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Energy Efficiency From A G&T Coop Perspective Jim Lamb East Kentucky Power. KMSA Spring Meeting Covington, KY April 24, 2008. Which Word Is More Important – “Energy” Or “Efficiency”?. The definition of efficiency is as follows –
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Energy Efficiency From A G&T Coop PerspectiveJim LambEast Kentucky Power KMSA Spring Meeting Covington, KY April 24, 2008
Which Word Is More Important – “Energy” Or “Efficiency”? • The definition of efficiency is as follows – accomplishment of or ability to accomplish a job with a minimum expenditure of time and effort: The Button Up program increases homeowner efficiency. • Or the ratio of the work done or energy developed by a machine, engine, etc., to the energy supplied to it, usually expressed as a percentage.
But Efficiency Isn’t Limited To Retail Use • The concept of efficiency can be applied to the other side of the meter. • More efficient, generation, for example, means the same MW output but at a lower cost
The Concept Of Efficiency – Type of Generation Technology Heat Rate Production (Btu/kWh) Efficiency Cost GAS@ $10/mmBtu GE LMS100 8,500 40% 85 $/kWh GE 7EA 10,600 32% 106 $/kWh ABB 11N2 11,500 30% 115 $/kWh *Combined Cycle 6,000 57% 60 $/kWh COAL@ $2/mmBtu CFB 9,600 36% 19 $/kWh PC 9,800 35% 20 $/kWh *SCPC 8,600 39% 17 $/kWh *Not in EKPC Fleet
Efficient Pricing • The idea of efficiency very much extends to how electricity is priced • EKPC’s price to its 16 distribution members • Distribution coop’s price to its retail members • Traditionally, prices have been set by taking total cost and dividing by total kWh sales – this is what is called “average cost” pricing • Fuel Adjustment Clause (FAC) is used like a broom, to sweep up anything that average cost pricing doesn’t cover • All fuel markets are in turmoil today, resulting in an EKPC FAC that is both high and volatile • Coal • Natural Gas • Wholesale Power Market
What Does Efficient Pricing Mean? • Here’s an example of good intentions yet a bad outcome – extreme energy conservation • Why is the outcome bad? Because of the way that prices are structured • Efficient pricing is the idea that extreme energy conservation can have good intentions and a good outcome • Efficient pricing also is the idea that the FAC has very little to sweep up
So What Are EK And Its Members Doing Futurely? • Retail Efficiency • Envision • Contemplating An RFP For Energy Efficiency • Generation Efficiency • Direct Load Control • GE LMS 100 Combustion Turbines • Price Efficiency • RTP Pilot • Rate Design Task Force • Have Filed New (Higher) Cogen Tariff • Not Yet Approved
One Thing Is Unequivocally True About Energy Efficiency – EKPC (the G&T) Cannot Embrace The Concept Alone, Nor Can Its Members Embrace The Concept Alone. We Affect Each Other.