Regulatory incentives for development of cogeneration facilities

This article discusses the regulations recently promulgated by the Federal Energy Regulatory Commission (FERC). It begins by describing the manner in which an owner of a cogeneration facility may seek to qualify for favorable treatment under the regulations, and the standards which the facility must meet. Next, the paper discusses other benefits of qualification and the obligations the regulations impose on an electric utility when it deals with a qualified cogeneration facility. Then, the exemptions from certain Federal and state laws and regulations under the FERC regulations for qualifying cogeneration facilities are examined. The paper also considers the impact of the Powerplant and Industrial Fuel Use Act of 1978 (FUA) and the National Gas Policy Act on cogeneration facilities. The discussion concludes with a description of the federal tax benefits available to an owner of a cogeneration facility. 129 references.