PURPA

From Interwest Energy Alliance Wiki

The Public Utility Regulatory Policy Act (PURPA) was passed in 1978, in the midst of the energy crises that ripped through industrial world economies. Faced with predictions that the price of oil would rise to $100 a barrel, Congress acted to reduce dependence on foreign oil, to promote alternative energy sources and energy efficiency, and to diversify the electric power industry.

One of the most important effects of the law was to create a market for power from non-utility power producers, which now provide 7 percent of the country's power. Before PURPA, only utilities could own and operate electric generating plants. PURPA required utilities to buy power from independent companies that could produce power for less than what it would have cost for the utility to generate the power, called the "avoided cost."

PURPA has been the most effective single measure in promoting renewable energy. Some credit the law with bringing on line over 12,000 megawatts of non-hydro renewable generation capacity. The biggest beneficiary of PURPA, though, has been natural gas-fired "cogeneration" plants, where steam is produced along with electricity.

From summary of PURPA from the website of the Union of Concerned Scientists.