PURPA: Reform or Repeal?

Fortnightly Magazine - June 1 1995
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B. Jeanine Hull

President, Electric Generation Association

Recharge the Economy with Renewable Energy Tax Credits

Vice President & General Counsel, LG&E Power Inc.

PURPA is not the issue; competition is. PURPA has introduced competition by demonstrating that the generation of electricity is not a natural monopoly. PURPA's faith in competition has proven itself in the form of lower-priced electricity for ratepayers. PURPA has also promoted fuel diversity by creating incentives for utilities to consider renewable fuel options for portions of their capacity needs.

I strongly disagree with the notion that we have already reached a world of perfect competition, and thus no longer need PURPA. Competition is neither perfect nor inevitable. Policymakers must continue to aggressively pursue a competitive agenda. Repealing the mandatory purchase provision of PURPA is to step away from competition, because it removes an effective check on a utility's market power.

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