New Mexico Utility Adds 25 Mw Of Distributed Power

Diesel Progress North American Edition, May, 2001 by Mike Osenga

Celerity, using Sixth Dimension communications technology, to operate utility-based distributed power network

As a result of what may be the first networked utility-based distributed power installations, the Public Service Co. of New Mexico (PNM) will be able to tap into 25 MW of dispatchable electric peaking capacity later this year.

While the concepts of distributed generation are being discussed far and wide, and pilot projects are seemingly everywhere, the PNM project, which could eventually total 75 MW, certainly ranks as one of the largest distributed power programs in North America so far.

It also underscores the theory of distributed power generation. The generator set owner benefits because the network operator assumes the responsibility for maintaining and operating the gen-sets at no cost to the owners. The utility benefits as it has access to a supply of electricity, without building new plants.

A total of 30 generator sets will be networked together to create the first 25 MW block of peaking capacity for the utility. The sets are a combination of Caterpillar, Cummins and Detroit Diesel-powered units in diesel, natural gas and dual-fuel packages.

Celerity Energy, Portland, Ore., using a fully managed communications network designed and maintained by Sixth Dimension, Inc., Ft. Collins, Colo., will create what Celerity calls the largest distributed energy project in the western United States. The project has been granted Exempt Wholesale Generator status by the Federal Energy Regulatory Commission. Additional sites, with 10 to 15 gen-sets, could be added in the near-term adding another 15 MW to the network.

Celerity, a two-year-old company, created to develop distributed generation systems worldwide, will install processor-based controls and paralleling switchgear at each of the gen-set sites, which Sixth Dimension's 6D iNET distributed intelligence network will then dispatch and control.

Managing the project is also Celerity's responsibility, including the day-to-day performance of the networked distributed resources, as well as overseeing the installation of the new controls, paralleling switchgear and protective equipment, the communications infrastructure, and obtaining the necessary permitting to implement the modifications.

Celerity also selected the suppliers to provide equipment that will supplement commercially available controls and switchgear: Sixth Dimension for the communications network; MYR Group-Sturgeon Electric as the general contractor; Environmental Services Inc. as the environmental consultant and Rust Tractor for qualifying and maintenance services.

In September 2000, Celerity reached an agreement with Caterpillar Inc. to fund the PNM project. Cat also secured the opportunity to fund future networked distributed resources projects both domestically and internationally and will also have access to some of Celerity's intellectual property and competencies. The two companies are in on-going discussions about a more comprehensive strategic relationship to develop, own and operate a variety of distributed resources along with energy services to end-use customers, Celerity said.

The 30 gen-sets, at 15 sites, make up the 25 MW of power included in the program. The gen-sets, which range from 400 kW to 2 MW, are in a variety of mostly standby applications in the Albuquerque area including hospitals, the airport, other municipal locations, and manufacturing facilities. The project was being phased-in this spring, with the final units expected to be completed in time for the summer peaking season.

Celerity will operate and maintain the control equipment installed on the standby generators. It will also manage fuel procurement and delivery, permit reporting and reapplication, determining the available capacity on a daily basis, plus financial reporting to the owners.

PNM and Celerity entered into a power-marketing agreement under which the utility will use the network's output for its wholesale requirements and will directly dispatch the power produced by the network of standby generators.

"The way it works is that we make a commitment to PNM of the nominal amount of power available," said Celerity's David Hoffman, president and CEO. "Monthly we declare a strike price for that resource, and on a two-day-ahead basis we declare the availability of it. PNM is then able to dispatch it and market it."

On the other end of the supply chain, Celerity dealt with each individual generator set owner directly.

"We did what we call a participant agreement, a relationship contract between us and the gen-set owner," Hoffman said. "We worked out the maintenance programs, which in this case we did with the Caterpillar dealer, Rust Tractor. We worked through different options with each gen-set owner on how we all get value out of this. It's different for a hospital than it is for an airport or a high-tech manufacturing facility."

The generator sets in the network each have varied permitted operating levels, but generally will operate about 400 hours annually, with contractual limits of two starts per day and eight hours of operations per day.