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Bluewater's contract delay proves futile in changing law

Delmarva spokeswoman Bridget Shelton said the utility has discussed the upcoming deadline with NRG, but "details of these discussions are confidential." Bluewater is working with a three-month extension, granted by Delmarva from its June 23 deadline to pay all $4 million.

Parent NRG must exit before Sept. 23 to avoid payment

The three months Bluewater Wind bought to try to salvage its offshore wind-power contract with Delmarva Power has not brought the change in federal law the developer had hoped for, industry observers say.

But it's anyone's guess what will happen when Bluewater and Delmarva reach a key deadline in their power-purchase contract in less than two weeks.

Sept. 23 is the deadline by which Bluewater's parent company, NRG Energy, can exit the contract without having to commit $2.75 million.

It would pay the money to Delmarva, and another $1.25 million by Jan. 1, 2013, and only get it back when -- and if -- the wind farm planned off Rehoboth Beach is up and running.

The immediate parties aren't talking publicly. David Gaier, NRG spokesman, declined to comment and said Bluewater President Peter Mandelstam would not be available for an interview.

Delmarva spokeswoman Bridget Shelton said the utility has discussed the upcoming deadline with NRG, but "details of these discussions are confidential."

Bluewater is working with a three-month extension, granted... more [truncated due to possible copyright]  

Parent NRG must exit before Sept. 23 to avoid payment

The three months Bluewater Wind bought to try to salvage its offshore wind-power contract with Delmarva Power has not brought the change in federal law the developer had hoped for, industry observers say.

But it's anyone's guess what will happen when Bluewater and Delmarva reach a key deadline in their power-purchase contract in less than two weeks.

Sept. 23 is the deadline by which Bluewater's parent company, NRG Energy, can exit the contract without having to commit $2.75 million.

It would pay the money to Delmarva, and another $1.25 million by Jan. 1, 2013, and only get it back when -- and if -- the wind farm planned off Rehoboth Beach is up and running.

The immediate parties aren't talking publicly. David Gaier, NRG spokesman, declined to comment and said Bluewater President Peter Mandelstam would not be available for an interview.

Delmarva spokeswoman Bridget Shelton said the utility has discussed the upcoming deadline with NRG, but "details of these discussions are confidential."

Bluewater is working with a three-month extension, granted by Delmarva from its June 23 deadline to pay all $4 million.

NRG has hesitated to pay because its leaders have said the project needs a federal loan guarantee before it can be constructed.

But the loan guarantee program for renewable energy was dramatically scaled back under the continuing resolution passed earlier this year that kept the federal government open.

Congressional observers say there's been little progress in restoring these funds so far, knowing that, with divided government, the entire federal budget is in play.

"Given the current political dynamics in Washington, "I just think it's not something that is reliable," said Matt DaPrato, an analyst with IHS Emerging Energy Research.

So come Sept. 23, NRG will need to decide whether it wants to hand over the money and proceed. If NRG instead seeks another extension, Delmarva will need to decide if it's willing to be flexible.

If Delmarva declines, NRG would then have to decide whether to pay the money or end the contract and walk away from the project for now.


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

SEP 12 2011
http://www.windaction.org/posts/31884-bluewater-s-contract-delay-proves-futile-in-changing-law
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