Utility company signs more than a dozen clients, who require 75kW or more demand per month, to its new backup generator service (BGS) program.

An increasing number of utility companies, like Wisconsin-based Madison Gas and Electric Co. (MGE), use generators to meet their need for more peaking capacity as well as offer affordable backup service to customers with higher-than-average power needs. MGE recently offered a backup generator service (BGS) for its customers with 75kW or more demand per month by using Cummins Onan PowerCommand generators.

According to Don Peterson, senior director, energy products and services, MGE provides electric service to 123,000 customers in a 250-sq-mile area located in Dane County, Wis. Before entering the BGS program in the spring of 1998, the utility had previously offered interruptible rates and a financing program for customers to purchase their own generators. But MGE discovered customers didn't want to have the up-front costs of generator ownership or the responsibility for maintenance and service. Those factors, coupled with regional concerns related to nuclear power and summer peak demands (MGE, for example, recorded a one-hr peak usage of 606MW in July 1998), helped prompt the utility to approach its local Cummins supplier.

The utility's initial order from Onan was for 10MW capacity with the hope of finding enough customers to use the generators in the summer. But there was a lot more interest than MGE anticipated, says Peterson. Within six months of the BGS program start-up, MGE has signed about a dozen customers at a cost of $1.50/kW per month for diesel and $3.50/kW per month for natural gas. The contracts vary in length from three to 10 years.

MGE runs the generators in parallel with the utility. Each PowerCommand generator is located at the customer's business and has a radio link to MGE's dispatch office. This allows technicians in the utility's main office to retrieve status points from the switchgear to monitor when a unit is running, checking the status of breakers and other vital information, says Dave Roso, engineer with MGE. In the event of a distribution outage, the generators are set to switch on automatically with no more than 30 sec of outage at the customer's place of business. Once normal system power is restored, the generators synchronize with the utility's systems and shut down without disrupting service.

"One MGE customer in the telecommunications industry has two 1250kW generators installed as backup because an outage can cost up to $1 million an hour in business," says Peterson.