The Pennsylvania Public Utility Commission has approved an agreement for Pennsylvania Power & Light Co. to purchase electricity from a small non-utility generating plant that will burn wood waste to produce electricity.

Under the agreement, PP&L will purchase energy from a 12-megawatt power plant to be built in Clinton Township, Lycoming County, by West Allegheny Biomass Energy Corp. Wood waste from sawmills and other operations in the area will fuel the plant.

"PP&L doesn't need the additional capacity provided by the West Allegheny plant," said John Sipics, PP&L's general manager of Power Systems Support. "Federal law, however, requires us to purchase power from facilities that meet certain qualifications, such as this West Allegheny plant."

The federal Public Utilities Regulatory Policies Act, or PURPA, mandates that electric utilities purchase electricity from small, independent power producers that seek contracts with the utilities. Under requirement, PP&L currently purchases 474 megawatts of power from 14 non-utility generators in its 29-county service territory in central and eastern Pennsylvania. The cost of the power is passed to PP&L customers in the Energy Cost Rate portion of electric bills.

PP&L will pay West Allegheny 2.8 cents a kilowatt-hour for power, which is significantly less than the average rate of 6.2 cents a kwh PP&L pays to most other qualifying facilities.

"The West Allegheny rate is equal to the average cost PP&L expects to incur to generate the power itself, which is referred to as 'avoided cost,'" Sipics said.