Verizon heeds call of fuel cells

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Fuel cell technology doesn't come cheap. Verizon spent about $13 million to build its facility, and it spent about $300,000 in the first year to operate and maintain its seven fuel cells. The company has benefited from federal and state tax breaks that have helped offset the initial cost of deploying the fuel cells. But the real economic benefit has come from better-than-expected cost savings.

When the project was launched last year, Verizon predicted it would save $250,000 per year in energy costs. The real savings exceeded those expectations, and came to about $680,000.

While $680,000 may be small potatoes for a company that spends $600 million a year to buy electricity from commercial power sources throughout the country, Verizon's Metz believes it provides another incentive to invest in developing the technology.

The biggest benefit fuel cells bring to a company such as Verizon is the control they give the company over its power supply. As the power industry has transitioned toward deregulation, it has become somewhat unstable in certain regions of the country.

Metz said this instability was the main reason Verizon wanted to explore developing its own energy sources.

"We saw what was happening in 2000 and 2001 with California's energy crisis," he said, "and we knew it was only a matter of time before we'd start seeing power grid issues in the Northeast."

Sure enough, Metz and his team were right. In August of 2003, North America experienced its largest blackout in history when much of the Northeastern United States and parts of Canada went dark.

"When the blackout happened in 2003, we knew we were on the right track," he said.

For now, Verizon is still evaluating the economics of its fuel cell project in Garden City. So far, the company has no immediate plans to convert other facilities to fuel cells.