Cogeneration optimism rests on shaky data base

While recent court cases have clarified federal cogeneration rules stemming from the 1978 Public Utilities Regulatory Policies Act (PURPA), the implementation of these rules appears to be a function of regional energy supply and demand, cogeneration economics, and state regulatory responses to federal cogeneration rules. Some states are discovering that many industrial companies have large quantities of cogenerated electricity ready to sell to electric companies for distribution, which could lead to some utility plant closings and the cancellation of new construction. Some question the economics of cogeneration and the requirement of a heavy subsidy. Utilities which already have surplus power will provide stiff competition for potential cogenerators, who should search for utilities having uneconomical service areas and develop their marketing skills. l figure.