IMPACTS OF THE PUBLIC UTILITY REGULATORY POLICIES ACT: THE EMERGENCE OF PRIVATE POWER COGENERATORS IN THE UNITED STATES

The Public Utility Regulatory Policies Act (PURPA) was passed in 1978 but not fully implemented until 1982. In the short time since its implementation, PURPA has had a profound effect on power generation in the United States. At this time, most new planned power generation in the US is anticipated to come from private generators (mostly cogeneration facilities) operating under PURPA. The emergence of PURPA as a major factor in electric power generation raises a number of important issues in the US. These include the need for: new institutional arrangements to deal with an industry that is seeing a major activity --- power generation --- becoming deregulated, and an assessment of contracting provisions for cogenerators that will both encourage cogeneration (where it makes economic sense) and protect utilities and their ratepayers. While there are still problems being worked out in implementing PURPA, it is very likely that PURPA-type policy could be very beneficial to many developing countries in establishing new, efficient, and cost-effective options for generating electricity.