Avoided cost standard under PURPA

Technical Report · Fri Apr 01 04:00:00 EST 1983

DOI:https://doi.org/10.2172/6189494· OSTI ID:6189494

Cole, R J; Holmlund, I; Smith, S A; Williams, T A

The Public Utility Regulatory Policies Act (PURPA) (P.L. 95-617) was passed to encourage electricity conservation through a variety of regulatory and rate reforms. Information is provided on the controversy surrounding the avoided cost standard established under PURPA. Promulgated by the Federal Energy Regulatory Committee (FERC) in February 1980, the avoided cost standard sets a minimum rate for utilities purchasing power from a qualified facility (QF) at the utilities full avoided cost. Recent court cases have challenged this standard and FERC is currently appealing to the Supreme Court. The impact of these court cases may have little effect on the actual rates set by state Public Utility Commissions (PUCs), which can require rates higher than the minimums established by FERC, since many PUCs appear in favor of requiring full avoided costs. The arguments for and against requiring utilities to pay full avoided costs come down to balancing between incentives for QFs on the one hand and fairness to utilities and their non-QF customers on the other.

• Research Organization: Pacific Northwest Lab., Richland, WA (USA)
• DOE Contract Number: AC06-76RL01830
• OSTI ID: 6189494
• Report Number(s): PNL-4470; ON: DE83010985
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
296000 -- Energy Planning & Policy-- Electric Power
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320603* -- Energy Conservation
Consumption
& Utilization-- Municipalities & Community Systems-- Public Utilities-- (1980-)
COST
ELECTRIC UTILITIES
ENERGY CONSERVATION
FINANCIAL INCENTIVES
LAWS
NATIONAL ENERGY ACT
PUBLIC UTILITIES
PUBLIC UTILITY REGULATORY POLICIES ACT
REGULATIONS
STANDARDS