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NARUC Acts to Reduce Barriers to Clean Combined Heat and Power and Waste Heat to Power

For Immediate Release

WASHINGTON, D.C. (January 13, 2019) — The National Association of Regulatory Utility Commissioners (NARUC) today adopted a resolution that aims to accelerate the deployment of clean combined heat and power (CHP) and waste heat to power (WHP) by addressing the issue of burdensome standby rates. Introduced by Commissioner M. Beth Trombold of the Ohio Public Utilites Commission and Commissioner Andrew G. Place of the Pennsylvania Public Utility Commission, the resolution received significant support from Commissioners, manufacturers, trade associations, and clean energy advocates across the country.

“Combined heat and power and waste heat to power systems can make a dramatic difference to company bottom lines in big manufacturing states like Ohio and Pennsylvania—and they can help cut air pollution, too,” said David Gardiner, Executive Director of the Alliance for Industrial Efficiency. “The Alliance applauds Commissioner Beth Trombold and Commissioner Andrew Place for their leadership in addressing a serious barrier to CHP and WHP in their own states, and around the country. We encourage other Commissioners to examine their standby rates and take measures to deploy more CHP and WHP to cut energy bills and reduce emissions.”

By generating both heat and electricity from a single fuel source, CHP and WHP dramatically increase overall fuel efficiency, thus lowering emissions and saving all electricity customers money. And because these systems can operate independently of the grid, they improve grid reliability and sites that use it can keep the lights on during extreme weather events.

The Trombold-Place resolution builds on existing resolutions from NARUC that support additional deployment of CHP and WHP, but do not address rate design issues. The resolution:

  • Supports “further exploration” of issues related to standby rates;
  • Reaffirms that rates should be “simple, transparent, and consistent,” and;
  • Encourages commissioners to ensure standby rates acknowledge that CHP and WHP can reduce demand and costs and improve system reliability and resiliency.

 

Though combined heat and power (CHP) systems are known for their ability to operate independent of the grid, they occasionally need to interconnect for supplemental or backup power during either scheduled or unscheduled outages. Utilities implement standby rates to recover the costs associated with assuring a CHP host has access to grid power when needed. However, new analysis shows that in many cases, these rates are excessive, inflexible, unpredictable, or lack transparency—making it less likely that a CHP project will be built in the first place. As a result of this analysis and the concerns voiced by nearly three dozen large manufacturing businesses and associations, Commissions in Indiana, Michigan, Minnesota, Ohio, and Pennsylvania are addressing standby rates. (This fact sheet offers more information about the barrier imposed by standby rates.)

“A diverse coalition, including large manufacturers, clean energy businesses, and non-profit efficiency and environmental advocates, support this resolution and the need for transparent, fair and equitable standby rates”, said Gardiner. “With more CHP and WHP, we can make America’s manufacturing sector more competitive while reducing emissions.”

The resolution is supported by manufacturing associations, such as the Electricity Consumers Resource Council (ELCON ), American Chemistry Council, and American Forest & Paper Association; non-profit organizations such as the American Council for an Energy-Efficient Economy (ACEEE) and the Ohio Environmental Council; and clean energy businesses such as the Midwest Cogeneration Association, Heat is Power, AMS Energy, Arctic Energy, Blue Sky Power, Capstone Turbines, HCS Group, Integrated CHP Systems Corporation.

“The resolution marks a positive first step in ensuring that standby rates around the country are transparent and encourage the most efficient use of CHP and WHP,” Gardiner said. “The Alliance for Industrial Efficiency looks forward to continuing to work with Commissions across the country to advance fair and equitable tariffs.”

The full resolution is available here.

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Media Contact: Isabel Harrison, 703-717-5501, isabel@dgardiner.com

The Alliance for Industrial Efficiency is a growing coalition of business, labor, non-profit organizations, and educational institutions that educate the public and decision-makers and advocate for policies that increase U.S. manufacturing competitiveness through industrial energy efficiency, especially the use of Combined Heat and Power (CHP) and Waste Heat to Power (WHP).


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