In a well timed move two of the Delmarva peninsula’s Electric Cooperatives, have joined with Delmarva Power in accepting bids for land based wind.

Maria got there first .

At first glance this sounds like it may do damage to Bluewater’s proposal to build wind off the Delaware coast. Common knee jerk reaction would be to say “Oh no, they are going along with Delmarva to get wind from Pennsylvania. All our new jobs are going to be lost…”

But if one takes a close reading, that it not what it says.

The Delaware Electric Cooperative and Old Dominion Electric Cooperative have joined Delmarva Power’s competitive bidding process to acquire land-based wind energy to supply their customers, the companies announced today.

Keep in mind that the earliest that a Bluewater Wind contract could provide Delmarva customers with clean, cheap, renewable energy, would be in 2014…..The average length of a bid for power is currently three years. So this being 2008, we would bid one for 2008 through 2011, one for 2009 through 2012, one for 2010 through 2013, and perhaps one more ranging from 2011 through 2014. If those utilities did not order energy from wind, ……it would during the interim, still come primarily from coal and gas fired turbines……So by purchasing from land based wind, which will be cheaper than any carbon based fuel, (although not as cheap as offshore) until Bluewater Wind comes on line, we will actually save Delmarva and the electric coop’s and their customers…….money. Not a bad thing at all.

The utilities made the announcement after Delmarva Power received more than 35 price bids from land-based wind developers from across the region.

Obviously there were too many bids for Delmarva to keep to themselves.

Early indications from the bids are that buying land-based wind power through this competitive process could save customers an estimated 50 percent compared to Bluewater Wind’s current proposal to Delmarva Power for a 25-year contract.

For those of you who read legalese, this doesn’t really say what one at first thinks it says: Here is how one focuses on the document itself:

Early indications from the bids are that buying land-based wind power through this competitive process could save customers an estimated 50 percent compared to Bluewater Wind’s current proposal to Delmarva Power for a 25-year contract.

Early means anything can happen. But the principal word in this clause is could. Of course it “could” happen. Anything is possible. A comet could smash into the Pacific ocean tomorrow…we just didn’t catch it. A tornado could hit the New Castle Courthouse and break windows. An elephant could break loose and tear up Terry Strine’s mobile home park, much to the chagrin of its residents. In any legal document, the word “could” is something most good lawyers try to have removed, or meticulously defined if the other party insists. The word “could” in a legal document, removes all accountability away from the person defending the claim. The word “could” allows me to make a preposterous statement and not be held liable, because…….it…..could……just……happen. Therefore I “could” say John Atkins “could” be back to his old tricks at Seacrets, and nothing “could” happen to me because I used the word “could“..

(Talk about running one word into the ground, wow.)

But the final clue is the word “estimated“. That word means a “guess”. It could be a rough “guess”, it could be an average “guess”, or it could be a “guess” that is quite close to the mark because a lot of effort went into analyzing the data leading one up to that guess…….

So when we are told the onshore wind will (no, remember it said “could”) save an estimated 50% over offshore wind, will it save that 50%? To do so Delmarva will have to buy the onshore wind at a price below 1/2 of what Bluewater is offering. And we know what Bluewater offered.

Bluewater’s price is 9.89 cents per kilowatt/hour. Currently Delmarva has just announced their bid over the next three years to buy electricity at 10.99 cents per kilowatt/ hour. That means that every kilowatt hour we pay TODAY, costs 1.1 cents more than Bluewater wind will be costing us twenty five years from now…….. Use 600 kilowatts/hour a month, the cost savings from Bluewater wind alone would save you 600 times 1.1 cents or $6.6 dollars a month.

Therefore, land based wind needs to come in at 4.95 cents per kilowatt hour to be 50% cheaper than Bluewater Wind. Theoretically that is possible if a big turbine works at 90% capacity, but in truth, it is very unlikely. After all, as Delmarva said……it could be 50% cheaper. But even if we haven’t yet seen the bids, we already know the claim is quite doubtful…….why? Because they used the word “could“…..

So if we reread that passage again, we see it says:

Early indications from the bids are that buying land-based wind power through this competitive process could save customers an estimated 50 percent compared to Bluewater Wind’s current proposal to Delmarva Power for a 25-year contract.

very little, really. We have to read that as maybe, …..or…….then again, maybe not. The same way a jaded person would take this next remark perennially coughed up at the end of every August.

“With a veteran quarterback, a series of strong running backs, and a top rated secondary, the Eagles could win the Super Bowl this year….”

Ummm. Let me place my bet in mid season.

Next the press release continues………

Final bids from wind providers are due at the end of March. The utilities will conduct a thorough analysis of the bids. The analysis will likely be complete by the end of April.

“Will likely” equals another synonym for “could“. If they were serious, they would have left out the word “likely” stating that the analysis WILL be complete by the end of April.

Here we see the whole mechanism behind this press announcement. They are stalling for time. It took very little time for the Coops to jump on board. Obviously they were able to digest the information rather quickly. But as one approaches the end of the General Assembly, it becomes easier to kill the wind power deal. Stick it in a drawer and say let us deal with it next year…..

That is the whole drive behind leaking these teasers in order to postpone any decision leading up to a final verdict, until it is too late. Everyone intuitively knows right now, that the price will not come close to that of Bluewater Wind. Everyone knows right now, that the economic benefits from out of state wind, will do nothing for Delaware. Everyone know right now, that when other states need green wind as much as we do, that the price will soar since they are not locked into a low costing contract as we would be with our own offshore wind…..but is it human nature to hesitate when buying a mortgage at 4% interest because you hear rumors that it may soon go to 3%? Yes!. But what if those rumors were planted to make you hold out until the rates shot up to 5%? In a nutshell, that is what is being done right here, right now.

In addition to a lower price, most of the onshore bids have no built-in price escalators. The Bluewater Wind proposal, by comparison, automatically increases the price to customers by 2.5 percent each year, starting in January 2008.

This is hilarious! Delmarva will be wiping the egg off their face as soon as this one gets out. I can only guess in their dealings with the Legislative committee, that they think all Delawareans are stupid. Well most of those I know are not; we just get fooled sometimes and elect stupid people to represent us……

Now here is what’s so funny. During the negotiations last August, the ones leading up to the September 13 decision by the Public Service Commission, around the negotiating table the 2.5 % increase was called the “Delmarva” escalator. That is because under the rules of the State of Delaware, Delmarva Power is entitled to an inflationary increase of 2.5% a year. Bluewater argued that they too should also be allowed the same arrangement, since the Delmarva Corporation had been getting it for years. Delmarva agreed it was fair, and it went into the contract. What is amusing and one has to shake their heads in disbelief at how dumb this corporation is, ……these land based companies will not have escalators because they are not contracted, the same way non union workers work cheaper with no guarantees because they have no contract, and afterwards, Delmarva will still tack on their inflationary hedge of 2.5 % and we still will have to pay for it!

Isn’t that funny?

Let’s move on:

“Onshore wind energy provides consumers with the same environmental benefits as offshore wind energy”Here the truth is being stretched a little. It should read that

“Onshore wind energy provides consumers with (some of) the same environmental benefits as offshore wind energy”

A couple of facts. Offshore wind provides more energy during the summer months than do land based wind farms, which are often stalled when a high pressure system sits on the Appalachians. Even during a summer High, offshore wind turbines benefit from the breeze causing temperature gradient existing between the sea and land during the summer months. Offshore platforms also provide artificial reefs for fish (which no land based unit can), and no forest habitat is destroyed in the placing of an offshore tower.

If the wind is blowing strong enough off Rehoboth, then less mercury, cadmium, and sulphur land on top of Millsboro’s residents. Finally mountaintop onshore wind farms run at 30 to 40 percent capacity, whereas offshore wind farms run up to 75 to 90 percent capacity. More carbon is offset with off shore.

Got to move on.

“We are pleased to join with the Delaware Electric Cooperative and the entire family of Old Dominion Electric Cooperatives in this groundbreaking process to bring clean, affordable renewable energy to the region up to five years ahead of any offshore proposal,” said Delmarva Power President Gary Stockbridge. “Together we can achieve considerable savings for our customers, establish a long-term source of renewable energy for both Delaware and the region, while doing what’s right to help protect the environment. The addition of the family of Old Dominion Cooperatives to Delmarva’s ongoing wind power bidding process should expand the growth of wind energy throughout the entire Delmarva Peninsula and the Commonwealth of Virginia. This is an exciting day for the development of renewable energy in the region,” Stockbridge said.

Question: who is doing all the talking? Isn’t the whole point of the press release that someone other than Delmarva is also seeking land based wind bids? Why then, do I see only one name repeatedly?

” J. William Andrew, President and CEO of the Delaware Electric Cooperative, said the cooperative is pleased to join with Delmarva Power on this issue. “This agreement demonstrates that Delaware’s largest electric utilities are acting responsibly and aggressively in obtaining renewable energy for customers at a time when issues of climate change and energy sustainability are at the forefront of the public agenda,” he said. “We see this as a great opportunity to bring renewable energy to our members and maintain the low rates our customers expect from us.”

Oh, there he is. But wait…. he doesn’t say anything about not going with offshore Wind. He is talking about what I mentioned in my first paragraph, that buying wind now was much better then coal, natural gas, or oil……Basically he says let’s buy cheap renewable power now…. no one can argue with that. When Bluewater comes on line, he never says that he will not buy from them as well. And some of you may remember, the Coops already bought rights to Bluewater Wind months ago contingent on if it was passed and would go into effect.

One gets the perception from this press piece that Mr. Andrews was suckered by Stockbridge to be tied in with Stockbridge’s denunciation of Bluewater Wind. ” Hey, Bill! Let’s get together and pool our bids on some of this outside wind deal until they figure what will happen with this Bluewater thing. Let’s announce it on Monday….Don’t worry, just come up and say a few words and our guys will set this whole thing up.”

Surprise, surprise.

Jackson E. Reasor, President and CEO, of the Old Dominion Electric Cooperative, said the Cooperative is pleased to join this process and expand the opportunities to the region and the over 500,000 members of the cooperatives they serve. “Wind power will play a strong role in moving us all toward cost effective renewable energy for our future and we are excited to get in early on this rapidly growing technology.”

Again, no argument there. Once again, notice that he just said “windpower”; not as Stockbridge said: “land based windpower.” Better to buy cheap wind now instead of expensive coal.

Finally:

The benefits of any potential agreement will be spread to more than 90 percent of the electric ratepayers on the Delmarva Peninsula and an additional 400,000 on the Virginia mainland.

Whoa…..did I just read potential? I did, didn’t I? Let’s read that line again…P…..O….T….E….N….T…..I….A….L… Well, I’ll be darned. Unlike Toby Keith, this is a lot more talk, and a little less action…..

Wasn’t this the same company that just last year, said that a gas fired plant was cheaper than Bluewater wind’s proposal, and could never prove it. They were of course proven wrong this year by 1.1 cents a kilowatt hour.

Wasn’t this the same company that just last year that said renewable energy was too costly for their consumers, and now… they are joining up with Coops to buy land based windpower?

Wasn’t this the same company that said they were looking out for all their customers and then bid 1.1 cents more than Bluewater Wind would charge us twenty five years from now?

Wasn’t this the same company that based their predictions on their costs versus those of Bluewater Wind, by using their 2006 prices, you know the one’s we had before the 59% increase?

Wasn’t this the same company that based every one of their estimates on the premise that gas prices would drop back down to where they were years ago?

Bottom line…………..Maybe, perhaps, in a rare circumstance…..it could happen.

Based on this company’s track record, I will have to see that 50% before it can be believed. Remember: those bids need to be 4.95 cents per kilowatt hour. Apparently all we have now……… is his word.

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