RIALTO, Calif., May 8, 2007 -- Chevron Energy Solutions, a Chevron (NYSE: CVX) subsidiary, today announced that it has begun engineering and construction of an innovative system at the City of Rialto's wastewater treatment facility that will transform wastewater sludge and kitchen grease from local restaurants into clean, renewable power.
The environmentally friendly system will increase municipal revenues, reduce landfill wastes and lower greenhouse emissions by nearly 5,500 tons annually, while decreasing the city's energy costs by about $800,000 a year. The system includes a 900-kilowatt fuel cell power plant, manufactured by FuelCell Energy (NasdaqNM: FCEL), that will generate electricity without combustion using methane, a biogas produced naturally on site by the organic materials contained in wastewater.
"Through energy efficiency, renewable power and innovation, this system solves a messy problem for cities," said Jim Davis, president of Chevron Energy Solutions. "By looking at wastewater treatment operations holistically, we're helping Rialto and other cities transform an urban waste into an asset."
The new system will provide a beneficial use for the thousands of gallons of fats, oils and grease (FOG) that are washed daily from restaurant grills and pans. The watery liquid is collected by grease hauling companies and often disposed of in landfills, where it releases methane – a potent greenhouse gas – as it decomposes, sometimes directly into the atmosphere.
At the Rialto facility, a FOG-receiving station will provide an effective disposal alternative, reducing the amount of FOG sent to landfills. It also will provide a revenue stream to the city through "tipping fees" paid by grease haulers for each disposal. Meanwhile, the fuel cell plant and other energy-efficient improvements will reduce greenhouse gas emissions by 11 million pounds of carbon dioxide annually, equivalent to removing 1,080 cars from the road each year.
In Rialto, a Los Angeles suburb of about 100,000 residents, forecasted population growth necessitated the expansion and upgrade of the city's aging wastewater treatment facility. The project, which costs $15.1 million, is eligible for a $4.05 million rebate on the fuel cell plant cost from California's Self-Generation Incentive Program, administered by Southern California Gas. The remaining cost will be self-funded through energy cost savings and FOG station revenues, without any impact on local taxpayers.
"Our city council and I are delighted to have found a solution with so many benefits all around," said Grace Vargas, Rialto's mayor. "It's a 'win' for multiple stakeholders – our city taxpayers, restaurants, grease haulers, and the environment."
Chevron Energy Solutions will proceed with engineering and construction of the project over the next few months. Project highlights include installation of the FOG-receiving station; repairs to the current digester equipment, where methane is naturally produced from organic matter; a new automation system and controls; a high-efficiency boiler; and three 300-kilowatt Direct FuelCell® units that will convert methane into hydrogen and then use the hydrogen to generate power electrochemically, without combustion. In addition, the residual waste heat from the fuel cells will be put to work to warm the digesters to human body temperature, to stimulate further methane production.
Fuelcell Energy sold its fuel cell plant to Rialto through Chevron Energy Solutions and will maintain the plant after it is installed. Because of its ultra-clean emission profile, the plant meets California's stringent air quality standards and is expected to be sited easily. It will also provide baseload power around the clock.
"Rialto can make use of existing resources and generate high efficiency power that is environmentally friendly while saving money on its energy costs," said William Karambelas, vice president of business development of FuelCell Energy. "This is a consistent and compelling story from both economic and environmental standpoints."
About Chevron Energy Solutions
Chevron Energy Solutions provides public institutions and businesses with environmentally sound projects that increase energy efficiency, reduce energy costs and ensure reliable, high-quality power for critical operations. The company employs proven technologies to meet customers' specific needs, including infrastructure technologies, energy controls, solar power, fuel cells and other systems. Its parent, Chevron Corporation, is investing across the energy spectrum to develop energy sources for future generations by expanding the capabilities of alternative and renewable energy technologies. Since 2000, Chevron, through its various subsidiaries, has spent more than $1.5 billion on renewable energy projects and on delivering energy efficiency solutions. For more information, please visit www.chevronenergy.com and www.chevron.com.
About FuelCell Energy, Inc.
FuelCell Energy is the world leader in the development and production of stationary fuelcells for commercial, industrial, municipal and utility customers. FuelCell Energy's secure, ultra-clean and high efficiency DFC(r) fuel cells are generating power at over 60 installations worldwide. The company's power plants have generated more than 150 million kWh of power using a variety of fuels including renewable wastewater gas, biogas from beer, onion, and milk processing as well as natural gas and other hydrocarbon fuels. FuelCell Energy has partnerships with major power plant developers, trading companies and power companies around the world. The company also receives substantial funding from the U.S. Department of Energy and other government agencies for the development of leading edge technologies such as hybrid fuel cell/turbine generators and solid oxide fuel cells. For more information please visit our website at www.fuelcellenergy.com.
Cautionary Statement Relevant To Forward-Looking Information For The Purpose Of "Safe Harbor" Provisions Of The Private Securities Litigation Reform Act Of 1995.
Some of the items discussed in this press release are forward-looking statements about FuelCell Energy's operations and the plans of Chevron Energy Solutions to install a system at the City of Rialto's wastewater treatment facility that is expected to transform wastewater sludge and kitchen grease from local restaurants into clean, renewable power. These statements are based upon the companies' management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron Energy Solutions and FuelCell Energy undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.