The National Association of Regulatory Utility Commissioners (NARUC) dispatched good news for expanded use of combined heat and power (CHP) and waste heat to power (WHP) this week, adopting a resolution to examine issues related to standby rates. ACC is proud to support the resolution, which focuses on two important industrial energy efficiency systems.
Also known as cogeneration, CHP is the simultaneous production of electricity and heat from the same source. Since the energy is generated close to where it is needed, little is lost in transmission. The chemical industry is a longtime leader in this innovative, energy-saving technology. CHP is a smart strategy to help reduce greenhouse gas emissions while boosting the competitiveness of many U.S. manufacturers.
While CHP systems are often able to operate independently of the central grid, they sometimes need to interconnect for supplemental or backup power, such as during an outage. Utilities use standby rates to recover the costs associated with providing these users with reliable access to grid power. But when these rates are too costly, uncertain, inflexible, or confusing, it can discourage investment in and deployment of new CHP projects.
Trombold-Place resolution builds on existing efforts
Introduced by the Public Utilities Commissioners of Ohio and Pennsylvania – states with significant manufacturing activity – the resolution approved by NARUC calls for further exploration of standby rates issues; “simple, transparent, and consistent” rates; and a recognition that CHP and WHP systems offer benefits such as reduced electricity demand, lower costs, and improved system reliability and resiliency.
A diverse set of manufacturers, clean energy businesses, and efficiency and environmental advocates support the resolution. They include the Electricity Consumers Resource Council (ELCON), American Chemistry Council, American Forest & Paper Association, American Council for an Energy-Efficient Economy (ACEEE), Ohio Environmental Council, Midwest Cogeneration Association, Heat is Power, AMS Energy, Arctic Energy, Blue Sky Power, Capstone Turbines, HCS Group, and Integrated CHP Systems Corporation.
The Alliance for Industrial Efficiency has long advocated for fair, equitable, and transparent standby rates and played a leading role in engaging stakeholders in support of the resolution.