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Conectiv appeals state wind-farm ruling

Conectiv Energy is asking the state to reconsider the utility’s plan to build a natural gas plant at its Hay Road facility north of Wilmington.

Four state agencies rejected the proposal last month.

The state erred when it instead chose a more costly combination of an offshore wind farm and a natural gas backup plant somewhere in Sussex County, Conectiv argued in a filing to the agencies Monday.

Conectiv attorney Elizabeth Wilburn wrote that if the state insists on a wind farm, Conectiv and NRG Energy have the right to compete with Bluewater Wind for that contract.

After electricity prices increased by 59 percent last year, lawmakers directed the state to see if new, homegrown sources of power could stabilize the price of electricity long-term.

In February, a consultant hired by the state said Conectiv’s Hay Road facility proposal was the best of the available bids, mainly because it provided the lowest price.

But last month, the Public Service Commission and three other agencies went in another direction. They ordered Delmarva Power to negotiate with Bluewater to buy power from a wind farm, saying it would be an environmentally friendlier and stable-priced source of energy.

Conectiv and NRG Energy could compete to build a natural gas plant in Sussex County to back up the wind farm on high-demand days, the agencies ruled.

In doing so, the agencies departed from the General Assembly’s instructions to consider price as an essential component, Wilburn wrote. That makes the state’s decision “legally flawed,” she wrote.

“It is easy for the state agencies to capitulate to public opinion and to conclude that wind generation is more environmentally friendly than generation from fossil fuels,” Wilburn wrote. But she said lawmakers instead “directed the state agencies to conduct a well-reasoned evaluation of all factors that results in the greatest long-term system benefits in the most cost-effective manner.”

She asked the state agencies to terminate the current power-purchase negotiations, and negotiate exclusively with Conectiv to buy power from Hay Road.

If the state rejects that argument, it should allow the Hay Road facility to serve as the wind farm’s backup, unless the state can show more evidence that a Sussex County backup is needed for reliability, she wrote.

And she said taxpayers could benefit if Conectiv and NRG competed with Bluewater to construct an offshore wind farm.

Jim Lanard, spokesman for Bluewater, declined to address that suggestion. He said only: “We respect the through process the Public Service Commission and three other state agencies managed, and we look forward to our continuing negotiations with Delmarva Power and Light, to site what may be the country’s first offshore wind park.”

Caroline Angoorly, senior vice president of NRG’s northeast region, said in an e-mail that as the state agencies made their wishes known, “our decision was to respond clearly and quickly to the expressed needs of Delaware in giving it what it wants: a competitive natural gas facility located on our Indian River site. Conectiv has clearly chosen a different path.”

Nicholas Di Pasquale, former head of the state Department of Natural Resources and Environmental Control and current conservation chairman for the Delaware Audubon Society, said Conectiv had the opportunity to submit a wind-farm proposal originally, and decided against it.

“This is more than the 11th hour. This is past midnight,” Di Pasquale said. “It’s just another way to disrupt the process.”

By Aaron Nathans

The News Journal

12 June 2007