Title: UPDATE PURPA Act
Policy area: Energy

Summary:
Updating Purchase Obligations to Deploy Affordable Resources to Energy Markets Under PURPA Act or the UPDATE PURPA Act
This bill amends the Public Utility Regulatory Policies Act of 1978 to modify the mandatory purchase and sale requirements for electric utility companies.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2776 Introduced in Senate (IS)]

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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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Updating Purchase Obligations to 
Deploy Affordable Resources to Energy Markets Under PURPA Act'' or the 
``UPDATE PURPA Act''.

SEC. 2. AMENDMENTS TO PURPA.

    (a) Cogeneration and Small Power Production Rules.--Section 210 of 
the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) 
is amended by striking subsection (a) and inserting the following:
    ``(a) Cogeneration and Small Power Production Rules.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall prescribe, and from 
        time to time thereafter revise, rules as the Commission 
        determines necessary to encourage cogeneration and small power 
        production, and to encourage geothermal small power production 
        facilities of not more than 80 megawatts capacity.
            ``(2) Requirements.--The rules under paragraph (1)--
                    ``(A) shall require electric utilities to offer--
                            ``(i) to sell electric energy to qualifying 
                        cogeneration facilities and qualifying small 
                        power production facilities; and
                            ``(ii) to purchase electric energy from 
                        facilities described in clause (i);
                    ``(B) shall be prescribed after consultation with 
                representatives of Federal and State regulatory 
                agencies having ratemaking authority for electric 
                utilities, and after public notice and a reasonable 
                opportunity for interested persons (including Federal 
                and State agencies) to submit oral as well as written 
                data, views, and arguments;
                    ``(C) shall include provisions requiring--
                            ``(i) minimum reliability of qualifying 
                        cogeneration facilities and qualifying small 
                        power production facilities (including 
                        reliability of those facilities during 
                        emergencies);
                            ``(ii) qualifying facilities to be 
                        responsible for any costs needed to hold 
                        electric utility customers financially 
                        indifferent to the cost of enabling the firm 
                        delivery capability of the qualifying facility, 
                        including the cost of any facilities or network 
                        upgrades associated with the interconnection 
                        service of the qualifying facility and 
                        transmission service arrangements of the 
                        qualifying facility to deliver the power of the 
                        qualifying facility to electric utility 
                        customers;
                            ``(iii) curtailment of qualifying 
                        facilities as the Commission determines 
                        necessary to ensure resource adequacy; and
                            ``(iv) reliability of electric energy 
                        service to be available to facilities described 
                        in clause (i) from electric utilities during 
                        emergencies; and
                    ``(D) may not authorize a qualifying cogeneration 
                facility or qualifying small power production facility 
                to make any sale for purposes other than resale.''.
    (b) Rates for Purchases by Electric Utilities.--Section 210(b) of 
the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-
3(b)) is amended--
            (1) in paragraph (1), by striking ``, and'' and inserting 
        ``; and'';
            (2) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively, and indenting the 
        subparagraphs appropriately;
            (3) in the matter preceding subparagraph (A) (as so 
        redesignated), by striking ``The rules prescribed under 
        subsection (a) shall insure'' and inserting the following:
            ``(1) In general.--Subject to paragraph (2), the rules 
        prescribed under subsection (a) shall ensure''; and
            (4) in the undesignated matter following subparagraph (B) 
        of paragraph (1) (as so redesignated), by striking ``No such 
        rule'' and inserting the following:
            ``(2) Limitation.--No rule''.
    (c) Termination of Mandatory Purchase Requirements.--Section 
210(m)(1) of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 824a-3(m)(1)) is amended--
            (1) in subparagraph (B)(ii), by striking ``or'' at the end; 
        and
            (2) by striking subparagraph (C) and inserting the 
        following:
                    ``(C) any independently administered, voluntary, 
                auction-based energy market (including an energy 
                imbalance market), regardless of whether--
                            ``(i) an applicable electric utility 
                        participating in such a market is a member of a 
                        regional transmission organization or an 
                        independent system operator; or
                            ``(ii) such a market has a governance 
                        structure and operation that is wholly separate 
                        and autonomous from a regional transmission 
                        organization or an independent system operator; 
                        or
                    ``(D) wholesale markets that are of comparable 
                competitive quality to markets described in 
                subparagraph (A), (B), or (C).''.
    (d) Nondiscriminatory Access.--Section 210(m) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 824a-3(m)) is amended by 
adding at the end the following:
            ``(8) Nondiscriminatory access.--For purposes of this 
        subsection, a qualifying small power production facility with 
        an installed generation capacity of 2.5 megawatts or greater is 
        presumed to have nondiscriminatory access to the transmission 
        and interconnection services and wholesale markets described in 
        subparagraphs (A), (B), (C), and (D) of paragraph (1).''.
    (e) Recognition of State or Local Determinations.--Section 210(m) 
of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-
3(m)) (as amended by subsection (d)) is amended by adding at the end 
the following:
            ``(9) State or local determination.--Effective beginning on 
        the date of enactment of this paragraph, no electric utility 
        shall be required to enter into a new contract or obligation to 
        purchase electric energy from a qualifying small power 
        production facility under this section, if the appropriate 
        State regulatory agency or non-regulated electric utility 
        determines that--
                    ``(A) the electric utility has no need to purchase 
                electric energy from the qualifying small power 
                production facility in the quantities offered within 
                the timeframe proposed by the qualifying small power 
                production facility to meet any obligation to serve a 
                customer, consistent with the needs for electric energy 
                and the timeframe for those needs, as specified in the 
                integrated resource plan of, or other applicable 
                demonstration of need by, the electric utility; or
                    ``(B) the electric utility employs integrated 
                resource planning or another applicable demonstration 
                of need and conducts a competitive resource procurement 
                process for long-term energy resources that provides an 
                opportunity for qualifying small power production 
                facilities to supply electric energy to the electric 
                utility in accordance with the integrated resource plan 
                of, or other applicable demonstration of need by, the 
                electric utility.''.
    (f) Technical Corrections.--Section 210 of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) is amended--
            (1) in subsection (h)(2)(A)(i), by striking ``subsection 
        (f) or'' and inserting ``subsection (f); or''; and
            (2) in subsection (k), by adding a period at the end.

SEC. 3. FEDERAL ENERGY REGULATORY COMMISSION REGULATIONS.

    (a) Required Amendments Relating to Location of Small Power 
Production Facilities.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Federal Energy Regulatory Commission 
        (referred to in this section as the ``Commission'') shall 
        publish in the Federal Register a final rule to amend, in 
        accordance with this section, the regulations of the Commission 
        promulgated to carry out section 3(17)(A)(ii) of the Federal 
        Power Act (16 U.S.C. 796(17)(A)(ii)) relating to the method 
        used by the Commission to determine whether a facility is 
        considered to be located at the same site as a facility for 
        which qualification is sought for the purpose of calculating 
        power production capacity.
            (2) Rebuttable presumption.--
                    (A) In general.--The amendments to regulations 
                required by paragraph (1) shall establish a rebuttable 
                presumption that--
                            (i) facilities separated by a distance of 1 
                        mile or more shall not be considered to be 
                        located at the same site; and
                            (ii) facilities separated by a distance of 
                        less than 1 mile shall be considered to be 
                        located at the same site.
                    (B) Rebutting presumption.--The Commission shall 
                allow any person (as defined in section 385.102 of 
                title 18, Code of Federal Regulations (as in effect on 
                the date of enactment of this Act)) to rebut the 
                presumption described in subparagraph (A).
            (3) Factors for consideration.--
                    (A) In general.--The amendments to regulations 
                required by paragraph (1) shall require that, in 
                determining whether a facility is considered to be 
                located at the same site as a facility for which 
                qualification is sought, the Commission shall take into 
                consideration, to the maximum extent practicable, the 
                following factors:
                            (i) The extent to which the owners or 
                        operators of the facilities are--
                                    (I) affiliates or associate 
                                companies (as those terms are defined 
                                in section 1262 of the Public Utility 
                                Holding Company Act of 2005 (42 U.S.C. 
                                16451)); or
                                    (II) under the control of the same 
                                person, subject to subparagraph (B).
                            (ii) The extent to which the facilities 
                        have been treated as a single project for 
                        purposes of other regulatory filings or 
                        applications.
                            (iii) Whether the facilities use the same 
                        energy resource.
                            (iv) Whether the facilities--
                                    (I) have a common generator lead 
                                line; or
                                    (II) connect at the same or nearby 
                                interconnection points or substations.
                            (v) The extent to which the owners or 
                        operators of the facilities have a common land 
                        lease or land rights with respect to land on 
                        which the facilities are located.
                            (vi) The extent to which there is common 
                        financing with respect to the facilities.
                            (vii) The extent to which the facilities 
                        are part of a common development plan or 
                        permitting effort, regardless of whether the 
                        interconnection of the facilities occurs at 
                        separate points.
                    (B) Control.--For purposes of subparagraph 
                (A)(i)(II), the Commission shall consider the owner or 
                operator of a facility to be under the control of a 
                person if--
                            (i) the person directly or indirectly owns, 
                        controls, or holds, with power to vote, 10 
                        percent or more of the outstanding voting 
                        securities of the owner or operator; or
                            (ii) the Commission determines, after 
                        notice and opportunity for hearing, that the 
                        person exercises, directly or indirectly (alone 
                        or pursuant to an arrangement or understanding 
                        with one or more persons), a controlling 
                        influence over the management of the owner or 
                        operator.
    (b) Prohibition on Requiring Minimum Term for Certain Contracts.--
The Commission shall not issue any regulation, guidance, or order that 
requires a minimum contract term for any power purchase contract 
between--
            (1) an electric utility (as defined in section 3 of the 
        Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
        2602)); and
            (2) a qualifying small power production facility (as 
        defined in section 3 of the Federal Power Act (16 U.S.C. 796)).
    (c) Required Amendment Relating to Legally Enforceable 
Obligations.--Not later than 180 days after the date of enactment of 
this Act, the Commission shall publish in the Federal Register a final 
rule to amend the regulation contained in section 292.304(d)(2) of 
title 18, Code of Federal Regulations (as in effect on the date of 
enactment of this Act), to provide that a legally enforceable 
obligation for the delivery of electric energy or capacity from a 
qualifying small power production facility to an electric utility shall 
not require any electric utility to purchase electric energy or 
capacity from a qualifying small power production facility at a rate 
that exceeds the incremental cost to the electric utility of 
alternative electric energy or capacity, as calculated at the time of 
delivery of the electric energy or capacity.
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