Work resumes on submarine base fuel cell after contractors not paid

Groton — Work has resumed on the fuel cell park at the Naval Submarine Base after being stalled for several months this summer.

The project was delayed due to FuelCell Energy, which is designing, manufacturing and overseeing the installation of the park, not having money to pay its contractors.

"There's been a lot of positive developments at FuelCell Energy over the past few months, including naming our new CEO, Jason Few. And while we did pause the project for a short period of time earlier this summer, we are now underway with full on-site construction with an anticipated fully operational date in early spring 2020," Tom Gelston, senior vice president for finance and investor relations for the Danbury-based company, said in an emailed statement.

Filings with the U.S. Securities and Exchange Commission show that the company, which is involved in several projects in various stages of development requiring different levels of investment, had liquidity issues and did not have access to working capital, or money available for day-to-day operations. FuelCell Energy's most recent filing, on Sept. 12, outlines new management and the selling of stocks to pay down some of its debt.

The company in early March secured a loan worth up to $23 million from Fifth Third Bank to finance the construction of the 7.4-megawatt fuel cell park at the base.

Early, initial projections indicated the project would be complete by the end of May 2019, but that has been revised several times. The project was delayed this spring due to more granite rock at the site than anticipated and the need for blasting, which required approval from the Navy. That issue has since been rectified.

The fuel cell modules themselves, considered the heart of the plant, are manufactured and awaiting shipment to the sub base, and most of the other parts are either ready to be delivered or in the final steps of assembly.

Once complete, the fuel cell park will produce about 64 million kilowatt hours of electricity annually and supply more than half of the electrical power on base. Energy produced by the fuel cells also will be sold to the local power grid. The Navy and the Connecticut Municipal Electric Energy Cooperative, or CMEEC, have entered into a 20-year power purchase agreement.

The fuel cell park will support an electric microgrid also in the works for the sub base. The microgrid will allow the base, in the event of a blackout or other power outage, to tap into the fuel cell park's output, enabling it to meet its critical power needs.

Fuel cells are like batteries in that they use an electrochemical process and natural gas to produce electricity. They also produce as byproducts heat and water that can be used for other purposes.

Bob Ross, executive director of the state's Office of Military Affairs, which helped secure approval for the microgrid project, said it has the attention of top Navy officials in Washington, who see it as a model that could be replicated across the country, given the partnership of the base, state, local utilities and private industry.

"This project is really important to big Navy. It has a lot of visibility inside the Beltway," Ross said.

He said he met recently with the head of the Navy's Resilient Energy Program Office, at his request, and CMEEC interim CEO Mike Lane to assess the project and make sure everything is back on track.

The Navy, as a whole, has moved toward more alternative sources of energy, in part to reduce reliance on foreign sources of oil. Energy is the single largest cost for Navy installations, and officials have said savings reaped from more efficient-energy sources can be used for other critical operations.

j.bergman@theday.com

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