Policies to Support CHP

Combined Heat and Power (CHP) represents a proven, effective, and underutilized near-term energy option to help the southwest states enhance energy efficiency, promote economic growth, maintain a robust energy infrastructure, and reduce emissions.

As an energy efficiency technology, CHP has many benefits, yet it remains underutilized due to market and non-market barriers. A key to achieving additional use of CHP is successful implementation of state policies. Experience shows that successful implementation approaches often have three main features – they send clear market signals, they have successful follow-through, and where applicable they adhere to the principle of ratepayer benefits or neutrality.

See below for examples and resources for effective state strategies that policymakers and regulators could consider to:

  • Recognize CHP as a cost-effective and environmentally beneficial energy resource
  • Communicate the benefits of and opportunities for CHP
  • Enable modification of utility programs to be consistent with the intent of policy and to design programs that consider and balance the interests of all participating customers
  • Ensure that there are no unintended barriers to full market access in retail competition states


Standby Rates

Output-based Emissions Regulations

Inclusion in Portfolio Standards

Inclusion in Demand Side Management

Decoupling Utility Revenues from Throughput

Tax Treatment

Additional Policies

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