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Cogeneration and small power production: state implementation of Section 210 of PURPA

Reinier Lock, J.C. Van Kuiken

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Abstract

State public utility commissions (PUCs) are required by Section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) to implement rules promulgated by the Federal Energy Regulatory Commission (FERC) governing the purchase of electric power by utilities from qualifying cogeneration and small power production facilities (QF's). Some states have completed their initial implementation obligations; most are still in the implementation stage. Most states initially concentrated on setting rates for purchases of power from smaller QF's. These rates will act as an early price signal for QF development, particularly important to smaller QF's needing to persuade financial backers of the adequacy of revenue streams, and will provide a useful experience base for future dealings with larger QF's. The common issues and problems emerging from these early state implementation proceedings are reviewed, compared, and commented upon.

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What this paper is about

State public utility commissions (PUCs) are required by Section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) to implement rules promulgated by the Federal Energy Regulatory Commission (FERC) governing the purchase of electric power by utilities from qualifying cogeneration and small power production facilities (QF's). Some states have completed their initial implementation obligations; most are still in the implementation stage. Most states initially concentrated on setting rates for purchases of power from smaller QF's. These rates will act as an early price signal for QF development, particularly important to smaller QF's needing to persuade financial backers of the adequacy of revenue streams, and will provide a useful experience base for future dealings with larger QF's. The common issues and problems emerging from these early state implementation proceedings are reviewed, compared, and commented upon.

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Available abstract

State public utility commissions (PUCs) are required by Section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) to implement rules promulgated by the Federal Energy Regulatory Commission (FERC) governing the purchase of electric power by utilities from qualifying cogeneration and small power production facilities (QF's). Some states have completed their initial implementation obligations; most are still in the implementation stage. Most states initially concentrated on setting rates for purchases of power from smaller QF's. These rates will act as an early price signal for QF development, particularly important to smaller QF's needing to persuade financial backers of the adequacy of revenue streams, and will provide a useful experience base for future dealings with larger QF's. The common issues and problems emerging from these early state implementation proceedings are reviewed, compared, and commented upon.

Key concepts: Cogeneration, Revenue, Production (economics), Commission, State (computer science), Business, Environmental economics, Power (physics)

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