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Bluewater, Delmarva restart negotiations

Is offshore wind power terribly expensive or a great bargain? It depends on whom one asks. In the debate over offshore wind power, Delmarva Power, Bluewater Wind and their allies have used charts and graphs to make their point. They are often based upon studies that make very different assumptions. But as the parties head back into negotiations, Public Service Commissioners and staff hope that Delmarva Power and Bluewater Wind can agree on some common measurements.

State agencies frustrated with differing studies push for completion of wind power contract

Is offshore wind power terribly expensive or a great bargain? It depends on whom one asks.

In the debate over offshore wind power, Delmarva Power, Bluewater Wind and their allies have used charts and graphs to make their point. They are often based upon studies that make very different assumptions.

But as the parties head back into negotiations, Public Service Commissioners and staff hope that Delmarva Power and Bluewater Wind can agree on some common measurements.

"We will have apples to apples, not apples to peaches," said James Geddes, PSC staff counsel, during Tuesday's meeting.

During that meeting, four state agencies ordered Delmarva and Bluewater back into negotiations to complete a 25-year contract for Delmarva to buy wind power from a 150-turbine wind farm off the coast of Rehoboth Beach.

Delmarva has argued wind power would be too costly for Delaware ratepayers. Bluewater, meanwhile, said its price would be reasonable and would stabilize costs while fossil fuels remain volatile.

At Tuesday's meeting, PSC Chairwoman Arnetta McRae expressed frustration at the... more [truncated due to possible copyright]  

State agencies frustrated with differing studies push for completion of wind power contract

Is offshore wind power terribly expensive or a great bargain? It depends on whom one asks.

In the debate over offshore wind power, Delmarva Power, Bluewater Wind and their allies have used charts and graphs to make their point. They are often based upon studies that make very different assumptions.

But as the parties head back into negotiations, Public Service Commissioners and staff hope that Delmarva Power and Bluewater Wind can agree on some common measurements.

"We will have apples to apples, not apples to peaches," said James Geddes, PSC staff counsel, during Tuesday's meeting.

During that meeting, four state agencies ordered Delmarva and Bluewater back into negotiations to complete a 25-year contract for Delmarva to buy wind power from a 150-turbine wind farm off the coast of Rehoboth Beach.

Delmarva has argued wind power would be too costly for Delaware ratepayers. Bluewater, meanwhile, said its price would be reasonable and would stabilize costs while fossil fuels remain volatile.

At Tuesday's meeting, PSC Chairwoman Arnetta McRae expressed frustration at the flood of studies, which tended to support the interested parties' preferred conclusions.

"One of the challenges we're facing in this docket is everyone's set of drawings," McRae said.

For instance, Delmarva's consultant said offshore wind power would cost its residential customers $16.74 to $25.49 more a month. Delmarva retained a second consultant, PACE Global Energy Services, whose analysis showed an increase of $21 -- $34 more a month.

A Bluewater consultant, meanwhile, said the monthly increase would be between $5.34 to $7.19 in the first year of the contract, which would turn into a monthly savings of between $2.28 and $2.80 by the last year.

The different prices depend on how much electricity one expects the project to provide; what one anticipates the market for traditional fossil fuels to be; whether one adjusts for inflation; what the discount rate will be; whether the government will enact a tax on carbon emissions; whether the wind farm is backed up by a natural gas plant; and other factors.

Jeremy Firestone, an assistant professor of marine policy at the University of Delaware, said during the meeting that the entire range of studies demonstrated that wind power would result in a maximum monthly premium of $10.70.

When his turn came to speak, Delmarva's assistant general counsel, Todd Goodman, took exception to Firestone's characterization of his consultant's report.

"I'm a little befuddled" by Firestone's argument, Goodman said. "I don't appreciate this muddying of the record."

In an interview, Firestone said he was using the Delmarva consultant's numbers, adjusted for inflation.

"I think that Chair McRae rightly asked the parties to come up with common metrics," Firestone said in an interview. "The parties that have been filing these reports haven't been making their assumptions clear. They file their reports, and we try and figure out what their assumptions were."

The agencies unanimously agreed on Tuesday at a public meeting in Legislative Hall to set a Dec. 10 deadline for the utility to complete a contract with Bluewater to buy wind power for 25 years.

The product of the negotiations will be sent to the four agencies, which are expected to cast a yes-or-no vote on Dec. 18.
Contact Aaron Nathans at 324-2786 or anathans@delawareonline.com.



Source: http://www.delawareonline.c...

NOV 24 2007
http://www.windaction.org/posts/12062-bluewater-delmarva-restart-negotiations
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