provide standby power when your cogeneration facility does not meet all your power needs Our engineers will work with you to determine the specific type of electrical interconnection equipment you will need for your project. The cogenerator pays for the costs associated with the design and installation of all electrical interconnection facilities A monthly payment schedule can be arranged. 4. Operation & Maintenance One area sometimes overlooked when a cogeneration project is being considered is operation and maintenance Scheduled maintenance programs and periodic overhauls of steam and electric generation equipment help to prevent system shutdowns. If proper maintenance is carried out, a cogeneration system will seldom face equipment outages This is because most cogeneration systems incorporate design characteristics which achieve high reliability In certain instances, it may be desirable to retain Edison to operate and maintain the project C. FINANCING A FACILITY 1. Ownership Options If your company decides to install a cogeneration system, there are several Ownership options to consider. A cogeneration facility will usually be owned by the customer. But some projects, depending on a number of factors, may be owned by Edison, or jointly owned by both parties. 2. Depreciation and Tax Credits Depreciation alternatives may affect the economical evaluation of your cogeneration project. The California legislature passed two measures late in 1980 that accelerate depreciation for cogeneration systems. Assembly Bills 1404 and 2893. There are also federal tax laws relating to depreciation for equipment. A qualified accountant, tax attorney or the state and federal tax offices can apprise you concerning the latest tax rules for depreciation. Federal credits also are available for certain cogeneration installations under the Energy Tax Act of 1978 and the Crude Oil Windfall Profits Tax If you use alternative fuels or waste heat recovery boilers, you may be eligible for added federal tax credits beyond the basic investment tax credit State tax credits may also be available Again, it is advisable to consult tax experts to learn of the most recent tax credit regulations pertaining to cogeneration. 3. State Financing Assistance Besides offering tax incentives for cogeneration, California's state government has programs to help finance cogeneration feasibility studies and assist in the financing of pollution control equipment Contact the California Alternative Energy Source Funding Authority, Post Office Box 1919, Sacramento. California 95809, for specific details on financing for qualifying cogeneration projects. The California Pollution Control Financing Authority, a separate agency. can issue bonds to help finance the purchase of pollution control equipment for cogeneration facilities Officials at the agency advise potential cogenerators to contact their office at the early planning stages of a project For details, write to: California Pollution Control 915 Capitol Mall, Suite 280 Sacramento, California 95814 Or call the Executive Director, at (916) 445-9597. D. THE APPROVAL PROCESS Once you make a decision to build a cogeneration facility, it will be necessary to apply for permits to construct and operate the facility. 1. Federal Fuel & Power Sales Laws One of the first determinations will be the type of fuel your facility will require Environmental regulations and present economics favor natural gas for cogeneration facilities in California. The federal Powerplant and Industrial Fuel Use Act of 1978 places some restrictions on oil and gas fuels. However, some exemptions are available for cogenerators Current federal regulations provide that a cogeneration facility can sell 50 percent or less of its electrical output without being subject to regulation as a public utility Since federal regulations relating to cogeneration are subject to change, the Economic Regulatory Administration in Washington, DC should be contacted for information on current regulations and permit requirements. 2. The Siting Permit No approval is needed from the Califomia Energy Commission (CEC) for facilities with a capacity of less than 50 megawatts If your planned cogeneration facility has a capacity of 50 megawatts or more, you are required to apply for siting approval from the CEC. and the approval process may take up to 12 months. 3. Air Quality Rules Air quality permits also are necessary. Emission control requirements depend upon the type of facility planned. because accepted control technology varies with the type of cogeneration equipment used Depending on the size of your facility. you may also be required to provide emission offsets. In other words, if you build a cogeneration facility which emits certain contaminants in excess of regulatory limits, you must reduce emissions at your existing facilities or make agreements that result in lower emissions at other locations in the local Air Quality Management District or Air Pollution Control District to compensate for the emissions from your cogeneration plant. There are regulations which provide various alternatives for cogenerators Contact your local Air Quality Management District, the local Air Pollution Control District or the state Air Resources Board in Sacramento for details on these requirements and additional information on how to apply for air quality permits. E. RESOURCES 1. State Congeneration Desk A central state office can assist you in obtaining information about the various state permits required. The Governor's Office of Planning and Research includes a special Cogeneration Desk (916-322-8515) in its permit assistance section. We suggest you contact this office as you begin to apply for govemmental permits 2. California Energy Commission To apply for a siting permit for cogeneration facilities with capacities of 50 megawatts or more, contact the California Energy Commission Office of Small Power Producers 3. Air Resources Board The headquarters of the Califomia Air Resources Board can provide you with information on air quality regulations and advice on appropriate emission-control equipment. (You can also contact your local Air Quality Management District or the local Air Pollution Control District, where you must obtain any required air quality permits.) 99-464 0-82-15 4. Equipment Information Cogeneration systems use conventional technology Equipment is readily available from manufacturers It's the application that's unique, which is why it's so important to have qualified personnel conduct a comprehensive feasibility study You can obtain information on cogeneration equipment from manufacturers, from companies that have installed cogeneration systems. and from engineering consultants who perform feasibility studies. H. EXAMPLES OF COGENERATION Following are brief descriptions of four cogeneration installations within Edison's service territory, including a residentia! cogeneration project. 1. Loma Linda University Officials at Loma Linda University view cogeneration as a means of keeping the institution solvent," says John H. Kriley, in charge of physical plant and construction operations at the university. "Without cogeneration, we would be priced out of the educational field," he adds A steam turbine topping cycle system was installed at the central plant of the school and hospital complex in 1980 as part of a $3.8 million energy conservation and power centralization program Energy savings from the cogeneration system have been significant, and Kriley expects savings to increase even more as energy costs continue to rise Conventional boilers provide hot water for space heating and the domestic hot water supply. The boilers also produce steam for two 1,200 kilowatt steam turbines that generate electricity to meet some of the power needs of the university and hospital complex Exhaust from the steam turbines is directed to absorption chillers to produce chilled water for air conditioning Loma Linda's cogeneration system operates in parallel with the Edison grid. 2. Kerr-McGee Chemical Unlike the system at Loma Linda, where all the energy produced is consumed on-site, the cogeneration plant at Kerr-McGee Chemical Corporation's Trona, Calif., facility produces excess energy sold to Edison. Kerr-McGee operates a gas turbine topping cycle system with a waste heat recovery boiler. The steam from the heat recovery boiler is used in chemical production This 15.000 kilowatt power generation system is primarily intended to meet electricity needs at the chemical plant, but when excess power is available, it is sold to Edison. The Trona cogeneration facility in Southern Califomia's desert area can use either natural gas or oil as a fuel. Kerr-McGee officials at the chemical firm say cogeneration can significantly reduce energy costs 3. Procter & Gamble Procter & Gamble's cogeneration project involves a system which sequentially produces all the heated process air required at the company's Oxnard, Calif., paper plant and generates approximately 20,000 kilowatts of electric power The cogeneration system consists of a large gas turbine similar to an airplane jet engine. fueled by natural gas or a middle-distillate petroleum product such as diesel fuel or kerosene. Procter & Gamble sells about half of its electrical output to Edison. The power purchased by Edison is equivalent to the needs of more than 10.000 homes The Procter & Gamble facility is one of the largest cogeneration systems operating in parallel with the Edison grid. |