{"id":84509,"date":"2019-02-25T09:00:57","date_gmt":"2019-02-25T14:00:57","guid":{"rendered":"https:\/\/\/?p=84509"},"modified":"2019-02-15T14:19:52","modified_gmt":"2019-02-15T19:19:52","slug":"despite-utility-pressure-purpa-has-continued-to-diversify-the-energy-market-40-years-strong","status":"publish","type":"post","link":"https:\/\/\/2019\/02\/despite-utility-pressure-purpa-has-continued-to-diversify-the-energy-market-40-years-strong\/","title":{"rendered":"Despite utility pressure, PURPA has continued to diversify the energy market 40 years strong"},"content":{"rendered":"
The Public Utilities Regulation Policies Act, or PURPA, has been a catalyst for utility-scale solar and other alternative energy projects since its inception and passage 40 years ago. In 2017, PURPA projects accounted for approximately 2,000 of the 4,500 MW<\/a> of solar energy production added in the United States.<\/p>\n PURPA has driven solar development because it obligates utilities to purchase renewable energy from qualified facilities\u2019 (QFs) projects if the cost of energy meets or is less than fossil fuels.<\/p>\n Cypress Creek Renewables’ Innovative Solar 16, a 2.58-MWdc<\/sub> solar array in Henderson County, North Carolina, is a PURPA-enabled project. Cypress Creek Renewables<\/em><\/p><\/div>\n \u201cThis is called the ‘must purchase obligation,’ and this thing is the target of assault by so many utilities around the United States,\u201d said Todd Glass, energy and infrastructure partner with Wilson, Sonsini, Goodrich & Rosati. \u201cThey\u2019ve hated it since 1978, they hate it still today and a subset of the utility industry is trying to rub it out.\u201d<\/p>\n PURPA was passed following the 1970s oil crisis<\/a> to add competition and diversify the energy market, loosening the grasp of a utility-held energy monopoly. As oil shipments decreased, prices for the fossil fuel shot up and revealed a glaring lack of alternative energy sources in the United States. This supply mismatch obligated utilities to purchase renewable energy from QFs at avoided cost.<\/p>\n Forty years later, gas prices have lowered, but so too has the price of solar. While utilities want to keep their electricity portfolios under their control as much as possible, cheap solar from outside facilities keeps sneaking in. Utilities have continued pushing for amendments to PURPA at state levels, trying to limit their requirements to buy more solar.<\/p>\n For example, the three investor-owned utilities in Arizona have filed petitions within the last three years to amend PURPA and limit contracts with QFs exceeding 100 kW outputs to two years at most. A hearing will likely be held on the issue sometime in 2019.<\/p>\n PURPA is different from Renewable Portfolio Standards, which mandates utilities operating in certain states to purchase a certain percentage of renewable energy. Instead of an obligation, PURPA was meant to introduce competition into the energy market, Glass said.<\/p>\n \u201cWe \u2014 the solar industry in particular \u2014 are very comfortable with competing,\u201d he said. \u201cWe just want to be able to compete fairly with the utilities and the others in the industry, because we think we can create some of the lowest-cost power. Problem is, if you defeat PURPA, you\u2019re left with these vertically integrated utilities that will discriminate against smaller solar projects. They won\u2019t buy it. They don\u2019t want to. That\u2019s what\u2019s playing out right now, because wind and solar are now cheaper than coal, nuclear and natural gas generation.<\/p>\n If it\u2019s required, utilities prefer building solar themselves and profiting, rather than buying it from other smaller developers.<\/p>\n However, not all utilities view PURPA as a nuisance. Certain energy markets have community choice aggregation (CCA)<\/a>, which gives customers the option to select their energy provider and often includes renewable options.<\/p>\n Four decades in the books<\/strong><\/p>\n Solar collectors provide energy to the residents of 519 East 11th Street, a building on the Lower East Side of New York City. The 30 Sunworks solar collectors played a pivotal role in jump-starting cogeneration in the state of New York, and eventually the passing of the Public Utilities Regulation Policies Act. Charlie Copeland, P.E.<\/em><\/p><\/div>\n The Public Utilities Regulatory Policies Act was passed by Congress on November 9, 1978, influenced largely by a small-scale solar and wind project located on New York City’s Lower East Side. Charlie Copeland, president and CEO of the engineering firm Goldman Copeland, was part of the Urban Homesteading Assistance Board back then. Members, known as \u2018homesteaders,\u2019 were responsible for living in and renovating abandoned New York City buildings in the 1970s.<\/p>\n \u201cI was always a little grim about our use of energy \u2014 fossil fuels,\u201d Copeland said. So the homesteaders did something unique for the 1970s. They installed 30 Sunworks solar collectors and a large windmill<\/a> on the rooftop of 519 East 11th Street, which provided more than enough energy to power the building and provide hot water. That excess energy was subsequently fed back into the power grid.<\/p>\n Local utility Con Edison was surprised by the excess energy.<\/p>\n \u201cThe utility took the position that nobody should ever [feed power] to their grid,\u201d Copeland said. Following that, a group of residents petitioned the Public Service Commission to allow cogeneration in the city and eventually won the case, defended by Attorney General Ramsey Clark.<\/p>\n \u201cThis was like the trigger that allowed all of us to install systems and provide electrical power to the grid,\u201d he said.<\/p>\n Ultimately, this victory legitimized cogeneration, letting residents create their own energy and making utilities buy it from them. Soon after, PURPA was enacted, and cogeneration was a nationwide concept.<\/p>\n Becoming a qualified facility<\/strong><\/p>\n While it\u2019s been a game changer for utility-scale solar, smaller solar projects up to 80 MW can also be considered for QF<\/a> status. Solar project owners can submit a self-certification with the state\u2019s energy commission declaring a project as a QF if it meets PURPA\u2019s standards<\/a>. The same self-certification must be sent to electric utilities that the project will transmit, interconnect or sell energy to.<\/p>\n