Negotiations continue between Bluewater Wind and Delmarva. Despite an imposed gag order of the megavolt discussion going on in DeLuca’s office , there are a a couple of kilowatts of information which have leaked out… some from one side, and some from the other…. And of course, there is some misinformation as well, as is usual in negotiations with which the public is heavily involved….

Much of the discussion centers upon whether Bluewater Wind will supply 30% of our electricity with clean, cheap, and stable prices lasting twenty five years….

Or….

Will they supply 20% of our electricity with chean, cheap, and stable prices lasting twenty five years…

Let us look at how that affects rate payers…. Let’s assume that in 5 years, our rates will have climbed as high as Hawaii’s are today…. $200 per megawatt. As most of you know by now, Bluewater Wind will provide wind generated electricity at a cheaper $105 dollar cost per megawatt.

What Delmarva will do, is average all the power they receive from different sources, and determine an average cost (cough, cough) and tack their approved 4% increase on top of that….. “carrying charges.”

Therefore we can use math to create a model which will determine how our costs will be affected by the current proposal, and how much it will cost if the reduced proposal becomes the finalized version.

With Bluewater Wind contributing thirty percent of our load, it looks like this…

30% @ $105 + 70% @ $200 = $171.50 per MWh X 4% Delmarva charge = $178.36

With Bluewater Wind contributing only 20% or our total:……..

20% @ $105 + 80% @ $200 = $181.00 per MWh X 4% Delmarva charge = $188.24

The difference is $10 per MWh. Not much, really….. Or is it?

Divided by 1000 to get our kilowatt/hour price, our two choices are 0.178 cents or 0.188 cents per every kilowatt hour we use for the next twenty five years…

The standard amount of electricity used per home for calculations of this type, is usually 1000 kilowatt/hr per month. (It simplifies calculations) But you can do these calculations using your own electric bills if you wish to determine how much your household will be paying….

So using a 1000 kilowatt/hours per month, the penny price difference comes to a rough figure of $10 per month….

I hope most of you catch the irony of this….We heard for the last eighteen months, that Delmarva Powers was looking out for its customers, by fighting a $6 increase on their monthly electric bill. But, lo and behold….they are negotiating right now with Senator Tony DeLuca to raise your bill $10 a month. (I’m shocked…Outraged….there’s gouging going on in here…. (here are your winnings, sir) Oh thank you….)

Obviously, twenty five years is a long time… If you are over 65 right now, there is a chance you may not live out the end of the contracts being signed today…. So if one takes that $10 dollars a month, and determines it will cost a customer $120 dollars a year, and $3000 over the life of the contract, then all of Delaware is going to pay (using 550,000 Delmarva customers as a base) ……………

…………

………..$1,650,000,000 or 1.65 Billion Dollars of Delaware’s income, will be sucked from all of us by this reduction of 100 MW being supplied by Bluewater Wind.

Not to belabor the obvious, but that is $1.65 billion we can’t spend at local restaurants, ..That is $1.65 billion we can’t spend at our grocery stores…. That is $1.65 billion we can not put towards our retirement. That is $1.65 billion we will not have to pay for our uncovered medical expenses…. That is $1.65 billion we can’t pay for our sewer bills, our water bills, our cable bills, or gas or propane bills, our gasoline bills, .. that is $1.65 billion we can’t pay for our credit card bills, and how many Delawareans do they employ?

So the cost may be sold to us as being small, just as a single point on our interest rate is often sold as being tiny…. But the long term effects over time, are a different story… It is not about whether or not it will cost us anymore…It is about realizing the fact that the Delawarean Senate can vote tomorrow to force the agreed PPA forward and we will then be able to invest that $1.65 billion over the next twenty five years in something productive, …instead of letting Delmarva siphon it straight up to Pepco Holdings, from whence we will see nary an economic ripple…….

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June 16, 2008 at 7:57 pm

liberalgeekK – You are missing the other variable. The 4% profit margin. If I have reverse engineered that number correctly. the difference in profit between the two proposals is $63.5 Million dollars over 25 years for Delmarva. This is the price for selling out their customers. $2.5M a year.

June 16, 2008 at 8:57 pm

kavipsNope, it was in there…Check again.

Whereas you sought to isolate the actual price difference exclusive of the 4%, I was more interested in what we ,as Delawareans, would pay inclusive of the profit margin. It is important to keep that percentage factor in because, as with any cost plus arrangement, the higher the cost….the more is earned within the percentage….

I have not been able to duplicate your results by any method tried so far. Just alone, your 2.5 million / year divided by 550, 000 of Delmarva’s customers, averages to just $4.54 dollars additionally paid per year. That cannot be correct? Just one Megawatt would cost us 2.20 times that yearly total?…..

June 16, 2008 at 9:29 pm

kavipsOK, Now I think I understand what you were saying…

Whereas I was predominantly worried about how much money would be sucked out of the entire Delawarean economy due to the 10% discrepancy, you were calculating explicitly how much extra Delmarva Power would earn in carrying charges, by extrapolating the 4% difference between the two plans…..

$178.36 – $171.50 = $6.86

$188.24 – $181.00 = $7.24

The obvious difference per megawatt is $0.38 cents per MWh.

Over the life of the contract, based on the assumption that one house uses 1 MWh per month (1Mwh = 1000 kWh)

$0.38 cents X 12 months X 25 years = $ 114.00 dollars

Spread over the 550,000 Delmarva customers (taken from their website) the amount becomes:

$114.00 dollars/ customer X 550,000 customers = $62.7 million dollars

Bingo.

(My apologies go out to all who suffer through these mathematical expressions. But having had to personally go through all of Delmarva’s miscalculations and obfuscating gobbledygook in an attempt to verify their results (they do not stand up), to be able to show the calculation in a quaint simple method, easy to comprehend, is actually a pleasure)……………

🙂

June 16, 2008 at 11:11 pm

| DelawarePolitics.net[…] This maybe our last chance. Negotiations are underway with DP&L. What happens this week will likely shape the Bluewater Wind deal. Contact your Senator and tell him/her how you feel about the Bluewater Wind Power deal. Unless of course you oppose us having 100% American made, local power and price stability then you have my encouragement to watch tv instead. […]

June 17, 2008 at 2:23 am

liberalgeekYes, that is what I did (the 2nd comment you made). I’m wondering what it takes for Delmarva to sell us out. So now we know.

June 18, 2008 at 9:56 pm

TomaHawkAny chance that these cost analyses can appear as an OP ED in the News Journal?

June 19, 2008 at 8:56 am

kavipsThe News Journal has received every post with entreaties to print it, and has published other points of view instead.

Ask them why 🙂

I’m mildly curious about what would happen if large numbers of News Journal readers started demanding such be printed. Many have mentioned they have tried. It will take an extreme large number to override the top echelon’s hesitancy.

I’m am guessing their suppression is because they fear that this argument will grow beyond them. At least, if I were in the NJ’s shoes, I would be quite fearful. Really, how many of you really knew what McDowell, Adams, DeLuca, or Copeland were like, until blogs began researching and publishing real facts?

If you are willing, you can use any of these facts, placed here for all with supporting references, and write to them yourself. In fact the more of you willing to write in your own name, the better….

But, if you wish to get the word out, better to send those still unfamiliar, either to here or to Tommywonk for information, both of which are far removed from the NJ’s editorial boards capacity to tamper with the text.

I distinctly remember the lovely Curmudgeon being disappointed at how much her last editorial piece was left on the cutting room floor when it was finally printed……