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The New PURPA Standard
Overview – What Areas will be Considered?
The Energy Independence and Security Act of 2007 (EISA)
amended PURPA by adding five (5) additional “standards” for
consideration by covered electric utilities. One (1) of
these standards is being considered in the proceedings at
this time. Shown below is the area that is to be evaluated
by covered utilities, as well as a brief description of what
is to be considered.
Here is the PURPA Standard.
The PURPA standard to be considered by covered utilities, as
well as what the EISA states must be considered when
evaluating the standard is outlined below. The text that
follows the standard is from the EISA.
1.
Smart Grid Investment (26 U.S.C. § 2621(d)(16)) Standard:
(A) IN GENERAL. - Each state shall consider
requiring that, prior to undertaking investments in
nonadvanced grid technologies, an electric utility of the
State demonstrate to the State that the electric utility
considered an investment in a qualified smart grid system
based on appropriate factors, including - (I) total costs,
(II) cost-effectiveness, (III) improved reliability, (IV)
security, (V) system performance, and (VI) societal benefit.
(B) RATE RECOVERY. - Each State shall
consider authorizing each electric utility of the State to
recover from ratepayers any capital, operating expenditures,
or other costs of the electric utility relating to the
deployment of a qualified smart grid system, including a
reasonable rate of return on the capital expenditures of the
electric utility for the deployment of the qualified smart
grid system. (C) OBSOLETE EQUIPMENT. - Each State
shall consider authorizing any electric utility or other
party of the State to deploy a qualified smart grid system
to recover in a timely manner the remaining book-value costs
of any equipment rendered obsolete by the deployment of the
qualified smart grid system, based on the remaining
depreciable life of the obsolete equipment.
Things To Keep In Mind.
It is important to note that, even though the standard is
written as if it is mandatory, PURPA does not require that
the standard be implemented. Rather, it is Sawnee’s
responsibility “to consider” the standard and determine,
based on evidence presented during the hearing process,
whether the implementation of the standard is appropriate
for its distribution system.
Got Questions?
Questions about this standard should be directed to Sawnee’s
PURPA Officer (see
Contact
Us).
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