Press Release

PUC Proposes Policy Statement on Combined Heat and Power

Published on 2/25/2016

Filed under: Electric Gas

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved a joint motion proposing a Policy Statement related to combined heat and power (CHP) technology and increasing development among Pennsylvania’s regulated electric and natural gas distribution companies.

CHP is a form of distributed energy, located at or near a building or facility, which provides at least a portion of the electrical load and uses thermal energy for space heating or cooling, process heating or cooling, refrigeration or dehumidification.

“CHP is an efficient means of generating electric power and thermal energy from a single fuel source, providing cost-effective energy services to commercial businesses like hotels, universities and hospitals,” said Chairman Brown in a joint motion with Commissioner Robert F. Powelson. “In addition to improving manufacturing competitiveness and reducing greenhouse gas emissions, CHP benefits businesses by reducing energy costs and enhancing reliability for the user.”

The Commission voted 5-0 to approve the joint motion, which proposes a Policy Statement intended to:

• Promote CHP investments;
• Encourage electric distribution companies (EDCs) and natural gas distribution companies (NGDCs) to make CHP an integral part of their energy efficiency and resiliency plans, as well as their marketing and outreach efforts;
• Encourage these companies to design tariffs relating to interconnection and standby rates for owners and operators of CHP facilities; and
• Promote the consideration of special natural gas rates for owners and operators of CHP facilities.

The proposed Policy Statement would require EDCs and NGDCs to report to the Commission biennially on the development of CHP in their service territories and their efforts to promote such development. 

The Commission held two en banc hearings on CHP in 2014, during which key stakeholders discussed the economics, social costs and benefits and regulatory policies that impact greater adoption in Pennsylvania. Participants at both hearings identified a list of benefits and barriers, outlined in the joint motion.

On Jan. 21, 2016, PUC Chairman Brown, on behalf of the Commission, signed a partnership agreement with the U.S. Department of Energy’s (DOE’s) Better Buildings Initiative. Specifically, the PUC’s partnership agreement pertains to the CHP for Resiliency Accelerator program, which was launched by DOE to support and expand the consideration of CHP solutions by states, communities and utilities for their infrastructure needs.

A Tentative Order consistent with today’s motion will prompt a 45-day comment period from the date of publication in the Pennsylvania Bulletin, followed by 25 days for reply comments. Interested parties can provide written comments to the Pennsylvania Public Utility Commission, Attn: Secretary, P.O. Box 3265, Harrisburg, PA 17105-3265.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.

For recent news releases and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov. Follow the PUC on Twitter – @PA_PUC for all things utility. “Like” Pennsylvania Public Utility Commission on Facebook for easy access to information on utility issues.

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