DG Clean Power, LLC
$150M Power Plant Proposed in Billerica
By Matt Murphy, Lowell Sun, 09/03/2006
BILLERICA -- During the height of the scorching heat wave last month, the region's energy supply was pushed to the brink as temperatures climbed to triple digits.
The demand for electricity became so high that the Police Department worried brownouts might disrupt operations.
But a new proposal to build a 350-megawatt, gas-fired power plant in North Billerica might not only ease the power burden on the region's electric grid, but inject up to $1.5 million annually into the town budget.
DG Clean Power, LLC has discussed plans with Billerica officials to invest up to $150 million in the construction of a gas-fired power plant off Billerica Avenue, behind the former D.J. Reardon building abutting the town's sewer treatment plant.
The "peaking" power plant would run about 1,500 hours a year -- or 62 days -- supplying excess power to the New England distribution grid during times of peak usage, officials said.
"In many ways, we had two heat waves this summer that probably increased peak demand beyond what was forecast by the New England ISO," said Joe Fitzpatrick, chief executive officer of DG Clean Power. "What this is really a response to is the need for quick energy capacity that the grid needs in periods of high demand."
Fitzpatrick, is the former energy secretary for Massachusetts, and served a term on the Lowell City Council in the late 1980s.
Fitzpatrick said he has filed for a system-impact study with the New England ISO, operator of the region's bulk power system. He and his business partner, Edward Liston, are negotiating with Baker Commodities in North Billerica to lease up to 15 acres for the plant. The area is dominated by businesses with few residents nearby.
Fitzpatrick plans to make a public presentation to selectmen on Sept. 18.
"This is huge. This is a tremendous project for the town. From a location standpoint we're blessed that major electric and gas lines criss-cross in that area," Town Assessor Richard Scanlon said. "We look forward to seeing this progress in the future."
Town Manager Rocco Longo, Assistant Town Manager John Sanguinet, Department of Public Works Director Abdul Alkhatib and Scanlon traveled to Bellingham this summer to tour a similar, but larger, power plant built by DG Clean Power.
Longo said Bellingham officials are so pleased with their first power plant project that they allowed a second plant to be built in town.
DG Clean Power has also built a facility in Blackstone. It has purchased the defunct L'Energia plant on Tanner Street in Lowell and plans to construct a second 95-megawatt facility next door.
Depending on market conditions, the Billerica plant may turn out 350 megawatts, and might be built in two phases or all at once.
DG Clean Power needs approval from several town boards and state agencies. Obtaining all permits could take up to a year, Fitzpatrick said.
Fitzpatrick and Liston are currently in talks with three investors to finance construction of the plant, and buy it. Construction could take six to nine months, and Fitzpatrick said he hopes the plant will be running by 2008.
Assuming the Billerica project gets the necessary approvals, Scanlon and Fitzpatrick have discussed negotiating a PILOT agreement, or payment in lieu of taxes. Fitzpatrick said Billerica stands to receive about $1.5 million annually, based on previous projects. That number could fluctuate depending on the ultimate size of the plant.
Billerica officials also see the power plant as having the potential to diversify the town's business community and create interesting possibilities for cost savings.
The site is close to the town's sewage treatment plant. Both Longo and Scanlon said the town could pump its "gray water" or sludge from the treatment facility to the power plant for cooling.
DG Clean Power's interest in the North Billerica site is not the first time a power company has explored building a plant on the property.
Fitzpatrick said his company might have already built a power plant at the site in 1998 if the market had not cooled and made the project financially unfeasible.
At least one other energy company has approached the town over the years about building on the property, but discussions never became serious, officials said.
While smaller projects like the Tanner Street plant in Lowell sailed through the permitting process, other attempts by energy providers to build a major power plant in Greater Lowell have encountered stiff opposition.
Baltimore-based Constellation Power, Inc. proposed a massive 750-megawatt, gas fired plant in East Dracut in 2001 but drew criticism from local environmental groups.
The company eventually withdrew its proposal, saying it was not economically viable.
At the proposed Billerica plant, Fitzpatrick said one stack that would emit steam while in use could rise about 100 to 150 feet, but he believes it will be largely obscured by the tree line.
The plant will occupy seven to 10 acres, which Fitzpatrick said should make it fairly easy to avoid infringing upon wetlands.
The industrial nature of the area will also prevent the project from disrupting residential neighborhoods, officials said.
"I don't know a lot about it yet. It's potentially a very good thing, a tremendous benefit for us and not a bad industry to have in town, particularly at that location," Selectmen Chairwoman Ellen Day Rawlings said. "But certainly there are many questions that need to be answered."
