October 25, 2016

Beacon Falls fuel-cell park loses major potential customer

PABLO ROBLES
PABLO ROBLES
FuelCell's manufacturing facility in Torrington, which received a $10 million state loan in 2014 to expand.

A proposed Beacon Falls fuel-cell park that would be the world's largest was dealt a blow Tuesday when it lost a large potential customer — utilities in Connecticut and two neighboring states.

Danbury's FuelCell Energy disclosed in a U.S. Securities & Exchange Commission filing that the 63.3-megawatt project's developer — a subsidiary of O&G Industries — had informed FuelCell on Monday that it had learned its bid into a major clean energy RFP had not been selected by a consortium of officials in Connecticut, Massachusetts and Rhode Island.

The developer had tapped FuelCell to manufacture, operate and service the fuel cells for the park.

Jeffrey Osborne, a financial analyst who covers the publicly traded FuelCell, had previously estimated that the deal could be worth as much as $500 million in revenue to the company.

"Company management has consulted with the project developer as well as the land owner, O&G Industries, and all parties expect to pursue alternate paths to continue to develop and construct the project, based on its merits and favorable economics," FuelCell said in its SEC filing Tuesday. The company will provide updates on the Project's development in the future."

A spokesman did not respond to a request for comment on what alternate paths exist for the project, which had received approval from the Connecticut Siting Council and inked a property tax deal with Beacon Falls early this year.

As of mid-afternoon Tuesday, the news had driven FuelCell's stock price down nearly 30 percent, to $3.68.

Earlier this year, FuelCell submitted one of two dozen bids to the tri-state RFP, which had a minimum project size of 20 megawatts. Its bid was one of a handful that, when combined, proposed generating approximately 240 megawatts of clean energy from Connecticut projects. The bids also included wind, solar, hydropower and transmission projects in multiple states.

FuelCell submitted 50 megawatts worth of bids to a separate RFP intended for smaller projects of 20 megawatts or less.

The Department of Energy and Environmental Protection said Tuesday that those bid selections could happen as early as this week.

Utilities look ahead to Mass. RFP

Connecticut utility parents Eversource and Avangrid (formerly UIL Holdings) were both involved in several separate project bids that were not selected. Both companies said they are looking to a Massachusetts energy RFP expected this spring.

Projects not selected by the multi-state RFP include Northern Pass, which aims to bring 1,090 megawatts of Canadian hydropower into New England. Bill Quinlan, Eversource's New Hampshire president, said in a statement that Northern Pass remains in a "strong position to play an important role in helping the region achieve a cleaner energy future."

Meanwhile, Avangrid CEO James Torgerson disclosed the news in an earnings call this week that the that three projects in which his company was involved, including a 600-megawatt wind proposal, had not been selected.

"However, we're pretty confident in the value and the merit of these projects, and we can see further opportunities with them, in particular with the new clean RFP in Massachusetts," Torgerson said.

He added that impact of the bid rejections on Avangrid's long-term financial forecast is negligible.

CT projects dominate selection process

Late Tuesday afternoon, the overseers of the RFP process disclosed which bids had been selected. Of the 460 megawatts worth of projects, five projects would be located in Connecticut.

Proposed projects selected to negotiate with the following groups of states include:

Massachusetts/Connecticut/Rhode Island

  • Antrim Wind would build a 28.8-megawatt wind project in New Hampshire.
  • Ranger Solar would build five solar project totaling 220 megawatts, including 20 megawatts in Enfield and 50 megawatts in Brooklyn and Canterbury.
  • EverPower would build Cassadaga Wind, a proposed 126-megawatt wind project in New York.
  • RES America would build 20 megawatts of solar in Pomfret and an additional solar project in Rhode Island.

Massachusetts/RI

  • Deepwater Wind LLC would build a 26.4-megawatt solar farm in Simsbury.
  • Ameresco would build a 20-megawatt solar farm in New Milford called Candlewood Solar.

Being selected doesn't guarantee a project developer will ultimately sign a contract to sell its power to a utility company, as negotiations and regulatory approval of 20-year contracts are still needed.

Contracts had originally been scheduled to be submitted to regulators by year's end, but the selection process was delayed by three months. Filings are now expected by March 1, 2017.

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