Topic:"Energy Efficiency" in M04265

RESPONSE TO INFORMATION REQUEST TO: NSUARB FROM: NSPI Question IR-2: The proposed load retention rate appears to be discouraging customers from using environmentally friendly natural gas in favour of energy derived predominantly from coal...

AI summary NSPI responds to a concern that the proposed load retention rate may discourage the use of natural gas in favor of coal. NSPI asserts its commitment to environmental regulations and highlights that natural gas is more environmentally friendly than coal, but warns against prematurely replacing existing resources with natural gas due to potential cost increases.

REQUIRED INFORMATION: The Company shall obtain the following information from the Customer, and file that information with the New Mexico Public Utility Commission (NMPUC): - 1. The customer shall provide detailed engineering and economic...

AI summary The Company is required to obtain specific information from customers, including engineering studies, sworn affidavits, and agreements on energy usage limits, to be filed with the New Mexico Public Utility Commission.

TERMS AND CONl>ITIONS - Ontario Hydro's evaluation will include, among other things: a review and assessment of the third-party reviewer's report; the supporting documentation provided by the applicant; and the effect, if any, that grantin...

AI summary The document outlines the terms and conditions for the Load Retention and Expansion Price (LREP) agreement, including evaluation processes, contract duration, energy efficiency requirements, and approval requirements from the Ontario Hydro Board and the provincial government.

GENERAL CONDITIONS (Continued) - 6. To promote energy conservation and efficiency, the Company may require that the customer implement energy efficiency measures prescribed by the Company. - 7. The State Tax Adjustment Surcharge is applica...

AI summary The document outlines general conditions for a specific rider, including requirements for energy efficiency measures, inapplicability of certain tariff provisions, exceptions for on-site generation, and the necessity of an electric service contract with confidentiality requirements.

This report describes the results of a survey which identified states that permit particular innovative utility rate mechanisms for the gas and electric industries. The report also provides insight into the rationale for such rate offering...

AI summary This report surveys innovative utility rate mechanisms in various states, focusing on incentive, retention/market driven, and efficiency rates. It discusses Illinois' economic development position and compares its rate mechanisms with those of Indiana, Michigan, Ohio, and Wisconsin. The findings are based on a survey and do not represent formal policy statements.

SECTION C. Economic Development Related Rates For purposes of this report, economic development related rates are those that provide an economic motivation to a customer in exchange for the alteration of the customer's load pattern (not ne...

AI summary This section discusses economic development related rates, focusing on interruptible rates and off-peak load rates. Interruptible rates allow customers to accept service interruptions in exchange for lower rates, benefiting both customers and utilities by reducing costs. Off-peak rates encourage energy use during non-peak times, lowering customer costs. Illinois is highlighted as one of 37 states allowing such rates.

Enhance the competitiveness of a specific industry 11 Increase the efficiency of utility plant utilization 32 Other 13 No Response 14 The same of the same of the same of the same of the same of the same of the same of the same of the same...

AI summary The text appears to be a fragmented and repetitive heading followed by a table with repeated entries, likely from a regulatory proceeding. It mentions topics such as enhancing industry competitiveness and increasing utility plant efficiency, but lacks substantive discussion or context.

General Capabilities - The module provides a comprehensive demand-side program evaluation capability, with inputs for program cost, load impact, timing, and capital costs. - Load impacts may be input chronologically for each program, or ma...

AI summary The LFA Module provides comprehensive capabilities for demand-side program evaluation, load impact analysis, and load shape data input. It supports detailed or aggregated data modeling, integrates with other modules like GAF and PROMOD, and allows flexible price response and reconciliation of electric price assumptions. The module supports various input formats and reporting by end-use, class, and company.

Dispatch of Non-Thermal Resources System load data is passed in the form of a typical 168-hour weekly load shape to the GAF from the LF A Module. Then, the dispatch of non-thermal resources is performed in the following order: - 1. The tra...

AI summary The document outlines the process for dispatching non-thermal resources in energy systems, including the handling of load data, hydro generation, transactions, pumped storage hydro, and direct load control devices. After non-thermal resources are dispatched, thermal generating units serve the remaining load.

RESPONSE TO INFORMATION REQUEST TO: NSUARB FROM: NSPI Question IR-28: While discussing Sable gas, Page 3 of the Report states: "Our electric business will benefit from the growth in industrial and residential use that had already begun." -...

AI summary NSPI explains that the growth in industrial and residential use driven by the Sable gas project will increase electricity demand, benefiting their electric business. The statement is supported by a Conference Board of Canada report and market observations.

"REVISED" Question 7: Reference 3) 1998 Nova Scotia Power Annual Report, page 16: "Nova Scotia is building its electric utility business to become more competitive. In July, the National Energy Board approved the company's export license....

AI summary The document asks Nova Scotia Power Inc. (NSPI) about its exploration of replacing lost customer loads through export sales, details on 1999 electricity exports, financial statements, and whether NSPI has considered shutting down uneconomic generating facilities to benefit other customers.

RESPONSE TO INFORMATION REQUEST TO: CAPE BRETON REGIONAL MUNICIPALITY FROM: NSPI Question IR-5: Will the conversion of Tufts Cove to natural gas enhance NSPl's overall efficiency? Response IR-5: The conversion may slightly decrease the ove...

AI summary NSPI responds to a question from the Cape Breton Regional Municipality regarding the efficiency impact of converting Tufts Cove to natural gas. While acknowledging a potential slight decrease in efficiency, NSPI highlights expected economic and environmental benefits.

EXPERIENCE (1985 to present) Barakat & Chamberlin, Inc. Director of the firm's strategic planning work for utilities. Has been instrumental in developing competitive business pla.11S for utilities t.11.roughout the United States and Canada...

AI summary Barakat & Chamberlin, Inc. has extensive experience in strategic planning for utilities, including resource planning, business planning, and energy efficiency programs. The firm has worked with over 70 utilities and has provided testimony in more than 50 regulatory and civil proceedings in the US and Canada.

Books :;,_ f "The Future of Integrated Resource Planning." Electric Utilities Moving into the 21st Century. Edited by Greg Enholm. 1994. Demand-Side Management: Concepts and Methods (2nd Edition). With Clark W. Gellings. Lilburn, GA.: Fair...

AI summary The text lists various publications and chapters related to electric utility management, focusing on demand-side management, rate design, and forecasting methods, with contributions by Clark W. Gellings and others. These works span from the 1980s to the 1990s and cover topics such as conservation, load forecasting, and integrated resource planning.

Conference Proceedings and Papers - "The Effect of Increasing Competition and Deregulation on IRP and DSM." In Proceedings of the 7th National Demand-Side Management Conference. With G. Collins and S. Shaffer. Cosponsored by Electric Power...

AI summary The text lists a series of conference papers and proceedings related to demand-side management (DSM), integrated resource planning (IRP), and energy efficiency in competitive markets. These papers were presented at various conferences between 1992 and 1995, with topics including DSM financial incentives, customer value, and utility shareholder mechanisms.

Articles in Technical Journals - "Cloudy Days for DSM." With A. Faruqui and G. Wikler. Electricity Journal, vol. 7, no. 6, July/August 1994, pp. 54-66. - "Efficient Block Rate Structures: Rethinking Conventional Wisdom." With K. Seiden. El...

AI summary The text lists various academic articles published in technical journals, primarily focusing on topics related to demand-side management (DSM), rate structures, forecasting models, and electricity generation costs. These articles were authored by John H. Chamberlin and his colleagues and appeared in journals such as the Electricity Journal, EPRI Journal, and The Engineering Economist.

SELECTED PRESENTATIONS f l l - "Lessons Learned from the California Experience." Regulatory Restructlfring Conference sponsored by Electric Utility Consultants, Denver, CO, April 1995. - "Pricing and Rate Competition." Retail Wheeling Summ...

AI summary The document lists a series of presentations and conferences related to energy regulation, demand-side management, and competitive electricity markets, focusing on topics such as pricing strategies, regulatory restructuring, and strategic planning in the utility sector.

DR. CHAMBERLIN - DIRECT EVIDENCE 2745 of the day. Under seasonal demand charges, on the other hand, customers are charged based on their single highest load occurring during on-peak hours. Once a demand level has been reached, a customer h...

AI summary Dr. Chamberlin discusses the challenges and benefits of implementing time-of-use (TOU) rates, emphasizing the need for a lost revenue recovery mechanism to mitigate risks for utilities. He supports voluntary TOU rates with revenue shortfalls covered by non-participating customers and suggests borrowing data from other utilities to avoid unnecessary experiments. He also argues that TOU rates should not be classified as demand-side management (DSM) programs.

DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE - A. Oh, sure. I think, sitting here today, I can recall that Pacific Gas & Electric has done a significant amount of customer outage cost surveys. Ontario Hydro has done some here a couple of years...

AI summary The cross-examination discusses customer outage cost surveys conducted by various entities, including Pacific Gas & Electric and Ontario Hydro, and references studies by EPRI. It questions whether domestic customers place significantly lower value on outage costs compared to large industrial customers, with the expert acknowledging variation in outage value among customer classes.

DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE 2767 in the U.S. there is a significantly increasing amount of production that's shifted from one facility to another throughout the country, throughout the U.S., in order to take advantage of diffe...

AI summary The discussion highlights concerns about electricity price differences influencing production shifts in the U.S., with examples like air separation companies moving operations to take advantage of lower prices. The witness raises questions about potential impacts on employment and capacity in Nova Scotia if such shifts occur.

urn to a declining rate structure. 3 In this paper, we show that the efficiency criticism of declining block rates has been incorrectly applied, and has therefore led to poor policy choices. The economic efficiency argu-I ment for inverted...

AI summary This paper argues that the efficiency criticism of declining block rates has been incorrectly applied, leading to poor policy choices. It highlights that inverted block rates may not always be economically efficient, especially when considering seasonal variations in electricity use and capacity costs.

A. Balancing Competing Objectives In choosing a desirable rate structure from the available alternatives, electric utilities and their regulators balance objectives that often compete with one another. The Public Utility Regulatory Policie...

AI summary The text discusses the balancing of competing objectives in setting electricity rates, referencing the Public Utility Regulatory Policies Act (PURPA) of 1978. It outlines PURPA’s three objectives: energy conservation, efficiency, and equitable rates. It also explains inverted block rate structures and PURPA’s stance on declining block tariffs, emphasizing efficiency and cost considerations.

II. Marginal Costs, Rate Design, and Conservation Our primary conclusion from this analysis is this: Economic effi- -)ncy cannot be promoted by the de- · sign of rate structures which deviate significantly from cost. If larger users are le...

AI summary The text argues that economic efficiency cannot be promoted by rate structures that deviate significantly from cost. Inverted block rate structures worsen efficiency by overcharging large users and undercharging small ones. Declining block rates in winter may promote conservation, efficiency, and equity, particularly for residential customers with electric heat.

ing. The energy service contract includes: - The use of utility-owned refrigeration equipment - Provision of equipment operating and maintenance services - The energy required to operate the system For companies that decide to provide ener...

AI summary The text discusses energy service contracts and how demand-side management (DSM) and energy efficiency can be integral to utility services. Examples include Wisconsin Electric and Centra Gas, highlighting how efficient equipment can increase profitability and remove barriers to energy conservation by providing immediate cost savings to customers.

"REVISED" Question 7: Reference 3) 1998 Nova Scotia Power Annual Report, page 16: ^^Nova Scotia is building its electric utility business to become more competitive. In July, the National Energy Board approved the company's export license....

AI summary The document contains a revised question from a regulatory proceeding regarding Nova Scotia Power's export sales, customer load retention, and financial statements. It asks whether NSPI explored replacing lost customer loads through exports, provides details on 1999 export sales, requests financial statements, and inquires about shutting down uneconomic generating facilities.

DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE 2755 - 1 A. Oh, sure. I think, sitting here today, I can recall 2 that Pacific Gas & Electric has done a. significant 3 amount of customer outage cost surveys. Ontario 4 Hydro has done some here a c...

AI summary The discussion revolves around customer outage cost surveys conducted by various entities, including Pacific Gas & Electric and Ontario Hydro, and the variation in outage cost valuation among different customer classes. The witness acknowledges differences in outage cost perception between residential and industrial customers.

Summary of NSPI Position I. t I. 5. NSPI believes that Sable natural gas not only should but cah be made available to consumers in Nova Scotia at a delivered cost that. enables displacement of alt~ative fossil fuels. Seeking 90,000 MMBtu/d...

AI summary NSPI argues that Sable natural gas should be made available to Nova Scotia consumers at competitive prices to displace alternative fossil fuels. It highlights concerns about discriminatory toll structures, pipeline capacity commitments, and revenue requirements that may make gas unaffordable. NSPI advocates for point-to-point tolling and fair access to ensure economic benefits for Nova Scotia.

Markets for Electrical Energy - 8. Markets for electrical ·energy are becoming increasingly competitive. Many jurisdictions are moving to open their transmiss~on grids to give electric customers access to a variety of sources of generation...

AI summary The document discusses the increasing competition in electrical energy markets, particularly in the US and Alberta, and the potential for electric-on-electric competition in Atlantic Canada. NSPI highlights its proximity to new natural gas supply as an advantage in the evolving competitive market.

NSPl's Interest in Gas - 11. NSPI has a serious and genuine interest in the use of natural gas in Nova Scotia. NSPI's interest in gas is twofold-primarily for its own use in generating electric power in Nova Scotia, and secondly as an alte...

AI summary NSPI has a significant interest in using natural gas for electricity generation and as an alternate fuel in Nova Scotia. It operates generating stations at Tufts Cove and Trenton that could be converted to natural gas, which would reduce dependency on foreign oil. NSPI is also considering building gas-fired combined cycle plants and has commissioned a pipeline study to assess feasibility.

21. The Accord has among its objects: "To achieve the early development of petroleum resources in the offshore area for the benefit of Canada as a whole and Nova Scotia in particular;" "To recognize the right of Nova Scotia to be the princ...

AI summary The Accord aims to develop offshore petroleum resources for the benefit of Canada and Nova Scotia, emphasizing the province's right to primary benefits. Concerns are raised that approving the M&NE and SOEP projects may result in offshore gas flowing to the U.S. and New Brunswick, failing to reduce Nova Scotia's dependence on foreign oil. NSPI supports using offshore gas locally but stresses the need for economically viable pricing.

Proposals To Use Gas To Generate Electricity NSPI has entered into a long-tetm contract (10 years) for gas delivery to the termination point of the Halifax lateral in Tuft's Cove. Though NSPI has the option of selling the gas if oil prices...

AI summary NSPI has a long-term gas contract for use at Tuft's Cove, with plans to build a 300 MW gas-fired plant to displace coal. Stora Forest Industries is also considering a 250 MW plant, which may reduce NSPI's load and coal demand. The impact on coal depends on NSPI's export market success and coal price competitiveness.

Development and Use of Natural Gas: Socio-Economic Impact on the Cape Breton Regional Municipality prepared for: Nova Scotia Petroleum Directorate prepared by: Gardner Pinfold Consulting Economists Limited and Hillary & Associates March,19...

AI summary This document, prepared for the Nova Scotia Petroleum Directorate by Gardner Pinfold Consulting Economists Limited and Hillary & Associates in March 1999, examines the socio-economic impact of natural gas development and use in the Cape Breton Regional Municipality.

CBRM ECONOMY AND NATURAL GAS Over the past 30 years, the CBRM economy has undergone substantial change, reflected in a decline in importance of raw materials and manufactured goods production and an increasing dependence on services as a s...

AI summary The CBRM economy has shifted from manufacturing to services over the past 30 years, but this shift has not offset economic decline. Socio-economic indicators show challenges, including high unemployment and low income. Natural gas is seen as a potential economic benefit through energy costs and offshore development, but concerns exist about the displacement of coal in electricity generation.

Impact on the Energy Market Nova Scotia households and bus,i.nesses spend about $1 billion annually on energy in final demand applications including space heating, hot water, cooking and process heat. The CBRM accounts for 12-15% of demand...

AI summary Nova Scotia households and businesses spend $1 billion annually on energy, with petroleum products and electricity as main sources. Natural gas could displace petroleum in the CBRM and mainland Nova Scotia, offering cost savings and reduced emissions, but may lead to job losses in energy distribution. A 10% price differential is expected, with market share projections varying by region.

1. CONTEXT Development of the Sable gas fields is at its mid-point, with production expected late in 1999 or early 2000. SOEP received regulatory approval in 1997, following a lengthy review process. For many Nova Scotians, SOEP means jobs...

AI summary The Sable gas fields are nearing mid-point development, with production expected by late 1999 or early 2000. SOEP received regulatory approval in 1997, offering jobs and industrial opportunities. Natural gas is expected to displace other fuels, raising concerns for established energy suppliers and creating opportunities for industrial development, particularly in the CBRM.

2. OBJECTIVES The Province of Nova Scotia and the CBRM require an analysis of how the development of the Sable Gas Projects and the availability of gas in the province are likely to affect the CBRM. There is also a need for guidance on wha...

AI summary The study aims to assess the impact of the Sable Offshore Energy Project and the availability of natural gas on the CBRM, including effects on coal use and employment at the CBDC's mines, and to recommend actions to maximize benefits and minimize negative effects.

Overview The CBRM has an important stake in the development of offshore natural gas, and its availability for use in the province. This stake manifests itself in three ways. - > On the positive side, there is potential for improved economi...

AI summary The CBRM has a significant interest in offshore natural gas development, with potential economic benefits from participation in exploration, access to lower energy costs, and competitive advantages. However, there is also a risk of economic decline due to the potential displacement of coal by natural gas in electricity generation.

Access to Natural Gas The CBRM shares with other p~rts of the province an interest in securing access to natural gas. There is the hope that gas would be a potentially cheaper source of energy, resulting in reduced energy costs and higher...

AI summary The CBRM is interested in securing access to natural gas for lower energy costs and industrial development but is concerned about high transportation costs and a small market potentially limiting access, which could harm the local economy.

Natural Gas as a Source of Electrical Energy Coal plays an important role in the CBRM, providing direct employment for some 1,700 and injecting over $140 million in operations spending annually into the regional economy. Mine operations ac...

AI summary Coal is a significant economic driver in the CBRM, supplying most of Nova Scotia Power Inc.'s coal for electricity generation. However, the shift toward natural gas for electricity production, driven by environmental and cost considerations, may reduce future coal demand.

SOEP In assessing opportunities and benefits, it is important to understand that contracting for offshore projects tends to occur on a global scale, involving large and highly specialized companies. From a locational perspective, the work...

AI summary The Sable Offshore Energy Project (SOEP) discusses the contracting approach for offshore projects, emphasizing the global nature of such projects and the use of an Alliance model to promote local participation. The document highlights the shift from fixed-price contracts to performance-based partnerships, which increase flexibility and opportunities for local contractors. Preliminary estimates indicate that Nova Scotia content in Phase I is around 22%, expected to rise to 30% by Phase II.

The job opportunities linked to these project activities number in the thousands. By main category of activity they include: SOEP PROJECT COMPONENTS M&NPP NS DISTRIBUTION SYSTEM Services Fabrication Construction Pipeline and Laterals Distr...

AI summary The text outlines the job opportunities associated with various project components, including the SOEP, M&NPP, and NS Distribution System, detailing roles across different categories such as engineering, construction, and operations. It also references the participation of CBRM firms in these projects.

int venture with one of these companies, or by subcontracting a particular aspect of the work. It would take considerable experience and substantial resources to compete internationally at this level. - Onshore Support for Offshore Activit...

AI summary The text discusses potential local participation in offshore energy activities, emphasizing onshore support roles such as marine supply bases, warehousing, and transportation. It references historical North Sea development for context.

- > Construction of Onshore Facilities: There are good prospects for local participation in construction of onshore facilities. Onshore construction is an activity well-known to local contractors, though the specific types of facilities re...

AI summary The text discusses local participation opportunities in the construction of onshore and offshore facilities related to the energy sector. While onshore construction offers potential for local contractors, offshore activities are dominated by international companies due to high capital requirements. Limited prospects for local supply of materials and equipment are also noted.

Steps to Improve CBRM Participation ' The lessons emerging from the first full year of SOEP development are applicable to all firms in Nova Scotia, including those in the CBRM. - )" ' Training and Up-grading. More time and effort need to b...

AI summary The document outlines steps to improve CBRM participation in the SOEP, emphasizing the need for training, initiative, responsiveness, joint venturing, and feedback mechanisms. It also highlights the importance of regional resource pooling and investment in throughput capacity, while cautioning about the cyclical nature of the offshore industry.

Nova Scotians spend about $2 billion annually to meet their energy needs. About half of this is spent on electricity, petroleum and wood to meet heating, lighting and operating demands in the residential, institutional, commercial and indu...

AI summary Nova Scotians spend approximately $2 billion annually on energy, with about half used for electricity, petroleum, and wood for heating, lighting, and operations. Natural gas entering the market in 2000 is expected to change energy supply and demand patterns by displacing other fuels like fuel oil, coal, and propane.

2. FACTORS AFFECTING NATURAL GAS DEMAND It is important to note that the mere availability of natural gas in Nova Scotia does not in itself guarantee a market. It must compete with existing fuels whose suppliers, including CBDC, would like...

AI summary The availability of natural gas in Nova Scotia does not ensure market success, as it must compete with existing fuels like those supplied by CBDC. Factors influencing natural gas demand include inter-fuel economics, gas distribution policies, environmental considerations, CBDC production capabilities, and potential electricity deregulation.

Assumptions The analysis rests on several key assumptions: );,, Price: Relative prices of energy forms now available are assumed to remain constant in real terms at today's levels. Natural gas is assumed to be distributed to consumers at a...

AI summary The analysis assumes constant energy prices, with natural gas priced 10% below oil. It uses a low gas price case to estimate delivered costs, considering lateral and distribution tariffs. Gas demand is projected based on displacement of competing fuels, with 35% of residential energy demand expected to be met by gas by year ten. Feasibility of gas distribution is not fully assessed beyond the Gas in CBRM Case.

BASE CASE: NO NATURAL GAS IN NOVA SCOTIA Electricity Petroleum Wood Natural Gas Total LFO HFO Propane 1996 786,000 219,600 27,900 31,500 1,750 0 1,066,750 1997 824,240 222,894 28,319 31,973 1,750 0 1,109,175 1998 820,000 226,237 28,743 32,...

AI summary The document presents a table showing energy consumption data across various fuels in Nova Scotia from 1996 to 2010, with a focus on electricity, petroleum, wood, and natural gas. The table indicates that natural gas consumption remained at zero throughout the period, highlighting the 'Base Case: No Natural Gas in Nova Scotia.'

Demand and Expenditures Consumers and businesses in the CBRM spend about $140 million annually on energy in final demand applications for which there is at least some potential for conversion to natural gas. Energy use and expenditures est...

AI summary Consumers and businesses in the CBRM spend approximately $140 million annually on energy for final demand applications that could potentially convert to natural gas. Sector-specific energy use and expenditure estimates by fuel type are detailed in Table IV-6.

Impacts at the Provincial Level Access to natural gas is expected to have a generally favourable impact in the province. Assuming gas is available throughout the province in conformance with provincial regulations, then the following kinds...

AI summary Access to natural gas is expected to have a generally favourable impact in Nova Scotia, particularly in energy savings and job creation in gas distribution. However, achieving significant market share is challenging due to current fuel prices and infrastructure costs. Environmental benefits from reduced greenhouse gas emissions are also anticipated, along with new business opportunities in gas-related industries.

Positive Impacts in the CBRM Access to natural gas would have a generally favourable impact in the CBRM. Assuming gas is available in the region in conformance with provincial regulations (ie, wide distribution at a uniform province-wide p...

AI summary Access to natural gas in the CBRM would lead to energy savings, job creation in gas distribution, potential industrial competitiveness gains, environmental benefits from reduced greenhouse gas emissions, and new business opportunities in gas-related services.

Some Caveats about CBRM Access to Gas Current market conditions are not favourable for the extension of natural gas supply to the CBRM. The market is small and uncertain. Prices for the fuels gas would try to displace are relatively low so...

AI summary The document discusses the challenges of extending natural gas supply to CBRM due to a small and uncertain market. Key factors include a declining population, weak industrial base, and reliance on Sysco for potential demand. NSPI's potential conversion of power generation units from coal to gas is also considered, though it could negatively impact coal mining prospects.

) Industrial opportunity would be compromised. ' - o From a purely economic standpoint, the availability of natural gas provides industry .with a wider array of energy options, thereby improving competitiveness. This would apply particular...

AI summary The availability of natural gas is seen as crucial for industrial competitiveness and environmental compliance. It would benefit Sysco, a major energy user in CBRM, and help the region compete with other areas. Natural gas would also aid in meeting tightening emissions standards, giving gas-equipped areas an advantage.

) Existing economic base is threatened. o While the availability of gas elsewhere in the province does not appear to represent an immediate threat to coal, it does afford NSPI and its larger industrial customers a long-term solution for re...

AI summary The existing economic base in CBRM is threatened due to the potential decline in coal demand, which could lead to the loss of the industrial base. However, access to gas offers a long-term solution for reducing emissions, which could benefit the area if it is also available.

Whose Coal is Cut Back Depends on Price Under a zero electricity export case, the key question becomes whose coal is displaced by gas: CBDC, other (either domestic or imported), or both. Fig. V-2 shows that between 1993 and 1998, NSPI reli...

AI summary The document discusses how the use of natural gas affects coal demand from CBDC and other sources. It suggests that unless CBDC can supply coal at competitive prices, coal demand from NSPI would decrease, but not necessarily from CBDC. The availability of natural gas is not the limiting factor for CBDC coal demand, but rather CBDC's ability to remain competitive with other coal suppliers.

Other Factors Two other factors could have a bearing on NSPI's gas utilization and system expansion plans, and hence on the impact on coal: - ➤ Industrial Generators: Existing NSPI customers could use gas to fire their own combined cycle e...

AI summary Two factors—industrial generators using gas and potential deregulation—could impact NSPI's coal utilization and system expansion. Industrial generators may switch to gas, reducing coal demand. Deregulation could lead to new competitors entering the market, potentially stranding NSPI's coal assets and requiring cost-spreading mechanisms for consumers.

vice and encouragement from the oil and gas industry. 3. Programs to provide training for jobs in natural gas distribution should be developed and established at one or more institutions in the CBRM. Special courses for gas fitters and rel...

AI summary The document recommends developing training programs for natural gas distribution jobs in the CBRM and suggests a review of provincial energy policy to align with current and future energy supply and demand conditions. It highlights changes in the energy landscape, including the arrival of natural gas, the closure of CBDC, and potential environmental regulations.

·- · Table A-1 Nova Scotia Final Energy Demand by Sector, 1996 Energy (OOOs MMBtu) $ (millions) Residential 33,300 470 Commercial/Institutional 28,700 280 Industrial 27,900 245 Transp ortation 61,800 1,050 Total 151,700 2,045 Statistics Ca...

AI summary Table A-1 presents Nova Scotia's final energy demand by sector in 1996, including residential, commercial, industrial, and transportation sectors, with corresponding energy use in MMBtu and expenditures in millions of dollars. The data is sourced from Statistics Canada and based on 1998 fuel prices.

Issues I I ,, I B Among fuels offering the same long-term supply security and reliability of delivery, cost tends to be the single most important factor in determining choice of fuel. Three factors go into the determination of cost from th...

AI summary The text discusses the factors influencing fuel choice from the consumer's perspective, emphasizing cost as the most important factor. It highlights three components of cost: price, combustion efficiency, and compliance with emissions standards.

I In order to penetrate markets in Nova Scotia, gas will have to be priced competitively. In new and expanding markets in Canada and the U.S., the experience indicates that inducing consumers to convert from oil to gas generally requires a...

AI summary The text discusses the conditions under which gas can compete with oil and other fuels in Nova Scotia, emphasizing the need for significant price differentials to incentivize conversion. It highlights variations in these differentials across residential, commercial, and industrial sectors and notes the likelihood of gas being used in combined-cycle generating units rather than replacing coal or oil in existing facilities.

ed "co-firing"). What is more likely, and what is occurring elsewhere, is the use of gas to power higher efficiency ("Combined-Cycle") generating units when additional generating capacity is required. - Three effects are evident with the s...

AI summary The text discusses the potential use of natural gas in Nova Scotia, particularly the Sable gas project, and how market deregulation elsewhere in North America has influenced customer choice and competition in the gas sector. It highlights the complexities of pricing and the multiple entities involved in delivering natural gas to consumers.

Combustion Efficiency and Operating Characteristics Combustion efficiency determines the actual cost of energy once it is converted to the user's needs. A shift to natural gas would cut the total amount of energy consurn.ed, where the shif...

AI summary The text discusses combustion efficiency across different sectors, noting that residential and industrial sectors may see efficiency gains or losses depending on fuel type and system design. Natural gas can improve efficiency in residential and power generation sectors, while industrial conversions may result in a slight efficiency loss but offset by other benefits.

Complying with Emissions Standards The measures needed to comply with emissions standards may impose direct or indirect costs on fuel users. Costs may take the form of investment in emissions control technology (eg, scrubbers on smoke stac...

AI summary The text discusses the challenges NSPI faces in complying with sulphur dioxide emissions standards under the Nova Scotia Environment Act. Options to reduce emissions include increasing energy imports, using low-sulphur coal, switching to natural gas, and installing scrubbers. However, the latter is not economically viable due to the age of the facility and the availability of more cost-effective alternatives.

What this means for the' CBRM Taken at face value, the distribution regulations and lateral policy imply that gas will be delivered to and distributed within the CBRM (and other markets in the province), provided it is economic to do so. T...

AI summary The text discusses the economic feasibility of gas distribution in the CBRM, noting that gas will be provided if the market can generate sufficient revenue to cover costs. It highlights limited impact on coal demand due to the difficulty of substituting gas for electricity in industrial uses and the high cost of converting residential heating systems.

TABLE B-1 BASE CASE: NO NATURAL GAS IN NOVA SCOTIA RESIDENTIAL ENERGY DEMAND Electricity Petroleum Wood Natural Gas Total Energy gwh LFO (mega 1) Prop (mega 1) tonnes ('000 mmbtu) ('000 mmbtu) 1996 3,730 530 25 17,500 0 34,394 1997 3,788 5...

AI summary This table presents residential energy demand in Nova Scotia from 1996 to 2010, showing data for electricity, petroleum, wood, and natural gas consumption. The data is segmented into various energy sources and measured in gigawatt-hours and million British thermal units. The table highlights the absence of natural gas usage during the period.

- 2. Natural gas displaces 10% of electrical load for domestic heating by 2010. - 3. Natural gas captures about 35% of the domestic fuel oil market by 2010. - 4. Natural gas achieves minimum of 10% higher efficiency than displaced oil furn...

AI summary The text outlines the impact of natural gas on the domestic energy market by 2010, including displacement of electrical load, capture of fuel oil market share, efficiency improvements, and cost advantages over heating oil.

TABLE B-7 CASE A: NATURAL GAS ON MAINLAND NOVA SCOTIA AND STRAIT OF CAN SO COMMERCIAL-INSTITUTIONAL ENERGY DEMAND (000s MMBtu) Electricity Petroleum Natural Gas Total Energy LFO HFO Propane 1996 9,389 6,425 1,386 790 0 17,991 1997 10,277 6...

AI summary The table presents energy demand data for commercial-institutional sectors in Mainland Nova Scotia and the Strait of Canso from 1996 to 2010, showing the consumption of electricity, petroleum products, and natural gas. Natural gas enters the market in 2000, with usage increasing over time.

- 2. Natural gas displaces 0% electrical load in the commercial-institutional sector. - 3. Natural gas captures 50% of the commercial-institutional fuel oil market by 2010. - 4. Natural gas achieves 5% lower efficiency than displaced oil-f...

AI summary The text outlines the displacement of electrical load by natural gas in the commercial-institutional sector, noting that natural gas captures 50% of the fuel oil market by 2010, achieves 5% lower efficiency than displaced oil-fired boilers, and is assumed to be sold at a minimum 10% below #6 fuel oil in terms of efficiency-adjusted energy equivalence.

- 2. Natural gas displaces 0% electrical load in the industrial sector. - 3. Natural gas captures 65% of the industrial market by 2010 (though most industrial boilers assumed dual-fired). - 4. Natural gas achieves 5% lower efficiency than...

AI summary The text discusses the displacement of electrical load by natural gas in the industrial sector, noting that natural gas captures 65% of the market by 2010, achieves lower efficiency than oil-fired burners, and is sold at a minimum 10% below #6 fuel oil in terms of energy equivalence.

TABLE B-9 CASE A: NATURAL GAS ON MAINLAND NOVA SCOTIA AND STRAIT OF CANSO TOTAL ENERGY DEMAND (OOOs MMBtu) Electricity Petroleum Wood Nahlral Gas Energy LFO HFO Propane 1996 29,117 25,009 8,449 2,121 283 0 64,980 1997 30,535 25,384 8,576 2...

AI summary Table B-9 presents historical energy demand data for Natural Gas on Mainland Nova Scotia and the Strait of Canso from 1996 to 2010, detailing energy consumption in OOOs MMBtu across various categories including electricity, petroleum, wood, and natural gas.

TABLEC-1 CASE B: NATURAL GAS IN THE CAPE BRETON REGIONAL MUNICIPALITY RESIDENTIAL ENERGY DEMAND (OOOs MMBtu) Electricity Petroleum Wood Natural Gas Total Energy LFO Propane 1996 1,578 2,410 80 40 0 4,108 1997 1,603 2,446 81 40 0 4,170 1998...

AI summary The table shows residential energy demand in the Cape Breton Regional Municipality from 1996 to 2010, with natural gas beginning to enter the Nova Scotia mainland market in 2000. The data includes energy consumption from electricity, petroleum, wood, and natural gas, with natural gas usage increasing over time.

- 2. Natural gas displaces 10% of electrical load for domestic heating by 2010. - 3. Natural gas captures about 30% of the domestic fuel oil market by 2010. - 4. Natural gas achieves 5% higher efficiency than displaced oil furnaces. - 5. N...

AI summary The text outlines the impact of natural gas on domestic heating and fuel markets by 2010, noting its displacement of electricity and fuel oil, efficiency advantages, and pricing assumptions relative to heating oil.

TABLEC-2 CASE B: NATURAL GAS IN THE CAPE BRETON REGIONAL MUNICIPALITY COMMERCIAL-INSTITUTIONAL ENERGY DEMAND (OOOs MMBtu) Electricity Petroleum Natural Gas Total Energy LFO HFO Propane 1996 1,328 909 196 1997 1,454 923 199 112 114 0 2,546...

AI summary The table presents energy demand data for the Cape Breton Regional Municipality from 1996 to 2010, showing trends in electricity, petroleum, and natural gas consumption. Natural gas begins entering the Nova Scotia market in 2000, as indicated in the text.

- 2. Natural gas displaces 0% electrical load in the commercial-institutional sector. - 3. Natural gas captures 50% of the commercial-institutional fuel oil market by 2010. - 4. Natural gas achieves 5% lower efficiency than displaced oil-f...

AI summary Natural gas is displacing fuel oil in the commercial-institutional sector, capturing 50% of the market by 2010, but is 5% less efficient than displaced oil-fired boilers. It is assumed to be sold at a minimum 10% below #6 fuel oil, considering efficiency-adjusted energy equivalence.

TABLE C-3 CASE B: NATURAL GAS IN THE CAPE BRETON REGIONAL MUNICIPALITY INDUSTRIAL ENERGY DEMAND (OOOs MMBtu) Electricity Petroleum Natural Gas Total Energy LFO HFO Propane 1996 1,512 275 1,246 135 0 3,169 1997 1,575 279 1,265 137 0 3,257 1...

AI summary This table presents the energy demand in the Cape Breton Regional Municipality from 1996 to 2010, showing the usage of electricity, petroleum, and natural gas. Natural gas enters the Nova Scotia market in 2000, as noted in the text.

- 2. Natural gas displaces 0% electrical load in the industrial sector. - 3. Natural gas captures 65% of the industrial market by 2010 (though most industrial boilers assumed dual-fired). - 4. Natural gas achieves 5% lower efficiency than...

AI summary The text outlines the displacement of electrical load by natural gas in the industrial sector, noting that natural gas captures 65% of the market by 2010, achieves lower efficiency than displaced oil-fired burners, and is sold at a minimum 10% below #6 fuel oil.

TABLEC-4 CASE B: NATURAL GAS IN THE CAPE BRETON REGIONAL MUNICIPALITY TOT AL ENERGY DEMAND (OOOs MMBtu) Electricity Petroleum Wood Natural Gas Energy LFO HFO Propane 1996 4,419 3,595 1,443 327 40 0 9,823 1997 4,632 3,648 1,464 332 40 0 10,...

AI summary The table presents energy demand data for the Cape Breton Regional Municipality from 1996 to 2010, detailing energy consumption by fuel type, including electricity, petroleum, wood, and natural gas. Natural gas usage increases significantly starting in 2001, while petroleum and wood usage decline over the period.

TOTAL ENERGY EXPENDITURES ($ 000s) I Electricity Petroleum Wood Natural Gas Total LFO HFO Propane - Andrews 1996 103,625 27,507 4,059 4,136 213 0 139,541 1997 108,623 27,920 4,120 4,199 213 0 145,075 1998 108,091 28,339 4,182 4,261 213 0 1...

AI summary The table presents total energy expenditures from 1996 to 2010, categorized by energy type and year. It includes expenditures on electricity, petroleum, wood, and natural gas. The electricity price is also provided as $23.45/mmbtu.

- 5. Natural gas burner tip price is $2.75/mmbtu or $2.61/GJ to displace #2 oil and #6 oil in the ind'l and com'l/inst'l sectors. Rate Base Calculation Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Rate 6 35% 12% 1,800 35% 12% 19,351 2,...

AI summary The text provides information on the natural gas burner tip price required to displace #2 and #6 oil in industrial and commercial/institutional sectors, along with a detailed table outlining rate base calculations, debt percentages, operating and maintenance expenses, and various capitalized costs over multiple years.

Regulatory Changes in the Electric Industry The electric industry in the U.S. is in a period of deregulation and rapid restructuring. The legislative and regulatory landscape for electricity markets in the United States is changing almost...

AI summary The U.S. electric industry is undergoing deregulation and restructuring, shifting from local monopolies operated by investor-owned utilities to more competitive markets. This shift has led to a decline in coal's market share as natural gas becomes more dominant due to industry consolidation and regulatory changes.

iance on gas has been strengthened somewhat because of ongoing problems and the high price associated with coal transportation which renders natural gas less expensive relative to coal in this region. - Regional Differences in Coal Product...

AI summary The text discusses regional differences in coal production and transportation costs, highlighting how western low-sulfur coal is becoming more competitive due to lower prices and productivity improvements, despite lower heat content. Transportation costs also play a significant role in determining the competitiveness of coal versus natural gas and other fuels.

Relative Cost of Fuel Electricity is a commodity that cannot be differentiated by source or quality and therefore, the challenge is to be the least cost producer. All the generating companies in the United Kingdom have implemented a range...

AI summary The text discusses efforts by UK generating companies to reduce fuel costs through diversification of fuel sources, investment in efficient CCGT plants, and closure of inefficient plants. These measures are driven by the need to remain competitive in a market where the Pool only pays for available plants.

Conclusion Regulatory changes have lead to the elimination of monopolies and the reduction of governmental intervention in the electric power industry in the United Kingdom. Reforms include the reduction of price controls and tariff restri...

AI summary The conclusion discusses the restructuring of the UK's electric power industry, highlighting the elimination of monopolies, reduced government intervention, and privatization. While some reforms have been successful, issues like market power of generators, loose regulation, and reintegration threats have emerged. The shift to natural gas and improved emissions technologies has also influenced generating technology choices and emissions levels.

Introduction Unlike the current restructuring in the United States and the previous restructuring in the United Kingdom, the restructuring of Alberta's electric utility industry is not expected to alter the distribution of fuels used for g...

AI summary Alberta's electric utility industry restructuring maintains coal as the primary fuel for electricity generation, emphasizing its cost-effectiveness, reliability, and competitive advantage in production. Coal accounts for 76% of generation capacity, with natural gas and hydro making up the remaining 27%.

Low Production Cost for Coal The low production cost of coal in Alberta can be attributed to inexpensive mining methods, the minimal preparation requirements and the low transportation costs associated with coal used for el~ctricity genera...

AI summary The low production cost of coal in Alberta is due to inexpensive surface mining methods, minimal preparation requirements, and low transportation costs. Subbituminous coal is primarily used for electricity generation and requires little preparation or transportation. Bituminous coal, however, requires more extensive preparation and is more costly to transport to distant markets.

Direct Testimony of Fred Hussey - Q. Please state your name, occupation and professional qualifications - A. My name is Fred Hussey. I am Vice-President, Engineering and Special Projects for Stora Enso Port Hawkesbury Limited ("Stora Enso"...

AI summary Fred Hussey, Vice-President of Engineering and Special Projects at Stora Enso, provides testimony about the company's operations, energy needs, and his professional background. He has previously testified before the National Energy Board of Canada regarding a gas pipeline project.

Q. Please describe in general terms the operations presently carried on by Stora Enso. A. Stora Enso operates a standard newsprint line, sometimes known as PM-1 (for "Paper Machine No. l "). PM-1 produces 185,000 metric tonnes of newsprint...

AI summary Stora Enso operates two paper production lines in Nova Scotia: PM-1, which produces 185,000 metric tonnes of newsprint annually, and PM-2, a Supercalendered paper line that is expected to reach full production by 2002, producing 350,000 metric tonnes annually. PM-2 requires significant electrical energy for production.

Q. Please describe Stora Enso's present energy usage and requirement. A. At present, Stora Enso purchases approximately 155 MW of power and energy from NSPI, under the Interruptible Rider of the Large Industrial Rate, the Industrial Expans...

AI summary Stora Enso currently purchases 155 MW of power from NSPI, with an expected increase to 205 MW due to production changes and PM-2's full production. They also have 25 MW of in-house generation and use process steam from TMP production and in-house boilers, which are transitioning to natural gas.

Q. How significant are energy prices in Stora Enso's cost structure? A. The cost of electricity typically represents the largest single cost of producing paper more than the cost of wood, capital, or labour - and this is true of Stora Enso...

AI summary Energy prices, particularly electricity, are the largest single cost in Stora Enso's production of paper, impacting its competitiveness in global markets. This is especially true for Stora Enso Port Hawkesbury Limited.

Q. Would you please summarize your evidence? A. Yes. Stora Enso Port Hawkesbury Limited is in the final stages of its engineering study and will soon be in a position to install a gas-fired, combined cycle cogeneration facility at its Poin...

AI summary Stora Enso Port Hawkesbury Limited is considering installing a gas-fired cogeneration facility to reduce energy costs, despite preferring to use existing NSPI capacity. The company argues that the Load Retention Rate would benefit all NSPI customers and is in the public interest, requesting the Nova Scotia Utility and Review Board to approve their application.

Q WHY DO YOU DISAGREE? 1 2 A 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Mr. Huskilson seems to imply that the customer's rate on the CAR tariff will be set precisely equal to the cost of the potential alternative. I do not...

AI summary The response argues against setting the CAR tariff equal to the cost of alternative energy sources, suggesting that competitive pricing would likely fall between incremental and total costs. It also emphasizes that CAR's purpose is to encourage customers to stay with the utility, not remain indifferent. The response also highlights administrative challenges in calculating exact alternative costs.

7 Q PLEASE STATE YOUR EDUCATIONAL BACKGROUND AND EXPERIENCE. I was awarded a Bachelor of Science Degree from the City College of New York in 9 1964 and a Doctorate of Philosophy in Mathematics from Brown University in 1969. 10 Subsequently...

AI summary The individual provides a detailed account of their educational background and professional experience, including roles in academia, industry, and consulting, with a focus on energy economics and regulatory matters, and highlights their extensive testimony before various regulatory bodies and commissions.

PJM HOURLY ENERGY PRICES July 05, 1999 Date Time (Hours) Price, $/kWh Price, $/MWh 7/5/1999 1600 0.9440 944.0000 7/5/1999 1700 0.9440 944.0000 7/5/1999 1800 0.8735 873.5000 7/5/1999 1900 0.7625 762.5000 7/5/1999 2000 0.6208 620.8300 7/5/19...

AI summary The document presents hourly energy prices from PJM on three dates in July 1999, showing fluctuations in prices per kilowatt-hour and megawatt-hour across different times of day.

will not be available in all areas of Nova Scotia for some years and that the usefulness of this rate is likely limited to customers who have the ability to use natural gas as their principal fuel. Nonetheless, the Board does not consider...

AI summary The document discusses the legal basis for a load retention rate proposed by NSPI, noting its limited availability in Nova Scotia and the absence of a price floor. NSPI argues that the rate must recover incremental and fixed costs, while expert testimony from Dr. Alan Rosenberg addresses features of competitive alternative rates.

Concerns About the Proposed Load Retention Rate - 1. NSPI's proposed load retention rate represents an effort by a regulated monopoly to appropriate for itselfthe benefits of competition while avoiding the obligations associated with eithe...

AI summary The document expresses concerns about Nova Scotia Power Inc.'s proposed load retention rate, arguing that it allows a regulated monopoly to avoid competition obligations while retaining regulatory benefits. It criticizes the lack of transparency and potential for unfair pricing, and questions the relevance of outdated US regulatory decisions. The document also highlights the inevitability of competition from natural gas and the need for a level playing field.

script, page 20 9. NSPI's representative considered it premature to have any ofits customers resort to self-generation prior to the period of 2008 to 2010. Christopher Huskilson, Transcript, page 37 10. In the meantime, every state in the...

AI summary NSPI's representative argued against customer self-generation before 2008-2010, while noting that all US states have restructured their electric industries. The US Federal Energy Regulatory Commission promotes wholesale competition. Encouraging alternative generation is seen as beneficial for environmental and economic reasons, and to avoid inefficiencies of the current monopoly.

1.0 COMPETITIVENESS These Proceedings have likely been somewhat historically unique in that it would appear that all parties have found some measure of common ground. The common ground, simply stated, is that to develop a healthy, consumer...

AI summary The document discusses the importance of market-driven competition in the energy sector to ensure consumer choice and business competitiveness. It highlights concerns about LR (long-term) rates being reactionary and the need for balanced terms and conditions to prevent disadvantaging consumers. The proposal by NSPI is seen as a step forward, but the need for checks and balances to protect all stakeholders is emphasized.

INTERVENTION OF IRVING OIL LIMITED Take Notice that Irving Oil Lunited (''Irving Oil'') hereby intervenes in this proceeding, and files this Intervention pursuant to the Notice of Hearing in the form approved by the Nova Scotia Utility and...

AI summary Irving Oil Limited intervenes in a regulatory proceeding, stating its interest in the development of natural gas markets in Nova Scotia and Atlantic Canada. It emphasizes its role as both a consumer and supplier of energy and seeks to participate in ensuring a competitive energy market in the province.

chargeable to power data upon which Mr. Hughes relied in making his calculations provide separate tables for use, assuming unfired boilers or supplemental firing, respectively. Indeed, a review of the tables in question reflects that, assu...

AI summary The document discusses the calculation of heat rates for power generation, focusing on the use of supplemental firing versus unfired boilers. Mr. Hamilton testified that supplemental firing is more economical for customers with high steam demand, while Mr. Hughes initially relied on data assuming unfired boilers. The examiner concluded that the evidence supports CSU's proposed heat rates in Schedule SUS.

5. Minimum Load Requirement According to Mr. Hughes, there are sharply changing economics of sea.le for cogencration units of between 1 MW and 10 MW in size. Within this range, as the size of the unit dccrcases, the installation costs per...

AI summary Mr. Hughes argues that Schedule SUS does not accurately reflect the changing economics of cogeneration units between 1 MW and 10 MW due to only two rate bands for smaller loads. He suggests that Schedule SUS should not be offered to customers with demand below 10 MW. However, the examiner agrees with his economic analysis but does not support his recommendation.

addition of cogeneration facilities was a benefit to the NIPSCO system and that because deferral might well mean cancellation such deferral could result in higher long run costs for NIPSCO customers. Public's witness, Dr. Chang, stressed t...

AI summary The text discusses the impact of deferring cogeneration facilities on NIPSCO customers, with witnesses debating the consistency of deferral with federal and state laws. Concerns are raised about potential higher long-term costs, while others argue that deferral might encourage cogeneration development. Witnesses also discuss the flexibility of resource plans and the benefits of customer-owned facilities.

Re Arkansas Power and Light Company Docket No. 88-072-TF O rder No. 6 Arkansas Public Service Commission September 15, 1988 ORDER authorizing an electric utility to reduce its rates for service to a large-load industrial customer in return...

AI summary The Arkansas Public Service Commission authorized an electric utility to offer reduced rates to a large-load industrial customer in exchange for deferring on-site electric generation for four years and granting the utility an option to install utility-owned cogeneration facilities. The order found that the agreement would benefit both the utility and ratepayers by maintaining fixed cost contributions and not adversely affecting other customers.

DISCUSSION [I, 2) AP&L and Mid-America support approval of the Agreement. As a result of the August 19, 1988, amendment to the Agreement, the Staff now recommends approval of the Agreement. Also as a result of the amendment, AEEC, the othe...

AI summary AP&L and Mid-America support the approval of an agreement, which would allow Mid-America to reduce its electricity purchases from AP&L through co-generation. The Commission must determine if the agreement is just and reasonable. Experts testified that co-generation is a viable alternative for Mid-America, which currently does not generate its own electricity.