[Congressional Record Volume 149, Number 46 (Friday, March 21, 2003)]
[Senate]
[Pages S4287-S4288]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAHAM of Florida:
  S. 688. A bill to provide that no electric utility shall be required 
to enter into a new contract or obligation to purchase or to sell 
electricity or capacity under section 210 of the Public Utility 
Regulatory Policies Act of 1978; to the Committee on Energy and Natural 
Resources.
  Mr. GRAHAM. Mr. President, I rise today to introduce this bill that 
will end the practice of forcing electric utilities to purchase 
unneeded electricity at above market rates--a practice that ultimately 
costs consumers more.
  This outdated practice began after the 1973-74 oil embargo. In the 
embargo's aftermath, we understood a far reaching assessment of our 
energy policies and enacted numerous laws to address the issues facing 
this country at that time. The Public Utility Regulatory Policies Act 
of 1978, PURPA, was one of several energy bills that resulted from 
those efforts.
  In 1978, the electric utility industry in this country was based on 
monopolies and almost totally reliant on antiquated technologies. It 
was also highly territorial, having only limited ability

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to move electricity from one part of the country to another.
  PURPA was intended to address these issues. It was designed to 
alleviate real and potential shortages in electricity and encourage the 
use of alternative fuels to generate electricity. To do this, it 
established a new class of electricity generators. The goal was for 
these new generators to rapidly implement new generating technologies 
that the utilities had been slow to adopt and to expand the amount of 
electricity generated with alternative fuels.
  To ensure that investors would build these new facilities, PURPA 
essentially guaranteed them a profit. It required the conventional 
electric utilities to purchase all of the electricity the new 
generators wanted to sell. Prices were essentially fixed--requiring 
traditional utilities to pay for the electricity based on the costs 
they ``avoided'' by not having to build additional capacity themselves.
  And PURPA worked. It led to the development of plants converting 
waste to energy and to construction of smaller, more efficient 
generating facilities.
  But much has changed since 1978.
  Today there are competitive wholesale markets throughout the country, 
giving generation project developers many opportunities to see their 
output. The Energy Policy Act of 1992 and a variety of Federal Energy 
Regulatory Commission directives now ensure that generators have access 
to transmission lines, so that power can reach those markets. And we 
now have additional capacity coming from a variety of non-utilities 
using small-scale facilities and newer, more efficient technologies 
which allow them to be price competitive.
  There have also been changes in the PURPA generators. One of PURPA's 
goals was to spur the use of alternative or renewable fuels, but 80 
percent of the electricity currently generated by PURPA facilities is 
produced by burning natural gas, oil and coal. And the ``equitable'' 
prices imposed on electric utilities purchasing PURPA power are 
substantially higher than market rates, increasing the cost to 
consumers by roughly $8 billion annually. Exactly the opposite of what 
was intended.
  The bill I offer today would rescind any requirement for electricity 
utilities to enter into new agreements to purchase electricity from 
PURPA facilities. It would not prevent utilities from buying PURPA 
power that is offered at competitive rates. And it would not affect 
existing PURPA agreements. Those agreements would remain in effect 
until they expire, allowing those PURPA facilities to continue selling 
their electricity to the utilities at the prices specified in the 
agreements. This approach would ensure that the investment in PURPA 
facilities can be recouped in accordance with the parties' 
expectations, but will protect consumers from new PURPA contracts--
contracts which force them to pay above market prices for electricity.
  This bill would also ensure that the electric utilities that are 
required to purchase PURPA electricity, possibly for decades to come 
under existing contracts, have the flexibility to recover those costs.
  I urge my colleagues to support this legislation, which is fiscally 
sound, and is an example of good government because it eliminates 
outdated and counterproductive legislation.
                                 ______