.4
RECEIVED
CLERK’S OFFICE
NOV
0
6
2000
Jeannine Kannegiesser
Center forNeighborhood Technology
2125 West North Avenue
Chicago,IL
60647
Dorothy Gunn, Clerk
Illinois Pollution Control Board
100
West
Randolph, Suite 11-500
Chicago, IL 60601
November 6,
2000
Dear Dorothy Gunn,
STATE OF IWNOIS
Pollution
Control Board
~
Please file the enclosedcomments under the IPCB Docket ROl-lO in the matter ofnatural
gas fired, peak-load electrical power generating facilities (peakerplants).
Thank you.
Sincerely,
Jeannine Kannegiesser
Enclosure
TO: Illinois
Pollution Control
Board
FROM: Jeannine Kannegiesser,
Analyst,
Center for Neighborhood Technology
RE: DocketROl-lO,
Natural gas fired, peak-load electrical
power
generating
facilities
(peakerplants)
DATE: November 6,
2000
What
is peak demand
and
why
are peaker
plants
appearing in Illinois?
Demand
for electricity
varies daily
and
seasonally.
Afternoon demand is
higher than demand during
the
rest of the
day
and summer demand is greater than during the
other seasons of the
year
(as
measured in
kW of
demand
at
a
given
time.
This
variation
is
caused by the
behavior
of
electric
customers
and
summer “peaks”
are
driven largely by consumption of air
conditioning
to
cool interior spaces.
Figure
1
and
figure
2
illustrate
the
daily
variation
in
demand
and
the
seasonal
variation
in
consumption
of
electricity respectively
Summer
peak
demand
can
cause
trouble for utilities
and
their customers
asnoticed
in
Chicago’s summer
of
1999.
When
demand
across
the
distribution
system exceeds
the
systems
capacity to
carry
power,
blackouts
and
brownouts
occur to
protect
the
system.
Power
prices
during these
periods of high
demand
can
be extremely high as higher cost power
generating
systems come
on-line
or power becomes
scarce.
The cost to the
utility
to serve peak demand is much higher than the cost to serve the baseload.
The
1997
electric
restructuring
law
in
Illinois
created an
attractive
business opportunity
for merchant
power generators.
In
a
state where
peak
demand
is growing,
it
became
legal
for alternative
suppliers to
market their
product
directly
to customers.
Applications for construction
permits
to build
peak power
plants
—
naturalgas
fired turbines
—
have
fueled
many local
debates over the siting of these facilities.
Because the prices for power during the
dines of peak demand
are
relatively high, peak power producers
expect to
make
a
profit by
running their plants
for a
limited number
of hours during the year.
Operating
a limited number of days also allows
many plants
to
fall
under the
annual emissions threshold for “major
source”
and
escape
stringent
environmental
review.
However,
the
“annual” peaker
plant
emissions
mightoccur
over
onlya matter of days or weeks,
concentrated
during
the
hot
summer months.
What are
the
alternatives?
The
motive for building a peak
power plant might be
reduced if electric customers
in
Illinois worked to
decrease their
demand for peak power.
Customers
can
do
this by improving end useenergy efficiency or
by generating their
own
power at the
siteof use.
Energy
efficiency is simply getting the most out of every
kWh
spenton
an
end
use; increasing
efficiency
can
help reduce
the
peak
and limit growth
in
demand.
Because
air
conditioning causes
much of the
summer
peak
load,
improving
the
efficiency
of
air
conditioners
is
an
attractive
efficiency
project.
Upgrades in lighting
and
other end uses
can
contribute
to decreases in peak load.
Distributed generation,
also
called
on-site
generation,
is
the
generation of electricity
by
small,
clean
generators
located on
or near
the
site where
the power will
be used.
Distributed generation
eliminates
the
need
to transport power long
distances
over
wires
and
can
be dispatched to serve
peak
demand or to
back-up
a
sensitive
operation
during power
outages.
Distributed
generation might
be
a
natural
gas
turbine, fuel cell, or renewable power source
like
photovoltaic cells.
Important benefits can also be
realized
by improving the
efficiency of newly
constructed
buildings
so
that their
impact
on load
growth
is minimized.
Technologies for generating power at the site ofuse
can
Centerfor Neighborhood Technology
11/6/00
IPCB
Docket
R0140
Page
1
)
decrease
the
growth
in
demand for
utility
power.
Thermal
storage can
shiftpower usage
to
the
time
of
day when power is muchless expensive.
Why are alternatives
not
being
selected?
Because customers
do not face real prices,
there is no incentive
for reducing usage
during times when
the cost of providing service is
at
its height
Residential
and small
commercial customers, in particular,
pay the
same rate per kWh regardless
of
when
they use it, despite the
fact that the
same kWh
on a hot
summer afternoon
could cost
the
utility many
times what a spring evening kWh
costs.
An
intermediary
in the
market can help
to
share
the
utility benefit
of
demand
side
measures with customers
making
the
investment in
efficiency
and
load
management
What are
the benefits?
Managing
peak
demand
and
load
growth
can
bring
benefits
to
Illinois
customers.
Reducing
peak
demand
before
the power market opens completely will give
small
consumers
a stronger position in that
market, particularly
if groups of
consumers
can pool
their
more attractive demand
and
shop together for
a
lower price.
Effectively,
the
characteristic demand curve becomes
“flatter”
as
consumers begin to
implement load
management
Such demand
management
provides other benefits.
The distribution system will experience less stress if
peak
demand is
maintained
below capacity.
Lower demand means
less
pollution as generators
operate
less
to
serve
customers.
Inasmuch as
reduced
peak
demand
makes
peak power
plants
less
profitable,
there
might
be
a reduction in permit applications for these
facilities
and
the
associated land
use
battles
may
become
less
frequent.
Whatis CNT doing about it?
The Center
for Neighborhood
Technology
has
begun
to
test these new
models
of
energy
service in
selected
communities
in
northeastern
fllinois
through
its
Community
Energy
Cooperative
and
is
currently
contributing
to
an
effort
to
improve
state
programs
to
promote
energy
efficiency
and
distributed
resources.
As the
1997
law
is
implemented
over the
next
five
years,
CNT hopes that the
state
programs will
provide
incentives
for
customers
to
invest
in
efficiency
and
distributed generation
in
preparation for a competitive
market
On October 17, CNT participated in a meetinghosted by
State Senator Steven Raushenburger where we
presented
the
case
for
state
action
to
prepare
consumers
for
the competitive
market
by promoting
efficiency
and
distributed
generation.
State
intervention
is
necessary
during
this
transition
when
customers
do not face
real
prices.
Demand reduction is
a
cost effective
and environmentally
preferable
alternative
to additional peak power plants, one
that should be made
available to consumers.
What
does CNT
suggest?
CNT urges
IPCB to promote
energy
efficiency and
distributed generation as an
alternative
to increased
commodity
production
by
including
these
options
in
its
report
to
the
Governor.
Encourage
the
Governor’s
office
to
support
a
statewide
energy
policy
that
promotes
efficiency
and
distributed
generation as
well
as
it
currently
supports
peaker plant construction.
The IPCB should
also
seek input
on quantification of pollution prevention possible from energy
efficiency
to
strengthen
the argument
for
these measures becoming a focus of statepolicy.
Centerfor Neighborhood Technology
11/6/00
IPCB DocketR0140
Page 2
F~gtini
1.
Daifr vatialion
in
demandfor e1èmici~y
30000
25000
20000
I
_____________
_____________________________________
,~15000
10000
5000
0
~
~
~
fl5.
~.
~.
Time
of
day
Centerfor Neighborhood Technology
11/6/00
IPCB Docket ROl-JO
~st
—
.—____—••T—•_•_•__———f_
Page 3
4
11/6/00
Page 4
4)
25
F(gure
2. Commonwealth
Edisongskm demand Nov 1998-Oct 1999
20
15
10
5
0
November
December
January
February
March
April
May
June
July
August
September
October
Month
Centerfor Neighborhood Technology
IPCB
Docket
ROl-lO
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