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O'BRIEN ENVIRONMENTAL ENERGY ANNOUNCES 22-MEGAWATT, 20-YEAR POWER PROJECT WITH PHILADELPHIA WATER DEPARTMENT

 O'BRIEN ENVIRONMENTAL ENERGY ANNOUNCES 22-MEGAWATT,
 20-YEAR POWER PROJECT WITH PHILADELPHIA WATER DEPARTMENT
 PHILADELPHIA, June 29 /PRNewswire/ -- O'Brien Environmental Energy (AMEX: OBS), a leading energy project developer, announced today that the Philadelphia City Council has unanimously approved a 20-year contract between the Philadelphia Water Department and O'Brien to build, own and operate power generation plants totalling 22 megawatts at the department's Water Pollution Control facilities, which is expected to save the department $54 million over the duration of the agreement.
 Bruce Levy, O'Brien vice president said, "Construction begins immediately and we anticipate initial operations by May 15, 1993."
 Under terms of the contract, O'Brien will receive a service fee of $3.9 million per year escalating at 1.75 percent annually to provide stand-by power capacity, and a possible early completion bonus of $1.2 million. The company also will receive standard avoided cost rates for its two megawatts of cogenerated electric sales to Philadelphia Electric Company, and 50 percent of the sale of production tax credits associated with methane gas from the sewage treatment gas.
 "This is especially important for O'Brien because the normal time lag for financing will not be a factor in this project," Levy said. "All the major equipment needed for the job is already in stock in our generator rental fleet, so we can move quickly and won't have to carry new project debt usually associated with this size project. Additionally, operation and maintenance costs will be minimal because 90 percent of the plant will only operate for a few days a year," Levy said.
 Kumar Kishinchand, Philadelphia's Water Department commissioner, explained, "We are eager to move ahead with this unique and important project that will reduce our costs and increase efficiency."
 "There are two aspects to the projects, two megawatts of cogeneration fueled by methane recovered from digeters, and 20 megawatts of standby or peak shaving power. The congeneration side operates continuously. The stand-by portion operates only during interruptions by Philadelphia Electric, estimated at 22 hours per year," Levy pointed out.
 "These demand-side savings are due to a Philadelphia Electric Company tariff that encourages major users to curtail during hot summer days, saving the utility the cost of having extra power available. If users go on this interruptible rate tariff, they receive lower rates throughout the year. In this case, the Water Department and O'Brien are effectively sharing these savings and Philadelphia Electric rate payers are indirectly saving the costs of new installed capacity that will only run a few days per year," Levy explained.
 -0- 6/29/92
 /CONTACT: Bruce Levy of O'Brien Environmental Energy, 215-626-5500/
 (OBS) CO: O'Brien Environmental Energy; Philadelphia Water Department ST: Pennsylvania IN: UTI SU: CON


SH-LR -- NY059 -- 4793 06/29/92 14:09 EDT
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Publication:PR Newswire
Date:Jun 29, 1992
Words:455
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