Implementing a Competitive Bidding Program for Electric Power Supply
- National Regulatory Research Institute (NRRI), Columbus, OH (United States)
The Public Utility Regulatory Policies Act of 1978 (PURPA) began a series of events that has shaped the current restructuring of the electric utility industry and the way the industry is regulated. While the primary intent was to conserve energy, it also had the effect of encouraging alternative sources of generation beyond the original intent. Initially, all public utility commissions required utilities to pay PURPA-qualified facilities (QFs) an administratively determined avoided-cost rate. Increasingly, however, many commissions and utilities are turning to competitive bidding to determine a rate for purchased power. A survey of March 1990 found competitive bidding programs operating in twenty-six states. The competitive bidding process has five stages: solicitation, evaluation, selection, negotiation, and contracting. Designing a competitive bidding program for power supply requires the public utility commission and/or utility to consider many interdependent elements that occur in each of these stages. Four legal issues concern the negotiating and contracting stages of bidding and many state commissions lack the authority to solve them. (1) Legal issue concerns transmission access. Lack of access may limit the economic advantages to be gained from bidding. (2) The current structures of the Public Utility Holding Company Act of l935 (PUHCA) may retard development of an independent power production industry because potential owners do not want to assume the legal requirements of the PUHCA. (3) Competitive bidding affects the siting and certification-of-need procedures of state commissions. (4) State/federal jurisdictional conflicts can arise because of competitive bidding, since FERC has exclusive jurisdiction to set wholesale power rates. A competitive bidding program should be a joint product of state and federal regulators, utilities, consumer groups, nonutility generators, and other interested parties.
- Research Organization:
- National Regulatory Research Institute (NRRI), Columbus, OH (United States)
- Sponsoring Organization:
- National Association of Regulatory Utility Commissioners (NARUC)
- OSTI ID:
- 6077559
- Report Number(s):
- NRRI--90-15; ON: TI91009683
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
296000* -- Energy Planning & Policy-- Electric Power
BIDS
COMPETITION
CONTRACTS
COST BENEFIT ANALYSIS
ELECTRIC POWER INDUSTRY
GOVERNMENT POLICIES
IMPLEMENTATION
INDUSTRY
LAWS
LEGAL ASPECTS
LOCAL GOVERNMENT
NATIONAL ENERGY ACT
NATIONAL GOVERNMENT
PROCUREMENT
PUBLIC UTILITIES
PUBLIC UTILITY REGULATORY POLICIES ACT
STATE GOVERNMENT