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January 30, 2017

S. Windsor fuel cell, studio project in limbo

A long-delayed fuel cell and movie studio project in South Windsor is in limbo as the town and Eversource battle over the details of a 20-year power purchasing agreement, or PPA, between the two parties.

Town Manager Matthew Galligan has not returned phone calls seeking further information, but documents from the state shed light on the project’s future and show that another company, heating, ventialation, and air conditioning manufacturer Mestek Inc., is now involved in the project.

The power agreement originally was between Eversource and CTS Energy, the company that first proposed the development of a 5-megawatt fuel cell project in town that would qualify for massive federal tax credits.

However, CTS Energy — founded as a subsidiary of dck North America — requested early last year that the agreement be transferred to South Windsor, prompting an ongoing, unresolved conflict between the town and Eversource.

While the PPA states that both parties must consent to the transfer of the agreement at the request of either party under reasonable circumstances, Eversource refused to provide consent, contending for months the town did not have the resources to undertake such a project.

During this time, the state Public Utilities Regulatory Agency, or PURA, reviewed the dispute.

PURA disagreed with Eversource and ruled it must allow South Windsor to take over the power agreement.

Now, Eversource is objecting on the grounds the town is attempting to impose an unfair rate, and PURA is considering the company’s case.

In the meantime, the project’s development continues to be delayed.

New parties involved in project

Documents in the PURA docket show the project has received major financial commitments from private companies and indicate the project’s proposed location — a piece of land owned by dck North America along Chapel Road, John Fitch Boulevard (Route 5), and Route 30 — has changed.

It is unclear why dck backed away from its intention to pursue the fuel cell project and take advantage of the tax credits.

Dck had more recently angled for that piece of land to be the site of a new casino proposed by joint tribal venture MMCT, but the group stated earlier this month that South Windsor is no longer being considered for the gaming facility’s home.

Responding to a request for comments from PURA, Mestek — which owns facilities throughout the country — provided a copy of a letter originally sent to Gov. Dannel P. Malloy explaining the company’s decision to pledge $30 million to the project.

Mestek used to operate a 160,000-square-foot facility at 515 John Fitch Blvd., but ceased operations there during the 2008 financial crisis. The letter indicates the project would be moved to that location and states Mestek decided to become involved in the project “in order to find a productive use for our facility in South Windsor as well as to participate in and support a major economic development project for the area.”

The letter also states that Mestek has “taken over the management of this project.”

Also in response to PURA’s request for comments, Edward R. Marek Jr., of the Los Angeles-based loan agency West Bay Capital LLC, provided a copy of a letter originally sent to Dana Arnold, CEO of studio developer Pacifica Ventures, committing to a two-year, $14 million loan for the development of the studio portion of the project.

Documents show that revenue from the fuel cell would be used to purchase additional land for the movie studio at a projected cost of $3.5 million.

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