The
UNIVERSITY
of VERMONT
J. Michael Gower
Vice President for Finance & Administration
and University Treasurer
December 29, 2005
Susan M. Hudson, Clerk
Vermont Public Service Board
Chittenden Bank Building, Fourth Floor
112 State Street, Drawer 20
Montpelier, Vermont 05620
Re:
Act 61 Implementation Workshop
Program Outline for Possible New Combined Heat and Power (CHP) Program
Dear Ms. Hudson:
Enclosed for filing with the Public Service Board (the “Board”) please find a discussion
draft “Combined Heat and Power Program Outline” prepared by the University of Vermont (the
“University”). This draft CHP Program Outline is offered to further consideration of a possible
program to encourage development of new CHP projects. This submission supplements the
University’s prior comments offered through its participation in this process.
Under the Program Outline an agent, or agents, appointed by the Board to administer the
program would solicit proposals from interested applicants seeking program support for CHP
projects. Applicants may be host locations, host utilities or a combination of stakeholders. The
draft Outline contains definitions for eligible facilities, the contents of an application and the
criteria to be used to evaluate proposals. While the Outline remains a work in progress, it is the
intent of the University’s straw proposal to encourage collaboration between host locations and
utilities, and to encourage the development of a flexible program that helps to remove barriers that
hamper the development of cost-effective new CHP projects. These barriers include:
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the cost of borrowing capital,
interconnection requirements with the local utility,
stand by charges for power,
the cost of labor and materials,
CHP feasibility studies,
environmental studies associated with/and including air permitting; and
uncertainty of the availability and costs of fuel over the long term.
348 Waterman Building, 85 So. Prospect Street, Burlington, VT 05405-0160
Telephone: (802) 656-0219, Fax: (802) 656-1363
Equal Opportunity / Affirmative Action Employer
During the workshops considering the development of a CHP program, some participants
suggested that a study be conducted to assess the potential for CHP development in Vermont. The
University believes that even if such a study is undertaken, the draft program outline should be
implemented immediately as a demonstration program. This would allow interested parties with
CHP projects in the planning stages to seek support for those projects during the pendency of the
study and encourage the development of new CHP projects whose costs, benefits, and other
impacts could be examined in detail as part of the study. It also would provide an opportunity to
test the program’s administrative process on a small scale.
The University notes that a significant assessment of the potential for CHP development in
the State of New York was published in the fall of 2002. While the conditions and circumstances
prevailing within the State of New York differ from those prevailing in Vermont, the University
nonetheless is including as an attachment a copy of the report, Combined Heat and Power Market
Potential for New York State, published in October 2002, by the New York State Energy Research
and Development Authority (“NYSERDA”). This report was prepared for NYSERDA by the
Energy Nexus Group Onsite Energy Corporation and the Pace Energy Project, and attempts to
address many of the considerations raised by Vermont Act 61 workshop participants.
In support of the University’s proposal to establish a program to encourage CHP in
Vermont, it notes the following NYSERDA findings:
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Use of on-site power generation with heat recovery can dramatically reduce both
energy consumption and its associated environmental impacts.
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There are numerous commercial and emerging technologies that can be used for
combined heat and power.
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By combining the electrical and thermal energy generation in one process, CHP can
have an overall efficiency of 70-80% compared with 30-33% for simple-cycle
electric generation.
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Selecting a CHP technology for a specific application depends on many factors,
including the amount of power needed, the duty cycle, space constraints, thermal
needs, emission regulations, fuel availability, utility prices and interconnection.
Recognizing the important efficiency and environmental benefits of CHP, NYSERDA initiated a
development and demonstration program to encourage the deployment of efficient CHP systems in
New York. The draft Program Outline prepared by UVM is based on the initial NYSERDA
program discussed in the study as well as other programs designed to encourage the development
of distributed resources.
The University understands that there remain many important policy decisions to be
considered as part of the development of any CHP program. These include the budget and scope
for any program, as well as the issues associated with the designation of an agent to provide
administrative services. The University hopes that its straw proposal will show workshop
participants how a program could be structured and serve a starting point for further collaboration.
348 Waterman Building, 85 So. Prospect Street, Burlington, VT 05405-0160
Telephone: (802) 656-0219, Fax: (802) 656-1363
Equal Opportunity / Affirmative Action Employer
The University very much appreciates the opportunity to offer comments on the need for
and design of programs to implement Act 61. The University hopes that these comments will
provide perspective and further the ongoing collaborative process. If you have questions
concerning this submission, please do not hesitate to contact me.
Respectfully submitted,
J. Michael Gower
Vice President for Finance and Administration
and University Treasurer
Enclosures
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348 Waterman Building, 85 So. Prospect Street, Burlington, VT 05405-0160
Telephone: (802) 656-0219, Fax: (802) 656-1363
Equal Opportunity / Affirmative Action Employer