August, 2000
  Incentives Deal of the Month
   from Site Selection's exclusive New Plant database
 

Connecticut Incentives Covering 25%
of FuelCell's Big Equipment Investment
in New 150-Employee Plant

More evidence that the biggest proportional incentives don't always go to the biggest projects: Danbury, Conn.-based FuelCell Energy (www.fce.com), a fast-growing firm that had only 114 employees at yearend 1999, is getting a major assist from the Connecticut Development Authority (www.state.ct.us/cda) in building a new 150-employee manufacturing facility in Torrington.

FuelCell, which develops and commercializes high-efficiency fuel cells for electric power generation, is undertaking a major equipment upgrade inside the new facility to meet rising market demand. Company officials estimate that the total expenditure for equipment inside the new facility will total US$16 million. Of that $16 million, the Connecticut Development Authority has committed itself to funding as much as $4 million.

"We're pleased to support FuelCell Energy by providing them with capital to acquire production machinery to manufacture state-of-the-art power generating equipment," said Arthur Diedrick, chairman and president of the Connecticut Development Authority. "FuelCell Energy is a rapidly growing high-technology company that is expected to create 150 new jobs in the Torrington Technology Park over the next two and a half years."


City Also Providing Property Tax Breaks

The $4 million is substantial for a project that's certainly no site selection behemoth. And those incentives are going to a company that's still decidedly small.

FuelCell's total incentive package, though, is actually larger than $4 million. City officials are also providing property tax incentives for the new, 65,000-sq.-ft. (5,850-sq.-m.) facility in Torrington. (The total value of the city's incentives had not been disclosed as of this writing).

"The City of Torrington is proud to be the host for FuelCell Energy's expansion in the Technology Park," said Torrington Mayor Mary Jane Gryniuk. "FuelCell Energy appears to be the leader in their field. . . . This expansion will be a great boost to the region's economy and will hopefully encourage other businesses to relocate in Torrington."


Burgeoning Demand Makes Project
'Critical Milestone for Long-Term Success'

Company officials say the new FuelCell plant in Torrington is "a critical milestone for the [company's] long-term success." The project's mission-critical status stems from demand for the company's Direct FuelCell technology in stationary power generation. The technology eliminates external fuel processing to extract hydrogen from a hydrocarbon fuel.

Recent Direct FuelCell technology "field trials" and orders, company officials say, have included the Los Angeles Dept. of Water and Power, Japan-based Marubeni Corp., the U.S. Navy, and Rhoen-Klinikum AG, a hospital in Bad Neustadt, Germany. King County, Wash., recently selected FuelCell to negotiate a fuel cell project using municipal digester gas and DFC power plant technology.

"These orders from around the globe validate our technology for producing clean energy," said Christopher Bentley, FuelCell Energy executive vice president and head of manufacturing operations. "Construction of this larger facility furthers our commercialization progress, bringing us closer to our goal of being recognized as the premier manufacturer of clean, efficient and cost-competitive DFC power plants."

FuelCell officials anticipate that construction on the new plant will be completed by the end of January 2001. The Torrington facility will allow for the expansion of manufacturing capacity for power plants to 50MW annually in 2001, ramping up to an anticipated annual production capacity of 400 MW in 2004.


FuelCell Fits Connecticut's Focus
On 'Independent Businesses'

For the Connecticut Development Authority, FuelCell fit what Diedrick calls the organization's "major focus on independent businesses that have the potential to strengthen Connecticut's economic base. The term 'independent businesses' is gradually replacing the term 'small businesses' in many financial, trade and business publications," Diedrick noted. The Connecticut Development Authority, says the agency's Web site, "consider(s) independent businesses to have less than $10 million in revenues."

FuelCell, however, exceeds that parameter. The company's 1999 sales totaled $20 million.

No one, though, seems likely to quibble over definitions - particularly if FuelCell continues its recent growth surge. 1999 sales increased by 17.7 percent, while 1999 employment jumped by 30.9 percent.


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