Bidding questions arise in Assembly 

A day after a consultant’s report called for a delay in choosing a new power plant, speculation mounted that the process is on the verge of sputtering out and could wind up back with the General Assembly.

“This has gotten off track,” said House Energy and Natural Resources Committee Chairman Gerald Hocker, R-Ocean View. “I think it’s going to get thrown back in our laps.”

State lawmakers ordered Delmarva Power, the state’s largest power supplier, to solicit bids for a new plant last year in the wake of a 59 percent jump in Delmarva rates. But the process, which drew three proposals – including offers for an offshore wind farm and a “clean” coal plant – was flawed, the state energy consultant’s report released Wednesday said.

Now, that report, which said Delmarva should restart the process to seek more bids, is pushing the process closer to collapse, observers say.

“I think everyone who’s looked at this recognizes that the cart is before the horse,” said Alan Muller, who directs the environmental group Green Delaware.

Delmarva’s own consultant said the three proposals were not in the company’s best interest and recommended choosing none of them. That thought was echoed Thursday by Delmarva President Gary Stockbridge. He said Delmarva opposes all three as too costly, and opposes postponement of the May 8 target for a tentative decision.

“They want us to find an option that would stabilize prices at a reasonable cost, and we don’t believe any of these bids meet those demands,” Stockbridge said. “We’ve been very clear that any of these bids have to have enough benefit to offset all the downsides of a long-term contract.”

Under the process, Delmarva would be forced to enter into a long-term contract with the winning bidder.

But one of the bidders accused Delmarva of “doing everything within its power to retain the status quo.”

“They should not be rewarded – and Delaware rate payers should not be punished – for Delmarva’s intrans-igence,” said Jim Lanard, director of strategic planning and communications of Bluewater Wind.

Bluewater wants an order that would make Delmarva sign a long-term power purchase agreement from a proposed 30-square-mile wind farm several miles off the state’s Atlantic coast.

Also up for consideration is a proposal by Conectiv Power to build a new 177-megawatt gas turbine at its Hay Road complex in east Wilmington and NRG’s offer to build a next-generation coal plant and produce 600 megawatts of power.

A group of state agencies is expected to decide on one of the bids.

“If Delmarva comes back and says ‘This is not a prudent thing to do, this is not going to save ratepayers any money,’ then I think this whole debate is going to fall back to the General Assembly,” said Sen. George H. Bunting Jr., D-Bethany Beach.

Gov. Ruth Ann Minner said Wednesday that the consultant’s objections should be considered before the PSC and three other reviewing agencies make a joint recommendation.

Previous reports have estimated that the plants could cost ratepayers from $100 million to $5.2 billion more than they would pay by 2038 if Delmarva got the power from regional markets.

NRG spokeswoman Lori Neuman said in a prepared statement that “NRG continues to be actively involved in the … process.”

Bill Yingling, a spokesman for Conectiv, said the company would stand by its proposal. The selection or any decision to change the process, Yingling said “is between Delmarva Power and the state.”

But Senate Minority Leader Charles L. Copeland, R-West Farms, said he was uncomfortable with arrangements that force Delmarva to sign a long-term purchase-of-power contract with plants that could be financially shaky.

“Why put Delaware ratepayers at risk to make an investment that power industry people themselves are not willing to make?” Copeland asked.

By Jeff Montgomery
The News Journal

delawareonline.com

6 April 2007