Public Utilities Regulatory Policy Act of 1978 (PURPA)

The Public Utilities Regulatory Policy Act of 1978 (PURPA) was enacted as part of the National Energy Act of 1978, during a time of unprecedented energy supply instability in the United States. The law requires utilities to purchase energy from non-utility generators or small renewable energy producers that can produce electricity for less than what it would have cost for the utility to generate the power, or the "avoided cost." Although once considered a key incentive for renewable energy, PURPA is less helpful for renewables today due to lower fossil energy prices.

Read background information on PURPA on the Union of Concerned Scientists web site.