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Bluewater would cap wind plant costs  

Bluewater Wind is willing to take on some of the financial risk of building a wind-power farm off the Delaware coast.

This comes after the Delaware Public Service Commission staff report suggested costs of buildng the plant would hit rate-payers hard.

The proposal also calls for a gas-fired power plant to back up wind generators.

The initial proposal had indicated the project would bring stability to electric bills.

The report indicated Delmarva customer bills would go up by more than $50 a month, with the Bluewater project and shift risks to the utility’s ratepayers.

Jim Lanard, a spokesman for Bluewater, said the report is based on a worst-case scenario in terms of rising costs for steel, generating equipment and other items.

Lanard says Bluewater is willing to put a ceiling on those worst-case costs in an effort to move the project forward.

According to Lanard, Delmarva Power came to the negotiating table as an unwilling partner and insisted on a number of provisions to protect its interests.

The Bluewater spokesman went on to suggest that it could be time to negotiate a deal between the Public Service Comission and Bluewater, rather than continue to deal with Delmarva.

Delmarva spokesman Bill Yingling disagreed with that assessement.

“Everything we have done has been in the interest of our ratepayers,” he said.

Yingling noted that a Delaware mandate to eventually derive 20 percent of its energy from alternative sources will have an impact on the all constituences.

He suggested that a competitive process to obtain that energy from competitive bidding, rather than building the effort around the Bluewater proposal, has support in the business community.

He went on to point out that the power grid is regional in scope, making state-specific projects less desirable.

The PSC report cited rising costs for steel, generating equipment and other items as reasons for the rising cost of the project. It also indicated that expected delays in getting the project into operation would further boost costs.

One factor affecting costs is the falling U.S. dollar, since the technology for the project comes from Europe.

Asked whether projections of continuious increases in non-oil commodity costs were realistic, given the fact that an economic slowdown or new capacity would increase supply, Lanard said the PSC staff had to look at worst-case scenarios in working to protect ratepayers.

The 90-page report drew questions from supporters of the project who questioned whether the PSC was making apples to apples comparisons, since any form of generating capacity would face rising costs.

Backers of the proposal have claimed lobbying efforts by the utility have turned legislators and others against the project.

Delaware Business Ledger

31 October 2007

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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