Some legislators want all-new hearings; others say project not dead
It was a political killing without fingerprints, a whodunit that Delaware environmentalists and political observers spent the holiday season trying to unravel.
Among the mysteries is whether the body in question, an offshore wind power contract, is truly dead.
On Dec. 18, four state agencies were poised to make a landmark decision. They could have ordered Delmarva Power to sign a 25-year offshore wind power purchase deal with Bluewater Wind.
The proposal had momentum, with the valuable endorsement of the Public Service Commission staff and signs of support from the Minner administration.
But amid opposition from lawmakers, the agencies voted to table the proposal, sending it into an uncertain future. It was, several agency heads said, a merciful fate, because a single “no” vote could have meant permanent defeat.
Now, advocates of the offshore wind farm are trying to identify the skeptics to win them over.
“The onus is really on the folks that are against this from happening to explain why,” said State Treasurer Jack Markell, a Democratic candidate for governor. “It’s important for the purpose of transparency, open government and for the purpose of making sure the people have faith in the system that everyone understand where folks are coming from.”
As the lobbying effort ramps up, a group of Democratic Senate leaders on Friday called for hearings to explore less-expensive ways to find renewable energy. The legislative session opens Tuesday. But advocates of the Bluewater plan say that may be a way to send the offshore wind farm to a slow death.
In a private meeting among agency heads that preceded the Dec. 18 meeting, Controller General Russ Larson sought to make approval of the wind farm contingent upon spreading costs statewide, beyond Delmarva customers. The other agencies rejected the overture, knowing that would have meant getting approval by the General Assembly, which was unlikely to be forthcoming.
In an interview last week, Larson said he was not voting his own judgment, but instead was being responsive to his constituency – the Legislative leadership.
That group was largely the one that, amid major increases in Delmarva Power electricity bills in 2006, asked the agencies to explore new in-state power plants as a way to guard against energy price spikes. The wind farm contract was the product of that process.
Larson said that in a series of closed-door discussions and teleconferences, he listened to lawmakers and made his decision.
So whom exactly said what?
“I can’t help you on that one,” Larson said. “It would be totally unfair for me to say so-and-so Jones dominated the conversation and demanded this. Because that didn’t happen. It’s not like one person said, ‘This is what we’re going to do, period.’ It was a much healthier discussion about what was going on, and which direction we needed to take.”
The secrecy has chafed at many.
Rep. John Kowalko, D-Newark South, said those legislative leaders with questions should step forward and make them known.
“If you’re going to have this monumental decision being made, it certainly screams for being done in the open,” Kowalko said.
To try to figure out who exactly swayed Larson, The News Journal made calls to a dozen legislative leaders. About half called back. Of those that did, several felt comfortable describing the overall conversation, but not the advice they gave Larson.
There were a few exceptions.
Sen. Charles Copeland, R-West Farms, said he suggested to Larson that the costs be spread statewide, since everyone would be getting the benefit.
Sen. Liane Sorenson, R-Hockessin, said she took a strong position in favor of the Bluewater project.
Sen. Harris McDowell III, D-Wilmington North, said Larson should “consider the facts on the table.” McDowell, who has generally been critical of the wind farm, said there were “seven studies, all of which said it was a bad deal.”
Many of the reports, including the ones commissioned by Delmarva and a few previous state studies, said the wind farm would be too costly or risky. But the most recent two reports, by the PSC staff and a consultant it hired, were complimentary of Bluewater’s revised proposal.
Sen. Thurman Adams, D-Bridgeville, the Senate’s president pro tempore, declined to say what he recommended to Larson, but said questions remain.
“There are just some things that are not clear. That’s why there are still questions to be answered. The various people involved there need more answers than they’ve received so far,” Adams said. “I don’t know how much it’s going to cost. Who’s right and who’s wrong? Delmarva’s got an answer. The wind people have got an answer. They’re not all the same. You’ve got to get to the bottom to find out, and who it’s going to affect.”
In the wake of the vote, House Speaker Terry Spence, R-Stratford, said he hoped lawmakers could gather additional information and try to resolve the matter in the first two months of the year. Spence could not be reached for this story.
House Majority Leader Richard C. Cathcart, R-Middletown, said the majority of the discussion at the leadership meeting was what the wind farm would cost, and that remains uppermost in legislators’ minds today. The PSC staff report came out too soon before the vote, he said.
Cathcart said legislators are more cautious given their experience with deregulation and the big rate increase that followed. They don’t want to get bitten twice, he said.
“A lot of us are gun-shy,” Cathcart said. “I’m a big believer in wind as an alternative source of energy. It’s something we should pursue aggressively. I think it’s something that we should be proud of being the first state to do it. I think that we need to make sure that we’ve explored every option we have in order to reduce the ultimate cost to the consumer while we’re getting there.”
Cathcart said he doesn’t think a five or six-month delay is asking too much to get the appropriate information.
Markell said the costs of the proposal are well known, and include heavy financial penalties if Bluewater fails to deliver its wind power.
In discussions with Larson, lawmakers also raised issues of federal permits. Copeland said he told Larson the state should wait for the federal government to approve rules for permitting offshore wind farms.
“You don’t want to sign on the bottom line and wait five years and find out you can’t do it,” Copeland said.
Bluewater spokesman Jim Lanard said his company is confident it could address lawmakers’ concerns as it better understands them.
Sorenson said there’s still the potential to work out an offshore wind farm deal.
“It certainly isn’t dead. If there were any intention for it to be dead, it would have been voted down,” she said.
On Friday, McDowell announced that three senators had asked him to schedule hearings to look at all of the state’s options for “affordable, environmentally friendly energy,” including on-shore wind. Those senators were Adams, Majority Leader Anthony DeLuca, D-Newark East, and Majority Whip Patricia Blevins, D-Elsmere.
In a statement, McDowell said he would go into the hearings with an open mind, but also argued that land-based wind power could be significantly less expensive.
“We cannot assume there is only one option out there,” McDowell said. “We need to look at everything and decide what the best deal for the people of Delaware will be. With a potential overcharge to consumers of billions of dollars, we would be remiss not to look at all options.”
DeLuca and Blevins did not return calls seeking comment.
Leann Ferguson, executive vice president of the Southern New Castle County Alliance civic group, wondered if it could be a maneuver to slow down or kill the Bluewater project. “That question begs to be answered.”
Cathcart said he was disappointed the Senate leadership didn’t reach out to the House leadership to make the hearings bipartisan. Searching for information on the Bluewater project is OK, but the time to cast a wider net was long ago, before the state issued a request for proposals, he said.
“To now come in at the eleventh hour, after we’ve already gone through the expense and trouble … to say we’re scrapping that, we’re going to look at other sources, I think is crazy,” Cathcart said.
Staff reporter J.L. Miller contributed to this story.
COST A CENTRAL ISSUE
At the center of the debate concerning the offshore wind farm project is the cost to build the wind farm and the added cost to consumers.
In the latest proposal, Bluewater Wind said it would cost $1 billion to construct 150 turbines off the coast of Rehoboth Beach.
A Public Service Commission consultant identified the average monthly price increase to a residential customer as about $6.50. One alternative proposal would have spread the costs to all Delmarva customers, including big businesses, which would have cut the monthly increase to $3.37. Other estimates of the cost, including those from a consultant hired by Delmarva, put it as high as $21 to $34 a month.
By Aaron Nathans
6 January 2008
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