Friday, January 13, 2012

Power Play for Power Delay: AEITF Stiff Arms Schumer Project

Senator Schumer at NY Biogas Plant
It takes a fair bit to P.O.  Senator Chuck Shumer, but the nascent Army Energy Initiatives Task Force has done just that.  Three years ago, a nonprofit group, Arsenal Business & Technology Partnership, was awarded the rights to develop a project supported by an enhanced use lease at Watervliet Arsenal in upstate New York.  Part of the plan is to build a non-intermittent, 24 hour a day biomass-fed power plant that would also generate steam for the Army's artillery manufacturing center.  In as much as the Artillery hasn't had a new system since the Crusader cratered, this seems like a good thing.  Problem is, the AEITF is saying, “not so fast”.

Seems the cooler heads at the newly formed organization would like to study the proposal for a couple of years.  Shumer is concerned that  this delay would hurt prospects of bringing in other organizations that support the nonprofit’s development concept.  The Senator thinks the loss would amount to billions of dollars.  So he called up the SecArmy to inquire about perhaps getting this unscrewed.   SecArmy, and former Congressman from the region, John McHugh has not responded according to the article.   Schumer has been a champion for renewable in N.Y.  This past November he interceded in a 1.4 megawatt biogas project, ensuring that it was grid connected in time to qualify for renewable energy credits.   He gets it and he gets it done. 

As part of their fund raising effort, the biomass partnership at Watervliet competed for state funds for the cogeneration plant through N.Y. Gov. Andrew Cuomo's local economic development council.   $800 million in funding was available, but in competing against nine other councils around the state they did not win.  The proposal for the funding listed the price tag for the co-gen plan as $23 million.

As I mentioned in an earlier post, the Army is getting its ducks in line to produce an IDIQ for PPAs that would support EULs like this.  It is expected that the IDIQ RFP will be released ASAP, but will not be awarded until FY13.  And now we have SNAFU.  I asked the AEITF for a comment and am still waiting; will keep you posted.  I am also out of acronyms.

One technique of leadership is to find out which way the crowd is going and get in front of it.  This would appear to be a perfect opportunity to for the AEITF to show leadership.  By grasping the project to their collective breasts and charging forward there is an opportunity for a quick win and a good friend in New York.  With the current budget struggles, that might be helpful.   Will keep an eye on this.   Dan Nolan

IDIQ - Indefinite delivery/indefinite quantity
PPAs – Power Purchase Agreement
RFP – Request for Proposal
EUL – Enhanced Use Lease
ASAP – As Soon As Possible
SNAFU – Google it

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