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Concord Steam plant construction delayed

Concord Steam has not started construction on its new wood-burning plant in the South End, and officials say the delay will likely require the city to revise its contract with the company.

Under contracts approved last year, the city and state governments will purchase power and steam from Concord Steam’s new plant for at least 10 years beginning Jan. 1, 2014.

That date is “not a likely goal that they would be able to meet,” said Deputy City Manager for Development Carlos Baia. He is now waiting for Concord Steam to provide a construction schedule, he said. Company officials told him they are waiting on key deliveries and will have a construction schedule in place by the end of January 2013.

Concord Steam purchased land at the corner of South Main Street and Langdon Avenue in 2007 for a $70 million plant to replace its facility on the New Hampshire Hospital campus.

After years of delay while securing contracts and financing, the company said last month that financing is in place. Concord Steam is now working to make important pieces of equipment, said treasurer and office manager Pansy Bloomfield. Many pieces of equipment cost “hundreds of thousands of dollars,” she said and require a lengthy engineering and design process.

“The schedule unfortunately has slipped a little, but it still is our intent to continue to work on our scheduled goal of making things happen,” Bloomfield said.

Baia said he anticipates that the city will have to revise its contract, but he will wait for more information from Concord Steam before asking the Concord City Council to take action.

Ward 5 City Councilor Rob Werner said he supports the project but worries about the delays.

“It is concerning because of the timeline required to construct such a new facility,” he said. “Even when it was indicated that the financing was straightened out, there was enough of a history of delay that I don’t think that there was complete confidence that things would proceed smoothly in terms of timing.”

Werner, who is chairman of the city’s Energy and Environment Committee, said he would like to see the project move as quickly as possible.

“A healthy and viable Concord Steam is in the best interest of the city,” he said.

Dan St. Hilaire, an at-large city councilor and executive councilor, played a role in approving both the city and state contracts with Concord Steam.

“The more the clock ticks, the more worried we do get,” he said. “But they still have over a year to make sure things are in place.”

If the company can’t meet its deadline, St. Hilaire said there are ways to negotiate and “mitigate the damage” without losing the contract entirely.

“I hope we try to work with them so long as they’re making strides to meet the deadlines as timely as possible,” St. Hilaire said.

State officials have not been in contact with Concord Steam about construction but have spoken with Concord officials, said state Energy Manager Karen Rantamaki. She said a provision in the state contract allows for re-negotiations if the city’s contract falls through.

Concord Mayor Jim Bouley said the new plant is also key to the city’s $7.85 million Main Street redesign project. The city plans to use Concord Steam to heat the sidewalks and is considering heating the road as well.

“Until we hear from them, I’m going to withhold judgment,” Bouley said yesterday. “And clearly their success is important to the community. As we go forth with the streetscape designs, one of the key components I think that has received almost unanimous support . . . is the idea of heating sidewalks and potentially heating the street.”

Meanwhile, Concord Steam’s rates will increase by about 15 percent beginning with this month’s billing cycle, according to the state’s Public Utilities Commission. Concord Steam President Peter Bloomfield has said the rate increase is a result of rising costs for the company and will only be in place until the new plant opens.

“That’s the reason why we’re doing this project, is to make sure that everyone has a relatively smooth transition either to lower cost steam or to something else,” Pansy Bloomfield said yesterday.

The company had said the new plant would lower rates by about 40 percent, but Baia said in a September report that the rates would likely only decrease by about 20 percent.

(Laura McCrystal can be reached at 369-3312 or lmccrystal@cmonitor.com or on Twitter @lmccrystal.)

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