This is part one of a two part post that will lay out a complete timeline for the PSC bid process and it’s undoing by Harris McDowell, Tony Deluca and Charlie Copeland. This part deals with the fair and open process that led up to the PSC staff recommendations. It is taken, for the most part from the PSC staff recommendation document.
Part II will deal with what happened after the recommendation and will demonstrate in no uncertain terms that Harris McDowell colluded with Delmarva Power to undo the deal andfrustrate the intent of HB6.
March 2006: The Delaware General Assembly introduced House Bill No. 6
in response to extensive consumer outrage occasioned by the announcement of
imminent and significant rate increases resulting from the higher cost of fuel used to generate electricity and the shift to PJM market-based prices. The cumulative effect of these increases was felt by Delmarva Power customers at one time due to the expiration of rate freezes established with deregulation of Delaware’s electric supply industry.
(The deregulation was voted on and past previously only after the Delaware General Assembly changed the rules regarding “conflict of interest.” That change allowed Harris McDowell who had a business relationship with Delmarva Power to endorse the deregulation.)
August 1st 2006: Following the HB 6’s mandate, Delmarva Power filed its proposed RFP.
October 2006: The PSC adopted a “big funnel” approach and developed the criteria to be included in Delmarva’s RFP that would guide the evaluation of the potential bids.
December 21, 2006: Conectiv Energy Supply, Inc. (a sister company to Delmarva Power also owned by Pepco Holdings) submitted a bid for a 180 MW combined cycle gas turbine (“CCGT”) located at its Hay Road site in Edgemoor, Delaware.
December 22, 2006: Bluewater Wind LLC submitted twelve variations of a bid proposal that included both 20- and 25- year terms and (1) a 600 MW capacity plant with a 400 MW energy limit or (2) a sale of two-thirds of the energy from a 600 MW plant.
December 22, 2006: NRG Energy Inc. (“NRG”) submitted a proposal to sell
energy and unforced capacity credits from 400 MW of a 600 MW coal-fired integrated gasification combined cycle (“IGCC”) facility to be constructed at its Indian River site.
May 3, 2007: PSC Staff issued the “PSC Staff Review and Recommendations on
Generation Bid Proposals,” (“Generation Bid Report”) in which it recommended that the State Agencies direct Delmarva to negotiate with both Conectiv and Bluewater for a hybrid energy supply that would combine a 200-300 MW offshore wind farm with a 150-200 MW synchronous condenser CCGT in Sussex county
May 22, 2007: By Order No. 7199, the State Agencies accepted Staff’s proposed
energy supply portfolio and directed Delmarva to negotiate in good faith with Bluewater for a long-term power purchase agreement (“PPA”) for the provision of offshore wind power.
August 7, 2007: The parties, having engaged in PPA negotiations through the summer, provided a status report to the State Agencies on. Aspiring for completed PPAs by the end of 2007, the State Agencies directed Delmarva to circulate detailed Term Sheets outlining the material terms of arrangements with Bluewater and the backup firm providers by September 14, 2007.
September 14, 2007: Delmarva filed all three Term Sheets as directed.
October 29, 2007: Staff issued the “PSC Staff Report On the Term Sheets for
Proposed Power Sales to Delmarva Power” (“the Term Sheet Report”), in which it recommended that the State Agencies consider the Bluewater proposal under specific parameters that would address the concerns raised by Staff.
November 6, 2007: In response to the Term Sheet Report, Bluewater withdrew the commodities pricing escalator from its proposal.
December 10, 2007: The PSC staff’s report regarding the State Agencies’ options with respect to the finalized Bluewater-Delmarva PPA submitted. It read in part:
“Within the conceptual framework of the EURCSA (HB6), Staff concludes that a balancing of
the benefits and risks associated with the PPA reveals that the long-term arrangement between Bluewater and Delmarva for the procurement of offshore wind power – with the equitable conditions recommended by Staff – is the preferred solution to promote long-term system benefits in the most-cost effective manner.”“Bluewater’s project is a cost-effective mechanism that takes control of Delaware’s energy needs and provides a price hedge against the unpredictable and volatile movement of the PJM market. Although this certainty comes at a price, Staff believes that it is more likely that the future will bring higher electricity prices in light of PJM market power, volatile fuel prices, the scarcity of new generating facilities in Delaware, pending regulations regarding carbon emissions, and rising energy demand in Delaware”