Friday, February 22, 2008

Delmarva Power Prices Going Up

While Delmarva Power and its allies in Leg Hall fight the offshore wind proposal, energy prices continue to rise. The Public Service Commission has released the results of Delmarva's recent purchase of energy to serve its Standard Service Offer (SOS) customers. (Sorry, I don't have a link, as yet.)
The results? Higher prices:
In total, Delmarva sought and acquired a total of 577.5 Megawatts (MW) of Peak Load for full-requirements SOS service. For the Residential class, Delmarva sought 36-month contracts accounting for approximately one-third of the SOS-eligible class need. The average weighted price for this class was $109.90/MWh, about 15% higher than bids last year. The remaining two-thirds of SOS supply will be supplied under contracts procured last year and in 2006. Because the energy secured for Residential customers this year only accounts for one-third of their total SOS needs, these customers will experience an incrementally smaller increase in rates. It is estimated that Residential class customers will see an increase of less than 2% on the total bill for electric service received from Delmarva for the remaining three classes (larger commercial and industrial customers), Delmarva sought 12-month contracts composing 100% of the needs.
The good news for now is that Delmarva buys much of its energy in three year contracts, so that the higher prices in this most recent purchase represents only about one third of the energy we buy. Even so, energy prices are going up, not down. In contrast, the projection that the wind farm will cost us extra depends on prices going down, not up. This is precisely the kind of price instability the wind farm will protect us from.

4 Comments:

Anonymous Anonymous said...

I spoke at Dover upon an invite from pro wind power proponents but focused on the fact that Germany gets 20% of it's electrical energy from solar panels it built and installed, loaned money for and bought at a 20 year fixed cost/price. Why can't we do this?

8:45 AM, February 23, 2008  
Anonymous Anonymous said...

Three Delaware legislators don't want Delmarva Power to be obligated to 20-year contracts for renewable energy. Isn't that right, Sen. Copeland, Rep. Hocker, Sen. McDowell? So the idea of a 20-year, long-term solar contract would be out from their point of view. Germany is also building offshore wind. What a novel idea, thinking about more than one renewable energy resource at a time! I'm happy that you, "Mr/Ms speaker in Dover," approve of 20-year contracts. Perhaps you should be talking to the Legislature about the value of locking in a price for 25 years for the clean, affordable, job-producing offshore wind project.

11:27 AM, February 23, 2008  
Blogger Nancy Willing said...

Tom, did you know that your testimony (video) at the 'Green Options' hearing is now up on the web? The link to it is up on my blog.

I read WDEL's web news this morning and they had an item that caught my eye.
Joe Farley gave commentary on the DEM presidential primary race, noted as former chairman of the DE DEM party. I googled Mr. Farley right away with the idea of checking out his family printing company and how far the Farley nepotism may reach beyond daughter Ann, NCC Community Affairs chief.

What I found, of course, was that Farley's main gig these days is lobbyist for Delmarva.

I see a much stronger connection by Delmarva -> Farley -> DE DEM Legis Senate leadership of DeLuca, Adams and McDowell working here.
Farley ties it all together, considering all of the chips he can cash in. Plus his is on the board of the NCC Chamber and a look at that web site in the legislative pages under government show how the Chamber was leaning as far as the developments with de-reg and HB 6 et. al.

Farley should be getting some heat from the stock and trade DEMs ASAP.

1:35 PM, February 23, 2008  
Blogger TommyWonk said...

Anon. 1: I remember your comment from McDowell's hearing. I don't know enough as to how Germany is promoting the use of solar energy. Bluewater Wind's proposal does not include any direct government loans. I do know that no one has come forward with a proposal for solar power in Delaware.

There are some serious entreprenuers developing large scale solar power plants in the U.S. We are likely to see them in Florida and the southwest long before they come to Delaware.

By the way, the break even point for alternative energy is about 10 cents per KWh, which is Bluewater Wind's price, as well as the price of conventional power Delmarva Power just bought.

3:02 PM, February 23, 2008  

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