Fuel Acquisition And Use Independent Power Projects

Passage of the Public Utilities Regulatory Policy Act ("PURPA") in I 978 created an entirely new industry that is referred to today as the Independent Power Producers ("IPP"). Requirements of project owners, environmental compliance, project design, the financial community and most of all, the need to be a low-cost producer presented a unique situation for the sourcing and the utilization of fuels. Depending on the specific type of project being developed, (e.g. coal-fired, wood/biomass, natural gas, petroleum coke or a blend of several fuel types) and the type of boiler design, it is important to acquire fuels that will optimize both the project's operating efficiency and flexibility. This paper will focus on the acquisition of fuel for coal-fired projects, but will describe the necessary steps in the sourcing, contracting for, and the utilization of fuels and transportation resources in the IPP industry today.