Combined Heat and Power: Connecting the Gap between Markets and Utility Interconnection and Tariff Practices (Part II)

Susanne Brooks, Maggie Eldridge, and R. Neal Elliott

August 2006

Executive Summary

Although many states have been making notable progress on combined heat and power (CHP) policies, significant barriers continue to hinder the realization of CHP’s nationwide potential.  In particular, individual utility policies and practices, especially relating to interconnection and tariffs, have long been identified by ACEEE and others as a major barrier to the expanded adoption of CHP.  The main driving force behind this project was to examine utility policies across the nation relating to CHP and distributed generation (DG) in order to identify utility barriers to entry for proposed CHP facilities.  We also wanted to identify the hierarchy that currently exists with regards to the progressivism of CHP policies on a state-by-state and regional basis.  Additionally, we wanted to highlight the most appropriate policy options that might help the CHP industry move forward.

Given the fact that utility policies vary dramatically nationwide, we sought to explore the range of friendliness to CHP on an individual utility basis.  In order to illustrate the clear hierarchy that exists regarding utility operations towards the adoption of CHP, we have created the following four-tier stratum.

• Level Four: those actively promoting the adoption of CHP through varied incentives
• Level Three: those not explicitly promoting the adoption of CHP, but willing to work with industry
• Level Two: those ambivalent, by choice or regional market trends
• Level One: those actively working against the adoption of CHP

We have divided this project into two parts.  Part I encompassed the initial study, which focused on the major utilities operating in 15 states.  Those states were as follows:

In this report, Part II, we focus on the remaining states not covered in Part I.  These states are as follows:

There is, however, significant overlap in terms of the states between Part I and Part II since many of the utilities covered in Part II have service territories in multiple states including some of those covered in Part I.  Though the main focus of Part II is on the states listed above, it is also meant to provide national and regional perspectives.  The appendices of this report include information from all the utilities covered in both Part I and Part II.  The discussions of the results have been organized by region—the majority of the utility details center around the Part II states, but the overall trends and general regional information are meant to encompass the entire United States.  We have tried to avoid repetition in Part II and therefore often refer readers back to Part I where they can find a significant amount of background information. 

In addition to the information in the body of this report and the appendices, we will be releasing a Microsoft Access database that will include all the research and information we gathered relating to (and directly from) the utility companies over the course of this project.  The database will be available for download on our Web site (http://www.aceee.org/chp/index.htm) soon after the release of this report.

View full report as a PDF or click to order hard copy.

62 pp., 2006, $30.00, IE063