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They cost you too…

The drop in payroll tax from 6.2% to 4.2% results in a savings of about $1000 a year to every wage earner.

(If truth were widely known, that tax cut is actually a bad idea. It hemorrhages a dying social security fund, requiring the eventual death of the program or an expensive emergency last ditch surgery in the future.)

But it is hard not to give a $1000 present to every voter. Even if it only comes out as $19 dollars and change each week… But, still again, if your electric bill is $198 and you only have $189 in your account, that additional amount is, well, a lifesaver…..

But, Republicans in the House, even after Republicans in the Senate voted passage, overwhelmingly voted….. not to vote on the measure…

They didn’t vote against it… THEY VOTED NOT TO VOTE ON IT……
(speculation is that they lacked the votes to keep it from passing)..

So, how does that relate to you?

House Republicans (read Tea Party) just voted NOT TO VOTE on whether or not you will be losing an extra $20 a month out of your next paycheck.

Imagine what this is doing to payroll clerks around the country?
Imagine what this is doing to family budgets around the country?
Imagine what this is doing to businesses who rely on consumer spending around the country?
Imagine what this is doing to businesses heavily involved in the financial sector, around this country?

So what would normally happen?

Normally a group that can’t find agreement, acknowledges the sad fact, and long before the deadline, announces that they failed to reach agreement and that things would continue as they were on a temporary basis, to unfortunately allow for more time to solve differences.


Instead, we have a vote not-to-vote, then get all sorts of very lame excuses from those who are delaying, none of which apply to the real problem that Social Security is doomed unless drastic action gets taken (higher rates, not lower), and we get nothing….

The tax cut will expire…

It is like sequestering a jury in a room, where everyone after much fact-covering argument has agreed to a judgment, except for one person who’s been bought off. And nothing, nothing, logic, emotional appeal, bullying, snuggling up to, befriending, produces any change. And you go years, every working day, to the same court house, the same jury room, they same chair at the same table, hear the same arguments, hoping against all odds, that today, he will see the light and switch. You go the next day.

That is today’s Congress. Held hostage by Tea Party Republicans who live in a dream world untouched by the reality of living under $185,000 a year. Like that bought-out juror, every day, they hold up progress with the unjustified belief that, if they wait long enough, the other 11 jurors will give up and sway over to the sole juror’s way….

Two things can happen… 1) return to the public and announce a hung jury, and do a complete retrial.. or 2) sneak up to that one juror, put a gun to his head, say nothing, pull the trigger, clean up the mess, dispose of the body, then go out to the public and announce what the 11 of you have decided…..

One is the nice way, sanctioned to due process of law. The other is the American Way.

It’s time to initiate the kavipsian policy of expression or what is otherwise known as “Show Us How You Really Feel”… Who knows? It could become the next great movement? The next time someone you know (or don’t), says anything about how millionaires should keep their tax cuts and the poor should pay, nod your head in agreement, smile a little bit, then hit them as hard as you can in their mouth, I mean as hard as you can! Put them flat on the ground holding their jaw… Then loudly say, “Don’t every talk that stupid way to me again!” Who knows, if 99% or all 303,930,000 would respond that way to our fellow congressional delegates, and the other 3.9 million of their like who advocate such madness, we might actually get the very progress we need, not because of intimidation, but because such policy is right….

For those who argue expression of violence is un-American, I’ll remind them that tonight, is John Wayne Night on AMC: view it!… I argue that such action is VERY American and perhaps it has been the lack of such spontaneous expressions of frustration from working American people, that has caused the logjam where nothing gets done because of one holdout, who thinks he can sway the world to his opinion and face no consequences… ….

Practice now, by punching brick walls.

From Aaron Nathans of the News Journal…..

NRG/Bluewater Wind got good news on a different front Monday, as the federal government moved one step closer to issuing the developer a lease on a tract off the southern Delaware shore.

The Department of the Interior announced it would open a 30-day public comment period on the environmental and socioeconomic impacts of offshore renewable-energy projects off Delaware, Maryland, New Jersey and Virginia.

If the department determines no significant impact off Delaware, it will move forward with Bluewater to sign the lease, said its president, Peter Mandelstam. He said he hopes to secure the lease by the end of the year.

Once a lease on these ocean blocks has been secured, construction permits can begin. Or better put: Bluewater can proceed with more detailed environmental reviews to try to get a construction permit.

And to those of us who marshaled the deal in 08, here is a reminder of how time flies… Bluewater faces a September deadline to exit the Delmarva contract or pay $2.75 million, money it would get back if it successfully completed the wind farm.

The following concern has also been noted in the Federal overview of the project. Construction will take place near an area off Delaware, where ships typically anchor. Wind development should be avoided in that area, the U.S. Coast Guard has argued.

The anchorage area, off Delaware Seashore State Park, sits on the outer edge of Bluewater’s proposed development area.

map of Bluewater's location vis a vis shipping lanes

Every time I pay my electric bill to Delmarva, I sigh, knowing that had wind gotten underway faster, I’d be paying 60% less…….

Entire East Coast Wind Proposals
Courtesy of Tommywonk

If all the planned East Coast wind farms were built, at peak capacity they would provide 2311 MW’s of electricity.

Yesterday, the peak for the PJM grid, was… 66,354 MWs. … And that was on a slightly warm day in May.

On such a day, if the wind were maxing out the entire East Coast at once, 3.5 % of the required energy, could come from offshore wind…

If we use the conservative estimate of 2 pounds of CO2 per kilowatt/hour, 2311 MWh’s of wind power off the East Coast could decrease 4,622,000 pounds of CO2 in Eastern air…. (Per hour)

The all time peak for demand in the PJM region, was set August 2, 2006 at 144,644 MwH. The peaks for 2009 and 2008 were 126,805 and 130,100 MwHs respectively.

None of these wind farms are in construction stage. All are still planned.

Looking at the scale of what is needed, BIG is the way off shore wind needs to go. The demand for off shore wind is obviously there….

not a bad negotiated price, dudes

wow, it gets worse?

Because that……. is what we do.

Here is the problem with Bluewater Winds term sheet. They want to pass on increases caused by rising costs of materials used for turbines, and changes in the foreign exchange rate.

They also asked for a 2.5% cost of living increase per year………

Without those two roadblocks we could be moving forward as we speak……

That may not sound like much. But due to the very inflationary cost of those materials needed to make turbines over the last five years, by 2013 when the deal is expected to go forward, the cost of turbines could be off the charts. According to the deal with Delmarva, those costs would have been spread over twenty five years. And if the worse case scenario were to occur, those costs, times the accumulating 2.5% per year, would have had us paying 2.5 times more than the most expensive state pays now…….

Rarely does the worst case scenario happen. But if it were to materialize, the valid question remains. Should we be the ones to pay, or should Babcock and Brown, which now has ownership of Bluewater Wind be the ones who pay up… ? The staff at the PSC, after reading the Independent Consultant’s report, has decided that the potential risk to Delaware citizens is too high……

But one should note that this report exists in a vacuum. It is accurate in assessing some of the potential risks that may occur. However, all of us should realize that great risks abound in our oil and gas markets as we speak.. Are the potential risks of building a wind farm dwarfed by the possible risks caused by new tensions in the Middle East? Perhaps. Obviously speculators have read the tea leaves over the debacle with Iran, and have considered today’s price of $94 a barrel to be a good investment……based on what is coming………

So whereas we may pay more for wind, the report fails to consider that we may pay even more for natural gas, which will have to be shipped from the Mideast in liquid form. To restate the obvious, war with Iran could recast Bluewater Wind in an even better light……

The PSC and the Independent Consultants both note that requesting such a cushion as was done by Bluewater Wind, is rather rare in energy regeneration bids….It would make sense if one were attempting new technology, but one of the defenses of Bluewater, was that this technology had been tested in Europe and was performing well.

If it is doing well, why should Delmarva customers pay the cost overruns of the investment? Anyway, isn’t that the idea of investment that one puts down one’s own money, then collects enough premium back to remain profitable?

Bluewater was also stung by a credibility issue. The problem was this. It’s initial proposal of a six dollar bid per Kw/hour at the outset of the independent consultant’s number crunching, rose to a potential of $55 a Kw/ hour. Probably prices would have settled in the $20’s, but competitively, that cost is still too high……

The reason for the initial change, from $6 to $10.59, was the trimming done by the PSC which removed 50 turbines. The loss of 50 turbines increased the cost per turbine, and by reducing the power created by the wind-farm, meant fewer homes could be serviced and fewer dollars could be brought in. Obviously if Bluewater’s costs increase, and their revenues drop, they will have to charge more per person for pay for electricity…Duh!

(This factor was not under Bluewater’s control. The PSC mandated this….Bluewater cannot be blamed.)

Another huge factor causing cost overruns is the time stretching from the initial go ahead to the point of actually providing electricity. Just a year or two difference in pulling the switch, can create huge cost increases that are passed on to us…..The real tragedy is that “Waiting for Godot” has cost us tons of money. Had we started with the studies on June or July, our costs and future prices could have been reduced even further.

The contract specified that Bluewater would provide up to the cap of 300 MW. Anything over that amount could be sold on the PJM (grid) for others to by. This amount is sold much cheaper than the contracted amount, because investment costs are not included, and would because of its cheap cost, drive down the overall price of electricity for everyone across the grid. Meaning less carbon sources would need to be burned to replace that energy.

There are times when the wind can provide only 60MW of power. That means 240MW will have to be made up by other means. Two gas turbines at NRG., if built, would require a natural gas line to be built across Delmarva. That would have added benefit for everyone down state except higher priced propane suppliers.

But this additional power could also be bought off the grid, particularly if land base wind farms start producing a greater chunk of the grid’s power. Just buying from the grid in that case, may use less carbon overall than firing up a gas turbine located somewhere in southern Delaware.

So here is the genius behind the compromise. If we return to the 600MW wind farm, with a 25% increase of wind generated power, on those slower wind days of summer, instead of 60MW our minimum would be 75 MW, meaning we need to outsource only 225MW instead of 240MW. Again less money spent, less carbon burned. On days when the wind does blow, Bluewater sells the extra to the PJM grid at that moment’s price. With more turbines, they stand to have more overage to sell, increasing their profit margins enough to cover any cost rise that the commodities’ market may experience.

In return for allowing them more of the turbines, and the potential for a greater revenue stream, they need to agree that all increased costs will be eaten by them……as is done when one opens a restaurant, or car dealership, or radio station……

Bluewater benefits from increased revenues. Delawareans benefit from receiving for twenty five years, less expensive electricity, than twenty states pay now………Delmarva benefits from not having to worry about consumers switching power supplies due to wind power’s high cost overruns, and everyone benefits from a little less CO2.

A win, win. Since time is critical, all parties should begin negotiating in earnest……

“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.

In an effort to educate my children, quite often old National Geographics are left around the house in various places. Usually they are teasers, one only has a few minutes to spare, but in those few minutes, lot’s can be learned.

Today, the one on top was June 2007’s titled “The Big Thaw.” I finally got a chance to read the entire article and gaze at all the pictures. Later when I went online, somehow my first two clicks put me here, which covers exactly the same material, and interviews the same persons. The visuals are stunning; the implications are horrific.

We are losing ice at rates long past alarming. So alarming that perhaps in as short as 15 years, many of Delaware’s homes will have to be abandoned to the sea…….. That means the year 2022. To those entering kindergartens this this year, by the time they graduate (which goes very fast by the way), going to the beach will be more of a “mission trip”, than a romp in the sand………

It is against this back drop that Delmarva is playing games. As Nancy Willing show us, while we face the oblivion of a large part of our state, Delmarva has hired a “Fudge Factor” operation, to bother Delawareans with this question:

If private citizens were willing to pay X dollars for wind turbines, and the government was willing to pay the same amount for wind turbines, would you prefer that private citizens pay for the turbines or the government?

Two more questions that were exposed were these:

“Would you be willing to pay for wind energy if it cost: $3 extra/month, $6 extra/month, $9 extra/month, $12 extra/month, $15 extra/month, $18 extra/month, $21 extra/month, $24 extra/month, $27 extra/month,…all the way up to $30/month (stated as “$360/yr.), or more?”

And just to show how caring Delmarva really is about the environment, they pull this question:

“Do you prefer Delaware offshore wind or wind energy from Pennsylvania?”

Nancy nails it. They are fishing for any negative information they can find to scuttle the deal they do not want. As most of us, including Matt Denn, Blue Water Wind, and NRG, who have commented, know too well that even if the information culled from the Delaware public is directly opposite to what Delmarva wants to hear, there is no guarantee that this Fudge Factor company, otherwise know as “Issues and Answers,” has no qualms about manipulating whatever information they find out.

It will require independent collaboration and the subsequent dismissal of Delmarva’s statistics, to forge a deal forward in this truly planetary endeavor…….

You may not like Hillary Clinton……perhaps her negatives are too high for you……but regardless of what you think of her personality and politics, she comes from New York. And that makes her something…………

You may think I came to praise her, but I am really going in the opposite direction and praising New York. What gives Hillary her credibility, is that some of the greatest people on earth chose her to be their Senator……

There is something different about New York. Not just the city, but the entire state has a distinctive unique characteristic. I guess it stems from the fact that no one, no one intimidates them. They don’t prance around Celia-like to politicians; they hold them accountable. Either the politician performs, or “he’s outta there.” ( The fact that a majority of them ‘dis Giuliani, speaks highly of them also. )

Today I got this snippet of news from the paper of a tiny little town near Minot…….It was an AP announcement that was deemed irrelevant every where but North Dakota……. It was an “A ha” moment, because it provides a solution that may have some bearing on Delmarva’s recalcitrance to “play ball by the rules.”

New York Attorney General Andrew Cuomo is investigating five major energy companies to determine if plans to create coal-fired power plants present an undisclosed financial risk to investors.

There are so many parallels to our situation. First both of our Attorney Generals are sons of famous political fathers. Second, if creating coal fired power plants presents an undisclosed financial risk to investors, what does that say about Delmarva, who is spurning Blue Water Wind, a triple A+ investment, for continuing to receive power from coal fired power plants, a triple F- investment?…….

Obviously New York is staging an “strong offense” as their primary “defense” to open the Long Island Sound Wind Farm. Should they succeed and open their wind farm before Delmarva allows us to open ours, we might as well turn all positive financial growth opportunities for this state, over to them………..

What is ironical is that their AG is suing the “old school” of power generation for the same reason Delmarva is suing to stop the “new school” of power generation.

As I mentioned in a comment over on Tommywonk, one option we have is for our AG to sue Delmarva Power for presenting an undisclosed risk to the people of Delaware by their not allowing us a healthy, environmentally friendly, and far cheaper electricity than we pay already……But ideally, taking the investors side of the equation would be much cleaner, easier to prosecute, and based on evidence found in Delawares blogs, and all over the internet, ….”a slam dunk.”

As I pointed out before, Delmarva bases their cost on figures consumers were paying BEFORE THE 60% RATE HIKES TOOK EFFECT IN MAY 2006. (All their calculations use 2005 numbers). They use these outdated cheap numbers to make their case that Delaware consumers will pay more if they go with Blue Water Wind.

Therefore they are misleading their investors. I am not a legal expert, but I believe there are laws against that? Duh! That should put them squarely in the same boat as Enron. And we know what happened to those cronies……….

Delaware needs to pursue the same strategy as New York. Why should they get all the glory. After all, compare their two AG’s! Only one has a father who has run for the Presidency…….. twice.

Will He Become the Aragorn Who Takes On Mordor? Sam the Brave, without whom, the Quest would End in Failure.

Cheap, Renewable Energy In The Making

Tommywonk, WGMD, and the News Journal all have stories regarding the Blue Waster Wind deal. There are positive notes.

Based on the term sheet
we can expect the following.

300 MW each hour, enough to power all the homes in Delaware.

No increase , for the next 25 years, over what we are now paying for electricity. By the way oil hit $ 80 a barrel today, pushing up coal and gas! But will it affect Delaware’s electricity rates? Not with wind power, it won’t!

Wind power guaranteed to be on line in either 6 3/4 or 7 years.

Construction costs of 1.5 billion directly infused into the local economy.

Increased aesthetics and fishing habitats to the Rehoboth/Dewey Beach area.

Transmission upgrades included in cost. No additional charges for Delaware consumers.

Finally. A business dedicated to full compliance with Federal, State, and Local environmental requirements.

But there are storm clouds of doubt and uncertainty surrounding both Delmarva’s and Connectiv’s commitment to this grand project, completion of which would elevate Delaware to be the “First State” in renewable energy.

They are focused on the lack of transparency of Delmarva’s calculations. Delmarva wishes to make up stuff, and not have to show how it came about with the figures it did. Can you imagine if Bush last night had said: ” No American has died in Iraq, and not one dollar of taxpayer money has been spent in Iraq. Therefore we will continue on plan.” That is exactly what Delmarva wants to be allowed to do……….
make stuff up……….

Furthermore, Delmarva wants to charge penalties to Blue Water Wind based solely on the stuff it makes up. Both Blue Water Wind and NRG have consulted among themselves and independently determined that penalties will not be necessary. They can perform well within the criteria. But Delmarva wants to charge them anyway should it ever arbitrarily decide it needs some extra cash………Likewise,

while Bluewater attempted to have similar dialog with Connectiv on this and other issues related to the proper coordination between the wind park and the back up facility, Connectiv declined to enter into a confidentiality agreement related to any such discussions and no dialog was possible.

As has often been my experience in business, when someone gets antsy about poking through their records, it usually means they are stealing. In government, when public officials get antsy about the opening of committees and hearings to public scrutiny, it usually means they are stealing. So why, might we ask, should Connectiv pattern the same behavior and not enter a confidentiality agreement Blue Water Wind, unless they have some dark secret they cannot afford to see the light or day? This should send up a red flag of outrage for all citizens. Is another Enron brewing at Connectiv?

Outstanding issues that may or may not block the forward momentum.

1) The first issue is the consequence of the delay caused by the impending lawsuits sponsored by Delmarva and Connectiv.

Delmarva has taken the position that it must retain its appeal rights ( and therefore it would not discontinue its appeal of the State Agencies prior order authorizing these negotiations), and that it does not control its affiliated company Connectiv and should therefore retain the right to terminate and/or collect delay damages.

In other word if Delmarva/Connectiv purposefully slows down the process, it is entitled to receive the delay penalties owed to it on behalf of the BlueWater Wind investors. As was dryly noted: “such a provision presents a serious concern to Blue Water investors..”

2) Delmarva seeks termination rights in the event of a consolidation triggered by accounting rules FASB Interpretation #46. Under these rules, if Delmarva is the primary beneficiary of Blue Water Wind, Delmarva may be required to consolidate Blue Water Wind. To prevent this, Blue Water has offered to modify the agreement so as to eliminate the consolidation, in lieu of termination rights. So far Delmarva has refused. Again, as is dryly noted, Delmarva’s termination could again cost Blue Water’s investors millions of dollars.

3) Finally Delmarva has adamantly insisted upon the right to veto any change of control (not to be unreasonably withheld) at Bluewater , for any time over the next 25 years, regardless of the level of ownership at which the change of control takes place. This of course gives Delmarva the option to block deals resulting in tens of Billions of dollars which may not have any relationship to the wind farm. (Delmarva has adamantly refused to accept the same restrictions upon itself). Obviously the Blue Water Investors are uneasy about this clause as well. Bluewater has proposed several compromise solutions, all of which have been rejected by Delmarva.

Obviously Delmarva is unhappy to find itself in the position of supplying Delaware with cheap energy. They would much rather see households paying $8oo a month for electricity, than say $80.

But with proper public pressure these deals could still go forward. It is reassuring that great strides have already been taken…………….

Delaware Wind can possibly Save our Troops
Should the unthinkable happen, and we find ourselves in another war, whether or not its commencement comes from a WWII or WWI scenario, we will still need energy to win it. And lots of it.

Most of our military data is satellite based with the servers here in the US at an undisclosed locations. Should our troops be fighting in a major engagement, those servers must stay running and on line. Imagine, being on the battlefield, facing incoming RPG’s and your information and communication systems do down and all screens go black………….fact was Aunt Mary Elizabeth, visiting relatives during the fair in Harrington, had just plugged her curling iron into the grid, and down the whole thing went……..

This is just one more reason why we need to get new energy sources on line, and wind is source with he fastest startup time.

We have covered the environmentally and cost effective benefits that wind provides. But now, with impending doom about to descend upon us, we need to create an energy source immediately.

Wind can start producing some electricity which can be added to the grid, the second the first offshore tower is completed. A coal gasification plant would have to wait until the entire structure was completed and inspected before beginning to create output.,…

Therefore even our National Security requires Delmarva power to stop dragging their feet and sign the contracts that get wind power started………Otherwise, there may not be an America to enjoy the clean cost of wind.

A deadline should be set soon: if Delmarva cannot come to an agreement within that time, the state through its PSC needs to step in and dictate the terms………

It could determine whether our troops live or die……..