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Interstate Renewable Energy Council: Unlocking DG Value: A PURPRA-Based Approach to State Policy Design

Research or Whitepaper
Valuation, Analysis, BCA   
This paper explores the benefits that could be quantified and incorporated into the development of PURPA-based avoided cost rates, to more accurately value the energy contribution of distributed facilities that serve local load. A comprehensive PURPA-based approach to DG policy design would incorporate many as-yet-unrecognized benefits of exports to the distribution system, including: line-loss avoidance; the ability to make smaller capacity additions that more closely follow incremental load changes; the deferral or avoidance of utility capital expenditures; an aggregate accounting of the energy and capacity on a utility’s electric system; the dispatch capability, reliability and emergency generation characteristics of DG; and the environmental benefits of displacing fossil-based resources. This paper addresses the advantages and disadvantages of such an approach.