Vicinity Energy Files Complaint to Pennsylvania Public Utility Commission Regarding Anti-Competitive Gas Pricing from Philadelphia Gas Works

PHILADELPHIA, October 25, 2021 – Vicinity Energy, owner of the nation’s largest portfolio of district energy systems, announces today that it has filed a formal complaint with the Pennsylvania Public Utility Commission (PUC) regarding the renewal of its gas transportation contract with Philadelphia Gas Works (PGW). The existing contract between Vicinity and PGW, which was originally executed in 1996 and expires at the end of 2022, has helped to ensure that Vicinity’s customers, representing approximately 100 million square feet of building space (75 million square feet of heating and 25 million square feet of summer cooling) in city center Philadelphia, continue to receive clean, reliable, and affordable steam service. In February 2021, PGW provided Vicinity with a new offer to continue gas supply to its Grays Ferry plant starting in 2023, which increases the price for gas supply to Vicinity by over 1000%.

Per the longstanding contract, PGW supplies gas transportation services to Vicinity’s Grays Ferry combined heat and power (CHP) plant in South Philadelphia; Vicinity purchases the natural gas itself from third party natural gas suppliers. Vicinity Energy is PGW’s largest customer and consumes this gas to generate both electricity, which is supplied to the PJM electric grid, and a by-product thermal heat in the form of steam. This steam is distributed to customers throughout the city through a vast network of underground pipes and is used to heat and cool buildings, as well as for critical processes and sterilization of lab and surgical equipment in hospitals, bio-medical and life science laboratories, and other facilities. Because the steam is a by-product of the CHP process, it is a clean, low carbon, and efficient alternative to directly consuming gas on site in individual buildings.

In its formal complaint to the PUC, Vicinity contests the drastic increase in the cost to transport gas through PGW’s pipeline and claims it is anti-competitive, unreasonable and an attempt to impose significant anti-competitive pressure on Vicinity’s mission critical energy services business. In addition to the dramatic price increase, PGW’s new offer also migrates Vicinity from firm gas delivery to interruptible supply. If permitted, this provides PGW with the ability to suspend the supply of gas to Vicinity at any time, which would interrupt the co-generation of electricity and steam in its plant. PGW has provided Vicinity with firm supply since the current contract was first signed in 1996. The new offer represents a fundamental shift in the longstanding terms of the agreement between Vicinity and PGW. While Vicinity Energy has backup options (including dual-fuel steam generators, portable steam generators and fuel oil reserves) and system redundancies, interruptible supply is unacceptable to Vicinity and the needs of its customers, including major hospitals, research labs, universities, and government buildings.

In the 1996 agreement, PGW was obligated to refurbish and construct a dedicated pipe to connect Vicinity’s Grays Ferry Plant to the interstate gas transmission line. Vicinity was required to repay PGW for the capital investment over the life of the contract. While PGW continues to own the pipe, it only transports gas to Vicinity’s facility and PGW has more than recouped its capital investment over the life of the current agreement. In addition, Vicinity has paid an annual fee to maintain the pipe throughout contract. Therefore, Vicinity contends that the ongoing cost to serve Grays Ferry is negligible and there is no basis for the significant price increase or the interruptible terms proposed by PGW. Vicinity is appealing to the PUC to review all terms presented in PGW’s new gas transportation offer as monopolistic and ultimately a risk to end-users.

PGW is already responsible for contributing 4.6 million tons of carbon equivalent emissions to the region’s carbon budget according to an October 2019 study by the University of Pennsylvania’s Kleinman Center for Energy Policy. In addition, PGW has admitted that its antiquated distribution system leaks the equivalent of 1 million tons of carbon dioxide per year. In light of this, PGW is the subject of a diversification study recently launched by Philadelphia’s Office of Sustainability. The purpose of this study is to determine if there are viable new business ventures for the city-owned gas utility, given the City’s commitment to upholding the goals of the Paris Climate Agreement and to reaching 100% clean energy by 2050. The City has publicly stated that it can only reach its decarbonization targets by reducing the carbon emissions from thermal energy. As a fossil fuel supplying entity, PGW’s future is uncertain. Vicinity has repeatedly reached out to PGW in attempts to cooperatively forge a path forward towards a more sustainable energy future for Philadelphia. While Vicinity continues this outreach, PGW’s responses have failed to address the huge divide between the parties, refusing to provide any justification or substantiation of their proposed increases and accordingly these efforts have thus far been unsuccessful.

By contrast, Vicinity estimates that its CHP operations avoid over 300,000 tons of CO2 emissions annually, as compared to on-site gas boilers and electric consumption from the grid. Further, CHP technology is 20% more efficient as compared to even the most advanced combined-cycle gas turbine power plants. Vicinity’s offering is a low carbon, green option today, and Vicinity plans to continue to reduce its carbon footprint. The company has made a public commitment to further invest in Philadelphia’s green energy infrastructure and to reach net zero carbon emissions by 2050, in line with the City’s published plan. Vicinity announced earlier this year it will begin using net-zero carbon vegetable oil recovered from Philadelphia’s food service industry to eliminate its use of petroleum-based heating oil.

In 2019, Pennsylvania Governor Tom Wolf directed Pennsylvania to join the Regional Greenhouse Gas Initiative (RGGI) through an executive order. Eleven states currently participate in the program, which sets a cap on emissions from power generators and provides a market through which these generators can trade credits. Pennsylvania regulators recognized the importance of incentivizing combined heat and power plants like Vicinity’s Grays Ferry Facility and became the first state to change its treatment of CHP in the RGGI program to reflect its unique attributes, including increased efficiency and reduced carbon emissions. Vicinity’s complaint highlights the commitment of the Commonwealth to its CHP technology and requests that the PUC consider the implications of PGW’s price increase on the broad use of the technology for decarbonization. PGW’s tactics are clearly motivated to limit the output of this important resource and push Vicinity to use higher carbon intensity alternatives. Vicinity will take all necessary steps to protect its customers from this greedy, anti-competitive and environmentally unsustainable attack by PGW including pursuing alternative natural gas transportation means and electrification of its steam generation assets.

According to the PUC’s website, the complaint process will involve a legal proceeding through which Vicinity will be required to present facts and evidence to a PUC administrative law judge. PGW will have an opportunity to file an answer to the complaint. Vicinity expects a formal review of the complaint by the PUC to take six months or more.

About Vicinity Energy

Vicinity Energy is a clean energy company that owns and operates an extensive portfolio of district energy systems across the United States. Vicinity produces and distributes reliable, clean steam, hot water, and chilled water to over 250 million square feet of building space nationwide. Vicinity continuously invests in its infrastructure and the latest technologies to accelerate the decarbonization of commercial and institutional buildings in city centers. Vicinity is committed to achieving net zero carbon across its portfolio by 2050. To learn more, visit https://www.vicinityenergy.us or follow us on LinkedIn, Twitter, Instagram, or Facebook.

Media Contact
media@vicinityenergy.us

 

A clean energy future is in our grasp

Clean Energy Future Infographic

By taking action and implementing a host of innovative energy strategies and technologies, Vicinity is leading the way to building decarbonization.

District energy is key to addressing our energy and climate challenges

This short video published by the International District Energy Association showcases the important role district energy plays in a clean energy future, through job creation, cutting carbon emissions and enhancing resiliency.

Vicinity Energy Cuts Greenhouse Gas Emissions in Grand Rapids with Purchase of Carbon Offsets

GRAND RAPIDS, Mich., August 18, 2021 – Vicinity Energy, owner and operator of the nation’s largest portfolio of district energy systems, announces that it has purchased carbon offsets for its Grand Rapids district energy operations offsetting carbon emissions in the City by 95,400 metric tons over a three-year period.

Vicinity Energy supplies space heating and cooling, domestic hot and chilled water, humidification, and sterilization to over 100 facilities located in downtown Grand Rapids. Through its efficient district energy operations, Vicinity currently reduces greenhouse gas emissions in Grand Rapids by 11,000 tons of carbon emissions annually, the equivalent of removing 2,400 cars from the road. The purchase of carbon offsets will allow Vicinity to further support the sustainability efforts of the City of Grand Rapids and the Grand Rapids 2030 District Plan, offsetting carbon emissions by an additional 95,400 metric tons over a three-year period, without any additional cost to customers.

“The City of Grand Rapids and building owners in downtown Grand Rapids have received low-carbon energy from our district network for over a century, and this purchase of carbon offsets reinforces our commitment to the City and our entire Grand Rapids customer base in delivering thermal energy that is both reliable and sustainable,” said JJ Loew, Vicinity Energy general manager in Grand Rapids. “We’re proud to continue our greening efforts alongside the City and all our customers to reduce carbon emissions and increase climate resilience in our community, so that future generations may thrive here for years to come.”

“Sustainability is one of the City’s core values. Since 2008, the City has reduced our carbon emissions by 30%, which exceeds the 26-28% Paris Climate Accord target for 2025, and we remain committed to further reducing carbon emissions,” said Alison Waske Sutter, Grand Rapids’ sustainability and performance management officer. “Vicinity’s purchase of carbon offsets supports our mutual goals to continue measurable progress toward reducing carbon emissions for both our city government operations and community in order to achieve the 2030 District’s target of net zero carbon by 2050.”

This milestone in Grand Rapids marks another key step forward for Vicinity in its efforts to further green its district energy systems nationwide, including its recent purchase of carbon-free electricity in Baltimore and the integration of renewable biogenic fuel into its energy mix. Together, these actions bring Vicinity closer to its goal of net zero carbon emissions by 2050.

About Vicinity Energy

Vicinity Energy is a clean energy company that owns and operates an extensive portfolio of district energy systems across the United States. Vicinity produces and distributes reliable, clean steam, hot water, and chilled water to over 250 million square feet of building space nationwide. Vicinity continuously invests in its infrastructure and the latest technologies to accelerate the decarbonization of commercial and institutional buildings in city centers. Vicinity is committed to achieving net zero carbon across its portfolio by 2050. To learn more, visit https://www.vicinityenergy.us or follow us on LinkedIn, Twitter, Instagram, or Facebook.

Media Contact
media@vicinityenergy.us

 

Vicinity Energy Moves Closer Toward Net Zero Carbon Goal in Baltimore with Shift to 100% Carbon-Free Electricity

BALTIMORE, June 22, 2021 – Vicinity Energy, Vicinity Energy, owner of the nation’s largest portfolio of district energy systems, announces that all the electricity the company purchases for its Baltimore District operations is now carbon-free. Vicinity has entered into an agreement with Constellation, a leading competitive energy provider, to purchase Emission-Free Energy Certificates (EFECs) to match 100% of its annual Baltimore electricity use starting this year.

Vicinity Energy centrally produces and distributes steam, hot water and chilled water to over 30 million square feet of building space in Baltimore. Through a long-term supply agreement, over 50% of the steam delivered to customers is derived from zero-carbon non-fossil fuel-based renewables. This has already resulted in greenhouse gas emissions reductions in the region by 30,000 tons annually, or the equivalent of removing about 11,000 cars from Baltimore’s roads every year.

Now, the company has transitioned to purchasing 100% carbon-free electricity to run its heating and cooling operations in the city. This change is expected to eliminate approximately 6,500 metric tons of carbon emissions associated with the company’s electricity use annually, the equivalent of taking 1,415 cars off the road per year.

EFECs represent the emissions-free attributes of generating sources that do not directly emit greenhouse gases, such as sulfur dioxide, nitrogen oxide, or carbon dioxide. The EFECs purchased by Vicinity Energy are sourced from facilities located in the PJM Interconnection. The generation source does not emit carbon dioxide into the environment. EFECs are tracked and reported through PJM Environmental Information Services’ Generation Attribute Tracking System (GATS).

“Simply put, we can now purchase electricity generated without fossil fuels to run our Baltimore operations,” said Bill DiCroce, president and CEO of Vicinity Energy. “We have been able to source our electricity from emissions-free sources. As we enter Baltimore’s famously hot summers, this will have a significant beneficial impact on our cooling operations; slashing carbon emissions, improving air quality, and moving us tangibly toward our overall goal of reaching net zero carbon emissions across our entire business by 2050. We’re privileged to keep Baltimore residents cool in the summer and warm in the winter, and with this milestone, we can do it in an even cleaner, greener way.”

“Constellation is pleased to support the sustainability goals of our customers,” said Daniel J. Verbanac, senior vice president, retail, for Constellation. “Voluntarily matching electricity supply requirements with a carbon-free power generation source encourages the use of clean, emission-free fuels, and demonstrates a commitment to the environment.”

This announcement comes on the heels of several other recent moves by Vicinity Energy to green its district energy systems, including the incorporation of renewable biogenic heating oil, as it continues on its path to net zero carbon emissions.

About Vicinity Energy

Vicinity Energy is a clean energy company that owns and operates an extensive portfolio of district energy systems across the United States. Vicinity produces and distributes reliable, clean steam, hot water, and chilled water to over 230 million square feet of building space nationwide. Vicinity continuously invests in its infrastructure and the latest technologies to accelerate the decarbonization of commercial and institutional buildings in city centers. Vicinity is committed to achieving net zero carbon across its portfolio by 2050. To learn more, visit https://www.vicinityenergy.us or follow us on LinkedIn, Twitter, Instagram, or Facebook.

Media Contact
media@vicinityenergy.us

 

 

Green Ribbon Commission Climate Action Exchange

Decarbonizing Boston’s district energy systems

On May 6, 2021, the Green Ribbon Commission hosted a virtual event to explore potential decarbonization pathways for Boston’s district energy systems, key challenges and opportunities, and how the State, City and large customers can be partners in supporting those pathways.

As owner and operator of one of the largest of these district energy systems in Boston, Vicinity is actively working to achieve 2050 carbon neutrality alongside the City. In this video clip, panelist Bill DiCroce, President and CEO of Vicinity Energy discusses Vicinity’s roadmap to decarbonization and how the company is partnering with the City to achieve a net zero carbon future.

Vicinity Energy Implements Renewable Biogenic Heating Oil, Transforming Food Waste into Energy and Creating Jobs

PHILADELPHIA, April 13, 2021 – Vicinity Energy, owner of the nation’s largest portfolio of district energy systems, announces it has signed a long-term fuel supply agreement with Lifecycle Renewables, a Boston-based firm that produces LR100™, a unique biogenic fuel derived from waste vegetable oil and fats discarded by the food service industry. The partnership will provide Vicinity with expanded access to this clean, renewable fuel to replace conventional fossil fuel oil in its district energy facilities, a milestone in the company’s roadmap to reach net zero carbon by 2050. The partnership also enables the immediate expansion of Lifecycle’s operations in Philadelphia, creating local jobs and supporting economic growth.

Vicinity Energy centrally produces and distributes steam, hot water and chilled water to over 230 million square feet (nearly eight square miles) of building space nationwide. Now, in partnership with Lifecycle Renewables, Vicinity will begin to integrate LR100™ across each of its facilities over time. Permits have already been acquired and the biogenic fuel tested in Philadelphia, with implementation in Boston on the immediate horizon and other districts to follow. A truly circular solution, the wastes discarded by the local food service industry will now be used to heat and cool businesses and institutions in the same city.

The benefits of transitioning to LR100™ include:

  • Significantly reducing Vicinity’s distillate fuel use, cutting carbon emissions by 12,200 tons, or the equivalent of removing 2,650 cars from Philadelphia’s roads each year
  • Recycling 600,000 gallons of food service industry waste oil (the average person consumes approximately 1.5 gallons of oil a year) into energy, that would otherwise be discarded in landfills or city sewers
  • Expanding Lifecycle Renewables’ operations in Philadelphia, resulting in job creation, recycling programs and cost savings for local restaurants, and sustainability benefits for the community
  • Reducing greenhouse gas emissions by over 80% versus distillate fuel, improving local air quality through reductions in nitrogen oxides, sulfur oxides and particulate emissions compared to traditional heavy fuel oils

“Vicinity is excited to partner with Lifecycle Renewables to accelerate our shared mission to reduce the carbon footprint of the communities we serve and deliver sustainable, local and circular energy solutions to our customers in support of nationwide carbon reduction goals,” said Bill DiCroce, president and CEO of Vicinity Energy. “Lifecycle Renewables has a proven record of delivering renewable heating oil that aligns with our Clean Energy Future roadmap, and we’re proud to move forward with this biogenic fuel supply agreement to support a cleaner, healthier environment.”

“We chose to partner with Vicinity because they are the most forward-thinking district energy company in the nation,” said Rory Gaunt, president and CEO of Lifecycle Renewables. “Their ambitious march towards net zero carbon emissions provides Lifecycle Renewables an opportunity to have a positive environmental impact on hundreds of millions of square feet of building space where our fellow Americans live, work, and play. We look forward to growing our partnership in response to Vicinity’s increased demand for our renewable fuel. Our team is energized by the opportunity to supply renewable heating oil to Vicinity, as they continue on the path to net zero carbon emissions by 2050.”

About Lifecycle Renewables
Lifecycle Renewables is an integrated food waste recycling and renewable fuels company. Using recycled waste oils and fats from the food service industry, Lifecycle Renewables produces LR100™, a renewable heating oil. LR100™ is a drop-in fuel for oil-capable facilities that competitively replaces fossil fuels. Environmental authorities consider LR100™ to be carbon-neutral, and users of the fuel realize significant emissions reductions. With focus on providing the highest quality service to our restaurant and food-production partners, Lifecycle Renewables seeks to create closed-loop waste-to-energy solutions for cities across America. Lifecycle Renewables is now serving restaurants in New England, Philadelphia and the Delaware Valley. Learn more at: lifecyclerenewables.com

About Vicinity Energy

Vicinity Energy is a clean energy company that owns and operates an extensive portfolio of district energy systems across the United States. Vicinity produces and distributes reliable, clean steam, hot water, and chilled water to over 230 million square feet of building space nationwide. Vicinity continuously invests in its infrastructure and the latest technologies to accelerate the decarbonization of commercial and institutional buildings in city centers. Vicinity is committed to achieving net zero carbon across its portfolio by 2050. To learn more, visit https://www.vicinityenergy.us or follow us on LinkedIn, Twitter, Instagram, or Facebook.

Media Contact
media@vicinityenergy.us

 

Vicinity Energy Provides Green Steam to Walters Art Museum Under New 20-Year Contract, Delivering Heat and Precise Humidification to Historic Buildings and Artifacts

BALTIMORE, March 3, 2021Vicinity Energy, owner of the nation’s largest portfolio of district energy systems, announces a 20-year steam contract with Walters Art Museum to provide heating and humidification to the landmark Baltimore facility, which encompasses 70,000 square feet of space. With 50 percent of its steam generated from renewables, the district energy system will deliver high-pressure sustainable steam for the museum, replacing the facility’s current boiler setup.

Walters Art Museum will receive approximately 12,000 pounds of steam per hour (pph), replacing its traditional boiler system and transitioning its two existing functional boilers to provide back-up energy as needed. Vicinity is funding the connection to the district system, resulting in zero up-front capital costs to the museum, enabling Walters to reallocate capital funds to support exhibits and other core offerings. Completion of the project is anticipated by April 2021.

“In order to preserve the historic artifacts housed in the Walters Art Museum, our buildings must meet precise humidification requirements. The reliability of district energy, in addition to its ability to meet the specifications of the museum’s exhibitions while also reducing our carbon footprint, makes Vicinity an excellent solution for Walters’s energy needs,” said Julia Marciari-Alexander, who serves as the Andrea B. and John H. Laporte Director.

In addition to providing the museum with steam, Vicinity Energy has committed to a long-term 20-year sponsorship of the Walters – underscoring Vicinity’s commitment to the city of Baltimore, its cultural artifacts, history and communities. Currently, Vicinity provides low-carbon district energy to 30 million square feet of buildings in Baltimore, reducing the region’s annual greenhouse gas emissions by 30,000 tons. As Vicinity advances its net zero carbon plan across all its operations, customers will continue to receive greener energy solutions as a result.

“Through renewable energy use and ongoing greening efforts, Vicinity’s district energy system provides immense opportunity to deliver greener, more reliable energy alternatives to Baltimore facilities, while dramatically reducing their carbon footprint,” said Bill DiCroce, president and CEO of Vicinity Energy. “We’re proud to be the long-term energy partner of such an important Baltimore institution as the Walters Art Museum and deliver reliable heating and the humidification required to preserve the city’s precious cultural artifacts.”

About Vicinity Energy

Vicinity Energy is a clean energy company that owns and operates an extensive portfolio of district energy systems across the United States. Vicinity produces and distributes reliable, clean steam, hot water, and chilled water to over 230 million square feet of building space nationwide. Vicinity continuously invests in its infrastructure and the latest technologies to accelerate the decarbonization of commercial and institutional buildings in city centers. Vicinity is committed to achieving net zero carbon across its portfolio by 2050. To learn more, visit https://www.vicinityenergy.us or follow us on LinkedIn, Twitter, Instagram, or Facebook.

Media Contact
media@vicinityenergy.us

A high energy conversation with Bill DiCroce

Dynamic districts, January 2021

by Energy Cast | Episode 105

 

In this episode of Energy Cast, host Jay Dauenhauer sits down with CEO, president and chairman Bill DiCroce from Vicinity Energy. Bill shares his thoughts on district energy networks, underscoring Vicinity’s pledge to reach net zero carbon emissions by 2050, and how the company and district energy is uniquely positioned to rapidly expand and deploy renewable strategies and energy sources to local cities and communities.

About Energy Cast

Energy cast is a podcast about the energy sector, with particular focus on business, policy and economic issues. Hosted by Jay Dauenhauer, each episode examines a facet of the energy sector – coal, oil/gas, nuclear, biofuels, battery, geothermal, hydro, wind, solar, and fusion – and the opportunities and challenges of bringing these technologies to the energy mix. As host of the Energy Cast Podcast for the past four years, Jay Dauenhauer, CSM, PMP, has an extensive energy background, including previously serving as a media analyst for TXU Energy and Executive Director of the Clean Coal Technology Foundation of Texas, working with stakeholders to pass clean energy legislation for the state.

Vicinity Energy celebrates Earth Day in Philadelphia

In celebration of Earth Day, Vicinity’s Philadelphia team joined with ACV Enviro for the Schuylkill River Bank clean up. The team spent the day removing a cubic yard of aerosol cans for safe disposal and filled an entire dumpster with trash! The Schuylkill River is used for recreation and is a source of drinking water in Philadelphia, in addition to being an important habitat for wildlife. As a local environmental company in Philadelphia, Vicinity organized this clean-up event because we feel strongly that it is our collective responsibility to keep our cities green.