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Proposed Calpine Power Plant
aka Metcalf Energy Center

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Saturday, August 14th, 1999 @ 12:29 AM
Subj: Qualifying Facilities (QFs) = High Electricity Prices?
From: [email protected]

Interesting quote from http://www.purpareform.org/legacy.htm showing how qualifying facilities (QFs) created by the Public Utility Regulatory Policies Act of 1978 (PURPA) may be responsible for our high electricity costs:

"Congress sought, in drafting PURPA, to ensure that consumers would pay no more for PURPA power than they would have to pay for other power. Unfortunately, that has not proven to be the case. A study by the Utility Data Institute ("UDI"), a division of The McGraw-Hill Companies, Inc., found that consumers are paying nearly $8 billion a year more for federally mandated PURPA power than they would have to pay if utilities were able to purchase the same amount of power at existing average wholesale power costs. The study found that while the average utility cost of power is 2.85 cents/kwh, power purchased from federally mandated PURPA generators averaged 6.46 cents/kwh, or over twice as much. This difference, $7.8 billion annually, represents the amount of the federally conferred subsidy going from consumers' pockets directly into the pockets of PURPA developers. Another key finding of the UDI study is that purchased power costs cause more of the regional disparity in the price of electricity than do the other costs of electricity production. Thus, it is PURPA that has driven up the price of electricity in many regions of the country, especially California and the Northeast."

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