Common use of Background Definitions Clause in Contracts

Background Definitions. 2.1 With energy shortages prevailing and gas-oil supplies diminishing, it is very important to conserve energy by increasing efficiency, and to reduce gas-oil consumption by encouraging the development of non-gas-oil types of generation. 2.2 Small power production and co-generation are two very effective methods of conserving energy and reducing gas-oil consumption. 2.3 Small power production is exotic generation for which the primary fuel/energy sources are wind, hydro, solar, biomass, waste, or renewable resources. Small power production facilities do not use gas-oil fuels as the primary fuel source. 2.4 Co-generation is the simultaneous production of electricity and useful heat in a way that requires less fuel than the separate production of electricity and heat. Co-generation facilities sequentially extract energy from a thermal process, and produce electricity and useful thermal energy. This recovery of waste heat by-products and the simultaneous production of two energy products is a more efficient use of gas-oil fuels than the separate production of two energy products. 2.5 The efficiency of small power production and co-generation can be maximized, if the customer's generation is connected parallel to the utility's system, so that the excess electricity the customer does not use is sold to the utility to be used by other customer's. 2.6 A parallel generation system is designed such that the customer's generation can be connected to a bus common with the utility's system. Power transfer between the customer's system and the utility's system is a common result.