Climate Challenge Participation Accord

DOE's Energy Partnerships for a Strong Economy

This Participation Accord describes the commitments that Houston Lighting & Power Company (HL&P) and the U.S. Department of Energy (DOE) have made to participate in the Climate Challenge Program in pursuit of the President's goals for reducing greenhouse gas emissions. The Climate Challenge Program is a joint voluntary effort of DOE and the electric utility industry to reduce, avoid or sequester greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Program Memorandum of Understanding and exhibits thereto dated April 20, 1994 (the Climate Challenge Program MOU) (see Attachment A to this Participation Accord).

HL&P is a coal, natural gas and nuclear-based electric utility with approximately 1.4 million customers. Roughly half of the electric power is purchased by industrial customers, while residential sales account for about 30 percent and commercial sales represent about 20 percent of the total. HL&P is the ninth-largest electric utility in the United States based upon electric energy sales.

I. HL&P Commitments

A.
Consistent with paragraph ll.B.1.a. and f. of the Climate Challenge Program MOU, HL&P has undertaken or will undertake the following specific projects and actions to limit or avoid greenhouse gas emissions:

- complete construction and commence operation of the San Jacinto Electric Generating Station, which will include two gas turbines with heat recovery steam generators and generate 162 MW of electric power for the HL&P system. The San Jacinto Station will improve the HL&P energy efficiency rate and lower the system CO₂ emissions rate, resulting in lower overall emissions of CO₂. San Jacinto also will provide process steam to an adjacent DuPont facility, replacing three older and less efficient gas-fired boilers previously used for that purpose. An estimated CO₂ reduction of over 500,000 tons/year for year 2000 is anticipated using methods outlined in the General Guidelines for reporting under Section 1605(b);

- investigate and pursue cost-effective gas turbine and/or steam supply project opportunities, such as the San Jacinto Station, that will improve HL&P and/or industrial energy efficiency, resulting in lower CO₂ emissions, as well as be used to meet anticipated future load growth by year 2000;

- promote utilization of coal fly ash, a combustion by-product, for use as a cement substitute. This substitution is anticipated to result in approximately 100,000 tons/year of reductions in CO₂ emissions by year 2000 through avoided filing of cement kilns;

- undertake an upgrade project, known as GT PRIME, for eight combined-cycle gas turbine units, including the installation of dry low-NOx burners. The GT PRIME project will achieve overall heat rate improvements and is anticipated to result in an estimated reduction of approximately 180,000 tons/year of CO₂ emissions in year 2000;

- evaluate and support demand-side management (DSM) projects which are economically and environmentally sound. DSM projects will be administered and accounted for according to Texas Public Utility Commission (PUC) regulations, and future DSM projects will be impacted by future PUC rules. HL&P DSM activities during the 1991-1994 time period have resulted in average CO₂ emission reductions of 50,000 tons/year through programs such as the Commercial and Industrial Efficiency Audit programs, the Good Cents Homes program and the Energy Efficient HVAC Retrofit program.

- support research performed by Rice University on methods to reduce emissions of methane from cultivated rice fields. Since 1990, HL&P contributions to this research have totaled over $134,000. HL&P will investigate agreements with area rice growers to adopt agricultural practices which reduce methane emissions; and

- contribute $5,000 in 1995 to the EEl Forest Carbon Management Program, and evaluate continued participation in future years.

Performance of the specific projects listed above represent HL&P's commitment to the Climate Challenge Program. Through year 2000, HL&P expects that other activities which limit or avoid greenhouse gas emissions, such as the generation of nuclear power and the growth of generation from highly efficient gas turbine facilities, will result in entity-wide CO₂ reductions of over 3,000,000 tons/year as compared to a 1987 baseline using methods outlined in the General Guidelines for reporting under Section 1605(b).

B.
HL&P will report annually on 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 subsection 1605(b) of the Energy Policy Act and Exhibit B, Supplemental Guidance on Commitment Definitions and Reporting, of the Climate Challenge Program MOU. The first such report may include a description of the activities and achievements of HL&P prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible.

C.
HL&P will confer with DOE on or before June 30, 1996 to evaluate jointly the progress of HL&P in achieving its Climate Challenge Program goals and to discuss possible adjustments to its voluntary commitments

D.
The Climate Challenge Program representative for HL&P will be:
Mr. Edward A. Feith
Manager, Environmental Department
P.O. Box 1700
Houston, Texas 77251


HL&P agrees to notify DOE prior to or, in any event, no later than 3O days after any change in the contact.

A.
DOE's commitments to HL&P are those set out in section III of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B.
DOE will consider HLP's requests to intervene in regulatory 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 HL&P for purposes of addressing Climate Challenge Program issues, it will provide notice to HL&P.

C.
DOE will provide an annual report to HL&P describing the actions that it has taken to fulfill its commitments under section III and Exhibit C of the Climate Challenge Program MOU and the results of those actions.

D.
The Climate Challenge Program representative for DOE, who will serve as

liaison to HL&P, will be:

Mr. Allan Hoffman
U.S. Department of Energy
1000 Independence Avenue SW
Washington, D.C. 20585
(202) 586-1786.


DOE agrees to notify HL&P prior to or, in any event, no later than 30 days after any change in liaison responsibilities or personnel.

A.

Use of DOE-developed materials by HL&P will be governed by the provisions of section VI of the Clime challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B.
In addition to the foregoing provisions, DOE and HL&P agree to act in accordance with the principles set out in section I of the Climate Challenge Program MOU and the general provisions set out in subsections V.A-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 its activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity.

(Original signed for)
_____________________________________
Mr. R.S. Letbetter
President and Chief Operating Officer
Houston Lighting & Power Company
February 3, 1995

(Original signed by)
_____________________________________
Hazel O'leary
Secretary of Energy
February 3, 1995

Attachment:

Attachment A - Climate challenge Program MOU and exhibits

Results of Climate Challenge Activities by Houston Lighting & Power Company

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