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Summary:

A non-profit government watch dog group called Cause of Action has filed a lawsuit accusing Delaware Governor Jack Markell and the Delaware regulatory agency Delaware Public Service Commission of cronyism with fuel cell maker Bloom Energy.

PHOTOS: Bloom Energy Does the Tennessee Waltz

A non-profit government watch dog group called Cause of Action has filed a lawsuit accusing Delaware Governor Jack Markell, and the Delaware regulatory agency Delaware Public Service Commission, of cronyism over a deal with fuel cell maker Bloom Energy. Bloom Energy is building a factory in Delaware to make its fuel cells, and also has one of the largest fuel cell contracts in the world with local Delaware utility, Delmarva Power & Light.

Fuel cells use natural gas or biogas combined with oxygen to create a chemical reaction to produce electricity. The electricity is generally more expensive than grid power, but can be cleaner (if it’s running on biogas) and is also a distributed system. Bloom Energy is an 11-year-old Silicon Valley company that has raised at least $650 million (and is closing another round of funding).

Cause of Action says the Governor and the Public Service Commission are “unconstitutionally discriminating against Bloom’s competitors and taxing a segment of Delaware residents to subsidize the crony company.” The suit is being delivered on behalf of a utility customer (named John Nichols) and one of Bloom Energy’s fuel cell maker competitors.

The Delaware utility customers will be covering the increase in price of electricity due to the utility’s Bloom Energy fuel cell project and Cause of Action says the cost through tariffs to ratepayers will be $133 million. Cause of Action says “the Delaware Renewable Energy Portfolio Standards Act (REPSA) was modified solely to accommodate the state’s deal with Bloom.”

The release states:

In return for Bloom’s promise to construct a manufacturing facility in Delaware, the state established a system of discriminatory eligibility requirements, subsidies, and energy-portfolio-standards multipliers that benefit Bloom. These requirements deny out-of-state companies equal competitive footing and increase costs for Delmarva ratepayers who might otherwise benefit from the competitive interstate market.

Bloom didn’t respond to request for comment, but I’ll update this post if I hear from them.

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  1. Perhaps a better name would be “Cause of Trouble”?

  2. This is the kind of CRAP that needs to be stopped… The only way these people will learn is for harsh jail sentences and or heavy fines and penalties.
    NO MORE ATTORNEY / POLITICIAN / LOBBYISTS

  3. Mark Collins Sunday, July 15, 2012

    Just thought you may like to see this… It kind of makes me mad as I am a champion of Fuel Cell Technology… Guess I will have to root for my second choice of USA Fuel Cell companies Fuel Cell Energy.

    Keep up the nice work!

    http://www.breitbart.com/Big-Government/2012/06/21/884-May-Be-Bloom-Energys-Fatal-Number-Fuel-Cell-Efficiency-Federal-State-Tax-Credits

    “Buried deep in the permit application, in Table 1 on page 161 of a 163-page application, was the number 884. On that page, under penalty of perjury, Bloom officially told the world that its energy servers emit 884 pounds of carbon dioxide per megawatt hour.

    Also buried on page 161 of the permit application is a Table 2 notation that says these 235 “clean” servers would emit 22.56 pounds of volatile organic compounds (VOCs) per day. But Delaware, like other states, regulates VOC emissions at far lower levels (Maryland, for instance, regulates boat repair shops that emit more than 15 pounds per day). Moreover, if the same amount of power had been generated by combined cycle gas turbines, only 0.249 pounds of VOCs would be emitted daily. That’s 90 times less pollution!
    To top it off, because of the Bloom servers’ low efficiency and high capital cost, Delaware citizens will pay Bloom over $200 per megawatt hour of power delivered to their electricity transmission grid. But in January 2012, the U.S. Energy Information Agency said the projected “levelized” cost of electricity over the next 30 years from advanced gas-fired combined cycle power stations is $65.50 per MWH.

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