The Public Utility Regulatory Policies Act (PURPA) was passed as part of the National Energy Act of 1978 and amended in the years since. PURPA was implemented to encourage, among other things: energy conservation, energy efficiency and domestic renewable energy. PURPA places several obligations on electric utilities, but the most well known is the obligation to purchase electric energy from interconnected qualifying facilities (QF), as defined under the act. Many details of PURPA were delegated to states for implementation and administration. For additional information on PURPA, visit ferc.gov and enter “PURPA’ into the search field.
Qualifying facilities
QFs are a special class of generating facility defined by law and categorized as either a cogeneration facility or small power production facility. Most often, QFs are smaller-scale, renewable resources like wind, solar and biomass.
A cogeneration facility is a generating facility that sequentially produces electricity and another form of useful thermal energy such as heat or steam that can be used for industrial, commercial, residential or institutional purposes.
A small power production facility is a generating facility whose primary energy source is renewable such as hydroelectric, wind, solar, biomass, waste or geothermal resources. Small power production facilities are limited to 80,000 kW in size.
Joint implementation plan
Great River Energy and its all-requirements member cooperatives received FERC approval to utilize a joint implementation plan that provides an integrated plan for complying with PURPA’s requirements. The goals of the plan are to comply with federal and state laws and regulations as well as aggregate power supply purchases from QFs.
Member cooperatives will continue to interconnect and meter QFs and to purchase power, on behalf of Great River Energy, directly from QFs that are smaller than 40 kW. The purchase rate for QFs that are smaller than 40 kW will continue to be established by each member cooperative.
Likewise, the purchase rate for QFs that are 40 kW or larger will continue to be established annually at Great River Energy’s avoided cost.
Members will also continue to sell electricity at retail to all interconnected QFs, regardless of size.Great River Energy will directly purchase the energy and capacity offered by new QFs that are 40 kW or larger and are interconnected to the member cooperatives’ distribution system or Great River Energy’s transmission facilities.
The 2005 Energy Policy Act provided the Federal Energy Regulatory Commission (FERC) with the authority to exempt, in certain instances, an electric utility from its must-purchase obligation from QFs that are larger than 20,000 kW. Great River Energy and its all-requirements members have requested and received such an exemption from FERC.
FERC Order No. 872, issued in July 2020, gave FERC the additional authority to exempt, in certain instances, an electric utility from being required to enter into new purchase agreements with small power production QFs that are larger than 5,000 kW. As of February 16, 2023, Great River Energy and its all-requirements members have requested and received such an exemption from FERC. This exemption only applies to small power production QFs and does not apply to cogeneration QFs. Great River Energy continues to be exempt from the obligation to purchase from cogeneration QFs larger than 20,000 kW.
PURPA qualifying facilities (QF) – under 40 kW
Minnesota State Statute 216B.164, subdivision 3 requires cooperatives to compensate PURPA QFs having less than 40-kilowatt (kW) capacity for net input into the utility system at the average retail utility energy rate. Please contact your local distribution cooperative for more information about applicable rates.
PURPA qualifying facilities (QF) – 40 kW or greater
Minnesota State Statute 216B.164, subdivision 4 requires cooperatives to purchase all energy and capacity made available by an interconnected PURPA QF having capacity of 40-kW or more and pay the PURPA QF the cooperative’s full avoided capacity and energy cost.
If you have questions regarding PURPA QF rates and purchase agreements, please email: distributedgeneration@grenergy.com
Please remember, your first call should be to your local distribution cooperative.
The following table represents Great River Energy’s current rates for full avoided capacity, energy and Renewable Energy Certificates (REC’s) costs as calculated in accordance with Minnesota Rules 7835. These rates are calculated annually.
Table footnotes:
- On-Peak hours are defined as weekdays from 10:00 to 20:00 CPT except for the following holidays: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
- Off-Peak hours are defined as all hours besides on-peak hours.
- Only available for QF’s that provide Firm Power as defined in Minnesota Rules 7835.0100.
- Only available for energy produced by a QF using an approved renewable technology and for which Great River Energy receives all Renewable Energy Certificates (REC), tradeable emission credits, green tags and other associated renewable and environmental attributes.