Renewable Energy Project Owned by CommonWealth Enters Commercial Operation

A 3.3 Mega-watt renewable energy plant developed by CommonWealth Resource Management Corporation that uses otherwise-wasted landfill gas (LFG) as a fuel to generate electricity has begun operating on a commercial basis at a municipal solid waste landfill in southeastern Massachusetts.

Known as the Greater New Bedford LFG Utilization Facility, and owned and operated by a CRMC subsidiary, CommonWealth New Bedford Energy LLC, the facility uses LFG collected from the landfill to fuel four reciprocating internal combustion engine-generator sets that produce electricity for export to the regional power grid via an interconnection with the local electric power distribution utility.

The project is expected to generate approximately 26 million kWh of electric power output for sale per year. All of the output will be sold under a ten-year power purchase agreement (“PPA”) to a major national power marketer with a substantial customer base in the New England market area.

The project will also be qualified to create, register and sell so-called Renewable Energy Certificates (“RECs”) in accordance with certain state regulatory programs and market mechanisms created within the New England Power Pool (“NEPOOL”) control area to support the production of power from renewable energy resources like LFG. Under the terms of the PPA, the power purchaser will buy all of the RECs generated during the first three years of the project term, and a smaller percentage thereafter. The unsold balance of the RECs generated by the project may be sold on a year-to-year or multi-year basis to other buyers. However, a floor value for all of the project’s RECs sold outside of the PPA from years four through 13 of the project term will be assured through a ten-year option agreement between the project and the Massachusetts Technology Collaborative (“MTC”) in its role as manager of the Massachusetts Renewable Energy Trust, a system benefit fund. Under that arrangement, the project has the option to sell, at a pre-established price, any or all of the available, unsold RECs generated by the project during the ten-year option agreement term (years four through 13 of the project life). The MTC has set aside secured funds from the Trust to back up its purchase obligation.

The project was developed and will operate under the provisions of a long-term Site Lease awarded to CommonWealth via a competitive bidding process by the Greater New Bedford Regional Refuse Management District, which owns the landfill.

LFG is a natural by-product of the anaerobic decomposition of organic materials deposited over time in a landfill. The gas consists predominantly of methane and carbon dioxide, and has a heating value of 500 British Thermal Units (BTUs) per cubic foot (about one-half the heating value of pipeline quality “natural” gas). The collection and productive use of LFG is considered environmentally beneficial, preventing its migration to surrounding properties and its release to the atmosphere, where it is believed to contribute to global warming. For this reason, the beneficial use of LFG has historically been supported by federal and state energy and environmental programs and related tax policies, including programs which facilitate the creation of potentially-tradable emission reduction offsets associated with the destruction of methane, a powerful greenhouse gas that is a principal constituent of LFG.

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