Energy Division Recommendations

We recommend the Commission deny the Petition to include turbo-expanders as an eligible project cost at any incentive level. This determination is consistent with prior Energy Division recommendations adopted by the Commission to exclude costs of project components such as processing equipment for renewable materials and nonrenewable fuels, fuel cleanup for nonrenewable fuels (such as waste gases derived from fossil fuel drilling

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operations), and thermal load equipment that utilizes waste heat. The Commission determined that these components are discrete and separate from

the generation facility. Energy Division believes turbo-expanders also fall within this category.

Considering the limited funding available for self-generation incentives, we do not believe it is practical to expend program funds for a technology which

utilizes nonrenewable fuel and has relatively high costs per watt. As with other technologies, turbo-expander system costs per watt are higher for smaller projects. Mafi-Trench estimates an average project size of 200kW. Given that estimated system costs for the 500kW project near Bakersfield are approximately $4.00/watt, system costs per watt are likely to be even higher for the proposed 200kW systems.

Mafi-Trench observes that although the technology is readily available, it is not widely used due to regulatory and economic considerations. The low penetration rate may also be attributed to the limited market for the technology. Consequently, there is very little data available to allow us to adequately assess the costs, performance, and benefits of completed projects. We believe Mafi-Trench was constrained by this lack of data as well.

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