Increasing Energy Reliability and Savings
Frank Graves specializes in regulatory and financial economics, especially for electric and gas utilities, and in litigation matters related to securities litigation and risk management. He has over 30 years of experience assisting utilities in forecasting, valuation, and risk analysis of many kinds of long-range planning and service design decisions, such as generation and network capacity expansion, supply procurement and cost recovery mechanisms, network flow modeling, renewable asset selection and contracting and hedging strategies.
“The recent changes in technology
and regulation also create more opportunities for innovative technology.
Principal, THe Brattle Group
The Brattle Group answers complex economic, regulatory, and financial questions for corporations, law firms, and governments around the world. We aim for the highest level of client service and quality in our industry.
We are distinguished by our credibility and the clarity of our insights, which arise from the stature of our experts; affiliations with leading international academics and industry specialists; and thoughtful, timely, and transparent work. Our clients value our commitment to providing clear, independent results that withstand critical review.
Brattle has over 350 talented professionals across three continents. For additional information about Brattle’s experts and services, please visit brattle.com
Is It Time to Join the CHP Club?
Frank C. Graves
Metin Celebi provides expertise in electricity markets and the analysis of environmental and climate policy. He has testified and consulted primarily in the areas of electricity spot pricing and market design and has experience in developing and analyzing climate policies, LMP modeling and generation plant valuation. His recent engagements include estimating economic damages in energy contracts, valuations of coal-fired and gas-fired power plants, impacts of environmental regulations on power markets and cost/benefit assessment of RTO membership to electric utilities.
Illustrative Cumulative CHP Savings in Present Value
Illustrative Combined Heat & Power Costs
Illustrative Customer's Existing Costs
Illustrative Combined Heat & Power vs Status Quo
PJM Western Hub Implied Market Heat Rates (Power Price / Gas Price)
PJM Western Hub Power and TCO Natural Gas prices
Long-term availability of reasonably-priced fuel, especially natural gas
New approaches to evaluate, design, and build on premises
Now a feasible option for smaller facilities
Senior living facilities
Hospitals and medical complexes
Who Can Benefit
Why CHP Now?
University and Hospital Systems in Pennsylvania
Longwood Medical Energy Collaborative
In two recent engagements, Brattle and Buchanan assisted a university and a hospital system that were in the process of negotiating an Energy Services Agreement (ESA) with a developer who proposed to construct and operate a gas-fired Combined Heat and Power (CHP) facility for the main campus. The proposed projects reduce the commodity and delivery charges for electricity purchases from the local utility, supply steam for heating and hot water needs, and include upgrades to other aspects of campus energy use, all under CHP supply and service agreements from third parties. In each case, the CHP buyer/user would make payments (composed of fixed/known and variable/uncertain fees) to the developer for 20 years, and would pay standby service fees by the utility. Brattle developed financial models for our clients to estimate the potential cost savings from the project and to evaluate financial risks/opportunities under various potential outlooks on client’s power and steam needs, delivered prices of gas and power, and standby fees and net metering regulations. In collaboration with Buchanan, corresponding transactional, financing and permitting agreements were developed.
For a large hospital complex with electricity, steam, and chilled water contract with CHP facility, we simulated CHP facility operations to estimate operating costs and profits for the CHP owner, and compared hospital’s costs under the existing contract against self-supply options. Our work on providing valuation of the facility under alternative strategy and scenarios led to negotiations for better contract terms and a plant purchase offer.
We evaluated (a) the profitability of the existing contract to the CHP owner and (b) the cost of providing the services on a stand-alone basis (without CHP)
We evaluated the cost of building a new CHP facility
These two data points were used to renegotiate better contract pricing and terms
We evaluated the economics of buying the plant from the owner
Large commercial buildings and corporate campuses
More resilient supply of electricity
Better efficiency compared to separate power and steam equipment
Lower, more predictable energy costs
Reduced carbon footprint
Recent cases have found the potential for millions of dollars of savings, exceeding 20% of energy costs
Benefits of CHP
CHPs have more predictable long-term energy costs, since they are protected from power market price fluctuations compared to purchases from your local utility or the competitive market
CHP operations can be reduced during days/hours when the power market is cheaper and excess power sold to the market when not all of it is needed on site
Even more risk mitigation with storage capability
CHP and Long-Term Cost Risk Reduction
Is a CHP facility right for your organization?
Please contact our experts
Realizing the potential
View the Presentation
Learn more about CHP through our colleagues at Buchanan Ingersoll & Rooney
Click or hover for more details
Each CHP project should begin with a rich, diverse analysis consisting of a range of scenarios and options, which Brattle and Buchanan can develop for you.
Variations to consider
Scale and scope of energy uses addressed
Types of technology used
The degree of risk to bear or push off to developers and suppliers
Opportunity and value scoping, including a market projection
Carefully-structured risk sharing agreement with the CHP developer
Consideration of technological improvements that can support other goals such as modernizing or hardening overall campus infrastructures
Building in optionality for adjusting the system in the future under deep decarbonization scenarios and technological change
We’re setting you up with a more powerful mechanism to manage your energy supply.
Milestones on the Road to CHP
University's CHP Plant
Hospital's CHP Plant
Combined Heat and Power Costs
Cumulative CHP Savings
PJM Western Hub Implied Market
PJM Western Hub Power and TCO Natural Gas prices
CHP systems capture two forms of energy at once, heat and electrical power. CHP can be the cornerstone of a more diversified platform of the gas-fired generation, renewable energy, electric and thermal storage, and smart controls for local loads, to make your campus more resilient, greener and cleaner, and more technology-forward.
Learn more about Frank
Learn more about Metin
Our 450 attorneys and government relations professionals across 15 offices proudly represent some of the highest profile and innovative companies in the nation, including 50 of the Fortune 100. We have especially deep experience in the energy industry, including helping power plant owners, operators, developers and energy users develop CHP facilities.
Buchanan is a national law firm with a proven reputation for providing progressive, industry-leading legal, business, regulatory and government relations advice to our clients.
Saves 20% of Status Quo present value costs