Saturday, December 9, 2017

Alcon v PREPA

Alcon was a pharmaceutical company located in Humacao PR (in back of Sam's Club). In the 80's PREPA power was very unreliable and they negotiated a contract with O'Brien Energy to build and operate a 2 MW (electric) cogeneration plant to supply power and chilled water for Alcon's manufacturing and support operations. 

It was a beautiful contract. O'Brien provided everything but the site. They built the plant and operated it, including fuel and maintenance, under a lease charging 75% of whatever the PREPA equivalent charges would be each month. 

It was a beautiful project from an engineering standpoint too. Fairbanks-Morse diesel with a Hitachi chiller running off the exhaust and radiator heat.  

PREPA claimed O'Brien was a utility and was barred from doing this. 

The case was ultimately decided in Alcon's and O'Brien's favor but by then it was too late. 

Not too late for someone who wants to get into the cogeneration business today, though. The decision would seem (get good legal advice before acting) to allow someone to set up a cogeneration plant in a shopping center, commercial building, hospital, manufacturing plant or wherever and sell the output directly to the users without going through PREPA.

The decision is 

848 F.2d 243
270 U.S.App.D.C. 186
American Paper Institute, Inc., American Gas Association,
Cogeneration Coalition of America, Inc., Brooklyn Union Gas
Co., Electricity Consumers Resources Council, Alcon, Inc.,
Energy Michigan, Inc., Intervenors.
No. 87-1219.
United States Court of Appeals,
District of Columbia Circuit.
Argued Feb. 18, 1988.
Decided June 3, 1988.

Here's a link:

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