Buffett's Berkshire Hathaway Energy pushing for PURPA reform

Dive Brief:

Warren Buffett's Berkshire Hathaway Energy is pressing Congress to consider altering the Public Utility Regulatory Policies Act (PURPA) and the way it ensures small generating facilities have access to efficient energy markets, SNL reports.
The proposal angered Maria Cantwell (D) who reportedly said at a Senate Energy and Natural Resources Committee hearing last week that the changes would allow the company to profit substantially while weakening reliability in the region.
The proposed changes would exempt utilities participating in a new western market from requirements they purchase energy from PURPA-designated qualifying facilities (QFs).

Dive Insight:

The Senate Energy and Natural Resources Committee last week held a hearing to consider almost two dozen bills which could be included in a comprehensive energy package. Several of the bills would make changes to PURPA, SNL points out, but one proposal brought frustration from Sen. Cantwell, who said lawmakers would not allow another Western energy crisis to take place.

The proposal, laid out in testimony given by by Berkshire Hathaway Energy Legislative and Regulatory Affairs Vice President Jonathan Weisgall, would allow utilities participating in California's new Energy Imbalance Market to avoid requirements they purchase power from small generation assets labeled qualified facilities under the law. Utiilities participating in regional markets are already exempted from purchasing from QFs, but those not in a competitive market are required to do so.

"The mandatory purchase obligation can cause operating inefficiencies and reliability issues
on the host utility systems," Weisgall said in prepared testimony. "PURPA contracts can cause operating inefficiencies and reliability issues for the host utility, which has no control over where the QFs are sited or integrated into its system."

"Many QFs are 'undispatchable' and might lead to over-generation conditions or inefficient use of
baseload units that are forced to cut back operations to accommodate unscheduled QF purchases," he said.

“I just see you making money coming and going on the repeal of the PURPA language," Cantwell repliaed in questioning Weisgall, according to SNL. "The Pacific Northwest is not going to support another cooked up scheme from California ISO about energy markets."

After years in relative obscurity, PURPA, signed by President Carter in 1978, is suddenly back on the table for reform as the Senate Energy and Natural Resources Committee prepares to take up broad energy legislation. Earlier this month, Sen. Angus King (I-ME) filed a bill that would make distributed energy resources qualifying facilities under PURPA if states refuse to unbundle their rates. Sen. Lisa Murkowski (R-AK), the chair of the committee, also introduced a more modest PURPA reform.

Weisgall said that in this case, exempting utilities participating in the EIM from PURPA requirements would expand acccess to renewables, but Cantwell expressed skepticism as PURPA is designed to help smaller renewable and cogeneration facilities compete.