The Public Utility Regulatory Policies Act of 1978 (PURPA) and the Public Utility Holding Company Act of 1935 (PUHCA) are being considered for repeal by Congress. Some groups feel that these statutes are actually hindering the industry's transition from a regulated monopoly. The arguments both for and against their repeal follow:
THE REPEAL OF PURPA
Arguments For Repeal
"PURPA is anticompetitive because utilities are required to purchase from Qualiying Facilities (QFs)".
"EPACT's provisions for exempt wholesale generators render PURPA obsolete." "PURPA has resulted in high prices to consumers because QF contract terms were lengthy and were based on erroneous forecasts of high capital costs and increases in demand and the price of natural gas. " "PURPA's goals have already been achieved." "If natural gas will be the fuel of choice as predicted, the environment will not need PURPA's strict protection since natural gas is the least harmful fossil fuel." "Cogenerators and renewables have already gotten a foothold and do not need further promotion." "Immediate repeal is necessary; it will take too long if it is contained in comprehensive industry restructuring legislation."
Arguments Against Repeal
"There is no guarantee that a free market can sustain the goals of PURPA, especially in the use of cogeneration and renewables."
"Our Nation must be able to handle another energy crisis through fuel diversity." "Incentives must remain in place to conserve energy and to use more environmentally benign fuels." "QFs bring increased reliability and decrease the need for large costly plants." "At this point, utilities still have too much market power and PURPA levels the playing field for nonutilities." "Immediate repeal is a piecemeal approach--repeal should be included in comprehensive industry restructuring legislation."
THE REPEAL OF PUHCA
Arguments For Repeal
"PUHCA's provisions are antiquated."
"PUHCA is impeding the transition to competition." "Utilities need to be able to diversify in order to improve profits." "PUHCA has already achieved its goal by making holding companies manageable and regulated." "The Securities and Exchange Commission itself recommends a conditional repeal." "PUHCA prevents all companies from playing on a level field." "Various other regulations have since been instituted that prevent holding company abuse." "Immediate repeal is necessary; it will take too long if it is contained in comprehensive industry restructuring legislation."
Arguments Against Repeal
"PUHCA regulations can protect consumers until full retail competition is up and running."
"Ratepayers are still at the mercy of the regulated monopolies." "PUHCA guards against monopolies and anticompetitive behavior." "Utility monopolies are now taking actions (e.g., merging) to increase market dominance, and PUHCA can keep them in control." "Immediate repeal is a piecemeal approach; repeal should be contained in comprehensive industry restructuring legislation." "PUHCA guards against interaffiliate transaction abuse."