Energy Policy Act of 2005: Impact on Distributed Generation

The Energy Policy Act of 2005 substantially modifies a number of past energy legislation and adds new legislation. A part of the bill has the stated purpose of achieving energy self-sufficiency by the year 2025. The energy bill provides for certain grants to small rural communities. This allocation funding may also be used to upgrade generation facilities. Meanwhile, the Federal Energy Regulatory Commission (FERC) is instructed by the bill to conduct a study of the potential benefits of cogeneration and small energy production. Funds are also authorized for research, development, demonstration and commercial application of distributed energy resources. Another major proposal of the Energy Policy Act of 2005 is the revision of the PURFA where the bill removes the requirement that utilities purchase power under the condition that the qualifying facility has access to alternative acutction-based or competitive long-term wholesale markets. The bill states that interconnection services be based on IEEE Standards 1547. It also states that agreements and procedures shall be established whereby the services offered shall promote the current best practices of interconnection for distributed generation. The Energy Policy Act of 2005 directly authorizes a grand total of US$800 million for various types of distributed generation projects and research. The major effect the bill has on distributed generation, however, will come due to changes in PURFA.