Page 125 - Sustainable On-Site CHP Systems Design, Construction, and Operations

Regulatory Issues 103

state-sponsored CHP assistance programs. The base program funding level is 30 percent
with an additional 10 percent being given if the project meets certain additional criteria
including being located in Consolidated Edison territory (i.e., located in New York
City), being connected to a spot network as opposed to a radial grid, being designed to
provide “flicker free” transition between normal and backup power modes or if the
project utilizes preengineered prefabricated, factory-tested modules that integrate
electric generation with thermal systems. Each criteria met will allow for an additional
10 percent up to a maximum of 50 percent of the project costs.
Eligibility requirements include being located in New York state and being a cus-
tomer of a utility that pays into the System Benefit Charge (SBC) fund as well as contrib-
uting to the SBC. The CHP system must include black start capability and be designed
to provide grid independent operation. The CHP system must have an annual thermal
efficiency of 60 percent or more based on the total thermal and power output expressed
in Btu divided by the higher heating value (HHV) of the total fuel input. The prime
mover of the CHP system must have NO emissions of no more than 1.6 lb/MWh. The
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project must install the necessary instrumentation and data logging equipment and
allow the state to monitor the performance of the system for 4 years following commis-
sioning. There are various reports required as well as an engineering level application
to solicit funding. The program favors contracting directly with the CHP plant owner
rather than a third party or ESCO but exceptions to this rule may be made on a case-by-
case basis.

California Standard Interconnection Rule
The California Public Utilities Commission together with the California Energy Com-
mission and the state’s electric utilities developed a statewide standard agreement for
interconnection, operation and metering requirements for distributed generation
including CHP. This agreement is incorporated into Rule 21 of each investor-owned
utility’s tariff and provides for a common specification for interconnection of CHP
power generators up to 10 MW with the power grid throughout the state. This har-
monization of standards across various utility regions significantly reduces the com-
plexity and time consumption in applying for interconnection resulting in reduced
project costs.

Connecticut Renewable Portfolio Standards
The state of Connecticut enacted legislation that requires electricity providers provide
a minimum percentage of their retail load using renewable sources of energy. There are
three classes of renewable sources with separate minimum percentage requirements for
each class. Class III renewables are defined as “the electricity output from combined
heat and power systems with an operating efficiency level of no less than 50 percent
that are part of customer-side distributed resources developed at commercial and
industrial facilities in this state on or after January 1, 2006, a waste heat recovery system
installed on or after April 1, 2007, that produces electrical or thermal energy by captur-
ing preexisting waste heat or pressure from industrial or commercial processes, or
the electricity savings created in this state from conservation and load management
programs begun on or after January 1, 2006.” The minimum percentage of Class III
renewables was 2 percent in 2008, is 3 percent in 2009, and goes to 4 percent from 2010
through 2020.