October 8, 2007
To: Senator Harris McDowell
Representative Deborah Hudson
Members of the Delaware General Assembly
Citizens for Clean Power responds to the six claims in Sen. McDowell’s 10/2/07 letter to the General Assembly (co-signed by Rep. Hudson). Citizens for Clean Power is a nonprofit group based in Lewes, Delaware.
 “On average, the Dutch electricity consumer pays about 30 cents per kWh (Kilowatt hour) – twice as much as Delaware consumers – in order to justify expensive options like off-shore wind.”
In Europe, price to the consumer is a function of the cost of electricity generation, local market conditions, environmental taxes, and value-added taxes (VAT). The Dutch pay extra for environmental taxes and VAT. Americans do not. On the other hand, the base cost of electricity for the offshore wind-loving Danes and for the Dutch is very similar to Delaware’s average cost for power.
Base Price of Energy, 14.14 cents/kWh
Consumer Cost, 33.93 cents/kWh
Base Price of Energy, 16.97 cents/kWh
Consumer Cost, 29.69 cents/kWh
Delaware (w/o offshore wind)
Base Price of Energy, 11.3 cents/kWh*
Consumer Cost, 13.73 cents/kWh
[Link] and [Link]
 ”The Dutch have built many onshore wind farms. They have started only one offshore wind power plant and it is experimental. They reported their onshore wind farms are much less expensive than the experimental offshore power plant.”
Offshore wind plants are far from experimental. Denmark has been operating offshore wind farms since 1990. The HornsRev wind farm is located in the North Sea - hardly a placid environment: [Link]
Offshore wind has been so successful in Denmark that their public officials want to install more, not less. Check it out at [Link].
Delaware lacks adequate resources on land for large-scale utility generation. This fact was established six months ago.
Bluewater Wind’s project is fully insured. Does Sen. McDowell think that the company (and its new backer, Babcock & Brown) would put turbines in the ocean without assuring their reliability?
In our opinion, people should not speculate about the cost of Delaware’s offshore wind project until the PSC staff completes its analysis (on or about October 29, 2007). Citizens for Clean Power respects the expertise of the PSC staff and the Independent Consultant. We think public officials should do the same.
 “Before deciding to build the experimental offshore power plant, the Dutch completed a detailed off-shore wind study with actual data on wind speeds for every hour of the year.”
Scientists at the University of Delaware have already done extensive studies of wind speeds over the Atlantic Ocean. The Department of Energy and the University of Delaware published details about the significant wind energy potential off coastal Delaware. The U.Del. study was done over a year ago. It was posted at: [Link] and [Link]
More wind studies will be undertaken as part of the permitting process. According to the term sheets, if Bluewater Wind fails to obtain necessary permits and approvals by the deadlines specified in the contract, they have to pay Delmarva Power about $6,000,000 in liquidated damages! Would it be rational for Bluewater’s investors to risk losing millions of their own dollars on a mere “experiment?”
 “When the decision was made to build the experimental project, the Dutch chose a size that is one-third the size of the power plant proposed for construction in federal waters off the Delaware coast.”
There are economies of scale in wind farm construction. The larger the wind farm, the lower the cost to the ratepayer. The Dutch have a tiny wind farm. We will not; unless, that is, Sen. McDowell and DP&L manage to cut back the size of the wind farm even further than the 150-turbines now proposed by Bluewater Wind. During negotiations, DP&L insisted on cutting back the size of the wind farm from 200 turbines to 150.
That maneuver cost DP&L customers an additional cent per kilowatt-hour on their bill. Is Sen. McDowell interested in even fewer turbines, which would raise the rates more? Delmarva Power is not interested in renewable energy; every kilowatt from renewable energy is one less kilowatt produced by their sister company Conectiv.
 ”The [Dutch] government agreed to provide large subsidies so that the electricity price would increase but not too fast.”
There is not one fact relevant to Delaware’s offshore wind farm in this statement. If the Dutch are unable to build a large wind farm and reap the benefits of 25-year level pricing, that is their misfortune.
We have tried to be respectful of all members of the Legislature. Frankly, however, we are disgusted that Delmarva Power supporters promote the myth that Delaware taxpayers, or DP&L ratepayers, will pay upfront to subsidize construction of the offshore wind farm. The Delaware offshore wind project will be financed upfront by investors and outside loans, not by government or the public. This important point was disclosed in Bluewater’s bid. Sen. McDowell, do you think it is ethical to imply otherwise? Do your colleagues think it is ethical?
Senator, since you have placed yourself in the position of spokesperson for Delmarva Power’s position, we charge you with the responsibility to speak from the truth. You have failed this important civic charge. The taxpayers and ratepayers will not pay a penny for the wind farm until and unless it churns power for DP&L customers. This commitment was in Bluewater Wind’s bid. It has been in the public record over six months.
 “A representative from Vestas Wind Systems (a leading producer of wind turbines) recommends that offshore wind turbines should not be in service for more than 20 years.”
Vestas sells turbines. Twenty years is the estimated design life. With proper maintenance and upgrades, useful life of Vestas turbines can be extended another five years, or more. Bluewater Wind includes maintenance and equipment upgrades in its plan throughout the service life of the turbines. This information was also contained in the original bid. Bluewater Wind has the expertise and the financial resources to meet their contractual obligations. It is not necessary for the Legislature to micromanage the contract.
To the Honorable Members of the General Assembly:
We don’t need more studies to repeat what has already been learned about renewable energy sources for Delaware. Hundreds of thousands of taxpayer dollars have been paid to the Independent Consultant and other PSC consultants to investigate the bids, and make recommendations. The studies were carefully considered before the Bluewater Wind project was named the primary power source under HB6.
Delaying or terminating the approval process could be disastrous for the state, legally and economically. We are shocked any legislator would suggest re-opening a major bid
process at this late date. So far, the RFP process has cost bidders and taxpayers in excess of $3 million. There are many intelligent, well-informed citizens in Delaware. The people have spoken. We demand in-state, price-stable, non-polluting energy. The offshore wind project will create new jobs and major business opportunities in Delaware. The public has said they are willing to pay extra for it.
Contrary to the public statement of another legislator, the purpose of HB6 was never to get “cheap” power. Delmarva Power’s decades-old mantra, “cheap power at any price,” is what got us into the mess we are in now - unpredictable price hikes from continued dependence on out-of-state fossil fuels and short-term contracts. The results: price instability, big rate hikes, horrendous pollution, and alarming rates of lung cancer, heart disease and asthma.
We believe it is in the best interest of the people of Delaware for members of the General Assembly to carefully examine the motives of public officials working to dismantle or circumvent laws they have enacted. We urge you to ignore misleading, inappropriate messages coming from Delmarva Power supporters. In a few weeks, we’ll hear from the real experts.
John Austin & Patricia Gearity
Citizens for Clean Power