The decision expands the Texas Legislature’s omnibus bill passed in 2007 to promote energy efficiency, provide near-term reductions in consumption and demand and avoid a power crisis in Texas.

The Texas CHP Initiative (TXCHPI) said that combined heat and power (CHP) is a proven technique for improving energy efficiency. The group said that, CHP already provides substantial efficiency advantages at many of the state’s largest industrial facilities, including petrochemical plants, refineries and manufacturing units.

The new rule reportedly recognizes the potential energy savings in smaller CHP systems, such as those located in buildings, hospitals and small industries.

Tommy John, TXCHPI’s vice president, said: The commission was wise to include CHP in the range of options available for smaller customers to reduce energy use. We are eager to demonstrate how the use of CHP and other energy conservation technology can make significant reductions in energy use in Texas.