PURPAPublic Utility Regulatory Policy Act of 1978
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The PUC in February decreased the timeline for some PURPA contracts from the previously set 20 years to five years.
PURPA was a prominent part of a larger movement in the 1970s to stimulate competition in markets traditionally considered natural monopolies.
With no new contracts, biomass-derived electricity appears to have less appeal to California utilities than it once did, when PURPA first passed.
One wood-using plant with a PURPA contract was not surveyed because the plant burned mostly coal.
The pricing structure was also overhauled so rates were tied to the cost of production and varied by energy source--a key point of distinction from PURPA.
While PURPA marks the point at which "the window to competition opened" (46) within the electricity industry, this competition did not immediately benefit the consumer.
California's experience notwithstanding, PURPA was sufficiently successful in producing reliable, competitively priced energy that the Energy Policy Act of 1992 (EPAct) opened the generation market further to permit non-utility generators to enter the wholesale market on a competitive, rather than cost-of-service basis.
These arguments, a perception of success in other deregulated utility sectors, and a desire to diversify energy sources led the federal government to start the process of deregulation at the wholesale level of the generation business with passage of the National Energy Policy Act of 1992, which went far beyond PURPA in allowing for independent power generation.
PURPA forced those utilities to let small, independent nonutility generators sell energy to other producers over the transmission grid.