In many cases after Superstorm Sandy, combined heat and power technology was credited with enabling critical infrastructure facilities to continue operating. How big a game changer is this technology? During today's OnPoint, Cindy Ortega, chief sustainability officer at MGM Resorts, explains how a combined heat and power system at her company's Las Vegas CityCenter facility has increased reliability and improved the bottom line. Ortega discusses the policy structure she believes is needed to reach President Obama's national goal of adding 40 gigawatts of installed combined heat and power capacity by 2020.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Cindy Ortega, chief sustainability officer at MGM Resorts. Cindy, it's great to have you here.
Cindy Ortega: Thank you, nice to be here.
Monica Trauzzi: Cindy, MGM has installed an 8.2-megawatt combined heat and power system for CityCenter in Las Vegas. Why has MGM decided to put such an effort behind this technology, and how much money are you saving?
Cindy Ortega: Well, if you look at CityCenter, CityCenter was the largest privately funded development in North America at the time it was built in 2010, and one of the objectives of that project was to make it as sustainable as we could. And so as we looked at the development, we thought, you know, how better to produce some of our own power for CityCenter and to use that waste heat, and to integrate it as we were building seven high-rises. So we did that. We built an 8.4-megawatt plant, as you said. And what we've seen from that is from between producing our own electricity, and then using that waste heat for all of the hot water needs of the whole complex, we are about 37 percent efficient over a similar building that would be the same sort of size and scale.
Monica Trauzzi: And it's been a year since Hurricane Sandy, and in many instances following the storm, CHP technology was accredited with enabling critical infrastructure to move forward and not have to shut down. How big of a game changer do you think that specific technology is, cogeneration?
Cindy Ortega: Well, you know, you think about hurricane areas, and we do have a resort down in Biloxi, Mississippi, but if you think about it, and think about Las Vegas for just a moment. At any point in time, Las Vegas has a couple hundred thousand people, that don't live there, in a very compressed area. And so if we had any kind of an emergency or any kind situation where the power went out or the gas went out, we still have to provide those people air conditioning in the summertime, lights, hamburgers to eat, all of those things. And what combined heat and power does for us is it separates our ability to produce power from the system grid. And we think that provides a more resilient solution than complete dependence on a system.
Monica Trauzzi: The president has signed a national goal for added CHP to an additional 40 gigawatts by 2020 for the United States. Currently, there are 82 gigawatts installed throughout the country. Can that goal be reached with the current policy framework that's in place?
Cindy Ortega: Well, you know, if you think about it, if you want business to do something, and business drives the way for the economy in the United States, if you want business to do something, then incent it. Because what it does is it changes the balance of the investment dollars. So if we were able to change the balance of investment into a more attractive investment in combined heat and power, you would start stimulating productions in hospitals, hotels, all of these areas where people could actually invest the shareholder dollar into that technology and utilize it. Could we make it to 40 [gigawatts] by then? Um, I don't know. It's a great goal. And I think that setting those kind of stretch goals are good, and I think it's a good way to set policy to get very many people going in the right direction.
Monica Trauzzi: So you're in town lobbying some folks on the Hill for tax parity with conventional energy, clean energy and conventional energy, what specifically are you asking for?
Cindy Ortega: Well, we're looking for the policy that's put through at the tax policy that we expect to come early next year, to include an increase in the federal subsidy or the federal tax credit for combined heat and power from the current 10 percent to 30 percent, which brings it on par with renewable solar and other renewable forms. And I think that's good sound policy, and we're willing, we've partnered with a few charitable trusts to come here and deliver that message to our representatives from Nevada.
Monica Trauzzi: U.S. EPA has a CHP partnership in place that works to bring industry together with local and state governments to develop new projects; what's your view of that program's overall effectiveness, and how much was being done actually to bring industry together with government?
Cindy Ortega: Well, I think the EPA does a good job of providing recognition for companies that are investing in combined heat and power. I do think it's a challenge for them because, you know, it's a very big reach, to reach businesses all over the United States. And so what we would really rather see is we would rather see a more focused effort in policy rather than a sort of incentive program to go toward combined heat and power.
Monica Trauzzi: And what do you think the appetite is in Congress right now to address this through a policy framework?
Cindy Ortega: I think that if the solution is presented in a business case way that really talks about how this is really a common-sense way for us to build our electrical grids in urban areas around the United States for us to encourage the reduction of waste of electricity throughout the United States. If the dialogue goes down that way, and our representatives can see this is really a good deal for everybody who is an energy customer, who is virtually everybody in the United States, then I think it has some potential to get some traction.
Monica Trauzzi: All right, Cindy. We'll end it right there. Thank you for coming on the show.
Cindy Ortega: Thank you. I appreciate it.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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