The Public Utility Regulatory Policies Act of 1978 (PURPA) was implemented to encourage, among other things,

  1. The conservation of electric energy,

  2. Increased efficiency in the use of facilities and resources by electric utilities,

  3. Equitable retail rates for electric consumers,

  4. Expeditious development of hydroelectric potential at existing small dams, and

  5. Conservation of natural gas while ensuring that rates to natural gas consumers are equitable.

One of the ways PURPA set out to accomplish its goals was through the establishment of a new class of generating facilities which would receive special rate and regulatory treatment. Generating facilities in this group are known as qualifying facilities (QFs), and fall into two categories: qualifying small power production facilities and qualifying cogeneration facilities.