Utility to open bid process for electricity from onshore wind and other energy producers
Delmarva Power has been saying for months it can get onshore wind power at a better price than power from Bluewater Wind’s proposed offshore turbines. On Tuesday, the company said it would open the bid process to prove the point.
Gary Stockbridge, president of Delmarva, said the company would accept bids from onshore wind power providers, and other renewable energy producers, to fulfill the company’s renewable energy purchase requirements under state law.
Delmarva has the option of buying a mix of electricity and renewable energy credits from a variety of renewable sources, including wind power, to satisfy state requirements. Credits help fund the construction of a wind farm, but don’t directly replace the burning of traditional fuels like coal or natural gas on a day-to-day basis.
The law, passed last year, says a gradually increasing portion of Delmarva’s electricity portfolio must come from renewable sources. By 2019, 20 percent will have to be green.
That’s different from the law that gave rise to the Bluewater bid. That law, passed in the wake of major electricity price increases in 2006, required the state to seek homegrown sources of electricity. The purpose was to stabilize the price of electricity.
Last year, four state agencies ordered Delmarva to negotiate with Bluewater for a 25-year contract to purchase wind power. But with a finished contract in hand, and amid opposition from Delmarva, lawmakers halted the process.
The bids for renewable energy are expected to be complete in March, but it’s unclear how much information the general public will be privy to. The bidders are entitled to some confidentiality when the bids are complete, Stockbridge said. Asked how the public will be able to consider the bids, he said state consultants will be able to analyze them.
“As any shopper could attest to, when you have more options on the table, you’re liable to get a better result at the end of the day,” Stockbridge said.
One leading offshore wind farm opponent, Sen. Harris McDowell III, D-Wilmington, will be holding hearings on finding less expensive alternatives to the $1.6 billion Bluewater project. McDowell led the effort to pass the law requiring more renewable sources of electricity.
Offshore wind advocates have said onshore wind power is theoretically less expensive than offshore, but there will be a lot of demand that will drive the price up.
Stockbridge said there’s a plentiful supply of onshore wind power, and it could provide a more stable price to Delmarva customers than the Bluewater project could. Stockbridge also said the price could increase less per year than Bluewater’s proposed 2.5 percent annual adjustment for inflation.
It’s unclear, even if electricity from onshore wind turbines ends up being less expensive, whether Delmarva’s purchase will equal the amount of power it would be required to buy under the 300-megawatt-maximum Bluewater contract.
Glenn Moore, Delmarva’s regional vice president, said the company will seek a price for an equivalent amount of electricity. But Stockbridge said the company is not committing to actually buying that much wind power.
By Aaron Nathans
23 January 2008
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