II 

116TH CONGRESS 

1ST SESSION S. 1760 

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

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 10, 2019 

Mr. BARRASSO (for himself, Mr. RISCH, Mr. CRAMER, and Mr. DAINES) 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 22:43 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1760.IS S1760

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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 22:43 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1760.IS S1760

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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.— 

9 ‘‘(A) IN GENERAL.—For purposes of this 

10 subsection, a qualifying small power production 

11 facility with an installed generation capacity of 

12 2.5 megawatts or greater is presumed to have 

13 nondiscriminatory access to the transmission 

14 and interconnection services and wholesale mar15 kets described in subparagraphs (A), (B), (C), 

16 and (D) of paragraph (1). 

17 ‘‘(B) EXCEPTION.—Subparagraph (A) 

18 shall not apply with respect to a qualifying 

19 small power production facility that, as of the 

20 date of enactment of this paragraph— 

21 ‘‘(i) produces both electric energy and 

22 useful thermal energy; and 

23 ‘‘(ii) on a million-British-thermal-unit 

24 basis, uses not less than 80 percent of the 

25 total annual aggregate net output of elecVerDate Sep 11 2014 22:43 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1760.IS S1760

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1 tric energy and useful thermal energy of 

2 the qualifying small power production facil3 ity for onsite industrial, commercial, or in4 stitutional purposes, rather than for sale.’’. 

5 (e) RECOGNITION OF STATE OR LOCAL DETERMINA6 TIONS.—Section 210(m) of the Public Utility Regulatory 

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

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

9 following: 

10 ‘‘(9) STATE OR LOCAL DETERMINATION.—Ef11 fective beginning on the date of enactment of this 

12 paragraph, no electric utility shall be required to 

13 enter into a new contract or obligation to purchase 

14 electric energy under this section from a qualifying 

15 small power production facility that is not a quali16 fying small power production facility described in 

17 paragraph (8)(B), if the appropriate State regu18 latory agency or non-regulated electric utility deter19 mines that— 

20 ‘‘(A) the electric utility has no need to pur21 chase electric energy from the qualifying small 

22 power production facility in the quantities of23 fered within the timeframe proposed by the 

24 qualifying small power production facility to 

25 meet any obligation to serve a customer, conVerDate Sep 11 2014 22:43 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1760.IS S1760

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1 sistent with the needs for electric energy and 

2 the timeframe for those needs, as specified in 

3 the integrated resource plan of, or other appli4 cable demonstration of need by, the electric util5 ity; or 

6 ‘‘(B) the electric utility employs integrated 

7 resource planning or another applicable dem8 onstration of need and conducts a competitive 

9 resource procurement process for long-term en10 ergy resources that provides an opportunity for 

11 qualifying small power production facilities to 

12 supply electric energy to the electric utility in 

13 accordance with the integrated resource plan of, 

14 or other applicable demonstration of need by, 

15 the electric utility.’’. 

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

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

18 824a–3) is amended— 

19 (1) in subsection (h)(2)(A)(i), by striking ‘‘sub20 section (f) or’’ and inserting ‘‘subsection (f); or’’; 

21 and 

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

23 end. 


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1 SEC. 3. FEDERAL ENERGY REGULATORY COMMISSION REG2 ULATIONS. 

3 (a) REQUIRED AMENDMENTS RELATING TO LOCA4 TION OF SMALL POWER PRODUCTION FACILITIES.— 

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

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

7 Energy Regulatory Commission (referred to in this 

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

9 Federal Register a final rule to amend, in accord10 ance with this section, the regulations of the Com11 mission promulgated to carry out section 

12 3(17)(A)(ii) of the Federal Power Act (16 U.S.C. 

13 796(17)(A)(ii)) relating to the method used by the 

14 Commission to determine whether a facility is con15 sidered to be located at the same site as a facility 

16 for which qualification is sought for the purpose of 

17 calculating power production capacity. 

18 (2) REBUTTABLE PRESUMPTION.— 

19 (A) IN GENERAL.—The amendments to 

20 regulations required by paragraph (1) shall es21 tablish a rebuttable presumption that— 

22 (i) facilities separated by a distance of 

23 1 mile or more shall not be considered to 

24 be located at the same site; and 


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1 (ii) facilities separated by a distance 

2 of less than 1 mile shall be considered to 

3 be located at the same site. 

4 (B) REBUTTING PRESUMPTION.—The 

5 Commission shall allow any person (as defined 

6 in section 385.102 of title 18, Code of Federal 

7 Regulations (as in effect on the date of enact8 ment of this Act)) to rebut the presumption de9 scribed in subparagraph (A). 

10 (3) FACTORS FOR CONSIDERATION.— 

11 (A) IN GENERAL.—The amendments to 

12 regulations required by paragraph (1) shall re13 quire that, in determining whether a facility is 

14 considered to be located at the same site as a 

15 facility for which qualification is sought, the 

16 Commission shall take into consideration, to the 

17 maximum extent practicable, the following fac18 tors: 

19 (i) The extent to which the owners or 

20 operators of the facilities are— 

21 (I) affiliates or associate compa22 nies (as those terms are defined in 

23 section 1262 of the Public Utility 

24 Holding Company Act of 2005 (42 

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


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1 (II) under the control of the 

2 same person, subject to subparagraph 

3 (B). 

4 (ii) The extent to which the facilities 

5 have been treated as a single project for 

6 purposes of other regulatory filings or ap7 plications. 

8 (iii) Whether the facilities use the 

9 same energy resource. 

10 (iv) Whether the facilities— 

11 (I) have a common generator 

12 lead line; or 

13 (II) connect at the same or near14 by interconnection points or sub15 stations. 

16 (v) The extent to which the owners or 

17 operators of the facilities have a common 

18 land lease or land rights with respect to 

19 land on which the facilities are located. 

20 (vi) The extent to which there is com21 mon financing with respect to the facilities. 

22 (vii) The extent to which the facilities 

23 are part of a common development plan or 

24 permitting effort, regardless of whether the 


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1 interconnection of the facilities occurs at 

2 separate points. 

3 (B) CONTROL.—For purposes of subpara4 graph (A)(i)(II), the Commission shall consider 

5 the owner or operator of a facility to be under 

6 the control of a person if— 

7 (i) the person directly or indirectly 

8 owns, controls, or holds, with power to 

9 vote, 10 percent or more of the out10 standing voting securities of the owner or 

11 operator; or 

12 (ii) the Commission determines, after 

13 notice and opportunity for hearing, that 

14 the person exercises, directly or indirectly 

15 (alone or pursuant to an arrangement or 

16 understanding with 1 or more persons), a 

17 controlling influence over the management 

18 of the owner or operator. 

19 (4) EXCEPTION.—Paragraphs (2) and (3) shall 

20 not apply with respect to a facility that, as of the 

21 date of enactment of this Act— 

22 (A) produces both electric energy and use23 ful thermal energy; and 

24 (B) on a million-British-thermal-unit basis, 

25 uses not less than 80 percent of the total anVerDate Sep 11 2014 22:43 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1760.IS S1760

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1 nual aggregate net output of electric energy and 

2 useful thermal energy of the facility for onsite 

3 industrial, commercial, or institutional pur4 poses, rather than for sale. 

5 (b) PROHIBITION ON REQUIRING MINIMUM TERM

6 FOR CERTAIN CONTRACTS.—The Commission shall not 

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

8 minimum contract term for any power purchase contract 

9 between— 

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

11 the Public Utility Regulatory Policies Act of 1978 

12 (16 U.S.C. 2602)); and 

13 (2) a qualifying small power production facility 

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

15 (16 U.S.C. 796)). 

16 (c) REQUIRED AMENDMENT RELATING TO LEGALLY

17 ENFORCEABLE OBLIGATIONS.—Not later than 180 days 

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

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

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

21 18, Code of Federal Regulations (as in effect on the date 

22 of enactment of this Act), to provide that a legally enforce23 able obligation for the delivery of electric energy or capac24 ity from a qualifying small power production facility to 

25 an electric utility shall not require any electric utility to 


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1 purchase electric energy or capacity from a qualifying 

2 small power production facility at a rate that exceeds the 

3 incremental cost to the electric utility of alternative elec4 tric energy or capacity, as calculated at the time of deliv5 ery of the electric energy or capacity. 

Æ 


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