December 18, 2007
Delaware
Delaware
Both Delmarva Power and an independent arbitrator appointed by the state stress that a contract for a wind farm delivered after a short, intense period of negotiation does not represent an agreement between the parties.
Critical parts of the proposed wind farm to be built off Rehoboth Beach remain in dispute even though some notable changes were made.
Delmarva Power submitted a letter to the Public Service Commission (PSC) to clarify the parts of the proposal with which it has repeatedly disagreed. Issues that the latest round of negotiations did not resolve include price, size, the in-service date of the project and the lack of fairness to Delmarva Power’s standard offer service (SOS) customers who will have to pay the entire cost of the project – despite using just 28 percent of the state’s electricity.
Delmarva Power and Bluewater Wind, with the help of Widener University Professor Lawrence Hammermesh, delivered a contract proposal to the PSC Monday, Dec. 10, as directed. Hammermesh had previously been an uninvolved observer who reported to the PSC that the parties were negotiating in good faith.
The PSC and the three other state agencies that are directing the power purchase agreement (PPA) met Nov. 20, and they agreed Hammermesh should take a more active role in the negotiations and help the parties resolve some of their differences. It was at that meeting that the companies were directed to have a contract drafted by Dec. 10.
Some aspects of the contract changed from previous term sheets submitted to the state. Instead of being delivered to Bethany Beach, power from the farm will be delivered to the Indian River substation, which has a higher capacity transmission line. Bluewater also reduced the monthly price of the wind farm’s energy by $2.02 per consumer.
Delmarva Power acknowledged the decrease in price, but continues to say the project is still an unfair burden on its SOS customers.
Hammermesh wrote that during negotiations, Delmarva Power suggested the in-service date of the project be delayed until the state passed legislation to evenly distribute costs associated with the project.
Delmarva Power also maintains the 25-year term of the contract is unduly long.
Hammermesh wrote in his initial letter, which accompanied the draft power purchase agreement sent to the PSC, “While it is labeled an agreement, and Bluewater has indicated that it is prepared to enter into that agreement, I wish to make clear that there are important aspects of it which Delmarva opposes, and there is therefore no mutually acceptable PPA at this point.”
Bluewater called the contract a victory for the environment, for Delmarva Power customers and for Bluewater Wind.
Delmarva Power spokesman Bill Yingling said his company does not dispute the benefits of wind power but would like to compare Bluewater’s offer to an on-shore wind contract. On-shore wind would deliver environmental and cost benefits to customers at 40 percent less expense, said Yingling.
If the contract is signed, Bluewater will construct the nation’s first off-shore wind farm, consisting of 150 turbines off Rehoboth Beach.
Proponents of the wind farm say electricity costs will be reliable for the 25 years of the contract and say the environmental benefits will be felt across the state.
The next PSC meeting is at 10 a.m., Tuesday, Dec. 18, at the Wells Theater in Slaybaugh Hall at Wesley College in Dover.
The PSC and three other state agencies will meet to consider the proposed deal and public comments, which must be mailed to Karen Nickerson, PSC secretary, at 861 Silver Lake Blvd., Dover 19904 or emailed to Karen.nickerson@state.de.us by Monday, Dec. 17.
Leah Hoenen
Cape Gazette Staff
URL to article: https://www.wind-watch.org/news/2007/12/18/arbitrator-says-offshore-windfarm-contract-is-still-pending/