Coordinating Utility Billing Rates to Maximize the Benefit from Onsite Energy Generation and Combined Heat and Power Systems

Reducing energy costs is becoming a major priority for many water and wastewater treatment facility owners. The recent economic downturn, rising energy costs, and increasingly stringent treatment regulations are among the many factors driving the need to reduce water and wastewater treatment energy usage and costs. Utilizing onsite power generation systems such as biogas fueled combined heat and power (CHP) systems to reduce energy costs by offsetting purchased electric power and manage demand are increasingly used in the water and wastewater industry. While, these systems can reduce energy costs, the full economic benefit is often not realized if the system design, the system operation strategy, and the electric utility billing rates are not fully understood and coordinated. The objective of this paper is to describe how the economic benefit from an on-site power generation systems heavily depends on the electric utility billing rate structure and to show concepts to maximize the benefit from these systems. To illustrate these concepts, this paper will present hypothetical and actual case studies showing the economic relationship between the on-site power generation system capacity, operation and the electric utility rate structure.