The plant may never get built.
Bloom Energy deal faces federal challenge
Delmarva Power bills to show credit, new charge
By Melissa Steele
CapeGazette.com
Jul 16, 2012
The state's latest attempt to secure alternative energy credits is now the focus of a federal lawsuit.
Filed in June, the suit accuses the state of economic protectionism by giving a contract to Bloom Energy, a California company that intends to create 1,500 manufacturing jobs at the former Chrysler plant in Newark.
The Newark location will serve as Bloom's East Coast manufacturing operation where Bloom fuel cells – commonly referred to as Bloom boxes – will be produced.
Additionally, fuel cells built at a California plant soon will be installed and tied into the area power grid at the Newark location and into an existing Delmarva Power substation along River Road in New Castle.
Officials anticipate 30 megawatts of electricity will flow into the regional grid from Bloom boxes. A 3-megawatt fuel cell power plant will be built at the Newark site, and a 27-megawatt plant is proposed on River Road in New Castle adjacent to an existing substation.
The 3-megawatt fuel cell power plant is expected to come on line this month, and the 27-megawatt facility is expected to begin operation by the end of 2012, said Matt Likovich, spokesman for Delmarva Power.
Delmarva Power last fall received approval from the Public Service Commission to apply a surcharge on customer bills. Customers will pay about $1 more each month over 21 years to raise $158 million to subsidize Bloom Energy's fuel cell project, Likovich said.
In exchange for the subsidy, Likovich said Delmarva Power will receive renewable energy credits under Delaware's mandatory Renewable Portfolio Standards Act, which requires Delmarva Power to obtain RPS compliance credits for its customers. Additionally, he said, the state's economy will directly benefit from 1,500 new jobs created when the new Bloom Energy goes online.
Opposition grows
Although state officials have touted fuel cells as an important alternative energy source, opposition to the Bloom Energy project is growing. A conservative consulting group in Delaware and a legal advocacy organization from Washington, D.C., are part of a recent effort to block Bloom Energy's future in the state.
Department of Natural Resources and Environmental Control Secretary Collin O'Mara issued a Coastal Zone permit in April for the 27-megawatt plant that sits in the Coastal Zone, but Middletown resident John A. Nichols, backed by the Caesar Rodney Institute, filed an appeal to the Delaware Coastal Zone Industrial Control Board to revoke the permit. The appeal alleged installing fuel cells would cause a negative environmental impact on the Coastal Zone. The appeal also alleged technical errors in Bloom Energy's permit process, Nichols said.
The board met June 13, and five of nine board members supported the Coastal Zone permit. Two members abstained from voting and two were absent, said board Chairman Richard Legatski.
"Mr. Nichols does not have legal standing, and the permit stands," Legatski said.
Under the Coastal Zone Act, Legatski said, Bloom Energy has met the legal requirements for operating a business in the protected area.
Nichols said he is in the process of filing a suit in Superior Court following the board's decision that he has no standing to challenge the Coastal Zone permit.
In a strategy typically used by environmentalists committed to keeping coastal areas pristine and undeveloped, the Caesar Rodney Institute supplied two witnesses supporting Nichol's opposition to the fuel-cell facility.
"We've been appalled by the lack of transparency," said Samuel Friedman, communications coordinator for the institute.
Originally, he said, the institute challenged the Bloom Energy project for economic reasons. Friedman said the institute believes the state fixated on fuel cells for an alternative energy source without looking into any other options.
"The state basically said we want fuel cells, and only Bloom can do it," Friedman said. "We believe it should've been open to other companies and energy sources."
A lawsuit filed June 20 in Delaware's U.S. District Court against Gov. Jack Markell and five members of the Delaware Public Service Commission supports Friedman's claim.
In it, Connecticutt-based FuelCell Energy Inc. and Nichols contend the state unfairly granted Bloom Energy an energy contract without considering other energy options, and the rate charged for Bloom's fuel cell power is higher than energy rates from comparable energy sources.
"As a Delmarva customer, I bear the burden of paying the overmarket cost for the energy," Nichols said.
Brian Selander, spokesman for Gov. Markell, said job creation is an important part of Bloom Energy's presence.
"It is disappointing the Delaware’s right-wing Caesar Rodney Institute teamed up with an out-of-state special-interest group in a last-minute effort to try an short circuit the creation of good middle-class manufacturing jobs here Delaware," he wrote in an email. "We intend to fight these efforts vigorously to protect these important jobs.”
On the heels of Bluewater's failure
Delaware's earlier attempt to secure an alternative energy source through Bluewater Wind failed late last year.
Bluewater Wind in December cancelled a contract to provide 200 megawatts of offshore wind energy. The offshore wind farm would have helped satisfy Delmarva Power's mandate to incorporate renewable energy sources in its power grid.
Bluewater Wind cited the inability to establish financing as the main reason for canceling the contact.
“Delmarva Power and NRG worked hard to see this project come to fruition,” said Gary Stockbridge, regional president for Delmarva Power, in an earlier report. “But the inability to secure a financing partner prevents us from moving forward.”
Delmarva customers received a small refund for their share of subsidizing the deal.
An average customer, using about 1,000 kilowatt hours of electricity per month, received a credit of about $1.31 in June and will receive the same amount on the July bill.
capegazette.villagesoup.com |
