House has next say on wind farm 

Legislation to force the state to approve a proposed offshore wind farm to generate electricity was sent to the full House late Wednesday, after a committee hearing dominated by supporters of a 150-turbine project east of Rehoboth Beach.

But the Energy and Natural Resources Committee also approved a measure calling for another bill that would spread Bluewater Wind’s electricity costs beyond Delmarva Power’s customers to all state electricity customers, a provision many believe would kill Bluewater’s project.

Prospects for quick action on either measure, House Concurrent Resolution 38 or HCR 4, was unclear. A Senate committee has been holding its own hearings on costs and alternatives to Bluewater’s project since February, with a report expected in April.

State lawmakers ordered Delmarva to study its electricity needs and seek new in-state supplies in 2006, after a 59 percent rate hike that followed a six year freeze. Delmarva utility argued that it could manage without long-term, instate supplies. But the Public Service Commission ordered bids and a series of revisions and scale-backs that produced Bluewater’s current plan.

Representatives of three public agencies and a delegate of the General Assembly tabled Bluewater’s proposal late last year, declaring they were unable to reach a required unanimous vote to make Delmarva Power sign a 25-year purchase contract for offshore wind electricity.

“I want the PPA [project],” Wilmington resident Tom Noyes testified at the hearing Wednesday. “I want the price protection that this will provide. Despite what you hear from Delmarva Power, they do not represent my interests. This body represents my interests.”

Bluewater wants Delmarva Power to sign a state-ordered contract for up to 155 megawatts annually from a $1.6 billion wind farm. The purchase, which emerged from a state-ordered bidding process, would account for about 12.5 percent of peak needs for Delmarva’s nearly 285,000 “standard offer” residential and small business customers.

Delmarva has argued that the long-term contract could unfairly burden its customers, and that it can get better prices for non-polluting “green” power from other sources, including on-shore wind farms.

Bluewater maintains that it’s output will help to stabilize electricity supplies and prices.

Delmarva President Gary Stockbridge testified that early review of the company’s recent land-based wind solicitation shows that “onshore” wind would be 50 percent cheaper than Bluewater’s offer.

“We’ve got a tremendous amount of new information,” he said. “This is about providing the same benefits for our customers for substantially less cost.”

Peter D. Mandelstam, Bluewater’s president, said that Bluewater’s project would more directly benefit Delaware, an argument that has taken deep root in Sussex County, where public objections to pollution from NRG’s coal-burning Indian River power plant near Millsboro are on the rise. He also said that state agencies recommended the project during an 18-month review.

The company’s owner, onshore wind developer Babcock & Brown, has indicated that it would make Delaware a hub for regional offshore wind ventures if Delaware approves the initial project.

“A long-term, fixed price contract is like insurance,” said Jeremy Firestone, a University of Delaware professor of marine policy and legal studies. “That’s why we might be willing to pay a little more, because we’re reducing risk” of energy shortfalls or paying higher prices for fossil fuel-based power, he said.

A Public Service Commission consultant estimated that electricity from Bluewater would cost about $6.56 per megawatt hour on average, although first-year costs would be in the $11-14 range.

Stockbridge said Delmarva was prepared to support creation of a state agency that could sign a contract with Bluewater and spread costs to all state customers. He also disputed claims that Bluewater would reduce pollution in Delaware, pointing out that the power grid manages supplies on a regional basis.

John A. Hughes, secretary of Delaware’s Department of Natural Resources and Environmental Control, said he supports Bluewater’s project both as a clean energy investment and as a potential source of offshore reef-type fishing habitats. He opposed the resolution that would spread costs beyond Delmarva.

Rep. Gerald W. Hocket, R-Ocean View, the committee chairman, had indicated earlier that he would seek tabling of both resolutions. But Rep. John Kowalko, D-Newark South, pressed for approval of the forced approval measure in exchange for agreement to allow a House vote to spread the costs.

By Jeff Montgomery

The News Journal

13 March 2008