ELECTRIC UTILITY FORECASTING OF CUSTOMER COGENERATION AND THE INFLUENCE OF SPECIAL RATES

Cogeneration, or the simultaneous production of heat and elec-tric or mechanical power, emerged as one of the main components of the energy conservation strategies in the past decade. Special tax treatment, exemptions from fuel use restrictions, and regulatory policy changes were crafted to encourage its more wide-spread adop-tion in anticipation of higher energy conversion efficiencies. The expansion of cogeneration still faces a broad spectrum of problems, current and future: environmental restrictions; capital constraints; fuel prices; utility rates and future utility economics; and the dif-ficulties of management. The most debated issue has been the reform of rates between individual cogenerators and the local electric utility. Many of the major cogeneration studies in the late 1970's urged an analysis of the exact impact from current electric utility rates upon cogen-eration project economics (1,2,3). The changes mandated by the Public Utilities Regulatory Policy Act of 1978 (PURPA) are now reaching the final implementation stage and the cogeneration projects of the mid-1970s are nearing completion. To better understand the relationship between utility rates, the economics of cogeneration, and its poten-tial development, the New England Electric System and th