By Jim Heneghan Delta-Montrose Electric Association 27 March 2014 How the Utilities Got Their Start  1882 Thomas Edison’s coal fired power plant begins operation in.

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Transcript By Jim Heneghan Delta-Montrose Electric Association 27 March 2014 How the Utilities Got Their Start  1882 Thomas Edison’s coal fired power plant begins operation in.

By
Jim Heneghan
Delta-Montrose Electric Association
27 March 2014
How the Utilities Got Their Start
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1882 Thomas Edison’s coal fired power plant
begins operation in Manhattan
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High capital cost for the plant
Central generation distributed via power lines to customers
Samuel Insull, Jr. Developed the Regulated
Utility Monopoly Concept in Chicago, Illinois
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High cost of entry required a “guaranteed” customer base to attract private investors
In exchange for allowing a monopoly, the states could regulate the industry
Large central generation resulted in relatively low cost of electricity to consumers
Inexpensive electricity prompted innovative appliances which brought comfort and
convenience to society
The Regulated Monopoly

Insull’s Idea to Allow State Regulation
◦ Greatly slowed the development of municipally owned utility
operations which were a growing trend
◦ Made difficult for “upstart” entrepreneurs to enter
the electric utility industry
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Legally protected service areas
◦ Viable in densely populated areas
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Regulation protected and assured the
interests of the people were protected
Wholesale Power Providers
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Independent Power Providers
◦ PURPA – Public Utility Regulatory Policies Act - 1978
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Regulated electric utility monopolies must purchase power from
independent sources if it is more efficient, cheaper than avoided
cost
Intended to promote greater use of renewable energy
◦ Renewable Portfolio Standards – 2004 in Colorado (first
by voter initiative)
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State requirements (thus far, no Fed RPS) that a percentage of
electricity sales be from renewable resources
◦ Third Party Owned Photovoltaic Generation
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In Colorado, 3rd parties can own PV generation and not be
regulated as a utility
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PV installed at a consumers site
Tied to the grid via the consumer’s electric meter
Consumer makes payments to Third Party Provider
It’s a Great Site. Why won’t the utility buy the power?!
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When is the electricity available?
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Hydro is often seasonal
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Reserve generation when the IPP is not available
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Percentage output compared to nameplate output 24 hrs -365 days per year
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Annual Plant Capacity Factor
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Available during peak demand periods?
Base load generation?
What about the Power line?
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Proximity of generator to power line
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$150K - $200K per mile for 3 phase
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Does my generation capacity mesh with the utility infrastructure
Capacity of the infrastructure
What if you can’t generate?
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Utility needs a back up
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G&T, RTO, Balancing Authority
3 Basic Considerations for Grid Connection
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Net Metering
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Interconnection occurs at the meter
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Electricity has “retail” value
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Kwh provided to grid is “banked” for later consumption
Intended to offset consumption on site
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Generally, low cost to interconnect
Often 240 V, single phase
Even though generation may be in excess of consumption at any given minute, hour, day, week or
month(s), it is intended that the “excess” will be consumed at some point during the year
Seasonal hydro is a good example – generate excess during irrigation season; consume in the winter
Connect to Utility Grid for Sale to Utility
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Interconnection occurs at Utility Grid
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Electricity has “wholesale” value
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Must meet utility interconnection standards
Typically, generation is stepped up to Utility voltage
Typically, will have sophisticated trip schemes
 May require transfer-trip
 Utility SCADA
A negotiated PPA determines the price the IPP receives for electricity
 May require generation schedules, curtailment clauses, regulatory compliance
Intended for consumption on the Utility’s grid
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May be subject to the Utility’s load factor
3 Basic Considerations for Grid Connection
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Connect to Utility Grid for Wheeling to Point of Consumption
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Interconnection occurs at Utility Grid
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Must meet utility interconnection standards
Typically, generation is stepped up to Utility voltage
Typically, will have sophisticated trip schemes
 May require transfer-trip
 Utility SCADA
◦
Electricity has “wholesale” value
 A negotiated PPA determines the price the IPP receives for electricity
 May require generation schedules, curtailment clauses, regulatory compliance
◦
Intended for consumption Outside of the Utility Service Area in which Generation is
Interconnected
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Subject to Grid Capacity
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System Impact Study
System Losses
Multiple Transmission Systems May be Involved
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Each Transmission Entity Has a “Layer” of Charges
Where Can I Find Help?

Internet
◦ www.dmea.com
 Net Metering Policy
 Net Metering Application
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www.dsireusa.org
 Database of State Incentives
Consultants
◦ Telluride Energy & Applegate Group
USDA
◦ Potential Funding for Small Hydro
Thank You
Questions?