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FAQ Sheet on PURPA Amendment Hearings
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Overview: The Utilities Committee’s hearings on the PURPA Amendments will give it opportunities to:
• review ways to promote energy conservation and the City’s sustainability goals; and,
• provide a public forum to explore alternative energy technologies.
Hearings on these Amendments are currently scheduled to be held November 30, and on May 23, 2007.
What is “PURPA”?
Initially passed in 1978, “PURPA” is the federal Public Utility Regulatory Policies Act. Its goals are to encourage:
• Conservation of power by utility customers;
• Efficient use of resources and facilities by electric utilities; and
• Equitable rates for consumers.
PURPA and its Amendments – also referred to as the PURPA Standards - are administered by the US Department of Energy.
What are the “PURPA Amendments”?
The federal Energy Policy Act of 2005 amends the existing PURPA Standards and adds additional Standards. The Standards support the PURPA goals by encouraging electric utility customers to adopt “Distributed Generation” and “Demand Response” technologies.
Why is City Council holding these hearings?
The law requires the “governing body” of an electric utility to conduct a public hearing process to consider each Standard, and then determine whether or not to adopt it on behalf of the utility. As the governing body of Cleveland Public Power, City Council is obligated to conduct this process. However, Council is not required to adopt any of the Standards.
What are Distributed Generation and Demand Response?
Distributed Generation (“DG”) is the use of small-scale power generation on the site of the load it serves. Examples of DG technologies are solar panels, wind power, fuel cells, and microturbines. Demand Response (DR) is a customer’s reduction of energy use in response to an external prompt, such as high energy prices. Customers implement DR with automated communications equipment.
What Standards will the hearings address?
Interconnection:
The Interconnection Standard lets a customer with Distributed Generation connect with its “host” utility. This allows 2-way flow of power: from the utility to the customer when his generation isn’t sufficient, and from the customer to the utility when the customer has excess power.
Net Metering:
Net metering lets a customer who generates his own power off-set its value against the cost of the power he requires from the host utility.
“Smart Metering”:
“Smart Metering” lets customers use Demand Response technology in conjunction with time-based rates from the utility. The utility charges a time-based rate that varies with its cost of power, and the customer’s DR equipment responds to reduce his demand during periods when energy is most expensive.
What potential benefits do the Standards offer Cleveland’s citizens?
Benefits can accrue to both individuals and the general population:
Reduced individual energy costs:
DG lets customers cut energy costs by using renewables as “free energy”.
Greater sustainability:
Greater use of renewable energy sources reduces the region’s need for non-renewable fuels.
Less stress on CPP’s distribution system and greater system reliability:
Increased use of DG and DR may benefit all of CPP’s ratepayers by supporting the larger electric infrastructure, since they may relieve stress on the distribution system by reducing demand. DR can also enhance system reliability: since customers can reduce power use during “peak demand” periods, the chance of brownouts or blackouts is reduced.
Potential positive impact on large-scale environmental and health concerns:
Two-thirds of the energy from a traditional coal-fired power plant is lost as waste heat, either during generation or transmission over distance. Use of DG and DR reduces our dependency on this conventional “central station model”, with potential reductions in greenhouse gases and in particulates, mercury, and other health hazards associated with coal-based power.
What concerns are expressed by the electric utility industry?
Safety and system integrity:
If a customer’s DG continues to energize the electric system after a fault occurs, there may be hazards to the lineman and damage to the system.
Equity:
Net metering raises rate equity issues for both DG and non-DG customers.
Costs:
How should a utility address the operational and administrative costs associated with adopting the Standards? |
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Cleveland City Council
601 Lakeside Avenue
Room 220
Cleveland, OH 44114
(216) 664-2840
(216) 664-3837 fax
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