“The obvious choice then, is to go back to their original proposal, a 6ooMW wind farm, allowing them a greater revenue stream, and then have them absorb all of the cost overruns, if any, that occur.”
On October 29th, the PSC report chose to protect Delaware citizens from a potential disaster. There were clauses within the term letters proposed by Bluewater Wind, which could, if a certain series of events occurred, cost us much more than we were led to believe originally.
However, if anything can be learned from this experience, it is that transparency within government is a rather amazing thing. Watching this process go forward, one must extend heartfelt thanks to the public servants carrying out this analysis, and their willingness to publish their results immediately, torpedoes be damned. The lesson learned by all, is that those Democrats in the General Assembly who wear their pants too high, need to allow FOIA to go forward , ASAP, so that each of our governmental actions can function as fully in the clear view of such transparency, as did this proposal for self generation of our own power. Anyone like me, watching this process go forward, can come to unabashed conclusion that the ONLY REASON those Democrats would vote down FOIA is because their hands are in our coffers and they want no one to know. There can be not other.
So we learned that some stipulations, placed in good faith by Bluewater wind, could, if commodities shot up as they have in the last 5 years, cost us considerably more for our electrical power.
I will echo what Tommywonk said in his WDEL(aware) Address. Paraphrased: We have to remember it is just one step in a negotiation……… Feeling the disappointment, and anger toward those political toadies who pushed this towards fruition, I can sympathize with Mike Castle’s ancestor, Benjamin Franklin, who watched the Constitutional Convention slide towards a divisive oblivion. “If we don’t all hang together, we shall surely hang separately.” The Great Compromise, also known as the Connecticut Compromise after those state’s delegates came up with it, passed by one vote and rallied the delegates to give us the government we have today……..
That compromise worked because it benefited the small states in the Senate (we have two Senators, the same as California), and large populous states in the House (where we have one). Both sides were happy and we moved on to other things.
Bluewater needs to make money on their investment. They also need to shoulder some risk and not have those costs added to our electric bills. The obvious choice then, is to go back to their original proposal, a 6oo MW wind farm, allowing them a greater revenue stream, and then have them absorb all the cost overruns, if any, that occur. Their cost per unit drops, and we again are guaranteed what we were led to believe, that we will continue forward for the next twenty- five years, paying less for electric, than twenty states now…..
Such a compromise meets all the objections proposed by the October 29th PSC Staff report. It benefits Bluewater Wind. It benefits Delmarva. It benefits us.
More to come.
6 comments
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October 31, 2007 at 7:26 pm
Alan Coffey
Do other EGeneration facilities have to shoulder some risk? Aren’t our rates set by their costs plus some amount for investment and profit?
I know nothing about this issue and am just asking.
October 31, 2007 at 9:51 pm
kavips
To some extent, yes. It depends on the amount of regulation that will be imposed afterward. Under regulated systems, as we once had, the generation partner makes its case to the board of regulators, requesting a rate increase. The board looked at the evidence and determineed the future price. This has worked well for consumers.
In an unregulated society, to ask for the right to “Halliburtonize” the construction process, that is, squander as much money as possible in the construction phase, since ones revenue is determined by costs + a percent on top, is unprecedented. The regulators said that some pressure to control costs, placed by the construction company upon itself, would be needed for the process to go forward. Otherwise it would fail to provide us with the cheaper alternative.
November 1, 2007 at 1:47 am
Alan
Thanks for the explanation. I have not followed this as closely as I should.
November 1, 2007 at 3:16 am
Nancy Willing
I just interviewed McDowell. His comments are very close to yours in that the risk in the deal was completely on the rate-payer and it would have locked us in to a 25 year deal – with possible worst case outcome that were not clearly indicated. Only now do the wind advocates admit that and offer to shoulder some of the risk.
Also, Senator McDowell felt that the process was not transparent enough. For instance, NY is much more open and holds alternative energy to the same rate rate of return as other energy suppliers. They were held to 7.5%after asking for 19%.
I mainly wanted to find out what he meant by the nail in the coffin quote and he said that Jeff Montgomery kept asking him if he thought that the “this was the end of it” while discussing the risk of an additional $55/month. McDowell was glad that the proposal was tanked. He says he will fully support wind power that is privately developed. He does not think that the rate-payers should shoulder this much risk and he is correct.
I hope that the parties come back to the table and rework a deal without the gas auxilliary and without the long-term lock-in to Delaware customers’ pocketbooks.
November 6, 2007 at 12:28 pm
PSC Indirectly Hints It May Back the kavips Compromise « kavips
[...] return, Bluewater wind does not pass escalating costs, if any, onto Delaware’s subscribers. Other posts of mine have delved into the win, win situation which this compromise [...]
November 21, 2007 at 12:22 pm
We Are Not Defeated: We Just Have More Work To Do « kavips
[...] “The kavips Compromise” should be explored. Although most of you already know it by heart, here it is one more [...]