Plans for cogeneration projects, which produce both heat and electricity
from the same fuel source, have mushroomed in Pennsylvania in the last three years. Developers across the state are either generating or proposing to generate about 4,700 megawatts of electric power, almost as much as five large nuclear plants could produce.
Most of the power would come from the burning of waste material, either municipal trash or coal-mine refuse. For example, Westinghouse earlier this month won a contract to build and operate a trash-to-steam plant for Delaware County that would produce 72 megawatts of electricity, enough to light about 18,000 homes.
To be economically viable, such plants depend on sales of their electric power to local utilities, which resell the power to consumers. Under a federal law enacted in 1978, utilities are forced to buy the power, although the price they pay for it may vary widely.
In Pennsylvania, where many utilities make more than enough power to serve their customers at their own plants, prices for cogenerated electricity have remained relatively low. Regulations adopted by the PUC in 1983 would have forced prices higher, but those regulations were appealed by Philadelphia Electric Co. and three other utilities, and have not been enforced.
Cogeneration developers say the state's energy resources make cogeneration attractive. For example, projects capable of generating more than 800 megawatts have been planned in the anthracite coal region of northeastern Pennsylvania, where nearly a billion tons of "culm," or waste coal once considered unusable, sit in massive man-made hills.
But the developers say the PUC's ambiguous rules have slowed development. New Jersey, by contrast, has an extensive set of regulations designed specifically to encourage cogeneration's growth.
Taliaferro agreed yesterday that Pennsylvania has been lukewarm to such development. "I'm sort of sending a signal that we're going to maintain that posture," she said.
Nonetheless, she added, "there may be some really good cogeneration ideas that have been put on hold because our rules are ambiguous."
Some of the proposals floated in her motion for an investigation could further discourage new development by tightening requirements for cogeneration projects. Others hint at forcing cogenerators to pay utilities to hook their plants to the electric grid.
Commission member Bill Shane added that since the state is "awash in excess capacity" for electric power, it is questionable that the PUC ought to be encouraging new cogeneration projects. He also said some developers "are simply interested in turning a quick buck. I don't see why we can't go after those bozos."
Developers reacted cautiously to the PUC plan, acknowledging generally that the issues raised are relevant but wondering whether the probe itself would delay existing plans.
"Our hope is that the PUC's actions will be accomplished in a timely manner so that ongoing projects will not be held up awaiting final PUC findings," said Bill Ginn, a project manager for O'Brien Energy Systems, the Philadelphia cogeneration developer. The company is building a cogeneration plant in Montgomery County that will burn methane gas from a county landfill to make power for a SmithKline Beckman laboratory.
Tom Cassel, a senior executive with Reading Co.'s energy-development subsidiary, warned that the PUC could run into legal problems if it attempted to rewrite existing cogeneration contracts.
"You've got hundreds of millions of dollars committed in this state," he said. "Anything that would reopen existing contracts we would oppose." ''What it appears to be is, the electric utility industry focusing on what I would consider its main threat; the trash-to-steam plants and the culm-fired power producers," added Harvey Morris, whose firm, Morris-Rospond Associates, specializes in small commercial cogeneration systems.
