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<br /> <br />PREFACE <br /> <br />The update for this document was completed on <br />January 15, 1982. Since then, several changes have <br />taken place affecting regulatory procedures at both <br />the federal and state levels. <br /> <br />Federal Proceedings <br /> <br />On January 22, a decision was handed down by the <br />United States Court of Appeals for the District of <br />Columbia Circuit in American Electric Power Service <br />vs. Federal Energy Regulatory Commission (Case No. <br />80-1789). <br /> <br />This decision vacates two sections of the Public <br />Utilities Regulatory Policy Act (PURP A): Section <br />292.303(c)(l) requiring the utilities to interconnect <br />with small power producers and cogenerators, and <br />Section 292.304(b)(2)-(4) requiring the rates to be paid <br />to small power producers and cogenerators to be based <br />on the utilities' full avoided cost. Although the <br />decision was handed down in the District of Columbia, <br />it presents a cloud over these two rules as they apply <br />throughout the United States. <br /> <br />FERC has filed a petition for rehearing and has <br />indicated that they will appeal this decision. The <br />critical question is: "what effect will the decision <br />have on the marketing of small power production to <br />the utilities?" <br /> <br />(1) The appeal process could take from <br />3-12 months. During this time, the <br />federal court decisions will likely be <br />stayed; if so, the present FERC rules <br />requiring interconnection and <br />payment of avoided cost will <br />continue. It should be recognized, <br />however, that financial institutions <br /> <br />i <br />