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.

6 Comments:

Blogger AnonymousOpinion said...

Tommywonk- thanks for your excellent reporting on Delmarva Power and Bluewater wind! Even though I generally don't comment, I've been reading your blog and I do know you're the man to go to for this issue. I really admire your persistence since you've been a tireless crusader on the issue. Great work.

10:35 PM, June 23, 2008  
Blogger David said...

You are a tireless warrior. Thank you so much for leading on this issue.

10:44 PM, June 23, 2008  
Anonymous Edmund Dohnert said...

Tom -

You should indeed feel proud of yourself in having played a significant role in relentlessly fighting for Delaware wind power even when things looked pretty hopeless. I myself was about to write off my home state as just another tiny provincial backwater run by a chummy 'ol boy network. It may still be, but at least the 'ol boys have been given a rude awakening.

While this agreement is certainly a major milestone and opens the way for the project to move forward, there are still obstacles. The regulatory approval process for large projects can be quite tedious, expensive, and time-consuming. But let us hope that a relatively environmentally benign project such as a wind farm will move along more smoothly than usual.

The thing that worries me the most is the shifting economic landscape. Bluewater has a two-year grace period in which it can withdraw from the project without incurring penalties. We are entering an increasingly perilous economic situation, and the cost of large projects of all sorts are going up at an alarming rate. Financing is getting more difficult, and the dollar is getting more shaky by the day. (If I recall correctly, Bluewater will be buying Danish turbines, presumeably with dollars.) So, it's going to be a race against time to get something up and running before the economics turn upside down.

Still, this is the best news I've heard in a long, long time.

8:25 AM, June 24, 2008  
Anonymous Patricia Gearity, Citizens for Clean Power said...

There are only 4 legislative days left to get enabling legislation passed for the wind project. Troops, pick up those phones once more, please! Ask them to vote YES for the new Bluewater Wind deal with Delmarva Power: 1) Your own state Representative and Senator; 2) House Speaker Terry Spence 3) House Majority Leader Richard Cathcart; and 4) Senator Thurman Adams. A "thank you" call to Sen. DeLuca would be a fine idea. Phone #s are at: http://legis.delaware.gov/
Thanks to everyone's efforts, we are almost there!

8:32 AM, June 24, 2008  
Blogger TommyWonk said...

Thanks folks for your kind words.

Now do as Pat says, and get on the phone to your legislators.

8:36 AM, June 24, 2008  
Blogger Brian said...

Yes, thank you to tommywonk for your great reporting of this issue, and after we're done calling our legislators, let's not forget to also thank Jack Markell for being the first statewide elected official to support this deal. Without him, I don't think this issue would have gained traction. His early support led the way for the other statewide officials to support the deal.

3:25 PM, June 24, 2008  

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