Online Edition | Washington State University | Pullman, Washington | Friday, November 30, 2001

Backup boilers start up Monday
Cogeneration project uncertain
as electric, fuel prices fluctuate
By Robert E. Frank, WSU Today

Washington State University has $23 million at its disposal, via the Legislature, to renovate its crippled steam heating system. That system, built in the late 1930s, has only three out of six boilers operating. With snow on the ground and temperatures falling, this situation could have been critical. Thanks to efforts by Facilities Operations and Capital Planning and Development, however, two new backup boilers are receiving final inspection and permit approval this week and should keep everyone warm until a new heating plant is complete.

But, the type of replacement heating system WSU will build is still uncertain.

In July, when the Legislature approved funding, the favored plan was to contract with a energy company and build a "cogeneration plant" that would produce enough steam and electricity to meet the university’s needs for years to come. Excess electricity could be sold on the open market, helping to minimize WSU’s utility costs.

That effort began immediately following the Legislature’s approval of the 2001-03 budget. WSU reviewed several project bids and chose Trigen Energy Corp. of White Plains, N.Y., as its potential cogeneration contracts.

But circumstances have changed, and WSU is back to evaluating plans to update the steam plant facility without the cogeneration option.

What happened?

During the first eight months of 2001, electricity prices and skyrocketed throughout the United States, with continuing power shortages anticipated. Since then, strong conservation efforts have been launched, many electrical generating plants have come on-line, and the price of electricity has decreased and gas prices decreased. In addition, summer weather was not as hot as anticipated, decreasing electrical demand.

In an effort to be good stewards of the state’s and university’s money, WSU’s Capital Planning and Development crews began reconsidering whether it would be more cost efficient to simply remodel the existing steam plant system rather than enter into a long-term cogeneration project. A third alternative is to build a new steam plant on the east side of campus.

The long-term stakes are huge. WSU’s power bill currently exceeds $10 million a year. So minimizing that cost while ensuring availability of electricity is important.

To say the least, this is a complex puzzle:

• Existing steam plant boilers can use natural gas, diesel fuel (and sometimes coal) to fire their burners — whichever is cheapest. The ability to generate steam and electricity cost efficiently depends on the ability to purchase natural gas and diesel fuel at reasonable prices.

• As new power-generating facilities come on-line throughout the western United States, electricity production will increase and prices will decline.

• Weather and water shed levels also can affect production and the price of electricity.

• If suppliers like Avista drop the price of electricity, it becomes less attractive and profitable for WSU to build a cogenerating plant and sell excess electricity.

Each of those factors changes regularly, making the university cautious.

"Traditionally, energy prices have been easier to predict," said Lori Lamb, assistant vice president for personnel and administration. "Now they (industry officials) are at a loss to make any predictions.

"Given the volatile energy market we are experiencing, we need to proceed with caution and look at all options before we make a final decision. The savings the university once anticipated in its utility costs — based on the sale of excess energy — has greatly diminished in the last several months," Lamb said.

"We’ve gone back and forth," said Jerry Schlatter, executive director, Capital Planning and Development. "Originally, the idea was to remodel the existing steam plant. Then, it was decided that we should look harder at cogeneration. Now, we are back to looking at just remodeling the steam plant before we make a final decision."

With three out of six boilers operational, suffice it to say, the university’s heating system is in need of serious help. When WSU lost a third boiler in August 1999, officials knew that a similar incident could caused the university to temporarily shut down if it occurred during the winter.

To avoid that dilemma, two new backup boilers, with dual gas/diesel fuel capability, were installed to "make sure the university will have sufficient steam," Schlatter said. Those boilers, which cost $1.6 million, are expected to carry WSU through the next couple winters, until a new system can be built.

For now, the challenge is determining whether it is best to update the steam plant system, or move to cogeneration.

"I’d expect that by then (February) we’d have pretty clear direction and can begin getting the project under way," Schlatter said. Meanwhile, Trigen and the cogeneration plant project are "on hold" awaiting the outcome of this new study. But, "cogeneration is still a serious part of that consideration."