An Assessment of the 

Feasibility of Emergency 

Electrical Generation Units 

to Serve System Load 

Requirements

By 

Alex Albertine

August 17, 2001 

Northwest Power Planning Council
1

Executive Summary

Over the past year a growing power crisis has emerged across the western states. 

Recent developments in power management in California have raised particular concerns 

as the Northwest region both plans and reacts to possible power shortages or extreme 

price increases. Our heavy reliance on electrical power has left millions of Americans 

vulnerable to severe consequences of power loss. In order to avoid the California 

experience of rolling blackouts or the effects of higher wholesale power increases, we 

must look for creative and innovative ways to both produce greater supplies of electric 

power, provide incentives for conservation and balance environmental needs 

simultaneously. Many debates have taken place as to what can be done to improve this 

situation. Some alternative proposals have been considered. One proposal encourages 

the use of emergency generators, already installed in a variety of buildings, be used to 

increase power generation. 

This study, which is based upon the need to explore the feasibility of power 

generation from relatively small generators in individual buildings, is limited in size and 

scope. Interviews were conducted over an eight-week period with building operators and 

managers in the city of Portland, Oregon who own or manage emergency generating 

units. Additional interviews were conducted with personnel from local electric utilities. 

This study sought first to determine the availability of emergency generators and the 

amount of power that could be generated. Owners and managers of buildings were 

questioned as to whether and how they would support using private generation in 

cooperation with utilities. Issues explored included economic, technical and legal ones 

relating to the practical use of emergency generators and the incentives and problems in 

establishing a workable program.

This study found that emergency generators are available in a variety of 

commercial and industrial buildings as well as hospitals, high schools, colleges, jails, and 

public safety facilities. According to industry information Washington, Oregon, Idaho, 

and Montana have just over 26,000 generators within their borders. This study contacted 

70 facilities or approximately 10% of the total available in the city of Portland. 

Federal, state and local jurisdictions govern the use of emergency generators. 

Agencies such as the federal Environmental Protection Agency and state agencies such as 

the Oregon Department of Environmental Quality have specific requirements and 

environmental codes that must be met. At the local level, emergency generators are 

subject to local structural, mechanical and electrical regulations.

From the information gathered 71% of the industrial and commercial building 

owners or managers indicated that they would be interested or likely interested in 

contracting with a utility to supply energy to the power grid using their emergency 

generating capacity. This level of support was qualified by the desire of respondents for 

support from utility companies and clear economic incentives to participate.
2

The results of interviews with utility personnel as well as additional research 

indicated that local utilities are supportive to the idea of using emergency generating 

capacity to augment present power production. Most utilities are considering innovative 

programs to increase the power supply, and see the use of emergency generation as a 

possible option. Some utilities are beginning to develop specific program parameters and 

consider legal and contract information that would mutually benefit both the owners of 

emergency generators as well as the utilities. Further, some program elements have 

specific environmental benefits.

 Emergency generators may be used up to 200 hours per year during peak power 

needs. In exchange for use of the emergency generators, utilities would supply support, 

maintenance, fuel and equipment to fully maintain the generators as well as build a 

centralized and parallel power supply. Building owners would be secure in knowing that 

they have guaranteed, dependable and non-interruptable power from well-maintained and 

tested emergency generators.

If the results of this survey are extrapolated region-wide there is significant 

generating capacity available using the capacity in emergency generators. An estimated 

3.7 gigawatts of generating capacity is believed to be available. This additional power 

provided at reasonable cost, both economically and environmentally offer an important 

opportunity to meet the power needs of a growing region.
3

Table of Contents

Pages 1-2 Executive Summary

Page 3 Table of Contents

Pages 4-6 Introduction

Evaluating conditions of emergency generation facilities

Pages 5-12 Types of Emergency Generator Units

Where Generators are Found

Determining Generator location, Type and Capacity 

How Much Power is Possible?

Other Necessary Equipment

Analysis of Feasibility

Pages 13-16 Codes and Requirements 

Support From Building Owner and Tenants

Support From Utilities

Environmental Feasibility

Conclusions and Recommendations

Pages 17-18 Conclusions and Recommendations

Appendices

Pages 19-20 Appendix 1 Facilities Director’s Questionnaire

Page 21 Appendix 2 Government Agency Questionnaire

Page 22-23 Appendix 3 Utility Questionnaire

Page 24 Appendix 4 Caterpillar

Page 25 Appendix 4 Cummins

Page 26 Appendix 4 Detroit Diesel

Page 27 Appendix 4 Deutz
4

An Assessment of the Feasibility of Emergency 

Electrical Generation Units to Serve System Load 

Requirements

Millions of Americans, often without thought, rely on our complex electrical 

power system to meet their daily needs. Without electrical power modern life and the 

completion of simple daily tasks becomes impossible. Electrical power is the essential 

backbone of America’s culture. Unfortunately, this reliance has left citizens vulnerable 

to the power system and the negative effects when it does not work properly. Presently 

the northwestern part of the United States is experiencing a lessening in availability of 

electrical power. Prices of wholesale power are increasing dramatically. These prices are 

predicted to continue to be high throughout the next several years. Economic and 

population growth, poor water conditions, lack of customer incentives to conserve, high 

natural gas prices and a dysfunctional deregulated power industry in California has 

resulted in the deterioration of the electrical power system. This situation must be 

improved to continue the high standard of living Americans enjoy. 

Many debates have taken place in a search for ways to improve this situation. No 

single clear answer has been found, but many alternative proposals have been considered. 

One idea, the focus of this study, is the use of emergency generation units to produce the 

demanded amount of power that the utilities are unable to provide. Many commercial and 

industrial facilities are already equipped with emergency power generation units. These 

units, which run on diesel fuel, are installed and are used in case of an emergency when 

the grid that usually provides the electrical power is temporarily out of service. It ha s 

been proposed that these emergency generating units also be put in operation to supply 

power during times of peak demand. The question of whether it is feasible to use these 

units as part-time power generators is the objective of this study proposed by the 

Northwest Power Planning Council.

The Northwest Power Planning Council is an interstate compact agency 

responsible for the assessment of electric power and fish and wildlife issues affecting the 

states of Idaho, Montana, Oregon and Washington. The Council makes policy 

recommendations at the request of the governors, legislators, congressional delegation 

and the Bonneville Power Administration.

This study is based on interviews of facilities operators who own emergency 

generating units and the utilities that support the power grid. The first goal of the study is 

to evaluate the current conditions of the emergency power generators. For example, 

where generators are located, amount of generating capacity, who controls their use, and 

under what circumstances generators are currently employed, are all questions addressed 

by the study. Since little was known about the emergency generating units, finding 

current information about these generators was essential in finding out how they might be 

used to offset the power demand.
5

The second goal of the study is to analyze the feasibility of employing emergency 

generators fulltime or on a part-time basis as needed. In question is the economic 

viability of keeping generators running for a longer than normal period of time. The study 

examines the impact on the utility, and if it is economically feasible for the utility 

company to pay for extra equipment, contracts, and servicing for emergency generators. 

The study also addresses the environmental quality issues that appear when the 

generators are in use. They are noisy and release large amounts of particle waste into the 

air. The generators also require fuel onsite for their operation, which, when running the 

generators more often, will result in the need for more onsite diesel fuel. 

Other complications may also arise. Health and safety issues may offer 

challenges. There are also several laws, regulations and institutional constraints on use of 

emergency generators. It is important to take into account these regulations and the 

actions necessary to modify regulations that prohibit the use of generators as power 

producers. At present, the primary purpose of these units is to provide electricity to the 

customer in case of service interruption. If emergency generators were to be used to 

augment system loads, as addressed in this study, the generators would no longer be 

considered emergency generators, but power generators and be subject to a different level 

of federal and state requirements.

Electricity is provided by the power producer, passed to the utility, and then to the 

consumer. In an ideal circumstance this is how the power industry would work on a 

simplified level. The current problem is that it now costs the utility too much to buy the 

power from the producer due to increased demand and impacts from additional economic 

factors and unpredicted events. Because the utility must supply energy to consumers, it 

will look for other options to produce power more efficiently. As shown in figure one, 

below, demand tends to increase during mid-day. If the utility is only able to fulfill part 

of their demand during mid-day the result would be blackouts. This study will review the 

use of emergency generators by the utility to fulfill the demanded amount of power as 

shown below.

This beginning study seeks to gather baseline data in regards to emergency power 

generation use. Conclusions are preliminary and based on limited data and estimated 

numbers. Yet, this information can provide groundwork for even more future research. It 

Fig. 1

The generator is able to fill 

the demanded amount of 

power.
6

is clear that if the full extent of emergency generation’s potential is to be realized, a more 

in-depth and broader study must be performed. However, it is my intention to provide 

the most recent and exact information possible. With this information gathered an 

estimate of generation potential has been made. Hopefully with this new information, 

producers, utilities and consumers will begin to prepare for innovative changes in the 

power industry.
7

Evaluating Conditions of Emergency 

Generation Facilities

Types of Emergency Generator Units

Emergency generators come in a variety of types and have varying amounts of 

kilowatt (kW or 1000 watt) capacity. The main manufacturers of emergency generators 

are Caterpillar, Cummins, Detroit Diesel, Perkins, and Deutz. Photos of the different 

generators, except Perkins, are included in appendices four, five, six and seven 

respectively. The average commercial grade generator will produce anywhere from 150 

kW to 800 kW. This is the standard range for generators installed in commercial 

buildings to support emergency equipment, such as lighting or elevators. For smaller 

buildings or those who only need generation for emergency lighting there are smaller 

generators available ranging from 50 to 150 kW. Buildings with tenants that require 

larger generation, or industrial plants, may use generators producing 800 kW to 4 

megawatts (MW or 1000 kW). Any generator larger than 4 MW is considered to be a 

power plant in itself.

Generators are a huge investment for a building owner. A standard 200 kW 

generator costs around $21,000. 400 kW generators cost about three times as much. 

There are also added expenditures such as an auto start panel, the auto-transfer switches, 

fuel tanks, various permits, installation and shipping. This does not include maintenance, 

which is estimated to be ten to twenty thousand dollars a year for an 800 kW generator. 

This maintenance figure also includes the amount spent on periodic testing.

Where Generators are Found

Human safety is the number-one reason for the installation of emergency 

generation units into office buildings. Federal law mandates the existence of emergency 

lighting in any commercial, industrial or public facility. Emergency lighting can be 

supplied two different ways. First, a facility may install emergency batteries to supply 

lighting during a power failure. Batteries are cheaper for the owners to purchase. They 

are also more environmentally friendly. Emergency battery systems recharge themselves 

when power is on and do not use any excess fossil fuels, leave any discharge or any 

particle waste when running. One drawback of emergency battery systems is that they are 

not as powerful since each can only produce approximately 50 kW. However, batteries 

can be stacked to reach higher capacities. Also, they are unable to support the building 

needs for more than a day or so at peak load. 

The second form of emergency lighting is through emergency generation units. 

These units come in all forms and sizes and can produce up to 4 MW of electrical energy. 

The benefit of an emergency generator is that it can be used to supply emergency 

lighting, backup the elevator system, run the computer system, or in an industrial building 

the generator can run the equipment needed to continue production. Generator use has 

flexibility and can be set up to run any electrical device during an outage. Even though 
8

emergency generators cost several thousands of dollars more than battery systems, their 

ability to continue to run building systems can save tenants lost revenue. In many cases 

generators can pay for their purchase and operation costs in a few years by the amount of 

revenue produced from not having to stop production during a power outage.

Emergency generators can be found in hospitals, office buildings, high schools, 

colleges and universities, jails, public safety facilities (Police, fire, emergency rescue), 

military facilities, airports, seaports, ski resorts, industrial production facilities, 

telecommunication facilities, or anywhere else that may need back up power to continue 

work.

Determining Generator Location, Type and Capacity

One of the goals of this study is to calculate the number, type and capacity of 

emergency generators available for electrical production in the Northwest. From those 

numbers I hoped to estimate the generation potential in kilowatts. Originally it was 

thought that by contacting building managers in buildings with known emergency 

generators I would be able to find the information necessary for the study. I also hoped to 

gather information from previous building studies, which along with my survey 

information of the city of Portland area, would be used to determine the number of 

generators within the four states of the Northwest Power Planning Council’s region. The

previous building studies would show me how to extrapolate my generator information 

from Portland to include all of the four states.

Initially I had no idea as to how we would be able to get the names and phone 

numbers of so many building managers for the many different types of buildings in 

Portland. But after contacting the Building Owners and Managers Association (BOMA), 

they provided me with a list of building managers and their phone numbers. I then 

contacted the building managers and interviewed them using the questionnaire I 

produced. (See Appendix 1) Unfortunately, several problems arose. First the list provided 

by BOMA only included commercial buildings, and it was necessary for me to contact all 

types of buildings. Secondly, the list did not indicate information on who had emergency 

generation capabilities. Out of the seven hundred buildings listed for Downtown Portland 

I had no idea how many or who specifically had the generators. 

In my survey I interviewed managers in 70 buildings. (10% of the 700 available.) 

Since buildings are not legally required to have generators (See codes and requirements 

p. 9) I found that only about 20 percent of the buildings I surveyed owned generators. 

This small of number was too small to be statistically used to estimate generation 

kilowatt capacity in the four northwestern states. 

Other errors also appeared. The previous building studies I had hoped to use were 

at least ten years old. Numbers from these old studies made their use for estimation 

inaccurate and unusable. 
9

In the interest of determining a more accurate number of generators, I requested 

from Caterpillar Inc. a list or number of generators installed around the four states. I 

knew Caterpillar periodically prepared a list of domestic generating units installed around 

the world. Caterpillar’s list was last updated Fall 2000 and holds the most accurate data 

as to how many generators are installed in Washington, Oregon, Idaho, and Montana. 

Caterpillar uses the list to enable its regional dealers to identify maintenance 

opportunities. The list is a comprehensive list, in that the list includes not only 

Caterpillar brand equipment, but also generating sets manufactured by other companies. 

The data provided by Caterpillar is presented below in table 1. 

Numbers refer to the amounts of generators of a particular kilowatt production size 

installed in a state.

Range (kW) 50-70 71-150 151-300 301-700 701-1200 1201-200 2000+ Total

State

Oregon 2,143 2,058 1,960 811 530 470 176 8,148

Washington 3,699 3,553 4,060 1,400 916 812 304 14,744

Idaho 321 494 323 122 80 71 27 1,438

Montana 547 621 538 222 146 129 48 2251

Total 6,710 6,726 6,881 2555 1672 1482 555 26,581

Table 1 shows that at last count, the state of Oregon had as many as 2,143 

individual small generating units, posting a capacity rating of between 50 and 70 

kilowatts. The total number of standby generation sets rises to 8,148 when we take into 

account units of a size ranging from 50 to 2000+ kW.

Obviously, not all of the generating units identified in Table 1 are available for 

delivering electricity into the grid. Some may not be operable; others may be used on 

remote sites. Further, the data in Table 1 may not be completely accurate, even though 

the data is based on an actual count of generator units as opposed to my original plan. 

However, I was assured by the manufacturer that the vast majority of these generators are 

serving as emergency generators standing ready to operate when the local distribution 

grid stops delivering electricity to a customer location. Typically such calls for 

emergency generation occur when there is a distribution fault or when rolling blackouts 

have been implemented. 

How much power is possible?

Finding out exactly how much emergency generation power or capacity is 

available is one of the main goals of the study. Assuming that we get full cooperation 

from building managers and do not run into any regulatory problems the total generation 

power becomes the maximum power available from emergency generation. In the table 

below I evaluate the total production capacity of the generation units indicated in Table 1. 

To calculate total production capacity for the units in each of the first six columns, I have 

taken the midpoint of the range and assigned that number to the column as the capacity. 

For the last column, with generator capacity in excess of 2000 kW, I have used 3000 kW 

Table 1
10

as the average capacity of this column. It is then simple multiplication. For instance, 

Oregon’s 2,143 generators producing 50-70 kW results in 2,143 x 60 = 128,580 kilowatts 

or about 129 megawatts. Based on this evaluation method, there are 9,528 megawatts or 

9.5 gigawatts of electrical distributed generation installed in the four northwestern states. 

9.5 gigawatts are the maximum amount of electrical capacity from emergency generators 

available in the northwestern states. This number is high enough to cover the expected 

amount of power generation needed in the Northwest throughout the next several years. 

9500 MW is about a quarter of the present utility generating capacity in the Northwest.

The numbers refer to the amount of production capacity at each generator size.

Range (kW) 50-70 71-150 151-300 301-700 701-1200 1201-2000 2001+ Total

Capacity 

(kW)

60 110 220 500 950 1600 3000

State

Oregon 129 226 431 406 504 752 528 2,975

Washington 222 391 893 700 870 1,299 912 5,287

Idaho 19 54 71 61 76 114 81 476

Montana 33 68 118 111 139 206 114 820

Total 403 739 1513 1278 1589 2371 1635 9,528

Other Necessary Equipment

Automatic Transfer Switch and Parallel Switching Gear

The Automatic Transfer Switch (ATS) is a key component of any emergency and 

standby generator system. It is the device that monitors the sources and transfers the 

critical load from the preferred or normal source, to the alternate, or emergency source. 

Automatic Transfer Switches can switch between alternative and normal power sources 

with only a thousandth of a second interruption. The interruption is so small the tenant 

rarely notices it. If a company, such as a microchip fabrication plant needed switching 

gear they would need to be on parallel gear already. Because of its importance, it is 

imperative that generator owners be aware of the many transfer scenarios and the 

solutions to the various standby power applications. Automatic transfer switches are a 

vital but expensive part of an emergency generation system. Without the switching gear, 

personnel from the building where the generator is located would have to turn on the 

generator manually. A model of the automatic switching gear is shown below.

Table 2
11

Parallel switching gear is used to hook the utility to the generator and the 

generator to the building. With this switch the utility is able to draw from the power 

produced by the generator and use it to support the system. Parallel switching gear is vital 

to the operation of a generator with a utility. There is no interruption when switching 

from generator to utility because the generator is always on standby ready to work and is 

capable of holding the building's load at the moment of disconnection. The utility’s main 

concern is the financial investment involved in the cost of the gear. Switching gear costs 

several thousands of dollars, and replaces the automatic transfer switch gear. One may be 

able to sell the highly priced automatic transfer switch to raise money for the even more 

expensive parallel switch.

Underground Storage Tanks

Underground storage tanks are often used to store fuel for generators used during 

emergency situations. Most of these underground storage tanks are regulated and must 

Fig. 2

Generator Power

Utility Power

Parallel Switch Gear

• Utility starts 

generator.

• Generator synchs 

with utility power.

• Both breakers are 

broken.

Power Flow

Utility

Generator
12

have a general permit registration certificate to operate to receive fuel. Some may be 

exempt from many state and federal regulations. Nevertheless building owners may 

spend several thousands of dollars a year obtaining permits for underground storage 

tanks.
13

Analysis of Feasibility

Codes and Requirements

Federal, state and local jurisdictions govern the use of emergency generators. 

Agencies such as the federal Environment Protection Agency (EPA) and state agencies 

such as the Oregon Department of Environmental Quality (DEQ) have specific 

requirements and environmental codes. At the local level, emergency generators are 

subject to local structural, mechanical and electrical regulations.

Both federal, state and local building codes require emergency lighting and other 

emergency equipment (i.e. water pumps and other fire-fighting tools) be accessible in any 

commercial, industrial, or public facility. This is a requirement due to the need for public 

safety and to reduce the risk of public panic in an emergency situation, such as storms or 

earthquakes. A building must meet these standards when being built and must reevaluate 

and requalify their emergency system, which includes all emergency equipment, every 5 

years. Emergency electrical systems may be ether battery or generator systems. Using 

generators to augment power demand does not interfere with federal regulations as long 

as the emergency lighting system stays in service during emergency situations. No extra 

federal permits are needed in order for a generator to supply energy to a utility. The 

parallel switching gear works with the generator. Thus, the primary purpose of the 

emergency generator is not compromised.

Both Oregon and Washington State building codes require the presence of back 

up power to elevators if the building was built after 1970. There are many rules of 

exception and other appendices to the code that in general do not affect most buildings. 

In order to install a generator, state law mandates an inspection to ensure the proper 

installation of the generator and exhaust system. In addition, several different codes 

mandate the placement of the generator in a building. Usually the generator must be 

installed in the basement, using adequate ventilation, or on the roof of the building. After 

initial installation and inspection, the generators are inspected only on a complaint basis. 

This means the state will only inspect if there are complaints with the use of the 

generator. Locally, generators must have trade-permits, both mechanical and electrical. 

This is standard for almost all cities in the Northwest. Permits last five years before 

reapplication is needed. None of the building permits prevent the use of emergency 

generators used in parallel with the utility.

The Environmental Protection Agency believes that emergency generators should 

be dedicated to emergency uses, and used only during periods when electric power from 

public utilities is unavailable. Since emergency generators are used intermittently and on 

an “as needed” basis it is difficult to determine their exact amounts of power generation. 

However, although power outages may vary considerably during a year, it is still possible 

to estimate their annual use by using information provided by the EPA. Estimates 

provided by the EPA suggest use levels for emergency generators at approximately 500 

hours per year. Based on this estimate EPA has determined use and emission 

requirements for these generators.
14

In Oregon, non-emergency electricity generation is addressed by the state’s air 

emission regulatory agency, the Department of Environmental Quality. The general 

requirements by the DEQ are more stringent than federal requirements. For electric 

power generators the DEQ demands two requirements that are not currently required 

federally. The first requires the use of low sulfur fuel (0.05 % by weight) to ensure that 

sulfur dioxide emissions are minimized and to reduce the effects of sulfur dioxide 

poisoning on emission control equipment. The second requirement demands that exhaust 

emission control systems minimize particulate matter, carbon monoxide, and volatile 

organic compound emissions. If not properly controlled, diesel engines can generate 

excessive odors and smoke that may lead to a nuisance condition and exposure to toxic 

air pollution, especially if the electric power generators are located near residences. 

If we are to deploy the use of emergency generators during non-emergency times, 

how does the state avoid the federal regulations on emergency-use-only generation? 

What would be a federally acceptable emergency that would legally allow an emergency 

generator to come online and support the utility? Prior to May 15, 2001 this question of 

whether emergency generators could be used in circumstances other than traditional 

emergencies had never been addressed. However, on that date the Oregon Department of 

Environmental Quality offered a permit that allowed buildings to run their emergency 

generators parallel to a utility. The permit allows generators that are connected to the 

utility to be run for up to 200 hours a year. The hours of operation must be structured so 

those generators run no more than five hours per day or more than 25 hours per week. 

The other permit requirements are the usual and normal standards required for the 

generators. In an effort to meet federal regulations the permit allows that generators only 

be run during of a Regional Emergency Warning of a potential Alert 2 or 3, as defined in 

the Pacific Northwest Energy Emergency Plan. Thus, using emergency generators during 

a declared emergency and meeting federal regulations. This policy does not restrict 

operation of emergency generators during periods of involuntary loss of utility power and 

brief periods of operation for testing and maintenance. This new policy regarding 

emergency generators and the DEQ went into effect July 16, 2001. (See Appendix 2 for 

information regarding code and requirements.)

Support From Building Owner and Tenants

From the information gathered by my limited survey, 55% of the industrial and 

commercial building owners or managers indicated that they would be interested in 

developing a contract with a utility to supply energy to the power grid. 32% of the 

building owners were unsure if they would be interested. The remaining 12% said they 

were not interested. (Data compiled from appendix 1, Building Managers Questionnaire)

In addition to surveying industrial and commercial sites I also spoke with hospital 

administrators. Hospitals are required for safety and insurance reasons to have emergency 

generation back up for use with important electrical equipment such as computer systems 

and life-support. Often most hospitals have more than one generator, one for their offices 
15

and another for emergency equipment. Some hospitals, depending on their size, may 

have three or four generators. Hospital emergency support generators are dedicated only 

for emergency support. However, there was some interest in allowing use of office 

support generators to run in parallel with a utility.

In surveying two local colleges I found that they had multiple generators. Both 

engineers had the same concerns concerning noise and pollutants as building owners, but 

they were also interested in exploring the possibility of using their generators in parallel 

with a utility.

Personnel at Portland International Airport expressed little interest in using their 

generating capacity outside their own needs. Their emergency generators are dedicated 

to support emergency communications systems, lighting, safety and security and other 

essential airport functions. 

It became clear through my interviews and survey that the question of using 

emergency generating power during non-emergency times raised questions and concerns 

in the minds of building owners and managers. Many indicated that they would need 

additional information and study to determine the feasibility of such a commitment. 

Further, many were concerned about capital and repair costs, fuel costs, air quality and 

noise issues. Some respondents were particularly interested in financial incentives to 

participate in a program. Those that totally disliked the idea cited concerns about cost of 

fuel, noise and other pollution as main deterrents.

As I indicated, some building owners and managers were interested in financial 

incentives to participate in an energy-producing program. This was particularly apparent 

if generator owners were able to sell excess electricity to a utility at market prices for 

profit. However, at current market prices only generators of 1 MW or more would be 

profitable. This is also assuming that the facility uses 80% of their produced energy and 

sells 20%. Using the more common 100kW generator and using the same ratio, profit 

could not be made until market price reaches $350. per MW. (Portland General Electric 

provided market prices).

Support From Utilities

Installing the switch gear necessary for running a generator and a utility in 

parallel can be a difficult and expensive undertaking. However, if the utility company can 

profit from the venture, it is likely to be more attractive. From my interviews with two 

utility companies it is apparent that at today’s market price only generators of 1 MW or 

greater would be profitable. Since the market price of electricity in the Northwest is 

relatively low, the utilities would most likely be willing to invest in equipment and 

contractual negotiations necessary only with larger emergency generators. Local utilities 

in Portland have begun programs to encourage some sharing of power generated 

independently outside of the traditional power grid. They are currently interested in 

generators of 1 MW or more to create a parallel system with their utility to supply power 

during peak power-demand situations. Unfortunately, it is unlikely that utilities will not 
16

be interested in smaller generators until the market price increases and maintains at a high 

price. (See Appendix 3 for the utility questionnaire.)

Environmental Feasibility

The greatest problem with emergency generation lies in the fact that emergency 

generators burn fossil fuels that are polluting and harm air quality. Advanced filters to 

control admissions may offer hope in solving this problem. 

Some utilities are offering a novel Demand Buyback Program. This program is 

designed to persuade large industrial concerns to consciously reduce the amount of power 

they consume by offering an incentive to conserve. The utility will buy-back energy 

conserved at market price. Basically the utility is paying the industrial company for a 

reduction of energy. The positive nature of the Demand Buyback Program is that it 

reduces, on a dramatic level, the amount of energy demanded. Further, it also helps 

reduce pollutants being released. It is hoped that the reduction of industrial waste and the 

increased pollution caused by the use of emergency generators will have a total zero sum 

effect on the environment, and yet increase the amount of total power available.
17

Conclusions and Recommendations

In conclusion, the use of emergency generation to augment regular power 

production has a promising future. Current energy forecasts, both in the Northwest and 

nationally, clearly indicate that power rates will continue to rise, probably in a dramatic 

fashion. In the short term, the Northwest Power Planning Council forecasts that the 

market price for Northwest power will soon exceed $100. per megawatt hour and 

possibly greater. At that price utilities will find it feasible to use emergency generators of 

700 kilowatts or less and still make a profit.

 If the results of my survey are extrapolated region-wide there is significant 

generating capacity available. If 71% (55% agree to produce power, 16% likely to agree) 

of all commercial and industrial buildings that contain emergency generating capacity 

agree to use that capacity to produce power nearly 3,900 megawatts or 3.9 gigawatts of 

power can be produced from emergency generators of 700 kW or more. However, since 

emergency power from airports, hospitals or other public safety facilities is most likely 

unavailable the 3.9 gigawatt estimate should be lowered to 3.7 gigawatts. This is a 

conservative estimate. Finally, since emergency generation use is limited by the DEQ to 

200 hours per year, 3.7 gigiwatts of generator capacity can produce 740-megawatt hours 

each year. This number is enough to meet any anticipated energy shortfall. If the market 

price reaches the once unheard of price of $350. per megawatt hour we could produce 

over 6.4 gigawatts. This is a total of 1,280 gigawatts of hourly production per year.

For this full amount of generation capacity to be realized strong and mutually 

beneficial agreements must be made between utilities and generator owners. It will be 

necessary for a utility to devise a program that allows the generator and the utility to 

safely and economically run in parallel. Based upon my survey information, I found that 

building owners wanted strong support from utilities. For example, commercial or 

industrial customers who install a new generator or already own one would like 

agreements that guarantee the use of standby generation. Agreements would also include 

utility assistance with installation and necessary equipment such as sophisticated 

computer controls that allow the unit to be connected to the utility’s electrical distribution 

system. All maintenance, operation and testing costs for the generators would also be 

assumed by the utility. This could save the customer up to an estimated $100,000. over a 

five-year period. (Estimated number gathered from the survey of building owners, 

Appendix 1, and the utilities, Appendix 2.)

In exchange for this support, utilities could draw on these standby generators 

during times of peak power for up to 200 hours per year. Utility engineers could operate 

the generators directly from their control centers, via a direct connection to the generator. 

Utilities could also test the back-up generation systems on a regular basis to ensure they 

are operating correctly.

The backup generator would always be available to serve the building needs first 

without interruption. The generator and utility operation are synchronized and work in 

parallel automatically protecting one another. If one system fails, the other takes over, 
18

ensuring a continuing supply of non-interuptable power. The standby generation system 

is designed so the building power need loads are automatically served first and any 

excess power generated flows into the utility’s system. For example, if the building load 

is 1000 kilowatts, and the generator is generating 1,500 kilowatts, only 500 kilowatts are 

flowing back to the utility.

Use of a centralized emergency generation program would most likely help 

extend the life of emergency power generators. Program operators would routinely startup the generators and test them at full load. The generator manufacturer Caterpillar states 

that more frequent full load runs are better for diesel engines. Testing at full loads can 

also help assure the building owner that the equipment will start and function properly in 

a power outage.

Maintenance agreements between building owners and utilities would provide 

that all regular maintenance and any repair bills would be paid by the utility. The utility 

assumes this as a reasonable cost to assure that the generator is available and properly 

working at all times. Lastly, the utility pays for all fuel costs whether power is used in 

the building or distributed to the utility’s power grid system.

I believe binding agreements between owners of emergency power generators and 

utilities offer an outstanding opportunity to capitalize on additional power generation. I 

recommend that utilities begin developing agreements with some of the provisions I 

suggest. These agreements, in conjunction with innovative programs such as Demand 

Buyback, could surely hold promise and benefit for utilities, building owners and 

electrical customers throughout our region. 

There is an estimated minimum of at least 740 gigawatts of production capacity 

per year in the four northwestern states. With 3.7 gigawatts production capacity utilities 

face three important issues:

1. How much capacity should utilities have under contract?

2. Which building owners should receive contracts to provide electricity?

3. What price should the utility pay for capacity provided under such contracts?

In summary, providing sufficient power at reasonable cost remains a challenging 

endeavor. Because electrical power is a critical commodity we must develop innovative 

ways and develop incentives to increase production and ensure a non-interruptable power 

supply. Although my survey was limited in size and scope, I believe it points to some 

creative possibilities in providing power throughout Oregon and the rest of the three 

Northwestern states through the use of emergency building generators. It is my hope that 

continued work be done in this area to bring this possibility to full fruition.
19

Appendices

Appendix 1

Facilities Director’s Questionnaire

Person’s name:

Title:

Name of Building:

• What is the type of building? (i.e. Office building, Hospital)

• How many floors does the building have?

• How many elevators does the building have?

• About how many different companies occupy the building?

• About how many tenants (or people) use the building?

• What type of generator does the building have? Model?

• How many kilowatts/megawatts does the generator produce? (This is a very 

important question; the amount should be posted on the side of the 

generator if it is not known.)

• Has the generator ever been upgraded, and for what reason?

• What is the specific model of generator? Who is the manufacturer? (i.e. Caterpillar) 

• Does the generator have a Reciprocating engine (Diesel or spark-ignition), 

Combustion turbine, or Other?

• When was the generator originally put into the building? (Year?)

• Who supplied the generator to be put in the building?

• How much did the generator cost the building and its tenants?

• How often is the generator used?

• Can the generator be used at different levels of output? (i.e. 75%) Does the generator usually run at 

100% or only in savvier emergencies?

• What is the current condition of the generator? Please specify any current condition problems.

• What type of fuel does the generator burn? Diesel or Dual? 
20

• How much fuel can the generator store? Or, how long is the generator able to run with a full amount of 

fuel on site?

• Would the building be willing to switch to a generator with a more clean 

fuel? (I.e. Natural gas?)

• What are the manning requirements for start up, operation and shut down of the generator?

• When there is a power outage what machinery uses the power the generator puts out? (i.e. lights, 

elevators)

• When in use, does the generator work to the full satisfaction of the building?

• Is there anything the generator does not power that needs to be run in an 

emergency?

• How reliable has the generator been while in the building?

• Is the generator checked regularly for mechanical problems?

• Would more regular use of the generator make it more reliable?

• Is the generator regularly repaired?

• If so, who repairs the generator?

• How much do repairs to the generator cost the building and its tenants?

• Was it required that a generator be put in the building? Or, did the tenants of the building request the 

generator?

• Were there other reasons for initially putting the generator into the building?

• Is there sensitive equipment relying on the existence of a generator during a power crisis?

• Would the building owner be willing to use the generator to help a utility support system load?

• Would the use of the generator by a utility company benefit the building owner in anyway?

• What problems might occur when the generator is run more often?

• What incentives would cause the owner to consider using the generator to support system load?

• Would paying for repairs to the generators be an incentive?

• Would the tenants of the building be willing to put up with the generator’s waste (noise, vibrations, 

and fumes?) if it were to be running often?

• Is there any other safety issues that have been overlooked by our study?
21

Appendix 2

Government Agency Questionnaire

Date: Time:

Person’s name: Title:

Agency:

• Related to your agency, what is your current policy regarding the use of emergency generators for 

serving system load?

• Are there any building requirements related to emergency powered generators?

• What are the requirements?

• In what types of buildings are the generators required?

• Must emergency generators be permitted?

• Who issues permits for emergency generators?

• What types of permits are there?

• What permits govern emission standards?

• What permits govern safety standards?

• What permits govern maintenance standards?

• Are buildings limited to the amount of time they are allowed to run their generators?

• Currently how long are buildings allowed to run their generators?

• What regulates the health and safety aspect of emergency generation units?

• Are there regulations of generators that require them to go through regular testing?

• How often are generators tested?

• What regulations are there related to onsite fuel storage?

• Are you aware of any way to use emergency generators to augment system load?

• Under what circumstances might the regulations change?
22

Appendix 3

Utility Questionnaire

Date: Time:

Person’s name: Title:

Name of utility company:

• Related to your utility company, what is your current policy regarding the use of emergency diesel 

powered generators?

• How effective has the policy been?

• What kind of response does your policy receive?

• What are the big issues that you concern your policy with?

• What would be a typical deal to be made with a building with emergency 

generators?

• What is typical compellation?

• Is there special equipment that you supply?

• How long of a duration do you let the generators run? 

• How often are the generators run?

• Who issues permits for emergency generators?

• Does law require emergency generators?

• In what types of buildings are the generators required?

• Is there an inventory of where the generators were put in?

• What types of generators are there?

• How many types of generators are there?

• What are the different models of generators?

• What are the specific specifications of the different models?

• Are you aware of a way to use diesel-powered generators to reduce the system load?

• Have you conducted any studies on the effectiveness of emergency generators to reduce system load?

• What have you learned?
23

• Is it possible for a utility to control emergency generators from a remote location outside of the 

building with the generator?

• Is additional equipment required for remote location operation?

• What equipment and personnel is needed to hook up a generator to be turned on from a remote 

location?

• What equipment and personnel is needed to startup, operate and shutdown a generator?

• How has equipment been supplied in the past?

• Who controls the generators from the remote location?

• How much would this process cost the utility?

• How much would this process cost the building owner?

• Would the use of the generator by a utility company benefit the building owner in anyway?

• What incentives would the utility be able to offer the building owner to consider using the generator to 

support system load?
24

Appendix 4

Caterpillar

 
25

Appendix 5

Cummins
26

Appendix 6

Detroit Diesel
27

Appendix 7

Deutz
28

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