Photo courtesy of Hill International
The utility chose the Red Lion substation because of its proximity to major transmission lines that deliver Bloom's electricity to its grid.

Delaware's campaign to entice Bloom Energy to build a new manufacturing plant in the state and then source energy from a fuel-cell farm to the grid went through a political minefield.

Consumer and environmental groups opposed the plan; ratepayers would have to shoulder some of the investment in the rate base and still be on the hook if Bloom took its plan elsewhere. Plus, the fuel cells generate electricity using natural gas, which didn't fit the renewables category.

But during a powwow with the company's representatives, state political leaders, utility officials and regulators, "the governor stressed it as a win-win for everybody," recalls Gary Stockbridge, CEO of Delmarva Power & Light Co. If the plan worked, the benefits from an estimated 900 jobs at the manufacturing plant "would exceed the cost to ratepayers," utility regulators said. Now, some two years after the assembly passed legislation allowing Delmarva to use Bloom's energy as part of its renewable mix—in addition to a complex tariff agreement—Bloom's two generating stations, the Brookside and Red Lion facilities in New Castle County, are on plan to deliver just under 30 MW to the grid.

Ratepayers now have a surcharge of between $1 and $1.34 a month for the renewable mix, and Delmarva is looking at how the energy from the fuel cells may be used in microgrids to improve reliability.

According to the 2011 order by the Delaware Public Utilities Commission, the tariff can provide for up to 30 MW, with a potential addition of up to 20 MW, which totals an estimated 3% of Delmarva's power capacity.

Challenges remain, and the scenario is tricky. The tariff deal alone took about a year to hammer out. Delmarva supplies natural gas to the generating stations, and Bloom sells its output on the power market, then passes its gas bill back to Delmarva in the form of credits. "It's a little complicated, but it works," Stockbridge adds.

With such projects, six months to a year of planning are common. "We had three months to get it done," says George Gottuso, Hill International's field manager for the Red Lion Energy Center. Marlton, N.J.-based Hill is the owner's representative on the project, which includes Bloom Energy's new manufacturing facility in Newark, Del. (see main story), the Red Lion and Brookside generating facilities."We built new transmission lines to accommodate [Bloom's power]" as well as the fuel-cell facility for the boxes. "The issue, logistically, was getting the major pieces of equipment on time and installed properly," he adds. The team worked from October through the end of 2012 and muscled through the material shortages they faced after Superstorm Sandy. "We had to search nationwide for fiber lines for transporting the electricity," he says, which they eventually acquired through Delmarva.

Hill's project team at Red Lion had to work a tight integration with Hill's schedule for the manufacturing facility project. If one part of the plan fell behind—supply chain, engineers, plant designers, construction—the team escalated issues.

Is Bloom now considered competition? Stockbridge shrugs. "We're a delivery company. Getting gas and electricity to our customers is first and foremost."