The Public Utility Regulatory Policies Act (PURPA) was enacted
in 1978 as part of President Carter’s response to the oil
embargo. A key purpose of PURPA was to encourage the
development of cogeneration and renewable energy facilities in
the United States. In addition, as stated in the law, PURPA was
to encourage 1) the conservation of energy supplied by electric
utilities; 2) optimal efficiency of electric utility facilities
and resources, and 3) equitable rates for electric consumers.
The law has been amended several times, notably by the Energy
Policy Act of 1992 and the Energy Policy Act of 2005 (EPAct
2005). Most recently, it was amended by the Energy Independence
and Security Act (EISA) of 2007. The federal EISA added four
standards to PURPA, under which a utility must initiate
consideration of the standards before Dec. 19, 2008, and make a
determination about whether to adopt the standards by Dec. 19,
2009.
On Nov. 3, 2008, Chelan County PUD's Board of
Commissioners held a public hearing to review standards for
smart grid investments and for providing information to
customers gathered by a smart grid. After considering the two
standards, the Commission decided not to adopt them, but
directed staff to continue to evaluate possibilities for the
future.
On Nov. 16, 2009, the Commission held a public hearing
to consider the two remaining PURPA standards: 1)
integrated resource planning/energy efficiency; and 2) rate
design modifications to promote energy efficiency investments.
Due to its related nature, the Commission also considered
establishing 10- and two-year conservation targets as required
under the Energy Independence Act, codified as RCW Chapter
19.285. More information about the Energy Independence Act is
available here.
The two PURPA standards discussed were: 1) Integrated Resource
Planning. According to PURPA, each electric utility shall
integrate energy efficiency resources into utility, state and
regional plans, and adopt policies establishing cost-effective
energy efficiency as a priority resource. 2) Rate
Design Modifications to Promote Energy Efficiency Investments.
According to PURPA, rates allowed to be charged by any electric
utility shall align utility incentives with the delivery of
cost-effective energy efficiency, and promote energy efficiency
investments. The District will consider a variety of programs
and considerations to comply with PURPA standards.
Under PURPA, electric utilities with total annual retail sales
of 500 million kilowatt hours must consider the new standards
(Section 102(a)). However, electric utilities can choose
whether it is appropriate to adopt the new standards, in whole
or in part, or not adopt the standards. In addition, nothing
under PURPA prohibits the Commission from modifying or
adopting, or not adopting, a different standard or rule
pursuant to state law.
At the Nov. 16, 2009 public hearing, commissioners decided not
to adopt the PURPA standards as written but instead to adopt a
10-year conservation plan and two-year conservation targets
that identify cost-effective energy efficiency measures
appropriate to the District and comply the state Energy
Independence Act.