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Box 4: Portland Aggregates to Buy a Fuel Cell When the city of Portland, Oregon, had to renegotiate its contract with its local utility, Portland General Electric (PGE), in August 1995, it combined its six largest electric accounts — two wastewater treatment plants, three water and sewer pump stations, and a downtown office building — totaling 42 million kWh annually. The aggregation qualified the facilities for PGE’s low tariff for industrial facilities. Because of the savings due to the low tariffs in its new five-year contract with PGE, the city could afford to pay PGE a special three-year premium on top of the low tariff as long as PGE provided 5% of its power from new renewable resources, to be built by August 2000. The deal meant that the city would pay a premium of 2.27¢/ kWh for the new renewables (originally thought to be 500 kW of wind power). And yet the city would still save $126,000 in the first year over what it would have paid if its facilities purchased power individually. As it turned out, PGE (now owned by Enron) did not build the new renewable resource. Instead, the utility returned the total amount of the tariff ($248,000) to the city for a fuel cell that produces power using anerobic digester gas from the wastewater facility. The tariff, combined with grants from the federal Fuel Cell Climate Change Program (now run by DOE) and the Oregon State Energy Office, is funding a 200-kilowatt plant that will produce 1.5 million kWh of electricity a year for the next 15–20 years, enough to power the wastewater treatment plant cleanly at a cost of 6.5– 8.5¢ per kWh. The plant, due to start running in summer 1999, will reduce the treatment plant’s electricity bills by $102,000 annually, and will pay for itself in less than eight years. |
Source: David Tooze, City of Portland Energy Office, personal communication, March 2, 1999.