critical policy issues for on-site generators

8/14/2019 Critical Policy Issues for on-Site Generators

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Critical Policy Issues forOn-Site Generators

An End-Users Viewpoint

Al Musur

Chairman, Industrial Energy Consumers of America


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Energy This Countrys

Biggest Policy Problem


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Energy This Countrys

Biggest Policy Problem

Because energy is where

economy, geology and ecologycollide.


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Policy Areas

Natural Gas

Power Generation

Clear Skies

Electricity

Electrical Transmission


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Natural Gas Policy

Natural Gas is the Fuel of Choice


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Natural Gas Policy


Exploration for Natural Gas is Bad


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Natural Gas Policy


Exploration for Natural Gas is Bad That Causes Price Increases

No CHP Projects with 5 electricity being displaced by

$5 Natural Gas

70% of Known Reserves on Unavailable Federal Lands

Prohibitions on Lateral Drilling

Coal Bed Fractionation

2800 Drilling Applications Back-logged at DOI


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Natural Gas Policy



Lack of Oversight of Natural Gas Markets


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Natural Gas Policy



Lack of Oversight of Natural Gas Markets Commodity Futures Trading Commission (CFTC)

Lost Oversight of Natural Gas & Electricity Trading

No Standard for Determining Undue Market Influence


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Natural Gas Policy




Approval of Oil/Gas Mega-Mergers


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Natural Gas Policy




Approval of Oil/Gas Mega-Mergers Eg. BP Amoco

Loss of Investment Capital

Midsize Companies Purchasing Assets v. Exploring

Small Exploration Companies Quitting the Business


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Natural Gas Policy





Lack of Federal Regulatory Authority


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Natural Gas Policy





Lack of Federal Regulatory Authority Reporting Injections


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Natural Gas Policy





Lack of Federal Regulatory Authority Reporting InjectionsFull Storage = 3.2 TCF

Inadequate Storage = 2.8 TCF

Delta 0.4 TCF < 2% of Annual Demand


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Natural Gas Policy





Lack of Federal Regulatory Authority Reporting Injections Reporting Transactions for Price Formation

Ordering Construction

Storage

Pipelines


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Power Generation

Crime to Burn Natural Gas in Non-CHP

Power Generation


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Power Generation


Power GenerationNatural Gas is the only fuel available to most industry and

is also a feedstock

Natural Gas is growing as the fuel of choice for residential

use

For this there is no substitute

Utility generators can burn everything from garbage to

nuclear fuel


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Power Generation


Power Generation

Burn Coal


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Power Generation


Power Generation

Burn Coal Illinois alone has more coal that Saudi Arabia and Kuwait

combined have oil

Developed technologies can burn coal cleanly


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Power Generation


Power Generation

Burn Coal

Burn Nuclear Fuels


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Power Generation


Power Generation

Burn Coal

Burn Nuclear Fuels

Spend Federal Funds on Developing and

Commercializing Technologies rather than

picking winners and losers in energy


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Power Generation


Power Generation

Burn Coal

Burn Nuclear Fuels

Spend Federal Funds on Developing and

Commercializing Technologies rather than

picking winners and losers in energyNo Renewable Portfolio Standard


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Clear Skies

New Source Review Reform


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Clear Skies

New Source Review Reform Trade new CO

2, NO

x, Hg standards for NSR changes

Utilities trying to include CHP in Clear Skies NSRReform

CHP projects should be exempt or there should be an

output efficiency standard for inclusion


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Clear Skies


Greenhouse Gas Issues


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Clear Skies


Greenhouse Gas Issues Energy Policy focused on GHG intensity

Clear Skies called for the DOE to revamp the 1605(b)

Greenhouse Gas Registry to reward absolute reductions of

Greenhouse Gasses

First step to the establishment of a Greenhouse GasEmission Trading Program in the U.S.


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Clear Skies



Greenhouse Gas Emission Credits for CHP


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Clear Skies



Greenhouse Gas Emission Credits for CHP Industrial installs a CHP facility for steam and electric

generation

Gross Greenhouse Gas emissions for site go up

Net Greenhouse Gas emissions go down netting out the

reduction at the utility stack for displaced generation

Utilities are claiming that the emission reduction at their

stack is their reduction regardless how achieved

Utility view is generally accepted among White Housestaff


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Electricity

PURPA Repeal


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Electricity

PURPA Repeal

PUHCA Repeal


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Electricity

PURPA Repeal

PUHCA Repeal

FERC authority to enforce NERC operating

rules


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Electricity

PURPA Repeal

PUHCA Repeal


rules

Net Metering Issues


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Electricity

PURPA Repeal

PUHCA Repeal


rules

Net Metering Issues California ISO OATT

Illinois MISO may yield different result due to regional

differences


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FERC Authority


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FERC Authority Utilities have learned at the State level: if one doesnt like

what a commission decides, have the Legislature fix it.

Push on the part of Utilities to limit FERCs authority:

Operating rules

RTO formation

Siting Authority

Utilities stirring up State Commissions & Governorsto push States rights issues


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FERC Authority

Regional Transmission Organization (RTO)

/ Standard Market Design Issues


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FERC Authority



Standardized CHP Interconnection Issues


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FERC Authority




Federal Authority for Transmission Design


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FERC Authority




Federal Authority for Transmission DesignNo current authority to order transmission interconnection

construction

No centralized siting authority

Suggestion socialize the cost of upgrading the

transmission system


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FERC Authority





Distributed Generation v Transmission

Upgrade Issues


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FERC Authority






Upgrade Issues USCHPA proposal for distributed generation instead of

transmission upgrade


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FERC Authority






Upgrade Issues

August 14, 2003 Issues


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What Can I Do?


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What Can I Do?

Become conversant with all of the issues

Resist the urge to pursue only your narrow

interests

Join with other consumer groups to achieve

enough mass to be effective

critical policy issues for on-site generators

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