FuelCell Energy Inc., (FCEL:US) a U.S. manufacturer of fuel-cell power plants, surged the most in more than a month on its first sale to Dominion Resources Inc.
FuelCell, based in Danbury, Connecticut, climbed 7.5 percent to 94 cents at the close in New York, the most since Nov. 5.
Dominion will own the 14.9-megawatt system in Bridgeport, Connecticut, and sell the output to Connecticut Light & Power Co. under a 15-year power-purchase agreement, FuelCell said today in a statement. It will have five 2.8-megawatt systems that convert natural gas to electricity without combustion, and will be completed by late 2013. The project will also convert waste heat into electricity, boosting its capacity.
Dominion would consider purchasing additional FuelCell systems, especially to serve customers that require an uninterrupted source of electricity, Jim Eck, the utility holding company’s vice president of business development, said in an interview today.
“This partnership with FuelCell diversifies the sources of clean power we can offer our customers,” Eck said. “This could be very attractive for data centers, hospitals and anyone that might need reliable islands of power independent of the grid.”
Connecticut Light agreed to pay $89 a megawatt-hour for the power produced by the plant over 15 years, which will “provide adequate returns” to Richmond, Virginia-based Dominion, he said.
For FuelCell, the agreement increases its order backlog by about $125 million and lends credibility to the company’s efforts to build similar plants in the U.S., Europe and Asia, said Chief Executive Officer Chip Bottone.
“We needed a big player to help us do this right,” Bottone said in an interview.
With the addition of waste-heat power, the fuel-cell project will be able to convert 50 percent of the energy in gas into electricity, Bottone said. The average gas plant converts about 41 percent, according to U.S. Energy Department data.
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