ANSONIA – Taxpayers are on the hook for a $63.6 million fuel cell project even though the deal imploded in front of a state regulatory commission a few days before Election Day.
On Oct. 30, the Connecticut Siting Council rejected an application from Johnson Controls to build a fuel cell on city property at the former SHW site on 35 N. Main St.
The problem – the council had already approved an application for a fuel cell at the location from another company, HyAxiom out of South Windsor.
Now officials say there is a hole in the current Ansonia budget because former Mayor David Cassetti’s administration booked $1.5 million in revenue from the Johnson Controls fuel cell, but it’s not close to being built, let alone operational.
Compounding the problem – the city signed a deal which requires it to pay $63,602,062.89 in principal and interest payments in twice-yearly installments to Johnson Controls until 2045, according to a payment schedule shared by the city.
The payments were supposed to be covered by revenue from the fuel cell, with any extra going to the city.
When Mayor Frank Tyszka stepped into office on Dec. 1, he said he was faced with a “surprise” bill for $695,551.51. It was a payment due on the fuel cell, which was supposed to be up and running in 2025.
That bill was paid using money from the city’s fund balance (reserves).
The Valley Indy spent a week reviewing public records and interviewing officials past and present to explain how the City of Ansonia got into this situation.
Officials from HyAxiom and Johnson Controls did not return calls for comment. Cassetti did not return a call for comment.
Ansonia Saw Promise In Fuel Cells
Ansonia’s history of trying to get fuel cells installed at the city-owned 35 N. Main St. goes back to at least 2022, based on public records.
Fuel cells generate electricity by combining oxygen and hydrogen. Click here for an explainer.
Municipalities like fuel cells because, depending on the deal, they can generate money through property tax assessments or revenue share agreements, or they can save towns money on utility bills.
Example — Derby leases public land to a 2.8-megawatt fuel cell on Coon Hollow Road for $50,000 annually.
First, There Was HyAxiom
In early 2022, Ansonia was in talks with HyAxiom, a fuel cell manufacturer based in South Windsor. HyAxiom sought to lease the land, where it would spend about $17.5 million to install and operate a 4.14-megawatt fuel cell facility.
At that time, city officials were on-board with HyAxiom’s plans, eager to put a former industrial site back to productive use. Mayor Cassetti wrote a letter of support.
“I fully support this project and intend to recommend Board of Aldermen approval,” Cassetti wrote in a letter to the state Department of Energy and Environmental Protection (DEEP) on March 3, 2022.
Five days later, the Board of Aldermen authorized the mayor to sign a lease with the HyAxiom.
City officials at the time said the deal would allow the property to once again generate income at a property which had sat dilapidated for years.
“A vacant property on the northern end of downtown could soon be providing revenue – and electricity – for the city,” The Connecticut Post reported.
However, Cassetti never signed the lease.
HyAxiom wasn’t offering enough money, according to Sheila O’Malley, who was Ansonia’s economic development director at the time.
“It wasn’t enough money for the lease. And what I recall is that there wasn’t an upfront payment that was going to be satisfactory. We didn’t like the terms they were proposing,” O’Malley said in an interview March 4.
City officials continued to negotiate with HyAxiom for about two years. In September 2023, O’Malley told the Board of Aldermen that the city was still in talks with the company.
Meanwhile, HyAxiom pursued state approvals for the project.
In October 2023, the company applied for a “declaratory ruling” from the Connecticut Siting Council, the state regulatory body which oversees approvals for power plant installations.
Both HyAxiom and the siting council sent notice of the application to city officials, inviting them to comment or raise objections. The Cassetti administration did not offer comment.
The siting council approved HyAxiom’s application in Ansonia on Feb. 15, 2024.
Exit HyAxiom, Enter Johnson Controls
However, there was still no signed lease agreement between HyAxiom and Ansonia.
Five days after the siting council gave HyAxiom a green light, the Cassetti administration put out a new request for proposals for the redevelopment of 35 N. Main St.
Then, on March 12, 2024, the Ansonia Board of Aldermen voted unanimously to reject a revised lease agreement with HyAxiom.
A month later, Johnson Controls representative Aaron Alibrio made a presentation to the Board of Aldermen outlining his company’s proposal for fuel cells on public property.
His company was one of three that responded to the city’s request for redevelopment ideas for the vacant industrial site.
Unlike HyAxiom’s project, Johnson Controls would give control over its fuel cells to the city – meaning the city would receive the revenue the project generates, and it would be able to apply for tax credits, including an $11 million tax credit from the federal government.
In return, the city would pay $37 million to the company to install the fuel cells.
The company’s estimates to the Aldermen did not include interest payments, which have brought the projected cost for the city to more than $63.6 million, according to the payment schedule shared March 4 by the city.
Alibrio estimated at the time that, even after the city makes its payments to the company, Ansonia would rake in between $500,000 and $1.5 million in revenue each year.
City officials liked what they heard.
In October 2024, the Aldermen voted unanimously to approve a lease-purchase agreement with Johnson Controls.
2025: Ansonia v. HyAxiom v. Johnson Controls
Although Johnson Controls had the city’s blessing – and a signed contract – it still needed approval from the state siting council.
Johnson Controls submitted an application to the council in May 2025.
However, HyAxiom intervened, submitting paperwork pointing out the company had already received approvals.
HyAxiom argued that it still held valid state approvals from the siting council and state environmental officials. The company said it still wanted to go ahead with its own project, and that approvals relating to the site were contingent on using fuel cells specifically manufactured by HyAxiom.
HyAxiom “will do everything in its power to develop the project approved by the Council,” the company wrote in a filing dated June 25.
The Cassetti administration backed Johnson Controls, saying it had no intention to give HyAxiom access to its property. The city said in a filing that it had made a clear decision to proceed with Johnson Controls’ plan, and the council should allow the new project to go forward.
But members of the siting council said they had no basis to overturn their previous approval of HyAxiom’s application.
In a meeting Oct. 30, council member Bill Syme said it’s not the siting council’s job to resolve arguments between municipalities and private companies.
“We’re not here to solve a root dispute between a town and HyAxiom,” Syme said.
City Budgeted Money That Didn’t Come
If everything had gone according to the Cassetti administration’s plan, Johnson Controls would have had the fuel cells up and running by the end of 2025.
City finance officials had budgeted for exactly that outcome.
The budget adopted by the city in June 2025 includes $1,264,235 in “fuel cell revenue projection.”
That’s money the city expected would come from the Johnson Controls fuel cell project between July 1, 2025, and June 30, 2026.
In addition, the city had budgeted another $5,250,000 in “use of future revenue,” which is money the city predicts will come from projects that haven’t gotten off the ground yet.
Part of that money was also supposed to come from the fuel cell project, according to past statements from finance officials.
Thomas Hamilton, a budget consultant hired by the Tyszka administration, talked about the stalled fuel cell project’s financial impact on the city during an Aldermen meeting Feb. 17.
Hamilton said the city is likely to run a $2 million shortfall this year, primarily due to the city booking revenue from the project.
The Tyszka administration hired Hamilton to analyze previous Ansonia city budgets. He’s working on a report that is supposed to be shared with the public.
Hamilton called the fuel cell situation a “major issue” affecting next year’s budget “that came as a really big surprise to me.”
The city will plug the fuel cell budget hole with money from the city’s fund balance, as well as from an account leftover after the city sold its sewer system in 2024.
Together, those accounts have about $15 million in them, according to Hamilton.
The consultant also pointed to another potential money crisis on the horizon. The project assumed Ansonia would get $11 million in tax credits from the federal government. Many of those credits are being phased out under the federal budget signed by President Donald Trump in July.
However, officials both past and present have said the deal still holds promise for Ansonia’s financial future. Every official The Valley Indy spoke with said the deal is worth saving.
“With respect to the fuel cell, the recommendation is to seek a negotiated solution with the vendors to put the project back on track,” Hamilton said at the Feb. 17 Aldermen meeting.
John Marini, Ansonia’s former corporation counsel under Cassetti, said the development would be good for the city.
“We wish them the best of luck in terms of proceeding. It’s a challenge that we would have needed to work out, and we wish them the best in working it out, because at the end of the day we need a development that’s right for the city,” Marini said.
Caroline Baird, a member of Tyszka’s newly appointed corporation counsel firm Androski Law, said her team is working to find the best path forward.
“It could be a very exciting project, very, very good for the city. But we’re really just kind of trying to review what the prior administration has done with it in discussions and trying to move it forward,” Baird said.
Tyszka’s office said the city is still reviewing the deal and trying to chart a course forward. Both Tyszka and Baird declined to provide a timeline for when the matter could be resolved.
“We are still discussing this with both parties and have no updates to share at this time,” according to an email from city chief of staff Nancy Spagnolo attributed to Tyszka.
Under the payment schedule with Johnson Controls, Ansonia is required to make a payment of $859,906.25 on June 1 this year. Its next payment, on Dec. 1, will be due for $2,179,906.25.