1. Sixth Northwest Conservation & Electric Power Plan CHP in the Sixth Plan?? Jeff King Northwest Power and Conservation Council Generating Resources Advisory Committee May 6, 2009

2. 2 2004 EEA/ORNL Assessment 1 Technical potential - 15,500 MW 2 Large industrial - 2661 MW Resource recovery - 76 MW (moderate - high economic potential) Wastewater - 6 Animal - 70 Small industrial - 2036 MW (difficult economics) Commercial/Institutional - 9515 MW (v. difficult economics) Economic potential 2 : Business as usual - 1191 MW (4% microturbine or fuel cell) Accelerated case - 5105 MW (27% "") Substantial technical improvement, esp. smaller technologies 15% off capital cost No standby charge 1.Energy and Environmental Analysis, Inc.. Combined Heat and Power in the Pacific Northwest: Market Assessment B-REP-04-5427-004r, August 2004. 2.Results for ID, OR & WA (MT not included)

3. 3 Oft-cited barriers to CHP development Host facility ROE higher than that of utility industry Limited availability of capital to host facility Lending requirements for guarenteed fuel supplies (biomass) Energy benefits not worth hassle of installing and operating a CHP system Utilities not motivated, see no rate of return - simply lost load Purchase prices do not reflect full capacity & energy value of the power Locational value Environmental values Onerous standby charges Lack of uniform interconnection standards & agreements Securing transmission access for sales of surplus power Complexity of permitting and environmental compliance

4. 4 Recommendations from 2004 EEA Study (paraphrased in some cases) Federal: Support technology development Support advanced technology demonstration projects Education & outreach to increase awareness Assess benefits of CHP deployment on transmission constraints Economic analysis of CHP impacts to support streamlining interconnection, reducing standby charges, etc. Create utility partnerships to strengthen system-wide benefits of CHP deployment States Establish streamlined interconnection procedures Develop economic methodology for establishing standby tariffs Establish fair avoided costs Require cost-based wheeling of power over distribution system Encourage IRP Provide tax and investment incentives Improve state-level siting procedures

5. 5 What value can the Sixth Plan add? In the form of: - Information - Recommended actions (more time to think about these later today) The brutal facts: - Limited information and no time before the draft plan - Some additional time, possibly some additional information between draft & final