Climate Challenge Participation Accord

DOE's Energy Partnerships for a Strong Economy

This Participation Accord describes the commitments that New England Electric System (NEES) Companies[1] 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 (MOU) and exhibits thereto dated April 20, 1994 (the Climate Challenge Program MOU) (see Attachment A to this Participation Accord).

I. NEES Companies' Commitments

A.

Consistent with paragraph II.B.1 of the Climate Challenge Program MOU, NEES Companies will:

Reduce greenhouse gas emissions by 20% below the 1990 baseline level by calendar year 2000 as described below:

• The 1990 baseline level is 15,420,000 short tons of carbon dioxide emissions, based on electricity generation requirements of 22,763 million kWh to serve its customers.[2] The emissions include emissions from generating units of New England Power Company and net purchased power.

• For purposes of this Accord, NEES Companies will continue to determine electricity generation emissions based on emissions from generating units of New England Power Company and net purchased power.

• NEES Companies expect to need and may use off-system emissions reductions (emissions offsets) to achieve the 20% reduction. This reduction commitment is contingent on NEES Companies' ability to acquire low-cost or no-cost offsets and to recover through rates any incremental costs to acquire such offsets, including administrative costs. The offsets may include but are not limited to capturing landfill and coalbed methane, conducting forest carbon management programs, recycling and destroying CFC's, recycling coal ash as a cement substitute thereby reducing carbon dioxide emissions from cement manufacturing, and implementing electrotechnologies that reduce end-use greenhouse gas emissions.

• For greenhouse gases other than carbon dioxide, NEES Companies may convert to carbon dioxide-equivalent emissions and emissions reductions by using Global Warming Potential (GWP) factors published by the Intergovernmental Panel on Climate Change (IPCC) in 1994, for a 20-year time horizon, including direct and indirect effects, and reflecting the median factor where a range is given. If the IPCC changes the GWP factors, NEES may use the revised factors. The 1994 IPCC factors include the following:
  Methane: 62

  CFC-11: 5,000

  CFC-12: 7,900

• NEES Companies' commitment excludes the impacts of industry deregulation, consolidation and competition. Such impacts are not considered in the commitment because neither their extent nor timing is sufficiently determinable to incorporate in this Accord. NEES Companies may revisit and, if necessary, revise the commitment when the nature of any industry change becomes clear.

  In order to achieve the commitment, NEES Companies have taken or expect to take the following actions:

• In 1991, natural gas burning capability was added to a 430 MW oil-fired generating unit at Brayton Point Station. This unit first used natural gas in 1992. Use of natural gas in lieu of oil at this unit is estimated to reduce annual emissions of carbon dioxide by 5,000 to 100,000 tons, depending on the amount of natural gas use.

• By mid-1995, natural gas cofiring capability will be added to three coal-fired units, with a combined capacity of 1070 MW, at Brayton Point Station. The gas will be able to be used as a startup fuel and to control nitrogen oxides and sulfur dioxide emissions. Use of natural gas in these units could vary considerably, but such use could reduce annual emissions of carbon dioxide by 100,000 tons.

• In late-1995, a project to repower Manchester Street Station is expected to be completed. Three principally oil-fired low efficiency boilers are being replaced with three natural gas fired high efficiency combined cycle generating units. When in full operation, it is estimated that this project will reduce annual net carbon dioxide emissions, including impacts on dispatching other units, by 1,000,000 tons.

• Energy is now being purchased from two landfill methane recovery electricity generators. The first, a 9 MW generator in Johnston, Rhode Island, began operation in 1990, with 1991 as its first full year of operation. Estimated annual recovery of methane from the Johnston generator is 18,500 tons (equivalent to about 1,150,000 tons of carbon dioxide at a GWP factor of 62). The second, a 3 MW generator in Rochester, New Hampshire, began operation in 1992, with 1993 as its first full year of operation. Estimated annual recovery of methane from the Rochester generator is 5,000 tons (equivalent to about 310,000 tons of carbon dioxide at a GWP factor of 62). By using methane as a fuel at the two generators, higher carbon fuels (e.g. residual oil) are displaced, which also reduces carbon dioxide emissions. Net annual fuel combustion carbon dioxide reductions of 12,000 tons and 3,000 tons are estimated for Johnston and Rochester, respectively.

• Four additional landfill methane recovery generators are planned for initial operation in 1996. These are in Nashua, New Hampshire, and in Barre, Randolph, and Plainville, Massachusetts. These generators, which will have a combined capacity of 8 MW, comprise four of seven planned projects under New England Power Company's "Green RFP" renewable energy initiative. When fully operational, these four generators together are estimated to recover 17,000 tons of methane annually (equivalent to about 1,000,000 tons of carbon dioxide at a GWP factor of 62) and reduce fuel combustion carbon dioxide emissions by about 11,000 tons annually.

• Three other "Green RFP" projects are planned for initial operation in 1996 or 1997. The projects are 20 MW of wind energy generation in 1997, 2 MW of waste heat recovery generation at an existing landfill methane generator in 1996, and 5.9 MW of municipal waste fuel generation at a total solid waste management/recycling facility in 1997. Together, these projects are estimated to reduce annual carbon dioxide emissions by 110,000 tons.

• An existing initiative to recycle 100% of coal ash production by the year 2000 includes a program to use ash as a substitute for cement, reducing carbon dioxide emissions from the cement manufacturing process. In 1993, recycling coal ash as a cement replacement reduced carbon dioxide emissions by an estimated 50,000 tons.

• Since the mid-1980's, demand-side management programs have reduced electricity generation requirements and associated carbon dioxide emissions. The NEES Companies plan to continue to expand these programs. Energy savings are estimated to increase from about 370,000 MWH in 1990 to 1,850,000 MWH in 2000. Associated carbon dioxide emissions avoided are estimated to increase from about 345,000 tons in 1990 to about 1,700,000 tons in 2000.

• In 1993, an energy conservation program to collect older, inefficient refrigerators and freezers from customers was begun. The program applies to the second (not the primary), standard-sized, operating unit in homes. CFC refrigerants (CFC-12) and CFC-containing insulating foams (CFC-11) from collected appliances are recycled and destroyed by incineration, respectively. In 1993, 2,700 pounds of CFC-12 were recycled (equivalent to about 10,700 tons of carbon dioxide at a GWP factor of 7,900) and 1,436 pounds of CFC-11 were destroyed (equivalent to about 3,600 tons of carbon dioxide at a GWP factor of 5,000).

• In 1992, a pilot project was initiated with a Malaysian lumber harvesting company to examine reduced impact logging practices as a way to offset greenhouse gas emissions. It is expected that this project will be completed in 1995. Current estimates are that the pilot project will reduce carbon dioxide emissions by over 400,000 tons over the project's total period of impact. The impact in year 2000 is estimated to be about 20,000 tons of carbon dioxide. New England Power Company has submitted this project for participation in the United States Initiative on Joint Implementation (USIJI).

• A pilot-scale biomass gasification facility (500 KW to 5 MW in capacity) is targeted to be in operation in 1996. This facility is part of an initiative to develop biomass fuel technologies and quantify the potential for future biomass generation.

• Other ongoing programs include developing and testing electrotechnologies; evaluating the efficiency of fossil generation, hydro generation, and transmission and distribution facilities; and developing clean generation technologies such as fuel cells and photovoltaics.

• NEES Companies are also participating as a Utility Ally in EPA's Landfill Methane Outreach Program, in the Utility Forest Carbon Management Program, and in the National Earth Comfort Program.

NEES Companies 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 NEES Companies prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible.

NEES Companies will confer with DOE on or before June 30, 1997 to evaluate jointly the progress of the NEES Companies in achieving its Climate Challenge Program goals and to discuss possible adjustments to its voluntary commitments.

The Climate Challenge Program representative for NEES Companies will be Dan Delurey, 601 Pennsylvania Avenue, NW; Suite 620 North Building; Washington, DC 20004. NEES Companies agree to notify DOE prior to, or in any event, no later than 30 days after any change in the contact.

II. DOE Commitments

A.

DOE's commitments to NEES Companies are those set out in Section III of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

DOE will consider NEES Companies' 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 NEES Companies for purposes of addressing Climate Challenge Program Issues, it will provide notice to NEES Companies.

DOE will provide an annual report to NEES Companies 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.

The Climate Challenge Program representative for DOE, who will serve as liaison to NEES Companies, will be Allan Hoffman, U.S. Department of Energy, 1000 Independence Avenue, SW, Washington, DC 20585, telephone (202) 586-1786. DOE agrees to notify NEES Companies prior to, or in any event, no later than 30 days after change to liaison responsibilities or personnel.

III. General Provisions

A.

Use of DOE-developed materials by NEES Companies will be governed by the provisions of Section IV of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

In addition to the foregoing provisions, DOE and NEES Companies 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.

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 by)
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John W. Rowe,  President and Chief Executive Officer
        New England Electric System


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                   Date




       (original signed by)
____________________________________________
    Hazel R. O'Leary, Secretary of Energy
        U. S. Department of Energy


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                   Date

New England Electric System is a public utility holding company headquartered in Westborough, Massachusetts. Its retail subsidiaries, Massachusetts Electric Company, The Narragansett Electric Company, and Granite State Electric Company, provide electricity to 1.2 million homes and businesses (approximately 3 million people) in Massachusetts, Rhode Island, and New Hampshire. Its wholesale generation and transmission subsidiary, New England Power Company (NEP), owns and operates 20 electric generating stations in New England. As used in this document, the terms "NEES" and "NEES Companies" refer to one or more of the subsidiaries of New England Electric System.

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