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The News Journal broke this story this morning… Some excerpts.

Attorney Randall Speck, who is representing the states, said there was a strong incentive for generators of the power in the PJM area to withhold some supply to increase prices. PJM tried to mitigate this, but was unable to do so, he said.

Capacity charges in the PJM area increased by about 1,200 percent from 2007 to 2008, and now make up 20 percent of a Delmarva customer’s bill.

The higher rates were supposed to spur construction of new power plants for the constrained East Coast. But despite the higher rates, power companies have been slow to build the new plants, the complaint alleges.

As a share of that, Delmarva Power ratepayers in Delaware will overpay by about $125 million in “unjust and unreasonable” rates, the states claim.

====

Wow. Keep in mind one of the misleading advertisements put up by Delmarva Power says Bluewater will cost more then 80 million a year….Does anyone seem surprised that NOT HAVING BLUEWATER WIND, will cost us 125 million instead?

You and I have been paying this money to increase capacity. We have already written the checks…Not only did our power companies cash the check and sit on the funds, earning interest, but the spent hundreds of thousands to throw a roadblock in the way of a competitor who wanted to do just what we were paying to have happen: build capacity.

This throws a credibility wrench into everything Delmarva has said…..It appears that their only reason for opposing Bluewater Wind, is so they can earn interest on our money while using the capacity shortage, as an excuse to raise our rates higher.

if you are shopping and you do not like how you get treated, you choose a different store with which to do business.

All of Delaware should scream at their Senators to get off their high horses and change vendors. More than ever we need Bluewater Wind in our own backyard, just to ensure that in our future, these shenanigans won’t take place here…….

Margaret O’Neill Bldg
Suite 3
410 Federal St.
Dover, DE 19901
Ph(302)739-2399
FX(302)739-2398

Being observant of the law, I have several questions I wish to ask of you relating to Senator Harris McDowell and the report coming out of his committee that slams Bluewater Wind.

I know that you are besieged by citizen’s requests at this time because of the recent turn of events, but would like to hear back from you on these matters.

My questions will pertain to, as following this brief background of your statement of policy.

The General Assembly finds and declares:

(l) In our democratic form of government, the conduct of officers and employees of the State must hold the respect and confidence of the people. They must, therefore, avoid conduct which is in violation of their public trust or which creates a justifiable impression among the public that such trust is being violated.

(2) To ensure propriety and to preserve public confidence, officers and employees of the State must have the benefit of specific standards to guide their conduct and of some disciplinary mechanisms to guarantee uniform maintenance of those standards. Some standards of this type are so vital to government that violation thereof should subject the violator to criminal penalties.

Thank you for your indulgence. First question is this.

If:

(1) No state employee, state officer or honorary state official may participate on behalf of the State in the review or disposition of any matter pending before the State in which he has a personal or private interest, provided, that upon request from any person with official responsibility with respect to the matter, any such person who has such a personal or private interest may nevertheless respond to questions concerning any such matter. A personal or private interest in a matter is an interest which tends to impair a person’s independence of judgment in the performance of his duties with respect to that matter……

Then how is the conduct of Harris McDowell while chairing the Senate Energy and Transit Committee hearing on Bluewater Wind, not a violation of the principals listed above?

Question 2:

If:

(2) A person has an interest which tends to impair his independence of judgment in the performance of his duties with respect to any matter when:

a. Any action or inaction with respect to the matter would result in a financial benefit or detriment to accrue to the person or a close relative to a greater extent than such benefit or detriment would accrue to others who are members of the same class or group of persons; or

b. The person or a close relative has a financial interest in a private enterprise which enterprise or interest would be affected by any action or inaction on a matter to a lesser or greater extent than like enterprises or other interests in the same enterprise.

Then how is the conduct of Harris McDowell while chairing the Senate Energy and Transit Committee hearing on Bluewater Wind, not a violation of the principals listed above?

Question 3:

If:

(1) No state employee, state officer or honorary state official may represent or otherwise assist any private enterprise with respect to any matter before the state agency with which the employee, officer or official is associated by employment or appointment.

(2) No state officer may represent or otherwise assist any private enterprise with respect to any matter before the State.

Then:

Despite the understanding that members of the General Assembly are not included in either the definition of either state officer or state employee..……How does the actions of State Senator Harris McDowell, who presided over what two very respected Senators publicly called a one-sided hearing, and witnesses have publicly acknowledged that openness was not tolerated in trying to find the one best solution to Delaware’s energy challenge….

How do these actions not heinously violate the principals stated above?

Question 4:

If:

No person who has served as a state employee, state officer or honorary state official shall represent or otherwise assist any private enterprise on any matter involving the State, for a period of 2 years after termination of his employment or appointed status with the State, if he gave an opinion, conducted an investigation or otherwise was directly and materially responsible for such matter in the course of his official duties as a state employee, officer or official.

Then:

How can Senator McDowell’s brazen attempt to pummel Delmarva’s interests over those of 90% of Delawareans, and not allowing any input from those same 90% of Delawareans, be considered as anything but “representing or otherwise assisting any private enterprise on any matter involving the State”?

Question 5:

If:

(1) Any person who knowingly or willfully violates any provision of this section shall be guilty of a misdemeanor, punishable for each such violation by imprisonment of not more than one year and by a fine not to exceed $l0,000.

Then:

How is it that Harris McDowell and others guilty of collusion are exempt from this clause in the law?

Question 6:

If:

(3) The Superior Court shall have exclusive jurisdiction over prosecution for all criminal violations of this section.

Then:

Can any citizen or citizen’s group including, but not limited to the ACLU, Common Cause, Citizens of a Better Sussex County, The Audubon Society of Delaware, The Green Party of Delaware, The Sierra Club, or any other; file claim in the Superior Court of Delaware to determine by legal means whether or not, the Public Integrity Law of Delaware was not-adhered-to in this case?

Question 7:

If:

No state employee, state officer or honorary state official shall accept other employment, any compensation, gift, payment of expenses or any other thing of monetary value under circumstances in which such acceptance may result in any of the following:

(1) Impairment of independence of judgment in the exercise of official duties;

(2) An undertaking to give preferential treatment to any person;

(3) The making of a governmental decision outside official channels; or

(4) Any adverse effect on the confidence of the public in the integrity of the government of the State.

Then:

How is a group of substantial campaign contributions coming from one such interest, under the appearance of a questionable quid pro quo, not a violation of the Public Integrity Law?

Question 8:

IF:

(c) No state employee, state officer, or honorary state official shall acquire a financial interest in any private enterprise which he has reason to believe may be directly involved in decisions to be made by him in an official capacity on behalf of the State.

Then:

How does passage by the Senate of SB228, which could benefit one Senator Harris McDowell, who as head of a Green Energy Consulting Business, which is a “for profit” entity which can now be in charge of and oversee the dispensing of over $100,000, 000 of Renewable Energy Credits, not a direct benefit to one Harris McDowell and those members of his committee which he chooses to appoint to his board of directors?

Question 9:

If:

(1) “Lobbyist” means any individual who acts to promote, advocate, influence or oppose any matter pending before the General Assembly by direct communication with the General Assembly or any matter pending before a state agency by direct communication with that state agency, and who in connection therewith either:

And (2):

(a) Every lobbyist shall register with the Commission in a lobbyist docket and file, at that time, the authorization from his employer as required by § 5833 of this title. A person who qualifies as a lobbyist in accordance with § 5831(a)(1)a. or b. of this shall register prior to performing any acts as a lobbyist. A person who qualifies as a lobbyist in accordance with § 5931(a)(1)c. of this title must register within 5 days after so qualifying, if not already registered as a lobbyist.

Then:

Why was Randall Speck, who represented unequivocally McDowell’s one-sided view, allowed to cross examine state employees on video tape which was not legally cleared by any other state agency, and not allowing any such cross examination by other registered lobbyist or registered attorney friendly to the interests of those state employees being cross examined also on that same video tape, allowed to do so without signing up with the Public Integrity Office as a lobbyist, which according to law, must be done if he is to collude or is to be involved with any part or portion of the Senate Committee of Energy and Transit’s hearings or events?
I'm Looking, but I See No Speck Here....

I reserve to further more questions in the future.

Although some affected by your investigation may impute that I have self interests in finding these answers, I would rather deflect all queries to your judgment as to whether, or not, the very integrity of the Public Integrity Office will be at stake, if these actions are allowed to go unchallenged.

At the behest of good government, I look forward to your reply.

You may answer here, in a public forum, if you wish………..

Sincerely:

Right now, before the Senate, Senate Bill 228 has been amended, striking everything but this clause.

SENATE AMENDMENT NO. 1

TO

SENATE BILL NO. 228



AMEND Senate Bill No. 228 by striking Sections 3 through 6 in their entirety.


SYNOPSIS

This Amendment limits the scope of the Bill to clarifying (1) that the Contract Administrator is not required to be a non-profit entity, but (2) that the SEU is a non-profit entity.

It is worthy to note that the original bill would never have passed except for this clause stating that the Contract Administrator had to be a non-profit entity. If not, just imagine the pain caused if Delmarva Power were to be in charge of our green energy directives.

This bill needs killed.

Future energy credits are a commodity that belong to the people of a state and should never, ever be turned over to a for profit entity.

McDowell himself is in charge of a “for profit” entity called the Delaware Alternative Power Corp.

It has become obvious, that this amendment………is the sole reason Russ Larson was ordered to change his vote , and not vote his affirmation to the Agreement between Delmarva Power and Bluewater Wind.

This is it.

If you have not yet called………..

And your Senator is a Democrat leave a message here: (302) 744-4286

If your Senator is a Republican leave a message here: (302) 744-4048

The question is who. My first target is Delmarva and its subsidiary Pepco Holdings. Of course the Bluewater Wind deal has to be politically tabled before that lawsuit becomes possible.

Why sue?

With all snark aside, that is the American corporate way of dealing with damages imposed upon one by another entity. And if we do not receive Bluewater Wind’s cheap and reliable renewable energy, we will all be hurt.

Let’s start with costs alone. And assume that Delmarva Power can purchase its energy for the next twenty five years at exactly the cost of what it pays right now. (like that’s ever going to happen), If one takes the bundled cost of the contract price of Bluewater Winds proposal, $105 per MW, and compares that to Delmarva’s purchased prices AS OF MARCH 2008 of $110 per MW, one already sees there is a $5 savings achieved by going with Bluewater Wind……

If one takes the aggregate maximum of 1,357,402 MWhs per contract year during the Service Term and multiplies that first by the $5 per MW difference, then by 25 for each of the years covered by the contract…………………..we get our first total of $169,675,260 that doing nothing will cost us IF PRICES FOR CARBON FUELS STAY THE SAME FOR TWENTY FIVE YEARS (Yo, that’s not going to happen).

This puts McDowell’s statement on treacherous legal footing. For the entire premise of his sham hearings, roughly estimated to have cost Delaware taxpayers $100,000, is that the wind farm proposed by Bluewater Wind is not in the best interest of Delaware ratepayers because of the risk and cost associated with the project.

But we see Bluewater saves us $169,675,260 over the rates we pay now, if we do nothing and carbon fuel costs stay the same and never rise…..   What McDowell will have to explain under oath, and it simply can’t be done, is how saving Delaware $169,676,260 dollars is costing Delawareans too much money!

That is just the tip of the iceberg.

So by doing nothing, and hoping for flat fuel costs, will already cost this state almost $170 million more than had we opted to go with Bluewater Wind. That part of our incomes could have been spent on other things, had Bluewater Wind been built as scheduled.

Next question:

So how little does fuel have to increase over the twenty five years span to actually cost us 1.6 Billion? Well, doing the math backwards, we take the 1.6 Billion divided by 25 years, and then divide that total by the number of MWh’s maxed per year, we see that if the average cost of a MWh is only 47 dollars more.   Once we reach that level,…… we, as a state, have lost 1.6 Billion Dollars solely because of McDowell’s interference.

Therefore by our nixing of Bluewater Wind, and trusting ourselves to Delmarva’s buying prowess, once we hit the average price of $152 per MHh, we, as Delawareans will have shelled out 1.6 Billion more.

Is that high cost, $152,  even a remote possibility? California has on occasion paid as high as $3880 per MWh. Closer to home? In 2005 record high temperatures drove prices within the PJM grid to over $150 per MWh for 234 hours, as opposed to just 5 hours in 2004. So $152 is not some far flung to-be-scoffed-at amount that could never, ever happen. It already has.

Of course, if one does not just consider money, there are other benefits stemming from Bluewater Wind as well. Less carbon, cleaner air, less breathable cancer among our population, all benefits that come from using windpower instead of coal.

New jobs, new technologies, and new tourist opportunities add additional revenue into the equation which was not calculated here.

This post is just the math. Done to show that McDowell and his buddies do not have a factual leg to stand on. For already, Bluewater wind is cheaper than what we pay now. And in case you were still unaware…………….fuel costs for all carbon derived fuels, will soon soar, making their assumptions much harder to stand up in court.

Al it takes is one of us to file papers, and like a clod falling on a slippery slope, the whole side of the mountain moves.

And I think that is worth suing for. What are your thoughts? Especially when one considers that the deal was about to be signed, until a few members twisted the Controller General’s arm. That arm twist will cost Delawareans 1.6 Billion Dollars.

Someone other than us had better pay for it.

HOUSE OF REPRESENTATIVES

144th GENERAL ASSEMBLY

HOUSE CONCURRENT RESOLUTION NO.45

RECOMMENDING THAT ALL FEES BEING PAID TO THOSE TESTIFYING BEFORE THE SENATE ENERGY & TRANSIT COMMITTEE IN ORDER TO FURTHER SENATOR HARRIS MCDOWELL’S PERSONAL AGENDA, NOT BE REIMBURSED BY STATE FUNDS, AND INSTEAD, MUST BE SETTLED INSTEAD BETWEEN THAT SENATOR AND THOSE WHO CAME TO TESTIFY, AS A PERSONAL DEBT OWED TO THEM BY THAT SAID SENATOR.


WHEREAS, House Bill 6 of the 143rd General Assembly (the Electric Utility Retail Customer Supply Act of 2006), signed into law by the Governor on April 6, 2006, establishes a process for procuring a new energy source based in Delaware; and

WHEREAS, House Bill 6 set forth the criteria for selecting a new energy generating source, including the cost-effectiveness of the project in producing energy price stability, reduced environmental impact, the benefits of adopting new and emerging technology, siting feasibility and the terms and conditions concerning the sale of energy output from such facilities; and WHEREAS, the Public Service Commission, the Director of the Office of Management and Budget, the Energy Office and the Controller General were given authority under House Bill 6 to select a bidder; and WHEREAS, the Request for Proposal issued under House Bill 6 established a competitive process in which three proposals for power were submitted, an IGCC coal power facility, a new natural gas facility and an offshore wind power facility, all of which were reviewed and evaluated; and WHEREAS, on May 22, 2007, the Public Service Commission, the Director of the Office of Management and Budget, the Energy Office and the Controller General directed that Delmarva Power enter into negotiations with Bluewater Wind to build an offshore wind power facility in Delaware, and to submit a term sheet outlining the major provisions of an agreement; and

WHEREAS, on November 20, 2007, the Public Service Commission, Office of Management and Budget, the Energy Office and the Office of the Controller General held a hearing on the Bluewater Wind term sheet and directed Delmarva Power and Bluewater Wind to submit a Power Purchase Agreement for consideration on December 18, 2007; and

WHEREAS, the negotiations that were held between November 20, 2007, and December 10, 2007, resulted in a more favorable agreement from the perspective of Delmarva residential ratepayers than was embodied in the term sheet; and

WHEREAS, the negotiations have produced a Power Purchase Agreement to build and operate in Delaware the nation’s first offshore wind power facility; and WHEREAS, the Public Service Commission staff report finds that the Power Purchase Agreement meets the criteria established by House Bill 6, including price stability, reduced environmental impact, and the use of new technology; and WHEREAS, operation of the proposed offshore wind farm would provide jobs for Delawareans and make Delaware a leader in a new industry at a time when manufacturing jobs are disappearing; and WHEREAS, construction of the proposed offshore wind power facility would make a significant contribution to a reduction in greenhouse gas and toxic pollution emissions; and WHEREAS, citizens of Delaware have offered thousands of comments and letters in favor of the proposed wind power facility; and WHEREAS, the Public Service Commission, the Director of the Office of Management and Budget, the Energy Office and the Controller General did not act on the Power Purchase Agreement because of the lack of a consensus among the four entities; and WHEREAS, approval of the Power Purchase Agreement would endow Delmarva Power’s customers with protection against future price increases and price volatility due to the rising cost of electricity produced from fossil fuels and international political uncertainties.

WHEREAS, the public was not given any right of full participation in those hearings hosted by the Senate Energy & Transit Committee, and witnesses hired by members of this committee and paid out of public state funds, were not given, not did they seek to provide, the option to be cross examined by those representing an opposite viewpoint, Ie the 90% of Delawareans who favor the signing of the Power Purchase Agreement between Delmarva Power and Bluewater Wind, which has allowed for the content of these hearings to become suspect, at best, and deceitful, at worst.

WHEREAS, as of the time this resolution was being written, our state financial outlook is grim, facing an estimated shorfall of 326 million dollars, and currently all state agencies are facing 3-10% cutbacks for this and next year, and only those services deemed absolutely necessary, will be funded by state monies generated by Delaware’s bond issue and taxpayers.

WHEREAS, $35, 000 was mis-spent on a legal fee to one Randall Speck in an attempt to discredit the head of the Delaware Public Service Commission, who last year lead all parties through a complicated, yet completely transparent process, which culminated in reaching the previously mentioned signed Power Purchase Agreement. Its chairperson, Arnetta McRae, who nobly served this state’s best interest, only to endure, having no prior warning or notice, through a personally disrespectful and demeaning grilling at the hands of the above mentioned lawyer Randall Speck, who was hired using state funds by Harris McDowell, chairman of the Senate Energy & Transit Committee, and despite being supported by public funding, unprofessionally went against all honorable and ethical standards previously agreed to, by the leadership of all parties pertaining to this legislative body,

WHEREAS, no public good was accomplished by this expenditure, and other members of that committee have refused to pass the report based on the tone with which it was written, thereby sending it back into committee.

NOW THEREFORE: BE IT RESOLVED by the House of Representatives of the 144th General Assembly of the State of Delaware, the Senate concurring therein, that it is the requirement of the General Assembly that the Controller General verify that this expenditure and others given to witnesses who were allowed to testify, but received no true cross examination by opponents holding opposing or different viewpoints in order to determine either the validity or the quality of their knowledge of windpower, as it applies to Delaware’s energy future, (and whose opinions were later discredited in public conversations on several of Delaware’s highly rated blogs as being incorrect), ARE NOT to be reimbursed by the State Treasury of Delaware, and that NO funding, currently in use, is to be diverted to the purpose of paying off those witnesses. mentioned above.

BE IT FURTHER RESOLVED that the upcoming report comprised by the Senate Energy & Transit Committee discrediting the Power Purchase Agreement between Delmarva Power and Bluewater Wind, be considered by this body, the House of Representatives of the 144th Legislative Session, to be highly suspect of being untruthful, and of perpetuating a policy supported by only a handful of Senators marching in allegiance with Delmarva Power. whose negligent conclusions were reached from only listening to one sided testimony. The House of Representatives calls for this report to be publically debated on its merits, on the Senate floor, and resolved by a open floor vote of all parties, done in full public view of Delaware’s citizens.

SYNOPSIS

This Concurrent Resolution recommends that the Controller General determine that no public funds shall be used to pay for witnesses appearing before the Senate Energy Committees hearings regarding the Power Purchase Agreement between Bluewater Wind and Delmarva Power because, in the opinion of the majority of thIS General Assembly, the actions taken by that said committee in their effort to discredit a proposed Power Purchase Agreement which met the criteria set forth in House Bill 6 of the 143rd General Assembly and is in the best interests of the citizens of this State, do not constitute a wise use of public funds. This Concurrent Resolution further requests that the full Senate debates publicly and openly all future recommendations being made by the Senate Energy Committee, since opposing viewpoints were not vetted at the hearing level. By a majority of the House of Representatives of the 144th Session of the Delaware General Assembly, this body condemns those tactics taken by Harris McDowell in his pursuit to discredit the viability of the state of Delaware having its own electrical generation facility off the coast of Rehoboth Beach.

Because that……. is what we do.

Today in a conference room off the first floor of the Senate building, a small discussion about large things will take place……very large things. The GAO will present their findings surrounding their investigation of the PBGC fund. What will be said about this small fund, should stab a stiletto into the heart of any future discussion about privatizing Social Security. Sure, if one is young, with no assets, and just beginning to invest, privatized Social Security initially sounds like a “grand” idea. Everyone assumes: “Wow, will I be rich when I retire!.”

 

But theory and practicality often diverge. When investing they rarely tred the same path. The prime reason is of course human. Humans in charge of lots, and I mean we are talking about tremendous sums of money here, tend to make dumb decisions. At least they look dumb to us as we see the liabilities of our plans rise far above our assets. But to those benefiting from commissions assessed to these large sums, they of course still look as brilliant as the day they were conceived..

 

Although the hearing (at this writing) has not yet occurred, one can expect to see what happens then a federally guaranteed pension fund becomes mismanaged (by good, well intentioned people of course). No one has a crystal ball. But to give one an idea of the types of choices that need to be made often on a daily basis: is it better to invest in stable income at 3% or play the foreign markets where risks are high, and occasionally, so are the payouts?

With assets at 55 billion, a quick calculation reveals that when volume of this type is turned over to private companies, commissions of 1% to 2% range amount to between 550 million to 1.1 Billion dollars. After grasping this fact, one slowly begins to understand why the financial sector is pushing hard to privatize Social Security, which as all of us know, is a “slightly” bigger fund.. Face it. If any of us were grossing half a billion a year, would we truly care too much if, with no penalty to ourselves, several million $300 checks were returned for insufficient funds?

 

So what happened with the PBGC?

 

First some background: (courtesy of Wikapedia)

 

The Pension Benefit Guaranty Corporation (or PBGC) is an independent agency of the United States government that was created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage both the continuation and maintenance of voluntary private defined benefit pension plans, as well as to provide timely and uninterrupted payments of pension benefits, and at the same time, keep pension insurance premiums at the lowest level necessary to carry out its operations.

 

One reason Congress enacted ERISA was “to prevent the ‘great personal tragedy’ suffered by employees whose vested benefits are not paid when pension plans are terminated.” When a defined benefit plan is properly funded by its sponsor, its assets should be approximately equal to its liability, and any shortfall (including benefit improvements) should be amortized in a relatively short period of time.

 

The key words throughout this diary are that in a properly funded pension plan, the assets should be approximately equal to its liabilities. Apparently this is not so, As anyone who has closely studied this administration might guess……the liabilities are indeed, greater than its assets. Just how much? That is the bombshell to be dropped in the Senate committee room today.

 

The PBGC is responsible for the pensions of 1.3 million Americans, but we don’t currently have the resources to keep all of our future commitments,” the newly appointed PBGC Director Charles E.F. Millard announced on February 18, 2008. (The PBGC had an accumulated deficit of $14 billion as of year-end FY 2007. )

 

Several large airlines have filed for bankruptcy reorganization in an attempt to renegotiate terms of their pension liabilities. These debtors have asked the bankruptcy court to approve the termination of their old defined benefit plans insured by the PBGC.

On September 14, Delta Airlines and Northwest Airlines filed for bankruptcy the day before they would have had to contribute about $200 million, in total, to their pension plans. Both airlines’ pension plans are severely underfunded, Delta’s by about $10.6 billion and Northwest’s by about $5.6 billion. If these plans are taken over by the federal Pension Benefit Guaranty Corporation (PBGC), the agency’s deficit would rise over a third from its current $23.3 billion.

As far back as 1984, in National Labor Relations Bd. v. Bildisco, 465 U.S. 513 (1984), the U.S. Supreme Court ruled that Bankruptcy Code section 365(a) “includes within it collective-bargaining agreements subject to the National Labor Relations Act, and that the Bankruptcy Court may approve rejection of such contracts by the debtor-in-possession upon an appropriate showing.” The ruling came in spite of arguments that the employer should not use bankruptcy to breach contractual promises to make pension payments resulting from collective bargaining.

 

If a creditor is unsecured and there is not enough money,….. they usually are not paid. So as a matter of practical economics, if the downturn in a company’s fortunes which resulted in bankruptcy makes the performance of an executory contract less valuable than its breach, a rational company would breach!

 

As we look forward to the now flagrant warning signs of possible economic collapse, a total breakdown of our underfunded private pension system may make a difference in the number of homeless retirees wandering our streets after such a cataclysmic market event happens. After tomorrows’ hearing it will be obvious to most, that based on the performance of the Pension Benefits Guaranty Corporation’s own assets over the past seven years of Republican administration, that at least when Social Security is handled by a government of the people,… and not by a corporation dedicated to it’s own profit,…. we have a slightly better chance of having actual citizens receive actual benefits.

 

For the bottom line is this. When handled privately…………….bankruptcy, reorganization, and non payment, is always cheaper than fulfilling one’s obligations.

 

 

 

HOUSE OF REPRESENTATIVES
144th GENERAL ASSEMBLY

HOUSE CONCURRENT RESOLUTION NO. 41

RECOMMENDING THAT THE DELAWARE PUBLIC SERVICE COMMISSION APPROVE THE PRICE FOR ALL POWER PURCHASED BY DELMARVA , IRREGARDLESS OF SOURCE, TO BE PEGGED FOR THE NEXT TWENTY FIVE YEARS AT 9.89 CENTS PER KILOWATT/HOUR SHOULD THE GENERAL ASSEMBLY NOT INSTRUCT RUSS LARSON TO CAST AN “AYE” VOTE FOR BLUEWATER WIND’S OFFSHORE WIND FARM. THIS IS THE SAME PRICE WHICH WOULD HAVE BEEN GUARANTEED PER KILOWATT FOR THE ENTIRE SPAN OF TWENTY FIVE YEARS, HAD BLUEWATER WIND BEEN ALLOWED TO BUILD 11.5 MILES OFF REHOBOTH BEACH, DELAWARE AND BEGUN OPERATIONS IN 2014 SUPPLYING ELECTRICITY TO DELMARVA’S SOS CUSTOMERS. DELMARVA IS CONFIDENT THEY WILL CONSISTENTLY PROVIDE A PRICE MUCH LOWER THAN 9.89 CENTS PER KILOWATT/ HOUR. THIS GUARANTEE TO CUSTOMERS OF DELMARVA, WHO PERHAPS MIGHT OTHERWISE PAY HIGHER ENERGY PRICES OFF THE PJM GRID, IS NECESSARY BECAUSE DELMARVA IS WORRIED ABOUT THE HIGH COST ITS CUSTOMERS MIGHT PAY WITH BLUEWATER WIND’S POWER. THE RECOMMENDATION TO THE COMMISSION IS THAT ALL FUTURE INCREASED COSTS OVER 9.89 CENTS PER KILOWATT/HOUR SHOULD BE BOURNE BY AND AMONG DELMARVA ITSELF. EFFECTIVE AFTER 12/31/2008 UPON PASSAGE OF THIS RECOMMENDATION, AND ITS SUBSEQUENT APPROVAL BY THE PUBLIC SERVICE COMMISSION, ALL STANDARD OPERATING SERVICE CUSTOMERS OF DELMARVA WILL BE GUARANTEED A STABLE PRICE OF 9.89 CENTS TIMES A PROFIT OF 4%, BRINGING THE BILLABLE AMOUNT ON EVERY CUSTOMERS BILL TO 10.286 CENTS PER KILOWATT/ HOUR IRREGARDLESS OF ENERGY PRICES ON THE GRID.. UNDER NO CIRCUMSTANCES WILL DELMARVA BE ALLOWED TO CHARGE ANY SOS CUSTOMER BY MORE THAN THAT AMOUNT WHICH WOULD HAVE BEEN GUARANTEED THROUGH AN CONTRACT WITH BLUEWATER WIND.

WHEREAS, House Bill 6 of the 143rd General Assembly (the Electric Utility Retail Customer Supply Act of 2006), signed into law by the Governor on April 6, 2006, establishes a process for procuring a new energy source based in Delaware; and

WHEREAS, House Bill 6 set forth the criteria for selecting a new energy generating source, including the cost-effectiveness of the project in producing energy price stability, reduced environmental impact, the benefits of adopting new and emerging technology, siting feasibility and the terms and conditions concerning the sale of energy output from such facilities; and

WHEREAS, the Public Service Commission, the Director of the Office of Management and Budget, the Energy Office and the Controller General were given authority under House Bill 6 to select a bidder; and

WHEREAS, the Request for Proposal issued under House Bill 6 established a competitive process in which three proposals for power were submitted, an IGCC coal power facility, a new natural gas facility and an offshore wind power facility, all of which were reviewed and evaluated; and

WHEREAS, on May 22, 2007, the Public Service Commission, the Director of the Office of Management and Budget, the Energy Office and the Controller General directed that Delmarva Power enter into negotiations with Bluewater Wind to build an offshore wind power facility in Delaware, and to submit a term sheet outlining the major provisions of an agreement; and

WHEREAS, on November 20, 2007, the Public Service Commission, Office of Management and Budget, the Energy Office and the Office of the Controller General held a hearing on the Bluewater Wind term sheet and directed Delmarva Power and Bluewater Wind to submit a Power Purchase Agreement for consideration on December 18, 2007; and

WHEREAS, the negotiations that were held between November 20, 2007, and December 10, 2007, resulted in a more favorable agreement from the perspective of Delmarva residential ratepayers than was embodied in the term sheet; and

WHEREAS, the negotiations have produced a Power Purchase Agreement to build and operate in Delaware the nation’s first offshore wind power facility; and

WHEREAS, the Public Service Commission staff report finds that the Power Purchase Agreement meets the criteria established by House Bill 6, including price stability, reduced environmental impact, and the use of new technology; and

WHEREAS, operation of the proposed offshore wind farm would provide jobs for Delawareans and make Delaware a leader in a new industry at a time when manufacturing jobs are disappearing; and

WHEREAS, construction of the proposed offshore wind power facility would make a significant contribution to a reduction in greenhouse gas and toxic pollution emissions; and

WHEREAS, citizens of Delaware have offered thousands of comments and letters in favor of the proposed wind power facility; and


WHEREAS, the Public Service Commission, the Director of the Office of Management and Budget, the Energy Office and the Controller General did not act on the Power Purchase Agreement because of the lack of a consensus among the four entities; and

WHEREAS, approval of the Power Purchase Agreement would endow Delmarva Power’s customers with protection against future price increases and price volatility due to the rising cost of electricity produced from fossil fuels and international political uncertainties.

NOW THEREFORE:
BE IT RESOLVED by the House of Representatives of the 144th General Assembly of the State of Delaware, the Senate concurring therein, that it is the recommendation of the General Assembly that the Public Service Commission freeze Delmarva Power’s rate to 10.286 cents per kilowatt hour for the duration of twenty five years that the Bluewater contract would have covered. and any cost from power purchased over 9.89 cents per kilowatt hour, would not be passed on to Delmarva’s SOS customers, but absorbed by Delmarva itself and its parent company Pepco Holdings. Those currently purchasing Delmarva’s power will never pay more than 10.286 per kilowatt hour. Even though the proposed wind power facility met the criteria established by House Bill 6 of the 143rd General Assembly and was deemed to be in the best interest of the citizens of this State; the PSC will regulate Delmarva’s pricing to remain in line with what Delmarva customers would have saved with an active windfarm.

BE IT FURTHER RESOLVED that the Public Service Commission is hereby requested to determine if it is in the public interest to freeze Delmarva’s price to 9.89 cents per kilowatt hour.over the remaining span of twenty five years concurrent with Bluewater Wind’s contract. Since Delmarva is confident that even with a national shortage of natural gas, coupled with a shortage of coal, excessive Carbon Taxes, stronger and expensive enforcements of Clean Air mandates, and the high price caused by excessive demand for renewable credits, they will still be capable of providing energy cheaper than that contracted by Bluewater Wind, they should be happy to set the billable price at 10.286 cents per kilowatt hours as constant over the next twenty five years. This is within the authority set forth in House Bill 6 of the 143rd General Assembly.

SYNOPSIS
This Concurrent Resolution recommends that should the Controller General fail to vote to approve the Agreement between Bluewater Wind and Delmarva Power; because, in the opinion of the majority of the General Assembly, the proposed Bluewater Wind Agreement meets the criteria set forth in House Bill 6 of the 143rd General Assembly and is in the best interests of the citizens of this State, that the Public Service Commission will set Delmarva’s price at 10.286. cents per kilowatt hour. This Concurrent Resolution further requests that any power purchased over 9.89 cents per kilowatt, be absorbed by Delmarva and its parent, Pepco Holdings; under no circumstances, market or otherwise, can the billable price to any Delmarva SOS customer ever rise above 10.286 cents per kilowatt hour until twenty-five years have passed.

Wind power for Dummies

Weed-whacking and Symbiosis

Anyone who has raised their own food in their backyard, knows a little about weeds. As often as you pull them out, they return to begin the process anew. So it is with arguments against offshore wind. Each time a new person ponders the issue and feels they have been genetically gifted with unique insight, we see two leaves sprout of an argument that has been debunked months before.

So like weeding ones garden, one must periodically revisit those areas to remove ideas that faulty genetic engineering has placed in places where they do not belong. And so:

What about buying Land based wind power which costs less than that offshore?

This may sound good if one is looking for the lowest cost. But as often as advice comes cheap, its value should be trusted only as deep as its analysis. I can tell you that overall a brand new Mercedes CLK63 sedan is cheaper then a used Dodge Neon. And you may not believe me. But only by investigating the analysis will we know if buying a CLG63 is better for us in the long run….(It’s not.)

So let us first examine the myth that land based wind is cheaper and secondly, probe the economics behind that myth that are always happy to propel that myth forward.

Of course anytime one makes generalizations as I just did, one risks the case that an exception will prove that the overall statement is not correct. It is possible for example in North Dakota, to build a simple small windmill, free on public land, close to existing transmission lines and do it cheaper than build a towering work of engineering on an offshore platform eleven miles into the ocean. That makes sense.

Therefore we need a common denominator or formula that translates all power sources to a single cost effective denominator so we can compare apples to apples as the saying goes, and not find ourselves comparing apples to paramecium, disintegrating pop stars, classic cars, or even oranges.

The best bet found so far for the simplistic comparison of power sources, is the $ per MW that many of you following this argument, have seen repeated over and over. Since at this same time last year even I had no idea what $ per MW was, I will take a moment to explain.

Most of you who pay for your own electricity have at least seen the kilowatt listed on your Delmarva or Electric Co-op bills. This is the standard method of measuring the amount of electricity coming into your home. It traces its origins to James Watt who by many is considered to be the founder of the Industrial Age by his invention of the steam engine. Watt needed a method to measure work produced, and electric companies were quick to apply it to their needs a hundred years later. A watt is a rather small measure. It takes a hundred to power a light bulb. Therefore the standard measure is considerably larger, a thousand times to be exact, and because of that precise level of expansion it is called a kilowatt, or a thousand watts. One kilowatt supplies ten 100 watt bulbs, and is roughly equal to 1.34 horsepower, which is enough to power a large Wal*Mart-bought automatic lawnmower. Therefore for household usage, a kilowatt is the preferred level of measuring electric energy. Since we humans are habitual measurers of time, the amount of energy it takes to supply a kilowatt over the time frame of one hour, is simply called a kilowatt hour. Keep in mind there is a difference between a kilowatt and a kilowatt hour. One can survive a 300 kilowatt lightning strike, but would eventually succumb it it had to undergo that ordeal for a full hour. Therefore on our electric bills we pay for kilowatt hours (kWh), which is simply the amount of electricity required to burn those ten light bulbs for one hour.

A megawatt or (MW) is a thousand kilowatts ( kw), just like a Megabyte (MB) on your computer is a thousand Kilobytes (KB). So if we are measuring power to a system of homes numbering in the thousands, it would make sense to use MWh to do so….( For the geeks and trivial buffs the next levels upward are giga, tera, peta, exa.) For principals of scale, the entire US power supply is around 4 petawatts, up from 2.7 PW in 1992)

Therefore when comparing the costs of different energy applications we need to consider the cost per MWh of energy produced. Then if that source is close or far away, we need supplement that generation cost with transmission costs to get a true idea of what we pay. It is easy really. It would be similar to you comparing how much a head of lettuce would cost to grow outside your kitchen window, and how much it would cost to drive both ways to purchase it at a store.

Bluewater wind according to the latest contract that almost, almost became reality last December had members of Delaware’s Legislative Committee not interfered, was costed out at at $98.93 MWh. So for the price of filling ones gas tank at today’s prices, Bluewater Wind will provide Delmarva the yearly average electrical needs of around a 876 homes for that one hour! Wow! For you non math-wizards this gives the average household a monthly charge for the usage part of their utility bill close to $81.31. (Keep in mind we pay an additional charge for demand as well).

What about buying Land based wind power which costs less than that offshore?

First of all, despite common assumptions, does it?

Remarkably the global experts live here in Delaware. Their names may be familiar to some: Jeremy Firestone and Willett Kempton. Their conclusion:

The bottom line is that, with the refinements to our comparison offered by WGES, along with the final price of the Delmarva/Bluewater Power Purchase agreement (PPA), the Bluewater Wind price still appears to be lower than the price offered today by WGES. (Washington Gas & Electric Service)

WGES offers 100% onshore wind, in one and two year contracts (see
https://www.wges.com/enroll/index.php). It is offered at 13.90¢/kWh for 1 year or 14.50¢/kWh for two years. The two-year contract also bundles two years of price stability. As a first summary comparison, we previously compared WGES’ 100% offer with wind only from Bluewater Wind (by itself effectively 100%). Basing our comparison on the proposed Delaware PPA contract, the (energy and capacity) prices from the Bluewater Wind project are 10.82¢/kWh in 2008 and 11.15¢/kWh in 2009. That is, in year 1, the currently-offered WGES landbased wind is 22% more expensive than the PPA price, and for the two-year combined price, 24% over the PPA price.

So how much lower is Bluewater Wind’s offshore 25 year contract cost compared to a 2 year contract with WGES ‘s offer based on land based wind? Compare $98.03 MWh with $145.00MWh and you have your answer. This is not slanted analysis. These are the two actual choices on the table for those Delawareans who currently subscribe to Delmarva. That $46.96 dollar savings (per MW) is what Charlie Copeland, Thurman Adams, Harris McDowell, Tony Deluca and others, has just prevented you and your children from receiving irregardless or whether it is spread to all Delawareans or not! Not just for two years, but twenty-five.

But how can that be? How can offshore wind be so much better and cheaper than that produced on shore?

The three answers lie in 1) economies of Scale, 2) more available wind offshore, and 3) proximity to our market thereby reducing transmission costs.

The head of Delmarva, Gary Stockbridge, frequently misquoted we could get cheaper wind power on land from Pennsylvania. Naturally the next question that popped into everyones head was: how much wind power is available from Pennsylvania? Apparently not much. Currently there are 89 MWh of PA wind power. Proposed? As of last week, 211 MW which have yet to go through the process Bluewater Wind has already begun. Total PA potential? 300MW! And we are to expect that all of this meager total will benevolently be sent to Delaware, so we can benefit from wind power that is already more expensive than that made offshore?

It would also be wise to remember that demand for a product has as much to do with determining the price of something as does the cost required to produce it. By 2020 almost 1/6 of the Northeastern Corridor’s electrical load will be required to come from renewable sources. (Right click on image below to see the Northeastern Corridor.)

Required Amounts of Renewable Energy
That includes Delaware’s 20%. From what source is this to come? And what if there are too few sources to provide this phenomenal demand? The price goes up, and up, and up. So much for wind remaining a cheap source of electricity if we try to get it from another state besides Delaware.

The offshore wind farm was originally planned for a capacity of 600 MW. In the deal approved with Delmarva it was narrowed to a capacity of 450 MW. Towers offshore can be built higher than onshore. The rotors can be built larger, since they are transported by ships, instead of trucks switchbacking up winding mountain roads. At altitudes of 80 m (or 250 feet) the wind blows uninterrupted as opposed to ground level due to the lack of turbulence that land objects create. Anyone who has ever sailed on open ocean knows how the wind seems to blow continuously instead of in bursts as we experience here on land. Therefore those offshore turbines tend to produce more electricity than those wind mills locked down on shore. We communicate this in our discussions by saying offshore wind has a higher capacity to be busy making power, than that capacity found on shore.

Everyone knows that wind does not blow all the time. Therefore when considering where to put a wind farm, (NOAA already has all the data), one looks for a place with a higher capacity for making power. This higher potential of offshore wind, is based on solid evidence. The combination of larger turbines which are able to generate as much as 5MW of power compared to land based units making 1MW, and the greater chance that the wind will blow offshore than it does onshore, ultimately mean that despite the higher cost of construction required for a wind farm built in water, the cost per MW will be lower…It is exactly the same principal that occurs in transportation where even though a bus costs more to rent a does a car, if you want to transport 450 people to Washington DC, it is better to rent buses to do so in order to achieve a lower cost per person, instead of finding a fleet of cars to carry them.

The third reason offshore wind in Delaware is cheaper than importing outrageously expensive onshore wind from Pennsylvania, is the cost of getting it here. Remember from Chapter 2 that transmission lines lose 10% of the power they carry in form of heat. Bluewater’s power ties into the grid at the Bethany Beach sub station, and that location is where the transaction price will occur. This higher level of efficiency means the entire system saves 10% over that of another system including us and stretching over 300 miles away. 10% is a lot to waste.

So even though a bus costs more than a car, the “cheaper-to-construct” land base wind power provides its electricity per MW at a much higher price than any local offshore wind farm would for Delawareans.

Symbiosis:

Anyone who has studied “systems” knows that any system that is balanced usually maintains the fine line of survivability. In politics, one has to look only as far as our three branches of government to see stability lies in balance. Likewise any parent of a student creating a terrarium knows the very fine line of balancing all the parts to create a whole that works.

It is obvious that deregulation in its current state does not work. It is equally obvious that offshore wind on the Atlantic Coast, due to its proximity to the largest power consumer on this planet, is a definite good investment. Any capacity from any North Atlantic wind farm built, will be sucked up by the power hungry Northeast corridor with barely a blip. But if wind power is allowed to become a producer of cheap energy, and able to sell that energy at rates way below that of Carbon fuel, as will happen in the future, then the free market that was set in part by the movement to de-regulate electrical generation, will possibly be able to succeed after all. The only reason we are paying 60% more under this arrangement, is because there is no other entity to compete with Delmarva and force down its inflated prices. Well guess what, with Bluewater Wind……now there is.

And here is the kicker:

As carbon fuel continue to skyrocket and wind continues to become cheaper, the entire Eastern Seaboard will one day become one long wind farm. It will happen as did cell towers spring overnight across this country, as were fiber optics buried from one shore to the other, as were four lane highways carved out of mountains and spanned across American rivers, as were airports built outside every large American city, as was a canal carved across Panama, as did steam ships replace graceful clippers, as iron horses replaced living ones.

And to think……if a tiny band of horse-shit shoveling farmers had been as successful in their attempt to block the very first railroad from being built, simply because it would make their livery business obsolete?

How different our world would be?

Just as those who saw the railroad’s potential, and looked westward at 3000 miles of unexplored wilderness, knew of its inevitability, those of us who see the end of an era of carbon energy approaching with the speed of a summer storm, know too offshore wind spanning the length of the Atlantic Seaboard is also inevitable.

Delaware's Silicon Valley?
Courtesy of ENS (Environmental News Service)

And where will the new cottage industry of off shore wind be settled, like the Silicon Valley of chip technology? Obviously where it was first done….

There is no time to lose if that central hub of expert manufacturing on this side of the Atlantic is to be located in Delaware………We are in the race, like it or not.

He is responsible only to the Legislative Council. WTF is a Legislative Council? From the Delaware Code 1101:

There is created a Legislative Council which shall be composed of 10 members of the General Assembly as follows:

(1) From the Senate: The President Pro Tem, the Majority Leader, the Minority Leader, 1 member appointed by the President Pro Tem and 1 member appointed by the Minority Leader.

(2) From the House: The Speaker of the House, the Majority Leader, the Minority Leader, 1 member appointed by the Speaker and 1 member appointed by the Minority Leader. (29 Del. C. 1953, § 1101; 55 Del. Laws, c. 322; 59 Del. Laws, c. 253, § 14.)

So WTF is a controller? Again from the Delaware Code 1110:

(a) The Council shall appoint a Controller General who, primarily, shall work with and assist the Joint Finance Committee of the General Assembly.

(b) The Controller General shall:

(1) At all times have full and complete access to all records of all agencies of the state government;

(2) Participate in any or all hearings held by the Joint Finance Committee of the General Assembly, the Director of the Office of Management and Budget or other state agencies in connection with contemplated general fund budget appropriations, capital improvement programs or supplementary appropriations;

(3) Request and obtain from any state agency all reasonable information and data as directed by the Joint Finance Committee to assist the General Assembly in the effective discharge of its state financial responsibilities; and

(4) Perform such duties as may be assigned or delegated to the Controller General by the Legislative Council.

(c) The Controller General has the authority to perform management and program reviews. Management and program reviews shall include, but are not limited to, any analyses necessary to determine operational efficiency and effectiveness, compliance with the laws of Delaware and legislative intent.

(d) The Council shall provide a secretary and such other aides as may be necessary to enable the Controller General to perform such functions.

(e) The Controller General, the secretary to the Controller General and such other aides as shall be employed to assist the Controller General shall receive such compensation, including salaries and other necessary expenses, as shall be determined by the Council, subject to the limitations imposed in the annual appropriation act. (29 Del. C. 1953, § 1110; 57 Del. Laws, c. 277; 62 Del. Laws, c. 277, § 18; 70 Del. Laws, c. 186, § 1; 75 Del. Laws, c. 88, § 21(13).)

The Controller General is a toady of the legislative council. Do as I say or you shall be paid 1 dollar this year is not beyond the council’s privilege. Therefore one can assume that those who killed the Bluewater Wind are those same few who killed the openness of the General Assembly act several years in a row.

This time they have dealt Delaware a 1.3 Billion a year stab in it economic heart….This time they cost us real money.

The Controller General is not responsible to the entire General Assembly. He is responsible only to the leadership, which as we all know, is far more concerned about its self preservation, than it is about the welfare of Delawareans…..

At least to the tune of 1.3 billion a year.

Therefore these people must go.

Thurman Adams

District 19 Bridgeville

Patty Blevins

District 07 Elsmere

Charlie Copeland

District 04 West Farms

Tony DeLuca

District 11 Varlano

Dick Cathcart

District 9 Middletown

Bob Gilligan

District 19 Sherwood Park

Helene Keeley

District 3 Wilmington South

Clifford “Bill” Lee

District 40 Laurel

Terry Spence

District 18 Stratford

No matter what defense these few may offer publicly, when all evidence is on the table, they cost everyone in Delaware real money. Actions speak louder than words.

If you know anyone in those districts you should encourage them to run. I am sure Babcock and Brown with assets of 55 Billion would be glad to assist in financing some of their campaign expenses……………..

So far one candidate has contested Terry Spence. Contribute to his campaign today. As far as you and the rest of Delaware are concerned, there is close to a 1.3 billion rate of return on your investment.