A non-utility power plant that at the time of construction does not have a firm power purchase agreement in place. Instead, the electricity generated by the plant is intended to be sold in the spot market. Merchant power plants pose several risks. They are subject to fluctuations in the price of electricity which may be less than the plant's capital and operating costs. These projects are also difficult to finance because lenders want a predictable and stable revenue stream that can be relied on to make debt service payments.