This ICF "quick take" discusses how CHP can help local distribution companies (LDCs) find sites that will grow revenue and benefit customers.
For LDCs, attracting new gas customers and building load with existing customers is a challenging business. Combined heat and power (CHP) offers a potential win-win: LDCs receive additional revenue from increased natural gas throughput, and customers benefit from lower net energy costs through on-site electricity production. In this Quick Take, ICF and SoCalGas discuss how their collaboration has helped SoCalGas to identify prime CHP customer opportunities, build a new business approach of having SoCalGas build, own, and operate CHP equipment on a customer’s site through a new gas tariff, and focus marketing resources and messages to top-tier locations. ICF’s CHP potential study identified sites that could see, for example, reduced site energy costs of 33% and economic payback within 6.5 years even without including tax credits or incentives. SoCalGas now has this kind of actionable, granular site-level economic information for over 1,000 C&I sites, and can actively pursue these robust opportunities.