Effects of PURPA on cogeneration in the United States Online publication date: Tue, 15-Jul-2014
by Arthur M. Mitchell, Lynn N. Hargis
International Journal of Global Energy Issues (IJGEI), Vol. 7, No. 3/4, 1995
Abstract: The percentage of US electricity generating capacity provided by industrial cogeneration, primarily for self-consumption, declined from 15% in the 1950s to only 4% by 1978. But in that year the Public Utility Regulatory Policies Act (PURPA) was enacted by the US Congress to encourage cogenerators and other non-utility power producers, known as 'qualifying facilities' or 'QFs'. PURPA required public utilities to purchase power from QFs at the utility's avoided cost and exempted QFs from utility regulation as wholesale power sellers. As a direct or indirect result of PURPA, and the success of project finance, the majority of electricity generating capacity additions in the US in 1990, 1991 and 1992 have been non-utility plants, of which the majority are cogeneration facilities. This paper describes in more detail the history, provisions and impact of PURPA on cogeneration in the United States and how it has led to even broader legislative changes to the US electric utility industry and to the interest of US utilities and other entrepreneurs in power projects around the world.
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