Paper mill in Louisiana has a 15 MW cogen system selling excess power back to Entergy. The avoided cost credits on their bills seem low compared to what I'd expect. They're getting about $0.028/kWh but market prices suggest it should be higher. Anyone familiar with Entergy's avoided cost methodology?
Cogeneration credit calculation errors
Harriet, Entergy's avoided cost calculations can be tricky. They use a blend of fuel costs, transmission losses, and capacity factors. The rate changes seasonally and by time of day. Make sure they're getting credit for both energy and capacity - sometimes the capacity component gets missed. Request the detailed avoided cost calculation from Entergy.
Thanks Lucille. I'll request the detailed calculations. The mill runs the cogen pretty consistently during peak hours when avoided costs should be highest. If they're missing capacity credits, that could explain the discrepancy. This could be significant money over the contract term.