[BETA] Fortnightly

When the phone rang it was Tom Mathews, director of mechanical and energy services at Hannaford Bros., the grocery chain that has become better known for shaving utility bills than trimming pork chops.

Mathews made news two years ago when Hannaford had threatened to install generating plants on site at some or all of its 140 or so retail stores, clustered in New England and the north and southeast states. Now he was calling to tell me about his new plan. He had secured a tentative agreement with EVANTAGE (a division of Virginia Power) to buy a complete package of bundled energy services.

"They'll pay our bills, monitor all our systems, identify capital projects and then carry out the projects--all for a guaranteed cost," says Mathews. "Think of it as rebundled service."

So Hannaford would quit the power business and go back to selling groceries.

"Actually," adds Mathews, "What we've found is that all of this is way too much for us. Even without electricity deregulation in place, we're already spending too much time on buying energy and looking at prices.

"At our stores in New Hampshire, we've been installing self-generation units in about a half-dozen stores, with about another half-dozen planned. {Hannaford wasn't selected for the state's pilot program in electric competition.] And we're involved in a case before the PUC to get a better backup rate from Public Service of New Hampshire. Wherever we had access to natural gas lines--about two-thirds of our installed electric load--we went to self-generation. Our plants are 650 kilowatts--from Waukesha, a big engine manufacturer in Wisconsin.

"Buying gas and transportation for our self-gen units is no simple matter. It requires a lot of expertise. And with electric deregulation we're going to get that in spades.

"We don't care to grow that part of our business."

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On April 28, the leasing agent for Chicago's 110-story Sears Tower joined with energy service marketer QST Energy Inc. to file a complaint with the Illinois Commerce Commission alleging that Commonwealth Edison had thwarted attempts by the agent and QST to install a $10-million, 13-megawatt, gas-fired cogeneration facility in the basement of the skyscraper. They allege that the cogen plant could supply both the building (heating, cooling, elevators, etc.) and its 100 or so tenants with electricity at a more economical price than would be available from Com Ed, the native utility. (QST claims the cogen plant would operate at 4 cents per kilowatt-hour.)

The complaint adds that Com Ed has refused to provide backup power for the cogen project (total building load is 26 MW, says Com Ed). Thus, the leasing agent and QST claim that Com Ed has violated state and federal laws that require utilities to encourage cogeneration. They also accuse Edison of reneging on a promise to the leasing agent to sell the "risers," the term for Com Ed's distribution lines that connect the tenants inside the building to the power grid. The risers are extensive enough to serve 6,000 homes, according to the utility.

"Edison has raised one spurious objection after another,"