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Utilities and Cogeneration: Some Regulatory Problems

Abstract:
Cogeneration-a technology which uses waste heat for electricity generation-has been known for over one hundred years. To be economically viable, it requires that excess electricity be fed into a grid for distribution. In the U.S., utilities have been legally obliged by PURPA legislation (Public Utility Regulation Practices Act) to put their grids at the disposal of electricity suppliers in industry. Nonetheless, cogeneration has recently accounted for no more than 14 percent of electricity used in industry (Anandalingam, 1985). Thus, PURPA legislation may not be enough to open markets to cogenerators.

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Energy Specializations: Electricity – Generation Technologies; Electricity – Policy and Regulation

JEL Codes: Q48: Energy: Government Policy, Q40: Energy: General, D24: Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity, L94: Electric Utilities, L95: Gas Utilities; Pipelines; Water Utilities

Keywords: Electric utilities, Cogeneration, Rate of return regulation, PURPA

DOI: 10.5547/ISSN0195-6574-EJ-Vol8-No4-1

Published in Volume 8, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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