WSPP Agreement Description

WSPP Agreement

WSPP provides this summary to introduce the reader to the WSPP Current Effective Agreement, September 11, 2023.  The summary is not a substitute for the actual terms of the Agreement and is not an opinion of WSPP about the meaning of any term of the Agreement. 

General Terms for Sales under WSPP Agreement

The WSPP Agreement represents a default standardized contract for electric power sales and physical options. That is, if the parties to a WSPP transaction do not mutually agree to changes to the WSPP Agreement, the terms of the WSPP Agreement will control. The WSPP Agreement, however, provides parties with the flexibility on the major terms to modify the agreement, by their mutual agreement, to be applied to any WSPP transaction as discussed below. The WSPP Agreement, by its terms, only applies to transactions between WSPP members.


Members are allowed to sell at market prices if they have received market based authority from FERC or if they are not regulated by FERC. For those members not eligible to sell at market prices, the WSPP Agreement contains price caps set at Seller's Incremental Cost plus up to 21.11 mills/kwh.


Three basic products are set forth in the Service Schedules. Service Schedule A details Economy Energy Service. The energy is subject to interruption upon notification. The stipulated damages provisions do not apply to Economy Energy Service unless the parties agree. Specific terms and conditions may be negotiated. Service Schedule B details Unit Commitment Service which is a sale from a specified unit for a specified period. Other than through force majeure, Unit Commitment Service may be curtailed based upon mutually agreed to recall provisions; when all or a portion of the unit is unavailable; to prevent system separation during an emergency (provided that prudent alternatives to curtailment have been exhausted); for the Seller to meet its public utility or statutory obligations; or due to the unavailability of transmission service. The stipulated damages provision applies to failures to deliver or to take Service Schedule B power unless the parties agree otherwise. Service Schedule C details the terms for firm sales or exchange service. Like Service Schedule B, the stipulated damages provision applies to failure to deliver or receive power. Firm service may be curtailed within mutually agreed to recall times, due to force majeure, or to meet public utility or statutory obligations. In the latter case, if the seller interrupts, it will pay damages consistent with the terms of the WSPP Agreement. Finally, the WSPP Agreement allows the sale of Physically-Settled Options which include a call option which is the right to buy Service Schedule B or C power or a put option which is the right to sell power under Service Schedules B or C.

Explanation of the Agreement

Confirmation Process

Confirmation agreements will include transaction specific terms including changes to the base agreement which the parties mutually agree to. Oral confirmation agreements will be permitted for transactions of less than one week. Written confirmations shall be required for transactions of one week or more. Upon request of purchaser or at election of seller, seller must provide written confirmation within five days of the request or agreement. Purchaser has five days in which to respond. If purchaser does not respond, seller's written confirmation shall be considered final. If seller fails to provide a requested written confirmation, then the purchaser may submit a written confirmation within five days after the deadline for submitting a written confirmation. If seller fails to respond within five business days, purchaser's confirmation is considered final. At any time if a party states that it will not accept modifications to the WSPP agreement proposed by one party, then those modifications will be rejected.

Modifying the Agreement

The parties to a transaction by mutual agreement may modify many of the major terms of the WSPP agreement for that transaction. Any such modification must be set forth in a confirmation agreement. The only provisions which may be modified are those which the WSPP agreement expressly states may be modified.

Force Majeure

In general, force majeure is an event beyond a party's control. Parties are required to exercise due diligence to overcome or avoid. A force majeure claim will not stand if a party's failure of performance is due to causes arising out of its own negligence or due to causes which it could remove or remedy. There are special provisions governing an interruption in transmission service. First, if the parties agreed on a specific transmission path at the time of the transaction, obtained firm transmission, and that firm transmission was interrupted, that would be a force majeure event. Second, if the parties did not agree on a specific transmission path, and a party's firm transmission was interrupted due to a force majeure event, then the party which booked the firm transmission may not declare force majeure if it could obtain alternate energy or means of delivering the energy to the delivery point.


No punitive or consequential damages are allowed. The only damages allowed are essentially cover type damages. For a seller's failure to deliver, it will pay damages based on the purchaser's replacement price less the original contract price plus the amount of additional transmission costs less transmission savings. For a purchaser's failure to take service, the purchaser will pay damages based on the seller's new contract price less the original sales price plus any additional net transmission charges the seller incurs. Each party has a duty to minimize damages in a commercially reasonable manner.


Events of default are defined in the agreement to include (1) the failure to make payment (when the payment date has been missed) within two business days of notice to provide payment; (2) failure to provide clear and good title or to have made accurate representations and warranties; (3) institution of proceedings indicating bankruptcy or insolvency; (4) failure to provide adequate assurances of creditworthiness within three business days of demand for such assurances. In the event of default, the non-defaulting party may terminate all WSPP transactions between the parties so long as it exercises that right to terminate within 30 days (or longer if the parties agree to an extension). Upon termination, liquidation of Service Schedule B and C transactions shall occur. Essentially, the value of the terminated transactions out to the date of termination will be estimated to determine the liquidated amounts plus costs associated with such termination. Revenues based on expected market prices, present valued, will be used in calculating the liquidation payments.


Unless the parties agree to different payment dates, payments are to be received on the 20th day of the invoicing month or the 10th day after receipt of the bill, whichever is later. Interest for late payments is one percent per month unless the parties agree to a different rate. In the event of a dispute, the entire bill shall be paid when due. Parties have two years to audit and dispute bills.


If one party has a reasonable basis for questioning the other party's creditworthiness or ability to perform, that party may require the other party to provide a letter of credit, a cash prepayment, collateral or security, a guarantee agreement, or some other mutually agreeable method of assuring performance. The second party has three business days to provide such assurances; failure to provide such assurances will be considered an event of default leading to termination and liquidation of all WSPP transactions between the parties. The second party's obligations to provide a letter of credit, deposits, etc. will be limited to the level of damages which the party would owe for non-performance; i.e. cover. The agreement also lists certain events which would allow calling for reasonable assurance, including (1) knowledge that one party is failing to perform under other contracts; (2) a party exceeding any credit or trading limit; (3) downgrading of debt below investment grade; and (4) substantial changes in market prices which materially impact a party's ability to perform.


Netting of payments is not required but is allowed. In order to facilitate matching of entities that wish to net, a member can execute the WSPP netting agreement (Exhibit A to the Agreement). If its counter-party has signed the netting agreement, then the parties will net. The members that have agreed to net will be posted on the WSPP homepage.

Taxes. Seller is liable for taxes to the delivery point. Purchaser is liable for taxes from the delivery point


Terms of transactions shall be confidential unless disclosure is required in a regulatory proceeding or in any other litigation, must be provided to NERC or a regional reliability council, or the parties agree to allow disclosure.

Performance, Title, and Warranties

Seller's obligation is to sell and deliver to the delivery point(s) in accordance with the WSPP Agreement and the applicable confirmation agreement. Purchaser's obligation is to receive and purchase at the delivery point in accordance with the WSPP Agreement and applicable confirmation agreement. Title to and risk of loss shall pass to purchaser at the delivery point. Seller warrants good title, free of liens or attachments but disclaims all other warranties including any warranty of merchantability or fitness for a particular purpose.

Mediation and Dispute Resolution

Before binding dispute resolution or any other litigation may proceed, the parties must engage in non-binding mediation. This can be a conference with the chairman of the Operating Committee and General Counsel or it can be mediation with a mediator. If mediation fails, the parties must use binding dispute resolution to resolve disputes involving the calculation of the stipulated damages and liquidation amounts. For all other disputes, binding dispute resolution is discretionary. The WSPP dispute resolution process will use arbitrators who will come from WSPP member companies as well as other sources. The procedures are Exhibit D to the WSPP Agreement.

Forward Contracts Exception

Included for bankruptcy set-off purposes.

Trade Option Exception

Included to make clear that the physical options under the WSPP Agreement are exempted from CFTC regulation.

Representations and Warranties

In general, parties warrant that they possess the necessary authority to enter into the transactions and to carry out the terms of the agreements. Each party also represents that it is solvent and that this representation is maintained until such time as notification is provided to the contrary.

Filing and Reporting Requirements

Each quarter, each FERC regulated seller (power marketers and investor owned utilities) must file pricing reports with FERC (which are filed by the WSPP) showing the pricing and margins for each transaction. The pricing data is public. The margin data is confidential for a period of one year. Confirmation agreements of one year or less do not need to be filed with FERC. FERC regulated sellers entering into confirmation agreements of greater than one year must file those agreements with the FERC.

The WSPP Open Access Transmission Tariff

As a result of FERC's Order No. 888, the WSPP filed an open access transmission tariff. This tariff is available to non-members as well as to members. This tariff, however, has very limited applicability. It only applies to members' facilities which are not subject to an open access transmission tariff. As a result, the tariff will apply only to a few smaller non-FERC regulated entities. The rates will be the rates posted by the transmission provider.