PUHCA: Debunking the case against reform

Journal Article · Sat Jun 01 00:00:00 EDT 1991 · Electricity Journal; (United States)

DOI:https://doi.org/10.1016/1040-6190(91)90141-F· OSTI ID:5522527

McCormick, Jr, W T

PUHCA reform does not in any way portend deregulation of the electric utility industry. It merely removes a technical and duplicative statutory impediment to the development of more competitive wholesale power production. PUHCA reform will provide utilities which need to add generating capacity with a greater array of purchase options. It will not change the regulation of electric rates. Wholesale rates charged by IPPs will be subject to regulation by FERC, which under the Federal Power Act is required to approve only just, reasonable, and nondiscriminatory rates. Market-based rates approved by FERC for IPPs under strict policy guidelines must meet the same statutory standards. State regulatory commissions will continue to have the authority and the obligation to set just and reasonably retail rates, including the authority to review the prudence of any purchase of power from an IPP. PUHCA reform does not alter the service obligations or service territories of electric utilities. It would create new opportunities for both independent suppliers and utilities with the ability to compete in wholesale markets. It is a win-win opportunity, both for the will buy suppliers/competitors it would free up to participate in power markets domestically and internationally, and the utility purchasers who would benefit from enhanced competition. PUHCA reform is no Faustian bargain. It is a no-lose situation for electric consumers who will benefit from the lower rates and more diverse resource options that competitive markets - freed from PUHCA's restraints - will make available.

• OSTI ID: 5522527
• Journal Information: Electricity Journal; (United States), Vol. 4:5; ISSN 1040-6190
• Country of Publication: United States
• Language: English

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