Qualifying Cogeneration Facilities In a Post-energy Policy Act World: Challenges and Opportunities

ABSTRACT

Much has been written, of the doom-and-gloom variety, about the future of qualifying cogeneration facilities after passage of the Energy Policy Act of 2005 (EPAct) in August, 2005. It is true that cogenerators will face a number of challenges. Yet, there remain signifi cant—and unique—benefits and opportunities for cogeneration Qualified Facilities (QFs). Of course, these benefits may depend upon the size of a particular QF, its location, confi guration, regulatory status, and other factors. But the right combination of these factors could provide economic advantages to cogeneration QFs, while relieving them of most of the regulatory requirements of the Federal Power Act (FPA), the Public Utility Holding Company Act of 2005 (PUHCA 2005), and state utility laws.

This article describes the new post-EPAct world for cogeneration QFs, the challenges that will be faced by both “existing” and “new” cogeneration QFs, and ways in which cogeneration QFs can take advantage of opportunities available to them under the new regulatory program.