Power Sales to Electric Utilities
The Public Utilities Regulatory Policies Act (PURPA) of 1979 requires that electrical utilities interconnect with qualifying facilities and purchase electricity at a rate based upon their full avoided costs (i.e., costs of providing both capacity and energy). Qualifying facilities (QF) include solar or geothermal electric units, hydropower, municipal solid waste or biomass-fired power plants, and cogeneration projects that satisfy maximum size, fuel use, ownership, location, and/or efficiency criteria. In Washington State, neither standard power purchase prices based upon a proxy ''avoided plant'', standard contracts, or a standard offer process have been used. Instead, a variety of power purchase contracts have been negotiated by developers of qualifying facilities with investor-owned utilities, public utility districts, and municipally-owned and operated utilities. With a hydro-based system, benefits associated with resource acquisition are determined in large part by how compatible the resource is with a utility's existing generation mix. Power purchase rates are negotiated and vary according to firm energy production, guarantees, ability to schedule maintenance or downtime, rights of refusal, power plant purchase options, project start date and length of contract; front-loading or levelization provisions; and the ability of the project to provide ''demonstrated'' capacity. Legislation was also enacted which allows PURPA to work effectively. Initial laws established ownership rights and provided irrigation districts, PUDs, and municipalities with expanded enabling powers. Financial processes were streamlined and, in some cases, simplified. Finally, laws were passed which are designed to ensure that development proceeds in an environmentally acceptable manner. In retrospect, PURPA has worked well within Washington. In the state of Washington, 20 small-scale hydroelectric projects with a combined generating capacity of 77 MW, 3 solid waste-to-energy facilities with 55 MW of electrical output, 4 cogeneration projects with 34.5 MW of generating capability, and 4 wastewater treatment facility digester gas-to-energy projects with 5 MW of electrical production have come on-line (or are in the final stages of construction) since the passage of PURPA. These numbers represent only a small portion of Washington's untapped and underutilized cogeneration and renewable resource generating potentials. [DJE-2005]
- Research Organization:
- Resources and Policy Groups, Washington State Energy Office, Olympia, WA
- Sponsoring Organization:
- USDOE
- OSTI ID:
- 860609
- Report Number(s):
- WAOENG-88-18; TRN: US200606%%686
- Country of Publication:
- United States
- Language:
- English
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