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Wind power contract scrutinized  

Hearing puts PSC in the familiar position of defending the Bluewater Wind initiative

There was no jury, no bailiff, no hand on the Bible. But the process that led to an offshore wind power contract appeared to be on trial at Legislative Hall on Wednesday.

A Washington-based attorney spent more than two hours grilling representatives of the Public Service Commission and its staff on the path that led to an offshore wind contract.

Four state agencies, including the PSC, ordered the creation of a 25-year contract for Delmarva Power to buy offshore wind power from Bluewater Wind. The agencies were responding to a legislative directive to seek new sources of in-state generation in the wake of a 59 percent increase in the price of electricity.

But before the agencies could order Delmarva to sign the contract, lawmakers halted the process in December, saying they wanted more time to consider it.

The attorney, Randall Speck, was hired by the Senate Energy and Transit Committee, led by Sen. Harris B. McDowell III, D-Wilmington, who has been holding hearings to examine whether there are lower-cost ways for the state to buy renewable power. Wednesday’s hearing was the first to deal specifically with the Bluewater Wind contract, of which McDowell has generally been critical.

Speck, whose résumé includes helping states with electrical deregulation and its after-effects, veered into familiar lines of questioning from critics of the offshore wind power contract.

He asked why no on-shore wind bids were accepted, how a state consultant’s scoring system worked and parsed the difference between “cost effectiveness” and “most cost-effective.”

Offshore wind power is not seen as the cheapest form of electricity, but the PSC staff has praised it for its long-term stable price and its ability to be built off the gusty Delaware coast. PSC Chairwoman Arnetta McRae said geological experts have noted the state is not a good place to put an onshore wind farm.

PSC representatives said the year-long response to the legislative mandate was exhaustive, transparent and involved unprecedented levels of public participation. McRae said, “I am immensely proud of the manner in which the process has unfolded to date.”

She said the commission did not formally review proposals from out-of-state, on-shore wind farms because the Legislature ordered the agencies to consider in-state sources of generation only. But she noted the agencies had the option to not make any recommendation.

The four state agencies were aware of the general costs of other options, she said, and still believed that “what we had before us was an alternative worth pursuing.”

McDowell noted during the hearing that on-shore wind power is generally considered much less expensive.

Commission representatives pointed to the high prices of oil and coal, the likelihood of a national carbon emissions reduction policy, and the high cost of transmission on the Delmarva Peninsula as ongoing issues that underscore its decision to seek the wind farm and a backup natural gas plant.

Speck asked the commission representatives about the proposed Mid-Atlantic Power Pathway, which Delmarva Power’s parent company would use to bring more power to the peninsula. PSC Executive Director Bruce Burcat said that it won’t change the high prices Delaware customers would have to pay for electricity and that the state needs to diversity its energy portfolio and take control of its future.

Speck asked why just three companies submitted bids for new generation. Burcat replied that the bids were “very serious, credible, important proposals.” Delaware is a relatively small state, he noted.

By Aaron Nathans

The News Journal

6 March 2008

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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