A combined heat and power (CHP) facility, also known as cogeneration, produces electricity and captures the heat byproduct, which can then be used for space conditioning, a manufacturing process or for cooling purposes. These facilities, when utilized by a manufacturer or large commercial customer, can reduce the amount of electricity required from a utility by 10% or more, and the power generated from the CHP facility may be 15%-40% less expensive than utility-supplied power. CHP and Waste Energy Recovery (WER) were included and encouraged as part of Governor Kasich’s statutory energy policy initiatives in 2012. As a result, some Ohio Investor-owned electric utilities now offer attractive incentives to manufacturing and large commercial customers contemplating the installation of a CHP system.
Dayton Power and Light (DP&L) recently introduced a rebate program for business and government customers that provides funding for a feasibility study. Upon pre-approval from DP&L, customers are eligible for incentives based on first-year production of a CHP installation that will provide eight cents per kilowatt-hour generation and $100 per kW capacity. The capacity incentive is paid when the installation is complete. The generation incentive is paid at six and 12 months, upon verification of system output. Duke Energy Ohio included language in their most efficiency portfolio inviting their customers to submit CHP proposals for qualification through their existing programs. In both cases, interested customers should contact the utility ahead of any potential installation. AEP is also pursuing approval for incentives for two CHP projects pending in its service territory.
Utility incentives, when combined with appropriate financing and other available incentives, lower the payback period of a CHP or WER installation. These technologies enable a business customer to increase their power reliability and quality, reduce power costs, and modernize their facility infrastructure to remain competitive in a global economy. Ohio has several gigawatts of CHP potential, with just under one gigawatt currently installed. Thus, exploring the potential for a CHP facility may be a beneficial move for your commercial business or manufacturing facility.
How can Kegler Brown help?
Utility incentives are provided to customers by an electric investor-owned utility company only after approval from the Public Utilities Commission of Ohio (PUCO). An incentive application may involve negotiation with the utility company and the PUCO staff prior to submission. The application itself must provide the legal basis and utility program specifics that PUCO will need to consider and approve the incentive. Kegler Brown’s energy/utility attorneys are knowledgeable on the law in this area and familiar with applicable electric utility programs. We can assist interested customers with the commencement and completion of the regulatory process from feasibility study to a Commission order.
The PUCO held a series of workshops highlighting the benefits of CHP and the regulatory process. These workshops and additional information may be found on PUCO’s website.