Bill to update PURPA rule introduced in Senate

A bill introduced Monday in the U.S. Senate seeks to protect Americans from inflated electricity costs.

The legislation would seek to do this by modernizing the Public Utility Regulatory Policies Act of 1978 (PURPA). PURPA requires all electric utilities to purchase all power produced by wind and solar generation facilities of 80 megawatts or less. PURPA requires utilities to pay a set “avoided cost” rate that is much higher than the market rates paid to all other generation resources.

“When the Public Utility Regulatory Policies Act (PURPA) was enacted in 1978, energy markets were drastically different. Today, a significant amount of all new power added to the grid comes from renewable energy resources. It’s critical that we modernize PURPA as soon as possible. Electricity consumers in Wyoming and across the country should not have to foot the bill for outdated rules and regulations,” Sen. John Barrasso (R-WY), one of the bill’s sponsors, said. “Our bill updates PURPA in a way that protects consumers while encouraging the development of all sources of American energy—including renewables.”

The “Updating Purchase Obligations to Deploy Affordable Resources to Energy Markets Under PURPA Act” would protect electricity customers from having to pay for unnecessary PURPA costs. Further, it would empower state public utility commissions and nonregulated utilities to waive PURPA’s mandatory purchase obligation if additional power is not required to meet customers’ electricity needs.

The legislation was also sponsored by Sens. James Risch (R-ID), Kevin Cramer (R-ND), and Steve Daines (R-MT).

“The nation’s energy outlook is very different today than it was when PURPA was created forty years ago,” Risch said. “It is time to bring the law into the 21st century to reflect the energy renaissance occurring in Idaho and all across our country. The UPDATE PURPA Act makes commonsense reforms that will put hard-earned dollars back into the pockets of Idahoans while empowering states and driving our energy sector forward.”

The original intent of PURPA was to reduce the amount of oil used in power generation in the United States. However, the sponsoring lawmakers say PURPA is outdated and no longer is a driver of renewable energy. Between 2008 and 2018, renewable electricity generation doubled in the United States and reached a record high in 2018.

“I support modernizing energy incentive programs while protecting consumers’ pocketbooks and empowering local regulators who know the needs of their constituents best,” Cramer, a former public utilities regulator in North Dakota, said. “This bill acknowledges the reality that energy markets have significantly changed since the 1970s and brings PURPA into the 21st century.”

U.S. Rep. Tim Walberg (R-MI) introduced similar legislation in the House.