Paying no upfront costs, the Coast Guard in 2007 signed a $41 million energy performance savings contract with the energy company Ameresco, based in Knoxville, Tenn. Under the 15-year contract, Ameresco built the power plant at the Coast Guard Yard; 34 wells and a methane collection system at the landfill; and the pipeline that runs beneath the city road, railroad tracks and highway separating the landfill from the plant.
The plant began generating electricity in April.
The only thing missing is a permit to sell excess electricity back to the power grid, and the Coast Guard expects to have that by next year, said Cmdr. John Slaughter, chief of the facilities management division at the Coast Guard Yard.
The contract with Ameresco allows the service to pay for the $15 million in construction costs through energy savings. Slaughter estimated the annual savings in avoided energy costs will exceed $2 million.
The way the contract is written, "our electricity costs are fixed for the next 15 years -- that in itself is huge," Slaughter said. He noted that fluctuating utility costs can make budgeting much more difficult.
Because the yard operates on a revolving fund basis, meaning it has to pay for operations out of the revenue it generates, the contract with Ameresco has increased its financial flexibility and stability, said Capt. John Kaplan, commanding officer of the yard.
The power plant has four generators, each with an output of 1 megawatt. Waste heat emitted in the engine exhaust stack is captured and delivered to the shipyard's steam distribution system. In addition, methane is directed to the yard's central boiler plant where it is burned to produce the balance of winter steam requirements.
Besides reducing demand on the local power grid, every year the plant operates it is cutting greenhouse gas emissions at a rate equivalent to removing 33,000 cars from local roadways, Slaughter said.