Abstract
FERC regulations that enacted section 210 of PURPA established that electric utilities must purchase power made available by small independent power producers at a price equal to the utility’s avoided cost. Promulgated during the last decade’s conservation era, these regulations may have priced power purchases too high; consequently, FERC is now reconsidering the pricing issue. In view of recent events, it may be appropriate to adjust these prices downward; this paper suggests some alternative strategies.
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