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Cogeneration has become a "buzz" word in the energy industry of late and it is appropriate to review the history, benefits, penalties, and attitudes that apply to cogeneration. By cogeneration, we mean the production of industrial process steam as a by-product of electric generation (or, as industry considers it, the generation of electricity as a by-product of thermal production). The first cogeneration facilities were installed when electricity was in its infancy. Since that time, cogeneration decreased as central stations provided lower and lower cost electricity. Presently, because of increasing electric rates and oil prices there has been a renewal of interest in cogeneration. There have been large-scale instances of cooperation between electric utilities and industrial installation since the 1920's. Public Service Electric and Gas Company (PSE&G) has been successfully involved in such an arrangement since 1957 at the Linden generating station. Here electricity for the PSE&G system and process steam for the Exxon Bayway refinery are simultaneously produced. The United States and the State of New Jersey have recently passed legislation strongly encouraging cogeneration. As a result, there has been a great deal of financial and legal encouragement toward the maximum development of cogeneration.