SoCalGas - On-Site Power Generation
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On-Site Power Generation


The very largest on-site generation facilities use large gas turbines, are located at refineries and can have capacities of several hundred megawatts. Smaller on-site generation systems, however, can be installed at commercial facilities, such as laundries, schools, hospitals, and hotels. On-site generation can be used in the power generation mode only or in the combined heat and power mode (cogeneration) where thermal energy that would ordinarily be rejected is profitably used. In terms of the numbers of applications, on-site generation is dominated by projects under 2000 kw.

Distributed Generation Brochure

We have compiled information for you on Self-Generation Program Incentives. 

In this section we have assembled information so that you can learn more about on-site generation:

Electric Generation Information


Electric Generation

Related Information

Benefits of On-Site Generation

Energy Cost Savings

Energy cost savings are obtained when the fuel cost of generating power onsite is less than the cost of purchasing the power from the local electric utility. This saving can be substantially increased if the heat associated with the generation of power ordinarily wasted is used, thus avoiding the purchase of the natural gas that would have provided the heat. Energy cost savings can often times be the sole reason for the installation of distributed generation. There are over 100 cogeneration facilities currently operating in SoCalGas’ system that have rewarded their owners with substantial energy cost savings.


On-site generation or on site generation can provide an essential redundancy to power provided by the local electric utility. Almost all of the current operators of cogeneration plants can also obtain their power from the local electric utility. These customers therefore have a dual source of energy as they have power when their systems are down (say for occasional maintenance) or when there is a failure of the local electric utility. This redundancy in turn can provide for health and safety, industrial process continuity or significant protection from computer and information technology upset. There can be significant cost savings associated with this redundancy.

Power Quality

Closely associated with reliability, is the ability of on-site generation in concert with small power storage systems, to provide for improved power quality. Harmonics, voltage sag and momentary outages (enough to trip expensive computers) can all be prevented through the use of such systems.

Risk Management

On site generation can also be used as a physical hedge to lock in the cost of power rather than expose one’s business to the vagaries of wildly gyrating electric energy costs. The opportunity/challenge of being exposed to monthly fluctuations of electric energy costs has been provided to small businesses as a result of electric restructuring and the regulators’ desire to provide business consumers with clear energy price signals. Given the remarkable impact of seasonal and daily weather on the cost of electric energy, it has been said that the volatility of the electric market will dwarf that of any of the other commodities (corn, gold, pork bellies, etc) that can be traded in an open market.


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