Before Sunday’s deadly explosion, the Kleen Energy Systems power plant in Middletown was supposed to be the “third most efficient plant in New England,” the co-chairman of the legislature’s Energy Committee said Tuesday.
“This was a Connecticut success story,” Sen. John Fonfara, D-Hartford, said. “It still is a success story, despite the tragedy.”
Until Sunday’s explosion that killed five and injured more than a dozen construction workers, the project had remained mostly under the public radar screen, he said.
But since Sunday, Fonfara said he has twice spoken with William Corvo, a former Middletown councilman and principle partner in the project. He emphasized that Corvo’s concerns have been focused on the victims and their families, but they have spoken briefly about the plant’s future this week.
Experts still need to complete an assessment of the damage to the 620-megawatt plant and its two turbines, Fonfara said, but “they’re still hoping they can get it online by the beginning of next year.” Once operational, the plant was expected to provide power for about 480,000 homes each year. And as it neared completion, Fonfara said it was already have a downward impact on rates. But again, Fonfara interrupted the interview to emphasize that his thoughts are focused on the victims of this horrific accident.
The deal to finance the project has been criticized because it stipulates payments are to be based on capacity rather than the production of electricity. The Department of Public Utility Control sought bids for four such contracts in 2007, and Kleen Energy won the lion’s share.
Combined, the four contracts will cost ratepayers $340 million, but were expected to save them $552 million in electricity generation costs over 15 years. Fonfara called the plant a deregulation success story because it would have been the first clean natural gas plant to go on line in Connecticut in eight years.
Will ratepayers face an increase because of the setback in Middletown? DPUC spokesman Phil Dukes said Monday that a more complete analysis will need to be completed before he can answer that question. Meanwhile, Dukes said Kleen Energy Systems may face a penalty payment for failing to generate electricity as promised under its contracts.
According to Energy Investors Funds, which is the private equity fund that owns a majority share of the $985 million project, the plant was being built to provide electricity to Connecticut Light & Power under a 15-year purchase agreement.
After the state deregulated the electricity market in Connecticut a rush of developers came forward to build power plants, but many of them were not well financed and some plants were partially completed before being dismantled, Fonfara said. As a “baseload” plant, the Middletown facility was expected to run 24/7 to offset electricity generated by older, dirtier coal and oil burning power plants.
In the short-term, Rep. Vicky Nardello, Fonfara’s co-chairwoman, said the setback won’t have an impact on the state’s capacity because it wasn’t scheduled to go online until November.
But whether it will have an impact on the state’s future capacity has yet to be determined, Nardello said.
According to both Nardello and the nonprofit advocacy and research organization Environment Northeast, demand for electricity is down because of the recession.
ISO New England, the operator of the region’s bulk power system and wholesale electricity markets, released a statement Monday claiming that from an operational standpoint, the setup is not expected to impede the system’s reliability in serving the state and region.
On Thursday, the Connecticut Energy Advisory Board will meet in New Britain to hear from utility companies about factors related to energy supply, demand, and cost over the next 10 years.