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	<title>D.L. Steiner, Inc &#187; Headline</title>
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	<description>Electrical Engineering - Lima, OH</description>
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		<title>To Glove or Not to Glove?</title>
		<link>http://www.dlsteiner.com/628/to-glove-or-not-to-glove/</link>
		<comments>http://www.dlsteiner.com/628/to-glove-or-not-to-glove/#comments</comments>
		<pubDate>Thu, 22 Apr 2010 14:36:56 +0000</pubDate>
		<dc:creator>Roger Ford</dc:creator>
				<category><![CDATA[Electrical Safety]]></category>
		<category><![CDATA[Headline]]></category>
		<category><![CDATA[arc flash analysis]]></category>
		<category><![CDATA[lima]]></category>
		<category><![CDATA[NFPA 70E]]></category>
		<category><![CDATA[shock hazard analysis]]></category>

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		<description><![CDATA[First in a series of articles Questions People Ask Us?
There is no doubt that wearing gloves is clumsy and makes the electrical worker’s job more difficult. It is not surprising, then, that D.L. Steiner, Inc. is often asked whether or not workers are required to wear their gloves when working on a de-energized panelboard, control panel, or PLC cabinet. The answer to this question has three parts.
Part One: an Observation to Clarify the Situation
What is being considered here is a cabinet in which the local switch has been turned to ...]]></description>
			<content:encoded><![CDATA[<p>First in a series of articles <em>Questions People Ask Us?</em></p>
<p>There is no doubt that wearing gloves is clumsy and makes the electrical worker’s job more difficult. It is not surprising, then, that D.L. Steiner, Inc. is often asked whether or not workers are required to wear their gloves when working on a de-energized panelboard, control panel, or PLC cabinet. The answer to this question has three parts.</p>
<h3>Part One: an Observation to Clarify the Situation</h3>
<p>What is being considered here is a cabinet in which the local switch has been turned to the <em>off</em> position in order to isolate the internal components from the feed voltage supply. This is <em>not</em> the same as a cabinet or panel that has been completely isolated from its power source. When a cabinet has been removed from all voltage and appropriately locked out and tested for the absense of voltage, no shock or arc-flash hazard remains. In the case of a cabinet where a local switch has merely been turned off, however, a line-side voltage is still present, even though the internal components are de-energized, having been isolated from the voltage by an integrated isolating switch. So in such a case if the internal components are free from dangerous voltage, are gloves still needed?</p>
<h3>Part Two: Questions to Guide Action</h3>
<div id="attachment_632" class="wp-caption alignleft" style="width: 235px"><img class="size-medium wp-image-632" title="Figure 1" src="http://www.dlsteiner.com/wp-content/uploads/2010/04/incomingfeed2-225x300.jpg" alt="Figure 1" width="225" height="300" /><p class="wp-caption-text">Gloves needed inside the Restricted Approach Boundary</p></div>
<p>This question is answered with a question – two questions actually. The first involves shock protection: <strong>What is the <em>Restricted Approach Boundary?</em> </strong>Simply put, this is the distance (which varies with voltage) where qualified workers must restrict their approach to energized electrical conductors over 50 Volts, unless using proper personal protective equipment (PPE) and voltage-rated tools (see NFPA 70E, section 130.2[C] for an explanation). Answering this question goes a long way in determining “Are gloves still needed?”</p>
<p>Consider the Restricted Approach Boundary to be a protective bubble that extends around energized components. The line voltage determines the size of this protective bubble. If workers are working on components sufficiently removed from the exposed energized conductors so that hands will not be placed within the Restricted Approach Boundary, there is no requirement to wear insulating gloves. Conversely, if electrical workers’ hands will “penetrate” or are likely to penetrate the protective bubble, they definitely face a shock hazard and should be wearing insulating gloves of an appropriate voltage rating.</p>
<p>The simplest situation for determining to glove or not to glove is when 120/240 Volts feeds the equipment. In this case, the Restricted Approach Boundary is “avoid contact” (see NFPA 70E, Table 130.2[C] for a complete listing of boundary dimensions with their corresponding voltages). If electrical workers are careful to avoid contact with energized components, they can work on adjacent de-energized components without wearing insulating gloves.</p>
<p>If the feed voltage is 480 Volts, the Restricted Approach Boundary grows to one foot. Workers can work on de-energized components that are more than one foot from the energized conductor without wearing protective gloves. But if their hands will or are likely to encroach the boundary, insulating gloves of the appropriate rating must be worn.</p>
<p>Is that all there is to it? Not quite. So far this discussion has only considered gloves as a protection from the hazard of electrical <em>shock</em>. But they are also intended to protect from a second electrical hazard, namely, <em>arc-flash</em>. Since we know there is a Restricted Approach Boundary for electrical shock; there is also an Arc Flash Protection Boundary. This naturally leads to the next key question: <strong><em>What is the Arc-Flash Protection Boundary?</em></strong> Whenever workers enter this boundary, they have placed themselves within an area that, should an arc-flash incident occur, could result in severe and damaging burns. These burns most frequently afflict the hands, because these body parts are typically closest to the potential arc source and therefore must vulnerable to arc burns.</p>
<p>By definition, the Arc Flash Protection Boundary is &#8220;the distance from a prospective arc source within which a person could receive a second degree burn if and arc flash were to occur.&#8221; (NFPA 70E Art. 100). Consequently, any worker who crosses this boundary is at risk of third degree burns and death.  The NFPA 70E requires that workers wear appropriate PPE (including gloves) as a thermal barrier. Thermal hand protection may be in the form of leather gloves, arc-rated gloves, or rubber insulated gloves with leather protectors depending on the particular circumstances involved (see NFPA 70E, Table 130.7[C][10] for PPE requirements in the vicinity of arch flash hazards).</p>
<div id="attachment_636" class="wp-caption alignright" style="width: 480px"><img class="size-full wp-image-636  " title="arcflashprotectionboundary" src="http://www.dlsteiner.com/wp-content/uploads/2010/04/arcflashprotectionboundary.jpg" alt="arcflashprotectionboundary" width="470" height="231" /><p class="wp-caption-text">PPE must be worn within the Arc Flash Protection Boundary</p></div>
<p>This question is not easy to answer, as it is <em>not</em> directly related to voltage levels or any single factor, but instead involves a combination of electrical conditions. The clearest indication of this boundary occurs when an arc-flash hazard analysis has been performed on the electrical equipment in question. In such a situation, each electrical device will have an electrical hazard label identifying the Arc-Flash Protection Boundary for that device. On some pieces of equipment with very low levels of arc-flash potential energy, workers may find the Arc-Flash Protection Boundary to be small enough to permit them to work on portions of the de-energized cabinet without wearing gloves. Typically, however, the Arc-Flash Protection Boundary will be large enough that gloves are required while working on de-energized components within the cabinet.</p>
<p>When an arc-flash hazard analysis has not been performed, NFPA 70E stipulates a default boundary of four feet <em>in some situations</em> when the voltage to a device is between 50 and 600 Volts (see NFPA 70E 130.3[A][1] for the conditions that create these situations). Obviously working in a cabinet or bucket in the presence of a live feed a four-foot boundary will require workers to wear gloves to protect their hands, even when working on de-energized electrical components within that equipment.</p>
<p>Knowing both the <strong>Restricted Approach Boundary</strong> and the <strong>Arc-Flash Protection Boundary</strong> helps workers properly protect their hands from the dangers of shock and arc-flash. In most cases, workers will discover that this protection involves wearing either leather gloves or rubber insulating gloves with leather protectors.</p>
<h3>Part Three: An Option to Consider</h3>
<p>Anyone who has ever worn voltage-rated gloves, with their bulky leather protectors, realizes just how clumsy such attire can be. When a delicate touch is needed, workers are tempted to forego protective gloves and risk injury from shock or arc-flash by doing the work barehanded. This leads us to yet anotherquestion: <strong><em>Is there no other solution?</em></strong> Yes, there is!</p>
<p>It’s a fundamental fact: when workers’ hands, or other body parts, will be placed within a Restricted Approach Boundary or an Arc-Flash Protection Boundary, <em>they need protection</em>. The most typical protection is to wear gloves; however, an acceptable alternative is to place guards on the conductors so that workers cannot make accidental contact with energized components. With such guards in positions, the equipment is now touch-safe, and the need to wear protective gloves is removed. Much of the newer electrical equipment, in fact, is being manufactured with touch-safe guards already in place, making them easier to maintain and repair when these services are required.</p>
<p>Workers should not gamble their safety by failing to use front-line protection from the hazards of electrical shock and arc-flash. Following the guidelines presented above will help electrical workers accurately determine when glove use is essential to protect against serious hand injury.</p>
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		<item>
		<title>The Ins and Outs of Electrical Safety Auditing</title>
		<link>http://www.dlsteiner.com/605/the-ins-and-outs-of-safety-auditing/</link>
		<comments>http://www.dlsteiner.com/605/the-ins-and-outs-of-safety-auditing/#comments</comments>
		<pubDate>Thu, 25 Jun 2009 14:31:29 +0000</pubDate>
		<dc:creator>Roger Ford</dc:creator>
				<category><![CDATA[Electrical Safety]]></category>
		<category><![CDATA[Featured]]></category>
		<category><![CDATA[Headline]]></category>
		<category><![CDATA[electrical safety audit]]></category>
		<category><![CDATA[lockout tagout]]></category>
		<category><![CDATA[NFPA 70E]]></category>

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		<description><![CDATA[The NFPA 70E now requires regular auditing of an employer's electrical safety program. What must a company do to stay compliant?]]></description>
			<content:encoded><![CDATA[<p><img class="alignleft size-full wp-image-610" title="magnifying-glass" src="http://www.dlsteiner.com/wp-content/uploads/2009/06/magnifying-glass.gif" alt="magnifying-glass" width="293" height="432" />What a loaded term is the simple word&#8211;<em>audit</em>. When coupled with the acronym <em>IRS</em>, it can strike fear in the hearts of even the most attentive taxpayer. In the the corporate world, the all-to-familiar audit raises images of masses of red tape, reams of columned spreadsheets and exhausted board members with glazed eyes. While the audit is standard practice for many business professionals, it may seem out of place to the electrical safety professional, but it is not!</p>
<p>When the 2009 edition of NFPA 70E was released, electrical safety auditing became part of the electrical industry’s best practices. Certainly, it will be one criterion OSHA will use to judge whether an employer is doing what it needs to provide a workplace that is “free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees;” [OSHA General Duty Clause]</p>
<p>NFPA 70E Article 100.7 (H) says: “An electrical safety program shall be audited to help ensure that the principles and procedures of the electrical safety program are being followed. The frequency of audit shall be determined by the employer, based on the complexity of the procedures and the type of work being covered. Where the audit determines that the principles and procedures of the electrical safety program are not being followed, appropriate revisions shall be made.”</p>
<p>Let’s take a look at some of the implications that arise from this new standard raises for American industry.—implications that must be addressed if a company wants to remain OSHA compliant..</p>
<p><strong>Auditing is mandatory.</strong> The little word <em>shall</em> is crucial. The clearest conclusion we can draw from this paragraph is that the NFPA did not intend auditing as an optional exercise. No employer can afford to ignore a regular audit of their electrical safety program. (You do have a documented electrical safety program, don’t you?)</p>
<p><strong>Audit frequency is flexible</strong>. With the exception of the need for annual auditing of the lockout/tagout procedure [(NFPA 70E article 120.3 (C) (3)] a company is free to set what it considers to be an appropriate frequency for its electrical safety audit. The frequency of audit is determined by “the complexity of the procedures and the type of work covered.” This seems to beg for a progressive auditing plan. Electrical procedures would be prioritized and scheduled for auditing according to the established priority. Lockout/tagout would be audited yearly, other procedures audited every other year or some other appropriate interval. Still other procedural audits might be triggered by programmed events, such as plant shutdown or the release of new safety standards.</p>
<p>The NFPA 70E itself is revised on a 3-5 year schedule. The release of a new revision of the NFPA 70E standard should automatically trigger an audit of the electrical safety program. Each company should ask itself, “Are our previously compliant procedures now out of phase with the new standard?” Remember that safety standards have no grandfather clause. Just because a procedure was compliant under the 2004 (or earlier) edition of NFPA 70E does not mean that it will remain acceptable under the newer 2009 edition. The changes to NFPA70E must be reflected in corresponding changes to an employer’s electrical safety policy.</p>
<p>As an example of how changes in NFPA 70E can influence your safety policy, the 2009 edition now requires electricians to wear an arc-rated faceshield when working within the flash protection boundary of HRC category 1 equipment. Companies that did  their arc flash analysis under the 2004 edition and have included a PPE list on their equipment labels would now find their category 1 labels to be inaccurate and in need of revision. A proper audit would have picked up this discrepancy and promoted compliance with the new standard.</p>
<p><strong>Auditing is focused on behavior.</strong> It is important to remember that the electrical safety audit is not intended to investigate the employer’s policy on paper, but to examine whether the electricians and technicians who are doing the work are actually using the policy in practice. It is important that company auditing of its electrical safety policy investigate the controls by which the policy is monitored and enforced.</p>
<p><strong>Auditing profits from independent eyes</strong>. Although the bulk of auditing can and should be accomplished in-house, there is a very real need for employers to have an independent auditor periodically examine its electrical safety program. Familiarity may breed contempt, but familiarity also breeds myopia. It is easy to overlook significant gaps in the electrical safety program by being so close to the project. Fresh unbiased eyes will see what may otherwise be overlooked. In addition, it is difficult for a person involved with the day-to-day management of operations to keep abreast of the latest in electrical safety standards and best practices. Periodically bringing in a safety professional to look over your electrical safety policy is simply an effective way to help ensure that a company remains both safe and compliant to the electrical safety standards..</p>
<p>Auditing is not comfortable, nor easy. Yet it is an essential part of an effective electrical safety program. After all, safety is the goal and auditing helps us do the best job we can of providing an electrically safe work place.</p>
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		<title>WHY Arc Flash Hazard Analysis?</title>
		<link>http://www.dlsteiner.com/595/why-arc-flash-hazard-analysis/</link>
		<comments>http://www.dlsteiner.com/595/why-arc-flash-hazard-analysis/#comments</comments>
		<pubDate>Thu, 19 Mar 2009 19:44:50 +0000</pubDate>
		<dc:creator>Roger Ford</dc:creator>
				<category><![CDATA[Electrical Safety]]></category>
		<category><![CDATA[Featured]]></category>
		<category><![CDATA[Headline]]></category>
		<category><![CDATA[arc blast]]></category>
		<category><![CDATA[arc flash]]></category>
		<category><![CDATA[arc flash analysis]]></category>
		<category><![CDATA[arc flash hazard analysis]]></category>
		<category><![CDATA[NFPA 70E]]></category>

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		<description><![CDATA[What! more red tape . . .why should I bother with arc flash studies?
An unsuspecting electrician opens an electrical panel only to discover that he has let loose a lethally dangerous explosion—light flashes so bright that it permanently damages eyes, heat that is 4 times the surface of the sun incinerates clothing and flesh, molten shrapnel bores upon him with bullet-like speed, and a blast wave that throws him like a rag doll with a pressure wave of hundreds or thousands of pounds per square inch.
Approximately 2000 workers will be ...]]></description>
			<content:encoded><![CDATA[<p class="MsoNormal" style="margin: 0in 0in 6pt;"><strong><span style="font-size: small;"><span style="font-family: Times New Roman;">What! more red tape . . .why should I bother with arc flash studies?</span></span></strong></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><span style="font-size: small; font-family: Times New Roman;">An unsuspecting electrician opens an electrical panel only to discover that he has let loose a lethally dangerous explosion—light flashes so bright that it permanently damages eyes, heat that is 4 times the surface of the sun incinerates clothing and flesh, molten shrapnel bores upon him with bullet-like speed, and a blast wave that throws him like a rag doll with a pressure wave of hundreds or thousands of pounds per square inch.</span></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><span style="font-size: small; font-family: Times New Roman;">Approximately 2000 workers will be admitted to hospital burn units this year due to thermal burns from arc flash or arc blast accidents. These accidents will result in nearly one fatality every day. Although electrical injuries are relatively rare (1 in 494 lost time accidents are electrical in nature) they nevertheless result in a disproportionate number of fatalities as 1 in 20 industrial fatalities are as a result of electrical accidents.</span></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><span style="font-size: small; font-family: Times New Roman;">Most of those killed or injured workers were unaware of and unprepared for the level of hazard they were facing. Because of the immensity of the risk, responsible employers recognize the need to facilitate electrical safety through performing arc flash hazard analysis on their electrical equipment.</span></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><strong><span style="font-size: small;"><span style="font-family: Times New Roman;">It costs a bunch. I just don’t see that it is worth the cost and bother.</span></span></strong></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><span style="font-size: small; font-family: Times New Roman;">It has been estimated that an arc flash accident may cost the employer as much as a million dollars or more. Lost production, equipment repair or replacement, lawsuits, skyrocketing insurance premiums and OSHA fines can add up in a hurry. Arc flash hazard analysis is a form of risk management whose relatively small investment provides protection against the potentially huge costs of an arc flash accident.</span></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><strong><span style="font-size: small;"><span style="font-family: Times New Roman;">My equipment is all installed according to the NEC. Doesn’t that guarantee that it is safe?</span></span></strong></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><span style="font-size: small; font-family: Times New Roman;">The NEC is intended to provide equipment installations that are safe from electrical hazards to workers in their <strong>normal</strong> working configuration. However, electricians and maintenance technicians by definition work on electrical equipment under <strong>abnormal </strong>circumstances—when they are broken, damaged, or in need of maintenance. These are the times that electrical arc flash accidents are most likely to occur. That is why OSHA asked the National Fire Protection Association (NFPA) to produce a standard providing for the safety of the worker exposed to electrical hazards. It is this standard, the NFPA 70E, that requires an arc flash hazard analysis before workers unknowingly expose themselves to potentially lethal hazards.</span></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><strong><span style="font-size: small;"><span style="font-family: Times New Roman;">Hey, there’s no law that says I’ve got to do an arc flash study, is there?</span></span></strong></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><span style="font-size: small;"><span style="font-family: Times New Roman;">It is true that OSHA regulations do not specifically require an arc flash hazard analysis. It is also true that the NFPA 70E is a consensus standard, not a law. However, OSHA can and does impose fines on companies that ignore the standards of the NFPA 70E. OSHA regulations require employers to provide workplaces that are “free from recognized hazards that are likely to cause death or serious physical harm to employees.”<sup>1</sup> More specifically OSHA requires that “Safety-related work practices shall be employed to prevent electric shock or <strong>other injuries</strong> [emphasis added] resulting from either direct or indirect electrical contacts. . . .”<sup>2</sup> OSHA tells employers WHAT to do, that is provide electrical safety, and the NFPA 70E is the handbook telling us HOW to accomplish it. Here is what the NFPA 70E has to say about arc flash hazard analysis: “An arc flash hazard analysis shall determine the Arc Flash Protection Boundary and the personal protective equipment that people within the Arc Flash Protection Boundary shall use.”<sup>3</sup></span></span></p>
<p class="MsoNormal" style="margin: 0in 0in 6pt; text-align: justify;"><span style="font-size: small; font-family: Times New Roman;">The NFPA also calls for equipment labels that identify the level of hazard the electrical worker may be expected to encounter: “Equipment shall be field marked with a label containing the available incident energy or required level of PPE”<sup>4 </sup>An effective arc flash hazard analysis identifies these necessary pieces of information for electrical worker safety. It’s not an option, it’s the law!</span></p>
<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Times New Roman;"><sup><span style="font-size: small;">1</span></sup><span style="font-size: 10pt; mso-bidi-font-size: 11.0pt;">29 CFR §1903.1</span></span></p>
<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Times New Roman;"><sup><span style="font-size: small;">2</span></sup><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;">29 CFR </span><span style="font-size: 10pt; mso-bidi-font-size: 11.0pt;">§</span><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;">1910.333</span></span></p>
<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Times New Roman;"><sup><span style="font-size: small;">3</span></sup><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;">NFPA 70E-2009 Article 110.8(B)(1)(b)</span></span></p>
<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Times New Roman;"><sup><span style="font-size: small;">4</span></sup><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;">NFPA 70E-2009 Article 110.3(C)</span></span></p>
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		<title>The Future of Electrical Utility in Ohio</title>
		<link>http://www.dlsteiner.com/58/the-future-of-electrical-utility-in-ohio/</link>
		<comments>http://www.dlsteiner.com/58/the-future-of-electrical-utility-in-ohio/#comments</comments>
		<pubDate>Tue, 30 Dec 2008 20:33:31 +0000</pubDate>
		<dc:creator>Roger Ford</dc:creator>
				<category><![CDATA[Advanced Energy]]></category>
		<category><![CDATA[Featured]]></category>
		<category><![CDATA[Headline]]></category>
		<category><![CDATA[alternative energy resources]]></category>
		<category><![CDATA[co-generation]]></category>
		<category><![CDATA[distributed generation]]></category>
		<category><![CDATA[electrical costs]]></category>
		<category><![CDATA[electrical utility]]></category>
		<category><![CDATA[lima]]></category>
		<category><![CDATA[net metering]]></category>
		<category><![CDATA[ohio]]></category>
		<category><![CDATA[ohio energy]]></category>
		<category><![CDATA[peak demand reduction]]></category>
		<category><![CDATA[PUCO]]></category>
		<category><![CDATA[rate stabilization]]></category>
		<category><![CDATA[S.B. 221]]></category>

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		<description><![CDATA[Changes to Public Utilities system in Ohio are cause for both confusion and opportunity for the electrical consumer.]]></description>
			<content:encoded><![CDATA[<h2>Ohio Energy: State of Confusion and Opportunity</h2>
<p>The state of Ohio electric energy production and distribution is one of both great challenge and also considerable opportunity.</p>
<h3>Electrical Marketplace Confusion</h3>
<p>It is obvious that Ohio electric power is in a state of flux. In 1999 Senate Bill 3 was signed into law. This law sought to establish in Ohio a competitive marketplace for electrical energy sales. In the transition period, it provided for a five-year market development period lasting from Jan. 1, 2001 to Dec. 31, 2005. During that time, rates were frozen in order to allow a competitive wholesale market to take shape.</p>
<p>The competitive market did not develop as expected. As the end of the market development period neared, the Public Utilities Commission of Ohio (PUCO) became concerned about the limited number of competitive electric suppliers and the low degree of market activity. They feared that this response was an indication that an immediate shift to market-based rates in 2006 would not be in the best interest of customers.</p>
<p>They set out to minimize the effects of rate “sticker shock” upon the unsuspecting electrical customers by gradually transitioning customers to market-based rates. The PUCO required Ohio’s electric utilities to develop rate stabilization plans (RSPs). These plans were intended to eliminate market uncertainty and provide customers with stable, predictable rates. For the most part, the Rate Stabilization Plans were initiated Jan. 1, 2006 for a three year period and are due to come to an end on Dec. 31, 2008 (The RSP of Dayton Power &amp; Light ends in 2010).</p>
<p>Throughout this period, the shift toward competitive marketplace for electricity supply has struggled. There appears to be a marked lack of enthusiasm on the part of the electric utilities to embrace the competitive concept. AEP Ohio commented in a 7/6/2006 news release, “We believe that a move to competitively bid market-based rates would be detrimental to our customers.” Indeed, on the PUCO’s own website there is a very telling notice, &#8220;<a href="http://www.puco.ohio.gov/PUCO/ApplesToApples/Electric.cfm?id=6348" traget="_blank">No Competitive Retail Electric Service providers are currently enrolling customers in Ohio</a>.&#8221;</p>
<p>Even as the shift to competitive market based electricity sales has caused uncertainty ANOTHER Senate Bill has compounded the problem. On May 1, 2008 S.B. 221 was signed into law. The impact of S.B 221 is in several areas. First, it is in many ways a backing away from a strict market-based electrical sales. It establishes a kind of hybrid system with both regulated rates and market-based rates. </p>
<p>Secondly, S.B. 221 is intended to provide PUCO with the power to stabilize rates after the official Rate Stabilization Program draws to conclusion in December 31, 2008.</p>
<p>Thirdly, it establishes a powerful impetus for utility usage of renewable energy resources. S.B. 221 requires that by 2025 25% of electricity sold by electric distribution utilities and electric services companies be from “alternative energy sources”. Alternate energy sources include renewable energy resources and advanced energy sources. Renewable resources are electrical energy generated through wind, solar, and hydroelectric power. Advanced energy sources are sources of recovered energy such as usage of waste heat for electric generation, improvements to real and reactive power, and peak demand reductions.</p>
<p><img class="size-full wp-image-59" title="S.B. 221" src="/wp-content/uploads/2008/12/puco.jpg" alt="Utility Goals for 2025" width="516" height="387" /><br />Utility Goals for 2025</p>
<p>These goals will be gradually phased in beginning in 2009 continuing through 2025. The utility company’s progress will be monitored by the PUCO and financial penalties will be assessed if it is determined that a utility has not made sufficient progress. Funds from these penalties will be deposited in the “advanced energy fund” to provide financing for alternative energy projects.</p>
<h3>Alternative Energy Resource Opportunities</h3>
<p>Electrical rates can be expected to rise in a predictable manner. Ohio utilities AEP Ohio, Duke Energy and FirstEnergy have filed Electric Security Plans. These plans, when accepted by PUCO, establish their rates for the next three years. AEP Ohio, for example, forecast an approximate 15% raise in rates per year over three years.</p>
<p>Although the rates will be predictable over the next three years, S.B. 221 puts considerable pressure upon the utilities to find adequate sources of Renewable and Advanced Energy Sources. Some of those sources may be found from the utility customers themselves. Opportunities exist for customers to capitalize on these opportunities. As the pressure on the utilities increases as the years close on 2025 we can expect the opportunities in the area of renewable resources to multiply. The following advanced energy resources will be worth monitoring.</span></p>
<p><u>Distributed Generation.</u> &#8211; Net metering is a scheme of distributed generation where a customer has their own small renewable generating equipment to provide a part of their own electrical needs. The generating equipment is hooked to the system and metered in such a way that the customer pays the net cost of the difference between total electrical consumption and the customer supplied power. During times of low electrical consumption the excess power is fed back into the grid and at that point the customer essentially “sells” power back to the utility. Before S.B. 221 the tariffs set by the utility for net metering schemes were limited to 1% of customer’s peak electrical usage. That cap has been eliminated by the new law.</span></span></p>
<p><u>Cogeneration</u> is an energy thermodynamic efficiency scheme where a heat engine or power station simultaneously provides both heat and electrical power. A boiler that produces heating may be tapped so that the excess heat provides power for small electrical generating equipment.</p>
<p><u>Power Factor Correction</u> provides increased power efficiency by correcting an imbalance between the real and reactive power.</span></span></p>
<p><u>Peak Demand Reduction</u> programs must be implemented by distribution utilities beginning in 2009.</p>
<p>The significance of these Alternative Energy Resources may not be immediately apparent. Any improvement in the area of alternate energy resources on the part of a utility customer reflect back upon the utility. The utility may be able to use these improvements as part of the utility improvement programs.</p>
<h3>Government Incentives</h3>
<p>Currently incentives by the utilities themselves to invest in these Alternate Energy Resources are largely non-existent. This should change as the implementation of S.B. 221 rolls forward. As pressure on the utilities to meet their established quotas of alternative energy resources grows, we can also expect incentives by the utilities to expand as well. In the mean time, companies should consider investigating governmental incentives for involvement in alternate and renewable energy resources. Proactive preparation in these areas should position forward-looking companies for the increasingly “green” industrial environment.</p>
<p><strong>State of Ohio Incentives:</strong> Companies who are interested in investing in alternate or renewable energy technologies should look to the Advanced Energy Fund for assistance. Currently the Ohio Department of Development (<a href="http://www.odod.state.oh.us/" target="_blank">www.odod.state.oh.us</a>) has three programs to assist in development of alternative energy projects.</p>
<p>The <u>Distributed Energy Resources Notice of Funding Available</u> seeks applications for grants to cover a portion of costs of projects in the area of distributed energy resources such as: industrial heat recovery, biomass or landfill methane for electric generation.</p>
<p>The <u>Manufacturing Facilities’ Energy Efficiency Notice of Funding Available</u> seeks applications for grants to cover a portion of projects in the area of improving manufacturing efficiency in areas of lighting, HVAC, geothermal, motor efficiency, power factor correction and cogeneration.</p>
<p>The <u>Renewable Energy Program Notice of Funding Available</u> seeks applications for grants to cover a portion of projects in the area of implementing renewable energy projects in the area of solar electric, wind electric, and solar thermal systems for commercial, industrial, institutional and governmental entities.</p>
<p>The <u>Advance Energy Job Stimulus Fund</u> T his bond-funded program creates an Advanced Energy Job Stimulus Fund that is administered through a public process managed by the Ohio Air Quality Development Authority (OAQDA). The Fund will award grants and loans to a portfolio of advanced energy projects that serve to attract new investment to Ohio, build upon Ohio&#8217;s manufacturing strength, advance energy technology development toward commercialization and prepare Ohio&#8217;s workforce for the future.</p>
<p>The fund will consist of $150 million advanced energy money (over three years) seeking to increase the development, production and use of advanced energy technologies in the state, and is divided in the following manner:</p>
<ul>
<li>$66 million for clean coal technology projects administered through OAQDA’s Ohio Coal Development Office (OCDO) (reviewed by the Technical Advisory Committee and approved by OAQDA); and </li>
<li>$84 million for non-coal-related projects in three $28 million annual appropriations administered by OAQDA (reviewed by the Development Finance Advisory Council, approved by the OAQDA and brought before Controlling Board for final approval).</li>
</ul>
<p>As a general guideline, grants may range from approximately $50,000 to $250,000 based on the size and scope of the entire project and the jobs, investment and other. Projects presenting outstanding value propositions for Ohio may be considered for significantly higher awards.</p>
<ul>
<li>Additionally, five percent of the fund may be set aside for small grant awards (generally in the range of $50,000) to support disruptive technologies with significant potential for success, even if they are in earlier stages of development.</li>
</ul>
<p>Loans may range from approximately $1 million to $2 million. For highly qualified applicants, loans could be structured a number of ways including below market rates, subordinate collateralized positions with participating financial institutions and/or varying principal payments for a specified period of time.</p>
<p><u>Tax Exemption.</u> Ohio has other incentives such as certain tax exemptions. The State of Ohio exempts certain property from real and personal property taxation, sales tax and use tax. The exemption applies to property used in renewable energy conversion, thermal efficiency, waste heat recovery, and the conversion of solid waste to energy. See <a href="http://www.odod.state.oh.us/taxreform.htm" target="_blank">http://www.odod.state.oh.us/taxreform.htm</a>.</p>
<p><strong>Federal Incentives:</strong> The Federal government offers substantial incentives for projects involved in alternate or renewable energy.</p>
<p><u>Federal Loan Guarantee Program.</u> The Federal government offers loan guarantees for large projects that employ advanced technologies that avoid, reduce or sequester emissions of air pollutants or greenhouse gases in the area of coal-based power generation, industrial gasification, and advanced coal gasification facilities. See <a href="http://www.lgprogram.energy.gov/press/092208.pdf" target="_blank">http://www.lgprogram.energy.gov/press/092208.pdf</a>.</p>
<p><u>Tax Incentive Assistance Project.</u> On October 2, 2008 President Bush signed into law legislation that extended the Energy Efficiency Tax Incentives that had expired in 2007. Tax incentives exist that support a variety of alternative energy resource development projects. See <a href="http://www.energystar.gov/index.cfm?c=products.pr_tax_credits" target="_blank">http://www.energystar.gov/index.cfm?c=products.pr_tax_credits</a>.</p>
<p>It may be too soon to jump onto the alternative or renewable energy resource bandwagon. The regulations from S.B. 221 have barely had time to implemented. The time is coming, however, and it may be very soon that action will be required. In the meantime the prudent businessperson will carefully investigate his/her opportunities and be prepared to join the wave before it washes over us.</p>
<p>&nbsp;</p>
<p><strong>Update 1/12/2009:</strong> The PUCO has failed at this point to approve AEP Ohio&#8217;s Electrical Security Plan (ESP). Consequently, the anticipated rate hikes have not taken effect and the 2008 rates will continue into 2009 probably through February.</p>
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