Customer surcharge will subsidize Bloom operation on east coast > Fuel Cell Dispatch

Customer surcharge will subsidize Bloom operation on east coast

Bloom Energy's pathway to manufacturing high-tech fuel cells on the site of the former Chrysler plant in Newark was cleared by Delaware lawmakers on Thursday.

The state House voted 35-4 to send Gov. Jack Markell legislation establishing the framework to let Delmarva Power collect a surcharge from customers to subsidize Bloom's operations.

The fast-tracked legislation flew through both chambers of the General Assembly two weeks after the California-based company announced plans to build a manufacturing facility in Delaware and hire 900 people within two years. Another 600 jobs could be created if Bloom's suppliers relocate to Delaware as well.

Markell intends to sign the legislation.

"Passage of the legislation marks another step in the effort to bring these jobs to Delaware," said Markell spokesman Brian Selander.

For relocating to Delaware, the state is offering $16 million in taxpayer-funded incentives, which could be revoked if Bloom doesn't make the investment and create the jobs it has promised.

Rep. J.J. Johnson, who worked at the Chrysler plant for 37 years, said Bloom's plan to build natural gas-powered fuel cells was "the best news that I've heard since 2008 when they decided to close the Chrysler plant.

"Ever since then, I was wondering what would be the new industry? What would be the manufacturing of the 21st century?" said Johnson, D-Jefferson Farms. "This is the type of jobs that our children and grandchildren will be able to have the same type of life that we had in the past."

Bloom's "Bloom Boxes" consist of blocks of fuel cells that use an electrochemical reaction to convert natural-gas energy into electricity. Each Bloom Box generates 100 kilowatts of power, which is enough to power average-size homes or a small office building.

The company plans to set up an array of Bloom Boxes on a site in Red Lion that will generate 30 megawatts of electricity for the regional power grid.

Senate Bill 124 creates a narrow exemption in the state's renewable-energy mandates that allows Delmarva Power to count electricity generated by Bloom's fuel cells, even though natural gas is not a traditional renewable energy source such as wind, solar and geothermal.

The legislation allows the Public Service Commission to authorize Delmarva to charge a tariff on Bloom's behalf.

Markell's administration has estimated Delmarva residential customers would see their bills rise by $1 each month to pay for Bloom's subsidy. It's estimated Bloom would generate $67 million in ratepayer-funded subsidies over a period of 20 years.

The four "no" votes came from Reps. Gerald Hocker, Harvey Kenton, Harold "Jack" Peterman and David Wilson, all downstate Republicans.

"I can't subsidize another new business on the backs of other businesses that can't make it by paying these rates," said Hocker, an Ocean View businessman. "I don't know if we're creating more jobs or losing jobs."

Rep. Joseph Miro, R-Pike Creek, said the cost to taxpayers and ratepayers was worth the risk of potentially bringing hundreds of new jobs to the state.

Peterman, R-Milford, said he is concerned the contract between Bloom and the state for the $16 million in direct taxpayer fund can't be amended by future legislators.

"I think that we're giving some of our authority away," Peterman said. "And that really concerns me."

Source: CHAD LIVENGOOD, DelawareOnline.com