E6-1096. Study of the Potential Benefits of Distributed Generation

AGENCY:

National Energy Technology Laboratory, U.S. Department of Energy.

ACTION:

Notice of inquiry and request for public comment.

SUMMARY:

The Distributed Energy Program from the Department of Energy's (DOE) Office of Electricity Delivery and Energy Reliability (OE) is seeking public input for a study of the potential benefits of distributed generation required by section 1817 of the Energy Policy Act of 2005. DOE invites interested parties to relate experiences, convey data, communicate results of case studies or analyses, or provide other information pertaining to the planning, installation, commissioning and operation of distributed energy systems as outlined below.

DATES:

Comments, reports, case studies and other information offered in response to this Notice shall be received no later than February 23, 2006 at any of the addresses listed in the ADDRESSES section.

ADDRESSES:

Interested parties are invited to submit comments electronically (using Adobe® Acrobat® or Microsoft® Word formats) or in hard copy. Submissions should include a cover page containing the commenter's name, affiliation, telephone number, mailing address, and e-mail address. DOE will consider all comments received.

Comments prepared in electronic formats may be submitted directly, via the Web at: http://www.dg1817report.org. Links to this Web page may also be found on the OE Web site: http://www.electricity.doe.gov, or the NETL Web site: http://www.netl.doe.gov. Written submissions may also be sent by regular mail to: Mario Sciulli, U.S. Department of Energy, National Energy Technology Laboratory, PO Box 10940, MS 922-342C, Pittsburgh, PA 15236; or by e-mail to: [e-mail].

FOR FURTHER INFORMATION CONTACT:

Mario Sciulli, U.S. Department of Energy, National Energy Technology Laboratory, PO Box 10940, MS 922-342C, Pittsburgh, PA 15236, e-mail address: [e-mail]. Information offered by commenters in response to this Notice will be available for public inspection at the Department of Energy, Freedom of Information Reading Room, Room 1E-190, 1000 Independence Avenue, SW., Washington, DC 20585 between the hours of 9 a.m. and 4 p.m. Monday through Friday, except for holidays.

SUPPLEMENTARY INFORMATION:

I. Background.

Section 1817 of the Energy Policy Act of 2005 (EPAct 2005) requires DOE to conduct a study in consultation with the Federal Energy Regulatory Commission (FERC) of the potential benefits of cogeneration and small power production. The Electricity Modernization Act § 1817, 119 Stat. 594, 1130 (2005). This study will encompass various forms of distributed energy technologies, ranging from those that produce only electricity to those that produce a combination of heat and power (CHP), installed at or near the point of use.

The first component of the DOE study will analyze potential benefits associated with expanded utilization of distributed energy technologies. For purposes of this Notice the terms “distributed generation” (DG), “cogeneration” and “small power production” are synonymous.^[1] Specific case studies will be evaluated to gauge the impact of regulatory mandates, tariffs, rate structures and similar policies on the proliferation of DG, CHP systems and other distributed energy technologies. The second component of the DOE study will address the rate-related issues “that may impede or otherwise discourage the expansion of” distributed energy technologies. Id. section 1817(a)(3).

II. Questions for Public Comment and Request for Data

To aid in conducting this study, DOE requests public input/comment that addresses the two issues discussed below.

A. Potential Benefits

In accordance with section 1817 of EPAct 2005, this study will attempt to identify, discuss and quantify benefits that are received directly or indirectly by three classes of recipients: “(i) * * * electricity distribution or transmission service provider[s]; (ii) other customers served by an electricity distribution or transmission service provider; and (iii) the general public in the area served by the public utility in which the cogenerator or small power producer is located.” Id. section 1817(a)(1)(B)(i)-(iii).

In analyzing the potential benefits of DG, CHP and other distributed energy technologies, the study will focus on the following areas:

(i) Dynamics of the electric system (grid) including reliability in terms of outages (seconds to hours), power quality (microseconds), and ancillary services (including reactive power or volt-amperes reactive);

(ii) Economic ramifications of distributed energy technologies, including reduction of peak power requirements due to on-site generation (based on distribution feeder load duration curves), offsets to investments in generation, transmission or distribution facilities that would otherwise be recovered through rates, and diminished land use effects and rights-of-way acquisitions; and

(iii) Physical security and emergency supply of power, including reducing vulnerability of a system to terrorism.

To accomplish this aspect of the study, DOE requests case studies, analyses, or reports valuing these potential benefits under varying circumstances for individual DG, CHP and other distributed energy technologies.

B. Rate-Related Impediments

Subsection 1817(a) of EPAct 2005 states that DOE's study must include, among other things, an analysis of rate-related issues that “may impede or otherwise discourage the expansion of cogeneration and small power production facilities.” Id. Section 1817(a)(2)(B). To evaluate rate-related impediments that may hinder or otherwise discourage the expansion of DG, CHP systems and other distributed energy technologies, this study will analyze whether rates, rules, tariffs, or other requirements imposed on such installations are comparable to rates imposed on other customers of the same class that do not have distributed energy facilities. For this portion of the study, DOE requests public comment (in the form of case studies or similar information) depicting the effect of rate-related issues on the planning, financing, installation, commissioning or operation of DG, CHP and other distributed energy technologies.

III. Public Participation

A. Report

DOE will make the draft report available to the public and provide an opportunity for interested parties to submit written comments on the initial conclusions reached by the study. Following the public review period, DOE will subsequently present the results of the study to the President and Congress not later than February 8, 2007, and will thereafter publish a final report.

B. Submission of Comments

DOE requests written comments from interested parties on all aspects of the study required by section 1817. DOE is especially interested in receiving written comments from persons with particular knowledge of the legal, economic and technical elements related to the benefits and rate-related issues concerning DG, CHP and other distributed energy technologies. Any information submitted to DOE, however, should not contain confidential, proprietary or business sensitive data.

Issued in Washington, DC, on January 24, 2006.

Kevin Kolevar,

Director, Office of Electricity Delivery and Energy Reliability, U.S. Department of Energy.

Footnotes

1.  The term “cogeneration facility” typically describes a facility that produces electric and/or thermal energy independent of or interconnected to the local electricity supplier (grid). 16 U.S.C. 796(18)(A). Similarly, “small power production facility” usually refers to a facility that produces less than 80 megawatts of electricity. Id.

Section 796(17)(A). “Distributed generation” (DG) generally applies to energy systems that produce electricity and/or thermal energy at or near the point of use.