rap sedano chp gatech 2013 dec 4
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The Regulatory Assistance Project 50 State Street, Suite 3
Montpelier, VT 05602
Phone: 802-223-8199
www.raponline.org
CHP Power Sector Policy:How government action enables CHP
Georgia Tech Energy Series
Presented by Richard Sedano
December 4, 2013
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Introducing RAP and Rich
RAP is a non-profit organization providingtechnical and educational assistance togovernment officials on energy and
environmental issues. RAP staff haveextensive utility regulatory experience.
Richard Sedano directs RAPs US Program.
He was commissioner of the VermontDepartment of Public Service from 1991-2001and is an engineer.
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CHP development inevitable,can be nurtured
Inevitable because customers are beingempowered
Technology
Use of markets in regulation
Valuable to the Electric Grid
Nurtured how? And how well?
By State Government?
By Utilities?
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CHP as a programHow a utility would encourage CHP rather than be passive?
Programs are about customers
Can CHP fit into utility program practice?
Screening Distinctions with Industrial Energy
Efficiency?
Managing Electric / Gas Savings
Compare with Geothermal Heating
Counting against requirements
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Regulatory Issues
Mechanics of counting (and EM&V)
Sharing electric and gas responsibility
Motivating performance by customer Motivating performance by utility
Enabling customer
Costs
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Regulatory Issues
Mechanics of counting (and EM&V)
Routine EM&V methods apply
Sharing electric and gas responsibility Motivating performance by customer
Motivating performance by utility
Enabling customer
Costs
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Regulatory Issues
Mechanics of counting (and EM&V)
Sharing electric and gas responsibility
Methods are fine, companies often dont agree Motivating performance by customer
Motivating performance by utility
Enabling customer
Costs
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Regulatory Issues
Mechanics of counting (and EM&V)
Sharing electric and gas responsibility
Motivating performance by customer Motivating performance by utility
Enabling customer
Fair Interconnection, stand by rates,
Costs
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Advanced program elements:planning and market rules
Geo-target
Motivate CHP where most needed by gridconditions
Acquire ancillary services with capacityand energy
Responsive customers
motivated especially by high amounts of windand solar, enabled by tech)
what does that mean for CHP?
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Policy Barriers to CHP
Rate design
Presumptions in Stand by Rates aboutreliability of CHP tend to be too cautious
Planning
Credit for reliability benefits from CHP
Operations
Purchase terms and valuation of products
REC issues where applicable
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Policy Barriers to CHP
Loss of sales in traditional regulation is adisadvantage to utilities
This can be addressed, some utilities dont
want to
Control of utility operation by the utilitymay not be compatible with customer-
sited generation
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A Resource Standard is a political actto value preferred resources
CHP can qualifyfor any standard
Assure no double
counting
Carve out / tierfor CHP?
All or justnew/recent?
Make it easy utilityacquires tags withpower
Make it market allow marketing oftags
Adding CHP means
standard amountsshould be reassessed
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Resource Standard is a political actto value preferred resources
Policy first
Resource standard should be designed tomeet policy goals so best to be clear about
them
Then create market rules that work anddont interfere with other markets created
Try to give the created market stability,but remember that government hascreated the market to serve policy
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http://www1.eere.energy.gov/seeaction/pdfs/
see_action_chp_policies_guide.pdf
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About RAP
The Regulatory Assistance Project (RAP) is a global, non-profit team of experts thatfocuses on the long-term economic and environmental sustainability of the powerand natural gas sectors. RAP has deep expertise in regulatory and market policiesthat:
Promote economic efficiency Protect the environment Ensure system reliability Allocate system benefits fairly among all consumers
Learn more about RAP atwww.raponline.org