Bush At Least Says the U.S. Should Talk about Climate Change

The New York Times has the story that President Bush finally thinks is time to talk about climate change:

Seeking to end America's isolation on the issue of global climate change, President Bush called today for the 15 countries that are major producers of greenhouse gases to confer this fall and adopt a common goal on curbing emissions.

The environmental blog Gristmill considers it good news of a sort:

To give credit where it's due, there is considerable symbolic significance to the news that the U.S. is shifting from a stance of truculent foot-dragging to active engagement.

But the Bush administration's history on the subject is not encouraging:

Take the series of meetings. You'll recall that the international community has already been holding a series of meetings on climate change , ever since 1995, under the unwieldy rubric of Conferences of the Parties to the United Nations Framework Convention on Climate Change. Just last November, COP-11 was held in Montreal. It was marked, as the previous COP meetings have been, by U.S. intransigence.
The G8 summits have struggled to address climate change as well. Indeed, Tony Blair tried to make climate change a top agenda item for 2005's G8 summit; he even flew to D.C. to beg for Bush's support. But that summit was marked by ... U.S. intransigence .
Then there was the 2005 Davos World Economic Forum, where Blair again begged Bush to move on climate change. Again ... intransigence.

This is not the first time George Bush said the U.S. would act. Actually, the Bush-Cheney 2000 website provides us the transcript of a speech on September 29, 2000, in which Bush said he would regulate carbon dioxide:

With the help of Congress, environmental groups and industry, we will require all power plants to meet clean air standards in order to reduce emissions of sulfur dioxide, nitrogen oxide, mercury and carbon dioxide within a reasonable period of time.

It took Bush all of 54 days after taking office to break that pledge. Today's announcement, as welcome as it may be, still does not represent a commitment to regulate carbon dioxide as he said he would do in 2000.

"The last full measure of devotion"

It has become a TommyWonk tradition to ponder the words of the Gettysburg Address on Memorial Day. Here's the infamous Powerpoint version, a lesson in how to take a powerful message and reduce it to mush.
And here is the text of the Bliss Version (with links to readings by Sam Waterston, Jeff Daniels and Johnny Cash):

Fourscore and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation or any nation so conceived and so dedicated can long endure. We are met on a great battlefield of that war.
We have come to dedicate a portion of that field as a final resting-place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this. But, in a larger sense, we cannot dedicate, we cannot consecrate, we cannot hallow this ground. The brave men, living and dead who struggled here have consecrated it far above our poor power to add or detract.
The world will little note nor long remember what we say here, but it can never forget what they did here.
It is for us the living rather to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth.

Silent Protest in Delaware

Those who worry about the loss of civility in the debate over the war in Iraq should come to Delaware. The New York Times has a story about a silent protest and counter protest that face each other each week across the intersection of Savannah Road and Kings Highway in Lewes:

Supporters of both sides in the debate over the war in Iraq have gathered here every week since September 2004 at the busiest intersection of this tranquil shore town of about 3,000 residents. In January, an additional group began congregating in silence on a third corner, their signs calling for the president’s impeachment.
They stand just about 35 miles from Dover Air Force Base, the arrival point for the bodies of soldiers shipped back from Iraq. But in this state, which has suffered a disproportionate number of war casualties, these protesters bring as much civility as fervor to this intersection of American public opinion.
“I have the utmost respect for him and his persistence,” said Ms. Kirby Gibler, looking across the street at Mr. Broderick as she wheeled her red wagon full of signs toward the corner. “When the war ends, all of us will stop coming here.”
Mr. Broderick conveys a similar respectful steadfastness. “They’re good people,” he said before taking his position. “We just don’t happen to agree.”

Creatures from the Abyss

For those of us stuck in the city and longing for a dip in the ocean, here are some remarkable images of life in the sea from the book, The Deep: The Extraordinary Creatures of the Abyss by Claire Nouvian.
This is a photo of Grimpoteuthis, the dumbo octopus, which measures 20 cm in length: This creature, 2 cm in length, doesn't yet have a name:
The name of this creature, 8 cm across, is Mertensia ovum.
It's a member of the phylum Ctnenophora, more commonly known as comb jellies.

PSC Order No. 7199

PSC Order No. 7199 runs to 33 pages, not including the staff report, and can be found online here. The opening pages are devoted to recounting the record. The good stuff starts with paragraph 52:

52. This process has made it abundantly clear that Delaware must, as Staff recommends, take control of its own energy future. As one of the commenters at the May 8, 2007 hearing pointed out, the Town of Long Beach, California emerged unscathed from the Enron debacle because it had its own generation. (5/8/07 Transcript at 1751). We believe it is imperative for new generation to be sited in Delaware to help maintain the reliability of the system and to provide power to DP&L’s SOS [Standard Offer Service] customers.
53. We realize that we cannot insulate ratepayers from all market forces in this era of deregulation, but we must do our utmost to ensure that we fulfill the mandate the General Assembly has given us: to supply DP&L’s Delaware SOS with reliable energy at reasonably stable rates, taking into consideration the criteria enumerated in the EURCSA [Electric Utility Retail Customer Supply Act of 2006]. Those criteria, as many of the commenters have observed, do not focus solely on price; rather, there are other public policy considerations that the General Assembly has identified as more important than price. Therefore, we cannot accept DP&L’s invitation to reject all of the bids because they exceed what DP&L has calculated to be a levelized 2005 market price.

The commission allows itself a bit of rhetorical flourish in paragraph 55:

55. With our vote here today we bring the potential for clean, renewable and carbon free wind power to Delaware, an important factor for consideration in EURCSA.

And on to the punchline:

Accordingly, we direct DP&L and Bluewater to negotiate in good faith for a long-term PPA for the provision of wind power. While we support Staff’s guidance on the 200-300 MW size, we will allow some, albeit not unlimited, flexibility in the size because we want to give DP&L and Bluewater the greatest flexibility in negotiating an agreement that will be the most beneficial for Delaware.

As for backup power:

56. We also direct DP&L to negotiate with both Conectiv and NRG to provide any backup firm power that may be necessary when wind power is not available, and that these negotiations be conducted independently, and in the same time frame that DP&L is negotiating with Bluewater.

The PSC set a timetable for negotiations:

We suggest conclusion of negotiations within a 30 to 60 day time frame maximum; however, to the extent that there is continuing progress we can accept some extension in that process.
57. In this regard, we direct DP&L to report back to the State Agencies at least weekly regarding the progress and status of the negotiations.

Code Orange

Just in time for the holiday weekend: The Air Quality Partnership of the Delaware Valley has declared the first Code Orange of the year.

Date: Friday, May 25, 2007
Action Day?: Yes
Forecast Discussion: Friday will be an Air Quality Action Day with high concentrations of ozone expected. Light winds, warm temperatures and sunny skies will allow ozone concentrations to reach the Code Orange range on Friday. PM concentrations will increase Friday but remain within the moderate range.

Even though I'm a generally healthy guy, I fall in the sensitive group on the scale because of a sinus infection. The AQP describes why we should be concerned about ozone:

Ozone in the upper atmosphere protects us from the sun’s harmful rays where it plays an important role protecting life on earth (good ozone). At ground level, where we breathe, ozone can be harmful to our lungs and the environment. In the summer, sunlight and heat can "bake" pollutants to form ground-level ozone, also known as smog (bad ozone). Inhaling high levels of ground-level ozone damages your lungs and may feel like a sunburn on your lungs.

PM 2.5 refers to particulate matter, which is a year round problem.

Delaware Chooses Wind Power

The Public Service Commission (PSC) and the other three state agencies charged with reviewing the energy proposals yesterday chose wind. More specifically, as the News Journal reports, they directed Delmarva Power to begin negotiations with Bluewater Wind and with either Conectiv or NRG to provide a natural gas backup generating facility. I will post the PSC's order as soon as it becomes available. (Update: It will be available online tomorrow.)
This is a huge victory for truly clean energy and for the long term interests of ratepayers. A large number of activists have worked very hard and impressed decision makers with the their determination and understanding of the issues. Bluewater Wind did a great job of winning over sceptics, such as the construction trades unions that originally backed NRG's proposal.
Negotiations are set to begin tomorrow and end possibly within 60 days, which strikes me as unlikely given the complexities of the issues. We will have to see how forthcoming Delmarva Power is when talks get underway. Three weeks ago, Delmarva president Gary Stockbridge said that the company wouldn't negotiate unless compelled to by court order. The company has wisely reconsidered its position:

Delmarva Power President Gary Stockbridge came under criticism several weeks ago for his vow not to negotiate. On Tuesday, he sounded more conciliatory.
"We will negotiate in good faith with all the parties," he said, adding he will try to get the best price for his customers, as well as buying an appropriate amount of power.
Delmarva has long argued it doesn't need to lock its customers into buying power from a new in-state source.

Even with its more conciliatory tone, Delmarva is offering the same rationale for being reluctant to enter into a long term agreement. As negotiations get underway, it will be important to distinguish between Delmarva's corporate interest and those of its customers. I'm guessing the state will have to push hard to drive the parties to a successful conclusion, which means that citizens interested in the outcome will have to stay vigilant.

John Carney and Jack Markell: Deal or No Deal?

Is there even a tentative agreement to avert a primary for the Democratic nomination for governor? That depends on what the definition of "is" is.
In the latest version of the deal story, City Council President Ted Blunt is protrayed as having thrown a monkey wrench into the works by refusing to put aside his own ambitions to run for lieutenant governor to allow for a purported deal between John Carney and Jack Markell. But Ted Blunt does not seem inclined to step aside for a deal that has yet to draw much interest from the would be party of the second part. (By the way, WDEL's Alan Loudell in his blog offers some thoughts as to why Jack Markell would not be interested in a deal.)
An interesting twist to the story unfolded at Ted Blunt's announcement on Saturday. As Celia reports, John Carney and his backers skipped the event, while Jack Markell seemed more than happy to attend:

Markell showed up for his announcement, as though it was business as usual and he was paying a courtesy call on a potential running mate, but Carney and other statewide Democratic officeholders did not.
"This is Ted's day. I think we've got two excellent candidates for lieutenant governor. When Matt announces, I'll be there, and I'm delighted to be here today," Markell said.

Will Ted Blunt and his supporters feel slighted by the very public effort to portray Blunt as getting in the way of a deal, real or imagined? One of John Carney's strengths is his ability to tap into the existing structure of the Democratic Party. But making a scapegoat of Ted Blunt could alienate Party leaders in Wilmington, many of whom, as Celia notes, are lining up behind Blunt:

Wilmington is clearly and perhaps defiantly Blunt's base. In addition to Mayor Baker, former Mayor James H. Sills Jr. came to the announcement, and so did most of the City Council members, although the ones who stayed away were notable. There was no sign of Councilman Charles Potter Jr., recently seen at a fund raiser for Denn, or Councilman Theopalis K. Gregory, who doubles as the Wilmington Democratic chair.

By leaning on Blunt to back off, Carney could be foregoing, or at least splitting, the support of much of the Party apparatus in the city. Wilmington provided about 25 percent of the votes in the last Democratic primary for governor in 1992.

Another Example of the Dubious Link between Technology and Productivity

Web Zen now and then highlights the latest in online games. This may be the most minimalist since "Don't Shoot the Puppy," which has now added levels to the game (I couldn't get past Level 9).
My new favorite is called "Poke the Bunny." Try it. It's oddly engaging for an online game with just three moving parts.

Order No. 7199

BEFORE THE PUBLIC SERVICE COMMISSION
FINAL AGENDA
MAY 22, 2007

11. IN THE MATTER OF INTEGRATED RESOURCE PLANNING FOR THE PROVISION OF STANDARD OFFER SUPPLY SERVICE BY DELMARVA POWER & LIGHT COMPANY UNDER 26 DEL. C. §1007(c)&(d): REVIEW AND APPROVAL OF THE REQUEST FOR PROPOSALS FOR THE CONSTRUCTION OF NEW GENERATION RESOURCES UNDER 26 DEL. C. § 1007(d) (OPENED JULY 25, 2006) – PSC DOCKET NO. 06-241_
Commission to consider proposed Findings, Opinion, and Order No. 7199.

The PSC will post the order online after the meeting. Stay tuned.

The Deal that Wouldn't Die

Today it's the turn of News Journal columnist Ron Williams to play up the story of a supposed deal in which Jack Markell would agree to step aside and clear the way for John Carney to get the Democratic nomination for governor next year. According to Williams, it's Wilmington City Council President Ted Blunt who's gumming up the works:

But it was Blunt's stealthy campaign for lieutenant governor -- begun months ago -- that has aborted a chance to stave off a gubernatorial primary election between John Carney and Jack Markell. At least for now.

Celia Cohen first published a story about the deal with the caveat that it "is not finalized," a droll bit of understatement on her part, given Jack Markell's comment way down in paragraph 18 of her story:

"I have no intention of running for lieutenant governor."

News Journal reporter Patrick Jackson elicited a similarly precise response from Markell on the subject:

"But I am still looking seriously at running for governor and there is no agreement, period, end of statement."

WDEL's Alan Loudell has a somewhat more sceptical take on the talk of an agreement in his blog, writing "I cannot imagine Markell settling for Number Two."
Given the fairly definitive statements from Jack Markell, who's working the story? I don't think it's Jack Markell. Ron Williams offers a clue:

"We're not done. I don't give up easily," said U.S. Sen. Tom Carper.

Celia is clear about who's driving the process:

Much of the brokering is credited to U.S. Sen. Thomas R. Carper.

Celia quotes Carper waxing metaphoric on the subject:

"What did Yogi Berra say? It ain't over 'til it's over. We haven't succeeded yet, but we haven't even gotten to the seventh inning stretch yet. In fact, the 'Star Spangled Banner' has just been sung and the umpire said, 'Play ball.'"

Last night, Markell, Matt Denn, Chris Coons and Paul Clark spoke at the inaugural gathering of the Young Democrats Movement. None mentioned a possible deal, although Coons did say that primaries aren't necessarily bad things, while recounting his early days as a political activist. In 1988 he worked on the Senate campaign of S. B. Woo, who won a tightly contested primary over Sam Beard. His eventual wife Annie worked for Beard. Evidently Chris and Annie got past it.

Dace, Hube and Mr. Wonk on WILM Saturday Morning

Hube from The Colossus of Rhodey and I will be once again joining Dace Blaskovitz on this Saturday's edition of his "Money & Politics in Delaware" program on WILM, 1450 on your AM dial.
Dace has included us as regular monthly guests for his weekly show, which airs every Saturday morning from 10:00 to 11:00 on WILM. Hube and I come on at 10:30.
We'll being talking about who's likely to be our next governor, energy, schools local politics, presidential politics and more. Join us for the fun.

John Carney and Jack Markell: Inside Game, Outside Game

Celia Cohen and the News Journal have published stories about talks to avoid a primary between John Carney and Jack Markell. Celia yesterday wrote that the "agreement" involving Markell running for lieutenant governor "is not finalized and could fall apart," which isn't quite what Jack Markell said in her story:

"I've been taking a very serious look at the governor's office. I have no intention of running for lieutenant governor. There have been plenty of conversations but no agreement."

The News Journal also quotes Jack Markell today as saying there is no deal:

"Sen. [Tom] Carper [D-Del.] has been trying to find a way in which everyone can still play a role without a primary," Markell said. "There have been discussions. ... But I am still looking seriously at running for governor and there is no agreement, period, end of statement."
Carney agreed that no deal had been reached, but held out hope that some common ground can be found.
"I've worked on a lot of campaigns before I ever ran myself, and I can't remember a primary that had a good outcome overall. Working together just makes a lot more sense than spending energy and resources against each other," Carney said. "I don't think it should come as news to anyone, especially in the Democratic Party, that everyone's been talking and trying to work something out."

Who wants this deal? Well, who sounds more motivated? My guess is that the push for a deal is coming almost entirely from John Carney and his supporters.
First off, I should say that both John Carney and Jack Markell are clearly qualified to serve as governor. They are both, in their different ways, wonky, which counts for something at this blog.
As for the idea that a primary could hurt the prospects of the eventual nominee, it's nonsense; I predict today that the Democratic candidate will be elected. (Dave Burris today asserted that Alan Levin scared the two into talking; it's a nice bit of bravado, but talk about a deal to avoid a primary has been percolating for months.)
It might help to think of John Carney and Jack Markell in terms of inside game and outside game.
John's a consummate inside game player, and a genuine technocrat (not a pejorative in my book). He earned a master's of public administration at UD, and has worked for Joe Biden, Tom Carper (who appointed him finance secretary), and as deputy chief of staff for then county exec Dennis Greenhouse. He's the kind of guy who does his homework, and will rarely stray from the company line. John's career has been guided and nurtured by Tom Carper; his strength is the inside game, in terms of his government experience and his ties within the Party. If the nomination were decided by Party leaders, I'd have to give him the edge.
Jack's career is of his own making; his strength is the outside game. If the nomination is decided by primary voters, I'd give him the edge. Last November, Jack posted the highest vote total of any statewide candidate--more than Tom Carper, Mike Castle, Beau Biden, Ruth Ann Minner or John Carney for that matter--a remarkable feat for a state treasurer. John, despite his considerable government experience, has never stood for election on his own.

The inside game/outside game dynamics of the Delaware's energy future illustrates the different positions the two find themselves in.

John Carney earlier this week took a position in cautious support of the Public Service Commission's pending decision in favor of wind power, a position that has been portrayed as different from that of Gov. Minner, who still holds out the possibility that coal gasification facility could make sense for Delaware. John last week said he hasn't ruled out coal; he supports the anticipated decision to negotiate with Conectiv and NRG for a backup facility.

I imagine he's been uncomfortable with the way Jack Markell has managed to get out front on this issue all year, first with his comment that price stability was the key consideration in choosing a long term energy source, and with his public letter to Delmarva urging that it reconsider its position of refusing to negotiate a long term energy contract or contracts according to the PSC decision. Delmarva backed down a few days later.

John Carney has already announced his candidacy and put up a Website. As for Jack Markell, he still uses his campaign Website, which is still being updated with events, and he never got around to closing his campaign office from last year.

Why Consider Coal as a Backup to Wind?

Does it make sense to consider a coal gasification plant as a possible backup for wind power in Delaware? Two weeks ago, the Public Service Commission (PSC) staff recommended that Delmarva Power be directed to negotiate a long term power deal with Bluewater Wind and with Conectiv energy for a natural gas facility to serve as a backup for wind power. Last week, the PSC adopted the staff recommendation, but added a scaled down version of NRG’s coal gasification plant as a possible backup.
After the PSC’s meeting last week, Gov. Minner said she thought a coal gasification plant could still be appropriate for Delaware, leaving me to wonder whether coal was left in the possible mix as a consolation prize for NRG. And yesterday, I opined, “it’s hard to see how a coal gasification plant could operate effectively as part of the mix.”
As if on cue, Aaron Nathans of the News Journal did some digging and found that others, far more knowledgeable than I, share my doubts:

A natural gas plant is suited for that backup role, said Dave Bayless, a professor of mechanical engineering at Ohio University.
A natural gas plant is able to fire up quickly, but a coal gasification plant starts up more slowly, he said. That means a coal plant used as a backup would be less responsive during peak demand periods, he said.
A coal gasification plant, while cleaner than a traditional coal plant, sends plenty of pollutants into the atmosphere upon startup and shutdown, he said.
"That would be the worst possible thing to do with IGCC," Bayless said, referring to coal gasification, also called integrated gasification combined cycle technology. "If you want a backup, use natural gas."
Robert Howatt, public utilities analyst for the Public Service Commission, agreed that natural gas has a quicker reaction time. Scaling down NRG's proposed 600-megawatt coal gasification plant to a backup unit "represents some real challenges and is unlikely."

The likelihood is reduced even further when the untested carbon sequestration methods are considered. Jeff Montgomery of the News Journal noticed a report from Standard & Poor’s that sums up the investment risks of carbon sequestration. As for using an underground aquifer for carbon sequestration, S&P's conclusion can be summarized succinctly: We don’t know what it will cost, or even if it will work:

So, the question arises, is CCS ready for prime time? The answer is maybe. Of course, overcoming technical hurdles is key to large-scale implementation. The use of CCS also depends whether its costs can be justified economically. In any case, legal and regulatory issues would be of paramount importance to the preservation of credit quality as CCS is put into practice on a large scale.

This would explaing why NRG wasn’t willing to accept the economic risk of carbon sequestration, but want to pass it on to ratepayers, as noted by the PSC’s consultants:

NRG has proposed an exception from provisions that it “absorb any additional environmental compliance costs caused by a change in law,” and its “proposed pricing for [carbon] sequestration is essentially a cost pass-through proposal that is inconsistent with the RFP requirements.”

The negotiations that lie ahead of us are likely to be complex enough without including the unwieldy and inappropriate coal option. I don’t mind allowing NRG its consolation prize, but the smartest, cleanest way to drive the process to a successful conclusion would be to set the coal option aside now instead of continuing to consider untested technology that investors believe won’t work.

John Carney Speaks

The News Journal reports that Lt. Gov. John Carney, who has been biting his tongue on the issue of Delaware’s energy future, has finally spoken up in public:

Carney said in a written statement Monday he supports the PSC position. Carney said the backup plant may be worth pursuing, “as this may help answer the question of what happens when the wind is not blowing.”
The state should also aggressively pursue conservation efforts, he said.

It is encouraging that he isn’t bucking the PSC, which should make it easier for the other agencies to get in line. What’s interesting is that he has taken a position somewhat different from that of Gov. Minner, who last week still thought that coal power could still be part of the equation:

Gov. Ruth Ann Minner still believes a coal gasification plant could be right for Delaware, despite the Public Service Commission's endorsement this week of wind power.
The governor said it might make sense to combine wind power with NRG Energy's proposed coal plant, a combination that provoked skepticism from some energy specialists.

Her view may have affected the PSC’s decision to direct Delmarva Power to negotiate with Bluewater Wind and with both Conectiv and NRG as potential backup sources. I have to wonder if the decision represents a kind of consolation prize for NRG; it’s hard to see how a coal gasification plant could operate effectively as part of the mix.
John Carney’s decision to speak up illuminates the inside game/outside game dynamics of the process. John’s a consummate inside game player, and a genuine technocrat. He earned a master’s of public administration at UD, and has worked for Joe Biden, Tom Carper (who appointed him finance secretary) and as deputy chief of staff for then county exec Dennis Greenhouse. He’s the kind of guy who will do his homework (considerable in this case), and will rarely stray from the company line. I’m hoping that we can take his comments as a signal that the other agencies (DNREC, Management and Budget and the Controller General) will fall in line behind the PSC next week. It’s hard to imagine that John Carney would take a public position if he didn’t expect that position to be upheld next week.
His statement also reflects a growing recognition of the importance of the outside game. The deliberations of the Public Service Commission rarely attract much attention, but this case is different. Hundreds of citizens have written and spoken in favor of wind and opposing coal. PSC executive Bruce Burcat noted the impact of public engagement in the process:

"A thousand people saying one sentence, we just want wind power, that's one thing. We would take note of that. But they added significantly to the debate, and the information that was provided," Burcat said. "We haven't seen this much involvement by the public in a PSC process before."

A majority of public opinion is one thing, but a passionate, well informed majority is another thing entirely. Wind power is shaping up to be a defining issue in next year’s election, combining concern about global warming, opposition to burning more coal, aspirations to do something unique and positive and a mistrust of DPL.
John Carney has surely noticed that Jack Markell has been out front on this issue all year, first with his comment that price stability was the key consideration in choosing a long term energy source, and more recently with his public letter to Delmarva urging that it reconsider its position of refusing to negotiate a long term energy contract or contracts according to the PSC decision. Delmarva backed down a few days later.
Now Jack has once again put his finger on the key issue before us, turning our attention to the negotiations between DPL, Bluewater Wind and a backup energy supplier:

Markell said Monday he supports the PSC’s directive to Delmarva. “I’ll be even more comfortable when everyone gets in a room and starts talking,” he said.

DPL has voiced its preference for continuing its current practice of buying power in three year contracts, which would leave ratepayers exposed to climbing energy prices. Hopefully, the dynamics of the inside game and outside game will keep the pressure on Delmarva to negotiate seriously.

Matt Ruben: A Reformer for Philadelphia City Council

Tuesday's primary election could be a watershed moment for the reform movement in Philadelphia. One of the reformers who is given a significant chance of winning an at-large seat on city council is Matt Ruben. Matt has won endorsements from Philly bloggers Above Average Jane and MyDD, reform organization Philly For Change, and from the Daily News:

Ruben, a teacher and Northern Liberties community leader, is probably the only candidate campaigning who finished his Ph.D. right before the primary. (It's from Penn.) Articulate, energetic and close-to-the-grassroots, he could provide an informed, intelligent and youthful perspective.

I worked with Matt when he was president of the Northern Liberties Neighbors Association (NLNA) and I served as executive director. Northern Liberties has been ground zero for redevelopment in recent years, and Matt was not afraid to stand up to developers, including the biggest in town, Bart Blatstein.
Not that the community is or was anti-development. The NLNA handled about 80 zoning cases a year when I worked there; I was a regular at the city's Zoning Board of Adjustment. In the vast majority of cases, the NLNA would work things out with the property owner, and the ZBA hearing consisted of asking that an agreement letter become part of the decision.
But on those occasions when an owner chose to push ahead without coming to agreement with the community, Matt and the NLNA's leaders were zealous in defending the community's interests. Two such instances involved Bart Blatstein, and the NLNA challenged Philly's biggest developer as no other community had done in recent history.
When Blatstein took his Schmidts redevelopment plan to the ZBA without an agreement, the NLNA appealed the decision to the courts. Facing a delay of a year or more, Blatstein finally sat down to negotiate with the community. One happy outcome is that the original design, a godawful mess I called Disney Italianate, was dropped for a sleek contemporary design by Erdy McHenry. The NLNA also appealed a permit for a "ballroom" project, and again brought Blatstein to the negotiating table. The organization had to set up a legal fund to mount these challenges, but Matt never flinched.
With this history, it's not surprising to see that Matt emerged as a leading anti-casino activist. One of the proposed casino locations is, inexplicably, on the waterfront close by Northern Liberties and Fishtown, two thriving communities that have no need for such inappropriate development on their borders.
Matt and other community leaders pressed the NLNA to undertake a community planning process, which has led to a Neighborhood Plan and a Waterfront Plan, which by the way doesn't include a neighborhood-destroying casino.
I am proud to have worked with Matt Ruben. He's tough and smart, with a remarkable record of standing up for his community in the face of long odds--and winning. Northern Liberties is a better place, thanks to his leadership, and Philly would be a better place if he were to be elected to city council.

Governor Minner Speaks on Delaware's Energy Future

Delawareans have been fervently arguing about Delaware’s energy future for months. So what does our governor think? The News Journal asked her:

"Going forward, the IGCC (coal gasification plant) bid could still be a positive improvement to Indian River, but it must be compared and possibly integrated into a solution that may include environmentally beneficial options, such as wind," she said in the statement.

The backstory is that last year, Minner stood with NRG executives in announcing a new coal gasification facility at the company’s Indian River site. You can find the press release here:

Curtis Morgan, president of NRG’s Northeast Region, said the company would move forward with plans to build a 630-megawatt Integrated Coal Gasification Combined Cycle, or “clean coal” plant on its Millsboro site. Clean coal technology removes up to 90 percent of sulfur dioxide emissions, up to 80 percent of oxides of nitrogen emissions, and up to 75 percent of mercury emissions, according to NRG. The new plant also will have the ability to capture emissions of carbon dioxide, a “greenhouse gas” that contributes to global warming of the earth’s atmosphere.
“NRG’s idea was very straightforward, but untried in our state,” Governor Minner said. “This proposal will significantly improve our environment by turning a polluting facility into a model of state-of-the-art clean technology.”

It seemed like a good idea at the time, according to DNREC secretary John Hughes:

John A. Hughes, secretary of natural resources department, said much has changed since Minner and NRG made their statement last year. "It was one of the best deals we've seen in years," said Hughes, speaking of the coal gasification plant. The proposal included the shutdown of two older, higher-polluting units at Indian River, he noted.
But, Hughes argued, that did not remain the best proposal as the bids began coming in.
"Cleaner than very clean is not using the energy in the first place," Hughes said, referring to wind power, several hours before Minner released her statement. "Clean wind" is also cleaner than coal, he said.

Hughes said Minner is part of the process, but didn't ask his office to delay a vote and won't tell his office how to vote.
Last week, the Public Service Commission (PSC) staff recommended that Delmarva Power be directed to negotiate with Bluewater Wind to build a wind farm and with Conectiv to build a natural gas backup facility. Tuesday, the PSC adopted the staff recommendations but added that NRG’s proposal should be considered as a backup facility as well. I have no way of knowing why NRG was added to the mix, though I do find it reassuring that John Hughes is saying that DNREC will not be told how to vote.
Even so, Governor Minner seems to hold out some hope that NRG’s proposal could still be feasible. As far as I’m concerned, being including in the negotiating mix can be thought of as a nice consolation prize for NRG and the trade unions backing its proposal, but making the economic or environmental numbers work for coal seems to me extremely unlikely.

Wind Power on Jupiter

This image of Jupiter's Little Red Spot was captured earlier this year by NASA's New Horizons Long Range Reconnaissance Imager (LORRI):
The Little Red Spot isn't so little in terrestrial terms:

The Little Red Spot is the second largest storm on Jupiter, roughly 70% the size of the Earth, and it started turning red in late-2005.

Try finding Delaware in that maelstrom. Of course, with Delaware turning blue in recent years, it might be easier, even from millions of miles away.

The clouds in the Little Red Spot rotate counterclockwise, or in the anticyclonic direction, because it is a high-pressure region. In that sense, the Little Red Spot is the opposite of a hurricane on Earth, which is a low-pressure region and, of course, the Little Red Spot is far larger than any hurricane on Earth.
Scientists don't know exactly how or why the Little Red Spot turned red, though they speculate that the change could stem from a surge of exotic compounds from deep within Jupiter, caused by an intensification of the storm system. In particular, sulfur-bearing cloud droplets might have been propelled about 50 kilometers into the upper level of ammonia clouds, where brighter sunlight bathing the cloud tops released the red-hued sulfur embedded in the droplets, causing the storm to turn red. A similar mechanism has been proposed for the Little Red Spot's "older brother," the Great Red Spot, a massive energetic storm system that has persisted for over a century.

As for wind power, Jupiter's winds reach 360 km/hour (that's about 220 miles/hour).

Image credit: NASA/Johns Hopkins University Applied Physics Laboratory/Southwest Research Institute

Wind Power: Progress to Date

I thought it would be useful to recap the events of the last two weeks:
April 24: Senator Harris McDowell’s task force published its report on the proposed Sustainable Utility (SEU), which would finance demand management projects in Delaware. Senator McDowell has voiced his opinion that the SEU alone should meet Delaware’s energy needs. SB 18, which would create an SEU, is on the Senate agenda.
May 2: The Public Service Commission (PSC) staff report recommended that Delmarva Power be directed to negotiate a contract to build a wind power farm with a natural gas backup facility.
Also, the Delaware Municipal Energy Corporation (DEMEC) announced a deal to purchase $200 million to $300 million of electricity from Bluewater Wind over the next 25 years. This important development was not reported in the News Journal until a week later. I don’t fault the reporters; Aaron Nathans and Jeff Montgomery have done a pretty good job of covering the story. I just think there has been more to write about than available column inches.
May 3: Delmarva Power president Gary Stockbridge said the company won’t negotiate a long term deal unless forced to by a court.
May 4: State treasurer Jack Markell fired off a letter to Mr. Stockbridge:

I was disappointed to learn of your reaction to the recommendations of the Public Service Commission’s staff report released on May 2nd which recommended that your company negotiate with both Bluewater Wind LLC and Conectiv Energy.
Thursday’s News Journal attributed to you the statement that “Even if the commission votes to accept the conclusions of the report, Delmarva will refuse to negotiate,” and that “We will take any action at our disposal to prevent that."

I imagine that this letter, which went unreported in most local media, landed loudly on Mr. Stockbridge's desk.
Also, University of Delaware Professor Willett Kempton circulated a letter he wrote to the PSC with Jonathon Levy of the Harvard School of Public Health, in which they estimate the net public health costs of forgoing wind power in favor of continuing to burn fossil fuels:

With the inclusion of other health outcomes and given the factors described above that might imply greater benefits per unit emissions reduction in Delaware, the discounted present value of the health benefits of the proposed wind park likely greatly exceeds $1 billion.

This important result also got lost in the media shuffle of the last two weeks.
May 7: The Office of Management and Budget published a consultant’s report recommending the creation of a state energy authority.
May 8: The PSC voted to direct Delmarva to open negotiations with Bluewater Wind and negotiate with Conectiv Energy and NRG Energy to back up the wind farm with a gas plant, located in Sussex County. Also, as the News Journal reported, Delmarva seemed to back off threats to defy the state’s authority to make it negotiate with a new power supplier:

As the Public Service Commission endorsed offshore wind power Tuesday, Delmarva Power appeared to be showing more willingness to consider local sources of new electricity.
The commission voted unanimously for Delmarva to open negotiations with Bluewater Wind to buy power generated by as many as 100 turbines off either Bethany Beach or Rehoboth Beach.
The commission also directed Delmarva to negotiate with Conectiv Energy and NRG Energy to back up the wind farm with a gas plant, located in Sussex County.

The PSC’s decision will likely be made public as an order promulgated at its meeting on May 22. The Office of Management and Budget, Controller General and DNREC also have to agree for the PSC’s decision to take effect.
Then we have the question of how effectively Delmarva will pursue the matter. The OMB’s consultant made an interesting point in reviewing the history of utility regulation:

Regulation is much better at restraining a ready, willing and able utility, than at pushing an unwilling utility to take on a responsibility with no easy solutions.

Public involvement has brought us thus far; public involvement is essential to seeing this process through to a successful conclusion. Stay tuned, stay well informed, and stay involved.

The Public's Role in Shaping Delaware's Energy Future

All of Delaware is waiting to see what the Public Service Commission (PSC) will do at its meeting this morning. The News Journal reports that PSC executive director Bruce Burcat acknowledges the role of public involvement in shaping the process and hopefully the outcome:

The wind project was bolstered by a public that made it clear it was behind the proposal, said Bruce Burcat, PSC executive director. Thousands of people weighed in on the question, with the "significant majority" supporting the wind project, he said.
"A thousand people saying one sentence, we just want wind power, that's one thing. We would take note of that. But they added significantly to the debate, and the information that was provided," Burcat said. "We haven't seen this much involvement by the public in a PSC process before."

The public record is packed with letters supporting wind power; one of my favorites is this from a schoolchild named Ashley Dennis:
Meanwhile, the News Journal reports that another consultant has further muddied the waters by recommending the creation of a state energy authority:

State consultants recommended partial re-regulation of Delaware's electricity market on Monday, adding another twist to the debate over the need for new power plants in the state.
"Delaware cannot simply turn the clock back to pre-1999 and try to reinstate regulation," the report, written by national experts Nancy Brockway and John Stutz, cautioned.
The state could take partial control of the electricity market by creating a state-run Delaware Energy Authority to build power plants and sell electricity to residential customers, the report recommended. Such a system could end consumer rights to sign up with other suppliers but create a stable, consumer-friendly market.

The report, along with two appendices, can be downloaded from the Website of the Office of Management and Budget.

The PSC Meets Tomorrow to Discuss Delaware's Energy Future

The Public Service Commission (PSC) is scheduled to meet tomorrow, and Delaware’s energy future is on the agenda:

2. IN THE MATTER OF INTEGRATED RESOURCE PLANNING FOR THE PROVISION OF STANDARD OFFER SUPPLY SERVICE BY DELMARVA POWER & LIGHT COMPANY UNDER 26 DEL. C. §1007(c)&(d): REVIEW AND APPROVAL OF THE REQUEST FOR PROPOSALS FOR THE CONSTRUCTION OF NEW GENERATION RESOURCES UNDER 26 DEL. C. § 1007(d) (OPENED JULY 25, 2006) – PSC DOCKET NO. 06-241
The Commission will hear argument and deliberate whether, in its judgment, Delmarva Power & Light Company should pursue a long-term power contract with one or more of the three bidders. The three State agencies (Department of Natural Resources & Environmental Control, Office of Management & Budget, and Controller General) will also have to make a similar decision.

The Washington Post has the story on page A-1:

REHOBOTH BEACH, Del. -- Two hundred towering windmills, each so tall that its blades would loom over the U.S. Capitol Dome, could be built in the Atlantic Ocean near one of Washingtonians' favorite beach retreats, under a plan being considered in Delaware.
The plan, which could create the first wind "farm" in waters along the East Coast, envisions a thicket of turbines offshore of either Rehoboth Beach or Bethany Beach, Del. As the blades are spun by ocean winds, designers say, the wind farm could provide enough power every year for 130,000 homes.
The wind farm is one competitor in an unusual kind of power-plant bake-off: Delaware officials are also considering plants that would burn coal or natural gas as they seek ways to generate more electricity. A preliminary decision could be made tomorrow.

University of Delaware Professor Willett Kempton is circulating a letter he wrote to the PSC with Jonathon Levy of the Harvard School of Public Health, in which they estimate the net public health costs of forgoing wind power in favor of continuing to burn fossil fuels:

Focusing on premature deaths, this approach would yield an estimate of approximately 8 fewer deaths per year due to the Delaware wind park. Using EPA’s standard economic value of statistical life of approximately $6 million, these benefits are on the order of $50 million per year. There would also be proportional improvements in a number of other health outcomes, ranging from respiratory or cardiovascular hospital admissions to asthma attacks to days with restricted activity, as described in the Cape Wind EIS above.
Applying the above scaling factor to the findings reported for Cape Wind yields additional benefits of approximately 9 fewer hospital admissions, 3,500 fewer asthma attacks, and 10,000 days with restricted activities (major or minor), among other outcomes. These outcomes have direct and indirect economic consequences as well; using the values from the Cape Wind analysis with a 0.64 scaling factor yields an additional $6 million in benefits per year.
If we multiply the above health benefits over the 25-year life of the project, it will mean that the project will avoid roughly 200 deaths, with a total societal benefit of over $1 billion, along with numerous other health outcomes with a total societal benefit of approximately $150 million. If the health costs were discounted at a 3% social discount rate, that would be a discounted present value of approximately $1 billion. With the inclusion of other health outcomes and given the factors described above that might imply greater benefits per unit emissions reduction in Delaware, the discounted present value of the health benefits of the proposed wind park likely greatly exceeds $1 billion.
Over the 25-year contract term of the project, the State’s Independent Consultant estimated that Delmarva ratepayers would pay $493 million additional for the wind power. But, as we have shown, rejecting this bid in order to achieve an apparent $493 million savings in electric costs is not cost-effective because it imposes a cost of at least one billion dollars, and likely more than that, on the population and the health system. This cost was not included in the evaluation by either the Delmarva consultant or the Agency Independent Consultant, neither of whom included public health impacts in their analysis.

This analysis, which I urge you to read in its entirety, is based on the full 600 MWs wind proposal, and thus can be roughly scaled to the size of the wind farm being considered. In rough terms, every dollar in excess cost (as estimated by the PSC’s consultants) would translate into two dollars in health savings.
At this point, we all need to be mindful of the ways in which the events of the last week require that we revisit earlier economic estimates. Specifically, the hybrid proposal put forward by the PSC staff and the announcement by the Delaware Municipal Energy Corporation that it plans to buy $200 million to $300 million of electricity from Bluewater Wind over the next 25 years, make earlier assessments of the net cost of wind power even more tenuous.

Jack Markell's Letter to Delmarva Power

Jack Markell just fired off this letter to Gary Stockbridge, president of Delmarva Power:

May 4, 2007
Gary Stockbridge
President
Delmarva Power
800 King Street
P.O. Box 231
Wilmington, DE 19899
Dear Mr. Stockbridge,
Responsible planning for Delaware’s major infrastructure decisions that will so greatly impact our lives and those of future generations demands openness and accountability by governmental officials and corporate responsibility on the part of energy producers and suppliers.
In that light, I was disappointed to learn of your reaction to the recommendations of the Public Service Commission’s staff report released on May 2nd which recommended that your company negotiate with both Bluewater Wind LLC and Conectiv Energy. Thursday’s News Journal attributed to you the statement that “Even if the commission votes to accept the conclusions of the report, Delmarva will refuse to negotiate,” and that “We will take any action at our disposal to prevent that."
While I understand that Delmarva believes it is not in the company’s interest or perhaps in the interests of ratepayers to add additional energy supply to the marketplace, I don’t understand a flat-out refusal to negotiate.
While I’m not suggesting that Delmarva be required to enter into any particular transaction, I do believe that all parties ought to demonstrate good faith consistent with the legislation which led to this process in the first place. Negotiation – simply conferring with others in order to learn whether you can come to terms or reach an agreement -- doesn’t seem to be an onerous burden.
As State Treasurer with fiduciary responsibility to our taxpayers, I have stated on a number of occasions that it is critical that there be transparency in the PSC’s public process, and I have been outspoken in my views that the PSC and the other decision-making agencies strongly consider the importance of price stability, new technology, and reductions in environmental impact (especially greenhouse gas emissions). Furthermore, I have argued repeatedly that we should take a long-term view of cost-effectiveness, considering not only today's business environment but the business environment in which these facilities will operate during their entire functioning life.
I am pleased that the PSC staff report appears to be a first step toward those goals. Respecting the process and being willing to at least enter into negotiations, if that is the decision of the PSC’s next vote is an essential piece of maintaining the public’s trust.
As a matter of good faith to your customers in Delaware, and as a matter of respect to our public institutions I urge you to consider the recommendations of the staff report on their merit, and to not unilaterally rule out negotiations with Bluewater Wind and Conectiv Energy, if that is the outcome of the vote by the Public Service Commission.
Sincerely,
Jack Markell
Delaware State Treasurer

TommyWonk to Talk Energy on WDEL this Evening

I’ve been invited to talk about energy with Allan Loudell on WDEL, 1150 AM, at 5:35 this evening. Allan, of course, is a pretty wonky guy himself, so I’ll try to be ready with plenty of facts and figures.
Update: I just got done; Allan had me on at 5:25 not 5:35. It was fun and, I hope informative.

Delmarva Power to Delaware: Never Mind

The News Journal reports that Delmarva wants nothing to do with any source of new power in Delaware:

Delmarva Power's president said today the company won't negotiate with a wind power company or a natural gas company unless compelled by a court of law.

The Public Service Commission, acting under the authority of 26 Del. C. § 1007(d), opened Docket 06-241 on July 25, 2006. A request for proposal (RFP) was developed, and three companies (NRG, Bluewater Wind and DPL sister company Conectiv) came forward with proposals for new power generation in Delaware. After many hours of hearings, hundreds of thousands of dollars spent on consultants and thousands of pages of proposals, analyses and comments, Delmarva want to take its football and go home?
Surely such a drastic decision would not be taken lightly:

After taking a day to digest the report, Gary Stockbridge, Delmarva president, said that even if the commission votes to accept the conclusions of the report, Delmarva will refuse to negotiate. Delmarva believes accepting any of the bids would cause ratepayers to have to pay much more for years to come, he said.

Let's be clear about a couple of points: First, the State of Delaware isn't presenting Delmarva with a take-it-or-leave-it deal. The RFP process calls for Delmarva to begin negotiations based on the findings of the PSC, OMB, Controller General and DNREC. If DPL has concerns it needs addressed, they can be put on the table in the negotiating process. But Delmarva doesn't even want to talk about it.
Second, Gary Stockbridge may cite the interests of ratepayers in refusing to negotiate, but he doesn't represent the public; he is accountable to DPL's parent company Pepco Holdings and its shareholders. The elected officials and agencies of state government are responsible for representing the public interest. It is sheer sophistry for Mr. Stockbridge to conflate Delmarva's interests with those of its customers, a point I discussed in a letter to the PSC sent just yesterday:

On this point, it is important to distinguish between Delmarva’s risks and those of its customers, who are now exposed to considerable risk of fuel price increases. It is understandable that Delmarva’s management would be concerned about the financial obligations imposed by a long term contract.
...
While a long term supply contract creates a risk for the company, purchasing power every three years is not without risk. Specifically, three year purchases of power leaves Delmarva’s customers more exposed to the risk of future price increases—which is precisely the risk that the RFP is intended to ameliorate.

Mr. Stockbridge says he would rather work something out than go to court:

Stockbridge said he hopes it doesn't come to that. Even if the commission votes to order negotiations, the company will have other tools short of litigation, including working with the Legislature, Stockbridge said.

I have a hard time imagining that he'll get very far by thumbing his nose at the General Assembly, the Public Service Commission and the thousands of citizens who have taken an intense interest in Delaware's energy future.
Update: The News Journal has more on Delmarva's intransigence:

The company has long argued the state's energy needs can be fulfilled through a combination of conservation, competitive buying on the open market and new transmission lines. Under the staff proposal, Delmarva could be forced to buy more electricity than it can sell, the company argued.

The amount of electricity produced and sold in Delaware are numbers that can be negotiated. Delmarva's argument on this point is unconvincing.
A factor that the News Journal missed, but was reported here on Wednesday, is that Bluewater Wind announced a twenty year deal with the Delaware Municipal Energy Corporation:

The agreement between DEMEC and Bluewater Wind is for the offshore wind energy generator to supply electricity, associated capacity, and related environmental attributes (also called Renewable Energy Credits) to DEMEC for 20 years. The contract is the first in the nation to provide for the purchase and delivery of energy from an offshore wind park and is valued between $200 million and $300 million over the life of the contract.

In other words, DEMEC has already taken a sizable chunk of capacity off of Delmarva's hands. They seem to think, despite Delmarva's arguments, that a long term contract for energy is a valuable asset.

Progress on Wind Power in Delaware

Two breaking developments mean that the prospect for wind power in Delaware is looking brighter. First, we have this interesting news from the PSC, via the News Journal:

Delmarva Power should contract with Bluewater Wind to build a smaller wind park than originally proposed, and Conectiv Energy to build a natural gas plant to back it up, according to a Public Service Commission staff report released today.
Bluewater, which wants to build an off-shore wind park, had originally proposed a 600 megawatt facility; the report suggests the PSC instead approve a 200-300 megawatt facility.

Here’s the punchline from the staff report, which is available as a PDF here:

Staff recommends exploration of building additional generation assets in southern Delaware, coupled with development of demand response programs, energy efficiency programs, renewable distributed generation, short- and long-term bilateral contracts, and market purchases. With respect to the bids, Staff recommends that the State Agencies direct Delmarva to negotiate with both Conectiv and Bluewater for a hybrid energy supply that combines a 200-300 MW offshore wind farm with a 150-200 MW synchronous condenser CCGT in Sussex County.

Delmarva has been pushing for the PSC to do nothing about new generating facility in Delaware. Earlier today, I posted a rather technical letter to the PSC on why continuing to rely on three year contracts, as is done now, does not protect consumers from price shocks:

While a long term supply contract creates a risk for the company, purchasing power every three years is not without risk. Specifically, three year purchases of power leaves Delmarva’s customers more exposed to the risk of future price increases—which is precisely the risk that the RFP is intended to ameliorate.

One reason Delmarva has resisted the RFP is that it doesn’t want to be saddled with more generating capacity than it can sell to its regular customers, which may be why the PSC staff are recommending a smaller wind farm.
But concerns about being able to use the full capacity of a wind farm should be ameliorated by the announcment today that the Delaware Municipal Energy Corporation has agreed to buy $200 million to $300 million of electricity from Bluewater Wind over a twenty year period:

The agreement between DEMEC and Bluewater Wind is for the offshore wind energy generator to supply electricity, associated capacity, and related environmental attributes (also called Renewable Energy Credits) to DEMEC for 20 years. The contract is the first in the nation to provide for the purchase and delivery of energy from an offshore wind park and is valued between $200 million and $300 million over the life of the contract.

Taken together, these developments mean that wind power has moved a long way towards adoption. But popular support is as important as ever. Go to the “Choose Wind” page at Delawareliberal to find out how you can help make wind power a reality in Delaware.
In the meanwhile, there's plenty of homework to do on today's developments. Check back for updates.

Another Letter to the PSC

In addition to the considering coal, natural gas and wind power via the energy RFP, the Public Service Commission (PSC) has opened another docket on Delmarva’s Integrated Resource Plan (IRP), which includes conservation measures as well as a new power plant. I sent this rather technical letter to the PSC earlier today:

May 2, 2007
Ms. Arnetta McRae
Chair
Delaware Public Service Commission
861 Silver Lake Blvd.
Dover, DE 19904
Re: PSC Docket 07-20, Integrated Resource Plan
Dear Ms. McRae:
Having reviewed the docket and considered the economic risks to Delmarva’s customers, I conclude that the public interest is best served by building a wind power facility to reduce the exposure to price increases borne by ratepayers. My views are informed by my experience in government negotiating environmentally complex, capital-intensive, long term contracts, and by the analytical tools I gained while earning an MBA in finance. More specifically, I conclude (1) that Delmarva’s stated preference for continuing to buy energy via three year auctions would not provide any price protection to its customers, and (2) opting for wind power would contribute to price stability for Delmarva’s customers.
1. Three year auctions would not enhance price stability.
Delmarva’s proposed IRP includes several key elements: demand side management (DSM), upgrades to transmission capacity, adding 125 MWs of generation capacity and continuing to purchase power via three year auctions.
Delmarva's preference for continuing to rely on three year contracts is clearly stated in its Response to Comments on the IRP (March 23, 2007): “To reduce price volatility and obtain competitive energy prices for RSCI SOS customers, the IRP recommends continuation of a procurement strategy that relies on multiple suppliers competing through an auction process for three year full requirements contracts to serve a percentage of RSCI SOS load.”
While I agree with the importance of DSM, and support the creation of a sustainable energy utility (SEU), I do not agree that auction purchases of energy is in the best interests of Delmarva’s customers. Even with DSM, continuing to rely on the auction process would leave ratepayers exposed to price volatility.
In comparing risks of price stability, Delmarva’s consultants assigned a “N/A” rating to the Conectiv Base proposal—the same rating given to Bluewater Wind. I find this methodology flawed; Delmarva’s SOS customers are already exposed to considerable market risk. Instead of demonstrating that the current procurement practice provides the best possible price stability, it appears that Delmarva’s consultants simply assumed that to be the case. This assumption is unwarranted. Unlike gas or coal, we know that the cost of wind is not expected to increase over the next 25 years.
On this point, it is important to distinguish between Delmarva’s risks and those of its customers, who are now exposed to considerable risk of fuel price increases. It is understandable that Delmarva’s management would be concerned about the financial obligations imposed by a long term contract. In rating the financial strength of utilities, Standard & Poor’s has traditionally imputed debt for long term purchased power agreements (PPAs). In other words, S&P calculates a risk factor or percentage of the net present value of PPAs with terms of three years or longer, and treats it as being similar to debt. Last year, S&P announced that it “is abandoning its practice of not imputing debt for purchased power agreements (PPAs) with terms of three years or less.”
S&Ps offers this rationale for its announcement: “Because expiring contracts must be replaced with either debt-financed capacity additions or replacement PPAs for regulated utilities to meet load serving obligations, Standard & Poor’s must look beyond the termination of near-term and intermediate-term contracts to approximate the fixed obligations that will succeed the current contracts in evaluating a utility’s financial
profile."
In other words, utilities cannot escape the reality of long term obligations even if they choose to meet those obligations with short term purchases of power. While a long term supply contract creates a risk for the company, purchasing power every three years is not without risk. Specifically, three year purchases of power leaves Delmarva’s customers more exposed to the risk of future price increases—which is precisely the risk that the RFP is intended to ameliorate.
Delmarva has said that it does not want to engage in a long term process as envisioned in the RFP, citing the risk of lower than projected demand from SOS customers. It is understandable that Delmarva would not want to contract for more electricity than it can sell to its customers. Here we see another advantage to wind power: It is scalable. The unit cost of 200 MWs isn’t much different from the unit cost of 600 MWs. The size of the proposed wind farm is an issue that could easily be addressed in contract negotiations with Bluewater Wind. On this point, the announcement today that the Delaware Municipal Energy Corporation has agreed to buy $200 million to $300 million of electricity from Bluewater Wind over a twenty year period should significantly reduce the risk to Delmarva.
2. Wind power would contribute to price stability.
Including wind power as part of Delaware’s generating capacity would help protect customers from future increases in the costs of fossil fuels. According to the U.S. Energy Information Administration, the price of Brent crude oil climbed from $13.08 per barrel in January, 1978 to $63.93 last month. The wellhead price of natural gas, measured in dollars per thousand cubic feet, increased from $0.54 in 1975 to $6.66 in February. There is no reason to believe that the price of oil and natural gas will not continue to climb in the future, apart from any future changes in required emissions controls.
The costs of these future controls will be considerable. The technology of carbon sequestration is in its infancy. Perhaps the best estimate of the cost of carbon controls can be found in a study from MIT titled “The Future of Coal,” which estimates that carbon sequestration is likely to increase the cost of electricity by 27 percent and reduce effective power generation by 19 percent.
(“The Future of Coal,” p. 30, http://web.mit.edu/coal/)
NRG and Conectiv seek to place the entire economic burden of compliance with future controls on carbon emission squarely on the shoulders of consumers. Conectiv is seeking recovery of possible future carbon taxes. The PSC’s consultants have noted that NRG has proposed an exception from provisions that it “absorb any additional environmental compliance costs caused by a change in law,” and its “proposed pricing for [carbon] sequestration is essentially a cost pass-through proposal that is inconsistent with the RFP requirements.”
In conclusion, I am increasingly convinced that price stability is the crucial consideration, in which we see the public’s environmental and economic aligned. To the extent that Delmarva continues to rely on three year auctions, its customers will remain vulnerable to price volatility. Wind power is the best long term option for protecting ratepayers from future price shocks.
Thank you for the opportunity to offer my views on this important decision.
Sincerely,
Thomas Noyes

If you want to be heard on Delaware's energy future, go to the “Choose Wind” page at Delawareliberal.

Mission Not Accomplished

Four years ago today, our commander-in-chief spoke from the deck of the aircraft carrier, the Abraham Lincoln:

THE PRESIDENT: Thank you all very much. Admiral Kelly, Captain Card, officers and sailors of the USS Abraham Lincoln, my fellow Americans: Major combat operations in Iraq have ended. In the battle of Iraq, the United States and our allies have prevailed. And now our coalition is engaged in securing and reconstructing that country.

The president’s assertions turned out not to be the case: Far more Americans have died in Iraq since May 1, 2003 than died in the weeks before. The U.S. and its dwindling alliance have not prevailed. As for securing and rebuilding Iraq, it’s not proceeding according to plan.
We were told we would be greeted as liberators. We were told Iraq was aiding and abetting al Qaeda. We were told that Saddam Hussein was preparing to deploy weapons of mass destruction. We were told that by toppling Saddam Hussein, we would set in motion forces of freedom and democracy that would transform the region. Later, after things got messy, we were told that the insurgency was in its last throes.
The truth is that Iraq had no WMDs. The truth is that there was no operational link between Saddam Hussein and al Qaeda. The truth is that Iraq had not attacked us, was not planning to attack us, and did not have the means to attack us.
The truth is that we are now caught in a bloody sectarian conflict that has nothing to do with our national interest. The truth is that the Iraq debacle has not transformed the region into a garden of peace and democracy. The truth is that, instead of strengthening our hand in the Middle East, our presence in Iraq underscores our weakness in the region and around the world.
The truth is that more than 3,000 of our young men and women have paid for this folly with their lives, and more bear the cost of broken bodies, brain damage and official neglect.
Today, Congress will deliver a bill that would set a timetable for bringing U.S. troops home. As the New York Times reports, Senate majority leader Harry Reid once again urged our stubborn president to take this opportunity to change course:

“We ask him again to listen to the American people and his own military experts,” Mr. Reid said on the Senate floor. “We ask that he finally summon the courage to admit his mistakes and take the steps we propose to begin to heal the grave wounds he has caused.”