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Delmarva proposals could be rejected  

Despite the ongoing review of billion-dollar proposals to add new-generation coal or off-shore wind farms to Delaware’s mix of power generators, one possible alternative – do nothing – remains a distinct possibility.

State lawmakers ordered Delmarva to seek electricity supplies from new Delaware sources last year, with the Public Service Commission, Controller General’s office, Delaware Energy Office and the Office of Management and Budget making the selection.

The measure arose in part from public backlash over a 59 percent jump in rates tied to deregulation of the utility industry, along with concerns over Delmarva’s ability to meet consumer demand and pressure for cleaner, “renewable” fuel sources.

Plans now call for a choice and referral to Delmarva by May.

But agency evaluators could choose none of the above.

“They could pick nothing,” said Jeremy Firestone, an attorney, researcher and University of Delaware professor who has requested “interested party” designation that would give him access to all documents in the case now before the Public Service Commission.

Delmarva has disputed the 400 megawatt total called for in the proposals, putting its needs at half that amount. A Delmarva executive recently described the overall selection process and Request for Proposals (RFP) as “controversial” and described the final selection as an uncertain “if” in a separate PSC filing.

“This RFP was part of a search for intelligence: OK, what will be the best course? It’s not – ‘You shall do this,’ ” said Merrie Street, spokeswoman for Delmarva Power. “I think the perception in some places has been: ‘OK, the RFP is a done deal.’ ”

Up for consideration is an offer by NRG Energy to build an estimated $1.5 billion, 600-megawatt plant near Millsboro at Indian River that would burn a clean gas squeezed from super-heated coal; Bluewater Wind LLC’s proposed 200-turbine “wind farm” in federal waters several miles off Delaware’s coast; and a Conectiv proposal for a conventional, natural gas-fired turbine at its Hay Road power complex in east Wilmington.

Another option before the PSC would leave the state’s long-range needs in Delmarva’s hands, to be met with a combination that includes conservation and a $1.2 billion, 230-mile transmission line that would expand local access to out-of-region power markets.

“I think the commissioners may be committed to picking something,” Firestone said, “since they’ve put all this time into it.”

Lobbying, letter-writing and public promotions have steadily increased in the weeks since the submission, and some state lawmakers have offered reminders that the decision eventually could fall to the General Assembly.

“The information about how this is going to impact ratepayers is going to be subjected to public discussion prior to the Controller General signing on the dotted line,” said Rep. Robert J. Valihura, R-Laurel Ridge, who sponsored the bill last year that set the Delmarva bidding process in motion. The General Assembly-controlled Controller General’s Office has a veto, he added, and lawmaker “consensus” will be required before any decision.

“I don’t believe the public is going to be left out in the cold at the end of the day about what it might cost them before the General Assembly says yes or no,” Valihura said.

Deadline looms

Delmarva Power ratepayers will learn some of the financial stakes next week regardless of bidder confidentiality claims, state officials said Thursday.

The four state agencies on the decision panel were still scrambling this week to decide how to compare and summarize costs and benefits involved in four fundamentally different long-term supply proposals, and how to “score” the results before a series of public hearings next month.

The Public Service Commission gave three companies an extra day on Thursday to justify confidentiality “black-outs” in their original power plant offers, citing business disruptions caused by this week’s storm.

Even with the new Friday deadline, those close to the process were holding out little hope for a wholesale opening of the books to the public in coming days. The News Journal filed a Freedom of Information request for the proposal documents last month and received heavily redacted copies. On Friday, The News Journal sent notice to Attorney General Beau Biden and the PSC appealing the redactions and the PSC’s process of allowing the companies to decide what information should be public.

Consultants for the state and Delmarva are scheduled to deliver draft evaluations of the proposals to the Public Service Commission on Feb. 21, with the documents to be released to the public on Feb. 23 and reviewed at a PSC meeting on Feb. 27. Public hearings would follow in all three counties.

“One of the big concerns on our part is, if all the bidders released all the cost information, we’re going to have a lot of public confusion about comparing apples to oranges,” said Jennifer Cohan, a senior legislative analyst with the legislature’s Office of the Controller General.

Cost, impact and innovation

Legislators called for a decision on the four options based on energy price stability, environmental impact and technological innovation, among other measures. The requirement has since evolved into a complex series of “weighting” factors, including price, business viability and “favorable characteristics,” such as environmental benefits and fuel diversity.

Maneuvering outside the commission selection panel has been furious, and has included lobbying of legislators, public meetings, advertisements and a letter-writing campaign to the PSC. Some environmental groups have embraced the Bluewater plan as best for the region, noting that it will operate virtually without emissions once installed.

Rep. Gerald Hocker, R-Ocean View, whose district takes in NRG’s existing Indian River Power Plant, was less convinced. He questioned Bluewater’s ability to deliver consistent supplies at needed levels because of its reliance on wind. He also noted that NRG has offered to retire two of its older, dirtier units as part of the gasifier project.

“I’m hoping we can work out both NRG and wind,” said Hocker, who chairs the House Energy and Environmental Control Committee. “The way it’s been told to me, you have to have NRG. Delmarva can’t do it.”

Emission control costs

Philip Cherry, a Department of Natural Resources and Environmental Control administrator who represents the Energy Office on the selection panel, said that the proposals need to account for rising emission control costs for coal-powered plants, including the possibility of carbon taxes or requirements to reduce carbon dioxide emissions under a Delaware-endorsed Regional Greenhouse Gas Initiative.

“I’m expecting to see each of the bids and an accounting for the cost of carbon in each of the proposals,” Cherry said. “And I want to be sure that what they’re bidding and the prices that those bids represent” includes cost for greenhouse gas controls.

All three companies excluded some or all of their cost and pricing information, however, and some went farther. Bluewater blacked out details about the amount of power it would produce. NRG cut out details about pollution rates and other information. Conectiv excluded information on fuels, financing and pollution “offsets.”

“There may be some reason why you wouldn’t want one bidder to know what another bidder bid,” said Firestone. On the other hand, “people are maybe looking at this a little differently” because some or all of the construction and operating costs eventually will be passed directly from the winning bidder to customers if a selection happens.

By Jeff Montgomery
The News Journal

Contact Jeff Montgomery at 678-4277 or jmontgomery@delawareonlinecom.

delawareonline.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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