"The licensing agreement offers a number of value drivers for us beyond the $26 million initial license fee," continued Mr. Bottone. "The royalty has been enhanced compared to the prior structure, both in terms of cash impact and tenure; increased production, whether in the USA or South Korea, will help us leverage our integrated global supply chain to further reduce product costs; a second manufacturing source is valued by some project investors; the agreements will result in additional revenue streams such as balance of plant sales and consulting revenue for design and equipment procurement for the POSCO Energy production facility; and as we work to further leverage our collective strengths, we expect to further enhance the value proposition for customers and our business."
As a result of entering into this license agreement, commencing with the first quarter 2013 financial results, license and royalty income will be classified under Revenues on the Consolidated Statements of Operations reflecting the Asian business model for the Company's core technology and growing license and royalty stream.
The Company announced the sale of a 14.9 MW fuel cell park in Bridgeport, Connecticut with the power plants sold to Dominion, one of the largest utilities in the USA with operations in 15 States. Five 2.8 MW DFC3000® power plants will supply 14.0 megawatts of ultra-clean electricity and heat from the fuel cells will be converted into an additional 0.9 MW of virtually emission free electricity through use of an organic rankine cycle configuration. Connecticut Light & Power will purchase the electricity from Dominion under a 15 year energy purchase agreement. The inter-connection work to connect the fuel cell park to the electric grid is currently in process and being performed by United Illuminating. Fuel cell parks assist utilities in adding environmentally friendly and economical baseload power generation throughout their service area, reducing congestion of their existing transmission and distribution grid.