Library filed under Taxes & Subsidies from Delaware
When the recession hit, Firestone said, people began to conserve more energy and therefore the value of the renewable energy credits fell. Bluewater could no longer bank on selling renewable energy credits to other power companies for a set price. The price fell and so did the number of credits a power company was required to carry, he said.
The average residential Delmarva Power customer could end up paying just 70 cents a month more over the next 25 years for Bluewater Wind's power than they would have paid for fossil-fuel generated electricity, a team of state consultants said Thursday. The projection is significantly lower than the $6.46 a month "wind power premium" the consultants projected in a December analysis of the previous proposed contract between Bluewater and Delmarva, which would have had Delmarva buy twice as much wind power. ...Under the new, smaller contract, Sheingold estimates the average monthly additional cost on a residential customer, averaged over 25 years, will be 70 cents. In the early years, those additional costs will be an estimated $1.79 a month over market, and over time, will turn into a savings as fossil fuels get more expensive.
Delmarva Power signed a landmark offshore wind power deal with Bluewater Wind on Monday, agreeing to buy enough power to light 50,000 homes in Delaware for the next 25 years. The long-awaited, $800 million deal could make Delaware the first state in the nation to build a wind farm off its shores. An array of as many as 70 towering windmills would rise in a tract east of Rehoboth Beach by 2012. ...Both parties agreed the contract will cost average residential customers about $5 a month more -- over the 25 years -- than they would have paid for electricity without offshore wind power. With volatile fossil fuel prices, no one can predict how much additional cost -- or savings -- customers may see over the life of the contract.
Delaware's two big wind-power initiatives face an uncertain future as millions of dollars in federal subsidies are being held up in Congress. ...In the absence of an extension for the credit, Delmarva would likely have to wait out a delay in construction, or pay more for the power. The Bluewater project's timeline is longer, making it less susceptible to the short-term political stalemate. But the uneven history of the credit underscores a risk to the Bluewater project, observers say. ...Bluewater spokesman Jim Lanard said it was "unimaginable" that Congress would stop funding the tax credit, and that Bluewater was prepared to move forward with the project even if Congress elects to fund the tax credit on a year-by-year basis.
The Bluewater Wind offshore wind farm proposal exploits the Delaware Renewable Portfolio Standard Act intended to foster the use of renewable energy sources. ...To qualify as an electricity supplier, BWW has to offer a supply that meets customer needs all the time, not just to the extent the wind blows. The BWW proposal drafts Delmarva as its supply partner, reducing supplier competition. Further, Delmarva's SOS customers may lose the right to choose another supplier if the BWW take-or-pay wind and Delmarva backup power partnership proves expensive. They could be locked in for 25 years.
A House Democratic appeal for faster action on a proposed $1.6 billion offshore wind farm got little traction Thursday, with House Republicans terming any concrete action unlikely before springtime. "I think some of them are waiting until Harris McDowell has finished up his hearings" in March, said House Speaker Terry R. Spence, R-Stratford. Senate Energy & Transit Committee Chairman Harris B. McDowell III, D-Wilmington North, began a series of hearings on Bluewater Wind LLC's proposed 150-turbine wind project east of Rehoboth Beach this month, with a report due in early April. ...Estimates say the project may initially add $13 to $14 per month to Delmarva's standard-offer customer bills, but could decline to break even with current rates after 2025 if natural gas prices increase significantly. Spreading the cost to other Delmarva or state electricity customers could lower rate impacts to $7 extra monthly in early years.
A new report commissioned by Delmarva Power says average electricity customers will pay between $21 and $34 more per month if a proposed offshore wind farm is built. The report, done by PACE Global Energy Services, a Virginia-based consulting firm, says the project would be financially unstable because the developer, Bluewater Wind, has opted to absorb increases in commodity costs instead of passing them on to customers. "Given the magnitude of the impact to our customers, we felt it was important to bring in a fresh perspective," Delmarva President Gary Stockbridge said in an interview Friday, when the report was released. He said the report was unbiased and would hold up to scrutiny.
Pace Global Energy Services, LLC (“Pace”) was commissioned by Delmarva Power and Light (“Delmarva”) to independently assess the economic impacts of the proposed Bluewater Wind off-shore wind farm (the “BWW Project”) on Delmarva’s Standard Offer Service (“SOS”) customers. The review undertaken by Pace was based solely on publicly-available information and data sources. The report can be downloaded by clicking on the below link.
An offshore wind farm developer said today it would not raise the price of its power if the prices of steel and other commodities go up. In making the concession, Bluewater Wind hoped to win over state regulators who have said the company's offer to sign a long-term power purchase agreement with Delmarva Power would be too expensive.
This week's Public Service Commission staff report on future electric power supply has raised renewed debate - not only among energy suppliers but also among academics, politicians, advocacy groups and citizens. ...Bluewater was disappointed but hopeful and Delmarva Power, hesitant from the beginning to negotiate with Bluewater, commended the report, saying, "So far, our analysis also confirms that the price risks associated with Bluewater Wind's proposal are too high. We support the conclusion that the Bluewater Wind proposal is not in the best financial interests of our customers." ...Sen. Charlie Copeland, R-Wilmington, said, "The report confirms the concern I've had all along that the cost to the consumer is ill-defined. While we all want the wind farm to go ahead, we shouldn't make 25 percent of consumers handle the cost when we don't even know what it is."
Bluewater Wind will build 150 energy-producing turbines off the coast of Rehoboth Beach by about 2014 at an estimated cost of $1.6 billion, according to a statement released this afternoon by Bluewater. ...Bluewater spokesman Jim Lanard put it more bluntly: "Our biggest concern is that Delmarva has a secret black box they may use to try to blow up the process." Delmarva would pay 10.59 cents per kilowatt hour for the wind energy, McGonigle wrote. That's 1.05 cents higher than Bluewater's original bid.
Friday is the deadline for Delmarva Power to release details of agreements with three power companies to provide stable-priced electricity for the next 25 years. Homeowners, environmentalists and state officials are awaiting data to see if the wind farm will offer a competitive price, as well as whether the wind farm will be big enough to make a sizable contribution to the state's electricity supply. ...
Critics have said the wind farm plan would include heavy up-front costs for building the turbines and installing them at sea. But Jim Lanard, spokesman for Bluewater Wind, said wind power will end up being less expensive than traditional fossil fuels once the government begins taxing emissions.