Buying Electricity and Natural Gas for a BIG User Joan Kowal Energy Manager, UMCP March 6, 2012 Sustainable Tuesdays Speaker Series.

Buying Electricity and Buying Electricity and Natural Gas for a BIG UserNatural Gas for a BIG User

Joan KowalJoan KowalEnergy Manager, Energy Manager, UMCPUMCPMarch 6, 2012March 6, 2012Sustainable Sustainable Tuesdays Speaker Tuesdays Speaker SeriesSeries

Retail Electric CompetitionRetail Electric Competition

The Electric Utility IndustryThe Electric Utility IndustryThe electric utility industry consists of three

functions needed to deliver power to customer loads:– Generation– Transmission– Distribution

It consists of many entities. Most notable are:– Generators (Fossil, Nuclear, and Renewable)– Regional Transmission Organizations (PJM)– Distribution Companies (PEPCO, BGE)– Load Serving Entities or Suppliers (Constellation,

Washington Gas Energy Services, Pepco Energy Services)

– Government Regulators (FERC, PSC)– End-users (UMD, homeowners, retail stores)

Typical Electrical SystemTypical Electrical System

Electric Supply at UMCPElectric Supply at UMCP

The electric needs on campus are met through:– On-site production from a natural gas,

combined heat and power plant– Purchased energy delivered at the

Mowatt substation (building located by Architecture.)

Campus Electric ConsumptionCampus Electric Consumption

UMD Combined Heat and Power PlantUMD Combined Heat and Power Plant

• 27.5 MW natural gas, CHP plant installed at the College Park Campus– Doubled steam efficiency from 35% to

nearly 70% – Energy Star award for 2005– Annual CO2 reductions of 53,000 tons– Also produces chilled water for air

conditioning using steam in summer

ChilledWater

How System Works:How System Works:

Heating Steam

BackPressureSteam

Turbine625 PSISteam

2 Heat Recovery

SteamGenerators

ExhaustHeat

6250 F

2 Combustion Turbinesand Generators

Electric Power22 MW

FuelGas or Oil

ElectricPower5MW

70% of Condensate Returns to CHP

125 PSISteam

AuxiliaryBoilers

Make UpWater

Steam DrivenChillers on

Campus

Energy ProcurementEnergy Procurement

Electricity– Supplier – WGES– Distribution Company – PEPCO– Contract Structure (main campus)

• Block and Index

• Fixed Supplier Fee

• All other costs are a pass-through

– Term is 3 years with two, 1 year options

Electric Contract (cont’d)Electric Contract (cont’d)

Block and Index Contract– Advantages

• Reduces risk premiums from supplier

• Allows UMD to reduce costs by reducing load in high priced hours

• Allows rate to more closely reflect market over term of contract in lieu of locking in fixed-price for entire term on one day

– Disadvantages• Reduced price certainty

Electricity ProcurementElectricity ProcurementBlock and IndexedBlock and Indexed

Natural Gas ProcurementNatural Gas ProcurementSupplier – Pepco Energy Services/WGESDistribution Company – Washington

Gas LightContract Structure

– Fixed Price for small accounts– Block and Index contract for CHP supply– Large account is interruptible; oil used as

back-up fuel

Natural Gas ProcurementNatural Gas ProcurementBlock and IndexedBlock and Indexed

53,000

54,000

55,000

56,000

57,000

58,000

59,000

60,000

61,000

62,000

63,000

64,000

06/01/11 06/06/11 06/11/11 06/16/11 06/21/11 06/26/11

Th

erm

s

June Natural Gas Use vs Block PurchaseUsage

BlockPurchase

Buying in the Daily Market at Index

Selling in the Daily Market

MD Renewable Energy MD Renewable Energy

State has a renewable portfolio standard (RPS) that requires electric suppliers to meet certain standards:– In 2012, 6.5% from Tier 1 renewable sources

(including at least .1% from solar); and 2.5% from Tier 2 resources

– In 2022, 20% from Tier 1 renewable sources (including at least 2% from solar); and 0% from Tier 2 resources

RPS Definitions – Tier IRPS Definitions – Tier I (1) solar energy including PV and solar hot water heating;  (2) wind;  (3) qualifying biomass;  (4) methane from the anaerobic decomposition of organic

materials in a landfill or wastewater treatment plant;  (5) geothermal;  (6) ocean, including energy from waves, tides, currents, and

thermal differences;  (7) a fuel cell that produces electricity from a Tier 1 renewable

source under item (3) or (4) of this subsection;  (8) a small hydroelectric power plant of less than 30 megawatts (9) poultry litter-to-energy (10) waste-to-energy; and (11) refuse derived fuel. 

RPS Definitions – Tier II RPS Definitions – Tier II

Hydroelectric power other than pump storage generation 

On-site Renewable EnergyOn-site Renewable Energy

Solar hot water heating system installed at Ellicott Dining Hall and to be included at the University House

Solar photovoltaic at Cole Field House – 5.25 kW

Installation of geothermal heat pumps at the new Shuttle Facility; two renovated Sorority Houses; and new University House

Project SunburstProject Sunburst DOE American Recovery and Reinvestment

Act of 2009 funds allocated to Renewable Energy in MD

UMCP was awarded a grant of $1000/kW of installed solar capacity

Competitive solicitation awarded to WGES and Standard Solar for a 630kW installation at Severn

Commercial Operation June, 2011 Estimated output of 792 MWh annually

Aerial View of Severn with Aerial View of Severn with 2,300 Solar Panels2,300 Solar Panels

Off-Site Renewable EnergyOff-Site Renewable Energy Executed three long term

power purchase agreements (PPAs)– Two land based wind with total

capacity of 65 MW

– One solar project with capacity of 13MW

Aggregation of University System of Maryland Institutions with state and local agencies

Buying Off-Site RenewablesBuying Off-Site Renewables

• Bundled RECs through PPAs• Long term commitment to buy power and RECs• If buyer doesn’t buy RECs, power cannot be

counted as renewable energy

• Unbundled RECs• Green attributes associated with power

generation

Bundled RECs through PPAsBundled RECs through PPAs

1 MW

h

Elect.1 MW

h RECLoad Serving Entity

Electricity and RECs bundled together

Unbundled RECsUnbundled RECs

1 MWh Elect.

1 MWh REC

1 MWh Elect.

Electricity and RECs sold separately

Can’t claimrenewable energy

Can claimrenewable energy

Renewable PPA Contracts – Renewable PPA Contracts –

Project

Nameplate Capacity -(expected

annual MWh)

UMCP’s Share

% of Annual

Electricity Use

Technology Location On-line Date

Roth Rock Phase II

10 MW – (30,605) 10% 1.53% Land-based

wind MD – Garrett County 8/11

Pinnacle Project

55 MW – (174,542) 10% 9%

Land-based wind

WV - Mineral County 1/12

Constellation’s Mount St. Mary’s Solar Project

13MW – (22,291) 10% 1% Solar MD -

Emmitsburg 6/12

WGES’ Severn Solar Installation

630kW (792)

100% 0.40% Solar Severn 6/11

Total 11.77%

ReferencesReferences

eia.doe.gov/www.ferc.gov/www.eei.org/www.energy.state.md.us/