Utilities and the CHP Value Proposition

Electric and natural gas utilities could reap substantial rewards by investing in or otherwise encouraging new combined heat and power (CHP) systems in their service territories. The benefits of CHP to individual facilities are well-known, but those benefits are likely less compelling than the benefits that confer to the utility systems in which the CHP project is located.
This report summarizes the major benefits that CHP offers to utilities and explores how those benefits are currently being valued today. It identifies utilities that have actively sought to encourage new CHP in their service territories and considers the policies that have helped these utilities view CHP more favorably than in the past.
This report includes suggested policy and regulatory changes, and describes some of the major issues policymakers should consider when exploring CHP opportunities at the utility scale.