An Analysis of the Department of Energy's Nonprice Regulation of Industrial Energy Use

This study analyzes Department of Energy (DOE) regulatory activities within the industrial sector. The focus in this report is on nonprice regulations such as prohibitions on specific fuel use. The objective is to provide basic inputs into DOE's decisions about its future regulatory activities. Section II describes the basic statutory and regulatory framework of the Industrial Fuel Act (FUA) that is related to the cogeneration exemption. Section III focuses on the incentives that are a part of the Public Utility Regulatory Policies Act (PURPA). Section IV examines the remaining five regulatory areas, distinctly less important to industrial energy use than FUA and PURPA's provisions for cogeneration. Section V brings together key characteristics of these regulatory activities to support conclusions about the rationales for government intervention in private markets, and about the costs and benefits of such intervention.