II 

115TH CONGRESS 

2D SESSION S. 2776 

To modernize the Public Utility Regulatory Policies Act of 1978, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 26, 2018 

Mr. BARRASSO (for himself and Mr. RISCH) introduced the following bill; 

which was read twice and referred to the Committee on Energy and Natural Resources 

A BILL 

To modernize the Public Utility Regulatory Policies Act of 

1978, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Updating Purchase 

5 Obligations to Deploy Affordable Resources to Energy 

6 Markets Under PURPA Act’’ or the ‘‘UPDATE PURPA 

7 Act’’. 

8 SEC. 2. AMENDMENTS TO PURPA. 

9 (a) COGENERATION AND SMALL POWER PRODUC10 TION RULES.—Section 210 of the Public Utility ReguVerDate Sep 11 2014 04:36 May 04, 2018 Jkt 079200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2776.IS S2776

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1 latory Policies Act of 1978 (16 U.S.C. 824a–3) is amend2 ed by striking subsection (a) and inserting the following: 

3 ‘‘(a) COGENERATION AND SMALL POWER PRODUC4 TION RULES.— 

5 ‘‘(1) IN GENERAL.—Not later than 1 year after 

6 the date of enactment of this Act, the Commission 

7 shall prescribe, and from time to time thereafter re8 vise, rules as the Commission determines necessary 

9 to encourage cogeneration and small power produc10 tion, and to encourage geothermal small power pro11 duction facilities of not more than 80 megawatts ca12 pacity. 

13 ‘‘(2) REQUIREMENTS.—The rules under para14 graph (1)— 

15 ‘‘(A) shall require electric utilities to 

16 offer— 

17 ‘‘(i) to sell electric energy to quali18 fying cogeneration facilities and qualifying 

19 small power production facilities; and 

20 ‘‘(ii) to purchase electric energy from 

21 facilities described in clause (i); 

22 ‘‘(B) shall be prescribed after consultation 

23 with representatives of Federal and State regu24 latory agencies having ratemaking authority for 

25 electric utilities, and after public notice and a 


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1 reasonable opportunity for interested persons 

2 (including Federal and State agencies) to sub3 mit oral as well as written data, views, and ar4 guments; 

5 ‘‘(C) shall include provisions requiring— 

6 ‘‘(i) minimum reliability of qualifying 

7 cogeneration facilities and qualifying small 

8 power production facilities (including reli9 ability of those facilities during emer10 gencies); 

11 ‘‘(ii) qualifying facilities to be respon12 sible for any costs needed to hold electric 

13 utility customers financially indifferent to 

14 the cost of enabling the firm delivery capa15 bility of the qualifying facility, including 

16 the cost of any facilities or network up17 grades associated with the interconnection 

18 service of the qualifying facility and trans19 mission service arrangements of the quali20 fying facility to deliver the power of the 

21 qualifying facility to electric utility cus22 tomers; 

23 ‘‘(iii) curtailment of qualifying facili24 ties as the Commission determines nec25 essary to ensure resource adequacy; and 


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1 ‘‘(iv) reliability of electric energy serv2 ice to be available to facilities described in 

3 clause (i) from electric utilities during 

4 emergencies; and 

5 ‘‘(D) may not authorize a qualifying cogen6 eration facility or qualifying small power pro7 duction facility to make any sale for purposes 

8 other than resale.’’. 

9 (b) RATES FOR PURCHASES BY ELECTRIC UTILI10 TIES.—Section 210(b) of the Public Utility Regulatory 

11 Policies Act of 1978 (16 U.S.C. 824a–3(b)) is amended— 

12 (1) in paragraph (1), by striking ‘‘, and’’ and 

13 inserting ‘‘; and’’; 

14 (2) by redesignating paragraphs (1) and (2) as 

15 subparagraphs (A) and (B), respectively, and indent16 ing the subparagraphs appropriately; 

17 (3) in the matter preceding subparagraph (A) 

18 (as so redesignated), by striking ‘‘The rules pre19 scribed under subsection (a) shall insure’’ and in20 serting the following: 

21 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

22 the rules prescribed under subsection (a) shall en23 sure’’; and 

24 (4) in the undesignated matter following sub25 paragraph (B) of paragraph (1) (as so redesigVerDate Sep 11 2014 04:36 May 04, 2018 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2776.IS S2776

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1 nated), by striking ‘‘No such rule’’ and inserting the 

2 following: 

3 ‘‘(2) LIMITATION.—No rule’’. 

4 (c) TERMINATION OF MANDATORY PURCHASE RE5 QUIREMENTS.—Section 210(m)(1) of the Public Utility 

6 Regulatory Policies Act of 1978 (16 U.S.C. 824a– 

7 3(m)(1)) is amended— 

8 (1) in subparagraph (B)(ii), by striking ‘‘or’’ at 

9 the end; and 

10 (2) by striking subparagraph (C) and inserting 

11 the following: 

12 ‘‘(C) any independently administered, vol13 untary, auction-based energy market (including 

14 an energy imbalance market), regardless of 

15 whether— 

16 ‘‘(i) an applicable electric utility par17 ticipating in such a market is a member of 

18 a regional transmission organization or an 

19 independent system operator; or 

20 ‘‘(ii) such a market has a governance 

21 structure and operation that is wholly sep22 arate and autonomous from a regional 

23 transmission organization or an inde24 pendent system operator; or 


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1 ‘‘(D) wholesale markets that are of com2 parable competitive quality to markets de3 scribed in subparagraph (A), (B), or (C).’’. 

4 (d) NONDISCRIMINATORY ACCESS.—Section 210(m) 

5 of the Public Utility Regulatory Policies Act of 1978 (16 

6 U.S.C. 824a–3(m)) is amended by adding at the end the 

7 following: 

8 ‘‘(8) NONDISCRIMINATORY ACCESS.—For pur9 poses of this subsection, a qualifying small power 

10 production facility with an installed generation ca11 pacity of 2.5 megawatts or greater is presumed to 

12 have nondiscriminatory access to the transmission 

13 and interconnection services and wholesale markets 

14 described in subparagraphs (A), (B), (C), and (D) of 

15 paragraph (1).’’. 

16 (e) RECOGNITION OF STATE OR LOCAL DETERMINA17 TIONS.—Section 210(m) of the Public Utility Regulatory 

18 Policies Act of 1978 (16 U.S.C. 824a–3(m)) (as amended 

19 by subsection (d)) is amended by adding at the end the 

20 following: 

21 ‘‘(9) STATE OR LOCAL DETERMINATION.—Ef22 fective beginning on the date of enactment of this 

23 paragraph, no electric utility shall be required to 

24 enter into a new contract or obligation to purchase 

25 electric energy from a qualifying small power proVerDate Sep 11 2014 04:36 May 04, 2018 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2776.IS S2776

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1 duction facility under this section, if the appropriate 

2 State regulatory agency or non-regulated electric 

3 utility determines that— 

4 ‘‘(A) the electric utility has no need to pur5 chase electric energy from the qualifying small 

6 power production facility in the quantities of7 fered within the timeframe proposed by the 

8 qualifying small power production facility to 

9 meet any obligation to serve a customer, con10 sistent with the needs for electric energy and 

11 the timeframe for those needs, as specified in 

12 the integrated resource plan of, or other appli13 cable demonstration of need by, the electric util14 ity; or 

15 ‘‘(B) the electric utility employs integrated 

16 resource planning or another applicable dem17 onstration of need and conducts a competitive 

18 resource procurement process for long-term en19 ergy resources that provides an opportunity for 

20 qualifying small power production facilities to 

21 supply electric energy to the electric utility in 

22 accordance with the integrated resource plan of, 

23 or other applicable demonstration of need by, 

24 the electric utility.’’. 


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1 (f) TECHNICAL CORRECTIONS.—Section 210 of the 

2 Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 

3 824a–3) is amended— 

4 (1) in subsection (h)(2)(A)(i), by striking ‘‘sub5 section (f) or’’ and inserting ‘‘subsection (f); or’’; 

6 and 

7 (2) in subsection (k), by adding a period at the 

8 end. 

9 SEC. 3. FEDERAL ENERGY REGULATORY COMMISSION REG10 ULATIONS. 

11 (a) REQUIRED AMENDMENTS RELATING TO LOCA12 TION OF SMALL POWER PRODUCTION FACILITIES.— 

13 (1) IN GENERAL.—Not later than 180 days 

14 after the date of enactment of this Act, the Federal 

15 Energy Regulatory Commission (referred to in this 

16 section as the ‘‘Commission’’) shall publish in the 

17 Federal Register a final rule to amend, in accord18 ance with this section, the regulations of the Com19 mission promulgated to carry out section 

20 3(17)(A)(ii) of the Federal Power Act (16 U.S.C. 

21 796(17)(A)(ii)) relating to the method used by the 

22 Commission to determine whether a facility is con23 sidered to be located at the same site as a facility 

24 for which qualification is sought for the purpose of 

25 calculating power production capacity. 


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1 (2) REBUTTABLE PRESUMPTION.— 

2 (A) IN GENERAL.—The amendments to 

3 regulations required by paragraph (1) shall es4 tablish a rebuttable presumption that— 

5 (i) facilities separated by a distance of 

6 1 mile or more shall not be considered to 

7 be located at the same site; and 

8 (ii) facilities separated by a distance 

9 of less than 1 mile shall be considered to 

10 be located at the same site. 

11 (B) REBUTTING PRESUMPTION.—The 

12 Commission shall allow any person (as defined 

13 in section 385.102 of title 18, Code of Federal 

14 Regulations (as in effect on the date of enact15 ment of this Act)) to rebut the presumption de16 scribed in subparagraph (A). 

17 (3) FACTORS FOR CONSIDERATION.— 

18 (A) IN GENERAL.—The amendments to 

19 regulations required by paragraph (1) shall re20 quire that, in determining whether a facility is 

21 considered to be located at the same site as a 

22 facility for which qualification is sought, the 

23 Commission shall take into consideration, to the 

24 maximum extent practicable, the following fac25 tors: 


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1 (i) The extent to which the owners or 

2 operators of the facilities are— 

3 (I) affiliates or associate compa4 nies (as those terms are defined in 

5 section 1262 of the Public Utility 

6 Holding Company Act of 2005 (42 

7 U.S.C. 16451)); or 

8 (II) under the control of the 

9 same person, subject to subparagraph 

10 (B). 

11 (ii) The extent to which the facilities 

12 have been treated as a single project for 

13 purposes of other regulatory filings or ap14 plications. 

15 (iii) Whether the facilities use the 

16 same energy resource. 

17 (iv) Whether the facilities— 

18 (I) have a common generator 

19 lead line; or 

20 (II) connect at the same or near21 by interconnection points or sub22 stations. 

23 (v) The extent to which the owners or 

24 operators of the facilities have a common 


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1 land lease or land rights with respect to 

2 land on which the facilities are located. 

3 (vi) The extent to which there is com4 mon financing with respect to the facilities. 

5 (vii) The extent to which the facilities 

6 are part of a common development plan or 

7 permitting effort, regardless of whether the 

8 interconnection of the facilities occurs at 

9 separate points. 

10 (B) CONTROL.—For purposes of subpara11 graph (A)(i)(II), the Commission shall consider 

12 the owner or operator of a facility to be under 

13 the control of a person if— 

14 (i) the person directly or indirectly 

15 owns, controls, or holds, with power to 

16 vote, 10 percent or more of the out17 standing voting securities of the owner or 

18 operator; or 

19 (ii) the Commission determines, after 

20 notice and opportunity for hearing, that 

21 the person exercises, directly or indirectly 

22 (alone or pursuant to an arrangement or 

23 understanding with one or more persons), 

24 a controlling influence over the manage25 ment of the owner or operator. 


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1 (b) PROHIBITION ON REQUIRING MINIMUM TERM

2 FOR CERTAIN CONTRACTS.—The Commission shall not 

3 issue any regulation, guidance, or order that requires a 

4 minimum contract term for any power purchase contract 

5 between— 

6 (1) an electric utility (as defined in section 3 of 

7 the Public Utility Regulatory Policies Act of 1978 

8 (16 U.S.C. 2602)); and 

9 (2) a qualifying small power production facility 

10 (as defined in section 3 of the Federal Power Act 

11 (16 U.S.C. 796)). 

12 (c) REQUIRED AMENDMENT RELATING TO LEGALLY

13 ENFORCEABLE OBLIGATIONS.—Not later than 180 days 

14 after the date of enactment of this Act, the Commission 

15 shall publish in the Federal Register a final rule to amend 

16 the regulation contained in section 292.304(d)(2) of title 

17 18, Code of Federal Regulations (as in effect on the date 

18 of enactment of this Act), to provide that a legally enforce19 able obligation for the delivery of electric energy or capac20 ity from a qualifying small power production facility to 

21 an electric utility shall not require any electric utility to 

22 purchase electric energy or capacity from a qualifying 

23 small power production facility at a rate that exceeds the 

24 incremental cost to the electric utility of alternative elecVerDate Sep 11 2014 04:36 May 04, 2018 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2776.IS S2776

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1 tric energy or capacity, as calculated at the time of deliv2 ery of the electric energy or capacity. 

Æ 


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