CPUC Backs SoCal Gas CHP Plan

SoCal Gas can get into the small-scale combined heat and power business under a decision approved by the California Public Utilities Commission Oct. 22 as long as plants it builds and operates on utility customer premises are shareholder funded and no bigger than 20 MW.

The decision came after Commissioner Mike Florio characterized the state’s past efforts to bolster the number of combined heat and power facilities to cut greenhouse gases as “less than a roaring success.”

Since the last decade, the state has been trying to encourage the spread of combined heat and power—which produced both electricity and heat in the form of steam, for instance, that can be used in industrial process like food canning.

However, Florio said that to date only a couple projects have been built as a result.

The commission hopes that allowing SoCal Gas to get into this segment of the combined heat and power market will change that by spurring advancement of the technology, noted commission President Mike Picker.

“Utilities can move to scale quickly,” he said.

Commissioner Carla Peterman said the small-scale market the decision seeks to enliven has so far been “underserved.”

Under the decision, SoCal Gas can offer to build and operate combined heat and power facilities near or on its customers’ premises for the next 10 years at shareholder expense. Its customers would pay a tariff to use the facilities.

Facilities could use three types of technologies—fuel cells, industrial waste heat to run turbines that produce power (sometimes called bottoming cycle cogeneration), or use of waste heat to produce mechanical power, such as running pumps.

Florio said the arrangement could go a long way toward promoting combined heat and power technologies to cut greenhouse gases since the utility could more readily finance projects and could wait a longer time to recover its costs than small or medium-sized businesses.

He said the upfront costs of installing systems have been a barrier to expanding combined heat and power in California.

The tariff was opposed by Shell Energy and independent power producers on grounds it was unnecessary. However, the decision noted the opponents did not produce evidence of activity in the small-scale market. —William J. Kelly

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CPUC Backs SoCal Gas CHP Plan

William J. Kelly

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