WASHINGTON – Today, U.S. Senators Jim Risch (R-Idaho), John Barrasso (R-Wyo.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.) released the following statements after the Federal Energy Regulatory Commission (FERC) released its final rule updating regulations implemented under the Public Utility Regulatory Policies Act of 1978 (PURPA).
In June 2019, Risch, Barrasso, Cramer, and Daines introduced the UPDATE PURPA Act ( S. 1760). Many of the commission’s reforms in today’s final rule mirror the provisions included in the senators’ legislation.
“Over the last four decades, the United States’ energy landscape has undergone a remarkable shift while our energy laws have remained largely unchanged,” said Risch. “Today’s final rule from FERC rightfully modernizes outdated PURPA regulations to give states more flexibility and promote the development of renewable energy, while helping Idahoans keep more of their hard-earned cash. I thank Chairman Chatterjee and the Commission for their efforts to advance these necessary reforms.”
“Today’s action by the Federal Energy Regulatory Commission (FERC) will go a long way in lowering Americans’ electricity bills,” Barrasso said. “I’m pleased FERC included many of the reforms from our bill to modernize the Public Utility Regulatory Policies Act of 1978 (PURPA). Electricity markets have changed drastically in the four decades since PURPA became law. Under this final rule, electricity consumers in Wyoming and across the country will no longer have to foot the bill for outdated rules and regulations.”
“The United States energy landscape has significantly changed over the last 40 years, but many federal regulations have not,” said Cramer. “The Federal Energy Regulatory Commission’s reforms will benefit consumers, prevent abuses of the old regulations, and result in fewer market distortions.”
“Updating PURPA will lead to more energy jobs in Montana and lower energy costs for our rural communities,” Daines said. “This decision recognizes the markets role in meeting the needs of today’s energy economy.”
Background: PURPA is a 40-year-old law that requires all electric utilities to purchase all power produced by qualifying facilities of 80 megawatts or less. PURPA requires utilities to pay these small renewable facilities an administratively-set “avoided cost” rate for their power that is much higher than the market rates paid to all other generation resources. PURPA also requires utilities to purchase this power even when it is not needed to serve their customers.
In originally passing this law, Congress’ intent was to reduce the amount of oil used in power generation in the U.S. and diversify the generation fleet. In these respects, PURPA has succeeded.
PURPA is no longer a driver of renewable energy. Competitive energy markets, open access to transmission, financial incentives, and renewable portfolio standards have created an environment where renewable energy is commonplace.
In June 2019, Risch, Barrasso, Cramer, and Daines introduced S. 1760, the “ Updating Purchase Obligations to Deploy Affordable Resources to Energy Markets Under PURPA Act” (or the UPDATE PURPA Act). FERC’s rulemaking included the following commonsense reforms to PURPA that were included in S. 1760:
- Protects electricity customers from having to pay for unnecessary PURPA costs.
- Empowers state public utility commissions and nonregulated utilities with additional flexibility in determining energy rates.
- Lowers the purchase obligation megawatt threshold for qualified facilities with access to organized electricity markets.
- Prevents abuse of the Federal Energy Regulatory Commission's one-mile rule.
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