Work Group MeetingSeptember 10, 2014

2014 Schedule and Sub-committee Progress

KY Department for Energy Development and Independence

Lee ColtenAssistant Director

Efficiency and Conservation

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State Energy Office

Kentucky Department for Energy Development and Independence

The Department for Energy Development and Independence's mission is to improve the quality and security of life for all Kentuckians by creating efficient, sustainable energy solutions and strategies; by protecting the environment; and by creating a base for strong economic growth.

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2014 CHP Meeting Schedule

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Sub-committee Status

Technical Application

Education and Outreach

Policy

Financing

Each committee has met 3 times with the exception of the Policy committee which has met twice

Committee members/stakeholders are actively participating in sharing the work load

Sub-committee work items are being rolled into a CHP Action Plan for Kentucky

Committees will continue to collaborate on specific items and pass along information via the main work group

KPPC Kentucky’s Resource Center for Environmental Sustainability

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Technical Application Update

Harshaw Trane

Jason VolzEnergy Engineer, P. E., LEED AP

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A presentation was given August 6th regarding maintenance of reciprocating engines by Steve Killian of the Wayne Co– Used by over ½ of CHP applications in the US– Well proven technology with a lifetime maintenance cost of <.75

cents/kWh– Maintenance requirements are well documented– A lube analysis can optimize reliability while reducing downtime and

maintenance costs Development of Air Permitting Guidance for CHP

– Will also discuss in Policy committee as necessary State-wide Interconnection requirements being reviewed

– Will also discuss in Policy committee as necessary Also working on:

– Vendor list, Heat Load Guidance, CHP Reference Library

Technical Committee Recent Work Items

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Upcoming Sub-committee Items– Turbine Maintenance

o Tentative presentation in October from Jeff Fassett of IEM Energy Consultants

– Waste Heat to Power Referenceso Discussion of cited reports and opportunities for KY

– Fuel Issueso Infrastructureo Availability

Next Actions

Finance Update

Utilities Dynamics

John BoydBusiness Development Executive

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August 13th Presentation for Electricity Price Structure by Cheryl Eakle and Jason Volz– Defined all components of a non-residential electric bill– Variation in Application of Demand Charge, Ratchet and Standby Rates– Scenarios examined with and without CHP

o Looked at the effect of an unplanned outage with demand ratchet on the utility bill.

August 13th Presentation for Natural Gas Outlook by Jason Willan of Fellon McCord– Increased domestic production seems to have reduced volatility, but the

supply/demand balance remains tight. Prices should trend higher due to coal retirements, LNG exports, regulations, and mfg demand, but expected to remain below peak levels of mid 2000s.

Finance Committee Recent Work Items

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Discussion of Industrial Revenue Bonds with the Economic Development Cabinet

Review of the White Oak Case Study for a CHP performance contract

Continue ESA Discussions– Are there CHP scenarios outside of those outlined in the 2012 PSC

memo? Continue Standby Rate Discussions

– Review State rates and application in conjunction with demand ratchet clauses

Review possibility of USDA or other programs and applicability to CHP

Next Actions

Education and Outreach Update

Kentucky Pollution Prevention Center

Lissa McCrackenActing Director

Cheryl EakleEngineer

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November 6, 2014

Bowling Green, KY

November 13, 2014

Richmond, KY

CHP Workshops

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Financing Options/Incentives Economics

Demand Management & Ratchets Stand-by Charges

Policy Implications *Panel Discussion* Other Topics??

CHP Workshop Topics

CHP 101 Overview Technologies Kentucky Installations Benefits & Risks

Fuels Natural Gas Biomass Biogas Other/Waste Heat to Power

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Confirm Workshop Venues Finalize Agenda Develop Marketing Materials

– Direct-mail postcard to targeted audience – week of Sept 29th

– Email campaign to spread the word Identify Associations to Engage

– Association of Independent Kentucky Colleges & Universities (AIKCU)– KY Hospital Association (KHA)– KY Association of Counties (KACO)– KY League of Cities (KLC)– KY Industrial Utility Customers (KIUC)– Other?

Next Actions

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Promote Workshop at Various Events– Gov. Local Issues Conference – Aug 28 (Louisville)– Gov. Conference on Energy & the Environment – Oct 7-8 (Lexington)– KY League of Cities Conference & Expo – Oct 7-10 (Louisville)– KY Innovation Conference – Oct 24 (Lexington)– Other?

Promote Workshop through Publications– “The Goods” (KAM)– Kentucky Living– Kentucky Energy Watch (DEDI)– Sustainable Solutions Post (KPPC)– Other?

Next Actions

Policy Update

Kentucky Association of Manufacturers

Greg HigdonPresident and CEO

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Presentation was given August 14th by Jeremy Faust of GCEA about the ePAD legislation (PACE)– ePAD is an energy project finance tool that works through property tax

assessments– Allows for longer term financing– May be seen as “off balance sheet”– Nationally $245 million worth of projects are in the pipeline using a

similar (PACE) financing mechanism– Legislation will likely be proposed again in January

Thermal Sales– EKPC Spurlock Plant sells steam to Inland Container, but only because

of additional boiler capacity (additional fuel used)– Recast Energy Case Study

Policy Committee Recent Discussions

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Letter will be drafted requesting PSC opinion of CHP-related issues.

Information will be relayed to the Policy committee as it becomes available for:– Permitting Issues – waiting on Tech SubCommittee– Interconnection Guidance - waiting on Tech SubCommittee– Rate Issues - waiting on Finance SubCommittee– Air Quality Regulation Impacts – 111(d) – comments to EPA due Oct.– Third Party Arrangements – need to clarify with PSC, per 2012 staff

opinion– CHP as coop-owned asset – opportunity?

Next Actions

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• Questions/Comments?– Next Work Group Meeting will be November 12th

@10:30am, 301D Fair Oaks

Roundtable and Next Steps

Frankfort, KY September 10, 2014

http://energy.ky.gov/Programs/Pages/chp.aspx

DEDI (502) 564-7192

KAM (502) 352-2485

KPPC (502) 852-0965

Work Group Meeting Number 4