A Comparison of Purpa Renewable Energy Policy Changes throughout the United States From 2014-2019: There Has Got to Be a Better Way Forward

Abstract

For 40 years, the Public Utility Regulatory Policies Act (PURPA) has served to encourage the diversification of energy sources within the electricity sector, specifically renewable energy technologies, through state-by-state rules enacted consistent with broadly flexible federal rules. More recently, as renewable energy costs have plummeted and the pace of new installations has skyrocketed, many have asked whether PURPA’s requirements have become too much of a burden on consumers in the long run. PURPA requires utility companies to purchase energy, without negotiating prices, from utility-scale independent renewable energy producers below a certain size. The past five years have seen a wave of states adjusting their PURPA rules in response to these concerns. The Federal Energy Regulatory Commission (FERC) also promulgated a new set of PURPA regulations as of July 2020 to radically reduce the scope of independent renewable energy producers who qualify under PURPA and the rates that they would receive. This Note reviews the history of PURPA and its overall governance regime; explores state responses to controversies and identifies lessons that can be gleaned from the states as laboratories of policy innovation; and examines the implications of the new FERC PURPA regulations. It concludes that the examples of Michigan and North Carolina show that PURPA can play an important role in bringing together diverse stakeholders to develop creative win-winwin solutions to the challenges of a transforming electricity sector. This role for PURPA should not be abandoned by federal or state regulators without regulatory reforms with equal or greater potential to achieve similar creative solutions.