How Regulatory Policy Impacts Large Scale Cogeneration Facilities

Abstract

Congress passed the Public Utility Regulatory Policies Act (PURPA) in November 1978. It was about two years before the Federal Energy Regulatory Commission (FERC) which was charged with promulgating rules implementing PURPA, completed this task and the development of small power and cogeneration facilities began to occur. Our company, PSE Inc., was one of the first to obtain certification for a project as a Qualifying Facility, Certificate Number QF 80-6 being received on August 8, 1980. Since that first certificate we have received certificates on twelve other projects. We presently have in operation two plants generating over 470,000 KW. Four plants totaling 190,000KW should be in operation by the second quarter of 1988. An additional four plants with over 550,000 KW total are expected to be in operation before the end of 1989. Thus by 1990 we could well be operating over 1100 MW of capacity representing an investment of about $800 million dollars. With this kind of record in the development, financing, construction and operation of Qualifying Facilities, we believe our experience allows us to judge “How Regulatory Policy Impacts Large Scale Cogeneration Facilities” quite well. Some of the conclusions we have reached are: “Exempt from Regulation” means exempt from regulation as electric utilities and that is all. Each state has different policies and regulations. Obtaining necessary permits, certificates, contracts, etc. to develop a project is complex, time consuming, and expensive. The cogenerator is at a distinct disadvantage when pitted against a utility before that utility’s agent. The best possible legal help is essential to deal with these issues.