[Congressional Record Volume 141, Number 167 (Thursday, October 26, 1995)]
[Extensions of Remarks]
[Page E2047]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              PURPA REPEAL

                                 ______


                          HON. EDOLPHUS TOWNS

                              of new york

                    in the house of representatives

                       Thursday, October 26, 1995

  Mr. TOWNS. Mr. Speaker, today, I am pleased to join my friend and 
colleague from Florida, Mr. Stearns, in the introduction of important 
and long-overdue legislation to begin to reform the way in which 
electric utilities in this country are regulated. This bill would 
repeal section 210 of the Public Utility Regulatory Policies Act of 
1978 or PURPA.
  Section 210 of PURPA is unusual legislation. It requires utilities to 
buy power from certain privileged nonutility generators of electricity 
at a price that is set by the State, with guidance from the Federal 
Energy Regulatory Commission. This price is supposed to be no higher 
than a utility avoided cost, the cost which the utility would have 
payed to generate the electricity itself or to buy the power from other 
sources. Unfortunately, in most cases, this avoided-cost calculation 
has turned out to be higher than the market price for electricity and 
consumers are paying billions of dollars for high-cost power which is 
not needed. In New York alone, it has been estimated that PURPA has 
resulted in billions of excess power costs. This harms business, costs 
jobs, and penalizes residential users who must pay electric bills which 
are higher than they need be. While this measure will not affect 
existing above-market contracts, it will eliminate the possibility that 
the problem will be made worse in the future.
  The drafters of PURPA never anticipated the changes which are now 
sweeping through the electric industry. In large part, these changes 
were initiated by the passage of the Energy Policy Act of 1992, which 
opened up the Nation's transmission system and greatly expanded the 
firms who could compete to supply power. PURPA today stands pat as an 
outdated moment to a different era in our national energy policy. 
Simply put, PURPA's time has come and gone.
  The restructuring of the electric industry is accelerating both at 
the State and Federal levels. Mr. Schaefer, chairman of the Energy and 
Power Subcommittee, has indicated that he intends to hold several 
hearings on this important issue and I applaud him for his foresight. 
Further change in the regulation of utilities, including the 
introduction of greater competition, is inevitable.
  Repeal of section 210 of PURPA is an important step in this process 
of allowing competition to play a greater role in the electric 
industry. Repeal will also lower future electricity prices to our 
constituents.
  I urge speedy consideration of this legislation.

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