How Would PURPA Repeal Affect Cogenerators?

Abstract

Congress has been considering electricity restructuring legislation
for the past several years. Legislative hearings have been conducted in
both the House and the Senate, and markup of legislation proceeded in
the Senate.
It is clear that such legislation will loom as a major agenda item for
Congress in 2001, particularly in light of reliability and pricing problems
that appeared in certain markets last summer.
Prominent features of this proposed legislation include provisions
which would repeal the Public Utility Regulatory Policies Act of 1978
(PURPA). Current proposals call for PURPA to be repealed prospectively
for fossil fueled qualifying cogeneration facilities, while the mandatory
purchase/sale provisions of PURPA for alternative fueled small power
producers may be maintained.
Congress may also amend certain elements of the Federal Power
Act and the Public Utility Holding Company Act (PUHCA) with respect
to electricity restructuring, interconnection and transmission. Specifi-
cally, many provisions of the proposed legislation focus on repealing
PURPA for qualifying cogeneration facilities, including the right to au-
tomatically connect to the grid, the PURPA “put” obligation, the exemp-
tions provided in Section 210(e) from the Federal Power Act and PU-
HCA, the statutory rights to standby and backup power, and finally
exemptions from certain state ratemaking and accounting requirements
for qualifying facilities.