MAR 2 81984










Prepared for




;:6 1984






Prepared by
Dilip R. Linaye, Shah^?d Qasim Synergic Resources Corporation P.O. Box 1505 Bala Cym.-yd, PA 1 9004-3''-06

Kay, 1983

Prepared for
Hontsna Department of Natural Resources and Conservation 59520 32 South Ewing, Helena, Montana Bicnass Utilization and Cogeneration Program Contract Agreement Kunber ED-SRC-653

Available from
Montana State Library, 1515 East Sixth /.venue Justice and State Library Building, Helena, Montana 59620

This report was prepared under an agreeme-it funded by the Montana Department of Natural Resources and Conservation. Neither the Department, nor any of its employees makes any w;2rranry, express or ir.iplied, or assumes any legal liability oi responsibility for the accuracy, completeness, or usefulness of any infornation apparatus, product, or process discloted, or represents that its use would not infringe on privately owned rights. Reference herein to any specific comn.ercial product, process, or service by trad-: name, tradeiuark, manufacturer, or otherwise, does not necessarily constitute or imply its endcrsement, recommendation, or favoring by the Department of Natural Resources and Conservation or any employee thereof. The reviews and cpir. ion ot authors expressed herein do not necessarily state or reflect those of the Department or any employee thereof.




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II-l II-2 11-17 11-26 11-30


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IV-1 IV-18 IV-21



















industry and and electric utilities use primary energy consumed. and the related reporting requirements. the regulation of electric utilities. l-l . Other factors contributing to this declining trend included the following: Industry was hesitant to invest in generation because of the possibility of Federal and state regulation as a utility.S. less industrial generation/cogeneration the became 's. INTRODDCTION A. and approxigen- mately using cogeneration On-site eration/cogeneration was more reliable and less expensive than utility generated power. BACKGROUtro According to the General Accounting Office. plants this generated was their own electricity (2^) . Coupled with tech- availability of advances of inexpensive fuels for power in generation and nological central station utility generation and trans- mission electricity. the waste heat from power generation and process energy use amounts to over seven million barrels per day oil equivalent (1) . U. However. in the 1920 's and 1930 's. Cogeneration by can offer a method to reduce the amount useful of waste thermal heat simul- taneously producing electricity and energy from a common primary energy source. Industrial generation of In electricity has been practiced for most industrial half of a long time. use of energy.I. economically attractive.S. From 1920 's to the mid-1970 there was a generally declining trend in the proportion of electricity cogenerated in industry {3) . the early 1900 's. nearly half the U. government. first by in state agencies and then by the Federal and resulted and elimination of of unproductive service competition. Because of its potential for efficient in cogeneration is receiving increasing attention the The concept of cogeneration is not new. consolidation the extension utility areas.

industrial generation declined from 18% of total electric (4) . when demand forecasts were growing at an annual rate of 710 percent. has been mostly deferred or cancelled. New generating capacity committed in the 1968-1974 time frame. increased resistance to rate increases and regulatory lag. environmental/siting constraints. environmental for constraints the utilization of coal. decreasing The nation has of faced increasing sources. potential in increased and efficiency of energy reliable supply of less uncertainty Moreover. Few large projects by the have been The basic problems high faced utilities escalating customer include high fuel costs of new capacity. completed. electric part. in cogeneration and faced on by small power production. 1-2 . industry the energy recent costs more energy. Many electric utilities are facing financial problems of unprecedented magnitude. and high capital costs expanding the energy energy resources has Efficient utilization of our become a very high priority and cogeneration has become economically attractive. the energy situation in the United States has undergone a significant transition. delivery system. Federal legislation has to attempted to remove scale some institutional barriers Moreover. regulatory to changes (discussed below) provide an opportunity obtain significant economic benefits from cogeneration. interest rates. generation in 1941 to about 4% in 1977 In the last decade. At of the the same time. for excess power sold • Utilities charged high prices for standby or supplemental power needed by the cogenerator.• utilities offered very low prices by an industry to a utility. Cogeneration offers use. costs. Industry facing rapidly escalating energy costs is searching for alternative methods to the obtain its for future energy requirements. the problems interest. As a result. in utilities have resulted increased their industrial cogeneration. to prices energy and availability conventional energy supply disruptions.

. These changes have led utilities not only to consider industrial cogeneration in their planning for future capacity needs. owned and operated by a utility. Among the non-conventional fuels. allowing time for their economic situation to stabilize before having to undertake another new plant. coupled with slower load growth. BIOMASS AS AN ENERGY RESOURCE Cogeneration systems can be fired with conventional as well as nonconventional fuels. with the and to some extent. while the capital requirements for new capacity have continued to escalate rapidly. These utilities. 's and are expected to continue in the 1980 in have created industrial a trend towards increased interest by and acceptance of cogeneration utilities. Cogeneration ventures. Cogeneration could contribute significantly in this approach. The significant changes in the economic and institutional aspects of power generation. looking ahead to the late 1980 's. see their best prospects in completing plants now almost completed. utilities may be able to raise capital through innovative financing schemes such as joint ventures or third party arrangements to build new capacity for cogeneration. biomass is an important energy source. Utilities are therefore increasingly interested in examining (6) opportunities for participation in industrial cogeneration projects B. but have also resulted in the growing recognition of cogeneration systems as a utility business opportunity. In addition. which occurred in the 1970 's. that a discouraging increases in load growth expectation two percent annual growth rate will be manageable. have led to lower revenues than forecast. As part of this basic approach it would be advantageous to flatten the system load curve and to reduce or eliminate use of expensive peaking generation requiring use of high cost fuels in relatively inefficient power plants. can be highly complementary to traditional utility operations and possibly offer a potential for higher profits than the traditional utility business. These problems. The use of biomass as an energy resource is not 1-3 .

Examples are timber mill wastes. Industries located near central collection points for biomass residues may contract with their owners for supply of these residues. The utilization of biomass residues as an energy fuel need not be limited to those industries which produce the residues. Alternatively.S.a new idea either. Biomass residues typically possess limited economic value and may even carry a significant economic penalty for their disposal. dairy and and food processing wastes. used wood for space heating. In the mid-1800 's wood supplied over 90% of our energy needs. and as late as 1940. The greatest potential for biomass residue utilization resides in the on-site or local use of residues that are accumulated at central locations. an ina dustry may be recently formed supplied with biomass to fuels by firm which may have process and market biomass residues acquired from surrounding industries. and rice straw. orchard prunings. 20% of the homes in the U. The utilization of biomass residues for fuel also need not be limited to new biomass conversion installations. Biomass residues are a renewable energy resource which are primarily produced as wastes or by-products of industrial and agricultural production. feedlot manures. cotton gin trash. In the wake of the first oil shock that started raising the costs of fossil fuels. Conversion technologies that can economically con- vert biomass residues to usable energy are currently commercially available. cotton gin trash. 1-4 . Examples are some food processing and lumber mill wastes. Many plants have fossil fuel fired boilers that still have significant operating lives remaining. Economic incentives for biomass residue utilization are increased when the residue carries an associated disposal cost. biomass fuels once again became a focus of interest as an alternate source of energy. these boilers to There are several options available for retrofit of biomass residue use.

This manual will provide a broad description of cogeneration technologies and biomass fuels that can be used to fire the cogeneration systems. 1-5 . Brief case studies of five working biomass fueled cogeneration are systems presented in Appendix A. A resource list of manufac- turers/suppliers of prime-movers and multi-fuel boilers for cogeneration systems is given in Appendix B.




Typically. the system is Topping Cycle.II. and ease of varying this ratio during operation II-l . e. pump or substituted When electricity or shaft power is the called a first output. compressor.. mechanical at the same is energy. cogeneration The thermal energy may A system that produces and systems produce electrical and thermal energy. Schematically. be in the form of steam. Several are cogeneration technologies no are being used by industry or meet the under development.g. time produces thermal energy to meet process requirements. systems the capable producing electricity in because primary form of cogeneration systems are fan is use. hot water or hot air. on is This discussion of of cogeneration technologies and steam. mechanical cogeneration a similar to electrical ones except that for the electrical generator. The following characteristics must be considered when selecting a cogeneration system: • Applicable size range Total installed cost Fuels required • • • Ratio of electric energy to thermal energy output. of the because single technology will a requirements application. also a cogeneration will focus this system. the For specific and the characteristics industrial process cogeneration system must be compatible for cogeneration to be technically and economically feasible. shaft power to drive process equipment. all cogeneration of applications. and when the thermal output is produced first it is termed a Bottoming Cycle. INTRODOCTIOW Cogeneration is defined as the sequential production of two forms of output energy from the same energy input. COGENERATTON TECHNOLOGIES A.

cell. Combustion Turbines Internal Combustion Engines Combined-Cycle Systems Bottoming Cycles In addition. than to The low600 to medium-pressure steam square inch) (i. is expanded High pressure steam from the boiler in the turbine. which in turn drives an electrical genera- tor to produce electricity. 3. Steam Turbines 2. 4. This system utilizes a backpressure turbine. Two of the closed-cycle gas turbine and the fuel B. 5. than the The condensate returning from the process usually less steam delivered to it because of losses or consumption. Steam Turbine Systems A schematic diagram of a conventional steam turbine (ST) cogener- ation system (topping cycle) is shown in Figure II-l. steam at pressures less turbine pounds per exiting the exhaust is used meet process is thermal requirements. SYSTEM DESCRIPTIONS 1. Cogeneration technologies suitable for use with biomass-derived fuels that are presently in use include: 1. a great deal of more research and development effort is being focused on developing these are efficient and/or more economical systems.. minimum output) • • • Construction time.e.e.• operation and maintenance requirements Part load performance Turn down (i. II-2 .

Figure II-l COGENERATION SYSTEM WITH A BACKPRESSURE STEAM TURBINE Hiah Pressure Steam 'Clean Gases" To Stack * T7 Boiler i Stack Gas Cleanup Svstem Electrical nerator T t Slowdown t Ash r Inert Sludge or other Solid Wastes Low to Medium Pressure Steam To Industrial Process Applications Q Water Makeup 3oiler Peed Pump Condensate Ret-umed From Process II-3 .

A shown If condensing in steam . two (not increase system The shown in figures) use either boiler blowdown or hot stack gases to pre-heat the incoming make-up water and/or returned condensate. allow the backpressure of all turbine the system at designed extraction heating overall other is steam intermediate pressures. the assuming the and condenser power sufficient Alternatively. the electrical the output can remain constant or even increase by increasing turbine if is steam flow to the have condenser. turbine is cogeneration flexible than system a (such as that Figure II-2) more backpressure system. to A small amount the extraction to steam the is used meet auxiliary to steam boiler. It is more efficient than a condensing system because the thermal energy from the boiler is not lost in a cooling tower. Figure II-2. However. this turbine at one or more intermediate points and supplies the process requirements while a large fraction of some of the steam exits the the steam of is expanded in the turbine to a vacuum condition.A schematic diagram of a cogeneration in system using In an extracsys- tion/condensing steam turbine is shown tem. less A backpressure turbine is also expensive than a condensing is turbine. at electrical requirements decrease. proportional This has two is steam requirements of (a) industrial consequences: smaller. the process steam requirements decrease.. requirements and heat in to feedwater a returning the Although usually not is shown Figure II-l. system efficiency. capacity. A backpressure steam turbine system is the least expensive steam turbine cogeneration system because it does not need a separate heat or a rejection system (i. used Feedwater to one of three system but the design which enhancements also increase cost. the to quantity of the electrical energy the available directly process.e. and the ratio of electrical output to thermal output (b) the electrical output of a backpressure system decreases proportionately with the decrease in process steam requirements. cooling tower) condenser. the rate which steam extracted from turbine can be II-4 .

Figure II-2 COGENERATION SYSTEM WITH AN EXTRACTION CONDENSING STEAM TURBINE High Pressure Steam To Stack Fuel- Stack Gas Cleanup Svstem Electrical /^ Generator 3lowdown Inert Sludge or Other Wastes Extraction Steam To Process Extraction Steam For Feedwater Heating f Makeup Water Boiler poed Pump Feedwater Deaerator Heatar(3) -0 Condensate k Condensate From Process t II-5 .

tubes. The energy from the expanding gases is used .increased. bed is in constant motion. and a combustor. "clean" fuel but cost of equipment that generates forms from "dirty" solid forms may be quite significant. combustion turbine called a gas turbine) consists of compressor and a turbine connected by a common shaft. AFB also fuels that cannot be used in conventional boilers. this added flexibility and the additional electrical output per unit steam flow to process may offset the increased cost of a condensing system. Combustion Turbine Systems A schematic is diagram in of a combustion A a turbine (CT) cogeneration (sometimes system shown Figure II-3. and other a conventional boiler solid fuels is for use with wood. the This results rapid heat or transfer to boiler walls. located in the fluidized stack to bed the combustion passed chamber The gases remove usually are cooled and through large fabric bags particulate emissions. In many applications. to a Ambient air is compressed. In a fluidized-bed combustion boiler. coal. hot gases are then expanded in the turbine. in The similar to a boiling liquid. wood the fluidized-bed boiler. Figures II-l and II-2 show a biomass-f ired (or coal-fired) boiler with a stack-gas cleanup system to remove particulates and other con- taminants that typically occur when solid fuels are burned. the An a atmospheric fluidized bed (AFB) boiler eliminates boilers can need burn for complex flue gas treatment system. An alternative to wastes. heated and the high temperature in the combustor. 2. fuel is burned in a bed of inert particles suspended by air currents in the combustion zone. fired by gaseous or gas or fuel oil) Boilers liquid fuels derived from biomass (or by natural the usually do not require a scrubber.

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addition to the heat from the engine jacket and oil cooler. heat recovered from the engine exhaust. and the hot turbine exhaust gases are used to produce process steam in a heat exchanger. "clean" gaseous or liquid fuels. additional fuel is burned in the heat recovery steam generator. IC The ratio of electricity to heat is larger engines are available in a wide range of sizes and are particularly attractive for use in smaller cogeneration systems. Combined-Cycle Cogeneration Systems As shown in Figure II-4. since CT systems are modular. consists of a gas turbine and a bottoming steam The gas turbine exhaust is used to generate steam for process heating and to generate electricity in a steam turbine. Their principal disadvantage is that they Howthan burn only relatively expensive. up to 1500 psia. engine can cogenerate steam and electric power.to drive both the compressor and generator. At sizes less than several than megawatts. Because engine-based systems are modular and factory built. If in Hot water can be produced in the engine jacket and oil cooler. than with a CT system. construction time is less that required for CT steam turbine are systems. systems. an By connecting heat recovery steam generator to the exhaust. . can be used to heat large quantities of water. Gas turbine cogeneration systems can supply steam at very high pressures. Internal Combustion Engines Internal combustion or (IC) engines also require very "clean" liquid a gaseous fuels. is steam not required. 4. a combined-cycle tem (C-C) cogeneration systurbine cycle. ever. construction time can be quite short. systems also more economical steam turbine 3. If a larger ratio of steam to electricity is needed. Process steam can also be extracted from the steam turbine.

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and they generally used only in sizes greater than 50 MW. is The concept shown in Figure II-5. In practice. Brayton and Stirling cycle engines). Bottoming Cycle Systems Bottoming "waste" cycle cogeneration is essentially the recovery of heat from a process to generate mechanical or electric power.g. are the same fuels used with CT systems) The C-C system has a higher than energy conversion efficiency at part load either a CT or ST system. high temperature waste heat from any process (e. • Steam Rankine Cycle In the steam Rankine bottoming cycle. because Stirling engines have not been developed sufficiently. that exhaust prime candidates for bottoming cycles would be processes heat at high temperatures. because a combined-cycle system is more flexible to varying steam and electric loads. in adjusting 5. metal refining and treatment. and well- established technology.A C-C system is more complex and more expensive (per kW of elec- trical output) are than either a CT or a ST cogeneration system.. the steam Rankine cycle is attractive for bottoming cycle applications because it has ate a good efficiency and moderand capital cost for most of the temperature size ranges of . (e. however. Since large quantities of biomass fuels usually are not available at one location. only the Rankine and Brayton cycles are usually considered. glass and cement The steam is used manufacture) produces steam in waste heat boilers. In principle.g. generator to produce electricity. In addition to the advantages of ready availability. which in turn drives a to drive a steam turbine. any external-combustion heat engine may be used in this cycle Rankine. In industrial applications. The expanded steam is condensed in a condenser and pump- ed back to the boiler. it is unlikely that C-C systems will be used with biomass fuels {these .. usually after being heated in a regenerator.

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and feed pumps can be designed for lower pressures. interest. inch. These factors for become more significant as a power the levels appropriate of fciottoming cycles consequence quantity waste heat available at 500°? or more. common to ST topping cycles and C-C plants. There are several reasons for preferring organic fluids rather than water in low to medium temperature applications (200°F to 850°F) Since organic fluids have a much lower saturation pressure in this temperature range. valves. toluene. Steam turbine bottoming cycles are most suited to applicathe tions where and 1200°F. eliminating air in-leakage problems such as excess 11-12 . pumps. These advantages are counterbalanced by certain inherent due to the physical properties of water. the working Since water can become very corrosive when it contains certain of kinds impurities. The basic cycle fluid. Because thermodynamic properties of water. which increases the cost of the piping. the working rather than water. The steam should be superheated to avoid erosion of the turbine blades that results from impingement of water droplets. the system has to be operated at a pressure of several hundred pounds per square etc. Some organic fluids can be cona densed at pressures above atmospheric pressure without significant loss of efficiency. and the maintenance lower of demands. to have well established solutions. strict of the control has to be maintained over its composition. piping. cost at they do lead higher complexity. turbine cases. • Organic Rankine Cycle The configuration of an organic Rankine bottoming cycle is essentially the same as a steam two Rankine is bottoming that an cycle. difference uses an between the cycles such as organic as Rankine organic compound.. available waste heat has a temperature between 500°F difficulties fluid. Although the above mentioned problems. boiler tubes.

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The disadvantage that the equipment and is less is commonly used and may have to be specially designed. furnace in which the products of combustion from the burning fuel not contact the item being heated.) The compressed air is then heated to high temperature in the the furnace. than water. temperature waste available (1000°F A schematic diagram of the cycle is shown in Figure II-6.with condensing steam turbines. but instead heat the interior walls of the furnace cavity. In this application. organic vapors are denser than steam and. combustor and used to heat The hot gases leaving the furnace are then expanded in a the compressor and an turbine to drive electric generator. and turbine working fluid then is a heated heated hot the waste Ambient (The is compressed and regenerator. *A do II-I4 . Organic fluids have a much higher molecular weight a As result. a the organic Rankine cycle definite cost advantage over is steam Rankine cycle. turbines. than therefore. whereas steam begins to condense. use of the regenerator. organic cycle turbines are smaller and At lower simpler steam has a temperatures. improves system's efficiency. superheating and re-superheating are unnecessary in organic Rankine systems. which gas-to-gas heat is exchanger. which a gas turbine bottoming cycle is applied to an indirectly heated furnace. there not as much operating experience as • Gas Turbine (Brayton) Cycle Gas tions 1700°F) turbine high bottoming cycles are suited heat is to those rare applicato in where . Organic fluid vapor becomes super- heated as it expands in the turbine. hot furnace exhaust gases that might otherwise be wasted are used to generate electricity. by a a combustion the gas air a turbine combustor could be replaced by in heat exchanger gases. Thus. with steam systems.* Alternatively.

and In a closed-cycle system. Because of the higher system pressures. 11-15 . capital costs are moderate compared relatively low.The main advantages of the gas turbine for bottoming cycle appli- cations are: the technology to is well developed. the compressor ambient. as to produce steam for process shown in Figure II-7. requirements are The primary limitation is the need for waste heat at steam systems. 6. Also. Since the it gas turbine exhaust is not contaminated by products of combustion. The closed-cycle system is not yet commercially available. the possible to obtain is higher outlet pres- from compressor than possible in an open-cycle system. then used use. can be returned to the compressor to complete is the cycle. The gas turbine shown in Figure II-3 uses an open cycle. used to heat the compressed working fluid The hot gas is expanded in a turbine. because the boiler removes most of the heat from the turbine exhaust gases. / and maintenance very high temperatures. the working fluid has a higher density. an external heat source in a heat exchanger. fluidized and the bed as the heat source turbine other using an oil-fired furnace with a turbine inlet temperature of 2200°F. since it is neither limited to air as the working fluid nor to atmospheric pressure is at the compressor inlet. sure inlet turbine it is exhaust pressures a are greater than As a result. The cooling requirement after the heat-recovery boiler very small. New Technologies The closed-cycle gas turbine system offers a wide range of design possibilities. it is possible to use a working fluid other than air. so named because the compressor inlet and turbine exhaust are at ambient pressure and are not directly connected. In this system. Two options for using closed-cycle gas turbines for cogeneration have been studied: (1500°F one using an inlet atmospheric temperature) . and the closed-cycle system is physically smaller.

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performance characteristics. System characteristics are presented to facilitate a comparison of the different technologies for specific applications. the cost of essentially similar equipment may vary here among manufacturers. as shown in Figure II-8. C. of a the cost and performance specific system may be significantly different from average values because. and construction time vary sigamong nificantly cogeneration technologies. substitute for Total (i. This information is representative of the but not it current state-of-the systems art. must be designed for each application. COGENERATIOW SYSTEM CHARACTERISTICS 1. installed operation and maintenance cost. Total Installed Costs Applicable cost. site-specific engineering study. Total II-9 for several cogeneration technologies.. The total installed cost for a wood- or wood-waste-fired steam turbine system. of the However. installed firing cost rate) as is a function shown in of peak rate of fuel and usage 11-10 are design Figures II-8. should be used items with they caution. but are not detailed. includes the cost of a flue- 11-17 .One of the advantages of the closed cycle is that part-load effi- ciency can be nearly equal to full-load efficiency. because interconnecting piping. installed costs given in 1982 dollars. Cogeneration are "off-the-shelf" As a result. for example. expected values Therefore. a closed-cycle system is more expensive than an open-cycle one despite cost of the heat exchangers and the fact that the turbine and compressor are physically smaller. that are the information for a presented represents useful the preliminary a assessment of cogeneration feasibility. size range.e. The system size ranges shown in these figures are based on the information available.

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as a first approximation. upper curve represents the cost with an extraction turbine and full condensing capacity. cost curves are shown for the combined-cycle and systems. the If it is not required cost is because a "clean" used. Figure 11-10 includes cost curves for high-speed and medium-speed IC engines.gas particulate fuel removal is system. In Figure II-9. multipliers can be applied to the cost curves and 11-10 to in These II-9.e. 11-21 . Medium-speed engines have a higher installed cost than high-speed ones. combustion turbine cogeneration total The for lower a curves for each for system represent the installed cost system designed relatively large thermal energy production and relatively small electric power generation. Figures II-8. a the costs should be similar to that of combustion turbine with a heat recovery steam generator as shown in Figure 11-10. ever. systems assess the effect of fuel type on installed costs. Total installed cost multipliers for different fuel types are shown in Table II-l. The total installed cost of a specific cogeneration system may vary depending on the type of fuel burned due to fuel handling or processing requirements and equipment design. total installed reduced curve for significantly each (i. Cost How- information for gas turbine bottoming cycles was not available. but are more efficient.. approximately the 25%). These costs dollars. The cycles total as a installed cost for steam and organic rankine bottoming function of power are generating given in capacity 1980 is shown in Figure 11-11. while the upper curves are for systems designed to maximize electric power generation and have relatively small thermal energy production. The lower of cost a system represents total installed no cost backpressure while the turbine cogeneration system with condensing capacity.


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If the rate sufficiently "oversized" high.. be It should noted that for the two modes of operation. Act electric utilities must purchase electricity from cogenthat a utility will pay for cogenerated power is erators. mance factors for Conversely. whereas the perpower a maximum electrical generation are for a system with an extraction steam turbine and full capacity condenser. for the in such a case. steam turbine performance Table II-2 for the operating mode a that maximizes thermal energy pro- duction are for a system with formance factors for backpressure turbine. II-9 and for used to estimate the cost of for a cogeneration engine. For example. Although the performance factors for the two modes of operation shown in Table II-2 may apply to different system designs.2. a because this results lower higher fuel utilization efficiency and a system installed cost. the the system design may factors shown in vary. the valves shown indicate the range of performance possible with each cogeneration technology. full load) performance factors for several cogeneration technologies are shown in Table II-2 for three industrial process steam pressures and two modes of system operation. Cogeneration systems are typically designed to maximize thermal in energy production in industrial applications. must The revenue from the sale of electricity. compensate higher total installed cost and higher fuel and operating and maintenance costs. a Except an IC the performance cogeneration system designed to maximize thermal energy production relate to the lower cost curves in Figures II-8. system specific factors for applications. II-9 and 11-10 for each system. The performance factors from Table II-2 and the cost curves from II-IO can be Figures II-8. System Performance Design (i. the perfor- maximum electricity production relate to the upper cost curves for each system. it may be economically feasible to install an cogeneration system capable of maximizing electric power production.e. 11-24 . With the enactment of the Public Utilities Regulatory Policies (PURPA) .

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expressed as a percent of total installed cost. tity of waste heat available is known. is 214 million Btu per hour The peak fuel usage rate hour steam de- (i. Operation and Maintenance Costs Annual operation and maintenance costs will vary as system type. fuel burned.6 million. System installed cost can then be determined from Figure 11-11. $10. One approach is to design a system capable of meeting peakload 11-26 . the obtained from the installed a cost for this system.To 11-10.. It will be that a system designed to maximize thermal energy production The peak fuel required. a lower cost curve for is combustion turbine with heat recovery steam generator. D. are shown in Table II-3. The efficiency of bottoming cycle cogeneration systems as tion of peak a func- cycle temperature is shown in Figure 11-12. II-9 and cost of will be combustion for turbine an a with heat recovery steam 100 generator estimated industrial process requiring million Btu per hour of assumed is steam at pressure of 150 psia. The electrical generating capacity of this system is equal to the peak rate of fuel usage times the electrical power to ratio fuel from Table II-2. 3. from a the temperature and quan- the electrical power available bottoming cycle can be estimated using Figure 11-12.e. Multiplying 214 by 0. usage rate is equal to the steam demand divided by the thermal energy to fuel ratio. The peak cycle temperature will typically be 50°F to 200°F less than the temIf perature of the recoverable waste heat. illustrate the the a use of Table II-2 and Figures a II-8.061 results in a generating capacity of 13 megawatts.468 from Table II-2) total Referring to Figure II-9. mand divided by 0. annual hours of operation and Estimated first operation and maintenance costs. 100 million Btu per . year a function of system size. INDUSTRIAL APPROACHES TO COGENERATION At least three cogeneration approaches can be taken by industrial users.

Figure 11-12 BOTTOMING CYCLE EFFICIENCY AS A FUNCTION OF PEAK CYCLE TEMPERATURE 100 - 30 - U z a M u H 50 u 40 - Brayton 20 - Rankine 400 800 1200 1600 2000 2400 PEAK CYCLE TEMPERATURE ("F) 11-27 .


Under this industrial cogeneration approach. or transmitted via the utility network to another The use of grid for selling excess electricity directly to user. will therefore be higher. Independent systems have traditionally been sized to meet peak electric requirments. In a grid-connected equipment is sized and to meet the is user's normal baseload electhe trical requirements. another private user is known as "wheeling". Although this it approach is eliminates the risk of potential utility power blackouts. utility the purchases from an industrial cogenerator to help meet have the own baseload or peakload demands. and approach provides greatest flexibility offers the greatest potential cost and fuel savings of the three industrial options the utility and the industrial cogenerator work together. effective only if sufficient equipment redundancy or overcapacity is built in to ensure reliability. electricity purchased thermal from grid and to meet peakload requirements. system. Supplemental energy some redundancy in standby equipment may be required. less which this it might otherwise to meet with efficient equipment. electricity a can be produced with minimal may be able to use requirements for excess power its it standby equipment. with supplemental equipment included to meet thermal demand. The excess power is ether purchased by the utility system for resale to customers. — if A second approach pursued by industrial facilities is to build a cogeneration system connected to the utility grid to allow for the purchase of supplemental electricity when needed.requirements that is connected to the grid and sells excess electricity. initial capital costs A third industrial approach the is to design a system that operates independent of utility grid. 11-29 .

discussed in the following chapters. gas and coal are well known as are the technologies used to burn them. and will not be addressed such as in this manual.E. are However. so non-conventional and will be sources of fuel biomass not well known. FUELS FOR COGENERATION SYSTEMS Cogeneration systems can be fired with non-conventional renewable fuels. conventional as well as Conventional fuels such as oil. Tl-m .



biomass as an two approaches exist the utilization of energy resource. Mill which mills. thinnings mills. from paper trimmings and sawdust from sawwood other industrial commercial waste materials. are and municipal. the The other approach is such as utilization of available waste materials. Table III-l gives estimates of wood residue generation. and discuss their col- lection and transportation. of standing and timber commercial present. as the fuel source. in the refer wood. non-marketable include bark and species. Collection the and transportation costs contribute significantly to total cost of woody biomass. A. BIOMASS ENERGY RESOCTRCES Although energy context agricultural Currently. the it term is biomass used to is defined to as living plants. and animal wastes. no The forest value residues at consist i. Methods for the economical harvest- ing and collection of biomass from woods are rapidly being developed. One approach the intensive cultivation of trees and other plants specifically for use as fuel. Mechanical equipment is now available that reduces manual labor and increases productivity. wood and agriThis manthe cultural residues and municipal waste. mill has wastes. WOOD AND WOOD WASTES Woody biomass consists mainly of forest residues and forest products that trees. and and culls. ual will address only the latter approach only because of high capital costs and long payback periods associated with energy plantations. which to is mostly organic materials.e..III. dead diseased wastes. This chapter will describe the various biomass energy resources that can be utilized with cogeneration systems. III-l . matter.

Table III-l FACTORS FOR ESTIMATING WOOD WASTE GENERATION TYPE OF WASTE QUANTITY Mill wastes .28 percent of lumber Loggin Residue Hardwood Softwood 10-15 tons/acre 5-15 tons/acre Pre-Commercial Thinning 25 tons/acre Land Clearing 50-150 tons/acre III-2 .

In-woods processing can now be accomplished by machines that take whole tions trees and reduce them rapidly to chips. given Transportation methods and costs are the same as those in Table III-2 for forest residues. include 8 topping 10 produce shortwood logs with (lengths of tops to or feet) and longwood (tree-length as removed) require transport roundwood with appropriate These approaches unloading. ding. and chipping at the power generation facility. because the PNW's rough terrain. is provided (PNW) in Table III-2. now utilize in-woods chippers along with mechanical feller-bunchers. sawdust) because such materials are generated at central locations. including skid- chipping. handling. fuelwood procurement able. Some forestry operafellers. if Although a radius of 50 miles or less is generally advis- railroads offer possibilities for low-cost transport. Trucks are invariably used for the trip out of the woods. ics Studies of the economhas favor in-woods chipping and this approach been incorporated into the design of some of the power generation facilities that are in operation now. the Mechanical means of loading and unloading are essential to system and must be transportation investigated for incorporation into the design of the system.. bark. The estimated cost of collecting forest residues. Two basic approaches to the transport system are truck and rail.g. especially are distances long enough to warrant an extra loading-unloading operation. Collection times costs those Pacific North West in region are about three of incurred the South. or combinations of such equipment to pro- vide a complete "chip-making" operation on wheels that can be relocated from place a to place in the forest. where they can and routed directly to a furnace for be handled more easily than logs combustion. There are no collection costs associated with forest industry residues (e. skidders. The chips produced are then loaded into truck or van for transport to the plant. for the and loading. III-3 .Conventional and de-limbing to approaches to in-woods processing up .

Mill Residues as Potential Sources of Biomass Mitre/Metrek.10 *DTE = Dry Ton Equivalent Howllet and Gamache.S. McLean. AND TRANSPORTATION OF LOGGING RESIDUES IN THE PACIFIC NORTHWEST AND SOUTHEAST U. Virginia .60 23. REDUCTION. III-4 . COST ($/DTE)* Pacific Northwest (Douglas-Fir Region) Collection Chipping Transportation (50 miles) Labor 36. Forest and Source: MTR-7347: Volume VI.50 2.40 5.50 9.30 5.70 10.60 5.Table III-2 ESTIMATED COST OF COLLECTION. Silvicultural Biomass Farms.50 Southeast (Loblolly Pine Plantation) Collection Chipping Transportation (20 miles) Labor Total delivered cost 9.00 Average delivered cost 61.

Specific information on the quantity and composition of the wastes generated by various Montana municipalities and communities can be obtained from the Solid Waste Bureau of the Montana Department of Health and Environmental Sciences. ly. ible materials can be burned to generate steam that can be used either to produce electricity or to provide heating for in industrial processes. though this value varies substantial- The amount of MSW available in a given area can be roughly estiif mated the population is known.S. the separation of these materials from MSW has been found to be an expensive and risky undertaking. fee may be charged for accepting MSW since the plant is relieving the As an collectors/municipality of the greater expense of MSW disposal. III-5 . Approximately 75% of the dry waste material is combustible.S. Environmental Protec- tion Agency estimates that an average American generates 3. in uncertain demand and fluctuating prices for recovered Table III-4 shows estimates of per capita waste generation by size of municipality. Expensive because of the additional equiptype of ment needed to separate each recoverable material the and risky because of products. However. MDNICIPAL SOLID V«ASTES (MSW) Energy recovery from municipal solid wastes generated by house- holds and commercial enterprises presents a unique opportunity to address two problems simultaneously: energy a production and waste disposal. The U. I In order to obtain a regular supply of this fuel. The combust- Moisture content averages 38%. The metals and glass present MSW may be recycled.3 pounds of solid wastes per day. Table III-3 presents an average composition of municipal waste. some Municipal solid wastes consist of have mixture of materials. waste deliverA tipping ies must be established by contract with waste collectors. any feasibility study of energy from solid wastes should include a thorough assessment of waste generation.B. However. can be that energy value and some that recycled. ranging from 20% to 60%. (EPA) the U.

000 PER CAPITA GENERATION LBS. III-6 .Table III-3 COMPOSITION OF U. Report to the Maine Augusta. et al.5 Source: Dearborn. 1975 MATERIAL Paper Glass Metal Plastic Rubber Textiles Wood Food Wastes Yard Wastes Miscellaneous Organic COMPOSITION 29 10 9 3 (%) 3 2 4 18 20 2 Total 100 Source: New England Energy Congress Table III-4 PER CAPITA WASTE GENERATION IN MUNICIPALITIES OF VARIOUS SIZES SIZE OF MUNICIPALITY (Population) Less than 1.000 5. 1974.2 2.S. ME.K.000-10.000 Over 10.000-5. Resource Recovery. URBAN REFUSE.000 1.5 4. /DAY 2.5 3. Advisory Committee Board of Environmental Protection . R.

for soybean. crop residue feed to condition fertilize soil.S.alternative to contracting with governmental agencies and dealing with the many non-combustibles in MSW. cotton. ings and is food processing residues. this alternative provides more energy per pound of waste. Department of Agriculture and estimates that 35% of the residue from corn. barley. because waste from these sources is almost entirely combustible. air and except in those cases where In both the drying makes them crumbly and uncollectible.. residue resource available at a given site. method and soil conditions must be considered. In addition to fewer bureaucratic problems. Depending crop and soil residue can be removed from the field and used as an energy feedstock without harming soil productivity. The U. wheat) time the may eith- be collected harvest) at or the same primary crops are . hulls used (see Table III-5 and on Appendix D) . a Estimates of site-specific potentially recoverable crop residues must be made on basis. and orchard prunUsually. the To assess the crop type of crop. preferably in consultation with an agronomist or county exten- sion agent. the control erosion and conditions. of cultivation. small grain production are available removal under conventional tillage practices. commercial or retail school system to (or with private disposal contractors that serve such institutions) utilize its wastes. collected (total at some subsequent time (post-harvest) Vegetable crop residues may be similarly collected. collection consist of chopping III-7 . al arrangements may be made with a locbuilding complex. may total and post-harvest options. AGRICULTDRAL WASTES Agricultural waste residues are by products of food production and consist of crop residues. this livestock. or college. corn. C.g. Field crop residues er (e.

6 tons/acre Sorghum Wheat 85% Orchard Pruning (25-45% moisture) Almonds 1.Table III-5 CONVERSION FACTORS FOR ESTIMATING RESIDUE GENERATION QUANTITY AVAILABILITY Vegetable Crop Residues (Dry Wt.2 tons/acre 1.4-1.2-2.4-1.0 tons/ acre 0.7-3.0 tons/ acre 85% 80% 90% 60% Corn 4.5 tons/ acre 1.0 tons/acre Cotton Oats 1.0-2.0-1.0-1.5-2.5 tons/acre 2.5 tons/acre 3.25 tons/acre 1.2 tons/acre 1.0 ton/acre 98% 98% 98% Figs 1.5-2.0-3.0-1.0 tons/acre 98% 98% 98% 98% Apples Apricots 1.25 tons/acre 1.3 tons/acre Potatoes Tomatoes Field Crop Residues (14% moisture) Barley Beans 1.5 tons/acre 1.2 tons/acre Grapefruit 98% III-8 .7 tons/acre 85% 90% 90% 90% Rice Saf flower 1.5 tons/acre 1.2-2.2 tons/acre 1.2-1.3-2.5-1.7 tons/acre 95% 98% 95% 90% 90% 98% Squash 1.5 tons/acre Avocadoes Cherries Dates 0.7 tons/ acre 2.0-4.0 tons/acre 1.) Artichokes Asparagus Cucumbers Melons & 1.

0-1.5 tons/ acre 98% 98% Limes 0.Table III-5 CONVERSION FACTORS FOR ESTIMATING RESIDUE GENERATION (Continued) QUANTITY AVAILABILITY Orchard Pruning (25-45% moisture) Grapes Lemons & 2.25-2.9-1.4 tons/acre 1.0-1.4-2.7-2.9-1.0-1.5 tons/ acre 2.8 tons/acre Olives 98% 98% 98% Oranges Peaches Pears Plums 1.5 tons/acre 0.0-2.5 tons/acre 1.0 tons/ acre 1.0 tons/acre 98% 98% 98% 98% Prunes 1.5 tons/acre Walnuts III-9 .

stacking or one of several baling methods bales. round Although total harvest collection posof sesses the economic advantage reduced collection labor require- ments. the small tractor and loader for but for energy produc- use of a compactor or chipper trunk loading would also be required. or giant round bales). depending on the transportation distance. The bulk density of orchard prunings is sufficiently high for loads to be weight-limited rather than volume-limited. Orchard prunings are currently collected as standard practice and are usually piled at roadside and burned. tracted to residues should be subresidues for true cost of using these energy production. density The residues. van or truck. Agricultural processing industry residues are already collected at their point of generation. Collection costs depend on the densif ication and loading Current disposal costs obtain the for the method used. (e. No additional collection costs would be these incurred for by the utilization of vary widely. The costs of crop residue collection are primarily determined by the volume of residue per of the acre. post-harvest collection allows the residues to field dry and is preferred. a Current collection equip. ment consists of tion. and fuel low bulk density to lb/ft3) of crop residues requires that some sort of baling method be used in all but short distance hauls. Another agricultural residue that deserves mention is waste from the food processing industry.. while transportation costs depend on transportation 3 the bulk cost. the (2 distance. residues. III-IO . Transportation of these residues may be accomplished by tractor and field wagon. Food processing activities produce sub- stantial quantities of waste either as products fuel or that as can a be gathered for and used directly combustible feedstock anaerobic digestion to produce methane.g. standard bales. on Transportation costs their these residues depending moisture content and bulk density.

otherwise collection is not feasible. poultry. liquid disposal systems generally cost more. after treatment in a methane gas producing digester. and swine. the remaining effluent a is an excellent fertilizer. contains percent water percent solids. benefit from the use important "spillover" of the of animal waste from source fuel is in the a salinity digester. solid disposal and liquid disposal sys- Of the two types. About 90 percent of the solids are volatile and. its nitrogen is in gen in form more readily absorbed by plants than the nitro- the raw waste and it can easily be distributed by a liquid manure handling system. In fact. Liquid disposal is common in dairy operations and/or in the colder and damper climatic regions of the U. They are also often the source of solid waste Another as a disposal and water pollution problems. sists of manure from cattle. Disposal systems may be divided into two categories: tems. Processing its animal as waste a for its energy Animal content waste need not 85 reduce availability and 15 fertilizer.S. per day. Wastes recovered from dirt lots contain impurities that create both biological and physical problems in a digester. In this system. fresh ili-ll . waste production in the A summary of animal waste characteristics is shown in Table III-7. is The value of animal their wastes as potential energy feedstock fairly large due to availability in generated in quantities that are continually being centralized locations. The type of manure disposal method employed depends on (beef or the type of farming operation dairy cattle) . Table III-6 shows estimates of average animal U.D.S. removal that results conditioning wastes The main requirement for a viable source of animal wastes is that the animals be reared in confined areas such as feedlots. ANIMAL WASTES Animal wastes provide a good fuel source for the production of This biomass fuel resource conbiogas through anaerobic digestion.

46 100 lb. and III-12 .000 lb.75 layers) Source: College University. Sheep (per live weight) 25 Poultry (per 250 4-lb. 85 10 live weight) 60 Beef Cow (per 1.9 live weight) 50 Horse (per 1.Table III-6 ANIMAL WASTE PRODUCTION PER DAY POUNDS OF WASTE ANIMAL WET DRY Dairy Cow (per 1. 3. Manure Extension Service." Special Circular 242. Pennsylvania State "Soil Tests. live weight) 0.000 lb. Legumes. live weight) 15 Swine (per 150 lb.000 lb. 0. Agricultural of Application.


The solids settle In some cases bottom and can then be eventually be pumped out. or often in by default depending on the to dissolved the oxygen concentration the pond. to directly the liquid can used irrigate cropland through the use of large sprinklers or sprayers. septic pond. III-14 . or lagoon. anaerobic. a is pumped through a sewer system into a ditch.liquid manure tank. where bacterial decomposition takes place over The biochemcial process involved is aerobic prolonged time period.



fungi. there are two types of • • Thermochemical conversion Biological conversion. or micro-organisms. • This chapter will provide an overview of some of the important biomass energy conversion techniques that may be suitable for Montana. A. The the thermochemical air) to conversion produce processes use heat in (sometimes in absence of chemical reactions biomass. is the simplest and best developed biomass conversion proand Forest and agricultural wastes IV-1 residues can be burned to . exist to convert available biomass from wastes into Conversion techniques range relatively simple to quite complex. biomass energy conversion processes. DIRECT COMBDSTION This cess.IV. Basically. These conversion techniques include: • Anaerobic digestion Fermentation. The biological conversion processes are chemical reactions caused by treating biomass with enzymes. BIOMASS ENERGY RECOVERY TECHNOLOGIES A wide and variety residues of methods energy. Ex- amples of such conversions include: • Direct Combustion • • Gasification Pyrolysis.

combustion technologies Fuel handling described in the following section can also burn coal. It has been estimated that the forest pro- ducts industry uses biomass to supply at least 1. IV-2 . Multifuel boilers are available of fuels. and pollution control systems for coal combustion would be different. a and hot air are required this for many manufacturing processes. This industry has the potential to become virtually energy self-sufficient by using more of the biomass already available and to it. that require the preparation and treatment process of goods can also use the direct combustion conversion process. In general. Wood usually has in high moisture content.1 quads. Hot water. Since these two types of fuels require slightly different technologies. be fired with coal Although boilers are available that can the capital and wood. steam. or heat. they will be described separately. Wood Combustion Technologies Techniques for wood combustion are similar to those employed with coal. or about 45 percent. 1. investment is usually quite large for these types of systems. and large percentage of energy could be supplied by direct combustion.produce steam. MSW is generally not fired in boilers designed for coal or wood because of its corrosive characteristics. a though there are a few important differences. Other heat industries. as high as 60-70 percent wet climates. This able section describes direct combustion technologies as applic- to wood wastes and to municipal solid wastes. of its total energy needs per year. Fluidized bed systems have the additional potential of using municipal solid waste. electricity. in such as tex- tiles paper products. that can be fired with a number Common multifuel boilers can use wood or coal with natural gas or oil as back up fuels. been used Wood and lumbermill wastes have for successfully in boilers process steam and electicity production for some time.

This makes firing difficult and lowers boiler efficiency since a proper ation of the wood's energy is lost in evaporating the water. The optimum level of drying is to about 35 percent moisture content. the improving steam cycle efficiency slightly. which can reduce moisture to to 55 percent but consume used (heated power and have high maintenance costs. There are a number of techniques for burning wood wastes. (Figure IV-2) is dependent upon the heat content of the flue gas. IV-3 . wood there is approximately a equivalent alternative handling. depend(See Table IV-3) ing on type and supply of wastes. negating the low ash content of the wood. ure IV-1) The rotary dryer allows regulation of fuel moisture by employment of suppleThe moisture content of wood fuel from a cascade dryer mental firing. This can be done by hydraulic 50 presses. wet wood is usally dried. with practically no sulfur and very little The collection and handling of wood residues results in the ad- dition of soil and rocks to the fuel in some cases. since further drying requires additional energy while posing problems in the handling of a dry. ft. and burned in suspension. is a relatively clean fuel. to dry Rotary and Cascade dryers can use flue gas from the boiler the wood. to 2" For to 4" ease of the wood should be hogged (shredded) by a ham- mermill. knife hog or chipper. . combining size reduction with drying) but this method has the same limitations as pressing. A hot hog can be air is sent through the hogging machine. Since many wood furnaces have trouble sustaining combustion when the moisture content of wood exceeds about 57 percent. price of (a ton of . fuel stream passes In both systems hogcon(Fig- through the dryer where fines are separated. Wood ash.. (See Tables IV-1 and IV-2) Assuming that a user has arranged to have wood waste delivered to the \ plant at to a competitive cu. 7000 natural the gas) are number of modes of preparing wood for burning. possibly explosive fuel. veyed to the boiler.

Table IV-1 FUEL PROPERTIES OF BARK. WOOD AND COAL Fuel Characteristics .

February 1980 Figure IV-2 CASCADE DRYER Pracoilaeior zaoarataa out at arfmr or Hum <jam [ I zawoustiOia ffnaa 'rem ftyaan csrrtad avaf Irom ooiler Flyasn :o aisDosal Jr/ jark :o ooiier ComousuDIa iinaa to arr'O QarH convtfvor ^r {it iusoention-firing svstem <nsi3ile<3) jerta(3S at 3vo3S3 ooan rjurirKj :ow u^ain _ sroauction ro incr^asa jas 'law rnrouqn arvar: -losaa at luii loaa Source: "Power From Wood" . POWER . IV-5 . February 1980.Figure IV-1 ROTARY DRUM DRYER To stack Dhad ho<f->uai Hnma ar» seearataa tram in» ilua-jaa snaam oy fwo Cm/3« Iraeiian conv«vad macfiamcai coHactora arr^nqaa in sfaa. Tha damn gas 13 aitcrfarqaa m^c/iameilly to lurnaea lu»4 <3i3tntsuiar3 Supplamanlary^ired air naaiar Stokar-lirea ooilar wtin solid-^ual Surngr Rotarf drtar \ J \ / pit«d bin Large luM saniciaa toztoraga Pnaumanc convaycr trans/an pu4varvi«f^t tuai Irnm starsqa otn to Qurrtmn on oottar anis crt^r Source: "Power From Wood". POWER .


Semi-suspension Firing In semi-suspension firing. about 5/16" in diameter through which 75-80 percent of combustion air is fed. Disadvantages are the same as the Dutch Ovens. IV-7 . The grate blocks are mounted on cooling water pipes. These units can burn woodwaste with up to 68 percent moisture without an auxiliary burner and with extremely clean combustion gas. combustion chamber in which the wood. Semi-pile Con±>ustion - Inclined Water-Cooled Pinhole Grate In these boilers. even bed. . Refractory-lined fuel cells are similar to Dutch Ovens except that the flue gas exits through the top of the combustion chamber rather than the back or side.pile Combustion Dutch Ovens Dutch ovens and similar furnaces are the oldest method The oven utilizes a refractory lined of wood burning. and steam jets located on the grate blast ash down to the bottom of the furnace. vaporization and combustion occur ing during this movement (see Figures IV-4 and IV-5) Air is fed from beneath the grate as well as above. piled up to a foot. Preheated air is fed through the gate while cold. and manual ash removal. . high pressure air is fed tangentially at the top of the furnace. woodwaste is fed from beneath a grate via a screw conveyor. hogged or unhogged woodwaste is fed onto an inclined grate (angle of approximately 55°) where it slides toward the bottom with drying. - Cyclone Furnace In a cyclone furnace. poor load following characteristics. is dryed and gasified with the combustion of the volatile matter being completed in the second chamber Dutch Ovens are rarely installed (see Figure IV-3) today because of high maintenance costs. hogged wood is fed onto a grate by pneumatic distributors to form a thin. and within each block there are "pinholes". The type of grate chosen depends on the size of the boiler and the requirements of the industrial use.

POWER. Figure IV-5 PINHOLE GRATE DESIGN Sleam oart Filler grata \'>.Figure IV-4 INCLINED WATER COOLED GRATE Unaargraia air ronsa Source: "Power From Wood" . . IV-E . February 1980.y Ccoiing-waiar oioa Source: "Power From Wood" . February 1980. POWER.

IV-9 wood fines in an an- two oppositely rotatstanding pilot is reif there is a disrup- . - Water-cooled Vibrating Grates Water-cooled vibrating grates are the most expensive design. commended to ensure re-ignition tion of the fuel flow. accurate load control.000 A wide range of designs is offered by varpph steam. fuel with up to 55 percent moisture without auxiliary Since a water cooled grate can be totally firing. maintenance. exhibiting high reliability.000 pph or greater with fuels containing 55 percent moisHowever. and the ability The traveling-grate spreader to burn coal with wood. ious manufacturers- - Water-cooled Grates s Water-cooled grates have higher heat utilization rate_ use of a smaller than air-cooled grates and permit the They can handle furnace for a given steam demand. but it can burn fuel with a higher moisture than a traveling grate with advantages similar to the traveling grate spreader stokers. stoker is the popular choice for boilers rated 175. it is more expensive than the ture or less. unit is designed for wood steaming capacity will be lower on coal where control of primary air is necessary to prevent slagging. These finely divided woodwaste such as sanderdust. dry. It should be remembered that if the pinhole grate. Suspension Firing Suspension burning can only be done with clean. - Scroll Feed Burners Scroll feed burners inject dry nualar scroll discharge between A ing combustion air streams.- Flat Air-Cooled Grates Flat air-cooled grates are more economical than water cooled grates for boilers producing less than 70. - Traveling-grate Spreader Stokers Traveling-grate spreader stokers provide continuous ash discharge. packaged systems burn clean enough to be installed on boilers designed for oil or gas. fired with auxiliaries if desired non-forest industries may desire this capability in case of a hog fuel Both designs require minimal supply interruption.

and injecting the mixture through a nozzle into a refractory section of the burner where it is ignited. accomplished by converting to organic through combustion. burning clean woodwaste. The ten percent investment tax credits for alternative energy property applies to wood burning furnaces. They are usually used for direct drying due Experience with cyclonic to relatively high cost. water. part of the waste.4 problem order to associated with burning wood to is a particulate emissions. lower particulate emissions permissible level sary to (. purposes include sterilization This is of the waste and reduction the putrescible content. there have been problems with units attempting to remove ash as molten slag. ash and heat. may be able to meet emission requirements with only mechanical collectors. is possible that systems. • Regulatory Aspects The only environmental In . the end products of carbon dioxide. interest has grown in recovering this heat in the form of steam and electricity. swirled by combustion air and burned before reaching the end of the refractory chamber.- Suspension Burners Suspension burners fire small pieces of woodwaste containing less than 12 percent moisture by mixing the wood with air under pressure. Technologies for Municipal Solid Wastes (MSW) The basic purpose of incinerating MSW is reduction of the amount Other of its of waste destined for ultimate disposal in a sanitary landfill. furnaces is satisfactory when operated in a nonslagging mode.2 - lbs/million Btu) bag it will probably be neces- use it a scrubber. See cogeneration section. filter some or electrostatic precipitator. however. IV-10 . - Cyclonic Burners Cyclonic burners are cylindrical furnaces in which dry wood particles are injected. However. 2. In recent years.

equivalent 360 the burning of tons of coal per day. The volume of residue would be 10% of the original refuse stream. (at a A plant this size would to supply require a large metropolitan area the least 500. are 90 Costs are to similar to waterwall because incinerators the but has exact been figures difficult determine technology steadily evolving during the last few years. (see Fig- ure IV-6 for a process flow diagram) Given a load of 1000 tons per day of typical MSW.000/ton/day (1977 dollars) . tal Capi- charges for a waterwall incinerator costs range are from $15. These gases and particuwhere they are lates are fed into the secondary chamber mixed with then additional air and burned at high temperatures. and large industrial customer or a district heating system would be needed to purchase the steam. IV-11 . The flue gases (see through a heat recovery boiler to produce steam Figure IV- The units are about 55% efficient while reducing waste volume by percent. is smaller quantities of some refuse with heat of recovery accomplished with combination modular combustion incinera- These units are commonly dual chamber. tors. In the primary chamber starved air the solid refuse is combusted under con- ditions of starved air resulting in incomplete combustion and production of combustible particulates and gases.000- 30. are quantity of for refuse be burned. while the low sulfur content of most refuse guarantees compliance with sulfur dioxide emission requirements .The only commercialized technology for energy recovery from solid wastes is incineration with heat recovery. capacity while operating around $10-15/ton Incineration of usually units. Electrostatic precipitators are sufficient to meet particulate emission standards. the The to type of incineration technique depends on incinerators tons per day.000 pph. pass 7) . to the steam output would be 250.000 people) required solid waste. Waterwall than 150 often used refuse quantities greater Boiler efficiences are approximately 70 percent of heat input and steam production can be used for electricity or process pur- poses.

1 J fa .


IV-14 . or a liquid fuel. There is technology. Brittlizing chemicals can be added. and ferrous scrap. Materials separation can also be performed with other energy recovery systems. it technique that eliminates the fire hazard associated with dry in RDF while allowing control of ure IV-9) the moisture content the fuel (Fig- Pyrolysis oxygen techniques involve to heating organic the materials and in an deficient environment stimulate physical chemical decomposition of the solid waste. followed by pulverization to pro- The heavy material can be further separated into various components such as glass cullet.) require large quantity of waste and dependable customers located nearby in order to justify the investment. such as temperature. pressure. it is By controlling operating parameters reaction time. The light fraction is called "fluff" RDF. glass and metals. possible to control the composition of the a pyrolysis products.. followed by air classifica- tion to separate the light organic material from heavy organic material. etc. The most advanced of these technolo(RDF) . Large items are rejected and the remaining slurry fed into a liquid cyclone separator to remove additional heavy materials. It can be transformed into "densified" RDF by pelletizing or briquetting. however the capital cost of separation equipment a (air classifiers. which can be sold (see Figure IV-8) . type of catalysts. duce "powdered" RDF. aluminum. low Btu gas. a wet RDF process that is an adaptation of hydropulping The refuse is fed into a hydropulper where it is chopped up in a water suspension. with a The remaining material is partially dewatered. The other technologies for energy recovery from waste have yet to demonstrate that they are capable of competitive performance relative to waste disposal alternatives. etc. gies is the production of Refuse Derived Fuels Solid wastes are shredded or milled for size reduction. medium Current pyrolysis technologies result in either Btu gas. in a fluidized bed combustor. magnetic separators.. leaving RDF 20-50 percent water or alone is content which can be burned as supplement The advantage of this to coal.

Figure IV-8 DRY PROCESS RDF SYSTEM Secondary Shredder Primary Shredder Ruff RDF Embrittling Agent Air Classifier] Densifiew RDF Densifier Dust Heavies to Materials J Recovery and Landfills S RDF Ball Mill > IV-15 .

Figure IV-9 WET PROCESS RDF SYSTEM Steam Generator Low Pressure Sleam to Process flecycie Water Tank Tipping Roor To Recovery of Aluminum Nonferroua Materials 'Return to Process I Small Ferrous Metals Glass (by Color) Recovered Ferrous Metal IV-16 .

the energy purchaser will be expected to make a long-term agreement to purchase energy. If the recovery facility is owned by a municipality. the optimum materials for bioconversion are sewage sludge. a licensed as hazardous waste disposal facility. IV-17 . are the enzyme hydrolysis. glucose. carbon dioxide and small quantities of other gases. there arises the problem of decidand how expenses and fees ing who should own and operate the facility. which to fermented to dilute ethanol. Because of the possible toxicity of MSW and industrial waste. followed by distillation remove water Institutional and Regulatory Issues Though and. In rural areas. should be calculated and assessed. If MSW is used. is a method used (a for the production of ethanol from Acid hydrolysis.. Hydrolysis solid waste. and methane producers that create methane. there are various instituwhich need to tional constraints be resolved when considering this sort of facility. (an experimental process) drolysis then two methods under Hyis works by converting cellulosic material. If industrial waste is used in the facility. energy recovery from solid waste is a desirable concept in many cases. Disposal of residues is also influenced by RCRA. financially attractive. are used: animal manure and crop residues. the plant will have to be If hazard- ous waste is to be incinerated. investigation. for . the obtaining a suf- ficient supply of MSW may entail obtaining agreement of various municipal and county officials in order to ensure a reliable supply of MSW. Two types of bacteria acid formers that produce organic acids. well-developed industrial method for and producing ethanol non-fuel purposes). the industry the will need to determine whether the energy recovery process meets wastes under the standards for hazardous and non-hazardous Resource Conservation and Recovery Act of 1976 and the Clean Air Act Amendments of 1977. Bioconversion methods use bacteria to convert organic wastes into compounds which can be further processed by fuels.

clear gasification systems produce combustion products similar to the output of oil burners. The limitations concerning landfills and the elimination of open dumps have increased the expense of conventional methods for the disposal of solid wastes. solid-fuel fired systems. ammonia. synthetic natural gas (SNG) . have helped to improve the economics of an energy resurce recovery facility. With addi- tional cleaning. the gas can be used for a reciprocating internal com- bustion engine as well. Saw mills products manufac- turing plants can use their wastes to generate gas for use in natural gas-fired boilers or turbines for electricity generation. combustion. In processes (1) vessel under conditions of controlled IV-18 . Gasification can produce hydrogen.. The combination of increasing disposal costs and escalating energy prices will mean that a facility that was not economically feasible a few years ago may be so today B. Gasification can be simply explained as combustion. evolution of hydrocarbon gas for of a subsequent gasifiers. and carbon mon- oxide or synthetic gasoline. The Energy Tax Act of 1978 provides an additional 10 percent investment tax credit for energy recovery plants. wood methanol. The principal economic advantage of gasifiers is that they can be retrofitted to existing gas and oil fired boilers. thus saving some of the In costs associated with switching to new. These two Acts. and other regulations. addition. Wood wastes and wastes from food processing operations can be converted by this process. GASIFICATION This process releases bio-energy by heating wastes in limited amounts of air or oxygen. and and (3) (3) combustion occur in fixed carbon char. (1) a special case of direct In direct combustion. three processes continuously occur: it is heating and drying of feedstock as (2) brought from ambient to reaction temperature.

tars. Downdraft gasifiers are designed specifically to elminate the tars and oils from IV-19 . Various gasifier designs are briefly explained the following pages. the tars will be burned off with the gas and will contribute to the energy value of the gas. product gas may be cooled This gas conditioning before product utilization occurs. will condense cooler causing problems of tar formation. gasifiers. if allowed. combustion gases also contact incoming biomass and dry The gas produced will retain a heating for value of 100-200 Btu/scf (standard cubic foot) air-fed gasifiers. which the more important. Most of the evolved gases in process are not ignited. biomass. will increase costs and reduce the energy value of the gas. Since all of the gas genthe erated is combusted and the sensible heat of served in gas stream have is conhigh close-coupled (85-90%) . if the hot gas product is used in the "close-coupled" mode in which it is mixed immediately with air and burned completely. and 300-500 Btu/scf for oxygen-fed gasifiers. Counter-Current Gasification The simplest gasifier is the counter-current (updraf t) . However. and as the combustion gases rise they encounter the descending and gases. 2. The rising it. which undergoes pyrolysis to produce the char. High temperatures are generated when the air contacts the char. A wide variety of chemicals. Co-Current Gasification Two basic of types of the co-current downdraft gasifiers is exist: downdraft and cross-flow. In addition. fixed bed in gasifier in which air or oxygen is introduced through grates the bottom of the shaft furnace. tars. gases evolved from (2) gasification of the char join the gases evolved in process a to form in low-energy gas. and in oils is produced during regions pyrolysis and. wet. 1.temperature and oxygen (2) starvation (pyrolysis) . these the units can very efficiencies and cleaned Alternatively.

undergoes pyrolysis. The gas somewhat more difficult to burn con- natural and requires insulated tars. The gases produced by the gasifiers is can be burned in existing to oil/gas than installations.the gases. Downdraft gasifiers are highly sensitive to moisture and cannot tolerate content greater than 30 percent. be significantly lower. use of downdraft gasifiers. IV-20 . These gases can then be used the principal with minimal filtering to fuel spark and diesel engines. in a A very rapid pyrolysis occurs. while fuel costs will. lower than that of of The temperature of the low-Btu gas or flame will that be natural oil. 3. time pneumatically mixed with a hot granresulting ular material. making it an excellent means of storing energy in more dense concetrations then biomass This ability to store energy allows an industry to solve the problem of producing energy in excess of its actual plant needs. is this type gasifier. A potential advantage of the fluidized bed gasifer is its ability to produce charcoal as a solid energy product. piping pilot prevent a densation of pyrolysis oils and holder gas is A gas flame or flame used to ensure combustion. bed of biomass particles such as sand. The gases formed by the pyrolysis reaction exits the gasifier and enter a cyclone separator where the entrained char is removed. short residence that permits a much greater volume of bio- mass to be gasified. After passing through a drying zone. tars. Charcoal has a high heating value. be so it is possible some de-rating the boiler will necessry. Fludized Bed Gasification Fluidized through-put and the bed gas gasifiers offer the potential In for a much of greater production capacity. and char produced contact inThe coming oxidized under chars and gases then pass through air and are high a temperatures. of course. Operating costs will be higher for the retrofit gasifier due to maintenance of a solids handling system. remaining cooler reduction zone where most of the tars are broken down into gases. the biomass feedstock The gases. gas.

a system involving a screen and hog used. batch process and con- The batch is type digester to is filled for a with a slurry of organic materials that left digest specified retention period. to sea weed algae all be converted produce methane gas. C. More information on fuel preparation is presented in Section III. ANAEROBIC DIGESTION This biological in conversion the process is the to controlled decay of organic material ures. oxygen paper. Alternatively. the drying system can make direct use of boiler flue gases as a heat source. so drying of the biomass fuel before burning may be required. Digester Systems and Designs Digester systems are of two basic types: tinuous feed. gas IV-21 . expensive to install and operate. is This system advantageous where digesters the materials little are available only sporadically.Gasifiers require fuel with a moisture content of less than 30 percent. after which the digester is emptied and refilled. This section will describe digester systems currently available. and Mancan the argicultural wastes. Drying equipment is The fuel used by the gasifier will require processing through a A device that reduces the size of the particles (known as "hogging"). waste heat sources from the jacket coolant and exhaust gases can be used to predry the gasifier fuel. of sizes range of and fluidized beds can operate with a sizes. When the gas used as engine fuel. attention. produce methane. and the suspension dryer. (more Fixed than bed 1/4 gasifiers are most suitable for inch) . Batch require daily However. absence of sewage. 1. (such as hammerhill) is commonly reducing energy use and maintenance costs by screening out corsized fuel and rectly hogging only fuels the oversized larger fuel. Two methods of drying are used: is the to be rotary drum dryer.

2. This is undesirable a continuous uneven gas user available. These digesters loaded on a regular schedule. Structures and Structural Components A wide variety of structures IV-10 have some been used for digesters of animal wastes. even with pumped losses in cold climates. and an equal fraction unloaded. with a fraction of their is capacity. effects slurry feed systems storage A rigid structure with a fixed roof can be used if an exterior (Figure IV-10). or Use of gravity the pressurized below or feed systems will determine Pumped to whether feed digester are is built above more ground level. site depending on below-ground reduced heat layout and existing topography. and of starting out at a very low increasing if then the declining biogas can be is again.feed digesters are better suited to the continuous are supply of animal wastes on farms and feedlots. (prone systems more expensive and complex mechanical failures). however. Figure of shows examples. excavation costs for below-ground digesters may be high. Continuous. However. by use The of disadvantage of production reduced additional digesters filled at regular intervals. storage system is available for biogas However. is One the advantage of potential for digesters. and gas The variations alterna- usually are tives. A floating design many petroleum if facilities) to can incorporate the minimum storage capacity biogas be used constantly and continuously. usually daily. the The size of time. even with continuous use of biogas some gas storage capacity is required in order to account roof for minor (not variations unlike in gas production storage is rates. The loading amount is generally the amount of manure slurry produced each day.production rate and is variable to in a batch peak systems. digester time is then determined (usually 10 by to the 20) desired retention by the Retention in days multiplied daily loading volume will determine digester size. investment in numous batch digesters will usually be uneconomic on small farms. Flexible walled digesters (Figure IV-10) will also allow some gas storage. IV-22 . and are inexpensive. feed.

Bulletin 827.Figure IV-10 TYPICAL DESIGNS OF AGRICULTURAL DIGESTERS Poaiinq root cfflu«fit out Slurry 'n Source: Pennsylvania State University College of Agriculture. November 1979." IV-23 . Design and Operation. "Agricultural Anaerobic Digesters.

3. Location to within or next to the animal heat. This hopper. Mechanical manure collection systhat tems should feed directly into a hopper feeds and the mechanical or to gravity digester feed systems. for addition of water to manure is essential in order all to maintain a constant solids/slurry level acceptable to equipment used. help to ensure a mixed and fluid feed to the digester and also reduce the chance of air digester) (which is toxic to methogenic microbes in the being pumped into the digester. suggested in order is take advantage of the animal This area one of so the most likely trouble spots. to Delays avoided. water supply slurry. although The a operating data to support the suggestion. A water supply will be needed. moving manure from housing to digester are be to The slurry preparation area should be kept warm in order avoide shelter equipment is damage. Dilution water may also be needed to prevent ammonia toxicity. be It has been there suggested seems to design should more efficient. Slurry Preparation The most efficient digestion process will result if manure is fed into the in digester as soon as possible animal after it leaves the animal. planning reasonable access all equipment should be made. A temporary storage area should also be provided for manure. case of equipment failure. in IV-24 .The two-stage digester design basis of two definite steps digester: the in (Figure IV-10) was developed on the the microbial process of the anaerobic the acid that be no forming and this methane forming stages. two separate chambers or two stage design may be one chamber with dividing wall. for according to diarea to gester operators.

Storage of Digester Effluent The upon the on required desired fields be storage area for the digester effluent will depend If the residue is to be use for this effluent. daily. fertilizer by or other methods. acid-forming compounds and methane-forming simple break into complex carbon organic organics Since then a methane. 5. the actual digestion of animal wastes. In Iowa. Water Quality Commission recommends that thus. shows the basic process. this complex process acting upon complex mixture of materials.4. case of to equipment or at the weather time problems. the actual results of the process vary due to many factors. for the residue be spread best land the application. . storage for several months may be in order. The process of anaerobic digestion is understood by complex chemical and microbiotic process well in scientists its purist sense. A and other unknown diagram. of contaminates such as precise description. simple flow in Figure IV-11. spread only in is a storage area for two or three days effluent would However. More it may be possible recycle some water back into the digesten slurry. then a larger storage area will be needed. Separation could then be of liquids and as solids may be desirable irrigation to so liquids distributed importantly. dioxide. Solids storage requires no special (as facility. and is anaerobic down bacteria. when precise chemical and biological components are known. IV-25 . reducing storage requirements and water usage. defies uneaten feed. or refed to beef cattle. These could be used as bedding spread on fields when desired a soil conditioner) material. if needed. mixed with bedding materials. However. and into Two types bacteria. a other gases. land spreading on snow covered or frozen ground be avoided. Characteristics of Anaerobic Digestion Many factors influence a digester preformance.

Figure IV-11 SliMPLIFIED DESCRIPTION OF ANAEROBIC DIGESTION PROCESS FIRST PHASE: SECOND PHASE GASIFICATION Methare CartDon dioxide LIQUEFACTION Complex organics Simole organics ("volatile acids") Facultative Methane bactena and anaerobic bactena Cellulose Volatile acids I Starcn Hemiceilulose Methane Cartxjn dioxide I Cellobiose Maltose Glucose and other sugars Aldenydes Ketones Farty acids Volatile acids Hydrogen Carbon dioxide Source: Pennsylvania State University College Of Agriculture. IV-26 . Noveitiber 1979. Bulletin 827.

and nitrogen in manures varies for different animal species. wasted feed. for carbon-to-nitrogen ratio can significantly affect digester Carbon and nitrogen are the principal elemental nutrients bacteria. manure four composition. fat. and minerals. Dairy cow manure. ents of manure are water. as well as each farm.6. bed- ding material. dairy cows. anti-slip materials and grit tracked into The composition of manure will vary for the barn by animals and workers. other chemicals nitrogen. as used in this discussion. the major animal waste producers in Montana. Slurry Composition The factor. swine. with age and diet of the animals. The optimum carbon-nitrogen The availability of carbon ratio is believed to be between 16 and 30. organic matter. and ash. animal as from which the manure comes is a major influencing the animal's diet and digestive system and determine poultry. Seasonal changes in Major farm operation and diet will also affect composition. the process. Manure. A discussion of some specific factors of manure composition and their influence on digester operations follows. Beef cattle. The carbon content in dairy manure balance. starch. The major element in manure carbon. and is slightly higher swine and than that required for an efficient poultry swine or manures usually have excess nitrogen. will increase adding gas poultry and the the dairy manure production IV-27 . cellulose and lignin. are represented in Table IV4. for different animals. The operation. have been determed to contain as much as 30 percent cellulose and 20 percent is lignin (weight of solids basis) include . hydrogen. oxygen. if the nitrogen content too the process retarded or stopped. and nitrogen is necessary as food for bacteria and as a is catalyst high. is However. urine. manure to Consequently. compon- The organic com- pounds include protein. for example. anaerobic The carbon component for the is converted into methane. includes feces. and with manure management.

cubic feet of biogas per pound converted volatile Conversion rates are often given relating gas output to the amount of volatile solids fed to the digester are less than 11 (as in Table IV-4) . Only a fraction of volatile solids in manure can be converted to gas by bacteria. is added. efficiency of solids reduction. and that most of can be converted. Landfill Biogas The natural process of anaerobic digestion of municipal waste in landfills produces and biogas — a mixture other of methane. digestion material swine or poultry manure becomes (in more to effective when that contains excess carbon relation nitrogen). as little as 20 percent of the total solids may be available for conversion in the digester. about 0. the However. such as bedding or litter.25. Once landfill covered with an impermeable surface. venture established of that includes both species. a Biological oxygen demand of the value may be used as A measure of biodegradability (VS) slurry. this is not practical unless two livestock species is are housed on the same farm. BOD to the volatile volatile solids solids ratio of about 1 indicates manure.. and cellulose (BOD) broken down only very slowly. These figures all cubic feet per (2) pound not because all in (1) not volatile are solids are biodegradable in and biodegradable the solids converted time) the time that they remain digester (retention 7. whereas swine poultry manure show (of higher values. Dairy for example has a low BOD/VS ratio. the expected production of biogas 11 percent methane) of estimated at solids. Based upon some analyses (at for 60 typical incoming is solids. Lignin is is practically unaffected by bacteria in a digester. is nigtrogen trace amounts of gases. the biogas is recoved by drilling IV-28 . or a cooperative Conversely. carbon the dioxide. and On the the basis of volatile available solids percentage total solids) BOD/VS values for daily manure.

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projects to more economical use carbon dioxide removal use to techniques produce a supplies. Opportunities for Utilization of Biogas Biogas has a composition of approximately 60 percent methane and 40 percent carbon dioxide and other gases. or the biogas can used site transported the to nearby at the facilities. 8. The compositions of biogas and natural gas are compared below.shallow wells and (between 30 feet and 100 feet deep) to into the landfill using standard industrial the compressors and on the create pressure After differentials processing. high-Btu product which gas companies augment their Recovering environmental the gas from landfills with can reduce some of as the hazards and associated Research safety the landfills towards such gas the is accumulation explosion.) Biogas Methane (%) Carbon dioxide (%) Hydrogen sulfide (%) Carbon Monoxide (%) Hydrogen (%) Nitrogen (%) Oxygen (%) Others (%) . (Specific information on the Btu in content of natural gas delivered various Montana localities is presented in Appendix E. The and to heating 550 value of biogas Some wellhead find it is between 450 Btu per cubic foot. directed of the improving efficiency continuing and in environmental response to recovery results technology of the positive early operational sites. industrial between landfill be collecting wells.

This is primarily a precaution should the supply of biogas be interrupted. to 700 Btu per cubic the be exact value to is determined by the methane by content. is its use as a usually limited by the unfavorable economics of gas storage. and Hydrogen plugging water removed to minimize corrosion effects. such as LP gas shoud be used for pilot fuel. by Air supply to the burner should be ports on conventional boilers can closed. The heating value of biogas is only 30 percent of LP gas and 60 percent of natural gas. Though gas scrubbing is not particularly investment. complex. LP gas burner orifices should be enlarged about 70 percent.e. Biogas can be utilized as an energy source as the mixture of methane and carbon dioxide as produced or converted into pure methane. Biogas can be used directly in boilers and water heaters of many types with only minor modification of equipment. various potential household and farm uses. Methane has a heating value of approximately 1. IV-31 .. carbon dioxide removal only be considered when methane can be sold for pipeline distribution or when substantial storage is necessary. the systems require substantial should capital Therefore. the Biogas carbon can upgraded essentially pure methane removing dioxide. Air inlet reduced. Pure methane can be produced from biogas by scrubbing the carbon dioxide and other gases from the mixture. almost entirely be • • A separate fuel source.The heating value of biogas ranges from 540 foot. Energy in the form of pure methane Biogas has vehicle fuel i. Burner equipment modifications include: • Enlargement of burner nozzle orifices from the standard natural gas or LP designed orifices. can be stored more compactly than in the form of biogas.000 Btu per cubic foot. although not all impurities need to be removed for every use. low pressure storage requires very large container volumes while high pressure sulfide storage and requires expensive can be compression equipment.

engines. will be the maximum power output from an engine 20 operated on biogas to 40 percent less than that of the engine operating on liquid fuels. An example of such a moisture removal system is shown in Figure IV-12. more complicated than conversion of be spark- ignition engine. the engine may run on 20 percent diesel fuel and 80 percent biogas. store large. Many experimental digesters have furnished gas trucks. a a fuel tank that be would quite sufficient so biogas operate a mobile will vehicle will use of biogas motor fuel likely be confined to stationary engines. engines are common in municipal sewage for treatment engines. also means that the fuel mixture must be ignited by a spark or by some other fuel. or tractors. this case. automobiles. Biogas-fueled plants. In In spark-ignition engines. fuel. a small amount of regular diesel In fuel must be injected in order to achieve ignition of the biogas. The heat value per unit volume of an appropriate a biogas-air mixture is only 60 percnt of the heat value of and gasoline-air mixture. used in a only 75 percent of the heat value of the fuel mixture diesel engine. should be one treatment for measure biogas — the removal of in water vapor — provided before combustion boilers and water gas in heaters of any type. the high octane rating be used in high compression engines. however. Biogas has a high (100 to 110) octane rating and consequently can However. A system for cooling and heating the combination with condensate traps will facilitate the delivery of biogas to valves and orifices without risk of condensation in these narrow channels. Consequently. to as However.In addition. energy conversion should more efficient with a diesel operation. IV-32 . biogas alone can be used as diesel however. Conversion of fuel to a compression-ignition is (diesel) engine from liquid a dual fuels.

12 SYSTEM FOR MOISTURE REMOVAL FROM BIOGAS BEFORE COMBUSTION 3umer pressure gauge Cutlet 'o atner 'jsas or to storage T'vaiogas '^^^^^>l ( met frorn^"""- qas pumo) Source: Pennsylvania State University College of Agriculture. Bulletin 827. IV-33 .Figure IV.

at an engines. for drying. and engine/generators produced by the the production of The or biogas cooperative may be used adjacent nearby energy-consuming facility. such as a factory or a process plant. heating. IV-34 . cooking.potential space uses of biogas crop are direct in burning for boiler fuel. stationary electricity.



. should be based on the "avoided cost" The rates charged by a utility to a QF for standby/backup power must be non-discriminatory. COGENERATION: ECONOMIC AND FINANCIAL CONSIDERATIONS COGENERATION . three other parts of the 1978 NEA also provide incentives for cogenerators. Utility Regulatory Policies Act for which provides the following facilities that "qualify" (7) by meeting certain operating and effi- ciency requirements • Utilities must purchase any and all power that the qualifying facility (QF) wants to sell. To qualify. V. (FUA) The Powerplant and Industrial Fuel Use Act allows cogenerators to be exempted from prohibitions on the use of v-1 . NEW RULES A number of significant changes have occurred in the last few years relative to the institutional and regulatory aspects of cogeneration and small scale power production. The most important provisions are in the Public (PURPA) . power purchase The rate offered by the utility for such of the utility. the Public Utility Holding Company Act and state regulations related to rates and financial reporting. A self-generation (small power production) facility must be smaller than 80 MW and use biomass. • •• • The QF is exempted from utility regulation under the Federal Power Act. The National Energy Act (NEA) of 1978 contains a number of important provisions which attempt to remove institutional barriers to cogeneration/self-generation. waste or renewable resources to produce electricity. In addition to PURPA. the facility must not be more than 50% owned by an electric utility.OLD GAME.

However. These include: • Extraction steam turbines Back-pressure steam turbines • V-2 .C. first. Supreme Court recently overturned the Mississippi Court of and has agreed to hear an appeal by FERC of the D. the thermal energy would have been conventionally value. Court of Appeals (which asked FERC to reconsider the 100% avoided cost rule and the requirement for utilities to interconnect with The a QF) created some uncertainties in PURPA imple- mentation. (In some cases.) treated as "reject heat" and have no In bottoming cycles.C. The Natural Gas Policy Act (NGPA) provides an The exemption from incremental pricing of natural gas to cogenerators.oil and natural gas. on the other hand. A number of different options are available for topping cycles. additional property which may be used with cogeneration systems. thermal energy is used in an industrial process and the energy which would normally be rejected is used to generate electricity. Energy Tax Act (ETA) provides a 10% investment tax credit for certain Also. incentives were provided in subsequent legislation passed by the 96th Congress (8^) . Topping cycles involve the secondary utilization of thermal energy after the electricity generation process. ruling. Recent Federal Court rulings in Mississippi (which ruled PURPA unconstitutional) and in the D. TEGHWICAL OPTIOMS FOR COGENERATION Cogeneration can be achieved by "topping" or "bottoming" cycles. a resolution of the latter case is not likely to occur until spring 1983. Appeals ruling.

waste heat boiler to generate gas For a given quality of steam requirements. Steam turbine V-3 . under present input gas turbines need natural gas or distillate oils as fuels. turbines can produce more electricity than steam turbines.• • • Gas turbines Gas turbines with waste heat boiler Combined cycles (steam turbine and gas turbine) Low-speed diesels Fuel cells • • • Other new technologies. than the energy conventionally rejected from a power plant) This is achieved by extracting the steam at an intermediate step in the turbine (extraction turbine) or by having the steam exhausted from the turbine at a high pressure (back-pressure turbine) . For represent the most prevalent method for electric power generation. steam is taken from the turbine at ture a pressure and tempera- appropriate for the process energy needs (generally much higher . The result is a decrease in the amount of electricity produced per unit of steam and an increase in the availability of thermal energy. However. of course. Diesel engines have a higher conversion efficiency than but gas turbines also require petroleum-based fuels. while steam turbines (at least large installations) can use coal- fired boilers. used for power generation. Gas turbines are also conventionally The exhaust from a gas turbine can be used as a hot air for process use or passed through steam. gas turbines or diesels. Steam turbines. • • Most existing cogeneration systems use steam turbines (extraction or back-pressure) . cogeneration. technology. Bottoming options include: • Low-pressure Rankine cycle Stirling cycles Br ay ton cycles.

New technologies such as combined cycle cogeneration or fuel cells with heat recovery are likely to be attractive technical options because of the possibility of decoupling the electric and . however. low. can be used with reject heat streams as low as 150°?. The electrical a efficiency is.temperature streams. Gas turbines can be used to intermediate or large sizes — there are many in the 1-10 MW range. Diesels can be as small as 100 KW. Also. With high tempera- Stirling cycles can also be and with very high. (450°?) . Organic Rankine cycles which use process similar to steam turbines. can also be used to generate electricity and thermal energy. but with organic fluids. Federal legislation has attempted to remove most of the institutional barriers V-4 .systems are generally economically feasible only in large sizes (over 10 MW) . The potential for bottoming cycle cogeneration appears to be 's. Brayton cycles can be employed. and are currently being researched. Low-pressure steam turbines can be used with reject heat temperatures of 400°? to 1000°F. as discussed above. ture boiler and furnace exhausts used. including solar and geothermal. thermal outputs (changing the ratio of electric and thermal output) Other new tech- nologies. Bottoming applications depend on the quality (temperature and pressure) of reject heat from an industrial process. THE BCOWOMICS OF COGENERATION The changing economics of energy have made cogeneration an attractive option for industry. Currently to available and emerging thermal technoand logical options can be used provide industry's needs generate power for the utility grid. limited in the 1980 Table V-1 shows some of the technical characteristics of cogeneration systems. but are not likely to achieve significant penetration in the 1980 's.

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types and cost. • promising candidate applications for cogener- V-6 . a and obtain a reasonable price for exports of The legislation also prevents high standby charges.type regulation. How- careful evaluation of cogeneration economics must be performed A number of analytical tools are before investing significant capital. It is important to note that the economic evaluation of cogener- ation must adequately consider utility perspectives and roles. will allow industries to cogenerate without fear of utility. changing ecoThe nomics of the utility's generation are important to the cogenerator. expected shortly. electricity. available to perform such economic evaluation. called "Evaluation of Dual Energy Use Systems (DEUS) Applications" are to (10) • Develop a methodology to assess cogeneration options. Identify ation. perspective of the utility must therefore be understood by the cogenerator. which depends on the generation mix. State implementation of the Federal rules. Since the price paid by the utility for purchase of power from the industry is based on the avoided cost. the fuel and anticipated capacity expansion. The objec- tives of the EPRI project. with explicit consideration of utility perspectives and impacts.: to industrial cogeneration. Synergic Resources Corporation is developing a computerized evaluation tool to assess the costs and benefits of cogeneration {9) . and included in his economic analysis. The EPRI Project In a current EPRI project to evaluate cogeneration alternatives. ever.

for participation in • Identify research. A methis odology for screening evaluation of cogeneration applications a being developed and is described in recent paper by Limaye (U. such as Institutional buy-back rates and regulatory rates) . industry and This calculation is based on the value of electric and thermal energy used. into account the total impacts on the utility. alternative arrangements for ownership and operation. the size of the cogeneration system is determined under alternative sizing options. energy needs for the application. An overview of the first step is shown in Figure V-1.. The methodology will be supported by a data base on the performance and cost characteristics of existing cogeneration facilities. and local utility data. but do determine how the benefits. etc. In the first step. and the related social and environmental considerations. The first step in this study was to conduct surveys and case studies of existing cogeneration facilities to identify the site-specific factors which influence successful and implementation of cogeneration. the costs of producing these outputs. do not affect the overall benefits of cogeneration from the systems view- point. contax siderations standby and (PURPA credits. V-7 . the aggregate benefits.• Identify and assess utility options industrial cogeneration. These considerations influence the negotiated position of each party relative to the cogeneration venture.) . Methodology for Cogeneration Evaluation The methodology consists of two steps. development and demonstration needs and priorities. Using inforthe mation regarding the characteristics of cogeneration technologies. costs and impacts are shared by the various affected parties. taking society. Such institutional and regulatory factors are therefore considered in the second step under each type of arrange- ment for ownership or operation. costs and impacts of cogeneration are calculated.

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the most attractive options Figure V-2 shows an overview of the second step. the analysis includes the impact on such third parties. the value of thermal energy generated is calculated based on the alternative costs of thermal energy generation for the industry. a detailed evaluation of the economic. that this analysis will provide all concerned parties with adequate infor- mation to enter into a meaningful negotiation process which will lead to the implementation of the most attractive cogeneration systems. financial and regulatory aspects is performed from the point of view of the utility and industry to provide information regarding the alternative methods of It is hoped allocating the benefits of the cogeneration option. Similarly. an analysis of the impacts on the utility and industry is then performed. Where appropriate. V-9 . benefits and impacts of the cogeneration option. if third party considerations are In important. can be identified. By performing these sets of calculations for different cogeneration technologies and different sizing and performance options. taking into account the value of the thermal and electric outputs relative to the capital and O&M costs under each sizing and operating option. an attractive option. The value of the power generated is then calcu- lated based on data on the utility's generation mix and expansion plan. The perfor- mance calculations provide information regarding the amount of thermal and electric energy generated by the cogeneration system under different operating strategies. An economic analysis is then performed. Based on this alternative organizational and financial options are identified. The economic data are then compared to to determine the conventional energy generation systems the aggregate costs.Calculations are then performed for the performance of the cogeneration system and its capital. operating and maintenance costs. this step. the detailed analysis of the cogeneration options. an analysis of For each option considered to be the institutional and regulatory analysis. the constraints is performed. For each of these options.

J CN > '-I I D 0> .

taking into account the customer's requirements In order to calculate this value. for thermal energy supply reliability. if any The future changes in the fuel mix and fuel prices. V-11 . thermal load factors and other operating characteristics will have to be considered in determining these costs. and the the costs of installing a boiler or other means of generating required thermal energy. The energy value of the power can be calculated.Value Of Thermal And Electric Energy The value of thermal energy produced by a cogeneration system can be calculated as equal to the costs of alternative generation of such energy in a conventional plant. it is necessary to determine the fuel costs at the customer's site. following considerations: taking into account the The amount and the type of fuel saved by the local electric utility because of the availability of cogenerated power The variation of the available power by time of day and the related fuel used by time of day for the utility The variation of fuel use and power generated by season. The value of the electric power generated by the cogeneration system consists of two parts: the energy value and the capacity value. expected over the lifetime of the cogeneration facility Any savings in operating and maintenance costs for utility plants Possible reductions in transmission and distribution losses for the utility system. The operating hours of the plant.

accomplished by treating each cogenerator as another unit in the utility system available to meet the utility's loads. If the cogenerated power is not available when the utility needs it. the capacity credit would be very ity.The capacity value of the power generated also depends on a large number of considerations. if the cogenerated power is available at all times when the utility needs it. The characteristics of power output.While no power generation facility is likely to be 100% reliable. The greater the diversity of supply. a cogenerator which is prepared to guarantee long-term availability through a long-term contract is likely to have a greater value for its capacity than one where there is some uncertainty regarding the long-term availability of power. the cogeneration system is adequately accounted for in the utility's calculations of loss of load probability and reserve margin. In general. if the reliability of no avoided capacity costs. On the other hand. These include the following: The availability of the power to the utility . the capacity value of a cogeneration system will have to be calculated based on displaced utility capacity over some future This requires some guarantees of the planning horizon. In long-term availability of power from the cogenerator.In order to realize credits for capacity.In many cases. argued that they would have to back up cogeneration facilities with enough standby capacity and that there would be However. general. small. then there should be some capacity credit given to the cogeneration system. the higher the reliability of the system. then the utility will have to back up the cogeneration system with additional capacIn such situations. Reliability . or non-existent.Given a number of cogenerators on a utility system. V-12 . the supply diversity of the probability of outages of one or more cogenerators should be calculated in This can be determining the appropriate capacity credits. the greater the capacity value of the cogenerator. then an appropriate method can be determined for developing the proper capacity value. forced outage rates and maintenance schedules for each cogenerator can be analyzed using the utility's evaluation methodologies. the Some utilities have greater should be its capacity value. experience with cogeneration facilities shows that they can accomplish a high degree of reliability with a small amount of unscheduled maintenance. the power generated by the cogeneration system must displace utility capacity over some period of time. Long-term availability of power . Supply diversity .

Other factors affecting generation capacity credits . which includes an assessment of the reliability of the T&D network. cases. Computer Evaluation of Dual Energy Use Systems (PEPS) In order to perform the sizing and performance calculations. model accomplishes step 1 This of the evaluation methodology. In If a the long-run. or utilities with substantial purchased capacity. The calculation of avoided transmission and distribution capacity has to be site-specific and is extremely difficult.Many utilities with excess generation capacity have argued that they should not provide any capacity value to potential cogenerators. an analytical model called DEUS - Computer Evaluation of Dual Energy Use Systems. utility has excess capacity now. It requires the analysis of the reliability of supply at the customer level. it may have to add capacity in the future. it is possible that it could lead to the deferral or elimination In such of some future T&D investments by the utility. If the cogenerator is sufficiently large and is located near a load center. then the short-term capacity Short-term capacity credits are credit should be zero. however. but is experiencing some load growth. the degree of operating control that the utility has over a cogeneration system. An overview of V-13 . the cogenerator should be given an appropriate capacity credit. has been developed.It is possible that a cogeneration system would reduce the need for transmission and distribution capacity additions.Other factors which influence the capacity value of a cogenerator include the quality of the power generated. reflected in the development of the capacity value of the cogenerator. and to screen and evaluate the costs and benefits of cogeneration options relative to a conventional systems. the size of the cogenerator and the possible value of the cogenerator for spinning reserve. cogenerated power available. leading to Such savings should be some savings in investment costs. The availability of the cogenerator will allow such capacity additions to be either deferred or cancelled. relevant only for utilities with low current reserve margins.Short-term versus long-term considerations . Their arguments are probably valid in the shortIf utilities do not save any capacity costs by having run. Transmission and distribution capacity credits . the situation is different.



this model




Figure V-3.

The model can evaluate up to




no-cogeneration base



account industrial requirements for heat and power, fuel types, utility
rate schedules,

(including industrial and PURPA rates)


economic data,

operational ground rules, and various ownership types.

In many industrial processes,

the actual process thermal and power

demands vary with time-of-day and/or seasonally.
anticipated PURPA
represent 36

To be compatible with



program has



time periods per year.

For example,

the 36

time periods

might be used to cover four seasons,

three types of days per week,


time periods








program has the capability to evaluate DEDS configurations incorporating
up to four fuel streams, with each fueling a given type energy conversion

system (ECS)

COPE - Cogeneration Options Evaluation

A computer model called COPE - Cogeneration Options Evaluation, has

been developed to calculate after tax cash flows to the utility, industry
and, where appropriate,

third parties



COPE can handle all prac-

tical ownership and financial arrangements and account for tax credits,








parameters, COPE is

taking into account the most recent legislation and regulations.

designed to provide information to all potential participants in


generation venture so as to identify mutually beneficial institutional arrangements (see Figure V-4)

The magnitude and distribution of after-tax costs and benefits of a

cogeneration system are significantly influenced by its ownership structure (utility,
industry, third party), operating mode
(thermal dispatch

versus utility economic dispatch)

and the electricity sales arrangement

(simultaneous buy-sell, buy-shortage/sell-excess)

COPE is designed to









sales arrangements.


o o a

a Q


o p

5> •H

> o


Figiire v-4


































In the past, a conmion assumption was that a cogeneration system is

owned entirely either by an industry or a utility. interest in cogeneration,

With the increased

number of innovative arrangements are being
joint ventures among


utility and
One arrange-

third parties may offer benefits to all the participants.

ment to form a joint venture is to create a separate corporation for the
sole purpose of owning and operating the cogeneration project.
In this

arrangement, the cogeneration project would be taxed as a corporation.

The partnership arrangement can also be used


form joint ven-

Partnerships do not pay a Federal tax on earnings comparable to

the corporate earnings tax; however, each partner pays Federal tax on his

share of earnings from the partnership.

Also, partnerships enjoy con-

siderable flexibility in the apportionment of tax and depreciation benefits as well as profits


among partners.





to design partnership arrangements so as to attract private

"third party")

investors by offering

them substantial tax-related




third parties,

having no site-specific

thermal or electric


are unlikely

insist on


operating modes.

Thus, partnerships between utilities,

industries and

"third parties" could often be mutually beneficial.

COPE is being designed to analyze any one of the following ownership
The utility can be either

investor-owned or



exempt utility.

100% Ownership

100% Utility Ownership 100% Industry Ownership


100% Third Party Ownership (or Separate Corporation)

Joint Ventures

Partnership - Utility/Industry




Partnership - Utility/Third Party Partnership - Industry/Third Party Partnership - Utility/Industry/Third Party.


Leasing Arrangements

Lessor/Lessee - Third PartyA^tility Lessor/Lessee - Third Party/Industry.


Case studies of cogeneration ventures are currently being conducted
and will be presented at a forthcoming workshop sponsored by EPRI

Illustrative Results





application of

these models



economic evaluation of cogeneration in a pulp mill are shown in Figure
The results indicate that a 59 MW cogeneration system offers

25% rate

of return on incremental investment over a no-cogeneration case.

A 100

MW cogeneration

system offers








from electricity sales from pulp sales.



MW case




Figure V-6 shows the rate of return vs. size for the

pulp mill application.




regulatory environment and

uncertainties with PURPA







utilities for financing and implementing cogeneration.

The reasons for considering such cooperative efforts are:

Cogeneration is likely to be more capital intensive than a conventional energy system, and industry may have other uses for capital which are more attractive.


FigTjre V-5





H 1<< s < aa

3 &



X o < >






CO yj

= H


u 3



O H o w

z .s sz 3O
Hi ai CC


Q< O
Hi UJ -1 cc a. I-



o o o
to CO 01




storage and use of coal and the associated environmental requirements. • Utilities are generally willing to accept a lower rate of return than industry. Options For IndustryAftility Cooperation ^ A number of options exist for cooperative efforts among industry and utilities to implement cogeneration including: Sole utility ownership of the cogeneration plant sale of thermal energy by the utility to industry with Joint venture between industry and utility (with utility owning 50% or less to qualify the cogeneration facility for PURPA benefits) Third party ownership with contracts for thermal energy and electricity sales to industry and utility respectively. • Industry may not consider power generation a natural extension of its primary business. operation and maintenance of cogeneration systems. Industrial plant managers may be hesitant to face the problems related to the handling. Thus. Many utilities are currently actively seeking cooperative ventures with industry. (dispatch) V-21 . • The industry may not have the skilled staff needed to operate and maintain a power generation system. Partial ownership with the utility owning the power generation equipment and industry owning the remaining plant Sole industry ownership but operating control by utility.. even when such generation is economically attractive. industries interested in cogeneration may find the local utility a willing and cooperative partner. • • Utilities can offer the necessary expertise in the construction.

a joint venture arranagement should reduce the "moral risk" of a project where two or more participants must cooperate: if all partici- pants have a stake in the operation. These opinions do not carry assurance that an actual project structured along similar lines may not be treated differently. where cooperation between the industrial user(s) energy and the utility purchaser of the electricity is essential. V-22 . they will all have an incentive to do their part. partnership structure offers great flexibility for joint venture arrangement between utilities and industrial cogenerators. The utility may. and still qualify under PURPA as long as the assets are divided equally upon liquidation of the partnership. The jointly owned corporation. be able to contribute more than 50% of the equity to the partnership and/or receive more than 50% of the cash flow. of a undertaking among the two or more participants in a The legal relationship among the participants may take the form a partnership.Multi-Party Approaches For Financing The main theoretical justification for share the risk of a project.* A hypothetical partnership agree- ment could be structured as follows: • Utility puts up 75% of equity and industry 25% Opinion provided by FERC personnel based on informed review of hypothetical examples. in fact. Types of Joint Ventures The term joint venture refers to financing a specific contractual relationship or project. In addition. or an unincorporated association. This is particularly appropriate in the case of cogenerof the thermal ation. a multi-party approach is to This reduces the total risk to any one participant. while commensurately reducing the possible returns. The in advantages and a disadvantages of joint ventures are presented Figure V-7 and typical structure is shown in Figure V-8.

• • Mav imnare che credit of the oarticioants. Joint ventures can reduce the costs of capital and the capital requirements for par- ticipants when compared to the alternative of sola ownership. PURPA ownership Limits. Risk of regulations changing and the property being treated as a regulated utility operation. Jiore effectively than • Provides additional sources of capital. • DISADVANTAGES • Control over timing and use of the facility may not be optimal for all participants. V-23 .Figiore V-7 ADVANTAGES . May be arranged without impad: on the balance sheets of the oarticicants. Joint ventures using partnerships allows great flexibility in structuring the financial arrangement between zhe participants. I>!PLICATICNS ?CR UTILITIES Joint venture financing is t.ne most likely method of financing cogeneration under the current.^ND DISAIDVaMTAGZS CF JOINT ^/HNTURS FI^IA^CI^TG OF A CCGZNERATION PROJECT ADVANTAGES • iMay be able to use tax incentives individual ownership.


V-25 . the utility and industry agree to split the value equally. The owner (s) of an undivided interest in a project contributes capital in proportion with his ownership and receives profits in the same proportion. Any funds borrowed to capitalize the project would be shown on the participant's balance sheet as would the assets of the project. allocate risks and share benefits of the project that is being developed. be established as a separate entity the cogeneration project would the equipment. split equally are • If or when the partnership is terminated/liquidated. Project Entity Under the project entity approach. profits/losses and cash flows is paid back. Coqeneration Financing Structures Financing structure describes the arrangements used to secure capital. If a wholly owned subsidiary owns an undivided interest in the project's assets. The financing structures that are available for cogeneration projects are "undivided interest" and "project entity". The cogeneration project entity may be owned by a sole owner or by a joint venture.utility gets 75% of the profit and losses and cash flows until the difference in their initial equity contribution Thereafter. as shown in Figure V-9. to own and operate Project financing is the term used to describe the raising of capital to finance a project entity approach. Undivided Interest The undivided interest structure may be used by a sole owner or a joint venture. the subsidiary's accounting with the parent would have to consolidate its own as if it owned the undivided interest itself.


become a form of collateral. therefore reduces the financing costs. (not necessarily in propor- Capital is secured by the assets and The debts of the project are not shown future cash flows of the project. as debts on the participant's balance sheets. There are three basic variations on the project entity structure: • Contract supported. A cogeneration project is a much better risk from a lender's point of view if it has long-term contracts for the purchase of its outputs. The project entity approach may affect the participant's cost of credit or ability to raise additional debt even though the project debt does not appear on the participant's balance sheet. Contract-Supported Project Financing Contract-supported project financing is the most common form of project financing and is really a form of credit support by the sponsors of a project. which reduces the risk. • • Ownership changes with phases. Separate equipment ownership. Depending on how firm the contracts are. the steam and electricity. V-27 . namely. A schematic flow chart which describes a simple contract-supported project financing for a cogeneration project is presented in Figure V-10.Each participant contributes capital and receives project benefits based on agreement with other participants tion to his ownership interest) . The sponsors can enter The contracts and into such contracts and then assign them to the lenders. the owners may or may not have to show the obligations on their balance sheets.


Different Methods for Different Phases of the Project A third means of integrating various structural approaches into the organization of a single project is to adopt different methods for the developmental and operational phases of the project. principally boilers. howto the ability arrange the structural components in such a V-29 . with the utility assuming responsibility for permanent financing following completion of construction. Snnnnary of Project Financing Structures The most common project financing structure is contract supported. A primary reason for using this approach would be to avoid the regulation of industrial participants in a state which recaptures A financing the earnings from cogeneration and sale of electric energy. while the turbine generators and related electrical equipment would be owned by the utility on a sole ownership basis. structure may be employed in which the specific assets associated with steam production. basis of this method is that the industrial firm(s) will bear the burden of construction financing. would be owned by the industrial companies through a project entity.type capital structure. ever. burners and condensers. is One of the keys to successful project financing. foregoing structures may properly be considered the basic building blocks of project financing. This approach can a help the utility participant finance the construction of solve the facility and in problem assets which with industrial an participants have financing The utility-type industrial. Other project financing structures include: ship and separate equipment ownerThe ownership that changes with project phases.Different Methods for Different Equipment Another possible means of combining various project entity structures is to divide the equipment to be employed in the project into separate component groups and to adopt a different ownership option for each group.

Each utility must evaluate the appropriate theoretical and practical considerations in order to select the most desirable financing arrangement. V-30 . alternative uses for the capital and the ability to maximize and utilize the tax benefits and other incentives available to the project.manner as to meet the specific objectives and requirements of the participants. The practical considerations involved in selecting a financing arrangement include: the ability of each participant to raise capital. the cost of the capital. The utility and other potential participants must iden- tify their financial in capabilities and constraints to determine their proper roles any cogeneration project. The structures identified above may be used to finance projects that could not be undertaken by any one participant or may produce better financial results by reducing capital costs through the best use of tax credits.

These laws made the sale of electric power by an industrial firm subject to the same regulation as public utilities. FEDERAL RBGDLATION OF COGENERATION INTRDDOCnON Prior to 1978. The National Energy Act was signed into law on November 9. VI-1 . the Federal laws that governed the relationship were the between the electric utilities and industrial cogenerators Federal Power Act and the Public Utility Holding Company Act. 1978. These latter incentives were largely contained in the Public Utility Regulatory Policies Act of 1978. and represented the Carter Administration's energy policy of conservation of oil and natural gas. Utilities were able to sell thermal energy cogenerated from power plant operations. tric Industrial firms that cogenerated elecby power avoided regulations using the electricity internally. the Fuel Use Act and the Natural Gas Policy Act. The relationship between cogeneration and utilities was changed in 1978 with the enactment of the National Energy Act. for The National Energy Act included restrictions on tax incentives for energy project development and incentives small power producers and cogenerators. but the rates of return from these operations were usually regulated by state law. fuel use. The National Energy Act included three major parts that defined cogeneration and identified regulatory incentives for cogeneration facilities that qualified under the definitions.VI . The three Acts are the Public Utility Regulatory Policies Act.

such purchases. Section 210 also required electric utilities to provide retail electric service to qualifying cogeneration facilities at just. 211 and 212 of the Federal Power Act still apply to qualifying facilities. and that do not discriminate against cogener- ators or small power producers. for qualifying cogeneration and small power production and procedures by which qualifying facilities could obtain the benefits provided under Section 210 of PURPA. and permitting under Part I Licensing of the Federal Power Act and Sections 210. and from most Federal regulations under the Federal Power Act and the Public Utility Holding Company Act. VI-2 .PDBLIC DTILir? REGDLATORY POLICIES ACT OF 1978 General Description The Public Utility Regulatory Policies Act of 1978 to (PURPA) authorized the Federal Energy Regulatory Coitmission regulatory and economic obstacles to (FERC) remove cogeneration and electric power production by small facilities using certain renewable or novel fuels. Section 210 of PURPA authorized FERC to prescribe rules requiring electric utilities to purchase electric energy from cogeneration and For small power production facilities which obtain qualifying status. These rates were not to exceed the utility's avoided cost. Section 210(e) of PURPA exempted all qualifying cogeneration and certain qualifying small power production facilities from state regulation regarding utility rates and financial organization. Finally. reasonable and non-discriminatory rates. Section 201 of PURPA authorized FERC to prescribe rules establishing requirements facilities. FERC was authorized to require electric utilities to pay rates that are just and reasonable to the rate payers of the utility and in the public interest.

each State regulatory authority and non-regulated electric utility must implement the FERC rules. to imple- mentation of regulatory the reserved the state commissions and to the non-regulated electric utilites. Section 201 . including publicly owned systems. ities.45 Federal Register 17959 (March 20. one year from the issuance of the FERC final rules. more broadly. 1980). 1980 respectively. The FERC described avoided costs as the pricing principle that the states had to use in implementing PURPA. Rates for Utility Purchase of Power One of the key provisions of PURPA 210 deals with the rates for exchanges of power between utilities and cogeneration facilities. Section 210(f) of PURPA requires that within one year of the issuance of the rules by the FERC. non-regulated electric utilities. to all electric util- As a result. Utilities in States or areas not subject to regulation by the FERC under Section 201 of the Federal Power Act are nevertheless subject to these requirements including utilities in Alaska.45 Federal Register 12214 (February 25. Specific Provisions of PURPA Implementation Under the statutory rules framework issued by of the Section FERC is 210 of PURPA. 1981. Hawaii and parts of Texas. As of March 20.The final rules implementing Sections 210 and 201 were issued by the FERC on February 19 and March 13. only 15 states had submitted their regulations implementing the FERC requirements. Rates to be paid to qualifying facilities Section 210 . 1980).* The rules promulgated by the FERC apply not only to utilities that sell power for resale in interstate commerce but. are subject to these requirements. and the Tennessee Valley Authority. cooperatively owned systems. VI-3 .

utilities may pay lower rate. so long as sufficient to encourage cogeneration. which the utility avoids by obtaining power from cogeneration or small power production facilities. VI-4 . For the existing rate is facilities. the second utility is subject to this same requirement to purchase the power. the avoided costs also include the capital costs of the avoided unit. when power is provided by a cogeneration facility on a reliable basis. In some cases. These expenditures would include fuel savings and and other variable operating maintenance the expenses. The majority of states had opened dockets and held hearings on PURPA rates by November 1981. Avoided costs were defined as all the expenditures that the utility would save by not generating or purchasing the equivalent amount of power produced by the qualifying facility. the utility can cut back on its need to construct new In such power plants. Wheeling The FERC's rules provide that if the qualifying facility consents. the purchasing utility may transmit or wheel power to a second utility. or the demand charge included in the avoided firm power purchase contract. would not be based on the cost of service for the qualifying facility but rather on the avoided costs of the utility purchasing the power. Each state for regulatory commission must establish specific avoided costs utilities under its jurisdiction.. It does not have to pay For power purchases from new capacity (capacity for which the construction commenced on or after the date of the enactment of PURPA) utilities must pay a full avoided costs. The second utility is only obligated to pay the avoided cost of the power it actually receives. the transmission charges. cases. or to buy or rent capacity from other utilities. If this occurs.

simultaneous Buy-Sell Provision These rules permit to a new cogenerator to require an electric utility purchase. and state law. the Federal Power Act. and they will not be subject to many of the prohibitions and requirements imposed on electric utility the companies by the Securities and Exchange Commission under Holding Company Act. Exemption from Utility Regulation The FERC exercised its exemption authority to the full extent authorized by Section 210(e) of PURPA. cogeneration facilities which sell electric power not be subject to rate regulation by the Commission to utilities will under Sections 205 and 206 of the Federal Power Act. these rates will be lower than the utility's avoided costs. It exempted all qualifying cogen- eration facilities from utility regulation under the Public Utility Holding Company Act. The economic benefits of this arbitrage accrue solely to the qualifying facility and are not shared by the utility's ratepayers. of As a result these exemptions. VI-5 . The rules require that traditional principles of load diversity be applied in a nondiscriminatory manner to rates for generating as well as non- generating customers. Rates for Standby/Backup Power The FERC's rules regarding sales of back-up power from utilities to qualifying cogeneration or small power production facilities are expressed in the form of a prohibition. all of their electric power produced. In many cases. Their books and records will not be scrutinized by FERC. while purchasing from the utility all of the electric power they use at non-discriminatory retail rates. The effect of this provision is to separate the activities of the facility as a generator and as a load. at the full avoided cost. A utility's rates cannot be based on the unsupported assumption that all qualifying facilities will require power at the same time and that this time will be the system peak.

Cogeneration facilities are still subject to applicable state and Federal laws concerning siting and environmental restrictions. in which energy is first applied to the useful thermal process and reject heat emerging from the process is used for electric power generation. The definition of a cogeneration facility established in the FERC rules requires that electric energy and other forms of useful energy be produced through the sequential use of energy. rules. and bottoming-cycle facilities.The exemption from state law applies only insofar as State law would regulate sales to utilities. One type of topping-cycle cogeneration facility. commercial. Only those processes which use heat rejected from one process for another process are able to obtain the greater efficiencies associated with cogeneration. or cooling purposes. heating. Qualifying cogeneration facilities are not subject to restrictions regarding size or fuel type. in which energy is first used to produce useful power and the reject heat from power production is used to provide useful thermal energy. It defines a cogeneration facility as a facility which produces electric energy and steam or forms of useful energy (such as heat) which are used for industrial. QDALIFICATION C31ITKRIA FOR CXXSENKRATION AND SMALL POWER PRODUCTION FACILITIES Definition of Cogeneration Facility Section 201 of PURPA contains the criteria for qualification for these rate and exemption provisions. The key provision of this definition is that requiring sequential use. at a cogeneration or still be small power producer which sells power retail may subjected to state utility regulation. The exemptions provided are only from laws and regulations concerning rates and financial organization. had been temporarily the excluded of a from final qualifying FERC pending completion Vi-6 . Eligible cogeneration systems include both topping-cycle facilities. the new diesel and dual fuel cogeneration under the facility.

**Edison Electric Institute. renewable resources produce solar. addition. energy. 1981. with a capacity of or megawatts or to which use biomass. the Public Utility Holding Company Act. Dispersed Energy Update. June 1.environmental the EIS impact statement (EIS) . electric wind. Unlike cogeneration facilities. Small power production facilities include and geothermal electric conversion systems. small power production facilities subject to statutory small restrictions regarding both size and fuel a Qualifying capacity power than production 80 facilities In may not have rated greater megawatts. the The company sought to eliminate an amendment in the Rule that removes the exclusion of new diesel and dual-fuel cogenerators from QF status. those facilities. are use. waste.** Definition of Small Power Production Facility Small power as production facilities are defined 80 in federal regulations less. FERC granted Consolidated Edison's petition to rehear Order Number 70-E.except facilities. its Final Rule establishing qualifying status for cogenerators and small power producers. small hydroelectric projects. allow itself more time to consider FERC granted the petition to issues raised by Con Ed. biomass burning facilities such as wood chip fired boilers.* On August 17. The FERC staff recently issued recommending that new diesel commercial cogeneration units be qualified under PURPA and the FERC has accepted this recommendation. financial power and for state regulation of rates and organization . biomass and geothermal small production which in Energy User News . VI-7 . only facilities of 30 megawatts and less are exempt from regulation under the Federal Power Act. and municipal solid waste facilities.

even if they are between 30 and 80 megawatts. biomass. of authorizing 80 the or FERC less to exempt the geothermal above-cited qualifying state and facilities Federal megawatts In from it regulations.addition to these exemptions are also exempt from regulations by the Securities and Exchange Commission under the Holding Company Act. small power or production as facilities renewable In the biomass waste FERC their primary energy source. when use of these fuels by new facilities is involved. Fuel Use Restrictions As stated must previously. rulemaking proceedings. among other things. qualifying cogeneration facilities may use any fuel. oil. use qualifying resources. VI-8 . the FERC restricted qualification to facilities which meet efficiency standards. permits the FERC to provide the rate and exemption benefits of Section 210 of PURPA to utility-owned geothermal power production facilities. Section 643 of the Energy Security Act of 1980 amends Section 210 of PdRPA by. addition. FERC to accordingly up to 25 permitted percent of these their small power production facilities use annual fuel inputs to be oil or gas. or production waste as a facilities may use only primary energy input. including gas or However. While qualifying small power renewable resources. received that the comments from representatives of the paper use of wood wastes or industry stating as an energy source often requires the use of oil gas for flame stabilization. Figure 2-1 presents a summary of the qualifications for exemption.

The standard also serves to prevent small power production facilities which fail to qualify due to excessive fossil fuel use or large size from gaining the regulatory and economic incentives by installing some token use of thermal energy to qualify as cogenerators..* Efficiency Standards The rules require that for any topping-cycle cogeneration facility. This operating standard would prevent a powerplant from attaining qualifying status by bleeding off a trivial amount of steam for some heating use.5 percent of the energy input of natural gas and oil to the facility. Existing power plants for that use part of their waste heat for heating water fish raising would not qualify as cogeneration facilities. However. the standard requires 45 percent efficiency. Other thermal energy uses that are an integral part of conventional generating facilities are not eligible for the benefits of Section 210 of PURPA. if the useful thermal energy output of the facility is less than 15 percent of its total energy output. Certification as a Qualifying Cogeneration Facility 1981) Application (Issued July for 23. the useful power output plus one half of the useful thermal energy output of the facility must be no less than 42. Since the energy outputs of a facility are Order Granting *FERC Docket Number QF81-13-000. test specifying that at least five FERC in its final rules adopted a percent of a qualifying topping-cycle cogeneration facility's total energy output must be in the form of useful thermal energy output. the installation of which began on or after March 13. VI-9 . Operating Standard (Bona Fide Test) FERC has recognized the problem of distinguishing cogeneration facilities that achieve meaningful energy conservation from those that are merely token facilities producing trivial amounts of useful heat. 1980. in which any of the energy input is natural gas or oil.

As this standard compares a facility's output to only the standard becomes prois the oil and gas used in supplementary firing. FERC adopted a rule providing that electric utilities may own no more than 50 percent of the equity of a qualifying facility. the useful power output of the facility must be no less than 45 percent of the energy input of natural gas and oil used for supple- mentary firing. Standards are retained only for facilities which use oil or gas In this application. efficiency standards would serve no fuel conservation purpose. the standards become progressively easier to meet as a facility substitutes alternative fuels for oil and gas. However. a cogeneration or small power production facility must be owned by a person not primarily engaged in the generation or sale of electric power (other than electric power solely from cogeneration facilities or small power pro- duction facilities). Ownership Section 201 of PURPA provides that in order to qualify. the efficiency of energy utilization within the plant is irrelevant to the effectiveness of the bottomingcycle. Bottoming-cycle cogeneration comprises eration facilities. Moreover. when bottoming-cycle cogeneration equip- ment is added to an existing plant. the fuel is used only for for supplementary firing. The efficiency standards for PURPA qualifying cogen- eration projects are presented in Figure 2-2. gressively easier to meet as more waste heat (and less oil and gas) used for power production. a special class of cogen- Since heat which would otherwise be wasted is converted to electricity. electricity generation.compared only to the input of oil and gas. The standard requires that for any new bottomoil is ing-cycle facility in which gas or burned in a supplementary firing mode. provision. the Conference Report of the House and Senate managers of the PURPA legislation specifically stated that electric utilities may participate To implement this in joint ventures the that own qualifying facilities. This rule has been modified to allow VI-10 .

is expected to take about 50-60 days. All qualifying facilities are exempt from Federal and state regulation concerning rates and financial organization. Interconnection must be made and stand-by power must be provided at non-discriminatory rates. of the The state regulatory commission and non-regulated utilities are to establish the rates or procedures to implement the rules. use data.100% electric utility ownership of qualifying geothermal facilities and to allow 100% ownership by companies which are declared not to be elec- tric utilities under certain provisions of the Public Utility Holding Company Act. A second procedure was established for FERC certilocation. The power may be wheeled at the qualifying facility's expense to a second utility which must pay the avoided cost for the power delivered. a cogenerator need not apply for qualification and can be "self certifying". Under the first. The key provisions of Section 201 of PURPA include definition of a qualifying cogeneration facility as: VI-11 . the key provisions of Section 210 of PURPA include: New qualifying facilities are to be paid 100% avoided costs for the power sold to the utility. The simultaneous purchase and sale of power between the utility and the qualifying facility is allowed. FERC provided two procedures for obtaining qualifying status. Summary of PDRPA In summary. fication which involves filing ownership. capacity and fuel FERC then examines the application and issues orders certifyThe FERC ruling ing the facility as qualified or denying certification.

One which meets minimum operating efficiency standards and produces at least 5% useful thermal output. 1981 FR 19229) The final rule: • extends "qualifying facility" status to geothermal energy projects. . FERC issued final rules implein menting (46 the legislation Order Number 135.. Modifications to PURPA The rules for a qualifying small power production facility were modified by Section 643 of the Energy Security Act to allow unlimited utility participation in geothermal projects and to raise the size limit from 30 to 80 megawatts. exempts geothermal facilities up to 80 MW from certain obligations under the Federal Power Act. In another change in final rule making for cogeneration and small power production facilities. state rate and financial regulation and the Public Utility Holding Company Act (PUHCA) • As a result of comments FERC received from several state utility it commissions. 54) The amendment (Docket Number RM 79are allows electric utilities that declared not to be electric VI-12 . • One which is not more than 50% owned by electric utilities. the FERC lifted the 50% ownership limit on cogeneration facilities for certain electric utilities including combined gas and electric utilities. • One which produces electricity and other form(s) of useful energy through the sequential use of energy. left for future determination the implications of extending the other exemption and rate privileges under Section 210 of PURPA to geothermal facilities more than 50% owned. March 23. In this regard. • • Unlimited in size and unrestricted as to fuel used.

. also been a raised. III and Section 210 H.S. Consolidated Edison of New York and Colorado-Ute Electric Association petitioned the DC Circuit of the U. Federal District Court Judge William Cox. Court of Appeals to vacate four aspects of FERC rules implementing PURPA. although its holding may of be followed in other jurisdictions. Judge Cox found that the Act unduly displaces and usurps the right of a state to make its own policies on intrastate matters. for a summary judgement. Pending the appeal. Representative Alexander (D-Arkansas) has introduced a similar bill (HR 2876) . utilities under certain provisions of the PUHCA to own 100% equity in a qualifying facility. American Electric Power Service Corporation. The National Association Regulatory Utility Commissioners encouraged members to implement PURPA in their states. is expected to be heard by the Supreme Court in its October 1981 term a with decision expected in the spring of 1982. Interveners in the case are Institute and the Brooklyn Elizabethtown Gas Company. Supreme The case Court and the Department of Justice will prosecute the appeal. American Paper VI-13 .S. Representative Heftel (D-Hawaii) has introduced a bill (HR 2992) which would amend PURPA and the Federal Power Act to allow 100% electric utility ownership of qualifying cogeneration facilities. declared certain In granting Mississippi's motion parts of PURPA to be unconstitutional. FERC has appealed the ruling directly to the U. a combination gas and electric utility company which earns most of its revenues from its gas utility operations may be allowed to own all the equity in a qualifying facility. Bills have recently been introduced in Congress to amend PURPA to increase electric utility ownership and expand the definition of cogen- eration facilities. Senators Humphrey (R-New Hampshire) and Johnson (D-Louisiana) introduced a similar bill in the Senate (S-1885) A constitutional challenge to PURPA Titles has I. In January 1981. Thus. Judge Cox's ruling applies only to the southern district of Mississippi. ruling on suit brought by the State of Mississippi.

.* THE POWERPLANT AND INDUSTRIAL FUEL USE ACT OF 1978 (FUA) Introduction The purposes of the Powerplant and Industrial Fuel Use Act of 1978 include the reduction of the Nation's dependence on foreign oil and the encouragement of the use of coal and other alternate fuels in lieu of natural gas and petroleum. issue The Act directs the Secretary of Energy to or regulations gas in which prohibit new and . thereby transferring all the utility's cogeneration benefits to QFs. court challenge. leading to the The petitioning companies feel these four issues are contrary to congressional intent and violate the PURPA statute.. to in defining eligible for • require utilities to pay QFs full avoided costs for power purchases. to allow "arbitrage" of PURPA 210) (the • simultaneous buy-sell provision • FERC interconnection QFs from exempt all sell to requirements (Federal Power Act. Onion Gas Company. Dispersed Energy Update . VI-14 . Sections 210 and 212) FERC denied a May 1980 request to rehear these issues. The four issues under appeal are FERC's legal ability: • considerations "fuel use" exclude to cogenerators as qualifying facilities (QFs) PURPA benefits. limit the use of petroleum and and natural certain existing This powerplants major fuel of burning installations unless (MFBI) authority includes coverage cogeneration the Secretary grants an exemption for such use. ^Edison Electric Institute.

VI-15 . Fuels which do not come under the Act's definition of petroleum or natural gas are not be subject to fuel use regulation. The Act contains various prohibitions and restric- tions on the use of petroleum and natural gas. 1980. Natural gas (except products which are specifically exempted) which is subject to regulation includes any fuel consisting in whole or in part of natural gas. These definitions have been further refined by the Departin final ment of Energy and the Economic Regulatory Administration (ERA) rules issued June 6.Sections 212(c) and 312(c) of the Act specifically provide for exemp- tions for petroleum and natural gas use in any new or existing cogene- ration facility upon a finding by the Secretary that "economic and other is benefits of cogeneration" are unattainable unless petroleum or gas used in the facility. Petroleum subject to FUA regulation is crude oil and products derived from crude oil. To the extent a powerplant or MFBI uses gas which is either derived or is entirely from coal or other alternate fuels. Definition of Fuels Covered The Act defines natural gas and petroleum and excludes certain categories. except for those products specifically exempted by rule or statute. synthetic gas from petroleum or natural gas liquids and any mixture of natural and synthetic gas. the prohibitions of the FUA do not apply. and includes components of natural gas such as methane and ethane. A cautionary note is that these types of natural gas are likely to be higher priced gas than natural gas normally sold by gas utilities. high cost gas as defined under Section 107 of the NGPA or stripper well gas. The orientation of the Act seems to be towards allowing use of types of gas where the use of these types would not have normally occurred. liquid petroleum gas.

and any other form of useful energy (such as steam. which (1) (2) define MFBI. a the facility must be. The Fuel Use Act cogeneration classifications are presented in Figure 2-3. or heat) which is or will be used for industrial. to be subject to the Fuel Use Act as either a powerplant or MFBI. heat input VI-16 . which together are capable of rate of at least 250 million Btu per hour. 1980. by design. powerplant.Definition of Coqeneration Facilities ERA electric issued final rules and to on June 6. for any facility. very advantageous for a utility participating in cogeneration facility to be so excluded and only covered by the FUA as an MFBI. 1979 and July 23. The term powerplant excludes cogeneration facility where less than half of its It is annual electric power generation is sold or exchanged for resale. ERA has issued interim rules which incorporate these definitions and proposed final rules which provide that the electricity generated must constitute more than 10% and less than 90% of the useful energy output of the facility. as well as rules relating to exemptions for cogeneration facilities. and provide administrative procedures applying for exemptions. commercial or space heating purposes. Additionally. 1979 interim rules relating to the prohibitions against oil and gas use in existing facilities and exemptions available. A cogeneration facility under a the FUA may fall into the category of either a powerplant or an MFBI. cogeneration new (3) facility. The Fuel Dse Act defines a cogeneration facility as a facility which produces electric power. including a cogeneration facility. and describe as the as for prohibitions exemptions applicable powerplants MFBI's well available. ERA also published on May 15. or be in an aggregation of one or a fuel more units located at the same site. gas. capable of fuel heat input of at least 100 million Btu per hour.

300 Existing MFBI's equal to or greater than million Btu per hour are subject to case-by-case orders or cate- gorical rules which may be issued by the Secretary imposing prohibitions Existing on the use of petroleum or natural gas in such facilities. there are significant advantages to being classified as a new MFBI rather than a new powerplant. if a facility falls into the definition of a MFBI. of using a fuel other than oil or natural gas as its primary energy source. For existing facilities. 1990. or combined cycle units. 1990 in existing powerplants. no natural gas would be permitted to be used in existing powerplants. there would be no statutory prohibition on construction as that the facility be constructed with the capability identified above. There is no similar prohibition on the use of oil beyond December 31. And. it would be subject to Fuel Use Act prohibition only with regard to the use of oil and natural gas in its boiler and not in any gas turbines or combined cycle equipment. the Fuel Use Act prohibitions with regard to existing powerplants apply only to the use of natural gas and only to its use until 1991 in amounts greater than during the 1977 calendar year. the Fuel Use Act allows even greater latitude in the fuel choice. new On the other hand. unlike the situation with a new powerplant.Fuel Use Restrictions facility falls into the category of a new powerplant rather it would be If a than a new MFBI. VI-17 . gas turbines. If a facility falls into the definition of an existing MFBI rather than an existing powerplant. • Construction without the capability of using a fuel other than oil or natural gas as its primary energy source. After December 31. subject to statutory prohibitions in the Fuel Use Act on: • The use of oil and natural gas in its boilers. Therefore.

for the And smallest class of existing MFBI's covered by the Act . Especially in the case of existing MFBI's. and must make the finding that the MFBI has or had the technical capability to use coal or another alternate fuel. A VI-18 . Many classes of petroleum and natural gas are exempt if from the FUA and used would not be subject to regulation. Therefore. is expensive and may be the least effective way to proceed. Neither a case by case nor a categorical order may be issued unless the Secretary finds that the MFBI has or had the technical capability to use coal or another alternate fuel. Sections 212(c) and 312(c) of the FUA allow oil and gas for cogeneration if the benefits of cogeneration are unattainable without using oil or gas. the Secretary has the burden of going forward with the rulemaking on a case-by-case order. If a cogeneration facility is classified as a powerplant rather in than an MFBI. the Fuel Use Act defines cogeneration differently from PURPA. Summary of FUA In summary. in both the case of existing MFBI's and new MFBI's. it is more restricted its fuel choices and subject to more statutory and administrative prohibitions under the Fuel Use Act. Therefore.MFBI's under 300 million Btu per hour ar^ subject to such a prohibition only on a case-by-case basis and the Secretary may not issue categorical rules imposing any such prohibition on such small facilities. the to statutory prohibitions and authority of the Secretary of Energy create administrative prohibitions on the use of oil and natural gas in these facilities are far less extensive than in the case of either new powerplants or existing powerplants. it is important for a cogeneration facility which wishes to a burn natural gas or petroleum to be classified as an MFBI rather than powerplant. (namely those under 300 million Btu per hour) a the Secretary may do this only on case-by-case basis which is a significant burden.

Proposed Regulations Revising The FUA On August for 11. Reg. Utilities. 505 and 506) (45 53368. A new MFBI would be prohibited from using oil and natural gas in boilers but could use these fuels in gas turbines or combined cycle equipment. 504. the MFBI is subject only to to case-by-case orders. gas turbines or combined cycle units.cogeneration facility as defined by the FUA could be classified as either a major fuel burning installation (MFBI) or as falling into a powerplant. 1980). • A new powerplant would be prohibited from using oil and gas in its boilers. 1980.* proposed Docket Number ERA-R-80-24 Fed. If under 300 million. August 11. are encouraged to develop gas turbine or combined cycle projects with industrial partners where over half the electric output is used by the industry. ERA issued proposed from the regulations regarding of exemptions cogeneration Industrial facilities Fuel Use prohibitions The the Powerplant and Act of 1978. therefore. The fuel restrictions are different for new or existing facilities. 503. oil may be used while natural gas may be used only until 1991 and in no greater amount than the volume used in 1977. VI-19 . (10 CFR Parts 500. In existing power plants. A cogener- ation facility the powerplant category but selling less than half of its annual electric generation would be covered as an MFBI. • • • An existing MFBI burning greater than 300 million Btu per hour is subject to case-by-case orders or categorical rules. The primary implication of the Fuel Use Act on electric utility participation in cogeneration is the availability of natural gas and oil to new MFBI gas turbine and combined cycle projects that would not be available to new power plants.

bill (HR 2941) Representative Pauzin (D-Louisiana) the Section 301 the to repeal of the FUA. November 2. 1981.regulations are an attempt to ease administrative burdens for cogen- eration facilities seeking exemptions and virtually eliminate fuel use restrictions for industrial cogenerators that primarily produce thermal energy rather than electric energy. Docket ERA-R-81-06 (Federal Register. On November 2. New bills have been introduced in the current session of Congress to modify the FUA. but the comment period was extended. 1980.* This would provide relief for industrial and utility days boiler after owners although it would not become effective until 60 publication. Representative Heftel (D-Hawaii) introduced a bill (HR 2922) to exempt qualifying facilities and mechanical cogeneration introduced a from FUA regulations. 1981) VI-20 . ERA indicated that it will publish final rules by the end of November that would relax the exemption requirements Tor the Fuel Use Act restrictions on oil and gas use in boilers. ERA has also proposed a blanket exemption for cogeneration facilities in states that use large amounts of oil and gas for electric generation up to the Statewide Energy Limit for the total capacity of those facilities. FUA Public comments raised additional issues so additional reforms may be proposed later. Comments were due on these proposals on December 15. Representative Transition Act Collins (HR 4885) (R-Texas) introduced Natural Gas Market which among other items would repeal all of the Fuel Use Act.

9. Efficiency Stctndards At present two sets of efficiency standards have been promulgated by FERC. 1979. Rules issued by the FERC implementing that legislation provided that natural gas used by qualifying cogeneration facilities shall be exempt from the incremental pricing provisions of the NGPA.203(a) VI-21 . This Act provides for incremental pricing where industrial users of gas are surcharged while other users are not. . an existing qualifying facility will not get exemption from incremental it pricing without meeting efficiency standards even though would be exempt from regulation. subjected to these efficiency standards before permitting facilities to take advantage of the exemption from incremental pricing. it But FERC also believed be appropriate that all facilities. newand existing. Under an interim rule issued November 1. NATURAL GAS POLICY ACT OF 1978 (NGPA) Introduction national The major impact of the NGPA will be to create a deregulated market for natural gas. In other words. 206(c) The Act provides an incentive the for cogeneration to in Section which gives the FERC discretion exempt qualifying facilities from its incremental pricing program developed under Title II of the NGPA.* FERC believed it was appropriate to exempt existing facilities from efficiency standards for the purposes of PURPA.. cogeneration facilities in existence on November 1980 (the effective date of the Commission's incremental pricing rules) that used natural gas as a fuel *18 CFR S 282.

not exempted by this provision.55. if a topping-cycle cogeneration facility qualifies. With the regard to bottoming-cycle use cogeneration facilities. 1979. Generally. this rule must be submitted to Congress review.on or prior to that date. could qualify under a simple efficiency standard. The FERC issued final regulations exempting mechanical cogeneration facilities from the incremental pricing provisions under Title II of NGPA. Approximately 160 facilities filed affidavits for exemption as When the final rules under Section qualifying cogeneration facilities. the Commission allowed facilities which had gained exemptions under the interim rule to retain their exemptions. may be exempt from other provisions of incremental pricing regulations. Gas used for supplementary firing is Such gas. If only a fraction that fraction of the total natural gas use is exempt. of the reject heat is used for power generation.70 after subtracting boiler efficiency considerations. (10 CFR Part 580) VI-22 . all of natural gas (excluding the supplemental firing) is exempt from incremental pricing. all the natural gas used is exempt. or alternatively 0. and facilities converting to gas from some other fuel must meet the efficiency standards in the final PURPA rule. however. This rule is intended to make available to mechanical cogeneration facilities the same exemption from incremental pricing that is provided to electric cogeneration facilities. if all of reject heat is made available for power production. '45 Federal Register 45098. New constructed after November 1. facilities. This interim efficiency rule results only in exemption from incremental pricing. 201 of PURPA were issued.* for Prior to taking effect. The efficiency standard is that the ratio of energy inputs to (deleting outputs supplementary firing) must equal at least 0.

Curtailment Priorities

On July 2, 1980, in Docket No. ERA-R-79-10-A, ERA issued a proposed

rulemaking to revise the priority system of curtailments for interstate

pipelines for natural gas.

In the proposed rule, ERA specifically stated

that cogeneration facilities would not be treated differently than any



of natural gas under


curtailment plan.

ERA apparently

believes that a plan to manage the use of gas during curtailments is not
the place to provide incentives for cogeneration.

Comments were due on

August 29, 1980.*












Dockets** which adopt the end user gas curtailment system.

commercial and process gas users get higher priorities, while boiler gas
users get the lowest priorities.

Issuance of the





expected until early 1982.

Summary of WGPA




industry participation


qualifying cogen-

eration projects by exempting those projects from incremental pricing

Qualifying cogeneration projects were not granted priority under
Such priority would have

interstate pipeline gas curtailment rules.

substantially improved cogeneration attractiveness both to industry and
to utilities.

*45 Federal Register 71787, October 30,


**ERA Docket R-79-10-A and FERC RM-80-67.




the preparation of




Fall 1981,


number of









utility participation in DEUS.

A summary is provided below:

D.C. Court of Appeals

On January 22,



Court of Appeals



District of

Columbia issued its opinion in the appeal of the American Electric Power









provisions of






Orders 69 and 70, which apply to rates and exemptions for cogeneration
and small power production.

The appeal presented four issues:

Whether the rates utilities pay for purchases from qualifying cogeneration and small power production facilities CQFs") should be based on full avoided cost Whether FERC has authority to require, by rule, utilities to make all interconnections necessary to sell to or purchase from a QF
Whether QFs could make simultaneous sales to utilities at avoided cost and purchases from utilities at system average cost

Whether FERC is required to impose fuel use restrictions on qualifying cogeneration facilities.











avoided cost for electricity purchased from QFs.
the conclusion

This decision was based
strike a balance among

that PURPA requires FERC



criteria of
















purchased from QFs.

The Court stated that while PURPA identifies avoided



cost as the upper limit for such rates, it does not mandate that the purchase rate be at the avoided cost level.
The Court held that FERC had

failed to explain adequately how the avoided cost formula is consistent with PURPA's mandate.

result of

the Court's


FERC must

promulgate a new rule to establish rates for purchases from QFs.

The Court also vacated FERC's rule requiring utilities to make all

necessary interconnections with QFs.

It held that Sections 210 and 212

of the Federal Power Act require FERC to provide utilities an opportunity















impact on

utility's reliability and

ability to render adequate service.


Court upheld FERC's





permits a QF to take advantage of utility rates below avoided cost by
engaging in the fiction that the electricity it produces for its own use












also upheld FERC's

decision not to invoke fuel use










qualifying status under Section 210 of PURPA.

The decision is being appealed by FERC to the Supreme Court.


decision did not address the question of the constitutionality of PURPA.
That issue was argued before the Supreme Court in FERC



see below)

FERC V. Mississippi

As indicated in this report, Judge Cox in the United States District













Solicitor General of the United States filed

notice of appeal of this

decision with the Federal District Court of Mississippi on behalf of the Department of Energy and the Federal Energy Regulatory Commission.

Judge Cox issued a final judgement on February 27, 1982, on the case

specifically identifying Title


Section 210 and Title III, of PURPA as

These portions of PURPA deal with

mandatory con-

sideration by state regulatory authorities and non-regulated utilities

rates for

small power producers and cogenerators.

Section 210 of

PURPA specifically authorizes FERC to issue rules requiring utilities to









producers at rates based on guidelines established by PURPA.

The basic











"integral state function" which was in violation of standards previously

established by

U.S. Supreme Court decision.

The case was appealed by FERC to the Supreme Court.
the Supreme Court overturned

On June



the Mississippi District Court decision.

The Supreme Court held that the provisions of PURPA which were challenged
in the FERC vs. Mississippi case

• •

were "within Congress' power under the Commerce clause".
did not "trench on state sovereignty in violation of the Tenth Amendment".

Powerplant and Industrial Fuel Use Act

The U.S. Department of Energy has adopted


number of rules dealing

with fuel use by private industry.
are in the process of formulation.

In addition, a number of other rules

The main thrust of these rules will

be to broaden the definition of "cogeneration facility", so as to enable

























making by private industry in general.






General Accounting Office, Industrial Cogeneration - What It EMD-80-7, April 29, 1980. Is, How It Works, Its Potential


Prospects for Cogeneration Fred J. Sissine, "Energy Conservation: IB81006, Library of Congress, WashTechnology," Issue Brief No. ington, D.C., February 1982.
An Economic and Frederick H. Pickel, Cogeneration in the U.S.; Energy Laboratory Report, MIT-EL-78Technical Analysis M.I.T. 039, Boston, Massachusetts 1978.



Draft Synergic Resources Corporation, Cogeneration Data Base Report submitted to Electric Power Research Institute, September


Industrial Cogeneration Case Synergic Resources Corporation, Studies, EPRI EM-1531, Electric Power Research Institute, September 1980.


Thomas C. Hough and Dilip R. Limaye, Utility Participation in DEUS Final Report, subProjects; Regulatory and Financial Aspects mitted to Electric Power Research Institute, December 1981.


Governor's Energy Council, Pennsylvania Renewable Energy Resource Assessment, June 1982.


Argonne National Laboratory, Solid Waste Utilization - Incineration April 1978. with Heat Recovery. (ANL/CES/TE78-3)


California Energy Commission. Biomass Handbook Conversion Demonstration Program. November 1980.





Development Planning and Research Associates, Inc. Energy Resource Potential From Animal Wastes in Iowa. Prepared for the Energy Policy Council. May 1982.
Howeett and Gamache, Silvicultural Biomass Forms; Forest and Drill Georgia Pacific Residues as Potential Source of Biomass. Corporation. Portland Oregon; MTR-7347; Volume VI, Ditre/Detrek, McLean, VA, 1977.
Office of Technology Assessment, Energy From Biological Processes, Washington, D.C., July 1980.
Solar Energy Research Institute, Biomass Energy Conversion Workshop for Industrial Executives, April 9-10, 1979. Golden, Colorado.
U.S. DOE, Cogeneration: Technical Concepts, (DOE-FFU-1703) September 1978.







Technology Assessment of Solar Energy System: A Environmental Residuals and Capital Costs of Energy Recovery from Municipal Sludge and Feedlot Manure. In Cogeneration Industrial submitted to Pennsylvania Governor's Energy Council. 1979. U. Prospects. McLean. 1982. 1980. Office Technology Assessment. November. Argonne Incineration with Heat Recovery. Solar Energy Institute. Colorado. May. 5. Utilization April. U. 9. Potential Resources Synergic report Preliminary Pennsylvania. Portland Oregon.S. Biomass 4. Assessment of Corporation. U. Solar Energy System: DOE.15. Trends. June. 1980. Washington. 1980. the 3. Waste Solid (ANL/CES/TE78-3) . Corporation. Cogeneration: Technical (DOE/FFU/1703) September 1978. 1977. Biomass Energy Conversion April 9-10. 1982. Biomass Handbook for Conversion Demonstration Program. 6. Inc. Virginia. California Energy Commission. Forest and Hewlett and Gamache.S.. DC. Concepts. Energy From Biological 7. Silvicultural Biomass Forms: Georgia Pacific Mill Residues as Potential Sources of Biomass. 8. 2. National Laboratory. Chapter III and IV 1. MTR-7347: Volume VI. Energy Policy Council. Governor's Energy Council. 1978. Golden. . June 198 2. 1980. Chapter II 1. DOE. July. A Technology Assessment of Environmental Residuals and Capital Costs of Energy Recovery From (DOE/EU-0107) September Municipal Sludge and Feedlot Measure. Energy Research Associates. (DOE/EU-D107) September. Research Workshop for Industrial Executives. DOE.S. Pennsylvania Renewable Energy Resource Assessment. of Processes. Mitre/Metrek. Development Planning and Prepared for the Resource Potential From Animal Wastes in Iowa.

Norfolk. Septem. 11. see Final Rules Implementing Sections 201 and 210 of PURPA. Industrial Cogeneration . Evaluation of Dual Energy Use Volume I. .S. Venkateswara. April 1982. The legislation providing additional incentives to cogeneration includes the Crude Oil Windfall Profits Tax Act. .What it EMD-80-7. 9. How it works. Cogeneration Technology. ." Issue Brief No. submitted to Electric Power Research Institute. 039. Its potential . 4. 5. . Limaye. 3. April 29.. Energy Laboratory Report. .Chapter V 1. An Economic and Frederick H. Virginia. Cogeneration in the U. Fred Conservation: Prospects for Sissine. April .. Limaye. Methodology for Evaluation of Cogeneration Projects paper presented at the National Fuel Cell Seminar. U.C. prepared for Electric Power Research Institute. 1980. ber 1980. MIT-EL-78Technical Analysis M. Library of Congress. "Energy J. B. PA. Washington. Studies EPRI EM-1531. 6.T. Industrial Cogeneration Case Synergic Resources Corporation. is. . Dilip R. Synergic Systems: Resources Corporation. Hough and Dilip R. March 1981. 2. September . 45 Federal Register 12214 and 17949. Synergic Resources Corporation. 12. Utility Participation in DEUS Projects: Regulatory and Financial Aspects Draft Final Report. Bala Cynwyd. 8. the Energy Security Act and the Housing and Community Development Act of 1980.I. Massachusetts 1978. Synergic Resources Corporation. 7. Draft Synergic Resources Corporation. Pickel. 1981. Thomas C. Evaluation of Dual Energy Use Systems (DEUS) Applications: Project Overview RP1276. General Accounting Office. August 1980. Technical Documentation of COPE-Cogeneration Options Evaluation unpublished draft report. June 1981. February 1982. 10. Electric Power Research Institute.S. 1981. D. Cogeneration Data Base report submitted to Electric Power Research Institute. . IB81006. Executive Summary Draft Report. For further details. Boston.




MONTANA Champion major paper Packaging and is a division of Champion has International. been a a packaging system company. Present generation capacity supplies 10 to 15 percent of the firm's total requirements for electricity.CHAMPION PACKAGING MISSOULA. System energy is supplemented extent by natural gas. Champion Packaging has recently quadrupled the hog fuel capacity of its system by adding a 350. cogeneration its mill facilities the The firm currently generates an average of 7.000 Ib/hr boiler. . and the system is fueled from primarily by boilers burning hog the black liquor to waste some pulping process.5 MW with some in peak capacity being held emergency power fuel reserve. Much of this fuel is being obtained from other Champion facilities. Champion Packaging is collecting and utilizing hog fuel obtained from sources loacated up to 200 miles away. This expansion has substantially reduced the company's natural gas requirements. in Champion paper operating since biomass 1960 's.

The steam is then at returned 165 to Weyerhaeuser through the turbine extraction process valve psig and turbine exhaust at 65 psig to meet steam requirements within the pulp and paper operations.2 MW) is the product of a relationship between Weyerhaeuser and the local electric utility. division ownership responsibility for the various components of the system has been made on the basis of which party had of the better is business sole and operational of knowledge. The production steam the responsibility Weyerhaeuser. The larger system (51. EWEB installed the and operates site. the electricity is wheeled through EWEB and sold to the Bonneville Power Administration or to other industrial firms. Eugene for Water five and Electric Board (EWEB) . of the relationship include: • No joint ownership arrangements or undivided interests of any facilities have been made due to legal and operational considerations. and has been the operating over years. . EWEB owns and is responsible for the turbine generator Other aspects and the electric output for use within the EWEB system. steam the turbine is produced from two black liquor recovery boilers and one fossil fuel boiler at 875 psig. Depending on the market price for power. turbine-generator on leased for land within mill The while fed to Weyerhaeuser is responsible generating steam.WEYERHAEUSER SPRINGFIELD. The second system is completely owned by Weyerhaeuser and is fueled by wood waste. The Weyerhaeuser/EWEB system exemplifies the possibility of the cooperative described in company/utility an ownership The and operating of arrangement and earlier section. OREGON Biomass cogeneration operation at Weyerhaeuser ' s Springfield facilities presently consists of two generation systems totaling over 62 MW in nameplate capacity.

A portion of this overall system dependability can be attributed to the use fuel of multiple boilers instead of of 81 a single large unit.• A single engineering firm completed the design for entire project. • Weyerhaeuser controls the rate of steam production. to deal The project is seen as one measure in the larger effort in with energy shortages the Northwest and as providing some guarantee of continuing jobs in the area. have offered considerable support the program. has been well received in the community and public toward each both local entity have and improved measurably. been An overall by the conversion efficiency percent has acheived system. and thus exerts indirect control over the rate of electrical production. Facility availability has been in excess of 92 percent. The concept attitudes agencies. . Governmental to state. the • The price paid by the utility for steam is based on the kilowatt hours produced and indexed to the market price of petroleum. thereby reducing interface problems.

to According company estimates costs about 2. About 25 percent of the steam is extracted from pressure offices. Development of a cogeneration facility was approved in 1979. this biomass cogeneration and 90% of system the met 100% of the electricity demand of the plant the thermal demand. The system is integrated power to with the utility grid. Net Annual electricity sales to local utility exceeded $1 million. to a This leads to net sale it of about 18.000 MWh per year. The and company buys all sells all generated Pacific Gas and Electric electricity required to run the process plant operations. Ground shells are used to fire 4 . In when Pacific Gas and Electric informed Diamond Walnut Growers the company began a about possible natural gas shortages.000-lbs/hr boiler which drives a 5-MW steam turbine.600 Btu/kWh and an overall cogeneration efficiency of 31. In 1981. the investigating possibility of using walnut shells as fuel. CALIFORNIA This Diamond Walnut Growers plant in Stockton. . STOCKTON. for the turbine at low process use and for is heating the to facility. which net heat rate of 14.5 percent. including The remaining results steam in a condensed maximize electricity production. The cogeneration system is a based on a steam topping cycle.DIAMOND WALNUT GROWERS. INC. produces 1976.9<:/kWh cogeneration electricity. hundred tons of waste walnut shells daily. 15 . of the is one It world's larger walnut-processing facilities about one in the world. California. system availability was 90%. excluding capital cost considerations. and it became operative in October 1980.

The biomass cogeneration facilities have had consistenly good technical performance. MW unit was established in 1977 and in 1978. wood fuel is generated internally. has contracted steam the be be entire in thermal plant production and of in the the The will to used used process generation of electricity internally by Publishers. One of the important advances in waste utilization energy systems is the Portland a Metro Service District resource recovery facility. MW. for Publishers facility. Although much of the MW turbine was added. Because of to a 10 rapidly increasing A 5 fuel prices. In 1963. The plant is expected to be operating in 1984.PUBLISHERS PAPER OREGON CITY. 300.000 tons of refuse each year. Publishers had switched back hog fuel by 1974. . OREGON Publishers Paper has established cogeneration of its units at a a number fuel Oregon locations. Plans call for utilization rate of 700. the company removed hog boiler at one of its facilities and converted to petroleum. times and has Publishers has expanded its system a number of 20 recently installed a $14 million. some is obtained from outside sources on a contract basis.000 Ib/hr system at one of its sites.

000 tons of hogged fuel. Steam generating facilities include one Combustion Engineering recovery boiler rated at 210.000 tons of unbleached Kraft Paper and 57 million board feet of kiln dried lumber annually. Management prudently embarked upon program to reduce total energy consumption per unit of production and also to replace bunker oil with more hogged fuel. A major program was implemented in 1978 with the ultimate goal of replacing 6 million imperial gallons of bunker "C" a year with 50. each with a capacity of 275. By 1976. MANITOBA FORESTRY RESOURCES THE PAS. it became prices apparent was not that a respite and from the the continuing itself a escalation of oil likely that supply might eventually be in jeopardy. Both the paper and the lumber processes involve extensive use of energy in the form of steam and electricity. . CANADA The Company has a production capacity of 130.000 Ibs/hr. This involved modification of existing equipment Some of and considerable investment in additional material handling. The latter were designed to produce 60% of total steam from Bunker "C" oil and the balance from hogged fuel. In addition an This ingenious melding of the old and new systems was undertaken. MANITOBA.. this is hauled 70 miles from lumber mills.000 Ibs/hr and two Foster Wheeler Power boilers. greatly increased flexibility of opportunities to exploit the most economical and oil conserving options by plant operators. It commenced production in 1970. Electricity at 11 MW is generated in-house unit) by and two turbo-generators (backpressure rated unit) (extraction-condensing 13 MW These meet about 45% of the plant's electrical load requirements with the remainder supplied from Manitoba Hydro.

fuel usage per ton of paper dropped 50% between 1976 and per ton This represents a decrease of 53 6 imperial gallons of paper or about million gallons of Bunker "C" a year.Fossil 1979. .




DNRC.published in the July 12. Permission was received to print the portion of this list compiled from Energy User News. deletions. N. corrections should brought the attention of Montana The list of suppliers was compiled from two primary sources: • The Cogeneration Equipment Compendium . CA 95825 (916) 924-2496 Energy User News 7 E.COGENERATION SYSTEMS SUPPLIERS This list of suppliers of cogeneration of Natural systems consists of those known this to the Montana Department It Resources and Conservation at complete to time. Cogeneration Program California Energy Commission 1111 Howe Avenue Sacramento. 1982 issue of Energy User News.Y. 12th St. Further information about these two primary sources including any updates may be obtained from: Manager.published by the California Energy Commission • Major Suppliers of Cogeneration Systems . or should not be construed be as and all additions. 10003 (212) 741-4485 . New York.

J. 210-09 67th Ave. 13400 West Outer Drive Detroit. Bayside. El Segunda.N. P. Allentown. 1000 Fifth St. Corporation 1114 Avenue of the Americas 10036 New York. N. of Garret Corp. Wood Ridge. Ind 47201 Cooper Energy Services N.Y. Mass 01910 . Box 457 Worcester. One Oliver Plaza Pittsburgh. 111 60606 Brown Boveri-Turbo Machinery 711 Anderson Avenue North St. Lynn. Wis 53511 Fluor Power Services Inc. N. 100 Prospect Hill Road Windsor. I Passaic St. 200 W. 9851 Sapulveda Blvd. 1134 New York. Rm. Minn 56301 Caterpillar Corp. Adams Peoria.Y. 629 Forest Ave. PA 15222 Electro-Thermal Systems Inc.A. N.Y. Empire State Building. CA 90245 Curtis Wright Corp.Y. Mossville Building A 100 N. N. 10301 Fairbanks Morse Engine Div. 07039 Gas Energy Inc. New York. CA 92111 American M. 10001 Cogenic Energy Systems 645 5th Ave.Y. Ohio 43050 General Motors Corp. IL Cogeneration Development Corp. Orange Ave. of Brooklyn Union Gas 195 Montague St. 07075 Alturdyne 8050 Armour St. Dravo Corp. Conn 06095 Cummins Engine Co. N. Sandusky St. Beloit.J. N. Staten Island. PA 18105 Air Research Div. N. Columbus. Chicago.E.O. Mich 48228 General Electric Co. Cloud. San Diego. N. Mount Vernon. 1100 Western Ave. of Colt Industries 701 Laton Ave. Los Angeles. Foster Wheeler Energy Corp. Brooklyn. Livingston. 11364 Alpha Systmes 1301 El Segunda Blvd. Detroit Diesel Allison Div. Monroe St. II S. Div. Mass 01613 In-Novo Engineering and Development Co. Inc.Y. CA 90045 Coppus Engineering Corp.MAJOR SUPPLIERS Air Products & Chemicals. Medium Steam Turbine Dept. 11201 10022 Combustion Engineering Inc.

08016 Solar Turbines International 2200 Pacific Highway P. Queens. 968 Albany Shaker Road Latham. N. CA 92138 Louis Allis Div. Wis 53207 Martin Cogeneration Systems P. Box 40510 Houston. CA 92715 . Box 2161 Oakland. 12110 Ultrasystems. N.Hispano-Suiza Inc. Subsidiary of Ingersoll Rand Lamberton Road Windsor. TX 77043 Inger soil-Rand Industrial Rotary Marketing 9525 Katy Freeway. Mass 02154 The Trane Company Process Division 3600 Pammel Creek Road LaCrosse. 10022 Turbonetics Energy. Wellsville. 11377 Thermo Electron Corp. NE Minneapolis.O. 14895 Perrenial Energy Systems Paradise Hill Dr. 13160 Rolls-Royce.Y. Inc.O. Inc. Wis 54601 North American Turbine 11500 Charles St. TX 77040 Norwalk-Turbo 7 Northway Lane Latham. Milwaukee. of Litton Industrial Products Inc. P. 375 Park Ave.J. Waltham. Kan 66601 Sundstrand Energy Systems 4747 Harrison Ave. Union Springs. Box 80966 San Diego.Y. Stewart St. 2400 Michelson Dr.Y.Y. PA 19335 Onan Division of McGraw Edison Generator Sets And Controls-3 1400 73rd Ave. 427 E. Suite 333 Houston. Energy Systems Div. Minn 55432 Transamerica Delaval Engine and Compressor Division 5500 85th Ave. ILL 61101 Terry Corp. Worthington Group McGraw Edison Co. Irvine. P. Inc. Columbus Road Burlington. N.O. 10633 Shadow Wood Drive Houston.Y.Y. N. PA 16512 Solar Energy Systems Inc.O. 12110 National Urban Energy Corp 59-55 47th Ave. N. Box 1698 Topeka.Y. 968 Albany-Shaker Road Latham. 123 Second Ave. 12110 O'Brien Machinery Dowington. N. Rockford. TX 77024 Skinner Engine Co. Conn 06095 Mechanical Technology Inc. Division of Banner Industries Erie. N. CA 94621 Turbodyne. New York. N.

United Technologies Power Systems Division 10 Farm Springs Road Farmington, CT 06032

Waukesha Engine Div. Dresser Industries 1000 W. St. Paul Waukesha, Wis 53187

Western Engine Co. 500 S. Lombard Road Addison, 111 60101
Westinghouse Electric Corp. Gateway Center Pittsburgh, PA 15222
Whiting Corp. Ormat Div. 15700 Lathrop Ave. Harvey, 111 60426













locating organizations within the region which provide cogeneration energy

consulting services.

This directory should not be considered complete but

consists of organizations known to Montana Department of Natural Resources









should be brought to the attention of Montana DNRC.











Directory of

Energy Consultants"





reprinted with their permission.

Additional information about the Energy

User News' Directory can be obtained from:

Energy User News


12th St.

New York, N.Y. 10003 (212) 741-4485


Eliot Allen & Associates Inc. 5006 Commercial St. SE Salem, OR 97306 (503) 371-4561 Eliot Allen

Webster Management Cons & Webster Inc.) 90 Broad St. New York, N.Y. 1004 (212) 269-4224 Thomas C. Luhmann


EMC Engineers, Inc. Box 36009 2750 S. Wadsworth, #201 Denver, CO 80236 (303) 988-2951 Virgil E. Carrier

P.O. Box 5406 Denver, CO 80217 (303) 770-7700

Energard Corp. P.O. Box 4241 Bellevue, WA 98009
(206) 455-5723 James R. Scace

Synergic Resources Corporation Three Bala Plaza, 5th Floor Bala Cynwyd, PA 19004 (215) 667-2160 Dilip R. Limaye

4th & Pike Building, Suite 820 Seattle, WA 98101 (206) 624-8508

Energy & Resource Consultants P.O. Drawer Boulder, CO 80306 (303) 449-5515 Dr. Michael D. Yokell

Forster-Morrell Engineering 1617 N. Circle Dr. Colorado Spring, CO 80909 (303) 574-2127 Bruce E. Morrell



Frantz Engineering

849 W. Main St. Bozeman, MT 59715 (406) 586-3748 Claud E. Matney, P.E.

Planergy inc. 901 W. Martin Luther King Blvd. Austin, TX 78701 (512) 477-8012 Wayner N. Brown
520 S.W. 6th Ave. #1112 Portland, OR 97204 (503) 226-3457


architects/architecturslL engineering services

Arix Engineers Architects Planners 2021 Clubhouse Dr. Greeley, CO 80632 (303) 330-2749 Patrick C. Dwyer

Ellerbe Associates Inc.
(Ellerbe Inc.) One Appletree Sq. Bloomington, MN 55420 (612) 853-2328 William Marshall

760 Horizon Dr. Grand Junction, CO 81501 (303) 243-7569
609 E. Madison, Suite #1 Riverton, WY 82501 (307) 856-6505

3025 One Union Sq. 30th Floor Seattle, WA 98101 (206) 625-0666

John Graham and Co.
1110 3rd Ave. Seattle, WA 98101 (206) 447-5620 Harold Broomell

Suite 100 1815 S. State St. Orem, UT 84057 (801) 225-8491

The Benham Group 1200 NW 63rd P.O. Box 20400 Oklahoma City, OK 73156 (405) 848-6631 Bill Allison

3101 S. Maryland Parkway Suite 201 Las Vegas, NV 89109 (702) 369-5800

Burns and Roe Industrial Service Corp. 650 Winters Ave. Paramus, N.J. 07652 (201) 265-2000 John A. Rocco

601 Williams Blvd Richland, WA 99352 (509) 943-8200

Leo A. Daly 8600 Indian Hills Dr Omaha, NE 68114 (402)391-8111 James M. Ingram
200 Cedar St. Seattle, WA 98121 (206) 682-1571


Associates Tower Building 7th Ave. at Olive Way Seattle, WA 98101 (206) 622-5000 Herbert C. Westfall

R.W. Beck




445 S. Figueroa Los Angeles, CA 90071
(213) 683-1560 Gary E. Melickian

Bouillon Christofferson 505 Washington Building Seattle, WA 98101 (206) 682-3910 Robert J. Smith



1626 Cole Blvd. Golden, CO 80401 (303) 232-6262
250 E. Broadway Salt Lake City, UT 84111 (801) 521-9255 115 N.E. 100th Seattle, WA 98115 (206) 523-0560

Brown and Caldwell 1501 N. Broadway Walnut Creek, CA 94596 (415) 937-9010 George Chouinard

Suite A-109 10200 E. Girard Ave. Denver, CO 80231 (303) 750-3983
100 W. Harrison St. Seattle, WA 98119 (206)281-4000

Ekono, Inc. (Ekono Oy) 410 Bellevue Way S.E. Bellevue, WA 98004 (206) 455-5969 William 0. Aho

CH2M Hill
1600 S.W. Western Blvd. Corvallis, OR 97339 (503) 752-4271 Lament Matthews

Energy Systems Management Inc. 12191 Ralston Rd. Suite 100 Arvada, CO 80004 (303) 425-0958 James L. Ponder

1500 114th Ave. S.E. Bellevue, WA 98004 (206) 453-5000
P.O. Box 22508 Denver, CO 80222 (303) 771-0900

Thomas J. Gerard N. 1322 Post Spokane, WA 99201 (509) 328-2771 Thomas Gerard


Associates Inc.

Gibbs & Hill, Inc. 11 Penn Place 393 Seventh Ave. New York, N.Y. 10001 (212) 760-4000 George H. Ehrhardt

1250 14th St. Denver, CO 80202 (303) 893-4907

Box 23296 Tigard. P.E. CO 80228 (303) 988-7720 Jack McKee .C. Cincinnati. CO 80211 (303) 433-6721 Jerry W. Kinney. Wood. CO 80111 (303) 741-2600 P. Inc. PA 19603 (215) 775-2600 Carl W. Denver. Inc. CO 80222 (303) 753-1260 C. The RMH Group.E. 12707 120th Ave. 3312 S.O. Clermont St.O. Inc. 405 Urban St. OH 45219 (513) 281-2900 N. Huxtable A. 29th Place Bellevue. CO 80110 (303) 761-3522 Van Gulik & Associates Inc.E. Denver.E. Neff • 333 W.E. Wood/Harbinger. Denver.W. N. WA 98004 (206) 454-0065 Swanson Rink & Associates 1640 Boulder St. WA 98007 (206) 881-8500 Douglas D. Bellevue.T. 6th St. Roberson 29606 • 5650 DRC Parkway Suite 100 Englewood.M. OR 97034 (503) 635-3734 Joe Van Gulik McFall Konkel & Kimball 2160 S. OR 97723 (503) 639-1451 • 11400 S.E. Inc. Box 1498 Reading. 2900 Vernon Pi.) P. Hampden Ave. Denver. 543 Third St. Box 5456 Greenville. B. (803) 298-6000 J. Kiel. Horst J. Lake Oswego. WA 98033 (206) 821-4242 Stephen V. P. P. Inc.Gilbert/Coiranonwealth (Gilbert Associates. Sirrine Co.E. Kirkland. Kelly Ave.O. Portland. Kei Kruchek Engineers Inc. OR 97201 (503) 292-6472 William McNeal Trans Energy Systems Suite 101 14711 N.




MT 59701 (406)723-5421 Fergus Electric Cooperative Inc. Kalispell. 58501 (701) 222-7900 Big Horn County Electric Cooperative Inc.D. MT 59427 (406) Montana Office: 448 Main Kalispell.O. 40 E.O.O. 510 LaSalle Rd. Inc. Highway 2 West P. MT 59068 (406) 446-2310 Big Flat Electric Cooperative Inc. Bismarck. Box H Malta. P. Troy. MT 59501 (406) 265-7807 Lincoln Electric Cooperative Inc. MT 59935 (406) 295-4540 • Central Montana Electric G&T Cooperative 705 Lincoln Lane Billings. MT 59917 (406) 296-2511 Lower Yellowstone Electric Association 310 Second Avenue. MT 59901 (406) 775-7461 873-5566 RURAL ELECTRIC COOPERATIVE SYSTEMS Goldenwest Electric Co-Op Inc. Mt 59901 (406) 755-5483 920 S.MONTANA ELECTRIC OTILITIES INVESTOR OWNED SYSTEMS Montana Dakota Utilities Co. Inc.O.W. Box 1119 Red Lodge. Inc. Main Office: 400 N. Sidney. MT 59270 (406) 482-1602 . Box 430 Havre. 313 W. Box 58 Lewistown. MT 59050 (406) 639-2341 Montana Light & Power Co. MT 59353 (406)795-2423 Beartooth Electric Cooperative. Inc. P. Janeaux St. N. Box AE Lodge Grass. Broadway Butte. Box 358 410 East Main Cut Bank. Portland. Box 628 Eureka.E. Box 245 Wibaux.O. OR 97204 (505) 243-1122 • Glacier Electric Cooperative. P. N. MT 59538 (406) 654-2040 Hill County Electric Cooperative. Regis Paper Co Libby MT Montana Power Co. Fourth St. P. 6th Ave.O. MT 59457 (406) 538-3465 Pacific Power Main Office: & Light Co. Flathead Electric Cooperative. P. MT 59101 (406) 248-7936 Controlled by St.

Bannack St P. Inc. P. Huntley.O. Box 109 Corvallis. Box 392 Glasgow. MT 59215 (406) 485-3430 Tongue River Electric Cooperative. Inc.O. Box 368 Circle.O.O. 225 E. Box 2553 Billings. Box 227 Medicine Lake. Box 368 Ekalaka. MT 59270 (406) 482-4100 & T Electric Co-Op. MT 59247 (406)789-2231 U. MT 59047 (406) 222-3100 Yellowstone Valley Electric Co-Op. MT 59003 (406) 784-2341 Mid-Yellowstone Electric Cooperative Inc P. P. MT 59250 (406) 762-3352 Vigilante Electric Cooperative Inc. Inc. MT 59103 . Inc. MT 59037 (406) 348-3411 Ravalli County Electric Co-Op Inc. MT 59860 (406) 883-5361 Southeast Electric Cooperative. P. Box 287 Opheim. 1950 Sherwood St.S. Inc.O. Inc.O. Inc. P. Box 71 Dillon.O. Inc. BOX 386 Hysham. MT 59038 (406) 342-5521 "PPer Missouri G ^°'^ 1069 Sidney.Marias River Electric Cooperative Inc. 910 Roosevelt Highway Shelby. MT 59801 (406) 549-6115 Valley Electric Cooperative. MT 59828 (406) 961-3211 FEDERAL SYSTEMS Sheridan Electric Cooperative Inc. Inc.Power Div. Missoula Electric Cooperative. Bureau of Indian Affairs Department of the Interior (Flathead Irrigation Project . MT 59324 (406) 775-8762 Water & Power Resources Service Department of the Interior Regional Office P. MT 59436 (406) 467-2526 McCone Electric Co-Op. Box 138 Ashland. P. MT 59230 (406) 367-5315 Northern Electric Cooperative.O. Inc. MT 59725 (406) 683-2327 Park Electric Cooperative. Missoula. Box 908 Livingston.) Poison. MT 59474 (406) 434-5575 Sun River Electric Cooperative. Box 217 Fairfield.



S. Department of Energy Region VIII Lakewood. Department of Energy Bonneville Power Administration Portland. Municipal Waste (503) 234-5052 • Cogeneration (503) 234-4037 Federal Energy Regulatory Commission 555 Battery St.STATE AND FEDERAL CONTACTS ENERGY Montana Energy Division Department of Natural Resources and Conservation Helena. Room 415 San Francisco. OR 97208 (503) 234-3361 • Biomass. CO 80226 (303) 234-2420 U. MT 59620 (406) 449-3008 Montana Facility Siting Bureau Department of Natural Resources and Conservation Helena. CA 94111 (415) 764-7150 . MT 59620 (406) 449-4600 U. MT 59620 (406) 449-3940 Montana Public Service Commission Helena.S.

MT 59801 (406) 728-4300 • Regional Administrator Helena. MT 59620 (406) 449-2821 United States Environmental Protection Agency Drawer 10096 Helena. MT 59620 (406) 449-3454 Montana Water Quality Bureau Department of Health & Environmental Science Helena. MT 59620 (406) 449-2872 Montana Solid Waste Management Bureau Department of Health & Environmental Sciences Helena. MT 59801 (406) 329-3604 . Forest Service Federal District Forester Missoula. MT 59620 (406) 449-2406 Montana Water Resource Department Helena.S. MT (406) 449-2074 U.ENVIRONMENTAL Montana Air Quality Bureau Department of Health & Environmental Science Helena. MT 59626 (406) 449-5414 WOOD Montana Department of State Lands Misoula.

MT 59620 (406) 449-3402 & Health .BOILER PERMITS Montana Bureau of Safety Helena.

MT 59604 Crop Residue Resource Information (406) 449-5303 Geo-Heat Utilization Center Oregon Institute of Technology Klamath Falls. OR 97601 (503) 882-6321 TAX INCENTIVES Montana Department of Revenue Helena. MT 59715 • Biogas Department of Microbiology (406) 994-2903 Department of Chemistry (406) 994-4801 • Geothermal Department of Earth Sciences (406) 994-3331 Montana Crop & Lifestock Reporting Service Helena. MT 59812 • Resource Information (406) 243-5113 • Biomass/Waste Fuels Department of Chemistry (406) 243-4022 Montana State University Bozeman. MT 59620 (406) 449-3933 . MT 59620 (406) 449-2837 BUILDING CODES Montana Department of Administration Helena.INFORMATION University of Montana Missoula.



f. 676? JlzZQzlQixM. Sec. 494t L. 327? L. R. 1975. 327? L. amd. 23.TITLE 75 ENVIP0NH6NTAL PROTFCTICN CHAPTER 20 MAJOR FACILITY SITIMG Part 1 Policy and General Provisions known l^Z^zlQlj. 70-823. amd. R.C. aaid. 494? L. £:i£Qi£i:_iiiE£i:^£iiS5 Qth^H l3til QL tijli^SA supersedes other laws or regulations except as provided in 75-20-401. 494. If any provision of this chapter Is in conflict with any other law of this state or any rule promulgated thereunder. 1975. 1» 1947? 70-801. Sec. this chapter shall govern and control and the other law or rule shall be deemed superseded for the purpose of this chapter.M. — CiJiioitiQD^* -8- In this chapter. Ch.- En. 1975. unless the . This History: Ch. Ch. 2? 2? 1947? 70-802. (i) it l» lizZUriUi* £filii:^_aDiJ_l£Slil5tiid£_ix£idina5A is the constitutionally declared policy of this state to maintain and improve a clean and healthful environment for present and future qenerations» to protect the env ronrrental fe-sa<)port 1 system from degradation and prevent unreasonable depletion and degradation of natural resources? and to provide for administration and enforcement to attain these objectives. Sec. Amendments to this chaoter shall have the same effect. Sec. IlzZHzinZji cfiapter Ch. Sec.M. History: Ch. Ch. StlflHi-iiilSi This chaoter shall be and may be cited as the ""iontana Major Facility itinq Act".C. Sec. The leqisla-ture finds that the construction of (2) additional power or energy conversion facilities may be necessary to meet the increasing need for electricity? energy? and other products and that these facilities have an effect on the environment? an impact population on concentration? and an effect on the welfare of the citizens of this state. 1973. 23. 1973. L. i i History: En. amd. 1. Therefore? it is necessary to ensure that the location? construction? and operation of power and energy conversion facilities will produce miniiTial adverse effects on the environment and upon the citizens of this state by providing that a power or energy conversion facility may not be constructed or operated within this state without a certificate of environmental compatibility and public need acquired pursuant to this chapter. 327? L. Sec.M. Ch. L • 1 979• En. 1947. 1973.C. R.

processing. chapter 15. or experimentation. "Department of health" means the department of (9) health and environmental sciences provided for In Title 2. "board of health" means the board of h-^alth and (5) environmental sciences provided for In 2-15-2104. including necessary borings to ascertain foundation conditions.und-'r this chapter that Is requirea for the construction or operation of a facility. or distributing crude oil or natural gas* and Strip anr! those facilities subject to The Montana i i . of "Certificate" ireans certificate the (6) environmental compatibility and public need by issued the board . chapter 15. Including upgrading to a design capacity covered by subsection normal include that the term does not (10)(b)t except maintenance or repair of an existing facility. "Commence to construct" means: (7) any clearing of land» excavation* construction. part 21. "^Board" Biaans the board of natural resources and (4) conservation provided for in 2-15-3302. gathering. investigation. (a) and facilities and associated facilities designed for or caojble of producing. -9- . except that the terrr.context requires otherwiset the followinq definitions apply: "Addition thereto" means the installation of new (1) machinery and equipment which would s on f cent! y ch?*nqe the conditions under which the facility is oner^ted. "-'. (10) "Facility" means: except for crude oil and natural qas refineries.nr. transporting. does not include a facility. "Associated facilities" (3) includes bur not limited to transportation lirW<s of <ind» iny aqupductst diversion dans* transmission substetionst storage ponds» reservoirs* and any other device or equipment associated with the production or delivery cf the en-»rTy form or product oroduced by a facility./ qu^^ i J^ ^^ i i ^. (C) ••Oepartment" means the department of natural resources and conservation provided for in Title 2. t^>e fracturing of underground formations by any (b) means if such activity is related to the possible future development of a gasification facility or a facility employlnn qeothermal resources but does not Include the gathering of geological data by boring of test holes or other underground exploration.ppl cation" means an (2) application for a certificate subtnitted in accordance with this chio'-t^r rind the rules adopted her'^urder. transmitting. or (a) other action that would affect the environment of the site or route of a facility but does net mean changes needed for temporary use of sites or routes for nonutility purposes or in uses securing qeological data. part 33. (c) the commencement of eminent domain proceedlnas under Title 70» chapter 30» for land or rights-of-way upon or over which a facility may be constructed. an existing (d) the relocation or upgrading of facility defined by (b) or (c) of subsection (10).

(d) any use of geothermal resources* including the use of underground space in existence or to be created* for the creation* use* or conversion of energy* designed for or capable of producing geothermally derived power equivalent to 25 million Btu per hour or more or any addition thereto having an estimated cost in excess of $750*000. Sec. Sec. 1* Ch. I . Sec. 3* Ch.M. 1* Ch. ^...'xcass of $10 million.egawatts of electricity nr rore or (i) pollution control ^'aclllties ani env ronirental approved by the dea^rtment of health sciences added to an existing plant) having an estinr. (ii) producing 25 million cubic ffiet or more of gas derived froTi coal per day or any addition thereto having an estimated cost in excess of SIO million. 539* L. 1975.ated cost in '. Ch. 1974. (iil) producing 25t000 barrels of llauld hydrocarbon products per day or more or any addition thereto having ^n estindted cost in excess of $10 million. 1974. 67iS* L. 231* L. amd. Sec. 1979. 527* L. amd.» Und-9rqrounc1 i^ine Reclamation Act» pach pl^ntt unit? or other cr capable facility ano associat<^d facilities clesinne>T for of: qeneratino 50 ir. R.. S'. 133* L. 2* Ch. 2S8. amd* Sec. means any person engaged in any aspect (13) "Utility" of the production.. storage* sale* delivery. amd I. 327* 1973. t* Sec. 1979. 1. any underground in situ gasification of coal. 1981. (e) means any individual* (11) "Person" group* firm* partnership* corporation* cooperative* association* government subdivision* government agency* local government* or other organization or entity* (12) "Transmission substation" means any structure* device* or equipment assemblage* commonly located and designed for voltage regulation* circuit protection* or switching necessary for the construction or operation of a proposed transmission line. any addition thereto (except i ) History: En. 1979. i. 3md. (c) '?dch pipeline and associated facilities designed for or capable of transporting gas (except for natural gas watert or liquid hydrocarbon products from or to a facility located within or v/ithout this state of the size indicated in subsection (10)(a) of this section. 1* Ch.'c. 3* Ch.. 1* Ch. nach electric transmission line and associated (b) facilities of a desi'Jn capacity of more than 69 kilovclts» except that the term does not include an electric transmission line and associated facilities of a design capriCity of 220 kjlovolts or less and 10 rriles or less in 1 ength. 70-'^03. L.C. or utilizing or converting 500t000 tons of coal per (V) more or any aadltion thereto havinc an estimated year or cost in excess of $10 -Tiillion. ^. 494* L. Cisc.. (iv) enriching uranium minerals or any addition thereto having an estimated cost in excess of $10 million. 1947. ( I -1 n- . amd. i 7 7 dinu. or furnishing of heat* electricity* gas* hydrocarbon products* or in energy any form for ultimate public use. amd. Sec.

268» amd. 2. i . -incl increased $250. Ch. deleted "refining" -?fter "ut 1 7 nq" in (10){a)(v). L. Ch.000 at th'^ pnd of 121Ii_A{112DlJlL£Qil i J i i i 1 i J I (10) (d). L. 527» L. 6. 1974. Sec. Ch. Sec 22. Ch. 197?. 1981. Ad2atiCQ_2f LUle^A The board may adopt rules implement but not 1 mi ted rules (1) appl cat ons rules (2) chapter rules (3) i i i ina the provisions of this chapter. L.C. 1974. 22t Ch. section Ch. including to: governing and content of the forir further defining the terms us'^d in this governing the form and content of long-rance pi ans any other rules the board considers necessary to (4) accomplish the purposes and objectives of this chanter* Sec. 4. Ch.C0C to trillion throughout (10)(a).Ti any or privatt source to assist in its activities under this chapter. amd. En. L. 197A. 197<5. 494. amd.000 to '750. 1981. Sec. i2Il_EIl£i^iii£_Ii5l£i provided: "This act is effective on passage and apprqval Approved April 10» 1979. 20.2£ti IQL department may contract with a potential applicant under formal a this chapter in advance of the filing of application for the development of information or provision of services required hereunder. 'liftst and other funds fro. . 1. History: En. 1. 327. L. Sec. L. aird. 1. 1977. 12Sl_£Lfp£tiy£_Q^t£jL 539. 268. 6.TCility in increasec %\n (10)(3). amd. -11- .^ciliti'=s subject to The Montana Strip and ^'in«^ Underground Rtclarration Act within the exception to the definition of f. Sec. The (l) iDfQnnaiiQDi I^zZQzlQLs C20tL. 2^rZfl=LQ2_tb£oy^t3_15z2Dzllfl_r£s-£idsd^ 21=Z2zI11a iL^DiSi nlftSi ac'J tumlk* The departn'ent public may receive irc^nts.C-"^. aoded f. Ch. Sec. Section 9^ Ch. History: En. 327» L. . Payments made to the department under such a (2) contract shall credited against the fee payable be hereunder.. 1947t 70-820(1). L." Approved April 29. 494. amd. "" \ I^zZQz1!}1m. $250. 70-306 ( 2 )( c ) History: 115. Ch. 179. L. Sec. Ch. 270. Sec.the ena of (1). 1947. Ch. L. 2. 20. Conpilor's the C oiment s 1 Substitutea "wou s f c ant -^n y channe conditions unaer which the facility is cneratGd" for "would s ani f cantl y chanqe the conditions under which thr certificate was issued" a*.Sec. Sec. 1975. 1975. L. 1973. provicod: "This act is effective on p^ssaqe and aocroval. 1973. R. acd. R. 1975. amd.M. 327.

wind. If the board decides to issue a certificate for a (4) nuclear facility. amd. 7. 1973. R. 3. 1973.fi±£ usauirsd zz. available space or right-of-way. 4t 1947» 70-804(1).M. 3. 494t L. 80t app. 1947. R.C. grain. it shall report such reccmmendat on to the applicant and may not issue the certificate until such recomirendat on is approved by a majority of the voters in a statewide election called by initiative or referendum according to tfie laws of this state. A facility with respect to which a certificate (2) is issued may not thereafter be constructed* 0Derated» or (naintained except in conformity with the certificate and any terms* conditionst and modifications contained therein. amd. A certificate is not reguired under this chapter (2) for a facility under diligent onsite physical construction or in operation on January 1.M. 1975. Ch. The board may adopt reasonable rules establishing (3) exemptions from this chapter for the relocation. wood. safiL^tisa £Qnf2Il]2£Q£:£_=r_dacIlflyal_il^_afliiul^£_^iflt2_oJ[ Ciiillf leal e in Iql DUClSdC-l^iiliiXji (1) A person Tay not commence to construct facility the a in state without first applying fdr and obtaining a certificate of environmental coirpat bl 1 ty and public -need issued with respect to the facility by the board. put apjjlies to any unpreempted aspect of a facility over which an agency of the federal government has partial jurisdiction. tflxes* shall the penalties collected under this chapter the earmarked revenue fund for use by carrying dfparxment out its functions ^^nd responsibilities under chis chapter.Ch. location. or (ii) utilizes coal. or construction methods. 327» L. 270t L. l^^Tt 70-822.. I. Sec. A certificate may only be issued pursuant to (3) this chapter. Ch. reconstruction.M. size. or upgrading of a facility that: (a) would otherwise be covered by this chapter. Ch. i i i i History: En. llzZQzZQZ^ ^iSfiaQliaOi* (l) This chapter does not apply to any aspect of facility over which an agency of the a federal government has exclusive jurisdiction. and (b) (i) is unlikely to have a significant environmental impact by reason of length. 1975. Part 2 Certification Proceedinqs 25rZflzZ2lA ££r. or sun as a fuel source and the technology of which will result in -12- . 70-fl24.tifii. 70-824 by History: R.C. 1975*. Nov. Sec. biomass. Sec. finest and be deposited in in 51. Sec. 1978.C*. ^94f L. 4.

2QSfe££i2lgj A 15. amdo Sec. 327. 19A7t 70-80^(3) thru (5): an^oe See. ^\^'1^) (vi) at the applicant's option.r. 1973-. An application may consist of an (2) application for 1 i llzZQzllX± — i i - <? i i i -13- .C. Ch« 327. arrd« Sec. 1947. 1975. R. Ncvr 7. aredter ?ffici<^ncyt prorrote f^nerqy conservst on r and prcn'oto qr^dter system reliability than the existing facility. Ch. Ch.. A.M.C. ^9/rt L. (V) baseline data for the primary and reasonable alternate locations. L. and shall be availabl"^ for public nsDOct on. ?? Ch.. l^'^l. R. app. containing the follovv^nq nf or mat on: (i) a description of ttie location and of the facility to be built thereon. provided: "This ^ct is effective on passage anc approv^al. Sf ifiL^iiLii-aQd-QQiicei (1) (a) An applicant shaf file with the department ana department of health a joint application for a certificate under this chapter and for the pertrfts required under the laws administered by the department nf health and the beard of health in such form as the board requires under applicable rules. Sec. 30» app. atrd. ^39^ L-'. History: Ch. if ordered. amd. Acaii£i2tli2Q_rr_fililia_imiI_£QDt£.zlQz^Ql3L certificcite may -^-C be transferred.i^d En. April 29t 19?l. 3. ^9"^.y. i History: En. a f. ^. l. Ser^ 4? 1975. 80.nii_rr_D£2Qf. (iii) a statement explaininq the need for the facility? (iv) a description of reasonable alternate locations for the proposed facility? a general description of the comparative merits and each location detriments of submittedt and a statement of the reasons wh^ prfira'-y the proposed location is best suited for the facility." App/ot'ed Cofrpilpr's Tomments ISSi.AcsDdaiSDl-. 3t l. 1973. ivjov. 579» L» 1981. 3f ToM. 70-804(2). Ch. A (b) copy or copies of the studies referred to in subsection (l)(a)(ii) above shall be with the filed depcirtment. suhject to the approval of t^e board? person who agrees to comply with the terms. (ii) a surairary of any studies which have been made of the env ronjiental impact of the facility. 1978. ££ILtifiCi!t£_tr. amd» Sec. 67fet 1979„ 1. L. 1973. Sec. conditions? modifications contained therein. Adrlec' subsection {3)(b)(ii)c £fieiiiv^ Datgi Section 9» Ch. Sec. and (vii) such other information as the applicant considers relevant or as the board and board of health by order ot rulo or the department and department of health by ord''r or rul may r ecju re. 7. an environmental study plan to satisfy the requirements of this chapter.

L. amd. 1979. Sec. 1975. 179." Approved April 29.more facilities in combination which ore physically two or a and directly attached to each other and arn coerrit onal y sinqle operatincj entity. L. It Ch.ent aqencies: quality council.ni ss oner f city or county planning and f^dpral agencies charqad with the duty of protacting the environirent of planning land use in th^ area in which any portion of or the proposed facility may be located* both as or nf)=jr 1 y and alternatively proposed and on the followin'. department of revenue. Sec. public service regulation. L. 539. R. 1961. L. amd.M. amd. L. Sec. amd. L. 1974. Ch. fish» wildlifet and parks. Sec. The following functions of the department of (2) i I i -14- .C. 2t Ch. and substituted "as the board ^nd board of health by order or rule or the department and department of health by order or rula may require" for "as the board and board of health by rule or the department and department of health by order require" at the end of : (l)(a)(vi ). 270. Ch. 1981. 1973. Compiler's Comments 1 981 Amendm e nts Chapter 274 substituted "department of commerce" for "oepartment of community affairs" in (3)(e). (g) The copy of the application shall be accompanied (4) a -notice specifyina the date on or about which the by application is to be filed. £fi:?£liY£_£aiiI Section 9» Ch. It 6. L. 6t Ch. Ch. 4t Ch. state as i 1 i i i i govGrnr". Chapter 539 substituted "for the permits required under the laws administered by the department of health and the board of health" for "for the permits required by state air and water quality laws" in (l)(a). rtepartment of commerce. application shall be accompan en ny arcof ot An (3) service of a copy of the application on the chief executive each unit of of local officer jovernmentt county beards. An application shall also be accompanied by (5) proof that public notice thereof was given to persons residing in the area or alternative areas in which any portion of the proposed facility may te locatedt by publication of a those newspapers that summary of the application in will substantially inform those persons of tne application* (a) (b) (c) (d) (e) (f) environmental department of department of department of History: EnSec. amd. ) . Sec. 274. Ij:dQ^S£_Qf_£UDi:tlaQi Section 6. amdSec. 274. 494t L. 115» L. provided: "This act Is effective on passage and approval. amd. Sec. Ch. provided in part: "(1) The department of community affairs s abol shed. 1901. Sec. 3t 1981. state lands. 1975. 6t Ch. L. Ch. Sec. amd. L. 263. 197^. 327. 676. 539» L. 70-306 (part 1947. com. 1981. 1979. 1» Ch. deoartment of highways. If 553f amd. 1977.

are transferred I to the department of commerce: (e) relating to r ecotnmendat ons c'oncerninq major facility siting and contained in 75-20-^ll» 75-20-216? and 75-20-5C1. Subsection regarding (3) persons ana agencies to be served with a copy of an application was amended by both of the above chapters. ) llzZQzZl^A. 1» Ch. 1979» and a composite section was prepared by the C<^de Coinm ss oner » 1979. or the department may require a r.C. without filing an application for an amendment. Sec. . Sec. L. Ch. L. any An application may be amended by an applicant (2) the If time prior department's recommendation. material The applicant shall submit supplemental (3) in a timely manner as requested by the department or as offered by the applicant to explain. It Ch. Notice of such an application shall be given as set forth in {3)t (4).liQnl This section was amended by Ch. amd. in listed the the agencies department of healtht or and 75-20-216(5) their duties carrying out from responsibilities under this chaptert the department may require such additional filing fees as the department determines necessary. and (5) of 75-20-211. Rfiauirsieal if Liiitiaa Section 26» 676» CfiDiraCti Ch. It Ch. 2f Ch." 553 Llia!E2iii£_^££. Sec. 1973. 553 "municipality" to "unit of local frorr.M." H^iidsL qI £^s£liQ£ n^ta. 1979t nrovidyd: "The department may in its discretion waive th« requ rptient that bjseline dJta for the primary and reasonable alternate locations be submitted an with application unoer 75-20-?l 1 1) (. 1974. 1975. i ( ) i i Inadvertent 21-ZQjzllZ± £ur-£_fi!i:_L£ililL£ of i££yic£i failure of service on notice the =)ny of or to mun c pal ti es t government agencies* or identified persons in 75-20-211(3) and (5) may be cured pursuant to orders of the department designed to afford them adequate notice to enable their effective participation in the proceeding.<i. The department's determination as to whether information is -15- . 197-^. 179. 1977. 6.— coTiniiuni . R. 5yi20lSID£Dl£l_lEdt££isl_:. 115. 327t L. and Ch. .i) (V in those cases in which the applicant hasT prior to July It 1979t entered into a contract with the department to compilo baseline information. L. 270t 6t Ch. L. 6. Ch. amd. Sec.ew application and filing fee. 1975. I947t 70-306( par t History: En. . aif. L. Sec. 268. . 676 deleted "chief executive officer of each" but the Code Commissioner reinserted this phrase to incorporate the change ^ by Ch. 494t L. ty • effairs . amd. to the proposed amendment is such that it prevents the department. i i i Sec. amd.76» L.:^_5(T!ejDilm£ntSji (l) An a application for an amendment of an application or such certificate shall in such form and contain be Information as the board by rule or the department by order prescribes. government". support* or provide the detail with respect to an Item described in the original application.

It History: En. 6. Sec. L.C-M. £n. Sec. 197^. Upon 30 days' i — 1 A_ . plus (li) 1% of any estimated cost over $1 million ana up to $20 mil 1 ion. L. 1977. 676. CM.d. amd. R. 1973. (b) The department may allow in its discretion a credit against the fee payable under this section for the development of information or providing of services required hereunder or required for preparation of an environmental impact statement under the Montana or national environmental policy acts. 1. Ch. 19^7. air. If Ch. 179» L. 1975. Sec. 270. Ch. 327. 1947. L. L.125% of any amount of estimated cost over $300 mill on. an'd.-. amd. 1975. amd. The department shall evaluate the applicability. a description of reasonable alternative locations. and usefulness of the data and determine the amount which may be credited against the filing fee payable under this section. airdSec. Sec. 5» Ch. Sec. L. L. and such information as the board by rule or department by order requires. Ch. 179. potential 21z2QzjL1±^ I»2ii£2 Sf Xlit£Di IQ fils^ A applicant for a certificate may file a notice of intent to file an application for a certificate for a facility defined in 75-20-104(10) at least 12 months prior to the actual filing of an application. 1974. 6t Ch. a-Td. 6. 6. Sec. The notice of intent shall specify the type an<j size of facility to be applied its fort preferred location. Ch. 1973. L. 70-306(7). L. L. 27J» L. 115. 197^. 494. Sec. plus (V) . amd. History: Ch. 197A. Ch. 1975. Ch. plus (iii) 0. plus (Iv) 0.. 1977. 676. 1» 115. L.25% of any amount of estimated cost over $100 million and up to $300 million. 1. An applicant complyinq with this section is entitled to a 5% reduction of the filing fee required under 75-20-215. 1975. Ch. 1979. 268. validity. 49-^. amd. Sec. 1979. Sec. 327f L. 3m<1. amd. The applicant shall pay to the department a filing fee as provided in this section based upon the department's estimated costs of processing the application under this chapter^ but which shall not exceed following scale based upon the estimated cost of the tile faci 1 i — ty: 2* of any estimated cost up to $1 million.» an application supplemental or whether required shall be conclusive- for amendment is Sec. The applicant may submit the information to the depart. amd. L. Sec.ent together with an accountinq of the expenses incurred in preparing the information. 260. 2.5% of any estimated cost over $20 minion and (i) up to 5100 million. IlzZQzZl^ £iliDg_££2_rr_as:cQiiQ±5&ilii:^_-= nsfund r= A filing fee shall be deposited in the (1) (a) Ui^A earmarked revenue fund for the use of the department In administering this chapter. Spc. ft. Sec. 70-306(6). 1. 2» Ch. 6t Ch. Ch.

Ch. 7. 1974. Notwithstanding the provisions of this section* the revenue derived from the filing fee must be sufficient to enable the departmentt the department cf fiealtht the boardt the Loard of healtht and the agencies listed in 75-if0-2l6( 5) to carry out their responsibilities under this chapter. A refund shall made after be administrative and judicial remedies have been exhausted by all parties to the certification proceedings. 266* L. Payments m^^de to the department under such a contract shnll be credited against the fee payable hereunder.QS£i^ . (2)(b). 327t L. 1947. 1973. the department and department health of shall within 90 days notify the applicant in writing that: accepted the application is in compliance and (a) is -17- — iiiiilifx_£i!5Lu£ll2ai_3Dd_LSC2Ll 2Q P£2£.V. amd. amd. R.ay not be included in the estimated cost of a praposed facility for the purpose of c^lculatinc a filing fee. (t>) If a contract is not entered into? the applicant shall pay the filing fee in installments in accordance with a schedule of installments developed by the departmentt proviaed that no one installment n:ay exceed 20% of the total filing fee provided for in subsection (1). llSt L. 1* L.C. 1979. Ch. amd. The department may amend a contract to require additional payments for necessary expenses up to the limits set forth in suosection (l)(a) above uoon 30 days' notice to the applicant. 1977. 70-806 ( 2 ) ( a ) . The department and applicant may enter into a contract which exceeds the scale provided in subsection (l)(a). 494* L.notice to the applic^antt this credit may at any be tiTf reduced if the depart. 2f Ch. amd. 676» L. Ch. The contract may continue an acreement entered into pursuant to 75-20-106.!D£J:-5£i£Q£i£S*. SecCh. The applicant is entitled to an accountino of (5) moneys expended and to a refund with interest at the rate of 6^ a year of that portion of the filing fee not expended by the in departjient carrying out its responsibilities under this al] chapter. 1. (1) After receiot of an application. History: En. 1975. 1975. If an application consists of a combination cf two (4) or more facilities* the filing fee shall he based en the total estimated cost of the combined facilities. 1» 6. Sec. Sec 270t 6» Ch. (a) The departnient may contract with Tn applicant (?) for thp develooment of informationt provision of services and payment of fees required under this chapter. L. Sec. amd.Tent determines that it is necessary to carry out its responsibilities under this chanter. amd. Ch. 15. 179. Sec. 1974. Sec. The estimated cost cf uoqrading an existing (3) transmission substation rr.zZQ=Zlhx L^LllllX rr_ai5iildDi£_tX-Qi. fees shall filing be The revenues derived from (6) used by the department in compiling the information required for rendering a decision on a certificate and for carrying out its and the board's other responsibilities under this chapter. Sec.

Tjplete. of health shall year The department within I (3) followi-ng the date of acceptance of an application and the board of health or department of health* if applicable* opiniont within an additional 6 months issue any decision. certification. The decision* opinion* certification* or permit. the primary and reasonable for under their jurisdiction order* their decision. is certification. Prior to the issuance of a preliminary decision by the department of health and pursuant to rules adopted the board of health. certification* or permit issued under this subsection is board retains authority to make the conclusive* the determination required under 75-20-30 i 2) (c . opinion* in alternate locations order. or conclusive on all matters that the department of health and health administer. permit. the of health or board of health satisfies the review requirements by those agencies and shall b-^ acceptable in lieu of an environmental impact statement under the Montana Environmental Policy Act. A copy of the decision. and any of the criteria board of specified in subsections (2) through (7) of 75-20-503 that the determinations xade under the laws part of are a administered by the department of health and the board of the decision* opinion* order* Although health. with or without conditions. order. Upon receipt of an application complying with (2) and this sectjoot the 75-20-211 T5-20-215f throuqh department shall commence an intensive study and evaluation facility and its effects* corsidering all the prooosed of applicaole criteria listed in 75-20-301 and 75-20-S03 and the departrnent of health shall commence a study to enable it the board of health to issue a decision* opinion» order» or certification* or peritit as provided in subsection (3)» The department and department of health shall use» to the extent they consider applicable* valid and useful existing studies applicant or compiled by a and reports submitted by the state or federal agency. opinion. or permit shall be served upon the department and the board and shall be utilized as part of their final site selection process. certification* or permit required under the laws order. by applicantt the resubmission the and shall within 30 days departir. The decision* opinion. Within 22 months (4) following acceptance of an application for a facility as defined in (a) and (d) of 75-20-104(10) and for a facility as defined in (b) and (c) the ( ) . the by department of health shall provide an opportunity for public review and comment. administered by the department of health or the board of health and this chapter.as coiTplete. certification. standards.ent and department of health notify the applicant in writing thit the application is in coirpliance add is accepted as co. or permit of the department order. The department of health and the all determine compliance with board of health shall implementation plans and permit requirements. (b) or deficiencies deficiencies application is not In compliance and list the of t>^ese upon correction and therein.

i I i -19- .75-20-10A( 10) which is more than 30 miles in le^Gt^ and within 1 year for a facility as defined in (b) and of (c) 75-^0-lOA 10) is which miles or 30 less in lenqtht the department shall make a report to the board which shall contain the department's studies* evaluations* recomncndv^t onst other pertinent docurents resulting from its study and evaluation* and an c'nvi ronment al impact stdteir. 1979.and parks. The department shall allocate fun. Insferted Chapter 539 "or department of health" after "the board of health" in the middle of the first sentence of the laws substituted "permit required under (3). 1«. amd. deleted "of air water and impacts under the federal and quality state air and water quality statutes" after "The decision* opinion* order? certification. The report r^ay include opinions as to the advisability of qrantinn* denying* cr modifying the certificate. or permit* with or without conditions* is conclusive on all third in matters" the sentence of (3). ^9^* L. Sec. revenue. public and service regulation shall report to the departrrent information relatino to the impact of the oropos^d site on each department's area of expertise.ent or analysis prepared pursuant to thn Montana Envi ronrrental Policy Act* if any. L. Sec. Sec. 676.JID£Iliii Chapter 274 substituted "department of commerce" for "department of community affairs" in (5). CoTipiler's Comments i221_iiE£Qj. L. determi n.M.pl ementati on plans" in the second sentence of (3). 539. 39* Ch. 218* L. L. 1975. Sec. arr. 327* L.31. state lands. 274* L. Sec. 6. 2t Ch. R. 268.d. substituted "the board of health shall determine compliance with all permit standards* requ rements f and their implementation plans under "the jurisdiction" board of health shall determine for compliance with air and water quality and standards n. amd. If tne application is for a comb n-^t ion of two or ir. 8* Ch. 3* 7* Ch. Ch.C. Sec. 1945. 213* L. cornmerc^?. amd. 70-907(1)* (2).^t ons made under laws administered by the the department of health and the board of heal tn" for "the determinations made under federal and state air and water quality statutes" at the end of the third sentence of (3). fish* wildlife* .ore facilitiest the deoartment shall rrake its report to the board within the qreeter of the lenqths of time provided for in this subsection for either of ( i i of the f 3C il i t i es. substituted "specified in subsections (2) through (7) of 75-2C-503" for "specified in 75-20-503(3) and in the (4)" third sent*jnce of "the substituted (3). It Ch. 1973. amd. 1975. 1981.is -obtained from filing fees to the departments rrakinq reports to reimburse then: the of for costs cotr^piling information and issuing the required report. departments of highways. atnd. 4* Ch. (5) The History: En. Ch. Sec. Sec. 197^. administered by the department of health or board of health and this chapter" for "permit required by state federal or and air water quality laws and this chapter" at the end of the first sentence of (3). amd. 1979.

Except for those hearings involving applications submitted for facilities as defined in and (b) (c) of 75-20-104 ( 10) t certification hearings shall be conducted by the board In the county seat of Lewis and Clark County or the county in which the facility or the greater portion thereof is to be located.and deleter! "A decision by the depart/rent of heal tr> or board of health is subject to appellate revlev^ pursuant to the air and water quality statut*?s administered by tht department of health and board cf health" at the end of (3)iL^n^LiL 2l fUDSLliflDl Section 6t Ch. l^-ZQzZl^^ tJa^rina dale r=_l2i:£ti2n_rr_uiia2£. L. 9f 676.zZll± ISl^iHQ 3Il_aciili£iiiiiin. s abol The following functions of the deodrtii^nt of (2) community affairs ar<ii transferred to the department of commerce: • . 1979. 1931» provided: £f f q<^ t." Approved April 29» 1981. or failure to deposit the filinq fee as oroviaed in (3) 75-20-215. amd. amd.•• Cal£i Section 9t Ch. 70-9l8{?). 1975. Sec. . Sec. . 18» Ch. 1947. At the request of the applicant* the department of (3) health and the board of health shall hold any required permit hearinqs required under laws administered by those agencies in conjunction with the board certification hearing. History: En. L.An aoplicatinn may be voided by the department for: any material and knowingly false statement in the (1) or application in accompanying statements or studies required of the applicant. A9^t L. f-^ilure to file an application in substantially (2) form and content required by this chapter and the rules the adopted thereunder. In such a conjunctive hearing the time periods established for reviewing an application and for issuinr: a decision on certification of a proposed facility under this chapter supersede the time periods specified in other laws administered by the department of health and the board of -20- — . Sec. 27^.lffleDi_l£ upon fl£t_a5_iijili_-r tliZ^XilLQi ±2 tjfi b£ld iaiQllil* (1) receipt of the department's report submitted under 75-20-216* the board shall set a date for a hearing to oeqin not more than 120 days after the receipt. 327t L. 18» Ch. • to recommendations concerning major r^latinq (e) 75-20-216* and facility siting and contained in 75-20-211* 75-20-501. -^. . 1973. 539t L. I i HzZQ. Except as proviaed in 75-20-221(2)* the department (2) shall the act as for staff the board thrcuuhout the decisionmaking process and the board may request the department to present testimony or cross-examine witnesses as the board considers necessary and appropriate.C*^. 198lt provided in part: "(1) The department of comnunity affairs shed. Ch.i V£ "This act i5 effective on passage and approval.

the and a hearing is reguired because departrent's determination appealed to the board as is ) I -21- . IC. 7." Aporoved 1-981. 197^. llzZ^zll2x AE£D£lffi£nlS ii2_a_£££tili£at£* (1 Within 30 days after notice of an amendment to a certificate is given as set forth in 75-20-213(1). IIIiiiliYfi "This act April 29. amd. 1973. Ch. 539» L. 213» L.heal th« History: En. Section 9. amd. Sec. amd. 268» L. Sec. L. Ch. provided: effective en passage and approval. Ch. After hearing* the board shall grant. including notice to all active parties to the original proceedinc. 7» Ch. If the department determines that the proposed change would result any material increase in any environmental Impact of the in facility or a substantial change in the location of all or a portion of the facility. 1975. 327. Sec. L. amd. the department shall deterrri-r>e whether the proposed change in the facility would result in any material increase in any environmental impact of the facil ity or a substantial change in the location of a portion of the facility other than as provided in all or the alternates set forth In the original application. 676. the board shall hold a hearing In the same manner as a hearing is held on an application for a certificate. Sec 3» Ch. 19c31. If the department or the subsection board under (3) determines that a hearing Is reguired because the (4) proposed change would result In any material increase in any environmental impact of the facility or a substantial change in the location of all or a portion the facility* of the applicant has the burden of showing by clear and convincing evidence that the anendment should be granted. is Q^tfij. Ch. 1975.f.C. 5. 1947* 70-807(4): amd. l. R. Compiler's Comments 19 51 Substituted "department cf health and AlD£DdffifiDll the board of health" for "duly authorized stote ^ir and wat'3r quality =igencies" near the beginning and at the end of (3). If the department determines th3t the proposed (4) change in t|-i«^ facility would not result in any material increase in any environmental would not be impact a or substantial chango in the location of all or a oortion or the facility. ^94. Sec. Ch. In those cases where the department detormlnes (2) t^lat the proposed change in the facility would not result in any material increase in any environmental impact or would not be a substantial change in the location of all or a portion of the facility* the board shall automatically grant the amendment either ds applied for or upon such terms or conditions as the board considers appropriate unless the department's determination is appealed to the board within 15 days after notice of the department's determination is gi ven. Sec. deny. or modify the amendirent with such conditions as deems It appropr ate. 39. L. 1981. 1979. 539.

(1) If the board appoints a hearing examiner to conduct any certification proceedings under this chapter. 7» Ch« 327» L. the hearing examiner may not be a member of the board. History: En. aaid. Sec. L. amd. L. 1979. the hearing examiner may -22- . 39f Ch. 1981. the applicant has the burden of showing by clear and convincinq evidence that the amendment should be granted". Sec. 372. and serve upon the other active parties. amd. 268» L. The hearing examiner (5) shall require the active parties to submit. 494. R. Sec lit 7. A prehearinq conference shall held (2) be following notice within 60 days after the department's report has been filed with the board.M. Compiler's Comments for "If lSfll_AlIlSDiJlD£I]ti Substituted subsection (3) a hearing is required. 1974. 1. 1973. 1975. L. and inserted subsection (4). A hearing examiner. amd. or other exhibits that any active party wishes the board to consider. and.C. and an identification of the witnesses and documentary exhibits to be presented by the active parties who Intend to participate in the hearing. Sec. at least 20 days prior to the date set for the hearing. Ch. 676. if any. 213. in writing. 70-307(3). The prehearing conference shall be organized and (3) suptsrvlsed by the hearing examiner. If a hearing is held before the board of health or the department of health. L. If an amendment is required to a certificate which (5) would affectf amendt alter or modify a declsiont opinion» order? certification* or permit issued by the department of health or board of healtht such amendment must be processed under the applicable statutes administered by the department of health or board of health* in Sec. 3t Ch. investigations. shall be appointed by the board within 20 days after the deportment's report has been filed with the board. Sec. 1947. or a member or employee of the department of health or board of health. board the and the board of health or the department of health shall mutually agree on the appointment of a hearing examiner to preside at both hearings. Ch. reports. These written exhibits and any documents that the board itself wishes to use or rely on shall be submitted and served in like manner. 1975.provided showinc] subsection (2)» the appellant has tho burden of clear and convincinq evidence that th^ oroposed by chanqe in the facility would result in any material increase In any environmental iirpact of the facility or a substantial chanqe in the location of all or a portion of the facility provided in the alternates set forth in the than as other original application. an employee of the department. all direct testimony which they propose and any studies. The prehearinq conference shall be directed toward (4) a determination of the issues presented by the application. Ch. the department's report. For good cause shown.

These witnesses aro subject to cross-examin:)tion. 1975. Sec. Sec. Compiler's Comments omp ler Louinerits 12£i_AQ£D£!m£Dii Inserted "or the department of health" fter "board of health" throughout the last sentence of (1) s> and near the end of (9). 9." Approved Apr 1 29* 1981. hearing exairiner appointed to conduct a (10) The certification proceeding under this chapter shall insure that the time of the proceeding* from the date the department's report is filed with the board until the recommended report and order of the examiner is filed with the board* does not exceed 9 calendar months unless extended by the board for good cause. «ail£tr — rz £3L±i£5 at iil SlaleJESilt LctfiDt ZZ £2rtiii£3liQD C£2£££^iQ£ 12 B3rti£iC31£^ (M The -23- . I En. L. L. 1947* 70-609(3). 1981. provided: £Il££tiMe_D2J:£i Section 9* Ch. At the conclusion of hearing* the hearing the (9) examiner shall declare the hearing closed ana shall* within 60 days of that date* prepare and submit to the board and in the case of a conjunctive hearing* within to the days 90 board and the bodrd of health or department o^ health proposed findings of fact* a conclusions of law* and recommended decision. 1973.C. 539. 539. The hearing examiner shall allow discovery which (6) shall be completed before the commenceTent of the hearinQt upon qoocJ cause shown and under such other conditions as the hearing examiner shall prescribe. 327* L. Th-. amd.allow the Introduction of new evidence at any time. i I^Z. L. Public witnesses and otn'^r interested public (7) parties tray appear and present oral testirnony at tho hearing or submit written testimony to the hearing exairiner the at ire of t thp r appf-arance. Sec 12* amd. 6* Ch. 676* L. amd. a or (11) The board or hearing exatriner may waive all portion of the procedures forth set in subsections (2) through {b) of this section to expedite the hearing for a facility when the department has recommended approval of a facility and no objections have been filed.2Slz2. 9* Ch. Ch. 1979. i i History: A9'f. Sec. 1981* "This act is effective on passage and approval. R.ZJLt.M. Ch. hearing exariiner shall (3) a issue prehearing order specifying th° issues of fact and of law» identifying the witnesses of the active partiest naming the oublic witnesses and other interested parties who have submitted written testimony in lieu of appearance* outlining the order in which the hearing shall proceedt setting forth those section 75-20-3C1 criteria as to which po issue of Fact or law has been raised which are to be conclusively presumed and are not subject to further proof except for oood cause shown* and any other special rules to -expedite the hearing which -the Hearing examiner shall adopt with the approval of the board.

other interested person who establishes an any (e) interest in the proceeding. to preserve historical sites. 1947? 70-808.) active party in certification proceeding in which the department recommends denial of all or a portion of a facility. 1979. (a) entity* unit of local govornirentt each political (b) of health? and government aqoncyf including the department service of a copy of the application receive entitled to under 75-20-211(3). If the unit of local particpate? it shall list in this intend to not does This statement statement its reasons for failing to do so. 553? Any studies? =. amd. or other biological health? environment? personal the to promote consumer values. or to promote the orderly development of the areas in which the facility is to be located. 1973. ^94? L. 1979. R. History: En.M. 327. of intent shall be published before the proceeding begins in newspaper of general circulation within the jurisdiction a of the applicable unit of local government. to represent commercial and industrial groups. The parties to a certification proceeding may also (3) any Montana citizen and any include? as public parties? in (b)? (c)? (d)? or (e) of subsection party referred to i (1). In a certification proceeding held under this (3) chapter? the applicant has the burden of showing by clear -24- . party if the Any party waives the right to be a (<t) party does not participate in the hearing before the board or the board of health.C. nonprofit organization formed in whole or in any (d) to protect part to promote conservation or natural beauty. Tha department shall be an any (Z.a proceeding to parties to a certification proceeding or of decision» order» a opinion* issuance involvinq the the board of health under this certification? or permit by chapter nay include as active parties: the appl cant. Sec. L. Sec 2. Sec 13? Ch. Sec.= hUL^SQ 21 Crfififi (1) investigations? reports? or other documentary evidence? including those prepared by the department? which any party wishes the board to consider or which the board itself expects to utilize or rely upon shall be made a part of the record. interests. fi^iHSDtS amd. L. Each unit of local government entitled to receive (5) service of a copy of the application under 75-20-211(3) showing whether the shall file with the board a statement government intends local to participate in the unit of government certification proceeding. copy (c) a any person entitled to receive service of of the application under 75-20-211(5). 8? Ch. 1975. amd. 676? L. Ch. A record shall be made of the hearing and of all (2) testimony taken. 8? Ch.

Sec.r^. 'fu cy T:nt. the nature cf the probable (b) env roniyental i i i i i that the facility represents the minimum adverse available environmental impact* considering the state of technology and the nature and economics of the various (c) al ter nat ves i each of the criteria listed in 75-20-503. 9» Ch. (a) impact.. Dg£iiiQn_£f_l22j2£d_zz_i. Ch.14. Part Dec i 3 s i ons llzZH-lQla. R. No other rules ruieb or by cr of History: Ch. (ii) that the facility consistent with regional is plans expansion of the appropriate grid of the utility for utility systems serving the state and interconnected (d) (e) systeirs. Sec.iner» the board shall make corrPlete findings* issue an opinicnt and render a decision upon the reccrdt either granting or denying the filed or granting application as it upon such termst conditions* or aiod f cat ons of the construction* operation* or maintenance facility as the of the board considers appropr at^. (f) that the location of the facility as proposed conforms tc applicable state and local laws and regulations issued thereunder* except that the board may refuse to apply to any local law or regulation if it finds that* as applied the proposed facility* the law or regulation is unreasonably the -25- . 1947r 70-S09(l).i2flLD£i_DS£^iid£X_i2£ the suDrrission o^" ££lJ.C. (2). aind. 1975. examiner upon a showinc] cf qood cause by one trie more of parties tc the hearinq. 49'+t L. 9.' Di. En. 676f L.iIi£:^tiuQA (I) Within 6C clays after recommended decision by the hearing exaT. and (iii) that serve the interests of facility will utility system economy and reliability. board may not grant a certificate either as The (2) proposed by the applicant cr as modified by the board unless it shall find and deteririnG^ the basis of the need for the facility. 327» L. liquid in the case an or cf electric* gas* transmission line or aqueduct: (i) what part* if any* of the line or aqueduct shall be located underground.cira» ena -cne "on tana Kuies frvidence unless one or f^ore rules of svidence are: waived the hearinc. 1973. and. 1979. and convincinq evidence that the aopljcation shouta daujjr. Sec.

1979. interest? that the facility will serve the public (q) Iponven encet and necessity. 1975. 10* Ch. 15* Ch. 69* L. CciDlan_jLiaii£d_ai±J:_iJ£ciiiflD caalsfllSA zz. R. amd. 1973. Sec. to the (b) the benefits applicant and the state resulting from the proposed facility. Sec 10* R. Sec. i i i History: Ch. A94* Sec. 327* L. Ch. tnat the department of health or board of health (h) order* cert fi cat ont or ssue'1 a decision* opiniont have permit as required by 75-20-216(3). If the board has found that any regional or local (2) law or regulation which would be otherwise applicable is i i ISrZflziQii — rendering unreasonably restrictive pursuant to 75-20-301 2) f * it shall state in its opinion the reasons therefor. i i i i History: En. (3). the effects of the proposed facility on the public (d) welfare* and safety. and (i) that the use of public lands for locition of the lands were selected facility was evaluated -^nd public whenever their use is as economically practicable as the use private lands and compatible with the envi rontrental of criteria listed in 75-20-503. (c) the effects of the economic activity resulting from the proposed facility.C. IlzZHzlQ^x CgPditiQQS itDposgd* If the board determines that the location of all or a part of the proposed facility should be modified* it may condition its certificate upon such modification* provided that the persons residing in the area affected by the modification have been given reasonable notice of the aiod f cat on. (4). 1973. amd. 1979. amd. will In determining that the facility the serve (3) public interest* convenience* and necessity under subsection (2)(g) of this section* the board shall consider: the (a) items listed in subsections (2)(a) and (2)(b) of this section. 1947. 1975. 676. amd. 70-810(2).view of the existing technoloayt of factors in whether cost or economicst or of the needs of consumerst 'of outside of the directly affected or inside located restrictive government subdivisions. Considerations of need* public need* or public {h) convenience and necessity and demonstration thereof by the applicant shall apply only to utility facilities. 1. 10* <»94* L. Ch. health* (e) any other factors that it considers relevant.M. Sec. 327* L. 1947* 70-810(1).C. Any certificate issued by the board shall (3) include the following: an environmental (^) evaluation statement related to ( ( ) -26- . 10* Ch. Sec. 16* Ch. L. In a decision on an application for a k( 1 ) Pcert f cate* the board shall issue an opinion stating its reasons for the action taken. Sec. 676* L. L. En.M. 1979. amd.

of The board tray waive compliance with any of the (2) provisions of this chapter upon receipt of notice by a IS-ZQriQit*. 75-20-501. lit It Compiler's Comments £If£Cti^£ d5i£x Sec.C.the facility beinq certified. apply to any The provisions of subsection (5) (4) facility for which a certificate has not been issued or for which construction is yet to be commenced.pl y with the requirements of this chapter and the con-ditions of the certificateo The (A) board shall issue as part of the certificate the following time limits durinq which construction of a facility must be completed: i (a) ( For ) a TS-ZO-lCt 7 that limit t-s 10 years. and (vi) 3 time limit as provided in subsection (^)» durinq which construction of the facility must be completed. R. 1973. 120. (1) HsiYfiL — J2La£. amd" Sec. (ii) any aaverse environmental effects which cannot be avoided by issuance of the certificate. 1947.akes a clear and convincing showing to the board at a public hearing that an imiredlate. (V) a plan for ponitorina environmental effects of the proposeo facility. L. 75-20-501* and this part. 120* L. 1979. (iv) alternatives to the proposed facility. Sec. 1979. 327» L. urgent need for a facility exists and that the applicant did not have knowledge that the need for facility existed the Sufficiently in advance to fully comply with tl^ie provisions 75-20-216 thrcuah 75-20-222. provisions of and this part if the appl icant r. 11* Ch. provided: "This act is effective on passage approval. 1975. 1979. Under this subsection* a qood faith e^'fort to complete construction includes the process of acquirina any necessary state or federal permit or certificate for the any review of facility and the process of judicial such permit or certificate.M. (b) a statement signed by the applicant showing agreement to com. facility as defined is more than 30 miles in in (b) or (c) of length* the time (b) For o facility as defined (b) or in (c) of 75-20-lOA(7) that is 30 miles or less in length* the time limit is 5 years. (c) The time imit shall be extended for oeriods of 2 years each upon a showing by the appl icant to the board that complete a good faith effort beinq undertaken to is construction. 2. 1 History: En. (iii) problems and objections raised by other federal and state agencies o^nti interested rroups. Ch. Ch. The statemen*: shall include but not be limited to analysis of the followinq information: (i) the env r onirental impact of the oroposed facility. Sec. amd." Approved and March 19.££ilia3ijL -27- . 494* L. Ch." 2l BLO^SlQQi 2l ££i:iiijL£aJLLoi] of The board may waive compliance with any the 75-20-216 through 75-20-222. 70-811(1)* (2).

any subsection shall be credited toward the fee paid under 75-20-215 to the extent the data or evidence presented at the hearing or the decis'ion of the board under subsection can be used in traking a certification decision under (3) this chapter. 1973. (d)* (10)(b)t facility defined in subsection (3) of 75-20-104* or for any portion of or process in a facility defined in subsection the extent that the process or (10) (a) of 75-20-104 to portion of the facility is not subject to a permit issued by the department of health or board of healthThe applicant shall pay all expenses required to (6) process and conduct a hearing on a waiver request under subsection However* payments made under this (3). and facility will the proposed (d) have a beneficial effect on the economy of the county in which the facility is proposed to be located* The waiver provided for in subsection (3) applies (4) only to permanent job losses by a single emoloyer* The waiver provided for in subsection (3) does not apply to jobs of a temporary or seasonal nature* including but not limit-^d to construction Jobs or job losses during labor disputes. The waiver provided for in subsection (3) does not (5) apply to consideration of alternatives or minimum adverse environmental impact for a facility defined In subsections or (e) of 75-20-104t for an associated (c).^cility or been damaqed or destroyed as d associated facility has fire» flood? or other natural disaster or as the result of disorder and result of insurrection* wart or other civil immediate need for construction of a new an there exists facility or the relocation of a facility or associatRO previously existing facility or associated facility In order to prorrote the public welfare* shall waive compliance with the The beard (3) subsections {2)(c)» (3)(b)f and requirements of of (3)(c) 75-20-301 75-20-501(5) and and the requirements of subsections (l)(a)(iv) and (v) of 75-20-2lIt 75-20-216 3) relatinq to 75-20-303(3) (a) consideration of V) the f applicant makes a clear and ( ( i Operations (b-) th n t/ie preceding lO-year period. History: En- Sec. the county and municipal qoverninq bodies in whose jurisdiction the facility is proposed to be located support by resolution such a waiver. Sec. 327* L.» utility or person subject to this chapter that a f. The board may (7) grant only one waiver under subsections and (4) for each permanent loss of Jobs as (3) defined In subsection (3)(a). arrd. 11* Ch. the proposed facility will be constructed within a (c) of the operations that have ceased or been 15-mile radius ** i i curtailed. 11* -28- .

L. 17» Comments l£2I_Aa. Ch. 1947. aird. Sec.eDdm£Di-i Added subsections (3) throu<.n (7). ar^'i.d.^ i f i cat on and Legal Responsibilities i -i2£D£. operation. 539» L. L. 676.piler's 1975. 494. provided: aporoval. Sec. The board. R. Ch. 1979. 18. 70-617.K. L. 49Af L.pliance of the proposed facility with state standards and ir. Cotr. Ch. Ch. Sec. >3mrt. exc°pt that the retain state air and water quality agency or ogencies shall authority which they have or may be granted to determine feoersl and com. Ch. En. 70-820(2). L." "This act is effective on passaca and Approved April ^9t 1V81. 676. 1979. and the board of health shall operations of all certificated facilities for assuring the continuing compliance with this chapter and certificates discovering and preventing for and issued hereunder chapter and the certificates. or other condition for the certificate? fr. Sec. 1979* E£^2£3li2Q_flL_iU^C2DSiQQ-Ql_£££tiIit-ai£* A I5i:2£zfL23j certificate may be revoked or suspended by the board: the in statement material false any for (1) studies or in application or accompanying statements if a true statement would have required of the applicant warranted the board's refusal to grant a certificate. chapter This does not prevent the application of (2) in engaged th»-^ state laws for the protection of employees i i i ££flUil£. 17. 7t Ch. Part 4 Postcer t Ilzlilz±Qlx flQiiSIDIUeQl. 19^7* 70-311(3)» (4). amd. L. The noncompliance with this pay all expenses related to the monitoring applicant shall in subsection (3)(a)(v) of 75-20-303 to the plan established as facility.C.C. amd.M. R. 1975. 20. 19Ui. 1974. 1981. 20. 4. Sec. 17. aipd.ai2 zr: law» no state or qovernrrent may require any approvil» consent* permit* local construction. 327.C.i£^ AddiliflQ^l nOl £pj:m. L. 1975. Sec.L (1) Notwithstanding any oth'^r £2i££BtiJLDSA other or regional agency or irun c pal ty DSXiLiliSd — i i i construction. 19. monitor department of health. 268. L.i£.tt£El5 £tC£I tl of ilSii^QC£ itlS. tLiS^^lS Cjil^i Section 9. Sec. Ch. 676. the department. Sec. Ch. 49^. -29- .a ntenance of a facility author i. Ch.Ch. History: Sec. History: En. an. 1973. 1973. the 2irZfir^QZA ItQULt^LlnS*. 327. available for tfio funds extent federal not been have health.M. 539» L. Ch.pl ementet on plans for air and water quality and to enforce those standards. L. or maintenance of a facility.T'^d by 3 ODerationt or certificate issued pursuant to this chapter. of determined by the department provided for such purposes. 1947. R.

1973.M.Sec. 1947* 70-819(3). i History: Ch. Sec.failure to maintain safety standards or to the terms or conditions of the certificate.CM. 19* Ch.ployee under oath that shall state the by d written statement specific facts of the failure to enforce the requirement or Knowingly making false statements or charqes rule. R«C. 19.C. In the affidavit subjects the affiant to penalties prescribed under the law of perjury. amd. Sec. amd.M. 327* L. — -30- . 327* L. 19* 19^7.1973. ^94* L. If the public officer or employee neqlects or (2-) refuses for an unreasonable time after receipt of the statement to enforce the requirement or rule* the resident nay bring an action of mandamus in the district court of the first judicial district of this state* in and for the county of Lewis and Clark. History: En. 1975. R. 19t Ch. Sec. If he fails to do so* the public officer held or employee shall be in contempt of court and Is subject to the penalties provided by law. An owner of an interest in real property who obtains all or part of his supply of water for domestic* agricultural* industrial* or other legitimate use from a surface or underground source may sue a person to recover damages for contamination* diminution* or interruption of the water supply proximately resulting from the operation of a fjcility. 70-819(1)* (2). i2f_i:t3j3Et££_ti:^_££Sl£!^DtSjL 1 ) A resident of this state with knowledge that a requirement of chapter or a rule adopted under it this is not being enforced by a public officer or employee whose duty it s to requirement or rule may bring the failure to enforce the enforce to the attention of the public officer or eir. fQicnifiQfirLt Sec ( iBt I^zZQz^Qis. Ch. 1975. Ch. The remedies enumerated in this section do not exclude the use of any other remedy which may be available under the laws of the state. 19* 1975. 327» L. En. R. or comply 'or violation of any provision this chaptert of (3) or orders of the board or issued thereunder* rules the (2) for with depar tiient • Ch« ^g-itt History: En. L. 494* L.. 1947t 70-813(1)._i:£dltJD_d££lili2QSA (l) Any active party as defined in 75-20-221 aggrieved by the final decision of the board on an application d for certificate may obtain Judicial review of that decision by the filing of a petition In 3 state district court of competent jurisdiction. 1973. If the court finds that a requirement of this chapter or a rule adopted under it is not being enforced* the court may order the public officer or employee to enforce the requirement or rul*? to whose duty it is perform his duties. Sec. and iJe05Ilm£Dl_Qi. amd.

! yg ^Da tg. Sec. amd.CM. 2i-2Cri0fi» 13. 1947.C. 25-2Qriti21i — as History: En. 13. Section 9. 494. except to enforce compliance with this c^^apter or the provisions of a certificate issued hereunder pursuant to 75-2C-404 and 75-20-405 or 75-20-408. 70-813. "This act is effective on passage and approval. Sec. Sec. L. L. 1979. 70-312. in constructs. or controversy concerning any in a matter which was or could have been determined proceeding before the board under this chapter or to stop or maintenance of a delay the construction. case. amd. or (b) reserve the richt to appeal the denial by the department of health or the board of health until after the board has issued a final decision. 327. operation* or facility. R. Ch. Compiler's Comments 19 81 Am endment: Added subsections (3) and Ct).. 327.juaicial review procedure shall t)e thp same is that for contested cases unoer the Viontana Ad-n n st r at v^^ °rocedur^ Act. 1947. 12t Ch.iiLli£licn_fli_C£!U£lS 75-20-401. ££Di2lti£3_fQL_vi£laiiJ3Q_flf_i. 1981. L. Sec. provided: Effect. 539.t}dpt£I_==_Ci5iil Whoever commences to (l) (^) fli:liflD_lix_itlQiiiey_a£aiil_alA construct or operate a facility without first obtaining a certificate required under 75-20-201 or a waiver thereof under 75-20-304(2) or having first obtained a certificate. Wh^n the board of health or department of health (3) conducts hearings pursuant to 75-20-2 16 3) and 75-?0-216 and the applicant is qrantecJ a peririt or Cer t f c at on » with or without conoitions* pursuant to the laws administered hy the department of health and the beard of hCdlth and thi'i chapter* the aecision may only be appealed in conjunction the With final decision of the board as nrnvided in subsections (1) and (2). 20. amd. 1973. ^94» L.ict££lA JUI. Sec. 75-20-406. and expressly set in forth 75-20-408. Ch. l. R. If a permit or certification is denied by the department of heal tn cr th<^ board of h*^altht the applicant may: the (a) apoeal denial the appellate under review procedures provided in the laws administered by the department of health and the beard of health. 1981. 539. 676.V. L. (2) Trie i i i ( i i i - !j'=' History: Ch. L. Ch. 1981- Except ££Sll. 1973. Ch." Approved April ^9. Ch. or maintains a facility other than compliance with the certificate or violates any other adopted provision of this chapter or order rule or any -31- . operates. no court of this state has jurisdiction to hear or determine any issue. 8. Nothinn in this section may construed to (4) prohibi-t the board from holding a hearinq as herein provided on all T. See 12t 1975.atters that are not the subject of a pendinq appeal by the aoplicant under subsection (3) (a). En. 1975. amd.

Qt f^£lliljt_iJa_laD^flij(0£JCli_flrflCS£t^j.M R. Sec. right-of-way..l p acts -iccur is for o civil the df orement oHf^'j penally of not noro tnan SlJtOOO for ejch viclatjon. amd.— 2£ aui2SDil2D_i2^ LQULL zz lifflil^tiflQS^ Notwithstanding any contrary provision in the law. 21. the pendency of an appeal from a board order does not automatically stay or suspend the operation of the order. amd. amd. Ch. . ^94* L. During the pendency of the apoeal. Sec. 1975. L. Ch.3J . Ch. — - knowingly submits false information in any thereunder or or application roquirecJ by ^hjs plant 10-year report* chapter or rule cr ordor adoptpd thereundtr or causes -^ny of to Tt. 70-821. 19A7.C. 21 . Sec. History: En. A landowner upon whose land a facility is proposed to be located shall have the option of receiving any negotiated settlement for use of his land. if and when the land is used for a facility. Upon a proper showing* permanent or a preliminary injunction or temporary restraining order shall be granted without bond.71 in or 1 uiT. 21» Ch. Sec. the operation of the -32- — mx . 1975. in whole or in part. Sec. 16."Montana for injunctive or other appropriate relief aoainst violation and to enforce this chapter or a certificate the issued hereunder. 1979. by easement. L. All fines and penalties collected (5) shall be deposited in the earmarked revenue fund for the use of the department in administering this chapter. 327* L 1973. 676. I1zZQ=±iQa Dn^sr. Ch.^T R.p not more than five consecutive annual instal 1 ments History: En. amd. Fach day of a continuing violation constitutes a separate offense. Ch. 1979. the court may upon motion by one of the parties stay or suspend. L. f^jcn i^ay of ^ continuinq violation ccnstitutas (b) i 1 i "j s-^pardtH off'^nse* Tha oonalty is recoverable in a civil suit brought (c) general tne ^ittorney on behalf by of the stite in the district court of the first judicial district of Montana.M. In addition to any penalty provided in subsections (3) or (2)* whenever the department determines that a person (1) is violating or is about to violate any of the provisions of this sectiont it may refer the matter to i-he attorney general who may bring a civil action en behalf of the state in thedistrict court of the first judicial district of . (^t) The department shall also enforce this chapter and bring legal actions to accomplish the -snforcement through Its own legal counsel. 270 L. 68. or ether legal conveyance in either a SU. 1.Dui ^t^^^d hx 5CC£. knowingly Whoever and willfully violates (2) subsection (1) shall be fined not more thiin IlOtOOO for each violation cr imprisoned for not more than 1 year* or both.C. 2. Sec. 71. 1979.

1979» proviOed: LQSlLti^2LLQQ± the intent of the leqislatjre that sections Z^t and become an integral part of Title 75» chapter 20^ HCAt that the provisions of that chapter apply to sections 2^ 25. except that the cost of the bond is not chargeable to the aoplicant as part of the fee. If the party oetitioninq for review prevails upon final resolution of an appeal* h= does not forfeit bond nor is he responsible for damaqes caused by del ay History: En. 5iLL£ii: &2Cd_zr_fitt}££_S££ULitX» ^f an order of the board is st3yed or suspended* the court may require a — bond with good and sufficient surety conditioned the that party petitioning for review answer for all damaqes caused by the delay in enforcing the order of the board. 27. 676» L. Ch. The plan shall be submitted by each April 1 of (2) year and must include the following: (a) the general type of all location? and si2e» -33- £flDi£DlJ5 .ient for its review a long-range plan for the construction and operation of facilities." Sections 2^ and 25 are codifioo as 75-2r-^10 75-^C-<Vll. L. iutiaiiitfid dun. 676. is "It 25 and and and llzZQ.• Hi story: Compiler's Comments Sec.z±ll*. ZZ. Sec. 2y5il^iil£_l£_CUbii£A (1) Fach utility and each person contemplating the construction of a facility within this state in the ensuing 10 years shall furnish annually to the depart:. Part 5 Lonq-Range Plans llzZHzl^lx ADcmal -iQDflrnfiDae zz. 25t Ch. 1979.

Ch. 1979. the description of (c) a efforts to involve protection and land use planning dqencies in environmental the plannin-] process. 1973. No person may file an application for a facility (5) unless the facility had been adequately identified in a long-range plan at least 2 years prior to acceptance of an application by the department. The plan shall be furnished to the governing (3) body in which any facility included in the plan each county of under (2) (a) of this section is proposed to be located and available to the public by the department. as well as other efforts tc identify and miniiTiize environmental problems at the earliest possible stage in the planning process. amd. 327. Sec. 22. 40.C. The utility made or person shall give public notice throughout the state of plan by filing the plan with the environmental quality its council f the department of health and environmental sciencest the department of highwayst the depart^rent of public service regulation? the department of state lands. 1979. L. 68. 1979. 1981. Ch. amd. Sec. (d) f>rojections of the demand for the service rendered the utility or person and explanation of the basis for by those projections and a description of the manner and extent to which the proposed facilities will meet the projected demand. 494. 3» Ch. Citizen environmental protection and resource planning groups and other interested oersons may obtain a plon by written request and payment therefor to the department. 70-814. Sec. 213» 1975. Sec. 1975. Ch.facilities to be owned and operated hy the utility or oerson is projected to commerce durino the whose construction ensuing IC years. Compiler's Comments I2fiI_AiD£I]ilffleDiJ. L. and the department of commerce. History: En. Ch. 553. amd. aird. . 274t L. the department of fisht wildlifet and parks. Sec. L. R. 6t Ch. A rural electric cooperative may furnish the (^) department with a copy of the long-range plan and 2-year plan required to be work completed under federal rural electrification requirements in lieu of the lonq-range plan required in subsection (1).M. 14» Ch. amd. Sec. Substituted "department in of for "department of community affairs" commerce" (3). 14. 1947. Sec. L. L. a in the case of utility facilitiest description (b) efforts by the utility or person to coordinate the plan of utilities or persons so as to provide with other a plan for aieetinq the energy needs of coordinated reqional the region. amd. and additional (e) information that the board by rule or the defvartTent on its own initiative or upon the sdvice of interested state agencies might request in order to carry out the purposes of this chapter. as well as those facilities to be retroved from service durinq the planning period. 676t L. 17.

-35- .loxinq subnission of the plant the deoartirent shall co. research activities of the new utility of (g) technology available minimize it which freight to envi ronmentcl impact. t .Timence examination and evaluation cf the oroposcd site to determine whether construction cf the proposed facility would unduly impair the environmental in values 75-20-503.»• JSliiily iiI_iD£iudSd_l^£iiiti°ii if e utility and identifies a proposed facility in its plant submitted pursuant to 75-20-5Glt as one on which construction is proposed to be commenced within the '^-year period fol. Sec. This study may be continued until such time as a person files an application for certificate a under 75-20-2. availability and desirability (b) of alternative sources of energy. consistency with areawi de state and regional (b) land i i use plans. (e) socially beneficial the output of this uses of facilityt including its uses to or protect enhance environmental quality.Ij:^QifG£ provided i in Section o » 2f Ch. R. concernina irajor 75-20-216* and . 19^7t 70-815. Information gathered under this section rray be used to suoport findings and recommendations required for issuance of a certificate. 327t L. s abol i following functions community affairs are transferred (?) she^ . 15t I n llzZSLzlQAa. iS£t oLiL £nYi£2Da£Dtal £Yal!ial£:ix evaluating lono-range planst conducting 5-year site reviewst and evaluating applications for cert f cates t the board ana department shall give consideration to the fcllowinq list of environmental factorst where applicablet and may by rule add to the categories of this section: energy needs: (1) (a) growth in demand and projections of neeo.C. Ch. (c) availability and desirability of alternative sources of energy in lieu of the proposed facility. (f) conservation activities which could reduce the need for more energy. (d) alternative uses of the site. Sec. I981t E!JD£l. The • . 27^» L. En. amd. the the deDart'n3nt departnnent of of comtrerce: (e) relating i to recommendations facility s 75-20-501. 15t 1973. i nq and contained in 75-20-211» . (c) consistency with existing and projected nearby land use.11.M. (d) promotional activities of the utility which may have given rise to the need for this facility. 49^t L.i2Di part: "(1) The department of community affairs cf to — — . 2^zZQzii2Z± — or person lists History: Ch. land use impacts: (2) (a) area of land required and ultimate use. 1975.

opportunities for using public lands for location facilities whenever as economically practicable as the of use of private lands and compatible with the requirements of this section. (e) hydrologic studies of effects of effluents on receiving waters* including mixing characteristics of receiving waters* changed evaporation due to temperature differentials* and effect of discharge on bottom sediments..g. (d) inventory of effluents* including physical* chemical* biological* and radiological characteristics. (k) effects on unique or otherwise significant ecosystems* e.* wetlands. i uses relationship to projected uses. monitoring programs. water resources impacts: (3) hydrologic studies of adequacy of water supply and (a) impact of facility on streamflow* lakes* and reservoirs.itterns and population dispersal. i . (h) (i) — i I . public recreation plan for the project. mpacts sceni c (1 effects on natural systems* wildlife* plant life. hydrologic studies of (b) impact of f ac 1 on t es groundwater cooling system evaluation* including consideration (c) of alternatives. effects on plant and animal life* including algae* (j) macro nvertebrates* and fish population. (m) important impacts on Historic architectural* (n) archeol ogi cal » and cultural areas and features. qeoloqic suitability of the site or route. extent of recreation opportunities and related (o) compatible uses. (1) air quality impacts: (^) (a) meteorology wind direction and veloci ty» airbient temperature ranges* precipitation values* nver s on occurrence* other effects on dispersion. (p) public facilities and accommodation.ntens ve (r) industries or other activities to utilize the waste heat ) i ( i i from f ac i 1 i t ies. . q-) opportunities for joint use with enerny. (Q) (h) (•) (J) this site at faci 1 ity. . relationship to water rights. construction practices. (f) relationship to water quality standards effects of changes in quant ty and qual ty on (g) water use by others* including both withdrawal and in situ (s) i i i . extent of erosion* scourinq* wasting of land* both result of fossil fuel demands of the as a and corridor design and construction precautions for (k) transmission lines or aqueducts. sefsmologlc characteristics. population already in on the areat impact population attracted by construction or operation of the (e) faci f ac i 1 Ity (f) i i tsel f 1 availability of energy of from iciipact ty on growth p.

and heavy (v) metalst trace eletrents* radioactive matsrialst and other toxic substances. 2» Ch.iipacts: (5) (a) solid waste inventory. (c) relationship of present and projected noise levels to existing and potential stricter noise standards. Sec. 16t Ch.al Exploration £iiClQi:aliflD_::i_QQlif icaliQD. (3) submit to the department -37- a statement of the . (b) disposal program. standards in effect and projected for emissions.. 327» L. 1979. (a) wastes and associated disposal program for (b) solidt liquidf radioactive* and gaseous wastes.cf 25z2QziQflij fi£fliti£i:iD5l dSCdltHlfiDtA The board person who test holes or other underground exploration* investigation* cr exper itr. mon tor ng--adequacy (d) and sampling of devices teciin iques. amd. 1947* 70-816. amd.ent of the proposed action. (g) solid wastes i. aird. Sec. design capability to meet standards. 69* L. 23* Ch. 676* L« 1979. R. (b) operational levels.) land use controls over development and population. (c) relationship of disposal practices to environmental quality criteria.M. (f) rf 1 at onsh p tc present and projected air qualitv of the area. monitoring program. (d) capacity of disposal sites to accent projected waste loadings. 1975. Sec. emissions and controls: i — stack des gn part cul ates.entat on possible future related the to devf 1 opment of a facility employing qeothermal resources to comply with the following requirements: nctify the departa. . 1973. ) i i ) i i ( i i i i i i i i i i i History: En. mpacts: no se (7) (a) construction period levels. Sec.C. 16» Ch. (c) analyses studies the adequacy of and of engineering safeguards ano operating procedures. sulfur ox des ) (iv) oxides of nitrogen. Parts 6 through Part 10 9 reserved Geotherrr. (b) (c) (d) (e) ( ( i topography factors affectino dispersion. 494» L. radiation impacts: (6. (d) inon tor ng--adequacy of devices and Tiethods. (1) submit to the department a description of the area (2) i i adopt rules requiring every shall proposes to gather geological data by boring of nvol ved.

il3L0Ufll2__Ilz2i2rlIfl5* 5» Ch. (c) the liability of nuclear facilities to sudden catastrophic accidents which can affect large areas of the state. providing jobs. 1979) Part Compiler's Comments IlzZnzllSil 70-829 by Sec. ZOt Ch. and submit such other information as the board may (5) require in the rulps. the (e) impact of nuclear facilities on the proliferation of nuclear bombs and terrorism. 1 throuqh 70-325 ^throuqh 70-829. (^) at such times as the department geoloqlcal data reports be required by the rulas. and countless future generat ons. L.C-M. (d) the refusal of utilities. (f) the increasing pattern of abandonment of used nuclear facilities their by owners. (a) the which remains a severe radiological hazard for many thousands of years and to which no means of containment assuring the protection of future generations exists. 19^7. the spending of scarce capital to pay the (b) rapidly increasing costs of nuclear facilitiest preventing the use of that capital to finance renewable sources which energy for hold more promise supplying useful energy. Sec. and the detrimental effect of the large uranium import (g) program necessary to the expansion of nuclear power on i i -38- . ^t amd. 19731 aind< Sec. resulting in radiological dangers to present and future societies as well as higher public costs for perpetual management. industry. Sec. Part 11 Enerqy Conversion Facility (Repealed. and holding down energy costs. 197«^J 19^7» 70-82C(3J. thousands of people. L. and government to assume normal financial responsibility for compensating victims of such nuclear accidents. R. 517. R. 70-825 throuqh 1975. 20^ Ch. 676.. 227 j L. submit to aiay Sec. 1979. ^9^t Ch. 268f L.CM. L. including the fcllowinq unresolved ssues: generation of waste from nuclear facilities. En. Part 12 Nuclear Enerqy Conversion IlzZQzlZQLx fijrC2S£ z=: fiDilin2S_^_i2_QU£l2aL_sdiatl ccwers 12 itie rr_L£5£j:yaliflQ-iif-miils^j:_f£i:llil^_j3e£i:fiyal people of Montana find that substantial The (1) OSflClSji public concern exists regarding nuclear reactors and other major nuclear facilities. 28t Ch.proposed activities to be conducted and the ut i methods to be 1 i zed. History: En.

American enerqy wel 1 i ndepenaence ? defens'? pel icy- and economic to ior be nc. Compiler's Comrrents ^Sii^LULliiiyj Section 7 of Initiative *^0 was a severability clause. Sec. (i) generating 50 megawatts of electricity or rrore by means of nuclear fission* (ii) converting* enrichinqt fabricating* or reprocessing uranium rrinerals or nuclear fuels* or (iii) storing disposing of radioactive wastes or or materials from a nuclear facility. I^zZQ. Nov. 7i 1^7^. Nov. and further* that no legal limits exist regarding the total compensation which may be required from the designers* manufacturers* distributors* owners* and/or op^jrators of a nuclear facility for damaqeB resulting from the existence or operation of such facility. general July 1. Sec. Initiative 80 was approved at the £l£g£liy£_^2l£^ eltcticn held November li 197n. anc was effective 197-9.T. 80* app. facility" "nuclear any (b) include does not small-scale facility used solely for educational* research* or purposes not connected with the commercial medical generation of energy.£fiJ: taLilil^c^ issue board ray not a certificate to construct a nuclear facility unless it finds that: of a (a) rights no legal limits exist regarding the person or group of persons to bring suit for and recover full and just the designers* compensation fro'n manufacturers* distributors* owners* and/or operators of a nuclear facility for daitiaqes resulting from the existence or operation of the facility. "Facility*" as defined in 75-?0-104(7) is further (2) defined to in include any nuclear facility as defined subsection (l)(a) of this section. (i) The £Sr:tifiC^£_lCI_lJbe_iitinfl_£if_^_nU£j. History: En. 7* 1978.*'.a nuclear facilities are built and operated In this state. QfifinlliCC^i as 75-20-201 appl y: through 75-2C-203f and used in this p. 2» I.zlZQZs.prehens vp> laboratory testing of substantially similar physical systems in actual i -39- .nrt the followinc definitions (a) "Nuclear facility" means each plant? unit» or (1) other f-acility designed for» or capable of. -History: En. ^ eo» app. 1» I. (b) the effectiveness of all safety systems* includina but not limited to the emergency core cooling systems* of such the nuclear facility has been demonstrated* to satisfaction of th^ board* by the co.M. : (2' Therefore* the peoole of Montana reserve themselves the exclusive riqht to deterrrtn«^ whether tr.

7.M.operat on. Nov. The governor shall establish procedures for annual (2) review by state and local officials of established evacuation and emergency medical aid plans with regard for* but not lirrited to* such factors as the adeguacy of such plans* changes in traffic patterns* population densities* the locations of schools. 80* app. — £iii£iaiiQcji:_5flor2:^5l_5ijltKii:it^ far -40- . IDSdit^J di_i_al5Dii (1) The governor shall annually publish* publicize* and release to the news media and to the appropriate officials of affected comraunitiest in a manner designed to inform residents of the affected communities* the entire evacuation plan specified in the licensing of each certified nuclear facility within this state. and (d) tne owner of such nuclear facility has posted with board a bond totalling not less than 30% of the total the capital cos* of the facility* as estimated by the board* to for pay the decommissioning of the facility and the decontamination of any area contaminated with radioactive iraterials due to the existence or operation of the facility in the event the owner fails to pay the full costs of such decommissioning and decontamination. 5* I. 4f I. iDi^^lici HzZQzIZQIm. 90* app. Copies such plan of shall irade available to the public upon be reguest at no aiore than the cost of reproduction. 1978. (c) History: £n. 7* 1978. Fxcess boni* if any* shall be refunded to the owner upon demonstration* to the satisfaction of the board* that the site and environs of the facility pose no radiological danger to present or future generations and that whatever other conditions the board may deem reasonable have been met* Nothing in this section shall be (2) construed as relieving the owner of nuclear facility from full a financial responsibility for the decommissioning of such facility and decontamination of any area contaminated with radioactive materials as a result of the existence or operation of such facility at any time during which such materials remain a radiological hazard. Nov.M. Sec. i materials from such nuclear radioactive tine as facilities can be contained with no reasonable chance» determined by the boardt of intentional or unintentional such materials into the natural escape or diversion of to environmant in such manner as cause subst<^Ptial or long-term hjrm or hazard to present or future generations due to imperfect storage technologies* earthquakes or other or other acts of Gcdf theftt sabotage* ^acts of war social whatever gther causes the board may deem instabilities* or time during which such to be reasonably possible* at any materials remain a radiological hazard. Sec. History: En. hospitals* and industrial developments* and other factors as reguested by locally elected representatives.

RO. History: En.nuLls^L Motwi thstandi nq lacilitis^A the provisions of subsections (2) and (3) of 75-20-304. the board may not waive compliance with any of the provisions of this part or 75-20-201 through 75-2n-2C3 r&latinq to certification of a nu clear facility.M. 6» I. Sec. 7t lo?"". Nov. -Al- . app.

S.CDnpauy.id. "Corrpany" means The Kiontana Pcwer Corrpany. of 2 # Pa"e ScK^-uU-SlP^::?-^^!:. Has agreed in the standard contract to provide electrici-j\' to the Conpany on a short-term basis as defined in the contract...^ I? 3. "MPSC" neans The Montana Public Service Cormissicn. -Bj(Siyn^tu^g 2 l-'or o- (D»t^) Oti"ic. RATE : $0. . I 3. govemirent association. "Seller..ii:PrS. 2.. the Seller will consumption kWh is less than the production receive pavment for only the prodacticn k^'... Has signed the 3u. (Space for Stanip or Stal of CommjiJfon) • Sp*ct b5oT» C-fOi line* iof n>e of Cc«ncni»*k>fi _ _'^ .w.r of Utility) Approved....2 Supp..ritten jo.Ponfl -03-3 Puo!':C Service lbe. 3. Snail Power Production (CCG/SPP) facilities that are Qualifying Facilities under the Rules of the M?SC. or other entity that: : 1.. //'.'.0234/kWh SPECL^ TERMS AND CONPnTCNS This schedule will be revi&ved annually for each Change of Rata and revised upon MPSC approval. I'S'8"2 ~o n and atter (Date) PUSLIC SERVICE COMMISSION OF MONTANA.??••1 I Shcrt-Tem Power Purchase —Srr'/lce AVAILABILITY: Ito any Seller who operates facilities for the purpose of generating short-term electric energy in parallel with the CorpaThis schecrole is applicable to Coceneration and ny's si'sten.SIP?.P.c ser--ice rendered ?"^^ Sst""T..l-lQn£. .:.' stipulating the terr?s and conditions of the interconnection and sale of ele:._... the Seller will be billed for only the consumption kVh in excess of prcdjction kVln according to the If the Seller's Corrpany 's applicable Retail Sales Rate Schedule.-^ _ .. "Contract Year" means twelve month-s begirjiing on July 1.tricity x. Operates a qualifying CCG/SPP facility..ana. DEFINITICN5 agency. Contract Year : If the Seller opts for Short-Term Net Net Billing Option Billing in the standard contract and the Seller's consumption kivh exceeds the production ^Tn.. 4ob3b & 436 5c electn.lllns SK€«l No.D./ ^7 Cfll7.-..2.iru x-. partnership.dl£2'.tract v/ith tiiu C.i'?45(p«»«) Oraer No. ._3 0.-32 Canc... political subdivision.Montana Sheet No. municipality^.h in excess of consumption kVJh' according to the energy rate in this schedule. August 193 Docket.o the Cc~paj.' for purposes of this schedule. corporation.ar. CommiSoicn of i . k^vh.iar.8. and all rretered consumption W-J (if applicable) will be bill'3d to : Iijaed : . is any individual.. A S-jller under this Option will receive no separate pa\ment for capacity.. .. No.

331474 I»jned. TUe.. If the Seller is demand-met ered for consuciption. .. No ^.f. oJ CofnpA'.Br. Mantel a Nam* . "— Sccr-tarr.-82 C«nci!!ln3 S'o«et No. (SigT^iturg of Officer of Utility) August J iy b2 —=~i Docket No 81.^lc_-SI?P::82_Supp.-12H.2.TPP-B2 Sup..- .Effectrre_ ..^is and all other! schedules is governed by the rules and regulations approved by the MPSC. ..'. 4865b & 485dc Apprcnred .p.r.-.C. 2 of 2 n —Service Short-Term Pover Purchase the Seller according to the Conpany's applicable Retail Sales Rate Schedule.. (D»t^) .Pona !C3-B '••rT^1^"107-l j^f |V'!/- T-. (Sp»ce tor Stamp or Seal of Commi»»ion) For electric service renaered on ana arrer (Dite) PUBLIC SERVICE COMMISSION O? MONTANA -e-- "Sp^cs below thcx 'Jnej for a*e d Cxncaiijioo only.v.10 (Dale} Order No.STPP.v/) Page Sci:..llf. '--T Shc.n:?aay _.. ' l^lY-. the Seller will be required to install a kW/kWh meter to separately measure production.i .£'.Q. Ail service provided -v the Company under i.c.

KYTE : Energy: $0. . amission cf Mon'iznd.Coppany. CfxEirates a qualif-ying COG/SPP facility. nronicipaJLity or other entity th^at: .. corporation. Pmall Power Production (COG/SPP) facilities that are Qualifying Facilities 'Jinder the Rules of the MPSC.. 1. Shtzl lio. The. of 3 il Ho._Ju.Ul-.ing urie terms and cor:oitiG-.. .I^rta <.Factor Annual Capacity Payment Adjustment: At the end of each Contract Year._ inter . 2. ' 5Sp*ce~btio-w 'Jxyt lint* for Commiyuon ooly.74 X ACCF Contract kW/month = where: NZCF = Annual Contract Capacity. _ _.0533/kWh Capacity: The Seller will be ccnpensated monthly for capacity accc^rding to the following forrnula: $ /Annual $6.rer^u7Usr"37---l^-S2 PUBLIC SERVICE COMMISSION Or MONTANA...co tier: and sale of electricity to the Conpany. SicrttLry.- (Sixnaturt of Officer of Utilir)') /.ia.a. ii'o'Z for electric service rendered ^on'^ff--a-nier-"-(D. "MPSC" means The Montana Public Service Caimission.:-81 Oincilllnj SH^el Supp. government agency. partnership. ._5upp. DEFINITia^S association.Br • V"-<--- '. "Contract Year" means twelve months beginning on July 1.7J-:=I Public Sc:v:ce Cc.ll be made utilizing the following formula: l.ugust (Space for Stamp or Sea! r>i J .ana.__L£>_a (D»tr) .s sclriedule is applicable to Cogeneration and ny's system. Power. political subdivision.s of ':r." for purposes of this schedule. "Corpany" rneans The M:?ntana Power Coirpany. Has signed the standard written contract \-dth tlis Ccrrpany 3tipulat..U9n.-niuwn) t!»< of .Ll?e. Has agreed in the standard contract to provide electricity to the Carpany on a long-term basis as defined in the contract.. #1 --Se mce Lopg-Term Po wer Purchase AVAHJ^ZLITY: lb any Seller who operates facilities for the purpose of generating long-term elecrtric energy in parallel with the CcrrpaThj.t.LX?P-82 Pa'-re 1 K*m« of Ccrripia?) Sc}c^^^\^^'^^-32. 3.^ X•• Com.xjnr.. is any individual.. : "Seller.. a reconciliation of the accumulated monthly capacity paNirents made to the Seller for the Contract Year and actual capacity \^lue to the Corpany for the Contract Year vn.d.

2. V Secrrfcxrr.-82 Nwna oJ Comp^sy) Sc!W-j'. the 'Seller's ccnsunption must be measured and billed on a demand basis and a separate kW/kVih merer to measure production is required. the Seller will be billed at the Coirpany's applicable Retail Sales Rate Schedule for only the consunption kW in excess of the production kW. Shtei no.. No. Com crlsi'ton) .cn tor ca'vment reconciliation. : (B) To rcBet the conditions of this Option and to receive a separate capacity pa^-rent. 1982 Aug us t 3 . the Seller will ccnsuTption receive pa^irent for only the production kWh in excess of consumption kwh according to the energy rate in this schedule. monthly capacity payments for the expected excess production k^v will utilize the expected annual net production capacity factor... .85 {NXx) ( ) (AOC/.LTPP. and gross capacity fact Iitoed- July 30..AKW) Service 5/. - i'$/A7iiNW) (.'ed annually for each Contract: Year and revise:^ upon MPSC approval.i_LI£Ii-8~2-5uP? 1 Page • ^•' 2 of 3 Lona-Term Power Purchase — (a.-B2 Csncilllng Si«et Supp.CQiiipany.taua.. Under this Option. Glance of Rate : This sche-dule will be revie.theri AAW-J = ACJCW SPECIAL TEP?S AND CCNDmO^S: 1...v5iny = i80-92 x^ACCF) ^ (.FoT.rr) . the Seller will be ccrpensated for only the production k>-j in excess of the consurrption kv7 according to tlie Prcduc:J.LIPP." inrorrrat:j.PQuar.>u(^-v) Where AAKV'J = Annual Actual kW (for Contract Year) ACCF = Annual Contract Capacity Factor AACF = Annual Actual Capacity Factor (for Contract Year) ACKW = Annual Contract kW If AAKW is greater than ACKV.) = (Dollars Paid to Seller. If the Seller's production kS\" exceeds the consumption kiv.i 'j53-!3 r> ..Bt- rc (SiTTiiture of Officer of Utiliry) 19 r. i^sr^(Sp»ce for Sixinp or S-»al ryi EUHLIC SERVICE COMMISSTl^'O? LiONTANA.-.. The Annual Capacity Payment Adjustrrent is to be applied to the actual excess production kW for the Contract Year. the Seller will be billed for only the consunnption kWi in excess of production kvai according to tl'ie If the Seller's Coirpany's applicable Retail Sales Rate Schedule. Net Billing Option (A) If the Seller opts for Long-Term tet Billj_:ig xn the standard contract and the Seller's consuirption Wvh exceeds the production Idvh.. kVJi is less than the production kv.The.on Capacity Tlie calculation of Payment Prccedure detailed in this Schedxile.Hoii. tor electric service renaered .^ Refund to CcJT5.h. The procedure will utilize the annual contracted and ann'ual gross produccion kt-.

.roriE'r!-3 Public Service Tbe. Long-Tern Power Purchase 3. Coiiiiiiiiision oi i/iOntana ShMt No LTI'. anc«lllng 3S*.i5c»^ 'lin'.P-. 3 of 3 LTPP-82 Supp.J:-TP.-..k..U.. 4865b & •Spi*£= b^Io" ".^^- --- Z^^.aw.-82 Supp.t No.ex.. .__Lrir:2L _ (5i?nat\ire of Officer of Utiliry) August (Spacs for St»in-J or S»sJ ci Comnrii.. Id '62 for electric service rendered Effectir* Doc^e'c^l "'STTTTn Order No. 330378 Ii>D«d July 30.t All service provided by the Corrpany under this and all other schedules is governed by the rules and regulatiOxis approved by the MPSC.wa) 3.P..l-lQnLana....^^.CQiapaay...t 43b jc lor (iSte) arter PUBLIC SERVICE COMMISSION OF MONTANA. 1932 (DltT) -By- _i:ik^. —Sc:v.?.. on an^l 'Zzl.-- _ »« pf Commi-Aioa ooV- ..82 NfluM of Co^p^ay) Pasa ScS«3^jU .

' :£</ Assistant President ONLY. 7.. NORTH DAKOTA 58501 Volume MPSC Int Revised sht-t No. 5.t i cmis of Ihe inter connec t ion and sale of the electricity 'o the coapsny 4. ..iie .'-/c. A standard written contract with the comoany has been signed stipulating the terms and cond i. meter enclosure cabinets.^ F. 6...'iC ii itT i. 33^ed July 7.i. 2.. j. io' i?.c- [SPACE BELOW THESE LINES FOR USE OF COMMISSION Effsctive Approved jii-jy ] C^ 1 QP9 (Dale) for pl. 1 ' > ' t: . or meter connection cabinets that may be required by the company to properly meter usage and sales to the company.RATE STPP-92 i <. The rates and terras and '-ordi ions ser for'ih hcrrein . ruui..^r'J '^' Z^/^-y/// . i. The customer shall. 1982 PUBLIC SERVICE COMMISSfON OF MONTANA Seal of Commission) 7 hf. .j..^.£ ' y-r..o-'^r\ r. . written consent of the company. s i.i:: ' - ^ .ice ^or IDoiel Stamp or on and after Julv 16. ELECTRIC RATE SCHEDULE MOMTAWA-DAKOTA <00 UTILITIES CO. ." and "Interconnection Cost Amortization Option" set forth in Rates 94 and 95..-^rr-rir Tondgred Docket No.j ':. C^tnce'ijng NORTH FOURTH STREET BISMARCK. install and wire the necessary service entrance equipment meter sockets. AVAILABILITY: To any qualifying cogeneration and small power production (COG/SPP) operating facilities for the purpose of generating short-term electric energy in parallel with the company's system. with prior.if". furnish. All services provided by the company under this and all other schedules are governed by rhe rules and regulations approved by the Montana Public Service Commission. 1982 (Date) By /^ /J'c^-.?r3 s---biecc to the provisions of the "Net Billing Option. This schedule is I •'!_' cable to co»enerar.ciii . 25 23 SHORT TERM POWER PURCHASE . 1A66/Kvh CONDITIONS: Change of Rates: This schedule will be reviewed annually for each Contract Year siid revisEo ui Oi! he\ "ojmaiif: on app-rov'.c Service Commission. 4865b (Sp..15. Original Sheci lio. 81. The term of the contract hereunder shall be at least twelve months but less than four years. The company shall install appropriate metering facilities to record all flows of energy necessary to bill and pay in accordance with the charges and payments contained in this rate schedule. Order No.2. respec t ively t: 3.ii'.<. RATE: Energy: TETiuS AND 1.k: .^ Vica.. .

Th: parallel with rhe conpsny's systsin. 1982 (Date) &] (SPACE U.96 X ACCF) x (AACF) x (AAKW) $/AAKW = ( ) X (ACCF) X (ACKW) Refund to Company = (Dollars Paid to Seller) .10?JTAi'JA ELECTRIC RATE SCHEDULE UTILITIES CO. Docket No.33 X .owar j"' ^'^ lection (CCG/SPP) facilities for the purpose of generating long-terra electric energy in nrhcduJe is -^. 81.. cogener. NORTH DAKOTA 53501 Cancelling MONTAMA-DAKOTA Volume MPSC 1st Revised Sheet No. Cornmision) 7 hry^r/!y''fZ£ ) X^ (J77~-^Y/V (Secreia'y) .aCCF $/Annual Contract Kw/month .S'^.r. Page 1 of 2 LONG TERM POWER PURCHASE AVAILABILITY: RATE LTPP-93 To any quslifj'ing cogeneration and small j. 400 NORTH FOURTH STREET BISMARCK.2.85 where: ACCF = Annual Contract Capacity Factor » At the end of each Contract Year.15'..^C-. (Space for Seal of 4ab3D IDaiel SMmp or on and after Julv 16. L 26 25 2£ji5±Il^ Sheet No.STATE OF r.23«i/Kwh Capacity: The Seller will :>e componsaCe.l:hlv- ro: .-pp] ic< hie r.ion ^nd .-I moi. i Assistant Vica/ President BSLOWTHESE LINES FOR USE OF COMMISSION ONLY } Effective Approved Ju1v 1A^ 1Q«2 OrdfftaieNo.-^^-U for electric sor^ lc B rondorod .VIMISSIQN OF MONTANA .Jt. according to the following formula: .($/AAKW) where: (AAKW) AAKW = Annual Actual Kw (for Contract Year) ACCF = Annual Contract Capacity Factor AACF = Annual Actual Capacity Factor (for Contract Year) ACKW = Annual Contract Kw If AAKW is greater than ACKW then AAKW = ACKW Issued -J^ly 7. 1932 PUBLIC SERVICE CO. ' i RATE: Energy: 5..o. Annual Capacity Payment Adjustment: a reconciliation of the accumulated monthly Capacity payments made to the Seller for the Contract Year and actual Capacity value to the company for the Contract Year will be made utilizing the following formula: (S6 3.small power production i'acilities chaL' are Qoaiify n? Facilities under the Rules of the Montana Public Service Corraission.

I 2 of 2 TERMS AND CONDITIONS: This schedule will be reviewed annually for Change of Rates: 1. furnish. The company shall insCall appropriate metierinj.n accordaiu with Che charges and pa'/ments contained in Chift rate. respectively. 81.-^-. "schedule.-ic L The races and ticrr-j ind oad Co Che provisions of Che ''Net Billing Option. The customer shall. 7. NORTH DAKOTA 58501 MONTANA-DAKOTA MPSC L->t Volum<* >hetit No. c- 4.'ii meter sockets. Approved.sssry servi'-o entrance equ ipce. meCer enclosure cabineCs. - . Assistant Vicj^ President aetow these lines for use of commission ONL Y j for p1 prTri r gp'-.naL Shg«t No. .'EDULE UTILITIES CO. A sCandard wriccen conCracC wich Che company has been signed stipulating Che Cerms and conditions of the incerconnecc ion and sale of Che elecCriciCy to the company. Order No. 2.2. with prior written consent' of the company.15.i. The Cerm of Che conCracC hereunder shall be four years or more. each ConCracc Year and revised upon Che Commission's approval. 1982 (Date) Docket No.d pay i.i. foi-cli licieia arc subject: lo. 6. install and wire the neci. P. or meter connection cabineCs ChaC may be required by Che company Co properly meCer usage and sales Co Che company.ii'e -6 . i t.z Cancelling Orit. Julv 16. 4865b (Space for Sfamp or Seal of Commission) . 1982 (Djte) By (SPACE (" . 5.pr. Issued July 7. facilities Co record all flows of energy necessary Co bill <. rondercd on and afCer July l^^tb32 PUBLIC SERVICE COMMISSION OF^MONTANA Effective (A^ ... 400 MORTH FOURTH STREET BISMARCK. < 3. -_-2." and "InCerconnection Cost Amorcizacion Opcion" set forch in Races 94 and 95. All services provided by the company under this and all other schedules are governed by the rules and regulations approved by the Montana Public Service Commission.STATE OF rvlONTAr-JA ELECTRIC RATE CCl.

'. I Tg^i^^. APPLICABLE : To all non-utility owners or operators of qualifying facilities who are willing and able to enter into a written contract.s:^^' ^^"^^JWKCH^^SnS FROM CnGF^'T:Ri*.C..Mont:. at the option of the Seller exercised at the time of execution of a written contract at: R/vTES : 1) Short-Term Rate a) All energy' purchased is to be priced.'F. Oregon 16.. 1982/March Fredric D.crritory 5^:crvecj \>y (. (Sellers) DEFI^rETIONS : Qualifying Facility means either a cogencration facility or sviiall pov/er production facility not greater than 50 megawatts capacity as defined hereunder: (a) Cogeneration Facility means a facility which produces electric energy together with steam or other forms of useful energy (such as heat) which are used for industrial. exercised at the time of execution of a written contract at i) the Average Rate or ii) the Time Differentiated Rate.alifyin^ facilities iocaCed in the 'f...ssued S/^g/^^/T^jz^^^eL). RATES FOR SALES All sales by Company to Sellers shall be in accordance with standard rate schedules filed by Company with the Commission. or cooling purposes through the sequential use of energy. I9S2 " No.l6j:x^ic LIGHT CO-MPA-NT 4. cotranerci al heatinj. (b) Small Power Production Facility means a facility which produces electric energy using as a priaary energy source biomass._yinc ^t Public Ser\'ice Building. 7 8?.TORS ^ SCIKOLTLE i. or any combination thereof. '^5^.ICUT C Ot-fPAN Y ^\^ ^ ^<{^ ". A2C'j ^ -.'-' For qi.6iUy 7.-iny in fionCana.oiiip. '* No. . : FOR PLT^CHASES Tne rates for purchases by Company hereunder shall be either 1) the ShortTerm Rate or 2) the Long-Term Rate. fContinued") . .c65a aft&ii?. : CO^TDITTONS OF SERVICE All purchases shall be accomplished according to the terms and conditions of a written contract. 81.S>C. at the option of the Seller.. 87 SMAf. .. waste. 1 PACIFIC POVrF. Reed.^r6d.j2. __ .^Qj:--^c.^: >^ "' j ApprovGC: Januarylssued by PACIFIC PO^'ER ^r£eQ^i^^ye.2. Portland. Vice President and Treasurer"'<^-''^''3.-::r:.T. rri'.^Oj\.. Original Sheer No.R At-n FROn'iCKRf.--.xenck..QC/'. K 6t I . . /CIW Effective on and alter (x ^^. renewable resources.15 Order No. ' - \ 4^.

contract ' \ (Continued) Issued OVr-i: >2/.21 per kw per month) x (dcf) for al'l contracted kw. Vice President and Treasurerservico renclo red on 16.m.15 85 5 & 4 86 5a . where (dcf) represents the Demonstrated Capacity Factor pursuant ^oy ^/'' / the terms and conditions of a written '{•'(^^^^^-^L(J..C.. 1. 1 P. 193 Public Service Building.76c Peak period.99c per kwh B) Capacity Payment ($7. Oregon after July 7..:iry . Off-Peak: All other times. Ja-. 4 _ e c tr 1 Issued by PACIFIC POWER & LIGHT COMPA:. Reed. No. ii) Time Differentiated P^te 6 a. k\^d ?.2.'. All energy and contracted capacity is to be pricec' at the option of the Seller. at i) the . Mont. 1982 81.. to 10 p. 87-2 ^ light co^^/v^n' SCHEDULE NO.S.84c per kwh for all kwh sold during the Off-Pc:ak period.S. 2 . b) Term of Contract: Not less than one (1) year.28c per kwh .V. .m.-:arc'r. 2) Long-Term Rate a) Availability: Available to all Sellers willing to sign a written contract with a term of not less than four years.i-riccti\e -T:: Fredric D.Average Rate or ii) the Time Differentiated Rate.\M.:. b) i) Average Rate A) Energy Paj-ment 4. 5/29/8 Effective on and after 4.:l VHODUCD'C RATES FOR PURCTL\SES : (Continued) i) Average Rate 2. Portland. :ket y. 7 OrlRinal Sheet PACIFIC povn-:R K'O . exercised at the time of execution of the contract. Monday through Friday On-Peak: per kwh for all kwli purchased during the On2.L PC.o lor No. 87 PUIiCilASES FROM COGENT:nATO..

c/ id: oanuary 43fi5 Effective on and after March 16.P. i'ortiand....y.f SCUEDinj: NO 87 coG^v.p:ny^s"r:g^:Lrly'fii:raL° P-Sulations contained Published tariff ^f publi:heTJariff '•and to those regulatory authorities. 19 8 2 ^X"o.xLcen contract. in thf%':.sEs FKo:. „„„...„h for all Off.old during Oa-P. llZ'i Fredric D ''. to 10 p. L i' RULSS A>rD^R^nrT^TTmrc.„.oi. (. SI..ma:-:-..Peak: W. 87-3 Hi.r. where rdcf^ wiicit..^^"^!^^"^?:^?^^1SH-Hss Effective.:. 15 RnO. r. 1982 &436 5a 4 ... 7 Original Sheet: No. 2. n ^ Oregon after J ly 7..' red on ar.„„^.S.C.ak • All other times P^iods"' B) "* '" '" '"" =°" ""'"? """-"X Capacity Payment All times C$7.. .05c^per . 6. RATES FOR PiyXR\Sr:S r (Continuad) ii) Time Differentiated Rate A) ' Energy Payment 0„-Pea^: 6 a. ...^voK3 A::h ..„. for e lec tri c ''^'^ Public Service Pn^^ oer\lCe BULldln2 Pnrf-lanrl Treasurer servjcc rend-. . .aci j . feCl. -.21 per kw per month) x (dcf) for all contracted kw.term^ the hoT^ and conditions of a written wi. represents th(= Demonstrated ^apdcicy Fprro-n Capacitv actor pursuant to th<.ig. prescribed by Fissued 5/29/S? ^i^b£^. .. Mont. No.


4865 ***** . 81.15 ORDER NO.Service Date.2. UTILITY DIVISION DOCKET NO. JAN 4 1982 DEPARTMENT OF PUBLIC SERVICE REGULATION BEFORE THE PUBLIC SERVICE COMMISSION OF THE STATE OF MONTANA ***** In the Matter of Avoided Cost Based Rates for Public Utility Purchases ) ) ) ) from Qualifying Cogenerators and Small Power Producers.


14 15 18 21 23 Billing Alternatives Interconnection Payments Insurance Force Majeure . 38 39 ORDER 40 . . . 27 28 30 31 32 Capacity Adjustments Payment Options Liquidated Damages Governmental Regulation and Termination CONCLUSIONS OF LAW 36 ..INDEX Page FINDINGS OF FACT • 2 2 5 BACKGROUND STANDARD TARIFF RATES Policy Energy 5 ^ Capacity Rates H 13 Short-Term Rates Long-Term Rates Procedure TARIFF AND STANDARD CONTRACT TERMS AND CONDITIONS..


. Helena. : DEPARTMENT OF PUBLIC SERVICE REGULATION BEFORE THE PUBLIC SERVICE COMMISSION OF THE STATE OF MONTANA ***** In the Matter of Avoided Cost Based Rates for Public Utility Purchases from Qualifying Cogenerators and Small Power Producers ) ) UTILITY DIVISION 81. Appearing on behalf of Montana Consumer Counsel: John C. Legal Department of the Montana Power Company. Appearing on behalf of Montana Power Company: Dennis R. Montana 59701. 40 East Broadway. 1227 11th Avenue. Helena.O. Kalispell. and Sullivan. Montana 59624. P. P. Allen. 1 Main Building. Eraser & Wyse. . Bennett. Heckathorn & Phillips. 4865 ***** APPEARANCES Appearing on behalf of Montana-Dakota Utilities Co. Nelson. Box 514. Murphy. Public Service Commission. Chief Counsel. Rives. 900 Thomas H. Robinson.. Huss & Hjort. South West Fifth Avenue. Boley. Zimmerman.: John L. Appearing on behalf of PSC Advocacy Staff: Eileen E. Michael E. Alke. Montana 59620. C.O. Kellner Fuller Avenue. Scribner. Stoel. Portland. Lopach. Butte.15 DOCKET NO. Hughes. Box 759. Shore. Montana 59601. Montana 59620.2. ORDER NO. Oregon 97207. 406 Appearing on behalf of Pacific Power & Light Co. Montana 59901. Eugene Phillips. Helena. Helena. Penwell Building.

Commissioner HOWARD L. 4865 Robert Olson. BEFORE THE MONTANA PUBLIC SERVICE COMMISSION: GORDON E. Staff Attorney." 2. that rates for Among other things. Appearing on behalf of PSC Advisory Staff: Brenda Nordlund. 1981 the Commission adopted final rules gov- erning purchases and sales between public utilities and qualifying small power production facilities. 81. Montana 59620.DOCKET NO. state regulatory authorities. The Commission rules are . SCHNEIDER. Commissioner THOMAS J. DRISCOLL. ORDER NO. Public Service Commission. Commissioner CLYDE JARVIS.15. Section 210 of the Public Utility Regulatory Policies (PURPA) as Act of 1978 required the Federal Energy Regulatory Comwell as mission prescribe (FERC). Energy Law Institute. Helena. 1227 11th Avenue. On May 4. Commissioner FINDINGS OF FACT BACKGROUND 1. Concord. New Hampshire 03301. BOLLINGER. to rules to encourage cogeneration and small power pro- duction (COG/SPP) including rules requiring electric utilities to purchase electric power from cogeneration and small power pro- duction facilities.2. Chairman JOHN B. the rules were to insure of purchases electric energy from qualifying facilities (QF) "be just and reasonable to the electric consumers of the electric utility and in the public interest" and that the rates would not exceed the "incremental cost to the electric utility of alternative electric energy. 2 White Street. ELLIS.

the Alternative Institute. and conditions for service. 1981 with public 1981. Comments were received PP&L. Pacific Power and Light (PP&L). and Conservation and several individuals. and standard contracts for purchases of electricity . with proper notice. 1980 in Helena. avoided cost-based rates. The rules. regarding avoided cost methodologies. The the Energy Law several individuals. 1980. Testimony and/or comments were received from the Montana Power Company (MPC). went to public hearing on October 23. ended with adoption of final rules on May 3. PP&L. however.5. and tariffs from COG/SPP. 4865 3 modeled after FERC regulations of PURPA. rulemaking proceeding 4. the development of tariffs providing rates. City of Livingston. The draft rules. pursuant FERC regulations. ORDER NO.15. the Montana-Dakota Utilities Natural (MDU).1908). left to a contested specific case proceeding terms. The Commission initiated this proceeding on February and MPC file testimony 24. provide the obligations of the COG/SPP and the regulated electric utilities. The Commission's to rules (ARM 38. 1981. 1981 when it requested that MDU. 1980 and extending through October 23. issued on March 16. Energy and Resource Organization. the Department of Resources A second.5. Montana. 4. implementing Section 201 and 210 featured a The rulemaking procedure public comment period commencing with the issuance of draft rules on September 2. April 27.1901 through general 38. (DNRC).2.DOCKET NO. 81. revised draft of the rules was comment extending through from MPC.

1981. of Boise. Power and John Fox were hired to proAdditionally. When the Montana Consumer Counsel declined to present a docket. Staff. Chief Counsel. presented statements to the Commission. 6. For explicatory purposes. 7. ORDER NO. Ms.2. 1981 in the district courtroom of the Federal Building in Helena. . 81. case in this the Commission created the Commission Ad- vocacy the Staff for the purpose of providing testimony concerning of instant issues independent was each utility's case. 8. Robert Olson assisted Shore in the presentation and preparation of Advocacy Staff's case. . Alpha Engineers. Ms. Mr. Public hearings were held on September 29 and 30. Pursuant to the procedural order dated April 13.DOCKET NO. assigned to head the Advocacy and Drs Thomas M. Eileen Shore. withdrew their intervention status immediately before the hearing. Inc. Barber of JUB Engineering. and commensurate with the Commission's rules. 4865 4 5. Montana. categories: the major issues have been divided into two standard tariff rates and tariff and standard conAnalysis of each issue will include tract terms and conditions. Parties were given an opportunity to cross-examine one and another other interested persons. to a REDF participated limited extent throughout the proceeding. (REDF) Rural Energy Development Foundation and Alpha Engineers. including engineer James Idaho and economist Dr. Inc. vide expert testimony. Incorporated were granted intervention status. Lawrence Nordell of the Montana Department of Natural Resources and Conservation.15.

the Commission wishes to set forth several critical policy findings. and are are reviewed by the applicable to all contracts with qualifying a facilities which do not choose to negotiate Thus. that ". STANDARD TARIFF RATES Policy 9. different rate.DOCKET NO. tariff only an option--an alternative negotiation. at a rate which is a negotiated term of the contract between the utility and the facility.. 1901(2 ) ( j ) defines standard rates "those rates calculated by a means approved by the Commission which . is to the Commission's intent.1903(2) reads. 4865 5 a brief sununary of the parties' testimony and pertinent Commisfollowed by the Commission's determina- sion rule when necessary. are computed annually and made available to the public..15. ARM 38."." as ARM 38 .are based on avoided costs to the utility..5. If the qualifying facility agrees. in respect to tariff rates. tions on a general basis. Commission. 81.. in part. establish (QFs) regulated entitled The rates in to which for all qualifying sale facilities to are exchange is the of power the to utilities. ..2.each utility shall purchase any energy and capacity made available by a quali- fying facility: is (a) At a standard rate for such purchases which based on avoided costs to the utility as determined by the or (b) Commission. ORDER" NO..5 . Any utility-specific matters will be resolved at the end of each section.. 10. Prior to a discussion of the relative merits of each proposal and the resulting findings..

2. 2) long-run incremental costs. 81. avoided costs" is interpreted here to represent 1) exhaustiveness in cost components and. Thus the primary is objective rates developing calculation methods to allow "Full which most accurately reflect full avoided costs. The Conunission recognizes that any deviation from full or complete avoided costs. 13 Both MDU and PP&L argued that the methods they proposed represent methods suited to their unique systems. either on the high side or low side. are accepted by other state Commissions. If conclusive evidence is submitted suggesting the methods developed herein need refinement. or gradualism. 4865 6 11. when appropriate. The Commission intends to encourage progressive refinement and of the methods at and will entertain filing of constructive criticism evidence each annual proposed tariffs. ods and that any deviation from those meth- would cause the incurrance of needless additional adminis- trative costs. . not the Commission. then the Commission will revise the methods with grandfathering provisions as deemed necessary. on results in an in adverse affect rate ratepayers. ORDER NO.15. The Commission has found several subhas stantial unknowns and thus attempted to find some middle ground balancing the unknowns between the low side and high side of the true the avoided costs. its way to Although the Commission has neither gone out of develop uniformity nor to maintain the PP&L and MDU proposals. 12.. it finds that it is the utilities. A second goal in the Commission's deliberation is moderation. DOCKET NO.

g. treated as nonfirm while long-term firm is paid energy depending on specific resource(s) avoidable and ability to follow load. 15. rates. baseload plant with the fixed costs added to reflect PP&L further distinguishes long-term firm from short- term firm. Energy 14. on an interim basis. or short . to The all Commission and the is establishing are only to an option available QFs companies free negotiate rates utilizing their proposals. running costs via some form of production modeling. In structuring energy payments all three utilities make some type of distinction between firm and nonfirm QF. 4865 7 who are best equipped to deal with the increased costs of differing methods. Nonfirm energy rates. lambda. the Commission has a found portions of their proposals unacceptable for purposes of standard tariff and has found that the utilities are similar in that they are all experiencing load growth with similar genera- tion expansion plans. 81. in all three cases.15. The Advocacy Staff proposes a calculation of avoided energy costs which does not distinguish between nonfirm and firm energy and which does not utilize production modeling.2. Furthermore. MDU goes to the running cost of capacity. ORDER NO. a 5 system The utilities diverge however in structuring firm energy MPC uses the same production modeling effort but provides for mill bonus a firm performance. reflect short run incremental e. Short-term firm is.DOCKET NO.

1982.2. Dr. situation. 16.15. p. 20-22) provides calculations which at least for the period suggest that the theorem is correct -July. suggesting that the concept of fuel savings and optimal system planning necessarily. M. running costs lambda will be dominated by the of baseload plants. in both cases resulting in little or no thermal peaking or cycling capability.g. of MPC. TAL-2 projects percent real decrease in the load weighted . is not convinced that the system. costs. The Commission feels a that a system with peak shaving hydro storage capability or system with a relatively high load factor. 81. hydro resources.l) MFC's a forecast of system lambda (Exh. 17. The Commission. 56 Exh. but focuses on the energy function of base The key to evaluating the alternative calculations of lies in the purported relationship between avoided energy costs short run incremental energy costs (e.lambda-equal -energy-related-base load-generation-costs theorem is correct when applied to systems characterized by load growth. ORDER NO. and limited thermal peaking and/or cycling capacity. however. 1981 to June. coal-fired base- The Commission has been presented testimony in this proceeding as in several other proceedings.DOCKET NO. An example exemplifies this B. system lambda) and the a incremental energy costs of bringing on line load steam plant. 4865 8 run marginal load plants. In the case Power (Exh. p. equate a rolling average system lambda with the energy-related cost of baseload expansion. 18. or at least theoretically.

5 percent annual Despite energy (The the projected decrease in system lambda. 15. In the short run. The latter figure represents annual real increases (over and above 1984. over the same time period the company of projects Montana Power Company. not system lambda. real total or average costs to escalate 81.02 percent #3. 1981-2000 Projection Loads and Resources February. However. 19.DOCKET NO. for example. It is these plants. system lambda (or its equivalent short run production modeling) does represent the time differentiated costs the utilities will avoid by purchasing QF production. one contract year or one test year. Jim Bridger) or will soon be bringing (Colstrip #3) to the Commission in search of additional revenues.2.07 percent in 89. March. 1981). 1981 and the Montana Power Company Forecast of Electricity and Natural Gas Prices 1981-1990.15. inflated operating expenses) of 18. Thus the Commission finds . 81. it is not system lambda. in 15. or marginal costs.1 percent annual average). but coal-fired steam plants that the utilities have recently brought (Coyote #1. ORDER NO. (4.6 percent (6. drastic) that has and in will result in substantial (perhaps increases the utilities' costs and consumers' rates. percent 1990. range The long- plans of all three utilities include no less than nine baseload plants prior to 1990. and #4.78 in 1985. Evident some substantial divergence between system lambda and long-run incremental energy costs. reflecting Colstrip is Colstrip and Resource respectively. 4865 9 average system lambda between 1980 and 1990 average).

p. ORDER NO. 1) a MPC witness Bruce Ambrose calculates 13.3 percent. Sch. indicates Jordan Exh.15. 81. O. unknown losses (Exh. For purposes of the initial tariffs. p. 4865 10 that energy rates must reflect both system lambda in the short run and the baseload alternative in the long-run. The avoided energy cost discussion to this point has avoided not addressed only has generation the costs. costs. The Commission finds unacceptable the utilities line and Advocacy Staff's proposed rates The which simply ignore losses. avoided energy-related a transmission Whereas the existence of net avoidance of transmission the record although logical.DOCKET NO. 4. 49) that some be avoided. amount are line losses will Marginal line substantial. Electric rate case proceedings for MDU and PP&L have indicated marginal line losses of similar magnitude. Commission finds appropriate an energy loss factor This of 8. is not clearly established. . proper approach is to establish some nominal energy loss factor subject to refinement with utility-specific the analysis. The record in this for proceeding provided Commission a line loss sound basis and establishing costs. respectively. 20.1 percent for the winter and summer periods. of Barber Tr. Ambrose for the MPC system.5 percent and 26. secondary energy loss factor of 30. (e.2. factor represents the approximate load weighted average of transmission level energy losses calculated by Mr.g.

percent to 10 percent). industry construction inflation in- dices (generally. proposals are similar in that they reflect the possible deferral or avoidance of a specific avoidable generating plant. 22 percent of the Wyodak #2 baseload plant (1986 recently deferred to 1988) is used to calculate avoided capacity. MDU also uses baseload expansion plans entire 1985 (1985) but proposes the .15. 4865 11 Capacity 21. The utilities' proposals do not recognize partial or aggregate capacity payments to QFs who do not meet the per- formance criteria and grant full payment to those above the criteria level with avoidable utilities' a full length contract beginning the year the to plant is scheduled come on line. In the case of PP&L. 81.2. ORDER NO. fixed costs as potential capacity payments MPC uses a gas-fired combustion turbine which was in their 1980 longhas range plan but since been deleted from the Company's ex- pansion plans. discount rates 6 for discounting future cost avoidance (4 percent to percent). The Commission has been presented four distinct proThe three utilities' posals for structuring capacity payments. length of the contract (5-35 6 years).. discounted prepayments in any way reflect expected avoidance of . All three offer some level of prepayments for capacity provided but it is not clear whether these prior to the 1985-1988 period. DOCKET NO. 22 The capacity payments to QFs in each case are a func- tion of the beginning year of the contract (1982-1988). and a - qualifying performance criteria (capacity factor of 65 percent 75 percent).

the exclusively capacity-related value of baseload expanthe Whereas utilities discount pre-on line capacity (1982-1985 or 1988). The Commission in reviewing the capacity rate proposals of each utility found unnecessary complexity a predominant char- acteristic. ORDER NO. The Commission also finds merit in the concept of partial capacity credits and the recognition of . 4865 12 system Payments planning for (engineering studies. opposed to make-or-break performance criteria. 23. siting. rather than leveliz- discounted sum of inflated costs over the life of the annualize capital A contract. the Advocacy Staff's proposal features full prepayment of capacity. Advocacy Staff. The Advocacy Staff's proposal differs primarily in how are calculated and to whom the payments are made. 24. updated at least the Commission finds persuasive the Advocacy Staff's a proposal to simply annualize the cost of combustion turbine in constant contract year dollars. 81. ing the The Advocacy Staff. The Advocacy Staff's proposal utilizes a combustion turbine to estimate sion. capacity contracts of less than full duration are discounted to reflect the inflated costs of building the plant beyond the deferral period (or length of contract).2.15. the payments and not necessarily in the calculation of avoided capacity. of a third area major difference The lies in the as concept partial capacity payments. annually.DOCKET NO. For purposes of a standard tariff. proposes partial capacity payments based on the QF's expected reliability relative to that expected of a combustion turbine.) efforts. costs of in terms of constant contract year dollars. etc.

) are not fully accounted for.DOCKET NO. the The Commission is less sure in respect to merits of full prepayment. (engineering studies. Commensurate the for with to these findings. 81. components remote siting transmission. It should be pointed out that there is no explicit distinction here between firm and nonfirm — the pricing provisions of each schedule will dictate an implicit distinction.15. in light of the fact that 1) the magnitude of a full capacity payment is only in the area of four to seven mills. The short-term/long-term distinction is made in anticipation that the system planners.g. leads the Commission to believe that full prepayment will not error on the high side of truly avoidable costs. line etc. 2) the utilities siting. The second class is to consist of all QFs who are willing and able to sign a contract of at least four years duration. ORDER NO.2. 4865 13 aggregate QF capacity. will require four year con- . a the Commission rate directs schedules utilities two develop of QFs -- tariff providing classes short-term and long-term. do incur system planning costs on line dates. and etc. in the initial start up period only.) prior to the primarily (e. Rates 25. One class is to be comprised of QFs unwilling or unable to commit themselves to a performance contract of at least four years. The Advocacy Staff's capacity proposal accepted by the Commission is essentially that practiced by the utilities in recovering capacity-related revenues. However. 3) the fact that several "full avoided cost" losses.

. out that only MFC's proposal does not feature optional time differentiation. The Commission. monthly. even with evidence of substantial seasonal cost variation. 4865 14 tracts with appropriate penalty provisions loads into for incorporating QF for projections of system resources purposes of designing system expansion plans.15. The rate shall reflect a one contract year projection of annual load weighted average system lambda (or equivalent measure of short run incremental energy costs) and shall include the appropriate calculations of variable O&M. Short-Term Rates 26. and the nominal energy loss factor. companies' proposals will be scrutinized It should be pointed and adjustments made on an as needed basis. ORDER NO. The relatively higher general level of sophistication on the part of QFs presents a challenge The to structure rates most accurately reflecting costs. The utilities are encouraged to structure time differentiated rates featuring seasonal. 81. initially.2. The short-term QF's energy rate schedule shall reflect short run incremental energy costs as determined from the utilities' production modeling efforts. 27.DOCKET NO. a leaves to the utilities the time option of establishing short-term differentiated rate schedule reflecting the companies' short run cost variation. and/or daily rating periods. revenue requirement associated with working capital.

DOCKET NO. 29. Long-Term Rates 30. That is. ORDER NO. In addition annual to the or energy rate. must use hourly loss of load data for structuring the differentiation. the aggregate capacity payment shall be cal- culated by assuming a 42. where utility is most likely to be capacity short. 81. 4865 15 28. receive one-half of a full capacity payment the energy payment using the assumed 85 percent load for converting the annualized capital costs into a Kwh The Commission again leaves to the utilities the option of time differentiation with respect The utilities. while the annual average aggregate capacity the time differentiated option payment is spread over all hours. spread as the same aggregate loss capacity load payment over those the indicated by of probability. would hours. That is. short-term QFs will added to factor payment. the short-term option include initial — a both average time differentiated — shall nominal aggregate capacity credit.5 percent availability level relative to an assumed 85 percent combustion turbine availability. to the nominal aggregate capacity payment.15. should they desire to develop time differentiation in the initial tariffs. and For purposes of the is tariffs until convincing evidence provided to suggest otherwise. The second class of QFs are those who are willing and to a able to commit themselves contract of at least four years for failure to deliver con- with appropriate penalty provisions .2. or the 1982 tariffs.

4865 16 tracted capacity. respectively. Added to the running costs are the fixed costs with bringing associated addition on line a base load plant on line a a less the costs In with to bringing energy combustion separate the payment. is as well as below) The to a 85 percent availability to be developed. lambda. but allocated to rating periods commensurate The with system payment.15. 32. 31. associated capital turbine. separate time differentiated capacity an however. ORDER NO.2. annualized capacity payment based on the costs of a combustion turbine paid in proportion factor (above. As with the to short-term option. The time differentiated energy rate shall feature the same base- load plant costs. the Commission encour- ages the utilities structure a time differentiated suboption featuring time differentiated energy and capacity rates based on system lambda and hourly loss of load probability.DOCKET NO. QF's Rather than of payments reflecting the probability providing capacity as needed. capacity payment can be structured on a monthly or annual basis. The utilities are directed to develop a long-term rate featuring an energy component based on the cost (current contract year constant dollars) of the projected running costs of the next baseload plant. provides opportunistic alternative to th^ nontime partial differentiated capacity partial capacity payment. 81. rate These long-term QFs the shall be paid an energy reflecting energy-related generation costs and a associated with baseload expansion capacity payment reflecting the remaining capacity-related baseload expansion costs. the time differentiation can allow .

to reflect . DOCKET NO. insurance. The utilities (seasonal. The Commission has left the time differentiation. O&M. ORDER NO. shall use Antelope Valley #2 and PP&L.15. All costs to be updated each June 1. averaged. daily) offerings long-term capacity payments 33. The costs of the combustion turbine used as a proxy to determine the portion of baseload expansion related solely to the capacity function.3 percent. for the contract year beginning July 1st. encouraged and/or to develop in its time differentiation of monthly. 81. Depending on the level of differentiation. fuel inventory. those costs shall reflect the costs of Colstrip #3 and #4. an option to at least initially. hours with less probability of capacity shortage should feature something less than full capacity. taxes. as well as the line loss nominal factor of 8. 4865 17 for full capacity payments in exchange for QFs capacity provided in the hours most likely to correspond with capacity shortage. The calcula- tion of costs is to be exhaustive including coal. The long-term costs shall be calculated full and rates structured such that long-term energy and capacity rates fully account for the annualized costs of owning and operating baseload plants..2. are to be stated in constant contract year dollars. are the utilities. administrative and general. In the case of MPC. must be equally exhaustive and based on reasonable combustion turbine alternatives to QF's capacity and must reflect costs consistent with actual costing experience or industry estimates. MDU Wyodak #2. This overcomes the problem of relating common facilities to individual plants.

include. Capital costs are to be annualized by applying the comoverall panies' incremental cost of capital including tax effect — not embedded cost of capital — and shall be updated Finally. the calculated avoided costs used in arriving at the tariffed The tariffs are the M^ rate schedules. in compliance . 2) each utility is directed to provide 1) the proposed tariffs. inflation. according to standard industry practice. at some middle but is certainly an item open to future refinement and utility specific experience if it exceeds average industry or regional performance.DOCKET NO.2. to and 3) detailed working papers. 81. ORDER NO. In submitting initial tariffs in compliance with this Order. and proposed revised tariffs each June 1st thereafter. terms and conditions service and the standard contract. 34. Appendix A provides a summary of the rate schedules to and Appendix B pro- be developed in compliance with this Order vides specific direction in costing to be followed in arriving at costs pursuant to this Order. for purposes of converting baseload capital costs into energy rates. annually to reflect the contract year capital market. each utility shall use an assumed baseload capacity factor The 70 percent reflects the Commission's attempt ground. Procedure 35. in for addition to the rate schedules. of 70 percent. 4865 18 1) refined resource plans.15. and 3) 2) more accurate and/or complete cost information. 36.

and 5) the estimate of overall marginal cost of capital. 37. ORDER NO. the working papers must include the most recent version of the actual engi- neering cost study. 4) detailed combustion turbine calculations. In and provide the transformation of costs of the the case baseload costs. turbine percent baseload percent combustion production .5 percent availability the 70 assumption calculating and 85 aggregate capacity payments. by time line revealing projections of costs by component from the time of initial planning to on available. 81. Several requiring in refinement the 42.1905(1). These avoided cost data satisfy and supplement of ARM 38. requirements The working papers must provide the source and derivation of the costs. As all parties become experienced in QFs production. including incremental cost of capital. the Commission encourages of further pursuit QFs of a progressively obvious refined items treatment structuring are rates. 4865 19 with this Order.5. These five year projections must be presented in both constant contract year dollars and in nominal the terms.15. year projections The avoided costs must include. at least. actual engineering cost studies supporting the estimated combustion turbine avoided costs must also be provided.2. the of incurrance If production. five (beginning with the contract year) of: 1) the average annual system lambda (or equivalent short run production modeling).DOCKET NO. into rates. 2) time differentiated system lambda and/or loss of load probability supporting the time differentiation. 3) baseload running cost and capital cost calculations detailed by component.

" "retail capacity /variable a energy.DOCKET NO.2. avoided reserve requirements. did not require wheeling under the assumption that the utilities would. and reserve requirement values to be included in the calculation of each rate schedule." "time of delivery. 4865 20 factors." fixed "performance rates. the 8. For example. The Commission has merely established a The utilities and the QFs payment option available to all QFs. 38. incentive. line loss.3 percent The line loss are factor. faith" assumption in respect to opportunity cost and wheeling. are encouraged to negotiate at will in a business-like atmosphere." etc. payment schemes poses of tariff. in good faith." for pur- "levelized. ORDER NO. was in error. if PP&L finds that its tariffed short- term energy rate is too low and that it can offer its "oppor- tunity cost" rate with no effect on ratepayers. The utilities 1982 filing detailing appropriate transmission. utilities directed avoided line losses. 81. of these The Commission intends to expand the role factors in the calculation of the 1982 standard rates. avoided transmission costs. only. The tariff providing rates as found appropriate by the " Commission precludes the use of "opportunity cost. The Commis- in its rules. then the Commission in no way intends sion. to restrict that offering.15. utilize opportunity cost concepts in providing QFs access to lucrative regional markets If the Commission finds its "good with no effect on ratepayers. then it will . are directed to provide evidence in their June 1. and to appropriate investigate and inflation factors. as well as other options provided herein.

" ARM 38. the Commission wishes to remind the utilities to that ARM 38. 39. (1) provide a) potential rules. AITO CONDITIONS ARM 38. tives is and performance incenOrder. The contract . 4865 21 readdress these provisions. as the offering of levelized . TARIFF AND STANDARD CONTRACT TERMS 40. or Likewise.5.15. 1903(2 (b) ) fixed capacity/variable energy contracts. 81. addition to these provisions a the Commission contemplates utility sponsored working conference to be held in each utilities service area for purposes of providing information to potential QFs.5. in no way restricted by this The innovative contracts resulting from negotiation should be the prime mover in the purchase of QF's energy.5.1902(5) reads. shall be accomplished according to the terms of a written con- tract between the parties as or in accordance with the standard tariff provisions shall specify: approved by the Commission. DOCKET NO. of information. front loading contracts required by ARM 38 5 .2. and c) the Commission's standard complaint procedure. b) qualifying the facility with copy of: these Commission's approved standard provisions tariff.1903(8) requires each utility "upon initial the contact with a potential qualifying one facility. that "All purchases. in part.. Lastly.1908 one requires of the each utility to provide the Commission with copy utility's initial In written response to the potential qualifying facility... ORDER NO.

service. to be a component of the QF's tariff -. Accordingly utility-sponsored testimony contains tariff and standard contract proposals in varying degrees of length and complexity. (d) The means for measurement of the energy or capacity purchased or sold by the utility. (h) The term of the contract. To promote understanding of party responsibilities and to minimize uncertainty as to allocation of risks. 4865 22 The nature of the purchase and sales. (i) Applicable operating safety and reliability standards with which the qualifying facility must comply. The utilities propose that all QFs be required to execute a written contract prior to interconnection. (c) The amount and manner of payment of interconnection costs. and maintained by the Commission. the Commission finds that all QFs should be required to sign a standard contract.15. is containing the terms and conditions of The standard contract regulated. The applicable rate schedule or negotiated rates for the purchases and sales. ORDER NO. 81.approved. (e) The method of payment by the utility for purchases. for a minimum term of one year. The services to be provided or discontinued by either (g) party during system emergencies. Appropriate insurance indemnity and liability pro(j) visions. 42. The standard contract should concisely set forth the options available to QFs regarding short and long-term purchase rates and terms and billing and payment . for the present. the Commission's intent here is to resolve contested issues with respect to the specific terms and conditions for service under the standard tariff. and the method of payment by the facility for utility sales.DOCKET NO.2." (a) (b) Commensurate with the rules. (f) Any installation and performance incentives to be provided by the utility to the qualifying facility. 41.

Their exclusion of any net billing option was premised on two (1) contentions: that the reliability of meters. BILLING ALTERNATIVES 43. definitions. was suspect. 4865 23 alternatives. 1903(5) (c) and 38. Dr. Contrary to Commission rules.5. ORDER NO.1905(6)).2. utilities confined their standard billing proposals to simultaneous sale and purchase arrangements. could not be captured by 44.DOCKET NO. a single meter. Power on the that was value gathering information actual generating characteristics of small QFs but he questioned the cost-effectiveness of mandating dual meters for every QF when a sampling technique might provide the same information at a lower cost. On to cross-examination. Terms be and conditions from made the redundant QF by and Commission standard rules should excluded tariff contract. therein. 5 . and computations and/or formulas for payment determinations should be confined to appendices to the standard contract. 81. each of the (ARM 38 . and (2) that valuable istics of QFs. information concerning the production characterindividually and in the aggregate. not specifi- cally designed to run backward and forward. . Dr. To and the the QF's choice should be clearly specified technical extent practicable. specifications. Power maintained that the net billing option should be available to small QFs as such an option would minimize trans- action agreed and metering there costs.15.

indicate to the Commission that there is general lack of understanding. 81. (Tr.15. thus avoiding the cost second meter. QFs would opt for net billing. he testified that the concept of net billing presumes that a utility's avoided costs and its retail rates are roughly approximate." 47. 48. The fact the utilities are united in opposition to net in billing. mised on two assumptions: that the state of the art of metering is such that in a single meter. the QF is logically entitled to be billed for his/her net consumption at the retail rate. The Commission would clarify that net billing was prefirst. concerning the net billing option Dr. Power then concluded that "[a]nybody who was range displacing all of their consumption certainly would be better off opting for some other arrangement than net billing. a can accurately record net consumption or production within of the given billing period. whether currently in place Montana or not.DOCKET NO. ORDER NO. The Commission wishes to dispel any notion that a QF who opts for net billing would receive any rate other than the . in the Dr. energy rates. 4865 24 45. are accurately reflected avoided not retail. a that up until the point a QF becomes net producer.2. 46. Once the during costs a billing period. combination with some of Dr. per the Commission's rules. and second. Power stated that in his opinion only very small and that their motivation would be In addition. B-115). to avoid additional metering charges. the utility avoids in in purchasing the QF's cost. a QF becomes a net producer. Power's statements a regarding the concept.

but believes that there are means to accomplish such without abrogating the Commission rule that gives a QF the option of operating in parallel on a net billing basis. the The Commission finds that issue was resolved in those proceedings as reflected in ARM 38. The utilities were given two hearing and public comment opportunities in the Fall of 1980 and the Spring of 1981. This finding confirms what is explicitly stated in ARM 38. however.1905(6). PP&L's of proposed tariff net implicitly recognizes they give the at- tractiveness billing their wherein local large QFs the option of offsetting load and then delivering any Likewise. the extent that meters currently in use cannot reliably track net consumption or production. Should the utilities find a second meter necessary. ORDER NO. the utilities will have incentive to stay abreast of . 49.15. the amount subject to net billing is determined not by one but two meters. PP&L's revised contract appears to endorse.DOCKET NO. cost of the The Commission would note that by placing the to second meter on the utilities.2. (as then the proposed) utility shall and provide payments.1905(6). 4865 25 utility's avoided cost rate for its net production . any simultaneous to the exclusion of a sale and purchase arrangements." In both instances. excess energy to the company at avoided cost rates. 50. the second meter request.5. PP&L has the make QF upon under net billing option. The Commission finds merit in collecting QF production it data. modified net billing approach via their definition of "Net Metered Output. 81.

with respect to standard billing options. Mr. 81. second meter at no cost to the QF. QF. ORDER NO.15. to be unneces- convoluted. the option. of 'Net PP&L's definition it Metered Output' QF should be of a amended because necessarily forecloses selection simultaneous sale and purchase arrangement. the QF has upon request. net basis. These findings should serve to explicitly clear the air In summary. without excessive rigmarole: within 15 to 20 days after the billing period had ended. 52. and operating or in parallel with Net a single meter is measuring net consumption production. at the expense of the QF. 2) and is purchased at the appropriate tariff schedule.2. of 1) simultaneous purchase and sale whereby all QF production is measured via a second meter.DOCKET NO. the If utility deems or a second meter necessary for either billing integrity data collection a then it remains the utilities' prerogative to install 33. Jordan's suggested alternative should suffice to adequately meet the needs of QFs and utility alike. set Appendix Articles sarily and V of their respective contracts. consumption billed at the appropriate retail tariff schedule and net production is purchased at the appropriate QF's tariff schedule. In a related matter as the Commission forth in finds MFC's A and and PP&L's billing IV procedures. the utility should make payment to the A statement showing the amount of energy delivered to the . 4865 26 development regarding a single meters that were specifically designed to operate on 51.

The Commission would reiterate that the issue of pay- ment of interconnection costs was settled in the rules. 1904(2 )(c) provides for that.2. and MDU's policy to purchase all energy be That restriction should deleted from MDU's tariffs. MDU and PP&L are directed to amend their standard contracts to provide some method using reasonable financing charges for QFs to amortize such costs. if QF. 54. the the utility QF installs interconnection the facilities "[the] the must reimburse utility but reimbursement a may be accom- plished by means of amortization over within the term of the contract. 5. . 56. absent guidelines distinguish which QFs need help financing interconnection costs. Interconnection Payments 55. 4865 27 utility's system during the billing period and the computation of the payment amount should be included with each payment.15.1902 (5)(c) specifies that "the amount and manner of payment of interconnection costs" be set forth in the contract. however. the amortization rule will be available to all QFs. ORDER NO.5.DOCKET NO. arise The Commission is aware that instances may as where a QF has ready access to as financing to how to as do the utilities. The Commission finds MDU's 600 KWH per month ceiling on energy purchases from QFs of 100 KW or less to be inconsistent with Commission rules available from QFs." reasonable period of time ARM 38. ARM 38. 81.

the Commission will require only general liability insurance provisions in standard to contracts. the QF. not should be financially responsible for any alterations or modifications that are necessitated by a change in the utility's system voltage.000 to per single occurrence. .2. The Commission also determines that. ORDER NO. 59. been accomplished between the utility and QF. liability. whenever they see fit.DOCKET NO. 81. and property insurance provisions required that the utility be named insured as well of as receive any proceeds. insurance is essential to For the purchasing electricity from time being. The Commission is reluctant that to mandate comprehensive explosion. In destroyed or damaged addition. once intertie has the utility. if a capacity supplier.000 ranged from $500. Insurance 58.000. pending QF replacement facilities. property damage Suggested floors for liability limits $1.15. liability insurance proposals from MPC and PP&L give the utility unilateral power to require the QF to purchase additional coverage. or destruction insurance. The Commission will permit the utilities increase liability limits. The utilities proposed that the QFs be required to maintain liability and. 4865 28 57. a liability collapse insurance and coverage would and include underground hazards contractual without more information as to the cost of such insurance and better justification as to why a such QF.

15. The Commission under- stands the utilities desire to have access to a source of funds should the QF be destroyed and performance be discontinued. there is not necessarily any direct relationship between the cost of replacing a QF and the damages the utility will face as a result of the disruption. 60. to contract their to provide capacity. however.DOCKET NO. obtain and maintain property named insured and proceeds requirements should be deleted. ORDER NO. 81. In light of the Commission's decision to allow all QFs. the Commission leaves to to the initiative of insurance companies differentiate given a premiums that QF's reflect size and adequate liability coverage particular operating characteristics. irrespective utilities of size. The Commission finds the utilities' proposals for property insurance to be particularly lopsided. to the may want to amend proposals distinguish between smaller and larger QFs.2. The Commission finds the record to be insufficient to justify distinguishing liability insurance limits on the basis of QF size. 62. therefore. Absent a better explanation for the need for such requirements. The combination of named insured treatment. 61. and receipt and retention of proceeds in anticipation of proof of replacement expenditure. could neces- sitate duplication of policies by the QF. Such proposals should be . the Commission finds the standard contracts suppliers need to only contain a provision adequate requiring capacity insurance. 4865 29 only if such requests are made in good faith and upon reasonable justification.

to the utilities are directed investigate the possibilities of obtaining group insurance for smaller QFs Force Majeure 64. for distinguishing property insurance treatment on th^ basis of QF size. ORDER NO. PP&L exempted small hydro projects from this exclusion on the rationale that. forecasts. 81.. 4865 30 accompanied by sufficient justification. meterological. DOCKET NO. The Commission finds that it is unreasonable to give small hydro development deferential treatment when other types of small power production or cogeneration might suffer from similar circumstances. such projects are susceptible to dry water years that are beyond the control of the operator.2.15. Following Advocacy Staff suggestion. 63. provision should not interpreted to give QFs carte blanche to enter into contractual obligations without reasonable engineering. like PP&L. or hydrological studies or economic . Both MFC and PP«ScL proposed force majeure clauses in their standard contract which specifically exlcuded nonavail- ability of fuel or lack of motive force to operate QF's facility. The utilities are directed to include nonavail- ability of fuel or motive force in their force majeure clauses. Lack of foreseeability or reasonable control will still be the major This determinants as to whether performance will be be excused. based on system planning needs.

66. adjustment to its The annual capacity payment should be made. Because QFs for FP&L's the proposal they accommodates the notion yet made of it for paying capacity reasonable actually deliver. tent this "all or nothing" approach clearly is inconsis- with the proposition that a QF should be paid for any capacity it actually delivers to a utility.15. the Commission finds that if a QF fails to deliver capacity according to its commit- ment it would be appropriate for the utilities to adjust either their annual or monthly capacity payment by a factor of delivered capacity to contracted capacity. The QF will still be paid for each kilowatt it delivers. MFC proposes that if a QF fails to meet its capacity during any 12 commitment hour contract capacity review the QF should lose its right to receive any capacity payments for that entire year. 4865 31 Capacity Adjustments 65. 66. Commission Failure to meet contractual capacity commitments should not be casually disregarded. 81. the MDU's proposal has same "all or nothing" effect even though its impact is less drastic — MDU would only require forfeiture of the QF's right to capacity payments for the month in which the deficiency occurred.2. recognizes that some adjustment should be failure to fulfill contractual obligations.DOCKET NO. ORDER NO. but the reduced per unit payment will force the QF to realize a loss beyond that which results from the . The utilities argued that if during any contract year a QF fails to deliver sufficient capacity some total agrees.

Barber too stressed the need for flexibility in payment options. a (2) fixed capacity component. MPC and MDU are directed to incorporate this finding into their standard contract. also suggested that the utilities be required to sign a con- . he particularly noting the desirability of front In order to further facilitate QF financing. Dr. the and a variable energy component.2. Payment Options 68. He specifically addressed payments which were based upon (1) levelized annual payments for energy and capacity as derived from projected avoided costs. 81. Power urged that the utilities provide a variety of payment options to any QF contracting to supply energy and capacity over a four to five year contract term. increased annually by the general inflation rate. Mr. A considerable amount of testimony was provided to the Commission pro and con variations in innovative payment schemes. actual or projected avoided and energy and (3) variable capacity energy payments. 67.DOCKET NO. 4865 32 loss of anticipated revenue associated with its decreased capacity production. loaded contracts. based on either preceding or succeeding years' costs. based on the current contract year's avoided costs.15. 69. ORDER NO. Additionally the Commission recommends that MPC and MDU incorporate PP&L's idea of using an estimate of capacity capabilities for the initial contract year and then adjusting the second and remaining years according to the QF's demonstrated capacity.

projected over the term of the number of years before the QF would actually deliver then when the QF comes energy.2. any a a firm amount. 70. that its initial In its rebuttal brief. PP&L requested levelized payment proposal and on October 29. Their proposal consisted of payments that have been levelized over the term of the contract. 1981. ORDER NO. only PP&L presented any alter- native method of payment. Rather than requiring bonds for all QFs opting for levelized payments. 81. the Oregon Public Utilities Commissioner modified his position on performance bonds. At hearing PP&L withdrew its levelized payment option and justified its action in light of a recent decision by the Oregon Public Utilities Commis- sioner that required all QFs opting for to provide a a levelized payment plan however.15. supporting testimony be reinstated because. the Oregon Commissioner may . based on prices as projected at the time the contract was executed. performance bond. PP&L's levelized payment option was available only to QFs willing to provide capacity for a period of years. he suggested that payments commence at the higher of the contracted rate (a projection) or the-then . 4865 33 tract with a QF for contract. on-line. Of the three utilities.DOCKET NO. prevailing The avoided cost rate (valuation to at be time-of-delivery ) Commission it finds this proposal particularly noteworthy because would not only give the QF greater flexiblity in financing but it would give system planners considerable lead time to integrate QF production into their resource planning efforts.

considerable ) resolved in rulemaking.. Neither the Commission has changed in the interim. When the Commission or adopted this contracts. would initially aid benefit the QF by covering debt service and ultimately utility and/or ratepayers by providing power below avoided costs during the second half of the contract. . QF performance bonds in particular instances. the ARM 38 5 . 73. their payment options need not mirror PP&L's proposal. ORDER NO. that this particular issue was.15. rule. 81. The Commission reinstates and accepts PP&L's levelized payment proposal. 4865 34 require. upon utility petition and with good cause shown. 1903 (2 (b ) explicitly front- requires utilities to offer long-term shall levelized or offer loading contracts: "." DOCKET NO. 71. their payment options to MPC and MDU should expand comply with Commission As rules. MPC . the loaded Commission merely wishes after to remind the parties debate. With respect to the offering of levelized and/or front contracts.1903(2). nor its policy.. the levelized.2.5. long as the payment option incorporated into the tariff and standard contract embodies the purposes of ARM 38. . with the admonition that Commission rules must not be disregarded merely because another state's regulatory body has taken a different approach to the same issue.the utility long-term con- tracts with qualifying facilities which permit a rate higher than avoided costs in the early years of the contract and a lower rate in the latter years 72. rule it recognized that front-loaded.

they necessarily place the Commission in a posia tion to set aside for doing so. should PP&L perceive formance that there is sufficient risk of nonpersuch a by the QF. rule when there are no rules or guidelines In declining to act as arbitrator regarding pro- spects of QF nonperformance [dubious QF contracts containing a . Although the Commission concedes that PP&L's suggestions may be practical and well conceived.15. Because of the risk associated with nonperformance of or front-loaded rebuttal levelized contracts that as a PP&L has indicated policy. The Commission wishes to emphasize. levelization of payments provision] utilities that. 4865 35 and MDU will have discharged their obligation under the rule. however. 75. ORDER NO. 81. matter or of corporate QF contracts of four megawatts more which contain a levelized payment provision will be submitted to the Commission and that. PP&L will submit contract to the Commission for advance review. in all its brief.2. . 74. that all QFs signing long-term contracts. per Commission rule. any losses the utility incurred as a result of complying with this rule will be given appropriate treatment in ratemaking proceedings.DOCKET NO. are entitled to levelized or front-loaded contracts. the Commission assures the on a should a QF default front-loaded or levelized contract and subsequently the QF is discovered to be judgment proof. The Commission rules do not contemplate advance review and Commission approval of questionable contracts.

The for calculating the appropriate damages should account (1) for two contingencies: early termination or default on a front-loaded or "levelization of payments" long-term contract and (2) premature termination or default on The particulars a nonlevelized long-term contract. be of how to compute these damages will to addressed below. The Commission finds that each utility should include a liquidated formulae damages provision in their standard contract. that liquidated damages clause can be used for a frame of reference in this instance. an additional element of uncertainty can be eliminated from the contract. if a reasonable time the estimate can be agreed upon at the contract is executed. 4865 36 Liquidated Damages 76. Overcollection .2. Although none of the utilities proposed addressed because a liquidated damages provision of a that specifically contract.DOCKET NO. 81. The Commission requires this provision to encourage QFs to accurately assess energy and capacity production capabilities when it commits. provision. however. the Commission recognizes that it may be very difficult to ascertain the losses either party has experienced as a result of of termination or those losses default. first the Commission wishes a discuss the policy rationale for requiring such 77. default or termination levelized MFC's standard contract provided for per unit capacity payments that varied with the term of the contract.15. its production into a utility system resource planning under tract. 78. and the utility integrates. ORDER NO. long-term power con- As well.

81.15. The Commission rejects the notion that policy consid- erations warrant encouragement of cogeneration and small power QF accountability for early termination or production at any cost: or default-related losses should not be a function of QF size. Differences in the amount of losses estimated due to overcollection were supposedly justified losses by the nature of the in termination. implicitly. Dr. 79. the of the date of notice of termination or the QF should return the entire difference between total payments received under the front-loaded contract and that would have the total payments been received had payments been based upon the QF's actual term of performance and avoided capacity and energy rates as projected at the time the contract . Power suggested that the Commission adopt a repayment (liquidated damages) provision similar to that ordered by the Idaho Public Utilities Commission. There. the System planning that were recognized only eventuality minimum notice requirements were not met. 4865 37 of payments during the actual term of the contract vis a vis the original term and the impact of unexpired term on system planning were handled separately under MFC's proposal. the magnitude As of the possible loss to the utility and/or ratepayers. the Idaho PUC forgave small QFs (less than 1 MW in size) all but a nominal proportion of the damages that could flow from early termination or default and only required larger QFs to repay one-half of what was lost. 80. ORDER NO.2. termination. rather than constructing what could be perceived as serious disincentives to QF development.DOCKET NO.

4865 38 was executed. Governmental Regulation and Termination 82. upon four or more years advance notice. The Commission finds this repayment formula not only alike.2. damages a should QF. any. the termination should roughly approximate a The approach the Commission has adopted is modification of similar proposals from MPC and MDU. incur system planning related losses. Burdensome governmental regulation was proffered by the utilities as a suitable justification for almost* immediate termi- nation of a QF contract. ORDER NO. utility and ratepayer 81. it that a utility will incur minimal. 81. utility necessarily An amount equal to the average monthly capacity payment times the difference between the lesser months) of 48 months or the unexpired term of the contract the (in and number of months notice given these regarding losses. terminate However.DOCKET NO. for is system planning to purposes. if its a long-term contract. logical but eminently fair to QFs . Because the Commission a determined term above that. and the QF should reimburse the utility has for the value of the system planning latitude the forfeited. minimum or of four years required follows actually the avoid defer capacity if expansion. of utility relies on and a the continuation QF capacity in system planning QF prematurely terminates less its minimum four year contract or gives the utility will than 48 months notice of its termination. Irrespective of the fact that they .15.

DOCKET NO. 81.2.15, ORDER NO. 4865

















primarily to the benefit of the QF.

The Commission is not persuaded.

The fact that there




involved making





that such

clause begs contention and promotes uncertainty as to




are requested to delete

such provisions from their contracts.


Montana-Dakota Utilities Company, Montana Power Company

and Pacific Light & Power Company are public utilities within the









The Commission properly exercises jurisdiction over the

rates and terms and conditions for the purchase of electricity by










Sections 69-3-102, 69-3-103 and 69-3-603, MCA.
The rates the Commission has directed the utilities to









reflect each utility's avoided energy and capacity costs.








power production is promoted by the rates and terms and conditions established by this order.

DOCKET NO. 81.2.15, ORDER NO. 4865



MDU, MFC and PP&L shall develop rates which are consis-

tent with the Findings of Fact entered by the Commission in this

These rates shall be developed as summarized below. avoided energy rates shall be based on (1)
for short-










utility's short run incremental running costs,
term contracts
(four or more years),

and (2) for long(per

annualized costs





Appendix B)

of owning and operating a

baseload plant,

converted to <:/KWH by using an assumed capacity

factor of 70 percent.

avoided capacity rates shall be based on the annualized

capital costs of

combustion turbine; payments can be structured
A factor relating a QF's

on either an annual or monthly basis.

capacity factor to


85 percent availability factor of a combus-








capacity payment








capacity payment, equal to one-half of the avoided capacity rate,
shall be added to the short-term energy rate.

detailed working papers shall be submitted in support

of aforementioned rate calculations.


MPC and PP&L shall revise their proposed standard




that is consistent with the Findings of

Fact herein.

Proposed tariffs, including avoided energy and capacity
shall be filed with this Commission

rates and standard contract,


DOCKET NO. 81.2.15, ORDER NO. 4865



forty- five










Done and Dated this


day of January, 1982.







DRISCOLL, Commissioner


ELLIS, Commissioner

"c^^fTssT oner



SCHNEIDER, Commissioner

Madeline L. Cottrill Secretary
(SEAL By :«==5^fc*V ^9^^.^2,<::^^ Acting Secretary NOTE; You may be entitled to judicial review of the final decision in this matter. If no Motion for Reconsideration is filed, judicial review may be obtained by filing a petition for review within thirty (30) days from the service of this order. If a Motion for Reconsideration is filed, a Commission order is final for purpose of appeal upon the entry of a ruling on that motion, or upon the passage of ten (10) days following the filing of that motion. cf. the Montana Administrative Procedure Act, esp. Sec. 2-4-702, MCA; and Commission Rules of Practice and Procedure, esp. 38.2.4806, ARM.

At the option of the QF, energy and capacity is to be purchased at either 1 the Short-Term Schedule or 2 the Long-Term Schedule.



The Short-Term Schedule

Availability: available to all QFs willing and able to sign the standard contract.
Rates: all energy and capacity purchased is to be priced, at the option of the QF, at a) the Annual Average Rate or b) the Time Differentiated Rate.

Annual Average Rate

X C/KWH for all KWH purchased, where X equals the annual average projection of short run incremental energy costs plus the aggregate capacity payment.


Time Differentiated Rate (initially, at the option of the utility)
- X.

<:/KWH for all KWH purchased during time period t, where X equals the projection of short run incremental energy costs during each time aggregate period t plus the capacity payment allocated to each time period t based on hourly loss of load probability.



The Long-Term Schedule

Availability: available to all QFs willing and able to sign the standard contract and a performance contract of duration not less than four years.
Rates: all energy and contracted capacity is to be priced, at the option of the QF, at a) the Aiinual Average Rate or b) the Time Differentiated Rate.

Annual Average Rate



Energy Payment
X <::/KWH for all KWH purchased, where X equals the annualized unit cost of owning and operating a baseload plant, less the annualized unit cost of owning a combustion turbine.


Capacity Payment
Y $/KW(cf) for all contracted KW, where Y equals the annualized unit cost of a combustion turbine (from 2ai, above) and CF represents the negotiated expected or demonstrated QF plant capacity factor.


Time Differentiated Rate (initially, at the option of the utility)

Energy Payment

<?/KWH for all KWH purchased during each time period t where X represents the annualized unit cost of owning and operating a baseload plant less the annualized unit cost of a combustion turbine, differentiated by time period t to reflect short run incremental energy cost variation.


Capacity Payment
$/KW for all contracted KW delivered during each time period t, where Y equals the annualized unit cost of combustion turbine (from 2bi, above) differentiated by time period t to reflect the relative probability of capacity shortage in time period t.


All values are to be inflated/discounted to reflect constant contract year dollars.

Inflation is to reflect industry specific, regionalized real cost indices

Discounting is to reflect standard (e.g. DRI national general inflation.


projections of

Variables and formulae are defined and an example provided,

Definition of Variables


= = = = =





baseload capital cost 2 ($/KW) combustion turbine capital cost 3


e f

= = = =

baseload annual carrying charge (%) 4 combustion turbine carrying charge (%) baseload fixed O&M^ ($/KW) combustion turbine fixed O&M ($/KW)
line loss factor coal cost





coal fuel content




baseload plant heat rate^ (BTU/KWH) baseload variable O&M^ (<:/KWH)

cf = QF capacity factor^

Short run incremental energy cost via production modeling of economic dispatch. To include variable O&M and revenue requirement fuel and associated with working capital inventory.

Actual baseload capital actual engineering cost are to be exhaustive and list the components, the

cost estimates to be supported by The capital cost estimates detailed by component. Rather than Commission refers you to Appendix A

of EPRI's


P°«« ^l-^/^^\\t =\%Vr\""#E^^^^


'?rst efur/ter°w"'ll I'l'rJLe. appropriate. adjustment made as deemed


Actual combustion turbine -X''\/°avaflabl""e,'\?Tonsil?en^ equally e.haus:ftrLS?res?!.ate\^. ^^"rl'atmi'nt^liusi'be tive and detailed by component.
.nnual carrying


support d by cal-laUons/I.^SSre"-



'JTo^usti'on turbines.








coasts =°aSlo^rated




initially, e<,ual to 8.3%

-PP^/f ,^° \\\TaTy's\s fnT'^n^h;


conunensurate with analysis

^i^Jl^l^^ aU^o"c\^ed1o^%atin, results.


coal cost and

contract content are to -fleet acU.al^

fo^porenf Jff lec-t^nr Sansro'aSL
Plant heat rate is to reflect expected operating load.


plant heat rate


QP capacity factor is to performance alter rir^ coSJ^fci «P--^^,,-I',\tr'^fi?sf initially, and demonstrated year.

Rate Schedule Formulae

short-term energy




(8760)( .85). 85





long-term energy =



(bd + f) )g + hi + k 1 (8760). 70

long-term capacity =





Example Rate Calculation 10 \= .

" 2.ell as state regulatory authorities. 1981 the Commission ador^ted final rules governing purchases and sales betv/een public utilities and . prescribe rules to encourage cogeneration and small power production (COG/SPP) including rules requiring electric utilities to purchase electric power from cogeneration and small power production facilities. Section 210 of the Public Utility Regulatory Policies (PURPA) . 81. 48G5b ***** FINDINGS OF FACT BACKGROUND 1.ould not exceed the "incremental cost to the electric utility of alternative electric energy. Among other things. On May 4. 1982 DEPARTMENT OF PUBLIC SERVICE REGULATION BEFORE THE PUBLIC SERVICE COMMISSION OF THE STATE OF MONTANA ***** IN THE MATTER of Avoided Cost Based Rates for Public Utility Purchases from Qualifying Cogenerators and Small Power Producers.2.Service Date: June 25. ) ) ) ) UTILITY DIVISION DOCKET NO. 15 ORDER NO. Act of 1978 required the Federal Energy Regulatory Comto mission (FERC) as v. the rules were to insure that rates for purchases of electric energy from qualifying facilities (QF) "be just and reasonable to the electric consumers of the electric utility and in the public interest" and that the rates v.

. 4. On January 22. 1981. DOCKET NO.2. On January 4. A second revised draft of the rules was issued on March 16. The rulemaking procedure featured a public comment period commencing with the issuance of draft rules on September 2.5.15 on February 24.5. 1982. 1980. making proceeding ended with adoption of final rules on May 1981. 5. and MPC file testimony regarding avoided cost methodologies.2.1901 through 38. The Commission initiated Docket No. The Commission's rules (ARM 38. MPC and PP&L each filed Petitions for Reconsideration and/or Clarification and. MDU. The rule4. The Commission rules are modeled after FERC regulations implementing Section 201 and 210 of PURPA. i 48G5a which Pc t t i (_) ns . 1908) . 1982. avoided cost-based rates.15. 1981 with public comment extending through April 27. provide the general obli- gations of the COG/SPP and the regulated electric utilities. 1980 and extending through October 23. PP&L. 81. pursuant to FERC regulations. ORDER NO. 81. No. on Fcbruar\ a V 1( 1 7 1982. 1981 when it requested that MDU.er production facilities. 3. and tariffs and standard contracts for purchases of electricity from COG/SPP. the Commission issued Order 4865 setting forth the Commission's initial findings in this Docket. tho the Commission issued Order No. 4865b : qualifying small pov.

n approved on interim basis MFC's and MDU's tariffs based on Colstrip 3 (2) 4 directed PP&L to resubmit new tariffs (3) and and requested each utility to provide rebuttal to the Commission's concerns within 45 days. 9. 33). (1) original compliance tariffs. 81. FINAL AVOIDED COST TARIFFS 10.15.g.June 30. 1983 for the contract year July 4865. This section reviews each Company's initial tariff filings.2. the Commission indicates negotiated payment options (e. 8. fixed minimum payments and levelized) v. inherent problems the Commission perceives with these the Commission's corrective measures. 4865b : 6. . final avoided cost tariffs. ORDFJR NO.. had a working session where it 1982 the Coinmission c. the resulting final tariffs will be updated June 1. The Commission has two objectives to achieve in this order regarding the avoided cost tariffs submitted by the three electric utilities. the Commission seeks to approve. after correct- ing for apparent conceptual problems (detailed below) the util- ities have with the avoided cost methodology. Finding of Fact No. 7. and the tariff filings. Second. 1983 . 1. the interim tariffs for MDU and MPC and to address existing problems with PP&L's pro- posed tariffs.hich it finds acceptable. First.DOCKET NO. 1984 (Order No. By March 5. 1982 the utilities had submitted their On March 12.

and were directed to take a time series calculation into account in order to equate that cost stream into present day dollars. 8]. As a result. 48 65b MDU did not submit any cost stream information with regards to the Antelope Valley project. thai. 13. Order No. MDU is not faced with that situation with regards to Antelope Valley since our letter of intent with Basin Electric states that we v. 37. Montana Power Company 16. 15. However.ill undoubtedly be significantly less than the 1984 expenditure. MDU chose not to make a cost stream calculation but rather lumped all expenditures into one and then brought that value back to 1902 dollars. 4865a) is theoretically flawed. . MPC ' s calculation of annual capital costs for the base- load electric generating plant suffers from the same analytic problems as MDU's. unlike MDU. the Commission finds no grounds for In Sched- deviating from the direction of Orders 4865 and 4865a. t-Iio CoininisGi on ' s direction (Findingri of Fact No. the Commission provides a corrected baseload capital cost calculation and resulting long-term energy rate.DOCKET NO. ule A. Since the 1985 expenditure v.ill not put forth any capital until 1984 should we choose to execute our option then. 4865. . V7ith another expenditure coming in 1985. ORDFAi NO. 2. MPC not only chose to not follow the direction of Order's 4865 and 4865a but further tir<juer. and Finding of Fact No.13. While the Company's 1985 expenditure. relative to its is small. MDU will have one large capital expenditure in 1984. 1984 expenditure. Order No. . Montana Power had a cost stream extending almost fourteen years for their Colstrip units #3 and v4.

4865b 17. 1982) had the following remarks: The Company disagrees with that interpretation of the Order. 81. 198 2 correspondence to MFC. Table VI.2.15.15 that the appropriate manner of calculating avoided costs is to inflate or deflate a stream of capital expenditures Mr. In its "rebuttal comments" the Company (Mr. The Company. Page 7 of 7) begins with a $489. 4865 (page 1 of Appendix B) contemplates converting this cost stream to 1982 dollars via real cost and inflation indices. My discussions with Jim Cullier indicate that the Company's position is that the Company's treatment of the cost stream results in a calculation which reflects the ratepayers cost of Colstrip Units #3 and While there is merit in the argument. The Staff's letter of March 17.000 budgeted for 1987. however. preferred fact is simply false. the 4. The cost stream (Cost Calculations. 1982 is the first indication in Docket 81. Order No. Jack Haffey. In its March 17. Haffey' s letter goes on to add: . No where in Appendix B or anywhere else in the Order is there any mention whatsoever of "cost streams. the Com- mission stated the following: The primary problem involves the Company's calculation of the capital cost associated with Colstrip Units #3 and 4." What is requested in Appendix B are the "actual baseload capital cost estimates. has chosen not to follow this procedure and instead sums the actual cost stream with an AFUDC component. ORDER NO.000 expenditure in 1973.2. and culminates with $166." Those estimates or* "values" have indeed been placed in 1982 dollars in the Company's calculation of capital costs. 18.- DOCKET NO. April 26.

such a procedure would the Order. The Company's analytic treatment involved simply summing all expenditures 1973 through 1987 — — in nominal or current year's dollars and then discounting this sum back from 1984 to 1982 dollars by multiplying the sum by a factor of 0. 3 and 4 This cost does not accurately reflect the time value of money which stems from two factors 1) price inflation -. by using the word "contemplated.2. including AFUDC.15 nor in Order No.and 2) this latter" . 81. 4865 "contemplated" the conversion of the "cost stream" to 1982 dollars finds no support in In fact. not be consistent with the Order since a fictitious number bearing no resemblance to avoided costs would be the result.079 and 1. 81. ORDER NO.15." it appears as though the Staff is admitting that the Order did not Qxplicitly state what was required of the utilities. indicating only the cost of Colstrip to Montana ratepayers on an accounting basis. [Footnote deleted] 19. 4 865b The Staff's assertion that Order No. DOCKET NO.8629 (this factor equals the 7 inverse of the product of 1. 4865. the Company claims to have converted its 1973 through 1987 baseload capital cost expenditures.2. Furthermore. to 1982 dollars.074 from page of 7 of the Company's compliance work papers dated February 25. It is the Commission's finding thcit this methodology is ?! logically unsound. -.. 1982). What this approach would yield is the cost of Colstrip #3 and 4 if it were built entirely in 1982. As stated in Finding of Fact No. 18.a rise in the general price leveli the re^il earning potential of investments. 20. Such a calculation was not suggested by any of the witnesses in Docket No.

" 21. A literal interpretation of the 19) Company's logic (Finding of Fact Nos. DOCKET NO. the Federal Energy Regulatory Commission defined "avoided costs" as: "Avoided costs" means the incremental costs to an electric utility of electric energy or capacity or both which.. 81. avoided costs are to be based on the costs a utility would avoid incurring as and/or capacity. 69. capital. issued in February of 1980. but for the purchase from the qualifying facility or qualifying facilities. costs in 1973 dollars are not best estimates of what it would cost the Company today to install an incremental kv.101(b)6) That is. of capacity. 18 and would lead one to believe it would be capital costs that in part occured in year 1973 and in 1973 dollars. ORDER NO. a result of a QF ' s supplying energy For example. Clearly the Company recognizes that prices for materials.. such utility would generate itself or purchase from another source. (§292. 22. etc. 4 65b J definition representing economic cost. In Order No. have not remained constant since year 1973. the question could be posed as to what exactly the cost would be to the Company of obtaining an incremental kw of capacity. a best estimate is reflected by use of constant contract year dollars.2. labor. . That is. The following example rectifies for the Company the meaning of "avoided costs.15. if the Company's forecasts indicate a one kw deficit in capacity in year 1990.

as soon as possible. ..that we take estimates in 198 9 dollars and add them to estimates in 1986 dollars and add tho. the v\7itness Dr.>ed belov7. The Commission finds the Company's baseload capital a cost calculation of $1245. is requested that the Company provide. 26.0. 4865b S 23. (Tr.e to I know of nobody estimates in 1981 dollars. B-lOl) who would make that suggestion. 198 2 response is tl^^ Company's decision to deviate from its own finding regarding a . 0/kw. This calculation appears to properly follow the intent of Order No. two copies of signed tariff pages reflecting this calculation.. the Commission requested the following: In my discussions with Jerry Rust he indicated a preliminary Colstrip 3 and 4 cost of $1596/kw resulting in a modified long-term energy rate of 5. 4865 (page 1 of Appendix B) in its It treatment of the historical cost stream. 81. Evident from the Company's May 14. 1982 correspondence with PP&L. The Commission derived a constant contract year estimate of $1598.and that is crystal clear in my testimomy -. p.15. using the Company's cash flow with AFUDC and PP&L's escalation/de-escalation factors. Pacific Power and Light 25..18jH5/kwh.2. Regarding the treatment of costs incurred overtime. descri}.DOCKET NO. ORDER NO.0 to underestimate constant contract year estimate by $353. In its March 29. I 24. advocacy staff's expert statements: Tom Power made the following certainly do not recommend -.

15. The Company has since corrected this problem and is reflected in the baseload $/kw estimate and the long-term energy rates in Schedule A. which reflects the Commission's baseload capital cost of $1598/kw. tariffs differ from the Company's in the value of the long-term energy rates. 4865b 10 $1596/kw capital cost estimate for Colstrip #3 and 4. the Company is directed to adopt certain previously submitted values for parameters used in deriving short and longterm energy and capacity payments. Schedule B details the assumptions used to As indicated below arrive at $1598/kw for a baseload plant. PP&L is to resubmit final avoided cost tariffs as The parameters and resulting tariffs sunuTiarized in Schedule A. In MDU s work papers complying with Order No. rather than use this estimate the Company simply adopted certain parameters including the $1245/kw estimate. ORDER NO. MPC is to resubmit final avoided cost tariffs as comThese puted by this Commission and summarized in Schedule A. ' .2.DOCKET NO. the Company did not separately discount 1984 and 1985 baseload capital cost expenditures. 28. Resulting Tariffs 27. (Schedule A) this value of $1598/kw approximates PP&L's correctly computed baseload capital cost estimate of $1596/kw. In a later finding in this Order. 81. . 4 855. from MPC. 29.

15.DOCKET NO.2. Variable/Utility . ORDER NO. 4865b 11 SCHEDULE A Input Parameters and Resulting Avoided Cost Energy and Capacity Tariffs. 81.

ORDER NO. 4865b 12 SCHEDULE B Calculation of Variable "a" For jMPC Cash Flow 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 .2. 81.15.DOCKET NO.

ORDER NO. the concern is for more concrete information on future energy/capacity payments in order to acquire loans from financial institutions. 4 86 5b 13 in this Schedule reflect PP&L's cost information for Colstrip #3 and 4 in constant contract year dollars. communication with both utilities and prospective QF's. become effective upon approval. Rates based upon levelized annual payments for both energy and capacity based . 32.DOCKET NO. it is evident to this Commission that much concern has emerged over some sort of tariffed alternate payment option. With regard to payment options. All utilities are to resubmit their respective final avoided cost tariff pages within five days. 81.2.15. Order No. i. These tariffs will PAYMENT OPTIONS 31. Thomas Power: Payment Arrangements Q. What options for payment arrangements should be provided to QFs? I would recommend that three options be provided by each of th^ utilities. 4865 allows 1) a QF the option to adopt either of the short-term or long-term standard tariffs. or 2) negotiate with their respective utility From recent an alternate avoided cost energy and capacity rate. From the QF's perspective. A. 30. Some payment options that QF's and utilities are free to arrange via negotiation were summarized by Dr.

33. They would vary from year to year. ii.upon the marginal energy costs actually experienced in the previous year or projected for the coming year. M. The capacity payment would be fixed in real terms but the energy payment would be based. DOCKET NO. 81. All payments would be fixed in real terms for the life of the contract. This proposal has two variants: (1) A fixed minJr. the Commission offers the following elaborations. The capacity payment would be increased each year by the general rate of inflation to protect its value.ium .2.15. and which the Commission finds acceptable. (Exh. 4 86 5b 14 upon projected avoided costs. Page 47) (i The first two of Dr.. ORDER NO. QF's may negotiate a fixed minimum rate with a utility. An annual adjustment for the overall inflation rate in the economy would be made to protect the purchasing power of these payments. iii. Power's proposed payment options ii) and are examples that QF's and utilities are free to negotiate Dr. First. To the above proposals which address the market failure problems QF's face in obtaining financing. 34. The levelized annual payments would have the same present value as the estimated avoided investment cost and operation costs over the life of the contract. Rates which had a fixed and variable component for the life of the contract. Power's third proposal is currently a standard tariff option. Rates which were based entirely on current marginal energy and capacity costs.

35. As the U. when published. 15.S. Power: I'm proposing that one estimate long-run incremental costs in current 1981 dollar terms and base the avoided cost rates on that.d rate of ('I'r. to refine the initial estimate. p.2. as indicated by the Consumer Price Index (CPI) . ORDER NO. In turn. inflation v/as each year.'-oided cost tariff may never fall below the initial floor. Department of Labor's indices are initial estimates. setting that avoided cost rate on a levelized basis in real purchasing power terms and then increasing it at whatever the actual experienc . 81. the final or "revised" index may be used later. A fixed minimuin rate may be negotiated that is annually adjusted for the previous years rise (fall) in the general price level. A QF may also negotiate a levelized or front-loaded. and I also suggest an option similar to what Pacific and Montana Power have both proposed. As with (1) above. 4865b 1'3 rate may be established that equals the initial year's standard tariff for long-term energy. In fact this is just one procedure a utility may use to derive a fixed minimum rate. i^ contract with utility. Under no circumstances would the (2) rate ever fall below the initial fixed minimum. Such a contract would make use of standard capital recovery methods in levelizing capital costs. . a levelizing arrangement that would load more the payments at the front end or something that I think has some attractive features. an annual inflation adjustment may be used v/ith a levelized tariff as suggested by Dr. 1^ -i:!9) .DOCKET NO. a latter year's av.

over the life of the con1) tract. over the life of the contract. DOCKET NO. over the life of the contract. . tions discussed above. the present value of the 5) projected inflation [Curve C minus Curve A] is levelized over the life of the contract and added to the initial year standard rate [Curve A] resulting in Curve D. . 4) the QF is paid the initial year standard rate plus a negotiated level of projected inflation [Curve C] A Icvelized payment. 2) A fixed payment. Schedule C provides a graphical summary of payment opIn summary. the QF is paid the standard rate which varys from year to year [assuming no real inflation in the cost components used to compute standard rates. 3) the QF is paid the initial year standard rate plus the previous year's inflation [Curve B] A fixed payment. where. the Commission has indicated five payment options which it finds acceptable: The standard rate. Curve B v/ould represent this option]. where.2. the QF is paid the greater of the initial year's standard rate [Curve A] and the actual standard rate. ORDER NO.15. 81. 486 5b 16 SCHEDULE C j^/Kwhr 1982 TIME 2012 36. v/hero. where.. over the life of the contract. A fixed minimum. where.

15. 38. it is the "conservation adder" recently granted in the equity returns of both MPC (Ordc( No. Lastly. which is at stake. 45) and PP&L (Order No. Initially. 1982 and MFC's letter of April 26. the Commission will use such evidence in considering whether utilities are providing adequate service at just and reasonable rates. lack of good faith. Finding No. ORDER NO.2. 1982. The Montana Commission holds that utility failure to actively pursue QF contributions to their resource base. . 39.ration when setting rates of return and approving issuances of security used to finance the construction of conventional thermal units. 33) 4775b. 81.ed by all three utilities commendable. The Commission finds the working session efforts initial. It is with PP&L's letter of May 14. 4881a. via negotiated terms of contract through 36 service. 4865b 17 37. that this Commission finds a possible The Idaho Public Utilities Commission has taken the same problem into conside. — as discussed in Finding Nos. the Commission wishes to point out that the process of establishing final tariffs complying with the method- ology set forth in this proceeding has been frustrating.DOCKET NO. Further it finds that MDU has been relatively cooperative in addressing the compliance concerns of the Commission. 33 — to constitute failure to provide cost effective To the extent the evidence in future proceedings does not demonstrate that the utilities have in fact vigorously pursued such contracts. Finding No.

In addition to reporting each contact made. The objective of encouraging cogoneration and small power production is promoted by the rates and terms and conditions established by this order. The Commission welcomes additional information that will aid the Commission in analyzing the individual efforts of each utility in encouraging QF contributions to a utility's resource base. 97-617. 92 Stat. Pub. the Commission directs the Companies to submit one copy of the completed contractural agreement with each QF.2. Montana-Dakota Utilities Company. 4. 69-3-103 and 69-3-603.5. 3119 (1978).DOCKET NO. The rates the Commission has directed the utilities to file are just and reasonable to Montana ratepayers as they re- flect each utility's avoided energy and capacity costs. Montana Pov7er Company & and Pacific Power Light Company are public utilities within the meaning of Montana law. . Section 210. The Commission properly exercises jurisdiction over the rates and terms and conditions for the purchase of electricity by public utilities from qualified cogenerators and small po-'cr producers. MCA.35. ORDER NO. L. 3.1908(1)]. CONCLUSIONS OF LAW 1. 81. 4865b 18 40. MCA. 2. Sections 69-3-102. The Companies are reminded of their obligation to provide information to the Commission regarding their initial written response to each prospective QF [ARM 38. Sections 69-3-101 and 69-3-601(3).

or upon the passage of ten (10) days following the filing of that motion. Sec. 81. and Commission Rules of Practice and Procedure. DONE IN OPEN SESSION this 21st day of June. cf. :i .y3 from t!ie service of this orcier. ELLIS. 38. v/ithin thirty (30) d^).2. S0iNEIDER.15. 4865b 19 ORDER Each utility is to submit their respective tariffs as listed iji Schedule A within 5 days. esp.ill become effective upon approval. (SEAL) NOTE: You may be entitled to judicial review of the final If no Motion fox" Reconsiddecision in this matter. Commissioner ATTEST: / A^aLi^^ /LC^ :< Ma^te^ine L. these tariffs v. Cottrill Commission Secretary . MCA. I a Motion for Reconsideration is filed.4806 AR^l. a Commission order is final for purpose of appeal upon the entry of a ruling on that motion. 1982. by a vote of 3 - 0. HOWARD L. judicial review may be obtained by filing a petition for reviev. ORDKR NO. eration is filed. esp. the Montana Administrative Procedure Act. Conutiissioner THOMAS J.DOCKET NO. BY ORDER OF THE MONTANA PUBLIC SERVICE COMMISSION. 2-4-702.2.











the general public is using more dead and waste timber as a source of fuelwood. high value products such as lumber and timber suitable for from their In plywood. Energy costs have escalated rapidly in recent years. the immediate future the industry will use increasingly substantial volumes of lower quality dead and waste timber forest residue — usually referred to as — for wood fiber products such as pulp and paper. a fuel source that had been more or less abandoned by the early 1960s. Many people are returning to wood for home heating. At the same time. Residue manufacture (mill residue) was used for wood fiber products and fuel. Until very recently the forest products industry's needs have been supplied almost entirely by harvesting sawtimber. and for industrial fuel. And despite it will the industry's depressed condition during the recent recession. It provides jobs for thousands of Montanans. both the industry and the general public have increased their use of wood fiber. continue to provide a very large part of western Montana's economic base. Lenihan The wood products industry is the backbone of western Montana's It is the only economy. Over the past few years. Ten years ago there was . These shifts are leading to a potential conflict among users of dead and waste timber from Montana's forests. This increased use has greatly increased the demand for dead and waste timber.WOOD FOR FIBER PRODDCTS AND FUEL A DIMINISHING SUPPLY? By: Charles E. sizable basic industry in some counties west of the Divide. Keegan and Mary L.

All these developments greatly increased industrial demand for wood fiber. . and the manufacture of wood fiber products may find their supply dwindling and prices increasing. steam generation. will have to come from increased harvesting of forest residue. and a New fiberboard and particleboard plants were paper pulp and mill greatly energy expanded costs its production most a capacity. both for fiber products and fuel. This manufacturing or mill residue will continue to provide the major source for industrial wood fiber users. it Measured against the available supply that there may be a shortage that is clear could affect both types of users. if it is to be satisfied. very recent increases have caused the projected demand for mill residue to exceed the anticipated supply substantially. This mill residue shortfall. However. In addition. Until now. increasing forced major fuel primary wood products manufacturers to shift to wood fiber as source. built. Now Montana residents and industrial firms that rely on wood for heat. the preferred and virtually the only source of wood fiber for these users has been residue from lumber and plywood production. both Conflict may occur as the industrial and home users attempt to harvest most readily accessible components.virtually no competition between home fuelwood and industrial users. The Bureau of Business and Economic Research at the University of Montana recently assessed both the industrial and home firewood user demand for wood fiber in Montana. Industrial Demand for Wtaod Fiber The wood products industry in western Montana changed considerably over the past ten years. of dead and waste wood.

We used three major sources.4 million cords for the remainder of the 1980s. which is equivalent to approximately 2. we have projected industrial demand for wood fiber and considered the probable demand for home use. the we estimate of that the annual industrial wood pulp. and industrial fuel in Montana will be just under 2. These projections cover the years 1983 through 1990.^ . To assess the potential shortage. Then we looked at the portion that will have to come from forest residue.1 and be plywood production levels. All wood fiber 4 volumes have been translated into cords. Hcane Fuelwood Demand Projecting demand for home fuelwood is more difficult because of the very large numbers of small users. 380 Department of Energy cords of estimated that in 1981 Montanans used thousand home . approximately million cords will available in the form of mill residue. Based on projected lumber 2. needs manufacture particleboard. The U.150 pounds of wood fiber (oven dry weight) Using fiber these for sources.S.^ This means that 300 thousand cords will have to be supplied by other sources. note its That survey asked each forest products manufacturer to fiber the annual use of wood Another source is residue from sawmills and plywood in plants. utilization 2 conducted with jointly industry Bureau the Forest Discussions and Forest Service personnel comprise the third source. First we examined the estimated wood fiber demand for uses other than plywood and lumber production. cooperative by the research work and forest residue Service. fiberboard. feet by 4 A cord is a stack of logs feet by 8 feet. One is an industry-wide census sponsored jointly by the Bureau of Business and Economic Research and the Forest Service. paper.

we have a total annual demand for 680 thousand cords of dead and waste timber. increasing competition for wood 380 We will use the 1981 1983 figure of thousand cords as the annual demand for the years through 1990.9 million cords. This considerable volume.^ fuelwood. let us compare this projected demand to Montana's commercial sawtimber harvest for the ten-year period 1972- 1981. based on availability and removal costs: o Logging residue dead wood or low quality green wood left over after logging operations — . projected industrial and home fuelwood demand for dead and waste timber it will be necessary to harvest an additional volume equal to 20 to 25 is a percent of the last ten years' annual sawtimber harvest.1 billion To meet the board feet per year. To provide some perspective. is It also includes small trees that will not be of sawtimber quality when mature. We based on user surveys and data from the 1980 Census of Population. This not of includes any wood fiber material in commercial forests that high enough quality to be sawtimber. Forest residue can be broken down into the following components. Supply Is there wood available to meet this need? The demand for all or some of the 680 thousand cords will be supplied by forest residue. Among those people we contacted there were mixed opinions concerning future home fuelwood use. to the We feel such use is peaking now due fiber. These estimates are similar to some the Bureau made earlier. or approximately 2. Adding this to the 300 thousand cords for industrial use that will not be supplied by mill residue. The harvest in Montana for that period was just under 1. feel they are reasonably good estimates.

we estimated that nearly 840 thousand cords of logging residue. sound enough and large enough to be handled by conventional techniques. In seemingly infinite supply becomes more fact. Industrial demand for nonsawtimber wood fiber is centered in west central Montana. live trees in overstocked stands Untreated slash from previous logging operations Dead or other "cull" {low value) material on scheduled for logging or stand improvement. should be available annually in Montana. sites not If one looks at the total estimated volume of this dead and waste timber in Montana. the potential supply is enormous and greatly exceeds the demand for nonsawtimber wood fiber. but it appears that the statewide supply might be sufficient to meet statewide demand. there may not be enough wood fiber available to meet the demand in fairly large areas of the state. is There geo- one catch: unfortunately. Dead and waste timber material from current logging sites — logging the residue — is the first choice of industrial users and one of top choices of home firewood users. through conventional sawtimber harvesting techniques. we estimate that approximately half the . given conventional harvesting methods. limited.o o o Small. Based on projected harvest levels. But when we begin to examine a such factors much as accessibility and cost. the demand is not distributed graphically in the same fashion as supply. that component and see if Let's examine the supply available from this supply is sufficient to meet statewide demand.^ Some of this would be too expensive to recover. of the volume of logging residue that might be available at various costs. The Bureau of Business and Economic Research has made some rather detailed estimates annually. In fact.

This may cause supply problems in the near . assuming they could get it all (which is unlikely) a This leaves in shortfall of 100 to 120 thousand cords. a number of forests located east of the Continental Divide have estimated firewood cuts well in excess of the commercial timber harvest. major cord processors as a Missoula price. result. Expanding the haul distance might raise the total available to almost 240 thousand cords." Missoula larger area users. a 100-mile In haul distance of case. approximately twoone-third by thirds will be needed industrial with home fuelwood users. then. users. both industrial and home. future. will in require a share of the total wood fiber the supply than users As in a most other is timber-producing parts of state. Missoula area users will be forced to incur higher removal and delivery costs since they'll have to use those components of the forest residue resource that are more difficult to obtain. In some other parts of the state the situation is similar. to need. To their demand.expected demand for forest residue in the state is in Missoula County and its surrounding area (Figure 1) . Evidently. For example. Our estimates residue indicate be that approximately annually. Of the 340 by thousand cords. the 170 thousand cords of logging will available at a reasonable in price. This is barely what industrial users expect . within County. We estimate this demand to be 340 thousand cords annually. compared with the total statewide annual demand of 680 thousand cords. west for central Montana and the future demand use for nonsawtimber exceed the wood fiber industrial home fuelwood may readily accessible supply by a large amount. though on a smaller scale. a this we used $65 per cutoff relatively high price considering the uses. there greater satisfy potential for conflict between users western Montana.

of the firewood currently used is gathered with free use Were landowners and managers operating strictly to maximize they as dollar returns. use. fuelwood side? First of all. will probably continue for some time. This would entail using harvesting techniques that. And we feeling this happen. Most permits.One way to solve this shortfall problem is to begin utilizing components of forest residue other than those currently available in the course of conventional logging operations. The supply/demand relation- ship will mean conflicting demand for a limited supply of wood fiber. However. is Champion International of already utilizing relatively large volumes to small timber from thinning and stand conversion operations meet industrial fuelwood needs at its pulp and paper mill. we expect that there will be a great deal more commercialization of home fuelwood harvesting. In Montana. general that public relations and political factors will slow the rate of fuelwood commercialization on both public and industrial private lands. would attempt to recoup think is as much of will their lands to a fuelwood value degree. Implications for Osers and I^nd Mcuiagers If it is not economically feasible to harvest small stems and other previously unutilized components of forest residue for fiber products and fuelwood. . they the could. Home fuelwood users . Free use or low-cost permit fee in such as the recently announced $10 certain sections of Northern Region National Forests. while not new to the forest industry. the tendency lately has been to use more small stems from overstocked or improperly stocked stands. have not been commonly used in the northern Rocky iMountain area. there may be some problems. what might happen on the home No matter what is done to develop new harvesting tech- nology.

that one or more of these plants could close as their current wood fiber contracts expire. It's possible. the sawmills and houselog sectors industry might suffer as the pulp and paper industry and home fuelwood users compete for the lower quality sawtimber supply. As the firewooder finds that wood is becoming more difficult he will become more willing to pay for it. especially in heavy use areas. Industrial users . of the In addition. though. There are fiber product plants in the state with relatively low value use for wood fiber. This competition could lead to a shortage of raw materials and resuting reduced operating levels in the pulp. and particleboard sectors. sawmills will receive more revenue for their wood fiber residue. f The supply of timber physically available to the home a irewooder with only chainsaw and pickup will become greatly reduced in some areas. paper. It is possible that we could see plant closures if new wood supplies are not developed. more and more commercialization is coming and home fuelwood is going to become more expensive. These plants probably cannot afford to use any roundwood at all and may not be able to compete as mill residue prices increase. . to gather. increased competition A mill that will cause benefit. such as small steams. fiberboard. then. because more expensive components of roundwood.Physical constraints may also lead to increased commercialization of home fuelwood. If little or only limited success is achieved. we foresee various competition for nonsawtimber roundwood. We expect that within the industry wood fiber This will happen costs will increase both for use as fiber and fuel. for is will have residue to be utilized and prices to because increase. Whatever the reason. The present structure industry and normal operating be levels of if Montana's successful forest products will probably maintained techniques are developed to harvest additional wood fiber economically.

We do want to point out. we will have a substantial and consistent market for dead timber and small stems. that in many is parts of Montana increased utilization of forest residue just a matter of a wood fiber resource that is unutilized. we In Montana a have never had a consistent pulpwood market. despite recent price increases. Commercial fuelwood harvesting has been low volume and in much of the state's timber-producing region. The land management agencies. concerns energy use. This should allow many stand treatments that were not economically feasible in the past. we are optimistic about the potential for more is fully utilizing our forest residue resource. The wood fiber there. a no longer Rather it is matter of an increasing demand of wood fiber that will require new harvesting techniques to satisfy. Despite some of these rather negative concerns. sporadic. Now.An additional ramification If of the supply /demand relationship increases. Both public and private land managers should benefit from the upcoming demand for nonsawtimber roundwood. and universities in this region have all given the problem high priority. the forest products industry. . market. let alone home or industrial fuelwood Pulpwood has been harvested only in recession years. Land mcinager s . though. the price of dead and waste timber industrial users may find other fuels becoming more competitive.

Montana: University of Montana. August 1980. . FOOTNOTES ^Industrial demand is based on projected plant capacity. ^Both of these Forest Service Ogden. 1982) Localized home fuelwood demand is based on 1980 U. utilization was Sciences Lab in handled through Price was not projects were completed under the sponsorship of the Intermountain Forest and Range Experiment Station in The cooperative research work on forest residue handled through the Intermountain Station's Forestry The cooperative research on mill residue was Missoula. the Forest Survey Unit of the Intermountain Station. D. Utah. White. Keegan III. The Cost and Availability of Forest Residue in the Northern Rocky Mountains (Missoula. Bureau of Business and Economic Research. "Estimates of Wood Consumption from 1949 to 1981.S. Keegan III and Randle V. Business Quarterly 17 (Winter 1979) These estimates have been updated based on a 1981 census of the industry and discussions with industry personnel. considered in this analysis. Census of Population data and user survey data obtained from the Montana Power Company.C. Throughout this report. "Forest and Mill Residue in Montana and the Potential for Major Manufacturing Plants.). Department of Energy.S." (Washington.. ^Charles E. ^The demand and supply figures are based on estimates presented in Charles E." Montana 10-18. . : ^U. 1981) ^The localized industrial demand was estimated from the Bureau's Montana Forest Industries Data Collection System (unpublished data. home fuelwood demand is an estimate of expected consumption.

2. The discussion in this paper will deal with the collecting and transportation costs of logging and forest residues. roundwood for wafer and flake- board manufacture. limbs and unmerchantable logs or pieces from trees harvested for primary forest products. Paper products are prime example of a product manufactured from residues. planer shavings for animal bedding. The major obstacle to the use of log- ging and forest residues for energy purposes is its availability and cost of gathering and transportation. In addition.COST OF COLLECTING AND TRANSPORTING WOOD RESIDUES By John A. both live and dead unmerchantable trees. piling. poles. Forest residues consisting of pole size timber which need to be removed to improve the growth of residual crop trees. Combes Introduction: Wood residue consists of that portion of the woody biomass which will not be manufactured into a primary forest product such as lumber. 3. plywood. and barkdust for flower gardens are other examples of uses for wood residues. Logging residues consisting primarily of tops. or similar products. Firewood. Wood residues are broken down into three categories: ft 1. Residues (mill residues) from the manufacture of primary products. This does not mean that residues a are not used in the marketplace. and downed material are included. .

150 million board feet of timber is harvested annually of which half is logged from National Forest lands. Availability: Logging and forest residues as a potential resource for use in the generation of steam and electrical energy from the forests of Montana is first discussed: 1.000 cunits of material annually. 1 cunit equals approximately 2. are skidded to the log landing such as commonly done when harvesting is done with mechanical faller-bunchers and grapple skidders. B..2 bone dry tones (bdt) The availability of logging residues is dependent upon several factors including the demand for primary forest products which dictates how much timber is harvested and residues generated annually. Other factors include the accessibility of residues to the log landing or road. One cunit equals 100 cubic feet of solid wood. For the species of Montana. Other factors which affect the availability of logging residues are whether the tops and branches. Gathering residues with ground lead or skyline cable machines on steep terrain results in the logging residue becoming more economically inaccessible than when it is found on favorable terrain where skidders and log fowarders can readily operate.400 pounds of wood on a bone dry basis or 1. while still attached to the merchantable log. The total volume of logging residue generated from the harvest of timber is nearly 700. . Another important factor is the distance the logging area is from the area of potential use of the residues. Logging residues: An average of 1.

part .ie Forest residues are the most expensive and therefore. rails.There is a tendency for residues in the form of roundwood to find its way into the pulp and paper market when the demand for lumber and plywood products is depressed. 2. For example. The demand for firewood. the demand for such material in 1983 is nearly nonexistent since the market for primary wood products has markedly improved. hog fuel for pulp mills.000 tons comes from Western Montana. least economically available residue for bio-energy or other uses. resulting in a greater production of mill residues for use in the pulp and paper industry. small timber and logs for tree stakes. corral poles. many cull logs were harvested. posts. during the years 1980 - 1982. and pulpwood places residues from both logging and forest thinning operations on a competitive basis. Sometimes under thinning contracts. fuel. the costs of making forest residues available is usually borne by the end product value of the residue itself.000 oven dry tons of logging residue generated in Montana annually of which 200. The major cost of making logging residues available is borne by the value generated by the primary product. In conclusion from an economical standpoint. This brings us to the point of competition for wood residues. for use as a commercial there would be approximately 230. Forest residues: t. However. However. hauled and chipped for pulp manufacture.

5 cunits of forest residues per acre. Of the areas that are accessed. Forest residues must be located relatively near. only about 45 percent of the commercial forest lands in the National Forests of Montana are accessible. In areas of insect killed timber and thickets of suppressed lodgepole pine. The most significant factor concerning the availability of forest residues is access. At the present time. The total forest residue available for bio-energy or other products from the commercial forest land of the National Forests in Montana is estimated as follows: Million Cubic Feet Pole timber Cull trees Sound dead trees 1. as an example. on the average. Down trees Total This.of the cost in delivering the residue is offset by the funds received for performance of the contract from the contracting agency or company. whereas the residues would most likely be least in stands of sawtimber. to existing roads in order to be economically available. probably no further than 500 feet. most likely less than . equals a little over 12. the forest residues would be above the average per acre.

The answer to this question is generally no. The Forest Service. the residues having commercial applications would be material with a small end diameter of 3 inches and larger. reasons for this are twofold. Another question arising is whether a user of wood residues could contract for logging or forest residues on a long term basis. approximately 2. of the 10. skidding or yarding and transportation. . Therefore.310 million cubic feet of forest residues available on commercial forest lands. Cost of Collecting and Transporting: The major cost factors affecting the removal of residues is the falling and bunching. twigs. The majority of the forest nutrients In reside in the needles. providing suitable markets exist. Second.half of the forest land is economically available for collecting forest residues. general. the ever changing economic. and most other public land The prime owners do not sell forest products using long term contracts. the competitive nature for forest products preclude the tying up the resource for only one user. resource and environmental standards result in contractual stipulations being outdated in relatively short periods of time. and the smaller portions of the limbs.500 million cubic feet would be economically available. » C. The question arises whether removing logging or forest residues removes the nutrients from the forest floor. First.

In the lodgepole pine and second growth forests. . the use of faller-bunchers in conjunction with grapple skidding or forewarders results in most of the logging residues being taken to the landing attached to the sawtimber or trees to be manu- factured into primary forest products. of the material using cable systems. Skidding refers to the gathering of woody material and transporting it to the landing or concentration area using rubber tired or tracked skidders. Yarding refers to the gathering The latter is usually done on slopes over 35 percent and swampy terrain. Conventional skidding tech- niques using chokers usually results in most of the residue being left in the woods. Mechanical faller-bunchers are the most efficient means for felling and bunching forest residues although the use of power saws with bunching done with winches is also quite efficient. New techniques in prebunching trees using small radio controlled winches can materially reduce the cost of gathering or bunching trees for later transportation to the landing by use of grapple skidders on the more gentle terrain or cable yarders on steeper terrain. 2. Skidding and yarding: The cost of skidding or yarding varies in accordance with many factors. Skidding techniques used in harvesting timber for primary forest products varies significantly. The latter method is adaptable for handling small trees on steep terrain. Falling and bunching: This process would be associated with the gathering of forest residues if such residues have not been readied through a timber stand improvement contract.1.

the residues normally average 50 percent moisture content. a great deal of water is needlessly transported. landing for the reduction of heavy fuels on the forest floor. 4. density of . In addition. This substantially reduces the cost of acquiring logging residue from the residue user's standpoint. the use of prebuncher winches to bunch material into skyline corridors would be the most cost effective way. amount of compaction in the van. In summary. consisting of using ground lead yarders or skyline machines usually results in most residues being left in the woods. 3. The transportation cost per BTU for logging or forest residues varies with the moisture content. Handling and chipping: The transportation of residues from the landing or concentration yard would be most efficiently done by chipping and blowing the residues into chip vans. Many times. Large material consisting of dead and cull logs would normally be hauled on log trucks and processed through "in plant" chipping plants. On steeper terrain. particularly on public lands.Cable yarding. Therefore. the most economical way to gather forest residues would be by using small faller-bunchers or prebuncher winches in conjunction with grapple skidders and forewarders. The handling part of the operation primarily consists of feeding the residues into the mobile chipper. Transportation: Wood residues are bulky and from the fuel standpoint have low BTU values per unit of weight as compared to other conventional fuels. the logging contractor may be required to skid or yard the larger pieces of residue to the.

and inorganic contaminants mixed in with the residue. As a rule of thumb. A constraint to hauling residues from many points in the forest relates to the ability of chip vans to negotiate the forest roads. the average haul should Costs can vary quite dramatically as demonstrated from the above discussion. be no more than 40-50 miles. the following scenario is developed using costs on a 1981 dollar basis: . This would be in addition to the variation of cost due to haul distances and types and grades of roads on which the residues are hauled. Economically. 75 miles should be considered as the maximum haul for logging and forest residues.the wood (varies by species) . To give some idea of the cost of delivering wood residues to a point of use for energy purposes. Many of the access roads to landings and potential sites for concentrating forest residues are not designed to handle commercial chip vans.

/ Handling and chipping 16.00 $41. The cost per BTU can readily be figured using 8.00 13.00 Transportation (50 miles) 15.Dollars per Oven Dry Ton Forest Residues Logging Residues Skidding Skidding Yarding Yarding Felling and Bunching Skidding or yarding $32.00i/ 16.500 BTU's per oven dry pound or 17 million BTU's per oven dry ton.00 28.00 $47.00 $10.00 17.400 BTU's per pound.00 !_/ Assumes that a certain amount of the material to be skidded or yarded to the landing is attached to saw logs or peeler logs.00i/ $16.00 $82. .001/ 15. 2_/ Assumes larger pieces of cull or dead material is hauled intact to the delivery point for chipping with an "in plant" chipper. If costs are developed the energy derived is approximately 6.00 $92.00 $35. on a green weight basis.00 13.00 20.00±.00 20.

Conclusion: The cost of collecting and transporting logging residues is dependent upon its availability. and the characteristics of the residues itself. This is accomplished by giving the purchaser of National Forest timber a credit against stumpage payments for gathering and transporting the residues. characteristics of the area from which it is harvested. The cost of delivering residues is higher than the delivery of conventional fuels in Montana and most other western States. are the least costly to deliver although they nay be the least available of the residues because of competing uses and market fluctuation of the primary products. If mill residues are available. The credits to the purchaser cannot exceed the value received for the residues plus the value of the slash reduction benefits to the Forest Service. Mill residues. although not discussed in this paper. no monies have been appropriated through fiscal year 1983 to implement the provisions of this act. The major advantage of wood residues for energy purposes over conventional fuels is that it is renewable. Unfortu- nately. . a mix of mill residues with logging and forest residues can significantly lower the delivery cost of the fuel.10 The Wood Residue Utilization Act of 1980 (Public Law 96-554) was enacted to help offset the cost of delivering logging residues to a point of use for energy purposes.


m .

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Its Is. CODEN: ENEYDS. June 1980. . New York. Inc. and Oxford. Houston. February 26-28. . .. Boon in. Los Angeles. 1979. Michael W. On-site Stephen H. Final Cogeneration Feasibility Studv McGaw Pharmaceutical Laboratories. David M. May 15New York. Report #GAO/EMD-80-7. August 1980. Harkins. . Published by IEEE (Cat N 79CH1419-1 lA) 19. Pennsylvania Public Utility Technology Energy February 26-28. Volume 4. New York. V45. 1979. May 1980. December 1979. Feasibility Of Cogeneration District Energy System For Oakland City Center Project Available from the California Energy Commission. D. Burch. Feasibility Of Cogeneration Energy Supply For Oakland Airport California Energy Terminal Available from the Facilities Commission. International Conference on Energy Use Manage. 220 pages. Pennsvlvania.C. H. Strategies For Scheduling Power MIT. Commission.C.L. 1979. . P43. Energy and Minerals Division. Goldman. Conference Rec Annu Pulp Paper industry Tech Conference Pittsburgh. . Return On Effectiveness And Its Applications To Cogeneration Presented at AGA/EPRI/MCA/Gas Research Institue Sixth Conference.C. pages 1563-1578..P. Original contains (411722) color plates: All DTIC/NTIS reproductions will be in black and white. Texas. November 1979. Heat Recovery In Cogeneration Systems Changing Energv Use Futures. Techniques For Evaluation Of Advanced Cogeneration TechnoPresented at AGA/EPRI/NCA/Gas Research Institute Sixth logies Energy Technology Conference. . Cogeneration Feasibility Studv At The Palo Alto Subregional Water Available from the California Energy Quality Control Plant Commission. CODEN: CRCFDZ 1979. . Plants Producing Both Heat and Electric Energy Massachusetts Energy (Oxford) V4 N6 pages 1033-1051.. pages 106-114. . October 22-26. Nil. .. Report to the Congress. (5). . Diesel & Gas Turbine Progress.. . Cogeneration Systems For The Pulp And Paper Industry Power System Eng. New York. Available from the California Energy Commission. John L. — - . . .. England. Januarv 1981. Washington. page 354. CPA . . It Industrial Cogeneration What It Potential. April 29. Ind. 1980. Washington. cage 152. 1979. E. for Energy Management Corporation. California. Golay.I. Energy Systems Planning. . (7) . (2) .. D. 1979. How Works.. Steven B. Dale H. General Electric Corporation. Published by Pergamon Press. Peak Shavings And Cogeneration In The BO's Power Consultants.S. Cambridge. Brown. Boyen. 2nd.. General Accounting Office Washington D.

CODEN: ASMSA4 Stone & Webster Eng. February 26-28. New York and Oxford. September 26. England. . Hugh. Staples. Los Angeles. 1979. Washington University. Industrial Coqeneration: Problems And Promise . And Solar Heat Sources Report #CONF-790383-1. Submitted to EPRI October 1981..R. 1979. . . . New York. Limaye. San Diego. Cogeneration Utilized In Retrofitted 'J^/AC System Specif Eng V41. D. N4. Byproduct Power And Waste Energy Recovery Presented at AGA/EPRI/NCA/Gas Research Institute Sixth Energy Technology Conference.. D.C. . . Closed-Cycle Gas Turbine . 16 pages. . Allen S. Kennedy Anl. Nuclear. . Steiner. McDonald. Chinmei. Small Cogeneration Plants Have Large Potential Changing Energy Use Futures. Closed Draft Lee. Missouri. Scott. New York. .B. Pferdehirt. New Jersey.. 2nd. . Montgomery. January 23-25. L. D.. Cogeneration. Milan. . Cherry Hill. Michael J. Meckler. 8 pages. V4. . Corp. California. (7). . 71 pages.. McConnell . Norfolk. Energy (Oxford) V4 Nl. Virginia. Inc. Lockwood. C. Industrial Cogeneration Methods Of Measuring And Improving E Economic Merit ASME Paper N 79-IPC-Pwr-l for Meet December 2-7.M. pages 58-64.. 1979. Gordon W... pages 101-117. Keller. Forty Years Of Experience On Closed-Cvcle Gas Turbines Ann Nuclear Energy. Italy. 1978.Icerman. Kline.C. Newport Beach. ASEA. 1979. CODEN: SPENDR. Methodology For Evaluation Of Cogeneration Projects Paper presented at the National Fuel Cell Seminar. . KPFF Consulting Engineers. Contract EY-76-C-03-0167 Conference on energy conversion and solar energy. Washington. Prospects And Problems Available from the California Energy Commission. . 1979. Raymond M. . Inc. General Atomic Co. California. CODEN: ENEYDS February 1979. . 1979. International Conference on Energy Use Mange. . April 1979. Wayne P. Tucson. Gershon Meckler Associates. pages A94-A101. May 1980. Gershon. *Department of Energy./et al Technology for Energy Conservation Conference. Neal. D. California. . Conceptual Design And Evaluation Of A Process Market Pulp Mill And Its Cogeneration Systems Report. Bottoming Cycle Cogeneration.. . V5 N8-10. .. St. Washington.. October 22-26. Louis. 1979. ASES Inc. R. Evaluation Of Alternative Steam Sources For Industrial Cogeneration ASME Paper N 79-ICP-Pwr-2 for Meet December 2-7. June 1979.F. G. White Plains. Published by Pergamon Press. (12). . Melick. June 1981.A Proven Cogeneration Plant Adaptable To Fossil. page 93.. D. West Energy Consult. CODEN: ANEND. Curt. A Method For The Preliminary Feasibility Analysis Of Community Energy Systems Presented at information Transfer Inc. page 392.F. pages 405-422. r.

EC-77-A-31-1062.. Illinois. Paper presented Philadelphia. April 1. 1979..C. The Potential For Report prepared Development By 1990 Energy. Oak Ridge National Laboratory. Barna. N5. Chicago. Ohio. October 22-26. California. Sagerman. Sinclair.. Inc. page 517. 1979. Massachusetts. February 26-28. Cleveland. pages. Pickel.J. *Department of Energy. 1979. Lewis Research Center. Burns.C. ITIACR. page D. Transfer Considerations In Standby Generator Application IEEE Trans Ind Appl V IA-15. 1979. . February 26-28. Why Did The Role Of Cogeneration Diminish? Washington. pages 560-569. Rawling. Problems Of Piping Networks Supplied From Cogeneration Power Plants ASiME Paper N 79-PVP-66 for Meet UN 25-29. 1979. Chris S. Energy Frederick H.C. An Assessment Of Current Issues Regarding Presented at AGA/EPRI/NCA/Gas Research Institute Cogeneration Sixth Energy Technology Conference. D. 1979 Company. Washington. page 23.. . X'Jashington. R. 1979. Schwartzburg. 1979. VI. North Wales. Solt. Cogeneration With IFCI Utility Demand Control Employing Error Adaptive Techniques at lECI 1979 on: Annual Conference Proc 5th. 1981. WestingSeptember-October 1979. Inc. Inc. 2nd. ENTED9 MIT. Gorges. of Control Appl and Ind Published bv IEEE (79CH1444-9 19-21.. .A.. Energy And Cost Savings Results For Advanced Technology Systems From The Cogeneration Technology Contract Report No.. Microprocess... . Pennsylvania. 9 Research Institute Cogeneration Workshop.Nochumson.. G. J. 1979. CODEN: VI.). Cambridge. Leeds & 93-98. July 31. March lACPDC. Pennsylvania. CODEN: . . H. Charles W.. Industrial Cogeneration for the Department of Ross. . . . William E. New York. Northrup . (GKCO Consultants) and (Vineta. Technol Proc Energy Technol Conference 6th. Los Angeles. Washington. 1979. Analysis Of Industry/Utility Shared CogenPower Electric W-7405-ENG-26 Contract Benefits eration Texas. Oliker. Oradell. 8 p. Burns & Roe. Charles. D. Published by Gov Inst. .J. . Economic Aspects Of Heat Supply From Existing Power Plants In Energy Technol Proc Energy Technol Conference 6th..K. CODEN: lECI). International Conference on Energy Use Manage. ENTED9 Burns & Roe. CODEN: house Electric Corp. NASA-TM-79213 Alternatives Study (CTAS) National Aeronautics and Space Administration. page 361-37. . 138-15.. Inc. Orlando. John R. . A. Resource Planning Associates. . (17). D. The USA Published by Gov Inst. I. Alternative Cogeneration Systems Using Gas Turbine Engines Changing Energy Use Futures. New York. C. . N. 1979. February 26-28. G. San Antonio.D.C. ..

MA. GE Schenectady. Bala-Cynwyd. Wilson. California. V 101. ISSN 0025-6501. Gary S.S. . Cyril Theccanat. V4. .. . . . . December 1979. Cambridge. N 8. Los Angeles. . Northwest Regional Cogeneration Potential A paper delivered at the Thermal Power Conference. Washington. Pullman. 1979. pages 75-78.. V PAS-99. September Contract EM-78-C-01-4300 1979.. 1979. April 1982.C. Michael W. B. M. New York. Studv Of Pacific . October 22-26. and Oxford. Stephen Yerazunis. D. CODEN: TAPPAP. NORTHWEST RELATED Anderson. November 1979.? Energy (Oxford). CODEN: 6. Schenectady. New York. Pennsylvania. Cogeneration Data Base mitted to EPRI. April 1979. July 1980. Kovacik. Was... TRW. Inc. New York. (Proceedings are forthcoming. Cogeneration Feasibility Study For The City Of Los Angeles Civic Center Municipal Buildings Available from the California Energy Commission. New York. Cogeneration An Effective Use Of Energy Resources Changing Energy Use Futures. . . September 1981. 526 p. ENEYDS. August 1979. Waltham. Western Energy Consultants. Inc. *Department of Energy. Progress Report On A Northwest Cogeneration Potentials. Martin Beckner. Synergic Resource Corporation. and Oxford.. James Sergison. pages 1520-1527. Bonneville Power Administration. Frank E. San Diego.. Draft Report sub- Industrial Cogeneration Optimization Program Final Report. January 1980. . Washington. Analysis Of Electrification Alternatives To Oil Fueled Low Pressure Boilers In The Commercial Sector IEEE Trans Power Appar System. GE.) November 1978. . . Synergic Resources Corporation. MIT. Massachusetts. N 11. Published by Pergamon Press. England. Cogeneration An Energy Alternative For The U. William B. New York. GE. 2nd. Golay. New York. N 1 AN-February 1980.. V4 pages 1491-1498.. Schenectady. T'herrao Electron Corp. pages 20-27. . Conserving Energy Via Cogeneration Mech Eng. 1979. Venkateshwara. . New York. CODEN: MEENAH. England. Wicks.Published by Pergamon Press. Technical Documentation Of COPE-Cogeneration Options Evaluation unpublished draft report. Washington State University. Sol Turbines Int. N pages 1023-1031. Utilizing The Cogeneration System To Control Purchase Power Demand TAPPI V 62. David J. . International Conference on Energy Use Manage. California. paqes 18-27. V4.

. Gordian Associates. three of which deal with cogeneration. JN. . 1979. England. 1979. New York. Seattle. *Department of Energy. . William D. 19R0. March 1979. 80 pages. & FINANCIAL CONSIDERATIONS Thomas C. Princeton University. Washington.. Towards A Fuels Policy For Industrial Cogeneration Changing Energy Use Futures. 1979. Inc. POLICY Hough. Los Angeles. Kidder. Peter A. Limaye. . August 10-12. and Oxford. Review Of Concepts Presented at DOE/ET AL Solar 79 Northwest Conference. pages 1476-1490. Solar Energy For Process Heat. Published by Pergamon Press. Cogeneration In The Pacific Northwest a paper presented to the Hardware for Energy Generation Conference. Seattle. January 19. is composed of five separate bills. Redmond.C. Inc. Technical Analysis". Int Conference on Energy Use Manage. D. Regulatory And Financial Aspects Draft Final Reoort.C. . New York. enacted October 15.. submitted to Electric Power Research Institute. November 1978. Tallman. Redmond. Washington. October 22-26. The NEA. Financial Considerations Affecting Implementation Of A Large Multiparty Cogeneration Proiect Contract W-7405-ENG-26 84 pages. . Industrial Electrical Cogeneration Potential In The Bonneville Power Administration Service Area "Phase I. Washington. Industrial Waste Heat For Adjacent Communities And Industrial Applications A report prepared for the Pacific Northwest Regional Commission by the Rocket Research Company.C. Executive Summary. N 5. and Dilip R. reference to a summary is suggested. Forest Products Research Society. Seattle. January 1979. 24 pages. . "Phase II. D... 1979. CODEN: CHEEA3. April 1981.. April 1979. Robert H. 2nd. has available fact sheets and pamphlets describing the NEA. Washington. (4). Williams. Robert J. Troop. SOLAR Beverly. V 4. Proceedings Of The Sixth Annual Energy Conservation Management Conference The Conference included a panel discussion of cogeneration and biomass utilization in the Pacific Northwest. Peabody and Company. Rocket •^ Research Company. Executive Summary. February 29. Washington. Seattle. D.. New York. For those not familiar with the separate parts of the Act. . Cogeneration In A Changing Regulatory Environment Chem Eng (New York) V 87. III Economic Analysis". Washington. . January . California. .. 1979. pages 111-118. Washington. 120 pages.. . 1978. Office of Public Affairs. 12 pages. February 26. The Department of Energy. Utility Participation In DEUS Projects.. National Energy Act. Boeing Engineering & Construction Companv.

ASME paper N 79-GT-89 for Meet March 12-15. Manage. Los Angeles. October 22-26./et al Technology for Energy Conservation Conference. Producer Of Energy Subject To Regulation As A Public Utility? Presented at Information Transfer. . Z. page 340. Tilliette. 2nd. Fr. Published by Pergamon Press. US Jet Propulsion Lab. . Application Of Recuperative Gas Cvcles With A Cent d'Etud Bypass Heat Generator To Solar Energy Power Plants Nucl de Saclay. January 23-25. Tuscon. Robert Nathan. New York. Int Conference on Energy Use California. California. 1979. Meckler. 1979.. . 1979. New York. pages 1212-1221.P. CODEN: .^-fhen Is It ^^ Net Danziger.. 1979. California. ASMSA4. and Oxford. Pierre. Integrating Solar Powered Heat Recovery/Cogeneration Chillers With Building And Thermal Storage Characteristics Changing Energy Use Futures. Meckler Energy Group. 7 pages. B. Solar Energy And Cogeneration. V 4. England. (11). Milton. Encino. Inc. Inc.

Commissioner. Northwest Power Planning Council Role of Cogeneration in the Regional Power Plan 1:30 - 2:00 Cogeneration: Econcmic and Financial Issues Dilip Limaye.9:45 Cogeneration: Old Game. President. Regis.5:00 Panel Discussion/Q&A Session (Dilip R. International Cogeneration Society 10:15 . 1983 May 17. Synergic Resources Corporation 9:45 . Montana May 17-18. St.11:00 Cogeneration in Montana: Status and Prospects Dilip Limaye. Director. 1983 8:00 9:00 9:00 Registration 9:15 Welcome and Introduction Howard Haines. Senior Analyst.AGENDA BIOMASS COGENERATION WORKSHOP Holiday Inn Missoula. Montana Department of Natural Resources and Conservation 9:15 . Synergic Resources Corporation 12:00 - 1:30 LUNCH Speaker: Gerald Mueller. Conservation and Renewable Resources. Synergic Resources Corporation 2:00 . Technology Division. St. Montana Power Company 2:30 3:00 Industry Perspectives Emmett Lisle. MPC.2:30 Utility Perspectives Peter Antonioli.10:30 Coffee Break 10:30 .10:15 Cogeneration: A National Perspective Tyson Greer. New Rules Dilip Limaye. Montana Public Service Commission 3:45 . Northwest Chapter. Member. Chairperson. Synergic Resources Corporation 11:00-12:00 A Technical Overview of Cogeneration Shahzad Qasim. MPSC) . Limaye. Regis Paper 3:15 3:00 3:15 - Coffee Break 3:45 Regulatory Perspectives John Driscoll.


9:30 Collection aind Transportation Costs John Combes. 1983 May 18. 1983 8:00 .10:00 Biomass Cogeneration Case Study Stanley Richardson. 11:30 .AGENDA BIOMASS CX)GKNERATION WORKSHOP Holiday Inn Missoula. U. Flodin Lumber Company 10:00 .11:00 Discussion of Energy Conversion Systems Shahzad Qasim. Synergic Resources Corporation Step by Step Approach 11:00 . Montana May 17-18.8:20 BPA Biomass Cogeneration Program Douglas Seely. Forest Service 9:30 .10:15 Coffee Break 10:15 . Bureau of Business and Economic Research.12:00 Panel Discussion/QtA Session . Bonneville Power Administration 8:20 .11:30 Feasibility Analysis: Synergic Resources Corporation Shahzad Qasim.8:45 Wood Resources in Montana Chuck Keegan.S. University of Montana 8:45 .



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