The Reviewers have already told us that the District Energy System we are using, a utility-owned plant which generates grid electricity and heats hot water for our building from landfill gas, is allowed as on-site renewable energy and will be allowed to use Option 2 of the DES. We will use the same cost structure for baseline and proposed models. We are struggling with the cost for the heating hot water.

The primary purpose of these generators is to make grid electricity. Heating hot water is an extra perk. (The reviewers didn't buy that the heating hot water was "free" - it has to have a cost) Landfill gas is unmetered, so it is not clear how much is used. Heating hot water is also unmetered, so it is not clear how much is generated. We know, however, that the electricity produced costs the utility $49 per megawatt-hour. We have a very clear idea of pumping energy costs and distribution losses, so it is just the cost of the hot water at the generator that is puzzling.

$49 per MWHr can give us a good idea of the total operating cost of this DES plant, a number which includes fuel and maintenance. We've asserted that the cost-per-BTU for our heating hot water should be about the same as the cost-per-BTU for the generated electricity. This is being challenged.

We can calculate from the peak capacity of the equipment, that 11% of the output of the generator becomes hot water, 31% of the output becomes electricity, and the rest goes up the stack as waste heat. This is the closest we can come to ratioing the outputs. But how do we prorate costs?

Is it valid to say that the cost per btu of the electricity and hot water is about equal? Or is there a valid way to prorate these outputs given that we know the cost of one of them, but the actual fuel cost is not known?