A Tale of Two Companies
It was noted that both the FUA and PURPA granted special privileges to owners of cogeneration facilities, or QFs. So, it is rather likely that some clever, planned and coordinated approach to legislative engineering, such as lobbying, went into the crafting of both new laws as they evolved, in parallel, through Congress. Unfortunately, this is not something for which Westinghouse may claim bragging rights.
The General Electric Company, on the other hand, definitely found a way to work with the congressional staffs on both pieces of legislation to help them draft a set of energy laws and regulations to be as favorable to gas turbines as possible.
The wide difference between GE and Westinghouse, when it came to their views and actions regarding the energy legislation of 1978, was glaring. Westinghouse's upper management had its focus on the Fuel Use Act, and saw it as a death sentence to the long-term future of gas turbines. At the same time, the law was seen as confirmation of a solid future of coal-fired steam plants.
In fact, in 1979, the prohibition on the use of natural gas under FUA even led Westinghouse to rename the product to combustion turbines, and the Gas Turbine Systems Division (GTSD) was renamed Combustion Turbine Systems Division (CTSD). It was as if removing the word "gas" from the product name would change its stature under the law. I believe that the Electric Power Research Institute (ERPI) may have had something to do with this change in name as well.
It was clear—at least to some of us—that there was little commitment to the gas turbine business among management circles at Westinghouse. There was a strong reluctance to acknowledge the potential of gas-turbine-based cogeneration and independent power as the way of the future under PURPA, and the means by which the business could survive, grow and prosper, in spite of FUA. Mere mention of the words "cogeneration" and "combined cycle" was all but forbidden in front of certain upper managers.
However, GE had a different idea on how to tackle the problems posed by the Fuel Use Act, and Westinghouse gas turbine advocates, and later, beneficiaries of the gas turbine business in the United States should be very thankful for that.
It is known that GE spent most of their lobbying effort on the formulation of the PURPA rules related to Qualifying Facilities and, most likely, on the cogeneration exemption to the Fuel Use Act as well. While this writer, as a Westinghouse employee, attended many congressional hearings on FUA, in order to understand, and lessen, the extent of the bad news for gas turbines, our GE counterparts were seen at concurrent hearings on PURPA, to make sure that GE’s plan to create a new Independent Power Producer (IPP) market for gas turbines was taking form.
After the National Energy Act was signed into law, GE was quick to announce formation of the Cogeneration Projects Department. Its purpose was to pursue new market opportunities made possible by PURPA. Their approach was to assist a new breed of project developer entrepreneurs to exploit the sudden vulnerability of electric utilities under PURPA. GE helped developers find good project sites, close to fuel supply and transmission lines, assisted them in the application of GE equipment for cogeneration, and supported their proposals of Power Purchase Agreements (PPA) to the neighboring utilities.
While Westinghouse was concerned that promoting cogeneration and working with IPP entrepreneurs would upset its traditional utility customer base, GE aggressively pursued the growing number of IPP developers, and helped them to navigate the new territory opened to them by PURPA.
This stark difference between the two power generation giants was not lost on industry observers. This writer recalls an issue of The Energy Daily, a D.C.-based energy newsletter, where publisher Llewellyn King devoted the front-page to highlighting this unusually wide difference between GE and Westinghouse in how each viewed the future of the power generation industry. This writer has contacted King in an attempt to obtain a copy of that issue.