Thursday, July 31, 2008

PSC Docket No. 06-241 Is Closed

Well, it's done. The Public Service Commission, Office of Management & Budget, Department of Natural Resources & Environmental Control and the Controller General voted to approve the power purchase agreement between Bluewater Wind and Delmarva Power.
The four agencies then closed out Docket No. 06-241 by voting to transfer the question of a possible natural gas backup plant to the IRP (Integrated Resource Planning) docket.
Legally, the parties have 30 days to appeal the decision, but the odds of that are seen as ranging from remote to no way.
Before bringing the meeting to a close, PSC chair Arnetta McRae mentioned the "profound influence" of the public in shaping the outcome.
Afterwards, Bluewater Wind hosted a gathering of 200 supporters. Even Delmarva Power president Gary Stockbridge showed up, where he too paid tribute to the power of the public support for wind power in Delaware. He said he could use some of that support for the approval of the contracts for onshore wind now before the PSC.

My Day

I have a busy day ahead of me.
I plan to be on hand today when the Public Service Commission and three other state agencies make history by approving the agreement between Bluewater Wind and Delmarva Power to bring offshore wind power to Delaware. The gavel will come down at
1:00 in the House Chambers in Leg Hall.
And then tonight at 7:30, the monthly gathering of Drinking Liberally meets at Catherine Rooney's at 1616 Delaware Avenue in Trolley Square. My friends at Delaware Liberal will put their considerable egos on display, albeit it for a good cause: helping to defray the costs of sending me to the Democratic National Convention in Denver.
Jason has posted an interview with me this morning at Delaware Liberal in which we discuss about wind power, Denver and the connection between blogging and life as we know it.

Wednesday, July 30, 2008

Drinking Liberally Thursday: Sending Me to Denver

This month's edition of Drinking Liberally gathers Thursday night at Catherine Rooney's in Wilmington at 7:30. (That's 1616 Delaware Avenue in Trolley Square.) My pals at DelawareLiberal are making this a fund raising event to help defray some of the costs of going to Denver by holding a contest for Delaware's Hottest Blogger. Mercifully, as the beneficiary, I am not being required to compete.
The National Journal has posted a story on the embedded bloggers at the convention, noting our privileged access:
The embedded bloggers, in fact, will have better entree to the delegations than will traditional journalists, who will need to apply for a floor pass.
The story notes that the bloggers sitting with the state delegations are all good Democrats:
None of these blogs is known for being particularly critical of the Democratic Party at the national level. "My blog is more policy-driven than, say, personality-driven," Noyes says. "Folks know me. I know them. I imagine they are going to be comfortable with the kind of thing I am writing because I have done it for years."
I suppose the story had to break sooner or later: I was picked because I'm friendly with Democrats.
I wonder if this is the first of more stories on bloggers as journalists labor to fill the 24 hour news cycle with content. We're already seeing a trickle of stories on the food being served. By the way, I checked, and it will still be possible to eat fried food at the convention, despite the fuss being made over the request to caterers that at least some of the food be healthy.

Monday, July 28, 2008

Why More Offshore Drilling Won’t Bring Down Gas Prices

Critics, and even supporters, of John McCain’s proposal to open up more coastal waters to offshore drilling have rightly noted that it would take ten years or longer for any oil to reach consumers. But there’s a more fundamental reason why opening up more of our coastal waters won’t bring down gas prices, as any student of corporate strategy will tell you.
Consider an imaginary strategy session in an imaginary oil company. An executive proposes that the company increase its capital investment in order to bring down the price of its products. It doesn’t take much imagination to realize that it would be irrational for the executives around the table make the extra investment.
This is basic business school stuff. The oil business is an example of a mature industry; there is little chance that any technological breakthrough or change in the market would alter the fundamental economics of the industry.
A company in a mature industry should treat its productive assets as a cash cow, “milking it for all its worth” and using the profits elsewhere. Why? Simply put, more capital investment won’t generate more revenue.
This is why oil companies have not drilled on 41 million acres of offshore leases they already control, as Joe Biden pointed out two weeks ago. It’s also why oil companies are returning more cash to their shareholders rather than increasing investment in production:
HOUSTON (AP) — As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what will probably be another round of eye-popping quarterly profits, just where is all that money going?
The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.
It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel.
You don’t have to view oil executives as morally deficient to understand why they won’t pour more capital into production—you just have to see them as acting to maximize return to their shareholders.
The standard strategy for companies in mature industries is to use their profits from cash cows to fund investments in new industries—which is just what Joe Biden and T. Boone Pickens are proposing to do by investing in renewable energy.

Sunday, July 27, 2008

Is History Marching in Obama's Direction?

One would hardly imagine the Economist would be among those journals heaping accolades on Barack Obama's foreign policy trip. But the venerable magazine's American columnist with the pen name Lexington has been forced by events to admit that Obama had a very good week:
THIS week Americans have been bombarded with images of Barack Obama posing as the commander-in-chief. Mr Obama standing shoulder-to-shoulder with world leaders. Mr Obama flying in a helicopter over Iraq with General David Petraeus. Mr Obama shooting hoops with the troops. Mr Obama boarding a jumbo jet with his name emblazoned on the side. And John McCain? He was photographed on a golf cart with the 84-year-old George Bush senior.
Lexington paints a picture of a candidate playing to win, instead of not to lose:
This was the boldest move in a campaign marked by bold moves. Democrats usually adopt a defensive crouch when it comes to foreign policy. Bill Clinton and Al Gore all but ignored it in their runs for the presidency. John Kerry wore his service in Vietnam like a shield. But Mr Obama has marched into Republican territory with his head held high.
It was also a risky move. There was the risk of looking presumptuous. Presidential candidates do not usually fly around the world in their own personalised versions of Air Force One. There was the risk of crossing the line between talking to foreign leaders and negotiating with them. And there was the risk of a gaffe; Michael Dukakis never recovered from looking silly in a tank.
But these worries have been silenced by events. The decision of the Iraqi prime minister, Nuri al-Maliki, more or less to endorse Mr Obama’s timetable for withdrawing American troops from Iraq sent shock waves through Washington, DC, discombobulating the White House and driving the McCain campaign into panic. And the resurgence of the Taliban in Afghanistan underlined Mr Obama’s argument that America needs to devote more resources to the country that nurtured Osama bin Laden.
Even the Bush administration played into Mr Obama’s hands. It signalled its willingness to work with the Iraqis on a “time horizon” for troop withdrawals. And it dispatched a high-ranking State Department official, William Burns, to participate in multilateral talks with Iran over its nuclear programme. Mr Obama had made talking to Iran a centrepiece of his campaign, something the Republican right has fiercely resisted.
Frank Rich write in the New York Times that Obama's timing was just right:
But to dismiss Barack Obama’s magical mystery tour through old Europe and two war zones as a media-made fairy tale would be to underestimate the ingenious politics of the moment. History was on the march well before Mr. Obama boarded his plane, and his trip was perfectly timed to reap the whirlwind.
As if to demonstrate that they are not just fools for Obama (as they once were for McCain), some of the media's biggest stars started asking whether Obama shouldn't admit that the sight of events turning his way wasn't proof that McCain wasn't right all along:
It was laughable to watch journalists stamp their feet last week to try to push Mr. Obama into saying he was “wrong” about the surge. More than five years and 4,100 American fatalities later, they’re still not demanding that Mr. McCain admit he was wrong when he assured us that our adventure in Iraq would be fast, produce little American “bloodletting” and “be paid for by the Iraqis.”
I am not particularly concerned with the question of whether Obama gets a bump in the polls from the trip. I think the most important effects will be long term, as voters become more comfortable with him representing our country on the world stage.

Friday, July 25, 2008

A Final Submission to the PSC on Wind Power

After a long and largely unprecedented process, a new Power Purchase Agreement (PPA) is now before the Public Service Commission and other agencies charged with the selection and approval of a new electric generating facility in Delaware. This two year effort should be crowned by emphatically and enthusiastically approving the PPA on the table. When I first spoke at a hearing on the subject of Delaware’s energy future in March of last year, I urged that we should not fall into the comfortable old habits of conventional thinking: The debate over offshore wind power to Delaware has revolved around the matter of price. At the outset, many simply assumed that wind power must be more expensive than electricity from conventional sources. I and others argued otherwise.
It is gratifying to see the independent consultant revisit the assumptions it used last year, particularly the cost of carbon controls and the effect of natural gas prices. Last year the independent consultant published analyses in which the price of natural gas was projected to drop over the next several years:

Source: PSC Staff Report, October 29, 2007, Appendix C
I criticized this assumption, and the resulting conclusion, in my letter to the Commission dated December 12, 2007: The unrealistic estimates of future natural gas prices—based on federal Energy Information Agency (EIA) projections)—have been replaced with a set of somewhat more plausible estimates:

Source: Independent Consultant’s Report, July 3, 2008, Page 34
While these changes in assumptions have led to a more modest estimate of the net cost of the project of 70 cent per month for the average customer, I still find the forecasts to be optimistic. The “High Gas” scenario shows the price in 2007 dollars rising to $12 per MMBtu roughly thirty years from now. But the NYMEX futures market for delivery in December and January has traded above $12 in recent weeks, though prices have moderated a bit (
I do not bring this up to fault the Commission or other agencies for using the EIA projections. I understand the importance of establishing a single set of assumptions to better compare competing and complicated analyses. As a federal agency, the EIA provided a convenient benchmark—though it unfortunately bore little resemblance to real world prices.

The consultant’s assumptions on the cost of carbon controls have also been revised sharply upwards. Again, I and others have pointed out that plausible estimates of the cost of future carbon controls would make wind power look affordable by comparison. The International Energy Agency projects that demand for coal power will increase 73 percent by 2030 ( At the same time, the need for carbon emission controls will increase the cost of coal power by at least 20 percent, according to an MIT study published last year (

The unrealistic assumptions used as the basis of the independent consultant’s results were buried deep within the written record, but their importance reverberated throughout the debate over wind power in Delaware. In my view, these crucial variables need to be placed front and center in future analyses of our energy options.

It would be flattering to think that eventually the independent consultant, the majority of citizens, 62 legislators and even the opponents of wind power came around to our point of view due to our superior analytical skills. The truth is that the view that we couldn’t afford wind power was overwhelmed, not by careful analysis, but by the relentless rise of fossil fuel prices. Even the most committed advocates did not anticipate just how quickly the rise of fossil fuel prices would bring us to the break-even point for wind power.

We can expect prices to remain volatile and continue to climb in the future. For this reason, I recommend that the PSC and the parties to the agreement not consider the PPA as an end point, but as a beginning, and be prepared to revisit the final size and scale of the wind farm in order to respond to future increases in energy prices.

In closing, I want to offer my gratitude and congratulations to the Commission, its staff and the other agencies, for an outstanding job of handling the almost impossibly complex procurement and negotiating processes with integrity and grace under pressure.

The simple fact of the matter is that wind power would cost us a little bit more if—and only if—fossil fuel prices remain flat for the next thirty years. If recent history is any guide, and if the laws of economics are not overturned, we can expect fossil fuel prices to continue to climb over the next thirty years.

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.

Thursday, July 24, 2008

Does Offshore Oil Drilling Reduce Pollution?

Christine O'Donnell, who is challenging Joe Biden, repeats a number of the standard fossil fuel industry talking points in her op-ed advocating offshore drilling that appeared in the News Journal today. But the piece contained a point that I had not seen before:
Biden would like us to believe that offshore drilling is an environmental catastrophe. But only 1 percent of the oil pollution in the sea is the result of oil drilling, while 63 percent is the result of natural seepage on the ocean floor.
So the earth itself is messier than oil companies. Where did Ms. O'Donnell learn such startling truths? From the Free Republic perhaps? This excited post links to a 1999 press release from the University of California, Santa Barbara:
Next time you step on a glob of tar on a beach in Santa Barbara County, you can thank the oil companies that it isn't a bigger glob.
So what's forming these unsightly globs? The same press release tells us:
Most of the seepage is methane, a potent greenhouse gas which escapes into the atmosphere, said Luyendyk. About 10 percent of the seepage is composed of "higher hydrocarbons," or reactive organic gases which interact with tailpipe emissions and sunlight, creating air pollution.
Last I checked, methane doesn't end up on the beach in unsightly black clumps that stick to your feet.
It gets better. There are those who maintain that drilling offshore reduces pollution, arguing that we should drill it before it leaks. I tracked the assertion to the Institute for Energy Research, which published a report advocating exploitation of offshore oil reserves. This report included a citation to a study published by the National Academy of Sciences.
It turns out the study was funded, and even reviewed for content, by organizations like ChevronTexaco, Shell Global Solutions, ExxonMobil and the International Association of Independent Tanker Operators (INTERTANKO).
The UCSB press release concludes by saying that the rate of increase of global methane atmospheric concentrations has been declining for the past 20 years, and that a "worldwide decrease in natural hydrocarbon seepage related to onshore and offshore oil production may be causing a global reduction in natural methane emission rates."
In other words, oil companies have been reducing methane emissions without so much as a thank you from an ungrateful nation, though the researchers did not attempt to confirm this assertion. Also left unexamined is the question of how burning the methane instead of letting it seep into the atmosphere benefits the environment.
I imagine Ms. O'Donnell didn't delve too deeply into questions like these. She probably just saw a neat argument on a website and ran with it. She didn't say whether we should be drilling for oil off of Rehoboth, so we may never get the chance to test the hypothesis that offshore oil rigs reduce pollution here in Delaware. Of course, if you like the idea, you could always vote Republican and let us know how it works out.

The Tour de France and Obama's Tour de Force

The shift of the D.C. establishment away from John McCain and towards Barack Obama is now official. A day after I compared Obama's trip to the Tour de France, David Broder refered to it as "Obama's Tour de Force." Broder opens by attributing some of Obama's new found foreign affairs luster to advance hype and luck before detailing how his outlook on the world is being confirmed by events:
Acknowledging all that, it is still the case that Obama is pulling off this trip in great style and thereby has enhanced his Oval Office credentials.
What he could not have counted on is the role that luck has played in the events that have surrounded the tour and in the actions of a cast of supporting players.
When, on the first day of the trip, Obama stepped onto a basketball court at the air base in Kuwait and sent his first three-point shot cleanly through the basket, you knew that the gods had decided to favor him.
He could not have known in advance that on the very day he left Chicago, President Bush would suddenly reverse six years of policy and send a high-ranking State Department official off to a meeting with Iranian and European nuclear negotiators.
He could not have guessed that Iraqi Prime Minister Nouri al-Maliki, eager to promise his constituents that the American occupation would not be endless, would persuade Bush to declare agreement to "a time horizon" for the departure of U.S. troops.
And he could not have assumed that a Maliki spokesman, briefing reporters on the prime minister's meeting with Obama, would volunteer the comment that "the end of 2010 is the appropriate time for the withdrawal" of U.S. troops.
Suddenly, long-standing Obama policies -- direct talks with Iran and a 16-month timetable for withdrawal -- seemed to be ratified by events.
Broder can't help but nit-pick one or two of Obama's answers to reporters' questions, before turning to the way events have turned against McCain:
But his troubles are minimal compared with those of John McCain, who looks like the odd man out in the ongoing foreign policy debate. Having given steadfast support to the policies of both Maliki and George Bush, he has a legitimate complaint: They owed him more consideration in the way they announced their shifts. As it is, McCain appears isolated from trends in both Baghdad and Washington.
Things are getting tough for John McCain when David Broder has to point out that his stature on the world stage has been superceded by the upstart senator from Illinois.

Wednesday, July 23, 2008

Obama Sets the Agenda on Foreign Policy

As I was watching the Tour de France, the perfect metaphor came to me for what Barack Obama is doing with his trip abroad this week. Just as Lance Armstrong was the patron, the boss, who set the agenda for the peleton (pack of riders), Obama is setting the agenda for the debate over America's place in the world.
The Tour's patron does more than win races; he has to dominate the proceedings. It helps to be fast, to be a strong climber and have a strong team, but a rider can wear the yellow jersey and still not qualify as the peleton's patron. The mark of the patron is setting the agenda. The patron determines the pace of the peleton, and decides who is allowed to break away and who isn't. The art of the patron is one of muscular diplomacy: Riders on other teams know they have to consider his point of view when they map out their own tactics.
Many observers considered Obama as the political equivalent of a sleek time trialist; he performs well in front of a crowd, but could he handle the rarefied air of foreign affairs? In cycling terms, Obama needed to survive the mountains without losing ground to McCain in order for his trip to succeed. Instead, he has dominated.
Consider the events of the last week:
Obama's contention that we need to shift attention and forces from Iraq to Afghanistan has become conventional wisdom.
After criticizing Obama for discussing diplomacy with Iran, the Bush administration sent the highest level diplomat the country has seen in 28 years to a meeting on its nuclear program.
Iraqi Prime Minister Nouri al-Maliki came out clearly for a timetable for U.S. withdrawal from his country. Even George Bush has suggested a "horizon" for withdrawal from Iraq.
Obama seems to be answering the question of whether he can be effective on the world stage.
Harold Meyerson of the Washington Post
says he can:
Obama's Strategic Vision
Maybe the symbolism of Barack Obama giving a major speech this week at Berlin's Victory Column -- a 19th-century monument to Prussia's military triumphs -- isn't as incongruous at it might seem. After all, it was Frederick the Great -- the 18th-century Prussian monarch who transformed his kingdom into the dominant German state -- who once advised his generals, "He who would defend everything ends up defending nothing."
You can't deploy everywhere in strength, Frederick was saying, and that's a lesson Obama seems to understand a lot better than John McCain does.
As the New York Times reports, McCain is being reduced to ill-tempered backbiting:
Senator John McCain and his campaign sharply stepped up criticism of Senator Barack Obama on Tuesday as a craven and naïve traveler to the Middle East who, as Mr. McCain put it at a raucous town-hall-style meeting here, "would rather lose a war in order to win a political campaign."
It's hard to picture Obama as naïve when world leaders are aligning themselves with his strategic vision. In contrast, John McCain's approach seems to be to bull your way through, much as our current president has done.
The image of Barack Obama on the world stage is appealing to those who have seen U.S. influence in the world decline over the last eight years. I don't know if Obama's trip will lead to a quick bump in the polls, but it will make it easier for undecided voters to conclude that the guy can shape events and restore America's leadership in the world.
Photo: Department of Defense

Tuesday, July 22, 2008

Climbing Mountains in the Tour de France

After 15 stages and 64 hours of riding, the Tour de France resumes today in the Alps. Six riders are within 49 seconds of each other with two stages left in the Alps, including tomorrow's stage on the slopes of the fabled Alp d'Huez.
Frank Schleck is followed by Bernard Kohl, Cadel Evans, Denis Menchov, Christian Vande Velde and Carlos Sastre. Any of these six could end up in yellow on Sunday.
Versus is starting its coverage at 6:30 in the morning here on the east coast, repeated in the afternoon, the evening and again at night. The
New York Times has a convenient interactive map that summarizes each stage. The Google Earth Blog shows off the work of some geeks who have mapped out the race in three dimensions, including street views.
The next two stages display the Tour at its most fundamental: Who among the six riders can outlast the others in the Alps. The object is to put the other riders into difficulty in the delicate parlance of the commentators.
Photo: Jasper Juinen/Getty Images

Monday, July 21, 2008

More Wonkiness in Delaware

Delaware's blogosphere has gotten a little wonkier recently. There's a new blog in town, and it's called DelaWonk.
The blog is written by an otherwise anonymous blogger by the name of Mark, who likes to highlight policy issues like WiFi in Philly and DelDOT's use of Google maps. His own blurb sounds high-minded enough, and suggests that he works in the public sector:
DelaWonk is a website that brings together professionals and public policy experts for conversations on policy issues. We try and enlighten the public policy conversation.
But Mark isn't above mixing it up in the messy business of politics. Mark has weighed in a few times on the side of John Carney. For instance, he has complained that John deserves more credit for his efforts on wind power and delved into some arcane details of Jack Markell's TV spots.
Anyway, it's great to see thoughtful, well written commentary from a new blogger. As far as I'm concerned, there's rooms for plenty of wonkiness online here in Delaware.

Sunday, July 20, 2008

Spinto Band and Hoots & Hellmouth in Arden

The wooded grove behind Arden's Gild Hall is the perfect place to spend a hot summer afternoon with good friends and great music.
Delaware's own Spinto Band deconstructs the elements of pop and rock and reassembles them in energetic, tuneful, off balance arrangements that at times reminds me of early Talking Heads. These guys can play a mile a minute and still turn on a dime.
Hoots & Hellmouth from nearby Chester County showed no energy shortage with raucous songs steeped in country and gospel traditions.
The Arden Concert Gild produces great music year-round, which may be why WXPN and the Grand Opera House have decided to partner with them in the last year. For the most exciting, eclectic concert series in the Wilmington area, pay close attention to the Gild's offerings for the coming season.

Friday, July 18, 2008

Arden Music Fest this Saturday

The Arden Concert Gild, Delaware's hippest concert promoters, present this year's Music Festival on Saturday from 1:00 to 8:00 PM in the shady grove behind the Gild Hall. The good folks at the Concert Gild have come up with another outstanding lineup this year, including The Sauce, described as "R&B trance groove," and blues woman Gina Sicilia.
Those who remember Robert Hazard from his days as an 80s Philly rock icon will be surprised to learn that he has reinvented himself as a songwriter's songwriter. (Not that he didn't know how to craft a catchy tune; he wrote "Girls Just Wanna Have Fun" for Cyndi Lauper.) His new record, Troubador, is a near-perfect demonstration of the craft
Hoots and Hellmouth, pictured here at the 2006 Philly Folk Fest, offers roots music on way too much coffee. Just try sitting during one of their sets; I don't think it can be done.
Wilmington's own Spinto Band serves up quirky, melodic pop with plenty of hooks. The Spinto boys, many of whom are second generation Sin City Band kids, have been touring the U.S. and Europe in anticipation of their second record. Who knows; maybe some of the old folks (not to mention Hoots and Co.) will join the boys for a rousing rendition of "Shake, Rattle and Roll."
So if you're wondering just how much fun outdoor music can be, come on down. Tell 'em TommyWonk sent you.

Thursday, July 17, 2008

Bluewater Wind Pitching Wind Power to Maryland

One of the pivotal features of the power purchase agreement (PPA) between Bluewater Wind and Delmarva Power is that Bluewater will be able to market the wind farm to other potential buyers in New Jersey and Maryland, provided that Bluewater gives Delmarva the best deal it offers any new customer. This growth opportunity is significant enough for Bluewater to agree to a smaller project with thin profit margins. As the News Journal reports, Bluewater has gotten right to work selling wind power to Maryland:
[Maryland] Energy policy director William Brandon Farris confirmed broad details of the talks Wednesday, after reports circulated that Maryland Gov. Martin O'Malley supported the Delaware offshore wind venture and was open to working with the company on Maryland's needs.
"We're having discussions with Bluewater Wind," Farris said. "We are looking at all aspects. We fully support the Bluewater Wind proposal and would like to be involved in some way."
O'Malley spokesman Shaun Adamec said Maryland's governor outlined his views on offshore wind and Bluewater's agreement Friday during a National Governors Association event.
"He believes that it's a far more progressive way and a far more results-oriented way of looking at the energy crisis than lifting a ban on offshore drilling," Adamec said.
The Baltimore Sun reports that Governor O'Malley let the cat out of the bag while criticizing proposals to open up coastal areas to offshore oil drilling:
O'Malley's statement of interest in offshore wind power came in response to questions at a news conference about his position on President Bush's decision to lift an executive order prohibiting oil drilling off most of the U.S. coastline, a move that leaves a congressionally imposed ban in place.
The governor rejected Bush's position in harsh terms - calling the argument that it would help lower fuel prices "patently false" - before volunteering that the proposed project off the Delaware coast is "one offshore effort I would like to go in on."
With a PPA in hand, Bluewater now has considerable advantage of being able to expand its planned wind farm. It's far less expensive to add wind turbines to an existing project than it would be to build an entirely new project
Update: Allan Loudell has invited me to join him on WDEL, 1150 AM at either 5:25 or 5:35 to discuss the latest news on wind power. If you miss me during the noon hour, WDEL also posts podcasts of recent interviews.

Wednesday, July 16, 2008

One Last Chance to Speak for Wind Power in Delaware

We're not done yet. The Public Service Commission (PSC) is holding a public meeting on the power purchase agreement between Delmarva Power and Bluewater Wind. Citizens will be able to speak to the PSC at the meeting tomorrow, Thursday at 7:00 PM in the House Chamber in Legislative Hall.
This is the last chance for citizens to speak up before the PSC, the Office of Management & Budget, DNREC's Energy Office and the Controller General meet to make a final decision on July 31.
The PSC has posted a brief (if technical) presentation by its independent consultant on the PPA.

Tuesday, July 15, 2008

Joe Biden, Offshore Wind and Offshore Oil

The News Journal reports that Joe Biden went to Cape Henlopen to slam George Bush and John McCain for wanting to open up more of the country's coastline to offshore drilling:
"I think this is a last-ditch effort to go out and rape the offshore continental shelf, so that they own it and are able to use it as leverage in the future, because they know if they don't get it in the last couple of months of this administration, they're not going to get it," Biden said.
Biden prefers offshore wind to offshore oil.
"I'm proposing a five-year Apollo project for energy and climate change that would make a substantial, $50 billion investment in alternative energy and energy efficiency," Biden said.
Money for the project could come from elimination of more than $2 billion in tax breaks now available to oil producers despite continuing, massive profits, Biden said.
Investments should include federal subsidies for transmission lines to carry electrical power from new clean wind farms like Bluewater's, Biden said. National support also is needed for solar and geothermal energy, biofuels and new battery technologies.
Biden had previously pointed out that oil companies have not actually drilled in most of the offshore oil fields. As I said several weeks ago, the the energy policy created by the two oil executives who run our government has produced little more than higher prices and billions in wasted subsidies

Sunday, July 13, 2008

I Went Back to Ohio

As I noted on Friday, Akron is Chrissie Hynde's home town. She wrote about the place in her 1982 song, "My City is Gone."
I went back to Ohio,
but my city was gone.
There was no train station.
There was no downtown.
I had not been to Akron since before the song was written. The downtown looks like it is recovering somewhat since then, though it features only a fraction of the office buildings Wilmington has.
I counted four office towers in Akron that looked like they were built between the 1950s and the early 1970s. Wilmington has built several times that number since the early 1980s. Akron's population of 210,000 is nearly three times larger than Wilmington's, and spread over 62 square miles, compared to Wilmington's 11 square miles. Akron's population continues to shrink while Wilmington's began to rebound in the 1980s.
Chrissie Hynde really did go back to Ohio. Last year she opened a vegan-Italian fusion restaurant called The Vegiterranean, located on the northern edge of downtown in a loft district. I did not get a chance to try the place. I've been staying in a hotel in an edge city location just off one of the highways ringing the city. The road to the hotel is lined with chain restaurants, two of which were shuttered.
Akron boomed early in the 20th century to provide rubber tires for the growing auto industry. Various spin-off companies sprung up to develop rubber products. A great uncle of mine started such a company in his attic (the house didn't have a garage). But Akron hasn't developed new industries as the rubber business declined, the way Wilmington has with financial services.

Friday, July 11, 2008

Akron, Ohio and Denver, Colorado

I'm en route to Akron, Ohio for a family thing. But if you're looking for a good night out later this month, my pals at Delaware Liberal are putting on a special Drinking Liberally on Thursday, July 31 at Catherine Rooney's in Wilmington. They're helping to defray the considerable costs of my trip to the convention in Denver in August.
In the meanwhile, here's a trivia question:
What two rock acts came out of Akron, Ohio?
Update and slight correction: I should have asked what rock acts have their roots in Akron.
The answers are Devo and Chrissie Hynde of the Pretenders, though she formed her band in England.

Wednesday, July 09, 2008

Back to the Regulators

After six months in the General Assembly, the focus of the effort to bring offshore wind power to Delaware returns to state and federal regulators. The News Journal reports that the Public Service Commission has scheduled one last public hearing before a schedule vote on the proposal:
The commission approved a date of July 31 for a final vote by the PSC, the Department of Natural Resources and Environmental Control, the Office of Management and Budget and the General Assembly’s Controller General’s Office.
The PSC also set July 17 for an evening public hearing in Dover on the contract, along with a deadline of July 25 for written public comments to be submitted to the PSC.
Yesterday also brought news of progess on setting up a federal permitting process. The Minerals Management Service, which is part of the Interior Department, published proposed regulations guiding the siting of offshore wind power projects in federal waters:
The U.S. Department of the Interior’s Minerals Management Service (MMS) today published a proposed rule in the Federal Register (2.04 MB PDF file) that will regulate alternative energy production activities and alternate uses of existing facilities on the Outer Continental Shelf (OCS). The proposed rule is accompanied by a draft environmental assessment analyzing the potential environmental effects of the rulemaking in accordance with the National Environmental Policy Act. The proposed regulations will establish a program to grant leases, easements, and rights-of-way (ROW) for orderly, safe, and environmentally responsible alternative energy project activities and alternate uses of existing facilities on the OCS. The rule will also establish methods for sharing revenues generated by this program with nearby coastal States.
Bluewater Wind's Peter Mandelstam cheered the news:
"That was the piece that we were waiting for and you were waiting for," Mandelstam said. Bluewater officials said they will read the rules closely and reply with comments promptly, in hopes the rules can be enacted before the turnover in the White House in January.
The worst-case scenario would be for the federal government to not know how to respond to the proposed project. (I've been there.) Hopefully the proposed regulations will move ahead as quickly as possible.

Monday, July 07, 2008

TommyWonk Back on Progressive Voices

I will be going on the Progressive Voices program on WVUD, 91.3 FM, at 7:00 this evening to discuss wind power in Delaware.
As decisive as the unanimous vote in the General Assembly was, we still need to hear from the Public Service Commission (PSC), Office of Management & Budget, Department of Natural Resources & Environmental Control and the Controller General. The PSC will be hearing from the parties to the negotiation tomorrow, and will meet with the other three agencies to render a final decision on July 31. Public comments are being taken up until July 21.

I will also touch on the curious matter of the shrinking premium for wind power.
As I noted on Friday, the PSC's independent consultant reduced the estimated extra cost the average customer would have to pay for wind power.
Update: I was joined by John Kowalko and John Flaherty, who provided terrific perspective on the entire history of how we brought wind power to Delaware. Dana hopes to post podcasts of the program soon.

Saturday, July 05, 2008

How Can Obama Be Ahead with So Much Negative Coverage?

On the face of things, it would seem that it was another tough week for Barack Obama.
According to the national news media, Obama is flipping on any number of issues. Even worse, his campaign is in trouble over comments a week ago by Wes Clark, in which the former
NATO commander had the audacity to suggest that McCain's admirable war record was not, in itself, enough to qualify him to run the country.
So how could it be that Barack Obama still ahead in the polls?

For insight on this question, we can find clues from of all people, two national opinion columnists.
David Ignatius of the Washington Post offers his perspective on how Obama is weathering these media storms:
During the July 4th week, Barack Obama did something that's becoming characteristic of his campaign: He took an issue on which he appeared to be vulnerable -- in this case the cluster of themes lumped together as "patriotism" -- and by going on the offensive in a powerful speech, he subtly changed the terms of the debate.
Obama delivered his patriotism address last Monday in Independence, Mo. (extra points for the campaign scheduler). This might have been the usual cliche-filled verbal waving of the flag, the sort of empty summer exercise that makes American politics so predictable. Such a speech would have reinforced the sense that Obama was on the defensive -- that he was doing the rhetorical equivalent of kissing babies and eating corn on the cob in an attempt to placate skeptical voters.
But Obama doesn't try to please everyone in these situations. When he decides he's in trouble (and that sometimes takes him awhile), he goes to the heart of the matter -- into territory that a more cautious and traditional politician would avoid. Knowing that millions of people have seen images on the Internet questioning whether he and his wife, Michelle, love their country, he went at the issue head-on.
The entire piece is worth reading:
"The question of who is -- or is not -- a patriot all too often poisons our political debates," he said. Then he laid down his marker: "I will never question the patriotism of others in this campaign. And I will not stand idly by when I hear others question mine." He went on to paint a picture of his own American story, with personal vignettes that would have done Ronald Reagan proud.
Ignatius sums up the Obama campaign's response to these issues:
Take your greatest weakness -- the thing people whisper about you by the water cooler -- and address it directly, without apologies or sweet talk. That's Obama's approach, and in a country where people increasingly seem to regard politicians as professional liars, no wonder people find it refreshing.
So one piece of the answer is that the Obama campaign has learned to attack when your opponent expects you to cower. Didn't Karl Rove say something like that? And how does Mr. Rove fit into this election campaign? Paul Krugman tells us what we've learned from the hyped outrage over Wes Clark's comments:
What General Clark actually said was that Mr. McCain’s war service, though heroic, didn’t necessarily constitute a qualification for the presidency. It was a blunt but truthful remark, and not at all outrageous — especially given the fact that General Clark is himself a bona fide war hero.
Here's the money quote:
Now we know what a McCain administration would represent: namely, a third term for Karl Rove.
So here we find two clues as to why Obama leads despite lousy coverage: First, he refuses to play defense according to the GOP playbook. Second, maybe voters don't want to be governed by the GOP playbook.

Friday, July 04, 2008

Wind Power Costs Were Overstated

The latest report from Public Service Commission's independent consultant admits that previous estimates of the cost of offshore wind were too high. The News Journal story on the consultant's report features this headline:
State: Cost of wind power overstated
Pat Gearity of Citizens for Clean Power writes:
Jeremy Firestone and Tom Noyes are vindicated by yesterday's admission by the PSC's Independent Consultant that his 12/07 $6.46/month estimate for BWW was overblown, in light of 1) projected major natural gas cost increases ignored in the estimate; and 2) the likelihood of future carbon taxes on fossil fuel generation which would reduce the comparative cost for offshore wind. The cost spread for all Delmarva Power customers was included in the IC's December 2007 report, so the fact that those numbers were not widely used is not the real story (see below). Also, DPL's excuse is truly bogus regarding a "miscommunication" with the PSC consultant. They had the informed comments filed by Firestone and Noyes before the PPA was scuttled on 12/18/07. DPL knew all along that Firestone and Noyes were right. Firestone at P. 6, 12/13/07:; Noyes at P. 15-16, 12/13/07:
For the record, here's part of what I submitted to the PSC in December:
Opponents of the wind farm claim that we can't afford it. The simple fact of the matter is that wind power would cost us a little bit more if—and only if—fossil fuel prices remain flat for the next thirty years.
If recent history is any guide, and if the laws of economics are not overturned, we can expect fossil fuel prices to continue to climb over the next thirty years.
And this from the latest consultant's report:
Forecast market energy prices are 21% higher in 2014 and approximately 7% higher on average over the term of the Final PPA than previously projected as a result of higher natural gas and CO allowance cost forecasts...
I plan to spend some time with the consultant's report, and will offer comments on the methodology before the PSC and three other agencies make their final decision on July 31. Sure the deal is done, and obscure points from the public record may not matter so much.
But the debate over wind power in Delaware revolved around cost more than any other issue. If the methods used to evaluate the proposal produced inflated cost estimates, those methods deserve scrutiny before the docket is closed.

When in the Course of Human Events

In CONGRESS, July 4, 1776
The unaminous Declaration of the thirteen united State of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. —Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.

He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the consent of our legislatures. He has affected to render the Military independent of and superior to the Civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For Quartering large bodies of armed troops among us:

For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us, in many cases, of the benefits of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:

For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by the Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

[New Hampshire] Josiah Bartlett, William Whipple, Matthew Thornton
[Massachusetts] John Hancock, Samual Adams, John Adams, Robert Treat Paine, Elbridge Gerry
[Rhode Island] Stephen Hopkins, William Ellery
[Connecticut] Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott
[New York] William Floyd, Philip Livingston, Francis Lewis, Lewis Morris
[New Jersey] Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark
[Pennsylvania] Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross
[Delaware] Caesar Rodney, George Read, Thomas McKean
[Maryland] Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton
[Virginia] George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton
[North Carolina] William Hooper, Joseph Hewes, John Penn
[South Carolina] Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton
[Georgia] Button Gwinnett, Lyman Hall, George Walton

Thursday, July 03, 2008

Obama Leading McCain in Montana

How long until we hear the talking heads ask if Barack Obama has a cowboy problem? Rasmussen Reports has Obama up in Montana:
Barack Obama is leading John McCain by five percentage points in Montana. The latest Rasmussen Reports telephone survey in the state shows Obama attracting 48% of the vote while McCain earns 43%.
In April, the numbers were reversed with McCain leading 48% to 43%. That was before Obama clinched the Democratic nomination and defeated Hillary Clinton by fifteen points in Montana.
Against McCain, Obama leads among voters under 50, including a twenty-seven point lead among voters under 30. McCain leads among those over 50. Obama is supported by 89% of Montana Democrats while McCain gets the vote from 85% of Republicans.
How big a deal is this result?
It would be truly stunning if Obama could turn Montana into a competitive state this November. George W. Bush won Montana’s 3 Electoral College Votes by twenty percentage points in 2004 and by twenty-five points four years earlier. Even Bob Dole managed to win Montana, albeit by a narrow 44% to 41% margin (Ross Perot picked up 14% of the vote). gives Obama only a 16 percent shot of winning Montana. I'd say that number is likely to move a bit based on this result. (Update: 538 has boosted Obama's chances to 36 percent. Nate points out some interesting details in the poll.)
Atrios points out that
Montana's governor and two senators are already Democrats.

Wednesday, July 02, 2008

Update on Wind Power on WDEL this Evening

I will be talking about wind power with Allan Loudell of WDEL at 5:35 this evening. As I reported yesterday, Babcock & Brown seems to be getting on top of its recent financing difficulties.
It should be pointed out that the process to bring wind power to Delaware didn't end with the passage of SB 328. Next Tuesday, the Public Service Commission will meet and take public comments on the negotiated power purchase agreement. I'll be there, along with others who can stand to talk about it just once more for old times sake. The PSC and other agencies will meet to decide the issue once and for all on July 31.

Update: The PSC will not take public comments on July 8, but will do so on July 31.

Tuesday, July 01, 2008

Financial Update on Babcock & Brown

Two weeks ago, I wrote of the financial issues Babcock & Brown was having with some of its creditors. Earlier in June, some of the company's creditors had asked for a review of $2.7 billion of loans, citing a provision that the B&B's market capitalization not fall below the value of the credit facility. As majority owner of Bluewater Wind, B&B's financial strength is of considerable interest to Delawareans. Reuters reports that B&B has resolved the matter with most of the creditors involved:
Babcock & Brown, an Australian investment firm hit by worries over its heavy debt last month, won a reprieve from its lenders, sending its shares up as much as 17 percent on Monday.
Two-thirds of Babcock & Brown's 25-member bank consortium agreed to drop a clause that gave lenders the power to review terms of a 2.8 billion Australian dollar, or $2.7 billion, corporate debt facility if Babcock's market value fell below 2.5 billion dollars.
The company's market capitalization fell below that level last month, sparking a major sell-off as investors feared creditors might invoke the review clause and force the firm to quickly repay the debt.
In return for dropping the review clause, Babcock & Brown agreed to prepay some of the debt and pay a higher interest rate, 50 basis points more, on the three-year debt facility. A basis point is one-hundredth of a percentage point.
Babcock & Brown will pay an estimated $10 million a year over three years to remove the provision from the loans. Investors seem to think that this is a reasonable price to pay for greater certainty. B&B's share price has recovered about a third of its lost value since the agreement was announced. B&B hasn't slowed the pace of its dealmaking this week. Reuters reports that the Italian energy firm Saras bought a 30 percent share in four wind farms owned by B&B, which should help the company's balance sheet. The Financial Times reports that Babcock & Brown has more work to do to clean up its balance sheet and those of some of its underperforming funds:
As part of Monday’s deal B&B also agreed to reduce its debt by A$400m once various asset sales currently underway are completed. These include its European wind farms assets which could fetch up to US$3bn in a deal Babcock hopes to close in the third quarter. B&B is planning to appoint up to three investment banks to advise on its specialist funds in a bid to close the gap between their net asset value and their trading price.
The wind fund is not one of those underperforming funds. The Australian Herald Sun reports that B&B's wind fund is feeling flush enough to go shopping for assets:
Babcock & Brown Wind Partners has bought four wind farms in Germany for an undisclosed sum with the purchases funded completely from cash.