Orrick Advises Birch Infrastructure in Negotiation of vPPA Hedge Contracts


A cross-practice Orrick team represented Birch Infrastructure, PBLLC, in its negotiation with Allianz, Nephila and REsurety of hedge contracts to de-risk renewable energy procurement for data management company, Iron Mountain. The hedge contracts, consisting of a first-of-its-kind Settlement Guarantee Agreement (SGA) and a Volume Firming Agreement (VFA), were incorporated into virtual Power Purchase Agreements (vPPAs) that Iron Mountain signed with two wind farms, the 39.9 MW Ringer Hill project and the 253 MW Dermott wind farm, in 2016 and 2017.

The hedge contracts mitigate the risks associated with weather-based intermittency and power market fluctuations, and the demands posed by the 24-hour, fixed load renewable energy consumption for Iron Mountain’s data centers. Birch executed the SGA and VFA agreements for Iron Mountain, and the counterparties will manage the exposure, handle the underwriting and provide valuation and risk analytics for the transactions. The hedge contracts will enable Iron Mountain to continuously and reliably operate their data centers with renewable power.

The team was led by Giji John and included Eleanor Verret, Michelle Pichardo and Nikiforos Mathews.