Wonky Wednesday: Delaware’s Energy Future Is on the Line
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.
This is another example of how Republican policies require a willing leap into the world of fantasy.
As long as human induced global warming can be denied, Al Gore’s jet plane can be used to distract an easily distracted public, there is no need to consider all of the downstream costs associated with keeping the status quo.
Nice work Tom. In the other metrics that the consultants used, Bluewater did reasonably well also. As I said on your blog(shameless plug), I suspect that the pressure will be applied in such a way that if one of the two fossil plants can’t be used, then the whole thing will be scuttled. I then expect the whole process to restart in a year or two. One important fact is that Bluewater is the only one proposing from out of state. Their research and travel costs are much higher than NRG and Pepco. Thus the longer you stretch out the process, the more difficult it is for Bluewater to hang in there.
In my mind, deciding not to pick a company would be preferable to giving the go-ahead to a new fossil fuel plant, given the unquantifiable costs of controlling carbon emissions down the road.
Agreed. Hopefully other factors will help Bluewaters numbers as time goes by and we can start to see some more immediate benefits.
Wind is the logical and best choice, hands down.
It can make money, create jobs and provide minimal price fluctuations.
You know? No one has mentioned Carney’s position. Why the silence on what may be the largest decision affecting Delawareans this century? He does want to be gov, right?
Markell maneuvered this one well.
http://www.johncarney.org/main/
I have not heard that Lt. Gov. Carney has taken a position on this.
As for Jack Markell, I think he got right to the heart of the matter by emphasizing the importance of price stability–the measure that most perfectly aligns the public’s economic and environmental interests.
Here’s my problem with Markell. Why not just come out and advocate for wind power? Why not say “I support Bluewater Wind.” He obviously does, because he makes all the arguments. So why not come out and say it?
Dave, if that’s the only “problem” someone in your position can find with Markell, that almost sounds like an endorsement. Perhaps he could be one governor who earns respect from both Republicans and Democrats alike.
For the “problem” you mention, is one with which all politicians must contend just as soon as they announce their candidacy. For it is hard to establish a realistic majority if you choose to constantly splinter off support long before you have to………..
Same goes for Romney……Pundits can either wring hands and wish it were not so, or throw mud and hope that some of it sticks, but,face it…..in a democracy, presenting a clear image, and being vague with facts is the proven route to success. That’s why McCain is still a Senator and Dean, a party chairman.
At least Markell has figured that out……..
Those of you who consider yourselves sophisticated, can read through Markell’s remarks and know where he stands, long before he publically acknowledges it, Such is politics.