Public Utility Regulatory Policies Act (PURPA) of 1978

The Public Utility Regulatory Policies Act (PURPA) of 1978 contributed to the restructuring of the American electric utility system. It did so by providing incentives for nonutility companies to produce power using energy-efficient generating equipment and renewable-energy resources. By making electricity as cheaply as existing utilities in many cases, the new power companies injected competition into a formerly staid, monopolistic industry. The law&s;s unintentional consequences motivated policy makers to consider the value of introducing other free-market principles, some of which became elements of the Energy Policy Act of 1992.