Legalectric

Energy debate continues at series of public hearings
By Rachel Swick
Cape Gazette staff

Public hearings kicked off this week to discuss the future of power in Delaware, while at the same time evaluations of three proposals were released, instantly drawing criticism from two of the power bidders.

The evaluation by state agencies and an independent consultant looked at three proposals submitted to the state Public Service Commission (PSC) and Delmarva Power for a long-term contract for new power.

The proposals include a 200-megawatt natural gas plant from Conectiv, a 600-megawatt coal-gasification plant from NRG Energy and a 600-megawatt off-shore wind farm from Bluewater Wind.

The results ranked Conectiv first, with Bluewater Wind in second and NRG, third.

Jim Lanard, director of strategic planning and communications for Bluewater Wind, said the evaluations were inconsistent, giving such a great advantage to Conectiv for its lower price that the other proposals could not equal Conectiv – even though they may have outscored the natural-gas plant on aspects such as fuel diversity, innovative technology and environmental impact.

“It’s impossible to compare the three companies when Conectiv admits they will change their price in the future,” said Lanard, who questioned whether the price Conectiv quoted for costs associated with natural gas are realistic or just overly optimistic.

Lanard said the evaluation process was inconsistent because evaluators used one scale for price categories and an entirely different method when looking at emissions and environmental impact. He said the same scale should have been used for each factor; had the same scale been used, the overall results would have been different.

“Just with changes to those categories, Bluewater would be considerably ahead,” said Lanard.

Evaluation process flawed

While NRG officials did not agree that Bluewater would be ahead, they did agree that the evaluation did not come out with the best solution to Delaware’s energy problems.

“We absolutely stand behind our proposal, which would allow Delaware to meet its energy needs and environmental objectives affordably with IGCC and carbon capture and sequestration, now and into the future,” said Caroline Angoorly, NRG’s senior vice president for the Northeast Region.

“After reviewing the initial evaluation reports, however, I’m concerned that all of the taxpayer-funded work done to make this a competitive process, with an independent evaluation of the value being offered to the state, has been wasted.”

NRG concluded that the consultants’ report is fundamentally flawed on many levels. Most notably, the report recommends state agencies do the exact opposite of what the request for proposals was intended to accomplish. The consultants, who ranked each proposal on a point system, gave the most points to a natural gas project – when the process was designed to move Delaware toward greater fuel diversity.

“More natural gas generation means Delaware ratepayers will be vulnerable to more volatile and high gas prices,” said Angoorly. “Moving to IGCC technology would provide increased fuel diversity and would allow us to use U.S. coal, which has much more stable pricing than natural gas and is in abundant supply. And we can use this technology to remove the substances that have traditionally made coal environmentally less desirable.”

NRG also noted that while the proposed IGCC plant met all seven criteria listed in the request for proposals – including use of innovative baseload technology, existing fuel and transmission infrastructure and existing brownfield or industrial sites – the project ranked a distant third.

“The evaluation process concludes that IGCC – the very technology that leaders around the world are holding up as the next generation of power plants – is wrong for Delaware,” said Angoorly.

NRG submitted these comments to the PSC after reviewing the evaluation reports. NRG maintains that the evaluation was not objective because the consultants relied on models for evaluation that were constructed by Delmarva Power, an affiliate of Conectiv, which was one of the bidders. Angoorly said it would have been better for the consultants to construct their own models, so that the review would have been truly independent.

NRG was awarded no points for its proposal to shut down two of its oldest operating units at Indian River, which would cut down on carbon and other emissions.

“The evaluation process has failed to reflect the real cost to Delaware of a large, intermittent energy resource,” said Angoorly. “If Delmarva chooses offshore wind power, additional power will have to be purchased from another source to meet energy needs when the weather is warm, the wind is not blowing, air conditioners are on and electricity demand and costs are at their highest.”

Risks merit emphasis

The first of three public hearings was held Tuesday, March 6, in Dover and drew many Sussex County residents and business owners interested in talking about wind.

It also drew many NRG employees, who were bused to the hearing by the company.

Kim Furtado, holistic health expert and Millsboro resident, said she was encouraged by how much average citizens cared and knew about the power question in Delaware. “After examination of the point system used by this RFP process and the consultants’ report, it is clear to me health factors are not included with enough foresight,” said Furtado.

“I urge you to place appropriate perspective on the health risks of each bid as you analyze the consultants’ reports, and honor your historical opportunity to do so.”

The second hearing, to be held at Delaware Technical & Community College was postponed due to the winter weather on Wednesday, March 7.

It will be held at 7 p.m., Monday, March 12, at Del Tech in Georgetown. The public is welcome to attend.

Toxic Release Inventory 2005 numbers released

Statistics compiled in the Delaware Toxics Release Inventory 2005 indicate a decline in toxic emissions for most big polluters in the state, including the Indian River Power Plant in Millsboro.

“In Delaware, TRI reports for 2005 show that on-site releases reported under TRI were lower by 18 percent when compared to 2004, and they were lower by 29 percent compared to 1998,” said Delaware Department of Natural Resources and Environmental Control (DNREC) Secretary John Hughes upon the release of the data this week.

“One reason for the decrease in reported on-site release amounts is that the Indian River Power Plant had fewer impurities, including chlorine, in the coal it burned in 2005.”

Indian River Power Plant, owned by NRG Energy, is the biggest polluter in Delaware, but efforts to clean up the plant in recent years are steadily reducing toxic emissions.

In 2004, Indian River reported releasing 241 pounds of mercury into the air and land. That number went down in 2005, when Indian River only released 205 pounds of mercury.

With new regulations from the state and new technology the plant owners plan to install, that number should drop dramatically in the coming years, said NRG officials.

In 2004, Indian River released 130,000 pounds of sulfuric acid into the air. In 2005, that number dropped to 110,000 pounds.

“While there is positive news within the TRI data, there is also some negative news within the program. Recently, the EPA (Environmental Protection Agency) weakened the TRI program by enacting a rule allowing more facilities to report on the TRI short Form A that does not report any amounts,” said Hughes. DNREC sent a letter to the EPA opposing the rule change.

“Fuel quality, as well as amount of energy production, can affect the environment,” said Hughes. “We encourage both industry and the public to do their share to help preserve the environment through greater energy efficiency and material selection.”

For more information on TRI data, visit www.serc.delaware.gov/services/search/index.shtml

Contact Rachel Swick at: rswick@capegazette.com