Endnotes

(2)For the purposes of this article, "renewable" energy refers to wind, biomass, waste-to-energy, photovoltaic, and solar thermal-electric technologies. Hydropower is considered a mature, conventional energy technology and is not covered in this article.

(3)The Energy Information Administration's Annual Energy Outlook 1995, DOE/EIA-0383(95) (Washington, DC, January 1995), estimated 1993 nonhydropower renewable electricity generation at 79 billion kilowatthours, comprising about 2.5 percent of the Nation's electricity supply.

(4)Nonmarket benefits are the desirable byproducts of economic activity that accrue to parties not directly involved in market agreements. These benefits are typically diffuse and are not bought and sold in a market, yet society still values them. In the case of renewable energy production, nonmarket benefits include reduced environmental damages relative to fossil fuel energy production, and reduced supply risk resulting from a more diverse national fuel mix.

(5)M. Silverman and S. Worthman, "The Future of Renewable Energy Industries," Electricity Journal (March 1995).

(6)A cogenerator is a generating facility that produces both electricity and usable thermal energy (such as heat or steam) for industrial, commercial, heating, or cooling purposes.

(7)The term "utility" is used generally throughout this article specifically to connote "electric utility."

(8)The rules that implement PURPA stipulate that a small power facility can achieve qualifying status provided that its rated capacity does not exceed 80 megawatts and no more than 50 percent of the plant is owned by a utility. Such a facility is considered to be a renewable QF if 75 percent or more of its fuel is derived from renewable sources. See S. Williams and B.G. Bateman, Power Plays: Profiles of America's Independent Renewable Electricity Developers, 1995 Edition (Investor Responsibility Center, June 1995).

(9)Avoided cost is defined in PURPA as the ". . . incremental cost of alternative energy . . . the cost to the electric utility of the electric energy which, but for the purchase from such cogenerator or small power producers, such utility would generate or purchase from another source."

(10)J.R. Bloom and J.M. Karp, "The Folly of PURPA Repeal," Public Utilities Fortnightly (July 1, 1995).

(11)At least nine utilities have formed a coalition to lobby Congress to eliminate the mandatory power purchase provisions of PURPA: Allegheny Power System, Central Maine Power, Consolidated Edison, General Public Utilities, New York State Electric & Gas, Niagara Mohawk, Northwest Utilities, Oklahoma Gas & Electric, and San Diego Gas & Electric.

(12)Barring a settlement between the CPUC and the California utilities, the FERC decision effectively cancels 1,500 megawatts of new QF capacity, almost 600 megawatts of which was to be provided by renewables. See National Renewable Energy Laboratory, Public Utility Regulatory Policies Act Briefing Book (April 10, 1995).

(13)"IPPs Stunned, State Miffed; Just Another Day on the PURPA Front," Inside F.E.R.C. (February 27, 1995).

(14)"NYSEG Request for Relief From QF Contracts Blown Out of the Water," Inside F.E.R.C. (April 17, 1995).

(15)See "Green Pricing" box..

(16)L.A. Burkhart, "Lawmakers Target PURPA for Repeal," Public Utilities Fortnightly (July 1, 1995).

(17)With some notable exceptions, the electric power industry historically has been composed primarily of investor-owned utilities. These utilities have been redominantly vertically integrated monopolies (combining electricity generation, transmission, and distribution) whose prices have been regulated by State and Federal government agencies. Restructuring the industry entails the introduction of competition into at least the generation phase of electricity production, with a corresponding reduction in regulatory control. Restructuring may also modify or eliminate other traditional aspects of investor-owned utilities, including their exclusive franchise to serve a given geographical area, assured rate of return on their investments, and vertical integration of the production process.

(18)According to the Energy Information Administration's Annual Energy Outlook 1995, DOE/EIA-0383(95) (Washington, DC, January 1995), demand-side management programs are expected to reduce the demand for electricity by 73 billion kilowatthours in 1997, relative to the level that would have been reached in their absence.

(19)Stranded investment refers to financial impairment ¯not necessarily plant closure in the physical sense¯when the price of plant output falls to a level at which the owner can no longer earn a sufficient return on investment.

(20)"Stranded What, Exactly?" Public Utilities Fortnightly December 1, 1994).

(21)"CEC Hearings to Explore Restructuring's Effect on Utility RD&D Spending Levels," The Solar Letter (January 20, 1995).