It is not hard to connect the dots when it comes to Harris McDowell’s serial energy malfeasance. The dots are so close together that they are practically touching.
[Re-Bumped up 10:59 pm – 26 comments so far and not a single one defending McDowell]
Dot Number 1: Energy Deregulation
In 1999 the Delaware General Assembly voted to allow Delmarva Power to make as much money as it wanted to without regard to the fact that it was a public utility and not a regular private corporation. Connecticut had passed similar “deregulation” scheme (see also: abject failure) the prior year with the help of an eager lawyer named Randall Speck.
Eight House members stood to make personal financial windfalls if the deal went through. Naturally, they could not vote on the project though, since voting to increase their personal wealth so brazenly would not only be unethical, but it would have run afoul of the state’s conflict of interest regulations. They abstained.
Luckily, H.B. 10 was passed several weeks later, which stated that “conflict of interest” is soooooo 1980’s. The barn door was opened and the horses sauntered out voting for deregulation and a financial windfall for certain well connected persons that spring.
The conflict of interest issue and the brazen money grab by eight House members passed quietly, with little notice.
Even John Flaherty admitted later that he was not fully aware of the change in the conflict of interest regs. “…It sounds like they are deregulating ethics,” he said after the fact.
After the deregulation passed the house something interesting happened. Senator Harris McDowell held the deregulation bill in the committee for weeks. Not because it was crap, but because he wanted to the bill amended to include $1.5 million for a state-controlled “green” energy fund called the Sustainable Energy Utility (SEU) which would be used to pay for incentive programs encouraging conservation and energy efficiency. That sounds noble right? Hold that thought.
Harris McDowell’s just happened to run an “green energy” consulting business called the Delaware Alternative Power Corp. which appeared on his annual financial disclosure report through 2001.
Dot Number 2: Killing Off Shore Wind
Shockingly, deregulation didn’t work out so well for people who were not Delmarva Power shareholders. The slogan, “A 59% Rate Increase!” was not exactly used to promote the scheme back in 1999 so that increase came as kind of a surprise in 2005. In fact, it was such a surprise that rate payers were going to have to pay 59% more at the same time that Pepco’s third quarter profits reached $170 million and the company’s stock value increased by $500 million (allowing the company to increase its dividend payments to stockholders by 4 percent) that some people were alarmed.
So alarmed that the idea of re-regulating Delmarva was floated. To stave off that negative outcome for Delmarva, worried legislators put on their thinking caps and came up with HB 6 (the Electric Utility Retail Customer Supply Act of 2006). HB 6 established a process for procuring a new energy source based in Delaware and the RFP (Request for Proposals) for the project was put together by experts in the field. Namely, Delmarva Power.
You read that right. Delmarva Power wrote the RFP that the Blue Water Wind and others responded to. You can imagine the high-fives being traded around the offices of Pepco holdings when the RFP came out. Written by Delmarva Power, it was a classic, “heads we win, tales you lose” situation which closed the door on re-regulation while opening the door on a new Conectiv Energy power plant in Delaware. Except, some interlopers spoiled the party.
Blue Water Wind submitted a proposal that turned into a huge headache for Delmarva Power because it was good. The public fell in love with it, the unions loved it and the PSC liked it with some small modifications. It met all the RFP requirements and seemed like a slam-dunk. Only it wasn’t a slam-dunk for Pepco Holdings Inc, which makes more money when one subsidiary (Conectiv) sells electricity to another subsidiary (Delmarva Power). They didn’t want these newcomers horning in on the gravy train AND perhaps more importantly, a successful wind park could undermine their whole “If it doesn’t burn, it doesn’t earn.” business model – so they called Harris McDowell who sprang into action.
McDowell’s game plan would be to not only kill this specific wind project – but kill the very idea of off shore wind power. So While Delmarva Power pretended to negotiate a contract with Blue Water Wind, they prepared a lawsuit. To buy some time and perform some “discovery” for that pending lawsuit, McDowell called in his old deregulation buddy Randall Speck to run his the now famous “hearings.”
At this point maybe McDowell figured “In for a penny, in for a pound” or maybe malfeasance is like an Atlantic City Casino buffet to McDowell which he cannot get enough of, either way then went “whole hog” and drafted a bill:SB228 to remove any accountability and oversight from the SEU.
Remember the SEU? That little $1.5 million dollar fund set up to help ordinary non-Charlie Copeland type people get solar panels? You may be thinking, “So what if the SEU becomes an independent committee that answers to nobody? What’s a measly million bucks? The state blows that on Blue Hen themed novelites each year.”
Well…that little SEU could soon control in excess $100 million by 2014 based on proceeds a surcharge on green house gas emissions.
And who is the chair of the SEU? None other than Senator Harris B. McDowell III.
And who leaked a draft report to create negative PR around the wind park project as though it was the General Assembly’s final word on wind power? None other than Senator Harris B. McDowell III.
And who called Randall Speck to grill the PSC and develop some pretext for a Delmarva Power lawsuit? None other than Senator Harris B. McDowell III.
And who blocked de-regulation until he got his slice of the “green energy” cake? None other than Senator Harris B. McDowell III.
I don’t know. On the other hand, I guess it could all be a big coincidence. McDowell is probably a decent guy. I’m sure there are really good explanations for all this. I mean, nobody could be this brazenly corrupt for this long and get away with it….
…right?