585 Pine Street
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Burlington, Vermont 05401-4891
802/658-0300
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802/865-7386 (TTY/voice)
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Fax: 802/865-7400
December 20, 2005
Susan M. Hudson, Clerk
Vermont Public Service Board
Chittenden Bank Building, 4 th
floor
112 State Street, Drawer 20
Montpelier, Vermont 95620
RE: Act 61 Combined Heat and Power program
The following are the comments of the Burlington Electric Department (BED) in response to five specific questions that evolved from the Board’s November 15 th
workshop on this topic, which were distributed on November 18 th
. Each question is presented below (Q), followed by BED’s response (A).
Q1. What should the next steps be regarding this topic?
A1. BED repeats our earlier assertion in response to the PSB’s memorandum of September 9,
2005, that an information-gathering exercise is a critical step in assessing the need for and shape of a well-organized statewide CHP program. In this respect it is just like any other technology one wishes to analyze for programmatic treatment.
Some specific topics at minimum which such an investigation might explore could include:
 an assessment of the market and appropriate specific applications for the technology in the state;
 a determination of the overall statewide potential for CHP to help assess the scale of an organized efforts;
 a survey of the range of appropriate technologies for potential inclusion in a program;
 an assessment of the delivery mechanisms and what vendors and contractor infrastructure are in place now to develop the resource;
 an assessment of potential barriers to the technology in the current market;
 what fuels are needed for cost-effective implementation of the technology vs. what’s available in Vermont on a geographic basis;
 what opportunity exists for utility interconnection and potential utility dispatch of, or purchase from CHP generators;
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 what would be the impact on the typical host distribution utility’s revenue of implementing and potentially subsidizing the technology,
 what are the resulting rate impacts on all the other customers in a given utility territory of implementing and potentially subsidizing the technology;
 if a subsidy-based program is to be considered, is there an equity question associated with the delivery of a potentially very large incentive to a single customer?
CHP is a very significant investment with a very long expected lifetime. It deserves the attention that a thorough assessment would provide.
Q2. Do existing studies provide sufficient information regarding issues associated with the development of combined heat and power in Vermont? If so, should the Board establish some type of CHP program (pilot or otherwise)? If yes, what should the program look like?
A2. BED is not aware of generic studies relevant to any of the issues raised in A1 that are specific to Vermont. While generic information about the technology and its cost-effectiveness can likely be easily found, in our experience most pertains to industrial applications (typically urban) and almost exclusively natural gas-fired, since we expect these conditions predominate in existing installations around the U.S. Neither of these conditions are prevalent in Vermont. An initial literature review (see below) would be an excellent way of seeing whether or not the questions posed above are answered by existing studies.
Act 61 invests in the PSB the authority to develop a CHP program. BED respectfully suggests that the question of whether or not and what kind of dedicated CHP program is needed should await the results of the assessment suggested in A1 and be a step in the systematic process described in the next answer (A3).
Q3. If existing studies do not provide sufficient information regarding issues associated with the development of CHP in Vermont, should a new study be performed? If a new study should be performed, what should be included in the study (for example, analysis of technical potential, analysis of market barriers, literature review, other items)?
A3. Regarding a new study, please see A1. A literature review is an excellent idea. It may even be considered as a first and preliminary step to be undertaken prior to finalizing the scope of the statewide study. Such a stepwise approach would provide a clear answer to Q2 before embarking on a study design.
We’d suggest the following discrete program investigation/development steps, with assessment of the results along the way. These suggestions are based on BED’s own lengthy experience with designing and implementing energy efficiency programs:
1) Preliminary step: Research the literature: are the questions or a subset of questions in A1 answered in a Vermont-specific way?
2) If not, scope and implement a Phase 1 study to address remaining questions raised in A1.
3) Assess the resulting study: Is a program needed and of sufficient potential value to justify the effort?
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4) If yes, scope and implement a Phase 2 program design process; include specs for a pilot effort if one is needed to fill specific knowledge gaps or to test specific program mechanisms.
5) Implement pilot if needed, or “scale-up and go” if not.
6) Assess pilot, modify design, and then scale-up (or not) based on results.
Q4. Should a pilot program be designed prior to the completion of any studies that may be performed? If so, what should the pilot program look like? Should any contractor hired to perform a study of issues associated with CHP in Vermont also be asked to propose a design for a pilot program?
A4. BED believes it would be premature to design a pilot program prior to making the determination as to whether or not and what kind of program is needed. In our experience, pilot programs should aim at answering specific questions about a program design prior to that program going full-scale. Whether or not one is needed is a question one typically answers as a program design is developed and vetted to surface the remaining questions which need to be answered by field testing prior to broad-scale implementation. In that context, they can be a great learning tool.
As laid out in A3, a pilot program should be a preliminary step in program implementation for the purpose of answering questions still unanswered without field testing. These questions typically surface during the program design phase, and so this design should logically be a part of the larger program design contract.
BED believes that a preliminary question to ask is whether or not a program design should even be part of the market assessment (Phase 1), or should it be scoped out as a subsequent step once the nature of the market potential and delivery mechanisms are better understood? We’d suggest that determination could await the results and analysis of the market assessment. It’s possible that the results of the first phase might suggest that a different contractor would be better-suited for the program design (Phase 2), if the PSB determines at that point that a program design is needed.
Q5. Should the Board authorize Efficiency Vermont to provide technical assistance to customers considering CHP now (that is, prior to the establishment of a combined heat and power program)?
A5. As a member of the advisory committee, BED has sensed frustration from Efficiency
Vermont with the inability to use EEC funds to even make a preliminary analysis of the site-bysite potential for CHP or to offer concrete advice to customers on the topic. This seems unnecessarily restrictive. If Efficiency Vermont could make some initial suggestions about the direction a customer might pursue, demonstrate some preliminary cost-effectiveness, and help the customer compare and contrast the opportunity with potentially competitive efficiency options, this would satisfy the top level of concern, and better prepare the customer to work with the vendor community. In addition, Efficiency Vermont might be able to provide a “second opinion” as to specific proposals by vendors. It would be interesting to know the price tag for these two functions. They may be all that’s needed to address the need that has surfaced to date.
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This concludes BED’s comments on this topic. If you have any questions or concerns do not hesitate to contact me. My phone number is 802-865-7339 and my email address is: tbuckley@burlingtonelectric.com.
Sincerely,
Thomas A. Buckley
Burlington Electric Department
Manager, Customer & Energy Services
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