[Congressional Record Volume 145, Number 41 (Tuesday, March 16, 1999)]
[House]
[Page H1331]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              INTRODUCTION OF THE RATEPAYER PROTECTION ACT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Florida, Mr. Stearns, is recognized for 5 minutes.
  Mr. STEARNS. Mr. Speaker, today I rise to introduce legislation with 
strong bipartisan support that will not only save American consumers 
billions of dollars. It will also remove a significant federal barrier 
to a more competitive electric power industry.
  More than 20 years ago, the Public Utility Regulatory Policies Act 
(PURPA) was enacted as one of the original components of the Carter 
Energy Plan. Convinced that we were running out of natural gas and that 
the price of oil would soar to $100 per barrel or even more by the year 
2000, Congress passed PURPA to encourage conservation and promote the 
use of renewable fuels to generate electricity. It did this by 
establishing a special class of power generators known as qualifying 
facilities (``QF's'') and it required utilities to buy all the 
electricity that these facilities wished to sell at a price determined 
generally by federal regulators and specifically by state regulators.
  Congress sought, in drafting PURPA, to ensure that customers would 
pay no more for PURPA power than they would have to pay for other 
power. It did this by providing in PURPA that the maximum price for 
electricity from QF's would be the cost that the purchase utility would 
have incurred if it had generated the electricity itself or had 
purchased it from a source other than the QF. Unfortunately, this has 
not proven to be the case because government projections of utility 
avoided costs have been seriously in error. One recent study estimates 
that PURPA is costing electricity consumers nearly $8 billion a year in 
excess power costs. Since over 60 percent of PURPA contracts will not 
expire until after the year 2010, consumers will continue to pay these 
excess costs well into the future.
  PURPA also stands in the way of a more competitive electric industry. 
By granting special status to some electricity generators, but not 
others, PURPA encourages the creation of uneconomic projects just to 
qualify for PURPA benefits. Moreover, PURPA was premised on utilities 
continuing to be the exclusive suppliers of electricity to all 
consumers within their franchise territories. In many states today, 
customers have the ability to choose their own electric supplier. 
Requiring utilities to purchase new PURPA power when they may no longer 
have retail customers to whom they can resell power makes no sense.
  With 20 years of experience behind us, it is clear that PURPA has 
outlived its usefulness. My legislation would do three things to reform 
PURPA: (1) It would prospectively repeal PURPA's mandatory purchase 
obligation on the date of enactment, so that there would no longer be 
any new obligations to purchase this power; (2) it would respect the 
sanctity of existing PURPA contracts; and (3) it would ensure that 
purchasing utilities would continue to be permitted to recover the 
costs of existing PURPA contracts as long as these contracts are in 
effect.
  As I said upon introduction of virtually identical legislation during 
the last two Congresses, my only interest in introducing this bill lies 
in achieving the most efficient and most cost-effective means of 
electric generation for America's consumers. While it would 
prospectively repeal PURPA and would ensure that no new PURPA contracts 
would be required, it recognizes the legitimate current expectations of 
QF developers and utility purchasers. I believe that it represents a 
broad based consensus on this important issue and I would urge that 
this measure be included in whatever electric industry legislation 
might be considered by this Congress.

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