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Category — Public Utility Regulatory Policies Act (PURPA)

PURPA: Another Subsidy for Intermittent Energies

“PURPA has been the most effective single measure in promoting renewable energy.”

-Union of Concerned Scientists

What if Congress passed a law that forced you to buy intermittent energy for the same price as reliable energy? What if, in an attempt to promote “alternative” energy sources such as wind power, Congress passed a law that enabled wind to crowd out reliable resources? Congress actually passed that law in 1978, the Public Utility Regulatory Policies Act (PURPA). Its role has changed and its scope has narrowed, but “PURPA is still alive and kicking.

Background

President Jimmy Carter, working from the viewpoint that the federal government had to intervene in markets to reduce demand and increase supply, formulated PURPA as part of a five-part National Energy Plan.

Oil and gas were seen as wasting resources relative to plentiful coal, so public policy needed to transfer demand from the former to the latter. (This was before the global warming issue took hold.) Advised by peak-oil (and peak-gas) proponent  James Schlesinger, the first secretary of the Department of Energy, Carter introduced a new energy plan for America. In a cozy fireside chat on national TV, Carter emphasized sacrifice, energy efficiency, and 55-degree thermostats as demand-side strategies to construct a new energy balance.

Other parts of the National Energy Plan included the Energy Tax Act (which introduced the gas-guzzler levy for vehicles), the National Energy Conservation Policy Act, the Power Plant and Industrial Fuel Use Act (repealed in 1987), and the Natural Gas Policy Act. These laws were aimed at reducing consumption of both natural gas and Arab oil.

The repealed Fuel Use Act essentially mandated that coal plants be built in place of natural gas-fired power plants (for nine years it was against the law to build a natural gas-fired power plant, although exemptions were granted). Given the recent surge in production of natural gas from shale formations in the U.S. and elsewhere, the idea of conserving natural gas seems absurd. It also runs contrary to PURPA’s secondary goal to promote fuel diversity.

PURPA can be seen as yet another element of conservation by decree, or conservationism, based on the view that resources are fixed in both the physical sense and the economic sense.  It was an integral part of Carter’s and Congress’ technocratic solution to the “fixity” problem as they saw it. [Read more →]

January 22, 2013   5 Comments