A Regulator's View of Cogeneration

Abstract

The Pennsylvania Public Utility Commission regulates essentially all types of public utilities and has the authority to investigate issues of public interest. To establish a point of reference, Pennsylvania's utilities contribute about 5 percent of the total national electric generation. In view of the energy requirements of Pennsylvania's industry and the impact of increasing energy costs on employment the Commission directed its technical staff to investigate the potential for industrial cogeneration and a pricing formula consistent with the electric utilities' costs. The Commission's technical staff has completed proposed regulations to implement the provisions of the Public Utility Regulatory Policies Act (PURPA) Section 210 concerning small power producers. The regulations incorporate suggestions from both potential producers and utilities. Staff has devised a strategy for utility purchases of energy and capacity which should be of interest to regulators in other jurisdictions, encourage potential cogenerators and satisfy utilities.