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ABC seeks support for PURPA Plus bill

By Anna Austin | October 27, 2011

The American Biogas Council is asking its members to urge their representatives in the U.S. Senate to support a bill allowing states to make their own decisions about incentivizing small renewable energy generation.

PURPA Plus, which was introduced to the Senate Energy & Natural Resources Committee in August, would modify the Public Utility Regulatory Policy Act of 1978. PURPA is still in effect today, and requires utilities to pay an “avoided cost” rate for certain types of small power production, cogeneration facilities and other types of qualifying facilities. “The problem with that is the avoided cost is usually the cost of the cheapest type of electricity the utility is generating,” explained Patrick Serfass, executive director of the ABC. “It might be generating power from wind, hydro, natural gas, nuclear and coal, but in almost every case coal is the cheapest and that’s what they are required to pay a biogas producer who is making electricity, for example.”

If that biogas producer has to turn on the facility’s lights or use power for something else, he’s probably paying a retail rate, Serfass said. “If he is selling any power back, he is getting a small fraction of that rate, so he’s not even getting paid the same rate he’s being charged.”

PURPA Plus would remove the avoided cost component from the bill, allowing individual states to set their own rates. “States get to choose if they want to encourage small distributed generation from renewable energy, that’s why it’s important,” Serfass said. “It allows them to create an incentive for renewable energy at no cost to the taxpayers. It’s a clear winner and something Congress and the public should get behind.”

He added that the ABC would like to see the bill’s cap of 2 megawatts (MW) lifted to 5 MW, as the many of biogas projects in the works in the U.S. are between 2 and 5 MW.

For more information, email mjwalsh@mlstrategies.com.

 

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