Yuma Cogeneration Associates told the Federal Energy Regulatory Commission on May 17 that it will produce extra electricity at its Arizona cogeneration plant at a loss if need be to meet FERC’s efficiency requirements.
Yuma Cogeneration is asking FERC for a limited waiver of the efficiency standard in the commission’s regulations for its topping-cycle cogeneration qualifying facility (QF) located in Yuma, Ariz. Yuma Cogeneration had satisfied the standard continuously from its commercial operation date in 1994 through 2009, but, due to an increase in curtailments and a reduction in demand by its steam host, it narrowly missed satisfying the 45% efficiency standard for calendar years 2010, 2011 and 2012 (when it operated at an efficiency of 44.5%, 43.7%, and 43.4%, respectively).
Yuma Cogeneration told FERC that it was not aware that the facility did not satisfy the efficiency standard because the plant’s efficiency was not correctly calculated during this period. Yuma Cogeneration only recently discovered the calculation error. Yuma Cogeneration has changed the operating profile of the facility going forward to achieve the 45% efficiency standard, and currently anticipates that the facility will meet the efficiency standard for 2013 and going forward. Therefore, the waiver requested is limited in duration and will allow Yuma Cogeneration to continue to operate as a QF and thereby continue to produce significant energy savings and economic and environmental benefits to the local region.
The facility is a 52.3 MW topping-cycle cogenerator. It consists of one General Electric Frame 6, natural gas-fired combustion turbine generator, one heat recovery steam generator with supplemental firing, and one extraction/condensing steam turbine generator. The facility is interconnected with the Arizona Public Service transmission system. The entire output of the facility is committed to San Diego Gas & Electric (SDG&E) under a long-term power purchase agreement (PPA).
Due to the plant’s characteristics, the cycling of the unit on and off is very inefficient. Historically, it has been operated as baseload generation, 24 hours per day, seven days a week. Under this operating profile, it continuously satisfied the QF efficiency standard from its commercial operation date in 1994 through and including 2009.
The facility’s steam host is an adjacent carpet manufacturing facility owned and operated by Shaw Industries.
Beginning in late 2009, the Yuma facility began to operate more intermittently due to a confluence of factors, the company told FERC.
- First, the PPA gives SDG&E curtailment rights that significantly increased in late 2009, the company said. Under the PPA, SDG&E now has the right to 2,200 curtailment hours per year, and curtailment periods can be as little as eight hours.
- Second, due to the downturn in the economy and regional housing markets, Shaw reduced production significantly at its facility, and consequently, reduced its annual steam offtake by about 37% in comparison to the amount taken in 2007 prior to the recession.
- Third, during this period, the California Public Utilities Commission (CPUC) adopted significant changes to the implied heat rate factor used in the Short-Run Avoided Cost (SRAC) rates under the PPA.
As a result, beginning in 2010, the facility started operating only five days a week for 16 hours per day. The facility’s hours of operation decreased from approximately 7,200 hours in 2008 to less than 1,800 hours in 2011 and 2012. This meant that the facility was being stopped and restarted an average of two to three times per week, and as many as five times per week, rather than only once per week. Every restart requires a very inefficient three-hour start-up period. Consequently, the facility was operating at slightly below the 45% efficiency standard for the 2010-2012 period.
“Yuma Cogeneration has changed the operating profile for the Facility to ensure that it will satisfy the efficiency standard going forward,” said the company’s FERC filing. “Beginning on May 6, 2013, Yuma Cogeneration intends to minimize the number of shut downs and start-ups, by running the Facility continuously through curtailments if necessary, for the rest of the 2013 calendar year. During periods when the Facility is curtailed or is not dispatched, it will sell its energy to SDG&E under the terms of the PPA (i.e., at a lower ‘alternative energy price’). These sales will be made at a loss if necessary. With these changes in place, Yuma Cogeneration anticipates that the Facility will meet the efficiency standard for 2013 and going forward.”