The Public Service Commission (PSC) held the first of three hearings on the Delmarva Power RFP last night in Dover. The hearings continue tonight and tomorrow night:
Tonight at 7 p.m., Delaware Technical & Community College, Owens Campus theater, Georgetown
Tomorrow night, March 8 at 7 p.m., Carvel State Office Building auditorium, 820 French St., Wilmington
Speakers will be allowed three minutes to present their views, which isn’t much given the complexity of the topic. I plan to be there Thursday night. I will probably speak and hand in some more extensive written comments.
I’ve written about the redactions of the proposals that make it difficult to evaluate the options. We don’t have all the data, but the PSC’s consultants do. The consultants’ evaluation of the economics of the proposals includes these revealing scores for price stability:
Bluewater 20.0
NRG 0.0
Conectiv 0.7
It’s hard to offer an informed analysis of each category, particularly given the redaction of the proposals, but one result seems inescapable: The NRG and Conectiv proposals offer no meaningful price stability to ratepayers. In particular, NRG and Conectiv seek to place the entire economic burden of compliance with future controls on carbon emission squarely on the shoulders of consumers.
More specifically, Conectiv is seeking recovery of possible future carbon taxes. NRG has proposed an exception from provisions that it “absorb any additional environmental compliance costs caused by a change in law,” and its “proposed pricing for [carbon] sequestration is essentially a cost pass-through proposal that is inconsistent with the RFP requirements.”
In other wards, Conectiv and NRG want to pass on the costs of future controls on carbon emissions to ratepayers. These costs are uncertain for two important reasons: First, we don’t know what form these controls will take. Second, the technology of carbon sequestration is in its infancy. As I noted recently, a forthcoming MIT study estimates that carbon sequestration could increas the cost of electricity and reduce effective power generation by 10 to 30 percent.
Given the technical and economic uncertainties of carbon controls, one is led to the surprising conclusion that wind power is the one option that offers proven technology at a predictable cost.
This is why, as Jack Markell has pointed out, price stability is such a crucial consideration, in which we see environmental and economic factors both indicating that building a fossil fuel plant in Delaware is not in the public interest.