Was restructuring a success? Prices provide a dispassionate analysis, showing that restructuring was poorly designed, badly executed, and focused on the wrong part of the grid. With those lessons...
Thus, the Triathlon's real benefit for natural gas LDCs (whose load factors are typically half that of electric utilities) is to help reduce negative cash flows resulting from the short seasonal profile of natural gas consumption for comfort heating. Were it not for the intense segregation of IRP and DSM programs that discriminate against society's best interests, the Triathlon would represent an ideal, cost-effective technology.
But consider PEPCO, which competes against WGL in the Washington area. PEPCO's recent DSM programs bought considerable business through large-tonnage, "high-efficiency" (electrical) chiller rebates. Otherwise, PEPCO's customers may have gone with gas-fueled cooling systems, primarily to avoid PEPCO's substantial demand charges. Although PEPCO's service territory is considerably smaller than Washington Gas Light's, PEPCO spent an estimated $50 million on its program, compared with WGL's estimated rebate expenditures of less than $100,000. Although electric utilities easily can outspend natural gas utilities, nobody wins a rebate war.
As for efficiency increases for gas appliances, Mr. Rosenstock apparently missed my discussion on electromagnetic valves. I suppose I should have also mentioned that 60 percent of an engine's waste heat can be recovered for other useful purposes.
Overall, I couldn't agree more that customers should enjoy access to unbiased information on energy technologies and resources. However, America's future cannot be relegated to a totally electric world. Robust competition requires viable alternatives (em and not just from energy marketers on the supply side. Being free to choose among energy suppliers, but only as long as that energy is electricity (no matter how diverse the resource), will not, in my opinion, guarantee a more competitive market.
Mark E. Krebs
Director, Market Planning
Laclede Gas Co.
Editor's Note: The FORTNIGHTLY
has edited each letter for clarity of
presentation and to fit available space. (em B.W.R.
Gas vs. Electricity
Which Is More Efficient?
EEI's Steve Rosenstock:
1. Electric Demand Growth. Electric demand growth predicted for the U.S. by the Electric Power Research Institute falls well below assumed population and economic growth rates. Krebs' own Figure 1 supports that conclusion. It indicates that yearly per-capita electricity consumption will grow from approximately 11,000 kilowatt-hours per person in the year 2000 to 25,000 kWh per person in the year 2050 (em an average annual growth rate of only 1.65 percent.
In fact, EPRI's predictions for electric demand growth are consistent with integrated resource planning and demand-side management. Mr. Krebs says that "EPRI's prediction "opposes the economic goals of IRP and DSM." But that is not true. Otherwise the Gas Research Institute could be found guilty of the same charge, as GRI projects gas demand growing from 21.3 Quadrillion Btu (Quads) in 1994 to 23.7 Quads in 2000, for a growth rate of 1.31 percent in the years 2000-2015 (em comparable to EPRI's predicted
1.65-percent U.S. electric growth rate for the first half of the 21st century.
2. Fuel-Cycle Analysis. The analysis of fuel-cycle efficiency is heavily flawed. Krebs posits that coal burned at U.S. electric utilities returns only about 8,000 Btu per pound, on average, but the DOE/EIA Electric Power Annual 1994 shows much higher