Thursday, February 21, 2008

Bluewater Wind Rebuts Delmarva Power

We've heard recently from Delmarva Power president Gary Stockbridge. Yesterday it was Bluewater Wind president Peter Mandelstam's turn in the opinion pages of the News Journal:
Bluewater offers clean, stable energy

Delmarva Power's latest op-ed essay in The News Journal claims its continued opposition to Bluewater Wind's offshore wind park proposal is grounded in concern for its customers. History strongly suggests this opposition is based on protecting profits.
Where was this concern for customers when Delmarva Power raised rates by 59 percent following deregulation? Its own opinion poll confirms customers support the offshore wind project. But now it wants customers to pay nearly $5 million for costs incurred fighting the very proposal most of their customers support.
Delmarva Power boasts about its support for the state's renewable energy standards, but fails to mention it secured a provision in the law that allows it to pass along all of the costs to customers -- even penalties Delmarva will be forced to pay if it fails to meet the standards.
The record is clear. Delmarva Power's opposition stems from fear for its bottom line and that of parent company Pepco Holdings. Pepco Holdings is based in Washington, D.C., and is worried that power generated by Bluewater will replace power that would otherwise have been bought from another Pepco-owned company, Conectiv.
Although some people have suggested that we do not know how much ratepayers will pay for energy from the offshore wind park, this is not true. Bluewater's price is set for 25 years, down to the last penny.
The issue arises when experts try to compare this set price with the estimated cost of doing nothing -- that is, Delmarva Power's continued reliance on the volatile fossil fuel market to purchase energy. In doing this comparison, the state's independent consultant concluded customers will pay an average of only $2.69 more per month for clean, renewable and stable energy.
To put this in perspective, Delmarva Power's 59 percent increase costs customers about $54 per month -- every month. That is 20 times the increase with the offshore wind proposal. If energy prices continue to rise above what is currently projected -- an outcome we think likely -- consumers will save money with offshore wind.
Delmarva Power points to New Jersey's offshore wind solicitation as a reason to reconsider the process that led to Bluewater's selection in Delaware.
The comparison fails. First, New Jersey has offered up to $19 million of state funds toward the more than $1 billion project. In Delaware, there are no state dollars at risk for the wind project funded by Bluewater. No Delaware customers will pay a dime until the project produces electricity.
While Bluewater, like any business, would rather not publicly disclose to its competitors the terms of its bid prior to submission, the Bluewater New Jersey bid will require a long-term contract and will not be priced lower than what we have proposed in Delaware.
Indeed, Bluewater firmly believes legitimate bidders will not be able to finance an offshore wind park in New Jersey without a long-term contract.
Delmarva Power proclaims it wants to purchase renewable energy; it just doesn't want it produced in Delaware. So the choice is whether Delaware will have homegrown, pollution-free energy, or whether it will allow Delmarva Power to outsource renewable energy needs.
An in-state wind park will produce reliable electricity without harmful pollutants, while creating hundreds of jobs and providing long-term price stability that since the deregulation of electricity rates. As the demand for alternative and renewable energy sources increases, having a wind park protects Delaware from being at the mercy of other states for clean, affordable energy. We think the choice is clear.
Mandelstam makes two important points here. First, he zeroes in on the price risk we face if we do nothing to intervene in Delamarva Power's preference for relying on the energy market, which is driven by fossil fuel prices.
Second, he corrects Delmarva on the nature of the New Jersey proposal Bluewater is working on. Delmarva Power is running radio spots claiming that Bluewater is not proposing a long term power purchase agreement (a standard industry tool, by the way) in its New Jersey proposal.


Anonymous Anonymous said...

Anything green by wind or sun energy (while volatile fossil fuel prices is going up) is good. I have a home in a 55 and over community. To be a part of a greener Delware/planet, I want to spend $10,000 to install wind mills and sollar panels to supply most of the power I need run this small home. This would mean getting permission from the community and interconnecting with Delmarva Power. Do you have any suggestions for me?

Present address in Smyrna. I already have a solar power energy tower in this in-town home. I save about 25% of my electric bill by using the solar energy generated from two solar panels (on a sunny day).



7:24 PM, May 07, 2008  
Anonymous Anonymous said...

You post hits upon so many disconnected and irrelevant side issues, it's hard to even begin criticizing it. Time is short, so I'll just say this-- the cost of this wind power is going to be up to 55 cents per Kw-h. That's ten times the cost of competing sources. The reason its only raising customer's rates so little is because its a tiny amount of the total power Delaware actual consumes...and the actual raise customers see will likely be far higher than what Bluewater claims, as the risk of this venture is being passed on. If they can't sell the remainer of the power to other states, Delaware has to buy it all. Lucky you.

If Delaware wants clean, stable energy, they should build a nuclear reactor...a plant that would produce 30 times the amount of electricity this windfarm boondoogle does, and produce it all the time, not just when the wind blows.

8:16 PM, June 25, 2008  
Blogger Tom Noyes said...

I have no idea how you could possibly conclude this will cost 55 cents/kWh, I have read thousands of pages of public documents on this, most importantly the PPA, which specifies a price of 9.893 cents/kWh plus a small capacity charge.

But you might want to check a more recent post on this: the bill to get this deal done just passed both houses without a singly no vote, and has already been signed by the governor.

9:09 PM, June 25, 2008  

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