The Connecticut Clean Energy Fund’s March completion date to get a nearly $2.5 million biomass gasification project at Tallon Lumber in New Canaan up and running has come and gone.
Again.
It’s been six years since the family-run lumber company agreed to host on their property a CCEF demonstration project aimed at converting waste lumber into electricity.
Numerous attempts to get the project to operate have failed as the project’s budget climbed from an estimated $875,000 to $2.5 million, nearly triple the original amount.
Tallon Lumber is now charging CCEF rent – reportedly $3,000 per month – for housing the gasification equipment on its property.
Following years of false starts, it finally appeared that a fix was likely this past winter.
The investment committee of Connecticut Innovations, the state’s venture capital arm that manages the clean energy fund, approved an additional expenditure of $484,000 to remedy technological hitches with the Tallon project. The appropriation provided up to $250,000 to purchase some new equipment and to cover the cost of running the gasifier for six months.
However, the project hit another unanticipated problem that again stalled the project. The Finnish company, Pudhas Energia, that had supplied the original gasifier now wanted five times the price it had quoted CCEF to provide a critical piece of equipment costing about $50,000 to largely remedy the project’s technical problems.
Sticker Shock
Keith Frame, associate director for new technologies and project management at the energy fund, told the company that the deal was over unless the price was reduced. Pudhas counter-offered with a lower cost, but still at four times the original quote, Frame said.
“They recognized that the environmental movement is really growing and that they are a unique supplier,” Frame said. “They perceive that they are the only supplier and believe the price they offer for it is a reasonable market price, a price that others would pay for it, too.”
As a result, Frame killed the deal and was planning to meet with an American company that specializes in just gasifier clean up last week.
Frame is hopeful that the project will be operational by September.
In part, Tallon Lumber has become a poster child of what some believe is wrong with CCEF. Funded through a surcharge on state ratepayers’ electric bills, CCEF has been under fire for the past year for several reasons, including its management of the Tallon Lumber project.
Rep. George Wilber, (D – Colbrook), sponsored a bill this session that would place CCEF under the oversight of the state Department of Public Utility Control. The bill also leaves the fund, which has collected about $117 million, with Connecticut Innovations for administrative purposes.
Since CCEF’s inception in 2000, the clean energy fund approved 206 projects that promised to produce 71.5 megawatts of clean energy; so far, those projects have produced 2 megawatts of energy.
“The main goal of the bill is to provide another layer of oversight, especially if the state might pay [the funds] back the money we took a few years ago,” Wilber said.
In 2003, when the state was experiencing a budget deficit, it used money from the Connecticut Energy Efficiency Fund and CCEF to help bridge its budget gap. Now that the state is experiencing a sizable surplus, state lawmakers are considering returning about $40 million to the two funds, Wilber said.
Wilber said the bill’s purpose is to ensure CCEF does not continue to operate in the same manner as it has in the past.
The bill also expands the CCEF advisory board, he said. “That way, we ought to get some people with technology [expertise] on it,” he added.
The bill, HB 6209, was approved unanimously by the state House of Representative and at press time, was posted on the Senate’s calendar for consideration.