Distributed Power Faces Utility Opposition
The technology and economics are in line for commercial
expansion of distributed power, but progress is threatened by
entrenched utilities, according to distributed power sponsors.
In the marketplace distributed power is winning increasing
accolades for its reliability and peak-shaving potential, a panel
of industry representatives told state regulators meeting in San
Francisco earlier this month. Panelists urged members of the
National Association of Regulatory Utility Commissioners (NARUC) to
resist what they described as utility efforts to establish
"disconnect charges" for customers choosing distributed generation
and bypassing the local electric grid.
"If utilities put in disconnect charges for residential
customers, they could stop distributed power in its tracks," said
Gary Mittleman, president/CEO of two-year-old PlugPower, a marketer
of a small residential natural gas-or propane-fired fuel cells.
"And I am not talking about just fuel cells, I'm also talking about
wind power, micro-turbines, everything. We need a level playing
Tony Prophet, president/CEO of Allied Signal Power Systems,
maker of a commercial microturbine, said "models" are emerging for
blocking distributed generation by the utility industry. "It is in
the interest of the utility shareholders" to block distributed
power. One tactic, Prophet contends, is for the utilities to refuse
to connect with distributed power sources or to require each unit
be dealt with on a case-by-case basis.
Reliability is no longer an issue. Prophet emphasized to the
regulators that Allied Signal's demonstration units nationally have
operated for up to two years in harmony with local grids, proving
that the new, small power plants can co-exist with the centralized
grid. "Our machines, in reality, have added to the reliability on
Dan Rastler, distributed power manager for the Electric Power
Research Institute, Palo Alto, CA, told the regulators that
decentralized small power plants-fuel cells, micro-turbines, wind
power and others-are now viewed as good for individuals and good
for utilities in providing an added measure of reliability. He said
customers are concerned about a lot more than "just the cost of
electricity," they are concerned about unmet needs that can be
created by power quality blimps, outages, etc.
Both distributed power producers point to major corporate
support. PlugPower, with Detroit Edison as a founding sponsor, has
backing from Southern California Gas and from General Electric,
which is the global distributor of the fuel cells in the
residential and small commercial markets. The units are about the
size of a dishwasher and range from 4 to 5 kW in size. Allied
Signal, which earlier in the year acquired Honeywell, has alliances
with Caterpillar, Ford and Emerson, and it has demonstrated its
small megawatt-micro-turbines in a half dozen utility service
territories representing a variety of climates and grid tie-ins.
With peaks again rising to all-time records in California this
summer, Robin Morrison, from the California Independent System
Operator (ISO) drew short of endorsing distributed generation, but
she noted that the Cal ISO "clearly is on the side of deepening our
ancillary services markets" to lessen price spikes and curb peaks,
and distributed generation is viewed as a way of taking some of the
strain out of the distribution and transmission grids.