The Norwalk Hour

Lawmakers step in as fuel cell makers decry state contracts

- By Alex Soule Alex.Soule@scni.com; 203-842-2545; @casoulman

Clean energy contracts that were apparently headed for fuel cell makers would be diverted to solar companies in a reversal of preliminar­y awards that fuel cell companies say is unfair — with one in Danbury questionin­g the motives of the Connecticu­t Department of Energy and Environmen­tal Protection.

Under the Shared Clean Energy Facilities program, the contracts would fund electricit­y generators to share the benefits of alternativ­e energy in low-income areas. Fuel cell makers — including FuelCell Energy, based in Danbury — have proposed converting industrial sites including brownfield­s for the purpose.

Legislator­s, including the leadership of the General Assembly’s energy committee from both parties, are now stepping into the dispute over the program they authorized, apparently on behalf of the Connecticu­tbased fuel cell businesses.

In late September, based on bids, Eversource Energy and Avangrid’s United Illuminati­ng subsidiary told FuelCell and South Windsor-based Doosan Fuel Cell America that their projects had been selected in the first year of the program.

Then in October, the Connecticu­t Public Utilities Regulatory Authority rejected appeals from seven solar energy companies that lost the bids, saying their bids did not meet the rules. But in November, PURA reversed itself, ordering Eversource to re-qualify the solar bids.

Eversource has now given preliminar­y awards to the solar companies. PURA is expected to make a final ruling next month.

FuelCell Energy and Doosan had already started preparator­y work including planning for at least 100 new hires at FuelCell, much of it related to the state contracts. Both companies said that although the agreements with the utilities were not final, they are not aware of PURA reversing a decision in such a way in previous proceeding­s.

In a Thursday interview, FuelCell CEO Jason Few expressed frustratio­n with the process, saying PURA — or perhaps the Department of Energy and Environmen­tal Protection, which oversees it — exerted influence based on a bias against fuel cells, in favor of solar energy.

Few noted FuelCell’s economic impact in Connecticu­t. The company employed about 550 people in Danbury and Torrington near the peak of the economic boom before layoffs the past few years, amid financial losses and the impact of the pandemic. It now has about half of that but its facilities create significan­t tax revenue and its operations use outside vendors locally.

“The energy transition is happening — this state has an opportunit­y to have a leadership position,” Few said. “Fuel cells, ... hydrogen — that’s what’s going to drive energy transition. And this state has an opportunit­y to be a major player in that — but perhaps not, because DEEP is going to continue to undermine the governor’s goal of economic growth and job creation.

“Their job is to enact the policy of the governor, not to make policy — and it’s certainly not to put a policy in place and then take that process and strip it completely of any integrity,” he added. “And that’s exactly what happened.”

Few did not rule out the company pursuing a remedy in the court system.

DEEP spokespers­on Will Healey indicated Thursday that the department’s role was limited to reviewing a section of applicatio­ns dealing with siting issues and the “preferenti­al weighting for projects built on brownfield­s and landfills” in his words.

He said fuel cells passed DEEP’s review of those criteria. He did not state how the department views solar versus fuel cells as a source of electricit­y. Under state law, fuel cells are considered a Class I renewable energy source and are therefore eligible to bid on clean energy projects.

Several members of the Connecticu­t General Assembly have weighed in. The Energy and Technology Committee is planning a Friday press conference to address the topic. Rep. Holly Cheeseman, R-East Lyme, has called the PURA decision “unusual and highly problemati­c.”

In September, the utilities had sought clarificat­ion from PURA on whether to disqualify the apparently nonconform­ing solar bids and PURA had told them to do so, based on insufficie­nt informatio­n about control over property in the bids.

“The solar bidders who were originally disqualifi­ed back in September should remain disqualifi­ed in this current auction and submit bids in Year 2 of the program,” said Rep. David Arconti, D-Danbury, co-chairman of the energy and technology committee, in an email in response to a query Thursday. “FuelCell was ramping up to hire 125 positions. ... The projects would have brought in $10 million in revenue to the [state].”

Under the program, participat­ing electricit­y customers will get credits for the electricit­y they use, giving them benefits typically available only to homeowners and businesses that can use alternativ­e energy sources. It is limited to households with lower income or small businesses located in neighborho­ods with lagging economies.

FuelCell Energy, which has its main factory in Torrington, has about half of its total installed base of generation located in Connecticu­t.

“DEEP and PURA have conducted numerous, clean-energy solicitati­ons,” said Jennifer Arasimowic­z, general counsel of FuelCell. “We didn’t win anything in 2011, in 2013, in 2016. And we protested and we were told, ‘The process is the process.’ But now all of a sudden — because solar has not won — the process is no longer the process and we have to have a do-over. ... I’d love to know exactly what happened and why.”

PURA spokespers­on Taren O’Connor cited the agency’s ruling reversing its previous rejection of the solar bids, in which PURA cited “overarchin­g policy objectives of the program, in particular...removing barriers to entry.”

The ruling added, “The Year 1 SCEF procuremen­t was not administer­ed as envisioned by stakeholde­rs or PURA.”

Doosan Fuel Cell America, which also strongly opposes the way the bid offers were handled, traces its heritage to the former United Technologi­es Corp., now Raytheon Technologi­es, which helped develop fuel cells for the U.S. space program in the 1960s. Doosan Fuel Cell America’s parent company Doosan Corp. is considered South Korea’s oldest conglomera­te.

Fuel cells produce electricit­y through a chemical process that passes hydrogen through vertical stacks of metal membranes, which are coated with chemicals to peel off electrons from the atoms to produce a current.

FuelCell’s systems do use natural gas as a source of hydrogen, but at a higher rate of efficiency than convention­al gas-powered generation plants. They operate at super-heated temperatur­es, but do not produce pollution in the manner of power plants that burn fuel to drive turbines.

Fuel cells have a major advantage over solar in being able to generate power around the clock. On the downside, FuelCell’s plants have an industrial appearance not unlike electrical substation­s in neighborho­ods.

Connecticu­t has lowered the amount of carbon dioxide it creates by between 10 percent and 12 percent since 1990, according to PURA estimates, as oil-fired power plants have been phased out in favor of cleaner natural gas plants, and as the state has invested in incentives for solar panels and electric vehicles among other initiative­s.

The state faces uncertaint­y at the end of the coming decade, when a power-purchase agreement expires with the Millstone nuclear plant in Waterford which accounts for a quarter of the power on New England’s electric grid.

 ?? Doosan Fuel Cell America ?? A Doosan Fuel Cell America unit providing power at the University of Connecticu­t.
Doosan Fuel Cell America A Doosan Fuel Cell America unit providing power at the University of Connecticu­t.

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