DETROIT, Nov. 16, 2010 /PRNewswire/ -- A coalition of public and private enterprises, led by Detroit Renewable Energy LLC, the new parent company of Detroit Thermal, LLC; along with the City of Detroit, the Greater Detroit Resource Recovery Authority, the International Union of Operating Engineers Local 324, Utility Workers Union of America, AFL, CIO Local 223, and DTE Energy, has attracted a $50 million investment to Detroit in a deal that assures a long-term, cost-effective and eco-friendly supply of renewable energy from waste derived fuel to support the essential energy needs of Detroit's core business districts.
Detroit Renewable Energy LLC (DRE) was funded by Greenwich, Connecticut-based Atlas Holdings LLC with participation by Youngstown, Ohio-based Thermal Ventures II, LP. DRE is a new Detroit-based holding company for several companies that will operate as independent subsidiaries of DRE. The announcement was made by Victor Koppang, President, Detroit Thermal LLC. "Atlas shares our belief in a strong future in Detroit's downtown core business districts with this new investment," said Koppang.
Detroit Renewable Energy LLC acquired the Detroit energy-from-waste plant (EFW plant) that produces steam and electricity from municipal waste; and also purchased Detroit Thermal, LLC, which owns and operates the district energy underground steam system along the Woodward Corridor from the riverfront to New Center-Midtown. DRE also acquired Hamtramck Energy Services, LLC, which operates the private industrial steam plants at five General Motors facilities.
Each of the businesses will operate as independent subsidiaries under the umbrella of newly formed DRE and will be headquartered in Detroit, Mich. The Greater Detroit Resource Recovery Authority (GDRRA) will continue to supply the EFW plant with the municipal waste it turns into energy.
The EFW plant will operate under the name of Detroit Renewable Power LLC as an independent subsidiary of DRE.
A request is being made to the Detroit City Council for the development of an Industrial Development Plant District. DTE Energy will continue to purchase all of the electricity generated by Detroit Renewable Power from the EFW plant. The International Union of Operating Engineers Local 324 ratified a new three-year collective bargaining agreement with Detroit Renewable Power.
"This new investment of $50 million, on top of the $35 million we already invested since buying the district energy system in 2003, assures a long-term, cost-effective and environmentally-friendly supply of renewable energy from municipal waste that would otherwise be trucked to landfills," Koppang said.
"Detroit Thermal's customers can count on uninterrupted steam energy services and at the same time help improve the environment by lowering emissions and reducing their carbon footprint," Koppang said. "We have a 21st century system and nearly $120 million in new customer commitments, and the interest in our service keeps growing. The future looks great to us."
DRE purchased the EFW plant from Energy Investors Fund, LLC of Needham, Mass., and Covanta Energy Corp., of Fairfield, NJ. The EFW plant will operate as a separate company and sell steam - its primary product - to Detroit Thermal, LLC and electricity to DTE Energy.
The new investment also means that about 130 skilled EFW plant employees will get their jobs back with the restart of the facility. The plant was temporarily closed and the employees were laid off earlier this month when its prior contracts expired during the due diligence period that led to the present purchase.
Timelines and specifics of the EFW plant future operations, as well as other details of the new Detroit Renewable Energy LLC were not announced pending finalization of those details.
SOURCE Detroit Thermal, LLC