CALL FOR COMBINED HEAT AND POWER (CHP) PROJECTS Program Guide
TABLE OF CONTENTS Introduction... 2 Purpose... 2 About CHP... 2 Program Description... 2 Call for CHP Projects... 3 Participant Webinar... 4 Questions... 4 Participation Instructions... 4 Step 1... 4 Step 2... 4 Step 3... 4 Project Eligibility and Qualification... 4 Scoring Criteria... 5 Project Scoring Examples... 8 Example No. 1... 8 Example No. 2... 8 Example No. 3... 9 Notification of Qualified Projects... 10 Project Submission... 10 Determination of Incentives... 10 Reservation Letter... 10 Metering and Project Data... 11 PECO Requirements... 11 Interconnection... 11 Other PECO Requirements... 11 1
INTRODUCTION PURPOSE PECO established the Call for CHP Projects (CfP) program to identify and rank prospective combined heat and power (CHP) projects interested in obtaining financial incentives under PECO s Act 129 Phase III CHP program offering. PECO developed the CfP as a means for interested customers to compete for financial incentives based on the merits and qualifications of their prospective projects. To participate in this CfP, a Customer must submit a completed Project Submission Form to PECO via email within the CfP window. The CfP window is the period of time between the issuance of a call and the deadline for project submission form. The call schedule is maintained on the CHP website at www.peco.com/chp. ABOUT CHP CHP is a clean and efficient approach to generate power and thermal energy from a single fuel source. Typical CHP systems: Figure 1. CHP Process Flow Diagram Are located in close proximity to the energy consumer's building, campus, or industrial processes Provide at least a portion of a facility's electrical load Capture thermal energy from hot exhaust gases for use in space heating, cooling, domestic hot water, dehumidification, and/or process heating Improve a facility's operational efficiency, cut energy costs, and reduce emissions (Source: US Department of Energy) PROGRAM DESCRIPTION Qualified projects that participate in a Call for CHP Projects will be eligible to receive financial incentives. The financial incentives under the program are as follows: 1. Capacity incentives (up to 10 MW max) on a declining tier basis 2. Performance incentive The capacity incentive is based on the operational capacity of the system and is capped at 40% of the total project cost. The performance incentive is based on net electric generation of the CHP system. The combination of the capacity and performance Incentives is capped at $2,000,000, or 50% of total project cost. PECO reserves the right to deny any project submission that may result in PECO exceeding its approved program requirements. For qualified projects (under 1,000 kw in size) PECO may offer a design incentive. Design incentives are limited. To become eligible for a design incentive, 2
interested parties must first validate and document the viability of their project prior to contacting PECO. This can be done using the tools available by the U.S. Department of Energy CHP Technical Assistance Partnerships Mid-Atlantic Region found at http://www.midatlanticchptap.org/. Such analysis must be demonstrated prior to the award reservation of any design incentives. After completion of a viability analysis of the project, the Applicant can apply for a design incentive by submitting the documentation described in Step 2 of the Instructions for PECO staff to review. The design incentive is $30/kW and is limited to projects having an increase in capacity of up to 1000 kw or less, thereby capping the maximum design incentive at $30,000. Payment of the full amount of the design incentive will be made on or following the project's Commercial Date of Operation (CDO). Prior to the CDO, there will be no reimbursement by PECO under any circumstances. Funding for the design incentive is limited and eligibility of applicants to receive the design incentive is at the sole discretion of PECO staff. Further criteria and requirements for the design incentive such as the date by which a project has to achieve its CDO are being developed by PECO and will be published when completed. For questions or additional clarifications regarding an Applicant's eligibility for a design incentive, Applicants may reach out to Mr. Paul Miles via phone (866-850-0357) or e-mail (pecochp@exeloncorp.com). To get the most current program information visit the CHP website at www.peco.com/chp or reach out via email pecochp@exeloncorp.com or via phone 866-850-0357. Table 1. CHP Program Incentives Incentive Type Capacity Incentive Performance Incentive Maximum Total Incentive Incentive Award $300/kW: Projects up to 500 kw $150/kW: Projects between 500 kw up to 1.5 MW $75/kW: Projects between 1.5 MW and 10 MW Capacity incentives must not exceed 40% of the project cost. $20/MWh in the first year. The performance incentive is based on net electric generation of the CHP system. No more than 50% of the project cost or $2,000,000, whichever is lower. CALL FOR CHP PROJECTS 3
SCHEDULE The schedule for each CfP will be posted on the CHP website. Please visit www.peco.com/chp for the latest information. PARTICIPANT WEBINAR PECO will host an informational webinar to describe the process and answer questions raised by participants. The webinar schedule, a registration link, presentation materials and Q&A will be posted to the CHP website at www.peco.com/chp. QUESTIONS Please send any questions relating to this CfP to PECO via email (pecochp@exeloncorp.com) or by phone 866-850-0357. For the benefit of potential participants, PECO will post frequently asked questions to CHP website at www.peco.com/chp. PARTICIPATION INSTRUCTIONS To become eligible to receive incentives, interested parties must participate in a scheduled CfP submission. PECO will review and score the project submissions received to determine if the projects qualify. STEP 1 Verify that your project meets the eligibility requirements specified in this Program Guide. If in doubt, consult the program website www.peco.com/chp or contact PECO at 866-850-0357 before proceeding. Note that the details of the program and technical requirements are subject to change without prior notice please be sure to visit the site periodically and register for email updates. STEP 2 Complete the Project Submission Form available on the PECO CHP web site. To do so, go to CHP website at www.peco.com/chp to download and complete the Project Submission Form. STEP 3 Submit your Project Submission Form to PECO by email (pecochp@exeloncorp.com) prior to the deadline indicated on the PECO CHP web site. If you have missed the Call window, please contact PECO for further information regarding your eligibility and details on the next Call window. PROJECT ELIGIBILITY AND QUALIFICATION Any PECO commercial and industrial customer with a valid non-residential electric account may participate in the CfP and submit Project Submission Forms accordingly. 4
PECO is seeking CHP-qualified projects through its CfP process. Although there are many differing scoring criteria, additional credit is given to projects where PECO customers have teamed up with design and build firms that have extensive and demonstrated expertise with CHP projects. Credible technical partners should provide the resources and management skills to plan, engineer, permit, build, and as necessary operate CHP systems. This program offers incentives for various types of CHP configurations including, but not limited to: steam turbine, reciprocating engine, gas turbine, microturbine, and fuel cells. All projects must be fully commissioned with a commercial date of operation (CDO) within the approved program phase to be eligible for financial incentives, allowing for full verification of the project in order to comply with regulatory requirements. While the CHP program may be suspended at any time, under no circumstances will financial incentives be paid for performance or installation or certification that occurs after May 31, 2021. All projects will be scored, evaluated, and ranked after the Project Submission Form due date using a two-step review process. The initial screen verifies project and participant eligibility, while the detailed review evaluates and scores project implementation probability and construction. As part of the initial screening, customers are required to comply with the criteria noted below. Failure to comply with any of the criteria may result in the project not being properly scored and thus not proceeding to qualification. The proposed project site location is in PECO s service territory. The CfP form does not contain intentionally false or misleading information. Project Submission Form is complete and signed by the customer. The project must satisfy all utility regulation and environmental requirements. The CDO is within the approved program phase. The project will not export electricity to the grid. The customer may be contacted by PECO for formal project submission clarification. After the initial screen, PECO will score each project submission to identify projects that demonstrate a high likelihood of success. Projects with the highest scores are those that have the highest likelihood of implementation. Finally, PECO will prioritize the project submissions in rank order based on the score and make awards accordingly. PECO may reject projects from consideration that fail to meet CfP criteria but will permit resubmission if appropriate modifications are incorporated into the resubmission in future calls. All applicants will be informed of PECO s decision regardless of the outcome. SCORING CRITERIA 5
PECO will score each qualified project submission according to the criteria described below and use the score to rank projects received. PECO will determine the score for the project using information provided in the project submission for each of four categories: 1. Project maturity 2. Design & Build firm experience 3. Interconnection application 4. Project timeline For each, the score is determined by the criteria described below. The higher the score, the greater the likelihood of a project successfully achieving a CDO. PECO has provided the scoring criteria below to help guide prospective customers as to how to best prepare their project submissions. PECO encourages all eligible customers to submit their projects regardless of the score they are able to achieve. Table 3. Scoring Criteria Category Scoring Criteria Score Project is near or under construction. 45 A. Project Maturity B. Design & Build Firm Experience A contract for the construction of the project has been executed between the developer and the customer, and equipment designated for the project has been ordered. A contract for the construction of the project has been executed between either the developer, or design/build firm and the customer. A formal letter of intent signed by the either the developer, design and/or build firm and the customer has been executed. Project is still under design or in a conceptual phase. Design and Build Firm experience is scored independently whether or not they are separate entities. The same firm may have experience in both categories, and may be listed twice in the project submission form. The average score between the design and build categories is the effective score for this category. The Design/Build Firm has demonstrated project experience with one or more CHP facilities in PECO s service territory. The Design/Build Firm has engineering/construction experience with one or more CHP facilities. 40 30 10 0 20 10 6
C. Interconnection Application D. Project Timeline The Design/Firm does not have engineering/construction experience with CHP facilities. The interconnection application has been approved. The customer has submitted an interconnection application of the CHP project. The customer has not yet submitted an interconnection application for the CHP project. Proposed completion within 12 months of call. 10 Proposed completion within 18 months of call. 5 Proposed completion within 24 months of call. 2 0 25 15 0 7
PROJECT SCORING EXAMPLES EXAMPLE NO. 1 A customer s project submission provides evidence that the customer has retained an experienced design & build firm (same entity) with examples of two CHP projects the design & build firm has successfully completed within the PECO service territory. The customer has indicated in the Project Submission Form that it has executed a contract with the contractor firm for the construction of the project and submitted a copy of the contract as evidence. The customer has furthermore indicated and provided evidence that the interconnection application associated with the project has been submitted to PECO; however, it has not yet been approved by PECO. Based on the project schedule provided, the customer expects the project to achieve CDO by a date that is within 18 months of the call. Table 4. Scoring Example 1 Category Scoring Criteria Score A. Project Maturity A contract for the construction of the project has been executed between the developer and the customer. Construction has not yet started. 30 B. Design & Build Firm C. Interconnection Process D. Timeline The customer has contracted with a design & build firm that provides demonstrated project experience with two CHP facilities in PECO s service territory. Customer has submitted an interconnection application to PECO for the CHP project. Project schedule shows a timeline with steps to achieve CDO within 18 months of this CfP. 20 Average of 20 (Design Firm) and 20 (Build Firm). Both are the same entity. 15 5 TOTAL POINTS EXAMPLE NO. 1 70 EXAMPLE NO. 2 A customer s project submission provides evidence that the customer has retained an experienced design firm with examples of five CHP projects the design firm has successfully completed within the PECO service territory. The build firm that has been retained has no prior CHP experience. The customer indicated it has a formal letter of intent with the lead build firm and has submitted the letter as evidence. 8
The customer has indicated it has not submitted an interconnection application yet. Based on the project schedule provided, the customer expects the project to achieve CDO by a date that is within 24 months of the call. Table 5. Scoring Example 2 Category Scoring Criteria Score A. Project Maturity A formal letter of intent has been executed between the build firm and the customer. 10 B. Design & Build Firm C. Interconnection Process D. Timeline Firm has demonstrated project experience with five CHP facilities in PECO s service territory. No interconnection application has been submitted to PECO. 10 Average of 20 (Design firm score) and 0 (Build firm score) Project schedule shows a timeline with steps to achieve CDO within 24 months of 2 this CfP. TOTAL POINTS EXAMPLE NO. 2 22 EXAMPLE NO. 3 A customer s project submission indicates it has retained a design firm that has experience with the development of CHP facilities but not in PECO s service territory. The build firm, on the other hand, does have experience with the development of CHP facilities in PECO s service territory. The customer has indicated that the CHP project is under construction and has provided documentation indicating that construction has commenced. The customer has also submitted evidence of the interconnection approval for the CHP project received from PECO. Based on the project schedule provided, the customer expects the project to achieve CDO by a date that is within 12 months of the call. Table 6. Scoring Example 3 Category Scoring Criteria Score A. Project Maturity Project is under Construction. 45 B. Design-Build Firm C. Interconnection Process D. Timeline Firm has EPC experience with one or more CHP facilities but not in the PECO service territory. Interconnection application has been approved by PECO. 15 Average of 10 (Design Firm score) and 20 (Build Firm Score) Project schedule shows a timeline with steps to achieve CDO within 12 months 10 of this CfP. TOTAL POINTS EXAMPLE NO. 3 95 25 0 9
NOTIFICATION OF QUALIFIED PROJECTS PECO will notify customers participating in the CfP regarding the outcome of their project submissions and advise on next steps in the process regardless of the score. If a CHP project qualifies for incentives, PECO will send a preliminary reservation letter to the customer indicating the maximum total amount of the incentives that could be paid for the project. PROJECT SUBMISSION Complete Project Submission Forms may be submitted by email prior to the call deadline noted on the CHP website. Email: pecochp@exeloncorp.com Phone: 866-850-0357 Web: www.peco.com/chp DETERMINATION OF INCENTIVES Upon preliminary acceptance of a project submission, the customer will submit, as part of the formal CHP application, a planned schedule of milestones, measurement and verification, interconnection, operational requirements (inclusive of planned CDO), and any additional required documentation. Details and requirements are fully contained in the program application. The application will require formally engineered and certified design documents and additional attestations as applicable on a project-specific basis. Examples include but are not limited to design drawings, equipment specifications, permitting applications, OEM warranty, maintenance contracts, interconnection application, etc. RESERVATION LETTER Qualified projects will receive a reservation letter indicating the maximum amount of incentives that could be paid for a customer s project. Any such reservation letter will be strictly held to projected completion dates. Accordingly, projects must be completed and fully commissioned (achieve CDO) within 18 months of the issuance of the reservation letter. Within the reservation letter, provisions exist for a single term extension; however, an extension is not guaranteed (subject to timing and available program funding). In any event, no extension will be issued that allows for a CDO beyond the Act 129 Phase III program end date of May 31, 2021. The incentives for qualified projects shall be as follows: The incentives shall be a combination of the capacity incentive related to operating capacity of the CHP system once in service, and a $0.02/kWh performance incentive for net electricity produced for a period of 12 months after the CHP system is fully commissioned, operational, and substantially verified by PECO. The combination of the capacity incentives and the performance incentive is capped at the lesser of $2 million or 50% of the total project cost. PECO has sole and final determination of the annual energy savings to be used in calculating the incentive amount. PECO also 10
reserves the right to require specific measurement and verification activities including monitoring before, during and after the retrofit and to base the incentive payment on the results of these activities. Under no instances will incentives be paid until a project has been deemed commercially operational by PECO or its agents. METERING AND PROJECT DATA Once the system is fully commissioned and operational, the customer shall be responsible for providing the necessary data to PECO electronically on a (minimum) monthly basis during the initial year as part of the system performance verification. The data will have to be obtained from PECO-approved metering, and all costs associated with the metering including labor, materials, and electronic communication are the customer s responsibility. Please contact PECO for greater detail on metering requirements, which includes information on the minimum trend data interval and required trend points. PECO REQUIREMENTS INTERCONNECTION The customer is responsible for understanding and complying with the PECO interconnection agreement. The CHP system must adhere to the PECO interconnection agreement. The cost and installation of the hardware and software to assure compliance shall be the customer s responsibility. PECO shall require the customer to provide design details of this aspect of the system and the review of this information shall be part of the interconnection approval process. The steps to implement this process can be found athttps://www.peco.com/myaccount/myservice/pages/selfgeneratedpower.aspx. To contact the PECO Interconnection team, you may e-mail them at NetmeterInterconnects@exeloncorp.com. OTHER PECO REQUIREMENTS 1. Under the PECO CfP program, PECO is entitled to 100% of the energy benefits associated with the energy-saving measures. This excludes the value of energy cost savings realized by the customer, but includes all rights to all associated PJM Energy, Capacity, and Reserves Products. The customer agrees to provide PECO with such further documentation, as PECO may request to confirm its ownership of such benefits and products. 2. The customer is responsible for obtaining and paying for all necessary permits associated with their CHP project. 3. PECO has the right to publicize the customer s participation in this program and share information such as energy and total cost. PECO, however, understands that information such as financing and detailed cost 11
breakdowns may be sensitive to the customer and will keep such details confidential unless it is required by the public utility commission to disclose it. 12
COMBINED HEAT AND POWER CALL FOR CHP PROJECTS PROJECT SUBMISSION FORM Please visit the CHP website located at www.peco.com/chp to download the project submission form 13