Capstone Turbine "Part of the Solution" to California Energy Crisis

Microturbine manufacturer sees small scale, distributed generation as way to ease power crunch in California.

Published: 08-Jan-2001

Capstone Turbine Corp. (www.microturbine.com) (Nasdaq:CPST) plans to increase awareness of its microturbine power systems "as an immediate part of the solution" to the escalating power crisis in California.

Capstone's clean-burning, refrigerator-sized power plants can help utilities reduce dependence on skyrocketing spot-market electricity while helping businesses "keep the lights on" during brownouts or rolling blackouts.

"Distributed generation systems like the Capstone MicroTurbine are supplements to centralized power plants and the electric grid. Generating power onsite enables businesses to improve power reliability as well as reduce reliance on expensive peak power," said Dr. Ake Almgren, president & CEO of Capstone Turbine.

"To the beleaguered utility grid, turning on a Capstone MicroTurbine is essentially the same as turning off load. For a nursing home, hotel, factory or any other business, the difference can be significant: to have power or not to have power.

"Distributed generation can help resolve bottlenecks in the electric distribution system. Wide-scale distributed generation can help keep California's businesses and economy up and running as well as reduce costs to all parties," Almgren said.

As part of its plan to increase public awareness of its microturbine systems, Capstone will debut a new advertising campaign in the Jan. 29 California issue of BusinessWeek magazine. A preview of the ad is online at www.microturbine.com/Y2k1.pdf.

Wholesale prices for electricity have recently peaked as high as $1,400 per megawatt, compared to about $40 per megawatt in 1999. With customer prices regulated by the state, Pacific Gas & Electric (www.pgecorp.com) (NYSE:PCG) and the Southern California Edison division of Edison International (www.edisonx.com) (NYSE:EIX) reportedly have incurred billions of dollars in costs they have been unable to pass on.

The California Public Utilities Commission last week approved a 90-day rate hike of up to 15% on business customers, but utilities emphasize that much greater increases will be needed to cover past and ongoing losses.

Distributed generation produces power at or very near the sites where it is used. It supplements and reduces demand on the current infrastructure.

"But for distributed generation to work, small-scale generators must be affordable, reliable, safe, simple to operate and must be very clean," Almgren said. "Capstone MicroTurbines are the only small-business-sized microturbine generators widely available today with single-digit NOx (nitrogen oxide) emissions, an especially critical factor here in California. Our UL-Listed systems are today's best value for clean, reliable, onsite power generation," Almgren said.

Almgren added that wide-scale deployment of distributed generators "is a step toward the Governor's goals," referring to a statement made by California Governor Gray Davis Dec. 26 to "find new ways to incentivize even more conservation (and) accelerate the development of new supply."

Capstone has long advocated utility ownership of small (less than 2 megawatts) distributed generation systems, since they are best positioned to implement wide-scale deployment of such a solution. Current California deregulation prohibits investor-owned utilities from doing so.

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