Nowhere are the failings of traditional utility regulation more evident than on Long Island. The New York Public Service Commission (PSC) has raised rates for the Long Island Lighting Co. (LILCO)...
PURPA Debate Inches Forward in House
only three or four cents, we cannot forget that many utility rate bases around the country are filled today with the costs of nuclear power plants that make some of the worst PURPA projects look like bargains."
Elizabeth A. Moler, FERC chair, noted it was becoming "increasingly difficult to reconcile PURPA's avoided-cost requirements with encouraging higher-priced renewable technologies, particularly in light of the goal of the Energy Policy Act to encourage competitive wholesale power markets."
PURPA repeal also was premature, according to Moler's testimony, given that, in her eyes, utilities still wield market power in transmission: "At a minimum, those who control the nation's transmission grid must provide comparable open access before we can have competitive wholesale power markets."
The testimony of Cheryl L. Parrino, Wisconsin Public Utility Commission chair and president of the National Association of Regulatory Utility Commissioners, seemed to echo parts of the Markey bill. She said PURPA reform should enable a state to "opt out" of mandatory purchase requirements if it finds that:
s Energy procurement is competitive
s Prices are driven by the market, rather than by the utility
s Reliability of services is protected.
Robert K. Green, executive vice president and COO of UtiliCorp United Inc., called for a comprehensive, nationwide approach to PURPA: "We believe some analogies to the current telecommunications reform legislation may be instructive. ... Any deregulatory efforts of PURPA should only be done in the context of comprehensive legislation that would bring competition to all local utility electric customers. With achievement of retail open access, there will be no need for PURPA because all competitors will be free to market directly to customers." t
Joseph F. Schuler, Jr. is associate editor of PUBLIC UTILITIES FORTNIGHTLY.
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