Gerald R. Forsythe

    World Cogeneration named Gerald R. Forsythe, Chairman and CEO of Indeck Energy Services, Inc. as its Executive of the Year in 1993. Indeck develops, owns and operates cogeneration and independently owned power plants, concentrating on US and Canadian markets. Indeck currently has ten operating plants for 550 MWS, two plants under construction, and five plants in development.

    Indeck has a corporate staff of 70 engineers, technicians, financial and fuel supply experts plus another 80 personnel located at the operating facilities. Inc. magazine ranked Indeck seventh in its 1992 annual fist of America's fastest growing privately held companies.

WC: Congratulations to you and the Indeck team on your many accomplishments in the cogeneration industry.

GRF: I am very pleased to accept this prestigious award on behalf of the employees of Indeck who are responsible for our success. We appreciate your recognition.

WC. Where do you see industry changes occurring the next five to ten years?

GRF: Over this period cogeneration plants will supply the majority of new North American capacity rather than central electric utilities. In the United States, this increasing reliance on non-utility sources represents a fundamental departure from the traditional method of meeting new electric power requirements. It is a change of the first magnitude.

    I can illustrate this point as follows. Over the past five years, the percentage of all new electric generating capacity coming on-line from non-utility sources has increased from 34 percent in 1987 to 50 percent in 1991.

    US cogen market penetration is already occurring outside the already strong base in the northeast and California. Many public utilities in the Midwest and elsewhere have traditionally opposed cogen projects vigorously. Some public utilities have gone so far as to cut normal rates in half for industrial customers planning large expansions and considering cogen for new plant power needs.

WC: Will these "blocking" actions diminish?

GRF: Yes. This reactive behavior is changing more and more as US utilities face the prospect of growing power demands and shrinking ability to meet those demands through their own construction. For example, one utility, that in the past was wholly antagonistic to our service, now has asked Indeck Energy to bid on a peaking power installation.

WC: In the multi-utility grids, dispatching occurs across all plants on the basis of next best unit, best measured in terms of marginal cost. Do you see a time when independent cogen plants will become true nodes in these dispatching systems?

GRF: Over the long-term, this is a real possibility. With an increasing number of independent power projects entering the grids, it's a matter of time before the independent facilities become base load and some of the older, less efficient utility plants become the variable in a dispatching system.

WC: What keeps utilities out of this business?

GRF: I think initially they discounted the third party developer and the opportunity that was presented. The utility philosophy differs entirely from the third party developers just from the way they approach design and construction to the way they buy fuel. There has not been an incentive for them to make it better. One of our 50 MW plants that we built for $40 million would cost the utility $60 to $70 million. And from the operating standpoint, we operate each of our facilities with 17 personnel, while they would have three times that number. The efficiency of the third party developer is the difference and that's where we make our money.