Attached is a barrier report released yesterday by Secretary Richardson



FOR IMMEDIATE RELEASE
           May 31, 2000

           NEWS MEDIA CONTACT:
           John B. Townsend II, 202/586-5806

                          Energy Department Report Identifies Barriers
                      Blocking Competition In Electric Utility Industry

                      Distributed Power Projects Could Reduce Power Outages

           Secretary of Energy Bill Richardson today released a comprehensive
report that documents, for the
           first time, the marketplace barriers that prevent electric utility
customers, developers and vendors from
           creating projects that would enable consumers to generate their own
electricity. According to the
           Energy Department report, distributed power systems that produce
electricity onsite can reduce the
           amount of power utility companies need during peak demand and help
prevent power outages.

           "Hundreds of millions of dollars and hundreds of thousands of work
hours are lost each year due to
           power supply disruptions that could otherwise be avoided if the
barriers to distributed electricity
           generation were removed," said Secretary Richardson. "When 
facilities
 such as hospitals and
           businesses with computers or other critical electronic technology 
can
 get power from either the grid or
           their own generating equipment, energy reliability and security 
will
be greatly improved."

           The newly released Department of Energy (DOE) report contains a
10-point action plan for reducing the
           technical, business practice and regulatory barriers that 
discourage
interconnection of distributed
           generation technologies to the electricity grid in the United 
States.
 The report, Making Connections:
           Case Studies of Barriers to Interconnection of Distributed Power, 
is
the first to document the problems
           the developers of distributed electricity generation projects
encounter while attempting to interconnect
           to the electric grid.

           Onsite generation, also known as distributed electricity 
generation,
allows residential, commercial and
           industrial customers to produce their own electricity by using
smaller, decentralized, electrical
           generation systems located at or close to their facilities. Power
sources for distributed electricity
           generation systems include fuel cells, microturbines, 
photovoltaics,
wind turbines and combined heat
           and power systems. The technology reduces the need to build new 
large
 central generating plants or
           transmission and distribution lines. The report concludes,
distributed power systems at industrial
           plants or commercial buildings can be more energy efficient and
provide greater reliability onsite than
           conventional central generating stations.

           The Energy Department examined 65 distributed electricity 
generation
projects. Of the 65 case
           studies, only seven reported no major utility-related barriers.
However, in most cases, substantial
           regulatory, technical and business-practice barriers exist, which
inhibit distributed generation
           interconnection to the grid in the United States. For example, 17
projects, more than 25 percent of the
           case studies, experienced delays greater than four months.

           Other findings include:

                Lack of a national consensus on technical standards for
connecting equipment.
                Lengthy and costly approval process that hampers competition
from smaller distributed
                generation projects.
                Unfamiliarity by utility companies in dealing with
customer-generator interconnection requests.
                Costly regulatory appeals that prevent relatively small-scale
distributed generation projects.

           Although a handful of public utility commissions across the country
have adopted rules on
           interconnection, the report concludes that removal of the barriers
will require the participation of
           industry, utilities, developers, environmental groups and state and
federal regulatory agencies. The
           report outlines an action plan for reducing barriers to distributed
generation. Some of the
           recommendations include:

                Adoption of uniform technical standards for interconnecting
distributed power to the electric grid.
                Acceleration of the development of distributed power control
technology and systems.
                Development of tools for utilities to assess the value and
impact of distributed power at any
                point on the grid.
                Establishment of new regulatory tariffs and utility incentives
that help reduce regulatory barriers.

           According to the report, many of the artificial market barriers to
distributed generation grow out of
           long-standing regulatory policies and incentives designed to 
support
monopoly supply. Distributed
           generation promises greater customer choices, efficiency 
advantages,
improved reliability and a host of
           environmental benefits.

           Copies of the report are available at
http://www.eren.doe.gov/distributedpower/barriersreport/

           Secretary Richardson discussed the report's findings during remarks
today at an electricity reliability
           summit in Akron, Ohio. During the summit, government officials,
regulators, labor representatives,
           utility company executives and consumers discussed ways to enhance
the reliability of Ohio's electric
           system. Since late April, Secretary Richardson has co-hosted 
similar
summits in Hartford, Newark,
           New Orleans, Sacramento, Seattle and Houston.

                                             - DOE -
(See attached file: MAKING CONNNECTIONS.pdf)

 - MAKING CONNNECTIONS.pdf