Bluewater, Delmarva in talks this weekend; Resolution forcing contract languishes in Senate as adjournment nears 

Bluewater Wind and Delmarva Power will work through the weekend to try to forge an agreement on a long-term offshore power deal, with the talks boosted by Bluewater’s agreement this week to move forward with a smaller power-purchase guarantee.

Senate Majority Leader Anthony J. DeLuca, D-Newark East, said he is hopeful a compromise can be reached by next week, when time will essentially run out for negotiations he has been coordinating.

“At this stage, I’m pretty optimistic that we’re going to be able to bring this to a successful conclusion,” DeLuca said in an interview late Friday afternoon. “If things don’t work out, our caucus will meet early next week to make a decision on our course of action.”

Time is of the essence because the legislative session ends June 30 and the Senate is waiting to act on a resolution passed by the House that would order Delmarva to sign a 25-year, $1.5 billion deal committing it to buy as much as 300 megawatts an hour of wind power from Bluewater.

Delmarva has said that’s too much power at too high a price, and could sue if ordered to sign.

The talks were bolstered this week by Bluewater’s willingness to accept a smaller purchase commitment as a basis for getting the offshore wind farm project going.

In recent days, the parties have been discussing commitments totaling 200 megawatts an hour, said Patrick McCullar, president and CEO of the Delaware Municipal Electric Corp. That’s down from the 300 megawatts in the state-arbitrated contract Delmarva objects to.

McCullar’s group, which represents nine municipal utilities, is involved in the talks and hopes to buy 25 megawatts an hour from Bluewater.

Delmarva is said to prefer committing to buy less than 200 megawatts and it is unclear whether Bluewater can get other commitments adding up to 200 megawatts before the end of the month – or whether it would proceed without them.

Bluewater would have the flexibility under the contract to build more turbines to produce additional electricity, and to find other buyers. But company officials have consistently said it needs a long-term contract with at least one sizable buyer to build the project.

Bluewater spokesman Jim Lanard declined to specify how big a power-purchase commitment was under discussion, but confirmed it is less than what was in the December contract.

DeLuca said Friday that he expects to resolve the Bluewater-Delmarva contract this month, but that’s not where the matter will end.

“We really need to regionalize this in the two- or three-state area in order for it to be completely successful,” DeLuca said. “That won’t happen by the end of June.”

On Friday, Lt. Gov. John Carney, who has been active in the negotiations, released a list of more than 3,000 names of people who have signed a pro-Blue- water petition on his gubernatorial campaign Web site. Carney, a Democrat, said he would present the petition, which calls for the Senate to support the project, to DeLuca.

Carney echoed DeLuca’s optimism.

“If the parties don’t reach agreement, it is my hope the Senate could pass the resolution sent over by the House,” Carney said at a news conference Friday morning. “We’re running out of time.”

Carney’s Democratic opponent in the race for governor, Treasurer Jack Markell, said most Delawareans have long known the wind farm is very popular.

“John’s Internet petition doesn’t bring much new information to the table,” Markell said.

Despite the stated optimism of political leaders, other wind farm backers remained skeptical that Delmarva, which has walked away from negotiations before, would consummate even a scaled-back deal.

“Here we are at the end of the session,” said Nick DiPasquale of Delaware Audubon. “Until things start moving, I’m going to be pretty skeptical of a positive outcome.”

Jim Black of the Clean Air Council said he wasn’t sure what to make of the latest developments.

“I should be optimistic about it. But we’ve come up short so many times, I don’t want to speculate about whether it’s a good sign or bad sign,” Black said.

Delmarva Power officials declined to comment.

By Aaron Nathans

The News Journal

14 June 2008