QF

Since the Federal Energy Regulatory Commission (FERC) issued its electric "giga-NOPR" on transmission access, stranded investment, and Real-time Information Networks (RINs), the heat is on (em and rising. Congress is busy, too. It's working hard on telecommunications, nuclear waste, and privatization of the federal power marketing agencies, but the odds may be growing against repeal of PURPA (the Public Utility Regulatory Policies Act) or PUHCA (the Public Utility Holding Company Act.

It was after seven o'clock in the evening (em nearly 12 hours since the DOE-NARUC Second National Electricity Forum had gotten underway up in Providence, RI (em when it all finally hit home. This time the regulators were serious. People were paying attention.

The bad news for qualifying facilities (QFs) continues. A high-profile project in the District of Columbia appears dead, but developers won a small victory when a federal court refused to stop a suit by the developers against municipal officials for damages connected with the regulatory barriers erected by the city at the behest of concerned citizens. More damaging was the recent decision of the Massachusetts Supreme Court requiring reluctant regulators to review the ceiling price set for QF purchases in a recent bid conducted by Boston Edison Co.

The Florida Public Service Commission (PSC) has refused to settle a dispute between Florida Power Corp., an electric utility, and numerous qualified cogenerating facilities (QFs) over pricing terms contained in negotiated purchased-power agreements previously approved as cost-effective. The PSC ruled that interpretation of provisions in negotiated, as opposed to approved standard-offer, contracts between utilities and QFs was a matter for the courts and rejected allegations that review and approval gave the PSC continuing jurisdiction to interpret the contracts.

According to the Natural Gas Vehicle Coalition (em a national organization of local natural gas distributors, pipelines, and equipment manufacturers promoting natural gas vehicles (NGVs) (em the U.S. government supports our country's continued reliance on petroleum-based fuels for transportation through billions in subsidies and tax incentives.

The Federal Energy Regulatory Commission (FERC) has ruled that an Illinois statute did not require rates above avoided cost for wholesale sales by qualifying facilities (QFs), and so did not violate the Public Utility Regulatory Policies Act (PURPA) (Docket No. EL95-27-000).

The statute at issue requires a utility to buy power from qualifying solid-waste energy facilities at the utility's retail rate. But the statute includes an offsetting monthly tax credit, which prevents a utility from paying more than its avoided costs.

Despite all the talk, despite keen interest in certain industry sectors, and despite federal legislation, increased competition in the electric power industry is far from certain. Unlike other deregulated industries, electric power is primarily regulated by state public utility commissions (PUCs) (em not by a federal regulatory agency. The debate over the values and benefits of competition as opposed to regulation will have to take place over and over again.

California's 1993 qualifying facility (QF) auction dramatically illustrates problems that can be encountered in structuring auctions for electric utility solicitations of supply-side resources from qualifying cogeneration and small power production facilities.

In the 1993 California QF auction, three California utilities were to select QFs that would be awarded long-term purchased-power contr

We stand on the threshold of a new era in the electric services industry. I deliberately avoid the term "electric utility industry," because the future is not limited to the vertically integrated monopoly utility. Many utilities may already perceive the first cracks in their armor: nonutility generators (NUGs), self-generators, and energy service companies.

Competition is not in the industry's future; it is here now. Further, competition and market forces are not going to magically disappear.

The Massachusetts Supreme Court has ruled that the state's Energy Facilities Siting Board could not rely on a ruling by the Massachusetts Department of Public Utilities (DPU) to determine project need as part of the construction approval process for a qualifying facility (QF). The Siting Board had found itself unable to determine the need for a 170-megawatt gas-fired cogeneration project proposed by Altresco Lynn, Inc. because it was unclear whether Massachusetts utilities would require surplus power from out-of-state suppliers before 2000.