Monday, March 05, 2007

Energy and Price Stability

The Public Service Commission is holding hearings this week on the Delmarva Power RFP:
7 p.m. March 6, House Chambers, Legislative Hall, Dover
7 p.m. March 7, Delaware Technical & Community College, Owens Campus theater, Georgetown
7 p.m. March 8, Carvel State Office Building auditorium, 820 French St., Wilmington
I've written about the redactions of the proposals that make it difficult to evaluate the options. We don't have all the data, but the PSC's consultants do. Here's what their report (available here) has to say on the proposals:
The most significant non-conformity (of two mentioned) in Bluewater's proposal is its generating capacity, which is lower than specified.
The most significant non-conformities (of five) in Conectiv's proposal are its proposed natural gas-based one-time pricing adjustment which "raises concerns about the energy pricing," and its seeking recovery of possible future carbon taxes.
The most significant non-conformities (of four) in NRG's proposal are its proposed exception from provisions that it "absorb any additional environmental compliance costs caused by a change in law," and its "proposed pricing for [carbon] sequestration is essentially a cost pass-through proposal that is inconsistent with the RFP requirements."
The consultants' evaluation of the economics of the proposals are summarized below:
Note the scores for price stability:
Bluewater 20.0
NRG 0.0
Conectiv 0.7
It's hard to offer an informed analysis of each category, particularly given the redaction of the proposals, but one result seems inescapable: The NRG and Conectiv proposals offer no meaningful price stability to ratepayers. In particular, NRG and Conectiv seek to place the entire economic burden of compliance with future controls on carbon emission squarely on the shoulders of consumers.


Anonymous Anonymous said...

I must admit that the Bluewater rankings here are quite good. If you forget about the path of least resistance (Conectiv) Bluewater really does match up competitively with the NRG bid. Like you say, it is hard to make a truly informed decision given the redactions, but from a price and price stability standpoint Bluewater is solid.

As always, thanks for the insight.

10:00 PM, March 06, 2007  

Post a Comment

<< Home