The Color PURPA

Excerpted from November 1997 issue

Purpa coerces utilities to buy expensive power
    Utilities would willingly buy power if it were cheaper than they can produce it.

    Allegheny's woes

    Lousy economics

"Because of a federal law called Public Utility Regulatory Policies Act (PURPA), Allegheny Power (West Penn Power), under certain circumstances, was required to purchase power from non-utility generators (PURPA Projects)," reads a little blurb sent to West Penn Power customers, and forwarded to us by Thomas Phipps. 

As far as I know, no utility has ever needed orders from The Federales to purchase power from non-utility generators. If a company --- small or large, of any political or religious persuasion --- produces electricity cheaper than the utility can, the utility will voluntarily buy that power. The requirement PURPA foisted off on utilities was to buy power from non-utility generators at high prices. No self-respecting company goes out of its way to purchase anything at high price just for the fun of it. Nor do utilities like making their customers pay for regulatory stupidity. 

Accordingly, Allegheny Power intends simply to buy the stupid expensive power generators just so they won't have to buy power from them, saving their customers about $500 million over the next 30 years, by spending $15 million up front. 

The buyout may be the best solution to a predicament brought on by governmental interference in the marketplace, but I am not particularly optimistic. There is always the chance that the Public Utility Commission will require Allegheny Power to produce power from those politically correct failures anyway, even if Allegheny succeeds in buying them. They'll pass the savings on to the customers. 

Excerpted from November, 1997 The Energy Advocate
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