Public Utility Regulatory Policies Act (PURPA)

Overview – What is PURPA?

PURPA originally was enacted in 1978, as part of the National Energy Conservation Policy Act, and was designed to serve three (3) purposes:

     (1) to encourage conservation of energy supplied by electric utilities;
     (2) to encourage optimal efficiency of electric utility facilities and resources; and
     (3) to encourage equitable rates for electric consumers.

The statute originally included six (6) standards related to customer rate determination and design which had to be considered (but not necessarily adopted) by state regulatory authorities and certain non-regulated electric utility companies.  PURPA was amended in 1992 to add four (4) additional standards for consideration and again in 2005 to add five (5) standards.  In 2007, more standards were added, including four (4) new standards.  Three (3) of the four (4) have been addressed in an earlier process and only one (1) currently applicable to non-regulated electric utilities such as Sawnee EMC, remains to be considered. Sawnee EMC intends to address this one (1) remaining standard in a hearing on May 5, 2009.

What’s New - The Energy Independence and Security Act of 2007 (EISA).

The Energy Independence and Security Act of 2007 (EISA) amended PURPA by adding new standards for consideration by state regulatory authorities and/or covered non-regulated electric utilities.  As with the previous standards, the new standard must be considered, but does not necessarily have to be adopted by the covered utilities.  In other words, PURPA does not require any change in rates, rate design, utility policies, or other matters.  Instead, it requires only a process to be followed for considering the standard, and issuing written findings.

How does this effect SEMC?

Sawnee Electric Membership Corporation (“Sawnee”) is a covered electric utility because it had retail sales greater than the specified threshold of 500 million kilowatt-hours two years before the specified calendar year (2007).  Sawnee is considered to be a non-regulated utility and, therefore, must conduct its own proceedings to consider the  new PURPA standard that is currently applicable to Sawnee EMC.

How to use this Web Site.

This Web site is designed to provide information about the new PURPA standard, as well as Sawnee’s process for considering and making its determination whether or not to implement this standard for its distribution system. We invite you to utilize this Web site to learn more about this process.