Utility Drive this week published a commentary by Joshua Epel, a former chairman of the Colorado Public Utilities Commission, on the need to reform PURPA to replace capacity payments for qualified generating facilities with real-time competitive pricing.
“As a result of innovation, state policies, competitive pricing, and federal tax credits, states are leading the remarkable clean energy transition in the United States. Responding to state energy policies and the demands of their customers, electric utilities are doubling and tripling down on their efforts to provide customers with resilient, reliable and clean energy, while doing so at affordable prices. However, these successes are being undermined by an outdated 40-year-old federal law that is impeding the expansion of clean energy in many states.
The Public Utilities Regulatory Policy Act (PURPA) was passed by Congress over 40 years ago to address the oil embargo, incentivize renewable energy development and help alleviate uncertainty in the energy market. Given the crisis the nation was facing, the Federal Energy Regulatory Commission (FERC) put in place strict regulations to act as a forcing mechanism that would achieve the statute’s goals on a short timeline. The goal of PURPA was laudable: provide access to “small renewable energy providers,” known colloquially as Qualified Facilities or “QFs,” to compete with fossil fuel electricity.
However, today, PURPA is being misused to undermine the development of a competitive renewable energy marketplace. PURPA contains a number of outdated concepts that are contrary and indeed impeding the effort to de-carbonize the electric utility sector. Unlike 40 years ago, QFs are not replacing fossil fuels. They are blocking the growth of renewable energy projects necessary to replace fossil fuels.
Read more in Utility Drive.