NARUC urges FERC to make changes to Public Utility Regulatory Policies Act

The National Association of Regulatory Utility Commissioners (NARUC) recently sent a letter to the members of the Federal Energy Regulatory Commission (FERC), urging them to reform the Public Utility Regulatory Policies Act of 1978 (PURPA).

In the letter, NARUC described four major changes in the electric industry, including the creation of wholesale markets, the widespread adoption of qualifying facilities technologies as sources of power, the open-access regulation of the transmission system, and the use of competitive methods to select projects throughout the states.

“We appreciate the challenges for FERC to address the many issues that have been stalled over the past year,” NARUC President John W. Betkoski III said. “However, PURPA is an issue that deserves immediate attention and action. Our state members have a deep interest in ensuring that PURPA is reformed in a manner that reflects our needs today. We need renewables, but we need to procure them in a better way.”

The letter outlines three propositions for reforming PURPA.

NARUC recommended that FERC adopt regulations that encourage the use of competitive solicitations for PURPA compliance and project selection rather than the use of administratively determined avoided costs.

NARUC also suggested that FERC lower or eliminate the rebuttable presumption that qualifying facilities at or below 20 megawatts do not have nondiscriminatory access to the market. NARUC said this would increase competition and reduce transaction costs to state commissions.

Additionally, NARUC recommended that FERC address disaggregation issues by making changes to the “one-mile rule” and making other related reforms.

“FERC already has the statutory authority to enact comprehensive reforms of PURPA’s implementing regulations, and it would be an enormous missed opportunity if FERC enacted only small changes to them,” Travis Kavulla, past president of NARUC and vice-chair of the Montana Public Service Commission, said. “There are ways forward on this problem that encourage both competition and the development of renewable technologies, while protecting consumers.”