Independent Power Producer

Independent Power Producer

The Independent Power Producer (IPP; also: Non-utility generator (NUG)) is an entity, which is not a public utility, but which owns facilities to generate electric power for sale to utilities and end users. [ [ Independent Power Producer (IPP) - Americas Generators ] ] NUGs may be privately-held facilities, cooperatives such as rural solar or wind energy producers, and non-energy industrial concerns capable of feeding excess energy into the system. [ independent power producer (IPP), non-utility generator (NUG) ] ]


Prior to the US Public Utility Regulatory Policies Act of 1978, NUGs were rare, and the few that existed were seldom able to provide energy to utilities and other public customers even at no cost to the utility. Section 210 of PURPA now requires utilities to purchase energy from NUGs which qualify (qualifying facilities) at the utility's avoided cost. This allows NUGs to receive a reasonable to excellent price for the energy they produce and insures that energy generated by small producers won't be wasted.


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