Monday, July 23, 2007

The Energy Negotiations Continue

The initial sixty days is up, but the negotiations to bring wind power to Delaware continue. I don't know much, but I have learned that the parties are not folding their tents, even though the period of sixty days, set by the Public Service Commission (PSC), has passed.
One knowledgeable correspondent, mindful of the need for confidentiality, described the negotiations as a Rubik's Cube. Among the issues that need to be worked out among DPL, Bluewater Wind and either NRG or Conectiv are financial risk, project capacity, and price.
NRG and Conectiv are competing for the job of building a natural gas plant to provide a backup for wind power. What kind of compensation will they seek for building a plant that will operate on standby?
Bluewater Wind already has a long term agreement with the Delaware Municipal Energy Corporation (DEMEC). How will this agreement affect Bluewater Wind's ability to cover its capital and operating costs?
And Delmarva Power never wanted to be in the power generation business in the first place. How would long term contracts to buy wind and natural gas affect its role in Pepco Holdings' corporate strategy?
Understanding how all the moving parts fit together and running the numbers on all the variables is an enormous job. And because these questions involve the public interest and not just a set of competing corporate interests, it's important that we understand how the talks are proceeding.

On this score, the PSC tomorrow considers a motion that Jeremy Firestone has proposed to require more detailed reports on the negotiations:
10. IN THE MATTER OF INTEGRATED RESOURCE PLANNING FOR THE PROVISION OF STANDARD OFFER SUPPLY SERVICE BY DELMARVA POWER & LIGHT COMPANY UNDER 26 DEL. C. §1007(c)&(d): REVIEW AND APPROVAL OF THE REQUEST FOR PROPOSALS FOR THE CONSTRUCTION OF NEW GENERATION RESOURCES UNDER 26 DEL. C. § 1007(d) (OPENED JULY 25, 2006) – PSC DOCKET NO. 06-241
Commission to consider Jeremy Firestone's Motion Seeking Clarification of Delmarva Power & Light Company's Reporting Requirements Under Order No. 7199.
The PSC is scheduled to hear a report on the negotiations
from mediator Lawrence Hamermesh on Agust 7. Stay tuned.

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