Texas passes cogeneration bill

AUSTIN, Texas, May 29, 2013 /PRNewswire/ — Concerns about power generation margins or resource adequacy and water shortages have lead Texas to a policy crossroads.  Texas Combined Heat & Power Initiative (TXCHPI) salutes the Texas Legislature for passing House Bill (HB) 2049, by Texas Representative Dan Huberty (Dist. 127, Houston).  The policy removes regulatory barriers and improves the business climate for cogeneration facilities in Texas. Cogeneration often referred to, as “Combined Heat and Power” or “CHP” is the simultaneous production, and use, of electricity and heat energy.  HB 2049 clarifies language in the Texas Utility Code to allow cogeneration facilities to sell electricity and heat energy to the same customer within the proximity of the facility thereby maximizing the efficiency and minimizing financial risk. Prior to this change, cogeneration facilities could sell electricity to only one customer.

Texas’ leading industries, such as chemical processors and refineries, need heat (typically in the form of steam) for their manufacturing or processing operations. Cogeneration facilities will now be able to more directly serve the heat and power needs of Texas’ leading industries, and the measure is likely to spur economic development in other situations where cogeneration can be effectively implemented.

CHP technology is advantageous since it increases the economic benefits of using Natural Gas while preserving water for Texas communities.  Natural gas used in CHP produces up to 65 percent fewer emissions than coal per kilowatt hour (kWh) making it a much cleaner base load fuel.  CHP does not use water resources like traditional power generation and the energy is produced and consumed where it is needed without the loss of energy that typically occurs during transmission and distribution.

“Texas Legislators understand the need to remove regulatory barriers and HB 2049 is one example that will help usher in new cogeneration project opportunities.  TXCHPI believes that this policy change will help the entire Texas grid by relieving grid congestion, increasing grid capacity and reducing the amount of water used in the generation of electricity,” said Paul Cauduro, Executive Director of the Texas Combined Heat and Power Initiative.