Breaking Wind
January 8th, 2008 by Maria Evans
The background:
On April 6, 2006, House Bill 6 did something amazing, it passed the Delaware State House (34 - 4), and the Senate (15 - 4), and it was signed into law by the Governor, all on that day. The Bill was the General ASSembly’s reaction to a harsh rate spike for Delmarva Power and Light customers, and it started the process for Delaware’s first “cost-effective” utility:
To stabilize long-term pricing in the DP&L service territory, the Act provides for a request for proposals through a competitive process to build cost-effective merchant generation in the State, to be utilized to serve some of the load requirements of DP&L.
When the process was complete, the primary spot was filled by the country’s first off shore wind project, submitted by Bluewater Wind, with a back-up gas plant that would be built by either NRG Energy, (The company that bought the embattled Indian River Power Plant, Delaware’s worst polluter, from Delmarva Power and Light) or Conectiv, (Sister company to Delmarva Power and Light).
(Holy incest, Batman, could that be the reason why Delmarva Power and Light is fighting the wind project…it’s not being built by someone they’re in bed with? Hmmmm…and could that be why DP & L’s President, Gary Stockbridge, wanted to reopen the bidding process after Bluewater was chosen so other companies, like maybe Conectiv, could simply swipe Bluewater’s idea and propose their own wind farm?)
Delmarva Power and Light resisted negotiating, and at one point, the Delaware Public Service Commission deemed the project “not in the public interest” because of pricing issues. But on December 14th, after months of negotiations and Bluewater Wind cutting their price by digging into their profits, the Public Service Commission gave the project a thumbs up:
“Bluewater’s project is a cost-effective mechanism that takes control of Delaware’s energy needs and provides a price hedge against the unpredictable and volatile movement of the PJM market,†the staff wrote in the report.
But despite the PSC’s recommendation, on December 18th our General ASSembly, represented by Russ Larson, tabled the project, citing questions about which Delaware energy customers would pay for the project. HB 6 applied the cost to DP & L’s residential and small business customers, and the PSC could have, without the intervention of the legislature, spread those costs to Delmarva’s large business customers, too, significantly reducing the price.
The wrench in the works was thrown in by a handful of legislators, unknown until just this week, who questioned spreading the cost to all Delaware energy users, including Delaware Electric Cooperative customers. (Is this where I’m supposed to act stupid and think that this group of legislators were oblivious to this entire issue until the day before the final decision was going to be made? It was part of HB 6. Good grief).
So basically the Delaware General ASSembly, the body that passed HB 6 in one day because it was so important, is stalling the process over an issue that’s clearly spelled out in their own legislation, causing Delawareans who have followed the process to roll their eyes so much that the friction is causing the current warm spell.
The interview with Pete Schwartzkopf:
To gain some kind of insight into what happened, last week I spoke with Representative Pete Schwartzkopf, whose 14th District would be the most impacted by the project. Schwartzkopf supports the project, citing, among other things price stability:
“They can tell you on day one and they can tell you on day 3005 what you’re going to pay for power.”
And the creation of new jobs:
“A lot of jobs would be made, these are things that the leaders of our state should be looking at…” FULL AUDIO
With the proposed wind farm sitting 11.5 miles off the coast of Rehoboth Beach, I wondered what kind of feedback Representative Schwartzkopf was getting from his District:
“I only had one person contact me or give me any negative feedback on the wind farm location. They want the wind, they just didn’t want it off Rehoboth.” FULL AUDIO
A question I often hear from people when discussing the project is why are only DP & L residential and small business customers affected by it? Well, according to Representative Schwartzkopf, it’s partly because Delmarva’s customers were “thoroughly impacted with deregulation” and had to eat a 59% increase. AUDIO There’s also the obvious difference that DP & L is a for profit company while the Delaware Electric Cooperative, Delaware’s other main energy supplier, is non-profit and customer run, and as a non-profit, isn’t under the jurisdiction of the PSC.
Schwartzkopf sent an e-mail to the leadership expressing his disappointment at the project being tabled last month, and asking that they convene a meeting with the independent consultant:
I ask that you join me in requesting the House and Senate leadership to convene a meeting either jointly or separate and allow the independent consultant, not Bluewater Wind or Delmarva or the PSC, to address the many questions that we have followed by an explanation as to what happened leading up to the vote on 12/18/07. If Russ is voting on our behalf, then we need to be fully informed so that we can express our will on our leadership to represent us fairly.
Interestingly, Schwartzkopf told me that no one from the leadership ever asked him if he supported the project or not. The General ASSembly never had a vote on whether or not to table the project on December 18th.
Another issue we discussed was the cost of the project. Contrary to rumor, an extra charge on your bill for wind energy isn’t a given. According to Schwartzkopf, the numbers that we’re hearing attached to the monthly increases are based on, “Today’s prices for coal, and the worst case scenario for wind.” AUDIO
Until I spoke with the Representative, one of my main concerns was that the State would have to absorb the price of the project if it wasn’t completed. That’s not the case. Delawareans aren’t paying for the construction of the wind farm, and if, for any reason, the project is stopped before it’s completed, we won’t pay anything.
“This (the wind farm) is a win, win, win, win all the way around.” AUDIO
Finally, the 14th’s Representative has a message for supporters of the project, “Don’t give up.” AUDIO
We’ll keep you up to date on this issue as it unfolds…AGAIN.
January 9th, 2008 at 10:19 am
Nice story title.
Perhaps you could bring this up on the air and then Frank can call in thirty seven times with his opinion?
January 9th, 2008 at 10:26 am
I’m on Saturday morning-expect it.
January 9th, 2008 at 6:40 pm
Maria, I sure do love it when the two of us are on the same side!!!
Your write-up was both factual and very well presented.
I went up to Dover yesterday to speak to our legislators on behalf of getting this wind power contract off the table and approved. What I learned was more about the “monkey wrench” that has been thrown into the works by certain key legislators and their supporters behind closed doors. Even Thurman Adams told me that he defers to Senator Harris McDowell who is “working on the issue”. Well McDowell is the leader of the monkey wrenchers!
I also heard several legislators saying that they were for windpower, but the cost must be spread. Something like 80% of the DE households are DP&L customers, so spreading the cost out over the remaining 20% won’t make a significant difference to the approximately $6 per month that Bluewater Wind would charge them per month. Note that this charge will not begin until BWW is on-line, about 2014. What do you think that fossil fuel generated electricity will cost by then, further dwarfing the $6 BWW charge?
For me, this windpower issue continues to be a no-brainer. To have electricity generated by free and clean fuel at stable prices over the duration of the 25 year contract is simply marvelous.
It seems to me the only significant enemies, since 90% of the state wants wind power, is DP&L and their legislator allies like McDowell. Is it a stretch to think that maximizing their profits is DP&L’s motive, at increased cost to the ratepayers and increased health hazzards from burning coal — who cares about the rate payers? Sure, Bluewater Wind will make their profit if the process goes forward, by providing a desirable product at stable prices, plus 500 jobs during the 3-4 year construction, plus 80 jobs thereafter, plus the being the center of the technology on the Eastern Seabord for further expansion, to DE’s further future benefit.
Indeed, this is a no-brainer. We must not let special interests interfere with what is clearly in our best interests.
PS: Rep Pete Schwartzkopf is doing a great job of leadership on this issue. Senators Bunting and Simpson likewise support this effort. I wish I could say the same about Rep Joe Booth and Rep Gerald Hocker, but unfortunately they are monkey wrenchers. If you don’t like it, write to the two of them. Saying they are for windpower but … is another way to say they are opposed. And a note to Senator McDowell would be a great idea too!
January 11th, 2008 at 11:34 am
Is there anywhere where you can find the true cost breakdown? I haven’t found one place saying who is footing the $1 billion cost of construction. Delmarva online’s links don’t work anymore for articles on that subject. The only thing I found on BWW website is, “The key terms of this contract, including price, will be made public once the parties have reached agreement, and the entire agreement will be approved by state officials. Once the agreement is in place, the permitting process will begin.” Lastly, has BWW ever done a project all the way through from planning to final construction and actually generating power? From their website it looks like the answer to that is no and they just sub out all the work.
January 11th, 2008 at 3:44 pm
The construction of the wind farm is paid for by Bluewater Wind, I cover that in the article. We don’t pay anything until they start providing power. If it isn’t completed, if it falls down, whatever, we don’t pay. The cost is built in to the what they’re charging DP&L for the energy they generate, they only get paid if they generate power, and what they’re charging DP&L has been laid out for the next 25 years.
Bluewater is part of Babcock and Brown, and B&B just got a 274 turbine farm up an running http://domesticfuel.com/?p=3770.
As far as the cost breakdown…I’ll check on it…it may be in the “Terms of Agreement.” And I wouldn’t go to DP&L for any kind of numbers, they were saying something like it would cost everyone $34 a month but the PSC’s independent consultant came up with different numbers:
January 12th, 2008 at 9:48 am
Something is not clear to me. If the wind farms will generate energy, continuosly, at practically no cost, why have we not heard from Delmarva Power, that Delmarva customers can look forward to a reduction in energy costs, now, now twenty years from now. I have been told that Pepco owns Delmarva. Delmarva sold them a package telling them they would be making “X” amount of profit, which is what this is all about. Pepco is not willing to give Delmarva customers one iota of the cost savings they will get as a result of the renewable energy source. In fact, they have the nerve to add more to our energy costs, calling it the “price of a cheeseburger.”
I call this a scam. They are scamming the entire region here that they will be servicing. Where is the Delmarva Commissioner of Energy? Doesn’t anyone care that consumers are at the “mercy” of the mafia? This is a lose lose situation.
January 12th, 2008 at 11:45 pm
Deep Throat’s word’s…..follow the money. I hope someone peeks under the table to see which way it’s going,
January 14th, 2008 at 6:04 am
[...] Back in September, I interviewed Levin on the air and one of the questions he was asked was about energy. Levin indicated that he supported the proposed wind farm off the coast of Rehoboth Beach. In light of the new and bizarre developments with the General Assembly and the wind farm, I asked Levin if he was still a supporter of the project. I think we need it (the wind farm) more than ever right now…In fact, I’d even like to do it with the State of Maryland on a regionalization basis and even increase the size of it out there because I think we and Maryland can do this together and really share in a lot of the benefits. AUDIO [...]
January 17th, 2008 at 6:53 pm
[...] And does Burris possess the leadership our beloved Delaware needs so desperately right now? I can only hope that someone does because we’re knee deep in stuff like a General ASSembly that can’t remember it’s own legislation, an old bridge debacle sitting next to a new bridge debacle, environmental concerns, and development issues, (I had to stop there before I developed the carpal tunnel syndrome). [...]
January 23rd, 2008 at 12:42 pm
[...] I’ve talked to other legislators who don’t agree with spreading the cost to other Delaware energy users particularly the Delaware Electric Coop customers, since they didn’t experience the same rate spikes as Delmarva Power customers and because the Coop is non-profit. Copeland’s response to excluding the Coop customers was a quick, “Why not them?” [...]