Bluewater: Wind farm will cut use of fossil fuels 

Environmental, health benefits would be diluted, Delmarva argues

A physics argument broke out at Friday’s hearing on the Bluewater Wind contract. When a wind farm powers up, which plants power down?

Bluewater Wind officials said Friday that in the congested Delmarva Peninsula, it will be area fossil-fuel plants. Area residents will realize a direct environmental and health benefit, they said.

But Delmarva Power officials said the benefits will be diluted throughout the 13-state PJM electrical grid, and would have its biggest impact on oil-burning plants, not generators that use the notoriously dirty-burning coal.

Friday’s hearing at Legislative Hall was the last in a series of controversial hearings called by Sen. Harris McDowell III, D-Wilmington, chairman of the Senate Energy and Transit Committee. On Friday, the committee heard from the primary players in the proposed offshore wind contract – Bluewater Wind and Delmarva.

After high electricity prices took hold in 2006, lawmakers directed four state agencies to seek in-state power sources so Delaware could take control of its own energy future. The agencies recommended Delmarva buy power from an offshore wind farm, backed up by a natural-gas plant.

But in December, lawmakers, who said they needed more information on the 25-year contract, blocked the other agencies from ordering Delmarva to sign it. Bluewater advocates say that decision was made to favor Delmarva, which doesn’t want the offshore wind farm.

Delmarva has been arguing offshore wind power is too expensive, and it can buy wind power from on-shore sources for much less.

Bluewater is owned by Babcock & Brown. Hunter Armistead, the head of Babcock’s North American Energy Development Group, said the best way to offset local emissions from dirty power plants is to build renewable power locally.

Addressing Delmarva’s contention that it can buy on-shore wind power from out of state at a lower cost, Armistead called that “virtual wind.” Out-of-state wind power only offsets emissions where it is created, he said.

Randall Speck, the attorney hired by McDowell’s committee, pressed Bluewater representatives on this point. “Because it’s an interconnected grid, isn’t any place on the grid in PJM able to supply power to Delaware?”

Onshore wind power is plentiful in places such as South Dakota and Illinois, Armistead argued, but on the crowded East Coast, where land is at a premium, the best place to put a wind farm is offshore.

“The only true way to reduce emissions in the area is to actually inject renewables into the area,” Armistead said.

But Delmarva officials saw it another way. Citing a PJM Interconnection official who spoke at the hearings, they contended environmental benefits of an offshore wind farm would be spread throughout the grid. It wouldn’t be coal that would go first, but more-expensive fossil fuels such as oil, said company spokesman Bill Yingling.

PJM spokesman Ray Dotter, reached Friday, said that when the transmission lines on the peninsula are congested, wind power would displace traditional, high-cost sources of electricity nearby. On low-congestion days, power could be dispatched from afar, so the impact on fossil fuels would be diluted, he said.

Bluewater spokesman Jim Lanard said that under today’s economics, if the wind turbines were spinning, they would cause area natural gas-burning plants to back off. But in the future, when taxes on carbon emissions and other factors likely make coal-fired power more expensive, coal plants such as NRG’s Indian River facility would burn less fuel, he said.

Friday’s hearing also featured a look back at the prickly state-ordered negotiations between Bluewater and Delmarva. Armistead called Delmarva cordial in working toward a productive resolution, but “it was very clear it was a very reluctant dance partner.”

Armistead said he wondered why the utility was resisting, and said he believed it was because the wind farm would take away business from Delmarva’s sister company, Conectiv.

Delmarva officials rejected that theory. Delmarva President Gary Stockbridge said the company had two major concerns – the wind contract puts too much burden on Delmarva customers for too long; and it’s unfair to ask only the company’s customers to pay for a wind resource that will be shared by other Delawareans who are not Delmarva customers.

The Bluewater project will have “a direct and meaningful impact on Delaware residents’ disposable income,” Stockbridge said. Job creation wouldn’t make up for that impact, he said.

By Aaron Nathans

The News Journal

8 March 2008