MONTVILLE PUSHES FOR BIOMASS GENERATION PROJECTS

Montville - Mayor Ronald K. McDaniel Jr. has asked the state authority that regulates energy to require Northeast Utilities and NSTAR to seek new biomass generation projects as a condition of a proposed merger of the two utility companies.

McDaniel, in comments that he made to the state's Public Utilities Regulatory Authority, said that a plan to convert one of Montville Power LLC's generation units into a biomass system is vital for the town.

The approximate $100 million project has stalled as NRG Energy Inc., the New Jersey-based parent company that owns the Lathrop Road plant, has been unable to find a company to purchase the power.

McDaniel said the project would create jobs and tax revenue for the town. It would also be a way for the town to soften the blow it suffered when AES Thames, the town's top taxpayer, filed for bankruptcy and eventually closed. That plant is for sale.

"I would say right now - outside of the AES Thames negotiation that is happening outside of our purview - this is the most significant economic development project that I have on my desk to support," McDaniel said Monday. "In terms of not only tax base but job retention and creation."

The biomass project would create between 30 to 35 full-time jobs at the plant and it would turn one of two generation units from a natural gas and oil-based unit to one that burns clean wood, NRG officials said.

NRG spokesman David Gaier said recently the biomass system conversion would create between 75 and 150 construction jobs during the year the project is anticipated to take. Two hundred other jobs would be created in forestry and logistics/shipping, the company said.

Northeast Utilities has proposed a $4.7 billion purchase of NSTAR, a Massachusetts power company. Northeast Utilities is the parent company of Connecticut Light & Power, Western Massachusetts Electric Co., Yankee Gas Services Co. and Public Service of New Hampshire.

The merger would create New England's largest utility company and would serve 3.5 million electric and gas customers in Connecticut, Massachusetts and New Hampshire. A final decision is expected on April 2.

Dennis Schain, a spokesman for the Department of Energy and Environmental Protection, which oversees the Public Utilities Regulatory Authority, said Monday the authority has the power to approve the merger with terms and conditions.

He added that the authority is reviewing all comments it has received concerning the merger and is considering any possible terms and conditions that what would be in the best interest of ratepayers.

In arguing that the terms of the proposed merger should require the inclusion of biomass projects, McDaniel pointed to similar mergers in Massachusetts and Maryland.

For example, he said energy regulators in Massachusetts in a similar merger required a contract with a private developer for the construction of the Cape Wind facility. The project off Nantucket Sound will use 130 wind turbines to produce 420 megawatts of electricity.

The biomass conversion would also help meet a state mandate that 20 percent of energy come from renewable resources by 2020.

The new system would annually use up to 400,000 tons of clean wood, which would come from forests in a 100-mile radius. It would provide up to 42 megawatts of electricity and have the capability to go to 82 megawatts by using natural gas. A megawatt serves about 1,000 average homes.

Residents of the town voiced concerns about environmental and noise pollution if the project were to move forward, but the company has aimed to address concerns through public hearings.

The Connecticut Siting Council last year determined the biomass system would not hurt the environment. The DEEP has also issued an air permit for the project.