PURPA Reform: Good for Consumers, Good for States, Good for Clean Energy
1970s-era energy regulations are outdated and ineffective.
WHY WE NEED REFORM
Right now, energy customers across the country are overpaying their electricity bills by the billions.
This is happening, in large part, because of a federal law called the Public Utility Regulatory Policies Act (PURPA), enacted in 1978. PURPA was part of Congress’s response to the national energy crisis. Its original goal was simple: achieving greater energy security from a diversity of sources.
Fast forward: In 2020, we are no longer living in energy scarcity; America is energy independent and our energy mix is diverse. It includes renewables such as wind and solar that are both cheaper and more readily available than they were in the 1970s.
But while times have changed, the law hasn’t. Unfortunately, PURPA’s requirements both force customers to pay more for power they don’t need, while also locking out innovative renewable energy technology. That doesn’t make sense.
In response, the Federal Energy Regulatory Commission (FERC) has a common-sense proposal to update and improve PURPA to meet today’s energy needs. It would give states greater flexibility in determining how utilities contract with energy suppliers, so consumers aren’t overcharged for electricity, while ensuring that cutting edge renewable sources come online sooner. This makes sense for consumers, the economy, and the environment.
Reforming PURPA is good for consumers, good for states, and good for clean energy.
PURPA contracts are costing customers
between $2.7 billion and $3.9 billion
in overpayments. 1
The overpayment of solar contracts is estimated at between $1.05 billion and $1.87 billion. 2
The overpayment of wind contracts is estimated at between $1.65 billion and $1.99 billion. 3
FROM THE EXPERTS
“CEA estimated that utilities and, in the end, customers overpaid by $2.7 billion and $3.9 billion for solar and wind contracts, respectively, from 2009 – 2019.” – Concentric Energy Advisors (CEA) study
“Ratepayer protection is the primary and fundamental reason why PURPA needs to be reformed quickly and comprehensively to stem what otherwise will be a continued, very costly, and long-term financial liability for a large number of U.S. electricity customers.” – Dr. David Dismukes LSU study
COMMENTS INTO FERC
WASHINGTON – A wide variety of groups have weighed in with the Federal Energy Regulatory Commission (FERC) on why the Public Utility Regulatory Policies Act (PURPA) of 1978 is needed to ensure consumers have access to market-driven electricity costs: