1. Federal Energy Regulation and Alternative Energy Introduction: The Law of Unintended Consequences By: C. Baird Brown Ballard Spahr Andrews & Ingersoll, LLP

2. The Law of Unintended Consequences PURPA was enacted in 1978 as environmental legislation (Public Utility Regulatory Policies Act) –Renewable technologies –Co-generation –On-site generation The independent power industry was born –Large gas and waste-coal fired co-generation facilities –Manufactured steam hosts Power purchasing evolved –PURPA required short-term avoided cost purchase –Long terms were traded for fixed pricing –Standard offer contracts

3. The Law of Unintended Consequences Utilities fought back –RFPs (requests for proposals) –Wheeling restrictions –Interconnection difficulties FERC moved to open access to the grid (Federal Energy Regulatory Commission) –OASIS and OATT (Open Access Same-time Information System and Open Access Transmission Tariff) –Separation of generation and transmission functions –Independent System Operators (ISOs) –ISO spot market dispatch What has become of renewables and distributed generation?