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Utility Standby Generator Programs
E SOURCE, Nov 2004, Pages: 13
Many electric utilities have been reluctant to build distributed generation (DG) businesses, viewing DG as a threat rather than an opportunity. However, several utilities have launched DG initiatives in the past few years, using standby generators to provide customers with increased power reliability. Typically, these programs offer to install, own, and operate generators at customers sites, while the customer pays a monthly fee in return.
In addition to providing customers with improved reliability, some utilities are obtaining other benefits from such programs. These include helping to unload overloaded distribution networks, avoiding the need to start combustion turbines to meet peaks in demand, continuing to provide power to customers while the utility works on distribution networks, and enabling customers to move on to interruptible rates.
Our market research shows that end users assign a high level of importance to improving reliability. As a result, some utilities have had plenty of take-up for their programs. For example, Madison Gas & Electrics program is oversubscribed, and theres a waiting list to join the 50 customers already signed up for the companys standby generator program. Other utilities have made more modest starts, slowly growing their programs and incorporating lessons learned along the way.
This report analyzes seven utility standby generator programs and looks in detail at the program characteristics such as customer numbers, pricing, customer propositions, what the generator is used for, and contract length. We identify success factors and lessons learned, and we also examine market research findings to better understand end users current standby generator practices and their desires and wishes regarding power reliability.
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