Cogeneration and its regulations

In the near term, regulators, utility managements, and legislators will grapple with numerous issues surrounding the development of cogeneration projects as sources of electric power. The Federal Energy Regulatory Commission predicts that 12,000 MW of new cogeneration plants will be constructed during the 1980s, and all 50 states are in the process of implementing new regulations pursuant to the Public Utility Regulatory Policies Act. The US utility system's overall fuel efficiency of 29% offers rich opportunities to conserve fuel, reduce costs, and decrease pollution via cogeneration. Policymakers should stop viewing utilities simply as efficiency tax collectors on the one hand and opponents of innovation on the other. In addition to mothballing inefficient central utility stations, the US must rapidly deploy district heating with cogenerated heat; policymakers should look beyond the obsolete stream systems and encourage development of the high-temperature hot-water systems so successful in Europe.