Divest yourself of generating plants or allow retail sales by competitors, and PURPA's mandatory purchase clause in section 210 will no longer hold.
That's the basic deal to be offered to investor-owned electric utilities under the Electric Power Competition Act of 1996 (H.R. 2929), a new bill to amend the Public Utility Regulatory Policies Act (PURPA) introduced by Rep. Edward J. Markey
(D-MA) on February 1.
In the technical sense, the bill would suspend PURPA section 210 for any electric utility receiving a "certification of competition" from its state public utility commission. But from another angle, one might argue that the utility must leap new hurdles to assure regulators not only that it will open itself to competition, but that it will maintain certain public-purpose ideas previously associated with a regulated regime.
To gain eligibility for the certificate, the utility would satisfy one of two tests (em a) retail competition or b) divestiture of generation from transmission (em plus certain other conditions relating to energy efficiency, renewable energy, low-income services, fuel diversity, price discrimination, and recovery of stranded costs.
An electric utility would obtain state certification under the retail competition standard by a showing that it would:
s Permit competition in retail sales to all consumers in its territory
s Allow competitors the opportunity to build, own, and operate new state-approved generating capacity
s Not gain advantages over competitors through its status as a regulated electricity buyer and seller in its territory.
Under the bill's divestiture standard, an alternative to the retail competition standard, certification would be forthcoming if the utility: