PURPA is Important Today as Yesterday
Paper and wood products manufacturers use renewable energy from biomass and highly-efficient combined heat and power (CHP) to make products. In addition, industry facilities must also purchase energy from utilities — a major manufacturing cost. In 2015, the industry spent over $9 billion on purchased energy.
- CHP provides higher efficiency, lower emissions and reduced transmission needs, as well as more competitive manufacturing and jobs. It is critical for the competitiveness of our industry’s mills.
- In the manufacturing process, excess power is usually generated, and facilities have contracts with the local utility to sell back the excess.
PURPA is the law that helps maintain fair treatment of facilities that use CHP. It also provides benefits to ratepayers, including requiring local utilities to purchase CHP-generated power at “avoided cost” (i.e. the cost the utility would have incurred had it supplied the power itself or obtained it from another source) and barring unfair interconnection practices.
- Prior to the enactment of PURPA, utilities routinely discriminated against CHP, such as by refusing requests for interconnection or requiring costly upgrades and studies in the name of “reliability” for interconnection.
Some claim that third parties rely on PURPA to cause utilities to purchase unneeded or more expensive power. Others argue that certain facilities are using loopholes in PURPA to game the system. AF&PA believes those claims can be resolved within the current PURPA framework. PURPA should be enforced to ensure greater transparency and the Federal Energy Regulatory Commission (FERC) should use existing tools through guidance or rulemaking.
AF&PA believes that if legislation is enacted, equitable treatment of industrial CHP should be maintained.