Climate Challenge Participation Accord

DOE's Energy Partnerships for a Strong Economy

The Climate Challenge Program is a joint, voluntary effort of the United States Department of Energy ("DOE") and the electric utility industry undertaken in pursuit of the President's goals for reducing greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Memorandum of Understanding dated April 20, 1994 ("Climate Challenge MOU"), (see Attachment A to this Participation Accord).

This Participation Accord describes the actions that Alabama Electric Cooperative, Inc. ("AEC") and DOE have committed to undertake under the Climate Challenge Program. AEC's commitments include specific activities and efforts to reduce, avoid, or sequester greenhouse gas emissions. DOE's commitments include specific actions designed to assist AEC in achieving its Climate Challenge Commitments.

Alabama Electric Cooperative, Inc. is a not-for-profit, wholesale, power generation and transmission cooperative that is wholly owned by 21 member distribution systems in central and south Alabama and northwest Florida. The owner system is comprised of 16 cooperatives, 4 municipals and 1 industrial member. AEC owns and operates 840 megawatts of generation from 3 coal fired, 1 compressed air energy storage, 1 combustion turbine and 2 hydroelectric stations.

Additionally, the electric cooperative and municipal systems listed in Attachment C own and receive bulk electric power from Alabama Electric Cooperative. Due to this ownership, the power supply relationship and AEC's provision of certain energy management services, the distributors in Attachment C participate in the Climate Challenge Program through Alabama Electric Cooperative.

I. AEC Commitments.

A.
Consistent with Paragraph II.B.I. and Exhibit B of the Climate Challenge Program MOU, AEC has or will undertake the following actions, which are further described in Attachment B to this Participation Accord:
1. Generation Efficiency Programs.
a. Natural gas combined cycle plant. b. Upgrade to extend life of hydro facility.
c. Installation of automated controls on two hydro facilities.
d. Upgrade boiler and turbine controls on coal-fired steam unit

2. Demand-Side Management Program.

a. Energy Efficient Heat Pump Rebates
b. Energy Efficient Water Heater Installations
c. Heat Recovery Water Heater Installations

d. Good Cents Manufactured Homes.

B.

AEC will report to DOE annually on its activities and achievements under the Climate Challenge Program. Results achieved during each year shall be reported in a clear and understandable manner that is consistent with the guidelines adopted pursuant to 1605(b) of the Energy Policy Act and the Supplemental Guidance on Commitment Definitions and Reporting in Exhibit B of the Climate Challenge MOU. The first such report may include a description of the activities and achievements of AEC prior to its becoming a participant in the program, expressed on an annual basis to the extent possible.

C.

AEC will confer with DOE no later than March 31, 1997 regarding AEC's participation in the Climate Challenge Program. The purpose of such meeting will be to evaluate AEC's process toward achieving its Climate Challenge commitments and possible adjustments to these commitments based on the availability of reasonable, cost-justified activities for reducing greenhouse gas emissions.

D.

The Climate Challenge representative for AEC will be Gary Smith, Director, Legal Affairs, Alabama Electric Cooperative, Inc., P.O. Box 550, Andalusia, Alabama, 36420 . AEC will notify DOE, prior to or in any event, no later than 30 days after any change in contact.

II. DOE Commitments.

A.
DOE will perform the actions and fulfill the commitments set out in section III of the Climate Challenge MOU.

B.

The Climate Challenge representative for DOE will be Mr. Larry Mansueti, Director, Climate Challenge Program, Office of Utility Technologies (EE-10), 1000 Independence Avenue, S.W., Washington, D.C., 20585, (202) 586-2588. DOE will notify AEC, prior to or in any event, no later than 30 days after any change in representative.

C.

DOE will meet with AEC upon request regarding possible adjustments of the Climate Challenge commitments set forth in subsection I.A. of the Participation Accord.

D.

DOE will consider requests by AEC to intervene in proceedings of federal, state and local commissions and boards on issues pertinent to the Climate Challenge Program. Before DOE intervenes in regulatory and other proceedings pertaining to AEC for purposes of addressing Climate Challenge Program issues, it will provide notice to AEC.

E.

To the extent permitted by applicable law and regulations and by the availability of funds, DOE will consider AEC's participation in Climate Challenge as a factor to be weighed positively in evaluating applications for financial and other assistance submitted to DOE in support of commitments made by AEC under this Participation Accord.

F.

DOE agrees to provide public recognition to AEC for its Climate Challenge activities. DOE will, among other things, prepare an annual report summarizing results achieved under Climate

Challenge and highlighting any outstanding achievements or innovative approaches of AEC.

III. General Provisions.

A.
Use of any DOE developed materials by AEC will be governed by the provisions of section IV of the Climate Challenge MOU.

B.

In addition to the foregoing provisions, DOE and AEC agree to act in accordance with the principles set out in section I of the Climate Challenge Program MOU and the general provisions set forth in subsections V.A, V.B, V.C, V.D, V.F and V.G of the Climate Challenge Program MOU, which are hereby incorporated by reference.

C.

Either party may withdraw from this Participation Accord or any of the activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity.

(Original signed by)
Hazel O'Leary
Secretary of Energy

(Original signed by)
James A. Vann, Jr.
President and Chief Executive Officer

Attachments:

Attachment A - Climate Challenge Program MOU and Exhibits
Attachment B - CO₂ Reduction Commitments
Attachment C - AEC Participating Member Systems

April 27, 1995
v1.3

Consistent with Paragraph II.B. 1. and Exhibit B of the Climate Challenge Program MOU, AEC has or will undertake the following actions:

I. GENERATION EFFICIENCY PROGRAMS

A. McWilliams Repowering.

AEC has undertaken repowering of an existing 43 MW coal-fired generation plant to a natural gas combined cycle plant capable of producing 143 MW. AEC anticipates the repowering will be completed in June 1996 and, as compared to a similarly sized coal unit, will result in the following CO₂ reductions:

              1996                               214,775 short tons

              1997                               368,187 short tons

              1998                               368,187 short tons

              1999                               368,187 short tons

              2000                               368.187 short tons

              1996-2000 Total                  1,700,000 short tons

B. Hydro Spillway Upgrade.

AEC has completed the upgrade and modification of the spillway of an existing hydro facility that will extend the useful life of the facility, which would otherwise have been shut down. AEC calculated the spillway upgrade will result in the following CO₂ reductions:

              1995                               22,288 short tons

              1996                               22,288 short tons

              1997                               22,288 short tons

              1998                               22,288 short tons

              1999                               22,288 short tons

              2000                               22,288 short tons

              1995-2000 Total                   134,000 short tons

C. Hydro Control Automation.

AEC will complete installation of automated controls on two hydro facilities in 1995 which will increase the generation from those facilities. AEC anticipates the hydro automation will result in the following CO₂ reductions:

             1995                                 557 short tons

             1996                               2,229 short tons

             1997                               2,229 short tons

             1998                               2,229 short tons

             1999                               2,229 short tons

             2000                               2.229 short tons

             1995-2000 Total                   11,700 short tons

D. Upgrade Lowman/Boiler and Turbine Controls.

AEC will upgrade the boiler and turbine controls in 1997 on Lowman Unit #1, an 82 MW coal fired steam unit. The control modification is expected to increase its operational efficiency and, therefore, reduce CO₂ emissions:

             1997                                55,833 short tons

             1998                               134,399 short tons

             1999                               134,399 short tons

             2000                               134,399 short tons

             1997-2000 Total                    459,000 short tons

II. DEMAND SIDE MANAGEMENT PROGRAMS

Since the late 1980's, AEC has participated in demand side management programs designed to conserve energy consumption through the more efficient use of electric power. Those programs consist of incentives for installation of energy efficient heat pumps, water heaters, heat recovery units for water heating and energy efficient manufactured homes. AEC plans to continue these programs that are expected to result for the years 1991-2000, in the short ton reduction of C02 as noted on Appendix 1.

Mr. Elmer McDaniel                                     Mr. Malloy Chandler

Executive Vice President                               General Manager

 and General Manager                                   Pioneer Electric Cooperative

Baldwin County Electric                                P.O. Box 468

 Membership Corporation                                Greenville, AL 36037

P.O. Drawer 220     

Summerdale, AL 36580                                   Mr. Max Davis

                                                       General Manager

Mr. Billy Adair                                        South Alabama Electric Cooperative

General Manager                                        P.O. Box 449

Central Alabama Electric Cooperative                   Troy, AL 36081

P.O. Box 370                   

Prattville, AL 36067                                   Mr. Jim Byrd

                                                       General Manager

Mr. J.E. 'Gene' Smith                                  Southern Pine Electric Cooperative

Chief Executive Officer                                P.O. Box 528

Choctawhatchee Electric Cooperative                    Brewton, AL 36427

P.O. Box 512                               

DeFuniak Springs, FL 32433                             Mr. Bobby Jones

                                                       General Manager

Mr. Stan Wilson                                        Tallapoosa River Electric Cooperative

General Manager                                        P.O. Drawer 675

Clarke-Washington Electric Cooperative                 LaFayette, AL 36862

P.O. Box 398

Jackson, AL 36545                                      Mr. Jerry Smith

                                                       General Manager

Mr. Joe Cade                                           West Florida Electric Cooperative

General Manager                                        P.O. Box 127

Coosa Valley Electric Cooperative                      Graceville, FL 32440

P.O. Box 837                

Talladega, AL 35160                                    Mr. Jerry Moseley

                                                       General Manager

Mr. Ed Short                                           Wiregrass Electric Cooperative

General Manager                                        P.O. Box 158

Covington Electric Cooperative                         Hartford, AL 36344

P.O. Box 1357                              

Andalusia, AL 36420                                    Mr. David Lucas

                                                       City of Andalusia

Mr. Jerry Twiggs                                       P.O. Box 429

General Manager                                        Andalusia, AL 36420

Dixie Electric Cooperative              

P.O. Box 30                                            Mr. Charlie McGowin

Union Springs, AL 36089                                City of Opp

                                                       P.O. Box 311

Mr. Clay Campbell                                      Opp, AL 36467

General Manager                  

Escambia River Electric Cooperative                    Mr. Jack Taylor

P.O. Box 428                                           Brundidge Electric

Jay, FL 32565                                          P.O. Box 638

                                                       Brundidge, AL 36010

Mr. Roy Barnes   

General Manager                                        Mr. Jeff Puckett

Gulf Coast Electric Cooperative                        City of Elba

P.O. Box 220                                           200 Buford Street

Wewahitchka, FL 32465                                  Elba, AL 36323



Mr. James Reeves

General Manager

Pea River Electric Cooperative

P.O. Box 969

Ozark, AL 36360

Please send comments to:
Lawrence.Mansueti@hq.doe.gov