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UTILITY INDUSTRY DENIES PUC OBSTRUCTS INDEPENDENT POWER

 UTILITY INDUSTRY DENIES PUC OBSTRUCTS INDEPENDENT POWER
 HARRISBURG, Pa., Dec. 16 /PRNewswire/ -- The president of the Pennsylvania Electric Association (PEA) today disputed the argument that regulation in Pennsylvania was obstructing the development of generating capacity by non-utility generators.
 William A. Badger offered this argument in testimony on behalf of Pennsylvania's investor-owned electric utility industry on House Bill No. 1844 in hearings being held by the House Consumer Affairs Committee. HB 1844 deals essentially with the payment of capacity charges by electric utilities to qualifying facilities (QFs) under the terms of the Public Utilities Regulatory Policy Act of 1978.
 HB 1844 states under its "Declaration of Policy" that "The current regulatory structure impedes the successful realization for consumers of the benefits of qualifying facility development."
 Badger pointed out that an analysis by the National Independent Energy Producers lists the commonwealth as ninth among the 50 states in the use of energy from qualifying facilities, with 3,659 megawatts in place or in stages of advanced development.
 "Under these circumstances, the PEA is unable to accept the suggestion that QF's development is being discouraged," Badger pointed out.
 The new PEA president, who noted in his testimony that he had served for 14 years on the Maryland Public Service Commission, told the House Committee that "my position would be essentially identical" in his capacity either as regulator or industry spokesman. "This legislative proposal," he emphasized, "although well intentioned, is not in the public's interest."
 Badger, pointing out to the committee that he was limiting his comments to general policy and legal questions raised by HB 1844, focused primarily on the bill's mandated definition of avoided energy and capacity costs; on mandated transmission access for QFs; and on the bill's requirement that utilities give priority to QFs in the sale or transfer of sulfur dioxide emission allowances authorized under Title IV of the Clean Air Act Amendments of 1990.
 The PEA president challenged the logic of requiring energy and capacity costs to be based on costs associated with a new coal-fired generating plant fueled by Pennsylvania coal when such charges may not represent the least-cost option available to utilities.
 "This language," Badger insisted "precludes the commission from examining a number of supply and demand-side options that may be available to provide for energy and capacity requirements."
 With respect to mandated transmission access, Badger said the PEA "is not aware of any circumstances where QFs have been denied transmission access. But," he added, "where a QF requires the construction of new transmission facilities or the enlargement of existing facilities, this has been, since the enactment of the federal statute (PURPA), and should continue to be the financial responsibility of the QFs."
 The PEA president also expressed the view that HB 1844's requirement that emission allowances be made available to QFs would be counter to the intent of the Clean Air Act Amendments and, in any case, was "neither necessary nor desirable."
 PEA is the trade association of the 11 investor-owned electric utilities in Pennsylvania. These utilities provide electric service to 95 percent of the state's population and supply about 98 percent of the electric energy consumed in the commonwealth.
 /delval/
 -0- 12/16/91
 /CONTACT: Harold R. Piety of Pennsylvania Electric Association, 717-257-5865/ CO: Pennsylvania Electric Association ST: Pennsylvania IN: UTI SU:


CD -- PG015 -- 2699 12/16/91 17:18 EST
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Publication:PR Newswire
Date:Dec 16, 1991
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