Monday, June 30, 2008

New York City Study Confirms the Financial Benefits of Recycling

Two years ago I published an analysis of the costs and benefits of recycling in the News Journal:
Conventional wisdom declares that recycling, while a nice idea for reducing landfill accumulation, is hard to justify in terms of the costs. But financial analysis of the projected need to invest in landfill expansion and construction leads to the conclusion that that increasing the recycling rate in Delaware would create significant economic benefits.
Last month, the Natural Resources Defense Council (NRDC) released a report concluding that recycling in New York City was a cost effective alternative to disposal in a landfill or incinerator. The findings are described in an NRDC press release:
Moreover, the study notes that recycling costs will drop even further as more residents participate in the recycling program and collection rates increase, because the price per ton will go down. Currently, sanitation crews collect fewer recyclables per shift than trash, resulting in a marginally higher cost per ton for collecting recyclables than regular trash.
Additionally, the report found that the overall costs of processing – as opposed to collecting – the city’s recyclables at local recycling plants is currently significantly less than the cost of processing trash, which includes additional transportation costs and high fees for out-of-state incineration and landfilling.
The report carefully compares collection and disposal costs:
  • The citywide costs per ton of curbside collection and disposal of recyclables in fiscal year 2005 (the most recent year for which complete data were available) were very close to the costs per ton of curbside collection and disposal of non-recycled refuse. Specifically, we concluded that the overall FY ’05 cost per ton of curbside recycling was $284 dollars per ton vs. $267 per ton for curbside refuse, representing a difference of roughly six percent. (See pages 19-20.)
  • This is a relatively insignificant difference given the type of accounting method utilized by DSNY to allocate large shared refuse and recycling costs. (See page 3-4, 19.)
  • The primary reason for the slightly higher per ton citywide cost for curbside recycling in FY ‘05 is simply that recycling collection crews collected fewer tons per shift than refuse collection crews. (See page 20.)
  • Indeed, the overall cost of processing – as opposed to collection – a ton of the city’s recyclables is currently significantly less than the cost the city must pay companies to bury or burn a ton of the city’s regular trash.
Once again, the conventional wisdom that environmental benefits come at a cost has been refuted by careful analysis.

Sunday, June 29, 2008

On the Air with Richard Korn

I’m going on Channel 28 this evening at 7:00 with Richard Korn to do a wrap-up on wind power. We'll be talking about how we got where we are, and what happens next.
Richard has the seven o'clock slot every last Sunday of the month on Channel 28. He'll be wrapping up several stories he's been following, including the introduction of Sunday bus service in Delaware.

Friday, June 27, 2008

Offshore Oil or Offshore Wind, Part 2

John McCain is repeating the old conventional wisdom that we should set aside environmental concerns and open up more of our coastal waters to oil drilling. You know the conventional wisdom: Environmental benefits are nice, but expensive. Clean energy proponents are well-meaning, but naive and not very practical. Put another way, if we want real energy, we need to make a mess somewhere.
John McCain is either unaware of the extent to which the world is changing, or hopes the rest of us won't notice. But more and more people are noticing the world is changing, and that environmentally sound energy choices are increasingly more economically sound than simply burning more fossil fuels. This is a theme I have stressed repeatedly, as when
I first spoke publicly in favor of wind power in Delaware in March of last year:
The conventional wisdom is that the public’s environmental interest is in conflict with the public’s economic interest. But my review of the record leads me to conclude that the conventional wisdom has been turned on its head in this case; burning more fossil fuels doesn’t make economic or environmental sense for Delaware. Simply put, 19th century technology is not suited to meet the environmental and economic needs of the 21st century.
I have at times used the financial analysis tools I learned in business school to demonstrate the economic value of sound environmental policy. But sometimes the reality is so clear that it can be understood without complex models.
The debate over wind power in Delaware was won because most people understood that rising fossil fuel prices would make the offshore wind farm a good deal by comparison. The idea of a gas tax holiday didn't work for Senators McCain and Clinton because people could easily see that oil companies would just keep prices high and pocket the difference.
I think McCain's proposal to open up offshore drilling will not be the vote winner he hopes for the same reason. You don't need to be trained in present value analysis to understand that oil that would not flow for another ten years isn't much use to anyone now. And as more people see the possibility of offshore wind coming online in four or five years, the idea of what's naive and what's practical will shift even more dramatically.
When confronted with the uncomfortable fact that offshore oil would not come online for ten years, John McCain resorted to the argument it would provide a psychological benefit. The New York Times reports
Barack Obama's sharp retort:
Mr. Obama was responding to remarks that Mr. McCain made on Monday in Fresno, Calif., when he observed that even though the nation might take years to benefit from offshore drilling, "exploiting those reserves would have psychological impact that I think is beneficial."
Mr. Obama seized on those comments while speaking at a town hall-style meeting here.
"'Psychological impact'?" Mr. Obama said. "In case you’re wondering, that’s Washington-speak for 'It polls well.'"
He added, "It’s an example of how Washington politicians try to convince you that they did something to make your life better when they really didn’t."
It's the 21st century folks. Fossil fuels are running out. The gee whiz era of renewable energy production is over. The Bluewater Wind project is scheduled to come online in four years. When offshore wind turbines can be erected twice as fast as offshore oil rigs, it's a clear sign that the energy economy is changing, and for the better.
Keep in mind I am not suggesting that wind power can replace gasoline for our cars now. The Economist last week published
a good review of how the electric grid needs to change to make the fullest use of wind power.

Thursday, June 26, 2008

Thank You Delaware

Wednesday, June 25, 2008

Delaware General Assembly Passes Wind Power Bill

I was at a fund raising event for Cam Hay, my city councilman, when I got the call from Pat Gearity: The wind power bill had passed. Passed the Senate? No, passed both houses. I was stunned.
This is what's described in Leg Hall lingo as greased. The bill wasn't even in the system when I headed out the door this evening. The News Journal explains:
Senate Bill 328 was filed on the floor by Majority Leader Sen. Anthony DeLuca, D-Varlano, moments before it was considered for a vote.
The bill passed the Senate at 5:30:07, and was walked over to the House, which promptly passed it at 6:19:31. Pat called at 6:36 to give me the news.

The vote was unanimous: 21 to zero in the Senate, 41 to zero in the House. All 62 members of the Delaware General Assembly signed on as sponsors.
As for what the bill does, the synopsis reads:
This bill promotes the establishment of clean offshore wind energy off the coast of Delaware, while minimizing the cost concerns related to offshore wind installations and encouraging DPL to execute offshore wind power purchase agreements for customers by: (1) Creating a 350% offshore wind renewable energy credit multiplier, (2) Making the 350% renewable energy credit multiplier available for the life of offshore wind contracts, and (3) spreading both the cost and the benefits of offshore wind power contracts executed by DPL to DPL's entire customer base, rather than only to DPL’s standard offer service customers.
I posted a summary of the deal here on Monday. When I got back to my computer, I had an e-mail from Jeremy Firestone with the header, "Legislation on Governor's desk," followed a few minutes later by another, "Nope, she signed it!"

Tuesday, June 24, 2008

Legislative Leadership Likes the Wind Power Deal

Most legislative leaders seem to like the deal between Bluewater Wind and Delmarva Power.
Senate majority leader Tony DeLuca briefed legislative leadership on the signed power purchase agreement (PPA) between Bluewater Wind and Delmarva Power. I'm told his presentation was enthusiastically received. Keep in mind that it was a meeting of legislative leadership that blocked Controller General Russ Larson from providing the fourth vote to adopt the unsigned PPA last December.
I think we will see most of legislative leadership signed on as sponsors of the as yet unnumbered bill. The only dissenting voices I have heard of come from some familiar naysayers, who at the end may feel compelled to vote yes.
At this hour, Sen. DeLuca has not introduced the bill that would clear the way for approval of the new PPA, which means that it may not come to a vote in the Senate until Thursday. My long-held belief that the General Assembly would not await until June 30 to decide the issue may well prove wrong.

Monday, June 23, 2008

Bluewater Wind and Delmarva Power Come to Terms

Bluewater Wind and Delmarva Power have struck a deal to bring offshore wind power to Delaware. The project will be the first offshore wind farm in the the United States. The revised power purchase agreement (PPA) was filed with the Public Service Commission this afternoon.
Here's what the parties agreed to:
1. Delmarva Power will buy 200 megawatts (MWs), not 300 as specified in the previous PPA. This will require anywhere from 55 to 80 turbines. (The Delaware Municipal Electric Corporation has separately agreed to buy another 20 MWs.)
2. The price remains unchanged: 9.893 cents/kWh.
3. Delmarva Power will buy renewable energy credits (RECs) valued at 350 percent of standard RECs, allowing Delmarva to meet its requirements under the renewable portfolio standards, with enough left over for Bluewater to sell on the market. This will allow Bluewater to recoup some of the revenue taken off the table when the size of Delmarva's purchase was reduced.
4. All of Delmarva Power's customers, including large industrial buyers, will buy electricity from Bluewater. This doesn't look like a as much of a problem as
it might have been six months ago, given the relentless rise in energy prices since then.
5. Bluewater will be able to market the wind farm to other potential buyers in New Jersey and Maryland. In turn, Bluewater agrees to give Delmarva the best deal it offers any customer.
6. Delmarva Power will drop its lawsuit, and waives the right to contest the PPA and the procurement process in court.
As significant as this is, we're not done yet. Senator Tony DeLuca will introduce a bill tomorrow to change the value of the project's RECs and include all of Delmarva Power's customers in the deal. This as-yet unnumbered bill will be brought to a vote in the Senate tomorrow or Wednesday. The House will then have until midnight (or later), June 30 to pass the bill.
If all the pieces are in place, the revised PPA could be brought up for consideration by the Public Service Commission, the Office of Management & Budget, the Department of Natural Resources & Environmental Control and the Controller General on July 8.
This compromise should enjoy strong support on both sides of the aisle of both chambers. But time is of the essence. If you want to see this get done, call your senator first thing Tuesday to urge that DeLuca's bill be brought to the Senate floor for a vote right away.

" outpouring of public sentiment..."

As of this morning, I am unable to confirm whether the negotiations between Bluewater Wind and Delmarva Power have concluded with a deal. I've been hearing that it's done, no it's almost done, I can't tell you anything definitive, why don't you call back tomorrow...
My definition of done is a signed document. By this definition the deal was not done last night.
The News Journal identifies one important factor as to why Delmarva Power accepted Senator Tony DeLuca's invitation to sit down and work out an agreement:
But after an outpouring of public sentiment for a wind deal, and after DeLuca and Lt. Gov. John Carney got involved, Delmarva started negotiating.
We could hear something today. If we do, it's because the public support for wind power was too strong and too insistent for even Delmarva Power to ignore.
Update: Bluewater Wind, Delmarva Power and Senator DeLuca will hold a press conference today at 1:00 at Delmarva Power's headquarters. Bluewater's Jim Lanard says he's "very excited to be attending."
Bluewater will hold public briefings at 3:00 PM at the Ramada Inn, 260 Chapman Road in Newark, and at 7:00 PM at the Boardwalk Plaza Hotel at Olive Avenue and the Boardwalk.

Update #2: I will be talking with Allan Loudell of WDEL at 4:35 and 5:25 this evening.

Sunday, June 22, 2008

Offshore Oil or Offshore Wind?

What should we be building off our coasts: wind turbines or oil derricks?
The United States has suffered through seven and a half years of energy policy created by two oil executives, with little to show but higher prices and billions in wasted subsidies. John McCain last week decided to double down on this dubious bet by giving energy companies whatever they want. Last week, he announced that he would open up coastal waters for oil drilling. To add insult to McCain's self-inflicted political injury, George Bush echoed his call within a few hours. Thus John McCain spent another week tarnishing his brand as independent of his party's conventional wisdom. After having shown himself willing to commit the heresy of taking climate change seriously, he decided that maybe we should be burning more hydrocarbons after all.
Joe Biden, speaking on Meet the Press, pointed out that oil companies already have enormous offshore reserves at their disposal:
This is a gift, a gift to the oil companies by John McCain. They have now leased 41 million acres of offshore leases. They're only pumping in 10.2 million of those acres. Seventy-nine percent of all the offshore oil available off the coast of Florida, into the Gulf of Mexico, the Atlantic Coast, the Pacific Coast, lies within those acres that they now have.
Even supporters of increased offshore drilling acknowledge that it would take as long as ten years to get more gasoline to the pumps. But if we're talking ten years, why go with an old, dying technology? If we get a go-ahead from the General Assembly, we could have the first offshore wind power project in the U.S. up and running in three years.
So it would take the U.S. three times longer to prop up the fossil fuels business by ruining our coastal waters than it would to get offshore wind power going. Apart from the question of which you would rather see off your coast, the new clean technology will do more, sooner to provide us with needed energy than the dirty old business could.
Beyond weakening his reputation for independence, John McCain has shown himself to be the candidate of the past instead of the future.

Friday, June 20, 2008

Ten Days Left in June

Tony DeLuca is quoted in today's News Journal as saying we're close:
The Senate majority leader, who has been herding the parties toward a compromise, said in a written statement late Thursday afternoon, "We are close to agreement."
"There are still a couple of minor, technical issues outstanding, so we'll be working through the weekend to get those straightened out. I am fairly confident that we'll be able to make an announcement early next week," DeLuca said.
The prospect of a deal between Bluewater Wind and Delmarva Power is mildly disorienting.
We've become so used to Delmarva Power doing everything it can to kill wind power in Delaware that we hardly know how to react to the prospect of the company coming to terms with Bluewater. It's hard to not believe that another crisis won't pop up to make life interesting, and give Harris McDowell a chance to once again talk about putting another nail in the coffin, just for old times sake.
But I'm still telling people to call their senators; it's the prospect of passing HCR 38 that brought Delmarva Power to the bargaining table.
Meanwhile concerns about Babcock & Brown's ability to raise capital are abating. The company's stock has recovered somewhat, and would be short-sellers are having trouble borrowing share to bolster their position.
The company has attracted bids for European wind power assets that would bring a tidy $300 million profit on the sale, which should go a long way towards strengthening its balance sheet.
The wind power story has had more cliffhangers than a Steven Speilberg movie; it may be fitting that we're down to the last ten days of June waiting for a decision.

Tuesday, June 17, 2008

Is Babcock & Brown Financially Sound?

The News Journal doesn't have much new to report regarding the wind power negotiations, except that they are close, but then there isn't much more to report. I've been told that there are some particulars that haven't been settled. This thing could go to the final week.
In the meanwhile, I've been getting questions about the problems Bluewater's parent company Babcock & Brown have been having with its creditors. Last week, some of the company's creditors evoked a clause in a debt facility (these are too fancy to be called loans) that allowed the creditors to review the terms of the loan if the company's share price dropped below a trigger price.
How serious is this problem? Could it sink the company's efforts to close the deal with Delmarva Power?
I've spent the last several days reviewing the company's financial statements and corporate structure. Babcock & Brown is set up as a parent company with a series of specialized funds, including Babcock & Brown Wind Partners, which is separately listed on the Australian Stock Exchange. Both the parent company and the Wind Partners are expected to post profits for the fiscal year ending June 30.
It's probably worth noting that the status of its debt facility is "review" which is conducted over a four month period. B&B has started talking to the banks involved and is continuing to make payments on the debt facility. B&B is looking at asset sales as a way to reduce the debt on its balance sheet. This process could continue past the question of dealing with the particular debt facility under review. The question is not whether B&B assets are sound, but how those assets are financed, as an energy analyst told the News Journal yesterday:
"I would not worry about the specific financial troubles of the parent organization right now," said Nathaniel Bullard, a Washington-based senior analyst with New Energy Finance of London. "There's plenty of time for any financial issues with Babcock, the parent company, to be ironed out."
Creditors seem to be getting anxious about the company's debt, not its overall profitability. The company is fielding offers for some of its wind power assets, according to Bloomberg. The B&B Wind Partners balance sheet looks strong, with 1,193 wind turbines on three continents producing nearly 5,000 GWH as of June 30, 2007.
Babcock & Brown is a sound business with productive assets. Management seems to recognize it needs to reduce the company's debt load and is proceeding with plans to do so. I see no reason why the company shouldn't be able to finance the construction and operation of the Bluewater Wind project.
Update: I'm going on WDEL, 1150 AM, with Allan Loudell at 12:15 to discuss the latest on the wind power talks.

Monday, June 16, 2008


I found this in my in-box this morning:
The Bluewater Wind project would require an estimated 500 workers during construction and 80 to 100 during maintenance. If Bluewater makes Delaware its east coast hub, more workers would be needed to provide construction and maintenance support for projects in other states.
Update: I will be going on the air with Allan Loudell on WDEL at 5:05 and later with Progressive Voices on WVUD at 7:00 PM to discuss what I know about the status of wind power negotiations, which are ongoing. It does not look like we will have anything definitive until tomorrow at the earliest.

Sunday, June 15, 2008

Wind Power Talks Continue

To be honest, I thought this thing was likely to have been wrapped up by now. But as the News Journal reported yesterday, the negotiations between Bluewater Wind and Delmarva Power are continuing through the weekend.
The pace of talks is slowed by the fact that both Bluewater and Delmarva have to review the terms with the finance geeks of their respective parent companies, which is what's going on this weekend. Bluewater has to run the numbers by the folks at Babcock & Brown, while Delmarva Power has to do the same with Pepco Holdings.
Meanwhile, Delmarva Power isn't letting up on its PR campaign; the company ran another large ad in the News Journal today. One wonders whether it's sinking in yet among Delmarva and Pepco executives that lawmakers and the public have hardly been swayed by the hundreds of thousand of dollars the company has spent on advertising and PR flacks over the last eighteen months
What's motivating the parties? Bluewater wants a clean go-ahead, without the present threat of the lawsuit filed by Delmarva Power nearly a year ago. Dropping the lawsuit would enable Bluewater to secure the first mover advantage in a market that is expected to grow rapidly. States from Virginia to Maine are all looking at building offshore wind. This first mover advantage is important enough that Bluewater is willing to at least discuss starting with a smaller project, which would mean shouldering much greater financial risk.
Tony DeLuca may have moved the deadline back a week, but has finally said in public what he has been saying privately for a while:
Senate Majority Leader Anthony J. DeLuca, D-Newark East, said he is hopeful a compromise can be reached by next week, when time will essentially run out for negotiations he has been coordinating.
"At this stage, I'm pretty optimistic that we're going to be able to bring this to a successful conclusion," DeLuca said in an interview late Friday afternoon. "If things don't work out, our caucus will meet early next week to make a decision on our course of action."
That decision is whether to bring HCR 38 for a vote. Of course Delmarva Power can count votes as well as any of us, which is probably why the company is talking at all.
I've learned that the parties, which have been reviewing the latest terms, will be getting back to DeLuca tomorrow. If there is no deal, and no chance of a deal shortly, then the Senate Democratic Caucus will be faced with that decision. If you want offshore wind power to become a reality in Delaware, then get back to the phone and call your senator tomorrow. Delmarva Power has been fighting the Bluewater Wind project for long enough. If Delmarva Power can't come to terms, then the time has come to bring the matter to a vote.

Friday, June 13, 2008

TommyWonk back on the Great Green Home Show on WILM

Hosts Paul Hughes and Doug Hunt have invited me back on the Great Green Home Show which airs Sunday morning at 11:00 on WILM, 1450 AM on your dial. I'm providing an update on energy legislation in the General Assembly, including bills on the Regional Greenhouse Gas Initiative and the Sustainable Energy Utility, and of course the status of efforts to reach an accommodation between Bluewater Wind and Delmarva Power.
If you miss the show Sunday morning, you can catch it online. I'm featured in segments 3 and 4, but the whole show is worth a listen.

Wednesday, June 11, 2008

Vice President Joe Biden?

Could Barack Obama pick Joe Biden as his running mate? Among those touting Senator Biden for the VP slot is Washington Post columnist E.J. Dionne:
I visited with Biden because he should be at the top of any list of vice presidential picks for Obama. Why Biden? In part because of where he took our discussion: Few Democrats know more about foreign policy, and few would so relish the fight against McCain on international affairs. Few are better placed to argue that withdrawal from Iraq will strengthen rather than weaken the United States.
Blogger Ezra Klein chimes in:
Biden is, arguably, the most effective voice Democrats have on foreign policy. And here's why: Joe Biden is an incredibly arrogant jerk. And that's exactly what Democrats need.
Klein revisits Biden’s now-classic takedown of Rudy Giuliani:
Biden, by contrast, laughed at Giuliani. He mocked him. "The irony is, Rudy Giuliani, probably the most underqualified man since George Bush to seek the presidency, is here talking about any of the people here," said Biden at one of the debates. "Rudy Giuliani... I mean, think about it! Rudy Giuliani. There's only three things he mentions in a sentence -- a noun, a verb, and 9/11. There's nothing else!"
Jake Tapper of ABC News last week wrote of "Biden's Shadow Campaign," in which he points out that Biden has been on the front lines in recent weeks, even though the senator hasn’t yet endorsed Obama.
There’s even a blog, ObamaBiden08, devoted to promoting Joe Biden as Obama’s pick for VP.

Wind Power and State Government

Should state government buy into the Bluewater Wind project? And how could the campaign for governmor be affecting efforts to close the deal to bring wind power to Delaware?
The pending wind power deal negotiated in Tony DeLuca's office would reduce the amount of electricity Delmarva Power would buy from Bluewater Wind, while hoping to bring other buyers into the deal. Why not include state government as one of the buyers?
House Amendment 1 to House Concurrent Resolution 38 mentions that the state government should buy electricity from Bluewater Wind, without mandating that it do so. On Monday, Jack Markell announced that he would have the state negotiate to buy power from Bluewater. Today, the News Journal reports that the state Office of Management & Budget is dong just that.
Is this just posturing, or would it make sense for the state?
I think it makes sense for state government for the same reasons it would make sense for Delmarva Power customers like me. All electricity buyers are feeling the effects of rising fossil fuel prices. In tough budget times, it would make sense for the state to lock in some price stability.
But of course the state can't buy into the Bluewater Deal unless Delmarva Power is on board. It's been five days since word got out about the deal negotiated in Tony DeLuca's office. We still haven't heard whether Delmarva Power will sign the deal. What we have heard is more radio advertising from the company.
Why is the company still balking? Here's a possibility: Delmarva Power could be trying to run out the clock on the General Assembly to see if expected Republican candidate Bill Lee becomes governor.
Lee has been largely absent from public view since agreeing to run, except for
the obligatory visits to events like the Italian Festival, and has had little substantive to say about the issues facing state government.
But I have been told that he opposes the Bluewater Wind project, as does lieutenant governor candidate Charlie Copeland. So is Delmarva Power hoping for Bill Lee to kill the deal if he gets elected? HCR 38 has enjoyed bipartisan support since it was introduced in January. Four Republican senators are on the measure as sponsors, and one or two are leaning in favor of Bluewater project, which has led some to speculate whether Copeland is trying to turn his colleagues in the interest of party discipline.
But what could a new governor do if the four agencies finally direct Delmarva Power to sign the power purchase agreement? I don't know, but Delmarva Power has shown itself willing to take as much time and spend as much money as necessary to kill the project.
I'll be discussing wind power and politics on
WDEL with Allan Loudell today at 12:15. In the meanwhile, if you'd like to read something smart about wind power in Delaware, just turn to anything kavips has written over the last week.

Monday, June 09, 2008

Wind Power: What's the Deal?

Amid the excitement over reports that a deal between Bluewater Wind and Delmarva Power could be in the works, astute readers may be wondering: Haven't we been here before. Isn't there already a deal on the table?
Yes there is. It's called the power purchase agreement or PPA, and it was negotiated last year. Delmarva Power has been doing everything it can to block adoption of the PPA, which it hasn't signed.
Is there reason to think that the company will relent and sign this new agreement? For that matter, how would this agreement, negotiated in Tony DeLuca's office, relate to the PPA that has been on hold since December?
The DeLuca deal would not replace the PPA, but amend it. I would guess that the parties would renegotiate the relevant portions of the PPA, and present it to the four agencies overseeing the procurement process. The General Assembly, either through a resolution or through its leadership, would recommend to Russ Larson, the controller general, that he vote to adopt the amended PPA when it comes before the four agencies for approval.
So will Delmarva agree this time, when it has fought Bluewater Wind so hard for so long? Delmarva Power, which filed a lawsuit to overturn the selection of Bluewater Wind proposal a year ago, was compelled by law to sit down and negotiate. It took the active engagement of an arbitrator to push the parties to hammer out a PPA, which Delmarva still opposed at the end of the negotiations. And even if the General Assembly passes HCR 38, and the four agencies approve the PPA, the lawsuit still sits on a judge's desk waiting to be reactivated.
Why then should Delmarva Power willingly enter into these new negotiations, when it has been so intransigent? HB 6 mandated that Delmarva Power negotiate a PPA. But there is no law requiring the company to sit down with Tony DeLuca, except perhaps the law of self-preservation. Lawmakers are more powerful than regulators. The Public Service Commission administers the law. Tony DeLuca and his colleagues write the law. It's one thing to defy three state agencies. It's another thing entirely to defy the General Assembly, where legislators have been known to introduce bills to punish those who cross them.
As for whether Delmarva Power is just stalling for time, we will know soon enough. Everything I'm hearing tells me that Senator DeLuca wants the matter resolved this week. The General Assembly is grappling with the biggest budget gap in years. Legislators can't leave wind power unresolved, and don't want to have the issue on the table two weeks from now. Delmarva Power faces a decision: Either sign on to the compromise, or see HCR 38 pass the Senate.
The lawsuit doesn't challenge the PPA itself, but the selection of Bluewater. I'm not a lawyer, but I imagine that it would be more difficult to challenge the legitimacy of the selection
after a year of negotiations under the guidance of an arbitrator, and later under the supervision of the Senate majority leader.
If HCR 38 passes and the PPA is approved in its current form, Delmarva could find itself in a weaker position. Which doesn't mean that Delmarva Power wouldn't try. It wouldn't matter whether the company has a good case; it could simply cripple the project by keeping it in legal limbo.
This brings us to Bluewater's motivation for negotiating, rather than simply pushing for a vote on HCR 38. Dropping the lawsuit is central to the deal. Bluewater doesn't make money until it actually builds the wind farm. It doesn't want to spend the next year or longer in a Kafkaesque nightmare in which the entire process is relived in a courtroom.

Sunday, June 08, 2008

Will Delmarva Power Agree to the Deal?

Is Delmarva Power serious about coming to terms with Bluewater Wind? The two companies have been discussing a deal that would reduce the amount of power Delmarva would buy, and bring in other buyers including the Delaware Municipal Electrical Corporation.
Will Delmarva say yes to the deal, or simply try to run out the clock on the General Assembly? While the company has been meeting with Bluewater in Senator Tony DeLuca's office, the PR campaign continues unabated.
The Delaware Business Ledger published an interview with Delmarva Power president Gary Stockbridge on Friday, the same day the story of negotiations broke in the News Journal. I'm so tired of playing Delmarva Power Truth Squad (see parts 1, 2, 3, 4 and 5) that I won't go through the interview point by point, except to mention this novel argument from Stockbridge:
Many people believe that if Bluewater is built, Indian River (coal-fired plant in Sussex County) will be closed.
I don't know the basis for this assertion, but you haven't heard it from me or any of the top wind power advocates in Delaware. Another day, another straw man argument from Mr. Stockbridge. Instead, what I'm wondering is why Delmarva Power is still out there fighting the deal when an agreement is sitting on Tony DeLuca's desk awaiting Mr. Stockbridge's signature.
This deal doesn't have a long shelf life. Delmarva Power hopes to stall approval of the Bluewater project by dribbling out factoids about land based wind, but I'm hearing that senators want this thing decided one way or another this week. If Delmarva Power is not willing to sign off on a deal in the next two or three days, then Tony DeLuca is likely to tell his caucus, and the full Senate, that he tried, but couldn't broker an agreement, and it's time to let HCR 38 come to a vote.
Gary Stockbridge may have become so used to dragging this out that he thinks he can hang on for three more weeks, while hoping that the company will finally come up with an argument that sways public opinion in its direction. I don't think that's going to happen.
Delmarva Power has been trying to convince people that offshore wind power is too expensive for a year and a half. It's been trying to sell the idea of cheaper onshore wind since January, without providing any meaningful detail about the bids it solicited.
Delmarva Power would like the General Assembly to not decide and keep the issue up in the air until next year. But the company just about exhausted its arguments against offshore wind in Delaware, and exhausted the patience of legislators. I don't know whether Delmarva Power is willing to sign the deal it negotiated in Tony DeLuca's office. But I'm hearing that the window of opportunity for the company is closing fast.

Friday, June 06, 2008

Is a Wind Power Agreement in the Works?

The News Journal reports that Senator Tony DeLuca has been talking with Bluewater Wind and Delmarva Power on a compromise plan that would bring the Delaware Municipal Electrical Corporation in as a buyer, possibly reduce the amount of power Delmarva would buy, and set the stage for other buyers to come on board down the road, without making the deal contingent on those new customers.
The key question is whether Delmarva Power will be willing to agree to a compromise. The print version of the News Journal article hints that Delmarva Power may be motivated to say yes:
The end of the session is a useful tool to pressure the parties to come to a conclusion, said Sen. Steve Amick, R-Glasgow. There's the threat of lawmakers bringing the matter to vote if Delmarva won't strike a deal.
I'm told that this isn't an idle threat. If the talks yield an agreement, then HCR 38 could be amended, or a new resolution introduced. But if Delmarva Power balks, then senators could just throw their hands up in the air and bring HCR 38 for a vote.
Many wind power advocates have thought Tony DeLuca to be opposed to the Bluewater proposal. I've been telling proponents to assume that any senator who has not publicly voiced opposition to the project is in play. As the Senate Majority leader, Tony DeLuca is in a position to bring the matter to the floor. I would expect the issue to be resolved sooner rather than later.

Thursday, June 05, 2008

Fixing the Sustainable Energy Utility

The Sustainable Energy Utility (SEU) is a great idea with a terrible governance structure. As currently constituted, the SEU's Oversight Board is self-perpetuating with no accountability to any public body. Senate Bill 276 would go a long way to fixing that. It would establish an accountable board, which would include seven members appointed by the governor, one senator and one representative, the Public Advocate and the secretary of DNREC. SB 276 would also provide that the SEU Board be explicitly subject to Delaware's FOIA.
John Kowalko did well in offering amendments to SB 228 to fix the SEU on Tuesday. Even though he lost the vote on the floor, he did gain 15 votes through the force of his argument. Several of his colleagues were sympathetic to fixing the SEU, but had specific, technical reasons for not supporting his amendments. Kowalko had tried, without success, to sit down with Harris McDowell to discuss his amendments. But by doggedly pointing out the flaws in the SEU, he helped create an atmosphere for fixing them. Jason's blogging on McDowell's murky dealings at DelawareLiberal raised public awareness of the potential for the SEU to serve private interests instead of the public interest. I have no doubt that Jason got some people's attention
when he went on Al Mascitti's show last month to discuss McDowell's machinations.
SB 276 is sponsored by most of the current legislators involved in the SEU, including Harris McDowell. The bill cleared the Senate Energy & Transit Committee yesterday and is on the Senate agenda today. There are other problematic features about the current SEU structure, but establishing public accountability would make it easier to deal with any remaining issues.

Wednesday, June 04, 2008

Update on Wind Power on WDEL Today

I'm going back on the air with Allan Loudell of WDEL at 12:45 to talk about the latest on wind power in (or near) Delaware. I plan to discuss some of the problems kavips dug up with Delmarva Power's onshore wind power contract.
Delmarva Power president Gary Stockbridge claims that the onshore wind from a company called Synergics could come online in 18 months. But the Maryland Daily Record reports that
it hasn't been smooth sailing for the company:
Synergics has been trying to get the turbines constructed since 2003, when it applied for a certificate of public convenience notice — approval needed in order to build any type of generation in the state — with the Maryland Public Service Commission. The projects were on track to move forward, but they got held up because of environmental concerns last year.
The company still needs approval from federal state and local regulators. Recently passed legislation has removed some of the regulatory roadblocks, but other remain:
Instead, the company needs authorization to build based on whether the transmission lines can move the energy.
The News Journal reports that Delmarva Power isn't even trying to match the terms of the Bluewater Wind contract:
Delmarva, which wants to buy about 160 megawatts of onshore wind power...
The Bluewater contract is for 300 megawatts. And even that comparison is shaky, given that onshore wind is less reliable than offshore wind. An onshore wind turbine will not generate as many megawatt hours as a comparable offshore turbine.

William T. McLaughlin: 1917-2008

Bill McLaughlin was mayor when I first decided to live and work in the city. He led Wilmington at a crucial time in the city's history. Many American cities, including Wilmington, declined in the 1960s and 1970s as jobs and residents fled to the rapidly growing suburbs. Some cities never recovered. But Wilmington rebounded, and began to grow again during Bill McLaughlin's tenure.
Tom Maloney gave us confidence that Wilmington could recover from the turmoil of 1968. But if you look at the city's skyline and population statistics, you will see clear evidence that the city renewed growth started on Bill McLaughlin's watch. Mayors Dan Frawley, Jim Sills and Jim Baker have contributed to the further growth of the city. But, more than any predecessor or successor, Bill McLaughlin was the guy who turned things around.
Mayor Jim Baker rightly called him, "Wilmington's finest gentleman" in the News Journal. I have never heard an unkind word about him, which is remarkable for a successful political leader. He engendered such genuine affection from everyone in the city because he treated everyone with characteristic dignity and modesty.
At last night's viewing, I found myself wondering how a man of such slender proportions could have had such an enormous impact on this city. Wilmington will give Bill McLaughlin his final farewell this morning at 10:00 at St. Elizabeth's at Cedar and Clayton Streets.

Tuesday, June 03, 2008

Delaware Getting in Line behind Barack Obama

TPM Election Central reports that super delegates announcing their support for Barack Obama today include Delaware DNC members Harriet Smith Windsor and Rhett Ruggerio (who is switching from Clinton), and state party chair John Daniello.
The New York Times reports that Tom Carper was among the senators talking about endorsing Obama at a meeting last night in Washington.

Monday, June 02, 2008

Four Weeks Left to Bring Wind Power to Delaware

As of tomorrow, the Senate will have 13 legislative days left to act on wind power. The General Assembly meets Tuesday, Wednesday and Thursday for each of the next four weeks, and concludes its business on Monday, June 30. I don't expect House Concurrent Resolution 38 to come up this week. But we need to get it on the Senate agenda before the month closes.
Legislators know how the majority of Delawareans feel about the chance to become the first state in the U.S. to move forward with offshore wind power.
We've heard the arguments from wind power opponents. Delmarva Power will continue to exaggerate the cost of the Bluewater Wind project using scary numbers that have nothing to do with the wind power agreement now on the table, while presenting sketchy numbers for onshore, out-of-state wind.
We know the benefits. Offshore wind power will provide us with 25 years of clean energy at a fixed cost. If fossil fuel prices continue to climb (and who thinks they won’t?) the Bluewater Wind project will provide a measure of price stability to our electric bills that no other option can give us.
The fight to bring offshore wind power to Delaware no longer hinges on careful analysis, but on staying power.
I'm tired. You're tired. But not too tired, I hope, to call your senator once more to urge that HCR 38 be brought to the floor for an up-or-down vote.
Do you think Gary Stockbridge and the other executives at Delmarva Power have given up? Don't count on it.
Delmarva Power is hoping to hang this up for the next four weeks in order to buy time until early next year. We cannot allow that to happen. So if you've called your senator, call again, even if you're already on a first-name basis with the Senate staff.
Contact information for senators
is posted here. If you don’t know who your senator is, click here.
Please call your senator to demand that they choose wind power based on the facts—not Delmarva Power’s scare tactics.
Lt. Gov. John Carney is gathering signatures for an online petition over at his campaign website.
You can also sign a petition asking for action at Citizens for a Better Sussex.

Sunday, June 01, 2008

Green Energy Workshop in Wilmington on Monday

For those whose interest in energy policy runs to more practical matters, State Rep. Gerald Brady and the Delaware Energy Office are hosting a green energy workshop in Wilmington Monday night at 6:30 p.m. at the Delaware Center for Horticulture, 1810 N. DuPont Street:
Scott Lynch of the Delaware Energy Office will provide information and answer questions on available state and federal assistance; alternative energy systems, including solar and geothermal; and practical ideas that we can all use to save money while conserving energy. The meeting is free and open to the public.
“The Delaware Energy Office is working diligently to provide useful information and assistance to environmentally-conscious and cost-conscious Delawareans,” Rep. Brady said. "Those who have attended previous workshops have learned how to both save significant money while going green at the same time."
For further information, contact Rep. Gerald Brady at (302) 229-0147 (home) or (302) 577-5313 (legislative office).
In the meanwhile, if you're interested in some smart blogging about wind power, kavips has posted Chapter 8 in an ongoing series, Windpower for Dummies.