Public Utility Regulatory Policies Act
The Public Utility Regulatory Policies Act (PURPA) was enacted in 1978 to encourage energy conservation and the development of renewable energy sources. It aimed to reduce dependence on fossil fuels by promoting the use of alternative energy and ensuring fair rates for consumers. PURPA established guidelines for states to follow in regulating electric utilities and required utilities to purchase power from qualifying facilities.
Under PURPA, small power producers and cogenerators can sell electricity to utilities at rates that reflect the cost of generating that power. This legislation has played a significant role in increasing the use of renewable energy sources, such as solar and wind, in the United States.