Public Utility Regulatory Policies Act
From Wikipedia, the free encyclopedia
The Public Utility Regulatory Policies Act (or PURPA) was a law passed in 1978 by the United States Congress as part of the National Energy Act. It was meant to promote greater use of renewable energy. This law created a market for non-utility electric power producers forcing electric utilities to buy power from these producers at the "avoided cost" rate, which was the cost the electric utility would incur were it to generate or purchase from another source. Generally, this is considered to be the fuel costs incurred in the operation of a traditional power plant.
Although a Federal law, the implementation was left to the States and a variety of regulatory regimes developed, although in many states virtually nothing was done.
The biggest result has been the prevalence of cogeneration plants, which produce electric power and steam. They are encouraged by the law on the theory that they harness the thermal energy (in the form of usable steam) that would otherwise be wasted if electricity alone was produced.
PURPA is starting to become out of date, since many of the contracts made under it during the 1980s are expiring. Another reason for PURPA's reduced significance is that open access to electricity transportation by utilities has created a vast market for the purchase of energy and State regulatory agencies have therefore stopped forcing utilities to give contracts to developers of non-utility power projects. However, it is still an important piece of legislation promoting renewable energy because it exempts the developers of such projects from numerous State and Federal regulatory regimes.
The act appears in US code in Title 16 - Conservation, Chapter 12 - Federal Regulation and Development of Power, Subchapter II - Regulation of Electric Utility Companies Engaged in Interstate Commerce, Sec 824a-3 - Cogeneration and Small Power Production.
In February 2005, Senator Jim Jeffords from Vermont introduced an amendment to PURPA calling for a Renewable Portfolio Standard.
PURPA was amended in 2005 by the Energy Policy Act of 2005 by sections 1251 through 1254.
See related energy policy contained in 42 USC Chapter 134 - Energy Policy.
