June 24th, 2008
Yesterday, Bluewater Wind and Delmarva Power announced they’d reached a deal, just signed that morning. Delaware is one step closer to having the first offshore wind project in the U.S. Can it be? Perhaps!
How did we get here? Long story… There was a “level playing field” RFP for power that would provide a stable price to the Delaware SOS Standard Offer Service (or SOL) customers suffering from the pain of deregulation. There were three proposals, one from NRG – coal gasification/IGCC, another from Bluewater Wind for offshore wind, and another from Conectiv for natural gas. When looking at the three proposals, the PSC wisely said, “We’ll have one from column A and one from column B” and ordered a wind/gas combo for dispatchable power.
I like to think I had an impact on that, because I’m the only one I heard advocating for that wind/gas combo at a hearing or in Comments. Ahem… and what I most remember is how pissed PSC Chair Arnetta McRae was that I would just pull in to Delaware from Minnesota, show up at a PSC hearing on the RFP and tell them how you can indeed have dispatchable wind by backing it up with gas or hydro, as they are in Minnesota, and because they have gas (not hydro) in Delaware, that was what they should do, what they MUST do! After the meeting, McRae really gave me what-for. At this point, I’ve got a lot of respect for her for taking a hard look at this, stuck in the politics of the situation, and leading Delaware to a good option — and getting harshly slapped up for that leadership. At that first hearing I went to, I also accosted Peter Mandelstam of Bluewater after the meeting, pushing the wind/gas combo, and he told me that they had their hands full with the wind RFP — true, but it’s only half the picture… The PSC staff did their homework, and issued this great report, not only rejecting coal gasification, but advocating for the wind/gas combo:
A wind/gas combo in the southern part of the state made a lot of sense because it’s a peninsula, and is dependent on generation coming in from elsewhere, and a good injection of generation from the south would do the system good, and all the better if it’s wind with gas back-up. The PSC ordered the wind/gas combo, and Delmarva Power started squealing like a stuck pig. Nope, says the PSC, you gotta get to it! They were ordered by the PSC to negotiate, sort of like Xcel and Excelsior, and the results have been as productive… until recently. Every day there were reports of “we’re close” and “we’re almost there” and “oh, we’re close” and “oh, we’re almost there” yesterday:
Like, wow… maybe they’ll get there. It still has to go to the PSC, and DNREC, the Office of Management and Budget and the Controller General have to sign off too (why on earth did the legislature do that, anyway? It’s as convoluted as some of the Minnesota energy legislation).
But wait… it’s not over. Bluewater said there are a couple of details they need to get through the legislature, like a legislative directive to PSC that they will do this (and a public directive to the state agencies who also must sign off per the legislation that started this whole mess), and an odd material term that the Renewable Energy Credits to Delmarva Power will be 350% of what they’d usually get. I need to spend some time with the PPA and figure that out because I’m not excited if Delmarva Power would get a free ride for a lot of its RPS requirement. Hmmmmmmmmm… Delmarva is already trying to get out of doing any DSM and doing a damn good job of it, and so now what will this mean for their renewable generation requirements? More on that later if there’s issues to note. So we’ve got a little twist, a little bit of a mixed bag, it’s not the perfect deal in my view, but I’m not the aribiter in this! From this vantage point, it probably is a perfect deal in terms of a “good deal” in family law, there’s probably issues on both sides enough to make one itch and cringe.
From the News Journal:
The wind part of the wind/gas combo is moving forward, the first in the U.S. offshore wind project just might be offshore of Delaware.