On behalf of a coalition of clean energy advocates and climate change organizations, SELC submitted comments to the Federal Energy Regulatory Commission encouraging it to use an upcoming review of the agency’s Public Utility Regulatory Policies Act (PURPA) rules to strengthen renewable energy markets.
Created in the 1970s, PURPA aimed to decrease reliance on fossil fuels and encourage competition by requiring utilities to purchase power from independent power producers — like solar farms, and solar-generating homes and businesses — and to pay fair rates based on the utility’s avoided cost, or the cost the utility would have otherwise incurred to meet its power needs.
Properly implemented, PURPA ensures that utilities cannot use their monopoly status to hamper the development of smaller clean energy producers. Unfortunately, as noted in SELC’s comments, the states empowered to implement these rules have done an uneven job.
“In many states, PURPA remains a vital tool to achieve the goals Congress established when it enacted the statute,” wrote SELC attorneys in the comments. “However, many states and utilities have failed to implement PURPA properly.”
North Carolina, for instance, has done a good job of implementing PURPA and ensuring that utilities actually pay avoided costs to clean energy producers. Largely because of this, North Carolina ranks second in the nation in installed solar capacity, while states with less robust implementation and enforcement — like Tennessee and Virginia — have few or no independent clean energy producers.
Before considering changes to their PURPA rules, FERC should undertake a robust 50-state survey of state PURPA implementation to figure out which states are complying with the law and which are shirking their responsibilities.
While powerful utilities would like to use this review to gut the requirements and maintain their monopoly power, FERC should ensure the law is working as intended to encourage competition and a vigorous clean energy marketplace that protects ratepayers from unnecessary costs.
Though the act is 40 years old, it is still needed — in fact, as renewable energy prices have become cost competitive, it is needed now more than ever. Vertically integrated utilities continue to use their monopoly power to shut out competition from independent clean energy producers.
FERC should use this process not to gut PURPA as the utilities would like to see, but to strengthen it and ensure that it is properly implemented across the Southeast and in every state in the nation.