Buying Electricity and Natural Gas for a BIG User Joan Kowal Energy Manager, UMCP March 6, 2012 Sustainable Tuesdays Speaker Series

Retail Electric Competition

The Electric Utility Industry The electric utility industry consists of three functions needed to deliver power to customer loads: –Generation –Transmission –Distribution It consists of many entities. Most notable are: –Generators (Fossil, Nuclear, and Renewable) –Regional Transmission Organizations (PJM) –Distribution Companies (PEPCO, BGE) –Load Serving Entities or Suppliers (Constellation, Washington Gas Energy Services, Pepco Energy Services) –Government Regulators (FERC, PSC) –End-users (UMD, homeowners, retail stores)

Typical Electrical System

Electric Supply at UMCP The electric needs on campus are met through: –On-site production from a natural gas, combined heat and power plant –Purchased energy delivered at the Mowatt substation (building located by Architecture.)

Campus Electric Consumption

UMD Combined Heat and Power Plant 27.5 MW natural gas, CHP plant installed at the College Park Campus –Doubled steam efficiency from 35% to nearly 70% –Energy Star award for 2005 –Annual CO2 reductions of 53,000 tons –Also produces chilled water for air conditioning using steam in summer

Chilled Water How System Works: Heating Steam Back Pressure Steam Turbine 625 PSI Steam 2 Heat Recovery Steam Generators Exhaust Heat F 2 Combustion Turbines and Generators Electric Power 22 MW Fuel Gas or Oil Electric Power 5MW 70% of Condensate Returns to CHP 125 PSI Steam Auxiliary Boilers Make Up Water Steam Driven Chillers on Campus

Energy Procurement Electricity –Supplier – WGES –Distribution Company – PEPCO –Contract Structure (main campus) Block and Index Fixed Supplier Fee All other costs are a pass-through –Term is 3 years with two, 1 year options

Electric Contract (cont’d) Block and Index Contract –Advantages Reduces risk premiums from supplier Allows UMD to reduce costs by reducing load in high priced hours Allows rate to more closely reflect market over term of contract in lieu of locking in fixed-price for entire term on one day –Disadvantages Reduced price certainty

Electricity Procurement Block and Indexed

Natural Gas Procurement Supplier – Pepco Energy Services/WGES Distribution Company – Washington Gas Light Contract Structure –Fixed Price for small accounts –Block and Index contract for CHP supply –Large account is interruptible; oil used as back-up fuel

Natural Gas Procurement Block and Indexed

MD Renewable Energy State has a renewable portfolio standard (RPS) that requires electric suppliers to meet certain standards: –In 2012, 6.5% from Tier 1 renewable sources (including at least.1% from solar); and 2.5% from Tier 2 resources –In 2022, 20% from Tier 1 renewable sources (including at least 2% from solar); and 0% from Tier 2 resources

RPS Definitions – Tier I (1) solar energy including PV and solar hot water heating; (2) wind; (3) qualifying biomass; (4) methane from the anaerobic decomposition of organic materials in a landfill or wastewater treatment plant; (5) geothermal; (6) ocean, including energy from waves, tides, currents, and thermal differences; (7) a fuel cell that produces electricity from a Tier 1 renewable source under item (3) or (4) of this subsection; (8) a small hydroelectric power plant of less than 30 megawatts (9) poultry litter-to-energy (10) waste-to-energy; and (11) refuse derived fuel.

RPS Definitions – Tier II Hydroelectric power other than pump storage generation

On-site Renewable Energy Solar hot water heating system installed at Ellicott Dining Hall and to be included at the University House Solar photovoltaic at Cole Field House – 5.25 kW Installation of geothermal heat pumps at the new Shuttle Facility; two renovated Sorority Houses; and new University House

Project Sunburst DOE American Recovery and Reinvestment Act of 2009 funds allocated to Renewable Energy in MD UMCP was awarded a grant of $1000/kW of installed solar capacity Competitive solicitation awarded to WGES and Standard Solar for a 630kW installation at Severn Commercial Operation June, 2011 Estimated output of 792 MWh annually

Aerial View of Severn with 2,300 Solar Panels

Off-Site Renewable Energy Executed three long term power purchase agreements (PPAs) –Two land based wind with total capacity of 65 MW –One solar project with capacity of 13MW Aggregation of University System of Maryland Institutions with state and local agencies

Buying Off-Site Renewables Bundled RECs through PPAs Long term commitment to buy power and RECs If buyer doesn’t buy RECs, power cannot be counted as renewable energy Unbundled RECs Green attributes associated with power generation

Bundled RECs through PPAs 1 MWh Elect. 1 MWh REC Load Serving Entity Electricity and RECs bundled together

Unbundled RECs 1 MWh Elect. 1 MWh REC 1 MWh Elect. Electricity and RECs sold separately Can’t claim renewable energy Can claim renewable energy

Renewable PPA Contracts –

References eia.doe.gov/