The principal federal policies supporting biopower are in the form of tax credits. The Energy Policy Act of 2005 maintains the closed loop (dedicated energy crops) and open loop biomass credits. The value of the credit and the eligible time period for when systems are put in place varies by feedstock type and technology.
Electric power generation has shifted significantly to production by non-utilities (entities that generate or sell electric power, but that do not operate retail distribution franchises) in response to provisions contained in the Public Utility Regulatory Policies Act of 1978 (PURPA, Public Law 95- 617) and the Energy Policy Act of 1992 (EPACT, Public Law 102-486).
PURPA required electric utilities to interconnect with, and purchase power from, certain cogeneration facilities and small power producers with purchase price being the utility’s incremental cost of production (defined as the utility’s avoided cost of power). EPACT created the exempt wholesale generators (EWG), a new class of electric power producers, and expanded the authority of the Federal Energy Regulatory Commission (FERC) to order transmitting utilities to provide transmission service for wholesale power transmission to any electric utility, Federal power marketing agency, or any person generating electric energy in wholesale electricity markets.
No national renewable portfolio standard exists for biopower, but several states have renewable portfolio standards.