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Settlement stipulates that Delaware’s renewable energy program must even the playing field for out-of-state companies

FOR IMMEDIATE RELEASE: October 21, 2015

 MEDIA CONTACT: Geoff Holtzman | geoff.holtzman@causeofaction.org | 703-405-3511

WASHINGTON – Today, Cause of Action is pleased to announce that a federal court in Delaware has approved a settlement agreement between our client, FuelCell Energy, Inc., and Delaware Governor Jack Markell and Delaware state utility officials regarding the state’s Renewable Energy Portfolio Standards Act (REPSA).

Under the terms of the settlement, Delaware’s Public Service Commission (DPSC) must now allow competition across state lines with respect to fuel cell manufacturers, in compliance with the commerce clause of the United States Constitution.

Cause of Action Executive Director Daniel Epstein issued the following statement:

“Today is a great day, not only for clean energy manufacturers, but for innovators and entrepreneurs everywhere who wish to compete on an even playing field. This settlement should send a message to government officials that fair interstate competition is a cornerstone of the U.S. Constitution. Cause of Action is proud to have played a role in reaching this agreement, and we will continue to fight hard in the name of economic fairness.”

BACKGROUND:

In a 2012 complaint filed in the United States District Court for the District of Delaware, Connecticut-based FuelCell Energy alleged that it was disadvantaged by the DPSC‘s special tariff awarded under REPSA to an in-state energy manufacturer and the associated State financial support for establishing in-state manufacturing that was offered to only one select company by the Governor of Delaware, without any prior public notice or bidding process.

FuelCell Energy, a global fuel cell company that designs, manufactures, installs, operates and services efficient and affordable stationary fuel cell power plants, argued that Delaware’s Renewable Energy Portfolio Standards Act, which was amended in 2011, violated the commerce clause of the United States Constitution, which prohibits state laws that discriminate against out-of-state competition.

Under REPSA, the State of Delaware only allowed bids on a State fuel cell project from a fuel cell company that agreed to establish manufacturing in the State, and the State provided financial incentives to support construction of the manufacturing facility, resulting in a sole-source contract rather than a competitively bid contract.

In April 2014, the District Court permitted FuelCell Energy to proceed with its constitutional claim.

The settlement agreement that we are announcing today will level the playing field for all out-of-state fuel cell manufacturers wishing to compete for business in the state of Delaware. Prior to this settlement, out-of-state fuel cell power plant manufacturers were prohibited from bidding on REPSA-funded incentives for fuel cell power generation projects, a violation of constitutional prohibitions on state-legislated discrimination against out-of-state businesses.

Cause of Action is a non-profit, nonpartisan strategic oversight organization committed to ensuring that government decision-making is open, honest, and fair.

CRI’s views: Although CRI was not involved in this lawsuit, we were very much supportive of it. Bloom Energy is a perfect example of crony capitalism, where over half a billion taxpayer dollars were promised to a company whose technology was not only unproven to work, but actually was proven to be even more polluting than the alternative solution, which was to build more natural gas pipelines and transmission stations in Delaware. Bloom did not even have to go through a competitive process to obtain the grant; it was awarded to them.

We hope this lawsuit will serve as a notice to Delaware’s state government that crony capitalism is not the answer to providing clean, affordable energy to Delawareans. We should support proven, reliable methods such as natural gas and nuclear power to reduce our carbon emissions and keep electric rates affordable. For more information on our energy plan, visit caesarrodney.org and click on the Center for Energy Competitiveness tab under “issues”.

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