Bluewater Wind Rebuts Delmarva Power

We've heard recently from Delmarva Power president Gary Stockbridge. Yesterday it was Bluewater Wind president Peter Mandelstam's turn in the opinion pages of the News Journal:

Bluewater offers clean, stable energy

Delmarva Power's latest op-ed essay in The News Journal claims its continued opposition to Bluewater Wind's offshore wind park proposal is grounded in concern for its customers. History strongly suggests this opposition is based on protecting profits.
Where was this concern for customers when Delmarva Power raised rates by 59 percent following deregulation? Its own opinion poll confirms customers support the offshore wind project. But now it wants customers to pay nearly $5 million for costs incurred fighting the very proposal most of their customers support.
Delmarva Power boasts about its support for the state's renewable energy standards, but fails to mention it secured a provision in the law that allows it to pass along all of the costs to customers -- even penalties Delmarva will be forced to pay if it fails to meet the standards.
The record is clear. Delmarva Power's opposition stems from fear for its bottom line and that of parent company Pepco Holdings. Pepco Holdings is based in Washington, D.C., and is worried that power generated by Bluewater will replace power that would otherwise have been bought from another Pepco-owned company, Conectiv.
Although some people have suggested that we do not know how much ratepayers will pay for energy from the offshore wind park, this is not true. Bluewater's price is set for 25 years, down to the last penny.
The issue arises when experts try to compare this set price with the estimated cost of doing nothing -- that is, Delmarva Power's continued reliance on the volatile fossil fuel market to purchase energy. In doing this comparison, the state's independent consultant concluded customers will pay an average of only $2.69 more per month for clean, renewable and stable energy.
To put this in perspective, Delmarva Power's 59 percent increase costs customers about $54 per month -- every month. That is 20 times the increase with the offshore wind proposal. If energy prices continue to rise above what is currently projected -- an outcome we think likely -- consumers will save money with offshore wind.
Delmarva Power points to New Jersey's offshore wind solicitation as a reason to reconsider the process that led to Bluewater's selection in Delaware.
The comparison fails. First, New Jersey has offered up to $19 million of state funds toward the more than $1 billion project. In Delaware, there are no state dollars at risk for the wind project funded by Bluewater. No Delaware customers will pay a dime until the project produces electricity.
While Bluewater, like any business, would rather not publicly disclose to its competitors the terms of its bid prior to submission, the Bluewater New Jersey bid will require a long-term contract and will not be priced lower than what we have proposed in Delaware.
Indeed, Bluewater firmly believes legitimate bidders will not be able to finance an offshore wind park in New Jersey without a long-term contract.
Delmarva Power proclaims it wants to purchase renewable energy; it just doesn't want it produced in Delaware. So the choice is whether Delaware will have homegrown, pollution-free energy, or whether it will allow Delmarva Power to outsource renewable energy needs.
An in-state wind park will produce reliable electricity without harmful pollutants, while creating hundreds of jobs and providing long-term price stability that since the deregulation of electricity rates. As the demand for alternative and renewable energy sources increases, having a wind park protects Delaware from being at the mercy of other states for clean, affordable energy. We think the choice is clear.

Mandelstam makes two important points here. First, he zeroes in on the price risk we face if we do nothing to intervene in Delamarva Power's preference for relying on the energy market, which is driven by fossil fuel prices.
Second, he corrects Delmarva on the nature of the New Jersey proposal Bluewater is working on. Delmarva Power is running radio spots claiming that Bluewater is not proposing a long term power purchase agreement (a standard industry tool, by the way) in its New Jersey proposal.