NRECA agrees with proposed changes to the Public Utility Regulatory Policies Act of 1978, saying they will inject market flexibility and help save money for electric cooperatives that provide renewable energy to their consumer-members.
The national trade association representing more than 900 electric cooperatives in 48 states made its comments to the Federal Energy Regulatory Commission, which enforces PURPA and is expected to finalize action on the rule change in 2020.
“We support the commission’s efforts to reform its PURPA regulations so they better reflect the evolution of and present realities existing in the energy markets,” said Randolph Elliott, NRECA senior director, regulatory counsel.
PURPA was created to encourage domestic renewable generation, conservation, efficiency and competition in response to the energy crisis of the 1970s. Certain generating units, either small power producers or cogeneration, were classified under this rule as “qualifying facilities” (QFs) that received special rates or regulatory treatment, like guaranteed sales to utilities at certain rates.
“NRECA members are regularly called upon to interconnect with and purchase the output of qualifying small power production and cogeneration facilities under PURPA,” Elliott said.
The rule can lead to additional costs for utilities when they are compelled to buy from a QF rather than generate that electricity themselves or shop the power markets for lower prices.
FERC’s proposed rule included the following significant improvements for co-ops:
Allowing co-ops to incorporate market forces in setting rates for QFs from which they must buy power.
Limiting QFs’ ability to claim a “legally enforceable obligation” for a co-op to purchase its generation.
- Easing requirements to buy energy and capacity from QFs to the extent co-ops’ supply obligations are reduced by state retail-choice programs.
- Allowing co-ops to contest a QF’s certification without filing a costly petition with FERC.
NRECA has for years advocated for changes to PURPA to protect the co-ops and their consumer-members.
“Not all of our preferred positions are reflected in FERC’s proposal, but we see this as a reasonable, balanced approach to the problems identified in PURPA by NRECA,” Elliott said.