Maria Evans on her WGMD blog pulls the figures off of the PSC’s website. What is intriguing his her statement that all the agreed figures were allowed an inflationary adjustment of 2.5 %. Intrigued, because 25 + 7 is roughly one third of a lifetime, I wondered how those cost escalators would be costing us at the end of the contract…

Since no tables were present in the PSC’s data, I did them myself.

The pricing below for the project products will be escalated at 2.5% per year after 2007:

o Base Capacity Payment Rate = $70.23 per kW-year
o Base Energy Rate = $98.93 per MWh
o Base Renewable Energy Credits Rate = $19.75 per REC

=========================================

Year————Data X Inflationary adjustment 2.5%

2007 ——————–9.893—–70.23—–19.75

2008 ——————–10.14—–71.98—–20.24

2009 ——————–10.39—–73.78—–20.74

2010 ——————–10.66—–75.63—–21.27

2011 ——————–10.92—–77.52—–20.80

2012 ——————–11.19—–79.46—–22.35

2013 ——————–11.47—–81.44—–22.90

2014 ——————–11.76—–83.48—–23.47

2015 ——————–12.05—–85.56—–24.06

2016 ——————–12.36—–87.79—–24.67

2017 ——————–12.66—–89.90—–25.28

2018 ——————–12.98—–92.15—–25.91

2019 ——————–13.30—–94.45—–26.56

2020 ——————-13.64——96.81—–27.23

2021 ——————-13.97——99.23—–27.91

2022 ——————-14.33—–101.71—–28.60

2023 ——————-14.68—–104.26—–29.32

2024 ——————-15.05—–106.86—–30.05

2025 ——————-15.42—–109.53—–30.80

2026 ——————-15.81—–112.27—–31.57

2027 ——————-16.21—–115.08—–32.36

2028 ——————-16.62—–117.96—–33.17

2029 ——————-17.03—–120.91—–34.00

2030 ——————-17.46—–123.93—–34.85

2031——————- 17.89—–127.03—–35.72

2032 ——————-18.34—–130.20—–36.61

2033 ——————-18.80—–133.46—–37.53

2034 ——————-19.27—–136.79—–38.46

2035——————–19.75—–140.21—–39.43

2036 ——————-20.25—–143.71—–40.41

2037——————–20.75—–147.31—–41.42

2038 ——————-21.27—–150.99—–42.43

2039 ——————-21.80—–154.77—–43.52

Through the forces of compounded interest, all prices will have doubled by the end of the contract just from inflation alone. Hopefully your salaries and savings will have suffered the same fate.

Don’t get too bent. Keep in mind these same escalators are currently already in effect for Delmarva, and have been for years…….In fact, inside information says that until Delmarva vociferously objected, this 2.5% inflationary adjustment was jokingly called “The Delmarva Constant” in discussions around the negotiating table……….