Texas at a policy crossroad

April 12, 2013 | By Barbara Vergetis Lundin

The Texas Combined Heat and Power Initiative (TXCHPI) is working to provide policy leaders with solutions to ease water shortages and improve power supply in the face of continued drought conditions and increasingly steep water usage fines.

TXCHPI contends that CHP, or cogeneration technology, reduces the water needed for energy production, as well as increases the use of natural gas. Research has shown that increasing CHP from 20 to 35 percent of the state's total electric generation by 2025 would add roughly 14,000 MW to the grid while conserving approximately 161 billion gallons of water, according to TXCHPI.

"Concerns about the adequacy of our power supply and ongoing water shortage have lead Texas to a policy crossroads," said Paul Cauduro, executive director at TXCHPI. "Our solution is to remove regulatory barriers and treat CHP systems equally in the tax code in order to create a wave of CHP developments in the state's industrial and commercial sector."

House Bill 2049 is currently under consideration by the Texas legislature to allow cogeneration facilities to sell electricity and thermal energy to the same customer, maximizing the efficiency of the cogenerating facilities while providing secure and reliable power without power transmission and distribution issues or line losses. House Bill 2074, if approved, would include CHP in the Texas margin tax exemptions that currently exist for renewable energy sources by allowing a corporation to deduct a small portion of the CHP system investment from their state margins tax.

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http://www.fierceenergy.com/story/texas-policy-crossroad/2013-04-12