The Public Utility Regulatory Policies Act (or PURPA)
The Public Utility Regulatory Policies Act (or PURPA) was a law passed in 1978 by the United States Congress as part of the National Energy Act . It was meant to promote greater use of renewable energy. This law created a market for non-utility electric power producers forcing electric utilities to buy power from these producers at the "avoided cost" rate, which was the cost the electric utility would incur were it to generate or purchase from another source. Generally, this is considered to be the fuel costs incurred in the operation of a traditional power plant. Although a Federal law, the implementation was left to the States and a variety of regulatory regimes developed, although in many states virtually nothing was done. The biggest result has been the prevalence of cogeneration plants, which produce electric power and steam. They are encouraged by the law on the theory that they harness the thermal energy (in the form of usable steam) that would otherwise be wasted...