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Another Re: Innovative Strategies for Electric Utilities

Good conversation.

Another barrier or, at least, complication in promoting P2 with electric utilities is utility restructuring and competition.  It used to be a that a number of utilities promoted demand-side management and provided EH&S technical advice (including P2) to industrial customers based on an economic development rationale--like states and localities, they wanted to attract and retain industry (i.e., customers) in their territories.  However, the notion of a utility territory is fading as customers gain more freedom to choose their energy suppliers and may even consider generating their own power.

Quite a few utilities are separating, even divesting, their generation from their transmission and distribution (T&D).  So in some cases the local utility (or electric coop) may be purely T&D with no generation assets.  Some companies may focus on the being the lowest cost power provider while others may move toward being energy service companies (ESCOs) that look to emphasize enhanced reliability, power quality, and other value-added services.  I'd bet that a lot of utility companies aren't sure of what they want to do until some of the restructuring/deregulation dust settles.  Certainly this is true in the area of combined heat and power (CHP)/distributed energy resources (DER)--some utilities appear to erect roadblocks while others seem to accept and many aren't sure what to do with small distributed power generation.

It seems that there are two fundamental types of P2 issues with electric utilities: promoting P2 in the utilities' own operations and promoting P2 among utility customers.  These interact in the case of green power markets. (Gas utilities can sometimes be allies in promoting clean energy and electricity.)

In the case of P2 in the utilities' own operations, there appear to be some of the typical industrial opportunities in equipment, vehicle, building, and grounds maintenance.  Plus there are things like encouraging recycling, beneficial use, and energy recovery from used mineral oils from transformers (but watch out for PCBs!); or encouraging utilities to find alternatives for SF6 as an insulating gas in switchgear (SF6 is one of the most potent greenhouse gases known); or providing high efficiency fully shielded (reduce light pollution, improve efficiency) lamps in areas where utilities provide fixtures for street lighting.  

As the initial post from Texas indicated there may regulatory ways to promote improved combustion efficiency, fuel switching, or other improvements without triggering the dreaded (from the generator's perspective) New Source Review process. (NSR, NSPS, grandfathering is a whole different discussion on regulatory impediments to innovation and P2.)  Of course the move towards gas and then renewables should be a net positive.

In the case of promoting P2 for utility customers it would be useful for P2 advocates to engage air quality regulators, state energy offices, and public utility commissions. If P2 advocates are at the table as utility rules and tariffs are rewritten, they will have an opportunity to promote P2, energy efficiency, and CHP/DER incentives (though be careful--not all CHP/DER options are clean).  P2 advocates should also look into opportunities for renewables and efficiency to garner NOx reduction credits under air quality State Implementation Plans (SIPs).

I hope this is useful and apologize for the verbosity. 


Rodney Sobin
Innovative Technology Manager
Virginia Department of Environmental Quality
Postal: P.O. Box 10009, Richmond, VA 23240-0009
Street:  629 E. Main St., Richmond, VA 23233-2429
Tel. 804-698-4382	fax 804-698-4264  Rsobin@deq.state.va.us
DEQ Innovative Technology http://www.deq.state.va.us/innovtech
Chesapeake Bay Program Innovative Technology http://www.chesapeakebay.net/innovative.html
Virginia Environmental Services Network http://www.vesn.org

	-----Original Message-----
	From:	Gary Miller [SMTP:gmiller@wmrc.uiuc.edu]
	Sent:	Thursday, July 25, 2002 8:59 AM
	To:	Thomas Vinson; nppr@great-lakes.net; p2tech@great-lakes.net
	Cc:	Grace Hsieh; Ken Zarker; Susan Roothaan; raulg@utep.edu
	Subject:	RE: Innovative Strategies for Electric Utilities


	You make an excellent point.  Perhaps we need to "sell" electric utilities 
	on the concept that they are providing a service - not just a 
	commodity.  With a service approach the less materials (in this case 
	electricity) required by the customer the more money the vendor makes.  The 
	vender's focus changes to producing less commodities through improvements 
	in transmission and end use efficiency.  Some chemical suppliers are taking 
	this approach now.  It seems to me that this concept could work with any 
	commodity including electricity.  I have greatly oversimplified this 
	concept and what it would take to make such a paradigm shift in this 
	particular industry.  You would have to find just the right innovative 
	mindset in order for a utility to adopt such a radical approach.  Some good 
	articles have appeared in P2 Review on the topic of innovative supplier 
	contracts or chemical management systems.  The automotive industry has been 
	adopting this approach.

	Has anybody come up with a way to promote this approach with utilities in 
	the U.S.?

	Gary Miller

	At 12:44 PM 7/24/2002 -0500, Thomas Vinson wrote:
	>It is a very interesting discussion.  It has moved to an area that I have 
	>had on my mind for a number of years...how do we "sell" electric utilities 
	>on P2?
	>The Electric Utilities is an area I have always wanted to address.  With 
	>so many sectors we have applied P2 principles and seen enormous benefit to 
	>the environment and the economy.
	>But like the proverbial salesman who can't get his foot in the door I seem 
	>to be at a loss with Electric Utilities.
	>Mark and LCRA are very open to change; in fact I have a great deal of 
	>respect for LCRA's innovative mindset.
	>In every other sector I have seen resistance to P2 change, but there is 
	>also some acknowledgement that P2 is a good idea. It is simply a matter of 
	>convincing them that the approach is feasible (sort of along the five 
	>factors that Gary Miller mentioned.)
	>But with this sector I seem to be missing something.  There seems to be 
	>some key factor that I am not addressing.  Discussions on P2 are ussually 
	>met with indifference and all my usual strategies seem ineffective.
	>I think I see the barriers:
	>1. Source reduction is nearly impossible.  This process is simple.  Burn 
	>stuff, convert it to electricity.  Without changing that paradigm it is 
	>hard to offer solutions.  LCRA found some options that involved using 
	>fuzzy logic (this is a math term not an assessment) to set a plants 
	>operating conditions at optimal working conditions.  But so far I have 
	>seen no interest from other utilities.
	>2. Source reduction from a use standpoint is economically detrimental to 
	>the utility company. Programs to reduce generation (like those discussed 
	>by Burton) of electricity are not in the better interests of the 
	>sector.  After all, they get more revenue as electric use increases.  I 
	>once heard a city manager lamenting the cool summer because it was cutting 
	>into his budget.  Energy conservation was the furtherest thing from his mind.
	>3. The politics are intense.  If you offer a solution to a metal finishing 
	>shop you affect at most a couple hundred people. But offer a change at a 
	>utility and you are talking about millions of people.  Energy issues tend 
	>to be highly charged.
	>4. Environmental department not integrated?  Perhaps Mark can offer some 
	>insight on this.  When talking with other sectors I get the impression 
	>that the environmental departments are ussually integrated into their 
	>business.  But sometimes I get the feeling electric utilites have 
	>segregated environmental departments.  Is this the case?  If so, what is 
	>the motivation for a utility to integrate it.
	>So does this group have sector specific ideas about how to approach this 
	>It seems to me there is enormous opportunity here to help the environment 
	>and save money if we could just get some momentum.
	>I think Burts discussion of strategies gets to the heart of the 
	>issue.  While we may get good results with the "you will save M O N E Y!" 
	>pitch, we are probably not at 100% effectiveness.
	>So, I put it to the group.  How do we practically implement the other 
	>areas Burt mentioned, and specifically how would this approach work for 
	>Tomas Vinson
	>Fax: 512/239-3165
	>Phone: 512/239-3182
	>Engineering Specialist
	>TNRCC - Pollution Prevention
	>PO Box 13087
	>Austin, Tx 78711-3087
	>Disclaimer:  Regulatory guidance  e-mails are provided to quickly get you 
	>an answer to legal requirements.  They are not a substitute for compliance 
	>with the regulation, but guidance based on the best information available 
	>to the staff of TNRCC at the time.
	> >>> <jlmartinezp@repsolypf.com> 07/22/02 01:40AM >>>
	>Very interesting discussion
	>I am writing form Europe. Here, we have a an internal law called IPPC 
	>(Integrated Pollution Prevention and Control); the idea was to 
	>have  something like PPAct but  being a bit more flexible. We are trying 
	>to combine  making a trade off between Prevention and Control of the Pollution
	>I think we, process, design or environmental engineers,  should be able to 
	>think about a trade off between  PP or Pollution Control following a case 
	>by case procedure.  Does Pollution Prevention pay? The answer should be 
	>yes, but applying  concepts like best available technologies not 
	>entailing  excessive costs.
	>I remember a paper form Bob Pojasek titled: "For PP be descriptive not 
	>prescriptive" so let us  select scrubbers when necessary  or let us select 
	>any source reduction measure when available at economic good conditions
	>I agree that we should avoid to transfer pollutants from  air to land (for 
	>example) but this is not always technical  or economical feasible.
	>I am studying  petroleum refineries cases and believe me that  it is 
	>harder to  decide when  to apply Pollution prevention or pollution control 
	>measures that go to your PP recipe book and select one of them
	>Jose-Luis Martinez
	>  -----Mensaje original-----
	>De:     Snyder, Mark [mailto:mark.snyder@moea.state.mn.us]
	>Enviado el:     viernes 19 de julio de 2002 20:53
	>Para:   nppr@great-lakes.net; p2tech@great-lakes.net; 
	>scott.butner@pnl.gov; 'Mark Johnson'
	>Asunto: RE: Innovative Strategies for Electric Utilities
	>This certainly sounds like a good step forward for cleaner air in Texas, 
	>but after reading the press release, I'm left with some questions.  Is 
	>this project to install scrubbers an example of pollution prevention or is 
	>it an example of more stringent pollution control?  Given that scrubbers 
	>have been around for a number of years and have been required for a number 
	>of facilities in different areas, what exactly makes this permit 
	>innovative?  Or is there something I'm missing from the press release?
	>Mark Snyder
	>Pollution Prevention Specialist
	>Minnesota Office of Environmental Assistance
	> > ----------
	> > From:         Mark Johnson[SMTP:Mark.Johnson@lcra.org]
	> > Sent:         Friday, July 19, 2002 12:02 PM
	> > To:   nppr@great-lakes.net; p2tech@great-lakes.net; scott.butner@pnl.gov
	> > Subject:      Innovative Strategies for Electric Utilities
	> >
	> > A shameless plug for my organization Lower Colorado River Authority 
	> (LCRA) and the Texas Natural resource Conservation Commission (TNRCC) and 
	> EPA Region 6!
	> >
	> > We recently submitted an application for a Flexible Air Permit to the 
	> TNRCC for our 1,500 MW coal fired power plant in La Grange Texas.   The 
	> innovative air permit will allow our facility to implement many P2 
	> projects that would have not been possible without the Flex Permit (most 
	> of these P2 projects would have triggered NSR).   The Flex permit will be 
	> put in motion over the next 10 years.
	> >
	> > This innovative permit strategy can be followed by most other utilities 
	> if the states are able to provide the flexibility.  It can provide some 
	> near term benefits and long term reductions without waiting for CAA 
	> reforms or implemntation of the Bush Clear Skies initiative.
	> >
	> > For more details please visit this link
	> > http://www.lcra.org/about/news/2002/07/plan.html
	> >
	> >
	> > Mark L Johnson, REM.
	> > Senior Environmental Coordinator
	> > Lower Colorado River Authority
	> > Email: mark.johnson@lcra.org
	> > Phone (512) 473- 3200 ext 2868
	> > Fax: (512) 473-3579
	> > Fax (512) 473-3579
	> >
	> >
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	Gary D. Miller, Ph. D.
	Assistant Director
	Illinois Waste Management and Research Center
	Department of Natural Resources
	One East Hazelwood Drive
	Champaign, IL  61820

	217/333-8942 phone
	217/333-8944 fax

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