Anti-cogen utility backlash seen long-term threat to developers
Many utilities are developing a wide range of economic and marketing tactics in defense of their markets. This backlash against cogeneration/self-generation by industrial and commercial customers is growing in virulence. The author describes types of anti-cogen practices, their costs and benefits, and gives advice on how to combat them. Anti-cogeneration tactics fall into three basic categories. The first is rate discounts and buyouts. These consist of lower electric rates for customers of a utility who are seriously considering cogeneration, which discourage the customer from pursuing the cogen project. A variation on this theme is a combination of discount rates with a payment from the customer to the utility of the amount that it would have cost the customer to build the cogen facility. Another is creative rate design. This technique includes a range of rate types such as high demand charges and standby rates, ratchet provisions in standby and demand charges, tiered rates, and other charges which make it extremely difficult for cogeneration hosts to justify the investment. Marketing tactics, the final type of anticogen tactic, are based on the fact that all cogenerators must eventually interact with the electric utility, whether for interconnection on backup, maintenance, or standby power. Utilities have had a chilling effect on the development of cogeneration by suggesting that there may be milli-seconds of delay between an outage at the cogen facility and the infusion of power from the utility, which could harm computerized records and certain processes. They have also raised questions about the reliability of particular cogen technologies and used utility hit squads to visit prospective cogenerators of all sizes to actively discourage them.
- Research Organization:
- Independent Power Corp., Oakland, CA (USA)
- OSTI ID:
- 6750842
- Journal Information:
- Cogenerat. J.; (United States), Journal Name: Cogenerat. J.; (United States) Vol. 5:4; ISSN COGJE
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
290800* -- Energy Planning & Policy-- Heat Utilization-- (1980-)
296000 -- Energy Planning & Policy-- Electric Power
COGENERATION
COMMERCIAL SECTOR
CONSTRAINTS
COST
DEUS
DUAL-PURPOSE POWER PLANTS
ECONOMIC DEVELOPMENT
ECONOMIC POLICY
ELECTRIC UTILITIES
ENERGY SYSTEMS
FINANCIAL INCENTIVES
GOVERNMENT POLICIES
INDUSTRIAL PLANTS
PLANNING
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RATE STRUCTURE
RECOMMENDATIONS
STEAM GENERATION