When a facility cogenerates a given quantity or type of usable energy, the producer of that energy may become entitled to special benefits under the Public Utility Regulatory Policies Act (PURPA) of 1978. These benefits include the right to produce energy from cogeneration whether this energy is needed or not (a right not guaranteed in other circumstances), and possibly the right to sell cogenerated energy at favorable avoided-cost prices to utilities. To further stimulate cogeneration, utilities may even be forced to purchase that energy at this favorable price under the terms of PURPA.
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