Capitol Hill: The Bells Toll for PURPA

Fortnightly Magazine - January 1 1996
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The beleaguered Public Utilities Regulatory Policies Act of 1978 (PURPA) has a new assailant (em U.S. Rep. Cliff Stearns (R-FL). Stearns's bipartisan legislation, H.R. 2562, the "Ratepayer Protection Act," proposes repeal of section 210 of PURPA, which requires electric utilities to purchase power at avoided costs. Contracts in place before October 31, 1995, would stand, but no electric utility would be obliged to enter into any new contracts after that date.

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Stearns is against PURPA's substitution of government intervention where the market should dictate. He argues that PURPA caused many consumers to pay exorbitant rates for electricity, and points out that the Energy Policy Act of 1992 (EPAct) gives nonregulated electric producers additional access to the wholesale electric market through transmission access and exemption from the Public Utility Holding Company Act. The competitive wholesale market created by EPAct thus makes section 210 of PURPA redundant.

Stearns hopes that the PURPA reform legislation will precipitate a much larger debate on deregulation, which he favors. He notes that House Energy and Power Subcommittee chairman Dan Schaefer

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