As the Public Service Commission endorsed offshore wind power Tuesday, Delmarva Power appeared to be showing more willingness to consider local sources of new electricity.
The commission voted unanimously for Delmarva to open negotiations with Bluewater Wind to buy power generated by as many as 100 turbines off either Bethany Beach or Rehoboth Beach.
The commission also directed Delmarva to negotiate with Conectiv Energy and NRG Energy to back up the wind farm with a gas plant, located in Sussex County.
After the shock of the 59 percent rate increase a year ago, advocates say keeping the process moving will result in adequate sources of power and more stable prices.
NRG, which sought to provide Delmarva with power from a coal gasification plant at its Indian River site, will compete with Conectiv to provide the backup power to the wind farm. NRG’s backup could be in the form of coal gasification or natural gas.
The PSC vote comes after its staff issued a report last week endorsing a wind farm, helped on less windy, peak demand days with electricity from a new Conectiv natural gas plant. Conectiv had originally proposed putting the plant in New Castle County.
Three other state agencies haven’t yet voted on whether to endorse the PSC’s directive to Delmarva. Those votes are expected in the next few weeks.
After the large increase in bills for Delmarva Power residential customers last year, the Legislature ordered the PSC to seek homegrown sources of electricity.
Delmarva has been opposed to the bids submitted by Bluewater, NRG and Conectiv, saying they were more expensive than the projected market price of electricity.
Delmarva last week defiantly said it would not negotiate. But on Tuesday, the company appeared to soften its position.
Tom Shaw, Delmarva CEO, said after the hearing he was pleased the PSC was willing to be flexible with the size of the proposed power plants. He said the company would take the commission’s action under advisement.
That flexibility could benefit Bluewater Wind, which wants to build a larger wind farm, or Delmarva, which hopes to minimize the amount of new power it needs to sell.
The commission left open another option: allowing the wind farm to stand on its own.
“It’s a Plan B,” said James Geddes, staff counsel to the commission.
European wind farms tend to do fine on their own, without backup generation, said Jesse Broehl, U.S. editor of Windpower Monthly, based in Denmark. He wondered whether there was a genuine need for backup power, or whether commissioners were trying to “please everyone.”
“Backup generation is one of the enduring myths of wind power,” Broehl said. “Grid system operators know how to deal with an intermittent resource.”
Until Tuesday, it was unclear whether Conectiv or NRG were willing to consider the role as a backup to the wind farm.
Conectiv officials said at the meeting they would participate in the negotiations, but voiced no enthusiasm. Meanwhile, NRG officials made it clear they wanted to participate in the discussions.
“This process is evolving and highly fluid, so all that is certain at this point is that NRG plans to remain engaged as the process moves forward,” said NRG spokeswoman Lori Neuman.
During the meeting, Caroline Angoorly, NRG northeast vice president, criticized the recommendation not to use coal gasification as the main power source. But she touted NRG’s site as an ideal place for a power plant to back up a wind farm off the shores of Sussex County.
“We have an existing facility in the fastest growing county in Delaware,” she said.
Jim Lanard, spokesman for Bluewater Wind, said the company was pleased with the outcome and was looking forward to negotiating with Delmarva.
“We are highly confident that an agreement can be reached to provide clean, renewable and stable-priced energy to Delmarva’s customers, and that this outcome will benefit everyone in the state of Delaware,” Lanard said.
Commissioner Dallas Winslow said during the meeting it was a shame other states were not allowed to participate in the process of locating a new power plant.
“By just planning for Delaware, we’re being somewhat myopic,” Winslow said.
By Aaron Nathans
The News Journal
9 May 2007