After a daylong hearing in a packed House Chamber at Legislative Hall, the Public Service Commission (PSC) unanimously approved a deal that paves the way to bring fuel cell technology to Delaware.
Under the plan, Bloom Energy will build a manufacturing center to produce its fuel cells at the former Chrysler plant in Newark. The California-based company will also add 30 megawatts of power to the regional power grid by installing fuel cells at two Delmarva Power substations. To help make those initiatives possible, the deal approved by the PSC includes a renewable energy tariff added to Delmarva customers’ bills. The tariff, according to a PSC consultant’s report, is expected to cost Delmarva Power’s residential customers an average of between $1.30 and $1.40 a month.
During the hearing representatives of Bloom Energy and Delmarva Power laid out the case for approval of the partnership that they say will bring jobs to the First State, and bring Delaware to the forefront of the nation's push for clean energy options.
Delaware’s Department of Natural Resources and Environmental Control (DNREC), the state's Public Advocate, and the Caesar Rodney Institute were also represented at the Public Service Commission hearing.
The deal is the product of nearly a year's work by Governor Jack Markell, DNREC Secretary Collin O'Mara, the Delaware Economic Development Office (DEDO), Delmarva and Bloom. Bloom Energy anticipates its facility in Newark will employ 900 people. State officials estimate the Bloom operation could mean nearly $300 dollars each year to the Delaware economy.
“This vote brings us closer to creating hundreds of jobs for Delawareans and making a substantial positive impact for our State’s economy. The commission's decision to move this process forward will bring significant benefits to Delaware.” Governor Jack Markell said in a written statement.
“We are pleased that the PSC has approved the tariff, and are looking forward to working with the State, the University of Delaware and Delmarva to now begin the process of creating jobs and applying our innovative fuel cell technology to bring affordable, reliable and clean energy to the entire east coast,” said Bill Kurtz, Bloom’s Chief Financial Officer and Chief Commercial Officer.
“From day one, the state, Bloom and Delmarva sought to make sure this project is a win-win for the people of Delaware.” Gary Stockbridge, president of Delmarva told the panel during his testimony. He went on to say that he believes the all parties have succeeded.
Reaction to Public Service Commission approval of Bloom Energy deal
State Public Advocate Michael Sheehy believes overall rewards outweigh the risks in the Bloom Energy deal.
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DNREC Secretary Collin O'Mara outlines how the state is protected in event the deal with Bloom Energy fails.
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Delmarva Power President Gary Stockbridge believes all sides were dedicated to making this deal fair to all parties.
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“My biggest concern,” said Delaware Public Advocate Mike Sheehy when discussing the tariff, “is something that we simply can't do without a legislative initiative. And that is to make sure that all the people in Delaware who use energy, and benefit from projects like this, pay for it.”
Aside from that, Sheehy is placing his faith in the Markell administration, DNREC and DEDO, saying he believes they have all done their due diligence in forwarding this project. He sees the potential upside in jobs and economic development as far outweighing any risks of additional costs to consumers.
DNREC Secretary Collin O'Mara says the state's goal has been to attract a high tech manufacturing operation to the former Chrysler plant in Newark.
“We want to make sure that through this process,” O'Mara says, “that good economic development opportunity comes through, that ratepayer protections are in place, and that the project is privately financeable.”
O'Mara says agreements between the state and Bloom Energy provide significant protections to Delmarva customers and the state. He says should Bloom fail to meet certain goals, like building the factory, missing employment targets, or if they close down after only a few years, the company would owe Delaware millions of dollars. A situation O'Mara said he hopes Bloom, Delmarva and the state never face.
Bloom vice president Joshua Richman acknowledges the company would write the state of Delaware a $41 million check if the factory is not up and running by December 31, 2013. However, in his testimony before the commission, he restates Bloom commitment to the project.
“If this fuel cell tariff is approved by the commission today, Bloom is committed to building its factory in Delaware,” Richman told the commission. “We've already begun spending money on the engineering and design of our factory, and we plan to move forward with the factory, breaking ground within months, so the factory is up and running in 2013.”
Once PSC's vote was final, Richman said Bloom would indeed begin construction in early 2012 and that its plant would be up and running in 2013.