Texas Cuts Red Tape for Combined Heat and Power

TXCHPI Anticipates Economic and Environmental Benefits From New Air Permit for On-Site Power Production

AUSTIN, Texas, Aug. 2, 2012 -- The State of Texas has taken

action to cut red tape for combined heat and power systems. The action was
taken by the Texas Commission on Environmental Quality
(TCEQ) when they approved a new permit by rule (PBR) for combined heat and
power systems (CHP) that is expected to reduce regulatory delays and
eliminate some equipment cost associated with CHP systems. The TCEQ action
was in response to legislation passed by the 82nd Texas Legislature and
championed by the Texas Combined Heat and Power Initiative (TXCHPI). The
TCEQ actions is expected to spur additional CHP usage and further establish
Texas as the nation's leader in electricity produced through combined heat
and power operations - also known as cogeneration. Combined heat and power
is the simultaneous production of electricity and heat from a single fuel

The new TCEQ's PBR recognizes the energy efficiency benefits of CHP and
creates a quicker path for attaining air permit compliance for systems up to
15 megawatts (MW). A report prepared by the Public Utility Commission of
Texas has identified that more than 7,000MW of potential CHP can be
economically developed in this size range over the next ten years at
commercial and industrial sites such as hospitals, data centers, nursing
homes, hotels, chemical manufacturers, paper manufacturers and oil
refineries. Interest in CHP has been buoyed by recent news that the Olympic
Village and several sporting venues in London are being powered by these

CHP is onsite electric generation with the heat energy produced during
generation captured and used to heat and cool buildings, to generate
additional power or to complete a manufacturing process. The systems are
extremely efficient and reduce on-site fuel costs and off-site power plant
pollutants. CHP also uses very little water and implementing more CHP will
help reduce the great amount of water consumed during the production of

With a total capacity of about 17,000 MW, Texas has the largest fleet of CHP
and cogeneration facilities of any state in the nation consistently
generating approximately about 20% of the electricity in the state. This is
roughly four times the amount of energy produced in Texas by wind power. CHP
systems are readily available and most all component parts are manufactured
and engineered in Texas and the U.S.

Paul Cauduro, Executive Director for the TXCHPI stated: "The new air permit
for CHP is a positive step for those that want to reduce energy costs and
generate their own reliable and secure power using natural gas engines and
turbines. This comes at a time when Texas needs CHP now more than ever
because these systems reduce strain on the ERCOT grid and provide reductions
in power plant air emissions and water use. The new permit should help usher
in more of this effective, economical and environmentally-sensible energy
option for Texas; and create plenty of jobs along the way. This will be the
topic of much discussion at CHP2012."

CHP industry professionals will meet at CHP2012, the nation's only
conference and trade show dedicated to the cogeneration, trigeneration and
waste heat recovery industry, at the Westchase Marriott in Houston beginning
Monday, October 15. www.CHP2012.com

The Texas Combined Heat & Power Initiative (TXCHPI) is a non-profit
association of business interests that supports clean, energy-efficient, CHP
technology applications in industrial, commercial and institutional
settings. TXCHPI champions CHP as the most effective, economical and
environmentally sensible energy option for Texas. Find more information at
the website www.texaschpi.org.

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