Public hearing about Bloom Energy possible (Karl Baker)

Bloom is reportedly planning to “swap out” old fuel cells at the fuel cell power facilities (FCF) that it operates for Delmarva Power (all of the electric power produced is sold to the grid). It has applied (apparently to DNREC, or at least DNREC is involved in the approval process) for a construction permit, and the cost “could be between $100 million and $150 million.” Bloom’s share price “plummeted” after the initial announcement (closed at $14.99 per share on 11/23).

David Stevenson of Caesar Rodney Institute has sent a letter to state regulators “questioning whether Bloom has been properly disposing of the hazardous waste that forms within its natural gas –powered fuel cells.” He is said to want environmental regulators to explain to the public how the old fuel cells will be disposed of and whether new cells will bring any environmental concerns.” The proposed solution is a public hearing, which DNREC Secretary Shawn Garvin now says his department is planning to conduct (specifically on Bloom’s construction permit submission) on or after 1/10/19 (a Thursday).

Garvin took exception to some of the language in Stevenson’s letter, however, including a statement that “DNREC continues to ignore [this problem].” Without directly naming Stevenson, Garvin reportedly complained about “intellectually dishonest” people who oppose alternative sources of electricity in principle. Only the desulfurization filters with the old Bloom fuel cells are hazardous, he stated, and (1) these are regularly replaced and then shipped out of state, and (2) DNREC officials review the hazardous waste manifests of these shipments to ensure compliance with the law.
Other sources have indicated that the answers on this issue are not so clear-cut.

A Bloom representative (David McCulloch) declined to set up an interview with a company executive for this story. He represented, however, that the new fuel cells will be more efficient than those currently used in the FCF, thereby reducing the amount of natural gas required to produce electricity. Subject to the construction permit being granted, “we intend to begin the replacements before the end of the year.” This timetable will presumably have to be adjusted if DNREC’s hearing is put off until 2019.

Investment analyst Michael Weinstein [of Credit Suisse] is quoted that the fuel cell replacements are in line with his expectations “to replace older generation systems with newer models that have longer replacement cycle, lower heat rates, higher efficiency, and smaller footprint.”

The article continues with some back story about the hazardous waste issue. When the desulfurization filters were first brought up, DNREC declined to treat them as hazardous. The EPA (Shawn Garvin headed the regional office at the time) sent DNREC a letter disagreeing, and DNREC eventually got in line with the EPA position. “Civic activists and former DNREC manager David Carter” were reportedly “outraged” by the position initially taken by state officials.

Updating of the fuel cells in the FCF was previously identified as one of the potentially available options to mitigate the heavy financial burden [$200 million and rising at $3 million per month] of the FCF operation on Delmarva Power ratepayers. Petition to Public Service Commission, John Nichols, 9/20/18.

Upgrade the equipment in use at the FCF or adjust other operating procedures with a goal of reducing the cost of electric power being produced. As the saying goes, “if you always do what you always did, you will always get what you’ve always got.”

The PSC dismissed Nichols’ petition, and DNREC probably has no intention of presiding over a discussion of the economic issue. Nevertheless, the subject may come up at a public hearing – and in our view it’s at least as important at the hazardous waste issues. At a minimum, it should be made absolutely clear that there are to be no upward adjustments in the Qualified Fuel Cell Provider tariff based on the cost of the new fuel cells.

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