination right exists
≠
revenue contract disappears instantly
The lender-protection documents add another clock.
The additional cure period has a financing cost
If Fox Run survives another 30 days from Day 120 to Day 150 at the same teaching-case burn:
30 × $114.5k
= $3.435m
Cumulative residual from Guaranteed COD to Day 150:
$11.490m + $3.435m
= $14.925m
A lender cure right can preserve a valuable PPA.
It also extends the period somebody has to fund the asset.
The cure right is therefore valuable only if the probability-weighted value of preserving the project exceeds the cost of carrying the cure.
Extending the outside date can be rational even though it increases delay cost
Suppose the buyer offers Fox Run a 60-day outside-date extension.
The project expects that, if the PPA survives and COD is achieved, the remaining contracted PPA value is $30 million.
Assume Fox Run estimates a 70% probability of reaching COD during the extension.
Expected preserved value:
70% × $30m
= $21.0m
Additional 60-day teaching-case carry:
60 × $114.5k
= $6.870m
Before extension fees, price concessions and other amendment terms:
Expected preserved value $21.000m
Additional delay carry (6.870m)
--------
Gross option value $14.130m
That is why a sponsor can rationally agree to extend a distressed PPA rather than let it terminate.
The outside date is a negotiation point.
It is not automatically the economically optimal exit date.
The buyer can demand value for giving up its termination option
Now reverse the perspective.
At Day 120 the buyer has a valuable contractual right:
I can leave.
If the sponsor asks for 60 more days, the buyer may ask for:
- a lower strike;
- additional delay damages;
- more credit support;
- a shortened contract term;
- a one-time amendment payment;
- revised performance obligations; or
- other consideration.
That is economically coherent.
The buyer is selling back part of its termination option.
The sponsor should model the amendment as:
Value of preserved PPA
-
additional delay cost
-
price / term concession
-
extra security cost
-
amendment fee
=
net extension value
not simply:
We got 60 more days.
The EPC and PPA date ladders can become misaligned after a change order
Assume Fox Run originally had:
EPC Guaranteed Substantial Completion 1-Jun
PPA Guaranteed COD 1-Jul
Float 30 days
Now a contractor change order grants:
+45 days
of EPC schedule relief.
New EPC Guaranteed SC:
16-Jul
PPA Guaranteed COD remains:
1-Jul
The project now has:
15 days of negative contractual float
during which the contractor can be on time while the project is already late under the PPA.
The change order has transferred schedule risk to the sponsor even if:
- the change-order price is fair; and
- the contractor's schedule relief is justified.
Every material EPC schedule amendment therefore needs a cross-document date review.
Force majeure can move one clock and leave another behind
The same problem occurs without a negotiated change order.
Suppose a supply-chain event gives the EPC contractor:
30 days of excusable delay
but does not qualify for equivalent PPA relief.
Then:
EPC guaranteed date moves +30 days
PPA guaranteed date 0 days
Residual sponsor date gap 30 days
If Fox Run's sponsor burn during that period is $89.5k/day before the PPA step-up:
30 × $89.5k
= $2.685m
The force-majeure event did not disappear.
It moved from contractor risk to sponsor risk.
A force-majeure matrix should therefore compare relief across:
- EPC;
- PPA;
- IA;
- tax equity;
- hedge;
- financing
rather than reading each definition in isolation.
The interconnection agreement can have another terminal clock
The FERC pro forma LGIA contains its own suspension and termination mechanics.
For example, it provides a framework under which prolonged suspension can ultimately result in termination if the customer does not request recommencement within the allowed period.
That clock solves a different problem from the PPA outside date.
Fox Run can therefore have:
PPA termination clock
EPC default / termination clock
LGIA suspension / termination clock
Construction maturity
Tax-equity funding deadline
running at the same time.
There is no universal "project longstop."
There is a stack of contractual clocks.
The construction lender cares about the earliest date that breaks the financing
For Fox Run's teaching case:
EPC LD cap exhaustion Day 50
Construction maturity Day 90
PPA outside date Day 120
Illustrative lender cure end Day 150
Which one is the financing longstop?
Potentially Day 90.
If construction maturity cannot be extended, Fox Run can default under the financing before the buyer has any PPA termination right.
A six-month PPA extension is not enough if the debt only has two months left.
So the date ladder should mark:
Earliest contractual consequence
Earliest liquidity crisis
Earliest event of default
Earliest termination right
Latest practical completion date
They are not necessarily the same.
The zone model is better than one generic delay sensitivity
A 120-day delay is not:
120 × average daily cost
in the legal sense.
Fox Run's zones are:
| Zone | Days | PPA damages | EPC LD recovery | Other consequence |
|---|---|---|---|---|
| 1 | 1–30 | $25k/day | $30k/day | ordinary delay |
| 2 | 31–50 | $50k/day | $30k/day | PPA step-up |
| 3 | 51–90 | $50k/day | $0 | EPC LD cap exhausted |
| 4 | 91–120 | $50k/day | $0 | construction maturity passed |
| 5 | 121–150 | contract / amendment specific | $0 | buyer termination + lender cure |
That is what the financial model should price.
The risk changes by zone.
Fox Run's cumulative delay schedule
Using only the teaching assumptions already established:
| Date / zone | Cumulative sponsor cost | Cumulative EPC recovery | Residual exposure |
|---|---|---|---|
| Day 30 | $2.685m | $0.900m | $1.785m |
| Day 50 | $4.975m | $1.500m | $3.475m |
| Day 90 | $9.555m | $1.500m | $8.055m |
| Day 120 | $12.990m | $1.500m | $11.490m |
| Day 150* | $16.425m | $1.500m | $14.925m |
*Day 150 assumes the same daily burn continues through an illustrative 30-day lender cure / step-in period and excludes any additional financing default rate, amendment fee or price concession.
The table makes one point brutally clear.
The largest losses occur after EPC LD protection has stopped.
The project should know what each extra 30 days costs
At the post-step-up burn:
$114.5k/day
every 30-day extension costs approximately:
30 × $114.5k
= $3.435m
That is the price of time before:
- extension fees;
- additional lender pricing;
- increased insurance;
- security top-ups;
- tax impacts; or
- PPA concessions.
So when a commercial team says:
We only need another month,
the finance team should hear:
We need another ~$3.4 million of sponsor economics under the current assumptions.
Then decide whether the month is worth buying.
The amendment memo should price both the date and the concession
Suppose the buyer offers a 60-day extension in exchange for a $1.50/MWh strike reduction over the remaining 10-year PPA.
Assume expected annual delivered PPA volume is:
400,000 MWh/year
Annual price concession:
400,000 × $1.50
= $600,000/year
Over 10 undiscounted years:
$6.0m
Now the 60-day extension has at least two costs:
Additional delay carry $6.87m
Undiscounted strike concession 6.00m
-------
Headline economic give $12.87m
The extension may still be worth it if it preserves a much larger PPA value.
But the amendment is not "free time."
It is a financing transaction with the offtaker.
The final completion dashboard
For Fox Run I would show one page:
EPC
Guaranteed SC
Forecast SC
LD rate
LD-bearing days
LD cap
LD cap exhaustion date
Default / termination trigger
Security remaining
PPA
Guaranteed COD
Forecast COD
Delay damages start
Step-up date
Outside / termination date
Extension rights
Pre-COD security
Interconnection
Grid-ready date
IA commercial operation
Suspension date, if any
IA termination clock
Financing
Construction maturity
Default / extension mechanics
Term-conversion deadline
Completion-support release
Tax equity / other capital
Funding deadlines
Placed-in-service requirements
Outside dates / investor rights
Then one final row:
Earliest date at which the current capital structure breaks
That is the project's real longstop.
What the finance team should ask before approving any date amendment
- Which document's date is changing?
- Which related dates do not move automatically?
- Does the amendment create negative EPC/PPA float?
- When does the EPC LD cap now exhaust?
- Does the PPA damage step-up move?
- Does the PPA outside date move?
- What is the new daily sponsor burn in each zone?
- Does construction maturity still leave enough time?
- Do tax-equity funding dates still work?
- Does any IA suspension / termination clock become relevant?
- What additional security is required?
- What price or term concession buys the extension?
- Does the lender get notice / cure / step-in before termination?
- What is the expected value of preserving the PPA versus the cost of carrying the extension?
Fox Run's Guaranteed COD is only the first important date.
The project-finance problem is everything that happens after it.
By Day 50 the EPC LD cap is gone.
By Day 90 the debt needs a solution.
By Day 120 the buyer can potentially leave.
And by Day 150, even an illustrative lender cure period has cost another $3.435 million.
That is why "longstop" should never be one cell.
It is a ladder of changing remedies, leverage and cash burn.
Primary sources: SEC — Renewable PPA Amendment with COD Delay Damages and Termination Deadline · SEC — PPA with COD Delay LD Period and Termination Right · SEC — PPA Lender Cure Rights · FERC — Pro Forma Large Generator Interconnection Agreement