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MIT continues fight against extra fee on new power plant

MIT is continuing its battle against the customer transition charge of $1.3 million a year by Cambridge Electric Company (CELCo), asserting that the $3,500-a-day CELCo fee is excessive.

MIT's 20 megawatt, natural gas plant is the only cogeneration facility in the nation to have a customer transition charge levied against it.

MIT is in the process of appealing the customer transition rate to the Massachusetts Supreme Judicial Court, where it may be determined whether the amount of the charge is excessive, according to Victoria V. Sirianni, director of physical plant.

On Feb. 29, the Federal Energy Regulatory Commission ruled that the customer transition charge, which applies only to MIT's cogeneration power plant, is not discriminatory under the Public Utility Regulatory Polices Act of 1978, which encouraged organizations to develop cogeneration plants.

"There's some passion in our feeling that from a public policy perspective, when the Federal government encourages conserving energy and doing with less, we shouldn't be penalized for doing precisely that," Ms. Sirianni said. "It's unfortunate that our power plant, after several years of construction, went on line just at the time the electric power industry is about to be restructured.

"Cogeneration, where one fuel generates both electricity and steam, is a good investment in the Institute's future. Cogeneration is 18 percent more efficient than generating electricity and steam independently," she added.

The cogeneration plant will reduce MIT's pollutant emissions by 45 percent, equivalent to reducing commuting to and from Cambridge by 13,000 round trips per day.

The customer transition charge, set by the Massachusetts Department of Public Utilities (DPU), is designed to allow the utility to recover the "stranded cost" of power commitments it claims it made in anticipation of MIT continuing as a customer. The DPU said it would review the proposed five-year charge after August of this year, when Cambridge Electric Co. (CELCo) and its affiliate, COM/Electric, have to submit their proposed rates under the state-wide deregulation and restructuring of electrical power.

Customers of another CELCo affiliate, Commonwealth Gas, will benefit from MIT's gas-burning plant through reduced costs and improved peak load supplies. CELCo, COM/Electric and Commonwealth Gas are subsidiaries of COM/Energy.

CELCo will still supply about 25 percent of MIT's electricity, serving some campus buildings that are not connected to the cogeneration plant.

CELCo has agreed that it will return money to MIT if a judgment is made in MIT's favor on the customer transition charge.

A version of this article appeared in MIT Tech Talk on March 13, 1996.

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